Document:

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                                                                   EXHIBIT 10.20

                               SECURITY AGREEMENT
                               ------------------

         This SECURITY AGREEMENT (this "Agreement") is made and entered into as
of March 17, 2000, by and between PowerSpring, Inc., a Delaware corporation
("Debtor"), and John A. Harpole, a Colorado resident ("Secured Party").

                                    Recitals
                                    --------

         WHEREAS, Secured Party and Debtor have entered into that certain
Agreement and Plan of Merger, of even date herewith (the "Merger Agreement"),
pursuant to which, among other things, Secured Party is exchanging his shares of
Mercator Energy Incorporated, a Colorado corporation ("Mercator"), in exchange
for certain consideration of the Debtor; and

         WHEREAS, in connection with the Merger Agreement, Debtor is issuing a
promissory note (the "Note"), of even date herewith, to Secured Party; and

         WHEREAS, in order to induce Secured Party to enter into the Merger
Agreement and accept the Note as consideration in part for his shares of
Mercator, Debtor has agreed to grant to Secured Party a security interest in
certain collateral described herein;

                                    Agreement
                                    ---------

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agrees as follows:

         1. Grant of Security Interest. As security for the prompt and full
payment when due of all of its Obligations (as defined in Section 2) and in
order to induce Secured Party to enter into the Merger Agreement and accept the
Note as consideration in part for his shares of Mercator, Debtor hereby grants
to Secured Party a security interest in all of the Debtor's properties and
assets of every kind, nature and description, real or personal or mixed,
tangible or intangible, wherever located, and whether now owned or hereafter
acquired, including without limitation:

                  (a) All of Debtor's inventory, meaning all goods, wares,
         merchandise, raw materials, supplies, work in process, finished goods,
         and other personal property of every description held for sale or lease
         or furnished or to be furnished under any contract of service, and all
         goods which are in transit, and all returned, repossessed and rejected
         goods of the foregoing description, and any other tangible personal
         property held by the Debtor for processing, sale or other business
         purpose or to be used or consumed in the Debtor's business;

                  (b) All machinery, equipment, furniture, office equipment and
         supplies, plan equipment, tools, dies, molds, fixtures and leasehold
         improvements of Debtor, of every kind

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and description, wherever located and including all additions, improvements,
accessions and substitutions thereto;

                  (c) All accounts, accounts receivable and notes receivable of
         the Debtor, whether now existing or hereafter arising, as well as all
         right, title and interest of the Debtor in the goods which have given
         rise thereto, including the rights or reclamation and of stoppage in
         transit, all other rights to the payment of money (including without
         limitation, tax refunds);

                  (d) All contracts and contract rights of the Debtor, now
         existing or hereafter arising, under contracts to sell or lease goods
         or render services;

                  (e) All insurance proceeds, whether arising out of any of the
         foregoing or otherwise;

                  (f) All notes, bills, drafts, acceptances, chooses in action,
         chattel paper, instruments, and any other forms of obligations and
         receivables and right to payments for credit extended and for goods
         sold or leased or services rendered, whether or not earned by
         performance, documents, books and records and rights in and to the name
         and all goodwill and all other general intangibles of the Debtor,
         including all customer lists, causes of action, judgment, rights to
         performance, licenses, permits, copyrights, trademarks, trade secrets,
         patents, patent rights, proprietary processes, software and related
         documentation, blueprints, drawings, designs, diagrams, plans, reports,
         charts, catalogs, manuals, technical data and any and all concepts or
         ideas in any manner related to the design, development, manufacture,
         sale, marketing, lease or use of any or all goods produced or sold or
         leased or services rendered by the Debtor in its business; and

                  (g) All collateral and all guaranties for, and all products,
         proceeds, substitutions, and accessions of, any of the foregoing
         property.

         The property described above shall hereafter be collectively referred
to as the "Collateral."

         2. Obligations. The security interest in the Collateral is granted
hereby in order to secure the payment and performance of the following
obligations of Debtor to Secured Party, whether now outstanding or incurred
after the date hereof (collectively the "Obligations"):

                  (a) Debtor's performance of its obligations under the Note (in
         an amount equal to the lesser of $666,666.00 or the amount then
         outstanding under the Note) and this Agreement;

                  (b) All interest, fees, expenses, obligations and liabilities
         of Debtor arising pursuant to or represented by the Note;

                  (c) All taxes, assessments, insurance premiums, brokerage
         fees, reasonable attorneys' fees and other expenses of sale of the
         Collateral; and

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                  (d) All renewals, extensions and modifications of any of the
         indebtedness and obligations referred to in the foregoing clauses, or
         any part thereof.

         3. Debtor's Representations, Warranties and Covenants. Debtor hereby
represents, warrants and covenants to and for the benefit of Secured Party, as
follows:

         Debtor has all requisite right, power and authority to execute,
deliver, and perform its obligations under, this Agreement and the Note. The
execution, delivery and performance of this Agreement and the Note by Debtor
have been duly authorized by all requisite corporate action on the part of
Debtor and do not and will not violate or conflict with the articles of
incorporation or bylaws of Debtor or any law, rule or regulation applicable to
Debtor or any order, writ, injunction or decree of any court, government
authority or arbitrator, applicable to Debtor, and do not and will not conflict
with, result in a breach of or constitute a default under the provisions of any
material mortgage, deed of trust, indenture, security agreement, loan agreement,
credit agreement or other instrument, agreement or contract binding on Debtor or
any of its property. Debtor has the unrestricted right to grant the security
interest in the Collateral contemplated hereby.

         4. Events of Default. Debtor shall be deemed to be in default
hereunder, and an Event of Default hereunder shall be deemed to have occurred,
upon the occurrence of any of the following events:

                  (a) Debtor's failure to pay when due, or duly and promptly to
         observe or perform, any of the Obligations;

                  (b) Debtor otherwise breaches (whether or not such breaches
         are within Debtor's control) any covenants, warranties or
         representations in or regarding this Agreement or the Note, and fails
         to remedy such breach within 20 business days of receiving written
         notice of such breach from Secured Party; or

                  (c) Debtor becomes insolvent, terminates its existence,
         dissolves or experiences business failure; a custodian, as that term is
         defined in Title 11, U.S.C., as amended, of any of Debtor's property is
         appointed or exists; or Debtor makes any assignment for the benefit of
         creditors; or any proceeding under any bankruptcy or insolvency law is
         commenced by or against Debtor.

         5. Remedies.

                  (a) If an Event of Default occurs and is continuing hereunder,
         Secured Party shall have full power and authority to sell, assign or
         deliver the whole or any part of the Collateral at any broker's
         exchange or elsewhere, at public or private sale, at the option of
         Secured Party, in order to satisfy any part of the obligations of
         Debtor now existing or hereinafter arising under the Note. On any such
         sale, Secured Party or its assigns may purchase all or part of the
         Collateral. In addition, at its sole option, Secured Party may elect to
         retain all the Collateral in full satisfaction of Debtor's obligations
         under the Note, in accordance with the provisions and procedures set
         forth in the Colorado Uniform Commercial Code.

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                  (b) The rights and remedies granted to Secured Party herein
         upon an Event of Default shall be in addition to all the rights, powers
         and remedies of Secured Party under the Colorado Commercial Code and
         applicable law and such rights, powers and remedies will be exercisable
         by Secured Party with respect to all of the Collateral. Debtor agrees
         that Secured Party's reasonable expenses of holding the Collateral,
         preparing it for resale or other disposition, and selling or otherwise
         disposing of the Collateral, including attorneys' fees and other legal
         expenses, will be deducted from the proceeds of any sale or other
         disposition and will be included in the amounts Debtor must tender to
         redeem the Collateral. All rights, powers and remedies of Secured Party
         shall be cumulative and not alternative. Any forbearance or failure or
         delay by Secured Party in exercising any right, power or remedy
         hereunder shall not be deemed to be a waiver of any such right, power
         or remedy and any single or partial exercise of any such right, power
         or remedy hereunder will not preclude the further exercise thereof.

         6. Attorney-in-Fact. Debtor hereby appoints Secured Party as the
attorney-in-fact for Debtor for the purpose of carrying out the provisions of
this Agreement and taking any action and executing any instrument which Secured
Party may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest. Without limiting the
generality of the foregoing, Secured Party shall have the right and power to
receive, endorse and collect all checks and other orders for the payment of
money made payable to Debtor and included within the Collateral and to give full
discharge for the same. Neither Secured Party nor any director or officer of any
issuer of the Securities shall have any liability for the distribution to and
collection of the Proceeds by Secured Party, but shall be fully protected in
relying on the written statement of Secured Party as to its authorization
pursuant to this paragraph. Any and all amounts collected by Secured Party
pursuant hereto shall be applied against the Obligations in the manner that
Secured Party shall determine, in Secured Party's sole and absolute discretion.

         7. Certain Other Rights of Secured Party.

                  (a) Duty of Care. Secured Party's only duty with respect to
         the Collateral shall be to exercise reasonable care to secure the safe
         custody thereof. Secured Party shall not have a duty to fix or preserve
         rights against prior parties to the Collateral, and shall never be
         liable for its failure to use diligence to collect any amount payable
         with respect to the Collateral, but shall be liable only to the account
         of Debtor for what Secured Party may actually collect or receive
         thereon.

                  (b) Financing Statement. Secured Party shall have the right at
         any time to execute and file this Agreement or a copy of this Agreement
         as a financing statement, but the failure of Secured Party to do so
         shall not impair the validity or enforceability of this Agreement.

                  (c) Payment of Expenses. At Secured Party's option, Secured
         Party may discharge taxes, liens and interest, perform or cause to be
         performed, for and on behalf of Debtor, any actions and conditions,
         obligations or covenants which Debtor has failed or refused to perform
         and may pay for the repair, maintenance or preservation of any of the
         Collateral, and all sums so expended, including, but not limited to,
         attorneys' fees, court costs, agents' fees or

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         commissions, or any other costs or expenses, shall bear interest from
         the date of payment at the highest legal rate and shall be deemed to
         constitute part of the Obligations secured by this Agreement.

         8. Cumulative Rights and Remedies. All rights and remedies of Secured
Party hereunder are cumulative of each other and of every other right or remedy
which Secured Party may otherwise have at law or in equity or under any other
contract or other writing for the enforcement of the security interest herein or
the collection of the Obligations, and the exercise by Secured Party of one or
more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies. Should Debtor have heretofore
executed or hereafter executed any other security agreement in favor of Secured
Party in which a security interest is created as security for the debts of
another or others, in respect of which Debtor may not be personally liable, the
security interest therein created and all other rights, powers and privileges
vested in Secured Party by the terms thereof shall exist concurrently with the
security interest created herein, and, in addition, all property in which
Secured Party holds a security interest under any such other security agreement
shall also be part of the Collateral hereunder, and all or any part of the
proceeds of the sale or disposition of such property may, in the discretion of
Secured Party, be applied by Secured Party in accordance with the terms hereof,
and of such other security agreement or agreements, or any of them.

         9. Termination. Upon payment and performance in full by Debtor of all
Obligations in accordance with their terms, this Agreement and the security
interest granted hereunder shall terminate.

         10. Further Assurances. Debtor agrees to execute and deliver such
further instruments and take such further actions as Secured Party may
reasonably request from time to time to preserve or give effect to its rights
under this Agreement.

         11. Arbitration. In the event that any dispute, controversy or claim
arises out of, under or in connection with, or otherwise relates to, this
Agreement, including, but not limited to, the parties' rights and obligations
hereunder, or to the actual or alleged breach or termination hereof, then the
parties hereto agree that the same shall be resolved, determined and settled by
final and binding arbitration in Denver, Colorado utilizing the procedures set
forth in Section 11 of the Merger Agreement.

         12. General Provisions.

         12.1 Governing Law. This Agreement shall in all respects be governed
by, and construed in accordance with, the internal substantive laws of the State
of Colorado, without giving effect to any conflict or choice of law principles
or rules.

         12.2 Amendment. This Agreement may not be amended or modified in whole
or in part in any manner except in a writing which makes reference to this
Agreement executed by both Debtor and Secured Party.

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         12.3 Assignment. Neither the Agreement, nor any rights, obligations or
duties hereunder, may be assigned or delegated without the prior written consent
of the other parties hereto.

         12.4 Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs, legatees,
personal representatives, devisees, executors, successors and permitted assigns.

         12.5 Entire Agreement. This Agreement and the other documents,
instruments and agreements referred to herein, sets forth the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof and supersedes in their entirety all prior and contemporaneous written
and oral agreements, arrangements, understandings, negotiations, communications,
covenants, representations and warranties among the parties hereto relating to
the subject matter hereof.

         12.6 Notices. Any and all notices, demands, requests, elections and
other communications required or permitted to be given hereunder shall be in
writing and shall be deemed to have been duly given (i) upon personal delivery;
(ii) upon confirmation of receipt when sent by facsimile transmission; (iii) one
business day after deposit during normal business hours with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt; (iv) five business days after being sent by first class
(certified or registered) mail, postage prepaid, return receipt requested, in
each case to the following addresses:

                            If to Debtor, to:

                            PowerSpring, Inc.
                            1675 Broadway, Suite 2150
                            Denver, Colorado  80202
                            Attn:  Chief Executive Officer
                            Telephone:  (303) 592-5555
                            Facsimile:  (303) 592-5556

                            With copies to:

                            Metretek Technologies, Inc.
                            1675 Broadway, Suite 2150
                            Denver, Colorado  80202
                            Attn:  W. Phillip Marcum, President
                            Telephone:  (303) 592-5555
                            Facsimile:  (303) 592-5556

                            Paul R. Hess, Esq.
                            Kegler, Brown, Hill & Ritter Co., L.P.A.
                            65 E. State Street, Suite 1800
                            Columbus, Ohio  43215
                            Telephone:  (614) 462-5400
                            Facsimile:  (614) 464-2634

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                            If to Secured Party, to:

                            John A. Harpole
                            Mercator Energy Incorporated
                            600 17th Street, Suite 600 South
                            Denver, Colorado 80202
                            Telephone:  (303) 825-1100
                            Facsimile:  (303) 825-2300

                            With a copy to:

                            Ducker, Montgomery & Lewis, P.C.
                            1560 Broadway, Suite 1500
                            Denver, Colorado 80202
                            Attn:  Bruce Ducker, Esq.
                            Telephone:  (303) 861-2828
                            Facsimile:  (303) 861-4017

Any party hereto may send any notice, demand, request, election or other
communication to the intended recipient at its address set forth above using any
other means (such as expedited courier, messenger service, telecopy, telex,
ordinary mail or electronic mail), but no such notice, demand, request or other
communication shall be deemed to have been given until it is actually received
by the recipient. Any party hereto may change its designated address by giving
written notice to all other parties.

         12.7 Waiver. The obligations of any party hereunder may be waived only
with the written consent of the party or parties entitled to the benefits the
obligations so involved. Any waiver of a breach or violation of or default under
any provision of this Agreement shall not be construed or operate as, or
constitute, a waiver of any other or subsequent breach or violation of or
default under that provision or any other provision of this Agreement. The
failure of any party to insist upon strict compliance with any provision of this
Agreement on any one or more occasions shall not be construed or operate as, or
constitute, a continuing waiver of, or an estoppel of that party's right to
insist upon strict compliance with, that provision or any other provision of
this Agreement.

         12.8 Severability. The provisions of this Agreement shall be deemed
severable. If any provision of this Agreement is determined to be illegal,
invalid or unenforceable in any situation: (a) the parties hereto shall agree to
a suitable and equitable provision to be substituted therefor in order to carry
out, so far as may be valid and enforceable, the intent and purpose of such
invalid or unenforceable provision; and (b) the remainder of this Agreement
shall remain in full force and effect, and the application of such provision in
any other situation shall not be affected.

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         12.9 Counterparts. This Agreement may be executed in any number of
counterparts (including counterparts executed by less than all parties hereto),
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.

         12.10 Headings. The headings used herein are solely for convenience of
reference and shall not be given any effect in the construction or
interpretation of this Agreement.

         12.11 No Third Party Beneficiaries. Nothing in this Agreement, express
or implied, in intended to create or confer and shall not be construed or
operate as creating or conferring, any rights or remedies under or by reason of
this Agreement, upon any person or entity other than the parties hereto and
their respective successors and permitted assigns.

         12.12 Further Assurances. The parties hereto agree to take or cause to
be taken all actions, including without limitation, the execution and delivery
of documents and instruments, which are necessary, convenient or desirable in
order to effect the transactions contemplated by this Agreement.

         12.13 Best Efforts. Each of the parties hereto shall act in good faith
and use its best efforts to bring about the transactions contemplated by this
Agreement.

         12.14 Expenses. Each of the parties to this Agreement shall pay its own
costs and expenses incurred in connection with this Agreement and the
consummation of the transactions contemplated hereby.

         12.15 Construction. In the event an ambiguity or question or intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party hereto by virtue of the authorship of any of the
provisions of this Agreement.

         12.16 Specific Performance. Each of the parties hereto acknowledges and
agrees that the other parties hereto would suffer irreparable damage for which
an adequate remedy at law would not be available in the event any of the
provisions of this Agreement is not performed in accordance with its specific
terms or otherwise is breached. Accordingly, each of the parties hereto agrees
that the non-breaching parties shall be entitled to an injunction, restraining
order or other form of equitable relief from any court of competent jurisdiction
to prevent breaches of, and to specifically enforce, the provisions of this
Agreement.

                                   * * * * *

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         IN WITNESS WHEREOF, this Security Agreement has been executed and
delivered by or on behalf of the parties hereto, effective as of the date first
above written.

                                 DEBTOR:

                                 POWERSPRING, INC.

                                 By /s/ W. Phillip Marcum
                                   -------------------------------------
                                    W. Phillip Marcum, President

                                 SECURED PARTY:

                                 /s/ John A. Harpole
                                 ---------------------------------------
                                 John A. Harpole

                                       9<PAGE>   1
                                                                   EXHIBIT 10.21

                            INDEMNIFICATION AGREEMENT
                            -------------------------

         This Agreement is made as of this ___ day of _________ ("Agreement"),
by and between Metretek Technologies, Inc., a Delaware corporation (the
"Company," which term shall include, where appropriate, any Entity (as
hereinafter defined) controlled directly or indirectly by the Company), and
______________ ("Indemnitee").

         WHEREAS, it is essential to the Company that it be able to retain and
attract as directors the most capable persons available;

         WHEREAS, increased corporate litigation has subjected directors to
litigation risks and expenses, and the limitations on the availability of
directors and officers liability insurance have made it increasingly difficult
for the Company to attract and retain such persons;

         WHEREAS, the Company's Restated Certificate of Incorporation and
Amended and Restated By-laws permit it to indemnify its directors to the fullest
extent permitted by law and permit it to make other indemnification arrangements
and agreements;

         WHEREAS, the Company desires to provide Indemnitee with specific
contractual assurance of Indemnitee's rights to full indemnification against
litigation risks and expenses (regardless of, among other things, any amendment
to or revocation of such Certificate of Incorporation or By-laws or any change
in the ownership of the Company or the composition of its Board of Directors);
and

         WHEREAS, Indemnitee is relying upon the rights afforded under this
Agreement in becoming a director of the Company.

         NOW, THEREFORE, in consideration of the promises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and agree as
follows:

         1. Definitions.

                  (a) "Corporate Status" describes the status of a person who is
         serving or has served (i) as a director of the Company, (ii) in any
         capacity with respect to any employee benefit plan of the Company, or
         (iii) as a director, partner, trustee, officer, employee or agent of
         any other Entity at the request of the Company. For purposes of
         subsection (iii) of this Section l (a), an officer or director of the
         Company who is serving or has served as a director, partner, trustee,
         officer, employee or agent of a Subsidiary shall be deemed to be
         serving at the request of the Company.

                  (b) "Entity" shall mean any corporation, partnership, Limited
         Liability Company, joint venture, trust, foundation, association,
         organization or other legal entity.

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                  (c) "Expenses" shall mean all fees, costs and expenses
         incurred by Indemnitee in connection with any Proceeding (as defined
         below), including, without limitation, attorneys' fees, disbursements
         and retainers (including, without limitation, any such fees,
         disbursements and retainers incurred by Indemnitee pursuant to Sections
         10 and I l(c) of this Agreement), fees and disbursements of expert
         witnesses, private investigators and professional advisors (including,
         without limitation, accountants and investment bankers), court costs,
         transcript costs, fees of experts, travel expenses, duplicating,
         printing and binding costs, telephone and fax transmission charges,
         postage, delivery services, secretarial services, and other
         disbursements and expenses.

                  (d) "Indemnifiable Expenses," "Indemnifiable Liabilities" and
         "Indemnifiable Amounts" shall have the meanings ascribed to those terms
         in Section 3(a) below.

                  (e) "Liabilities" shall mean judgments, damages, liabilities,
         losses, penalties, excise taxes, fines and amounts paid in settlement.

                  (f) "Proceeding" shall mean any threatened, pending or
         completed claim, action, suit, arbitration, alternate dispute
         resolution process, investigation, administrative hearing, appeal, or
         any other proceeding, whether civil, criminal, administrative,
         arbitrative or investigative, whether formal or informal, including a
         proceeding initiated by Indemnitee pursuant to Section 10 of this
         Agreement to enforce Indemnitee's rights hereunder.

                  (g) "Subsidiary" shall mean any corporation, partnership,
         limited liability company, joint venture, trust or other Entity of
         which the Company owns (either directly or through or together with
         another Subsidiary of the Company) either (i) a general partner,
         managing member or other similar interest or (ii) (A) 50% or more of
         the voting power of the voting capital equity interests of such
         corporation, partnership, limited liability company, joint venture or
         other Entity, or (B) 50% or more of the outstanding voting capital
         stock or other voting equity interests of such corporation,
         partnership, limited liability company, joint venture or other Entity.

         2. Services of Indemnitee. In consideration of the Company's covenants
and commitments hereunder, Indemnitee agrees to serve or continue to serve as a
director of the Company. However, this Agreement shall not impose any obligation
on Indemnitee or the Company to continue Indemnitee's service to the Company
beyond any period otherwise required by law or by other agreements or
commitments of the parties, if any.

         3. Agreement to Indemnify. The Company agrees to indemnify Indemnitee
as follows:

                  (a) Subject to the exceptions contained in Section 4(a) below,
         if Indemnitee was or is a party or is threatened to be made a party to
         any Proceeding (other than an action by or in the right of the Company)
         by reason of Indemnitee's Corporate Status, Indemnitee shall be
         indemnified by the Company against all Expenses and Liabilities
         incurred or paid by Indemnitee in connection with such Proceeding
         (referred to herein as "Indemnifiable Expenses" and "Indemnifiable
         Liabilities," respectively, and collectively as "Indemnifiable
         Amounts").

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                  (b) Subject to the exceptions contained in Section 4(b) below,
         if Indemnitee was or is a party or is threatened to be made a party to
         any Proceeding by or in the right of the Company to procure a judgment
         in its favor by reason of Indemnitee's Corporate Status, Indemnitee
         shall be indemnified by the Company against all Indemnifiable Expenses.

                  (c) Notwithstanding the foregoing, the Company shall not be
         obligated to pay the Indemnitee for Expenses or Liabilities to the
         extent the Company's Officers' and Directors' Insurance Carrier has
         already paid the Indemnitee such amounts pursuant to the Company's
         Officers' and Directors' Liability Insurance Policy.

         4. Exceptions to Indemnification. Indemnitee shall be entitled to
indemnification under Sections 3(a) and 3(b) above in all circumstances other
than the following:

                  (a) If indemnification is requested under Section 3(a) and it
         has been adjudicated finally by a court of competent jurisdiction that,
         in connection with the subject of the Proceeding out of which the claim
         for indemnification has arisen, Indemnitee failed to act (i) in good
         faith and (ii) 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, Indemnitee had reasonable cause to
         believe that Indemnitee's conduct was unlawful, Indemnitee shall not be
         entitled to payment of Indemnifiable Amounts hereunder.

                  (b) If indemnification is requested under Section 3(b) and

                           (i) it has been adjudicated finally by a court of
                  competent jurisdiction that, in connection with the subject of
                  the Proceeding out of which the claim for indemnification has
                  arisen, Indemnitee failed to act (A) in good faith and (B) in
                  a manner Indemnitee reasonably believed to be in or not
                  opposed to the best interests of the Company, Indemnitee shall
                  not be entitled to payment of Indemnifiable Expenses
                  hereunder; or

                           (ii) it has been adjudicated finally by a court of
                  competent jurisdiction that Indemnitee is liable to the
                  Company with respect to any claim, issue or matter involved in
                  the Proceeding out of which the claim for indemnification has
                  arisen, including, without limitation, a claim that Indemnitee
                  received an improper personal benefit, no Indemnifiable
                  Expenses shall be paid with respect to such claim, issue or
                  matter unless the Court of Chancery or another 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 fairly and
                  reasonably entitled to indemnity for such Indemnifiable
                  Expenses which such court shall deem proper.

                  (c) Any other provision herein to the contrary
         notwithstanding, the Company shall not be obligated pursuant to the
         terms of this Agreement:

                           (i) To indemnify or advance Expenses to the
                  Indemnitee with respect to Proceedings initiated or brought
                  voluntarily by the Indemnitee and not by way of defense,
                  EXCEPT with respect to Proceedings specifically authorized by
                  the Board or brought to

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                  establish or enforce a right to indemnification and/or
                  advancement of Expenses arising under this Agreement, the
                  charter or bylaws of the Company or any subsidiary or any
                  statute or otherwise;

                           (ii) To indemnify the Indemnitee hereunder for any
                  amounts paid in settlement of a Proceeding unless the Company
                  consents in advance in writing to such settlement, which
                  consent shall not be unreasonably withheld; or

                           (iii) To indemnify the Indemnitee for Liabilities in
                  connection with a judgment against the Indemnitee on a claim
                  for an accounting of profits made from the purchase or sale by
                  the Indemnitee of securities of the Company pursuant to the
                  provisions of Section 16(b) of the Securities Exchange Act of
                  1934, as amended.

         5. Procedure for Payment of Indemnifiable Amounts. Indemnitee shall
submit to the Company a written request specifying the Indemnifiable Amounts for
which Indemnitee seeks payment under Section 3 of this Agreement and the basis
for the claim. The Company shall pay such Indemnifiable Amounts to Indemnitee
within twenty (20) calendar days of receipt of the request. At the request of
the Company, Indemnitee shall furnish such documentation and information as are
reasonably available to Indemnitee and necessary to establish that Indemnitee is
entitled to indemnification hereunder.

         6. Indemnification for Expenses of a Party Who is Wholly or Partly
Successful. Notwithstanding any other provision of this Agreement, and without
limiting any such provision, to the extent that Indemnitee is, by reason of
Indemnitee's Corporate Status, a party to and is successful, on the merits or
otherwise, in any Proceeding, Indemnitee shall be indemnified against all
Expenses reasonably incurred by Indemnitee or on Indemnitee's behalf in
connection therewith. If Indemnitee is not wholly successful in such Proceeding
but is successful, on the merits or otherwise, as to one or more but less than
all claims, issues or matters in such Proceeding, the Company shall indemnify
Indemnitee against all Expenses reasonably incurred by Indemnitee or on
Indemnitee's behalf in connection with each successfully resolved claim, issue
or matter. For purposes of this Agreement, the termination of any claim, issue
or matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.

         7. Effect of Certain Resolutions. Neither the settlement or termination
of any Proceeding nor the failure of the Company to award indemnification or to
determine that indemnification is payable shall create an adverse presumption
that Indemnitee is not entitled to indemnification hereunder. In addition, the
termination of any proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent shall not 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 action or proceeding, had reasonable cause to
believe that Indemnitee's action was unlawful.

         8. Agreement to Advance Expenses; Conditions. The Company shall pay to
Indemnitee all Indemnifiable Expenses incurred by Indemnitee in connection with
any Proceeding, including a Proceeding by or in the right of the Company, in
advance of the final

                                       4
<PAGE>   5
disposition of such Proceeding. To the extent required by Delaware law,
Indemnitee hereby undertakes to repay the amount of Indemnifiable Expenses paid
to Indemnitee if it is finally determined by a court of competent jurisdiction
that Indemnitee is not entitled under this Agreement to indemnification with
respect to such Expenses. This undertaking is an unlimited general obligation of
Indemnitee.

         9. Procedure for Advance Payment of Expenses. Indemnitee shall submit
to the Company a written request specifying the Indemnifiable Expenses for which
Indemnitee seeks an advancement under Section 8 of this Agreement, together with
documentation evidencing that Indemnitee has incurred such Indemnifiable
Expenses. Payment of Indemnifiable Expenses under Section 8 shall be made no
later than twenty (20) calendar days after the Company's receipt of such
request.

         10. Remedies of Indemnitee.

                  (a) Right to Petition Court. In the event that Indemnitee
         makes a request for payment of Indemnifiable Amounts under Sections 3
         and 5 above or a request for an advancement of Indemnifiable Expenses
         under Sections 8 and 9 above and the Company fails to make such payment
         or advancement in a timely manner pursuant to the terms of this
         Agreement, Indemnitee may petition the Court of Chancery to enforce the
         Company's obligations under this Agreement.

                  (b) Burden of Proof. In any judicial proceeding brought under
         Section 10(a) above, the Company shall have the burden of proving that
         Indemnitee is not entitled to payment of Indemnifiable Amounts
         hereunder.

                  (c) Expenses. The Company agrees to reimburse Indemnitee in
         full for any Expenses incurred by Indemnitee in connection with
         investigating, preparing for, litigating, defending or settling any
         action brought by Indemnitee under Section 10(a) above, or in
         connection with any claim or counterclaim brought by the Company in
         connection therewith.

                  (d) Validity of Agreement. The Company shall be precluded from
         asserting in any Proceeding, including, without limitation, an action
         under Section 10(a) above, that the provisions of this Agreement are
         not valid, binding and enforceable or that there is insufficient
         consideration for this Agreement and shall stipulate in court that the
         Company is bound by all the provisions of this Agreement.

                  (e) Failure to Act Not a Defense. The failure of the Company
         (including its Board of Directors or any committee thereof, independent
         legal counsel or stockholders) to make a determination concerning the
         permissibility of the payment of Indemnifiable Amounts or the
         advancement of Indemnifiable Expenses under this Agreement shall not be
         a defense in any action brought under Section 10(a) above, and shall
         not create a presumption that such payment or advancement is not
         permissible.

         11. Defense of the Underlying Proceeding.

                                       5
<PAGE>   6
                  (a) Notice by Indemnitee. Indemnitee agrees to notify the
         Company promptly upon being served with any summons, citation,
         subpoena, complaint, indictment, information, or other document
         relating to any Proceeding which may result in the payment of
         Indemnifiable Amounts or the advancement of Indemnifiable Expenses
         hereunder; provide, however, that the failure to give any such notice
         shall not disqualify Indemnitee from the right to receive payments of
         Indemnifiable Amounts or advancements of Indemnifiable Expenses unless
         the Company's ability to defend in such Proceeding is materially and
         adversely prejudiced thereby.

                  (b) Defense by Company. Subject to the provisions of the last
         sentence of this Section 11 (b) and of Section 11 (c) below, the
         Company shall have the right to defend Indemnitee in any Proceeding
         which may give rise to the payment of Indemnifiable Amounts hereunder;
         provided, however that the Company shall notify Indemnitee of any such
         decision to defend within ten (10) days of receipt of notice of any
         such Proceeding under Section 11 (a) above. The Company shall not,
         without the prior written consent of Indemnitee, consent to the entry
         of any judgment against Indemnitee or enter into any settlement or
         compromise which (i) includes an admission of fault of Indemnitee or
         (ii) does not include, as an unconditional term thereof, the full
         release of Indemnitee from all liability in respect of such Proceeding,
         which release shall be in form and substance reasonably satisfactory to
         Indemnitee. This Section 1l(b) shall not apply to a Proceeding brought
         by Indemnitee under Section 10(a) above or pursuant to Section 19
         below.

                  (c) Indemnitee's Right to Counsel. Notwithstanding the
         provisions of Section 11 (b) above, if in a Proceeding to which
         Indemnitee is a party by reason of Indemnitee's Corporate Status,
         Indemnitee reasonably concludes that it may have separate defenses or
         counterclaims to assert with respect to any issue which may not be
         consistent with the position of other defendants in such Proceeding, or
         if the Company fails to assume the defense of such proceeding in a
         timely manner, Indemnitee shall be entitled to be represented by
         separate legal counsel of Indemnitee's choice at the expense of the
         Company. In addition, if the Company fails to comply with any of its
         obligations under this Agreement or in the event that the Company or
         any other person takes any action to declare this Agreement void or
         unenforceable, or institutes any action, suit or proceeding to deny or
         to recover from Indemnitee the benefits intended to be provided to
         Indemnitee hereunder, Indemnitee shall have the right to retain counsel
         of Indemnitee's choice, at the expense of the Company, to represent
         Indemnitee in connection with any such matter.

         12. Representations and Warranties of the Company. The Company hereby
represents and warrants to Indemnitee as follows:

                  (a) Authority. The Company has all necessary power and
         authority to enter into, and be bound by the terms of, this Agreement,
         and the execution, delivery and performance of the undertakings
         contemplated by this Agreement have been duly authorized by the
         Company.

                  (b) Enforceability. This Agreement, when executed and
         delivered by the Company in accordance with the provisions hereof,
         shall be a legal, valid and binding obligation of the Company,
         enforceable against the Company in accordance with its terms, except as
         such

                                       6
<PAGE>   7
         enforceability may be limited by applicable bankruptcy, insolvency,
         moratorium, reorganization or similar laws affecting the enforcement of
         creditors' rights generally.

         13. Insurance. The Company shall, from time to time, make the good
faith determination whether or not it is practicable for the Company to obtain
and maintain a policy or policies of insurance with a reputable insurance
company providing Indemnitee with coverage for losses from wrongful acts, and to
ensure the Company's performance of its indemnification obligations under this
Agreement. Among other considerations, the Company will weigh the costs of
obtaining such insurance coverage against the protection afforded by such
coverage. In all policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's officers and directors. Notwithstanding the foregoing,
the Company shall have no obligation to obtain or maintain such insurance if the
Company determines in good faith that such insurance is not reasonably
available, if the premium costs for such insurance are disproportionate to the
amount of coverage provided, or if the coverage provided by such insurance is
limited by exclusions so as to provide an insufficient benefit. The Company
shall promptly notify Indemnitee of any good faith determination not to provide
such coverage.

         14. Contract Rights Not Exclusive. The rights to payment of
Indemnifiable Amounts and advancement of Indemnifiable Expenses provided by this
Agreement shall be in addition to, but not exclusive of, any other rights which
Indemnitee may have at any time under applicable law, the Company's By-laws or
Certificate of Incorporation, or any other agreement, vote of stockholders or
directors (or a committee of directors), or otherwise, both as to action in
Indemnitee's official capacity and as to action in any other capacity as a
result of Indemnitee's serving as a director of the Company.

         15. Successors. This Agreement shall be (a) binding upon all successors
and assigns of the Company (including any transferee of all or a substantial
portion of the business, stock and/or assets of the Company and any direct or
indirect successor by merger or consolidation or otherwise by operation of law)
and (b) binding on and shall inure to the benefit of the heirs, personal
representatives, executors and administrators of Indemnitee. This Agreement
shall continue for the benefit of Indemnitee and such heirs, personal
representatives, executors and administrators after Indemnitee has ceased to
have Corporate Status.

         16. Subrogation. In the event of any payment of Indemnifiable Amounts
under this Agreement, the Company shall be subrogated to the extent of such
payment to all of the rights of contribution or recovery of Indemnitee against
other persons, and Indemnitee shall take, at the request of the Company, all
reasonable action necessary to secure such rights, including the execution of
such documents as are necessary to enable the Company to bring suit to enforce
such rights.

         17. Change in Law. To the extent that a change in Delaware law (whether
by statute or judicial decision) shall permit broader indemnification or
advancement of expenses than is provided under the terms of the By-laws of the
Company and this Agreement, Indemnitee shall

                                       7
<PAGE>   8
be entitled to such broader indemnification and advancements, and this Agreement
shall be deemed to be amended to such extent.

         18. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement, or any clause thereof,
shall be determined by a court of competent jurisdiction to be illegal, invalid
or unenforceable, in whole or in part, such provision or clause shall be limited
or modified in its application to the minimum extent necessary to make such
provision or clause valid, legal and enforceable, and the remaining provisions
and clauses of this Agreement shall remain fully enforceable and binding on the
parties.

         19. Indemnitee as Plaintiff. Except as provided in Section 10(c) of
this Agreement and in the next sentence, Indemnitee shall not be entitled to
payment of Indemnifiable Amounts or advancement of Indemnifiable Expenses with
respect to any Proceeding brought by Indemnitee against the Company, any Entity
which it controls, any director or officer thereof, or any third party, unless
such Company has consented to the initiation of such Proceeding. This Section
shall not apply to counterclaims or affirmative defenses asserted by Indemnitee
in an action brought against Indemnitee.

         20. Modifications and Waiver. Except as provided in Section 17 above
with respect to changes in Delaware law which broaden the right of Indemnitee to
be indemnified by the Company, no supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by each of the parties
hereto. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions of this Agreement (whether or
not similar), nor shall such waiver constitute a continuing waiver.

         21. General Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given (a) when delivered by hand, (b) when transmitted by facsimile and
receipt is acknowledged, or (c) if mailed by certified or registered mail with
postage prepaid, on the third business day after the date on which it is so
mailed:

                  (i)      If to Indemnitee, to:

                           [                              ]

                  (ii)     If to the Company, to:

                           Metretek Technologies, Inc.
                           [Address]

or to such other address as may have been furnished in the same manner by any
party to the others.

                                       8
<PAGE>   9
         22. Governing Law. This Agreement shall be governed by and construed
and enforced under the laws of Delaware without giving effect to the provisions
thereof relating to conflicts of law.

         23. Consent to Jurisdiction. The Company hereby irrevocably and
unconditionally consents to the jurisdiction of the courts of the State of
Delaware and the United States District Court for the District of Delaware. The
Company hereby irrevocably and unconditionally waives any objection to the
laying of venue of any Proceeding arising out of or relating to this Agreement
in the courts of the State of Delaware or the United States District Court for
the District of Delaware, and hereby irrevocably and unconditionally waives and
agrees not to plead or claim that any such Proceeding brought in any such court
has been brought in an inconvenient forum.

                  [Remainder of Page Intentionally Left Blank]

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

                                   METRETEK TECHNOLOGIES, INC.

                                   By:
                                      ------------------------------------
                                      Name and Title

                                   INDEMNITEE:

                                   ---------------------------------------
                                   [                                  ]

                                       9

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