Exhibit 10.3

FORM OF DIRECTOR INDEMNIFICATION AGREEMENT

This Indemnification Agreement (the “Agreement”) is made as of             ,
20    , by and between LEGEND OIL AND GAS, LTD., a Colorado corporation (the
“Company”), and [            ] (“Indemnitee”).

The Company desires to attract and retain the services of highly qualified
individuals, such as Indemnitee, to serve the Company’s Board of Directors and
to indemnify its directors, officers and key employees so as to provide them
with the maximum protection permitted by law. The Company and Indemnitee
recognize the increasing difficulty in obtaining liability insurance for
directors, officers and key employees, the significant increases in the cost of
such insurance and the general reductions in the coverage of such insurance. The
Company and Indemnitee further recognize the substantial increase in corporate
litigation in general, subjecting directors, officers and key employees to
expensive litigation risks at the same time as the availability and coverage of
liability insurance has been severely limited. In order to induce Indemnitee to
provide services to the Company, the Company wishes to provide for the
indemnification of, and the advancement of expenses to, Indemnitee to the
maximum extent permitted by Colorado law.

NOW, THEREFORE, the Company and Indemnitee hereby agree as set forth below:

1. Indemnification.

(a) Third Party Proceedings. The Company shall indemnify Indemnitee if
Indemnitee is or was a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Company) by reason of the fact that Indemnitee is or was a
director, officer, employee or agent of the Company, or any subsidiary of the
Company, by reason of any action or inaction on the part of Indemnitee while an
officer or director or by reason of the fact that Indemnitee is or was serving
at the request of the Company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys’ fees), judgments, fines and amounts paid
in settlement (if such settlement is approved in advance by the Company, which
approval shall not be unreasonably withheld) actually and reasonably incurred by
Indemnitee in connection with such action, suit or proceeding if Indemnitee
acted in good faith and in a manner Indemnitee reasonably believed to be in or
not opposed to the best interests of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, 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, that Indemnitee had reasonable cause to believe
that Indemnitee’s conduct was unlawful.

(b) Proceedings By or in the Right of the Company. The Company shall indemnify
Indemnitee if Indemnitee was or is a party or is threatened to be made a party
to any threatened, pending or completed action or proceeding by or in the right
of the Company or any subsidiary of the Company to procure a judgment in its
favor by reason of the fact that Indemnitee is or was a director, officer,
employee or agent of the Company, or any subsidiary of the Company, by reason of
any action or inaction on the part of Indemnitee while an officer or director or
by reason of the fact that Indemnitee is or was serving at the request of the
Company as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys’ fees) and, to the fullest extent permitted by law, amounts
paid in settlement (if such settlement is approved in advance by the Company,
which approval shall not be unreasonably withheld), in each case to the extent
actually and reasonably incurred by Indemnitee in connection with the defense or
settlement of such action or suit if Indemnitee acted in good faith and in a
manner Indemnitee reasonably believed to be in or not opposed to the best
interests of the Company and its stockholders, except that no indemnification
shall be made in respect of any claim, issue or matter as to which Indemnitee
shall have been finally adjudicated by court order or judgment to be liable to
the Company in the performance of Indemnitee’s duty to the Company and its
stockholders unless and only to the extent that the court in which such action
or proceeding is or was pending shall determine upon application that, in view
of all the circumstances of the case, Indemnitee is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.

 

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(c) Mandatory Payment of Expenses. To the extent that Indemnitee has been
successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 1(a) or Section 1(b) or the defense of any
claim, issue or matter therein, Indemnitee shall be indemnified against expenses
(including attorneys’ fees) actually and reasonably incurred by Indemnitee in
connection therewith.

2. No Employment Rights. Nothing contained in this Agreement is intended to
create in Indemnitee any right to continued employment or to continued service
on the Board of Directors.

3. Expenses; Indemnification Procedure. It is the intent of this Agreement to
secure for Indemnitee rights of indemnity that are as favorable as may be
permitted under the law and public policy of the state of Colorado. Accordingly,
the parties agree that the following procedures and presumptions shall apply in
the event of any question as to whether Indemnitee is entitled to
indemnification under this Agreement:

(a) Advancement of Expenses. The Company shall advance all expenses reasonably
and necessarily incurred by Indemnitee in connection with the investigation,
defense, settlement or appeal of any civil or criminal action, suit or
proceeding referred to in Section l(a) or Section 1(b) hereof (including amounts
actually paid in settlement of any such action, suit or proceeding) within 30
days after the receipt by the Company of a statement from Indemnitee requesting
such advance or advances from time to time, whether prior to or after final
disposition of such Proceeding. Such statement requesting such advance must
evidence to the Company’s reasonable satisfaction all Expenses incurred by
Indemnitee and shall include an affidavit of Indemnitee’s counsel attesting that
all Expenses sought to be advanced were reasonably and necessarily incurred by
Indemnity, and shall also include or be preceded or accompanied by an
undertaking by or on behalf of Indemnitee to promptly repay any Expenses
advanced if it shall ultimately be determined that Indemnitee is not entitled to
be indemnified against such Expenses, and further undertaking to promptly repay
any Expenses advanced but found not to have been reasonably and necessarily
incurred. Notwithstanding the foregoing, the Company shall not be obligated to
advance any expenses to Indemnitee arising from a lawsuit filed directly by the
Company against Indemnitee if a majority of the disinterested members of the
Board of Directors reasonably determines in good faith, within 30 days of
Indemnitee’s request to be advance expenses, that the facts known to them at the
time such determination is made demonstrate clearly and convincingly that
Indemnitee acted in bad faith after Indemnitee has had an opportunity, with
counsel, to present his case to the Board of Directors; provided, however, that
the Company may not avail itself of this clause if, at any time after the
occurrence of the activities or omissions that are the primary focus of the
lawsuit, the Company has undergone a Change in Control. If such a determination
is made, Indemnitee may have such decision reviewed by a court of competent
jurisdiction, and the burden of proof shall be on the Company to demonstrate
that, based on the facts known at the time, Indemnitee acted in bad faith.

(b) Notice/Cooperation by Indemnitee. Indemnitee shall promptly notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification covered hereunder. Indemnitee
shall, as a condition precedent to his or her right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company and shall be given in accordance with the
provisions of Section 12(d) below. In addition, Indemnitee shall give the
Company such information and cooperation as it may reasonably require and as
shall be within Indemnitee’s power.

(c) Procedure. Any indemnification and advances provided for in Section 1 and
this Section 3 shall be made no later than 30 days after receipt of the written
request of Indemnitee. If a claim under this Agreement, under any statute, or
under any provision of the Company’s Articles of Incorporation or Bylaws
providing for indemnification, is not paid in full by the Company within 30 days
after a written request for payment thereof has first been received by the
Company, Indemnitee may, but need not, at any time thereafter bring an action
against the Company to recover the unpaid amount of the claim and, subject to
Section 11 of this Agreement, Indemnitee shall also be entitled to be paid for
the expenses (including attorneys’ fees) of bringing such action. It shall be a
defense to any such action (other than an action brought to enforce a claim for
expenses incurred in

 

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connection with any action, suit or proceeding in advance of its final
disposition) that Indemnitee has not met the standards of conduct which make it
permissible under applicable law for the Company to indemnify Indemnitee for the
amount claimed, but the burden of proving such defense shall be on the Company
and Indemnitee shall be entitled to receive interim payments of expenses
pursuant to Section 3(a) unless and until such defense may be finally
adjudicated by court order or judgment from which no further right of appeal
exists. It is the parties’ intention that if the Company contests Indemnitee’s
right to indemnification, the question of Indemnitee’s right to indemnification
shall be for the court to decide, and neither the failure of the Company
(including its Board of Directors, any committee or subgroup of the Board of
Directors, independent legal counsel, or its stockholders) to have made a
determination that indemnification of Indemnitee is proper in the circumstances
because Indemnitee has met the applicable standard of conduct required by
applicable law, nor an actual determination by the Company (including its Board
of Directors, any committee or subgroup of the Board of Directors, independent
legal counsel, or its stockholders) that Indemnitee has not met such applicable
standard of conduct, shall create a presumption that Indemnitee has or has not
met the applicable standard of conduct.

(d) Notice to Insurers. If, at the time of the receipt of a notice of a claim
pursuant to Section 3(b) hereof, the Company has director and officer liability
insurance in effect, the Company shall give prompt notice of the commencement of
such proceeding to the insurers in accordance with the procedures set forth in
the respective policies. The Company shall thereafter take all necessary or
desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of
such policies.

(e) Selection of Counsel. In the event the Company shall be obligated under
Section 3(a) hereof to pay the expenses of any proceeding against Indemnitee,
the Company, if appropriate, shall be entitled to assume the defense of such
proceeding, with counsel selected by the Company (and reasonably acceptable to
Indemnitee), upon the delivery to Indemnitee of written notice of its election
so to do. After delivery of such notice, approval of such counsel by Indemnitee
and the retention of such counsel by the Company, the Company will not be liable
to Indemnitee under this Agreement for any fees of counsel subsequently incurred
by Indemnitee with respect to the same proceeding, provided that (i) Indemnitee
shall have the right to employ counsel in any such proceeding at Indemnitee’s
expense; and (ii) if (A) the employment of counsel by Indemnitee has been
previously authorized by the Company, (B) Indemnitee shall have reasonably
concluded that there may be a conflict of interest between the Company and
Indemnitee in the conduct of any such defense or (C) the Company shall not, in
fact, have employed counsel to assume the defense of such proceeding, then the
fees and expenses of Indemnitee’s counsel shall be at the expense of the
Company.

4. Additional Indemnification Rights; Nonexclusivity.

(a) Scope. Notwithstanding any other provision of this Agreement, the Company
hereby agrees to indemnify the Indemnitee to the fullest extent permitted by
law, notwithstanding that such indemnification is not specifically authorized by
the other provisions of this Agreement, the Company’s Articles of Incorporation,
the Company’s Bylaws or by statute. In the event of any change, after the date
of this Agreement, in any applicable law, statute, or rule which expands the
right of a Colorado corporation to indemnify a member of its board of directors
or an officer, such changes shall be deemed to be within the purview of
Indemnitee’s rights and the Company’s obligations under this Agreement. In the
event of any change in any applicable law, statute or rule which narrows the
right of a Colorado corporation to indemnify a member of its board of directors
or an officer, such changes, to the extent not otherwise required by such law,
statute or rule to be applied to this Agreement shall have no effect on this
Agreement or the parties’ rights and obligations hereunder.

(b) Nonexclusivity. The indemnification provided by this Agreement shall not be
deemed exclusive of any rights to which Indemnitee may be entitled under the
Company’s Articles of Incorporation, its Bylaws, any agreement, any vote of
stockholders or disinterested members of the Company’s Board of Directors, the
Colorado Business Corporation Act, or otherwise, both as to action in
Indemnitee’s official capacity and as to action in another capacity while
holding such office. The indemnification provided under this Agreement shall
continue as to Indemnitee for any action taken or not taken while serving in an
indemnified capacity even though he or she may have ceased to serve in any such
capacity at the time of any action, suit or other covered proceeding.

 

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5. Partial Indemnification. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
expenses, judgments, fines or penalties actually or reasonably incurred in the
investigation, defense, appeal or settlement of any civil or criminal action,
suit or proceeding, but not, however, for the total amount thereof, the Company
shall nevertheless indemnify Indemnitee for the portion of such expenses,
judgments, fines or penalties to which Indemnitee is entitled.

6. Mutual Acknowledgment. Both the Company and Indemnitee acknowledge that in
certain instances, Federal law or public policy may override applicable state
law and prohibit the Company from indemnifying its directors and officers under
this Agreement or otherwise. For example, the Company and Indemnitee acknowledge
that the Securities and Exchange Commission has taken the position that
indemnification is not permissible for liabilities arising under certain federal
securities laws, and federal legislation prohibits indemnification for certain
ERISA violations. Indemnitee understands and acknowledges that the Company has
undertaken or may be required in the future to undertake with the SEC to submit
the question of indemnification to a court in certain circumstances for a
determination of the Company’s right under public policy to indemnify
Indemnitee.

7. Officer and Director Liability Insurance.

(a) 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 reputable insurance companies providing the
officers and directors of the Company with coverage for losses from wrongful
acts, or 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. The Company shall have no obligation to obtain or maintain any
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.

(b) With respect to any policy or policies of director’s liability insurance
procured by the Company, in its discretion, for the benefit of its officers and
directors, Indemnitee shall be provided insurance coverage no less favorable
than that provided to similarly situated officers and/or directors, as the case
may be. In all such policies of director and officer liability insurance,
Indemnitee shall be named as an insured in such a manner as to provide
Indemnitee at least the same rights and benefits as are accorded similarly
situated officers or directors, as the case may be.

8. Severability. Nothing in this Agreement is intended to require or shall be
construed as requiring the Company to do or fail to do any act in violation of
applicable law. The Company’s inability, pursuant to court order, to perform its
obligations under this Agreement shall not constitute a breach of this
Agreement. The provisions of this Agreement shall be severable as provided in
this Section 8. If this Agreement or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify Indemnitee to the full extent permitted by any applicable
portion of this Agreement that shall not have been invalidated, and the balance
of this Agreement not so invalidated shall be enforceable in accordance with its
terms.

9. Exceptions. Any other provision herein to the contrary notwithstanding, the
Company shall not be obligated pursuant to the terms of this Agreement:

(a) Claims Initiated by Indemnitee. To indemnify or advance expenses to
Indemnitee with respect to proceedings or claims initiated or brought
voluntarily by Indemnitee, whether by way of claim, counterclaim, crossclaim, or
any similar means of asserting a claim, except (i) with respect to actions or
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Articles
of Incorporation or Bylaws, now or hereafter in effect, (ii) in specific cases
if the Board of Directors has approved the initiation or bringing of such claim
or (iii) as otherwise required under applicable law, regardless of whether
Indemnitee ultimately is determined to be entitled to such indemnification or
insurance recovery, as the case may be;

 

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(b) Lack of Good Faith. To indemnify Indemnitee for any expenses incurred by
Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or
interpret this Agreement, if a court of competent jurisdiction determines that
each of the material assertions made by Indemnitee in such proceeding was not
made in good faith or was frivolous;

(c) Insured Claims. To indemnify Indemnitee for expenses or liabilities of any
type whatsoever (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) to the extent such expenses
or liabilities have been paid directly to Indemnitee by an insurance carrier
under a policy of officers’ and directors’ liability insurance maintained by the
Company, and in the event the Company makes any indemnification payments to
Indemnitee and Indemnitee is subsequently reimbursed from the proceeds of
insurance, Indemnitee shall promptly refund such indemnification payments to the
Company to the extent of such insurance reimbursement.

(d) Excluded Action or Omissions. To indemnify Indemnitee for expenses resulting
from acts, omissions or transactions for which Indemnitee is prohibited from
receiving indemnification under this Agreement, the Articles of Incorporation,
the Bylaws, or applicable law; or

(d) Claims under Section 16(b). To indemnify Indemnitee for expenses or the
payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

10. Construction of Certain Phrases.

(a) For purposes of this Agreement, references to the “Company” shall include,
in addition to the resulting corporation, any constituent corporation absorbed
in a consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers, and
employees or agents, so that if Indemnitee is or was a director, officer,
employee or agent of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, Indemnitee shall stand in the same position under the provisions of
this Agreement with respect to the resulting or surviving corporation as
Indemnitee would have with respect to such constituent corporation if its
separate existence had continued.

(b) For purposes of this Agreement, references to “other enterprises” shall
include employee benefit plans; references to “fines” shall include any excise
taxes assessed on Indemnitee with respect to an employee benefit plan; and
references to “serving at the request of the Company” shall include any service
as a director, officer, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, employee or agent with
respect to an employee benefit plan, its participants, or beneficiaries; and if
Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the
best interests of the Company” as referred to in this Agreement.

(c) The term “Change in Control” shall be deemed to occur upon the earliest to
occur after the date of this Agreement of any of the following events:

(i) any Person or Group becomes the “beneficial owner” (each as defined in Rules
13d-3 and 13d-5 under the Securities Exchange Act of 1934, as amended), directly
or indirectly, of 35% or more of any equity securities of the Company that vote
generally in the election of directors on a fully-diluted basis;

(ii) during any period of 24 consecutive months, a majority of the members of
the Board of Directors or other equivalent governing body of the Company cease
to be composed of individuals (1) who were members of that Board of Directors or
equivalent governing body on the first day of such period, (2) whose election or
nomination to that Board of Directors or equivalent governing body was approved
by individuals referred to in clause (1) above constituting at the time of such
election or nomination at least a majority of that Board of Directors or
equivalent governing body, or (3) whose

 

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election or nomination to that Board of Directors or other equivalent governing
body was approved by individuals referred to in clauses (1) and (2) above
constituting at the time of such election or nomination at least a majority of
that Board of Directors or equivalent governing body (excluding, in the case of
both clause (2) and clause (3), any individual whose initial nomination for, or
assumption of office as, a member of that Board of Directors or equivalent
governing body occurs as a result of an actual or threatened solicitation of
proxies or consents for the election or removal of one or more directors by any
person or group other than a solicitation for the election of one or more
directors by or on behalf of the Board of Directors); or

(iii) any Person or two or more Persons acting in concert shall have acquired,
by contract or otherwise, control over the Voting Securities (and taking into
account all such Voting Securities that such Person or Persons has the right to
acquire pursuant to any option right) representing 51% or more of the combined
voting power of such Voting Securities; or

(iv) the Company sells or transfers (other than by mortgage or pledge) all or
substantially all of its properties and assets to another Person or Group.

11. Attorneys’ Fees. In the event that any action is instituted by Indemnitee
under this Agreement to enforce or interpret any of the terms hereof, Indemnitee
shall be entitled to be paid all court costs and expenses, including reasonable
attorneys’ fees, incurred by Indemnitee with respect to such action, unless as a
part of such action, the court of competent jurisdiction determines that each of
the material assertions made by Indemnitee as a basis for such action were not
made in good faith or were frivolous. In the event of an action instituted by or
in the name of the Company under this Agreement or to enforce or interpret any
of the terms of this Agreement, Indemnitee shall be entitled to be paid all
court costs and expenses, including attorneys’ fees, incurred by Indemnitee in
defense of such action (including with respect to Indemnitee’s counterclaims and
cross-claims made in such action), unless as a part of such action the court
determines that each of Indemnitee’s material defenses to such action were made
in bad faith or were frivolous.

12. Miscellaneous.

(a) Entire Agreement; Modification and Waiver. This Agreement constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.
No supplement, modification, termination or amendment of this Agreement shall be
binding unless executed in writing by 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 hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

(b) Construction. This Agreement is the result of negotiations between and has
been reviewed by each of the parties hereto and their respective counsel, if
any; accordingly, this Agreement shall be deemed to be the product of all of the
parties hereto, and no ambiguity shall be construed in favor of or against any
one of the parties hereto.

(c) Notices. Any notice, demand or request required or permitted to be given
under this Agreement shall be in writing and shall be deemed sufficient when
delivered personally or sent by fax or 48 hours after being sent by
nationally-recognized courier or deposited in the U.S. mail, as certified or
registered mail, with postage prepaid, and addressed to the party to be notified
at such party’s address or fax number as set forth below or as subsequently
modified by written notice.

(d) Counterparts. This Agreement may be executed in two or more counterparts,
including by facsimile or electronic signature, each of which shall be deemed an
original and all of which together shall constitute one instrument.

 

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(e) Successors and Assigns. This Agreement shall be binding upon the Company and
its successors and assigns, and inure to the benefit of Indemnitee and
Indemnitee’s heirs, legal representatives and assigns.

(f) Subrogation. In the event of payment under this Agreement, the Company shall
be subrogated to the extent of such payment to all of the rights of recovery of
Indemnitee, who shall execute all documents required and shall do all acts that
may be necessary to secure such rights and to enable the Company to effectively
bring suit to enforce such rights.

(g) Governing Law. This Agreement and all acts and transactions pursuant hereto
and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of Colorado,
without giving effect to principles of conflict of law.

The parties hereto have executed this Agreement as of the day and year set forth
on the first page of this Agreement.

 

COMPANY:

      LEGEND OIL AND GAS, LTD.   By:  

 

  Name:     Title:     Address:   1420 5th Avenue, Suite 2200    
              Seattle, Washington 98101

INDEMNITEE:

    

 

    

(Signature)

    

 

    

(Print Name)

    

Address:                                                                  

    

 

 

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