Document:

exv10w32

Exhibit 10.32

CAUSE NO. 2008-52399

	 	 	 	 	 
	QUEST RESOURCE CORPORATION,

	 	§
	 	IN THE DISTRICT COURT OF
	QUEST ENERGY PARTNERS, L.P.,

	 	§	 	 
	AND QUEST MIDSTREAM

	 	§	 	 
	PARTNERS, L.P.,

	 	§	 	 
	 

	 	§	 	 
	                    Plaintiffs,

	 	§	 	 
	 

	 	§	 	 
	v.

	 	§	 	 
	 

	 	§
	 	HARRIS COUNTY, T E X A S
	ROCKPORT ENERGY, LLC,

	 	§	 	 
	ROCKPORT GEORGETOWN

	 	§	 	 
	PARTNERS, LLC, ROCKPORT

	 	§	 	 
	GEORGETOWN LLC, ROCKPORT

	 	§	 	 
	GEORGETOWN HOLDINGS, LP,

	 	§	 	 
	JERRY D. CASH, BRYAN T. SIMMONS

	 	§	 	 
	AND STEVEN HOCHSTEIN,

	 	§	 	 
	 

	 	§	 	 
	                    Defendants.

	 	§
	 	165TH JUDICIAL DISTRICT

FULL AND FINAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE

     THIS FULL AND FINAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE (the “Agreement”) is made as of
the last date signed below, among Quest Resource Corporation; Quest Energy Partners, L.P.; Quest
Midstream Partners, L.P. (collectively, “Quest”); Rockport Energy, LLC; Rockport Georgetown
Partners, LLC; Rockport Georgetown, LLC; Rockport Georgetown Holdings, LP; Jerry D. Cash; Bryan T.
Simmons and Steven Hochstein. (collectively, the “Parties”).

RECITALS:

     WHEREAS, Quest Resource Corporation; Quest Energy Partners, L.P.; and Quest Midstream
Partners, L.P. sued Rockport Energy, LLC; Rockport Georgetown Partners, LLC; Rockport Georgetown,
LLC; Rockport Georgetown Holdings, LP; Jerry D. Cash; Bryan T.

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Simmons and Steve Hochstein in the case styled Quest Resource Corporation, et al. v. Rockport
Energy, LLC, et al.; Cause No. 2008-52399; In the District Court of Harris County, Texas;
165th Judicial District (the “Lawsuit”); and

     WHEREAS, Rockport Energy, LLC, Bryan T. Simmons (“Simmons”), and Steven Hochstein
(“Hochstein”) filed cross-claims against Jerry D. Cash (“Cash”); and

     WHEREAS, Cash did not file an answer to the Lawsuit or to cross-claims; and

     WHEREAS, Quest amended its petition and dropped Rockport Georgetown Partners, LLC; Rockport
Georgetown, LLC; and Rockport Georgetown Holdings, LP as defendants in the Lawsuit; and

     WHEREAS, Rockport Energy, LLC, Bryan T. Simmons and Steven Hochstein deny all liability under
claims asserted by Quest; and

     WHEREAS, there is uncertainty and disagreement concerning the existence and extent of
liability regarding matters at issue in the Lawsuit; and

     WHEREAS, to avoid the expense, inconvenience, and uncertainty of litigation, the Parties wish
to compromise and settle the claims filed in the Lawsuit and the matters in dispute among them with
respect to the Lawsuit; and

     WHEREAS, the Parties do not wish or intend this Agreement to be an admission by any of them
concerning any matter whatsoever; and

     NOW THEREFORE, in consideration of the promises contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:

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     1. Settlement:

	 	a.	 	As to Quest’s Claims against Rockport Energy LLC, Bryan T.
Simmons, Steve Hochstein, and Jerry Cash: Rockport Energy, LLC agrees to
assign, convey, pay or cause to be assigned, conveyed, or paid to Quest and
Quest agrees to accept the following:

	 	1.	 	60% of Rockport Energy, LLC’s
interest in the Bird Island well (API# 17-023-22995), the ALL RA
SUA unit, respective State Lease No. 18809 and any other
interests in said unit. The interest shall be assigned to Quest
in the form attached as Exhibit A.
	 
	 	2.	 	60% of Rockport Energy, LLC’s
imputed interest in LGS Partners, L.P. The interest shall be
conveyed to Quest in the form attached as Exhibit B.
	 
	 	3.	 	A cash payment of $188,650.00.
The payment of $188,650 shall be paid within five (5) business
days of the full execution of this Full and Final Settlement
Agreement and Release by the Parties by wire transfer to:
	 
	 	 	 	Name of institution: Comerica Bank

Name on the account: Quest Resource Corporation

ABA No.: 111000753

Account number: 1881237372

	 	b.	 	As to Rockport Energy, LLC, Bryan T. Simmons and Steve
Hochstein’s claims against Jerry Cash: Rockport Energy, LLC will transfer
$80,000 which has been held by Rockport Energy tax obligations. The amount
will be forwarded to Cash’s accountant, Tom Swearingen, to be held in escrow

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	 	 	 	pending payment to the I.R.S. Upon the completion of assignments, conveyances
and payments due to Quest described above, Cash shall no longer have any
interest in Rockport Energy, LLC and hereby relinquishes any such interest to
Bryan T. Simmons and Steve Hochstein. Cash agrees to relinquish his membership
in Rockport Energy, LLC in the form attached as Exhibit C.

     2. Release by Quest of Rockport Energy, LLC: Quest Resource Corporation, Quest Energy
Partners, L.P., Quest Midstream Partners, L.P. and its past and present affiliates, parents,
subsidiaries, divisions, predecessors, successors and assigns, and its present and former partners,
employees, representatives, officers, directors, shareholders, and attorneys (the “Quest Parties”),
hereby release and forever discharge Rockport Energy, LLC and its past and present affiliates,
parents, subsidiaries, divisions, predecessors, successors and assigns, and its present and former
members, managers, employees, representatives, officers, directors, and attorneys (the “Rockport
Energy Parties”) of and from any and all claims, causes of action, suits, demands, charges,
disputes, matters, controversies, liability, accrued or to accrue in the future, known or unknown,
relating to, arising out of, or in any way connected to the events and transactions which were
brought or could have been brought in the Lawsuit. This is a general release and is intended to be
as broad as the law allows.

     3. Release by Quest of Bryan T. Simmons: The Quest Parties hereby release and forever
discharge Bryan T. Simmons and his heirs, representatives, agents, successors, and assigns (the
“Simmons Parties”) of and from any and all claims, causes of action, suits, demands, charges,
disputes, matters, controversies, liability, accrued or to accrue in the future, known or unknown,
relating to, arising out of, or in any way connected to the events and transactions

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which were brought or could have been brought in the Lawsuit. This is a general release and
is intended to be as broad as the law allows.

     4. Release by Quest of Steven Hochstein: The Quest Parties hereby release and forever
discharge Steven Hochstein and his heirs, representatives, agents, successors, and assigns (the
“Hochstein Parties”) of and from any and all claims, causes of action, suits, demands, charges,
disputes, matters, controversies, liability, accrued or to accrue in the future, known or unknown,
relating to, arising out of, or in any way connected to the events and transactions which were
brought or could have been brought in the Lawsuit. This is a general release and is intended to be
as broad as the law allows.

     5. Release by Quest of Rockport Georgetown Partners, LLC; Rockport Georgetown, LLC; and
Rockport Georgetown Holdings, LP: The Quest Parties hereby release and forever discharge
Rockport Georgetown Partners, LLC; Rockport Georgetown, LLC; and Rockport Georgetown Holdings, LP,
and their past and present affiliates, parents, subsidiaries, divisions, predecessors, successors
and assigns, and their present and former members, managers, partners, employees, representatives,
officers, directors, and attorneys (“the Rockport Georgetown Releasees”) of and from all claims,
causes of action, suits, demands, charges, disputes, matters, controversies, liability, accrued or
to accrue in the future, known or unknown, relating to, arising out of, or in any way connected to
the events and transactions which were brought or could have been brought in the Lawsuit. This is
a general release and is intended to be as broad as the law allows.

     6. Release by Jerry Cash of Rockport Energy, LLC, Bryan T. Simmons and Steven
Hochstein: Cash and his heirs, representatives, agents, successors, and assigns (the “Cash
Parties”) hereby release and forever discharge the Rockport Energy Parties, the Simmons

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Parties and the Hochstein Parties of and from all claims, causes of action, suits, demands,
charges, disputes, matters, controversies, liability, accrued or to accrue in the future, known or
unknown, relating to, arising out of, or in any way connected to the events and transactions which
were brought or could have been brought in the Lawsuit. This is a general release and is intended
to be as broad as the law allows.

     7. Release by Rockport Energy, LLC, Bryan T. Simmons and Steven Hochstein of Jerry
Cash: The Rockport Energy Parties, the Simmons Parties and the Hochstein Parties hereby
release and forever discharge the Cash Parties of and from all claims, causes of action, suits,
demands, charges, disputes, matters, controversies, liability, accrued or to accrue in the future,
known or unknown, relating to, arising out of, or in any way connected to the events and
transactions which were brought or could have been brought in the Lawsuit. This is a general
release and is intended to be as broad as the law allows.

     8. Independent Settlement Agreement between Cash and Quest: The Parties acknowledge
and agree that the terms, conditions, obligations and representations embodied in the Settlement
Agreement dated May 19, 2009, between Cash and the Quest Entities (“Quest/Cash Agreement”)
supersede the terms, conditions, obligations and representations embodied in this Agreement with
regard to Cash and the Quest Entities to the extent they are inconsistent with the terms,
conditions, obligations and representations embodied in the Quest/Cash Agreement.

     9. Defense and Indemnity Obligations: The Quest Parties are obligated to defend and
indemnify Bryan T. Simmons and Steven Hochstein for actions taken as officers and employees of
Quest or a related Quest entity to the extent that defense and indemnity is provided

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to Quest employees, officers or directors. This Agreement does not include any release of the
Quest Parties’ obligations to defend and indemnify Bryan T. Simmons and Steven Hochstein.

     10. Dismissal with Prejudice: In consideration for the mutual promises contained in
this Agreement, the parties shall file a Motion for Dismissal with Prejudice in the form attached
hereto as Exhibit D. Said Motion for Dismissal with Prejudice shall be filed in the Lawsuit within
five (5) business days following Quest’s receipt of the assignments, conveyances and payments
described above in Part 1.a. Each Party will be fully responsible for its own court costs,
including taxable court costs, attorneys’ fees, and all other expenses arising out of the Lawsuit
or this Agreement.

     11. Confidentiality Agreement: The parties agree that the terms of this Agreement
shall be CONFIDENTIAL. This means that the parties and their attorneys shall not disclose to
anyone the terms of this Agreement, including the amount paid (or that any amount was paid) in
settlement of the Lawsuit, except as required by legal or regulatory process, court order,
governmental authority, professional requirements, or insurance agreement. Any person to whom this
information is disclosed will be advised that the information is confidential. In the event that
disclosure of this Agreement or its terms is sought from any party to this Agreement by subpoena or
other legal process, the party upon whom the request is serviced shall give notice of the request
as soon as practicable, by fax and by overnight delivery to the other Party’s counsel.

     12. Ownership of Claims Released:

	 	a.	 	Quest represents that it owns the claims and rights being
released in paragraphs 2-5 (the “Quest Released Claims”), and that no other
person or

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	 	 	 	entity owns, asserts, or has ever asserted any interest in the Quest Released
Claims.
	 
	 	b.	 	Cash represents that he owns the claims and rights being
released in paragraph 6 (the “Cash Released Claims”), and that no other person
or entity owns, asserts, or has ever asserted any interest in the Cash Released
Claims.
	 
	 	c.	 	Rockport Energy, LLC, Bryan T. Simmons and Steve Hochstein
represent that they own the claims and rights being released in paragraph 7
(the “Rockport Released Claims”), and that no other person or entity owns,
asserts, or has ever asserted any interest in the Rockport Released Claims

     13. Governing Law: This Agreement is to be construed, interpreted, and enforced under
the laws of the State of Texas.

     14. No Waiver: No waiver of any provision of this Agreement shall be effective unless
it is in writing and signed by the party against whom it is asserted, and any such written waiver
shall be applicable only to the specific instance to which it relates and shall not be deemed to be
a continuing or future waiver.

     15. Execution in Counterparts: This Agreement may be signed in separate counterparts
by facsimile, each of which shall constitute an original.

     16. Entire Agreement and Amendments: The Parties agree that this Agreement sets forth
all the promises and agreements between them and supersedes all prior and contemporaneous
agreements, understandings, inducements, or conditions, expressed or implied, oral or written. No
modifications, amendments, or changes to this Agreement shall be valid unless in writing and signed
by an authorized representative of the Parties.

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     17. Successors: It is understood and agreed that this Agreement shall be binding upon
and inure to the benefit of the Parties and their respective heirs, representatives, successors,
and assigns.

     18. Authority: Each signatory to this Agreement hereby warrants and represents that
such person has full authority to bind the Party or Parties for whom such person acts.

     19. Voluntary Execution: The Parties executing this Agreement represent, warrant and
acknowledge that both they and their attorneys have read this Agreement, that they have consulted
with their attorneys regarding this Agreement, that they are authorized to execute this Agreement,
that there may be facts pertaining to the subject matter of this Agreement of which they are not
presently aware but that they assume the risk of entering into this Agreement notwithstanding, that
this Agreement is binding on them and their respective entities after execution by them, and that
they execute this Agreement voluntarily, in good faith and without reliance upon any representation
of any kind or character not expressly set forth herein.

     20. No Admission of Liability: It is fully understood by the Parties that the terms
of this Agreement are contractual, that the Agreement is made in compromise, resolution, and
settlement of all disputed claims, that such compromise, resolution, and settlement and this
Agreement shall not be taken as an admission of liability of any kind or character by any of the
Parties, and that such liability is expressly denied by the Parties. This Agreement shall not be
admissible in any proceeding or cause of action as an admission of liability by any of the Parties.

     21. Construction of Agreement: All Parties have contributed to the drafting of this
Agreement and have had an opportunity to consult with their respective counsel of their choice and
to change any provision within this Agreement prior to its execution. In the event of any dispute
arising among the Parties in connection with this Agreement, it is the intent of the Parties

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that no party shall be entitled to have any wording of this Agreement construed either in
favor of or against any other party based on the fact that such party is alleged to have been the
drafter of the Agreement.

     22. Severability: This Agreement is intended to be performed in accordance with, and
only to the extent permitted by, all applicable legal requirements. If any provision of this
Agreement or the application of this Agreement to any person or circumstance shall for any reason
and to any extent, be invalid or unenforceable, the part of this Agreement in which such provision
is contained, the remainder of this Agreement, and the application of such provision to other
persons or circumstances shall not be affected thereby, but rather shall be enforced to the
greatest extent permitted by law.

     23. Attorneys’ Fees: If any Party files a lawsuit to enforce or construe any
provision in this Agreement, the prevailing party shall be entitled to recover all attorneys’ fees
and costs of court incurred in same.

signatures appear on the following page

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To evidence assent to the terms of this Agreement, the Parties have executed this Agreement as set
forth below:

Quest Resource Corporation

	 	 	 	 	 
	By:

	 	/s/ David C. Lawler	 	 
	 

	 	 	 	 
	 

	 	(name), (office)	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF OKLAHOMA

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF OKLAHOMA

	 	§	 	 

     BEFORE ME, the undersigned authority, on this day personally appeared David C. Lawler,
President of Quest Resource Corporation, known to me to be the person who signed the foregoing Full
and Final Settlement Agreement and Mutual Release, and acknowledged that he signed on behalf of
Quest Resource Corporation voluntarily and of his own free will after having read and understood
its effect.

     GIVEN before me this 15th day of May, 2009, by the said David C. Lawler, President of Quest
Resource Corporation.

	 	 	 
	 	 	
/s/ Jerris Johnson
 

NOTARY PUBLIC in and for

the State of Oklahoma
	 	 	
My Commission Expires:
	 	 	
10/16/2011
 

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Quest Energy Partners, L.P.

	 	 	 	 	 
	By:	 	
/s/ David C. Lawler
 

(name), (office)	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF OKLAHOMA

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF OKLAHOMA

	 	§	 	 

     BEFORE ME, the undersigned authority, on this day personally appeared David C. Lawler,
President of Quest Energy Partners, L.P., known to me to be the person who signed the foregoing
Full and Final Settlement Agreement and Mutual Release, and acknowledged that he signed on behalf
of Quest Energy Partners, L.P. voluntarily and of his own free will after having read and
understood its effect.

     GIVEN before me this 15th day of May, 2009, by the said David C. Lawler, President of Quest
Energy Partners, L.P.

	 	 	 
	 	 	
/s/ Jerris Johnson
 

NOTARY PUBLIC in and for

the State of Oklahoma
	 	 	
My Commission Expires:
	 	 	
10/16/2011
 

12

 

Quest Midstream Partners, L.P.

	 	 	 	 	 
	By:	 	
/s/ David C. Lawler
 

(name), (office)	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF OKLAHOMA

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF OKLAHOMA

	 	§	 	 

     BEFORE ME, the undersigned authority, on this day personally appeared David C. Lawler,
President of Quest Midstream Partners, L.P., known to me to be the person who signed the foregoing
Full and Final Settlement Agreement and Mutual Release, and acknowledged that he signed on behalf
of Quest Midstream Partners, L.P. voluntarily and of his own free will after having read and
understood its effect.

     GIVEN before me this 15th day of May, 2009, by the said David C. Lawler, President of Quest
Midstream Partners, L.P.

	 	 	 
	 	 	
/s/ Jerris Johnson
 

NOTARY PUBLIC in and for

the State of Oklahoma
	 	 	
My Commission Expires:
	 	 	
10/16/2011
 

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Rockport Energy, LLC

	 	 	 	 	 
	By:	 	
/s/ Steven L. Hochstein
 

Steven L. Hochstein, Manager	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF TEXAS

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF HARRIS

	 	§	 	 

     BEFORE ME, the undersigned authority, on this day personally appeared Steven L. Hochstein,
Manager of Rockport Energy, LLC, known to me to be the person who signed the foregoing Full and
Final Settlement Agreement and Mutual Release, and acknowledged that he signed on behalf of
Rockport Energy, LLC voluntarily and of his own free will after having read and understood its
effect.

     GIVEN before me this 14 day of May, 2009, by the said Steven L. Hochstein, Manager of Rockport
Energy, LLC.

	 	 	 
	 	 	
/s/ Katie M. Casey
 

NOTARY PUBLIC in and for

the State of Texas
	 	 	
My Commission Expires:
	 	 	
March 26, 2012
 

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Rockport Georgetown Partners, LLC

	 	 	 	 	 
	By:
	 	/s/ Jerry Cash 	 	 
	 

	 	 	 	 
	 

	 	(name), (office)	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF OKLAHOMA

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF OKLAHOMA

	 	§	 	 

     BEFORE
ME, the undersigned authority, on this day personally appeared Jerry
Cash,
Manager of Rockport Georgetown Partners, LLC, known to me to be the person who signed the
foregoing Full and Final Settlement Agreement and Mutual Release, and acknowledged that he signed
on behalf of Rockport Georgetown Partners, LLC voluntarily and of his own free will after having
read and understood its effect.

     GIVEN
before me this 19th day of May, 2009, by the said Manager,
Jerry Cash of Rockport Georgetown Partners, LLC.

	 	 	 
	 	 	/s/ Jennifer Johnson
	 	 	NOTARY PUBLIC in and for
the State of Oklahoma
	 	 	
My Commission Expires:
	 	 	04/19/13 

15

 

Rockport Georgetown, LLC

	 	 	 	 	 
	By:
	 	/s/ Jerry Cash	 	 
	 

	 	 	 	 
	 

	 	(name), (office)	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF OKLAHOMA

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF OKLAHOMA

	 	§	 	 

     BEFORE ME, the undersigned authority, on this day personally appeared Jerry Cash,
Manager of Rockport Georgetown, LLC, known to me to be the person who signed the foregoing Full
and Final Settlement Agreement and Mutual Release, and acknowledged that he signed on behalf of
Rockport Georgetown, LLC voluntarily and of his own free will after having read and understood its
effect.

     GIVEN
before me this 19th day of May, 2009, by the said Jerry Cash, Manager
of Rockport Georgetown, LLC.

	 	 	 
	 	 	
/s/ Jennifer Johnson

 

NOTARY PUBLIC in and for

the State of Oklahoma
	 	 	
My Commission Expires:
	 	 	
04/19/13

 

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Rockport Georgetown Holdings, LP

	 	 	 	 	 
	By:
	 	/s/  Jerry Cash	 	 
	 

	 	 	 	 
	 

	 	(name), (office)	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF OKLAHOMA

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF OKLAHOMA

	 	§	 	 

     BEFORE ME, the undersigned authority, on this day personally appeared Jerry Cash,
Manager of Rockport Georgetown Holdings, LP, known to me to be the person who signed the
foregoing Full and Final Settlement Agreement and Mutual Release, and acknowledged that he signed
on behalf of Rockport Georgetown Holdings, LP voluntarily and of his own free will after having
read and understood its effect.

     GIVEN
before me this 19th day of May, 2009, by the said Jerry Cash, Manager of Rockport Georgetown Holdings, LP.

	 	 	 
	 	 	
 

/s/  Jennifer Johnson

NOTARY PUBLIC in and for

the State of Texas
	 	 	
My Commission Expires:
	 	 	
 

04/19/13

17

 

Bryan T. Simmons

	 	 	 
	
/s/ Bryan T. Simmons
 
	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF TEXAS

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF HARRIS

	 	§	 	 

     BEFORE ME, the undersigned authority, on this day personally appeared Bryan T. Simmons, known
to me to be the person who signed the foregoing Full and Final Settlement Agreement and Mutual
Release, and acknowledged that he signed voluntarily and of his own free will after having read and
understood its effect.

     GIVEN before me this 14 day of May, 2009, by Bryan T. Simmons.

	 	 	 
	 	 	
/s/ Katie M. Casey
 

NOTARY PUBLIC in and for

the State of Texas
	 	 	
My Commission Expires:
	 	 	
March 26, 2012
 

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Steven Hochstein

	 	 	 
	/s/
Steven Hochstein
 
	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF TEXAS

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF HARRIS

	 	§	 	 

     BEFORE ME, the undersigned authority, on this day personally appeared Steven Hochstein, known
to me to be the person who signed the foregoing Full and Final Settlement Agreement and Mutual
Release, and acknowledged that he signed voluntarily and of his own free will after having read and
understood its effect.

     GIVEN before me this 14 day of May, 2009, by Steven Hochstein.

	 	 	 
	 	 	
/s/ Katie M. Casey
 

NOTARY PUBLIC in and for

the State of Texas
	 	 	
My Commission Expires:
	 	 	
March 26, 2012
 

19

 

Jerry D. Cash

	 	 	 
	
 

/s/  Jerry D. Cash
	 	 

ACKNOWLEDGMENT

	 	 	 	 	 
	STATE OF OKLAHOMA

	 	§	 	 
	 

	 	§	 	 
	COUNTY OF OKLAHOMA

	 	§	 	 

     BEFORE ME, the undersigned authority, on this day personally appeared Jerry D. Cash, known to
me to be the person who signed the foregoing Full and Final Settlement Agreement and Mutual
Release, and acknowledged that he signed voluntarily and of his own free will after having read and
understood its effect.

     GIVEN
before me this 19th day of May, 2009, by Jerry D. Cash.

	 	 	 
	 	 	
 

/s/  Jennifer Johnson

NOTARY PUBLIC in and for

the State of Oklahoma
	 	 	
My Commission Expires:
	 	 	
 

04/19/13

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Exhibit A

ASSIGNMENT AND BILL OF SALE

State: LOUISIANA

Parish: CAMERON

Assignor: Rockport Energy, LLC

Assignee: Quest Resource Corporation

Effective Date: November 1, 2008

     For adequate consideration, the receipt and sufficiency of which is acknowledged, Assignor,
named above, sells, assigns, and transfers unto Assignee, named above, and Assignee’s successors
and assigns, an undivided Sixty percent (60%) of Assignor’s right, title, interests, and properties
described in paragraphs 1. through 10. below, and all rights, estates, powers and privileges
appurtenant to those rights, interests, and properties, all collectively referred to in this
Assignment as the “Assets.”

     1. An undivided Sixty percent (60%) of all rights, title, and interests of Assignor in, to, and
under the oil, gas, and mineral leases (the “Leases”) and wells (the “Wells”) described in Exhibit
“A,” including any working interests and over-riding royalty interests, and the oil and gas
leasehold estates and other interests in the lands described on Exhibit “A.” Exhibit “A” is
attached to and made a part of this Assignment and Bill of Sale for all purposes.

     2. Without limit the foregoing, an undivided Sixty percent (60%) of all other rights, title, and
interests of Assignor, of whatever kind or character in and to the lands specifically described on
Exhibit “A” (the “Lands”), even though the interests of Assignor and the Lands may be incorrectly
described, or a description of an interest is omitted from Exhibit “A”; and, an undivided Sixty
percent (60%) of all rights, title, and interests of Assignor in, to, under, or derived from all
oil, gas, and mineral leases and leasehold fee or mineral interests and all other interests of
whatever character, insofar as the same covers or relates to the Lands, Leases and Wells described
in Exhibit “A” even though an interest may be incorrectly described or omitted from Exhibit “A.”

     3. An undivided Sixty percent (60%) of all rights, title, and interests of Assignor in all rights,
privileges, benefits, and powers conferred on the holder of the Leases, Lands and Wells with
respect to the use and occupation of the surface and the subsurface depths under the Lands and
Leases.

     4. An undivided Sixty percent (60%) of all rights, title, and interests of Assignor in any pooled
or unitized acreage or rights included, in whole or in part, within the Lands, including all oil
and gas production from the pool or unit allocated to such properties (including, without
limitation, units formed under orders, rules, regulations, or other official acts of any state or
other authority having jurisdiction and so called “working interest units” created under operating
agreements or otherwise) and all interests in any wells within the unit or pool associated with
such properties, whether the unitized or pooled oil and gas production comes from wells located
within or without the areas covered by the Lands, and all tenements, hereditaments, and
appurtenances belonging to the properties.

     5. An undivided Sixty percent (60%) of all rights, title, and interests of Assignor in all of the
permits, licenses, servitudes, easements, rights of way, orders, gas purchase and sale contracts,
crude oil purchase and sale contracts or agreements, surface leases, farmin and farmout agreements,
acreage contribution agreements, operating agreements, unit agreements, processing agreements,
options, leases of equipment or facilities, and other contracts, agreements, and rights, and any
amendments, which are owned by Assignor, in whole or in part, whether or not the same appear of
record in the county where the Lands are located, and which are appurtenant to, affect, are used or
held for use in connection with either the ownership, operation, production, treatment or marketing
of oil and gas, or either of them, and the sale or disposal of water, hydrocarbons, or associated
substances from the Lands and Leases.

     6. An undivided Sixty percent (60%) of all rights, title, and interests of Assignor in all of the
real, personal, and mixed property located in or on the Lands, Leases and Wells or used in their
operation, which are owned by Assignor or by a third person on behalf of Assignor, in whole or in
part, including, without limitation, crude oil, condensate, or products (in storage or in
pipelines), wells, well equipment, casing, tanks, boilers, buildings, tubing, pumps, motors,
valves, fixtures, machinery and other equipment, pipelines, gathering systems, power lines,
telephone lines, roads, field processing plants, and all other improvements used in operations.

     7. An undivided Sixty percent (60%) of all of the rights, title, and interests of Assignor in all
of the files, records, information, and data relating to the items described in paragraphs 1.
through 6. above, including without limitation, title records (including title opinions, abstracts,
and title curative documents); contracts; geological and seismic records, data and information;
and, production records, electric logs, and all related matters.

 

 

     8. To the extent transferable, the benefit of and the right to enforce all rights, covenants, and
warranties, if any, under the terms and conditions of any of the agreements and contracts described
in paragraph 5. above, which Assignor is entitled to enforce, with respect to the Assets, against
Assignor’s predecessors in title to the Assets and against any other party to such agreements and
contracts.

     9. To the extent necessary to allow Assignee to have full use of and access to the Lands, Assignor
grants such right of ingress and egress, rights of way and easements, and their full and
uninterrupted use, across any lands which Assignor may own or where Assignor may be the lessee
under an oil, gas, and mineral lease(s), over or through which Assignee crosses or has the right to
cross for use and access to the Lands described in Exhibit “A.” This grant is limited to the
rights of Assignor to grant such rights of ingress and egress, rights of way, and easements under
agreements, deeds, or leases through which Assignor claims title.

     10. An undivided Sixty percent (60%) of all other rights and obligations arising under contract or
otherwise by law, or by the occurrence of conditions precedents, which may or may not yet have
occurred, owned in whole or in part by Assignor, which rights and obligations are incidental to the
Assets described in paragraphs 1. through 9. above, including the right, if any, to operate the
Assets.

     TO HAVE AND TO HOLD the Assets unto Assignee and its successors and assigns forever; provided,
however, this Assignment is made by Assignor and accepted by Assignee subject to the following
terms, representations, agreements, and provisions:

     1. Assignor represents and agrees that its joint interest account, if applicable, with the operator
of wells on the Lands and Leases is current, and that all ad valorem taxes assessed, due and
payable on the Assets have been fully paid for all time periods. Assignor acknowledges Assignee
has materially relied upon this representation in accepting this Assignment.

     2. At closing, Assignor shall deliver to Assignee all relevant books, records, files, documents,
data, and other information pertaining to the Assets. From time to time, whether at or after
closing, as requested by Assignee, its successors or assigns, Assignor will execute and deliver any
and all documents and take such other reasonable actions as may be necessary to fully convey and
transfer the Assets to Assignee.

     3. Assignor shall be entitled to all proceeds accruing to the Assets prior to the Effective Date of
this Assignment and Bill of Sale, including proceeds attributable to product inventories above the
pipeline connection and gas product inventories as of the Effective Date and shall be responsible
for operating expenses, capital expenditures, all taxes, and other obligations on the Assets
acquired in previous Agreements prior to the Effective Date. Assignee shall be entitled to an
undivided Sixty percent (60%) of proceeds accruing to the Assets, whether it be a working interest
or over-riding royalty interest, after the Effective Date and shall be responsible for the
operating expenses, capital expenditures, all taxes, or other obligations on the Assets Assignor
may have had prior to the Effective Date.

     4. This Assignment and Bill of Sale is made expressly subject to all of the leases, agreements, and
other documents described in Exhibit “A,” and all other valid and existing contracts, easements,
and other instruments affecting all or any part of the Assets, together with any and all existing
overriding royalties and other interests payable out of production from all or any part of the
Lands, as shown of record.

     As to claims arising by, through, or under Assignor, Assignor warrants that title to the
Assets is good and marketable, and Assignor agrees that Assignor shall be responsible for title
defects occurring or arising out of occurrences or omissions of, by, through, or under Assignor,
but not otherwise. In addition, Assignor represents and covenants that the Assets are free and
clear of any and all liens, encumbrances, or claims of third parties created by Assignor; and,
further that Assignor has no notice of pending litigation or claims of any kind, including claims
by the owners of the surface and/or mineral estate, which would or could, if successfully
prosecuted, impair in any manner the Assets.

     ASSIGNOR MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, NATURE OR DESCRIPTION, EXPRESS OR
IMPLIED, WITH RESPECT TO THE EQUIPMENT AND PERSONAL PROPERTY LOCATED ON THE ASSETS, INCLUDING,
WITHOUT LIMITATION, THE CONDITION OF THE EQUIPMENT OR ITS MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE.

     It is the intention and agreement of Assignor and Assignee that the provisions of this
Assignment and Bill of Sale shall be severable. Should the whole or any portion of a section or
paragraph be judicially held to be void or invalid, such holding shall not affect other portions
which can be given effect without the invalid or void portion.

     The provisions of this Assignment shall be binding on and inure to the benefit of Assignee and
Assignor and their respective affiliates, heirs, devisees, legal or personal representatives,
successors, and assigns and shall constitute covenants running with the Lands and the Assets.

 

 

     This Assignment is executed by Assignor and Assignee as of the date of the acknowledgments of
their signatures below, but is effective as of the Effective Date stated above.

	 	 	 	 	 
	 	 	 	 	Rockport Energy, LLC (Assignor)
	 	 	
By:
	 	 

 

	 	 	 	 	 

 

	 	 	
Title:
	 	 

 

	 	 	 	 	Quest Resource Corporation (Assignee)
	 	 	
By:
	 	 

 

	 	 	 	 	 

 

	 	 	
Title:
	 	 

 

[Exhibit “A”: Description of Oil and Gas Lease, Land and Well.]

	 	 	 	 	 	 	 	 	 
	STATE OF TEXAS

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	§	 	 
	COUNTY OF

	 	 	)	 	 	 	 	 

     Before me, the undersigned, a Notary Public, in and for said County and State, on this ___
day of  , 2009, personally appeared _____, to me known to be the identical person who
subscribed the name of the maker thereof to the within and forgoing instrument as its _____, and acknowledged to me that he executed the same as his free and voluntary act and deed of
such corporation, for the uses and purposes therein set forth.

IN WITNESS WHEREOF, I have hereunto set my official signature and affixed my official seal the day
and year last above written.

	 	 	 	 	 
	My commission expires:	 	
 

 

	 	 

 

Notary Public

	 	 	 	 	 	 	 	 	 
	STATE OF OKLAHOMA

	 	 	)	 	 	 	 	 
	 

	 	 	)	 	 	§	 	 
	COUNTY OF OKLAHOMA

	 	 	)	 	 	 	 	 

     Before me, the undersigned, a Notary Public, in and for said County and State, on this ___
day of  , 2009, personally appeared _____, to me known to be the identical person who
subscribed the name of the maker thereof to the within and forgoing instrument as its _____, and acknowledged to me that he executed the same as his free and voluntary act and deed of
such corporation, for the uses and purposes therein set forth.

IN WITNESS WHEREOF, I have hereunto set my official signature and affixed my official seal the day
and year last above written.

	 	 	 	 	 
	My commission expires:	 	
 

 

	 	 

 

Notary Public

 

 

EXHIBIT “A”

Attached to and made a part hereof that certain Assignment and Bill of Sale
dated ___ by and between Rockport Energy, LLC, (as Assignor) and
Quest ___, (as Assignee):

	 	 	 
	Well:

	 	SL 18809 Well#1, known as the Bird Island Well, API # 17-023-22995,
located upon State Lease No. 18809, Cameron Parish, Louisiana.
	Lease:

	 	State Lease No. 18809, recorded December 27, 2005 at Entry No.
295296 of the official records of Cameron Parish, Louisiana, Harold
J. Anderson as original Lessee.

 

 

Exhibit B

BILL OF SALE AND ASSIGNMENT OF LIMITED PARTNERSHIP INTEREST

     This Bill of Sale and Assignment of Limited Partnership Interest (this “Agreement”),
dated effective as of May 19, 2009, and effective as of April 7, 2009 (the “Effective
Date”), is by and between ROCKPORT ENERGY LLC, a Texas limited liability company
(“Rockport”), and QUEST OIL & GAS LLC, a Kansas limited liability company
(“Quest”), as assignee of QUEST RESOURCE CORPORATION, a Nevada corporation (“Quest
Corporation”). Capitalized terms used but not defined herein shall have the meaning given such
term in the Agreement of Limited Partnership of LGS Development, L.P., a Texas limited partnership
(the “Partnership”) dated as of May 4, 2005 (as amended, the “Partnership
Agreement”). All capitalized terms used herein and not otherwise defined herein will have the
meanings assigned to such terms in the Partnership Agreement

RECITALS

     WHEREAS, Rockport has been named as a defendant in the case styled Quest Resource Corporation
et al. v. Rockport Energy, LLC et al.; Cause No. 2008-52399; In the 165th Judicial
District Court, Harris County, Texas (the “Lawsuit”);

     WHEREAS, Rockport holds an LP Interest in the Partnership, which LP Interest represents, as of
March 29, 2009 and subject to change in accordance with the Partnership Agreement, a Percentage
Interest of 44.66501% prior to Payout and a Percentage Interest of 25.00% following Payout (the
“Rockport Interest”); and

     WHEREAS, pursuant to the terms of the Full and Final Settlement Agreement and Mutual Release,
dated as of May 19, 2009 (the “Settlement”), among Quest Corporation, Quest Energy
Partners, L.P., Quest Midstream Partners, L.P., Rockport, Rockport Georgetown Partners, LLC,
Rockport Georgetown, LLC, Rockport Georgetown Holdings, LP, Jerry D. Cash, Bryan T. Simmons and
Steven Hochstein, in consideration of a release of all claims by the plaintiffs in the Lawsuit
against Rockport, its members, Jerry D. Cash, Bryan T. Simmons, and Steven Hochstein and the other
defendants in the Lawsuit, Rockport has agreed to convey and assign 60% of the Rockport Interest
(the “Transferred Interest”) to Quest, such interest being an LP Interest that, as of March
29, 2009 and subject to change in accordance with the Partnership Agreement, represents a
Percentage Interest of 26.799006% prior to Payout and a Percentage Interest of 15.00% following
Payout.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants contained herein
and in the Settlement and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto promise and agree as follows:

     1. Pursuant to the terms of the Settlement, Rockport hereby sells, assigns, conveys, grants
and transfers the Transferred Interest to Quest in consideration of the release and discharge by
Quest Corporation of all claims which were brought or could have been brought by Quest Corporation
in the Lawsuit.

 

 

     2. Rockport represents and warrants as of the date hereof that: (i) it is the beneficial and
record owner of the Transferred Interest; (ii) it holds good, valid and marketable title to the
Transferred Interest, free and clear of any security interest, mortgage, deed of trust, pledge,
lien or other encumbrance of any nature whatsoever (together, “Encumbrances”); (iii) it
possesses full authority and legal right to sell, transfer and assign to Quest the entire legal and
beneficial ownership of the Transferred Interest, free and clear of all Encumbrances; and (iv) upon
transfer of the Transferred Interest, Quest will own the entire legal and beneficial interest in
the Transferred Interest free and clear of all Encumbrances, and subject to no legal, equitable,
transfer or other restrictions of any kind, except transfer restrictions imposed by operation of
applicable securities laws.

     3. Each party hereby agrees from time to time after delivery of this instrument to do,
execute, acknowledge and deliver or to cause to be done, executed, acknowledged and delivered such
further agreements, transfers, assignments, conveyances and assurances, including but not limited
to the Consent and Amendment No. 4 to the Agreement of Limited Partnership of the Partnership dated
as of the date hereof, as may be reasonably requested by the other party in order to effect the
full assignment, transfer and assumption, as applicable, of the Transferred Interest and any
related liabilities.

     4. Nothing in this Agreement, express or implied, is intended or shall be construed to confer
upon, or give to, any person other than the parties hereto and their respective successors or
assigns, any remedy or claim under or by reason of this Agreement or any term, covenant or
condition hereof, and all of the terms, covenants and conditions, promises and agreements contained
in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their
successors and assigns.

     5. This Agreement may be executed in any number of counterparts with the same effect as if the
signatures thereto were upon one instrument.

     6. None of the provisions in this Agreement may be waived, changed or altered except in a
writing signed by all of the parties hereto.

     7. This Agreement shall be governed by and construed and enforced in accordance with the
internal laws (as opposed to the conflicts of laws provisions) of the State of Texas.

[Signature Page Follows]

2

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date
first written above, to be effective as of the Effective Date.

	 	 	 	 	 
	 	ROCKPORT:

ROCKPORT ENERGY LLC,

a Texas limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	Bryan T. Simmons 	 
	 	 	Title:  	Manager 	 
	 
	 	QUEST:

QUEST OIL & GAS LLC,

a Kansas limited liability company

 	 
	 	By:  	 	 
	 	 	Name:  	David C. Lawler  	 
	 	 	Title:  	President 	 

 

 

Exhibit C

BILL OF SALE AND ASSIGNMENT OF UNITS

     This Bill of Sale and Assignment of Units (this “Agreement”), dated effective as of
May 19, 2009, is by and among JERRY D. CASH, an individual resident of the State of Oklahoma (the
“Transferor”), STEVEN HOCHSTEIN, an individual resident of the State of Texas
(“Hochstein”), and BRYAN T. SIMMONS, an individual resident of the State of Texas
(“Simmons” and together with Hochstein, the “Transferees”). Capitalized terms used
but not defined herein shall have the meaning given such term in the Operating Agreement of
Rockport Energy LLC dated as of April 15, 2004 (the “Operating Agreement”).

RECITALS

     WHEREAS, each of Rockport Energy LLC, a Texas limited liability company (“Rockport”),
the Transferor, and the Transferees has been named as a defendant in the case styled Quest Resource
Corporation et al. v. Rockport Energy, LLC et al.; Cause No. 2008-52399; In the 165th
Judicial District Court, Harris County, Texas (the “Lawsuit”);

     WHEREAS, the Transferor currently holds 33.3 Units (the “Transferred Units”) in
Rockport, and each of the Transferees currently holds 33.3 Units in Rockport; and

     WHEREAS, pursuant to the terms of the Full and Final Settlement Agreement and Mutual Release
(the “Settlement”) dated as of May 19, 2009, among Quest Resource Corporation, Quest Energy
Partners, L.P., Quest Midstream Partners, L.P., Rockport, Rockport Georgetown Partners, LLC,
Rockport Georgetown, LLC, Rockport Georgetown Holdings, LP, the Transferor, and the Transferees, in
consideration of a release of all cross-claims by Rockport and the Transferees (collectively, the
“Cross Claimants”) against the Transferor, the Transferor has agreed to convey and assign
the Transferred Units equally to each of the Transferees.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants contained herein
and in the Settlement and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto promise and agree as follows:

     1. Pursuant to the terms of the Settlement, the Transferor hereby sells, assigns, conveys,
grants and transfers the Transferred Units equally to each of the Transferees in consideration of
the release and discharge by the Cross Claimants of all cross-claims which were brought or could
have been brought by the Cross Claimants against the Transferor in the Lawsuit.

     2. The Transferor represents and warrants as of the date hereof that: (i) he is the beneficial
and record owner of the Transferred Units; (ii) he holds good, valid and marketable title to the
Transferred Units, free and clear of any security interest, mortgage, deed of trust, pledge, lien
or other encumbrance of any nature whatsoever (together, “Encumbrances”); (iii) he
possesses full authority and legal right to sell, transfer and assign equally to each of the
Transferees the entire legal and beneficial ownership of the Transferred Units, free and clear of
all Encumbrances; and (iv) upon transfer of the Transferred Units, the Transferees together will
own the entire legal and beneficial interest in the Transferred Units free and clear of all

 

 

Encumbrances, and subject to no legal, equitable, transfer or other restrictions of any kind,
except transfer restrictions imposed by operation of applicable securities laws.

     3. Each party hereby agrees from time to time after delivery of this instrument to do,
execute, acknowledge and deliver or to cause to be done, executed, acknowledged and delivered such
further transfers, assignments, conveyances and assurances as may be reasonably requested by the
other party in order to effect the full assignment, transfer and assumption, as applicable, of the
Transferred Units and any related liabilities.

     4. Nothing in this Agreement, express or implied, is intended or shall be construed to confer
upon, or give to, any person other than the parties hereto and their respective successors or
assigns, any remedy or claim under or by reason of this Agreement or any term, covenant or
condition hereof, and all of the terms, covenants and conditions, promises and agreements contained
in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their
successors and assigns.

     5. This Agreement may be executed in any number of counterparts with the same effect as if the
signatures thereto were upon one instrument.

     6. None of the provisions in this Agreement may be waived, changed or altered except in a
writing signed by all of the parties hereto.

     7. This Agreement shall be governed by and construed and enforced in accordance with the
internal laws (as opposed to the conflicts of laws provisions) of the State of Texas.

[Signature Page Follows]

2

 

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date
first written above.

	 	 	 	 	 
	 

	 	TRANSFEROR:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	JERRY D. CASH	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	TRANSFEREES:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	STEVEN HOCHSTEIN	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	BRYAN T. SIMMONS	 	 

[Signature Page to the Bill of Sale and Assignment of Units]EX-4.5

EXHIBIT
4.5

BROADPOINT GLEACHER SECURITIES GROUP, INC.

2003 NON-EMPLOYEE DIRECTORS STOCK PLAN

(As Amended and Restated Through June 16, 2009)

     1. Purpose. The purpose of the 2003 Non-Employee Directors’ Stock Plan (the “Plan”)
is to promote the interests of Broadpoint Gleacher Securities Group, Inc. (the “Company”), its
Subsidiaries and its shareholders by further aligning the intentions of directors with those of the
Company’s shareholders. To do this, the Plan offers equity-based opportunities providing directors
with a proprietary interest in maximizing the growth, profitability and overall success of the
Company and its Subsidiaries.

     2. Definitions. For purposes of the Plan, the following terms shall have the meanings
set forth below:

          2.1 “Award” means an award or grant made to a Non-Employee Director under Sections 6 and/or 7
of the Plan.

          2.2 “Award Agreement” means the agreement executed by a Non-Employee Director pursuant to
Sections 3.2 and 15.6 of the Plan in connection with the granting of an Award.

          2.3 “Board” means the Board of Directors of the Company, as constituted from time to time.

          2.4 “Code” means the Internal Revenue Code of 1986, as in effect and as amended from time to
time, or any successor statute thereto, together with any rules, regulations and interpretations
promulgated thereunder or with respect thereto.

          2.5 “Common Stock” means the Common Stock, par value $.01 per share, of the Company or any
security of the Company issued by the Company in substitution or exchange therefor.

          2.6 “Company” means Broadpoint Gleacher Securities Group, Inc., a New York corporation, or any
successor corporation to Broadpoint Gleacher Securities Group, Inc.

          2.7 “Disability” means disability as determined by the Board in accordance with standards and
procedures similar to those under the Company’s long-term disability plan, if any. At any time
that the Company does not maintain a long-term disability plan, “Disability” shall mean any
physical or mental disability which is determined to be total and permanent by a physician selected
in good faith by the Company.

          2.8 “Exchange Act” means the Securities Exchange Act of 1934, as in effect and as amended from
time to time, or any successor statute thereto, together with any rules, regulations and
interpretations promulgated thereunder or with respect thereto.

          2.9 “Fair Market Value” means on, or with respect to, any given date(s), the average of the
highest and lowest market prices of the Common Stock, as reported on the NASDAQ NMS for such
date(s) or, if the Common Stock was not traded on such date(s), on the next preceding day or days
on which the Common Stock was traded. If at any time the Common Stock is not traded on such

 

 

exchange, the Fair Market Value of a share of the Common Stock shall be determined in good faith by
the Board.

          2.10 “Non-Qualified Stock Option” means any stock option that is not an “incentive stock
option” within the meaning of Section 422 of the Code.

          2.11 “Plan” means the Broadpoint Gleacher Securities Group, Inc. 2003 Non-Employee Director
Stock Plan, as set forth herein and as in effect and as amended from time to time (together with
any rules and regulations promulgated by the Board with respect thereto).

          2.12 “Restricted Shares” means the restricted shares of Common Stock granted pursuant to the
provisions of Section 7 of the Plan and the relevant Award Agreement.

          2.13 “Service Year” means the approximately annual period commencing at an annual meeting of
the Company’s shareholders and ending at the next annual meeting of the Company’s shareholders.

          2.14 “Subsidiary(ies)” means any corporation (other than the Company) in an unbroken chain of
corporations, including and beginning with the Company, if each of such corporations, other than
the last corporation in the unbroken chain, owns, directly or indirectly, more than fifty percent
(50%) of the voting stock in one of the other corporations in such chain.

     3. Administration.

          3.1 Administrator of the Plan. The Plan shall be administered by the Board.

          3.2 Plan Rules. The Board shall have full power and authority to promulgate, amend
and rescind rules and regulations relating to the implementation, administration and maintenance of
the Plan. Subject to the terms and conditions of the Plan, the Board shall make all determinations
necessary or advisable for the implementation, administration and maintenance of the Plan
including, without limitation, (a) making Awards in such amounts and form as the Board shall
determine, (b) imposing such restrictions, terms and conditions upon such Awards as the Board shall
deem appropriate, and (c) correcting any technical defect(s) or technical omission(s), or
reconciling any technical inconsistency(ies), in the Plan and/or any Award Agreement. The Board
may designate persons other than members of the Board to carry out the day-to-day ministerial
administration of the Plan under such conditions and limitations as it may prescribe, except that
the Board shall not delegate its authority with regard to the granting of any Awards to
Non-Employee Directors. Any determination, decision or action of the Board in connection with the
construction, interpretation, administration, implementation or maintenance of the Plan shall be
final, conclusive and binding upon all Non-Employee Directors and any person(s) claiming under or
through any Non-Employee Directors. The Company shall effect the granting of Awards under the
Plan, in accordance with the determinations made by the Board, by execution of written agreements
and/or other instruments in such form as is approved by the Board.

          3.3 Liability Limitation. Neither the Board nor any of its members shall be liable
for any act, omission, interpretation, construction or determination made in good faith in
connection with the Plan (or any Award Agreement), and the members of the Board shall be entitled
to indemnification and reimbursement by the Company in respect of any claim, loss, damage or
expense (including, without limitation, attorneys’ fees) arising or resulting therefrom to the
fullest extent permitted by law and/or under any directors and officers liability insurance
coverage which may be in effect from time to time.

2

 

     4. Term of Plan/Common Stock Subject to Plan.

          4.1 Term. The Plan shall terminate at such time as no shares of Common Stock remain
available for grant of Awards and no Awards remain outstanding. Outstanding Awards shall remain in
effect until they have been exercised, become vested or have terminated or expired.

          4.2 Common Stock. The maximum number of shares of Common Stock in respect of which
Awards may be granted or paid out under the Plan, subject to adjustment as provided in Section 12.2
of the Plan, shall not exceed 2,000,000 shares. In the event of a change in the Common Stock of
the Company that is limited to a change in the designation thereof to “Capital Stock” or other
similar designation, or to a change in the par value thereof, or from par value to no par value,
without increase or decrease in the number of issued shares, the shares resulting from any such
change shall be deemed to be the Common Stock for purposes of the Plan. Common Stock which may be
issued under the Plan may be either authorized and unissued shares or issued shares which have been
reacquired by the Company (in the open-market or in private transactions) and which are being held
as treasury shares. No fractional shares of Common Stock shall be issued under the Plan.

          4.3 Computation of Available Shares. For the purpose of computing the total number of
shares of Common Stock available for Awards under the Plan, there shall be counted against the
limitations set forth in Section 4.2 of the Plan the maximum number of shares of Common Stock
potentially subject to issuance upon exercise of Stock Options granted under Sections 6 of the Plan
and the number of shares of Common Stock issued under grants of Restricted Shares pursuant to
Section 7 of the Plan, in each case determined as of the date on which such Awards are granted. If
any Awards expire unexercised or are forfeited, surrendered, cancelled or terminated, the shares of
Common Stock which were theretofore subject to such Awards shall again be available for Awards
under the Plan to the extent of such expiration, forfeiture, surrender, cancellation or termination
of such Awards.

     5. Eligibility. Any member of the Board who is not an employee of the Company or any
Subsidiary (a “Non-Employee Director”) is eligible to participate in the Plan.

     6. Stock Options.

          6.1 Terms and Conditions. Stock options granted under the Plan shall be in respect of
Common Stock and shall be in the form of Non-Qualified Stock Options (“Stock Options”). Such Stock
Options shall be subject to the terms and conditions set forth in this Section 6 and any additional
terms and conditions, not inconsistent with the express terms and provisions of the Plan, as the
Board shall set forth in the relevant Award Agreement.

          6.2 Annual Stock Option Grant. Each person who is or becomes a Non-Employee Director
on the date of an annual meeting of the Company’s shareholders and whose service will continue
after such meeting shall be granted a Stock Option under the Plan to purchase a number of shares of
Common Stock, if any, determined annually by the Board; provided, however, that no Non-Employee
Director may receive Stock Options worth in the aggregate more than $100,000 (as determined by the Board)
in any Service Year (including Stock Options granted
pursuant to Section 6.3, but not including Stock Options granted
in lieu of a Non-Employee Director’s annual cash retainer pursuant to Section 6.8). Any Stock
Options granted pursuant to this Section 6.2 shall be granted as of the date of the annual meeting.

          6.3 Discretionary Stock Option Grant. In addition to any Stock Options granted
pursuant to Section 6.2, the Board may from time to time grant Stock Options to Non-Employee
Directors to purchase a number of shares of Common Stock determined by the Board; provided,
however, that no

3

 

Non-Employee Director may receive Stock Options worth in the aggregate more than $100,000
(as determined by the Board) in any Service Year (including Stock
Options granted pursuant to Section 6.2, but not including Stock
Options granted in lieu of a Non-Employee Director’s annual cash retainer pursuant to Section 6.8).

          6.4 Exercise Price. The exercise price of a Stock Option shall not be less than one
hundred percent (100%) of the Fair Market Value of the Common Stock on the date of the grant of
such Stock Option.

          6.5 Term. The term of each Stock Option shall be not more than ten (10) years after the date
immediately preceding the date on which the Stock Option is granted, as determined by the Board in its sole discretion.

          6.6 Method of Exercise. A Stock Option may be exercised, in whole or in part, by
giving written notice of exercise to the Secretary of the Company, or the Secretary’s designee,
specifying the number of shares to be purchased. Such notice shall be accompanied by payment in
full of the exercise price in cash, by certified check, bank draft, or money order payable to the
order of the Company, by delivery of shares of Common Stock already owned by the Non-Employee
Director for at least six (6) months, or, if permitted by the Board (in its sole discretion) and
applicable law, by delivery of, alone or in conjunction with a partial cash or instrument payment,
some other form of payment acceptable to the Board. Payment instruments shall be received by the
Company subject to collection. The proceeds received by the Company upon exercise of any Stock
Option may be used by the Company for general corporate purposes. Any portion of a Stock Option
that is exercised may not be exercised again.

          6.7 Exercisability. In respect of any Stock Option granted under the Plan, unless
otherwise determined by the Board (in its sole discretion) at any time and from time to time, such
Stock Option shall become exercisable as to the aggregate number of shares of Common Stock
underlying such Stock Option, as determined on the date of grant, as follows:

	 	•	 	One third (1/3), on the first anniversary of the date of
grant of the Stock Option, provided the Non-Employee Director
continuously remains a director of the Company;
	 
	 	•	 	Two thirds (2/3), on the second anniversary of the date of
grant of the Stock Option, provided the Non-Employee Director
continuously remains a director or consultant of the Company;
	 
	 	•	 	100%, on the third anniversary of the date of grant of the
Stock Option, provided the Non-Employee Director continuously
remains a director or consultant of the Company.

Notwithstanding anything to the contrary contained in this Section 6.7, such Stock Option shall
become one hundred percent (100%) exercisable as to the aggregate number of shares of Common Stock
underlying such Stock Option upon the death or Disability of the Non-Employee Director.

          6.8 Election to Receive Stock Options in Lieu of Annual Cash Retainer. In addition to
any Awards granted pursuant to Sections 6.2, 6.3, 7.2 and 7.3, the Board, in its discretion, may
permit a Non-Employee Director to elect to receive Stock Options in lieu of all or a portion of his
or her annual cash retainer. If the Board permits such an election, it, in its discretion, shall
determine the appropriate terms of such Stock Options. Any such election, if permitted by the
Board, shall be made in accordance with such procedures as are adopted from time to time by the
Board.

4

 

          6.9 Election of Form of Grant. The Board, in its discretion, may permit a
Non-Employee Director to elect whether an annual grant (in the amount determined by the Board) is
made to such Non-Employee Director in the form of Stock Options pursuant to Section 6.2 or
Restricted Shares pursuant to Section 7.2, provided that such election is made prior to the date of
the applicable annual meeting and otherwise is made in accordance with such procedures as are
adopted from time to time by the Board.

     7. Restricted Shares.

          7.1 Terms and Conditions; Annual Grant of Restricted Shares. Grants of Restricted
Shares shall be subject to the terms and conditions set forth in this Section 7 and any additional
terms and conditions, not inconsistent with the express terms and provisions of the Plan, as the
Board shall set forth in the relevant Award Agreement.

          7.2 Annual Grant of Restricted Shares. Restricted Shares may be granted alone or in
addition to Stock Options. Each person who is or becomes a Non-Employee Director on the date of an
annual meeting of the Company’s shareholders and whose service will continue after such meeting
shall be granted a number of Restricted Shares, if any, determined annually by the Board; provided,
however, that no Non-Employee Director may receive Restricted Shares worth more than $100,000 (as determined by the Board) in any
Service Year (including Restricted Shares granted pursuant to Section 7.3, but not including
Restricted Shares granted in lieu of a Non-Employee Director’s annual cash retainer pursuant to
Section 7.4). Any Restricted Shares granted pursuant to this Section 7.2 shall be granted as of
the date of the annual meeting.

          7.3 Discretionary Grant of Restricted Shares. In addition to any Restricted Shares
granted pursuant to Section 7.2, the Board may from time to time grant a number of Restricted
Shares to Non-Employee Directors determined by the Board; provided, however, that no Non-Employee
Director may receive Restricted Shares worth more than $100,000 (as determined by the Board) in any Service Year (including
Restricted Shares granted pursuant to Section 7.2, but not including Restricted Shares granted in
lieu of a Non-Employee Director’s annual cash retainer pursuant to Section 7.4).

          7.4 Election to Receive Restricted Shares in Lieu of Annual Cash Retainer. In
addition to any Awards granted pursuant to Sections 6.2, 6.3, 7.2 and 7.3, the Board, in its
discretion, may permit a Non-Employee Director to elect to receive Restricted Shares in lieu of all
or a portion of his or her annual cash retainer. If the Board permits such an election, it, in its
discretion, shall determine the appropriate terms of such Restricted Shares. Any such election, if
permitted by the Board, shall be made in accordance with such procedures as are adopted from time
to time by the Board.

          7.5 Restrictive Legend. With respect to each Non-Employee Director receiving an Award
of Restricted Shares, there shall be issued a stock certificate (or certificates) in respect of
such Restricted Shares. Such stock certificate(s) shall be registered in the name of such
Non-Employee Director, shall be accompanied by a stock power duly executed by such Non-Employee
Director, and shall bear, among other required legends, the following legend:

“The transferability of this certificate and the shares of
stock represented hereby are subject to the terms and
conditions (including, without limitation, forfeiture
events) contained in the Broadpoint Gleacher Securities
Group, Inc. 2003 Non-Employee Directors Stock Plan and an
Award Agreement entered into between the registered owner
hereof and Broadpoint Gleacher Securities Group, Inc.
Copies of such Plan and Award

5

 

Agreement are on file in the office of the Secretary of
Broadpoint Gleacher Securities Group, Inc., 12 East
49th Street, 31st Floor, New York, NY
10017. Broadpoint Gleacher Securities Group, Inc. will
furnish to the recordholder of the certificate, without
charge and upon written request at its principal place of
business, a copy of such Plan and Award Agreement.
Broadpoint Gleacher Securities Group, Inc. reserves the
right to refuse to record the transfer of this certificate
until all such restrictions are satisfied, all such terms
are complied with and all such conditions are satisfied.”

Such stock certificate evidencing such shares shall, in the sole discretion of the Board, be
deposited with and held in custody by the Company until the restrictions thereon shall have lapsed
and all of the terms and conditions applicable to such grant shall have been satisfied.

     7.6 Nature of Restricted Shares. A grant of Restricted Shares is an Award of shares
of Common Stock granted to a Non-Employee Director, subject to such restrictions, terms and
conditions as the Board deems appropriate, including, without limitation, (a) restrictions on the
sale, assignment, transfer, hypothecation or other disposition of such shares, (b) the requirement
that the Non-Employee Director deposit such shares with the Company while such shares are subject
to such restrictions, and (c) the requirement that such shares be forfeited if the Non-Employee
Director ceases to be a director for specified reasons within a specified period of time or for
other reasons.

     7.7 Restriction Period. In accordance with this Section 7 of the Plan and unless
otherwise determined by the Board (in its sole discretion) at any time and from time to time,
Restricted Shares shall only become unrestricted and vested in the Non-Employee Director in
accordance with such vesting schedule relating to such Restricted Shares, if any, as the Board may
establish in the relevant Award Agreement (the “Restriction Period”). Notwithstanding the
preceding sentence, in no event shall the Restriction Period be less than six (6) months after the
date of grant. During the Restriction Period, such stock shall be and remain unvested and a
Non-Employee Director may not sell, assign, transfer, pledge, encumber or otherwise dispose of or
hypothecate such Award. Upon satisfaction of the vesting schedule and any other applicable
restrictions, terms and conditions, the Non-Employee Director shall be entitled to receive payment
of the Restricted Shares or a portion thereof, as the case may be, as provided in Section 7.8 of
the Plan.

     7.8 Payment of Restricted Share Grants. After the satisfaction and/or lapse of the
restrictions, terms and conditions established by the Board in respect of a grant of Restricted
Shares, a new certificate, without the legend set forth in Section 7.5 of the Plan, for the number
of shares of Common Stock which are no longer subject to such restrictions, terms and conditions
shall, as soon as practicable thereafter, be delivered to the Non-Employee Director.

     7.9 Shareholder Rights. A Non-Employee Director shall have, with respect to the
shares of Common Stock underlying a grant of Restricted Shares, all of the rights of a shareholder
of such stock (except as such rights are limited or restricted under the Plan or in the relevant
Award Agreement). Any stock dividends paid in respect of unvested Restricted Shares shall be
treated as additional Restricted Shares and shall be subject to the same restrictions and other
terms and conditions that apply to the unvested Restricted Shares in respect of which such stock
dividends are issued.

     8. Deferral Elections. The Board may permit a Non-Employee Director to elect to defer
receipt of any payment of cash or any delivery of shares of Common Stock that would otherwise be
due to such Non-Employee Director by virtue of the exercise or settlement of any Award made under
the

6

 

Plan. If any such election is permitted, the Board shall establish rules and procedures for such
deferrals, including, without limitation, the payment or crediting of reasonable interest on such
deferred amounts credited in cash, and the payment or crediting of dividend equivalents in respect
of deferrals credited in units of Common Stock. The Board may also provide in the relevant Award
Agreement for a tax reimbursement cash payment to be made by the Company in favor of any
Non-Employee Director in connection with the tax consequences resulting from the grant, exercise or
settlement of any Award made under the Plan.

     9. Dividend Equivalents. In addition to the provisions of Section 7.9 of the Plan,
Awards of Stock Options may, in the sole discretion of the Board and if provided for in the
relevant Award Agreement, earn dividend equivalents. In respect of any such Award which is
outstanding on a dividend record date for Common Stock, the Non-Employee Director shall be credited
with an amount equal to the amount of cash or stock dividends that would have been paid on the
shares of Common Stock covered by such Award had such covered shares been issued and outstanding on
such dividend record date. The Board shall establish such rules and procedures governing the
crediting of such dividend equivalents, including, without limitation, the amount, the timing, form
of payment and payment contingencies and/or restrictions of such dividend equivalents, as it deems
appropriate or necessary.

     10. Termination of Service.

          10.1 Options. If a Non-Employee Director ceases to be a member of the Board for any
reason, any then unexercisable Stock Options shall be forfeited and cancelled by the Company.
Except as otherwise provided in this Section 10.1, if a Non Employee Director ceases to be a member
of the Board for any reason, such Non-Employee Director’s rights, if any, to exercise any then
exercisable Stock Options, if any, shall terminate ninety (90) days after the date of such
termination of service (but not beyond the stated term of any such Stock Option as determined under
Sections 6.5) and thereafter such Stock Options shall be forfeited and cancelled by the Company.
If a Non-Employee Director ceases to be a member of the Board due to death or Disability, a
Non-Employee Director (and such Non-Employee Director’s estate, designated beneficiary or other
legal representative, as the case may be and as determined by the Board) shall have the right, to
the extent exercisable immediately prior to any such termination of service, to exercise such Stock
Options, if any, at any time within the one (1) year period following such termination due to death
or Disability (but not beyond the term of any such Stock Option as determined under Sections 6.5).

          10.2 Restricted Shares. If a Non-Employee Director ceases to be a member of the Board
for any reason (other than due to Disability or death) prior to the satisfaction and/or lapse of
the restrictions, terms and conditions applicable to a grant of Restricted Shares, such Restricted
Shares shall immediately be cancelled and the Non-Employee Director (and such Non-Employee
Director’s estate, designated beneficiary or other legal representative) shall forfeit any rights
or interests in and with respect to any such Restricted Shares. If the Non-Employee Director
ceases to be a member of the Board due to death or Disability, the Non-Employee Director shall
become 100% vested in any such Non-Employee Director’s Restricted Shares as of the date of any such
termination.

     11. Non-transferability of Awards. No Award under the Plan or any Award Agreement,
and no rights or interests herein or therein, shall or may be assigned, transferred, sold,
exchanged, encumbered, pledged, or otherwise hypothecated or disposed of by a Non-Employee Director
or any beneficiary(ies) of any Non-Employee Director, except by testamentary disposition by the
Non-Employee Director or the laws of intestate succession; provided, however, that an Award may be
transferred to a Non-Employee Director’s family members or to one or more trusts established in
whole or in part for the benefit of one or more of such family members. No such interest shall be
subject to execution, attachment or similar legal process, including, without limitation, seizure
for the payment of the Non-

7

 

Employee Director’s debts, judgments, alimony, or separate maintenance. During the lifetime of a
Non-Employee Director, Stock Options are exercisable only by the Non-Employee Director.

     12. Changes in Capitalization and Other Matters.

          12.1 No Corporate Action Restriction. The existence of the Plan, any Award Agreement
and/or the Awards granted hereunder shall not limit, affect or restrict in any way the right or
power of the Board or the shareholders of the Company to make or authorize (a) any adjustment,
recapitalization, reorganization or other change in the Company’s or any Subsidiary’s capital
structure or its business, (b) any merger, consolidation or change in the ownership of the Company
or any Subsidiary, (c) any issue of bonds, debentures, capital, preferred or prior preference
stocks ahead of or affecting the Company’s or any Subsidiary’s capital stock or the rights thereof,
(d) any dissolution or liquidation of the Company or any Subsidiary, (e) any sale or transfer of
all or any part of the Company’s or any Subsidiary’s assets or business, or (f) any other corporate
act or proceeding by the Company or any Subsidiary. No Non-Employee Director, beneficiary or any
other person shall have any claim against any member of the Board, the Company or any Subsidiary,
or any employees, officers or agents of the Company or any Subsidiary, as a result of any such
action.

          12.2 Recapitalization Adjustments. In the event of any change in capitalization
affecting the Common Stock of the Company, including, without limitation, a distribution, stock
split, reverse stock split, recapitalization, consolidation, subdivision, split-up, spin-off,
split-off, combination or exchange of shares or other form of reorganization or recapitalization,
or any other change affecting the Common Stock, the Board shall authorize and make such
proportionate adjustments, if any, as the Board deems appropriate to reflect such change,
including, without limitation, with respect to the aggregate number of shares of the Common Stock
for which Awards in respect thereof may be granted under the Plan, the maximum number of shares of
the Common Stock which may be granted or awarded to any Non-Employee Director, the number of shares
of the Common Stock covered by each outstanding Award, and the exercise price or other price per
share of Common Stock in respect of outstanding Awards. Notwithstanding the foregoing, in the
event of a stock dividend, the proportionate adjustments described in this Section 12.2 shall occur
automatically, without any Board action being required.

          12.3 Certain Mergers.

               12.3.1 If the Company enters into or is involved in any merger, reorganization or other
business combination with any person or entity (such merger, reorganization or other
business combination to be referred to herein as a “Merger Event”) and as a result of any
such Merger Event the Company will be or is the surviving corporation, a Non-Employee
Director shall be entitled, as of the date of the execution of the agreement evidencing the
Merger Event (the “Execution Date”) and with respect to both exercisable and unexercisable
Stock Options (but only to the extent not previously exercised), to receive substitute stock
options in respect of the shares of the surviving corporation on such terms and conditions,
as to the number of shares, pricing and otherwise, which shall substantially preserve the
value, rights and benefits of any affected Stock Options granted hereunder as of the date of
the consummation of the Merger Event. Notwithstanding anything to the contrary in this
Section 12.3, if any Merger Event occurs, the Company shall have the right, but not the
obligation, to pay to each affected Non-Employee Director an amount in cash or certified
check equal to the excess of the Fair Market Value of the Common Stock underlying any
affected unexercised Stock Options or as of the Execution Date (whether then exercisable or
not) over the aggregate exercise price of such unexercised Stock Options, as the case may
be.

8

 

               12.3.2 If, in the case of a Merger Event in which the Company will not be, or is not,
the surviving corporation, and the Company determines not to make the cash or certified
check payment described in Section 12.3.1 of the Plan, the Company shall compel and
obligate, as a condition of the consummation of the Merger Event, the surviving or resulting
corporation and/or the other party to the Merger Event, as necessary, or any parent,
subsidiary or acquiring corporation thereof, to grant, with respect to both exercisable and
unexercisable Stock Options (but only to the extent not previously exercised), substitute
stock options in respect of the shares of common or other capital stock of such surviving or
resulting corporation on such terms and conditions, as to the number of shares, pricing and
otherwise, which shall substantially preserve the value, rights and benefits of any affected
Stock Options previously granted hereunder as of the date of the consummation of the Merger
Event.

               12.3.3 Upon receipt by any affected Non-Employee Director of any such cash, certified
check, or substitute stock options as a result of any such Merger Event, such Non-Employee
Director’s affected Stock Options for which such cash, certified check or substitute awards
was received shall be thereupon cancelled without the need for obtaining the consent of any
such affected Non-Employee Director.

               12.3.4 The foregoing adjustments and the manner of application of the foregoing
provisions, including, without limitation, the issuance of any substitute stock options,
shall be determined in good faith by the Board in its sole discretion. Any such adjustment
may provide for the elimination of fractional shares.

     13. Change of Control.

          13.1 Acceleration of Awards Vesting. Anything in the Plan to the contrary
notwithstanding, if a Change of Control of the Company occurs (a) all Stock Options then
unexercised and outstanding shall become fully vested and exercisable as of the date of the Change
of Control and (b) all restrictions, terms and conditions applicable to all Restricted Shares then
outstanding shall be deemed lapsed and satisfied as of the date of the Change of Control. The
immediately preceding sentence shall apply to only those Non-Employee Directors (i) who are serving
on the Board as of the date of the Change of Control or (ii) to whom Section 13.3 below is
applicable.

          13.2 Payment After Change of Control. Notwithstanding anything to the contrary in the
Plan, within thirty (30) days after a Change of Control occurs, (a) the holder of an Award of
Restricted Shares vested under Section 13.1(b) above shall receive a new certificate for such
shares without the legend set forth in Section 7 of the Plan (and, in the case only of a Change of
Control under Section 13.3.1 of the Plan, such holder shall have the right, but not the obligation,
to elect, within ten (10) business days after the Non-Employee Director has actual or constructive
knowledge of the occurrence of such Change of Control, to require the Company to purchase such
shares from the Non-Employee Director at their then Fair Market Value and (b) in the case only of a
Change of Control under Section 13.3.1 of the Plan, the holders of any Stock Options shall have the
right, but not the obligation, to elect, within ten (10) business days after the Non-Employee
Director has actual or constructive knowledge of the occurrence of such Change of Control, to
require the Company to purchase such Stock Options from the Non-Employee Director for an aggregate
amount equal to the then aggregate Fair Market Value of the Common Stock underlying such Stock
Option tendered, less the aggregate exercise price of such tendered Stock Option.

          13.3 Change of Control. For the purpose of this Agreement, “Change of Control” shall
mean:

9

 

               13.3.1 The acquisition, after the effective date of the Plan, by an individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of either (a) the shares of the Common Stock, or (b) the combined voting
power of the voting securities of the Company entitled to vote generally in the election of
directors (the “Voting Securities”); provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any acquisition by any individual
who, on the effective date of the Plan, beneficially owned 10% or more of the Common Stock,
(ii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained
by the Company or any Subsidiary, (iii) any acquisition by any underwriter in connection
with any firm commitment underwriting of securities to be issued by the Company, or (iv) any
acquisition by any corporation if, immediately following such acquisition, more than 70% of
the then outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation (entitled to vote
generally in the election of directors), is beneficially owned, directly or indirectly, by
all or substantially all of the individuals and entities who, immediately prior to such
acquisition, were the beneficial owners of the Common Stock and the Voting Securities in
substantially the same proportions, respectively, as their ownership, immediately prior to
such acquisition, of the Common Stock and Voting Securities; or

               13.3.2 Individuals who, as of the effective date of the Plan, constitute the Board (the
“Incumbent Board”) cease thereafter for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent
to the effective date of the Plan whose election, or nomination for election by the
Company’s shareholders, was approved by at least a majority of the directors then serving
and comprising the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents; or

               13.3.3 Approval by the shareholders of the Company of a reorganization, merger or
consolidation, other than a reorganization, merger or consolidation with respect to which
all or substantially all of the individuals and entities who were the beneficial owners,
immediately prior to such reorganization, merger or consolidation, of the Common Stock and
Voting Securities beneficially own, directly or indirectly, immediately after such
reorganization, merger or consolidation more than 70% of the then outstanding common stock
and voting securities (entitled to vote generally in the election of directors) of the
corporation resulting from such reorganization, merger or consolidation in substantially the
same proportions as their respective ownership, immediately prior to such reorganization,
merger or consolidation, of the Common Stock and the Voting Securities; or

               13.3.4 Approval by the shareholders of the Company of (a) a complete liquidation or
substantial dissolution of the Company, or (b) the sale or other disposition of all or
substantially all of the assets of the Company, other than to a Subsidiary, wholly-owned,
directly or indirectly, by the Company.

     14. Amendment, Suspension and Termination.

          14.1 In General. The Board may suspend or terminate the Plan (or any portion thereof)
at any time and may amend the Plan at any time and from time to time in such respects as the Board
may deem advisable to ensure that any and all Awards conform to or otherwise reflect any change

10

 

in applicable laws or regulations, or to permit the Company or the Non-Employee Directors to
benefit from any change in applicable laws or regulations, or in any other respect the Board may
deem to be in the best interests of the Company or any Subsidiary. No such amendment, suspension
or termination shall (x) materially adversely effect the rights of any Non-Employee Director under
any outstanding Stock Options or Restricted Share grants, without the consent of such Non-Employee
Director or (y) be effective without shareholder approval if such approval is required to comply
with any applicable law or stock exchange rule.

          14.2 Award Agreement Modifications. No modification, extension, renewal or other
change in any Award granted under the Plan shall be made after grant, unless the same is consistent
with the provisions of the Plan.

     15. Miscellaneous.

          15.1 No Right to Reelection. Neither the adoption of the Plan, the granting of any
Award, nor the execution of any Award Agreement, shall confer upon any Non-Employee Director any
right to remain a member of the Board for any period of time, nor shall it create any obligation on
the part of the Board to nominate any of its members for reelection by the Company’s shareholders.

          15.2 Unfunded Plan. The Plan shall be unfunded and the Company shall not be required
to segregate any assets in connection with any Awards under the Plan. Any liability of the Company
to any person with respect to any Award under the Plan or any Award Agreement shall be based solely
upon the contractual obligations that may be created as a result of the Plan or any such award or
agreement. No such obligation of the Company shall be deemed to be secured by any pledge of,
encumbrance on, or other interest in, any property or asset of the Company or any Subsidiary.
Nothing contained in the Plan or any Award Agreement shall be construed as creating in respect of
any Non-Employee Director (or beneficiary thereof or any other person) any equity or other interest
of any kind in any assets of the Company or any Subsidiary or creating a trust of any kind or a
fiduciary relationship of any kind between the Company, any Subsidiary and/or any such Non-Employee
Director, any beneficiary thereof or any other person.

          15.3 Payments to a Trust. The Board is authorized to cause to be established a trust
agreement or several trust agreements or similar arrangements from which the Board may make
payments of amounts due or to become due to any Non-Employee Directors under the Plan.

          15.4 Other Company Benefit and Compensation Programs. Awards under the Plan may be
made in addition to, in combination with, or as alternatives to, grants, awards or payments under
any other plans or arrangements of the Company or its Subsidiaries. The existence of the Plan
notwithstanding, the Company or any Subsidiary may adopt such other compensation plans or programs
and additional compensation arrangements as it deems necessary to attract, retain and motivate
directors.

          15.5 Listing, Registration and Other Legal Compliance. No Awards or shares of the
Common Stock shall be required to be issued or granted under the Plan unless legal counsel for the
Company shall be satisfied that such issuance or grant will be in compliance with all applicable
federal and state securities laws and regulations and any other applicable laws or regulations.
The Board may require, as a condition of any payment or share issuance, that certain agreements,
undertakings, representations, certificates, and/or information, as the Board may deem necessary or
advisable, be executed or provided to the Company to assure compliance with all such applicable
laws or regulations. Certificates for shares of the Restricted Shares and/or Common Stock
delivered under the Plan may be subject to such stock-transfer orders and such other restrictions
as the Board may deem advisable under the rules, regulations, or other requirements of the
Securities and Exchange Commission, any stock

11

 

exchange upon which the Common Stock is then listed, and any applicable federal or state securities
law. In addition, if, at any time specified herein (or in any Award Agreement or otherwise) for
(a) the making of any Award, or the making of any determination, (b) the issuance or other
distribution of Restricted Shares and/or Common Stock, or (c) the payment of amounts to or through
a Non-Employee Director with respect to any Award, any law, rule, regulation or other requirement
of any governmental authority or agency shall require either the Company, any Subsidiary or any
Non-Employee Director (or any estate, designated beneficiary or other legal representative thereof)
to take any action in connection with any such determination, any such shares to be issued or
distributed, any such payment, or the making of any such determination, as the case may be, shall
be deferred until such required action is taken. Transactions under the Plan are intended to
comply with all applicable conditions of SEC Rule 16b-3. To the extent any provision of the Plan
or any action by the administrators of the Plan fails to so comply with such rule, it shall be
deemed null and void, to the extent permitted by law and deemed advisable by the Board.

          15.6 Award Agreements. Each Non-Employee Director receiving an Award under the Plan
shall enter into an Award Agreement with the Company in a form specified by the Board. Each such
Non-Employee Director shall agree to the restrictions, terms and conditions of the Award set forth
therein and in the Plan.

          15.7 Designation of Beneficiary. Each Non-Employee Director to whom an Award has been
made under the Plan may designate a beneficiary or beneficiaries to exercise any option or to
receive any payment which under the terms of the Plan and the relevant Award Agreement may become
exercisable or payable on or after the Non-Employee Director’s death. At any time, and from time
to time, any such designation may be changed or cancelled by the Non-Employee Director without the
consent of any such beneficiary. Any such designation, change or cancellation must be on a form
provided for that purpose by the Board and shall not be effective until received by the Board. If
no beneficiary has been designated by a deceased Non-Employee Director, or if the designated
beneficiaries have predeceased the Non-Employee Director, the beneficiary shall be the Non-Employee
Director’s estate. If the Non-Employee Director designates more than one beneficiary, any payments
under the Plan to such beneficiaries shall be made in equal shares unless the Non-Employee Director
has expressly designated otherwise, in which case the payments shall be made in the shares
designated by the Non-Employee Director.

          15.8 Governing Law. The Plan and all actions taken thereunder shall be governed by
and construed in accordance with the laws of the State of New York, without reference to the
principles of conflict of laws thereof. Any titles and headings herein are for reference purposes
only, and shall in no way limit, define or otherwise affect the meaning, construction or
interpretation of any provisions of the Plan.

          15.9 Effective Date. The Plan as amended and restated shall be effective upon its
approval by the Board and by the Company’s shareholders.

12

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