Document:

exv10w7

Exhibit 10.7

QUEST RESOURCE CORPORATION

2005 OMNIBUS STOCK AWARD PLAN

FORM OF NONQUALIFIED STOCK OPTION AGREEMENT

To:                                          (“you” or the “Grantee”)

NOTICE OF GRANT:

          Quest Resource Corporation (the “Company”), hereby grants you an option (the “Option”) to
purchase common shares, $0.01 par value per share, of Quest Resource Corporation (“Shares”),
subject to the terms and conditions of the Quest Resource Corporation 2005 Omnibus Stock Award
Plan, as amended and restated (the “Plan”), and the Option Award Agreement between you and the
Company, attached as Exhibit A, as follows:

	 	 	 	 	 
	 

	 	 	 	 
	Grant Date:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Total Number of Shares Subject to Option
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	Option Price per Share ($):

	 	$                    	 	 
	 
	 	 	 	 
	Expiration Date:
	 	 	 	 
	 

	 	 	 	 

          In order to fully understand your rights under the Plan (a copy of which is attached) and the
Option Award Agreement, attached as Exhibit A, you are encouraged to read the Plan and this
document carefully. By accepting this Option, you are also agreeing to be bound by Exhibit
A. Please refer to the Plan document for the definition of capitalized terms used in this
Agreement.

	 	 	 	 	 	 	 
	 	 	QUEST RESOURCE CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 

 

EXHIBIT A

AGREEMENT:

     In consideration of the mutual promises and covenants contained herein and other good and
valuable consideration paid by the Grantee to the Company, the Grantee and the Company agree as
follows:

     Section 1. Incorporation of Plan

     All provisions of this Award Agreement and the rights of the Grantee hereunder are subject in
all respects to the provisions of the Plan and the powers of the Board therein provided.
Capitalized terms used in this Award Agreement but not defined shall have the meaning set forth in
the Plan.

     Section 2. Grant of Nonqualified Stock Option

     As of the Grant Date identified above, the Company grants to the Grantee, subject to the terms
and conditions set forth herein and in the Plan, the right, privilege, and option (the “Option”) to
purchase that number of Shares identified above opposite the heading “Total Number of Shares
Subject to Option,” at the per Share price specified above opposite the heading “Option Price per
Share.”

     Section 3. Exercisability of Option

	 	(a)	 	Except to the extent the Option is permitted to be transferred to a person set
forth in Section 8(b) of this Award Agreement, during the Grantee’s lifetime, this
Option may be exercised only by the Grantee. As of the dates specified below, this
Option, except as specifically provided elsewhere under the terms of the Plan or this
Award Agreement, shall become exercisable with respect to that number of shares under
the column stated “Number of Shares Subject to Option Exercisable,” provided that the
Grantee is an employee, and at all times since the Grant Date has been an employee, of
the Company on the specified date:

                              Date                Number of Shares Subject to Option Exercisable

	 	 	 	[Insert Applicable Vesting Schedule]

	 	(b)	 	In addition to the vesting conditions set forth above in Section (a), the
Option shall become fully exercisable upon the Grantee’s death or Disability while the
Grantee is serving as a employee of the Company; provided, however, if the Grantee dies
or becomes Disabled following the Grantee’s Termination of Affiliation, the
exercisability of the Option shall not accelerate due to such death or Disability and
shall be exercisable only to the extent it was exercisable on the date of the Grantee’s
Termination of Affiliation.

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     Section 4. Method of Exercise

     Provided this Option has not expired, been terminated or cancelled in accordance with the
terms of the Plan, that number of shares subject to the Option which are exercisable in accordance
with Section 3 above may be exercised, in whole or in part and from time to time, by delivery to
the Company or its designee a written notice to the Company or its designee which shall:

	 	(a)	 	set forth the number of Shares with respect to which the Option is to be
exercised (such number must be in a minimum amount of 50 Shares);
	 
	 	(b)	 	if the person exercising this Option is not the Grantee, be accompanied by
satisfactory evidence of such person’s right to exercise this Option; and
	 
	 	(c)	 	be accompanied by payment in full of the Option Price in the form of cash,
personal or certified bank check or electronic wire transfer payable to the order of
the Company or any other means allowable under the Plan which the Company in its sole
discretion determines will provide legal consideration for the Shares.

     Section 5. Expiration of Option

     Unless terminated earlier in accordance with the terms of this Award Agreement or the Plan,
the Option granted herein shall expire at 5:00 P.M., U.S. Central Time, on the tenth
(10th) Anniversary of the Grant Date (the “Expiration Date”). In the event the
Expiration Date is a Saturday, Sunday or any other day which is a holiday of the United States
Federal Government (a “Non-Business Day”), then the Option granted herein shall expire, unless
earlier terminated in a accordance with the terms of this Award Agreement or the Plan, at 5:00
P.M., U.S. Central Time, on the first day that is not a Non-Business Day (a “Business Day”)
following such Expiration Date.

     Section 6. Effect of Termination of Affiliation

     If the Grantee has a Termination of Affiliation for any reason, including termination by the
Company with or without Cause, voluntary resignation, death, or Disability, the effect of such
Termination of Affiliation on all or any portion of this Option is as provided below.

	 	(a)	 	If the Grantee has a Termination of Affiliation within the Option Term due to
the Grantee’s ceasing to be employed by the Company, the Option, to the extent
exercisable, may be exercised by the Grantee at any time prior to 5:00 P.M., U.S.
Central Time, on the ninetieth (90th) calendar day following the Grantee’s Termination
of Affiliation (but in no event later than the Expiration Date). In the event that
such ninetieth (90th) day shall not be a Business Day, then the Option shall expire at
5:00 P.M., U.S. Central Time, on the first (1st) Business Day immediately following
such ninetieth (90th) day. In any such case, the Option may be exercised only as to
the Shares as to which the Option had become exercisable on or before the date of the
Termination of Affiliation.
	 
	 	(b)	 	If the Grantee dies or becomes Disabled within the Option Term (A) while he or
she is an employee of the Company, or (B) within the ninety-day period referred to in

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	 	 	 	clause (a) above, the Option may be exercised by the Grantee or the Grantee’s
Beneficiaries entitled to do so at any time prior to 5:00 P.M., U.S. Central Time,
on the 365th calendar day following the date of the Grantee’s death or
Disability (but in no event later than the Expiration Date). In the event that the
365th day is not a Business Day, then the Option shall expire at 5:00
P.M., U.S. Central Time, on the first (1st) Business Day immediately following such
365th day.

     Section 7. Investment Intent

     The Grantee agrees that the Shares acquired on exercise of this Option shall be acquired for
his/her own account for investment only and not with a view to, or for resale in connection with,
any distribution or public offering thereof within the meaning of the Securities Act of 1933 (the
“1933 Act”) or other applicable securities laws. If the Board so determines, any share
certificates issued upon exercise of this Option shall bear a legend to the effect that the Shares
have been so acquired. The Company may, but in no event shall be required to, bear any expenses of
complying with the 1933 Act, other applicable securities laws or the rules and regulations of any
national securities exchange or other regulatory authority in connection with the registration,
qualification, or transfer, as the case may be, of this Option or any Shares acquired upon the
exercise thereof. The foregoing restrictions on the transfer of the Shares shall be inoperative if
(a) the Company previously shall have been furnished with an opinion of counsel, satisfactory to
it, to the effect that such transfer will not involve any violation of the 1933 Act and other
applicable securities laws or (b) the Shares shall have been duly registered in compliance with the
1933 Act and other applicable state or federal securities laws. If this Option, or the Shares
subject to this Option, are so registered under the 1933 Act, the Grantee agrees that he will not
make a public offering of the said Shares except on a national securities exchange on which the
common shares of the Company are then listed.

     Section 8. Nontransferability of Option

	 	(a)	 	Except as provided above in Section 6(b) (in the event of the Grantee’s death)
or below in Section 8(b), or as otherwise may be provided in the Plan, no portion of
the Option granted hereunder may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated, other than by will, by the laws of descent and distribution.
All rights with respect to the Option granted to the Grantee shall be available during
his or her lifetime only to the Grantee.
	 
	 	(b)	 	Pursuant to conditions and procedures established by the Board from time to
time, the Board may permit the Option to be transferred to, exercised by and paid to
(a) the Grantee’s child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive
relationships), (b) any person sharing the Grantee’s household (other than a tenant or
employee), (c) a trust in which persons described in (a) or (b) have more than 50% of
the beneficial interest, (d) a foundation in which persons described in (a) or (b) or
the Grantee owns more than 50% of the voting interests; provided such transfer is not
for value. Any permitted transfer shall be subject to the condition that the Board
receive evidence satisfactory to it that the transfer is being made for estate and/or
tax planning purposes on a gratuitous or donative basis and without consideration (other than
nominal consideration).

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     Section 9. Status of the Grantee

     The Grantee shall not be deemed a shareholder of the Company with respect to any of the Shares
subject to this Option, except to the extent that such Shares shall have been purchased and issued
to him or her. The Company shall not be required to issue or transfer any certificates for Shares
purchased upon exercise of this Option until all applicable requirements of law have been complied
with and such Shares shall have been duly listed on any securities exchange on which the Shares may
then be listed.

     Section 10. No Effect on Capital Structure

     This Option shall not affect the right of the Company to reclassify, recapitalize or otherwise
change its capital or debt structure or to merge, consolidate, convey any or all of its assets,
dissolve, liquidate, windup, or otherwise reorganize.

     Section 11. Adjustments

     In the event of any change in the number of outstanding Shares effected without receipt of
consideration therefor by the Company, by reason of a merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, stock split, share combination or other
change in the corporate structure of the Company affecting the Shares, the aggregate number and
class of Shares subject to this Option and the exercise price of this Option shall automatically
adjust to accurately and equitably reflect the effect thereon of such change; provided, however,
that any fractional share resulting from such adjustment shall be eliminated. In the event of a
dispute concerning such adjustment, the decision of the Board shall be conclusive.

     Section 12. Amendments 

     This Award Agreement may be amended only by a writing executed by the Company and the Grantee
which specifically states that it is amending this Award Agreement; provided that this Award
Agreement is subject to the power of the Board to amend the Plan as provided therein. Except as
otherwise provided in the Plan, no such amendment shall materially adversely affect the Grantee’s
rights under this Award Agreement without the Grantee’s consent.

     Section 13. Board Authority

     Any questions concerning the interpretation of this Award Agreement, any adjustments required
to be made under Sections 11 or 12 of this Award Agreement, and any controversy which arises under
this Award Agreement shall be settled by the Board in its sole discretion.

     Section 14. Withholding Taxes

     The Grantee agrees to make appropriate arrangements with the Company for satisfaction of any
applicable Federal, state or local income tax or payroll tax withholding amounts required by law to
be withheld, including the payment to the Company at the time of exercise of an Option of all

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such taxes and requirements. The Company is not required to issue shares upon the exercise of
this Option unless the Grantee first pays in cash or by share withholding to the Company such
amount, if any, of tax withholding. The Company may, in its discretion, elect to withhold shares
otherwise eligible to be delivered to the Grantee having a value equal to the minimum amount
required to be withheld to cover such applicable tax withholding liability.

     Section 15. Nonqualified Stock Option

     This Option is not intended to qualify as an “incentive stock option” within the meaning of
Section 422 of the Code, and shall not be so construed.

     Section 16. Notice

     Whenever any notice is required or permitted hereunder, such notice must be given in writing
by (a) personal delivery, or (b) expedited, recognized delivery service with proof of delivery, or
(c) United States Mail, postage prepaid, certified mail, return receipt requested. Any notice
required or permitted to be delivered hereunder shall be deemed to be delivered on the date which
it was personally delivered, received by the intended addressee, or, whether actually received or
not, on the third business day after it is deposited in the United States mail, certified or
registered, postage prepaid, addressed to the person who is to receive it at the address which such
person has theretofore specified by written notice delivered in accordance herewith. The Company or
the Grantee may change, at any time and from time to time, by written notice to the other, the
address specified for receiving notices. Until changed in accordance herewith, the Company’s
address for receiving notices shall be Quest Resource Corporation, Attention: Chief Financial
Officer, 9520 North May Avenue, Oklahoma City, Oklahoma 93120. Unless changed, the Grantee’s
address for receiving notices shall be the last known address of the Grantee on the Company’s
records. It shall be the Grantee’s sole responsibility to notify the Company as to any change in
his or her address. Such notification shall be made in accordance with this Section 16.

     Section 17. Binding Effect

     This Award Agreement shall bind, and, except as specifically provided herein, shall inure to
the benefit of the respective heirs, legal representatives, successors and assigns of the parties
hereto.

     Section 18. Governing Law

     This Award Agreement and the rights of all persons claiming hereunder shall be construed and
determined in accordance with the laws of the State of Oklahoma without giving effect to the
principles of the Conflict of Laws to the contrary.

     IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and the Participant
has hereunto set his or her hand effective the day and year first above written.

QUEST RESOURCE CORPORATION

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	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	GRANTEE	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

7exv10w10

Exhibit 10.10

INDEMNIFICATION AGREEMENT

          This Indemnification Agreement (this “Agreement”), dated as of                      ___, 20___, is made by
and between Quest Resource Corporation, a Nevada corporation (the “Corporation”) and                     
(the “Indemnitee”).

RECITALS

     A. The Corporation recognizes that competent and experienced persons are increasingly
reluctant to serve or to continue to serve as directors or officers of corporations unless they are
protected by comprehensive liability insurance or indemnification, or both, due to increased
exposure to litigation costs and risks resulting from their service to such corporations, and due
to the fact that the exposure frequently bears no reasonable relationship to the compensation of
such directors and officers;

     B. The statutes and judicial decisions regarding the duties of directors and officers are
often difficult to apply, ambiguous, or conflicting, and therefore fail to provide such directors
and officers with adequate, reliable knowledge of legal risks to which they are exposed or
information regarding the proper course of action to take;

     C. The Corporation and Indemnitee recognize that plaintiffs often seek damages in such large
amounts and the costs of litigation may be so enormous (whether or not the case is meritorious),
that the defense and/or settlement of such litigation is often beyond the personal resources of
directors and officers;

     D. The Corporation believes that it is unfair for its directors and officers to assume the
risk of huge judgments and other expenses which may occur in cases in which the director or officer
received no personal profit and in cases where the director or officer was not culpable;

     E. The Corporation, after reasonable investigation, has determined that the liability
insurance coverage presently available to the Corporation may be inadequate in certain
circumstances to cover all possible exposure for which Indemnitee should be protected. The
Corporation believes that the interests of the Corporation and its stockholders would best be
served by a combination of such insurance and the indemnification by the Corporation of the
directors and officers of the Corporation;

     F. The Corporation’s Restated Articles of Incorporation require the Corporation to indemnify
its directors and officers to the fullest extent permitted by the Nevada Revised Statutes. The
Restated Articles of Incorporation expressly provide that the indemnification provisions set forth
therein are not exclusive, and contemplate that contracts may be entered into between the
Corporation and its directors and officers with respect to indemnification;

     G. Section 78.7502 of the Nevada Revised Statutes (“Section 78.7502”), under which the
Corporation is organized, empowers the Corporation to indemnify its officers, directors, employees
and agents by agreement and to indemnify persons who serve, at the request of the Corporation, as
the directors, officers, employees or agents of other corporations

 

 

or enterprises,
and Section 78.751 of the Nevada Revised Statutes expressly provides that the indemnification
provided by Section 78.7502 is not exclusive;

     H. The Corporation’s Board of Directors (the “Board of Directors”) has determined that
contractual indemnification as set forth herein is not only reasonable and prudent but also
promotes the best interests of the Corporation and its stockholders;

     I. The Corporation desires and has requested Indemnitee to serve or continue to serve as a
director or officer of the Corporation free from undue concern for unwarranted claims for damages
arising out of or related to such services to the Corporation; and

     J. Indemnitee is willing to serve, continue to serve or to provide additional service for or
on behalf of the Corporation on the condition that he is furnished the indemnity provided for
herein.

AGREEMENT

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

     Section 1. Generally. To the fullest extent permitted by the laws of the State of
Nevada:

          (a) The Corporation shall indemnify Indemnitee if Indemnitee was or is a party or is
threatened to be made a party to, or is otherwise involved in, any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of
the fact that Indemnitee is or was a director, officer, employee or agent of the Corporation, or
while serving as a director or officer of the Corporation, is or was serving or has agreed to serve
at the request of the Corporation as a director, officer, employee or agent (which, for purposes
herein, shall include a trustee, partner or manager or similar capacity) of another corporation,
partnership, joint venture, trust, or other enterprise, or by reason of any action alleged to have
been taken or omitted in such capacity (each, a “Proceeding”).

          (b) The indemnification provided by this Section 1 shall be from and against all Expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding and
any appeal therefrom, but shall only be provided if Indemnitee acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of the Corporation,
and, with respect to any criminal Proceeding, had no reasonable cause to believe Indemnitee’s
conduct was unlawful or if the Indemnitee is not liable to the Corporation pursuant to Section
78.138 of the Nevada Revised Statutes.

          (c) Notwithstanding the foregoing provisions of this Section 1, in the case of any threatened,
pending or completed Proceeding by or in the right of the Corporation to procure a judgment in its
favor by reason of the fact that Indemnitee is or was a director, officer,

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employee or agent of the Corporation, or while serving as a director or officer of the
Corporation, is or was serving or has agreed to serve at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint venture, trust, or
other enterprise, no indemnification shall be made in respect of any claim, issue or matter as to
which Indemnitee shall have been adjudged by a court of competent jurisdiction, after exhaustion of
all appeals therefrom, to be liable to the Corporation or for amounts paid in settlement to the
Corporation, unless, and only to the extent that the District Court of the State of Nevada or the
court in which such Proceeding was brought or other court of competent jurisdiction shall determine
upon application that, despite the adjudication of liability but in view of all the circumstances
of the case, Indemnitee is fairly and reasonably entitled to indemnity for such Expenses which the
District Court of the State of Nevada or such other court shall deem proper.

          (d) The termination of any Proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that
Indemnitee is liable pursuant to Section 78.138 of the Nevada Revised Statutes or did not act in
good faith and in a manner which Indemnitee reasonably believed to be in or not opposed to the best
interests of the Corporation, or with respect to any criminal Proceeding, had reasonable cause to
believe that Indemnitee’s conduct was unlawful.

     Section 2. Successful Defense; Partial Indemnification.

          (a) Notwithstanding any other provision of this Agreement, to the extent that Indemnitee has
been successful on the merits or otherwise in defense of any Proceeding or in defense of any claim,
issue or matter therein, Indemnitee shall be indemnified against all Expenses (including attorneys’
fees) actually and reasonably incurred in connection therewith. For purposes of this Agreement and
without limiting the foregoing, if any Proceeding or any claim, issue or matter therein is disposed
of, on the merits or otherwise (including a disposition without prejudice), without (i) the
disposition being adverse to Indemnitee, (ii) an adjudication that Indemnitee was liable to the
Corporation, (iii) a plea of guilty or nolo contendere by Indemnitee, (iv) an adjudication that
Indemnitee did not act in good faith and in a manner Indemnitee reasonably believed to be in or not
opposed to the best interests of the Corporation, and (v) with respect to any criminal Proceeding,
an adjudication that Indemnitee had reasonable cause to believe Indemnitee’s conduct was unlawful,
Indemnitee shall be considered for the purposes hereof to have been wholly successful with respect
thereto.

          (b) If Indemnitee is entitled under any provision of this Agreement to indemnification by the
Corporation for some or a portion of the Expenses (including attorneys’ fees), judgments, fines or
amounts paid in settlement actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection with any Proceeding, or in defense of any claim, issue or matter therein, and any
appeal therefrom but not, however, for the total amount thereof, the Corporation shall nevertheless
indemnify Indemnitee for the portion of such Expenses (including attorneys’ fees), judgments, fines
or amounts paid in settlement to which Indemnitee is entitled.

     Section 3. Advance Payment of Expenses; Notification and Defense of Claim.

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          (a) The Corporation shall advance all Expenses actually and reasonably incurred by Indemnitee
in connection with the investigation, defense, settlement or appeal of any civil or criminal
Proceeding (but not amounts actually paid in settlement of any such Proceeding). Indemnitee hereby
undertakes to repay such amounts advanced only if, and to the extent that, it shall ultimately be
determined by the court hearing the Proceeding that Indemnitee is not entitled to be indemnified by
the Corporation as authorized hereby. The advances to be made hereunder shall be paid by the
Corporation to Indemnitee within 30 days following receipt of a written request therefor by the
Corporation from the Indemnitee.

          (b) Indemnitee shall, as a condition precedent to his right to be indemnified under this
Agreement, give the Corporation notice in writing as soon as practicable of any claim made against
Indemnitee for which indemnification will or could be sought under this Agreement. Notice to the
Corporation shall be directed to the President of the Corporation at the address indicated in
Section 10 of this Agreement (or such other address as the Corporation shall designate in writing
to Indemnitee). Notice shall be deemed received three business days after the date postmarked if
sent by domestic certified or registered mail, properly addressed; otherwise notice shall be deemed
received when such notice shall actually be received by the Corporation. In addition, Indemnitee
shall give the Corporation such information and cooperation as it may reasonably require and as
shall be within Indemnitee’s power.

          (c) Any indemnification and advances provided for in Section 1 and this Section 3 shall be
made no later than 30 days after receipt of the written request of Indemnitee. If a claim under
this Agreement, under any statute, or under any provision of the Corporation’s Restated Articles of
Incorporation or Bylaws providing for indemnification, is not paid in full by the Corporation
within 30 days after a written request for payment thereof has first been received by the
Corporation, Indemnitee may, but need not, at any time thereafter bring an action against the
Corporation to recover the unpaid amount of the claim and, subject to Section 14 of this Agreement,
Indemnitee shall also be entitled to be paid for the reasonable Expenses (including reasonable
attorneys’ fees) of bringing such action. It shall be a defense to any such action (other than an
action brought to enforce a claim for Expenses incurred in connection with any Proceeding in
advance of its final disposition) that Indemnitee has not met the standards of conduct which make
it permissible under applicable law for the Corporation to indemnify Indemnitee for the amount
claimed. However, Indemnitee shall be entitled to receive interim payments of Expenses pursuant to
Section 3(a) unless and until such defense may be finally adjudicated by court order or judgment
from which no further right of appeal exists. It is the parties’ intention that if the Corporation
contests Indemnitee’s right to indemnification, the question of Indemnitee’s right to
indemnification shall be for the court hearing the Proceeding to decide, and neither the failure of
the Corporation (including its Board of Directors, any committee of the Board of Directors,
independent legal counsel, or its stockholders) to have made a determination that indemnification
of Indemnitee is proper in the circumstances because Indemnitee has met the applicable standard of
conduct required by applicable law, nor an actual determination by the Corporation (including its
Board of Directors, any committee of the Board of Directors, independent legal counsel, or its
stockholders) that Indemnitee has not met such applicable standard of conduct, shall create a
presumption that Indemnitee has or has not met the applicable standard of conduct. In all
circumstances, unless otherwise required by law, the burden of proving that indemnification is not
appropriate will be on the Corporation.

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          (d) In the event the Corporation shall be obligated to pay the Expenses of Indemnitee with
respect to a Proceeding, as provided in this Agreement, the Corporation, if appropriate, shall be
entitled to assume the defense of such Proceeding, with counsel reasonably acceptable to
Indemnitee, upon the delivery to Indemnitee of written notice of its election to do so. After
delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel
by the Corporation, the Corporation will not be liable to Indemnitee under this Agreement for any
fees of counsel subsequently incurred by Indemnitee with respect to the same Proceeding, provided
that (1) Indemnitee shall have the right to employ Indemnitee’s own counsel in such Proceeding at
Indemnitee’s expense and (2) if (i) the employment of counsel by Indemnitee has been previously
authorized in writing by the Corporation, (ii) counsel to the Corporation or Indemnitee shall have
reasonably concluded that there may be a conflict of interest or position, or reasonably believes
that a conflict is likely to arise, on any significant issue between the Corporation and Indemnitee
in the conduct of any such defense or (iii) the Corporation shall not, in fact, have employed
counsel to assume the defense of such Proceeding, then the fees and Expenses of Indemnitee’s
counsel shall be at the expense of the Corporation, except as otherwise expressly provided by this
Agreement. The Corporation shall not be entitled, without the consent of Indemnitee, to assume the
defense of any claim brought by or in the right of the Corporation or as to which counsel for the
Corporation or Indemnitee shall have reasonably made the conclusion provided for in clause (ii)
above.

          (e) Notwithstanding any other provision of this Agreement to the contrary, to the extent that
Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness or otherwise participates in
any Proceeding at a time when Indemnitee is not a party in the Proceeding, the Corporation shall
indemnify Indemnitee against all Expenses (including attorneys’ fees) actually and reasonably
incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

     Section 4. Insurance and Subrogation.

          (a) The Corporation represents that it currently has in effect the policy or policies of
director and officer liability insurance (the “Insurance Policies”) identified below, a copy of
which has been provided to Indemnitee. Indemnitee has coverage as an “insured person” under the
Insurance Policies. Such coverage is limited to the terms of the Insurance Policies, which
generally insure Indemnitee against any liability asserted against, and incurred by, Indemnitee or
on Indemnitee’s behalf arising out of Indemnitee’s Corporate Status.

	 	 	 	 	 	 	 
	Insurer
	 	Policy No.
	 	Amount
	 	Deductible

	 
	 	 	 	 	 	 

          (b) So long as Indemnitee continues to serve as a director or officer of the Corporation, or
continues at the request of the Corporation to serve as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise, and thereafter so long
as Indemnitee could be subject to any possible claim or Proceeding, or could be made, or threatened
to be made, a party to any Proceeding, by reason of Indemnitee’s

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Corporate
Status, the Corporation will be required to maintain the Insurance Policies in effect or to
obtain policies of directors’ and officers’ liability insurance from established and reputable
insurers with coverage in at least the amount or amounts as prescribed by the Insurance Policies
and which provides the Indemnitee with substantially the same rights and benefits as the Insurance
Policies, and which coverage, rights and benefits shall, in any event, be as favorable to
Indemnitee as are accorded to the most favorably insured of the Corporation’s directors or
officers, as the case may be (“Comparable D&O Insurance”) unless, in the reasonable business
judgment of the Board of Directors as it may exist from time to time, either (1) the premium cost
for such Insurance Policies or Comparable D&O Insurance is disproportionate to the amount of
coverage provided, or (2) the coverage provided by such Insurance Policies or Comparable D&O
Insurance is so limited by exclusions that there is insufficient benefit provided by such director
and officer liability insurance. Notwithstanding the foregoing, if in connection with a merger of
the Corporation with another entity in which the Corporation is not the surviving entity or a sale
of all or substantially all of the Corporation’s assets or a similar transaction, the Board of
Directors may agree to purchase tail coverage that is less than that required by the preceding
sentence provided that former directors and officers of the Corporation are not treated differently
from directors and officers serving at the time of such transaction. Indemnitee shall at all times
have the right to inspect the Insurance Policies, and the Corporation shall provide notice to
Indemnitee no less than 60 days prior to the lapse or termination of coverage under any of the
Insurance Policies or Comparable D&O Insurance. The Corporation shall give prompt notice of the
commencement of any Proceeding to the insurers of the Insurance Policies in accordance with the
procedures set forth in the Insurance Policies. The Corporation shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such Proceeding in accordance with the terms of such Insurance
Policies, except if, in the reasonable judgment of the Board of Directors, Indemnitee has acted in
contradiction of the limitations set forth in Section 1(b) (requiring Indemnitee, among other
things, to have acted in good faith), so that it would be inequitable for Indemnitee to receive
coverage and erode the limits of insurance available for other insured persons.

          (c) In the event of any payment by the Corporation under this Agreement, the Corporation shall
be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with
respect to any insurance policy, who shall execute all papers required and take all action
necessary to secure such rights, including execution of such documents as are necessary to enable
the Corporation to bring suit to enforce such rights in accordance with the terms of such insurance
policy. The Corporation shall pay or reimburse all Expenses actually and reasonably incurred by
Indemnitee in connection with such subrogation.

          (d) The Corporation shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder (including, but not limited to, judgments, fines, ERISA excise
taxes or penalties, and amounts paid in settlement) if and to the extent that Indemnitee has
otherwise actually received such payment under this Agreement or any insurance policy, contract,
agreement or otherwise.

     Section 5. Certain Definitions. For purposes of this Agreement, the following
definitions shall apply:

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          (a) The term “by reason of the fact that Indemnitee is or was a director, officer, employee or
agent of the Corporation, or while serving as a director or officer of the Corporation, is or was
serving or has agreed to serve at the request of the Corporation as a director, officer, employee
or agent of another corporation, partnership, joint venture, trust or other enterprise,” or
substantially similar term, shall be broadly construed and shall include, without limitation, any
actual or alleged act or omission to act.

          (b) The term “Corporate Status” shall mean the status of a person who is or was a director,
officer, partner, trustee, employee or agent of the Corporation, or is or was serving, or has
agreed to serve, at the request of the Corporation, as a director, officer, partner, trustee,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise.

          (c) The term “Corporation” shall include, without limitation and in addition to the resulting
corporation, any constituent corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, and employees or agents, so that any person who is
or was a director, officer, employee or agent of such constituent corporation, or is or was serving
at the request of such constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Agreement with respect to the resulting or surviving
corporation as he or she would have with respect to such constituent corporation if its separate
existence had continued.

          (d) The term “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (e) The term “Expenses” shall be broadly and reasonably construed and shall include, without
limitation, all direct and indirect costs of any type or nature whatsoever (including, without
limitation, all attorneys’ fees and related disbursements, expert fees, appeal bonds, court costs,
transcript costs, travel costs, duplicating costs, telephone charges, postage and delivery fees,
other out-of-pocket costs and reasonable compensation for time spent by Indemnitee for which
Indemnitee is not otherwise compensated by the Corporation or any third party, provided that the
rate of compensation and estimated time involved is approved by the Board of Directors, which
approval shall not be unreasonably withheld), actually and reasonably incurred by Indemnitee in
connection with either the investigation, defense or appeal of a Proceeding or establishing or
enforcing a right to indemnification under this Agreement, Section 78.7502 of the Nevada Revised
Statutes or otherwise.

          (f) The term “judgments, fines and amounts paid in settlement” shall be broadly construed and
shall include, without limitation, all direct and indirect payments of any type or nature
whatsoever (including, without limitation, all penalties and amounts required to be forfeited or
reimbursed to the Corporation), as well as any penalties or excise taxes assessed on a person with
respect to an employee benefit plan).

          (g) The term “other enterprises” shall include, without limitation, employee benefit plans.

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          (h) The term “serving at the request of the Corporation” shall include, without limitation,
any service as a director, officer, employee or agent of the Corporation which imposes duties on,
or involves services by, such director, officer, employee or agent with respect to an employee
benefit plan, its participants or beneficiaries.

          (i) A person who acted in good faith and in a manner such person reasonably believed to be in
the interest of the participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner “not opposed to the best interests of the Corporation” as referred to in
this Agreement.

     Section 6. Limitation on Indemnification. Notwithstanding any other provision herein
to the contrary, the Corporation shall not be obligated pursuant to this Agreement:

          (a) Claims Initiated by Indemnitee. To indemnify or advance Expenses to Indemnitee
with respect to any Proceeding (or part thereof) initiated by Indemnitee, except with respect to an
Proceeding brought to establish or enforce a right to indemnification (which shall be governed by
the provisions of Section 6(b) of this Agreement), unless such Proceeding (or part thereof) was
authorized or consented to by the Board of Directors of the Corporation.

          (b) Action for Indemnification. To indemnify Indemnitee for any Expenses incurred by
Indemnitee with respect to any Proceeding instituted by Indemnitee to enforce or interpret this
Agreement, to the extent the court in such Proceeding concludes that it was not instituted by
Indemnitee in good faith or is frivolous, unless and to the extent that the court in such
Proceeding shall determine that, despite such conclusion, Indemnitee is entitled to indemnity for
such Expenses; provided, however, that nothing in this Section 6(b) is intended to limit the
Corporation’s obligation with respect to the advancement of Expenses to Indemnitee in connection
with any such Proceeding instituted by Indemnitee to enforce or interpret this Agreement, as
provided in Section 3 hereof.

          (c) Section 16 Violations. To indemnify Indemnitee on account of any Proceeding with
respect to which final judgment is rendered against Indemnitee for payment or an accounting of
profits arising from the purchase or sale by Indemnitee of securities in violation of Section 16(b)
of the Securities Exchange Act of 1934, as amended, or any similar successor statute.

          (d) Non-compete and Non-disclosure. To indemnify Indemnitee in connection with
Proceedings or claims involving the enforcement of non-compete and/or non-disclosure agreements or
the non-compete and/or non-disclosure provisions of employment, consulting or similar agreements
the Indemnitee may be a party to with the Corporation, or any subsidiary of the Corporation or any
other applicable foreign or domestic corporation, partnership, joint venture, trust or other
enterprise, if any.

     Section 7. Certain Settlement Provisions. The Corporation shall have no obligation to
indemnify Indemnitee under this Agreement for amounts paid in settlement of any Proceeding without
the Corporation’s prior written consent, which shall not be unreasonably withheld. The Corporation
shall not settle any Proceeding in any manner that would impose any fine or other

8

 

obligation on
Indemnitee without Indemnitee’s prior written consent, which shall not be unreasonably withheld.

     Section 8. Savings Clause. If any provision or provisions of this Agreement shall be
invalidated on any ground by any court of competent jurisdiction, then the Corporation shall
nevertheless indemnify Indemnitee as to costs, charges and Expenses (including attorneys’ fees),
judgments, fines and amounts paid in settlement with respect to any Proceeding, whether civil,
criminal, administrative or investigative, including an action by or in the right of the
Corporation, to the full extent permitted by any applicable portion of this Agreement that shall
not have been invalidated and to the full extent permitted by applicable law.

     Section 9. Contribution. In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for herein is held by a court of competent
jurisdiction to be unavailable to Indemnitee in whole or in part, it is agreed that, in such event,
the Corporation shall, to the fullest extent permitted by law, contribute to the payment of
Indemnitee’s costs, charges and Expenses (including attorneys’ fees), judgments, fines and amounts
paid in settlement with respect to any Proceeding, whether civil, criminal, administrative or
investigative, in an amount that is just and equitable in the circumstances, taking into account,
among other things, contributions by other directors and officers of the Corporation or others
pursuant to indemnification agreements or otherwise; provided, that, without limiting the
generality of the foregoing, such contribution shall not be required where such holding by the
court is due to (i) the failure of Indemnitee to meet the standard of conduct set forth in Section
1 hereof, or (ii) any limitation on indemnification set forth in Section 4(c), 6 or 7 hereof.

     Section 10. Form and Delivery of Communications. Any notice, request or other
communication required or permitted to be given to the parties under this Agreement shall be in
writing and either delivered in person or sent by facsimile, overnight mail or courier service, or
certified or registered mail, return receipt requested, postage prepaid, to the parties at the
following addresses (or at such other addresses for a party as shall be specified by like notice):

If to the Corporation:

Quest Resource Corporation

210 Park Avenue, Suite 2750

Oklahoma City, OK 73102

Attn: President

Facsimile: (405) 600-7756

If to Indemnitee:

                                                          

                                                          

Facsimile:
                                        

9

 

     Section 11. Subsequent Legislation. If the Nevada Revised Statutes are amended after
adoption of this Agreement to expand further the indemnification permitted to directors or
officers, then the Corporation shall indemnify Indemnitee to the fullest extent permitted by the
Nevada Revised Statutes, as so amended.

     Section 12. Nonexclusivity. The provisions for indemnification and advancement of
Expenses set forth in this Agreement shall not be deemed exclusive of any other rights which
Indemnitee may have under any provision of law, the Corporation’s Restated Articles of
Incorporation or Bylaws, in any court in which a Proceeding is brought, the vote of the
Corporation’s stockholders or the directors of the Corporation who are not at that time parties to
the Proceeding, other agreements or otherwise, and Indemnitee’s rights hereunder shall continue
after Indemnitee has ceased acting as an agent of the Corporation and shall inure to the benefit of
the heirs, executors and administrators of Indemnitee. However, no amendment or alteration of the
Corporation’s Restated Articles of Incorporation or Bylaws or any other agreement shall adversely
affect the rights provided to Indemnitee under this Agreement

     Section 13. Enforcement. The Corporation shall be precluded from asserting in any
Proceeding that the procedures and presumptions of this Agreement are not valid, binding and
enforceable. The Corporation agrees that its execution of this Agreement shall constitute a
stipulation by which it shall be irrevocably bound in any court of competent jurisdiction in which
a Proceeding by Indemnitee for enforcement of his rights hereunder shall have been commenced,
continued or appealed, that its obligations set forth in this Agreement are unique and special, and
that failure of the Corporation to comply with the provisions of this Agreement will cause
irreparable and irremediable injury to Indemnitee, for which a remedy at law will be inadequate. As
a result, in addition to any other right or remedy Indemnitee may have at law or in equity with
respect to breach of this Agreement, Indemnitee shall be entitled to injunctive or mandatory relief
directing specific performance by the Corporation of its obligations under this Agreement.

     Section 14. Attorneys’ Fees. In the event that any action is instituted by Indemnitee
under this Agreement to enforce or interpret any of the terms hereof, Indemnitee shall be entitled
to be paid all court costs and Expenses, including attorneys’ fees, actually and reasonably
incurred by Indemnitee with respect to such action, unless as a part of such action, the court of
competent jurisdiction determines that each of the material assertions made by Indemnitee as a
basis for such action were not made in good faith or were frivolous. In the event of an action
instituted by or in the name of the Corporation under this Agreement or to enforce or interpret any
of the terms of this Agreement, Indemnitee shall be entitled to be paid all court costs and
Expenses, including attorneys’ fees, actually and reasonably incurred by Indemnitee in defense of
such action (including with respect to Indemnitee’s counterclaims and cross-claims made in such
action), unless as a part of such action the court determines that each of Indemnitee’s material
defenses to such action were not made in good faith or were frivolous.

     Section 15. Interpretation of Agreement. It is understood that the parties hereto
intend this Agreement to be interpreted and enforced so as to provide indemnification to Indemnitee
to the fullest extent now or hereafter permitted by law.

     Section 16. Entire Agreement. This Agreement and the documents expressly referred to
herein constitute the entire agreement between the parties hereto with respect to the matters

10

 

covered hereby, and any other prior or contemporaneous oral or written understandings or agreements
with respect to the matters covered hereby are expressly superseded by this Agreement.

     Section 17. Modification and Waiver. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of
any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

     Section 18. Successor and Assigns. All of the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto
and their respective successors, assigns, heirs, executors, administrators and legal
representatives. The Corporation shall require and cause any direct or indirect successor (whether
by purchase, merger, consolidation or otherwise) to all or substantially all of the business or
assets of the Corporation, by written agreement in form and substance reasonably satisfactory to
Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the
same extent that the Corporation would be required to perform if no such succession had taken
place.

     Section 19. Service of Process and Venue. For purposes of any claims or Proceedings
to enforce this agreement, the Corporation consents to the jurisdiction and venue of any federal or
state court of competent jurisdiction in the states of Nevada and Oklahoma, and waives and agrees
not to raise any defense that any such court is an inconvenient forum or any similar claim.

     Section 20. Supersedes Prior Agreement. This Agreement supersedes any prior
indemnification agreement between Indemnitee and the Corporation or its predecessors.

     Section 21. Governing Law. This Agreement shall be governed exclusively by and
construed according to the laws of the State of Nevada, as applied to contracts between Nevada
residents entered into and to be performed entirely within Nevada. If a court of competent
jurisdiction shall make a final determination that the provisions of the law of any state other
than Nevada govern indemnification by the Corporation of its officers and directors, then the
indemnification provided under this Agreement shall in all instances be enforceable to the fullest
extent permitted under such law, notwithstanding any provision of this Agreement to the contrary.

     Section 22. Employment Rights. Nothing in this Agreement is intended to create in
Indemnitee any right to employment or continued employment.

     Section 23. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed to be an original and all of which together shall be deemed to be one
and the same instrument, notwithstanding that both parties are not signatories to the original or
same counterpart.

     Section 24. Term of Agreement. This Agreement will continue until and terminate upon
the later of (a) six years following the date that Indemnitee has ceased to serve at the

11

 

request of
the Corporation as a director, officer, employee or agent of the Corporation, or as a director,
officer, employee or agent of another corporation, partnership, joint venture, trust or other
enterprise; (b) the expiration of all applicable statute of limitations periods for any claim which
may be brought against Indemnitee in a Proceeding as a result of his Corporate Status; or (c) the
final termination of all Proceedings pending on the date set forth in clauses (a) or (b) in respect
of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and
of any Proceeding commenced by Indemnitee pursuant to Sections 3(c) and 13 of this Agreement
relating thereto.

     Section 25. Headings. The section and subsection headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

[ signatures follow on next page ]

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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered to be effective

as of the date first above written.

	 	 	 	 	 
	 	QUEST RESOURCE CORPORATION

 	 
	 	By  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 
	 	INDEMNITEE:

 	 
	 	By  	 	 
	 	Name:  	 	 
	 	 	 	 
	 

13

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