Exhibit 10.1
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT ("Agreement") is entered into on the 12th day
of January, 2007 between QUEST MINERALS & MINING CORP., a Utah corporation (the
"Company"), and Xxxxxx Xxxxxxxxxxx, Xx. ("Indemnitee").
R E C I T A L
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A. On January 3, 2006, the Company entered into a Loan Agreement
(the "Loan Agreement") with Xxxxx Xxxxxxxxxx (the "Lender"), pursuant to which
the Lender agreed to loan up to $300,000.00 to the Company on terms set forth in
the Loan Agreement.
B. As a condition of entering into the Loan Agreement, the
Indemnitee delivered a Guarantee (the "Guarantee") to the Lender guaranteeing
repayment of the amounts loaned under the Loan Agreement.
C. As a further condition of entering into the Loan Agreement,
the Indemnitee pledged 2,000,000 shares of common stock of the Company currently
owned by Indemnitee (the "Shares") to the Lender as collateral for the amounts
loaned under the Loan Agreement, all pursuant to a Stock Pledge Agreement (the
"Pledge Agreement").
D. On April 3, 2006, the Company defaulted under the Loan
Agreement and the Lender foreclosed on the Shares pursuant to the Pledge
Agreement. On the date of the foreclosure, the Shares had a market value of
approximately $260,000.
E. The Indemnitee delivered the Guarantee and pledged the Shares
in the course and scope of his employment with the Company, as a director for
the Company, and for the benefit of the Company. The Indemnitee's conduct was in
good faith, and he reasonably believed that his conduct was in, or not opposed
to, the corporation's best interests;
F. The Company wishes to provide for indemnification of the
Indemnitee upon the terms and conditions set forth below.
A G R E E M E N T
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It is agreed as follows:
1. The Company agrees to indemnify Indemnitee and to hold
Indemnitee harmless with respect to the foreclosure on the Shares and the
Indemnitee's personal loss therefrom in the amount of $260,000 (the "Loss").
2. In lieu of indemnification in the form of a cash payment for
the Loss, the Company agrees to issue, and the Indemnitee agrees to accept as
payment of indemnification for the Loss, 260,000 shares of the Company's Series
C Convertible Preferred Stock (the "Preferred Shares").
3. Notwithstanding anything contained herein to the contrary, the
parties hereby agree and stipulate as follows:
(a) The issuance of the Preferred Shares (the
"Indemnification Payment") is not indemnification for any loss, cost or expense
of Indemnitee resulting from his willful or negligent violation of Section 16(b)
of the Securities Exchange Act of 1934 or the Foreign Corrupt Practices Act of
1977.
(b) The Indemnification Payment is not indemnification
for any loss, cost or expense of Indemnitee as the direct result of a final
judgment for money damages payable to the Company or any affiliate for or on
account of loss, cost or expense directly or indirectly resulting form the
Indemnitee's negligence or misconduct within the meaning of the Utah Business
Corporation Act.
(c) The Indemnification Payment is not indemnification
for any advances which may have been made of, expenses of investigation, defense
or appeal of any matter the judgment of which is excluded under subsection 4(b)
next above.
(d) The Indemnification Payment is not indemnification
for any liability arising under the Securities Act of 1933 (the "Securities
Act").
4. Nothing contained herein shall be deemed to diminish or
otherwise restrict the Indemnitee's right to indemnification under any provision
of the articles of incorporation or bylaws of the Company, under Utah law, or
under any other agreement between the Indemnity and the Company.
5. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah.
6. This Agreement shall be binding upon all successors and
assigns of the Company (including any transferee of all or substantially all of
its assets and any successor by merger or operation of law) and shall inure to
the benefit of the heirs, personal representatives and estate of Indemnitee.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and signed as of the day and year first above written.
"COMPANY"
QUEST MINERALS & MINING CORP.,
a Utah corporation
/s/ XXXXXX XXXXXXXXXXX, XX.
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Xxxxxx Xxxxxxxxxxx, Xx.,
Chief Executive Officer
"INDEMNITEE"
/s/ XXXXXX XXXXXXXXXXX, XX.
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Xxxxxx Xxxxxxxxxxx, Xx.
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