PURCHASE TRADING PLAN AGREEMENT
WHEREAS, Xxxxx X. Xxxx (the "Purchaser") desires to purchase, from time to
time, certain shares (the "Shares") of Common Stock, par value $0.001 per share
(the "Common Stock"), of Quest Resource Corporation, a Nevada corporation (the
"Company").
WHEREAS, the Purchaser desires to enter into this agreement for the
purpose of establishing a trading plan to make purchases of Shares of Common
Stock in compliance with all applicable laws, including, but not limited to,
Section 10(b) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and the rules and regulations promulgated thereunder, including, but not
limited to, Rule 10b5-1. References herein to this "Agreement" refer to this
agreement and specifically include the trading plan described herein.
NOW, IT IS AGREED, as of this 17th day of June 2006 by the Purchaser and
Capital West Securities (the "Broker") as follows:
Section 1. Terms of Purchase.
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(a) The Purchaser desires that the Broker effect purchases of the Shares on
its behalf in accordance with trading requirements adopted by the Purchaser and
to be delivered in writing to the Broker by separate letter (the "Initial
Trading Instructions"). The trading requirements adopted by the Purchaser are
referred to herein as the "Program Period."
(b) In furtherance of Section 1(a) hereof, the Purchaser directs the Broker
to purchase, in customary brokerage transactions, the Shares, for the
Purchaser's account or accounts, in the Broker's sole discretion as to execution
and timing, subject to the condition that as of the time of any purchase of
Shares, any individual employee of the Broker making the Broker's investment
decisions on behalf of the Purchaser shall not be in possession of or aware of
material nonpublic information relating to the Company's business, operations or
prospects or the value of the Common Stock ("Material Nonpublic Information").
(c) Notwithstanding the foregoing, the Broker shall not purchase Shares at
any time when the Broker, in its sole discretion, shall have determined that
such purchase would violate applicable law, including, without limitation,
Section 10(b) of the 1934 Act and the rules and regulations promulgated
thereunder and Section 5 of the Securities Act of 1933, as amended (the "1933
Act").
(d) The Purchaser agrees that, during the Program Period, it shall not
exercise any subsequent influence over how, when or whether to effect purchases
of the Shares, except that the Purchaser may amend this Agreement as set forth
in Section 3 hereof. Each of the Purchaser and the Broker agree that it will not
discuss with the other the Company's business, operations or prospects or any
other information likely to be related to the value of the Shares or likely to
influence a decision to purchase the Shares. Notwithstanding the preceding
sentence, with the approval of counsel to the Broker, the Purchaser may
communicate with Broker personnel who are not responsible for, and have no
ability to influence, the execution of the trading plan set forth in this
Agreement.
Section 2. Representations, Warranties and Covenants.
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(a) The Purchaser represents, warrants and covenants to the Broker as
follows:
(i) During the term of this Agreement, the Purchaser will not engage,
and will not cause others to engage on behalf of the Purchaser,
in any transactions other than purchases of Shares pursuant to
this Agreement; provided that the Purchaser complies with Rule
16b-3 under the 1934 Act in connection with any such exercise and
the related securities) involving any security into which the
Common Stock is convertible or any other related security or
derivative, including, without limitation, corresponding or
hedging transactions with respect to the Common Stock. The
Purchaser also agrees not to enter into any binding contract with
respect to any transactions described in the preceding sentence.
(ii) The Purchaser will at all times, in connection with the
performance of this Agreement, comply with all applicable laws,
including, without limitation, Section 16 of the 1934 Act and the
rules and regulations promulgated thereunder.
(iii) The Purchaser agrees to provide such additional information and
to execute such additional documents or instruments as may be
reasonably requested by the Company or the Broker in connection
with the performance of this Agreement and to confirm compliance
with applicable law.
(iv) The Company's Compliance Officer has approved this Agreement.
(v) This Agreement constitutes the legal, valid and binding
obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms, except as the enforceability thereof
may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other laws
affecting the enforceability of creditors' rights and general
principles of equity, and as rights to indemnity hereunder may be
limited by applicable law. The Shares are not subject to any
liens, security interests or other impediments to transfer, nor
is there any litigation, arbitration or other proceeding pending,
or to the Purchaser's knowledge threatened, that would prevent or
interfere with the purchase of the Shares under this Agreement.
(b) The Broker represents, warrants and covenants to the Purchaser as
follows:
(i) The Broker has implemented reasonable policies and procedures,
taking into consideration the nature of the Broker's business, to
ensure that individuals making investment decisions will not
violate the laws prohibiting trading on the basis of Material
Nonpublic Information. These policies and procedures include
those that restrict any purchase or sale, or causing any purchase
or sale, of any security as to which the Broker has
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Material Nonpublic Information, as well as those that prevent
such individuals from becoming aware of or in possession of such
Material Nonpublic Information.
(ii) In connection with all purchases of Shares, the Broker shall
deliver to the Purchaser and the Company by facsimile or
electronic mail, no later than the close of business on the date
such transaction is effected, all information necessary (to the
extent that the Broker possesses such information) for the
Purchaser and/or the Company to make all required Form 4 and 5
filings, as required by Section 16(a) of the 1934 Act with regard
to purchases made pursuant to this Agreement. The information
shall be delivered to the Company, to the attention of the
Company's Compliance Officer, by facsimile at (000) 000-0000 or
by electronic mail at xxxxxx@xxxx.xxx, or such other facsimile
number or electronic mail address designated in writing by the
Company.
(iii) This Agreement constitutes the legal, valid and binding
obligation of the Broker enforceable against the Broker in
accordance with its terms, except as the enforceability thereof
may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other laws
affecting the enforceability of creditors' rights and general
principles of equity, and as rights to indemnity hereunder may be
limited by applicable law.
Section 3. Amendments. This Agreement (including the Initial Trading
Instructions) may not be amended by the parties hereto, except as follows: The
parties hereto may amend the provisions of this Agreement (including the Initial
Trading Instructions) upon notice to the Company; provided that at the time of
such amendment, the Purchaser was not in possession of or aware of Material
Nonpublic Information and only upon the written consent of the Company's General
Counsel (or his/her designee). Any modification by the Purchaser will be made in
good faith and not as part of a scheme to evade the prohibitions of Rule 10b5-1.
The amended Agreement or Initial Trading Instructions, as the case may be,
shall not take effect until 90 days after the amendment is adopted. During the
90 day period between the adoption date of the amendment and the effective date
of the amendments, the unmodified Agreement or Initial Trading Instructions, as
the case may be, will remain in effect.
Section 4. Termination. This Agreement shall terminate upon the earlier to
occur of the following:
(a) The close of business on September 30th, 2006; or
(b) The Broker purchases the maximum number of Shares allowable under the
Initial Trading Instructions, as may be amended as provided in Section 3 hereof;
or
(c) The Agreement is terminated by either party immediately upon receipt of
written notice to the other party; provided, however, that with respect to any
termination by the Purchaser pursuant to this Section 4(c) at the time of such
termination, the Purchaser was not in
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possession of or aware of Material Nonpublic Information and such termination
was made in good faith and not as part of a scheme to evade the prohibitions of
Rule 10b5-1; or
(d) Any purchase effected pursuant to this Agreement that violates (or in
the opinion of counsel to the Company or the Broker is likely to violate)
Section 16 of the 1934 Act, any other provision of the Federal securities laws
or regulations adopted by the U.S. Securities and Exchange Commission
thereunder, or any other applicable Federal or State law or regulation; or
(e) The Purchaser materially breaches its obligations under this Agreement;
or
(f) The Purchaser and/or the Company enter into a contract that prevents or
materially restricts purchases by the Purchaser under this Agreement.
If the Agreement is terminated pursuant to this Section 4 and a new
purchase trading plan agreement with respect to purchases of the Purchaser's
Common Stock is entered into with the Broker or any other person, the Purchaser
hereby agrees that the new purchasing trading plan will not take effect until 90
days after its adoption.
Section 5. Indemnification And Limitation on Liability; No Tax, Accounting
or Legal Advice.
(a) The Purchaser agrees to indemnify and hold harmless the Broker (and its
directors, officers, employees and affiliates) from and against all claims,
liabilities, losses, damages and expenses (including reasonable attorneys' fees
and costs) arising out of or attributable to: (i) any material breach by the
Purchaser of this Agreement (including the Purchaser's representations and
warranties), (ii) any violation by the Purchaser of applicable laws or
regulations and (iii) any action taken by the Broker in good faith and without
negligence pursuant to this Agreement. This indemnification will survive the
termination of this Agreement.
(b) Notwithstanding any other provision herein, the Broker will not be
liable to the Purchaser for: (i) special, indirect, punitive, exemplary, or
consequential damages, or incidental losses or damages of any kind, including
but not limited to lost profits, lost savings, and Loss of use of facility or
equipment, regardless of whether arising from breach of contract, warranty,
tort, strict liability or otherwise, and even if advised of the possibility of
such losses or damages or if such losses or damages could have been reasonably
foreseen, or (ii) any failure to perform or for any delay in performance that
results from a cause or circumstance that is beyond its reasonable control,
including but not Limited to failure of electronic or mechanical equipment,
strikes, failure of common carrier or utility systems, severe weather, market
disruptions or other causes commonly known as "acts of God."
(c) The Purchaser acknowledges and agrees that the Broker has not provided
the Purchaser with any tax, accounting or legal advice with respect to this
Agreement.
Section 6. Governing Law. This Agreement will be governed by, and construed
in accordance with, the laws of the State of Oklahoma, without regard to such
State's conflict of laws rules.
Section 7. Entire Agreement. This Agreement constitutes the entire
agreement
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between the parties hereto with respect to the subject matter hereof and
supersedes any previous or contemporaneous agreements, understandings, proposals
or promises with respect thereto, whether written or oral.
Section 8. Assignment. This Agreement and each party's rights and
obligations hereunder may not be assigned or delegated without the written
permission of the other party and shall inure to the benefit of each party's
successors and permitted assigns, whether by merger, consolidation or otherwise.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
/s/ Xxxxx X. Xxxx
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Xxxxx X.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Title: Vice President Sales
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