UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 1)*
Quest Energy Partners, L.P.
(Name of Issuer)
(Title of Class of Securities)
(CUSIP Number)
Jack T. Collins
210 Park Avenue, Suite 2750
Oklahoma City, OK 73102
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition
that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e),
Rule 13d-1(f) or Rule 13d-1(g), check the following box.
o
Note:
Schedules filed in paper format shall include a signed original and five copies of the
schedule including all exhibits. See Rule 13d-7(b) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting persons initial filing on
this form with respect to the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be filed for
the purpose of Section 18 of the Securities Exchange Act of 1934 (Act) or otherwise subject to
the liabilities of that section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
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1
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NAMES OF REPORTING PERSONS:
Quest Resource Corporation
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY):
90-0196936
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2
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CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS):
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(a)
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(b)
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3
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SEC USE ONLY:
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4
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SOURCE OF FUNDS (SEE INSTRUCTIONS):
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OO
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5
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CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e):
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o
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6
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CITIZENSHIP OR PLACE OF ORGANIZATION:
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Nevada
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7
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SOLE VOTING POWER:
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NUMBER OF
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3,201,521(1)
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SHARES
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8
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SHARED VOTING POWER:
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BENEFICIALLY
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OWNED BY
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0
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EACH
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9
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SOLE DISPOSITIVE POWER:
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REPORTING
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PERSON
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3,201,521(1)
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WITH
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10
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SHARED DISPOSITIVE POWER:
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0
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11
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AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON:
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3,201,521(2)
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12
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CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS):
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o
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13
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PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11):
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26.0%(3)
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14
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TYPE OF REPORTING PERSON (SEE INSTRUCTIONS):
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CO
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(1)
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On November 15, 2007, in connection with the Issuers initial public offering of common units representing
limited partner interests, Quest Resource Corporation contributed assets to the Issuer and received 3,201,521 common
units and 8,857,981 subordinated units.
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(2)
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The 8,857,981 subordinated units may be converted into an equal number of common units upon satisfaction
of the conditions in the Issuer Partnership Agreement (as defined in Item 6).
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(3)
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Based on the 12,316,521 Common Units outstanding as of June 9, 2009, as set forth in the Issuers Annual Report on
Form 10-K for the fiscal year ended December 31, 2008.
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2
TABLE OF CONTENTS
EXPLANATORY NOTE
This Amendment No. 1 on Schedule 13D/A (this Amendment) relates to common units representing
limited partner interests (the Common Units) of Quest Energy Partners, L.P. (the Issuer), a
Delaware limited partnership, which has its principal executive office at 210 Park Avenue, Suite
2750, Oklahoma City, Oklahoma, 73102, and updates the Schedule 13D filed by Quest Resource
Corporation (QRC), a Nevada corporation, on December 14, 2007 (the Original Schedule 13D). The
Original Schedule 13D is hereby amended and supplemented by QRC as set forth below in this
Amendment. Unless set forth below, all previous items of the Original Schedule 13D are unchanged.
Capitalized terms used herein which are not defined herein have the meanings set forth in the
Original Schedule 13D.
Item 1. Security and Issuer
The last sentence of Item 1 of the Original Schedule 13D is hereby amended and restated in its
entirety as follows:
The beneficial ownership reported in this Schedule 13D assumes that at July 2, 2009, there
were 12,316,521 Common Units outstanding.
Item 2. Identity and Background
The last paragraph of Item 2 of the Original Schedule 13D is hereby amended and restated in
its entirety as follows:
In accordance with the provisions of General Instruction C to Schedule 13D, information
concerning the executive officers and directors (the Listed Persons) required by Item 2 of
Schedule 13D is provided on
Schedule I
and is incorporated herein. To QRCs knowledge,
none of the Listed Persons have been, during the last five years, (i) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), or (ii) a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
Item 3 of the Original Schedule 13D is hereby amended and supplemented by adding the following
thereto:
The Support Agreement described in Item 4 of this Amendment (the terms of which are hereby
incorporated by reference) was entered into among QRC, the Issuer, Quest Midstream Partners, L.P.,
a Delaware limited partnership (QMLP), and certain unitholders of QMLP (the QMLP Investors).
QRC entered into the Support Agreement as an inducement to the Issuer and QMLP to enter into the
Merger Agreement described in Item 4 (the terms of which are hereby incorporated by reference).
The QMLP Investors entered into the Support Agreement as an inducement to QRC and the Issuer to
enter into the Merger Agreement. The parties to the Support Agreement did not pay additional
consideration to any other party thereto in connection with the execution and delivery of the
Support Agreement and thus no funds were used for such purpose.
As discussed below in Item 4 of this Amendment, the consideration being offered to holders of
the Common Units pursuant to the Merger Agreement (other than Common Units owned by QRC) consists
exclusively of equity interests of New Quest (as defined in Item 4) in exchange for the
3
outstanding Common Units. The Subordinated Units, incentive distribution rights and general
partner units of the Issuer and the Common Units owned by QRC will be canceled for no
consideration.
Item 4. Purpose of Transaction
Item 4 of the Original Schedule 13D is hereby amended and supplemented by adding the following
thereto:
The Issuer entered into an Agreement and Plan of Merger, dated as of July 2, 2009 (the Merger
Agreement), among the Issuer, QRC, New Quest Holdings Corp., a newly formed Delaware corporation
that is a wholly owned direct subsidiary of QRC (New Quest), QMLP, Quest Midstream GP, LLC, a
Delaware limited liability company that is the general partner of QMLP (QMLP GP), Quest Energy
GP, LLC, a Delaware limited liability company that is the general partner of the Issuer (QELP GP
or the General Partner), and certain wholly owned direct and indirect subsidiaries of New Quest.
The purpose of the Merger Agreement is to effectuate a recombination of the Issuer, QRC and
QMLP, pursuant to which, after a series of mergers and conversions (the Transactions), the
Issuer, QRC and QMLP would become wholly owned subsidiaries of New Quest. Pursuant to the
Transactions, each Common Unit of the Issuer (other than Common Units owned by QRC) would be
exchanged for 0.2859 shares of New Quest common stock, each share of QRC common stock would be
exchanged for 0.0575 shares of New Quest common stock, and each common unit of QMLP would be
exchanged for 0.4033 shares of New Quest common stock, in each case, with any fractional share of
New Quest common stock being rounded up to the nearest whole share of New Quest common stock. Upon
consummation of the Transactions, the equity of New Quest would be owned approximately 33% by
current equity holders of the Issuer, approximately 44% by current equity holders of QMLP, and
approximately 23% by current equity holders of QRC. The Subordinated Units, incentive distribution
rights and general partner units of the Issuer and the Common Units owned by QRC will be canceled
for no consideration.
At the time of the closing of the Transactions, New Quest will change its name to a name which
has not yet been decided and the rights of the holders of New Quest common stock will be governed
by Delaware law and the forms of New Quests certificate of incorporation and bylaws, each of which
were attached to the Merger Agreement. The New Quest board of directors will consist of nine
members, two of whom will be designated by the current board of directors of QRC, three of whom
will be designated by the conflicts committee of the board of directors of QELP GP, three of whom
will be designated by the board of directors of QMLP GP, and one of whom shall be the principal
executive officer of New Quest and who is expected to be David C. Lawler. It is currently expected
that Gary M. Pittman will be chairman of the New Quest board of directors.
The Merger Agreement contains customary representations and warranties and covenants by each
of the parties thereto. Completion of each of the Transactions contemplated by the Merger
Agreement is conditioned upon, among other things, the arrangement of one or more satisfactory
credit facilities for New Quest, the approval of the transaction by the stockholders of QRC and the
unitholders of the Issuer and QMLP, and consents from each entitys existing lenders.
Pursuant to the Merger Agreement, New Quest must file a registration statement with the
Securities and Exchange Commission to register its shares under the Securities Act of 1933, as
amended, which registration statement must be declared effective prior to the closing of the
Transactions. New Quest must also receive authorization for listing on the NASDAQ Stock Market of
the shares of New Quest common stock to be issued pursuant to the Merger Agreement. In connection
with the closing of the Transactions under the Merger Agreement, it is anticipated that the Issuer
will seek to cause its
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Common Units to be deregistered under the Securities and Exchange Act of 1934, as amended, and
delisted from the NASDAQ Global Market.
In connection with the execution of the Merger Agreement, the Issuer entered into a Support
Agreement, dated as of July 2, 2009, among the Issuer, QRC, QMLP and the QMLP Investors (the
Support Agreement). Pursuant to the Support Agreement, QRC, which owns all of the Subordinated
Units of the Issuer, agreed to vote all such Subordinated Units to approve and adopt the Merger
Agreement and certain of the Transactions contemplated therein and against certain other competing
transactions. QRC also granted a proxy to the chairman of the board of directors of QELP GP
authorizing him to vote its Subordinated Units of the Issuer to approve and adopt the Merger
Agreement and certain of the Transactions contemplated therein. QRC and the QMLP Investors also
agreed to vote certain of their respectively held equity interests of QMLP in favor of the Merger
Agreement and certain of the Transactions contemplated therein relating to such interests and
against certain other competing transactions. The QMLP Investors that also own membership
interests in QMLP GP approved, authorized and consented to a merger of QMLP GP as part of the
Transactions.
The foregoing summaries of the Merger Agreement and Support Agreement do not purport to be
complete and are subject to, and are qualified in their entirety by, reference to the Merger
Agreement, which is filed herewith as Exhibit 99.2, and the Support Agreement, which is filed
herewith as Exhibit 99.3, and each of which is incorporated by reference herein.
Except as described in this Item 4, QRC does not have, as of the date of this Amendment, any
other plans or proposals that relate to or would result in any of the actions or events specified
in clauses (a) through (i) of Item 4 of Schedule 13D. QRC may change its plans or proposals in the
future.
Item 5. Interest in Securities of the Issuer
Item 5 of the Original Schedule 13D is hereby amended and restated in its entirety as follows:
(a)-(b)(1) QRC is the sole beneficial owner of, and has the sole power to vote, or to direct
the vote, sole power to dispose or to direct the disposition of, 3,201,521 Common Units, which in
the aggregate represents approximately 26.0% of the outstanding Common Units. QRC is also the sole
beneficial owner of 8,857,981 Subordinated Units, which are convertible into Common Units on a
one-for-one basis upon satisfaction of the conditions as described in Item 6 below. Pursuant to
the Issuer Partnership Agreement (as defined in Item 6), the Merger Agreement and certain of the
Transactions contemplated therein will require the approval by a vote of the Subordinated Units
held by QRC, voting as a separate class from the Common Units, which is subject to the Support
Agreement described in Item 4 of this Amendment. Under the Issuer Partnership Agreement, QRC will
not be entitled to vote its Common Units with respect to the Merger Agreement or any of the
Transactions contemplated therein.
(2) As shown on
Schedule I
, the Listed Persons do not beneficially own any Common
Units.
(c) There have been no reportable transactions with respect to the Common Units within the
last 60 days by QRC except for the execution of the Merger Agreement and Support Agreement as
described in Item 4 of this Amendment.
(d) No person other than QRC has the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the Common Units.
(e) Not applicable.
5
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the
Issuer
Item 6 of the Original Schedule 13D is hereby amended and restated in its entirety as follows:
Issuer Partnership Agreement
Subject to the terms and conditions of the First Amended and Restated Agreement of Limited
Partnership of the Issuer, as amended (the Issuer Partnership Agreement), the General Partner and
its affiliates have the right to register for resale under the Securities Act of 1933, as amended,
and applicable state securities laws any limited partner units that they hold. The Issuer is
obligated to pay all expenses incidental to the registration, excluding underwriting discounts and
commissions.
Pursuant to the terms of the Issuer Partnership Agreement, the subordination period generally
will end if the Issuer has earned and paid at least $0.40 per quarter on each outstanding Common
Unit, Subordinated Unit and general partner unit for any three consecutive, non-overlapping
four-quarter periods ending on or after December 31, 2012. The subordination period will also end
if the unitholders remove the General Partner other than for cause and units held by the General
Partner and its affiliates are not voted in favor of such removal. When the subordination period
ends, all remaining Subordinated Units will convert into Common Units on a one-for-one basis, and
the Common Units will no longer be entitled to arrearages.
Depending on the matter subject to a vote, holders of the Subordinated Units vote either as a
separate class from the Common Units or as part of a single class with the Common Units. Pursuant
to the Issuer Partnership Agreement, the Merger Agreement and certain of the Transactions
contemplated therein will require the approval by a vote of the Subordinated Units held by QRC,
voting as a separate class from the Common Units, which is subject to the Support Agreement
described in Item 4 of this Amendment. Under the Issuer Partnership Agreement, QRC will not be
entitled to vote its Common Units with respect to the Merger Agreement or any of the Transactions
contemplated therein.
The Issuer Partnership Agreement additionally contains various provisions with respect to the
units governing, among other matters, distributions, transfers and allocations of profits and
losses to the partners.
Limited Liability Company Agreement of the General Partner
Under the Amended and Restated Limited Liability Company Agreement of the General Partner (the
LLC Agreement), QRC has the right to elect the members of the board of directors of the General
Partner.
Credit Agreement
QRC entered into an Amended and Restated Credit Agreement, dated as of July 11, 2008, as
amended (the Credit Agreement), among QRC, as the borrower, Royal Bank of Canada, as
administrative agent and collateral agent, and the lenders from time to time party thereto. The
3,201,521 Common Units and 8,857,981 Subordinated Units beneficially owned by QRC are pledged to
the lenders under the Credit Agreement as security pursuant to a Pledge and Security Agreement,
dated as of November 15, 2007, as amended (the Pledge Agreement). The Credit Agreement contains
customary representations and warranties, affirmative and negative covenants and events of default
relating to defaults of QRC and certain of its subsidiaries.
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Merger Agreement and Support Agreement
The information set forth under Items 3, 4 and 5 relating to the Merger Agreement and Support
Agreement are hereby incorporated by reference in this Item 6.
The above summaries of the material terms of the Issuer Partnership Agreement, the LLC
Agreement and the Credit Agreement do not purport to be complete and are subject to, and are
qualified in their entirety by, reference to the Issuer Partnership Agreement, which is filed
herewith as Exhibits 99.4 and 99.5, the LLC Agreement, which is filed herewith as Exhibit 99.6, the
Credit Agreement, which is filed herewith as Exhibits 99.7 through 99.12, and the Pledge Agreement,
which is filed herewith as Exhibits 99.13 and 99.14, and each of which is incorporated by reference
herein.
Item 7. Material to be Filed as Exhibits
Item 7 of the Original Schedule 13D is hereby amended and restated in its entirety as
follows:
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Exhibit 99.1
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Contribution, Conveyance and Assumption Agreement, dated as
of November 15, 2007, by and among the Issuer, QRC, QELP GP,
Quest Cherokee, LLC, Quest Oil & Gas, LLC, and Quest Energy
Service, LLC (incorporated herein by reference to Exhibit
10.1 to the Issuers Current Report on Form 8-K filed on
November 21, 2007).
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Exhibit 99.2
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Agreement and Plan of Merger, dated as of July 2, 2009, by
and among the Issuer, QRC, New Quest, QMLP, QMLP GP, QELP
GP, Quest Resource Acquisition Corp., Quest Energy
Acquisition, LLC, Quest Midstream Holdings Corp. and Quest
Midstream Acquisition, LLC (incorporated herein by reference
to Exhibit 2.1 to the Issuers Current Report on Form 8-K
filed on July 7, 2009).
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Exhibit 99.3
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Support Agreement, dated as of July 2, 2009, by and among
the Issuer, QRC, QMLP, and QMLP Investors (incorporated
herein by reference to Exhibit 10.1 to the Issuers Current
Report on Form 8-K filed on July 7, 2009).
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Exhibit 99.4
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First Amended and Restated Agreement of Limited Partnership
of the Issuer, dated as of November 15, 2007, by and between
QRC and QELP GP (incorporated herein by reference to Exhibit
3.1 to the Issuers amended Current Report on Form 8-K/A
filed on December 7, 2007).
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Exhibit 99.5
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Amendment No. 1 to the First Amended and Restated Agreement
of Limited Partnership of the Issuer, effective as of
January 1, 2007, by QELP GP (incorporated herein by
reference to Exhibit 3.1 to the Issuers Current Report on
Form 8-K filed on April 11, 2008).
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Exhibit 99.6
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Amended and Restated Limited Liability Company Agreement of
QELP GP, dated as of November 15, 2007, by QRC (incorporated
herein by reference to Exhibit 3.2 to the Issuers Current
Report on Form 8-K filed on November 21, 2007).
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Exhibit 99.7
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Amended and Restated Credit Agreement, dated as of July 11,
2008, by and among QRC, as the Borrower, Royal Bank of
Canada, as Administrative Agent and Collateral Agent, and
the lenders from time to time party thereto (incorporated
herein by reference to Exhibit 10.1 to QRCs Current Report
on Form 8-K filed on July 16, 2008).
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Exhibit 99.8
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First Amendment to Amended and Restated Credit Agreement,
dated as of October 24, 2008, by and among QRC, Royal Bank
of Canada and the Guarantors party thereto (incorporated
herein by reference to Exhibit 10.1 to QRCs Current Report
on Form 8-K filed on October 31, 2008).
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Exhibit 99.9
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Second Amendment to Amended and Restated Credit Agreement,
dated as of November 4, 2008, by and among QRC, Royal Bank
of Canada and the Guarantors party thereto (incorporated
herein by reference to Exhibit 10.1 to QRCs Current Report
on Form 8-K filed on November 7, 2008).
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Exhibit 99.10
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Third Amendment to Amended and Restated Credit Agreement,
dated as of January 30, 2009, by and among QRC, Royal Bank
of Canada and the Guarantors party thereto (incorporated by
reference to Exhibit 10.61 to QRCs Annual Report on Form
10-K filed on June 3, 2009).
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Exhibit 99.11
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Fourth Amendment to Amended and Restated Credit Agreement,
dated as of May 29, 2009, by and among QRC, Royal Bank of
Canada and the Guarantors party thereto (incorporated by
reference to Exhibit 10.62 to QRCs Annual Report on Form
10-K filed on June 3, 2009).
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Exhibit 99.12
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Fifth Amendment to Amended and Restated Credit Agreement,
dated as of June 30, 2009, by and among QRC, Royal Bank of
Canada and the Guarantors party thereto (incorporated herein
by reference to Exhibit 10.4 to QRCs Current Report on Form
8-K filed on July 7, 2009).
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Exhibit 99.13
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Pledge and Security Agreement for Credit Agreement by QRC
for the benefit of Royal Bank of Canada, dated as of
November 15, 2007 (incorporated herein by reference to
Exhibit 10.10 to QRCs Current Report on Form 8-K filed on
November 21, 2007).
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Exhibit 99.14
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First Amendment to Pledge and Security Agreement for Credit Agreement by QRC for the
benefit of Royal Bank of Canada, dated as of July 11, 2008 (incorporated herein by reference to
Exhibit 10.4 to QRCs Current Report on Form 8-K filed on July 16, 2008).
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information
set forth in this statement is true, complete and correct.
July 8, 2009
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QUEST RESOURCE CORPORATION
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By:
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/s/ Jack T. Collins
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Jack T. Collins
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Executive Vice President Finance/Corporate Development
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SCHEDULE I
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Name
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Position and Present Principal Occupation
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Common Units Owned
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David C. Lawler
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Chief Executive Officer, President and
Director of Quest Resource Corporation
and Quest Energy GP, LLC
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0
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Eddie M. LeBlanc, III
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Chief Financial Officer of Quest
Resource Corporation and Quest Energy
GP, LLC
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0
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David W. Bolton
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Executive Vice President Land of
Quest Resource Corporation and Quest
Energy GP, LLC
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0
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Richard Marlin
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Executive Vice President Engineering
of Quest Resource Corporation and Quest
Energy GP, LLC
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0
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Jack T. Collins
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Executive Vice President
Finance/Corporate Development of Quest
Resource Corporation and Quest Energy
GP, LLC
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0
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Thomas A. Lopus
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Executive Vice President Appalachia
of Quest Resource Corporation and Quest
Energy GP, LLC
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0
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Jon H. Rateau
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Chairman of the Board and Director of
Quest Resource Corporation; Vice
President of New Energy, Global Primary
Products Growth of Alcoa, Inc., a
primary aluminum producer company
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0
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John C. Garrison
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Director of Quest Resource Corporation;
certified public accountant; Chief
Financial Officer, Secretary and
Director of Empire Energy Corporation
International
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0
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William H. Damon, III
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Director of Quest Resource Corporation;
Senior Vice President and National
Director of Power Consulting for HDR,
Inc., an engineering-consulting firm
focused on power generation development
and engineering projects for electric
utilities and independent power
producers
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0
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Each of the above named persons is a U.S. citizen.
The principal business address for each of the persons listed above is c/o Quest Resource
Corporation, 210 Park Avenue, Suite 2750, Oklahoma City, Oklahoma 73102.
Quest Energy Partners, L.P. (MM) (NASDAQ:QELP)
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