FIRST AMENDMENT TO THE AGREEMENT AND PLAN OF MERGER dated as of October 2, 2009 among NEW QUEST HOLDINGS CORP., QUEST RESOURCE CORPORATION, QUEST MIDSTREAM PARTNERS, L.P., QUEST ENERGY PARTNERS, L.P., QUEST MIDSTREAM GP, LLC, QUEST ENERGY GP, LLC,...
Exhibit 2.2
FIRST AMENDMENT
TO THE
dated as of
October 2, 2009
among
NEW QUEST HOLDINGS CORP.,
QUEST RESOURCE CORPORATION,
QUEST MIDSTREAM PARTNERS, L.P.,
QUEST ENERGY PARTNERS, L.P.,
QUEST MIDSTREAM GP, LLC,
QUEST ENERGY GP, LLC,
QUEST RESOURCE ACQUISITION CORP.,
QUEST ENERGY ACQUISITION, LLC,
QUEST MIDSTREAM HOLDINGS CORP.
and
QUEST MIDSTREAM ACQUISITION, LLC
FIRST AMENDMENT dated as of October 2, 2009 (this “Amendment”) to the Agreement and Plan of
Merger (the “Original Agreement”) dated as of July 2, 2009, is by and among New Quest Holdings
Corp., a Delaware corporation (“Holdco”), Quest Resource Corporation, a Nevada corporation (“QRC”),
Quest Midstream Partners, L.P., a Delaware limited partnership, Quest Energy Partners, L.P., a
Delaware limited partnership, Quest Midstream GP, LLC, a Delaware limited liability company, Quest
Energy GP, LLC, a Delaware limited liability company, Quest Resource Acquisition Corp., a Delaware
corporation that is a wholly owned direct subsidiary of Holdco, Quest Energy Acquisition, LLC, a
Delaware limited liability company that is a wholly-owned direct subsidiary of QRC, Quest Midstream
Holdings Corp., a Delaware corporation that is a wholly owned direct subsidiary of Holdco, and
Quest Midstream Acquisition, LLC, a Delaware limited liability company that is a wholly-owned
direct subsidiary of QRC. Capitalized terms not otherwise defined herein shall have the meanings
given to them in the Original Agreement.
RECITALS
WHEREAS, the parties to the Original Agreement wish to amend the Original Agreement pursuant
to Section 11.5 thereof, and the respective Board of Directors of such parties have approved and
adopted this Amendment; and
WHEREAS, the parties to the Original Agreement (other than the QMLP Parties) wish to consent
to (i) the declaration and payment by the QMLP Parties of a pro-rata dividend on the QMLP Common
Units of 255,614 additional QMLP Common Units (the “Unit Dividend”) so that, after giving effect to
the Unit Dividend and the issuance of 4,063 QMLP Common Units to a QMLP employee on October 1, 2009
on a net exercise basis, the number of issued and outstanding QMLP Common Units as of the date
hereof shall equal 8,655,920, and (ii) the proportionate adjustments of outstanding rights held by
QMLP employees, directors and others to acquire Common Units in connection therewith (which shall
result in 3,385 additional Common Units being issuable pursuant thereto) (the “Adjustments” and,
together with the Unit Dividend, the “Additional Unit Issuances”), all of which rights were
disclosed in Section 7.3(a) of the QMLP Disclosure Letter, so that after giving effect to the
Adjustments and the issuance of QMLP Common Units to the QMLP employee on October 1, 2009 as
described above, the number of QMLP Common Units to be issued upon the vesting of outstanding
rights held by QMLP employees, directors and others to acquire Common Units on the date hereof is
114,635;
NOW, THEREFORE, in consideration of the foregoing, and of the representations, warranties,
covenants and agreements contained herein and in the Original Agreement, the parties hereto hereby
agree as follows:
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| 1. | Glossary of Defined Terms in the Original Agreement |
In the Glossary of Defined Terms, the references to the definitions of “Certificates of
Conversion,” “Conversions,” “QMLLC,” “QMLP Certificate of Conversion,” “QMLP Conversion” and “QMLP
Conversion Time” are deleted in their entirety.
| 2. | Preamble to the Original Agreement |
The Preamble to the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“AGREEMENT AND PLAN OF MERGER (the “Agreement”) dated as of July 2, 2009, is by and
among New Quest Holdings Corp., a Delaware corporation (“Holdco”), Quest Resource
Corporation, a Nevada corporation (“QRC”), Quest Midstream Partners, L.P., a
Delaware limited partnership (“QMLP”), Quest Energy Partners, L.P., a Delaware
limited partnership (“QELP”), Quest Midstream GP, LLC, a Delaware limited liability
company (“QMGP”), Quest Energy GP, LLC, a Delaware limited liability company
(“QEGP”), Quest Resource Acquisition Corp., a Delaware corporation that is a wholly
owned direct subsidiary of Holdco (“QRC Merger Sub”), Quest Energy Acquisition, LLC,
a Delaware limited liability company that is a wholly-owned direct subsidiary of QRC
(“QELP Merger Sub”), Quest Midstream Holdings Corp., a Delaware corporation that is
a wholly owned direct subsidiary of Holdco (“QMHC”), and Quest Midstream
Acquisition, LLC, a Delaware limited liability company that is a wholly-owned direct
subsidiary of QRC (“QMLP Merger Sub”). QMHC, QRC Merger Sub, QELP Merger Sub and
QMLP Merger Sub are sometimes referred to herein collectively as the “Merger Subs”
and each a “Merger Sub.””
| 3. | Recitals of the Original Agreement |
In clause (iv) of the third recital of the Original Agreement, the reference to “Holdco” is
hereby changed to “the QRC Surviving Entity.”
The fourth recital of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“WHEREAS, the board of directors of QMGP, acting upon the unanimous recommendation of
its Conflicts Committee, has (i) determined that this Agreement and the QMLP Merger are
advisable, fair to and in the best interests of QMLP and the holders of QMLP Common Units
(other than QMGP and its affiliates), (ii) approved the execution and delivery of this
Agreement by QMLP and QMGP and the execution and delivery of the Support Agreement by QMLP,
(iii) recommended approval and adoption of this Agreement and the QMLP Merger by the holders
of QMLP Common Units (other than QMGP and its affiliates), as a class, and the holders of
the QMLP Subordinated Units, as a class, and (iv) determined that the QMGP Merger is in the
best interests of QMGP, approved the QMGP Merger and recommended approval of the QMGP Merger
by the holders of the outstanding QMGP Units;”
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In the fifth recital of the Original Agreement, clause (iv) is hereby deleted in its entirety,
the reference to “, and” immediately before clause (iv) is hereby deleted, and “and” is hereby
added immediately before “(iii).”
| 4. | Section 1.3 of the Original Agreement |
Section 1.3(a) of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“(a) Upon the terms and subject to the conditions set forth in this Agreement, and in
accordance with the provisions of the Delaware LP Act and the Delaware LLC Act, at the
Effective Time, QMLP shall be merged with and into QMLP Merger Sub (the “QMLP
Merger”), and the separate existence of QMLP shall thereupon cease. QMLP Merger Sub
shall be the surviving entity in the QMLP Merger (sometimes referred to herein as the
“QMLP Surviving Entity” and, together with the QRC Surviving Entity and the QELP
Surviving Entity, the “Surviving Entities”). The QMLP Merger shall have the effects
specified herein and in the Delaware LP Act and the Delaware LLC Act.”
Section 1.3(b) of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“(b) As soon as practicable following the satisfaction or waiver (subject to Applicable
Laws) of the conditions set forth in this Agreement, at the Closing, QMLP Merger Sub shall
cause a properly executed certificate of merger (the “QMLP Certificate of Merger”)
meeting the requirements of Section 17-211 of the Delaware LP Act and Section 18-209 of the
Delaware LLC Act to be filed in accordance with such sections. The QMLP Merger shall become
effective at the Effective Time, which shall be designated in the QMLP Certificate of Merger
as the effective time of the QMLP Merger.”
Section 1.3(d) of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“(d) At the Effective Time, by virtue of the QMLP Merger, (i) the issued and
outstanding general partner units of QMLP (the “QMLP GP Units”) held by QMGP shall be
converted into a number of validly issued, fully paid and nonassessable shares of Holdco
Common Stock equal to the product obtained by multiplying (x) the number of shares of Holdco
Common Stock issuable pursuant to Section 1.3(c) by (y) 0.30612% (the “QMLP GP Exchange
Ratio” and, together with the QMLP Exchange Ratio, the “QMLP Ratios”), rounded up to the
nearest whole share of Holdco Common Stock, and (ii) the issued and outstanding membership
interests in QMLP Merger Sub shall remain as the sole issued and outstanding membership
interests in QMLP Surviving Entity.”
The reference to “, QMHC” in the first sentence of Section 1.3(e) of the Original Agreement is
hereby deleted.
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| 5. | Section 1.4 of the Original Agreement |
The reference to “Holdco” in the first sentence of Section 1.4(a) of the Original Agreement is
hereby changed to “the QRC Surviving Entity.”
| 6. | Section 1.5 of the Original Agreement |
Section 1.5 of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“Section 1.5 [Reserved].”
| 7. | Section 1.6 of the Original Agreement |
Section 1.6(a) of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“(a) Upon the terms and subject to the conditions set forth in this Agreement, and in
accordance with the Delaware LLC Act, at the QMGP Effective Time, QMGP shall be merged with
and into the QMLP Surviving Entity (the “QMGP Merger”), and the separate existence
of QMGP shall thereupon cease. The QMLP Surviving Entity shall be the surviving entity in
the QMGP Merger. The QMGP Merger shall have the effects specified herein and in the
Delaware LLC Act.”
Section 1.6(b) of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“(b) At the Closing, the QMLP Surviving Entity shall cause a properly executed
certificate of merger (the “QMGP Certificate of Merger”) meeting the requirements of
Section 18-209 of the Delaware LLC Act to be filed in accordance with such section. The
QMGP Merger shall become effective at the time designated in the QMGP Certificate of Merger
as the effective time of the QMGP Merger, which shall be on the Closing Date and promptly
following the Effective Time (the “QMGP Effective Time”).”
The reference to “QRC Surviving Entity” in the first sentence of Section 1.6(d) of the
Original Agreement is hereby changed to “QMLP Surviving Entity.”
| 8. | Section 1.7 of the Original Agreement |
Section 1.7(a) of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“(a) Upon the terms and subject to the conditions set forth in this Agreement, and in
accordance with the Delaware LLC Act, at the QEGP Effective Time, QEGP shall be merged with
and into the QELLC (the “QEGP Merger” and, together with the QRC Merger, the QELP
Merger, the QMLP Merger and the QMGP Merger, the “Mergers”), and the separate
existence of QEGP shall thereupon cease. QELLC shall be the surviving
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entity in the QEGP Merger. The QEGP Merger shall have the effects specified herein and
in the Delaware LLC Act.”
Section 1.7(b) of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“(b) At the Closing, QELLC shall cause a properly executed certificate of merger (the
“QEGP Certificate of Merger” and, together with the QRC Certificate of Merger, the
QELP Certificate of Merger, the QMLP Certificate of Merger and the QMGP Certificate of
Merger, the “Certificates of Merger”) meeting the requirements of Section 18-209 of
the Delaware LLC Act to be filed in accordance with such section. The QEGP Merger shall
become effective at the time designated in the QEGP Certificate of Merger as the effective
time of the QEGP Merger, which shall be on the Closing Date and promptly following the QELP
Conversion Time (the “QEGP Effective Time”).”
| 9. | Section 2.1 of the Original Agreement |
Section 2.1 of the Original Agreement is hereby amended and restated in its entirety to
provide as follows:
“Section 2.1 Limited Liability Company Agreement of QELLC. On or prior to the Closing
Date, each of QRC, QELP and QMLP shall agree on the form of limited liability company
agreement to be used for QELLC in the QELP Conversion, such agreement not to be unreasonably
withheld.”
| 10. | Section 3.1 of the Original Agreement |
In clause (a) of Section 3.1 of the Original Agreement, the reference to “Xxxxxx Xxxxxxx” is
hereby changed to “Xxxxxxx Xxxxxxx.”
| 11. | Addition of New Section 4.5 to the Original Agreement |
Article 4 of the Original Agreement is hereby amended by adding the following as a new Section
4.5:
“Section 4.5 Effect on Holdco Common Stock Held by QRC. At the Effective Time, each
share of Holdco Common Stock issued and outstanding immediately prior to the Effective Time
shall remain outstanding. Immediately following the Effective Time, each share of Holdco
Common Stock held by QRC or the QRC Surviving Entity shall be cancelled by Holdco without
payment therefor.”
| 12. | Section 5.19 of the Original Agreement |
In the third sentence of Section 5.19 of the Original Agreement, clause (iv) is hereby deleted
in its entirety, the reference to “, and” immediately preceding clause (iv) is hereby deleted, and
“and” is hereby added immediately before clause (iii).
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| 13. | Section 5.20 of the Original Agreement |
In Section 5.20 of the Original Agreement, clause (b) is hereby deleted in its entirety, the
reference to “and” immediately preceding clause (b) is hereby deleted, and the reference to “(a)”
is hereby deleted.
| 14. | Section 6.19 of the Original Agreement |
In clause (iv) of the last sentence of Section 6.19 of the Original Agreement, the reference
to “Holdco” is hereby changed to “the QRC Surviving Entity.”
| 15. | Section 6.20 of the Original Agreement |
In clause (b) of Section 6.20 of the Original Agreement, the reference to “Holdco” is hereby
changed to “the QRC Surviving Entity.”
| 16. | Section 7.19 of the Original Agreement |
Clause (iv) of Section 7.19 of the Original Agreement is hereby amended and restated in its
entirety to provide as follows:
“(iv) determined that the QMGP Merger is in the best interests of QMGP, approved the QMGP
Merger and recommended approval of the QMGP Merger by the holders of the outstanding QMGP
Units.”
| 17. | Section 7.20 of the Original Agreement |
Clause (b) of Section 7.20 of the Original Agreement is hereby deleted in its entirety and the
reference to “and (c)” is changed to “and (b).”
| 18. | Section 8.13 of the Original Agreement |
The first sentence of Section 8.13(b) of the Original Agreement is hereby amended and restated
in its entirety to provide as follows:
“For a period of six years after the Effective Time, Holdco shall cause to be maintained
officers’ and directors’ liability insurance covering all officers and directors of QRC,
QELP and QMLP who are, or at any time prior to the Effective Time were, covered by the
existing officers’ and directors’ liability insurance policies of QRC, QELP or QMLP
(“Existing D&O Insurance”) on terms substantially no less advantageous to such
persons than such existing insurance, provided that Holdco shall not be required to pay
annual premiums in an aggregate amount in excess of 300% of the aggregate amount of the last
annual premiums paid by QRC, QELP and QMLP prior to the date hereof with respect to the
Existing D&O Insurance (the amount of which premiums is set forth in Section 8.13 of the
applicable Disclosure Letter) in connection with procuring such insurance (it being
understood and agreed that if such 300% cap is met, Holdco shall purchase as much coverage
for the officers and directors who were the beneficiaries of the Existing D&O Insurance as
is reasonably practicable for such amount).”
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| 19. | Consent to Unit Dividend |
The parties to the Original Agreement (other than the QMLP Parties) hereby consent to the
declaration and payment by the QMLP Parties of the Unit Dividend and the making of the Adjustments.
| 20. | Representation and Warranties of the QMLP Parties |
The QMLP Parties, jointly and severally but subject to Section 11.1 of the Original Agreement,
hereby represent and warrant to QRC and QELP (a) that, as of the date of this Amendment and after
giving effect to the Additional Unit Issuances, (i) the issued and outstanding partnership
interests of QMLP consisted of 8,655,920 QMLP Common Units, 35,134 Class A QMLP Subordinated Units,
4,900,000 Class B QMLP Subordinated Units, 276,531 QMLP GP Units and the QMLP Incentive
Distribution Rights and (ii) the number of QMLP Common Units to be issued upon the vesting of
outstanding rights held by QMLP employees, directors and others to acquire Common Units on the date
hereof is 114,635 and (b) with respect to the change in structure of the QMLP Merger contemplated
by this Amendment, as to the matters set forth in Section 7.6 of the Original Agreement. The
parties hereto acknowledge and agree that (1) the representations and warranties of the QMLP
Parties set forth in (x) clause (a) of the immediately preceding sentence and (y) clause (b) of the
immediately preceding sentence solely with respect to the matters set forth in clause (i) of
Section 7.6(a) of the Original Agreement shall be considered QMLP Specified Warranties for purposes
of Section 9.2(b)(ii) and Section 9.3(b)(ii) of the Original Agreement and (2) the representations
and warranties of the QMLP Parties set forth in clause (b) of the immediately preceding sentence
(other than with respect to the matters set forth in clause (i) of Section 7.6(a) of the Original
Agreement) shall be considered “representations and warranties of the QMLP Parties set forth in
this Agreement” for purposes of Section 9.2(b)(iii) and Section 9.3(b)(iii) of the Original
Agreement.
| 21. | Acknowledgement |
In reliance on the representations and warranties of the QMLP Parties set forth in clause (a)
of the first sentence of Section 20 of this Amendment, each of QRC and QELP acknowledge and agree
that the fact that Section 7.3(a) of the Original Agreement provided that there were 8,655,243 QMLP
Common Units outstanding as of the date of the Original Agreement when in fact there were 8,396,243
Common Units outstanding as of the date of the Original Agreement is not a material breach of the
representation and warranty set forth in Section 7.3(a) of the Original Agreement.
| 22. | Other Terms of the Original Agreement |
Except as otherwise expressly set forth in this Amendment, all the provisions of the Original
Agreement are hereby ratified and confirmed by the parties and shall remain in full force and
effect. All references in the Original Agreement to “this Agreement” shall be read as references
to the Original Agreement, as amended by this Amendment, but references to the date of the Original
Agreement therein shall remain references to July 2, 2009.
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| 23. | Counterparts |
This Amendment may be executed by the parties hereto in separate counterparts, each of which
when so executed and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number of copies hereof
each signed by less than all, but together signed by all of the parties hereto.
| 24. | Headings |
Headings of the Sections of this Amendment are for the convenience of the parties only and
shall be given no substantive or interpretative effect whatsoever.
| 25. | Governing Law |
This Amendment and the rights and obligations of the parties hereto shall be governed by and
construed and enforced in accordance with the laws of the State of Delaware without regard to the
conflicts of law provisions thereof that would cause the laws of any other jurisdiction to apply.
[Signature pages follow.]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be signed by their respective
representatives thereunto duly authorized as of the date first written above.
| NEW QUEST HOLDINGS CORP. | ||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx President |
||||
| QUEST RESOURCE CORPORATION | ||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx President and Chief Executive Officer |
||||
| QUEST MIDSTREAM PARTNERS, L.P. | ||||
| By: | Quest Midstream GP, LLC, its General Partner |
|||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx President and Chief Executive Officer |
||||
| QUEST ENERGY PARTNERS, L.P. | ||||
| By: | Quest Energy GP, LLC, its General Partner |
|||
| By: | /s/ Xxxx Xxxxxxx | |||
| Xxxx Xxxxxxx Chairman of the Board of Directors of Quest Energy GP, LLC |
||||
Signature page to First Amendment to the
Agreement and Plan of Merger
Agreement and Plan of Merger
| QUEST MIDSTREAM GP, LLC | ||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx President and Chief Executive Officer |
||||
| QUEST ENERGY GP, LLC | ||||
| By: | /s/ Xxxx Xxxxxxx | |||
| Xxxx Xxxxxxx Chairman of the Board of Directors of Quest Energy GP, LLC |
||||
| QUEST RESOURCE ACQUISITION CORP. | ||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx President |
||||
| QUEST ENERGY ACQUISITION, LLC | ||||
| By: | Quest Resource Corporation, its Sole Member |
|||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx President and Chief Executive Officer |
||||
| QUEST MIDSTREAM HOLDINGS CORP. | ||||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx President |
||||
Signature page to First Amendment to the
Agreement and Plan of Merger
Agreement and Plan of Merger
| QUEST MIDSTREAM ACQUISITION, LLC | ||||
| By: | Quest Resource Corporation, its Sole Member |
|||
| By: | /s/ Xxxxx Xxxxxx | |||
| Xxxxx Xxxxxx President and Chief Executive Officer |
||||
Signature page to First Amendment to the
Agreement and Plan of Merger
Agreement and Plan of Merger
