Exhibit 10.61
THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
     THIS THIRD AMENDMENT TO AMENDED AND RESTATED AGREEMENT (this “Third
Amendment”) is entered into as of January 30, 2009, among QUEST RESOURCE
CORPORATION, a Nevada corporation (the “Borrower”), the Guarantors listed on the
signature pages hereto, ROYAL BANK OF CANADA, as Administrative Agent and
Collateral Agent for the Lenders parties to the hereinafter defined Credit
Agreement (in such capacities, the “Administrative Agent” and “Collateral
Agent,” respectively), and as the Lender.
     Reference is made to the Amended and Restated Credit Agreement dated as of
July 11, 2008 among Borrower, the Administrative Agent, the Collateral Agent and
the Lender, as amended by that certain First Amendment to Amended and Restated
Credit Agreement dated as of October 24, 2008 and that certain Second Amendment
to Amended and Restated Credit Agreement dated as of November 4, 2008 (as
amended, the “Credit Agreement”). Unless otherwise defined in this Third
Amendment, capitalized terms used herein shall have the meaning set forth in the
Credit Agreement; all section, exhibit and schedule references herein are to
sections, exhibits and schedules in the Credit Agreement; and all paragraph
references herein are to paragraphs in this Third Amendment.
RECITALS
     A. The Borrower, Administrative Agent and Lender desire to enter into this
Third Amendment.
     Accordingly, for adequate and sufficient consideration, the parties hereto
agree, as follows:
     Paragraph 1. Amendments. Effective as of the Third Amendment Effective Date
(hereinafter defined), the Credit Agreement is amended as follows:
     1.1 Definitions. Section 1.01 of the Credit Agreement is amended as
follows:
     (a) The following definitions are amended in their entirety to read as
follows:
     “Agreement means this Amended and Restated Credit Agreement as amended by
the First Amendment to Credit Agreement, the Second Amendment to Credit
Agreement and the Third Amendment to Credit Agreement.”
     (b) The following definitions are inserted alphabetically into Section 1.01
of the Credit Agreement:
     “Qualifying Lycoming Sale” means a sale of all or a portion of the Oil and
Gas Properties owned by Quest Eastern Resource, LLC, f/k/a PetroEdge Resources
(WV) LLC located in Lycoming County, Pennsylvania, to a purchaser for Net Cash
Proceeds of at least $5,100,000 provided that (i) a purchase and sale agreement
for such sale is executed on or before January 31, 2009, (ii) a signed copy of
such purchase and sale agreement is delivered to the Administrative Agent on or
before January 31, 2009, (iii) Net Cash Proceeds (other than any holdback
amount) are received by Quest Eastern Resource, LLC or Borrower on or before
February 28, 2009 and out of such Net Cash Proceeds Quest Eastern Resource, LLC
or Borrower applies $750,000 as a mandatory prepayment against the Original Term
Loan Principal Debt by the earlier of (A) one (1) Business Day after receipt by
Quest Eastern Resource, LLC or Borrower of such Net Cash Proceeds and
(B) February 28, 2009.”
Third Amendment to Quest
Resource Corporation
Amended and Restated Credit Agreement

--------------------------------------------------------------------------------

 

     “Third Amendment Effective Date means January 30, 2009.”
     “Third Amendment to Credit Agreement means that certain Third Amendment to
Amended and Restated Credit Agreement dated as of January 30, 2009, among the
Borrower, Royal Bank of Canada, as Administrative Agent, Collateral Agent and as
the Lender.”
     1.2 Section 2.04(c)(i). Section 2.04(c)(i) of the Credit Agreement is
amended to read in its entirety as follows:
     “(i) Dispositions. If any Net Cash Proceeds are received by the Borrower or
any Subsidiary (other than an Excluded Subsidiary) from one or more Dispositions
(including any deferred purchase price therefor and including sales of stock or
other equity interests of Subsidiaries (other than Excluded Subsidiaries))
excluding the PetroEdge Disposition and any Disposition permitted by
Section 7.07(a), the Term Loans shall be prepaid, immediately upon receipt of
such Net Cash Proceeds, in an amount equal to the amount of Net Cash Proceeds
received from all such Dispositions as follows: first, to the Additional Term
Loan Principal Debt until repaid in full, second, the next $4,500,000 will be
applied to the Original Term Loan Principal Debt (and any such prepayments will
be applied against installments of principal due on the Original Term Loan in
direct order of maturity as specified in Section 2.06(a)), third, provided
(a) the QELP Second Amendment has become effective, (b) the QELP First Amendment
has become effective, (c) the QMLP Second Amendment has become effective,
(d) the QELP Redetermined Borrowing Base is at least $190,000,000, and (e) such
Net Cash Proceeds are received by the Borrower or any Subsidiary (other than an
Excluded Subsidiary) by January 31, 2009 (or in the case of the Qualifying
Lycoming Sale, by the deadline specified therefor in the definition of
“Qualifying Lycoming Sale”), the Borrower or such Subsidiary will be entitled to
retain for its own use up to $20,000,000 of Net Cash Proceeds (subject to the
additional mandatory $750,000 prepayment specified in the definition of
“Qualifying Lycoming Sale” in connection with the Qualifying Lycoming Sale)
received by Borrower or such Subsidiary for working capital and to make Capital
Expenditures for the development of its Oil and Gas Properties (but if any of
the foregoing conditions are not satisfied, then no Net Cash Proceeds will be
retained by the Borrower or such Subsidiary for its own use pursuant to this
clause) and fourth, any excess Net Cash Proceeds will be applied to the Original
Term Loan Principal Debt, unless an Event of Default has occurred and is
continuing or would arise as a result thereof (whereupon the provisions of
Section 2.11(d) and not the provisions of this Section 2.04(c)(i) shall apply.”
     Paragraph 2. Effective Date. This Third Amendment shall not become
effective until the date (such date, the “Third Amendment Effective Date”) the
Administrative Agent receives this Third Amendment, executed by the Borrower,
the Guarantors, the Administrative Agent and the Lender;
     Paragraph 3. Acknowledgment and Ratification. The Borrower and the
Guarantors each (i) consent to the agreements in this Third Amendment and
(ii) agree and acknowledge that the execution, delivery, and performance of this
Third Amendment shall in no way release, diminish, impair, reduce, or otherwise
affect the respective obligations of the Borrower or any Guarantor under the
Loan Documents to which it is a party, which Loan Documents shall remain in full
force and effect, as amended and waived hereby, and all rights thereunder are
hereby ratified and confirmed.
Third Amendment to Quest
Resource Corporation
Amended and Restated Credit Agreement

2

--------------------------------------------------------------------------------

 

     Paragraph 4. Representations. The Borrower and the Guarantors each
represent and warrant to the Administrative Agent and the Lender that as of the
Third Amendment Effective Date and after giving effect to the waivers and
amendments set forth in this Third Amendment (a) all representations and
warranties in the Loan Documents are true and correct in all material respects
as though made on the date hereof, except to the extent that any of them speak
to a different specific date, and (b) no Default or Event of Default exists.
     Paragraph 5. Expenses. The Borrower shall pay on demand all reasonable
costs, fees, and expenses paid or incurred by the Administrative Agent incident
to this Third Amendment, including, without limitation, Attorney Costs in
connection with the negotiation, preparation, delivery, and execution of this
Third Amendment and any related documents, filing and recording costs, and the
costs of title insurance endorsements, if any.
     Paragraph 6. Miscellaneous.
     (a) This Third Amendment is a “Loan Document” referred to in the Credit
Agreement. The provisions relating to Loan Documents in Article X of the Credit
Agreement are incorporated in this Third Amendment by reference. Unless stated
otherwise (i) the singular number includes the plural and vice versa and words
of any gender include each other gender, in each case, as appropriate,
(ii) headings and captions may not be construed in interpreting provisions,
(iii) this Third Amendment must be construed, and its performance enforced,
under New York law and applicable federal law, (iv) if any part of this Third
Amendment is for any reason found to be unenforceable, all other portions of it
nevertheless remain enforceable, and (v) this Third Amendment may be executed in
any number of counterparts with the same effect as if all signatories had signed
the same document, and all of those counterparts must be construed together to
constitute the same document.
     Paragraph 7. ENTIRE AGREEMENT. THIS THIRD AMENDMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES ABOUT THE SUBJECT MATTER OF THIS AMENDMENT AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
     Paragraph 8. Parties. This Third Amendment binds and inures to the benefit
of the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent
and the Lender, and their respective successors and assigns.
     Paragraph 9. Further Assurances. The parties hereto each agree to execute
from time to time such further documents as may be necessary to implement the
terms of this Third Amendment.
     Paragraph 10. Release. As additional consideration for the execution,
delivery and performance of this Third Amendment by the parties hereto and to
induce the Administrative Agent, the Collateral Agent and the Lender to enter
into this Third Amendment, the Borrower warrants and represents to the
Administrative Agent, the Collateral Agent and the Lender that no facts, events,
statuses or conditions exist or have existed which, either now or with the
passage of time or giving of notice, or both, constitute or will constitute a
basis for any claim or cause of action against the Administrative Agent, the
Collateral Agent and the Lender or any defense to (i) the payment of Obligations
under the Term Notes and/or the Loan Documents, or (ii) the performance of any
of its obligations with respect to the Term Notes and/or the Loan Documents. In
the event any such facts, events, statuses or conditions exist or have existed,
Borrower unconditionally and irrevocably hereby RELEASES, RELINQUISHES and
forever DISCHARGES Administrative Agent, the Collateral Agent and the Lender, as
well as their
Third Amendment to Quest
Resource Corporation
Amended and Restated Credit Agreement

3

--------------------------------------------------------------------------------

 

predecessors, successors, assigns, agents, officers, directors, shareholders,
employees and representatives, of and from any and all claims, demands, actions
and causes of action of any and every kind or character, past or present, which
Borrower may have against any of them or their predecessors, successors,
assigns, agents, officers, directors, shareholders, employees and
representatives arising out of or with respect to (a) any right or power to
bring any claim for usury or to pursue any cause of action based on any claim of
usury, and (b) any and all transactions relating to the Loan Documents occurring
prior to the date hereof, including any loss, cost or damage, of any kind or
character, arising out of or in any way connected with or in any way resulting
from the acts, actions or omissions of any of them, and their predecessors,
successors, assigns, agents, officers, directors, shareholders, employees and
representatives, including any breach of fiduciary duty, breach of any duty of
fair dealing, breach of confidence, breach of funding commitment, undue
influence, duress, economic coercion, conflict of interest, negligence, bad
faith, malpractice, intentional or negligent infliction of mental distress,
tortious interference with contractual relations, tortious interference with
corporate governance or prospective business advantage, breach of contract,
deceptive trade practices, libel, slander or conspiracy, but in each case only
to the extent permitted by applicable Law.
     The parties hereto have executed this Third Amendment in multiple
counterparts to be effective as of the Third Amendment Effective Date.
Remainder of Page Intentionally Blank
Signature Pages to Follow.
Third Amendment to Quest
Resource Corporation
Amended and Restated Credit Agreement

4

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed as of the Third Amendment Effective Date.

            BORROWER:

QUEST RESOURCE CORPORATION,
as Borrower
      By:       /s/ David Lawler             David Lawler,            President 
   

     The undersigned, as the Guarantors referred to in the Credit Agreement, as
amended and restated by this Third Amendment, hereby consent to this Third
Amendment and hereby confirm and agree that (i) the Loan Documents (which
specifically includes the Guaranty executed by each Guarantor and each Security
Agreement and Mortgage executed by each Guarantor) in effect on the date hereof
to which each are a party are, and shall continue to be, in full force and
effect and are hereby confirmed and ratified in all respects except that, upon
the effectiveness of, and on and after the Third Amendment Effective Date, all
references in such Loan Documents to the Credit Agreement shall mean the Credit
Agreement as amended by this Third Amendment, and (ii) such Loan Documents
consisting of Guaranties, Security Agreements, Mortgages, and assignments and
all of the collateral described therein do, and shall continue to, secure the
payment by the Borrower of the Obligations under the Credit Agreement.

            GUARANTORS:

QUEST OIL & GAS, LLC
as a Guarantor
      By:       /s/ David Lawler             David Lawler,            President 
      QUEST ENERGY SERVICE, LLC,
as a Guarantor
      By:       /s/ David Lawler             David Lawler,            President 
   

Third Amendment to Quest
Resource Corporation
Amended and Restated Credit Agreement

5

--------------------------------------------------------------------------------

 

            QUEST EASTERN RESOURCE, LLC
as a Guarantor
      By:       /s/ David Lawler             David Lawler,            President 
      QUEST MERGERSUB, INC.,
as a Guarantor
      By:       /s/ David Lawler             David Lawler,            President 
   

Third Amendment to Quest
Resource Corporation
Amended and Restated Credit Agreement

6

--------------------------------------------------------------------------------

 

            ADMINISTRATIVE AGENT;

ROYAL BANK OF CANADA,
as Administrative Agent and Collateral Agent
      By:         /s/ Susan Khokher       Name:   Susan Khokher      Title:  
Manager, Agency     

Third Amendment to Quest
Resource Corporation
Amended and Restated Credit Agreement

7

--------------------------------------------------------------------------------

 

            L/C ISSUER AND LENDER:

ROYAL BANK OF CANADA,
as a Lender and L/C Issuer
      By:       /s/ Jason York             Jason York            Authorized
Signatory     

Third Amendment to Quest
Resource Corporation
Amended and Restated Credit Agreement

8