Exhibit 10.32
CAUSE NO. 2008-52399

         
QUEST RESOURCE CORPORATION,
  §   IN THE DISTRICT COURT OF
QUEST ENERGY PARTNERS, L.P.,
  §    
AND QUEST MIDSTREAM
  §    
PARTNERS, L.P.,
  §    
 
  §    
                    Plaintiffs,
  §    
 
  §    
v.
  §    
 
  §   HARRIS COUNTY, T E X A S
ROCKPORT ENERGY, LLC,
  §    
ROCKPORT GEORGETOWN
  §    
PARTNERS, LLC, ROCKPORT
  §    
GEORGETOWN LLC, ROCKPORT
  §    
GEORGETOWN HOLDINGS, LP,
  §    
JERRY D. CASH, BRYAN T. SIMMONS
  §    
AND STEVEN HOCHSTEIN,
  §    
 
  §    
                    Defendants.
  §   165TH JUDICIAL DISTRICT

FULL AND FINAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE
     THIS FULL AND FINAL SETTLEMENT AGREEMENT AND MUTUAL RELEASE (the
“Agreement”) is made as of the last date signed below, among Quest Resource
Corporation; Quest Energy Partners, L.P.; Quest Midstream Partners, L.P.
(collectively, “Quest”); Rockport Energy, LLC; Rockport Georgetown Partners,
LLC; Rockport Georgetown, LLC; Rockport Georgetown Holdings, LP; Jerry D. Cash;
Bryan T. Simmons and Steven Hochstein. (collectively, the “Parties”).
RECITALS:
     WHEREAS, Quest Resource Corporation; Quest Energy Partners, L.P.; and Quest
Midstream Partners, L.P. sued Rockport Energy, LLC; Rockport Georgetown
Partners, LLC; Rockport Georgetown, LLC; Rockport Georgetown Holdings, LP; Jerry
D. Cash; Bryan T.

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Simmons and Steve Hochstein in the case styled Quest Resource Corporation, et
al. v. Rockport Energy, LLC, et al.; Cause No. 2008-52399; In the District Court
of Harris County, Texas; 165th Judicial District (the “Lawsuit”); and
     WHEREAS, Rockport Energy, LLC, Bryan T. Simmons (“Simmons”), and Steven
Hochstein (“Hochstein”) filed cross-claims against Jerry D. Cash (“Cash”); and
     WHEREAS, Cash did not file an answer to the Lawsuit or to cross-claims; and
     WHEREAS, Quest amended its petition and dropped Rockport Georgetown
Partners, LLC; Rockport Georgetown, LLC; and Rockport Georgetown Holdings, LP as
defendants in the Lawsuit; and
     WHEREAS, Rockport Energy, LLC, Bryan T. Simmons and Steven Hochstein deny
all liability under claims asserted by Quest; and
     WHEREAS, there is uncertainty and disagreement concerning the existence and
extent of liability regarding matters at issue in the Lawsuit; and
     WHEREAS, to avoid the expense, inconvenience, and uncertainty of
litigation, the Parties wish to compromise and settle the claims filed in the
Lawsuit and the matters in dispute among them with respect to the Lawsuit; and
     WHEREAS, the Parties do not wish or intend this Agreement to be an
admission by any of them concerning any matter whatsoever; and
     NOW THEREFORE, in consideration of the promises contained herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows:

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     1. Settlement:

  a.   As to Quest’s Claims against Rockport Energy LLC, Bryan T. Simmons, Steve
Hochstein, and Jerry Cash: Rockport Energy, LLC agrees to assign, convey, pay or
cause to be assigned, conveyed, or paid to Quest and Quest agrees to accept the
following:

  1.   60% of Rockport Energy, LLC’s interest in the Bird Island well (API#
17-023-22995), the ALL RA SUA unit, respective State Lease No. 18809 and any
other interests in said unit. The interest shall be assigned to Quest in the
form attached as Exhibit A.     2.   60% of Rockport Energy, LLC’s imputed
interest in LGS Partners, L.P. The interest shall be conveyed to Quest in the
form attached as Exhibit B.     3.   A cash payment of $188,650.00. The payment
of $188,650 shall be paid within five (5) business days of the full execution of
this Full and Final Settlement Agreement and Release by the Parties by wire
transfer to:         Name of institution: Comerica Bank
Name on the account: Quest Resource Corporation
ABA No.: 111000753
Account number: 1881237372

  b.   As to Rockport Energy, LLC, Bryan T. Simmons and Steve Hochstein’s claims
against Jerry Cash: Rockport Energy, LLC will transfer $80,000 which has been
held by Rockport Energy tax obligations. The amount will be forwarded to Cash’s
accountant, Tom Swearingen, to be held in escrow

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      pending payment to the I.R.S. Upon the completion of assignments,
conveyances and payments due to Quest described above, Cash shall no longer have
any interest in Rockport Energy, LLC and hereby relinquishes any such interest
to Bryan T. Simmons and Steve Hochstein. Cash agrees to relinquish his
membership in Rockport Energy, LLC in the form attached as Exhibit C.

     2. Release by Quest of Rockport Energy, LLC: Quest Resource Corporation,
Quest Energy Partners, L.P., Quest Midstream Partners, L.P. and its past and
present affiliates, parents, subsidiaries, divisions, predecessors, successors
and assigns, and its present and former partners, employees, representatives,
officers, directors, shareholders, and attorneys (the “Quest Parties”), hereby
release and forever discharge Rockport Energy, LLC and its past and present
affiliates, parents, subsidiaries, divisions, predecessors, successors and
assigns, and its present and former members, managers, employees,
representatives, officers, directors, and attorneys (the “Rockport Energy
Parties”) of and from any and all claims, causes of action, suits, demands,
charges, disputes, matters, controversies, liability, accrued or to accrue in
the future, known or unknown, relating to, arising out of, or in any way
connected to the events and transactions which were brought or could have been
brought in the Lawsuit. This is a general release and is intended to be as broad
as the law allows.
     3. Release by Quest of Bryan T. Simmons: The Quest Parties hereby release
and forever discharge Bryan T. Simmons and his heirs, representatives, agents,
successors, and assigns (the “Simmons Parties”) of and from any and all claims,
causes of action, suits, demands, charges, disputes, matters, controversies,
liability, accrued or to accrue in the future, known or unknown, relating to,
arising out of, or in any way connected to the events and transactions

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which were brought or could have been brought in the Lawsuit. This is a general
release and is intended to be as broad as the law allows.
     4. Release by Quest of Steven Hochstein: The Quest Parties hereby release
and forever discharge Steven Hochstein and his heirs, representatives, agents,
successors, and assigns (the “Hochstein Parties”) of and from any and all
claims, causes of action, suits, demands, charges, disputes, matters,
controversies, liability, accrued or to accrue in the future, known or unknown,
relating to, arising out of, or in any way connected to the events and
transactions which were brought or could have been brought in the Lawsuit. This
is a general release and is intended to be as broad as the law allows.
     5. Release by Quest of Rockport Georgetown Partners, LLC; Rockport
Georgetown, LLC; and Rockport Georgetown Holdings, LP: The Quest Parties hereby
release and forever discharge Rockport Georgetown Partners, LLC; Rockport
Georgetown, LLC; and Rockport Georgetown Holdings, LP, and their past and
present affiliates, parents, subsidiaries, divisions, predecessors, successors
and assigns, and their present and former members, managers, partners,
employees, representatives, officers, directors, and attorneys (“the Rockport
Georgetown Releasees”) of and from all claims, causes of action, suits, demands,
charges, disputes, matters, controversies, liability, accrued or to accrue in
the future, known or unknown, relating to, arising out of, or in any way
connected to the events and transactions which were brought or could have been
brought in the Lawsuit. This is a general release and is intended to be as broad
as the law allows.
     6. Release by Jerry Cash of Rockport Energy, LLC, Bryan T. Simmons and
Steven Hochstein: Cash and his heirs, representatives, agents, successors, and
assigns (the “Cash Parties”) hereby release and forever discharge the Rockport
Energy Parties, the Simmons

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Parties and the Hochstein Parties of and from all claims, causes of action,
suits, demands, charges, disputes, matters, controversies, liability, accrued or
to accrue in the future, known or unknown, relating to, arising out of, or in
any way connected to the events and transactions which were brought or could
have been brought in the Lawsuit. This is a general release and is intended to
be as broad as the law allows.
     7. Release by Rockport Energy, LLC, Bryan T. Simmons and Steven Hochstein
of Jerry Cash: The Rockport Energy Parties, the Simmons Parties and the
Hochstein Parties hereby release and forever discharge the Cash Parties of and
from all claims, causes of action, suits, demands, charges, disputes, matters,
controversies, liability, accrued or to accrue in the future, known or unknown,
relating to, arising out of, or in any way connected to the events and
transactions which were brought or could have been brought in the Lawsuit. This
is a general release and is intended to be as broad as the law allows.
     8. Independent Settlement Agreement between Cash and Quest: The Parties
acknowledge and agree that the terms, conditions, obligations and
representations embodied in the Settlement Agreement dated May 19, 2009, between
Cash and the Quest Entities (“Quest/Cash Agreement”) supersede the terms,
conditions, obligations and representations embodied in this Agreement with
regard to Cash and the Quest Entities to the extent they are inconsistent with
the terms, conditions, obligations and representations embodied in the
Quest/Cash Agreement.
     9. Defense and Indemnity Obligations: The Quest Parties are obligated to
defend and indemnify Bryan T. Simmons and Steven Hochstein for actions taken as
officers and employees of Quest or a related Quest entity to the extent that
defense and indemnity is provided

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to Quest employees, officers or directors. This Agreement does not include any
release of the Quest Parties’ obligations to defend and indemnify Bryan T.
Simmons and Steven Hochstein.
     10. Dismissal with Prejudice: In consideration for the mutual promises
contained in this Agreement, the parties shall file a Motion for Dismissal with
Prejudice in the form attached hereto as Exhibit D. Said Motion for Dismissal
with Prejudice shall be filed in the Lawsuit within five (5) business days
following Quest’s receipt of the assignments, conveyances and payments described
above in Part 1.a. Each Party will be fully responsible for its own court costs,
including taxable court costs, attorneys’ fees, and all other expenses arising
out of the Lawsuit or this Agreement.
     11. Confidentiality Agreement: The parties agree that the terms of this
Agreement shall be CONFIDENTIAL. This means that the parties and their attorneys
shall not disclose to anyone the terms of this Agreement, including the amount
paid (or that any amount was paid) in settlement of the Lawsuit, except as
required by legal or regulatory process, court order, governmental authority,
professional requirements, or insurance agreement. Any person to whom this
information is disclosed will be advised that the information is confidential.
In the event that disclosure of this Agreement or its terms is sought from any
party to this Agreement by subpoena or other legal process, the party upon whom
the request is serviced shall give notice of the request as soon as practicable,
by fax and by overnight delivery to the other Party’s counsel.
     12. Ownership of Claims Released:

  a.   Quest represents that it owns the claims and rights being released in
paragraphs 2-5 (the “Quest Released Claims”), and that no other person or

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      entity owns, asserts, or has ever asserted any interest in the Quest
Released Claims.     b.   Cash represents that he owns the claims and rights
being released in paragraph 6 (the “Cash Released Claims”), and that no other
person or entity owns, asserts, or has ever asserted any interest in the Cash
Released Claims.     c.   Rockport Energy, LLC, Bryan T. Simmons and Steve
Hochstein represent that they own the claims and rights being released in
paragraph 7 (the “Rockport Released Claims”), and that no other person or entity
owns, asserts, or has ever asserted any interest in the Rockport Released Claims

     13. Governing Law: This Agreement is to be construed, interpreted, and
enforced under the laws of the State of Texas.
     14. No Waiver: No waiver of any provision of this Agreement shall be
effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall be applicable only to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
     15. Execution in Counterparts: This Agreement may be signed in separate
counterparts by facsimile, each of which shall constitute an original.
     16. Entire Agreement and Amendments: The Parties agree that this Agreement
sets forth all the promises and agreements between them and supersedes all prior
and contemporaneous agreements, understandings, inducements, or conditions,
expressed or implied, oral or written. No modifications, amendments, or changes
to this Agreement shall be valid unless in writing and signed by an authorized
representative of the Parties.

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     17. Successors: It is understood and agreed that this Agreement shall be
binding upon and inure to the benefit of the Parties and their respective heirs,
representatives, successors, and assigns.
     18. Authority: Each signatory to this Agreement hereby warrants and
represents that such person has full authority to bind the Party or Parties for
whom such person acts.
     19. Voluntary Execution: The Parties executing this Agreement represent,
warrant and acknowledge that both they and their attorneys have read this
Agreement, that they have consulted with their attorneys regarding this
Agreement, that they are authorized to execute this Agreement, that there may be
facts pertaining to the subject matter of this Agreement of which they are not
presently aware but that they assume the risk of entering into this Agreement
notwithstanding, that this Agreement is binding on them and their respective
entities after execution by them, and that they execute this Agreement
voluntarily, in good faith and without reliance upon any representation of any
kind or character not expressly set forth herein.
     20. No Admission of Liability: It is fully understood by the Parties that
the terms of this Agreement are contractual, that the Agreement is made in
compromise, resolution, and settlement of all disputed claims, that such
compromise, resolution, and settlement and this Agreement shall not be taken as
an admission of liability of any kind or character by any of the Parties, and
that such liability is expressly denied by the Parties. This Agreement shall not
be admissible in any proceeding or cause of action as an admission of liability
by any of the Parties.
     21. Construction of Agreement: All Parties have contributed to the drafting
of this Agreement and have had an opportunity to consult with their respective
counsel of their choice and to change any provision within this Agreement prior
to its execution. In the event of any dispute arising among the Parties in
connection with this Agreement, it is the intent of the Parties

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that no party shall be entitled to have any wording of this Agreement construed
either in favor of or against any other party based on the fact that such party
is alleged to have been the drafter of the Agreement.
     22. Severability: This Agreement is intended to be performed in accordance
with, and only to the extent permitted by, all applicable legal requirements. If
any provision of this Agreement or the application of this Agreement to any
person or circumstance shall for any reason and to any extent, be invalid or
unenforceable, the part of this Agreement in which such provision is contained,
the remainder of this Agreement, and the application of such provision to other
persons or circumstances shall not be affected thereby, but rather shall be
enforced to the greatest extent permitted by law.
     23. Attorneys’ Fees: If any Party files a lawsuit to enforce or construe
any provision in this Agreement, the prevailing party shall be entitled to
recover all attorneys’ fees and costs of court incurred in same.
signatures appear on the following page

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To evidence assent to the terms of this Agreement, the Parties have executed
this Agreement as set forth below:
Quest Resource Corporation

         
By:
  /s/ David C. Lawler    
 
       
 
  (name), (office)    

ACKNOWLEDGMENT

         
STATE OF OKLAHOMA
  §    
 
  §    
COUNTY OF OKLAHOMA
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared David
C. Lawler, President of Quest Resource Corporation, known to me to be the person
who signed the foregoing Full and Final Settlement Agreement and Mutual Release,
and acknowledged that he signed on behalf of Quest Resource Corporation
voluntarily and of his own free will after having read and understood its
effect.
     GIVEN before me this 15th day of May, 2009, by the said David C. Lawler,
President of Quest Resource Corporation.

          /s/ Jerris Johnson
 
NOTARY PUBLIC in and for
the State of Oklahoma     My Commission Expires:     10/16/2011
 

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Quest Energy Partners, L.P.

          By:   /s/ David C. Lawler
 
(name), (office)    

ACKNOWLEDGMENT

         
STATE OF OKLAHOMA
  §    
 
  §    
COUNTY OF OKLAHOMA
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared David
C. Lawler, President of Quest Energy Partners, L.P., known to me to be the
person who signed the foregoing Full and Final Settlement Agreement and Mutual
Release, and acknowledged that he signed on behalf of Quest Energy Partners,
L.P. voluntarily and of his own free will after having read and understood its
effect.
     GIVEN before me this 15th day of May, 2009, by the said David C. Lawler,
President of Quest Energy Partners, L.P.

          /s/ Jerris Johnson
 
NOTARY PUBLIC in and for
the State of Oklahoma     My Commission Expires:     10/16/2011
 

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Quest Midstream Partners, L.P.

          By:   /s/ David C. Lawler
 
(name), (office)    

ACKNOWLEDGMENT

         
STATE OF OKLAHOMA
  §    
 
  §    
COUNTY OF OKLAHOMA
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared David
C. Lawler, President of Quest Midstream Partners, L.P., known to me to be the
person who signed the foregoing Full and Final Settlement Agreement and Mutual
Release, and acknowledged that he signed on behalf of Quest Midstream Partners,
L.P. voluntarily and of his own free will after having read and understood its
effect.
     GIVEN before me this 15th day of May, 2009, by the said David C. Lawler,
President of Quest Midstream Partners, L.P.

          /s/ Jerris Johnson
 
NOTARY PUBLIC in and for
the State of Oklahoma     My Commission Expires:     10/16/2011
 

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Rockport Energy, LLC

          By:   /s/ Steven L. Hochstein
 
Steven L. Hochstein, Manager    

ACKNOWLEDGMENT

         
STATE OF TEXAS
  §    
 
  §    
COUNTY OF HARRIS
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared
Steven L. Hochstein, Manager of Rockport Energy, LLC, known to me to be the
person who signed the foregoing Full and Final Settlement Agreement and Mutual
Release, and acknowledged that he signed on behalf of Rockport Energy, LLC
voluntarily and of his own free will after having read and understood its
effect.
     GIVEN before me this 14 day of May, 2009, by the said Steven L. Hochstein,
Manager of Rockport Energy, LLC.

          /s/ Katie M. Casey
 
NOTARY PUBLIC in and for
the State of Texas     My Commission Expires:     March 26, 2012
 

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Rockport Georgetown Partners, LLC

         
By:
  /s/ Jerry Cash     
 
       
 
  (name), (office)    

ACKNOWLEDGMENT

         
STATE OF OKLAHOMA
  §    
 
  §    
COUNTY OF OKLAHOMA
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared Jerry
Cash, Manager of Rockport Georgetown Partners, LLC, known to me to be the person
who signed the foregoing Full and Final Settlement Agreement and Mutual Release,
and acknowledged that he signed on behalf of Rockport Georgetown Partners, LLC
voluntarily and of his own free will after having read and understood its
effect.
     GIVEN before me this 19th day of May, 2009, by the said Manager, Jerry Cash
of Rockport Georgetown Partners, LLC.

          /s/ Jennifer Johnson     NOTARY PUBLIC in and for
the State of Oklahoma     My Commission Expires:     04/19/13 

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Rockport Georgetown, LLC

         
By:
  /s/ Jerry Cash    
 
       
 
  (name), (office)    

ACKNOWLEDGMENT

         
STATE OF OKLAHOMA
  §    
 
  §    
COUNTY OF OKLAHOMA
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared Jerry
Cash, Manager of Rockport Georgetown, LLC, known to me to be the person who
signed the foregoing Full and Final Settlement Agreement and Mutual Release, and
acknowledged that he signed on behalf of Rockport Georgetown, LLC voluntarily
and of his own free will after having read and understood its effect.
     GIVEN before me this 19th day of May, 2009, by the said Jerry Cash, Manager
of Rockport Georgetown, LLC.

          /s/ Jennifer Johnson

 
NOTARY PUBLIC in and for
the State of Oklahoma     My Commission Expires:     04/19/13

 

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Rockport Georgetown Holdings, LP

         
By:
  /s/  Jerry Cash    
 
       
 
  (name), (office)    

ACKNOWLEDGMENT

         
STATE OF OKLAHOMA
  §    
 
  §    
COUNTY OF OKLAHOMA
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared Jerry
Cash, Manager of Rockport Georgetown Holdings, LP, known to me to be the person
who signed the foregoing Full and Final Settlement Agreement and Mutual Release,
and acknowledged that he signed on behalf of Rockport Georgetown Holdings, LP
voluntarily and of his own free will after having read and understood its
effect.
     GIVEN before me this 19th day of May, 2009, by the said Jerry Cash, Manager
of Rockport Georgetown Holdings, LP.

           

/s/  Jennifer Johnson
NOTARY PUBLIC in and for
the State of Texas     My Commission Expires:      

04/19/13

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Bryan T. Simmons

      /s/ Bryan T. Simmons
 
   

ACKNOWLEDGMENT

         
STATE OF TEXAS
  §    
 
  §    
COUNTY OF HARRIS
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared Bryan
T. Simmons, known to me to be the person who signed the foregoing Full and Final
Settlement Agreement and Mutual Release, and acknowledged that he signed
voluntarily and of his own free will after having read and understood its
effect.
     GIVEN before me this 14 day of May, 2009, by Bryan T. Simmons.

          /s/ Katie M. Casey
 
NOTARY PUBLIC in and for
the State of Texas     My Commission Expires:     March 26, 2012
 

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Steven Hochstein

      /s/ Steven Hochstein
 
   

ACKNOWLEDGMENT

         
STATE OF TEXAS
  §    
 
  §    
COUNTY OF HARRIS
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared
Steven Hochstein, known to me to be the person who signed the foregoing Full and
Final Settlement Agreement and Mutual Release, and acknowledged that he signed
voluntarily and of his own free will after having read and understood its
effect.
     GIVEN before me this 14 day of May, 2009, by Steven Hochstein.

          /s/ Katie M. Casey
 
NOTARY PUBLIC in and for
the State of Texas     My Commission Expires:     March 26, 2012
 

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Jerry D. Cash

       

/s/  Jerry D. Cash
   

ACKNOWLEDGMENT

         
STATE OF OKLAHOMA
  §    
 
  §    
COUNTY OF OKLAHOMA
  §    

     BEFORE ME, the undersigned authority, on this day personally appeared Jerry
D. Cash, known to me to be the person who signed the foregoing Full and Final
Settlement Agreement and Mutual Release, and acknowledged that he signed
voluntarily and of his own free will after having read and understood its
effect.
     GIVEN before me this 19th day of May, 2009, by Jerry D. Cash.

           

/s/  Jennifer Johnson
NOTARY PUBLIC in and for
the State of Oklahoma     My Commission Expires:      

04/19/13

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Exhibit A
ASSIGNMENT AND BILL OF SALE
State: LOUISIANA
Parish: CAMERON
Assignor: Rockport Energy, LLC
Assignee: Quest Resource Corporation
Effective Date: November 1, 2008
     For adequate consideration, the receipt and sufficiency of which is
acknowledged, Assignor, named above, sells, assigns, and transfers unto
Assignee, named above, and Assignee’s successors and assigns, an undivided Sixty
percent (60%) of Assignor’s right, title, interests, and properties described in
paragraphs 1. through 10. below, and all rights, estates, powers and privileges
appurtenant to those rights, interests, and properties, all collectively
referred to in this Assignment as the “Assets.”
     1. An undivided Sixty percent (60%) of all rights, title, and interests of
Assignor in, to, and under the oil, gas, and mineral leases (the “Leases”) and
wells (the “Wells”) described in Exhibit “A,” including any working interests
and over-riding royalty interests, and the oil and gas leasehold estates and
other interests in the lands described on Exhibit “A.” Exhibit “A” is attached
to and made a part of this Assignment and Bill of Sale for all purposes.
     2. Without limit the foregoing, an undivided Sixty percent (60%) of all
other rights, title, and interests of Assignor, of whatever kind or character in
and to the lands specifically described on Exhibit “A” (the “Lands”), even
though the interests of Assignor and the Lands may be incorrectly described, or
a description of an interest is omitted from Exhibit “A”; and, an undivided
Sixty percent (60%) of all rights, title, and interests of Assignor in, to,
under, or derived from all oil, gas, and mineral leases and leasehold fee or
mineral interests and all other interests of whatever character, insofar as the
same covers or relates to the Lands, Leases and Wells described in Exhibit “A”
even though an interest may be incorrectly described or omitted from Exhibit
“A.”
     3. An undivided Sixty percent (60%) of all rights, title, and interests of
Assignor in all rights, privileges, benefits, and powers conferred on the holder
of the Leases, Lands and Wells with respect to the use and occupation of the
surface and the subsurface depths under the Lands and Leases.
     4. An undivided Sixty percent (60%) of all rights, title, and interests of
Assignor in any pooled or unitized acreage or rights included, in whole or in
part, within the Lands, including all oil and gas production from the pool or
unit allocated to such properties (including, without limitation, units formed
under orders, rules, regulations, or other official acts of any state or other
authority having jurisdiction and so called “working interest units” created
under operating agreements or otherwise) and all interests in any wells within
the unit or pool associated with such properties, whether the unitized or pooled
oil and gas production comes from wells located within or without the areas
covered by the Lands, and all tenements, hereditaments, and appurtenances
belonging to the properties.
     5. An undivided Sixty percent (60%) of all rights, title, and interests of
Assignor in all of the permits, licenses, servitudes, easements, rights of way,
orders, gas purchase and sale contracts, crude oil purchase and sale contracts
or agreements, surface leases, farmin and farmout agreements, acreage
contribution agreements, operating agreements, unit agreements, processing
agreements, options, leases of equipment or facilities, and other contracts,
agreements, and rights, and any amendments, which are owned by Assignor, in
whole or in part, whether or not the same appear of record in the county where
the Lands are located, and which are appurtenant to, affect, are used or held
for use in connection with either the ownership, operation, production,
treatment or marketing of oil and gas, or either of them, and the sale or
disposal of water, hydrocarbons, or associated substances from the Lands and
Leases.
     6. An undivided Sixty percent (60%) of all rights, title, and interests of
Assignor in all of the real, personal, and mixed property located in or on the
Lands, Leases and Wells or used in their operation, which are owned by Assignor
or by a third person on behalf of Assignor, in whole or in part, including,
without limitation, crude oil, condensate, or products (in storage or in
pipelines), wells, well equipment, casing, tanks, boilers, buildings, tubing,
pumps, motors, valves, fixtures, machinery and other equipment, pipelines,
gathering systems, power lines, telephone lines, roads, field processing plants,
and all other improvements used in operations.
     7. An undivided Sixty percent (60%) of all of the rights, title, and
interests of Assignor in all of the files, records, information, and data
relating to the items described in paragraphs 1. through 6. above, including
without limitation, title records (including title opinions, abstracts, and
title curative documents); contracts; geological and seismic records, data and
information; and, production records, electric logs, and all related matters.

 

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     8. To the extent transferable, the benefit of and the right to enforce all
rights, covenants, and warranties, if any, under the terms and conditions of any
of the agreements and contracts described in paragraph 5. above, which Assignor
is entitled to enforce, with respect to the Assets, against Assignor’s
predecessors in title to the Assets and against any other party to such
agreements and contracts.
     9. To the extent necessary to allow Assignee to have full use of and access
to the Lands, Assignor grants such right of ingress and egress, rights of way
and easements, and their full and uninterrupted use, across any lands which
Assignor may own or where Assignor may be the lessee under an oil, gas, and
mineral lease(s), over or through which Assignee crosses or has the right to
cross for use and access to the Lands described in Exhibit “A.” This grant is
limited to the rights of Assignor to grant such rights of ingress and egress,
rights of way, and easements under agreements, deeds, or leases through which
Assignor claims title.
     10. An undivided Sixty percent (60%) of all other rights and obligations
arising under contract or otherwise by law, or by the occurrence of conditions
precedents, which may or may not yet have occurred, owned in whole or in part by
Assignor, which rights and obligations are incidental to the Assets described in
paragraphs 1. through 9. above, including the right, if any, to operate the
Assets.
     TO HAVE AND TO HOLD the Assets unto Assignee and its successors and assigns
forever; provided, however, this Assignment is made by Assignor and accepted by
Assignee subject to the following terms, representations, agreements, and
provisions:
     1. Assignor represents and agrees that its joint interest account, if
applicable, with the operator of wells on the Lands and Leases is current, and
that all ad valorem taxes assessed, due and payable on the Assets have been
fully paid for all time periods. Assignor acknowledges Assignee has materially
relied upon this representation in accepting this Assignment.
     2. At closing, Assignor shall deliver to Assignee all relevant books,
records, files, documents, data, and other information pertaining to the Assets.
From time to time, whether at or after closing, as requested by Assignee, its
successors or assigns, Assignor will execute and deliver any and all documents
and take such other reasonable actions as may be necessary to fully convey and
transfer the Assets to Assignee.
     3. Assignor shall be entitled to all proceeds accruing to the Assets prior
to the Effective Date of this Assignment and Bill of Sale, including proceeds
attributable to product inventories above the pipeline connection and gas
product inventories as of the Effective Date and shall be responsible for
operating expenses, capital expenditures, all taxes, and other obligations on
the Assets acquired in previous Agreements prior to the Effective Date. Assignee
shall be entitled to an undivided Sixty percent (60%) of proceeds accruing to
the Assets, whether it be a working interest or over-riding royalty interest,
after the Effective Date and shall be responsible for the operating expenses,
capital expenditures, all taxes, or other obligations on the Assets Assignor may
have had prior to the Effective Date.
     4. This Assignment and Bill of Sale is made expressly subject to all of the
leases, agreements, and other documents described in Exhibit “A,” and all other
valid and existing contracts, easements, and other instruments affecting all or
any part of the Assets, together with any and all existing overriding royalties
and other interests payable out of production from all or any part of the Lands,
as shown of record.
     As to claims arising by, through, or under Assignor, Assignor warrants that
title to the Assets is good and marketable, and Assignor agrees that Assignor
shall be responsible for title defects occurring or arising out of occurrences
or omissions of, by, through, or under Assignor, but not otherwise. In addition,
Assignor represents and covenants that the Assets are free and clear of any and
all liens, encumbrances, or claims of third parties created by Assignor; and,
further that Assignor has no notice of pending litigation or claims of any kind,
including claims by the owners of the surface and/or mineral estate, which would
or could, if successfully prosecuted, impair in any manner the Assets.
     ASSIGNOR MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, NATURE OR
DESCRIPTION, EXPRESS OR IMPLIED, WITH RESPECT TO THE EQUIPMENT AND PERSONAL
PROPERTY LOCATED ON THE ASSETS, INCLUDING, WITHOUT LIMITATION, THE CONDITION OF
THE EQUIPMENT OR ITS MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.
     It is the intention and agreement of Assignor and Assignee that the
provisions of this Assignment and Bill of Sale shall be severable. Should the
whole or any portion of a section or paragraph be judicially held to be void or
invalid, such holding shall not affect other portions which can be given effect
without the invalid or void portion.
     The provisions of this Assignment shall be binding on and inure to the
benefit of Assignee and Assignor and their respective affiliates, heirs,
devisees, legal or personal representatives, successors, and assigns and shall
constitute covenants running with the Lands and the Assets.

 

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     This Assignment is executed by Assignor and Assignee as of the date of the
acknowledgments of their signatures below, but is effective as of the Effective
Date stated above.

                  Rockport Energy, LLC (Assignor)     By:    

 
         

 
    Title:    

 
        Quest Resource Corporation (Assignee)     By:    

 
         

 
    Title:    

 

[Exhibit “A”: Description of Oil and Gas Lease, Land and Well.]

                 
STATE OF TEXAS
    )          
 
    )     §    
COUNTY OF
    )          

     Before me, the undersigned, a Notary Public, in and for said County and
State, on this ___ day of , 2009, personally appeared _____, to me known to be
the identical person who subscribed the name of the maker thereof to the within
and forgoing instrument as its _____, and acknowledged to me that he executed
the same as his free and voluntary act and deed of such corporation, for the
uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my official signature and affixed my
official seal the day and year last above written.

          My commission expires:    

 
   

 
Notary Public

                 
STATE OF OKLAHOMA
    )          
 
    )     §    
COUNTY OF OKLAHOMA
    )          

     Before me, the undersigned, a Notary Public, in and for said County and
State, on this ___ day of , 2009, personally appeared _____, to me known to be
the identical person who subscribed the name of the maker thereof to the within
and forgoing instrument as its _____, and acknowledged to me that he executed
the same as his free and voluntary act and deed of such corporation, for the
uses and purposes therein set forth.
IN WITNESS WHEREOF, I have hereunto set my official signature and affixed my
official seal the day and year last above written.

          My commission expires:    

 
   

 
Notary Public

 

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EXHIBIT “A”
Attached to and made a part hereof that certain Assignment and Bill of Sale
dated ___ by and between Rockport Energy, LLC, (as Assignor) and Quest ___, (as
Assignee):

     
Well:
  SL 18809 Well#1, known as the Bird Island Well, API # 17-023-22995, located
upon State Lease No. 18809, Cameron Parish, Louisiana.
Lease:
  State Lease No. 18809, recorded December 27, 2005 at Entry No. 295296 of the
official records of Cameron Parish, Louisiana, Harold J. Anderson as original
Lessee.

 

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Exhibit B
BILL OF SALE AND ASSIGNMENT OF LIMITED PARTNERSHIP INTEREST
     This Bill of Sale and Assignment of Limited Partnership Interest (this
“Agreement”), dated effective as of May 19, 2009, and effective as of April 7,
2009 (the “Effective Date”), is by and between ROCKPORT ENERGY LLC, a Texas
limited liability company (“Rockport”), and QUEST OIL & GAS LLC, a Kansas
limited liability company (“Quest”), as assignee of QUEST RESOURCE CORPORATION,
a Nevada corporation (“Quest Corporation”). Capitalized terms used but not
defined herein shall have the meaning given such term in the Agreement of
Limited Partnership of LGS Development, L.P., a Texas limited partnership (the
“Partnership”) dated as of May 4, 2005 (as amended, the “Partnership
Agreement”). All capitalized terms used herein and not otherwise defined herein
will have the meanings assigned to such terms in the Partnership Agreement
RECITALS
     WHEREAS, Rockport has been named as a defendant in the case styled Quest
Resource Corporation et al. v. Rockport Energy, LLC et al.; Cause
No. 2008-52399; In the 165th Judicial District Court, Harris County, Texas (the
“Lawsuit”);
     WHEREAS, Rockport holds an LP Interest in the Partnership, which LP
Interest represents, as of March 29, 2009 and subject to change in accordance
with the Partnership Agreement, a Percentage Interest of 44.66501% prior to
Payout and a Percentage Interest of 25.00% following Payout (the “Rockport
Interest”); and
     WHEREAS, pursuant to the terms of the Full and Final Settlement Agreement
and Mutual Release, dated as of May 19, 2009 (the “Settlement”), among Quest
Corporation, Quest Energy Partners, L.P., Quest Midstream Partners, L.P.,
Rockport, Rockport Georgetown Partners, LLC, Rockport Georgetown, LLC, Rockport
Georgetown Holdings, LP, Jerry D. Cash, Bryan T. Simmons and Steven Hochstein,
in consideration of a release of all claims by the plaintiffs in the Lawsuit
against Rockport, its members, Jerry D. Cash, Bryan T. Simmons, and Steven
Hochstein and the other defendants in the Lawsuit, Rockport has agreed to convey
and assign 60% of the Rockport Interest (the “Transferred Interest”) to Quest,
such interest being an LP Interest that, as of March 29, 2009 and subject to
change in accordance with the Partnership Agreement, represents a Percentage
Interest of 26.799006% prior to Payout and a Percentage Interest of 15.00%
following Payout.
     NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained herein and in the Settlement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto promise and agree as follows:
     1. Pursuant to the terms of the Settlement, Rockport hereby sells, assigns,
conveys, grants and transfers the Transferred Interest to Quest in consideration
of the release and discharge by Quest Corporation of all claims which were
brought or could have been brought by Quest Corporation in the Lawsuit.

 

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     2. Rockport represents and warrants as of the date hereof that: (i) it is
the beneficial and record owner of the Transferred Interest; (ii) it holds good,
valid and marketable title to the Transferred Interest, free and clear of any
security interest, mortgage, deed of trust, pledge, lien or other encumbrance of
any nature whatsoever (together, “Encumbrances”); (iii) it possesses full
authority and legal right to sell, transfer and assign to Quest the entire legal
and beneficial ownership of the Transferred Interest, free and clear of all
Encumbrances; and (iv) upon transfer of the Transferred Interest, Quest will own
the entire legal and beneficial interest in the Transferred Interest free and
clear of all Encumbrances, and subject to no legal, equitable, transfer or other
restrictions of any kind, except transfer restrictions imposed by operation of
applicable securities laws.
     3. Each party hereby agrees from time to time after delivery of this
instrument to do, execute, acknowledge and deliver or to cause to be done,
executed, acknowledged and delivered such further agreements, transfers,
assignments, conveyances and assurances, including but not limited to the
Consent and Amendment No. 4 to the Agreement of Limited Partnership of the
Partnership dated as of the date hereof, as may be reasonably requested by the
other party in order to effect the full assignment, transfer and assumption, as
applicable, of the Transferred Interest and any related liabilities.
     4. Nothing in this Agreement, express or implied, is intended or shall be
construed to confer upon, or give to, any person other than the parties hereto
and their respective successors or assigns, any remedy or claim under or by
reason of this Agreement or any term, covenant or condition hereof, and all of
the terms, covenants and conditions, promises and agreements contained in this
Agreement shall be for the sole and exclusive benefit of the parties hereto and
their successors and assigns.
     5. This Agreement may be executed in any number of counterparts with the
same effect as if the signatures thereto were upon one instrument.
     6. None of the provisions in this Agreement may be waived, changed or
altered except in a writing signed by all of the parties hereto.
     7. This Agreement shall be governed by and construed and enforced in
accordance with the internal laws (as opposed to the conflicts of laws
provisions) of the State of Texas.
[Signature Page Follows]

2

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above, to be effective as of the Effective
Date.

            ROCKPORT:

ROCKPORT ENERGY LLC,
a Texas limited liability company
      By:           Name:   Bryan T. Simmons        Title:   Manager       
QUEST:

QUEST OIL & GAS LLC,
a Kansas limited liability company
      By:           Name:   David C. Lawler         Title:   President   

 

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Exhibit C
BILL OF SALE AND ASSIGNMENT OF UNITS
     This Bill of Sale and Assignment of Units (this “Agreement”), dated
effective as of May 19, 2009, is by and among JERRY D. CASH, an individual
resident of the State of Oklahoma (the “Transferor”), STEVEN HOCHSTEIN, an
individual resident of the State of Texas (“Hochstein”), and BRYAN T. SIMMONS,
an individual resident of the State of Texas (“Simmons” and together with
Hochstein, the “Transferees”). Capitalized terms used but not defined herein
shall have the meaning given such term in the Operating Agreement of Rockport
Energy LLC dated as of April 15, 2004 (the “Operating Agreement”).
RECITALS
     WHEREAS, each of Rockport Energy LLC, a Texas limited liability company
(“Rockport”), the Transferor, and the Transferees has been named as a defendant
in the case styled Quest Resource Corporation et al. v. Rockport Energy, LLC et
al.; Cause No. 2008-52399; In the 165th Judicial District Court, Harris County,
Texas (the “Lawsuit”);
     WHEREAS, the Transferor currently holds 33.3 Units (the “Transferred
Units”) in Rockport, and each of the Transferees currently holds 33.3 Units in
Rockport; and
     WHEREAS, pursuant to the terms of the Full and Final Settlement Agreement
and Mutual Release (the “Settlement”) dated as of May 19, 2009, among Quest
Resource Corporation, Quest Energy Partners, L.P., Quest Midstream Partners,
L.P., Rockport, Rockport Georgetown Partners, LLC, Rockport Georgetown, LLC,
Rockport Georgetown Holdings, LP, the Transferor, and the Transferees, in
consideration of a release of all cross-claims by Rockport and the Transferees
(collectively, the “Cross Claimants”) against the Transferor, the Transferor has
agreed to convey and assign the Transferred Units equally to each of the
Transferees.
     NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants contained herein and in the Settlement and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto promise and agree as follows:
     1. Pursuant to the terms of the Settlement, the Transferor hereby sells,
assigns, conveys, grants and transfers the Transferred Units equally to each of
the Transferees in consideration of the release and discharge by the Cross
Claimants of all cross-claims which were brought or could have been brought by
the Cross Claimants against the Transferor in the Lawsuit.
     2. The Transferor represents and warrants as of the date hereof that:
(i) he is the beneficial and record owner of the Transferred Units; (ii) he
holds good, valid and marketable title to the Transferred Units, free and clear
of any security interest, mortgage, deed of trust, pledge, lien or other
encumbrance of any nature whatsoever (together, “Encumbrances”); (iii) he
possesses full authority and legal right to sell, transfer and assign equally to
each of the Transferees the entire legal and beneficial ownership of the
Transferred Units, free and clear of all Encumbrances; and (iv) upon transfer of
the Transferred Units, the Transferees together will own the entire legal and
beneficial interest in the Transferred Units free and clear of all

 

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Encumbrances, and subject to no legal, equitable, transfer or other restrictions
of any kind, except transfer restrictions imposed by operation of applicable
securities laws.
     3. Each party hereby agrees from time to time after delivery of this
instrument to do, execute, acknowledge and deliver or to cause to be done,
executed, acknowledged and delivered such further transfers, assignments,
conveyances and assurances as may be reasonably requested by the other party in
order to effect the full assignment, transfer and assumption, as applicable, of
the Transferred Units and any related liabilities.
     4. Nothing in this Agreement, express or implied, is intended or shall be
construed to confer upon, or give to, any person other than the parties hereto
and their respective successors or assigns, any remedy or claim under or by
reason of this Agreement or any term, covenant or condition hereof, and all of
the terms, covenants and conditions, promises and agreements contained in this
Agreement shall be for the sole and exclusive benefit of the parties hereto and
their successors and assigns.
     5. This Agreement may be executed in any number of counterparts with the
same effect as if the signatures thereto were upon one instrument.
     6. None of the provisions in this Agreement may be waived, changed or
altered except in a writing signed by all of the parties hereto.
     7. This Agreement shall be governed by and construed and enforced in
accordance with the internal laws (as opposed to the conflicts of laws
provisions) of the State of Texas.
[Signature Page Follows]

2

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.

         
 
  TRANSFEROR:    
 
       
 
       
 
       
 
       
 
  JERRY D. CASH    
 
       
 
       
 
  TRANSFEREES:    
 
       
 
       
 
       
 
       
 
       
 
  STEVEN HOCHSTEIN    
 
       
 
       
 
       
 
       
 
       
 
  BRYAN T. SIMMONS    

[Signature Page to the Bill of Sale and Assignment of Units]