Exhibit 2.4
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Quest Cherokee, LLC
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CONTRIBUTION, CONVEYANCE, ASSIGNMENT
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AND ASSUMPTION AGREEMENT
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THIS
AGREEMENT
("Agreement") is made
effective this 22nd day of December
2003 ("Effective Date"), by and among the
following parties:
QuestCherokee, LLC, a Delaware limited liability company
("Quest
Cherokee"); and
Bluestem
Pipeline, LLC, a Delaware limited liability company
("Bluestem");
and the following entities (jointly "Quest
Subsidiaries")
Quest Oil
& Gas Corporation, a Kansas corporation ("QOGC");
Quest
Energy Service, Inc., a Kansas corporation ("QES");
STP
Cherokee, Inc., an Oklahoma corporation ("STP Cherokee");
Ponderosa
Gas Pipeline Company, Inc., a Kansas corporation ("PGPC");
Producers
Service, Incorporated, a Kansas corporation ("PSI"); and
J-W Gas
Gathering, LLC, a Kansas limited liability company ("J-W");
WITNESSETH:
WHEREAS,
the Quest Subsidiaries have caused Quest Cherokee to be
organized
as a Delaware limited liability company and have
acquired all of the membership
interests in Quest Cherokee; and
WHEREAS,
QOGC has agreed to
assign and transfer
all of its interests
in
oil and gas leases and all tangible and
intangible personal property located on,
used in connection with, or relating to such leases
including the oil and
gas
leases and other personal property set
forth on Exhibit "A" to this Agreement to
Quest Cherokee in return for a membership interest representing a 47.90%
Percentage Interest (as defined in Quest
Cherokee's limited
liability company
agreement dated December 12, 2003) in Quest
Cherokee;
WHEREAS,
QES has agreed to transfer all of its interests in real estate
it
owns in fee simple and all of its interest
in vehicles, well
service equipment,
construction equipment, and other tangible and intangible
personal property
including the real and personal property set forth on Exhibit "B" to this
Agreement but excluding office
<PAGE>
furnishings to Quest Cherokee in return for a membership interest
representing a 1.96% Percentage Interest in
Quest Cherokee;
WHEREAS,
STP Cherokee has agreed to assign and transfer all of its
interests in real estate it owns in fee
simple, all of its
interests in oil and
gas leases in the Cherokee Basin area of Kansas and Oklahoma,
in pipelines and
gathering systems and appurtenant
easements, rights-of-way, permits, licenses in
the Cherokee Basin area, in all equipment, storage facilities, loading
terminals, tanks and other equipment,
fixtures and improvements located on, used
in connection with, or relating to the leases and
pipelines in the Cherokee
Basin area, and in all other tangible and
intangible personal
property located
on, used in connection with, or relating to such leases, and pipelines
(including the real and personal property set forth on Exhibit "C" to this
Agreement) to Quest Cherokee in return for
a membership interest
representing a
37.26% Percentage Interest in Quest
Cherokee;
WHEREAS,
PGPC has agreed to
assign and transfer
all of its interests
in
pipelines and gathering systems and appurtenant easements, rights-of-way,
permits, and licenses, and in all equipment, storage facilities, loading
terminals, tanks and other equipment,
fixtures and improvements located on, used
in connection with, or relating to its
pipelines and gathering systems, and in
all other tangible and intangible personal
property used in connection with such
pipelines and gathering systems, and in all other real and personal
property
(including the real and personal property set forth on Exhibit "D" to this
Agreement) to Quest Cherokee in return for
a membership interest
representing a
3.35% Percentage Interest in Quest
Cherokee;
WHEREAS,
PSI has agreed to
assign and transfer
all of its
interests in
pipeline leases, rights of way and easements and personal property used in
connection therewith or relating thereto
(including the
personal property
set
forth on Exhibit "E" to this Agreement) to Quest Cherokee in return for a
membership interest representing a .71%
Percentage Interest in Quest Cherokee;
WHEREAS,
J-W has agreed to
assign and transfer
all of its
interests in
pipelines and gathering systems and appurtenant easements, rights-of-way,
permits, and licenses, and in all equipment, storage facilities, loading
terminals, tanks and other equipment,
fixtures and improvements located on, used
in connection with, or relating to such
pipelines and gathering systems, and in
all other tangible and intangible personal
property used in connection with such
pipelines and gathering systems, and in all other real and personal
property
(including the real and personal property set forth on Exhibit "F" to this
Agreement) to Quest Cherokee in return for
a membership interest
representing a
8.82% Percentage Interest in Quest
Cherokee;
WHEREAS,
Quest Cherokee has agreed to accept such assignments and
transfers and to assume the liabilities set
forth in Article III;
NOW,
THEREFORE, the parties hereto do hereby agree as follows:
<PAGE>
ARTICLE I
CONTRIBUTIONS OF ASSETS AND MEMBERSHIP INTERESTS
1.
Contribution of Assets
by Quest Subsidiaries
to Quest Cherokee. As
a
capital contribution to Quest Cherokee,
the Quest Subsidiaries
hereby agree to
execute, acknowledge and deliver to Quest
Cherokee valid
conveyances of all of
the Quest Subsidiaries' right, title and
interest in and to the assets described
in the recitals above, including the assets described on
Exhibits A, B, C, D, E
and F (collectively, the "Assets"). Quest Cherokee hereby agrees to
accept the
Assets as a capital contribution. The Quest Subsidiaries and Quest Cherokee
hereby acknowledge and agree that the net
agreed value of the Assets contributed
by the Quest Subsidiaries is FIFTY ONE
MILLION AND NO/100 DOLLARS ($51,000,000),
which is allocated among the respective
Assets as set forth on Exhibit G.
2.
Execution of
Assignment and Transfer Instruments. Upon the Effective
Date and from time to time after the Effective Date, each of the Quest
Subsidiaries agrees to execute such
assignment and
transfer instruments
as is
reasonably requested by Quest Cherokee to carry out the
contribution
of the
Assets to Quest Cherokee. No such assignment will contain a warranty as to
condition of or as to title to the
subject Assets, except for a warranty of
title to the respective net revenue
interests in and to
the Assets specified in
such assignment (and to a working interest no greater than the respective
working interests in and to the Assets specified in such assignment, unless
there is a corresponding increase in net
revenue interest) against any claims to
any right, interest or title through the
assignor or transferor and except that
any deed of fee simple interest in real
estate owned by a Quest Subsidiary shall
be in the form of a general warranty
deed.
3.
Bluestem Pipeline,
LLC. Quest Cherokee owns all of the membership
interest of Bluestem. Quest Cherokee hereby designates
Bluestem as the assignee
of any of the Assets that are pipelines, gathering systems, or appurtenant
pipeline easements, rights-of-way, permits,
licenses, or contracts or equipment,
storage facilities, loading terminals, tanks and other
equipment, fixtures
and
improvements located on, used in connection
with, or relating to such pipelines
and gathering systems, and all other tangible and
intangible personal
property
used in connection with or related to such
pipelines and gathering systems
(collectively, the "Gathering System Assets").
Quest Cherokee directs the Quest
Subsidiaries, and the Quest Subsidiaries hereby agree, to transfer and
assign
the Gathering System Assets directly to
Bluestem.
Notwithstanding such
direct
transfer and assignment, the Quest Subsidiaries shall be deemed to have
contributed the Gathering System Assets to Quest
Cherokee and Quest
Cherokee
shall be deemed to have contributed such Gathering System Assets to Bluestem.
All such transfers and assignments to Bluestem shall be made under the same
terms and conditions as the transfers and assignments to Quest Cherokee
described herein. Bluestem shall assume all
liabilities and be entitled to all
rights in connection with the Gathering System Assets, to the extent
attributable to periods from and after the
Effective Date.
<PAGE>
4.
Percentage Interests.
In return for the
contribution of the Assets to
Quest Cherokee, the Quest Subsidiaries shall become members
of Quest Cherokee.
Effective on the Effective Date, the Quest Subsidiaries shall be issued
certificates of ownership interest evidencing the following Percentage
Interests:
QOGC
47.90%
QES
1.96%
STP Cherokee
37.26%
PGPC
3.35%
PSI
.71%
J-W
8.82%
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TOTAL:
100%
For all
purposes, including
determining
distributions and allocations of
income and tax items, the parties hereto
agree that any Percentage Interests of
the Quest Subsidiaries shall be effective
on the Effective Date.
ARTICLE II
ALLOCATIONS AND OPERATING AGREEMENTS FOR
OIL AND GAS PROPERTIES AND PIPELINES
1.
Allocations. All
receipts and disbursements with respect to the Assets
will be prorated as of the Effective Date
as follows:
(a) gross proceeds from production or transportation of hydrocarbons
prior
to the Effective Date attributable to the Assets will be t
