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Execution Copy
AMENDED AND RESTATED GUARANTY
THIS AMENDED AND RESTATED GUARANTY (as the same may be amended,
restated,
supplemented or otherwise modified from time to time, this
"Guaranty") is made
as of December 22, 2006, by each of J-W GAS GATHERING, L.L.C., a
Kansas limited
liability company, PONDEROSA GAS PIPELINE COMPANY, LLC, a Kansas
limited
liability company, PRODUCERS SERVICE, LLC, a Kansas limited
liability company,
QUEST CHEROKEE OILFIELD SERVICE, LLC, a Delaware limited liability
company,
QUEST ENERGY SERVICE, LLC, a Kansas limited liability company,
QUEST OIL & GAS,
LLC, a Kansas limited liability company, and STP CHEROKEE, LLC, an
Oklahoma
limited liability company (each, an "Initial Guarantor," and
together with any
additional Subsidiaries which become parties to this Guaranty by
executing a
Supplement hereto in the form attached hereto as Annex I, the
"Guarantors"), in
favor of Guggenheim Corporate Funding, LLC, as Administrative Agent
(the
"Administrative Agent") for the benefit of the Secured Parties (as
defined in
the Security Agreement). Each capitalized term used herein and not
defined
herein shall have the meaning ascribed thereto in the Second Lien
Term Loan
Agreement described below.
WITNESSETH:
WHEREAS, Quest Cherokee, LLC and Quest Resource Corporation
(collectively,
the "Borrowers") have entered into that certain Amended and
Restated Second Lien
Term Loan Agreement dated as of June 9, 2006 by and among the
Borrowers, the
Administrative Agent, and certain financial institutions from time
to time party
thereto (the "Lenders") (as the same may be amended, restated,
supplemented or
otherwise modified from time to time, the "Second Lien Term Loan
Agreement"),
which amended and restated the original Second Lien Term Loan
Agreement dated as
of November 14, 2005 (the "Original Second Lien Term Loan
Agreement").
WHEREAS, the Second Lien Term Loan Agreement provides, subject to
the terms
and conditions thereof, for extensions of credit and other
financial
accommodations by the Lenders to the Borrowers;
WHEREAS, certain Guarantors have previously entered into directly
or by
joinder that certain Guaranty dated as of November 14, 2005 in
favor of the
Administrative Agent (the "Original Guaranty") pursuant to which
certain
Guarantors guaranteed all of the Borrowers' obligations arising
under the
Original Second Lien Term Loan Agreement as amended by the Second
Lien Term Loan
Agreement;
WHEREAS, it is a condition precedent to the extensions of credit by
the
Lenders under the Second Lien Term Loan Agreement that each of the
Guarantors
execute and deliver this Guaranty, whereby each of the Guarantors,
without
limitation and with full recourse, shall guarantee the payment when
due of all
Indebtedness, including, without limitation, all principal,
interest, letter of
credit reimbursement obligations and other amounts that shall be at
any time
payable by each Borrower under the Second Lien Term Loan Agreement
or the other
Loan Documents; and
<PAGE>
WHEREAS, in consideration of the direct and indirect financial and
other
support that the Borrowers have provided, and such direct and
indirect financial
and other support as the Borrowers may in the future provide, to
the Guarantors,
and in order to induce the Lenders and the Administrative Agent to
enter into
the Second Lien Term Loan Agreement, each of the Guarantors is
willing to
guarantee the Indebtedness under the Second Lien Term Loan
Agreement and the
other Loan Documents;
NOW, THEREFORE, in consideration of the foregoing premises and
other good
and valuable consideration, the receipt and sufficiency of which
are hereby
acknowledged, the parties hereto agree that the Original Guaranty
is hereby
amended and restated in its entirety as follows:
Section 1. Representations, Warranties and Covenants. In order to
induce
the Administrative Agent and the Lenders to enter into the Second
Lien Term Loan
Agreement and to make the Loans and the other financial
accommodations to the
Borrowers, each of the Guarantors represents and warrants to each
Lender and the
Administrative Agent as of the date of this Agreement, giving
effect to the
consummation of the transactions contemplated by the Loan Documents
on the
Effective Date, and thereafter on each date as required by Section
6.02 of the
Second Lien Term Loan Agreement that:
(a) It (i) is a corporation, partnership or limited liability
company duly
incorporated or organized, as the case may be, validly existing and
in good
standing under the laws of its jurisdiction of incorporation or
organization,
(ii) is duly qualified to do business as a foreign entity and is in
good
standing under the laws of each jurisdiction where the business by
it makes such
qualification necessary, except where the failure to qualify could
not
reasonably be expected to have a Material Adverse Effect, and (iii)
has all
requisite corporate, partnership or limited liability company power
and
authority, as the case may be, to own, operate and encumber its
property and to
conduct its business in each jurisdiction in which its business is
conducted.
(b) It has the requisite corporate, limited liability company
or
partnership, as applicable, power and authority and legal right to
execute and
deliver this Guaranty and to perform its obligations hereunder. The
execution
and delivery by it of this Guaranty and the performance by each of
its
obligations hereunder have been duly authorized by proper
proceedings, and this
Guaranty constitutes a legal, valid and binding obligation of each
Guarantor,
enforceable against such Guarantor, in accordance with its terms,
except as
enforceability may be limited by (i) bankruptcy, insolvency,
fraudulent
conveyances, reorganization or similar laws relating to or
affecting the
enforcement of creditors' rights generally, (ii) general equitable
principles
(whether considered in a proceeding in equity or at law), and (iii)
requirements
of reasonableness, good faith and fair dealing.
(c) Neither the execution and delivery by it of this Guaranty, nor
the
consummation by it of the transactions herein contemplated, nor
compliance by it
with the terms and provisions hereof, will (i) conflict with the
charter or
other organizational documents of such Guarantor, (ii) conflict
with, result in
a breach of or constitute (with or without notice or lapse of time
or both) a
default under any law, rule, regulation, order, writ, judgment,
injunction,
decree or award (including, without limitation, any environmental
property
transfer laws or regulations) applicable to such Guarantor or any
provisions of
any indenture, instrument or agreement to which such Guarantor is
party or is
subject or which it or its property is bound or affected, or
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<PAGE>
require termination of any such indenture, instrument or agreement,
except where
such conflict, breach or default could not reasonably be expected
to have a
Material Adverse Effect, (iii) result in or require the creation or
imposition
of any Lien whatsoever upon any of the property or assets of such
Guarantor,
other than Liens permitted or created by the Loan Documents, or
(iv) require any
approval of such Guarantor's board of directors or shareholders or
unitholders
except such as have been obtained. Except as set forth in Section
7.03 of the
Second Lien Term Loan Agreement the execution, delivery and
performance by the
Guarantors of each of the Loan Documents to which such Guarantor is
a party do
not and will not require any registration with, consent or approval
of, or
notice to, or other action to, with or by any governmental
authority, including
under any environmental property transfer laws or regulations,
except filings,
consents or notices which have been made.
(d) It has no Debt other than Debt permitted under Section 9.02 of
the
Second Lien Term Loan Agreement.
In addition to the foregoing, each of the Guarantors covenants
that, so
long as any Lender has any Commitment outstanding under the Second
Lien Term
Loan Agreement or any amount payable under the Second Lien Term
Loan Agreement
or any other Indebtedness shall remain unpaid, it will, and, if
necessary, will
enable the Borrowers to, fully comply with those covenants and
agreements of the
Borrowers applicable to such Guarantor set forth in such Second
Lien Term Loan
Agreement.
Section 2. The Guaranty. Each of the Guarantors hereby
unconditionally
guarantees, jointly and severally with the other Guarantors, the
full and
punctual payment and performance when due (whether at stated
maturity, upon
acceleration or otherwise) of the Indebtedness, including, without
limitation,
(i) the principal of and interest on each Loan made to each
Borrower pursuant to
the Second Lien Term Loan Agreement, (ii) all other amounts payable
by each
Borrower under the Second Lien Term Loan Agreement and the other
Loan Documents,
including, without limitation, all obligations under Swap
Agreements, and (iii)
the punctual and faithful performance, keeping, observance, and
fulfillment by
each Borrower of all of the agreements, conditions, covenants, and
obligations
of such Borrower contained in the Loan Documents (all of the
foregoing being
referred to collectively as the "Guaranteed Indebtedness"). Upon
(x) the failure
by any Borrower, or any of its Affiliates, as applicable, to pay
punctually any
such amount or perform such obligation, and (y) such failure
continuing beyond
any applicable grace or notice and cure period, each of the
Guarantors agrees
that it shall forthwith on demand pay such amount or perform such
obligation at
the place and in the manner specified in the Second Lien Term Loan
Agreement or
the relevant Loan Document, as the case may be. Each of the
Guarantors hereby
agrees that this Guaranty is an absolute, irrevocable and
unconditional guaranty
of payment and is not a guaranty of collection. This Guaranty shall
be
subordinated in right of payment to the Guaranty granted by the
Guarantors to
the Administrative Agent pursuant to the Senior Credit Facility and
any right to
payment under this Guaranty shall at all times be subject to the
terms of the
Intercreditor Agreement.
Section 3. Guaranty Unconditional. Except as otherwise provided in
Section
2 of this Agreement, the obligations of each of the Guarantors
hereunder shall
be unconditional and absolute and, without limiting the generality
of the
foregoing, shall not be released, discharged or otherwise affected
by:
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<PAGE>
(i) any extension, renewal, settlement, indulgence, compromise,
waiver
or release of or with respect to the Guaranteed Indebtedness or any
part
thereof or any agreement relating thereto, or with respect to
any
obligation of any other guarantor of any of the Guaranteed
Indebtedness,
whether (in any such case) by operation of law or otherwise, or any
failure
or omission to enforce any right, power or remedy with respect to
the
Guaranteed Indebtedness or any part thereof or any agreement
relating
thereto, or with respect to any obligation of any other guarantor
of any of
the Guaranteed Indebtedness;
(ii) any modification or amendment of or supplement to the Second
Lien
Term Loan Agreement, any Swap Agreement or any other Loan
Document,
including, without limitation, any such amendment which may
increase the
amount of, or the interest rates applicable to, any of the
Guaranteed
Indebtedness guaranteed hereby;
(iii) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of
any
collateral securing the Guaranteed Indebtedness or any part
thereof, any
other guaranties with respect to the Guaranteed Indebtedness or any
part
thereof, or any other obligation of any person or entity with
respect to
the Guaranteed Indebtedness or any part thereof, or any
nonperfection or
invalidity of any direct or indirect security for the
Guaranteed
Indebtedness;
(iv) any change in the corporate, partnership or other
existence,
structure or ownership of any Borrower or any other guarantor of
any of the
Guaranteed Indebtedness, or any insolvency, bankruptcy,
reorganization or
other similar proceeding affecting any Borrower or any other
guarantor of
the Guaranteed Indebtedness, or any of their respective assets or
any
resulting release or discharge of any obligation of any Borrower or
any
other guarantor of any of the Guaranteed Indebtedness;
(v) the existence of any claim, setoff or other rights which
the
Guarantors may have at any time against any Borrower, any other
guarantor
of any of the Guaranteed Indebtedness, the Administrative Agent,
any
Secured Party or any other Person, whether in connection herewith
or in
connection with any unrelated transactions, provided that nothing
herein
shall prevent the assertion of any such claim by separate suit
or
compulsory counterclaim;
(vi) the enforceability or validity of the Guaranteed Indebtedness
or
any part thereof or the genuineness, enforceability or validity of
any
agreement relating thereto or with respect to any collateral
securing the
Guaranteed Indebtedness or any part thereof, or any other
invalidity or
unenforceability relating to or against any Borrower or any other
guarantor
of any of the Guaranteed Indebtedness, for any reason related to
the Second
Lien Term Loan Agreement, any Swap Agreement or any other Loan
Document, or
any provision of applicable law or regulation purporting to
prohibit the
payment by any Borrower or any other guarantor of the
Guaranteed
Indebtedness, of any of the Guaranteed Indebtedness;
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<PAGE>
(vii) the failure of the Administrative Agent to take any steps
to
perfect and maintain any security interest in, or to preserve any
rights
to, any security or collateral for the Guaranteed Indebtedness, if
any;
(viii) the election by, or on behalf of, any one or more of the
Holders of Secured Indebtedness, in any proceeding instituted under
Chapter
11 of Title 11 of the United States Code (11 U.S.C. 101 et seq.)
(the
"Bankruptcy Code"), of the application of Section 1111(b)(2) of
the
Bankruptcy Code;
(ix) any borrowing or grant of a security interest by any Borrower,
as
debtor-in-possession, under Section 364 of the Bankruptcy Code;
(x) the disallowance, under Section 502 of the Bankruptcy Code, of
all
or any portion of the claims of the Secured Parties or the
Administrative
Agent for repayment of all or any part of the Guaranteed
Indebtedness;
(xi) the failure of any other guarantor to sign or become party
to
this Guaranty or any amendment, change, or reaffirmation hereof;
or
(xii) any other act or omission to act or delay of any kind by
any
Borrower, any other guarantor of the Guaranteed Indebtedness,
the
Administrative Agent, any Secured Party or any other Person or any
other
circumstance whatsoever which might, but for the provisions of this
Section
3, constitute a legal or equitable discharge of any Guarantor's
obligations
hereunder.
Section 4. Discharge Only Upon Payment In Full; Reinstatement In
Certain
Circumstances. Each of the Guarantors' obligations hereunder shall
remain in
full force and effect until all Guaranteed Indebtedness (other than
contingent
indemnity obligation
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