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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 Third Lien
Term Loan
Agreement described below.
WITNESSETH:
WHEREAS, Quest Cherokee, LLC and Quest Resource Corporation
(collectively,
the "Borrowers") have entered into that certain Third 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 "Third Lien Term Loan Agreement")
which Third
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 the Third 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 June 9, 2006 in favor of
the
Administrative Agent (the "Original Guaranty") pursuant to which
certain
Guarantors guaranteed all of the Borrowers' obligations arising
under the Third
Lien Term Loan Agreement;
WHEREAS, it is a condition precedent to the extensions of credit by
the
Lenders under the Third 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 Third Lien Term Loan Agreement
or the other
Loan Documents; and
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
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Borrowers may in the future provide, to the Guarantors, and in
order to induce
the Lenders and the Administrative Agent to enter into the Third
Lien Term Loan
Agreement, each of the Guarantors is willing to guarantee the
Indebtedness under
the Third 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
Third 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
Third 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
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
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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 Third 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
Third 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 Third
Lien Term Loan
Agreement or any amount payable under the Third 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 Third 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 Third Lien Term Loan Agreement, (ii) all other amounts payable
by each
Borrower under the Third 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 Third 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 Agreement
and the Second
Lien Term Loan Agreement 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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(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
Third 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 Third 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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(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
cont
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