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 Credit
Agreement described
below.
WITNESSETH:
WHEREAS, Quest Cherokee, LLC and Quest Resource Corporation
(collectively,
the "Borrowers")
have entered into that
certain Amended and Restated Senior
Credit Agreement
dated as of February
7, 2006 by and among the Borrowers, the
Administrative Agent and certain financial institutions from time to time
party
thereto as
Lenders (the "Lenders") (as the same may be amended, restated,
supplemented or otherwise modified from time to time, the
"Credit
Agreement"),
which amended and
restated the original
Senior Credit
Agreement dated as of
November 14, 2005 (the "Original Credit Agreement");
WHEREAS the Credit 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 Credit Agreement as amended by the Credit Agreement;
WHEREAS, it is a
condition precedent to
the extensions
of credit by the
Lenders under the
Credit 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 Credit 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
<PAGE>
Borrowers may in the future provide, to the Guarantors, and in order to induce
the Lenders and the
Administrative
Agent to enter into
the Credit
Agreement,
each of the Guarantors is willing to guarantee the Indebtedness
under the Credit
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 Credit Agreement and
to make the Loans and the other financial accommodations to the
Borrowers and to
issue the Letters
of Credit described in the Credit Agreement, 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 Credit
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,
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<PAGE>
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 Credit
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
Credit Agreement.
In
addition to the
foregoing, each of the
Guarantors covenants
that, so
long as any Lender has any Commitment outstanding under the Credit
Agreement or
any amount payable under the Credit 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 Credit 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 Credit
Agreement,
(ii) any reimbursement obligations in respect of LC
Disbursements of each
Borrower or the
performance by it of such reimbursement
obligations, (iii) all
other amounts payable
by each Borrower under the Credit
Agreement and the
other Loan Documents,
including,
without limitation, all
obligations
under Swap
Agreements,
and (iv) 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 Credit 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.
Section 3.
Guaranty Unconditional. 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:
(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
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<PAGE>
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 Credit
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
Credit
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;
(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;
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<PAGE>
(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 obligations and Indebtedness in respect of Swap
Agreements) shall have
been paid in full in cash and the Commitments and all Letters of Credit
issued
under the Credit
Agreement shall have
terminated or expired or, in the case of
all Letters of Credit, are fully collateralized on terms reasonably
acceptable
to the Administrative
Agent. If at any time
any payment of the principal o
