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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 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
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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 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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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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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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(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
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