Exhibit 10.10
GUARANTY
(Subsidiary)
THIS GUARANTY (this “
Guaranty ”), dated as of November 15,
2007, is made by QUEST CHEROKEE OILFIELD SERVICE, LLC, a Delaware
limited liability company (the “ Guarantor
”), in favor of ROYAL BANK OF CANADA, as administrative agent
for the “ Secured Parties ” as defined in the
Credit Agreement (hereinafter defined).
W
I T N E S S E T H :
WHEREAS, pursuant to that certain
Amended and Restated Credit Agreement dated November 15, 2007
(as the same may hereafter be amended, supplemented and restated,
the “ Credit Agreement ”), among QUEST
ENERGY PARTNERS, L.P., a Delaware limited partnership (the “
MLP ”) QUEST RESOURCE CORPORATION, a Nevada
corporation (“ Quest Resource ”) and
QUEST CHEROKEE, LLC, a Delaware limited liability company (“
Quest Cherokee ” and together with Quest
Resource, each a “ Borrower ” and
collectively, the “ Borrowers ”), the
various financial institutions that are, or may from time to time
become, parties thereto (individually a “
Lender ” and collectively the “
Lenders ”) and Royal Bank of Canada, as
administrative agent and collateral agent (in its capacity as
administrative agent, the “ Administrative
Agent ”), the Lenders have agreed to make Credit
Extensions for the account of the Borrowers; and
WHEREAS, as a condition precedent to
the making of Credit Extensions under and as defined in the Credit
Agreement, the Guarantor is required to execute and deliver this
Guaranty; and
WHEREAS, the Guarantor has duly
authorized the execution, delivery and performance of this
Guaranty; and
WHEREAS, the Guarantor is a wholly
owned direct or indirect subsidiary of the Borrowers; and
WHEREAS, it is in the best interests
of the Guarantor to execute this Guaranty inasmuch as the Guarantor
will derive substantial direct and indirect benefits from the
extensions of credit made from time to time to or for the account
of the Borrowers.
NOW THEREFORE, for good and valuable
consideration, the receipt of which is hereby acknowledged, and in
order to induce the Lenders to make Credit Extensions to the
Borrowers pursuant to the Credit Agreement by fulfilling the
requirements of the Credit Agreement, the Guarantor agrees, for the
benefit of each Lender, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Certain
Terms . The following capitalized terms when used in this
Guaranty, including its preamble and recitals, shall have the
following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
“ Administrative
Agent ” is defined in the first recital.
“ Borrower
” and “ Borrowers ” is defined in
the first recital.
“ Commitments
” means each Commitment as defined in the Credit
Agreement.
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“ Credit
Extensions ” means each Credit Extension as defined
in the Credit Agreement.
“ Guarantor
” is defined in the preamble.
“ Guaranty
” is defined in the preamble.
“ Lenders ”
is defined in the first recital.
“ Loan Documents
” means the Loan Documents as defined in the Credit
Agreement.
“ Note ”
means each Revolving Note as defined in the Credit Agreement.
“ Obligations
” means the Obligations as defined in the Credit
Agreement.
“ Obligor ”
means the Borrowers or any other Person (other than the
Administrative Agent or any Lender) obligated under any Loan
Document.
“ Required
Lenders ” means the Required Lenders as defined in
the Credit Agreement.
“ Taxes ”
is defined in clause (a) of Section 2.7.
“ UCC ”
means the Uniform Commercial Code as in effect in the State of New
York.
SECTION 1.2 Credit
Agreement Definitions . Unless otherwise defined herein or
the context otherwise requires, capitalized terms used in this
Guaranty, including its preamble and recitals, have the meanings
provided in the Credit Agreement,
SECTION 1.3 UCC
Definitions . Unless otherwise defined herein or the
context otherwise requires, terms for which meanings are provided
in the UCC are used in this Guaranty, including its preamble and
recitals, with such meanings.
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1
Guaranty . The Guarantor hereby absolutely,
unconditionally, and irrevocably (1) guarantees the full and
punctual payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all
Obligations of the Borrowers and each other Obligor now or
hereafter existing under each of the Credit Agreement, the Notes
and each other Loan Document to which the Borrowers or such other
Obligor is or may become a party, whether for principal, interest,
fees, expenses or otherwise (including all such amounts which would
become due but for the operation of the automatic stay under
Section 362(a) of the United States Bankruptcy Code, 11 U.S.C.
§362(a), and the operation of Sections 502(b) and 506(b) of
the United States Bankruptcy Code, 11 U.S.C. §502(b) and
§506(b)), and (2) indemnifies and holds harmless each
Lender and each holder of a Note for any and all costs and expenses
(including reasonable attorney’s fees and expenses) incurred
by such Lender or such holder, as the case may be, in enforcing any
rights under this Guaranty; provided however, that the
Guarantor shall be liable under this Guaranty for the maximum
amount of such liability that can be hereby incurred without
rendering this Guaranty, as it relates to the Guarantor, voidable
under applicable law relating to fraudulent conveyance or
fraudulent transfer, and not for any greater amount. This Guaranty
constitutes a guaranty of payment when due and not of collection,
and the Guarantor specifically agrees that it shall not be
necessary or required that any Lender or any holder of any
Note
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exercise
any right, assert any claim or demand or enforce any remedy
whatsoever against the Borrowers or any other Obligor (or any other
Person) before or as a condition to the obligations of the
Guarantor hereunder.
SECTION 2.2
Acceleration of Guaranty . The Guarantor agrees that,
in the event of the occurrence of any event of the type described
in Section 8. 01(f) of the Credit Agreement,
with respect to the Borrowers, any other Obligor or the Guarantor,
and if such event shall occur at a time when any of the Obligations
may not then be due and payable, the Guarantor will pay to the
Lenders forthwith the full amount which would be payable hereunder
by the Guarantor if all such Obligations were then due and
payable.
SECTION 2.3 Guaranty
Absolute, etc . This Guaranty shall in all respects
be a continuing, absolute, unconditional and irrevocable guaranty
of payment, and shall remain in full force and effect until all
Obligations (other than contingent indemnity obligations) of the
Borrowers and each other Obligor have been paid in full (or, in the
case of L/C Obligations, Cash Collateralized), all obligations of
the Guarantor hereunder shall have been paid in full, all
Commitments shall have terminated and, except as provided in
Section 10. 01(e) of the Credit Agreement, all
Lender Hedging Agreements have terminated. The Guarantor may not
rescind or revoke its obligations hereunder. The Guarantor
guarantees that the Obligations of the Borrowers and each other
Obligor will be paid strictly in accordance with the terms of the
Credit Agreement and each other Loan Document under which they
arise, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the
rights of any Lender or any holder of any Note with respect
thereto. The liability of the Guarantor under this Guaranty shall
be absolute, unconditional and irrevocable irrespective of:
(1) any lack of validity, legality or enforceability of the
Credit Agreement, any Note or any other Loan Document; (2) the
failure of any Lender or any holder of any Note (a) to assert
any claim or demand or to enforce any right or remedy against the
Borrowers, any other Obligor or any other Person (including any
other guarantor) under the provisions of the Credit Agreement, any
Note, any other Loan Document or otherwise, or (b) to exercise
any right or remedy against any other guarantor of, or collateral
securing, any Obligations of the Borrowers or any other Obligor;
(3) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the
Borrowers or any other Obligor, or any other extension, compromise
or renewal of any Obligations of the Borrowers or any other
Obligor; (4) any reduction, limitation, impairment or
termination of any Obligations of the Borrowers or any other
Obligor for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to
(and the Guarantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination
whatsoever by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other event
or occurrence affecting, any Obligations of the Borrowers, any
other Obligor or otherwise; (5) any amendment to, rescission,
waiver, or other modification of, or any consent to departure from,
any of the terms of the Credit Agreement, any Note or any other
Loan Document; (6) any addition, exchange, release, surrender
or non-perfection of any collateral, or any amendment to or waiver
or release or addition of, or consent to departure from, any other
guaranty, held by any Lender or any holder of any Note securing any
of the Obligations of the Borrowers or any other Obligor;
(7) the insolvency or bankruptcy of, or similar event
affecting, the Borrowers or any other Obligor; or (8) any
other circumstance which might otherwise constitute a defense
available to, or a legal or equitable discharge of, the Borrowers,
any other Obligor, any surety or any guarantor. The Guarantor
waives all rights and defenses which may arise with respect to any
of the foregoing, and the Guarantor waives any right to revoke this
Guaranty with respect to future indebtedness.
SECTION 2.4
Reinstatement . The Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment (in whole or in part) of
any of
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the
Obligations is rescinded or must otherwise be restored by any
Lender or any holder of any Note, upon the insolvency, bankruptcy
or reorganization of the Borrowers, any other Obligor or otherwise,
all as though such payment had not been made.
SECTION 2.5 Waiver,
etc. The Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of
the Obligations of the Borrowers or any other Obligor and this
Guaranty and any requirement that the Administrative Agent, any
other Lender or any holder of any Note protect, secure, perfect or
insure any security interest or Lien, or any property subje
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