EXECUTION COPY
WAIVER AND AMENDMENT NO.
2
Dated as of April 25,
2007
to
THIRD LIEN TERM LOAN
AGREEMENT
Dated as of June 9, 2006
THIS WAIVER AND AMENDMENT NO. 2
(“ Waiver and Amendment ”) is made as of April
__, 2007 by and among Quest Cherokee, LLC (“ Quest
Cherokee ”) and Quest Resource Corporation (“
QRC ”), as borrowers (the “ Borrowers
”), the financial institutions from time to time parties
thereto (the “ Lenders ”) and Guggenheim
Corporate Funding, LLC, as administrative agent (the “
Administrative Agent ”) under that certain Third Lien
Term Loan Agreement dated as of June 9, 2006 by and among the
Borrowers, the Lenders and the Administrative Agent (as amended,
restated or otherwise modified from time to time, the “
Credit Agreement ”). Defined terms used herein and not
otherwise defined herein shall have the respective meanings given
to them in the Credit Agreement.
WHEREAS, the Borrowers have notified
the Lender that an Event of Default has occurred because Borrowers
have failed to comply with the minimum Total Debt to EBITDA ratio
for the Fiscal Quarter ended March 31, 2007 contained in Section
9.01(b) of the Credit Agreement (such Event of Default, the “
Existing Default ”) and Borrowers have requested that
the Lenders waive the Existing Default;
WHEREAS, the Borrowers, the Lenders
party hereto and the Administrative Agent have agreed to waive the
Existing Default on the terms and conditions set forth
herein;
WHEREAS, the Borrowers, the Lenders
party hereto and the Administrative Agent have further agreed to
amend Section 9.01(b) of the Credit Agreement on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of
the premises set forth above, the terms and conditions contained
herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Borrowers, the
Lenders party hereto and the Administrative Agent hereby agree as
follows.
1.
Waiver . Subject to the terms and conditions set forth
herein, the Lenders hereby waive the Existing Default. Neither this
Waiver and Amendment, nor any actions taken by any of the Lenders
in connection herewith, shall be deemed or construed as a waiver of
any other Event of Default or Default, whether now existing or
occurring after the date hereof, known or unknown, under the Loan
Documents.
2.
Amendment to Credit Agreement . Section 9.01(b) of the
Credit Agreement is hereby amended and restated in its entirety as
follows:
“(b)
For purposes of this
Section 9.01(b), “EBITDA” shall be calculated using
EBITDA for such quarter multiplied by four (4). The Borrowers shall
maintain a ratio of Total Debt to EBITDA of not more than the
following ratios for the quarters ending on the dates indicated
below:
|
Ratio
|
Period
|
|
4.50 to 1.0
|
for the quarter ending March 31,
2007,
|
|
5.50 to 1.0
|
for the quarter ending June 30,
2007,
|
|
4.75 to 1.0
|
for the quarter ending September 30,
2007,
|
|
4.25 to 1.0
|
for the quarter ending December 31,
2007,
|
|
3.50 to 1.0
|
for the quarter ending March 31,
2008,
|
|
3.25 to 1.0
|
for the quarter ending June 30,
2008, and
|
|
3.0 to 1.0
|
for each quarter ending on or after
September 30, 2008
|
3.
Amendment Fee . In consideration for the Lenders’
consent to this Waiver and Amendment, the Borrowers hereby agree to
pay to the Administrative Agent, for the benefit of the Lenders
under the Credit Agreement, a fee equal to 1.00% of the aggregate
amount of each Lender’s Commitment.
4.
Conditions of Effectiveness . The effectiveness of this
Waiver and Amendment is subject to the satisfaction of the
conditions precedent that the Administrative Agent shall have
received (i) counterparts of this Waiver and Amendment duly
executed by the Borrowers, the Lenders and the Administrative
Agent, and (ii) the payment of the fee in accordance with this
Waiver and Amendment.
5.
Representations and Warranties of the Borrowers . The
Borrowers hereby represent and warrant as follows:
(a) This
Waiver and Amendment and the Credit Agreement as amended hereby,
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