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 ▇-▇ 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
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
contingent indemnity obligations and Indebtedness in respect of Swap Agreements)
shall have been paid in full in cash and the Commitments under the Third Lien
Term Loan Agreement shall have terminated or expired. If at any time any payment
of the principal of or interest on any Loan or any other amount payable by any
Borrower or any other party under the Third Lien Term Loan Agreement, any Swap
Agreement or any other Loan Document is rescinded or must be otherwise restored
or returned upon the insolvency, bankruptcy or reorganization of any Borrower or
otherwise, each of the Guarantors' obligations hereunder with respect to such
payment shall be reinstated as though such payment had been due but not made at
such time.
Section 5. General Waivers; Additional Waivers.
(A) General Waivers. Each of the Guarantors irrevocably waives
acceptance hereof, presentment, demand or action on delinquency, protest and, to
the fullest extent permitted by law, any notice not provided for herein or under
the other Loan Documents, as well as any requirement that at any time any action
be taken by any Person against any Borrower, any other guarantor of the
Guaranteed Indebtedness, or any other Person.
(B) Additional Waivers. Notwithstanding anything herein to the
contrary, each of the Guarantors hereby absolutely, unconditionally, knowingly,
and expressly waives:
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(i) any right it may have to revoke this Guaranty as to
future indebtedness or notice of acceptance hereof;
(ii) (1) notice of acceptance hereof; (2) notice of any
loans or other financial accommodations made or extended under the
Loan Documents or the creation or existence of any Guaranteed
Indebtedness; (3) notice of the amount of the Guaranteed Indebtedness,
subject, however, to each Guarantor's right to make inquiry of
Administrative Agent and Secured Parties to ascertain the amount of
the Guaranteed Indebtedness at any reasonable time; (4) notice of any
adverse change in the financial condition of any Borrower or of any
other fact that might increase such Guarantor's risk hereunder; (5)
notice of presentment for payment, demand, protest, and notice thereof
as to any instruments among the Loan Documents; (6) notice of any
Default or Event of Default; and (7) all other notices (except if such
notice is specifically required to be given to such Guarantor
hereunder or under the Loan Documents) and demands to which each
Guarantor might otherwise be entitled;
(iii) its right, if any, to require the Administrative Agent
and the other Secured Parties to institute suit against, or to exhaust
any rights and remedies which the Administrative Agent and the other
Secured Parties have or may have against, the other Guarantors or any
third party, or against any collateral provided by the other
Guarantors or any third party; and each Guarantor further waives any
defense arising by reason of any disability or other defense (other
than the defense that the Guaranteed Indebtedness shall have been
fully and finally performed and indefeasibly paid) of the other
Guarantors or by reason of the cessation from any cause whatsoever of
the liability of the other Guarantors in respect thereof;
(iv) (a) any rights to assert against the Administrative
Agent and the other Secured Parties any defense (legal or equitable),
set-off, counterclaim, or claim which such Guarantor may now or at any
time hereafter have against the other Guarantors or any other party
liable to the Administrative Agent and the other Secured Parties; (b)
any defense, set-off, counterclaim, or claim, of any kind or nature,
arising directly or indirectly from the present or future lack of
perfection, sufficiency, validity, or enforceability of the Guaranteed
Indebtedness or any security therefor; and (c) any defense such
Guarantor has to performance hereunder, and any right such Guarantor
has to be exonerated, arising by reason of: the impairment or
suspension of the Administrative Agent's and the other Secured
Parties' rights or remedies against the other Guarantors; the
alteration by the Administrative Agent and the other Secured Parties
of the Guaranteed Indebtedness; any discharge of the other Guarantors'
obligations to the Administrative Agent and the other Secured Parties
by operation of law as a result of the Administrative Agent's and the
other Secured Parties' intervention or omission; or the acceptance by
the Administrative Agent and the other Secured Parties of anything in
partial satisfaction of the Guaranteed Indebtedness; and
(v) any defense arising by reason of or deriving from (a)
any claim or defense based upon an election of remedies by the
Administrative Agent and the other Secured Parties; or (b) any
election by the Administrative Agent and the other Secured Parties
under Section 1111(b) of Title 11 of the United States Code entitled
"Bankruptcy", as
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now and hereafter in effect (or any successor statute), to limit the
amount of, or any collateral securing, its claim against the Guarantors:
Section 6. Subordination of Subrogation. Until the Guaranteed
Indebtedness have been paid in full in cash and finally performed (other than
contingent indemnity obligations and Indebtedness in respect of the Swap
Agreements) the Guarantors (i) shall have no right of subrogation with respect
to such Guaranteed Indebtedness and (ii) waive any right to enforce any remedy
which the Secured Parties or the Administrative Agent now have or may hereafter
have against any Borrower, any endorser or any guarantor of all or any part of
the Indebtedness or any other Person, and until such time the Guarantors waive
any benefit of, and any right to participate in, any security or collateral
given to the Secured Parties and the Administrative Agent to secure the payment
or performance of all or any part of the Guaranteed Indebtedness or any other
liability of each Borrower to the Secured Parties. Should any Guarantor have the
right, notwithstanding the foregoing, to exercise its subrogation rights, each
Guarantor hereby expressly and irrevocably (A) subordinates any and all rights
at law or in equity to subrogation, reimbursement, exoneration, contribution,
indemnification or set off that the Guarantor may have to the payment in full in
cash of the Guaranteed Indebtedness until the Guaranteed Indebtedness are paid
in full in cash (other than contingent indemnity obligations and Indebtedness in
respect of Swap Agreements) and (B) waives any and all defenses available to a
surety, guarantor or accommodation co-obligor until the Guaranteed Indebtedness
are paid in full in cash (other than contingent indemnity obligations other than
Indebtedness in respect of Swap Agreements). Each Guarantor acknowledges and
agrees that this subordination is intended to benefit the Administrative Agent
and the Secured Parties and shall not limit or otherwise affect such Guarantor's
liability hereunder or the enforceability of this Guaranty, and that the
Administrative Agent, the Secured Parties and their respective successors and
assigns are intended third party beneficiaries of the waivers and agreements set
forth in this Section 6.
Section 7. Contribution with Respect to Guaranteed Indebtedness.
(a) To the extent that any Guarantor shall make a payment under this
Guaranty (a "Guarantor Payment") which, taking into account all other Guarantor
Payments then previously or concurrently made by any other Guarantor, exceeds
the amount which otherwise would have been paid by or attributable to such
Guarantor if each Guarantor had paid the aggregate Guaranteed Indebtedness
satisfied by such Guarantor Payment in the same proportion as such Guarantor's
"Allocable Amount" (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Guarantors as determined immediately prior to the making of such Guarantor
Payment, then, following payment in full in cash of the Guarantor Payment and
the Guaranteed Indebtedness (other than contingent indemnity obligations and
Indebtedness in respect of Swap Agreements), and all Commitments have terminated
or expired, such Guarantor shall be entitled to receive contribution and
indemnification payments from, and be reimbursed by, each other Guarantor for
the amount of such excess, pro rata based upon their respective Allocable
Amounts in effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Guarantor shall be equal to the maximum amount of the claim which could then be
recovered from such Guarantor under this Guaranty without rendering such claim
voidable or avoidable under Section
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548 of Chapter 11 of the Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute or
common law.
(c) This Section 7 is intended only to define the relative rights of
the Guarantors, and nothing set forth in this Section 7 is intended to or shall
impair the obligations of the Guarantors, jointly and severally, to pay any
amounts as and when the same shall become due and payable in accordance with the
terms of this Guaranty.
(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Guarantor or Guarantors
to which such contribution and indemnification is owing.
(e) The rights of the indemnified Guarantors against other Guarantors
under this Section 7 shall be exercisable upon the full and indefeasible payment
of the Guaranteed Indebtedness (other than contingent indemnity obligations and
Indebtedness in respect of Swap Agreements) in full in cash and the termination
or expiry (or in the case of all Letters of Credit full collateralization), on
terms reasonably acceptable to the Administrative Agent, of the Commitments
under the Third Lien Term Loan Agreement.
Section 8. Stay of Acceleration. If acceleration of the time for
payment of any amount payable by any Borrower under the Third Lien Term Loan
Agreement, any counterparty to any Swap Agreement or any other Loan Document is
stayed upon the insolvency, bankruptcy or reorganization of any Borrower or any
of their Affiliates, all such amounts otherwise subject to acceleration under
the terms of the Third Lien Term Loan Agreement, any Swap Agreement or any other
Loan Document shall nonetheless be payable by each of the Guarantors hereunder
forthwith on demand by the Administrative Agent. Section 9. Notices. All
notices, requests and other communications to any party hereunder shall be given
in the manner prescribed in Section 12.01 of the Third Lien Term Loan Agreement
with respect to the Administrative Agent at its notice address therein and, with
respect to any Guarantor, in the care of the Borrowers at the address of the
Borrowers set forth in the Third Lien Term Loan Agreement, or such other address
or telecopy number as such party may hereafter specify for such purpose by
notice to the Administrative Agent in accordance with the provisions of such
Section 12.01. Section 10. No Waivers. No failure or delay by the Administrative
Agent or any Secured Party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies provided in this
Guaranty, the Third Lien Term Loan Agreement, any Swap Agreement and the other
Loan Documents shall be cumulative and not exclusive of any rights or remedies
provided by law. Section 11. Successors and Assigns. This Guaranty is for the
benefit of the Administrative Agent and the Secured Parties and their respective
successors and permitted assigns, provided, that no Guarantor shall have any
right to assign its rights or obligations hereunder without the consent of the
Administrative Agent, and any such assignment in violation
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of this Section 11 shall be null and void; and in the event of an assignment of
any amounts payable under the Third Lien Term Loan Agreement, any Swap Agreement
or the other Loan Documents in accordance with the respective terms thereof, the
rights hereunder, to the extent applicable to the indebtedness so assigned, may
be transferred with such indebtedness. This Guaranty shall be binding upon each
of the Guarantors and their respective successors and assigns.
Section 12. Changes in Writing. Other than in connection with the
addition of additional Subsidiaries, which become parties hereto by executing a
Supplement hereto in the form attached as Annex I, neither this Guaranty nor any
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by each of the Guarantors and the Administrative Agent
with the consent of the requisite Lenders as required under the terms of the
Third Lien Term Loan Agreement. Section 13. CHOICE OF LAW. THIS GUARANTY SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK. Section 14. CONSENT TO JURISDICTION; JURY TRIAL.
(A) CONSENT TO JURISDICTION. EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE
COURT SITTING IN NEW YORK, NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO ANY CREDIT DOCUMENTS AND EACH GUARANTOR HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY TO BRING
PROCEEDINGS AGAINST ANY GUARANTOR IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ANY GUARANTOR AGAINST THE ADMINISTRATIVE AGENT OR ANY
SECURED PARTY OR ANY AFFILIATE OF THE ADMINISTRATIVE AGENT OR ANY SECURED PARTY
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTED WITH THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT SHALL BE
BROUGHT ONLY IN A COURT SITTING IN NEW YORK, NEW YORK.
(B) WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBY WAIVES TRIAL BY JURY
IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS GUARANTY OR ANY OTHER LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
Section 15. No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Guaranty. In the
event an ambiguity or question of intent or interpretation arises, this Guaranty
shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Guaranty.
Section 16. Expenses of Enforcement, Etc. Subject to the terms of the
Third Lien Term Loan Agreement, if an Event of Default has occurred and is
continuing under the Third Lien Term Loan Agreement, the Lenders shall have the
right at any time to direct the Administrative Agent to commence enforcement
proceedings with respect to the Guaranteed Indebtedness. The Guarantors agree to
reimburse the Administrative Agent and the Secured Parties for any costs and
out-of-pocket expenses (including reasonable attorneys' fees and time charges of
attorneys for the Administrative Agent and the Secured Parties, which attorneys
may be employees of the Administrative Agent or the Secured Parties) paid or
incurred by the Administrative Agent or any Secured Party in connection with the
collection and enforcement of amounts due under the Loan Documents, including
without limitation this Guaranty. The Administrative Agent agrees to distribute
payments received from any of the Guarantors hereunder to the Secured Parties on
a pro rata basis for application in accordance with the terms of the Third Lien
Term Loan Agreement and the Intercreditor Agreement.
Section 17. Setoff. At any time after all or any part of the
Guaranteed Indebtedness have become due and payable (by acceleration or
otherwise), each Secured Party and the Administrative Agent may, without notice
to any Guarantor and regardless of the acceptance of any security or collateral
for the payment hereof, appropriate and apply toward the payment of all or any
part of the Guaranteed Indebtedness (i) any indebtedness due or to become due
from such Secured Party or the Administrative Agent to any Guarantor, and (ii)
any moneys, credits or other property belonging to any Guarantor, at any time
held by or coming into the possession of such Secured Party or the
Administrative Agent or any of their respective affiliates.
Section 18. Financial Information. Each Guarantor hereby assumes
responsibility for keeping itself informed of the financial condition of each
Borrower and any and all endorsers and/or other Guarantors of all or any part of
the Guaranteed Indebtedness, and of all other circumstances bearing upon the
risk of nonpayment of the Guaranteed Indebtedness, or any part thereof, that
diligent inquiry would reveal, and each Guarantor hereby agrees that none of the
Secured Party or the Administrative Agent shall have any duty to advise such
Guarantor of information known to any of them regarding such condition or any
such circumstances. In the event any Secured Party or the Administrative Agent,
in its sole discretion, undertakes at any time or from time to time to provide
any such information to a Guarantor, such Secured Party or the Administrative
Agent shall be under no obligation (i) to undertake any investigation not a part
of its regular business routine, (ii) to disclose any information which such
Secured Party or the Administrative Agent, pursuant to accepted or reasonable
commercial finance or banking practices, wishes to maintain confidential or
(iii) to make any other or future disclosures of such information or any other
information to such Guarantor.
Section 19. Severability. Wherever possible, each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be
11
ineffective to the extent of such prohibition or invalidity without invalidating
the remainder of such provision or the remaining provisions of this Guaranty.
Section 20. Merger. This Guaranty represents the final agreement of
each of the Guarantors with respect to the matters contained herein and may not
be contradicted by evidence of prior or contemporaneous agreements, or
subsequent oral agreements, between any Guarantor and any Secured Party or the
Administrative Agent.
Section 21. Headings. Section headings in this Guaranty are for
convenience of reference only and shall not govern the interpretation of any
provision of this Guaranty.
[SIGNATURE PAGES TO FOLLOW]
11
IN WITNESS WHEREOF, each Initial Guarantor has caused this Guaranty to be
duly executed by its authorized officer as of the day and year first above
written.
QUEST CHEROKEE OILFIELD SERVICE, LLC, ▇-▇ GAS GATHERING, L.L.C., as a
as a Guarantor Guarantor
By: Quest Cherokee, LLC, its sole member By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ Title: Chief Executive Officer
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer
QUEST ENERGY SERVICE, LLC, as a PONDEROSA GAS PIPELINE COMPANY, LLC,
Guarantor as a Guarantor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------ ---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer Title: Chief Executive Officer
QUEST OIL & GAS, LLC, as a Guarantor PRODUCERS SERVICE, LLC, as a Guarantor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------ ---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Chief Executive Officer Title: President and Chief
Executive Officer
STP CHEROKEE, LLC, as a Guarantor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief
Executive Officer
Acknowledged and Agreed to:
GUGGENHEIM CORPORATE FUNDING, LLC, as Administrative Agent
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Managing Partner
ANNEX I TO GUARANTY
Reference is hereby made to the Amended and Restated Guaranty (as the same
may be amended, restated, supplemented or otherwise modified from time to time,
the "Guaranty"), dated as of December 22, 2006, made by each of ▇-▇ 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 the Guaranty by executing a Supplement thereto substantially similar in form
and substance hereto, the "Guarantors"), in favor of the Administrative Agent,
for the ratable benefit of the Secured Parties, under the Third Lien Term Loan
Agreement. Each capitalized term used herein and not defined herein shall have
the meaning given to it in the Guaranty. By its execution below, the
undersigned, [NAME OF NEW GUARANTOR], a [corporation] [partnership] [limited
liability company], agrees to become, and does hereby become, a Guarantor under
the Guaranty and agrees to be bound by such Guaranty as if originally a party
thereto. By its execution below, the undersigned represents and warrants as to
itself that all of the representations and warranties contained in Section 1 of
the Guaranty are true and correct in all respects as of the date hereof.
IN WITNESS WHEREOF, [NAME OF NEW GUARANTOR], a [corporation] [partnership]
[limited liability company] has executed and delivered this Annex I counterpart
to the Guaranty as of this __________ day of _________,
----.
[NAME OF NEW GUARANTOR]
By:____________________________________
Title:__________________________________