EXECUTION COPY
EXHIBIT F-2 TO CREDIT AGREEMENT
GUARANTY
THIS GUARANTY (as the same may be amended, restated, supplemented or
otherwise modified from time to time, this "Guaranty") is made as of November
14, 2005, by each of BLUESTEM PIPELINE, LLC, a Delaware limited liability
company, X-X GAS GATHERING, L.L.C., a Kansas limited liability company,
PONDEROSA GAS PIPELINE COMPANY, INC., a Kansas corporation, PRODUCERS SERVICE
INCORPORATED, a Kansas corporation, QUEST CHEROKEE OILFIELD SERVICE, LLC, a
Delaware limited liability company, QUEST ENERGY SERVICE, INC., a Kansas
corporation, QUEST OIL & GAS CORPORATION, a Kansas corporation, and STP
CHEROKEE, INC., an Oklahoma corporation (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 a Senior Credit Agreement dated as of the
date hereof 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 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, 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 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 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,
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
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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 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
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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;
(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;
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(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 of or
interest on any Loan or reimbursement obligation in respect of LC Disbursements
or any other amount payable by any Borrower or any other party under the Credit
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:
(i) any right it may have to revoke this Guaranty as to future
indebtedness or notice of acceptance hereof;
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(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 now and hereafter in effect
(or any successor statute), to limit the amount of, or any collateral
securing, its claim against the Guarantors:
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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
Issuing Bank, 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 and Letters of
Credit have terminated or expired or, in the case of all Letters of Credit, are
fully collateralized on terms reasonably acceptable to the Administrative Agent,
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 and
all Letters of Credit issued under the Credit Agreement.
Section 8. Stay of Acceleration. If acceleration of the time for payment of
any amount payable by any Borrower under the Credit 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 Credit
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
Credit 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 Credit 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 Credit 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
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hereunder without the consent of the Administrative Agent, and any such
assignment in violation of this Section 11 shall be null and void; and in the
event of an assignment of any amounts payable under the Credit 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 in Section 12.02(b) of the
Credit 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.
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(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
Credit Agreement, if an Event of Default has occurred and is continuing under
the Credit 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 Credit 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 Parties 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
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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 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]
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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.
BLUESTEM PIPELINE, LLC, as a Guarantor QUEST CHEROKEE OILFIELD SERVICE,
LLC, as a Guarantor
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Chief Executive Officer Title: Chief Executive Officer
X-X GAS GATHERING, L.L.C., as a QUEST ENERGY SERVICE, INC., as a
Guarantor Guarantor
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Chief Executive Officer Title: Chief Executive Officer
PONDEROSA GAS PIPELINE COMPANY, QUEST OIL & GAS CORPORATION, as
INC., as a Guarantor a Guarantor
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Chief Executive Officer Title: Chief Executive Officer
PRODUCERS SERVICE INCORPORATED, STP CHEROKEE, INC., as a Guarantor
as a Guarantor
By: /s/ Xxxxx X. Xxxx By: /s/ Xxxxx X. Xxxx
-------------------------------- --------------------------------
Name: Xxxxx X. Xxxx Name: Xxxxx X. Xxxx
Title: Chief Executive Officer Title: Chief Executive Officer
Signature Page to Guaranty
Acknowledged and Agreed to:
GUGGENHEIM CORPORATE FUNDING, LLC, as Administrative Agent
By: /s/ Xxxx X. Xxxxxx
------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
Signature Page to Guaranty
