Exhibit 10.9
EXECUTION
ASSET SALE AGREEMENT
(PostRock Energy Corporation)
     THIS ASSET SALE AGREEMENT (this “Agreement”), dated as of September 21,
2010, is made by and between POSTROCK ENERGY CORPORATION, a Delaware corporation
(the “Company”), and ROYAL BANK OF CANADA, as Lender (as defined below).
R E C I T A L S:
     A. Pursuant to that certain Third Amended and Restated Credit Agreement,
dated of even date herewith (as the same may hereafter be amended, supplemented
and restated, the “Credit Agreement”), among QUEST EASTERN RESOURCE LLC, a
Delaware limited liability company (“Borrower”), Royal Bank of Canada, as lender
(“Lender”), and Royal Bank of Canada, as administrative agent and collateral
agent (in its capacity as administrative agent and collateral agent, the
“Administrative Agent”), the Lender agreed to make Loans for the account of the
Borrower.
     B. Pursuant to Section 4.01(b)(i) of the Credit Agreement, Borrower is
required to deliver to the Administrative Agent this Agreement executed by the
Company.
     C. The Company has duly authorized the execution, delivery and performance
of this Agreement.
     D. Company owns indirectly 100% of the equity of Borrower.
     E. It is in the best interests of the Company to execute this Agreement
inasmuch as the Company will derive substantial direct and indirect benefits
from the loans made from time to time to or for the account of the Borrower.
     NOW THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and in order to fulfill the requirements of the Credit
Agreement, the Company agrees, for the benefit of Lender, as follows:
ARTICLE I
DEFINITIONS
     SECTION 1.1. Certain Terms. The following capitalized terms when used in
this Agreement, 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 Recital A.
     “Agreement” is defined in the preamble.

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     “Amount of Loss” shall mean (A) if the amount paid to Lender (whether for
principal, interest, fees, expenses, or otherwise) in connection with a
Qualifying Sale is (i) $*** or more, zero, (ii) if the amount paid is less than
$*** but equal to or more than $***, then the excess of $*** over the amount
paid to Lender in connection with a Qualifying Sale (excluding any payment
pursuant to this Agreement) but in no event to exceed $7,500,000, and (iii) if
the amount paid to Lender (whether for principal, interest, fees, expenses or
otherwise) in connection with a Non-Qualifying Sale is less than $***,
$7,500,000 and (B) in connection with the Company’s exercise of the Put Option,
$7,500,000.
     “Borrower” is defined in Recital A.
     “Business Day” shall have the meaning set forth for such term in the Credit
Agreement; “Business Days” shall be the plural of Business Day.
     “Closing Date” is defined in Section 2.1.
     “Company” is defined in the preamble.
     “Company Share Payment Notice” is defined in Section 2.1.
     “Company Shares” means shares of common stock of the Company, $0,001 par
value.
     “Credit Agreement” is defined in Recital A.
     “Current Operating Agreement” is defined in Section 4.2(d).
     “Deferred Payment Amount” means, in connection with a Qualifying Sale or a
Non-Qualifying Sale, the amount or amounts of any purchase price deferred,
whether or not evidenced by a promissory note.
     “Escrowed Amount” means, in connection with a Qualifying Sale or a
Non-Qualifying Sale, the amount or amounts placed in escrow against any
liabilities associated with the assets being sold, which amount will be paid
either to the buyer or the Lender, subject to Lender’s obligation to remit any
released Escrowed Amount to the Company to the extent required under
Section 2.1(b) hereof.
     “Fees and Expenses” is defined in Section 5.8.
     “Intercompany Loans” means all outstanding intercompany loans made by the
Company or PESC to Borrower permitted under the Credit Agreement in the
aggregate not to exceed $2,000,000.
     “Lender” is defined in the Recital A.
     “Loan Documents” means the Loan Documents (as defined in the Credit
Agreement).
     “Marcellus Assets” means the Marcellus shale gas properties owned by
Borrower and located in New York and West Virginia that constitute the real
property collateral mortgaged by Borrower to secure repayment of amounts owing
under the Credit Agreement and Note.

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     “Marcellus Pipeline” means the gathering system owned and operated by
Borrower.
     “New Operating Agreement” is defined in Section 4.2(d).
     “Non-Qualifying Sale” means a sale made with the consent of Lender, which
sale would otherwise meet the definition of a Qualifying Sale, except that the
sale will result in a payment to the Lender of less than $*** (excluding any
payment made pursuant to this Agreement).
     “Note” means the Note (as defined in the Credit Agreement).
     “Notice of Registered Holder” is defined in Section 3.1.
     “Obligations” means the Obligations (as defined in the Credit Agreement).
     “PESC” means PostRock Energy Services Corporation, a Delaware corporation
     “Pipeline Purchase Price” is defined in Section 4.3(b).
     “Pipeline Sale Circumstance” and “Pipeline Sale Circumstances” are defined
in Section 4.3(b).
     “PMP” is defined in the definition of “QC Marcellus Assets”
     “Proposed Non-Qualifying Sale” is defined in Section 4.2(a).
     “Put Exercise Circumstance” is defined in Section 4.2(b)
     “Put Option” is defined in Section 4.2(b)
     “Put Transfer” means the transfer of 100% of the equity interest in
Borrower by PESC to Lender, after and as a result of the Company’s exercise of
the Put Option.
     “Qualifying Sale” means (i) a voluntary sale of the Marcellus Assets
resulting in payment to the Lender of no less than $*** (excluding any payment
made pursuant to this Agreement) or (ii) a voluntary sale of a controlling
interest in the equity of Borrower resulting in a payment to such equity holder
of no less than $*** (excluding any payment made pursuant to this Agreement;
provided that any such sale involving an Escrow Amount or a Deferred Payment
Amount will constitute a Qualifying Sale only if the other consideration for
such sale includes cash proceeds that result in an amount being paid to Lender
on the Closing Date of at least $*** (excluding any payment made pursuant to
this Agreement).
     “QC Marcellus Assets” means the Marcellus shale gas properties owned by
PostRock MidContinent Production, LLC, successor by merger to Bluestem Pipeline,
LLC and Quest Cherokee, LLC (“PMP”) located in New York and West Virginia that
constitute a portion of the real property collateral mortgaged by PMP to secure
repayment of amounts owing under the Borrowing Base Credit Agreement, dated of
even date herewith, by and among, PESC and PMP, as borrowers, and Royal Bank of
Canada, as administrative agent and collateral agent.
     “Sale Process” is defined in Section 4.1.

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     “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 Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
ARTICLE II
LIMITED LOSS SHARING PROVISIONS
     SECTION 2.1. Limited Loss Sharing.
     (a) The Company hereby absolutely, unconditionally, and irrevocably agrees
to pay to Lender the Amount of Loss, if any, which Lender suffers as a result of
a Qualifying Sale or a Non-Qualifying Sale or to which Lender is entitled
hereunder in connection with the Put Transfer. The Company shall have the option
of paying such Amount of Loss, in cash or Company Shares (or a combination
thereof) at the closing of any Qualifying Sale, Non-Qualifying Sale, or Put
Transfer (the “Closing”; the date on which the Closing occurs, the “Closing
Date”). The Company shall notify the Administrative Agent in writing at least
five (5) Business Days in advance of the Closing Date of its election to pay all
or a portion of the Amount of Loss in Company Shares (such notice whether to pay
all or a portion of the Amount of Loss or of the Pipeline Purchase Price, the
“Company Share Payment Notice”). The Company is not a guarantor of the Credit
Agreement and therefore the Company has no obligations of any kind related to
the Credit Agreement except those set forth in this Agreement that are
specifically related to a Qualifying Sale, a Non-Qualifying Sale, a Put
Transfer, and the matters set forth in Article IV.
     (b) With regard to any Qualifying Sale or Non-Qualifying Sale that involves
an Escrowed Amount or a Deferred Payment Amount, the Amount of Loss shall be
calculated on the Closing Date excluding the Escrowed Amount and the Deferred
Payment Amount, but after repayment of any Intercompany Loans, in any case. If
upon disbursement of Escrowed Amount and/or the Deferred Payment Amount, the
amount of the payment to Lender would result in Lender receiving more than
Lender would be entitled to under this Agreement, any excess shall be remitted
by Lender to the Company within five (5) Business Days (to the extent received
by Lender, or if amounts in respect of Deferred Payment Amount are received by
the Company, the Company may retain any such excess). For example, if the
Marcellus Assets are sold for $*** cash on the Closing Date, the Amount of Loss
(after repayment of all Intercompany Loans) will be $5,550,000 ($*** minus
$***). If the Marcellus Assets are sold for a total of $*** but $*** is paid in
cash on the Closing Date and $5,000,000 is placed in escrow and becomes the
Escrowed Amount, the Amount of Loss (after repayment of all Intercompany Loans)
calculated at the Closing Date will be $7,500,000 (the excess of $*** minus $***
(subject to $7,500,000 maximum)). If the $5,000,000 in Escrowed Amount is
subsequently disbursed to the Lender, the Amount of Loss will be recalculated
(trued-up) based on a sale price of $*** and the Amount of Loss as recalculated
will be $5,550,000. Therefore, the Lender will retain $3,050,000 of the Escrowed
Amount and the Lender will remit to the Company $1,950,000 within five
(5) Business Days.

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     SECTION 2.2. Minimum Proceeds. Lender shall have no obligation, and there
is no agreement or understanding obligating Lender, to consent to a sale that
would constitute a Non-Qualifying Sale if Lender were to consent to such sale.
The Administrative Agent’s lien on the Marcellus Assets and Borrower’s equity
held for the benefit of the Lender shall not be released if less than $*** is
paid to Lender (excluding any payment made to Lender under this Agreement),
except in connection with a Non-Qualifying Sale.
     SECTION 2.3. Satisfaction of Obligations. Lender hereby absolutely,
unconditionally, and irrevocably agrees to accept in full payment of the
Obligations, (i) the Net Cash Proceeds received by Borrower (or Borrower’s
equity holder, in the case of a sale of Borrower’s equity) and paid to Lender in
connection with a Qualifying Sale or a Non-Qualifying Sale, together with the
Amount of Loss, if any, paid by the Company pursuant to this Agreement (up to
but not exceeding the amount of the Obligations at the time then owing by
Borrower to Lender), or (ii) in the case of an exercise of the Put Option, the
Put Transfer, together with any amount payable pursuant to Section 4.2(b) of
this Agreement (up to but not exceeding the amount of the Obligations at any
time then owing by Borrower to Lender). Upon satisfactory evidence that such
payments have been or will be made to Lender’s satisfaction, Lender will
instruct the Administrative Agent to execute and deliver on or prior to the
Closing Date, to such party as Borrower shall direct, all mortgage releases and
uniform commercial code financing statement termination statements covering the
Borrower’s collateral, including the Marcellus Assets, and shall return to the
Company the certificates (if any) representing the equity of the Borrower owned
indirectly by the Company.
     SECTION 2.4. Indemnification. The Company hereby absolutely,
unconditionally, and irrevocably indemnifies and holds harmless Lender for any
and all costs and expenses (including reasonable attorney’s fees and expenses)
incurred by Lender in enforcing any rights against the Company under this
Agreement.
     SECTION 2.5. Agreement Absolute, etc. This Agreement shall in all respects
be a continuing, absolute, unconditional and irrevocable obligation of the
Company, and shall remain in full force and effect until the first to occur of
(i) all Obligations (other than contingent obligations, such as those for
indemnification) of the Borrower have been paid in full (ii) a Qualifying Sale
or Non-Qualifying Sale shall have occurred on the Closing Date; or (iii) the
Company shall have exercised the Put Option and all related obligations under
the provisions of Article IV have been satisfied. The Company may not rescind or
revoke its obligations hereunder. The liability of the Company under this
Agreement shall be absolute, unconditional (except as provided by the terms of
this Agreement) and irrevocable irrespective of: (1) any lack of validity,
legality or enforceability of the Credit Agreement, the Note or any other Loan
Document; (2) the failure of Lender (a) to assert any claim or demand or to
enforce any right or remedy against the Borrower or any other Person under the
provisions of the Credit Agreement, the Note, any other Loan Document or
otherwise, or (b) to exercise any right or remedy against any collateral
securing, any Obligations of the Borrower, (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 Borrower, or any other extension, compromise or renewal of any Obligations
of the Borrower; (4) any reduction, limitation, impairment or termination of any
Obligations of the Borrower for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject to (and
Company hereby waives any right to or claim of) any defense or setoff,

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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 Borrower, 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, the
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 guaranty held by the
Administrative Agent, Lender or any holder of the Note securing any of the
Obligations of the Borrower; (7) the insolvency or bankruptcy of, or similar
event affecting, the Borrower; or (8) any other circumstance which might
otherwise constitute a defense available to, or a legal or equitable discharge
of, the Borrower. The Company waives all rights and defenses which may arise
with respect to any of the foregoing, and the Company waives any right to revoke
this Agreement with respect to future indebtedness.
     SECTION 2.6. Reinstatement. The Company agrees that this Agreement shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment (in whole or in part and whether in cash or by issuance of Company
Shares) of any of the Obligations is rescinded or must otherwise be restored by
the Administrative Agent, Lender or any holder of the Note, upon the insolvency,
bankruptcy or reorganization of Borrower, or otherwise, all as though such
payment had not been made.
     SECTION 2.7. Waiver, etc. The Company hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Obligations
of the Borrower and this Agreement and any requirement that the Administrative
Agent, the Lender or any holder of the Note protect, secure, perfect or insure
any security interest or Lien, or any property subject thereto, or exhaust any
right or take any action against the Borrower, or any collateral securing the
Obligations of the Borrower, as the case may be.
     SECTION 2.8. Waiver of Subrogation. Until the Obligations are paid in full
or satisfaction of the conditions specified in Section 2.3, and except for
Borrower’s repayment of the Intercompany Loans, which may occur at any time that
this Agreement is in effect, the Company shall not enforce or exercise any claim
or other rights which it may now or hereafter acquire against the Borrower that
arise from the existence, payment, performance or enforcement of Company’s
obligations under this Agreement or any other Loan Document, including any right
of subrogation, reimbursement, exoneration, or indemnification, any right to
participate in any claim or remedy of the Administrative Agent or Lender against
the Borrower or any collateral which the Administrative Agent now has or
hereafter acquires, whether or not such claim, remedy or right arises in equity,
or under contract, statute or common law, including the right to take or receive
from the Borrower, directly or indirectly, in cash or other property or by
set-off or in any manner, payment or security on account of such claim or other
rights. If any amount shall be paid to Company in violation of the preceding
sentence, such amount shall be deemed to have been paid to Company for the
benefit of, and held in trust for, the Lender, and shall forthwith be paid to
the Administrative Agent for the benefit of the Lender by the Company to be
credited and applied upon the Obligations, whether matured or unmatured. Company
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by the Credit Agreement and that the waiver
set forth in this Section is knowingly made in contemplation of such benefits.

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     SECTION 2.9. Payments Free and Clear of Taxes, etc. The Company hereby
agrees that:
     (a) All payments by Company hereunder shall be made in accordance with
Section 3.01 of the Credit Agreement free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts, deductions,
assessments, fees, withholdings or similar charges, and all liabilities with
respect thereto; excluding, in the case of the Administrative Agent and the
Lender, taxes imposed on or measured by its net income (including any franchise
taxes imposed on or measured by its net income), by the jurisdiction (or any
political subdivision thereof) under the Laws of which the Administrative Agent
or the Lender, as the case may be, is organized or maintains its Lending Office
(all such non-excluded taxes, duties, levies, imposts, deductions, assessments,
fees, withholdings or similar charges, and liabilities being hereinafter
referred to as “Taxes”). In the event that any withholding or deduction from any
payment to be made by the Company hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Company will
(i) pay directly to the relevant authority the full amount required to be so
withheld or deducted; (ii) promptly forward to the Lender an official receipt or
other documentation satisfactory to the Lender evidencing such payment to such
authority; and (iii) pay to the Lender such additional amount or amounts as is
necessary to ensure that the net amount actually received by the Lender will
equal the full amount the Lender would have received had no such withholding or
deduction been required. Moreover, if any Taxes are directly asserted against
the Lender with respect to any payment received by the Lender hereunder, the
Lender may pay such Taxes and the Company will promptly pay such additional
amounts (including, if incurred as a result of the Company’s or the Borrower’s
action, omission or delay, any penalties, interest or expenses) as is necessary
in order that the net amount received by the Lender after the payment of such
Taxes (including any Taxes on such additional amount) shall equal the amount the
Lender would have received had such Taxes not been asserted.
     (b) If the Company fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Lender the required receipts or other
required documentary evidence, the Company shall indemnify the Lender for any
incremental Taxes, interest or penalties that may become payable by the Lender
as a result of any such failure.
     (c) Without prejudice to the survival of any other agreement of the Company
hereunder, the agreements and obligations of the Company contained in this
Section 2.9 shall survive the payment in full of the principal of and interest
on the Loan.
ARTICLE III
PROVISIONS RELATING TO COMPANY SHARES
     SECTION 3.1. Exercise of Option to Pay With Company Shares. As provided in
Section 2.1 after delivery of a Company Share Payment Notice, the Company at its
election may pay all or a portion of the Amount of Loss by issuing to the Lender
Company Shares. The amount of Company Shares to be issued shall be calculated by
taking the Amount of Loss to be paid using Company Shares and dividing that
amount by the average closing price of the Company’s publicly traded common
stock during the prior thirty (30) calendar day period before the date of the
Company Share Payment Notice. The resulting number, rounded up to the next whole
number, is the number of Company Shares to be issued to the Lender in full (or
partial)

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payment of the Amount of Loss. Upon receipt of the Company Share Payment Notice
from the Company of its election to pay all or a portion of the Amount of Loss
in Company Shares, Lender shall within two (2) Business Days prior to the
Closing Date deliver a Notice of Registered Holder in the form of Exhibit A
hereto, identifying the person into whose name the Company Shares are to be
registered on the books of the Company (the “Notice of Registered Holder”).
     SECTION 3.2. Resale Registration Statement. Contemporaneously with the
execution of this Agreement, Lender and the Company shall enter into a
Registration Rights Agreement granting to Lender certain registration and other
rights.
     SECTION 3.3. Certificate(s); No Fractional Shares. The Company shall, as
promptly as practicable, execute or cause to be executed and deliver to Lender
or its nominee a certificate or certificates representing the aggregate number
of Company Shares specified in the Company Share Payment Notice. The stock
certificate or certificates so delivered shall be in such denominations as may
be specified by the Lender (or its nominee) and shall be registered in the name
of Lender (or such nominee) as specified in the Notice of Registered Holder. No
fractional shares will be issued pursuant to this Agreement.
     SECTION 3.4. Expenses. The Company shall pay all expenses, in connection
with the preparation, execution and delivery of stock certificates pursuant to
this Agreement, except that, in case such stock certificates are to be
registered in a name or names other than the name of the Lender, all stock
transfer taxes payable upon the execution and delivery of such stock certificate
or certificates shall be paid by the Lender at the time of delivering the Notice
of Registered Holder described in Section 3.1 above. In such case, the Lender
shall deliver with such notice evidence, satisfactory to the Company, that such
taxes have been paid.
     SECTION 3.5. Shares to be Fully Paid and Nonassessable. The Company
covenants that all Company Shares which may be issued in connection with this
Agreement will be, upon issuance, fully paid and nonassessable.
ARTICLE IV
PROVISIONS RE SALE PROCESS, PUT OPTION, AND PIPELINE SALE
     SECTION 4.1. Sale Process. Lender agrees and acknowledges that (i) the bid
solicitation and sale process being conducted by Robert W. Baird & Company,
under agreement with the Company (collectively, the “Sale Process”) for the sale
of the Marcellus Assets (or for 100% of the equity of Borrower) is an acceptable
and reasonable process for generating indications of interest and purchase
offers with respect to the Marcellus Assets (or 100% of the equity of Borrower);
and (ii) in the event that the Sale Process fails to result in indications of
interest, written offers or a contract for a Qualifying Sale or for a
Non-Qualifying Sale or any sale, neither the Company, nor PESC, nor the Borrower
shall be liable to Lender for such failure.
     SECTION 4.2. Proposed Non-Qualifying Sales; Put Option.
     (a) In the event that the Sale Process generates one or more written offers
for a sale of the Marcellus Assets or a sale of Borrower’s equity that would, if
consented to and consummated, constitute a Non-Qualifying Sale (a “Proposed
Non-Qualifying Sale”), the

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Company may or may cause Borrower (or PESC as applicable) to give written notice
to Lender of such offer(s) and provide Lender with a copy of such offer(s).
Lender shall have ten (10) Business Days to deliver its written consent to one
or more of the Proposed Non-Qualifying Sales based upon such offer(s) to
Borrower, or to decline Lender’s consent to any or all such Proposed
Non-Qualifying Sales. If Lender timely delivers its written consent to one or
more Proposed Non-Qualifying Sales, the Company shall (or shall cause Borrower
or PESC, as applicable to) use commercially reasonable efforts to negotiate with
the party or parties submitting offers to which Lender has consented; provided
however that neither the Company, nor PESC shall be required to make
representations and warranties in connection with any such negotiations (except
a representation by PESC to the effect that PESC owns, and has the right to
convey, 100% of the equity interest of Borrower in connection with a sale of
such equity interest). Additional offers that would constitute a Proposed
Non-Qualifying Sale may be submitted by the Company to the Lender at any time.
The Company shall (or shall cause Borrower or PESC, as applicable to) use its
commercially reasonable efforts to consummate a Proposed Non-Qualifying Sale (or
another Qualifying Sale, as the case may be) that maximizes the value of the
Marcellus Assets or Borrower’s equity, as the case may be, provided however that
neither the Company nor PESC shall be required to make representations and
warranties in connection with any such sale (except a representation by PESC to
the effect that PESC owns, and has the right to convey, 100% of the equity
interest of Borrower in connection with a sale of such equity interest).
     (b) In the event that (i) Lender does not timely consent to a Proposed
Non-Qualifying Sale; (ii) a Qualifying Sale or Non-Qualifying Sale fails to
close after the parties to such sale enter into a contract and such contract is
terminated; (iii) no written offer is received as a result of the Sale Process
on or before December 1, 2010; or (iv) no Qualifying Sale or Non-Qualifying Sale
has closed on or before December 21, 2010 (each event specified in foregoing
clauses (i)-(iv), a “Put Exercise Circumstance”), the Company and PESC shall be
entitled, upon ten (10) calendar days written notice to Lender, given at any
time on or after the occurrence of a Put Exercise Circumstance, to require that
Lender receive PESC’s transfer of (and PESC shall so transfer) 100% of the
equity in Borrower to Lender in full satisfaction of all of Obligations owed to
Lender and the Company’s obligations hereunder (the “Put Option”); provided,
however, if the Put Option is exercised, for purposes of this Agreement such
exercise will trigger an Amount of Loss equal to $7,500,000 minus the amount of
any Intercompany Loans. Such Amount of Loss shall be payable on the date the
transfer of 100% of the equity in Borrower to Lender occurs. Any Put Transfer
shall be made as is and without any representations and warranties from PESC
other than that PESC owns, and has the right to convey to Lender, 100% of the
equity interest in Borrower. Upon the Company’s exercise of the Put Option,
Lender shall take all actions necessary to facilitate the Put Transfer,
including without limitation, receiving the books and records of Borrower,
joining in the limited liability agreement of Borrower, and signing an
assignment of such equity interest or completing any power relating to such
equity interest in Borrower.
     (c) In the event that the Put Option is exercised and the Put Transfer
occurs, the Company agrees to assist, and to cause PESC to assist, Lender with
respect to clearing title as to the Marcellus Assets in connection with Lender’s
sale of the Marcellus Assets or of 100% of the equity interest in Borrower.

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     (d) In the event that Lender becomes the owner of the equity in Borrower as
a result of Company’s or PESC’s exercise of the Put Option resulting in a Put
Transfer, Lender acknowledges and agrees that the Operating Agreement set forth
in Exhibit B (the “Current Operating Agreement”) will be terminated by Quest
Cherokee, LLC (or its successor by merger). The Company, at Lender’s option (and
provided that PMP is a licensed operator at that time), shall cause PMP to enter
into the Operating Agreement set forth in Exhibit C (the “New Operating
Agreement”) and PMP shall operate the wells owned by Borrower that are part of
the Marcellus Assets until the earlier of (i) the date upon which Borrower no
longer owns such wells; or (ii) six (6) months from the date that Lender becomes
the owner of the equity in Borrower.
     SECTION 4.3. Marcellus Pipeline Sale.
     (a) As to any Qualifying Sale or Non-Qualifying Sale, Borrower shall be
entitled to contract with a buyer of the Marcellus Assets even if such buyer
does not contract to buy the QC Marcellus Assets contemporaneously therewith. In
the event that Borrower contracts with a buyer on such terms, Borrower shall be
entitled to exclude the Marcellus Pipeline from the Marcellus Assets to be sold.
     (b) In the event that (i) a Qualifying Sale or Non-Qualifying Sale occurs
but the QC Marcellus Assets are not sold contemporaneously with such Qualifying
Sale or Non-Qualifying Sale; or (ii) the Company or PESC exercise the Put Option
((i) and (ii) collectively, the “Pipeline Sale Circumstances”, singly a
“Pipeline Sale Circumstance”), Lender agrees that Borrower may sell the
Marcellus Pipeline to PESC or its designee (and that Lender shall cause Borrower
to sell the Marcellus Pipeline to PESC or its designee if Lender is the owner of
Borrower as a result of Company’s or PESC’s exercise of the Put Option), in
either case for a purchase price of $2,300,000 (the “Pipeline Purchase Price”).
In the case of a Pipeline Sale Circumstance arising under clause (i), such sale
of the Marcellus Pipeline shall occur on the Closing Date. In the case of a
Pipeline Sale Circumstance arising under clause (ii), such sale of the Marcellus
Pipeline shall occur as soon as practicable but in any event no later than ten
(10) Business Days from the date that the Company or PESC exercises the Put
Option. Lender agrees to take commercially reasonable action necessary to
facilitate such sale of the Marcellus Pipeline; provided however, the Marcellus
Pipeline will be sold as is and without any representations or warranties from
Lender.
     (c) The Pipeline Purchase Price constitutes the release price to be paid to
Lender to release its liens on the Marcellus Pipeline. Any Intercompany Loans
will be credited against the Pipeline Purchase Price, and any balance of the
Pipeline Purchase Price shall be paid in cash.
     SECTION 4.4. Intercompany Loans. Lender irrevocably agrees that before any
amount is paid to Lender (whether for principal, interest, fees, expenses, or
otherwise) in connection with a Qualifying Sale or a Non-Qualifying Sale, all
Intercompany Loans will be repaid in full with proceeds from such Qualifying
Sale or Non-Qualifying Sale, before any amounts are paid to Lender.

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ARTICLE V
MISCELLANEOUS PROVISIONS
     SECTION 5.1. Loan Document. This Agreement is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.
     SECTION 5.2. Successors and Assigns. This Agreement benefits the Lender,
and its respective successors and assigns and binds the Company and its
successors and assigns. The rights of the Lender under this Agreement may be
transferred with any assignment of the Loan pursuant to and in accordance with
the terms of the Credit Agreement. The Credit Agreement contains provisions
governing assignments of the Loan.
     SECTION 5.3. Amendments, etc. No amendment to or waiver of any provision of
this Agreement, nor consent to any departure by the Company herefrom, shall in
any event be effective unless the same shall be in writing and signed by or on
behalf of the party against whom it is sought to be enforced and is in
conformity with the requirements of Section 10.01 of the Credit Agreement. Each
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
     SECTION 5.4. Addresses for Notices to the Company. All notices and other
communications hereunder to the Company shall be in writing and mailed or
delivered to it, addressed to it at the address set forth below or at such other
address as shall be designated by the Company in a written notice to the
Administrative Agent at the address specified in the Credit Agreement complying
as to delivery with the terms of this Section. All such notices and other
communications shall, when mailed, be effective when deposited in the mail,
addressed as aforesaid. The Company’s address for notices is:
210 Park Avenue, Suite 2750
Oklahoma City, Oklahoma 73102
Attn: Chief Executive Officer
Facsimile: (405) 702-7487
Telephone: (405) 702-7756
     SECTION 5.5. No Waiver; Remedies. In addition to, and not in limitation of,
Section 2.7, no failure on the part of the Lender or any holder of a Note to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
     SECTION 5.6. Section Captions. Section captions used in this Agreement are
for convenience of reference only, and shall not affect the construction of this
Agreement.
     SECTION 5.7. Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under such law, such provision

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shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
     SECTION 5.8. Fees and Expenses. Each party shall bear its own attorney’s
fees, court costs and related expenses (the “Fees and Expenses”) in connection
with its enforcement of this Agreement; provided however, the prevailing party
in any lawsuit or other action shall have the right to payment of its reasonable
out-of-pocket fees and expenses by the other party.
     SECTION 5.9. Specific Performance. Lender recognizes and acknowledges that
a breach by it of any covenants or agreements contained in this Agreement will
cause the Company to sustain damages for which the Company would not have an
adequate remedy at law for money damages, and therefore Lender agrees that in
the event of any such breach, the Company shall be entitled to the remedy of
specific performance of such covenants and agreements and injunctive and other
equitable relief in addition to any other remedy to which the Company may be
entitled, at law or in equity.
     SECTION 5.10. Governing Law.
     (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAW OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.
     (b) EACH OF THE COMPANY AND THE LENDER AGREES ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK SITTING IN THE BOROUGH OF NEW YORK OR OF THE UNITED STATES FOR
THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS FROM ANY THEREOF, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY AND THE LENDER
CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE
JURISDICTION OF THOSE COURTS. THE COMPANY (1) IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM
NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT, AND (2)
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS ADDRESS FOR
NOTICES DESIGNATED HEREIN. EACH OF THE COMPANY AND THE LENDER WAIVES PERSONAL
SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
     SECTION 5.11. Waiver of Jury Trial, Etc. EACH OF THE COMPANY AND THE LENDER
HEREBY (a) EXPRESSLY AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER THIS AGREEMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH OF THE
COMPANY

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AND THE LENDER HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT THE
COMPANY, THE ADMINISTRATIVE AGENT OR THE LENDER, AS THE CASE MAY BE, MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE LENDER OR THE COMPANY, AS THE CASE MAY BE, TO THE
WAIVER OF ITS RIGHT TO TRIAL BY JURY; AND (b) EXPRESSLY AND IRREVOCABLY WAIVES,
TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH ACTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; PROVIDED THAT
THE WAIVER CONTAINED IN THIS SECTION 5.11 SHALL NOT APPLY TO THE EXTENT THAT THE
PARTY AGAINST WHOM DAMAGES ARE SOUGHT HAS ENGAGED IN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
     SECTION 5.12. Entire Agreement. THIS AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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     IN WITNESS WHEREOF, Company and Lender have caused this Agreement to be
duly executed and delivered by an officer duly authorized as of the date first
above written.

            POSTROCK ENERGY CORPORATION,
a Delaware corporation,
as Company
      By:   /s/ David C. Lawler         David C. Lawler        Chief Executive
Officer and President     

ROYAL BANK OF CANADA

         
By:
  /s/ Leslie P. Vowell
 
Leslie P. Vowell    
 
  Attorney-in-Fact    

Singature Page

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Exhibit A
FORM OF NOTICE OF REGISTERED HOLDER
     The undersigned, Royal Bank of Canada, the “Lender” described in that
certain Asset Sale Agreement dated as of September [__], 2010 among PostRock
Energy Corporation (the “Company”), Royal Bank of Canada, as administrative
agent and collateral agent, and Royal Bank of Canada, as lender (the
“Agreement”), hereby instructs the Company to issue the Company Shares (as
defined in the Agreement) as follows:
     Please issue the certificate for the Company Shares in the name of and in
the following denominations:
 
Denominations
 
Print or type name
 
Social Security or Employer Identification Number
 
Street Address

            City   State   Zip Code

ROYAL BANK OF CANADA

         
By:
       
Name:
 
 
   
Title:
 
 
   
 
 
 
   

Date:                                                             ,           

Exhibit A

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Exhibit B
CURRENT OPERATING AGREEMENT

Exhibit B

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Exhibit C
NEW OPERATING AGREEMENT

Exhibit C