Exhibit 10.6
EXECUTION
SECOND AMENDMENT TO SECOND LIEN SENIOR TERM LOAN AGREEMENT
     THIS SECOND AMENDMENT TO SECOND LIEN SENIOR TERM LOAN AGREEMENT (this
“Second Amendment”) is entered into as of June 30, 2009, among QUEST CHEROKEE,
LLC, a Delaware limited liability company (the “Borrower”), QUEST ENERGY
PARTNERS, L.P., a Delaware limited partnership (the “MLP”), QUEST CHEROKEE
OILFIELD SERVICE, LLC, a Delaware limited liability company (“QCOS”, QCOS and
MLP collectively called the “Guarantors” and individually a “Guarantor”), ROYAL
BANK OF CANADA, as Administrative Agent and Collateral Agent for the Lenders
parties to the hereinafter defined Term Loan Agreement (in such capacities, the
“Administrative Agent” and “Collateral Agent,” respectively), KEYBANK NATIONAL
ASSOCIATION, as Syndication Agent (in such capacity, the “Syndication Agent”),
SOCIÉTÉ GÉNÉRALE, as Documentation Agent (in such capacity, the “Documentation
Agent”), and the undersigned Lenders comprising Required Lenders.
     Reference is made to the Second Lien Senior Term Loan Agreement dated as of
July 11, 2008 among Borrower, the Administrative Agent, the Collateral Agent,
the Syndication Agent, the Documentation Agent and the Lenders parties thereto,
as amended by a First Amendment to Second Lien Senior Term Loan Agreement dated
as of October 28, 2008 (as amended, the “Term Loan Agreement”). Unless otherwise
defined in this Second Amendment, capitalized terms used herein shall have the
meaning set forth in the Term Loan Agreement; all section, exhibit and schedule
references herein are to sections, exhibits and schedules in the Term Loan
Agreement; and all paragraph references herein are to paragraphs in this Second
Amendment.
RECITALS
     A. The Borrower, Administrative Agent, the Syndication Agent, the
Documentation Agent and Lenders desire to enter into this Second Amendment.
     Accordingly, for adequate and sufficient consideration, the parties hereto
agree, as follows:
     Paragraph 1. Amendments. Effective as of the Second Amendment Effective
Date (hereinafter defined), the Term Loan Agreement is amended as follows:
     1.1 Definitions. Section 1.01 of the Term Loan Agreement is amended as
follows:
     (a) The following definition is amended in its entirety to read as follows:
     “Agreement means this Credit Agreement as amended by the First Amendment to
Credit Agreement and Second Amendment to Credit Agreement.”
     (b) The following definitions are inserted alphabetically into Section 1.01
of the Term Loan Agreement:
     “Second Amendment Effective Date means June 30, 2009.”
     “Second Amendment to Credit Agreement means that certain Second Amendment
to Second Lien Senior Term Loan Agreement dated as of June 30, 2009, among the
Borrower, Royal Bank of Canada, as Administrative Agent, Collateral Agent and as
a Lender, KeyBank
Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

1

--------------------------------------------------------------------------------

 

National Association, as Syndication Agent and as a Lender, Société Générale, as
Documentation Agent and as a Lender, and the Lenders party thereto.”
     1.2 Section 6.02(b). Section 6.02(b) of the Credit Agreement is amended to
read in its entirety as follows:
     “(b) as soon as available, but in any event within 45 days after the end of
each of the first three fiscal quarters of each fiscal year of the MLP, an
unaudited consolidated balance sheet of the MLP and its Subsidiaries as at the
end of such fiscal quarter, and the related statements of income and cash flows
for such fiscal quarter and for the portion of the MLP’s fiscal year then ended
(provided, that if the MLP is a public company, such financial statements shall
be required to be furnished no later than the date that the MLP is required to
timely file its quarterly report on Form 10-Q with the Securities Exchange
Commission (taking into account any extension of time available under
Rule 12b-25 under the Securities Exchange Act of 1934)), setting forth in each
case in comparative form the figures for the corresponding fiscal quarter of the
previous fiscal year of the MLP and the corresponding portion of the previous
fiscal year of the MLP, if any, all in reasonable detail and certified by a
Responsible Officer of the Borrower, as fairly presenting in all material
respects the financial condition, results of operations and cash flows of the
MLP and its Subsidiaries in accordance with GAAP (except as otherwise noted
herein), subject only to normal year-end audit adjustments and the absence of
footnotes and to adjustments or restatements arising out of or related to the
Misappropriation Transaction; provided, delivery of the unaudited balance sheet,
statement of income and cash flows of the MLP and its Subsidiaries for the
fiscal quarters ending September 30, 2008 and March 31, 2009 may be delayed and
not delivered to the Administrative Agent until August 15, 2009;”
     Paragraph 2. Effective Date. This Second Amendment shall not become
effective until the date (such date, the “Second Amendment Effective Date”) the
Administrative Agent receives all of the agreements, documents, certificates,
instruments, and other items described below:
     (a) this Second Amendment, executed by the Borrower, the Guarantors, the
Administrative Agent, the Syndication Agent, the Documentation Agent and the
Required Lenders;
     (b) from the Borrower and the existing Guarantors, such certificates of
secretary, assistant secretary, manager, or general partner, as applicable, as
the Administrative Agent may require, certifying (i) resolutions of its board of
directors, managers or members (or their equivalent) authorizing the execution
and performance of this Second Amendment and the other Loan Documents which such
Person is executing in connection herewith, (ii) the incumbency and signature of
the officer executing such documents, and (iii) no change in such Person’s
organizational documents since July 11, 2008;
     (c) payment on the Second Amendment Effective Date to the Administrative
Agent of a $15,000.00 amendment fee which fee will be shared ratably among each
Lender timely approving the Second Amendment, which fee once paid will be fully
earned and nonrefundable (as used in this Second Amendment, ratably shared means
that proportion which the Borrowing Base of a timely approving Lender bears to
the Borrowing Base of all timely approving Lenders);
     (d) fees and expenses required to be paid pursuant to Paragraph 5 of this
Second Amendment, to the extent invoiced prior to the Second Amendment Effective
Date; and
Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

2

--------------------------------------------------------------------------------

 

     (e) such other assurances, certificates, documents and consents as the
Administrative Agent may require.
     Paragraph 3. Acknowledgment and Ratification. The Borrower and the
Guarantors each (i) consent to the agreements in this Second Amendment and
(ii) agree and acknowledge that the execution, delivery, and performance of this
Second Amendment shall in no way release, diminish, impair, reduce, or otherwise
affect the respective obligations of the Borrower or any Guarantor under the
Loan Documents to which it is a party, which Loan Documents shall remain in full
force and effect, as amended and waived hereby, and all rights thereunder are
hereby ratified and confirmed.
     Paragraph 4. Representations. The Borrower and the Guarantors each
represent and warrant to the Administrative Agent and the Lenders that as of the
Second Amendment Effective Date and after giving effect to the waivers and
amendments set forth in this Second Amendment (a) all representations and
warranties in the Loan Documents are true and correct in all material respects
as though made on the date hereof, except to the extent that any of them speak
to a different specific date, and (b) no Default or Event of Default exists.
     Paragraph 5. Expenses. The Borrower shall pay on demand all reasonable
costs, fees, and expenses paid or incurred by the Administrative Agent incident
to this Second Amendment, including, without limitation, Attorney Costs in
connection with the negotiation, preparation, delivery, and execution of this
Second Amendment and any related documents, filing and recording costs, and the
costs of title insurance endorsements, if any.
     Paragraph 6. Miscellaneous.
     (a) This Second Amendment is a “Loan Document” referred to in the Term Loan
Agreement. The provisions relating to Loan Documents in Article X of the Term
Loan Agreement are incorporated in this Second Amendment by reference. Unless
stated otherwise (i) the singular number includes the plural and vice versa and
words of any gender include each other gender, in each case, as appropriate,
(ii) headings and captions may not be construed in interpreting provisions,
(iii) this Second Amendment will be construed, and its performance enforced,
under New York law and applicable federal law, (iv) if any part of this Second
Amendment is for any reason found to be unenforceable, all other portions of it
nevertheless remain enforceable, and (v) this Second Amendment may be executed
in any number of counterparts with the same effect as if all signatories had
signed the same document, and all of those counterparts must be construed
together to constitute the same document.
     Paragraph 7. Entire Agreement. This Second Amendment represents the final
agreement between the parties about the subject matter of this amendment 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.
     Paragraph 8. Parties. This Second Amendment binds and inures to the benefit
of the Borrower, the Guarantors, the Administrative Agent, the Collateral Agent,
the Syndication Agent, the Documentation Agent, the Lenders, and their
respective successors and assigns.
     Paragraph 9. Further Assurances. The parties hereto each agree to execute
from time to time such further documents as may be necessary to implement the
terms of this Second Amendment.
Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

3

--------------------------------------------------------------------------------

 

     Paragraph 10. Release. As additional consideration for the execution,
delivery and performance of this Second Amendment by the parties hereto and to
induce the Administrative Agent, the Collateral Agent and the Lenders to enter
into this Second Amendment, the Borrower warrants and represents to the
Administrative Agent, the Collateral Agent and the Lenders that no facts,
events, statuses or conditions exist or have existed which, either now or with
the passage of time or giving of notice, or both, constitute or will constitute
a basis for any claim or cause of action against the Administrative Agent, the
Collateral Agent or any Lender or any defense to (i) the payment of Obligations
under the Term Notes and/or the Loan Documents, or (ii) the performance of any
of its obligations with respect to the Term Notes and/or the Loan Documents. In
the event any such facts, events, statuses or conditions exist or have existed,
Borrower unconditionally and irrevocably hereby RELEASES, RELINQUISHES and
forever DISCHARGES Administrative Agent, the Collateral Agent and the Lenders,
as well as their predecessors, successors, assigns, agents, officers, directors,
shareholders, employees and representatives, of and from any and all claims,
demands, actions and causes of action of any and every kind or character, past
or present, which Borrower may have against any of them or their predecessors,
successors, assigns, agents, officers, directors, shareholders, employees and
representatives arising out of or with respect to (a) any right or power to
bring any claim for usury or to pursue any cause of action based on any claim of
usury, and (b) any and all transactions relating to the Loan Documents occurring
prior to the date hereof, including any loss, cost or damage, of any kind or
character, arising out of or in any way connected with or in any way resulting
from the acts, actions or omissions of any of them, and their predecessors,
successors, assigns, agents, officers, directors, shareholders, employees and
representatives, including any breach of fiduciary duty, breach of any duty of
fair dealing, breach of confidence, breach of funding commitment, undue
influence, duress, economic coercion, conflict of interest, negligence, bad
faith, malpractice, intentional or negligent infliction of mental distress,
tortious interference with contractual relations, tortious interference with
corporate governance or prospective business advantage, breach of contract,
deceptive trade practices, libel, slander or conspiracy, but in each case only
to the extent permitted by applicable Law.
     The parties hereto have executed this Second Amendment in multiple
counterparts to be effective as of the Second Amendment Effective Date.
Remainder of Page Intentionally Blank
Signature Pages to Follow.
Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

4

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
be duly executed as of the Second Amendment Effective Date.

            BORROWER:

QUEST CHEROKEE, LLC,
as Borrower
      By:   /s/ David Lawler         David Lawler        President       
GUARANTORS:

QUEST ENERGY PARTNERS, L.P.,
as a Guarantor
      By:   QUEST ENERGY GP, LLC,
Its General Partner
      By:   /s/ David Lawler         David Lawler,        President        QUEST
CHEROKEE OILFIELD SERVICE, LLC,
as a Guarantor
      By:   QUEST CHEROKEE, LLC,
Its Sole Member
      By:   /s/ David Lawler         David Lawler,        President     

Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

Signature Page 1

--------------------------------------------------------------------------------

 

          AGREED TO AS OF THE SECOND
AMENDMENT EFFECTIVE DATE:  
ADMINISTRATIVE AGENT:

ROYAL BANK OF CANADA,
as Administrative Agent and Collateral Agent
      By:   /s/ Susan Khokher         Name:   Susan Khokher        Title:  
Manager, Agency     

Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

Signature Page 2

--------------------------------------------------------------------------------

 

          AGREED TO AS OF THE SECOND
AMENDMENT EFFECTIVE DATE:  
L/C ISSUER AND LENDER:

ROYAL BANK OF CANADA, as a Lender
and L/C Issuer
      By:   /s/ Leslie P. Vowell         Leslie P. Vowell       
Attorney-in-Fact     

Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

Signature Page 3

--------------------------------------------------------------------------------

 

          AGREED TO AS OF THE SECOND
AMENDMENT EFFECTIVE DATE: 
KEYBANK NATIONAL ASSOCIATION,
as Syndication Agent and a Lender
      By:   /s/ Todd Coker         Name:   Todd Coker        Title:   Assistant
Vice President     

Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

Signature Page 4

--------------------------------------------------------------------------------

 

          AGREED TO AS OF THE SECOND
AMENDMENT EFFECTIVE DATE: 
SOCIÉTÉ GÉNÉRALE, as Documentation Agent and
a Lender
      By:   /s/ Elena Robciuc         Name:   Elena Robciuc        Title:  
Director     

Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

Signature Page 5

--------------------------------------------------------------------------------

 

          AGREED TO AS OF THE SECOND
AMENDMENT EFFECTIVE DATE: 
AMEGY BANK, N.A., as a Lender
      By:   /s/ Stewart T. Lang         Name:   Stewart T. Lang        Title:  
Vice President     

Second Amendment to Quest
Cherokee Second Lien Senior
Term Loan Agreement

Signature Page 6