Exhibit 10.17
EXECUTION
RELEASE AND TERMINATION OF GUARANTIES
     THIS RELEASE AND TERMINATION OF GUARANTIES (this “Release”) by Royal Bank
of Canada, as administrative agent and collateral agent (the “Releasing Party”),
is effective as of September 21, 2010 (the “Effective Date”) and is made in
favor of, and for the benefit of, each of PostRock Energy Services Corporation,
a Delaware corporation formerly known as Quest Resource Corporation and
successor in interest by merger to Quest Cherokee Oilfield Service, LLC
(“PostRock”), STP Newco, Inc., an Oklahoma corporation (“STP”), and PostRock
MidContinent Production, LLC, a Delaware limited liability company formerly
known as Bluestem Pipeline, LLC and successor in interest by merger to a related
entity named PostRock MidContinent Production, LLC (“MidContinent”).
     WHEREAS, pursuant to the terms of that certain Amended and Restated Credit
Agreement by and among the Releasing Party, as Collateral and Administrative
Agent, and PostRock, as initial co-borrower, Quest Cherokee, LLC (now merged
with and into MidContinent)(“Cherokee”), as Borrower, and the lenders party
thereto, dated as of November 15, 2007 (as further amended and supplemented from
time to time, the “First Lien Credit Agreement”), each of PostRock, PostRock
MidContinent Production, LLC (the successor by conversion to Quest Energy
Partners, L.P.)(“MidContinent I”), STP and Quest Cherokee Oilfield Service, LLC
(“Oilfield”) executed and delivered a guaranty in favor of the Secured Parties
(as defined in the First Lien Credit Agreement) guaranteeing the obligations of
Cherokee under the Credit Agreement (the “First Lien Guaranties”);
     WHEREAS, pursuant to the terms of that certain Second Lien Senior Term Loan
Agreement among Releasing Party, as Administrative Agent and Collateral Agent,
Cherokee, as Borrower, MidContinent I, as Guarantor, KeyBank National
Association, as syndication agent, Société Générale, as documentation agent, and
the lenders party thereto, dated as of July 11, 2008 (as further amended and
supplemented from time to time, the “Second Lien Credit Agreement”), each of
PostRock, MidContinent I, STP and Oilfield executed and delivered a guaranty in
favor of the Secured Parties (as defined in the Second Lien Credit Agreement)
guaranteeing the obligations of Cherokee under the Second Lien Credit Agreement
(the “Second Lien Guaranties” and together with the First Lien Guaranties, the
“Guaranties”);
     WHEREAS, in order to effect a restructuring of debt obligations, the
parties to (i) the First Lien Credit Agreement, (ii) the Second Lien Credit
Agreement and (iii) the Amended and Restated Credit Agreement among PostRock
Midstream, LLC and Bluestem Pipeline, LLC, as borrowers, Releasing Party, as
Administrative Agent and Collateral Agent, and the lenders party thereto, dated
November 1, 2007 (the “Bluestem Credit Agreement”) have agreed to restructure
their respective indebtedness under First Lien Credit Agreement, Second Lien
Credit Agreement and the Bluestem Credit Agreement;
     WHEREAS, this Release is related to and a part of the restructure of debt
obligations referred to in the preceding recital (the “Restructure”); and
Release and Termination of
Guaranties – Quest Cherokee Facilities

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     WHEREAS, in connection with, and in consideration of, the Restructure, the
Releasing Party wishes to forever terminate the Guaranties and release the
guarantors of such Guaranties;
     NOW THEREFORE, for good and valuable consideration, the existence and
sufficiency of which is expressly recognized by all of the parties hereto, the
parties agree as set forth below.
SECTION 1. Release.
     As of the Effective Date, the Releasing Party does hereby release, remise
and forever discharge each of PostRock (for itself and in its capacity as
successor in interest to Oilfield), STP and MidContinent (as successor in
interest to MidContinent I) from any and all duties, covenants, obligations and
liabilities (of every kind and character and howsoever arising) under, in
connection with, arising out of, relating to, or attributable to the Guaranties.
As of the Effective Date, the Releasing Party shall have no rights against any
of PostRock, STP and MidContinent under, in connection with, arising out of,
relating to, or attributable to the Guaranties.
SECTION 2. Termination.
     As of the Effective Date, the Guaranties are hereby terminated.
SECTION 3. Governing Law.
     THIS RELEASE SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE
WITH AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES REGARDING THE CHOICE OF LAW.
SECTION 4. Valid Obligation.
     The Releasing Party hereby represents and warrants that the execution,
delivery and performance of this Release by it are within its powers and have
been duly authorized by all necessary action, and that this Release constitutes
its legal, valid and binding obligation.
SECTION 5. Amendments.
     The provisions of this Release may be waived, amended or modified only in a
writing signed by all of the parties hereto.
SECTION 6. Further Assurances.
     The Releasing Party covenants and agrees that it will do, execute and
deliver, or cause to be done, executed and delivered all such further acts,
instruments, documents and agreements as may be reasonably requested by any of
the parties hereto (at the expense of such requesting party), which may be
necessary or desirable in order to evidence or effectuate this Release.
Release and Termination of
Guaranties – Quest Cherokee Facilities

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SECTION 7. Headings.
     The headings contained in this Release are for reference purposes only and
shall not affect in any way the interpretation or construction of this Release.
SECTION 8. Binding Effect and Inurement.
     This Release shall be binding on the Releasing Party and shall inure to the
benefit of PostRock, STP, MidContinent and their respective beneficiaries,
receivers, trustees, successors and assigns.
SECTION 9. Severability.
     If any term or provision of this Release or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or such provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable (i) such term or provision in any other
jurisdiction or the application thereof to any other circumstance in any
jurisdiction or the same application in any other jurisdiction or (ii) any other
term or provision of this Release or the application thereof to any circumstance
in any jurisdiction. With respect to the term or provision held invalid or
unenforceable, the Releasing Party shall negotiate in good faith with the other
parties hereto to amend this Release so as to effect its original intent as
closely as possible.
[Signature page follows]
Release and Termination of
Guaranties – Quest Cherokee Facilities

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     IN WITNESS WHEREOF, the Releasing Party, PostRock, MidContinent, and STP
have executed this Release as of the Effective Date.

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

Signature page 1 to Release and Termination of
Guaranties – Quest Cherokee Facilities

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                      POSTROCK ENERGY SERVICES CORPORATION,
     for itself and as successor in interest to Quest
     Cherokee Oilfield Service, LLC    
 
               
 
  By   /s/ David C. Lawler                           David C. Lawler            
President and Chief Executive Officer    
 
                    POSTROCK MIDCONTINENT PRODUCTION,
LLC, successor in interest to PostRock MidContinent
Production, LLC (the successor by conversion to
Quest Energy Partners, L.P.)    
 
               
 
      By   PostRock Energy Services Corporation,
     its sole member    
 
               
 
      By   /s/ David C. Lawler    
 
         
 
David C. Lawler    
 
          President and Chief Executive Officer    
 
                    STP NEWCO, INC.    
 
               
 
  By   /s/ David C. Lawler                           David C. Lawler            
President    

Signature page 2 to Release and Termination of
Guaranties – Quest Cherokee Facilities