Document:

exv10w4

Exhibit 10.4

EXECUTION

ASSUMPTION AGREEMENT

     This ASSUMPTION AGREEMENT (this “Assumption Agreement”), dated as of August 1, 2011, is made
by POSTROCK EASTERN PRODUCTION, LLC, a Delaware limited liability company (the “Additional
Debtor”), in favor of Royal Bank of Canada, in its capacity as “Collateral Agent” for the
Intercreditor Secured Parties pursuant to the Intercreditor Agreement and in its capacity as
“Administrative Agent” and “Collateral Agent” for the Borrowing Base Facility Secured Parties and
as Secured Party (“Secured Party”) under that certain Amended and Restated Pledge and Security
Agreement dated as of September 21, 2010 (as amended, modified, supplemented, or restated from time
to time, the “Security Agreement”). All capitalized terms not defined herein shall have the
meaning ascribed to them in such Security Agreement.

W I T N E S S E T H :

     WHEREAS, in connection with the Borrowing Base Facility Credit Agreement and the Pipeline
Credit Agreement each of PostRock Energy Corporation, a Delaware corporation, PostRock Energy
Services Corporation, a Delaware corporation, PostRock MidContinent Production, LLC, a Delaware
limited liability company, Quest Transmission Company, LLC, a Delaware limited liability company,
and STP Newco, Inc., an Oklahoma corporation(collectively the “Debtors”), have entered into the
Security Agreement in favor of the Secured Party for the benefit of the Beneficiaries;

     WHEREAS, the Additional Debtor is required to become a party to the Security Agreement; and

     WHEREAS, the Additional Debtor has agreed to execute and deliver this Assumption Agreement in
order to become a party to the Security Agreement;

     NOW, THEREFORE, IT IS AGREED:

     1. Agreement. By executing and delivering this Assumption Agreement, the Additional
Debtor, as provided in Paragraph 9(i) of the Security Agreement, hereby becomes a party to the
Security Agreement as a Debtor thereunder with the same force and effect as if originally named
therein as a Debtor and, without limiting the generality of the foregoing, hereby expressly assumes
all obligations and liabilities of a Debtor thereunder. The information set forth in Schedule 1-A
hereto is hereby added to the information set forth in the Annexes to the Security Agreement. The
Additional Debtor hereby represents and warrants that each of the representations and warranties
contained in Paragraph 5 of the Security Agreement is true and correct in all material respects as
it relates to such Additional Debtor on and as the date hereof (after giving effect to this
Assumption Agreement) as if made on and as of such date.

     2. Governing Law. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

Remainder of Page Intentionally Blank.

Signature Page to Follow.

 

 

     IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement to be duly executed
and delivered as of the date first above written.

	 	 	 	 	 
	 	POSTROCK EASTERN PRODUCTION, LLC,

a Delaware limited liability company,

as Guarantor

 	 
	 	By:  	 POSTROCK ENERGY SERVICES
 	 
	 	 	CORPORATION, 	 
	 	 	a Delaware corporation,

its sole member 	 

	 	 	 	 	 
	 	 	 
	 	By:  	                                         /s/ Stephen L. DeGiusti
 	 
	 	 	Stephen L. DeGiusti, Secretary 	 
	 

[Signature Page to Assumption Agreement]

 

 

Schedule 1-A

DEBTOR INFORMATION AND LOCATION OF COLLATERAL

			
	5.	 	POSTROCK EASTERN PRODUCTION, LLC

	 	 	 	 	 

	A.

	 	Exact Legal Name of Debtor:
	 	POSTROCK EASTERN PRODUCTION, LLC
	 
	 	 	 	 
	B.

	 	Mailing Address of Debtor:
	 	 210 Park Avenue, Suite 2750
Oklahoma City, Oklahoma 73102
	 
	 	 	 	 
	C.

	 	Type of Entity:
	 	limited liability company
	 
	 	 	 	 
	D.

	 	Jurisdiction of Organization:
	 	Delaware
	 
	 	 	 	 
	E.

	 	State Issued Organizational

Identification Number:
	 	 3924111
	 
	 	 	 	 
	F.

	 	Tax ID Number:
	 	 20-2309542
	 
	 	 	 	 
	G.

	 	Location of Books and Records:
	 	 210 Park Avenue, Suite 2750
Oklahoma City, Oklahoma 73102
	 
	 	 	 	 
	H.

	 	Location of Collateral:
	 	 210 Park Avenue, Suite 2750
Oklahoma City, Oklahoma 73102
	 
	 	 	 	 
	 

	 	 	 	and see Item I below.
	 
	 	 	 	 
	I.

	 	Location of Real Property:
	 	Braxton County, WV
	 

	 	 	 	Cabell County, WV
	 

	 	 	 	Calhoun County, WV
	 

	 	 	 	Doddridge County, WV
	 

	 	 	 	Gilmer County, WV
	 

	 	 	 	Kanawha County, WV
	 

	 	 	 	Lincoln County, WV
	 

	 	 	 	Pleasants County, WV
	 

	 	 	 	Ritchie County, WV
	 

	 	 	 	Wayne County, WV
	 

	 	 	 	Wirt County, WV
	 

	 	 	 	Wood County, WV
	 

	 	 	 	Monongalia County, WV*
	 

	 	 	 	Putnam County, WV*
	 

	 	 	 	Steuben County, NY*
	 
	 	 	 	 

 

			
	* 	 	Properties located in these counties owned
by PEP have not been pledged due to the de
minimis value of such properties.
   

[Schedule l-A Page 1]

 

	 	J.	 	Jurisdiction(s) for Filing Financing Statements:                             Delaware.
	 
	 	K.	 	Fixture filings in the relevant counties in which

the properties are located:                                   
                           See Item I. above.

COLLATERAL DESCRIPTIONS

	 	5.	 	POSTROCK EASTERN PRODUCTION, LLC

	 	A.	 	Collateral Notes and Collateral Note Security: None.
	 
	 	B.	 	Pledged Shares: None.
	 
	 	C.	 	Partnership/Limited Liability Company Interests: None.
	 
	 	D.	 	Partnership/Limited Liability Company Agreements: None.
	 
	 	E.	 	Commercial Tort Claims: None.
	 
	 	F.	 	Deposit Accounts (including name of bank, address and account number):
	 
	 	 	 	PostRock Eastern Production, LLC Revenue, Comerica Bank, Dallas, TX,
Acct # 18811277931

INTELLECTUAL PROPERTY

	 	1.	 	Registered Copyrights and Copyright Applications: None.
	 
	 	2.	 	Issued Patents and Patent Applications: None.
	 
	 	3.	 	Registered Trademarks and Trademark Applications: None.

[Schedule l-A Page 2]exv10w5

Exhibit 10.5

EXECUTION

GUARANTY

(Subsidiary)

     THIS GUARANTY (this “Guaranty”), dated as of July 31, 2011, is made by POSTROCK EASTERN
PRODUCTION, LLC, a Delaware limited liability company (“Guarantor”), in favor of ROYAL BANK OF
CANADA, as administrative agent for the Lenders (as defined below).

R E C I T A L S:

     A. Pursuant to that certain Second Amended and Restated Credit Agreement, dated September 21,
2010 (as the same may hereafter be amended, supplemented and restated, the “Credit Agreement”),
among PostRock Energy Services Corporation, a Delaware corporation “PESC”), and PostRock
MidContinent Production, LLC, a Delaware limited liability company formerly known as Bluestem
Pipeline, LLC (“PMP”; PESC and PMP, together with their successors and assigns, each a “Borrower”
and collectively the “Borrowers”), the various financial institutions that are, or may from time to
time become, parties thereto (individually a “Lender” and collectively the “Lenders”) and Royal
Bank of Canada, as administrative agent and collateral agent (in its capacity as administrative
agent, the “Administrative Agent”), the Lenders agreed to make Credit Extensions for the account of
the Borrowers.

     B. As a condition precedent to the making of Credit Extensions under and as defined in the
Credit Agreement, Guarantor is required to execute and deliver this Guaranty.

     C. Guarantor has duly authorized the execution, delivery and performance of this Guaranty.

     D. Guarantor is a wholly-owned subsidiary of PESC.

     E. It is in the best interests of Guarantor to execute this Guaranty inasmuch as Guarantor
will derive substantial direct and indirect benefits from the extensions of credit made from time
to time to or for the account of the Borrowers.

     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, Guarantor agrees,
for the benefit of each Lender, as follows:

ARTICLE I

DEFINITIONS

     SECTION 1.1 Certain Terms. The following capitalized terms when used in this Guaranty,
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.

     “Borrower” and “Borrowers” are defined in Recital A.

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     “Commitments” means the Aggregate Revolving Commitment (as defined in the Credit Agreement).

     “Credit Agreement” is defined in Recital A.

     “Credit Extensions” means each Credit Extension (as defined in the Credit Agreement).

     “Guarantor” is defined in the preamble.

     “Guaranty” is defined in the preamble.

     “Lender” and “Lenders” are defined in the first recital.

     “Loan Documents” means the Loan Documents (as defined in the Credit Agreement).

     “Note” means each Revolving Note (as defined in the Credit Agreement).

     “Obligations” means the Obligations (as defined in the Credit Agreement).

     “Obligor” means each of the Borrowers or any other Person (other than the Administrative Agent
or any Lender) obligated under any Loan Document.

     “PESC” is defined in Recital A.

     “PMP” is defined in Recital A.

     “Required Lenders” means the Required Lenders (as defined in the Credit Agreement).

     “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 Guaranty, including its preamble and
recitals, have the meanings provided in the Credit Agreement.

     SECTION 1.3 UCC Definitions. Unless otherwise defined herein or the context otherwise
requires, terms for which meanings are provided in the UCC are used in this Guaranty, including its
preamble and recitals, with such meanings.

ARTICLE II

GUARANTY PROVISIONS

     SECTION 2.1 Guaranty. Guarantor hereby absolutely, unconditionally, and irrevocably
(1) guarantees the full and punctual payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise, of all Obligations of the Borrowers and
each other Obligor now or hereafter existing under each of the Credit Agreement, the Notes and each
other Loan

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Document to which the Borrowers or such other Obligor is or may become a party, whether for
principal, interest, fees, expenses or otherwise (including all such amounts which would become due
but for the operation of the automatic stay under Section 362(a) of the United States Bankruptcy
Code, 11 U.S.C. §362(a), and the operation of Sections 502(b) and 506(b) of the United States
Bankruptcy Code, 11 U.S.C. §502(b) and §506(b)), and (2) indemnifies and holds harmless each Lender
and each holder of a Note for any and all costs and expenses (including reasonable attorney’s fees
and expenses) incurred by such Lender or such holder, as the case may be, in enforcing any rights
under this Guaranty; provided however, that Guarantor shall be liable under this Guaranty for the
maximum amount of such liability that can be hereby incurred without rendering this Guaranty, as it
relates to Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent
transfer, and not for any greater amount. This Guaranty constitutes a guaranty of payment when due
and not of collection, and Guarantor specifically agrees that it shall not be necessary or required
that any Lender or any holder of any Note exercise any right, assert any claim or demand or enforce
any remedy whatsoever against the Borrowers or any other Obligor (or any other Person) before or as
a condition to the obligations of Guarantor hereunder.

     SECTION 2.2 Acceleration of Guaranty. Guarantor agrees that, in the event of the
occurrence of any event of the type described in Section 8.01(f) of the Credit Agreement, with
respect to the Borrowers, any other Obligor or any other guarantor, and if such event shall occur
at a time when any of the Obligations may not then be due and payable, Guarantor will pay to the
Lenders forthwith the full amount which would be payable hereunder by Guarantor if all such
Obligations were then due and payable.

     SECTION 2.3 Guaranty Absolute, etc. This Guaranty shall in all respects be a
continuing, absolute, unconditional and irrevocable guaranty of payment, and shall remain in full
force and effect until all Obligations (other than contingent indemnity obligations) of the
Borrowers and each other Obligor have been paid in full (or, in the case of L/C Obligations, Cash
Collateralized), all obligations of Guarantor hereunder shall have been paid in full, all
Commitments shall have terminated and, except as provided in Section 10.01(e) of the Credit
Agreement, all Lender Hedging Agreements have terminated. No Guarantor may rescind or revoke its
obligations hereunder. Guarantor guarantees that the Obligations of the Borrowers and each other
Obligor will be paid strictly in accordance with the terms of the Credit Agreement and each other
Loan Document under which they arise, regardless of any law, regulation or order now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of any Lender or any holder
of any Note with respect thereto. The liability of Guarantor under this Guaranty shall be
absolute, unconditional and irrevocable irrespective of: (1) any lack of validity, legality or
enforceability of the Credit Agreement, any Note or any other Loan Document; (2) the failure of any
Lender or any holder of any Note (a) to assert any claim or demand or to enforce any right or
remedy against the Borrowers, any other Obligor or any other Person (including any other guarantor)
under the provisions of the Credit Agreement, any Note, any other Loan Document or otherwise, or
(b) to exercise any right or remedy against any other guarantor of, or collateral securing, any
Obligations of the Borrowers or any other Obligor; (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 Borrowers or any other
Obligor, or any other extension, compromise or renewal of any Obligations of the Borrowers or any
other Obligor; (4) any reduction, limitation, impairment or termination of any Obligations of the
Borrowers or any other Obligor for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and Guarantor hereby waives any right to or
claim of) any defense or setoff, 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 Borrowers, any other Obligor or
otherwise; (5) any amendment to, rescission, waiver, or other modification of, or any

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consent to departure from, any of the terms of the Credit Agreement, any 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 other
guaranty, held by any Lender or any holder of any Note securing any of the Obligations of the
Borrowers or any other Obligor; (7) the insolvency or bankruptcy of, or similar event affecting,
the Borrowers or any other Obligor; or (8) any other circumstance which might otherwise constitute
a defense available to, or a legal or equitable discharge of, the Borrowers, any other Obligor, any
surety or any guarantor. Guarantor waives all rights and defenses which may arise with respect to
any of the foregoing, and Guarantor waives any right to revoke this Guaranty with respect to future
indebtedness.

     SECTION 2.4 Reinstatement. Guarantor agrees that this Guaranty shall continue to be
effective or be reinstated, as the case may be, if at any time any payment (in whole or in part) of
any of the Obligations is rescinded or must otherwise be restored by any Lender or any holder of
any Note, upon the insolvency, bankruptcy or reorganization of either Borrower, any other Obligor
or otherwise, all as though such payment had not been made.

     SECTION 2.5 Waiver, etc. Guarantor hereby waives promptness, diligence, notice of
acceptance and any other notice with respect to any of the Obligations of the Borrowers or any
other Obligor and this Guaranty and any requirement that the Administrative Agent, any other Lender
or any holder of any 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 Borrowers, any other
Obligor or any other Person (including any other guarantor) or entity or any collateral securing
the Obligations of the Borrowers or any other Obligor, as the case may be.

     SECTION 2.6 Waiver of Subrogation. Until the Obligations are paid in full, all
Commitments have terminated and all Lender Hedging Agreements have terminated (except as provided
in Section 10.01(e) of the Credit Agreement), no Guarantor shall enforce or exercise any claim or
other rights which it may now or hereafter acquire against the Borrowers or any other Obligor that
arise from the existence, payment, performance or enforcement of Guarantor’s obligations under this
Guaranty 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 Lenders
against the Borrowers or any other Obligor 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 Borrowers or any
other Obligor, 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
Guarantor in violation of the preceding sentence, such amount shall be deemed to have been paid to
Guarantor for the benefit of, and held in trust for, the Lenders, and shall forthwith be paid to
the Administrative Agent for the benefit of the Lenders by Guarantor to be credited and applied
upon the Obligations, whether matured or unmatured. Guarantor 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.

     SECTION 2.7 Payments Free and Clear of Taxes, etc. Guarantor hereby agrees that:

     (a) All payments by Guarantor 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 each
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

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Administrative Agent or such 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 Guarantor hereunder is
required in respect of any Taxes pursuant to any applicable law, rule or regulation, then Guarantor
will (i) pay directly to the relevant authority the full amount required to be so withheld or
deducted; (ii) promptly forward to such Lender an official receipt or other documentation
satisfactory to such Lender evidencing such payment to such authority; and (iii) pay to such Lender
such additional amount or amounts as is necessary to ensure that the net amount actually received
by such Lender will equal the full amount such Lender would have received had no such withholding
or deduction been required. Moreover, if any Taxes are directly asserted against any Lender with
respect to any payment received by such Lender hereunder, such Lender may pay such Taxes and
Guarantor will promptly pay such additional amounts (including, if incurred as a result of
Guarantor’s or the Borrowers’ action, omission or delay, any penalties, interest or expenses) as is
necessary in order that the net amount received by such Lender after the payment of such Taxes
(including any Taxes on such additional amount) shall equal the amount such Lender would have
received had such Taxes not been asserted.

     (b) If Guarantor fails to pay any Taxes when due to the appropriate taxing authority or fails
to remit to any Lender the required receipts or other required documentary evidence, Guarantor
shall indemnify such Lender for any incremental Taxes, interest or penalties that may become
payable by such Lender as a result of any such failure.

     (c) Without prejudice to the survival of any other agreement of Guarantor, the agreements and
obligations of Guarantor contained in this Section 2.7 shall survive the payment in full of the
principal of and interest on the Revolving Loan.

     SECTION 2.8 Subordination. Guarantor hereby subordinates and makes inferior to the
Obligations any and all indebtedness now or at any time hereafter owed by the Borrowers or other
Obligor to Guarantor. Guarantor agrees that if any Event of Default has occurred and is continuing
under the Credit Agreement, it will not permit the Borrowers to repay such indebtedness or any part
thereof and it will not accept payment from the Borrowers of such indebtedness or any part thereof
without the prior written consent of the Required Lenders. If Guarantor receives any such payment
without the prior required written consent, the amount so paid shall be held in trust for the
benefit of the Lenders, shall be segregated from the other funds of Guarantor, and shall forthwith
be paid over to the Administrative Agent to be held by the Administrative Agent as collateral for,
or then or at any time thereafter applied in whole or in part by the Administrative Agent against,
all or any portions of the Obligations, whether matured or unmatured, in such order as the
Administrative Agent shall elect.

     SECTION 2.9 Negative Pledge. Guarantor shall not grant a Lien upon any of its
property, assets or revenues except Permitted Liens.

ARTICLE III

MISCELLANEOUS PROVISIONS

     SECTION 3.1 Loan Document. This Guaranty 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.

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     SECTION 3.2 Releases. At such time as the Revolving Loan shall have been paid in full
(other than contingent indemnity obligations and, with respect to L/C Obligations, if they have
been Cash Collateralized), the Commitments have been terminated, and, subject to Section 10.01(e)
of the Credit Agreement, no Lender Hedging Agreements are outstanding, the Administrative Agent
shall, at the request and expense of Guarantor following such termination, promptly execute and
deliver to Guarantor such documents and instruments as Guarantor shall reasonably request to
evidence termination and release of this Guaranty.

     SECTION 3.3 Administrative Agent and Lenders; Successors and Assigns.

     (a) The Administrative Agent is Administrative Agent for each Lender under the Credit
Agreement. All rights granted to Administrative Agent under or in connection with this Guaranty are
for each Lender’s ratable benefit. The Administrative Agent may, without the joinder of any Lender,
exercise any rights in Administrative Agent’s or Lenders’ favor under or in connection with this
Guaranty. The Administrative Agent’s and each Lender’s rights and obligations vis-à-vis each other
may be subject to one or more separate agreements between those parties. However, Guarantor is not
required to inquire about any such agreement and is not subject to any terms of it unless Guarantor
specifically enters into such agreement. Therefore, neither any Guarantor nor any of its successors
or assigns are entitled to any benefits or provisions of any such separate agreement nor are they
entitled to rely upon or raise as a defense any party’s failure or refusal to comply with the
provisions of any such agreement.

     (b) This Guaranty benefits the Administrative Agent, the Lenders, and their respective
successors and assigns and binds Guarantor and its successors and assigns. Upon appointment of any
successor Administrative Agent under the Credit Agreement, all of the rights of Administrative
Agent under this Guaranty automatically vest in that new Administrative Agent as successor
Administrative Agent on behalf of Lenders without any further act, deed, conveyance, or other
formality other than that appointment. The rights of the Administrative Agent and the Lenders under
this Guaranty may be transferred with any assignment of the obligations hereby guaranteed pursuant
to and in accordance with the terms of the Credit Agreement. The Credit Agreement contains
provisions governing assignments of the obligations guaranteed under this Guaranty.

     SECTION 3.4 Amendments, etc. No amendment to or waiver of any provision of this
Guaranty, nor consent to any departure by Guarantor 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 3.5 Addresses for Notices to Guarantor. All notices and other communications
hereunder to Guarantor 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 Guarantor 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. Guarantor’s address for
notices is:

210 Park Avenue, Suite 2750

Oklahoma City, Oklahoma 73102

Attn: General Counsel

Facsimile: (405) 702-7490

Telephone: (405) 600-7704

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     SECTION 3.6 No Waiver; Remedies. In addition to, and not in limitation of, Section 2.3
and Section 2.5, no failure on the part of any 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 3.7 Section Captions. Section captions used in this Guaranty are for
convenience of reference only, and shall not affect the construction of this Guaranty.

     SECTION 3.8 Setoff. In addition to, and not in limitation of, any rights of any
Lender or any holder of a Note under applicable law, upon the occurrence and during the continuance
of an Event of Default under or as defined in the Credit Agreement, each Lender and each such
holder shall be entitled to exercise (for the benefit of all Lenders pursuant to Section 10.09 of
the Credit Agreement) any right of offset or banker’s lien against each and every account and other
property or interest that Guarantor may now or hereafter have with, or which is now or hereafter in
the possession of, any such Lender, to the extent of the full amount of the Obligations.

     SECTION 3.9 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 3.10 Governing Law.

     (a) THIS GUARANTY 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;
PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING
UNDER UNITED STATES FEDERAL LAW.

     (b) GUARANTOR AGREES ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER
LOAN DOCUMENT 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 GUARANTY, GUARANTOR CONSENTS, FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. GUARANTOR (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 ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED
THERETO, 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. GUARANTOR 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.

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     SECTION 3.11 Waiver of Jury Trial, Etc. GUARANTOR HEREBY (a) EXPRESSLY AND
IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES TO THE LOAN DOCUMENTS OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR
THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND GUARANTOR 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 ADMINISTRATIVE AGENT OR ANY LENDER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF GUARANTOR 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 3.11 SHALL NOT APPLY TO THE EXTENT THAT THE PARTY AGAINST WHOM
DAMAGES ARE SOUGHT HAS ENGAGED IN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

     SECTION 3.12 Entire Agreement. THIS GUARANTY AND THE OTHER LOAN DOCUMENTS REPRESENT
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.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK

SIGNATURES BEGIN ON NEXT PAGE.]

Subsidiary Guaranty of

Borrowing Base Facility

Page 8

 

     IN WITNESS WHEREOF, Guarantor has caused this Guaranty to be duly executed and delivered by an
officer duly authorized as of the date first above written.

	 	 	 	 	 
	 	POSTROCK EASTERN PRODUCTION, LLC,

a Delaware limited liability company,

as Guarantor

 	 
	 	By : 	 POSTROCK ENERGY SERVICES CORPORATION,
 	 
	 	 	a Delaware corporation,
 its sole member 	 
	 	 	 
	 

	 		 	 	 	 
	 		 	 
	 	     By:  	/s/ Stephen L. DeGiusti
 	 
	 		Stephen L. DeGiusti, Secretary 	 
	 	

Signature Page

Subsidiary Guaranty of

Borrowing Base Facility

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