Exhibit
10.1
THIRD AMENDMENT
TO
NOTE PURCHASE
AGREEMENT
Dated as of September 14,
2004
AMONG
QUICKSILVER RESOURCES,
INC.,
AS I SSUER ,
THE GUARANTORS,
BNP PARIBAS,
AS C OLLATERAL A GENT ,
AND
THE PURCHASERS PARTY
HERETO
THIRD AMENDMENT TO NOTE PURCHASE
AGREEMENT
THIS THIRD AMENDMENT TO NOTE
PURCHASE AGREEMENT (this
“ Third Amendment ”) dated as of September 14,
2004, is among QUICKSILVER RESOURCES, INC., a Delaware corporation
(the “ Company ”); each of the undersigned
Guarantors (collectively, the “ Guarantors ”);
BNP PARIBAS, as collateral agent (in such capacity, together with
its successors in such capacity, the “ Collateral
Agent ”) for the purchasers party to the Note Purchase
Agreement referred to below (collectively, the “
Purchasers ”); and each of the undersigned
Purchasers.
R E C I T A L
S
A. The Company, the Collateral Agent
and the Purchasers are parties to that certain Note Purchase
Agreement dated as of June 27, 2003, as amended by that certain
First Amendment to Note Purchase Agreement, dated as of January 30,
2004 and as further amended by that certain Second Amendment to
Note Purchase Agreement dated as of July 28, 2004 (as amended, the
“ Note Purchase Agreement ”), pursuant to which
the Purchasers have purchased $70 million of the Company’s
Floating and Fixed Rate Senior Subordinated Second Lien Mortgage
Notes due December 31, 2006 (the “ Notes
”).
B. The Company has requested and the
Purchasers have agreed to amend certain provisions of the Note
Purchase Agreement and the other Transaction Documents.
C. NOW, THEREFORE, in consideration
of the premises and the mutual covenants herein contained, for good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Defined Terms .
Each capitalized term used herein but not otherwise defined herein
has the meaning given such term in the Note Purchase Agreement, as
amended by this Third Amendment. Unless otherwise indicated, all
section references in this Third Amendment refer to sections of the
Note Purchase Agreement.
Section 2. Amendments to Note
Purchase Agreement .
2.1 Amendments to Section
9.1(a) . Section 9.1(a) is hereby amended by deleting the word
“and” after clause (vi) thereof, deleting the period at
the end of clause (vii) thereof and replacing it with “;
and” and adding the following clause (viii) after clause
(vii):
(viii) unsecured Debt of the Company
and/or the Guarantors (which Debt may be convertible into capital
stock of the Company) in an original stated principal amount not to
exceed $150,000,000, provided that such Debt is subordinated to the
Notes and the other obligations of the Company and the Guarantors
under this Agreement and the other Transaction Documents on terms
substantially similar to those contained in Article XVI or on terms
otherwise reasonably satisfactory to the Holders.
2.2 Amendments to Schedule B
. The definitions in Schedule B are hereby amended as
follows:
“ Engineering Reports
” means the Initial Engineering Reports and each engineering
report hereafter delivered by the Company pursuant to Section
8.1(c)(i) or Section 8.1(c)(ii), provided that each such report
hereafter delivered must (a) separately report on Proved Developed
Producing Reserves, Proved Developed Nonproducing Reserves and
Proved Undeveloped Reserves and separately calculate the NPV of
each such category of Proved Reserves for the Company’s
interest, (b) use a 9% discount rate and a price deck for each
calendar year evaluated equal to (i) for natural gas, the quotation
for deliveries of natural gas for each such year from the New York
Mercantile Exchange for Henry Hub, provided that (A) if such
quotation is greater than $5.00 per mcf, the price shall be capped
at $5.00 per mcf and (B) with respect to quotations for calendar
years after the fifth calendar year, the quotation for the fifth
calendar year shall be applied and (ii) for crude oil, the
quotation for deliveries of crude oil for each such calendar year
from the New York Mercantile Exchange for Cushing, Oklahoma,
provided that (A) if such quotation is greater than $30.00 per
barrel, the price shall be capped at $30.00 per barrel and (B) with
respect to quotations for calendar years after the fifth calendar
year, the quotation for the fifth calendar year shall be applied,
(c) further adjust the cash-flows derived from the pricing
assumptions set forth in clause (b) above to account for the
historical basis differentials for each month during the preceding
12-month period calculated by comparing realized crude oil and
natural gas prices to Cushing, Oklahoma and Henry Hub NYMEX prices
for each month during such period, (d) take into account the
Company’s actual experiences with leasehold operating
expenses and other costs in determining projected leasehold
operating expenses and other costs, (e) identify and take into
account any “over-produced” or
“under-produced” status under gas balancing
arrangements, (f) contain information and analysis comparable in
scope to that contained in the Initial Engineering Report, and (g)
otherwise be in form and substance reasonably satisfactory to the
Super-majority Purchasers.
“ NPV ” means,
with respect to any Proved Reserves expected to be produced from
any Oil and Gas Properties, the net present value, discounted at 9%
per annum, of the future net revenues expected to accrue to the
Company’s and its Subsidiaries’ collective interests in
such reserves during the remaining expected economic lives of such
reserves. NPV means, with respect to the Company&
