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June 15, 2009

 

Quicksilver Resources Inc.

777 West Rosedale Street, Suite 300

Fort Worth, Texas  76104

Attention:  MarLu Hiller

Quicksilver Resources Canada Inc.

One Palliser Square, Suite 2000

125-9th Avenue, SE

Calgary, Alberta T2G OP8

Canada

Attention:  MarLu Hiller

 

Re:

Amended and Restated Credit Agreement (as amended or modified from time to time, the “U.S. Credit Agreement”) dated as of February 9, 2007, among Quicksilver Resources Inc., a Delaware corporation (the “U.S. Borrower”), the Lenders party thereto (the “U.S. Lenders”), JPMorgan Chase Bank, N.A., as Global Administrative Agent (the “Global Administrative Agent”), and the other Agents party thereto, and Amended and Restated Credit Agreement (as amended or modified from time to time, the “Canadian Credit Agreement” and, together with the U.S. Credit Agreement, the “Combined Credit Agreements”), dated as of February 9, 2007, among Quicksilver Resources Canada Inc., an Alberta, Canada corporation (the “Canadian Borrower” and, together with the U.S. Borrower, the “Combined Borrowers”), the Lenders party thereto (the “Canadian Lenders” and, together with the U.S. Lenders, the “Combined Lenders”), the Global Administrative Agent, JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian Administrative Agent, and the other Agents party thereto.  Unless otherwise indicated, all capitalized terms used herein, but not otherwise defined, shall have the same meanings herein as in the U.S. Credit Agreement.

 

Ladies and Gentlemen:

 

The Combined Borrowers have advised the Global Administrative Agent and the Combined Lenders that the U.S. Borrower has determined that, in addition to the financial information with respect to the U.S. Borrower and its subsidiaries, the U.S. Borrower 's annual and quarterly financial information should include additional information with respect to the U.S. Borrower and those of its subsidiaries that are “Restricted Subsidiaries” under the (1) the First Supplemental Indenture, dated March 16, 2006, among the U.S. Borrower, the subsidiary guarantors party thereto and JPMorgan Chase Bank, National Association, as trustee, to the Indenture, dated December 22, 2005, among the U.S Borrower and The Bank of New York Trust Company, N.A., as trustee (the “First Supplemental Indenture”), and (2) the Fifth Supplemental Indenture, dated as of June 27, 2008, among the U.S. Borrower, the subsidiary guarantors party thereto and The Bank of New York Trust Company, N.A., as trustee, to the Indenture, dated December 22, 2005, among the U.S Borrower and The Bank of New York Trust Company, N.A., as trustee (the “Fifth Supplemental Indenture” and together with the First Supplemental Indenture, the “Supplemental Indentures”).  Accordingly, the U.S. Borrower intends to file amendments to its 2008 Form 10-K and its First Quarter 2009 Form 10-Q (such filing with the SEC of a Form 10-K/A being referred to herein as the “Amended 10-K”) to restate its consolidated financial statements for the year ended December 31, 2008 and for the quarter ended March 31, 2009 to include this information (the “Additional Disclosures”).  While the Supplemental Indentures contemplate provision of such information by the U.S. Borrower in certain circumstances, the U.S. Borrower has advised the Global

 

 

Administrative Agent and the Combined Lenders that it has not received any notices of non-compliance from the trustee under any of the Supplemental Indentures or from any holders of its existing bonds.

 

In connection with the Additional Disclosures,  the Combined Borrowers have further advised the Global Administrative Agent and the Combined Lenders that the Combined Borrowers are seeking confirmation from the Combined Lenders that the fact that the U.S. Borrower had not included the Additional Disclosures in prior filings will not, for purposes of the Combined Credit Agreements, be considered or treated as a “Default” or “Event of Default” under, or failure to comply with, the Combined Credit Agreements.

 

In consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, the parties hereto hereby agree for purposes of the Combined Credit Agreements and the other Combined Loan Documents,  that the failure by the U.S. Borrower to comply, at any time prior to the Filing Date (as defined below), with the requirements of the second paragraph of Section 3.10 of the First Supplemental Indenture and the second paragraph of Section 3.10 of the Fifth Supplemental Indenture, and any “Default” or “Event of Default” arising solely from such failure under the Supplemental Indentures, shall not constitute a Default or an Event of Default under each Combined Credit Agreement.

 

The limited waiver set forth in the preceding paragraph shall be effective on the date that each condition precedent set forth in this paragraph is satisfied:

 

 

Miscellaneous.  (a) The Combined Borrowers hereby agree to pay on demand all reasonable out-of-pocket fees and expenses incurred by the Global Administrative Agent (including, without limitation, reasonable fees and expenses of counsel to the Global Administrative Agent) in connection with the preparation, negotiation and execution of this letter agreement and all related documents, (b) this letter agreement may be executed in counterparts, and all parties need not execute the same counterpart; however, no party shall be bound by this letter agreement until a counterpart hereof has been executed by the U.S. Borrower, the Canadian Borrower, the Global Administrative Agent, the Canadian Administrative Agent and the Majority Lenders; facsimiles or other electronic transmission (e.g., pdf) shall be effective as originals, (c) THIS LETTER AGREEMENT REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES REGARDING THE MATTERS SET FORTH HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES, (d) this letter agreement constitutes a “Loan Document,” a “Canadian Loan Document” and a “Combined Loan Document” under and as defined in the U.S. Credit Agreement, and a “Loan Document,” a “U.S. Loan Document” and a “Combined Loan Document” under and as defined in the Canadian Credit Agreement, and (e) this letter agreement shall be governed by, and construed in accordance with, the laws of the State of Texas.

 

Please evidence your agreement to each of the provisions of this letter agreement by executing a counterpart hereof where indicated and returning a fully executed counterpart to Catherine S. Callahan, counsel for the Global Administrative Agent, via facsimile number ###-###-#### or via electronic e-mail to ***@***.

 

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