AGREEMENT REGARDING MERGER AGREEMENT
This Agreement Regarding Merger Agreement dated April 9, 1998 (this
"Agreement") is by and among Quicksilver Resources Inc., a Delaware corporation
("QRI"), Quicksilver Energy, L.C., a Michigan limited liability company
("QELC"), Michigan Gas Partners, Limited Partnership, a Texas limited
partnership ("MGP"), Mercury Exploration Company, a Texas corporation
("Mercury"), Joint Energy Development Investments Limited Partnership, a
Delaware limited partnership ("JEDI"), and Trust Company of the West, a
California trust company, in the capacity indicated on the signature pages
hereto ("TCW").
QRI, QELC, MGP, Mercury, JEDI and TCW (collectively, the "Parties") are
parties to an Agreement and Plan of Reorganization and Merger dated March 31,
1998 (the "Merger Agreement"). In anticipation of the closing of the
transactions contemplated by the Merger Agreement, the Parties to the Merger
Agreement desire to clarify their intention with respect to certain matters
addressed in the Merger Agreement. Initially capitalized terms used but not
otherwise defined herein have the meanings ascribed to such terms in the Merger
Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein and in the Merger Agreement, the Parties hereto agree as
follows:
1. SECTION 2.5. In order to clarify the nature of the cash payments to
be made subsequent to Closing pursuant to Section 2.5 of the Merger Agreement,
the Parties agree that such a cash payment will only be made based on an
adjusted 3/31/98 Balance Sheet Amount if the adjustment relates to an asset or
liability item that was previously charged or credited in error to any of the
parties based on a 1/1/98 effective date of the transactions contemplated by the
Merger Agreement.
2. SECTION 3.1(h). The Parties agree that the definition of
"Permitted Liens" contained in Section 3.1(h) of the Merger Agreement shall
be deemed to include any liens securing borrowings under (i) the Credit
Agreement dated November 14, 1996 between QELC and NationsBank of Texas, N.A.
and (ii) the Credit Agreement dated April 9, 1998 between QRI, NationsBank of
Texas, N.A., as Agent, and the financial institutions listed on Schedule 1
thereto (the "New Credit Agreement"). The Parties further agree that for all
purposes any reference to NationsBank of Texas, N.A. contained in the Merger
Agreement, any Schedule or Exhibit thereto and any of the other Basic
Documents shall be deemed to include NationsBank of Texas, N.A. in its
capacity as agent for other financial institutions.
3. SECTION 3.1(i). The Parties agree that the financial statements
delivered by Mercury to JEDI and TCW are, instead of audited financial
statements of Mercury as of and for the year
ended December 31, 1997, (i) the audited consolidated balance sheet and
statements of income, cash flows and stockholders' equity of Mercury as of
and for the year ended September 30, 1997 and (ii) the unaudited consolidated
balance sheet and statements of income, cash flows and stockholders' equity
of Mercury as of and for the three months ended December 31, 1997. Section
3.1(i) of the Merger Agreement shall be deemed to include the representation
and warranty that such financial statements delivered to JEDI and TCW were
prepared in accordance with generally accepted accounting principles applied
on a consistent basis (except as noted therein) and fairly present the
financial position, results of operations and cash flows of Mercury as of the
dates and for the periods therein specified.
4. SECTION 4.1(b). The Parties hereby waive compliance with the
covenants contained in clauses (1), (5), (12) and (14) of Section 4.1(b) of the
Merger Agreement to the extent that such covenants would be breached by the
pledge of, or agreement or commitment to pledge, any shares of QRI Common Stock
pursuant to the New Credit Agreement.
5. CERTAIN SCHEDULES. The Parties agree that Schedule 2.1.1, Schedule
2.1.2, Schedule 2.2.1, Schedule 2.2.2, and Schedule 3.1(b) attached hereto shall
be deemed (i) to replace, respectively, Schedule 2.1.1, Schedule 2.1.2, Schedule
2.2.2, and Schedule 3.1(b) attached to the Merger Agreement and (ii) to be
Schedule 2.1.1, Schedule 2.1.2, Schedule 2.2.1, Schedule 2.2.2, and Schedule
3.1(b) to the Merger Agreement for all purposes as if they were attached to the
Merger Agreement at the time of execution of the Merger Agreement. The Parties
agree that Schedule 3.1(h), part III attached hereto constitutes the Revised
Well Exhibit referred to in Section 5.1(r) of the Merger Agreement.
6. REMOVAL OF LEGENDS FROM STOCK CERTIFICATES. QRI agrees that it will
cause all legends regarding securities law transfer restrictions to be removed
from certificates representing shares of QRI Common Stock issued pursuant to the
Merger Agreement upon receipt of a legal opinion reasonably acceptable to QRI's
counsel to the effect that such legends are no longer necessary under applicable
securities laws.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the Parties.
QUICKSILVER RESOURCES INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
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Title: Vice President
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QUICKSILVER ENERGY, L.C.
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
-----------------------------------
Title: Vice President
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MICHIGAN GAS PARTNERS,
LIMITED PARTNERSHIP
By: Mercury Exploration Company,
Managing General Partner
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
-----------------------------------
Title: Vice President
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MERCURY EXPLORATION COMPANY
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
-----------------------------------
Title: Vice President
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JOINT ENERGY DEVELOPMENT
INVESTMENTS LIMITED PARTNERSHIP
By: Enron Capital Management Limited
Partnership, its General Partner
By: Enron Capital Corp., its
General Partner
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
-----------------------------------
Title: Agent and Attorney-in-Fact
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TRUST COMPANY OF THE WEST,
a California trust company, as
Sub-Custodian for Mellon Bank for the
benefit of Account No. CPFF 869-3062
By: TCW ASSET MANAGEMENT COMPANY,
a California corporation, as
Investment Manager under that
certain Agreement dated as of
June 13, 1994, between TCW
Asset Management Company and
Xxxxxx Xxxxxxx Group, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Title: Managing Director
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By: /s/ Xxxx X. XxxXxxxx
-------------------------------------
Name: Xxxx X. XxxXxxxx
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Title: Senior Vice President
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