Document:

First Amendment to Combined Credit Agreements

 Exhibit 10.2 
  
 FIRST AMENDMENT TO COMBINED CREDIT AGREEMENTS 
  
 THIS FIRST AMENDMENT TO COMBINED CREDIT AGREEMENTS, dated as of September 21, 2004 (this “Amendment”),
among QUICKSILVER RESOURCES INC., a Delaware corporation (the “U.S. Borrower”), MGV ENERGY INC., an Alberta, Canada corporation (the “Canadian Borrower”), each of the lenders that is a signatory to, or which becomes
a signatory to, the U.S. Credit Agreement (together with its successors and assigns, the “U.S. Lenders”), each of the lenders that is a signatory to, or which becomes a signatory to, the Canadian Credit Agreement (together with its
successors and assigns, the “Canadian Lenders”, and together with the U.S. Lenders, the “Combined Lenders”), BANK ONE, NA, as Global Administrative Agent (in such capacity, together with its successors in such
capacity, the “Global Administrative Agent”), BANK ONE, NA, CANADA BRANCH, as Canadian Administrative Agent (in such capacity, together with its successors in such capacity, the “Canadian Administrative Agent”), BNP
PARIBAS and BANK OF AMERICA, N.A., as Co-Global Syndication Agents, and FORTIS CAPITAL CORP. and THE BANK OF NOVA SCOTIA, as Co-Global Documentation Agents. 
  
 W I T N E S S E T H :

  
 1. The U.S. Borrower, the Global Administrative Agent, the
Co-Global Syndication Agents, the Co-Global Documentation Agents, and the U.S. Lenders are parties to that certain Credit Agreement dated as of July 28, 2004 (the “U.S. Credit Agreement”), pursuant to which the U.S. Lenders agreed
to make loans to and extensions of credit on behalf of the U.S. Borrower. 
  
 2. The Canadian Borrower, the Global Administrative Agent, the Canadian Administrative Agent, the Co-Global Syndication Agents, the Co-Global Documentation Agents, and the Canadian Lenders are parties to that certain
Credit Agreement dated as of July 28, 2004 (the “Canadian Credit Agreement”, and together with the U.S. Credit Agreement, the “Combined Credit Agreements”), pursuant to which the Canadian Lenders agreed to make
loans to and extensions of credit on behalf of the Canadian Borrower. 
  
 3. The parties to the Combined Credit Agreements intend to amend the Combined Credit Agreements as follows: 
  
 NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the parties hereto agree as follows: 
  
 I. Amendments to U.S. Credit Agreement. 
  
 A. Section 2.7 of the U.S. Credit Agreement hereby is amended by
inserting the following Subsection 2.7(h) after Subsection 2.7(g): 
  
 “(h) Issuance of Other Subordinated Debt. In the event of the issuance of any Subordinated Debt permitted pursuant to Section 7.1(o), the Global Administrative Agent and the Required Lenders shall
have the option to reduce each of the Global Borrowing Base and the U.S. Borrowing Base once in connection with such issuance pursuant to and in accordance with the procedures 

 
of this Section 2.7(h) and in accordance with the provisions of Section 2.7(f). In connection with any such reduction, the Global
Administrative Agent shall promptly provide written notice to the Borrower and the Combined Lenders of its recommended reduction, if any, of the Global Borrowing Base and the U.S. Borrowing Base. Upon the approval of the Required Lenders of such
recommended reduction, or upon the agreement of the Required Lenders of other 
 reductions to the Global Borrowing Base and U.S. Borrowing
Base in accordance with the standards of Section 2.7(b), and the delivery of written notice thereof to the Borrower, the Global Borrowing Base and U.S. Borrowing Base shall be reduced as of the date such notice is delivered or such later date
as specified in such notice. Notwithstanding anything to the contrary in the Combined Loan Documents, (i) the language of the proviso of Section 2.10(b)(1) of this Agreement shall not apply to any Global Borrowing Base Deficiency or U.S.
Borrowing Base Deficiency resulting from the application of this Section 2.7(h) and (ii) the application of this Section 2.7(h) shall never result in an increase in the Global Borrowing Base or the U.S. Borrowing Base.”

  
 B. Section 7.1 of the U.S. Credit Agreement hereby is
amended by (i) revising the current Subsection 7.1(b) to read as follows: 
  
 “ (b) (i) Subordinated Debt (including, without limitation, the Existing Subordinated Debt), and (ii) Guarantees by any Subsidiary of the Subordinated Debt (including the Existing Subordinate Debt);
provided, however, that all such Subordinated Debt permitted pursuant to this Subsection 7.1(b) (inclusive of the Existing Subordinated Debt) does not exceed an aggregate principal amount of U.S.$70,000,000 and shall be in
compliance with the requirements of Section 7.14; and provided, further, that all Subordinated Debt (inclusive of the Existing Subordinated Debt and the Subordinated Debt permitted pursuant to Subsection 7.1(o)) does not
exceed an aggregate principal amount of U.S.$220,000,000;”; 
  
 (ii) deleting
the reference to “and” at the end of Subsection 7.1(m), (iii) inserting the word “and” at the end of Subsection 7.1(n); (iv) inserting the following Subsection 7.1(o) after Subsection 7.1(n):

  
 “ (o) other Subordinated Debt of the Borrower, which
Subordinated Debt may be convertible into capital stock of the Borrower, and Guarantees by Subsidiaries of such Subordinated Debt; provided, however, that all such Subordinated Debt (i) does not exceed an aggregate principal amount of
U.S.$150,000,000, (ii) is subordinated in right of security and payment to the payment in full in cash and cash equivalents of all Combined Obligations of the Borrower or the relevant Subsidiary, as the case may be, on terms and conditions
satisfactory to the Global Administrative Agent and the Required Lenders, (iii) has a maturity date at least six (6) months after the Maturity Date, (iv) is not permitted to be prepaid (other than the conversion of such Subordinated Debt to capital
stock of the Borrower) without the written consent of the Global Administrative Agent and the Required Lenders, (v) has a coupon not in excess of eight percent (8%); (vi) contains covenants not materially more onerous to 

  

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Borrower and its Subsidiaries than those contained in the Combined Loan Documents and (vii) contains other terms and conditions (including amount, interest,
amortization, covenants and events of default) as are satisfactory to the Global Administrative Agent and the Required Lenders;” 
  
 ; and (v) revising the proviso after the current Subsection 7.1(n) to read as follows: 
  
 “provided, that, the Borrower may not incur any new Indebtedness (other than (i) the renewal, extension,
refinancing or replacement of the Existing Subordinated Debt and (ii) Guarantees by any Subsidiaries thereof to the extent the same is incurred in accordance with Section 7.14) described in clauses (b), (g), (j), (k) and (o) above at any time
that a Default, Event of Default, Global Borrowing Base Deficiency or U.S. Borrowing Base Deficiency has occurred and is continuing.” 
  
 C. Section 7.14 of the U.S. Credit Agreement hereby is amended by revising Subsection 7.14(c) to read as follows: 
  
 “(c) permit (X) the outstanding principal balance of all Subordinated
Debt permitted pursuant to Subsection 7.1(b) (including, for sake of clarity, the Existing Subordinated Debt) to exceed U.S.$70,000,000 at any time and (Y) the outstanding principal balance of all Subordinated Debt (including, for sake of
clarity, the Existing Subordinated Debt and the Subordinated Debt permitted pursuant to Subsection 7.1(o)) to exceed U.S.$220,000,000 at any time;”. 
  

II. Amendments to Canadian Credit Agreement. 
  
 A. Section 2.7 of the Canadian Credit Agreement hereby is amended by inserting the following Subsection 2.7(h) after Subsection
2.7(g): 
  
 “ (h) Issuance of Other Subordinated
Debt. In the event of the issuance of any Subordinated Debt permitted pursuant to Section 7.1(o), the Global Administrative Agent and the Required Lenders shall have the option to reduce the Global Borrowing Base once in connection with
such issuance pursuant to and in accordance with the procedures of this Section 2.7(h) and in accordance with the provisions of Section 2.7(f). In connection with any such reduction, the Global Administrative Agent shall promptly
provide written notice to the Borrower and the Combined Lenders of its recommended reduction, if any, of the Global Borrowing Base. Upon the approval of the Required Lenders of such recommended reduction, or upon the agreement of the Required
Lenders of other reductions to the Global Borrowing Base in accordance with the standards of Section 2.7(b), and the delivery of written notice thereof to the Borrower, the Global Borrowing Base shall be reduced as of the date such notice is
delivered or such later date as specified in such notice. Notwithstanding anything to the contrary in the Combined Loan Documents, (i) the language of the proviso of Section 2.10(b)(1) of this Agreement shall not apply to any Global Borrowing
Base Deficiency resulting from the application of this Section 2.7(h) and (ii) the 
  

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 application of this Section 2.7(h) shall never result in an increase in the Global Borrowing
Base.” 
  
 B. Section 7.1 of the Canadian Credit
Agreement hereby is amended by (i) revising the current Subsection 7.1(b) to read as follows: 
  
 “ (b) (i) Subordinated Debt (including, without limitation, the Existing Subordinated Debt), and (ii) Guarantees by any Subsidiary of the
Subordinated Debt (including the Existing Subordinate Debt); provided, however, that all such Subordinated Debt permitted pursuant to this Subsection 7.1(b) (inclusive of the Existing Subordinated Debt) does not exceed an
aggregate principal amount of U.S.$70,000,000 and shall be in compliance with the requirements of Section 7.14 of the U.S. Credit Agreement; and provided, further, that all Subordinated Debt (inclusive of the Existing
Subordinated Debt and the Subordinated Debt permitted pursuant to Subsection 7.1(o)) does not exceed an aggregate principal amount of U.S.$220,000,000;”; 
  
 (ii) deleting the reference to “and” at the end of Subsection 7.1(m), (ii) inserting the word “and” at the end of
Subsection 7.1(n); (iii) inserting the following Subsection 7.1(o) after Subsection 7.1(n): 
  
 “ (o) other Subordinated Debt of the Borrower, which Subordinated Debt may be convertible into capital stock of the Borrower, and Guarantees by
Subsidiaries of such Subordinated Debt; provided, however, that all such Subordinated Debt (i) does not exceed an aggregate principal amount of U.S.$150,000,000, (ii) is subordinated in right of security and payment to the payment in
full in cash and cash equivalents of all Combined Obligations of the Borrower or the relevant Subsidiary, as the case may be, on terms and conditions satisfactory to the Global Administrative Agent and the Required Lenders, (iii) has a maturity date
at least six (6) months after the Maturity Date, (iv) is not permitted to be prepaid (other than the conversion of such Subordinated Debt to capital stock of the Borrower) without the written consent of the Global Administrative Agent and the
Required Lenders, (v) has a coupon not in excess of eight percent (8%); (vi) contains covenants not materially more onerous to Borrower and its Subsidiaries than those contained in the Combined Loan Documents and (vii) contains other terms and
conditions (including amount, interest, amortization, covenants and events of default) as are satisfactory to the Global Administrative Agent and the Required Lenders;” 
  
 ; and (iv) revising the proviso after the current Subsection 7.1(n) to read as follows: 
  
 “provided, that, the Borrower may not incur any new Indebtedness
(other than (i) the renewal, extension, refinancing or replacement of the Existing Subordinated Debt and (ii) Guarantees by any Subsidiaries thereof to the extent the same is incurred in accordance with Section 7.14 of the U.S. Credit
Agreement) described in clauses (b), (g), (j), (k) and (o) above at any time that a Default, Event of Default, Global Borrowing Base Deficiency or U.S. Borrowing Base Deficiency has occurred and is continuing.” 
  

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 III. Effectiveness. This Amendment shall become effective as of the date (the
“Effective Date”) when the Global Administrative Agent shall have received counterparts hereof duly executed by the U.S. Borrower, the Canadian Borrower, the Global Administrative Agent, the Canadian Administrative Agent and the
Combined Lenders (or, in the case of any party as to which an executed counterpart shall not have been received, telegraphic, telex, or other written confirmation from such party of execution of a counterpart hereof by such party). 
  
 IV. Reaffirmation of Representations and Warranties. To
induce the Combined Lenders and the Global Administrative Agent to enter into this Amendment, the U.S. Borrower and the Canadian Borrower hereby reaffirm, as of the date hereof, the following: 
  
 (i) The representations and warranties of each Loan Party
(as such term is defined in the U.S. Credit Agreement and the Canadian Credit Agreement, collectively, the “Combined Loan Parties”) set forth in the Combined Loan Documents to which it is a party are true and correct on and as of
the date hereof (or, if stated to have been made expressly as of an earlier date, were true and correct in all material respects as of such date). 
  
 (ii) Each of the Combined Loan Parties (a) is a corporation, partnership or limited liability company duly incorporated or organized (as
applicable), validly existing and in good standing under the laws of its jurisdiction of incorporation or organization, (b) has all corporate, partnership or limited liability company power (as applicable) and all material governmental licenses,
authorizations, consents and approvals required to carry on its businesses as now conducted and as proposed to be conducted, and (c) is duly qualified to transact business as a foreign corporation, partnership or limited liability company in each
jurisdiction where a failure to be so qualified would reasonably be expected to have a Material Adverse Effect. 
  
 (iii) The execution, delivery and performance of this Amendment and the other Combined Loan Documents by each Combined Loan Party (to the
extent each Loan Party is a party to this Agreement and such Loan Documents) (a) are within such Loan Party’s corporate, partnership or limited liability company powers, (b) when executed will be duly authorized by all necessary corporate,
partnership or limited liability company action, (c) require no action by or in respect of, or filing with, any Governmental Authority (other than (i) actions or filings pursuant to the Exchange Act and (ii) actions or filings that have been taken
or made and are in full force and effect) and (d) do not contravene, or constitute a default under, any provision of applicable Governmental Rule (including, without limitation, Regulation U) or of the articles or certificate of incorporation,
bylaws, regulations, partnership agreement or comparable charter documents of any Combined Loan Party or of any agreement, judgment, injunction, order, decree or other instrument binding upon any Combined Loan Party or result in the creation or
imposition of any Lien on any Borrowing Base Property or Collateral other than the Liens securing the Combined Obligations. 
  
 (iv) This Amendment and each other Combined Loan Document constitutes, or when executed and delivered will constitute, valid and binding
obligations of each 

  

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Combined Loan Party which is a party thereto, enforceable against each such Combined Loan Party which executes the same in accordance with its terms except
as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, or similar Governmental Rules affecting creditors’ rights generally, and (ii) equitable principles of general applicability (whether
enforcement is sought by proceedings at law or in equity). 
  
 (v) Neither a Default nor an Event of Default has occurred or will exist under either Combined Credit Agreement after giving effect to the transactions contemplated by this Amendment or the other Combined Loan
Documents. Neither the U.S. Borrower or any of its Subsidiaries nor the Canadian Borrower or any of its Subsidiaries is in default under, nor has any event or circumstance occurred which, but for the expiration of any applicable grace period or the
giving of notice, or both, would constitute a default under, any Material Agreement to which the U.S. Borrower or any of its Subsidiaries or the Canadian Borrower or any of its Subsidiaries is a party or by which the U.S. Borrower or any of its
Subsidiaries or the Canadian Borrower or any of its Subsidiaries is bound which default would reasonably be expected to have a Material Adverse Effect. The U.S. Borrower is in compliance with the financial covenants set forth in Article VI of
the U.S. Credit Agreement. 
  
 (vi) No event or
events have occurred since December 31, 2003 which individually or in the aggregate would reasonably be expected to have a Material Adverse Effect. 
  
 V. Defined Terms. Except as amended hereby, terms used herein when defined in the U.S. Credit Agreement shall have the same meanings
herein unless the context otherwise requires. 
  
 VI.
Reaffirmation of Combined Credit Agreements. This Amendment shall be deemed to be an amendment to the Combined Credit Agreements, and the Combined Credit Agreements, as amended hereby, are hereby ratified, approved and confirmed in
each and every respect. All references to the Combined Credit Agreements herein and in any other document, instrument, agreement or writing shall hereafter be deemed to refer to the Combined Credit Agreements as amended hereby. 
  
 VII. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF TEXAS. 
  
 NOTWITHSTANDING
THE FOREGOING SENTENCE AND AFTER GIVING EFFECT TO THE TEXTUAL AMENDMENTS CONTAINED IN SECTIONS I AND II OF THIS AMENDMENT, (i) THE U.S. CREDIT AGREEMENT (AS AMENDED HEREBY) SHALL CONTINUE TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW
SPECIFIED IN SECTION 10.9(a) OF THE U.S. CREDIT AGREEMENT, AND (ii) THE CANADIAN CREDIT AGREEMENT (AS AMENDED HEREBY) SHALL CONTINUE TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW SPECIFIED IN SECTION 10.9(a) OF THE CANADIAN CREDIT
AGREEMENT. 
  

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 VIII. Severability of Provisions. Any provision of this Amendment held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining
provisions hereof; and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 
  
 IX. Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of
which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy shall be effective as delivery of a manually executed
counterpart of this Amendment. 
  
 X.
Headings. Article and Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

  
 XI. Successors and Assigns. This
Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby (including any Affiliate of an Issuing Bank that issues any Letter of Credit), except that neither the U.S.
Borrower nor the Canadian Borrower may not assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Global Administrative Agent, each Issuing Bank and each Combined Lender (and any attempted
assignment or transfer by either the U.S. Borrower or the Canadian Borrower without such consent shall be null and void). 
  
 XII. No Oral Agreements. THIS AMENDMENT, THE COMBINED CREDIT AGREEMENTS, AS AMENDED HEREBY, AND THE OTHER COMBINED LOAN DOCUMENTS REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG
THE PARTIES. 
  
 [SIGNATURES BEGIN ON FOLLOWING PAGE]

  

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 IN WITNESS WHEREOF, the U.S. Borrower, the Canadian Borrower, the undersigned Combined Lenders, the
Global Administrative Agent, and the other “agents” under the Combined Credit Agreements have executed this Amendment as of the date first above written. 
  

			
	U.S. BORROWER
	
	QUICKSILVER RESOURCES INC.
		
	 By:
	 	 /s/ MarLu Hiller

	 Name:
	 	MarLu Hiller
	 Title:
	 	Treasurer
	
	CANADIAN BORROWER
	
	MGV ENERGY INC.
		
	 By:
	 	 /s/ MarLu Hiller

	 Name:
	 	MarLu Hiller
	 Title:
	 	Treasurer

  

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	AGENTS AND COMBINED LENDERS
	
	 BANK ONE, NA, as Global Administrative Agent and
 as a U.S. Lender

		
	 By:
	 	 /s/ J. Scott Fowler

	 Name:
	 	J. Scott Fowler
	 Title:
	 	Director, Capital Markets

  

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	 BNP PARIBAS, as a Co-Global Syndication Agent and
 as a U.S. Lender

		
	 By:
	 	 /s/ Betsy Jocher

	 Name:
	 	Betsy Jocher
	 Title:
	 	Vice President
		
	 By:
	 	 /s/ Polly Schott

	 Name:
	 	Polly Schott
	 Title:
	 	Vice President

  

 S - 3 

			
	 BANK OF AMERICA, N.A., as a Co-Global
 Syndication Agent and as a U.S. Lender

		
	 By:
	 	 /s/ Richard L. Stein

	 Name:
	 	 Richard L. Stein

	 Title:
	 	 Principal

  

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	FORTIS CAPITAL CORP., as the Co-Global
Documentation Agent and as a U.S. Lender
		
	 By:
	 	 /s/ Christopher S. Parada

	 Name:
	 	Christopher S. Parada
	 Title:
	 	Vice President
		
	 By:
	 	 /s/ Darrell W. Holley

	 Name:
	 	Darrell W. Holley
	 Title:
	 	Managing Director

  

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	THE BANK OF NOVA SCOTIA, as a Co-Global
Documentation Agent and as a U.S. Lender
		
	 By:
	 	 /s/ Nadine Bell

	 Name:
	 	Nadine Bell
	 Title:
	 	Senior Manager

  

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	COMERICA BANK, as a U.S. Lender
		
	 By:
	 	 /s/ Michele L. Jones

	 Name:
	 	Michele L. Jones
	 Title:
	 	Senior Vice President - Texas Division

  

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	THE ROYAL BANK OF SCOTLAND PLC, as a U.S.
Lender
		
	 By:
	 	 /s/ Chris H. Clarke

	 Name:
	 	Chris H. Clarke
	 Title:
	 	Senior Vice President

  

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	CALYON NEW YORK BRANCH, as a U.S. Lender
		
	 By:
	 	 /s/ Olivier Audemard

	 Name:
	 	Olivier Audemard
	 Title:
	 	Managing Director
		
	 By:
	 	 /s/ Pierre Debray

	 Name:
	 	Pierre Debray
	 Title:
	 	Managing Director

  

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	CIBC INC., as a U.S. Lender
		
	 By:
	 	 /s/ John P. Burke

	 Name:
	 	John P. Burke
	 Title:
	 	Executive Director
	 	 	CIBC World Markets Corp., as Agent

  

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	COMPASS BANK, as a U.S. Lender
		
	 By:
	 	 /s/ John M. Falbo

	 Name:
	 	John M. Falbo
	 Title:
	 	Senior Vice President

  

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	STERLING BANK, as a U.S. Lender
		
	 By:
	 	 /s/ Melissa A. Bauman

	 Name:
	 	Melissa A. Bauman
	 Title:
	 	Senior Vice President

  

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	TORONTO DOMINION (TEXAS), INC., as a U.S.
Lender
		
	 By:
	 	 /s/ Neva Nesbitt

	 Name:
	 	Neva Nesbitt
	 Title:
	 	Vice President

  

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	HARRIS NESBITT FINANCING, INC., as a U.S.
Lender
		
	 By:
	 	 /s/ James V. Ducote

	 Name:
	 	James V. Ducote
	 Title:
	 	Vice President

  

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	SOCIETE GENERALE, as a U.S. Lender
		
	 By:
	 	 /s/ Stephen W. Warfel

	 Name:
	 	Stephen W. Warfel
	 Title:
	 	Vice President

  

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	 BANK ONE, NA, CANADA BRANCH, as Canadian
 Administrative Agent and as a Canadian Lender

		
	By:	 	 /s/ Michael N. Tam

	Name:	 	Michael N. Tam
	Title:	 	Director

  

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	BNP PARIBAS (CANADA), as a Canadian Lender
		
	 By:
	 	 /s/ Edward Pak

	 Name:
	 	Edward Pak
	 Title:
	 	Assistant Vice President
		
	 By:
	 	 /s/ Michael Gosselin

	 Name:
	 	Michael Gosselin
	 Title:
	 	Managing Director

  

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	BANK OF AMERICA, N.A. (by its Canada branch),
as a Canadian Lender
		
	 By:
	 	 /s/ Medina Sales De Andrade

	 Name:
	 	Medina Sales De Andrade
	 Title:
	 	Assistant Vice President

  

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	THE BANK OF NOVA SCOTIA, as a Canadian
Lender
		
	 By:
	 	 /s/ Brian Williamson

	 Name:
	 	Brian Williamson
	 Title:
	 	Director

  

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	COMERICA BANK, CANADA BRANCH, as a
Canadian Lender
		
	 By:
	 	 /s/ Robert C. Rosen

	 Name:
	 	Robert C. Rosen
	 Title:
	 	Vice President

  

 S - 20 

			
	CANADIAN IMPERIAL BANK OF COMMERCE, 
	as a Canadian Lender
		
	 By:
	 	 /s/ John P. Burke

	 Name:
	 	John P. Burke
	 Title:
	 	Executive Director
	 	 	CIBC World Markets Corp., as Agent

  

 S - 21 

			
	TORONTO DOMINION BANK, as a Canadian
Lender
		
	 By:
	 	 /s/ Debbi Brito

	 Name:
	 	Debbi Brito
	 Title:
	 	Corporate Credit and Administration
	 	 	Assistant Manager

  

 S - 22 

			
	BANK OF MONTREAL, as a Canadian Lender
		
	 By:
	 	 /s/ James V. Ducote

	 Name:
	 	James V. Ducote
	 Title:
	 	Vice President

  

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	 SOCIETE GENERALE (CANADA), as a Canadian
 Lender

		
	 By:
	 	 /s/ Francois La Liberte’

	 Name:
	 	Francois La Liberte’
	 Title:
	 	Managing Director
		
	 By:
	 	 /s/ C. Hansen

	 Name:
	 	C. Hansen
	 Title:
	 	Director

  

 S - 24Second Amendment Agreement

 EXHIBIT 10.1 
  
 SECOND AMENDMENT AGREEMENT 
  
 Synthetic American Fuel Enterprises I, LLC 
  
 This Second Amendment Agreement (“Second Amendment”) is made and entered into as of October 6, 2004, by and among Synthetic American Fuel
Enterprises Holdings, Inc. (“Holdings”), Marriott Hotel Services, Inc. (“MHSI”) and Serratus LLC (“Buyer”). 
  

W I T N E S S E T H: 
  
 WHEREAS, Holdings, MHSI and Buyer entered into an Agreement for Purchase of Membership Interest in Synthetic American Fuel Enterprises I, LLC (the
“Company”) dated as of January 28, 2003, as amended by Amendment Agreement dated as of June 20, 2003 (the “Purchase Agreement”); 
  
 WHEREAS, Holdings, MHSI and Buyer entered into an Amended and Restated Limited Liability Company Agreement of the Company
dated as of January 28, 2003, as amended by Amendment Agreement dated as of June 20, 2003 (the “LLC Agreement”); and 
  
 WHEREAS, the parties desire to amend the LLC Agreement and the Purchase Agreement as provided herein; 
  
 NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: 
  

ARTICLE I 
 AMENDMENTS TO LLC
AGREEMENT 
  
 Section 1.1 Defined Terms.

  
 Section 1.1.1 Amended Definitions. The
definitions in Section 1.1 of the LLC Agreement are hereby amended as follows: 
  
 (a) The definition of “Applicable Percentage” is deleted in its entirety and replaced with the following: 
  
 “Applicable Percentage” means 117 percent, except that with respect to any period after September 30, 2004 during which the Sharing Ratio
of Buyer is 90%, the Applicable Percentage means 117 and 8/9 percent. 
  
 (b) The definition of “Purchase Agreement” is deleted in its entirety and replaced with the following: 
  
 “Purchase Agreement” means the Agreement for Purchase of Membership Interest among MHSI, Holdings and Buyer dated as of January 28, 2003,
as amended from time to time. 
  

 1 

 (c) The definition of “Sharing Ratio” is deleted in its entirety and replaced with the
following: 
  
 “Sharing Ratio” means (i) for the
period from the Closing Date through December 31, 2003, and for the period from October 1, 2004 through the earlier of (A) the date of a Successful Resolution or (B) March 31, 2005, 8.9% for MHSI, 1.1% for Holdings, and 90.0% for Buyer; and (ii) for
all other periods, 48.8% for MHSI, 1.1% for Holdings and 50.1% for Buyer; provided, however, that if, in any Quarter, the Administrative Member proposes to produce less than 450,000 tons of synthetic fuel, then the Members shall discuss in good
faith an appropriate change in the Sharing Ratio for that Quarter. 
  
 (d) The definition of “Tax Event” is amended by inserting the following sentence at the end thereof: 
  
 In addition, a Tax Event shall be deemed to occur upon the expiration of the 60th day after receipt by the Company of a Notice of Proposed Adjustment
(Form 5701) or other official form stating that the IRS proposes to disallow 50 percent or more of the Tax Credits claimed during the period covered by the audit, provided that such notice or form is then still outstanding and has not been withdrawn
or amended such that it no longer proposes the disallowance of 50 percent or more of such credits. 
  
 Section 1.1.2 Additional Definitions. The following definitions are hereby added to Section 1.1 of the LLC Agreement: 
  
 “PSF” means Synthetic American Fuel Enterprises II, LLC, a
Delaware limited liability company, formerly known as PacifiCorp Syn Fuel, LLC. 
  
 “PSF Audit” means the Internal Revenue Service audit of PSF for its taxable years ending December 31, 1999, March 31, 2000 and March 31, 2001. 
  
 “Successful Resolution” means any of the following actions
with respect to the PSF Audit: (i) the issuance of a technical advice memorandum, the issuance of a decision by the IRS Office of Appeals, the entry into a closing agreement by the IRS, or a similar written determination by the IRS that concludes at
least two of PSF’s synthetic fuel facilities were placed in service on or before June 30, 1998 and that does not deny at least 50% of the Section 29 tax credits originally reported by PSF for the period covered by the PSF Audit on other
grounds; or (ii) the issuance with respect to the PSF Audit of a revised Form 886-A or Summary Report or the withdrawal by the IRS in writing of its Summary Report and Notice of Proposed Adjustment with the result that the IRS is no longer proposing
to disallow at least 50% of the Section 29 tax credits originally reported by PSF for the period covered by the PSF Audit. 
  

 2 

 Section 1.2 Amendment to Section 10.8(a). Section 10.8(a) is hereby deleted in its entirety
and replaced with the following: 
  
 “(a) Upon (i) the
occurrence of a Tax Event (other than a Tax Event described in the last sentence of the definition of “Tax Event”), (ii) the exercise by Buyer of its right to defer payments for low volume pursuant to Section 2.6 of the Purchase Agreement
for the fourth time (the “Fourth Deferral”), or (iii) the occurrence of a Tax Event described in the last sentence of the definition of “Tax Event,” Buyer shall have the option, exercisable by delivery of written notice
thereof to the Company within 60 days of such Tax Event or Fourth Deferral, to require the Company to redeem its Membership Interest, in whole but not in part, such redemption to be effective on (A) the later of (x) the 60th day after the occurrence
of such Tax Event or Fourth Deferral or (y) the tenth day following receipt of the written notice from Buyer in relation thereto, in the case of an exercise pursuant to clauses (i) or (ii), or (B) the tenth day following receipt of the written
notice from Buyer in the case of an exercise pursuant to clause (iii); provided, however, that any redemption hereunder shall be subject to the expiration of any waiting period, if applicable under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, but once such waiting period expires, shall have effect from the date specified in clause (A) or (B), as applicable.” 
  
 Section 1.3 Effect on Capital Accounts. The parties understand and agree that their Capital Accounts as of the date hereof shall not be
adjusted as a result of the preceding amendments to the LLC Agreement, since these amendments merely alter the allocation of income and losses among the Members after the date hereof. 
  
 ARTICLE II 
 AMENDMENTS TO PURCHASE AGREEMENT 
  
 Section
2.1 Amended Definitions. The following definitions in Annex I to the Purchase Agreement are hereby deleted in their entirety and replaced with the following: 
  
 “Amended LLC Agreement” means the Amended and Restated Limited Liability Company Agreement
of the Operating Company, dated as of January 28, 2003, by and among Seller, MHSI and Buyer in the form attached as Exhibit I, as amended by the Amendment Agreement, and the Second Amendment Agreement dated as of October 6, 2004 by and among
Seller, MHSI and Buyer. 
  
 “Applicable
Percentage” means 117 percent, except that with respect to any period after September 30, 2004 during which the Sharing Ratio (as defined in the Amended LLC Agreement) of Buyer is 90%, the Applicable Percentage means 117 and 8/9 percent.

  
 “SynAmerica II Purchase
Agreement” means the Agreement for Purchase of Membership Interest relating to SynAmerica II, dated as of January 28, 2003, by and among Seller, Buyer and MHSI, as amended from time to time. 
  

 3 

 Section 2.2 Amended Schedule 2.4. Schedule 2.4 (Fixed Deferred Payment Schedule) to
the Purchase Agreement is hereby deleted in its entirety and replaced with Schedule 2.4 attached hereto. The parties understand and agree that the effect of the amended schedule is to increase the Fixed Deferred Payments otherwise due for the
next three Quarters, in recognition of the changes in Sharing Ratios during those periods. 
  
 ARTICLE III 
 MISCELLANEOUS 
  
 This Second Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns. This Second Amendment shall be governed by and construed under the laws of the State of New York applicable to contracts executed and performed therein. The Purchase Agreement and the LLC Agreement (including the Exhibits and Schedules
thereto), as amended by this Second Amendment, constitute the entire agreement of the parties hereto with respect to the subject matter hereof and thereof. This Second Amendment may not be changed or modified orally but only by an instrument in
writing signed by all the parties, which states that it is an amendment to this Second Amendment. This Second Amendment may be executed in any number of counterparts (including by facsimile), each of which shall for all purposes be and be deemed to
be an original, and all of which shall constitute one and the same instrument. 
  
 [SIGNATURE PAGE FOLLOWS] 
  

 4 

 IN WITNESS WHEREOF, each party hereto has caused this Second Amendment to be signed on its behalf as of
the date first above written. 
  

			
	 SYNTHETIC AMERICAN FUEL
 ENTERPRISES HOLDINGS, INC.

		
	By:	 	 /s/ Kathleen K. Oberg

	Name:	 	Kathleen K. Oberg
	Title:	 	President
	
	MARRIOTT HOTEL SERVICES, INC.
		
	By:	 	 /s/ Kathleen K. Oberg

	Name:	 	Kathleen K. Oberg
	Title:	 	Vice President
	
	SERRATUS LLC
		
	By:	 	 /s/

	Name:	 	 
	Title:	 	 

  

 5

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