EXHIBIT 10.1
THIRD AMENDMENT TO CREDIT AGREEMENT
This Third Amendment to Credit Agreement (this "AMENDMENT") dated as of
November 13, 2002, is among KCS ENERGY, INC. (the "BORROWER"), certain
commercial lending institutions named on the signature pages hereto (together
with their respective successors and assigns in such capacity, each as a
"LENDER" and collectively as the "LENDERS"), CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY, as agent for the Lenders (in such capacity, together with its
successors and assigns, the "AGENT"), CIBC INC., as collateral agent for the
Lenders (in such capacity, together with its successors and assigns, "COLLATERAL
AGENT").
PRELIMINARY STATEMENT
A. The Borrower, the Lenders, the Agent and the Collateral Agent have
entered into that certain Credit Agreement, dated as of November 28, 2001, among
the Borrower, the Lenders, the Agent and the Collateral Agent, as amended by
that certain First Amendment to Credit Agreement, dated as of May 14, 2002,
among the Borrower, the Lenders, the Agent and the Collateral Agent, as further
amended by that certain Second Amendment to Credit Agreement, dated as of August
14, 2002, but effective as of June 30, 2002, among the Borrower, the Lenders,
the Agent and the Collateral Agent (as so amended, and as from time to time
amended, supplemented, restated or otherwise modified, including pursuant to
this Amendment, the "CREDIT AGREEMENT").
B. The Borrower, the Lenders, the Agent and the Collateral Agent intend
to amend certain provisions of the Credit Agreement to (i) extend the Final
Maturity (as defined in the Credit Agreement) under the Credit Agreement, (ii)
to reduce the Commitment Amount (as defined in the Credit Agreement), and (iii)
to make other changes, as set forth herein.
NOW THEREFORE, in consideration of the foregoing and the mutual
agreements set forth herein, the parties hereto agree as follows:
Section 1. DEFINITIONS.
(a) Unless otherwise defined in this Amendment, each capitalized
term used in this Amendment has the meaning assigned to such term in the Credit
Agreement.
Section 2. AMENDMENT OF CREDIT AGREEMENT.
(a) The definition of "Final Maturity" as set forth in Section 1.2
of the Credit Agreement is hereby amended in its entirety to read as follows:
"Final Maturity" shall mean November 28, 2004 unless the
Liquidity Condition shall not have been satisfied, as shall be
determined by the Lenders in their sole discretion, by
December 15, 2002, in which event it shall mean December 15,
2002.
(b) The definition of "Liquidity Condition" as set forth in Section
1.2 of the Credit Agreement is hereby amended in its entirety to read as
follows:
"Liquidity Condition" shall mean that (i) less than
$20,000,000 in principal amount of the Borrower's Senior Notes
are outstanding on August 31, 2002 and (ii) the Borrower shall
have cash plus Available Commitment of not less than the then
outstanding principal amount of the Senior Notes on August 31,
2002; provided, however, that if the Borrower fails to satisfy
one or both of clause (i) and (ii) on August 31, 2002, the
Borrower shall have a one-hundred-and-six (106) day period in
which to remedy such failure, which remedy shall be subject to
the approval of the Lenders in their sole discretion.
(c) The Credit Agreement is hereby amended by adding the following
Section 5.21 immediately following the existing Section 5.20 of the Credit
Agreement:
"5.21 Maintenance of Cash Balance. Maintain on deposit in the
Borrower's accounts a cash balance in an amount equal to the
amount of the Loan Balance under this Agreement, and provide
to the Agent any information relating to such balance,
deposits or accounts as the Agent may from time to time
reasonably request."
Section 3. REDETERMINATION OF THE BORROWING BASE. As of the Effective
Date, the parties hereto agree that the Borrowing Base shall be $4,000,000,
subject to redetermination pursuant to Section 2.12 of the Credit Agreement or
reduction pursuant to Section 6.5 of the Credit Agreement.
Section 4. RATIFICATION. The Borrower hereby ratifies and confirms all
of the Obligations under the Credit Agreement and the other Loan Documents. This
Amendment is an amendment to the Credit Agreement, and the Credit Agreement as
amended hereby, is hereby ratified, approved and confirmed in each and every
respect.
Section 5. EFFECTIVENESS. This Amendment shall be effective as of the
date hereof (the "EFFECTIVE DATE"), provided that the conditions set forth in
this Section 5 are satisfied:
(a) On or before the Effective Date, the Agent shall have received
duly executed counterparts of this Amendment from the Borrower, the Agent, the
Collateral Agent and from all of the Lenders.
(b) Within one (1) day following the Effective Date, the Agent
shall have received prepayment of the Loans by the Borrower to the Agent for the
account of the Lenders, to be shared by the Lenders based on their respective
pro rata share of the total Commitments, in an amount equal to $1,000,000 for
application on the Loan Balance, which following such prepayment, such Loan
Balance shall not exceed $4,000,000.
(c) On or before the Effective Date, the Agent shall have received
such other instruments and documents as the Agent may reasonably request.
2
Section 6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby
represents and warrants to the Agent, the Collateral Agent and the Lenders, that
(i) the execution, delivery and performance of this Amendment has been duly
authorized by all requisite corporate action on the part of the Borrower; (ii)
the Credit Agreement and each other Loan Document to which it is a party
constitute valid and legally binding agreements enforceable against the Borrower
in accordance with their respective terms, except as such enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws relating to or affecting the enforcement of
creditors' rights generally and by general principles of equity, (iii) the
representations and warranties by the Borrower contained in the Credit Agreement
and in the other Loan Documents are true and correct on and as of the date
hereof in all material respects as though made as of the date hereof, except
those that by their terms relate solely as to an earlier date, in which event
they shall be true and correct on and as of such earlier date, and (iv) no
Default or Event of Default exists under the Credit Agreement or any of the
other Loan Documents.
Section 7. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 8. MISCELLANEOUS. (a) On and after the effectiveness of this
Amendment, each reference in each Loan Document to "the Credit Agreement",
"thereunder", "thereof" or words of like import referring to the Credit
Agreement shall mean and be a reference to the Credit Agreement as amended or
otherwise modified by this Amendment; (b) the execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided herein,
operate as a waiver of any default of the Borrower or any right, power or remedy
of the Agent, the Collateral Agent or the Lenders under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents; (c) this Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement; and (d) delivery of an executed
counterpart of a signature page to this Amendment by telecopier shall be
effective as delivery of a manually executed counterpart of this Amendment.
Section 9. FINAL AGREEMENT. THIS AMENDMENT, THE CREDIT AGREEMENT 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 ORAL AGREEMENTS BETWEEN THE PARTIES.
[Remainder of Page Left Intentionally Blank]
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by its officers thereunto duly authorized as of the date first above
written.
BORROWER:
KCS ENERGY, INC.,
a Delaware corporation
By:
-----------------------------------------
Name: ▇▇▇▇▇ ▇. Christmas
Title: President and Chief Executive Officer
S-1
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY,
as Agent
By:
-----------------------------------------
Name:
Title:
S-2
CIBC INC.
as Collateral Agent and Lender
By:
--------------------------------------
Name:
Title:
S-3
GUARANTY BANK
as Lender
By:
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
S-4