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EXHIBIT 10(XVIII)
SECOND AMENDMENT TO FORBEARANCE AGREEMENT
THIS SECOND AMENDMENT TO FORBEARANCE AGREEMENT, dated as of December 3,
1999 (herein called this "Amendment"), is entered into by and among KCS Energy,
Inc., a Delaware corporation ("KCS"), KCS RESOURCES, INC., a Delaware
corporation ("KRI") for itself and as successor by merger to KCS Pipeline
Systems, Inc., a Delaware corporation; KCS MICHIGAN RESOURCES, INC., a Delaware
corporation ("KCS Michigan"); and KCS ENERGY MARKETING, INC., a New Jersey
corporation ("KCS Marketing," and together with KRI and KCS Michigan, each
individually, a "Borrower" and collectively, the "Borrowers"), each lender that
is a signatory hereto or becomes a party hereto as provided in Sections 9.1 or
2.25 of the Credit Agreement (hereinafter defined) (individually, together with
its successors and assigns, a "Lender" and, collectively, together with their
respective successors and assigns, the "Lenders"), CANADIAN IMPERIAL BANK OF
COMMERCE, acting through its New York agency (in its individual capacity,
"CIBC"), and as agent for the Lenders (in such capacity, together with its
successors in such capacity, the "Agent"), BANK ONE, TEXAS, NATIONAL
ASSOCIATION, a national banking association, as co-agent for the Lenders, and
BANK OF AMERICA, N.A., formerly known as NationsBank, N.A., as co-agent for the
Lenders, and CIBC Inc., a Delaware corporation as collateral agent for the
Lenders (in such capacity pursuant to the terms hereof, the "Collateral Agent").
Terms used herein which are defined in the Forbearance Agreement (as hereinafter
defined) are used herein with the meanings given them therein.
W I T N E S S E T H:
WHEREAS, KCS, the Borrowers, the Lenders, the Collateral Agent and the
Agent have entered into a Forbearance Agreement dated as of July 26, 1999 but
effective as of July 1, 1999, which Forbearance Agreement was amended by an
Amendment to Forbearance Agreement dated as of September 30, 1999, (such
agreement, as so amended, the "Forbearance Agreement") pursuant to which, on the
terms provided therein, the Lenders have agreed (x) to forbear from exercising
any further rights and remedies as provided in the Loan Documents or otherwise
during the Forbearance Period and (y) to rescind the declaration contained in a
notice of default dated July 12, 1999 that all Obligations of KCS and the
Borrowers pursuant to the Loan Documents are immediately due and payable, such
rescission and forbearance to be in effect until termination of the Forbearance
Period and notice to the Borrowers from the Agent accelerating the date for
payment of the Obligations; and
WHEREAS, KCS, the Borrowers, the Lenders, the Collateral Agent and the
Agent now wish to amend the Forbearance Agreement in certain respects;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
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SECTION 1. Amendment to Section 1.2. Section 1.2 of the Forbearance
Agreement is hereby amended by deleting the reference to the date "December 3,
1999" in the ninth line thereof and inserting in lieu thereof the date "March 2,
2000."
SECTION 2. Amendment to Section 2.1. Section 2.1 of the Forbearance
Agreement is hereby amended by the addition of the following definition
immediately after the definition of "Interest Period":
"Specified Value" means, with respect to any Oil and Gas
Property, a value specified by the Agent, with the consent of the
Required Lenders.
SECTION 3. Amendment to Section 3.3. Section 3.3 of the Forbearance
Agreement is hereby amended as follows:
(i) The first sentence of clause (a) of Section 3.3 of the
Forbearance Agreement is amended and restated in its entirety to read
as follows: "(a) Accrued and unpaid interest on each outstanding Base
Rate Loan shall be due and payable on July 31, 1999, August 31, 1999,
September 30, 1999, October 31, 1999, November 30, 1999, December 31,
1999, January 31, 2000 and February 29, 2000."
(ii) The first sentence of clause (b) of Section 3.3 of the
Forbearance Agreement is amended and restated in its entirety to read
as follows: "(b) During the Forbearance Period, payments of principal
of the Tranche A Loans shall be due and payable in the amount of
$1,250,000 on each of July 31, 1999, August 31, 1999, September 30,
1999, October 31, 1999, November 30, 1999, December 31, 1999, January
31, 2000 and February 29, 2000."
SECTION 4. Amendment to Section 3.4. Section 3.4(a) of the Forbearance
Agreement is amended by deleting the reference to the date "December 3, 1999" in
the ninth line thereof and inserting in lieu thereof the date "March 2, 2000".
SECTION 5. Amendment to Section 3.6. Section 3.6 of the Forbearance
Agreement is hereby amended and restated in its entirety to read as follows:
Section 3.6 Sales of Oil and Gas Properties. At any time
during the Forbearance Period that any of the Oil and Gas Properties
are sold (other than Oil and Gas Properties described in Section
7.1(iii) of this Agreement), KCS and the Borrowers shall, substantially
concurrently with the sale thereof, pay principal of the Tranche A
Obligations in an amount equal to the Specified Value until the
principal of the Tranche A Obligations is paid in full and next to the
Tranche B Obligations. In addition, upon the sale of any such Oil and
Gas Properties, if the Net Cash Proceeds are greater than the Specified
Value, KCS and the Borrowers shall pay an amount equal to twenty
percent (20%) of the portion of the Net Cash Proceeds in excess of the
Specified Value which shall be applied (i) first to the repayment of
the
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principal of the Tranche A Obligations until the principal amount of
such Tranche A Obligations is repaid in full, and (ii) next to the
repayment of Tranche B Obligations until the principal amount of such
Tranche B Obligations is repaid in full. At the time of the making of
each payment hereunder, the Borrowers shall specify to the Agent the
Loans to which such payment is to be applied in accordance with the
terms of this Agreement. In the event the Borrowers fail to so specify,
the Agent may apply such payment to Loans as it may elect in its
discretion and in accordance with the terms of the Credit Agreement and
this Agreement. The Agent shall have the necessary authority to
release, and each Lender hereby consents to the Agent releasing, Liens
on the Oil and Gas Properties sold pursuant to this Section 3.6 (and
Oil and Gas Properties described in Section 7.1(iii) of this Agreement)
so long as the Net Cash Proceeds equal or exceed the Specified Value.
SECTION 6. Amendment to Section 7.1. Clause (iii) of Section 7.1 of the
Forbearance Agreement is hereby amended and restated to read as follows: "(iii)
have an aggregate value for all such sales during the period beginning December
3, 1999 and continuing thereafter of less than $250,000 (excluding sales of Oil
and Gas Properties, the proceeds of which are applied to the Loans in accordance
with other provisions of this Agreement)."
SECTION 7. Deletion of Exhibit A. Exhibit A of the Forbearance
Agreement is hereby deleted in its entirety.
SECTION 8. Conditions to Effectiveness. The effectiveness of this
Amendment is conditioned upon receipt by the Agent of all the following
documents, each in form and substance satisfactory to the Agent:
(i) Multiple counterparts of this Amendment as requested by
the Agent; and
(ii) certificates of the secretary or an assistant secretary
of KCS and each Borrower, certifying as to resolutions of the board of
directors of such entity authorizing this amendment and the incumbency
and signatures of the officers of such company authorized to execute
this Amendment.
SECTION 9. Effect. This Amendment shall be deemed to be an amendment to
the Forbearance Agreement, and the Forbearance Agreement, as amended hereby, is
hereby ratified, approved and confirmed in each and every respect. All
references to the Forbearance Agreement in any other document, instrument,
agreement or writing shall hereafter be deemed to refer to the Forbearance
Agreement as amended hereby.
SECTION 10. Counterparts. This Amendment may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Amendment by signing one or
more counterparts.
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SECTION 11. Successors. This Amendment shall be binding upon each of
KCS and the Borrowers, the Lenders, the Collateral Agent and the Agent and their
respective successors and assigns, and shall inure to the benefit of each of KCS
and the Borrowers, the Lenders, the Collateral Agent and the Agent and the
successors and assigns of the Lenders, the Collateral Agent and the Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
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KCS ENERGY, INC.
By:
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Name:
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Title:
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BORROWERS:
KCS RESOURCES, INC.
By:
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Name:
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Title:
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KCS MICHIGAN RESOURCES, INC.
By:
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Name:
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Title:
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KCS ENERGY MARKETING, INC.
By:
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Name:
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Title:
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CO-AGENT AND A LENDER:
BANK ONE, TEXAS, NATIONAL ASSOCIATION
By:
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Name:
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Title:
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CO-AGENT AND A LENDER:
BANK OF AMERICA, N.A.,
formerly known as NationsBank, N.A.
By:
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Name:
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Title:
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LENDERS:
COMERICA BANK-TEXAS
By:
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Name:
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Title:
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DEN NORSKE BANK ASA
By:
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Name:
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Title:
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By:
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Name:
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Title:
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GENERAL ELECTRIC CAPITAL CORPORATION
By:
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Name:
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Title:
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CIBC INC., Lender and Collateral Agent
By:
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Authorized Signatory
AGENT:
CANADIAN IMPERIAL BANK OF COMMERCE
By:
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