EXHIBIT 10(i)
SECOND AMENDMENT TO CREDIT AGREEMENT
This Second Amendment to Credit Agreement (this "AMENDMENT") dated as
of August 13, 2002, but effective as of June 30, 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, the "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, as
amended by that certain First Amendment to Credit Agreement dated as of May 14,
2002 (the "CREDIT AGREEMENT").
B. The Borrower, the Lenders, the Agent and the Collateral Agent intend
to amend certain provisions of the Credit Agreement 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. 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) Section 1.2 of the Credit Agreement is hereby amended by
inserting in the alphabetically appropriate places each of the
following defined terms:
"Senior Debt" shall mean, as of a given date, the aggregate
principal amount of all Debt outstanding as of such date under the
Senior Notes and this Agreement."
"Senior Debt Interest Expense" shall mean, for any period, the
total interest expense attributable to the Senior Debt of the Borrower
and its Subsidiaries for such period determined on a consolidated basis
in accordance with GAAP, but shall exclude non-cash amortization of
debt expense."
(b) Section 6.21 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"6.21 Debt to Adjusted EBITDA Ratio. Permit the ratio of (a) Debt to
(b) Adjusted EBITDA for the preceding four fiscal quarters to be more
than (i) as of the close of the fiscal quarter ending March 31, 2002,
4.25 to 1.0, and (ii) as of the close of the fiscal quarter ending June
30, 2002, and each fiscal quarter thereafter, 5.25 to 1.0."
(c) The following Sections 6.22 and 6.23 are hereby inserted into the
Credit Agreement immediately following the existing Section 6.21:
"6.22 Senior Debt to Adjusted EBITDA Ratio. Permit the ratio of (a)
Senior Debt to (b) Adjusted EBITDA for the preceding four fiscal
quarters to be more than 2.25 to 1.0 as of the close of any fiscal
quarter."
"6.23 Adjusted EBITDA to Senior Debt Interest Expense Ratio. Permit the
ratio of (a) Adjusted EBITDA to (b) Senior Debt Interest Expense for
the preceding four fiscal quarters to be less than 3.5 to 1.0 as of the
close of any fiscal quarter."
Section 3. 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 4. EFFECTIVENESS. This Amendment shall be effective as of June
30, 2002, provided that the conditions set forth in this Section 5 are
satisfied:
(a) 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) The Borrower shall have confirmed and acknowledged to the Agent,
the Collateral Agent and the Lenders, and by its execution and delivery
of this Amendment the Borrower does hereby confirm and acknowledge 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
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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 5. GOVERNING LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 6. 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 7. FINAL AGREEMENT. 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]
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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: /s/ Xxxxx X. Christmas
---------------------------------------
Name: Xxxxx X. Christmas
Title: President and Chief Executive
Officer
AGENTS AND LENDERS:
CANADIAN IMPERIAL BANK OF COMMERCE,
NEW YORK AGENCY,
as Agent
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title:
CIBC INC.
as Collateral Agent and Lender
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title:
GUARANTY BANK
as Lender
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
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