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EXHIBIT 10(XVII)
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
MEDALLION RESOURCES, INC., a Delaware corporation (formerly known as InterCoast
Oil and Gas Company) ("KCS Medallion"), KCS ENERGY, INC., a Delaware corporation
("KCS"), KCS ENERGY SERVICES, INC., a Delaware corporation (formerly known as
InterCoast Gas Services Company) ("Medallion Gas Services" and together with KCS
Medallion, KCS and KCS Energy Services, 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"), 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, 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 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, 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:
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."
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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 seventh 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), the Borrowers shall, substantially
concurrently with the sale thereof, pay principal of the Obligations in
an amount equal to the Specified Value until the principal of the
Obligations is paid in full. In addition, upon the sale of any such Oil
and Gas Properties, if the Net Cash Proceeds are greater than the
Specified Value, 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 to the repayment of the
principal of the Obligations until the principal amount of such
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
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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 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.
SECTION 11. Successors. This Amendment shall be binding upon each of
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 the
Borrowers, the Lenders, the Collateral Agent and the Agent and the successors
and assigns of the Lenders, the Collateral Agent and the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.
BORROWERS:
KCS MEDALLION RESOURCES, INC.
By:
---------------------------------
Name:
------------------------------
Title:
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KCS ENERGY, INC.
By:
---------------------------------
Name:
------------------------------
Title:
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KCS ENERGY SERVICES, INC.
By:
---------------------------------
Name:
------------------------------
Title:
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KCS MEDALLION GAS SERVICES, INC.
By:
---------------------------------
Name:
------------------------------
Title:
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LENDERS:
BANK ONE, TEXAS, NATIONAL ASSOCIATION
By:
---------------------------------
Name:
------------------------------
Title:
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COMERICA BANK-TEXAS
By:
---------------------------------
Name:
------------------------------
Title:
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SOCIETE GENERALE, SOUTHWEST AGENCY
By:
---------------------------------
Name:
------------------------------
Title:
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DEN NORSKE BANK ASA
By:
---------------------------------
Name:
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Title:
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By:
---------------------------------
Name:
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Title:
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PARIBAS
By:
---------------------------------
Name:
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Title:
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GENERAL ELECTRIC CAPITAL CORPORATION
By:
---------------------------------
Name:
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Title:
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CIBC INC., Lender and Collateral Agent
By:
---------------------------------
Authorized Signatory
AGENT:
CANADIAN IMPERIAL BANK OF COMMERCE
By:
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EXHIBIT (10)xx
UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
In re: )
) Chapter 11
KCS ENERGY, INC., a Delaware corporation )
) Case No. 00-0310 (PJW)
et al. )
) Jointly Administered
Debtors. )
)
FINAL ORDER AUTHORIZING AND RESTRICTING
USE OF CASH COLLATERAL AND GRANTING ADEQUATE PROTECTION(1)
The Debtors having filed the Motion of Debtors for Entry of Order
Authorizing and Restricting Use of Cash Collateral and Granting Adequate
Protection ("the Motion") seeking entry of an order authorizing and restricting
use of cash collateral and granting adequate protection of (a) the secured
claims of CIBC Inc., as lender, Canadian Imperial Bank of Commerce ("CIBC"), as
Agent for CIBC Inc. and the other Medallion Lenders and Resources Lenders and
CIBC Inc., as Collateral Agent for itself and the other Medallion Lenders and
Resources Lenders, and (b) the secured claims of the Medallion Hedging Lender
(CIBC, CIBC Inc., the Medallion Lenders, the Resources Lenders and the
Medallion Hedging Lender, together with their successors and permitted assigns,
are hereinafter referred to as the "Lenders"); the Debtors and the Lenders
having stipulated and agreed to the entry of the Interim Order; the Court
having reviewed the Motion, having held a preliminary hearing on the Motion and
having entered the Interim Order; objections having been raised to the Motion
by certain holders of 11%
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(1) All terms not otherwise defined herein shall have the meaning ascribed to
them in the Order Authorizing and Restricting Use of Cash Collateral and
Granting Adequate Protection dated as of January 19, 2000 (the "Interim Order").
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Senior Notes due in 2003 and such objections having been overruled by the Court;
the Debtors having provided due and adequate notice of the Motion and Order on
the parties entitled to such notice; the Interim Order providing that if no
objection is timely filed and served, the Court may enter an order continuing
the Interim Order as a final order without conducting a final hearing; and no
objections to the Motion or Order having been filed by any party.
IT IS HEREBY ORDERED THAT:
1. The Motion is granted in its entirety.
2. The Interim Order is continued as a final order effective as of
February 7, 2000 and is incorporated herein in its entirety.
Dated: February 7, 2000 /s/ XXXXX X. XXXXX
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UNITED STATES BANKRUPTCY JUDGE
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