Document:

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                                                                   EXHIBIT 10.35

                                FIRST AMENDMENT
                                       TO
                                 LOAN AGREEMENT

      THIS FIRST AMENDMENT TO LOAN AGREEMENT (this "Amendment") is made and
entered into as of March 11, 2005 between EXCALIBAR MINERALS INC., a Texas
corporation ("Excalibar"), and EXCALIBAR MINERALS OF LA., L.L.C., a Louisiana
limited liability company ("Excalibar LLC" and together with Excalibar and each
of their respective successors and assigns, individually and/or collectively,
jointly and severally, "Borrower"), and RBS LOMBARD, INC., a New York
corporation (together with its successors and assigns, "Lender").

      WHEREAS, Borrower and Lender are parties to that certain Loan Agreement
dated as of July 26, 2004 (as amended from time to time, the "Loan Agreement");

      WHEREAS, Borrower and Lender desire to amend the Loan Agreement to allow
and provide for certain matters, all as hereinafter set forth.

      NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                                   ARTICLE I
                                  DEFINITIONS

      SECTION 1.01 DEFINITIONS. Capitalized terms used in this Amendment, to the
extent not otherwise defined herein, shall have the same meaning as in the Loan
Agreement, as amended hereby.

                                   ARTICLE II
                                   AMENDMENTS

      SECTION 2.01 Amendment to Schedule I. Effective as of the date hereof:

            (a) Schedule I of the Loan Agreement is hereby amended by amending
and restating the definition of "Consolidated EBITDA" in its entirety to read as
follows:

            "`Consolidated EBITDA' means Consolidated Net Income plus, to the
      extent deducted from revenues in determining Consolidated Net Income, (a)
      Consolidated Interest Expense, (b) expense for taxes paid or accrued, net
      of tax refunds, (c) depreciation, (d) amortization, and (e) non-recurring
      non-cash charges, minus, to the extent included in Consolidated Net
      Income, extraordinary gains (as determined in accordance with

FIRST AMENDMENT TO LOAN AGREEMENT

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      GAAP) realized other than in the ordinary course of business, all
      calculated for the Newpark and its Subsidiaries on a consolidated basis."

      SECTION 2.02 AMENDMENT TO LOAN AGREEMENT AND OTHER LOAN DOCUMENTS.
Effective as of the date hereof, with respect to the Loan Agreement and the
other Loan Documents, all references in each such agreement to "Bank One, N.A.",
"Bank One" or "Bank One Loan Agreement" shall be deleted and replaced with
"JPMorgan Chase Bank, N.A. (successor by merger to Bank One, N.A. (Main Office
Chicago))", "JPMorgan Chase" or "JPMorgan Chase Loan Agreement", respectively in
lieu thereof.

                                  ARTICLE III
                              CONDITIONS PRECEDENT

      SECTION 3.01 CONDITIONS. The effectiveness of this Amendment is subject to
the satisfaction of the following conditions precedent, unless specifically
waived by Lender:

            (a) Lender shall have received all of the following documents, each
document (unless otherwise indicated) being dated the date hereof, duly
authorized, executed and delivered by the parties thereto, and in form and
substance satisfactory to Lender:

                  (i)   this Amendment;

                  (ii)  the Second Amendment to the JPMorgan Chase Loan
                        Agreement; and

                  (iii) such additional documents, instruments and information
                        as Lender or its legal counsel may request.

            (b) The representations and warranties contained herein, in the Loan
Agreement, as amended hereby, and/or in the other Loan Documents shall be true
and correct as of the date hereof as if made on the date hereof, except for such
representations and warranties as by their terms expressly speak as of an
earlier date; and

            (c) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents, instruments and
other legal matters incident thereto shall be satisfactory to Lender and its
legal counsel.

                                   ARTICLE IV
                                    NO WAIVER

      SECTION 4.01 No Waiver. Nothing contained in this Amendment shall be
construed as a waiver by Lender of any covenant or provision of the Loan
Agreement, the other Loan Documents, this Amendment, or of any other contract or
instrument between any Borrower and Lender, and the failure of Lender at any
time or times hereafter to require strict performance by any Borrower of any
provision thereof shall not waive,

FIRST AMENDMENT TO LOAN AGREEMENT

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affect or diminish any rights of Lender to thereafter demand strict compliance
therewith. Lender hereby reserves all rights granted under the Loan Agreement,
the other Loan Documents, this Amendment and any other contract or instrument
between any Borrower and Lender.

                                   ARTICLE V
                  RATIFICATIONS, REPRESENTATIONS AND WARRANTIES

      SECTION 5.01 RATIFICATIONS. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Loan Agreement and except as expressly modified and superseded by
this Amendment, the terms and provisions of the Loan Agreement are ratified and
confirmed and shall continue in full force and effect. Additionally, each
Borrower hereby ratifies and confirms its agreements under the Loan Agreement
and the other Loan Documents as a Borrower as of the Closing Date. Each Borrower
hereby agrees that all Liens and security interests securing payment of the
Obligations are hereby collectively renewed, ratified and brought forward as
security for the payment and performance of the Obligations, as the same may
have been modified by the this Amendment and the documents executed in
connection herewith.

      SECTION 5.02 RATIFICATION OF GUARANTY. Each Guarantor hereby ratifies and
confirms its guaranty to Lender (the "Guaranty"). Each Guarantor hereby
represents and acknowledges that it has no claims, counterclaims, offsets,
credits or defenses to the Loan Documents or the performance of its obligations
thereunder. Furthermore, each Guarantor agrees that nothing contained in this
Amendment shall adversely affect any right or remedy of Lender under the
Guaranty. Each Guarantor agrees that all references in such Guaranty to the
"Guaranteed Obligations" shall include, without limitation, all of the
obligations of Borrowers to Lender under the Loan Agreement, as amended hereby.
Finally, each Guarantor hereby represents and acknowledges that the execution
and delivery of this Amendment and the other Loan Documents executed in
connection herewith shall in no way change or modify its obligations as a
guarantor, debtor, pledgor, assignor, obligor and/or grantor under the Guaranty
and shall not constitute a waiver by Lender of any of their rights against such
Guarantor.

      SECTION 5.03 REPRESENTATIONS AND WARRANTIES. Each Borrower hereby
represents and warrants to Lender that (i) the execution, delivery and
performance of this Amendment and any and all other Loan Documents executed
and/or delivered in connection herewith have been authorized by all requisite
corporate action on the part of such Borrower and will not violate the
certificate/articles of incorporation or other analogous formation document of
such Borrower or the bylaws or other analogous charter or organizational
documents of such Borrower, (ii) except as disclosed to Lender in writing prior
to the date hereof, the representations and warranties contained in the Loan
Agreement, as amended hereby, and any other Loan Document are true and correct
on and as of the date hereof as though made on and as of the date hereof except
to the extent such representations and warranties relate solely to an earlier
date, (iii) except as

FIRST AMENDMENT TO LOAN AGREEMENT

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disclosed to Lender in writing prior to the date hereof, such Borrower is in
full compliance with all covenants and agreements contained in the Loan
Agreement, as amended hereby, and (iv) such Borrower has not amended its
certificate/articles of incorporation or other analogous formation document or
bylaws or other analogous charter or organizational documents since July 26,
2004.

                                   ARTICLE VI
                                  MISCELLANEOUS

      SECTION 6.01 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made in the Loan Agreement or any other document
or documents relating thereto, including, without limitation, any Loan Document
furnished in connection with this Amendment, shall survive the execution and
delivery of this Amendment and the other Loan Documents, and no investigation by
Lender or any closing shall affect the representations and warranties or the
right of Lender to rely upon them.

      SECTION 6.02 REFERENCE TO LOAN AGREEMENT; OBLIGATIONS. Each of the Loan
Documents, including the Loan Agreement and any and all other agreements,
documents or instruments now or hereafter executed and delivered pursuant to the
terms hereof or pursuant to the terms of the Loan Agreement as amended hereby,
are hereby amended so that any reference in such Loan Documents to the Loan
Agreement shall mean a reference to the Loan Agreement, as amended hereby. Each
Borrower acknowledges and agrees that its obligations under this Amendment and
the Loan Agreement, as amended hereby, constitute "Obligations" as defined in
the Loan Agreement and as used in the Loan Documents.

      SECTION 6.03 EXPENSES. As provided in the Loan Agreement, each Borrower
agrees to pay on demand all reasonable costs and expenses incurred by Lender in
connection with the preparation, negotiation and execution of this Amendment and
the other Loan Documents executed pursuant hereto and any and all amendments,
modifications, and supplements thereto, including, without limitation, the
reasonable costs and fees of Lender's legal counsel, and all reasonable costs
and expenses incurred by Lender in connection with the enforcement or
preservation of any rights under the Loan Agreement, as amended hereby, or any
other Loan Document.

      SECTION 6.04 SEVERABILITY. Any provision of this Amendment held by a court
of competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable. Furthermore,
in lieu of each such invalid or unenforceable provision there shall be added
automatically as a part of this Amendment a valid and enforceable provision that
comes closest to expressing the intention of such invalid unenforceable
provision.

      SECTION 6.05 APPLICABLE LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY
OF THE LOAN DOCUMENTS, IN ALL

FIRST AMENDMENT TO LOAN AGREEMENT

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RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS
AMENDMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND
CONSTRUED, AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO
THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.

      SECTION 6.06 SUCCESSORS AND ASSIGNS. This Amendment is binding upon and
shall inure to the benefit of Lender, Borrowers and their respective successors
and assigns, except that no Borrower may assign or transfer any of its rights or
obligations hereunder without the prior written consent of Lender.

      SECTION 6.07 COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original,
but all of which when taken together shall constitute one and the same
instrument.

      SECTION 6.08 EFFECT OF WAIVER. No consent or waiver, express or implied,
by Lender to or for any breach of or deviation from any covenant or condition of
the Loan Agreement shall be deemed a consent or waiver to or of any other breach
of the same or any other covenant, condition or duty.

      SECTION 6.09 HEADINGS. The headings, captions, and arrangements used in
this Amendment are for convenience only and shall not affect the interpretation
of this Amendment.

      SECTION 6.10 RELEASE. EACH BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO
DEFENSE, COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR
NATURE WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF
ITS LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF OR
DAMAGES OF ANY KIND OR NATURE FROM LENDER. EACH OF BORROWER AND LENDER HEREBY
VOLUNTARILY AND KNOWINGLY RELEASE AND FOREVER DISCHARGE LENDER, ITS RESPECTIVE
PREDECESSORS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS,
FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS, CAUSES OF ACTION, DAMAGES, COSTS,
EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR UNKNOWN, ANTICIPATED OR
UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED, CONTINGENT, OR CONDITIONAL, AT
LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART ON OR BEFORE THE DATE THIS
AMENDMENT IS EXECUTED, WHICH BORROWER MAY NOW HAVE AGAINST LENDER, ITS
PREDECESSORS, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, IF
ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS ARISE OUT OF CONTRACT, TORT,
VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE, AND ARISING FROM ANY LOANS,
INCLUDING, WITHOUT LIMITATION, ANY CONTRACTING FOR, CHARGING,

FIRST AMENDMENT TO LOAN AGREEMENT

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TAKING, RESERVING, COLLECTING OR RECEIVING INTEREST IN EXCESS OF THE HIGHEST
LAWFUL RATE APPLICABLE, THE EXERCISE OF ANY RIGHTS AND REMEDIES UNDER THE LOAN
AGREEMENT OR OTHER LOAN DOCUMENTS, AND NEGOTIATION FOR AND EXECUTION OF THIS
AMENDMENT.

      SECTION 6.11 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT REPRESENTS 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 UNWRITTEN AGREEMENTS BETWEEN THE PARTIES.

                  [Remainder of Page Intentionally Left Blank]

FIRST AMENDMENT TO LOAN AGREEMENT

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      IN WITNESS WHEREOF, this Amendment has been executed on the date first
written above, to be effective upon satisfaction of the conditions set forth
herein.

                                BORROWER:

                                EXCALIBAR MINERALS INC.,

                                By: /s/ John R. Dardenne
                                    ---------------------
                                    John R. Dardenne
                                    Treasurer

                                EXCALIBAR MINERALS OF LA., L.L.C.

                                By: /s/ John R. Dardenne
                                    ----------------------
                                    John R. Dardenne
                                    Treasurer

                                GUARANTORS:

                                NEWPARK RESOURCES, INC.

                                By: /s/ John R. Dardenne
                                    ----------------------
                                    John R. Dardenne
                                    Treasurer

                                NEWPARK HOLDINGS, INC.

                                By: /s/ John R. Dardenne
                                    ---------------------
                                    John R. Dardenne
                                    Treasurer

                                NEWPARK TEXAS, L.L.C.

                                By: /s/ John R. Dardenne
                                    ----------------------
                                    John R. Dardenne
                                    Treasurer

FIRST AMENDMENT TO LOAN AGREEMENT

<PAGE>

                                LENDER:

                                RBS LOMBARD, INC.

                                By: /s/ Richard Petrucci
                                    ---------------------
                                    Richard Petrucci
                                    Vice President

                               ORIGINAL: ___ OF 4
              [EXECUTION PAGE OF FIRST AMENDMENT TO LOAN AGREEMENT]

FIRST AMENDMENT TO LOAN AGREEMENT<PAGE>

                                                                  EXHIBIT 10.8

                               SECOND AMENDMENT TO
                  SECOND AMENDED AND RESTATED CREDIT AGREEMENT

            THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT
AGREEMENT (this "AMENDMENT"), dated as of March 15, 2004, to be effective as of
the Amendment Effective Date as set forth in Section 4 below, is by and among
KCS Energy, Inc., a Delaware corporation (the "BORROWER"), and each of the
Lenders party to that certain Second Amended and Restated Credit Agreement dated
as of November 18, 2003, among the Borrower, the Lenders party thereto, Bank of
Montreal, a Canadian chartered bank acting through certain of its U.S. branches
or agencies ("BANK OF MONTREAL"), as Agent and Collateral Agent, BNP Paribas, as
Documentation Agent and Bank One, NA, as Syndication Agent (as amended,
restated, supplemented or otherwise modified from time to time, the "CREDIT
AGREEMENT");

            WHEREAS, the Borrower has requested that the Lenders amend the
Credit Agreement to permit the Borrower to redeem its 8 7/8% Senior Subordinated
Notes due 2006 (the "SUB NOTES") with the proceeds of an issuance of unsecured
senior notes (the "NEW NOTES") that will not be contractually subordinated to
the Obligations and will not otherwise comply with all of the requirements of
Section 8.1(d) of the Credit Agreement; and

            WHEREAS, the Required Lenders have agreed to such amendment subject
to the terms and conditions set forth herein.

            NOW THEREFORE, in consideration of the premises and the mutual
covenants, representations and warranties contained herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows. Capitalized terms used but not otherwise defined herein shall have the
meanings assigned such terms in the Credit Agreement.

      Section 1. Amendments. The Credit Agreement is hereby amended as follows:

            (a) Clause (i) of the definition of "Adjusted Base Rate" is amended
and restated to read in its entirety as follows:

      "(i) the Federal Funds Rate for such day plus 0.5%,"

            (b) The definition of "Permitted Public Debt Refinancing" is amended
by deleting the words "all of the" from the second line thereof.

            (c) Section 2.7(d) is amended by deleting the words "one time" in
the penultimate line of the second sentence thereof and replacing the same with
"two times".

            (d) Section 5.2(f)(ii) is amended and restated to read in its
entirety as follows:

      "(ii) either (whichever of the following subclauses (A) or (B) is
      applicable) (A) until such time as it is satisfied and discharged, the
      Senior Subordinated

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      Indenture, as amended or modified from time to time, and such Loan shall
      constitute "Senior Indebtedness" and "Permitted Indebtedness" thereunder
      and all Liens created by any of the Security Instruments shall constitute
      "Permitted Liens" thereunder (as such terms are defined therein) or (B)
      from and after the consummation of any Permitted Public Debt Refinancing,
      the indenture governing such Permitted Public Debt Refinancing, and such
      Loan and all Liens created by any of the Security Instruments shall be
      permitted thereunder;"

            (e) The proviso to Section 8.1(d) is amended and restated to read in
its entirety as follows:

      "provided, however, that with respect to any portion thereof that would
      constitute Indebtedness, such Permitted Public Debt Refinancing (i) does
      not exceed $175.0 million in aggregate principal amount outstanding; (ii)
      bears interest at a per annum rate not to exceed 8 7/8 %; (iii) has a
      stated maturity date no earlier than March 1, 2010; (iv) shall be
      unsecured, except to the extent permitted by the "equal and ratable"
      provision described under the caption "Certain Covenants--Liens" in the
      March 8, 2004 draft "Description of the Notes" provided to the Agent (the
      "DESCRIPTION OF THE NOTES"), or any comparable provision not materially
      less favorable to the Lenders (it being understood in all events that no
      Lien which would cause the Borrower to be required to grant a Lien under
      such provision may be granted if prohibited by any term of this
      Agreement); (v) shall permit (A) the incurrence and maintenance of the
      Obligations now existing or, provided such Obligations constitute
      "Permitted Indebtedness" under any applicable provisions of the
      Description of Notes or otherwise are permitted to be incurred under the
      first paragraph appearing under the caption "Certain Covenants--
      Incurrence of Indebtedness" in the Description of Notes (or, in each case
      in this clause (A), under comparable provisions not materially less
      favorable to the Lenders), hereafter incurred by the Borrower or any of
      the Subsidiary Guarantors and (B) the Liens securing such Obligations; and
      (vi) is issued under an indenture with other terms (A) not materially less
      favorable to the Lenders than the terms set forth in the Description of
      the Notes or (B) otherwise reasonably acceptable to the Required Lenders."

            (f) Section 8.2(c) is amended and restated to read in its entirety
as follows:

            "(c) obligations under guarantees and contribution obligations by
      and among any Subsidiaries that are guarantors under the Senior
      Subordinated Indenture or any Permitted Public Debt Refinancing that
      constitutes Indebtedness;"

            (g) Section 8.4 is amended by deleting the word "or" after subclause
(b) of the proviso thereto and adding in its place a comma, and by adding the
following new subclause (d) at the end of such proviso:

      ",or (d) the holders of any Indebtedness issued in a Permitted Public Debt
      Refinancing, as evidenced by the "equal and ratable negative pledge"
      provision

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      described under the caption "Certain Covenants--Liens" in the
      Description of the Notes, or any comparable provision not materially less
      favorable to the Lenders."

            (h) Section 8.7(f) is amended and restated to read in its entirety
as follows:

      "(f) (i) any such loans, advances, Investments, purchases or acquisitions
      by the Borrower or any Subsidiary Guarantor into or from the Borrower or
      any Subsidiary Guarantor, as the case may be, or (ii) Investments by the
      Borrower or any Material Subsidiary in any Subsidiary of the Borrower
      which is not a Subsidiary Guarantor, not to exceed $1.0 million in the
      aggregate for all such Investments in all such Subsidiaries which are not
      Subsidiary Guarantors."

            (i) Section 8.8(e) is amended and restated to read in its entirety
as follows:

      "(e) any such dividend, distribution, purchase, redemption or other
      acquisition by any Subsidiary Guarantor to or from the Borrower or another
      Subsidiary Guarantor;"

            (j) Section 8.12 is amended and restated to read in its entirety as
follows:

            "8.12. SUBORDINATED INDEBTEDNESS; PRODUCTION PAYMENTS. With respect
      to the Senior Subordinated Indenture or the Borrower's 8 7/8% Senior
      Subordinated Notes due 2006, (a) materially amend or modify any of the
      terms or provisions thereof, or (b) otherwise amend or modify any such
      terms if such amendment or modifications would have the effect of (i)
      accelerating the maturity date of the principal amount thereof, or any
      scheduled interest payment thereon, (ii) increasing the principal amount
      thereof, (iii) causing, or purporting to cause, the Obligations not to
      constitute "Senior Indebtedness" (as defined in the Senior Subordinated
      Indenture) or causing the Liens securing the Obligations to no longer be
      "Permitted Liens" (as defined in the Senior Subordinated Indenture), (iv)
      providing any Lien for the benefit of the holders thereof, except to the
      extent permitted by Section 10.15 or 12.4 of the Senior Subordinated
      Indenture as in effect at the date hereof (it being understood in all
      events that no Lien which would cause the Borrower to be required to grant
      a Lien under such Section 10.15 may be granted if prohibited by any term
      of this Agreement), or (v) making the subordination provisions applicable
      thereto any less favorable to the Lender Parties than the terms of Article
      XIV of the Senior Subordinated Indenture as in effect at the date hereof
      as such terms benefit and pertain to holders of "Senior Indebtedness" (as
      such term is defined therein). With respect to any Permitted Public Debt
      Refinancing, the Borrower shall not amend or modify any of the terms or
      provisions thereof in a manner that would no longer comply with the
      definition herein of "Permitted Public Debt Refinancing". The Borrower
      shall not make, and shall not permit any Subsidiary to make, any payments,
      whether in cash, evidences of Indebtedness or other Property, on or with
      respect to the Borrower's 8 7/8% Senior Subordinated Notes due 2006,
      unless, but only to the extent, such payment would be permitted to be made
      pursuant to and not result in any violation of the subordination
      provisions applicable thereto. The Borrower

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      shall not, and shall not permit any Subsidiary to, (a) prepay, redeem,
      purchase or defease (1) any Subordinated Indebtedness (except with
      proceeds of a Permitted Public Debt Refinancing in the case of the
      Borrower's 8 7/8% Senior Subordinated Notes due 2006), or (2) any
      Indebtedness issued in a Permitted Public Debt Refinancing other than (x)
      with the Net Cash Proceeds from the issuance of equity securities, which,
      if Preferred Stock, is issued in compliance with Section 2.7(f) or (y)
      pursuant to a purchase offer required under the terms of the indenture
      governing such Indebtedness, or (b) renew, rearrange or amend or modify
      the Production Payment 2001 Facility other than (i) as required or
      contemplated under the express terms of the contracts and agreements
      constituting such facility, and (ii) as required to effect a purchase (in
      whole or in part) by either the Borrower or one or more of its Subsidiary
      Guarantors of one or both of the Star Production Payments and the
      termination or amendment of contracts and agreements relating to the Star
      Properties and required by any such purchase."

      Section 2. Covenants of the Borrower.

            (a) The Borrower may, at its option, consummate an offering and
issuance of New Notes (the "ISSUANCE") under a Permitted Public Debt Refinancing
(as defined giving effect to this Amendment) and redeem all of the Sub Notes
with a portion of the Net Cash Proceeds. Upon the consummation of an Issuance
(if any), the Borrower shall (i) within one Business Day of the closing date of
such Issuance, cause to be delivered to the trustee (the "TRUSTEE") under the
Senior Subordinated Indenture an amount sufficient to pay and discharge the
entire indebtedness outstanding on the Sub Notes, including interest to accrue
thereon to the Redemption Date (as defined in the Senior Subordinated
Indenture), which deposit shall be accompanied by instructions from the Borrower
irrevocably directing the Trustee to apply such funds to the payment of the Sub
Notes at redemption, all in accordance with Section 4.1(a) of the Senior
Subordinated Indenture; (ii) as soon as practicable, (A) deliver to the Agent a
certificate of the Chief Executive Officer, Chief Operating Officer or Chief
Financial Officer of the Borrower to the effect that all steps have been taken
that are required under Article IV of the Senior Subordinated Indenture to
satisfy and discharge such indenture, with the effect that such indenture shall
have ceased to be of any further effect, except as expressly provided for
therein; and (B) cause to be delivered the written permission of Andrews Kurth
LLP, counsel to the Borrower, for the Lenders and Bank of Montreal, as Agent and
Collateral Agent, to rely upon the Opinion of Counsel (as defined in the Senior
Subordinated Indenture) described in, and delivered to the Trustee under the
Senior Subordinated Indenture pursuant to, Section 4.1(c) of the Senior
Subordinated Indenture as though such opinion were separately addressed to the
Lenders and Bank of Montreal, as Agent and Collateral Agent.

            (b) Default in the performance of any obligations under Section 2(a)
above shall constitute an Event of Default.

      Section 3. Amendment and Ratification. Upon the effectiveness hereof as
provided in Section 4, this Amendment shall be deemed to be an amendment to the
Credit Agreement, and the Credit Agreement, as modified hereby, is hereby
ratified, approved and confirmed to be in full force and effect in each and
every respect. Except as expressly provided by the amendments set forth in
Section 1, the execution, delivery and effectiveness of this Amendment shall not

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operate as a waiver of any right, power or remedy of any Lender, the Agent, the
Collateral Agent, the Documentation Agent or the Syndication Agent, nor
constitute a waiver of any provision of any of the Loan Documents. All
references to the Credit Agreement in any other document, instrument, agreement
or writing shall hereafter be deemed to refer to the Credit Agreement as
modified hereby.

      Section 4. Conditions to Effectiveness. This Amendment shall become
effective as of the date (the "AMENDMENT EFFECTIVE DATE") when the Agent has
confirmed (and has so notified the Borrower) that (i) counterparts hereof have
been duly executed by the Borrower and the Required Lenders and delivered to the
Agent; and (ii) it has received for and on behalf of the Lenders the aggregate
amendment consent fee referred to in Section 5 below. The Agent agrees to give
the Borrower prompt written confirmation of the occurrence of the Amendment
Effective Date.

      Section 5. Amendment Consent Fee. Upon receipt of notification from the
Agent of the execution of this Amendment by the Required Lenders, the Borrower
shall pay to the Agent for the account of each Lender party hereto an amendment
consent fee equal to 0.125% of such Lender's Revolving Loan Commitment. Such fee
is non-refundable and fully earned regardless of whether or not any Permitted
Public Debt Refinancing occurs.

      Section 6. Representation and Warranties. The Borrower hereby represents
and warrants that, as of the Amendment Effective Date, after giving effect
hereto:

            (i) the representations and warranties of each Loan Party contained
      in the Loan Documents are correct in all material respects on and as of
      such date (other than those representations and warranties that expressly
      relate solely to a specific earlier date, which shall remain correct as of
      such earlier date), as though made on and as of such date; and

            (ii) no event has occurred and is continuing which constitutes a
      Default, an Event of Default or both.

      Section 7. Governing Law. This Amendment and the rights and obligations of
the parties hereunder shall be construed and enforced in accordance with and be
governed by the laws of the State of Illinois.

      Section 8. Counterparts. 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.

                            [Signature Pages Follow]

                                       5
<PAGE>

            IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective duly authorized officers as
of the date first set forth above, to be effective as of the Amendment Effective
Date.

                                     BORROWER:

                                     KCS ENERGY, INC.

                                     By: /s/ J.T. LEARY
                                        ----------------------------------------
                                         Name:   J.T. Leary
                                                --------------------------------
                                         Title:  VP & CFO
                                                --------------------------------

                                       6
<PAGE>

                                   BANKS:

                                   BANK OF MONTREAL, acting through
                                      its U.S. branches and agencies, including
                                      its Chicago, Illinois branch, as a Lender,
                                      the Agent and Collateral Agent

                                   By:  /s/ JAMES B. WHITMORE
                                        ----------------------------------------
                                         Name:   James B. Whitmore
                                                --------------------------------
                                         Title:  Managing Director
                                                --------------------------------

                                       7
<PAGE>

                                    BNP PARIBAS, as a Lender and
                                    Documentation Agent

                                    By: /s/ POLLY SCHOTT        /s/ GABE ELLISOR
                                       -----------------------------------------
                                        Name:  Polly Schott     Gabe Ellisor
                                               ---------------------------------
                                        Title: Vice President   Vice President
                                               ---------------------------------

                                       8
<PAGE>

                                     BANK ONE, NA, as a Lender and
                                     Syndication Agent

                                     By: /s/ CHARLES KINGSWELL SMITH
                                        ----------------------------------------
                                         Name:   Charles Kingswell Smith
                                                --------------------------------
                                         Title:  Managing Director
                                                --------------------------------

                                       9
<PAGE>

                                     STERLING BANK

                                     By: /s/ C. SCOTT WILSON
                                        ----------------------------------------
                                         Name:   C. Scott Wilson
                                                --------------------------------
                                         Title:  Vice President
                                                --------------------------------

                                       10

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