KCS ENERGY, INC.



                            7 1/8% SENIOR NOTES DUE 2012





                               PURCHASE AGREEMENT



                                                                  March 25, 2004



CREDIT SUISSE FIRST BOSTON LLC

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED

JEFFERIES & COMPANY, INC.

HARRIS NESBITT CORP.

BANC ONE CAPITAL MARKETS, INC.

BNP PARIBAS SECURITIES CORP.

c/o:     Credit Suisse First Boston LLC

         Eleven Madison Avenue

         New York, New York 10010-3629



Dear Sirs:



         1. Introductory. KCS Energy, Inc., a Delaware corporation (the

"COMPANY"), proposes, subject to the terms and conditions stated herein, to

issue and sell to the several initial purchasers named in Schedule A hereto (the

"PURCHASERS") U.S.$175,000,000 aggregate principal amount of its 7 1/8% Senior

Notes due 2012 (the "OFFERED SECURITIES") to be issued under an indenture, dated

as of April 1, 2004 (the "INDENTURE"), among the Company, KCS Resources, Inc., a

Delaware corporation, Medallion California Properties Company, a Texas

corporation, KCS Energy Services, Inc., a Delaware corporation, and Proliq,

Inc., a New Jersey corporation (collectively, the "GUARANTORS") and U.S. Bank

National Association, as Trustee.



         The holders of the Offered Securities will be entitled to the benefits

of a Registration Rights Agreement, to be dated as of the Closing Date (as

defined below), among the Company, the Guarantors and the Purchasers (the

"REGISTRATION RIGHTS AGREEMENT"), pursuant to which the Company agrees to file a

registration statement with the Securities Exchange Commission (the

"COMMISSION") registering the resale of the Offered Securities under the United

States Securities Act of 1933, as amended (the "SECURITIES ACT").



         The Company and the Guarantors hereby agree with the several Purchasers

as follows:



         2. Representations and Warranties of the Company and the Guarantors.

The Company and the Guarantors, jointly and severally, represent and warrant to,

and agree with, the several Purchasers that:



                  (a) A preliminary offering circular and an offering circular

         relating to the Offered Securities to be offered by the Purchasers have

         been prepared by the Company. Such preliminary offering circular and

         offering circular (the "OFFERING CIRCULAR"), as supplemented as of the

         date of this Agreement, together with any other document approved by

         the Company for use in connection with the contemplated resale of the

         Offered Securities are hereinafter collectively referred to as the

         "OFFERING DOCUMENT." On the date of this Agreement, the Offering

         Document does not include any untrue statement of a material fact or

         omit to state any material fact required to be stated therein or

         necessary in order to make the statements therein, in the light of the

         circumstances under which they were made, not misleading. The preceding

         sentence does not apply to statements in or omissions from the Offering

         Document based upon written information furnished to the Company by any

         Purchaser through Credit Suisse First Boston LLC ("CSFB") specifically

         for use therein, it being understood and agreed that the only such

         information is that described as such in Section 7(b) hereof. Except as

         disclosed in the Offering Document, on the date of this Agreement, the

         Company's Annual Report on Form 10-K most recently filed with the

         Commission and all subsequent reports (collectively, the "EXCHANGE ACT

         REPORTS") that have been filed by the Company with the Commission or

         sent to stockholders pursuant to the Securities Exchange Act of 1934

         (the "EXCHANGE ACT") do not include any untrue statement of a material

         fact or omit to state any material fact necessary to make the

         statements therein, in





{PAGE}



         the light of the circumstances under which they were made, not

         misleading. Such documents, when they were filed with the Commission,

         conformed in all material respects to the requirements of the Exchange

         Act and the rules and regulations of the Commission thereunder.



                  (b) The Company has been duly incorporated and is a validly

         existing corporation in good standing under the laws of the State of

         Delaware, with corporate power and authority to own or lease and

         operate its properties and conduct its business as described in the

         Offering Document and to enter into and perform its obligations under

         this Agreement; the Company is duly qualified to transact business as a

         foreign corporation and is in good standing in all other jurisdictions

         in which its ownership or lease of property or the conduct of its

         business requires such qualification, except where the failure to be so

         qualified would not have a material adverse effect on the condition

         (financial or other), business, properties or results of operations of

         the Company and its subsidiaries taken as a whole ("MATERIAL ADVERSE

         EFFECT"); and, to the Company's knowledge, no proceeding has been

         instituted in any jurisdiction revoking, limiting or curtailing or

         seeking to revoke, limit or curtail, such power and authority or

         qualification; and the Company does not own, lease or license any asset

         or property or conduct any material business outside of the United

         States.



                  (c) The entities listed on Schedule B hereto are the only

         subsidiaries, direct or indirect, of the Company (the "SUBSIDIARIES").



                  (d) Each Subsidiary has been duly incorporated and is a

         validly existing corporation in good standing under the laws of the

         jurisdiction of its incorporation, with corporate power and authority

         to own and lease and operate its properties and conduct its business as

         described in the Offering Document and to enter into and perform its

         obligations under this Agreement; each Subsidiary is duly qualified to

         transact business as a foreign corporation in good standing in all

         other jurisdictions in which its ownership or lease of property or the

         conduct of its business requires such qualification, except where the

         failure to be so qualified would not have a Material Adverse Effect;

         and all of the issued and outstanding capital stock of each Subsidiary

         has been duly authorized and validly issued and is fully paid and

         nonassessable and is owned by the Company, directly or through

         subsidiaries, free from liens, encumbrances and defects, except for

         liens resulting from the Company's credit facility and pledges under

         such credit facility.



                  (e) Except for the Registration Rights Agreement, there are no

         contracts, agreements or understandings between the Company or any

         Subsidiary and any person granting such person the right to require the

         Company or such Subsidiary to file a registration statement under the

         Securities Act with respect to any securities of the Company or such

         Subsidiary or to require the Company or such Subsidiary to include such

         securities with the Offered Securities and Subsidiary Guarantees

         registered pursuant to any registration statement.



                  (f) The Indenture has been duly authorized by all necessary

         corporate action; the Offered Securities have been duly authorized by

         all necessary corporate action; and when the Offered Securities are

         delivered and paid for pursuant to this Agreement on the Closing Date

         (as defined in Section 3), the Indenture will have been duly executed

         and delivered, such Offered Securities will have been duly executed,

         authenticated, issued and delivered and will conform in all material

         respects to the description thereof contained in the Offering Document

         and the Indenture and such Offered Securities will constitute valid and

         legally binding obligations of the Company, enforceable in accordance

         with their terms, subject to bankruptcy, insolvency, fraudulent

         transfer, reorganization, moratorium and similar laws of general

         applicability relating to or affecting creditors' rights and to general

         equity principles.



                  (g) On the Closing Date, the Indenture will conform in all

         material respects to the requirements of the United States Trust

         Indenture Act of 1939, as amended (the "TRUST INDENTURE ACT"), and the

         rules and regulations of the Commission applicable to an indenture

         which is qualified thereunder.



                  (h) On the Closing Date, the Exchange Securities (as defined

         in the Registration Rights Agreement) will have been duly authorized by

         the Company and the Guarantors; and when the Exchange Securities are

         issued, executed and authenticated in accordance with the terms of the

         Registration Rights Agreement and the Indenture, the Exchange

         Securities will be entitled to the benefits of the Indenture and will

         be the valid and legally binding obligations of the Company and the

         Guarantors, enforceable in accordance with their







                                       2



{PAGE}



         terms, subject to bankruptcy, insolvency, fraudulent transfer,

         reorganization, moratorium and similar laws of general applicability

         relating to or affecting creditors' rights and to general equity

         principles.



                  (i) The Subsidiary Guarantee (as defined in the Indenture) to

         be endorsed on the Exchange Securities by each Guarantor has been duly

         authorized by such Guarantor and, when issued, will have been duly

         executed and delivered by each such Guarantor and will conform to the

         description thereof contained in the Offering Document; and when the

         Exchange Securities have been issued, executed and authenticated in

         accordance with the terms of the Registration Rights Agreement and the

         Indenture, the Subsidiary Guarantee of each Guarantor endorsed thereon

         will constitute valid and legally binding obligations of such

         Guarantor, enforceable in accordance with its terms, subject to

         bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium

         and similar laws of general applicability relating to or affecting

         creditors' rights and to general equity principles.



                  (j) There are no contracts, agreements or understandings

         between the Company and any person that would give rise to a valid

         claim against the Company or any Purchaser for a brokerage commission,

         finder's fee or other like payment, other than the fees and

         compensation to be paid to the Purchasers in accordance with this

         Agreement.



                  (k) The Registration Rights Agreement has been duly authorized

         by the Company and each of the Guarantors and, on the Closing Date,

         will have been duly executed and delivered by the Company and each of

         the Guarantors; when the Registration Rights Agreement has been duly

         executed and delivered by the Company and the Guarantors and duly

         authorized, executed and delivered by the Purchasers, the Registration

         Rights Agreement will be a valid and binding agreement of the Company

         and each of the Guarantors, enforceable against the Company and each

         Guarantor in accordance with its terms, subject to bankruptcy,

         insolvency, fraudulent transfer, reorganization, moratorium and similar

         laws of general applicability relating to or affecting creditors'

         rights and to general equity principles; and on the Closing Date, the

         Registration Rights Agreement will conform in all material respects as

         to legal matters to the description thereof in the Offering Circular.



                  (l) No consent, approval, authorization, or order of, or

         filing with, any governmental agency or body or any court is required

         for the consummation of the transactions contemplated by this Agreement

         or the Registration Rights Agreement in connection with the issuance

         and sale of the Offered Securities by the Company except for (i) such

         consents as may be required under applicable state securities laws in

         connection with the purchase and resale of the Notes by the Purchasers

         and (ii) such consents, with respect to the Exchange Securities

         (including the related Guarantee), as may be required under applicable

         state securities laws and the Securities Act, including the order of

         the Commission declaring the Exchange Offer Registration Statement or

         the Shelf Registration Statement (each as defined in the Registration

         Rights Agreement) effective.



                  (m) Neither the Company nor any of the Subsidiaries is in

         violation of its respective charter or by-laws or in default in the

         performance of any obligation, agreement, covenant or condition

         contained in any indenture, loan agreement, mortgage, lease or other

         agreement or instrument that is material to the Company and the

         Subsidiaries, taken as a whole, to which the Company or any of the

         Subsidiaries is a party or by which the Company or any of the

         Subsidiaries or their respective property is bound (collectively,

         "AGREEMENTS AND INSTRUMENTS"), except for such defaults that would not

         result in a Material Adverse Effect; the execution, delivery and

         performance by the Company of its obligations under the Indenture, this

         Agreement and the Registration Rights Agreement, and the issuance and

         sale of the Offered Securities and compliance with the terms and

         provisions thereof, do not and will not, whether with or without the

         giving of notice or passage of time or both, conflict with or

         constitute a breach of, or default or Repayment Event (as defined

         below) under, or result in the creation or imposition of any lien,

         charge or encumbrance upon any property or assets of the Company or any

         of the Subsidiaries pursuant to, the Agreements and Instruments, nor

         will such action result in any violation of (i) the provisions of the

         charter or by-laws of the Company or any of the Subsidiaries or (ii)

         any applicable law, statute, rule, regulation, judgment, order, writ or

         decree of any government, government instrumentality or court, domestic

         or foreign, having jurisdiction over the Company or any of the

         Subsidiaries or any of their assets, properties or operations, which

         violations, in the case of clause (ii), would, individually or in the

         aggregate, either have a Material Adverse Effect or a material adverse

         effect on the consummation of the transactions contemplated herein; and

         the Company has full power and authority to authorize, issue and sell

         the Offered Securities as contemplated by this Agreement.









                                       3

{PAGE}



         As used herein, "REPAYMENT EVENT" means any event or condition that

         gives the holder of any note, debenture or other evidence of

         indebtedness (or any person acting on such holder's behalf) the right

         to require the repurchase, redemption or repayment of all or a portion

         of such indebtedness by the Company or any of the Subsidiaries.



                  (n) This Agreement has been duly authorized, executed and

         delivered by the Company and each of the Guarantors.



                  (o) The Company and the Subsidiaries have good and

         indefeasible title to all of their interests in oil and gas properties

         (other than interests earned under farm-out, participation or similar

         agreements in which an assignment or transfer is pending) and all other

         real property owned by the Company and the Subsidiaries and good title

         to all other properties owned by them, in each case, free and clear of

         all mortgages, pledges, liens, security interests, claims, restrictions

         or encumbrances of any kind except such as (i) are described in the

         Offering Document, (ii) liens and encumbrances under operating

         agreements, unitization and pooling agreements, production sales

         contracts, farm-out agreements and other oil and gas exploration

         participation and production agreements, in each case that secure

         payment of amounts not yet due and payable for the performance of other

         unmatured obligations and are of a scope and nature customary in the

         oil and gas industry or arise in connection with drilling and

         production operations, or (iii) do not, individually or in the

         aggregate, materially affect the value of the affected property and do

         not interfere with the use made and proposed to be made of such

         property by the Company or the Subsidiaries, as the case may be; all of

         the leases and subleases of real property that are material to the

         business of the Company or any of the Subsidiaries and under which the

         Company or any of the Subsidiaries holds properties described in the

         Offering Document, are in full force and effect, and neither the

         Company nor any of the Subsidiaries has received notice of any material

         claim of any sort that has been asserted by anyone adverse to the

         rights of the Company or any of the Subsidiaries under any of such

         leases or subleases, or affecting or questioning the rights of the

         Company or such Subsidiary to the continued possession of the leased or

         subleased premises under any such lease or sublease.



                  (p) The Company and the Subsidiaries possess such permits,

         licenses, approvals, consents and other authorizations (collectively,

         "GOVERNMENTAL LICENSES") issued by the appropriate federal, state,

         local or foreign regulatory agencies or bodies necessary to conduct the

         business in the manner described in the Offering Document, subject to

         such qualifications as may be set forth in the Offering Document and

         except for such Governmental Licenses which, if not obtained, would

         not, individually or in the aggregate, have a Material Adverse Effect;

         the Company and the Subsidiaries are in compliance with the terms and

         conditions of all such Governmental Licenses, subject to such

         qualifications as may be set forth in the Offering Document and except

         for such noncompliance which would not, individually or in the

         aggregate, have a Material Adverse Effect; all of the Governmental

         Licenses are valid and in full force and effect, subject to such

         qualifications as may be set forth in the Offering Document and except

         for such Governmental Licenses which, if not valid and in full force

         and effect, would not, individually or in the aggregate, have a

         Material Adverse Effect; and neither the Company nor any of the

         Subsidiaries has received any notice of proceedings relating to the

         revocation or modification of any such certificate, authority or permit

         that, if determined adversely to the Company or any of the

         Subsidiaries, would, individually or in the aggregate, have a Material

         Adverse Effect.



                  (q) No labor dispute with the employees of the Company or any

         Subsidiary exists or, to the knowledge of the Company, is imminent that

         could reasonably be expected to result in a Material Adverse Effect.



                  (r) The Company and the Subsidiaries own or possess, or can

         acquire on reasonable terms, adequate trademarks, trade names and other

         rights to inventions, know-how (including unpatented and/or

         unpatentable proprietary or confidential information, systems or

         procedures), patents, copyrights, confidential information and other

         intellectual property (collectively, "INTELLECTUAL PROPERTY RIGHTS")

         necessary to conduct the business now operated by them, or presently

         employed by them, and have not received any notice of infringement of

         or conflict with asserted rights of others with respect to any

         intellectual property rights that, if determined adversely to the

         Company or any of the Subsidiaries, would, individually or in the

         aggregate, have a Material Adverse Effect.







                                       4

{PAGE}



                  (s) (i) neither the Company nor any of the Subsidiaries is in

         violation of any federal, state, local or foreign statute, law, rule,

         regulation, ordinance, code, policy or rule of common law or any

         judicial or administrative interpretation thereof, including any

         judicial or administrative order, consent, decree or judgment, relating

         to pollution or protection of human health, the environment (including,

         without limitation, ambient air, surface water, groundwater, land

         surface or subsurface strata) or wildlife, including, without

         limitation, laws and regulations relating to the release or threatened

         release of chemicals, pollutants, contaminants, wastes, toxic

         substances, hazardous substances, petroleum or petroleum products

         (collectively, "HAZARDOUS MATERIALS") or to the manufacture,

         processing, distribution, use, treatment, storage, disposal, transport

         or handling of Hazardous Materials (collectively, "ENVIRONMENTAL

         LAWS"); (ii) the Company and the Subsidiaries have all permits,

         authorizations and approvals required under any applicable

         Environmental Laws and are each in compliance with their requirements;

         (iii) to the knowledge of the Company, there are no pending or

         threatened administrative, regulatory or judicial actions, suits,

         demands, demand letters, claims, liens, notices of noncompliance or

         violation, investigation or proceedings relating to any Environmental

         Law against the Company or any of the Subsidiaries; and (iv) there are

         no events or circumstances that could reasonably be expected to form

         the basis of an order for clean-up or remediation, or an action, suit

         or proceeding by any private party or governmental body or agency,

         against or affecting the Company or any of the Subsidiaries relating to

         Hazardous Materials or any Environmental Laws, except in the case of

         clauses (i), (ii), (iii) or (iv) where such violation, failure to

         receive required permits, authorizations and approvals or failure to

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC