EXHIBIT 10.171
THIRD AMENDMENT TO LETTER OF CREDIT AGREEMENT
THIRD AMENDMENT TO LETTER OF CREDIT AGREEMENT, dated as of
October 22, 1998 (this "Amendment"), among R&B FALCON CORPORATION, a
Delaware corporation (the "Obligor") and CHRISTIANIA BANK OG KREDITKASSE,
NEW YORK BRANCH (the "Bank"). All capitalized terms used herein and not
otherwise defined shall have the meanings provided such terms in the L/C
Agreement referred to below.
W I T N E S S E T H :
WHEREAS, the Obligor and the Bank are parties to a Letter of
Credit Agreement, dated as of December 30, 1996 (as amended to date, the
"L/C Agreement"); and
WHEREAS, the parties thereto and hereto wish to amend the L/C
Agreement as herein provided;
NOW, THEREFORE, it is agreed:
I. Amendments to L/C Agreement.
1. Section 1.01(c) of the L/C Agreement is hereby amended by
deleting the reference therein to "$20,000,000" and inserting a reference
to "$10,000,000" in lieu thereof.
2. Section 5.05 of the L/C Agreement is hereby amended by
deleting clause (a) thereof in its entirety and inserting the following
new clause (a) in lieu thereof:
(a) All Letters of Credit issued hereunder shall be used to
provide for the general corporate purposes of the Obligor and its
Subsidiaries; provided that no Letter of Credit shall be issued to
support Indebtedness for borrowed money of the Obligor or any of its
Subsidiaries.
3. Section 7.01 of the L/C Agreement is hereby amended by (i)
deleting the word "and" at the end of clause (f) thereof, (ii)
redesignating clause (g) thereof as clause (h) and (iii) inserting the
following new clause (g) immediately following clause (f) thereof:
(g) Additional senior Indebtedness of the Obligor in an
aggregate principal amount not to exceed $400,000,000 and additional
subordinated Indebtedness of the Obligor in an aggregate principal
amount not to exceed $200,000,000; provided that (i) no respective
issue of Indebtedness incurred pursuant to this clause (g) shall
have any scheduled amortization payments or a final maturity prior
to the fourth anniversary of the initial borrowing of such
respective issue of Indebtedness and (ii) the Obligor shall not make
any optional repayments (whether in cash, securities, or other
property), including any sinking fund or similar deposit, on account
of such Indebtedness; and
4. Section 7.02 of the L/C Agreement is hereby amended by (i)
deleting the word "and" at the end of clause (c) thereof, (ii) deleting
the period at the end of clause (d) thereof and inserting a semi-colon in
lieu thereof and (iii) inserting the following new clauses (e) and (f)
immediately following clause (d) thereof:
(e) the Obligor and its Subsidiaries may pledge assets in
support of Indebtedness permitted by Section 7.01(e), provided that
the aggregate principal amount of Indebtedness secured by Liens
permitted by this clause (e) shall not at any time exceed 15.0% of
the Obligor's Consolidated Net Worth (as defined in the Indenture);
and
(f) the Obligor and its Subsidiaries may pledge the rig RBS8M,
the contract with Shell Deepwater Development Inc. relating to such
rig, the construction contact with respect to such rig and the
insurances maintained on such rig in support of Permitted Project
Debt described in clause (ii) of the definition of Permitted Project
Debt (including any refinancing of such Indebtedness permitted by
clause (iii) of the definition of Permitted Project Debt).
5. Section 7.06 of the L/C Agreement is hereby amended by (i)
deleting the word "and" at the end of clause (b) thereof and inserting a
comma in lieu thereof and (ii) inserting the following new clause (d)
immediately prior to the period at the end of clause (c) thereof:
and (d) Arcade Drilling AS may make share capital distributions to
its shareholders pro rata according to their respective ownership
percentages
6. Section 7.10 of the L/C Agreement is hereby amended by
deleting said section in its entirety and inserting the following new
Section 7.10 in lieu thereof:
7.10. EBITDA Leverage Ratio. The Obligor will not permit its
EBITDA Leverage Ratio as of the end of any fiscal quarter of the
Obligor (calculated quarterly at the end of each fiscal quarter) (x)
ending on or before December 31, 1999, to be greater than 3.75:1.00
and (y) ending thereafter, to be greater than 3.25:1.00. For
purposes of this Section 7.10, "EBITDA Leverage Ratio" shall mean
the ratio of (i) the difference of Funded Debt minus cash and cash
equivalents of the Obligor on a consolidated basis to (ii) EBITDA
for the four fiscal quarters ending on such date; provided that (A)
EBITDA for the period ending on June 30, 1998 shall equal the
product of EBITDA for the six-month period ending on such date times
2 and (B) EBITDA for the period ending on September 30, 1998 shall
equal the product of EBITDA for the nine-month period ending on such
date times 1.33.
7. Section 9 of the L/C Agreement is hereby amended by
deleting the definitions of "Maturity Date" and "Permitted Project Debt"
appearing therein and inserting the following new definitions,
respectively, in lieu thereof:
"Maturity Date" shall mean June 30, 2000.
"Permitted Project Debt" shall mean Indebtedness (including,
without limitation, or duplication, the Guarantee of any such
Indebtedness by the Obligor and, in the case of clause (ii) below,
the issuance by the Obligor or any of its Subsidiaries of a surety
bond in support of any such Indebtedness) incurred in connection
with (i) the construction of Deepwater Pathfinder, Deepwater
Frontier and Drillship III (including, without limitation, the
Loans) by the respective joint venture or Subsidiary owning such
vessel not to exceed $375,000,000 in the aggregate, (ii) the
construction of the rig RBS8M (formerly RBS6) in an aggregate
principal amount not to exceed $250,000,000 and (iii) all
extensions, renewals and replacements of any such Indebtedness
described in clauses (i) and (ii) above by the primary obligor
thereof that do not increase the outstanding principal amount
thereof.
8. Notwithstanding anything to the contrary contained in the
L/C Agreement (including, without limitation, Section 7.08), the
indenture governing the Obligor's $400,000,000 notes offering closing on
or about December 22, 1998 shall be permitted to contain such negative
covenants with respect to Liens and Restricted Payments as the Obligor
deems appropriate to effectuate such notes offering.
II Miscellaneous Provisions.
1. In order to induce the Banks to enter into this Amendment,
the Obligor hereby represents and warrants that:
(a) no Default or Event of Default exists as of the Third
Amendment Effective Date both before and after giving effect to this
Amendment; and
(b) all of the representations and warranties contained in the
L/C Agreement and the other Credit Documents are true and correct in
all material respects on the Third Amendment Effective Date both
before and after giving effect to this Amendment, with the same
effect as though such representations and warranties had been made
on and as of the Third Amendment Effective Date (it being understood
that any representation or warranty made as of a specific date shall
be true and correct in all material respects as of such specific
date).
2. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of
the L/C Agreement or any other Credit Document.
3. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate
counterparts, each of which counterparts when executed and delivered
shall be an original, but all of which shall together constitute one and
the same instrument. A complete set of counterparts shall be lodged with
the Obligor and the Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the
"Third Amendment Effective Date") when the Obligor and the Bank shall
have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Bank at its Notice Office.
6. From and after the Third Amendment Effective Date, all
references in the L/C Agreement and each of the other Credit Documents to
the L/C Agreement shall be deemed to be references to the L/C Agreement
as amended hereby.
* * * *
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Amendment as of the date first above
written.
R&B FALCON CORPORATION
By:_________________________
Title:
CHRISTIANIA BANK OG KREDITKASSE, NEW YORK
BRANCH
By:_________________________
Title:
By:_________________________
Title: