EXHIBIT 10.173
FIFTH AMENDMENT TO LETTER OF CREDIT AGREEMENT
FIFTH AMENDMENT TO LETTER OF CREDIT AGREEMENT, dated as of
February 22, 1999 (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 (as defined below).
W I T N E S S E T H :
WHEREAS, the Bank and the Obligor 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 and Other Terms.
1. Section 6 of the L/C Agreement is hereby amended by
inserting the following new Section 6.11 immediately following Section
6.10:
6.11 Backstop Letter of Credit. The Obligor agrees that on or
before March 31, 1999, it shall deliver to the Bank, as beneficiary,
an irrevocable sight letter of credit issued by a bank satisfactory
to the Bank and otherwise in form and substance satisfactory to the
Bank, which letter of credit shall support the Obligations of the
Obligor hereunder, with such letter of credit to have an expiry date
not earlier than one month after the Maturity Date.
2. Section 7.01 of the L/C Agreement is hereby amended by (i)
deleting clause (e) thereof in its entirety and inserting the following
new clause (e) in lieu thereof:
(e) Indebtedness of the Obligor created under the R&B Falcon
Credit Agreement in an aggregate principal amount not exceed
$200,000,000.
, (ii) deleting the word "and" at the end of clause (h) thereof, (ii)
redesignating clause (i) thereof as clause (j), and (iii) inserting the
following new clause (i) immediately following clause (h) thereof:
(i) Senior unsecured Indebtedness of the Obligor (including
any refinancing thereof, provided that any such refinancing does not
increase the principal amount thereof beyond that outstanding on the
date of such refinancing) in an aggregate principal amount not to
exceed $350,000,000; provided that such Indebtedness (or refinancing
thereof, as the case may be) shall at all times (i) be unsecured and
(ii) have a maturity date not earlier than one year after the
Maturity Date (as such term is defined from time to time) (except
for any refinancing which results solely in the conversion of such
Indebtedness into, or exchange for, other Indebtedness of the
Obligor, in an aggregate principal amount not to exceed that
outstanding on the date of such refinancing, which is unsecured and
has a maturity date not earlier than one year after the Maturity
Date (as such term is defined from time to time)); and
3. Section 7.11 of the L/C Agreement is hereby amended by (i)
deleting clause (iii) thereof in its entirety and inserting the following
new clause (iii) in lieu thereof:
and (iii) sales of properties and assets which shall not exceed
$50,000,000 in fair market value in the aggregate in any fiscal year
of the Obligor; provided that in addition to the above permitted
asset sales, the Obligor and its Subsidiaries shall be permitted to
sell Non-Core Assets not exceeding $250,000,000 in fair market value
in the aggregate in any fiscal year of the Obligor.
4. 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. Interest Coverage Ratio. The Obligor will not permit
its Interest Coverage Ratio at the end of any fiscal quarter of the
Obligor (calculated quarterly at the end of each fiscal quarter of
the Obligor) to be less than (i) at any time prior to January 1,
2000, 1.50:1.00 and (ii) at any time thereafter, 1.75:1.00. For
purposes of this Section 7.10, the "Interest Coverage Ratio" shall
mean the ratio of (x) EBITDA for the four fiscal quarters of the
Obligor ending on such date to (y) Consolidated Interest Expense for
the four fiscal quarters of the Obligor ending on such date.
5. Section 7.13 of the L/C Agreement is hereby amended by
deleting said section in its entirety and inserting the following new
Section 7.13 in lieu thereof:
Section 7.13 Restriction on Certain Debt Payments. The
Obligor shall not (i) repay any indebtedness incurred pursuant to
Section 7.01(h) except out of net proceeds from the issuance by the
Obligor of (x) capital stock permitted to be issued hereunder or (y)
refinancing Indebtedness permitted pursuant to Section 7.01(h);
provided that, so long as no Default or Event of Default exists or
would result immediately after giving effect to such payment, this
Section 7.13(i) shall not be deemed to prevent the Obligor from
making regularly scheduled payments of accrued interest on such
Indebtedness or (ii) make any optional or voluntary payment or
prepayment on or redemption or acquisition for value of, or any
prepayment or redemption as a result of any asset sale, change of
control or similar event of any indebtedness incurred pursuant to
Section 7.01(i).
6. Section 9 of the L/C Agreement is hereby amended by (i)
deleting the definitions of "EBITDA" and "Eurodollar Margin" appearing
therein and (ii) inserting the following new definitions in appropriate
alphabetical order:
"Consolidated Interest Expense" shall mean, for any
period, total interest expense (including that attributable to
Capital Lease Obligations) of the Obligor and its Subsidiaries
in accordance with GAAP (provided that, in any event,
Consolidated Interest Expense shall not include capitalized
interest) on a consolidated basis with respect to all
outstanding Indebtedness of the Obligor and its Subsidiaries,
including, without limitation, all commissions, discounts, and
other fees and charges owed with respect to letters of credit
and bankers' acceptance financing.
"EBITDA" shall mean, for any period, the sum of
Consolidated Net Income for such period plus the following
expenses or charges to the extent deducted from Consolidated
Net Income in such period: interest, dividends on preferred
stock, taxes, depreciation, depletion and amortization.
Notwithstanding the foregoing, the calculation of EBITDA shall
not take into account any extraordinary gains or losses, any
non-cash items, or any non-recurring gains or charges.
"Non-Core Assets" shall mean (i) the drilling rigs
Seillean, Iolair, Peregrine VI (Hull), Peregrine VIII (Hull)
and Rig 82, (ii) Equipment Packages for Peregrine VI and
Peregrine VIII and (iii) four supply boats located in West
Africa on the Fifth Amendment Effective Date, each as
determined on the Fifth Amendment Effective Date.
"Fifth Amendment" shall mean the Fifth Amendment to this
Agreement, dated as of February 22, 1999.
"Fifth Amendment Effective Date" shall have the meaning
provided in the Fifth Amendment.
7. Notwithstanding anything to the contrary contained in
Section 1.01 of the L/C Agreement or in any other provision thereof, as
of the Fifth Amendment Effective Date, (i) the Bank shall not be required
to issue, nor shall the Obligor be entitled to request, any new Letter of
Credit under the L/C Agreement and (ii) no Letter of Credit outstanding
under the L/C Agreement on the Fifth Amendment Effective Date shall be
extended beyond the then applicable expiry date of such Letter of Credit,
in each case without the express prior written consent of the Bank. In
addition, as of the Fifth Amendment Effective Date, the Unutilized
Commitment shall be deemed to be $0 for all purposes of the L/C Agreement
(including, without limitation, for purposes of Section 2.01(b)).
8. Pursuant to Section 7.12 of the L/C Agreement, the Bank
hereby consents to the Fourth Amendment to the R&B Falcon Credit
Agreement, and the granting of the collateral contemplated therein, in
the form delivered to the Bank prior to the Fifth Amendment Effective
Date.
II Miscellaneous Provisions.
1. In order to induce the Bank to enter into this Amendment,
the Obligor hereby represents and warrants that:
(a) no Default or Event of Default exists as of the Fifth
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 Fifth 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 Fifth 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 Bank.
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 as of 12:01 AM (New
York time) on the date (the "Fifth Amendment Effective Date") when (i)
each of 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, and (ii) the Obligor shall have consummated an issuance of
its convertible preferred stock and received cash proceeds from such
issuance of not less than $250,000,000 less fees and commissions.
6. From and after the Fifth 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:
