EXHIBIT 10.218
THIRD AMENDMENT TO CREDIT AGREEMENT
THIRD AMENDMENT TO CREDIT AGREEMENT, dated as of December 9,
1998 (this "Amendment"), among R&B FALCON CORPORATION, a Delaware
corporation ("Holdings"), RBF DEEPWATER EXPLORATION III INC., a Nevada
corporation (f/k/a RB Deepwater Exploration III Inc.) (the "Borrower"),
the various lending institutions party to the Credit Agreement referred
to below (each, a "Bank" and, collectively, the "Banks"), CREDIT LYONNAIS
NEW YORK BRANCH, as Syndication Agent and CHRISTIANIA BANK OG
KREDITKASSE, NEW YORK BRANCH, as Administrative Agent for the Banks (the
"Agent"). All capitalized terms used herein and not otherwise defined
shall have the meanings provided such terms in the Credit Agreement.
W I T N E S S E T H :
WHEREAS, Holdings, the Borrower, the Banks and the Agent are
parties to a Credit Agreement, dated as of February 24, 1998 (as amended
to date, the "Credit Agreement"); and
WHEREAS, the parties thereto and hereto wish to amend the
Credit Agreement as herein provided;
NOW, THEREFORE, it is agreed:
I. Amendments to Credit Agreement.
1. Section 7.01 of the Credit 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 Holdings in an aggregate
principal amount not to exceed $400,000,000 and additional
subordinated Indebtedness of Holdings 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) Holdings 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
2. Section 7.02 of the Credit 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) Holdings 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
Holdings' Consolidated Net Worth (as defined in the Indenture); and
(f) Holdings 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).
3. Section 7.06 of the Credit 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
4. Section 7.10 of the Credit 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. Holdings will not permit its
EBITDA Leverage Ratio as of the end of any fiscal quarter of
Holdings (calculated quarterly at the end of each fiscal quarter) to
be greater than 3.75:1.00. 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 Holdings 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.
5. Section 9 of the Credit Agreement is hereby amended by
deleting the definitions of "Eurodollar Margin" and "Permitted Project
Debt" appearing therein and inserting the following new definitions,
respectively, in lieu thereof:
"Eurodollar Margin" shall mean a percentage equal to 1.25% per
annum.
"Permitted Project Debt" shall mean Indebtedness (including,
without limitation, or duplication, the Guarantee of any such
Indebtedness by Holdings and, in the case of clause (ii) below, the
issuance by Holdings 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.
II Miscellaneous Provisions.
1. In order to induce the Banks to enter into this Amendment,
the Borrower 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
Credit 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. In order to induce the Banks to enter into this Amendment,
Holdings and the Borrower hereby agree that in the event the Borrower
takes delivery of the Drillship pursuant to the Construction Contract at
any time prior to the Maturity Date, the Borrower shall grant to the
Collateral Agent on such date a first preferred ship mortgage on the
Drillship, and shall deliver to the Agent such legal opinions and other
documentation with respect to such security interest as the Agent may
reasonably request, all of which shall be reasonably satisfactory in form
and substance to the Agent.
3. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of
the Credit Agreement or any other Credit Document.
4. 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 Borrower and the Agent.
5. 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.
6. This Amendment shall become effective on the date (the
"Third Amendment Effective Date") when (i) each of Holdings, the Borrower
and the Required Banks 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 Agent at its Notice
Office and (ii) Holdings and/or the Borrower shall have paid to each Bank
an amendment fee equal to 0.15% of such Banks Commitment as in effect on
the Third Amendment Effective Date immediately prior to giving effect to
this Amendment. The Agent will give the Borrower and each Bank prompt
notice of the occurrence of the Third Amendment Effective Date.
7. From and after the Third Amendment Effective Date, all
references in the Credit Agreement and each of the other Credit Documents
to the Credit Agreement shall be deemed to be references to the Credit
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:
RBF DEEPWATER EXPLORATION III INC.
By:_________________________
Title:
CHRISTIANIA BANK OG KREDITKASSE, NEW YORK
BRANCH, Individually and as Agent
By:_________________________
Title:
By:_________________________
Title:
CREDIT LYONNAIS NEW YORK BRANCH,
Individually and as Syndication Agent
By:_________________________
Title:
SKANDINAVISKA ENSKILDA XXXXXX XX (Publ.)
By:_________________________
Title:
By:_________________________
Title:
CREDIT AGRICOLE INDOSUEZ
By:________________________
Title:
BANK OF NOVA SCOTIA
By:_________________________
Title:
