EXHIBIT 10.3
FIRST AMENDMENT TO LETTER OF CREDIT AGREEMENT
FIRST AMENDMENT TO LETTER OF CREDIT AGREEMENT (this "Amendment"),
dated as of April 24, 1998, among R&B FALCON CORPORATION, a Delaware
corporation ("R&B Falcon"), R&B FALCON DRILLING (INTERNATIONAL & DEEPWATER)
INC. (f/k/a Reading & Xxxxx Corporation), a Delaware corporation ("R&BFD"),
READING & XXXXX DRILLING CO., an Oklahoma corporation ("R&B Drilling") 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, R&BFD, R&B Drilling and the Bank are parties to a Letter
of Credit Agreement, dated as of December 30, 1996 (as in effect on the
date hereof, 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. The preamble of the L/C Agreement is hereby amended by (i)
deleting the text "READING & XXXXX CORPORATION ("Holdings"), a Delaware
corporation, READING & XXXXX DRILLING CO. (the "Obligor") " appearing
therein and (ii) inserting the text "R&B FALCON CORPORATION (the
"Obligor")" in lieu thereof, with such amendment being made in order to
effect the assignment pursuant to the terms and conditions contained herein
of all rights and obligations of R&B Drilling under the L/C Agreement to
R&B Falcon.
2. Section 7 of the L/C Agreement is hereby amended by deleting
Sections 7.01 through 7.09, inclusive, thereof in their entirety and
inserting the following new Sections 7.01 through 7.12 in lieu thereof:
7.01. Indebtedness. Obligor will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Indebtedness existing on the First Amendment Effective
Date and set forth in Annex IV and extensions, renewals and
replacements of any such Indebtedness that do not increase the
outstanding principal amount thereof;
(c) Indebtedness of the Obligor to any Subsidiary and of
any Subsidiary to the Obligor or any other Subsidiary;
(d) Permitted Project Debt;
(e) Indebtedness created under the R&B Falcon Credit
Agreement in an aggregate principal amount not to exceed
$500,000,000; and
(f) other Indebtedness in an aggregate principal amount not
exceeding $30,000,000 at any time outstanding; provided that the
aggregate principal amount of Indebtedness of the Obligor's
Subsidiaries permitted by this clause (f) shall not exceed
$5,000,000 at any time outstanding.
7.02. Liens. Obligor will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired by it, or assign
or sell any income or revenues (including accounts receivable) or
rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) any Lien on any property or asset of Obligor or any
Subsidiary existing on the First Amendment Effective Date hereof
and set forth in Annex V; provided that (i) such Lien shall not
apply to any other property or asset of Obligor or any Subsidiary
and (ii) such Lien shall secure only those obligations which it
secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding
principal amount thereof;
(c) any Lien (including, without limitation, Liens
hereunder) on the Deepwater Pathfinder, Deepwater Frontier, and
Drillship III or related contracts to secure the respective
Permitted Project Debt incurred to construct such vessel; and
(d) Liens on fixed or capital assets acquired, leased,
constructed or improved by Obligor or any Subsidiary; provided
that (i) such security interests secure Indebtedness permitted by
clause (d) of Section 7.01 but the aggregate principal amount of
such Indebtedness secured shall not exceed $20,000,000 at any
time outstanding, (ii) such security interests and the
Indebtedness secured thereby are incurred prior to or within 90
days after such acquisition or lease or the completion of such
construction or improvement, (iii) the Indebtedness secured
thereby does not exceed 100% of the cost of acquiring,
constructing or improving such fixed or capital assets and (iv)
such security interests shall not apply to any other property or
assets of Obligor or any Subsidiary.
7.03. Fundamental Changes. (a) Obligor will not, and will not
permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with
it, or sell, transfer, lease or otherwise dispose of (in one transac
tion or in a series of transactions) all or substantially all of its
assets, or any of the stock of or voting rights with respect to any of
its Subsidiaries (in each case, whether now owned or hereafter
acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall
have occurred and be continuing (i) any Subsidiary may merge into
Obligor in a transaction in which Obligor is the surviving corpora
tion, (ii) any Subsidiary may merge into any Subsidiary in a
transaction in which the surviving entity is a Subsidiary, (iii) any
Subsidiary may sell, transfer, lease or otherwise dispose of its
assets to Obligor or to another Subsidiary, (iv) any Subsidiary other
than the Obligor may liquidate or dissolve if Obligor determines in
good faith that such liquidation or dissolution is in the best
interests of Obligor and is not materially disadvantageous to the
Bank; provided that any such merger involving a Person that is not a
wholly owned Subsidiary immediately prior to such merger shall not be
permitted and (v) Obligor may merge with another Person if (A) Obligor
is the successor or survivor of such merger transaction and (B)
Moody's and S&P shall have affirmed in writing that such transaction
will not impair Obligor' implied senior debt rating as such debt
rating is in effect immediately prior to the announcement of such
merger transaction.
(b) Obligor will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other
than businesses of the type conducted by Obligor and its Subsidiaries
on the date of execution of this Agreement and businesses reasonably
related thereto.
7.04. Investments, Loans, Advances, Guarantees and Acquisitions.
Obligor will not, and will not permit any of its Subsidiaries to,
purchase, hold or acquire any capital stock, evidences of indebtedness
or other securities (including any option, warrant or other right to
acquire any of the foregoing) of, make or permit to exist any loans or
advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase
or otherwise acquire (in one transaction or a series of transactions)
any assets of any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) investments by Obligor or by any Subsidiary in the
capital stock of its Subsidiaries;
(c) loans or advances made by Obligor to any Subsidiary and
made by any Subsidiary to Obligor or any other Subsidiary; and
(d) investments by Obligor and/or any Subsidiary in the
aggregate not to exceed 10% of Obligor' consolidated Tangible Net
Worth.
7.05. Hedging Agreements. Obligor will not, and will not permit
any of its Subsidiaries to, enter into any Hedging Agreement, other
than Hedging Agreements entered into in the ordinary course of
business to hedge or mitigate risks to which Obligor or any Subsidiary
is exposed in the conduct of its business or the management of its
liabilities.
7.06. Restricted Payments. Obligor will not, and will not
permit any of its Subsidiaries to, declare or make, or agree to pay or
make, directly or indirectly, any Restricted Payment, except (a)
Obligor may declare and pay dividends with respect to its capital
stock payable solely in additional shares of its common stock, (b)
Subsidiaries may declare and pay dividends ratably with respect to
their capital stock and (c) Obligor may make Restricted Payments
pursuant to and in accordance with stock option plans or other
benefits plans for management or employees of Obligor and its
Subsidiaries.
7.07. Transactions with Affiliates. Obligor will not, will not
permit any of its Subsidiaries to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any
property or assets from, or otherwise engage in any other transactions
with, any of its Affiliates, except (a) in the ordinary course of
business at prices and on terms and conditions not less favorable to
Obligor or such Subsidiary than could be obtained on an arm's-length
basis from unrelated third parties, (b) transactions between or among
Obligor and its wholly-owned Subsidiaries not involving any other
Affiliate and (c) any Restricted Payment permitted by Section 7.06.
7.08. Restrictive Agreements. Obligor will not, and will not
permit any of its Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of
Obligor or any Subsidiary to create, incur or permit to exist any Lien
upon any of its property or assets, or (b) the ability of any
Subsidiary to pay dividends or other distributions with respect to any
shares of its capital stock or to make or repay loans or advances to
the Obligor or any other Subsidiary or to Guarantee Indebtedness of
the Obligor or any other Subsidiary; provided that (i) the foregoing
shall not apply to restrictions and conditions imposed by law or by
this Agreement, (ii) the foregoing shall not apply to restrictions and
conditions existing on the date hereof and contained in the Indenture
or identified on Annex VI (but shall apply to any extension or renewal
of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating
to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be
sold and such sale is permitted hereunder, (iv) clause (a) of the
foregoing shall not apply to restrictions or conditions imposed by any
agreement relating to secured Indebtedness permitted by this Agreement
if such restrictions or conditions apply only to the property or
assets securing such Indebtedness and (v) clause (a) of the foregoing
shall not apply to customary provisions in leases and other contracts
restricting the assignment thereof.
7.09. Tangible Net Worth. Obligor will not permit at any time
its Tangible Net Worth to be less than $600,000,000 plus (i) 50% of
its cumulative Consolidated Net Income, if positive, for the period
from April 1, 1998 through the date of calculation, plus (ii) 100% of
any equity issued by Obligor after April 24, 1998.
7.10. EBITDA Leverage Ratio. Obligor will not permit its EBITDA
Leverage Ratio as of the end of any fiscal quarter of Obligor
(calculated quarterly at the end of each fiscal quarter) to be greater
than the amount set forth in the table below on the applicable date.
For the purposes of this Section 7.10, "EBITDA Leverage Ratio" shall
mean the ratio of (i) difference of Funded Debt minus cash and cash
equivalents of 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.
EBITDA
Period Leverage Ratio
6/30/98 thru 6/30/99 3.00x
7/1/99 thru 12/31/99 2.50x
1/1/00 and thereafter 2.00x
7.11. Sale of Properties. Obligor will not, and will not permit
any Subsidiary to, sell, assign, convey or otherwise transfer any
properties or assets except for (i) the sale of inventory in the
ordinary course of business; (ii) the sale or transfer of equipment or
other property or assets that is no longer necessary for the business
of Obligor or such Subsidiary or is replaced by equipment or other
property or assets of at least comparable value and use and (iii)
sales of properties and assets which shall not exceed $50,000,000 in
the aggregate in any fiscal year.
7.12. Amendments to Material Agreements. Obligor will not
modify or amend the terms of the Indenture as in existence on the date
of this Agreement or any documents described on Schedule V without the
consent of the Bank, if the effect of such modification or amendment
would be to the material detriment of the Bank.
3. Section 9 of the L/C Agreement is hereby further amended by
deleting the following definitions in their entirety:
Approved Bank
Approved Company
Arcade
Authorized Officer
Capital Lease
Capital Lease Obligations
Cash Equivalents
Change of Control
Consolidated Capital Expenditures
Consolidated Current Assets
Consolidated Current Liabilities
Consolidated EBIT
Consolidated EBITDAR
Consolidated Funded Indebtedness
Consolidated Interest Expense
Consolidated Net Income
Consolidated Net Worth
Consolidated Rent Expense
Contingent Obligations
Credit Party
Dividends
Guarantor
Guaranty
Holdings
Holdings Convertible Debentures
Maturity Date
Obligor
Parent Guarantors
4. Section 9 of the L/C Agreement is hereby further amended by
inserting in the appropriate alphabetical order the following new
definitions:
"Authorized Officer" shall mean any officer of Obligor designated
as such in writing to the Bank by Obligor.
"Bonds" shall mean the Senior Unsecured Notes of Obligor issued
pursuant to the Indenture.
"Capital Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal
property, or a combination thereof, which obligations are required to
be classified and accounted for as capital leases on a balance sheet
of such Person under GAAP, and the amount of such obligations shall be
the capitalized amount thereof determined in accordance with GAAP.
"Change of Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any person or
group (within the meaning of the Securities Exchange Act of 1934 and
the rules of the Securities and Exchange Commission thereunder as in
effect on the date hereof) of shares representing more than 30% of the
aggregate ordinary voting power represented by the issued and
outstanding capital stock of Obligor; (b) occupation of a majority of
the seats (other than vacant seats) on the board of directors of
Obligor by Persons who were neither (i) nominated by the board of
directors of Obligor nor (ii) appointed by directors so nominated; or
(d) the acquisition of direct or indirect Control of Obligor by any
Person or group.
"Consolidated Net Income" shall mean with respect to Obligor and
its Consolidated Subsidiaries, for any period, the aggregate of the
net income (or loss) of Obligor and its Consolidated Subsidiaries
after allowances for taxes for such period, determined on a
consolidated basis in accordance with GAAP; provided that there shall
be excluded from such net income (to the extent otherwise included
therein) the following: (i) the net income of any Person in which
Obligor or any Consolidated Subsidiary has an interest (which interest
does not cause the net income of such other Person to be consolidated
with the net income of Obligor and its Consolidated Subsidiaries in
accordance with GAAP), except to the extent of the amount of dividends
or distributions actually paid in such period by such other Person to
Obligor or to a Consolidated Subsidiary, as the case may be; (ii) the
net income (but not loss) of any Consolidated Subsidiary to the extent
that the declaration or payment of dividends or similar distributions
or transfers or loans by that Consolidated Subsidiary is not at the
time permitted by operation of the terms of its charter or any
agreement, instrument or Governmental Requirement applicable to such
Consolidated Subsidiary, or is otherwise restricted or prohibited in
each case determined in accordance with GAAP; (iii) the net income (or
loss) of any Person acquired in a pooling-of-interests transaction for
any period prior to the date of such transaction; (iv) any
extraordinary gains, including gains attributable to property sales
not in the ordinary course of business; and (v) the cumulative effect
of a change in accounting principles and any gains or losses
attributable to writeups or writedowns of assets; and further
provided, that there shall be added to such net income (to the extent
otherwise deducted therefrom) any extraordinary losses.
"Consolidated Subsidiaries" shall mean each Subsidiary of Obligor
(whether now existing or hereafter created or acquired) the financial
statements of which shall be (or should have been) consolidated with
the financial statements of Obligor in accordance with GAAP.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or polices of
a Person, whether through the ability to exercise voting power, by
contract or otherwise. "Controlling" and "Controlled" have meanings
correlative thereto.
"Credit Party" shall mean (i) prior to the First Amendment
Effective Date, R&BFD and Reading & Xxxxx Drilling Co. and (ii) after
the First Amendment Effective Date, the Obligor.
"Deepwater Frontier" means the drillship being constructed for a
joint venture on the date of this Agreement in which Obligor
indirectly owns a 60% interest.
"Deepwater Pathfinder" means the drillship being constructed for
a joint venture on the date of this Agreement in which Obligor
indirectly owns a 50% interest.
"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, taxes, depreciation, depletion and amortization.
"First Amendment" shall mean the First Amendment to this
Agreement, dated as of April 24, 1998.
"First Amendment Effective Date" shall have the meaning provided
in paragraph II.5. of the First Amendment.
"Funded Debt" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar
instruments, (c) all Capital Lease Obligations of such Person,
(d) all Hedging Obligations of such Person, (e) all obligations,
contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, (f) all
obligations, contingent or otherwise, of such Person in respect of
bankers' acceptances and (g) all obligations, contingent or otherwise,
of such Person guaranteeing, indemnifying or having the economic
effect of guaranteeing any of the above described Funded Debt of
another Person. The Funded Debt of any Person shall include the
Funded Debt of any other entity (including any partnership in which
such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Funded Debt provide that such Person is not liable therefor. Funded
Debt shall expressly exclude Permitted Project Debt.
"Governmental Requirement" shall mean any law, statute, code,
ordinance, order, determination, rule, regulation, judgment, decree,
injunction, franchise, permit, certificate, license, authorization or
other directive or requirement (whether or not having the force of
law), including, without limitation, Environmental Laws, energy
regulations and occupational, safety and health standards or controls,
of any Governmental Authority.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or
having the economic effect of guaranteeing any Indebtedness or other
obligation of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, and including any obligation of the
guarantor, direct or indirect, (a) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or
other obligation or to purchase (or to advance or supply funds for the
purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the
owner of such Indebtedness or other obligation of the payment thereof,
(c) to maintain working capital, equity capital or any other financial
statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other
obligation or (d) as an account party in respect of any letter of
credit or letter of guaranty issued to support such Indebtedness or
obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of
business.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection
agreement or other interest or currency exchange rate or commodity
price hedging arrangement.
"Hedging Obligations" of any person means the net obligation (not
the notional amount) of such Person pursuant to any Hedging Agreement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such Person
evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily
paid, (d) all obligations of such Person under conditional sale or
other title retention agreements relating to property acquired by such
Person, (e) all obligations of such Person in respect of the deferred
purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person,
whether or not the Indebtedness secured thereby has been assumed, (g)
all Guarantees by such Person of Indebtedness of others, (h) all
Capital Lease Obligations of such Person, (i) all Synthetic Lease
Obligations of such Person, (j) all Hedging Obligations of such
Persons, (k) all obligations, contingent or otherwise, of such Person
as an account party in respect of letters of credit and letters of
guaranty and (l) all obligations, contingent or otherwise, of such
Person in respect of bankers' acceptances. The Indebtedness of any
Person shall include the Indebtedness of any other entity (including
any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's
ownership interest in or other relationship with such entity, except
to the extent the terms of such Indebtedness provide that such Person
is not liable therefor.
"Indenture" shall mean the Indenture, dated as of April 14, 1998,
between Obligor, as Issuer, and Chase Bank of Texas, National
Association, as Trustee, providing for the issuance of $1,100,000,000
of Senior Unsecured Notes and all renewals, extensions and
modifications thereof permitted by the terms of this Agreement.
"Index Debt" means senior, unsecured, long-term indebtedness for
borrowed money of Obligor that is not guaranteed by any other Person
or subject to any other credit enhancement.
"Lien" means, with respect to any asset, (a) any mortgage, deed
of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a
lessor under any conditional sale agreement, capital lease or title
retention agreement (or any financing lease having substantially the
same economic effect as any of the foregoing) relating to such asset
and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Maturity Date" shall mean June 30, 1999.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Obligor" shall mean R&B Falcon Corporation, a Delaware
corporation.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or
are being contested in good faith and by appropriate proceedings
for which adequate reserves with respect thereto, in accordance
with GAAP, have been established;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, maritime and other like Liens imposed by law,
arising in the ordinary course of business and securing
obligations that are not overdue by more than 30 days or are
being contested in good faith and by appropriate proceedings for
which adequate reserves with respect thereto, in accordance with
GAAP, have been established;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature,
in each case in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under Section 8.08;
(f) easements, zoning restrictions, rights-of-way and
similar encumbrances on real property imposed by law or arising
in the ordinary course of business that do not secure any
monetary obligations and do not materially detract from the value
of the affected property or interfere with the ordinary conduct
of business of Obligor or any Subsidiary; and
(g) any interest or title of a lessor or charterer under
any lease or charter between Obligor and any Subsidiary or
between any of its Subsidiaries or as otherwise permitted
hereunder;
provided that the term "Permitted Encumbrances" shall not include any
Lien securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the
United States of America (or by any agency thereof to the extent
such obligations are backed by the full faith and credit of the
United States of America), in each case maturing within one year
from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270
days from the date of acquisition thereof and having, at such
date of acquisition, the highest credit rating obtainable from
S&P or from Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the
date of acquisition thereof issued or guaranteed by or placed
with, and money market deposit accounts issued or offered by, any
domestic office of any commercial bank organized under the laws
of the United States of America or any State thereof which has a
combined capital and surplus and undivided profits of not less
than $500,000,000; and
(d) fully collateralized repurchase agreements with a term
of not more than 30 days for securities described in clause (a)
above and entered into with a financial institution satisfying
the criteria described in clause (c) above.
"Permitted Project Debt" means Indebtedness (including, without
limitation, or duplication, the Guarantee of any such Indebtedness by
Obligor) incurred in connection with the construction of Deepwater
Pathfinder, Deepwater Frontier and Drillship III by the respective
joint venture or Subsidiary owning such vessel not to exceed
$375,000,000 in the aggregate and all extensions, renewals and
replacements of any such Indebtedness by the primary obligor thereof
that do not increase the outstanding principal amount thereof.
"Prior Indebtedness" means the Funded Debt of Obligor on the date
of the R&B Falcon Credit Agreement, excluding the Indebtedness created
under this Agreement and the Indebtedness evidenced by the Bonds.
"R&B Falcon Credit Agreement" shall mean the Credit Agreement,
dated as of April 24, 1998, by and among Obligor, the lenders party
thereto and The Chase Manhattan Bank, as Administrative Agent.
"R&BFD" shall mean R&B Falcon Drilling (International &
Deepwater) Inc. (f/k/a Reading & Xxxxx Corporation), a Delaware
Corporation.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any
shares of any class of capital stock of Obligor or any Subsidiary, or
any payment (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase,
redemption, retirement, acquisition, cancellation or termination of
any such shares of capital stock of Obligor or any option, warrant or
other right to acquire any such shares of capital stock of Obligor.
"S&P" means Standard & Poor's.
"Synthetic Lease Obligations" of any Person means the aggregate
obligations of such Person under each lease or a guaranty of such
lease which requires such Person to make payments of rent or other
amounts over the term of such lease, including payments at
termination, which are more than seventy percent (70%) but less than
ninety percent (90%) of the purchase price of the Property subject to
such lease but excluding interest at an imputed rate of interest.
"Tangible Net Worth" means without duplication in accordance with
GAAP the sum of (i) the total amount of capital stock of Obligor, (ii)
preferred stock, (iii) paid-in capital, and (iv) retained earnings
minus the sum of (i) patents, patent applications, trademarks, service
marks, copyrights, and trade names and (ii) goodwill and all other
intangibles.
5. The L/C Agreement is hereby further amended by (i) deleting
Annex IV thereto in its entirety and inserting Annex IV attached hereto in
lieu thereof and (ii) by inserting immediately following Annex IV thereto
Annexes V and VI attached hereto.
6. On and after the First Amendment Effective Date, R&BFD is
hereby released from all obligations under and in respect of the Guaranty
contained in Section 11 of the L/C Agreement, and Section 11 is hereby
deleted in its entirety.
II Miscellaneous Provisions.
1. In order to induce the Banks to enter into this Amendment,
R&B Falcon hereby represents and warrants that:
(a) no Default or Event of Default exists as of the First
Amendment Effective Date both before and after giving effect to this
Amendment; and
(b) except as may be expressly modified by this Amendment, 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 First 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 First
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 R&B Falcon 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 on the date (the "First
Amendment Effective Date") when the following conditions have been met to
the satisfaction of the Bank:
(i) the Bank shall have received from R&B Falcon certified
copies of resolutions of the Board of Directors or statements of
unanimous written consent in lieu thereof of R&B Falcon with respect
to the matters set forth in this Amendment and such resolutions shall
be satisfactory to the Bank;
(ii) R&B Drilling shall have paid to the Bank all costs, fees and
expenses (including, without limitation, legal fees and expenses)
payable to the Bank to the extent then due;
(iii) all corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by
this Amendment shall be satisfactory in form and substance to the
Bank, and the Bank shall have received all information and copies of
all documents and papers, including records of corporate proceedings
or governmental approvals, if any, which the Bank may have requested
in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities;
(iv) each of R&B Falcon, R&BFD, R&B Drilling 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
(v) the Bank shall have received, and shall be satisfied with
both the form and substance of, an opinion of Xxxxx Xxxxxx, counsel to
R&B Falcon, R&BFD and R&B Drilling, with respect to the matters
contemplated by the this Amendment.
Upon the satisfaction of the condition described in clause (v) of the
immediately preceding sentence and upon the Bank's determination that the
other conditions described above have been met, the First Amendment
Effective Date shall be deemed to have occurred, regardless of any
subsequent determination that one or more of the conditions thereto had not
been met (although the occurrence of the First Amendment Effective Date
shall not release R&B Falcon from any liability for failure to satisfy one
or more of the applicable conditions specified above). The Bank will give
R&B Falcon prompt notice of the occurrence of the First Amendment Effective
Date.
6. From and after the First Amendment Effective Date, all
references in the L/C Agreement and each of the other Credit Documents
shall be deemed to be references to such documents 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:
R&B FALCON DRILLING (INTERNATIONAL &
DEEPWATER) INC. (f/k/a Reading & Xxxxx
Corporation)
By:___________________
Title:
READING & XXXXX DRILLING CO.
By:___________________
Title:
CHRISTIANIA BANK OG KREDITKASSE, NEW YORK
BRANCH
By:___________________
Title:
By:___________________
Title:
ANNEX IV
EXISTING INDEBTEDNESS
For purposes of this schedule only "Falcon" means Falcon Drilling Company,
Inc. and "R&B" means Reading & Xxxxx Corporation.
1. Indenture relating to R&B's 8% Senior Subordinated Convertible
Debentures due 1998 dated as of August 29, 1989, as supplemented,
between R&B and IBJ Xxxxxxxx Bank & Trust Company, as Trustee
(outstanding principal amount - $18,494,500).
2. Indenture dated as of January 15, 1994, between Falcon and Texas
Commerce Bank National Association, as Trustee, relating to
Falcon's 9-3/4% senior notes and guaranteed by certain
subsidiaries of Falcon (outstanding principal amount -
$5,250,000).
3. Floating Rate Senior Note Purchase Agreement, dated as of
February 23, 1994, by and between Falcon and Crescent/Mach I
Partners, L.P., and guaranteed by certain subsidiaries of Falcon
(outstanding principal amount - $9,000,000).*
4. Indenture dated as of March 1, 1996, between Falcon and Bank One,
Texas, N.A., as trustee, relating another series of Falcon's
senior notes (outstanding principal amount - $345,000).
5. Indenture dated as of April 14, 1998 between R&B Falcon
Corporation and Chase Bank of Texas, National Association, as
Trustee (outstanding principal amount - $1,100,000,000).
6. Agreement for the sale and purchase of Semi-Submersible Emergency
Support Vessel Iolair dated September 8, 1995 between BP
Exploration Operating Company Limited and Reading & Xxxxx
(Caledonia) Limited, a subsidiary of R&B (outstanding principal
amount - $7,500,000).
7. Performance Guarantee dated September 8, 1995 by R&B in favor of
BP Exploration Operating Company Limited, in connection with item
6 above.
8. Performance Guarantee dated September 8, 1995 by R&B in favor of
Britoil plc, in connection with item 6 above.
9. Initial Services Agreement dated September 8, 1995 between
Britoil Public Limited Company and Reading & Xxxxx (Caledonia)
Limited, a subsidiary of R&B, in connection with item 6 above.
10. Heads of Agreement for the provision of Vessel Services dated
September 8, 1995 between Britoil Public Limited Company, Reading
& Xxxxx (Caledonia) Limited, a subsidiary of R&B, and R&B, in
connection with item 6 above.
11. Credit Agreement dated February 24, 1998, among R&B Falcon
Corporation, RB Deepwater Exploration III Inc., various lending
institutions, Credit Lyonnais, New York Branch, as Syndication
Agent and Christiania Bank og Kreditkasse, New York Branch as
Administrative Agent ($150,000,000 Facility).
12. Loan Agreement dated as of December 14, 1996 among TRB Holding
Corporation, Reading & Xxxxx (U.K.) Limited and Nissho Iwai
Europe PLC (outstanding principal amount - $24,774,244).
13. Two promissory notes dated June 30, 1994 payable by subsidiary of
Falcon to Diamond Services Corporation (outstanding principal
amount - $536,646).
14. Secured promissory note dated January 1997 payable by Falcon to
Coastal Capital Corporation (outstanding principal amount -
$6,390,000).*
15. Four promissory notes payable by a subsidiary of Falcon to First
National Bank of Commerce (outstanding aggregate principal amount
- $6,958,378).*
16. Undertaking dated September 30, 1997 by Reading & Xxxxx Drilling
Co. to Xxxxxx Xxxxxxxx with respect to Reading & Xxxxx (U.K.)
Limited with respect to the continuance of its business.
17. Indemnification Agreement by R&B in favor of Conoco Development
Company with respect to equity contributions by a subsidiary of
R&B required under the Liability Company Agreement dated October
28, 1996 between Conoco Development Company and RB Deepwater
Exploration Inc.
18. Indemnification Agreement by R&B in favor of Conoco Development
II Inc. with respect to equity contributions by a subsidiary of
R&B required under the Liability Company Agreement dated April
30, 1997 between Conoco Development II Inc. and RB Deepwater
Exploration II Inc.
19. Guaranty by R&B and certain of its subsidiaries in favor of Bank
of America National Trust and Savings Association, National
Westminster PLC, New York Branch and certain other lending
institutions party to the Credit Agreement dated as of November
10, 1997 among Deepwater Drilling II L.L.C. and those
institutions.
_____________________________
* To be repaid on or before June 30, 1998
ANNEX V
LIENS
1. Mortgage of a Ship dated September 8, 1995 between Reading &
Xxxxx (Caledonia) Limited, a subsidiary of R&B, and BP
Exploration Operating Company Limited, in connection with item 6
in Annex IV.
2. Mortgage of a Ship dated September 8, 1995 between Reading &
Xxxxx (Caledonia) Limited, a subsidiary of R&B, and Britoil plc.,
in connection with item 6 in Annex IV.
3. Deed of Covenant dated September 8, 1995 between Reading & Xxxxx
(Caledonia) Limited, a subsidiary of R&B, and BP Exploration
Operating Company Limited, in connection with item 6 in Annex IV.
4. Deed of Covenant dated September 8, 1995 between Reading & Xxxxx
(Caledonia) Limited, a subsidiary of R&B, and Britoil Public
Limited Company in connection with item 6 in Annex IV.
5. First Naval Mortgage on the "SEILLEAN" dated December 14, 1996
between TRB Holding Corporation in favor of Nissho Iwai Europe
PLC, in connection with item 12 in Annex IV.
6. Collateral Assignment of Deposit Account, Pledge and Security
Agreement dated December 14, 1996 with respect to the "SEILLEAN"
between TRB Holding Corporation and Nissho Iwai Europe PLC, in
connection with item 12 in Annex IV.
7. Assignment of Insurances dated December 14, 1996 with respect to
the "SEILLEAN" between TRB Holding Corporation and Reading &
Xxxxx (U.K.) Limited and Nissho Iwai Europe PLC, in connection
with item 12 in Annex IV.
8. Vessel mortgage dated July 25, 1994 by Falcon in favor of Diamond
Services Corporation with respect to one of Falcon's barge rigs,
in connection with item 13 in Annex IV.
9. Texas and Louisiana UCC-1 Financing Statements filed July 2, 1994
in favor of Diamond Services Corporation with respect to two of
Falcon's barge rigs, in connection with item 13 in Annex IV.
10. First Preferred Mortgage on the vessel "Coastal Golden"
(Peregrine VI) in favor of Coastal Capital Corporation, in
connection with item 14 in Annex IV.
11. Liens - BSI Assets, in connection with item 15 in Annex IV.
12. Assignment of Construction Contract and Letter of Refundment
Guaranty to Christiania Bank og Kreditkasse, New York Branch, as
Collateral Agent in connection with item number 11 on Annex IV.
ANNEX VI
RESTRICTIVE AGREEMENTS
1. R&B Falcon Credit Agreement.
2. Credit Agreement dated February 24, 1998, among R&B Falcon
Corporation, RB Deepwater Exploration III Inc., various lending
institutions, Credit Lyonnais, New York Branch, as Syndication
Agent and Christiania Bank og Kreditkasse, New York Branch as
Administrative Agent.
3. Indenture dated as of January 15, 1994, between Falcon and Texas
Commerce Bank National Association, as Trustee, with respect to
Falcon's 9-3/4% senior notes (outstanding principal amount -
$5,250,000).
4. Floating Rate Senior Note Purchase Agreement, dated as of
February 23, 1994, by and between Falcon and Crescent/Mach I
Partners, L.P., including a form of Note (outstanding principal
amount - $9,000,000).
5. Indenture dated as of March 1, 1996, between Falcon and Bank One,
Texas, N.A., as trustee, with respect to another series of
Falcon's senior notes (outstanding principal amount - $345,000).
6. First Preferred Mortgage on the vessel "Coastal Golden"
(Peregrine VI) in favor of Coastal Capital Corporation, in
connection with item 14 in Annex 7.01.
7. Loan Agreement dated January 17, 1991 between Falcon Drilling
Company, Inc. and Coastal Capital Corporation, in connection with
item 14 in Annex 7.01.
8. Credit and Sale Agreement dated June 30, 1994 between Diamond
Services Corporation and Xxxxxx-Xxxxx Investments, Inc., in
connection with item 13 in Annex 7.01.
9. First Preferred Mortgage dated July 25,1994 by Xxxxxx-Xxxxx
Investments, Inc. to Diamond Services Corporation, in connection
with items 13 in Annex 7.01.
10. BSI, in connection with item 15 in Annex 7.01.
