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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
________________
Form 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED DECEMBER 31, 1996
COMMISSION FILE NUMBER 0-6352
ATWOOD OCEANICS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-1611874
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
15835 Park Ten Place Drive 77084
Houston, Texas (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
281-492-2929
_______________
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 15 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months and (2) has been subject to such filings
requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of December 31, 1996 6,710,413 shares of Common Stock $1 par
value
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<PAGE>
PAGE 2
PART I. FINANCIAL INFORMATION
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
The condensed consolidated financial statements herein have been prepared
by the Company pursuant to the rules and regulations of the Securities and
Exchange Commission for interim financial reporting. Accordingly, these
financial statements and related information have been prepared without audit
and certain information and disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted, although management believes that the
disclosures are adequate to make the information not misleading. The condensed
consolidated financial statements reflect all adjustments which are, in the
opinion of management, necessary to present fairly the financial position of the
Company as of December 31, 1996 and September 30, 1996, and the results of its
operations and cash flows for the three months ended December 31, 1996 and 1995,
respectively. All adjustments were of a normal recurring nature. The interim
financial results may not be indicative of results that could be expected for a
full year. It is suggested these condensed consolidated financial statements be
read in conjunction with the consolidated financial statements and the notes
thereto included in the Company's September 30, 1996 Annual Report to
Shareholders.
<PAGE>
PAGE 3
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, September 30,
1996 1996
(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 17,412 $ 17,565
Accounts receivable 18,547 16,687
Inventories of materials and supplies,
at lower of average cost or market 5,933 5,454
Deferred tax assets 1,510 1,510
Prepaid expenses 2,282 2,954
Total Current Assets 45,684 44,170
SECURITIES HELD FOR INVESTMENT:
Held-to-maturity, at amortized cost 22,577 22,576
Available-for-sale, at fair value 351 351
22,928 22,927
PROPERTY AND EQUIPMENT:
Drilling vessels, equipment and drill pipe 198,057 191,801
Other 4,882 4,810
202,939 196,611
Less-accumulated depreciation 107,635 105,487
Net Property and Equipment 95,304 91,124
DEFERRED COSTS AND OTHER ASSETS 752 1,088
$164,668 $159,309
See accompanying notes to financial statements.
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PAGE 4
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
1996 1996
(In thousands)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Estimated current maturities of long-term notes payable .... $ 22,750 $ 7,933
Accounts payable ........................................... 3,220 2,615
Accrued liabilities ........................................ 8,902 7,471
Total Current Liabilities .............................. 34,872 18,019
LONG-TERM NOTES PAYABLE, net of estimated current maturities .. 8,040 26,540
DEFERRED CREDITS:
Income taxes ............................................... 2,287 2,289
Other ...................................................... 9,747 6,907
12,034 9,196
SHAREHOLDERS' EQUITY:
Preferred stock, no par value;
1,000,000 shares authorized, none outstanding ............ -- --
Common stock, $1 par value;
10,000,000 share authorized with 6,710,000 and 6,691,000
shares issued and outstanding ............................ 6,710 6,691
Paid-in capital ............................................ 55,698 55,470
Net unrealized holding loss on available-for-sale securities (137) (139)
Retained earnings .......................................... 47,451 43,532
Total Shareholders' Equity ............................. 109,722 105,554
$ 164,668 $ 159,309
<FN>
See accompanying notes to financial statements.
</FN>
</TABLE>
<PAGE>
PAGE 5
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
December 31,
1996 1995
(In thousands except per
share amounts)
REVENUES:
Contract drilling $ 21,667 $ 17,943
Contract management 426 195
22,093 18,138
COSTS AND EXPENSES:
Contract drilling 12,406 12,888
Contract management 254 146
Depreciation 2,302 2,635
General and administrative 1,511 1,060
16,473 16,729
OPERATING INCOME 5,620 1,409
OTHER INCOME (EXPENSE)
Interest expense (532) (690)
Interest income 646 589
114 (101)
INCOME BEFORE INCOME TAXES 5,734 1,308
PROVISION FOR INCOME TAXES 1,815 646
NET INCOME $ 3,919 $ 662
EARNINGS PER COMMON SHARE $ .58 $ .10
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
OUTSTANDING 6,707 6,632
See accompanying notes to financial statements.
<PAGE>
PAGE 6
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
December 31,
1996 1995
(In thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
Net Income $3,919 $ 662
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation 2,302 2,635
Amortization of deferred costs 287 149
Changes in assets and liabilities:
Increase in accounts receivable (1,860) (878)
Increase (decrease) in accounts payable 605 (333)
Increase in accrued liabilities 1,431 888
Deferred mobilization revenues 4,500 3,000
Other (1,523) 1,166
Total adjustments 5,742 6,627
Net cash provided by operating activities 9,661 7,289
CASH FLOW FROM INVESTING ACTIVITIES:
Capital expenditures (6,000) (651)
Investment in RIG-200 (378) (1,474)
Net cash used by investing activities (6,378) (2,125)
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from exercises of stock options 247 83
Principal payments on long-term notes payable (3,683) (1,500)
Payment on short-term note payable --- (500)
Net Cash used by financing activities (3,436) (1,917)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (153) 3,247
CASH AND CASH EQUIVALENTS, at beginning of period 17,565 11,984
CASH AND CASH EQUIVALENTS, at end of period $17,412 $15,231
Supplemental disclosure of cash flow information:
Cash paid during the quarter for domestic
and foreign income tax $ --- $ ---
Cash paid during the quarter for interest $ 659 $ 738
See accompanying notes to financial statements
<PAGE>
PAGE 7
PART I. ITEM I - FINANCIAL STATEMENTS
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In January 1997, the Company executed a drilling contract for the ATWOOD
SOUTHERN CROSS which requires substantial refurbishment and upgrade of the
rig. The Company has previously committed to purchase $5 million of long
lead-time equipment for such an upgrade and will incur approximately $20
million of additional costs to complete the refurbishment and upgrade.
Management estimates that this rig will commence drilling operations in
Australia in late fiscal 1997 or early fiscal 1998.
2. In conjunction with the upgrade of the ATWOOD HUNTER, the bank group which
holds a mortgage lien on the rig has agreed to provide a waiver of the
annual capital expenditures limit for fiscal 1997, along with some other
amendments to the loan documents; while the Company has agreed to reduce
the outstanding loan amount through a $10 million prepayment, in addition
to the quarterly and excess cash flow payment requirements. For the
calendar year 1997, the Company estimates payments to the bank group will
total $22 million, and, accordingly, such amount has been included in
current maturities of long-term notes payable at December 31, 1996. In
addition, the Company has agreed to guaranty $3 million of the outstanding
balance of such bank debt.
3. In December 1996, the Company increased its short-term line-of-credit from
a bank from $10 million to $30 million, secured by the pledge of all of the
Company's United States treasury bonds.
4. On February 4, 1997, the Company filed a Registration Statement on Form S-3
with the Securities and Exchange Commission with respect to a public
offering by the Company of 1,500,000 shares of common stock. The net
proceeds from the Offering will be used by the Company to reduce bank debt
and to provide funding for various planned capital expenditures projects,
including the ATWOOD HUNTER upgrade and the ATWOOD SOUTHERN CROSS
refurbishment and upgrade, and for general corporate purposes.
<PAGE>
PAGE 8
PART I. ITEM 2
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
During the first quarter of fiscal 1997, the Company continued to maintain
100% utilization of its drilling equipment. Contract revenues, earnings before
interest expense, taxes and depreciation and net income for the three months
ended December 31, 1996 increased 22%, 85% and 492%, respectively, compared to
the three months ended December 31, 1995. This improvement in operating results
reflects the impact of dayrate increases on several of the Company's mobile rigs
which occurred during the fourth quarter of fiscal 1996 and the first quarter of
fiscal 1997, coupled with the commencement of dayrate revenues in January 1996
on RIG-200. A comparative analysis of contract revenues is as follows:
CONTRACT REVENUES
--------------------------------------------------
First Quarter First Quarter
Fiscal 1997 Fiscal 1996 Variance
------------------ ---------------- -------------
(In millions)
ATWOOD FALCON $ 4.2 $ 2.5 $ 1.7
ATWOOD HUNTER 3.5 2.5 1.0
ATWOOD EAGLE 4.7 3.9 0.8
RIG-200 0.4 0.0 0.4
SEAHAWK 2.8 2.7 0.1
VICKSBURG 1.3 1.3 0.0
RIG-19 0.9 1.9 (1.0)
RICHMOND 2.0 1.3 0.7
GOODWYN 'A' 1.9 1.8 0.1
NORTH RANKIN 'A' 0.4 0.2 0.2
------------------ ------------ ---------
$22.1 $18.1 $ 4.0
================== ================ =============
The increase in revenues for the ATWOOD FALCON was due to an increase of
approximately 60% in the contract dayrates during the quarter ended September
30, 1996. The increase in revenues for the ATWOOD HUNTER was also due to higher
dayrates. The ATWOOD HUNTER completed its work in Malaysia in December 1996 and
was mobilized to Singapore to undergo a substantial upgrade. No income or
expense associated with the ATWOOD HUNTER will be recognized during the second
and third quarters of fiscal 1997 while the upgrade is in process. During fiscal
1996, the ATWOOD EAGLE was relocated from Australia to Equatorial Guinea with an
approximate 25% increase in contract dayrate. The delivery of RIG-200 to
Australia was completed in November 1996. RIG-200 was installed on the offshore
platform in November and December, 1996 and commenced drilling operations in
January 1997. Commencing in January 1997, net realized mobilization income
(approximately $3 million) will be amortized over the estimated contract term of
five years. Relatively long-term, stable contracts for the SEAHAWK and VICKSBURG
continue to provide consistency to these operations. During the December 31,
1996 quarter, RIG-19 was relocated to a new platform, which caused revenues to
decline as no revenues or expenses were recognized during the relocation period.
The Company's only current United States operation, the RICHMOND, continues to
experience an increase in dayrate revenues. The increase in NORTH RANKIN 'A'
revenues was due to an increase in labor services provided to the rig.
Contract drilling and management costs were $12.7 million for the first
quarter of fiscal 1997 compared to $13.0 million for the first quarter of fiscal
1996. This decline in operating costs was primarily attributable to lower
operating costs for RIG-19 and the ATWOOD EAGLE. An analysis of contract
drilling and management costs by rig is as follows:
<PAGE>
PAGE 9
CONTRACT DRILLING AND MANAGEMENT COSTS
-------------------------------------------------
First Quarter First Quarter
Fiscal 1997 Fiscal 1996 Variance
--------------- ----------------- -------------
(In millions)
ATWOOD FALCON $ 1.7 $ 1.7 $ 0.0
ATWOOD HUNTER 1.9 1.8 0.1
ATWOOD EAGLE 2.5 2.9 (0.4)
RIG-200 0.0 0.0 0.0
SEAHAWK 1.7 1.6 0.1
VICKSBURG 0.8 0.8 0.0
RIG-19 0.8 1.4 (0.6)
RICHMOND 1.3 1.1 0.2
GOODWYN 'A' 1.5 1.4 0.1
NORTH RANKIN 'A' 0.2 0.1 0.1
OTHER 0.3 0.2 0.1
--------------- ----------------- -------------
$12.7 $13.0 $(0.3)
=============== ================= =============
The increases in operating costs for the ATWOOD HUNTER, SEAHAWK, RICHMOND,
GOODWYN 'A' and NORTH RANKIN 'A' were due primarily to increases in payroll
related costs. The reduction in operating costs for the ATWOOD EAGLE's was
attributable to the rig working in Equatorial Guinea where labor costs are lower
than in Australia. The relocation of RIG-19 to a new platform during the first
quarter of fiscal 1997 accounted for its reduction in costs, as no revenues or
costs are recognized during the relocation period.
An analysis of depreciation expense by rig is as follows:
DEPRECIATION EXPENSE
--------------------------------------
First Quarter First Quarter
Fiscal 1997 Fiscal 1996
----------------- ----------------
(In millions)
ATWOOD FALCON $ 0.7 $ 0.7
ATWOOD HUNTER 0.3 0.4
ATWOOD EAGLE 0.5 0.5
RIG-200 0.0 0.0
SEAHAWK 0.5 0.5
VICKSBURG 0.0 0.0
RIG-19 0.1 0.3
RICHMOND 0.1 0.1
OTHER 0.1 0.1
-----------------
----------------
$2.3 $2.6
================= ================
The reduction in depreciation expense for the ATWOOD HUNTER was a result of
moving the rig into the shipyard in December 1996 for upgrade. While undergoing
upgrade (estimated to take six to seven months) no depreciation expense is
recognized on the rig. Depreciation of RIG-200 will commence with the start-up
of its drilling operation in January 1997.
General and administrative expense increased 43% in the first quarter of
fiscal 1997 compared to the first quarter of fiscal 1996. This increase was
attributable to increases in payroll related costs and professional fees. As a
result of a reduction in outstanding long-term debt, interest expense has
declined. Due to an increase in profitability and a reduction in tax attributes,
current United States taxation is expected to be higher in fiscal 1997 compared
to fiscal 1996, which accounted for the increase in the provision for income
taxes.
<PAGE>
PAGE 10
A summary of the contract status of each of the Company's wholly or
partially owned drilling rigs as of January 31, 1997 is as follows:
<TABLE>
<CAPTION>
NAME OF RIG LOCATION CONTRACT STATUS
<S> <C> <C>
ATWOOD Thailand/Malaysia Term contract (estimated completion November 1997). Upon
FALCON Joint Development completion of the current drilling program, the rig will be
Area mobilized to the Philippines to commence drilling under a
contract for two wells, plus an option (which may be
exercised on or before June 30, 1997) for three years of
drilling operations in up to 3,500 feet of water in the
Philippines' South China Sea.
ATWOOD Singapore Being upgraded to operate in up to 3,500 feet of water in the
HUNTER Gulf of Mexico (estimated commencement of drilling
operations in July or August 1997).
ATWOOD Equatorial Guinea Under contract until May 1997 with two six-months options.
EAGLE
RIG-200 Australia Term contract (minimum duration of two-years from January
1997).
SEAHAWK Malaysia Term contract (estimated completion September 1997).
VICKSBURG Australia Under contract until January 1998, subject to early
termination under certain circumstances.
RIG-19 Australia Term contract (estimated drilling work of between 9 and 12
months from January 1997).
RICHMOND United States Term contract (estimated completion February 1997).
Following completion of the current contract, the rig will
commence drilling operations for three firm wells, plus three
option wells (estimated completion July 1997).
ATWOOD Australia Being refurbished and upgraded to operate in up to 2,000 feet
SOUTHERN of water in Australia (estimated commencement of drilling
CROSS operations in late fiscal 1997 or early fiscal 1998).
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company had outstanding bank debt of $29.3
million all of which was borrowed by a subsidiary of the Company which owns the
ATWOOD HUNTER and the ATWOOD EAGLE. The debt is secured by preferred mortgages
on the ATWOOD HUNTER and ATWOOD EAGLE, and the loan documents restrict the
amount of capital expenditures that can be incurred in any given year on these
rigs. The estimated capital expenditures to be incurred in fiscal 1997 to
upgrade the ATWOOD HUNTER to enable the rig to perform under its three year
contract with British-Borneo Petroleum Inc. will significantly exceed the annual
limit. On February 3, 1997, the bank group agreed to waive the annual capital
expenditures limit for 1997 and the Company reduced the outstanding loan
balances through a $10 million prepayment and agreed to guaranty $3 million of
the outstanding balance. The Company estimates that excess cash flows during the
1997 calendar year will require $9 million in principal payments, in addition to
regular quarterly payments of $750,000. The remaining balance of the facility is
due in March 1998.
The Company obtained an additional $30 million short-term line of credit
with a bank that is secured by the pledge of all the Company's United States
treasury bonds. The Company borrowed $5 million under this facility in February
1997 to finance a portion of the prepayment to the other bank group. Additional
borrowings under this facility may be used to fund principal payments to the
bank group and to fund equipment upgrades.
In January 1997, the Company executed a drilling contract for the ATWOOD
SOUTHERN CROSS which requires substantial refurbishment and upgrade of the rig.
The Company has previously committed to purchase $5 million of long lead- time
equipment for such an upgrade and will incur approximately $20 million of
additional costs to complete the refurbishment
<PAGE>
PAGE 11
and upgrade. Management estimates that this rig will not commence drilling
operations in Australia until late fiscal 1997 or early fiscal 1998.
Following completion of the ATWOOD FALCON's current contract (estimated
November 1997), the rig will be mobilized to the Philippines to commence
operations under a contract which provides for drilling of two initial wells
(estimated 90 days duration), with an option (which may be exercised on or
before June 30, 1997) for three years of drilling operations in up to 3,500 feet
of water in the Philippines' South China Sea. In the event the option is
exercised, the rig will be transported to a shipyard following completion of the
initial two well program to undergo an upgrade at a cost of approximately $50
million, which will be partially offset by a $10 million mobilization fee.
Management estimates that the upgrade and mobilization will take six to seven
months to complete.
On February 4, 1997, the Company filed a Registration Statement on Form S-3
with the Securities and Exchange Commission with respect to a public offering by
the Company of 1,500,000 shares of common stock. The Company believes that cash
on hand, borrowings under its new credit facility and the proceeds of the
Offering will be sufficient to fund its planned rig upgrades and other capital
expenditures during 1997. The Company would expect to finance additional upgrade
expenditures through a combination of operating cash flow, equity or debt
financings or a sale of investment securities. The Company continues to
periodically review and adjust its planned capital expenditures in light of
current conditions.
<PAGE>
PAGE 12
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
TO OUR SHAREHOLDERS AND EMPLOYEES
The Company commenced fiscal year 1997 with a continuing positive trend in
its financial results and activities. Net income for the first quarter of fiscal
year 1997 increased $3.3 million (492%) compared to the first quarter of fiscal
year 1996. This improvement in financial performance reflects the impact of
increased dayrates realized by the Company on several of its rigs during the
second half of calendar 1996. Based upon current contract commitments, the
Company anticipates a high level of equipment utilization for fiscal 1997.
In January 1997, the Company executed a one hundred seventy-five (175) day
contract for the ATWOOD SOUTHERN CROSS ("SOUTHERN CROSS") for work in Australia.
Following water depth upgrade, enhancement and refurbishment, the SOUTHERN CROSS
is currently expected to commence operation in late fiscal 1997 or early fiscal
1998. The Company remains optimistic about ongoing opportunities for the
SOUTHERN CROSS in 1998 following this initial contract commitment.
In October 1996, the ATWOOD HUNTER ("HUNTER") completed a fifty well
contract in Malaysia (commenced in April 1993) and, after drilling one well for
another operator, moved to a Singapore shipyard in December 1996 to commence
upgrade to operate in up to 3500 feet of water in the U.S. Gulf of Mexico. To
date, drydocking and other upgrade work in Singapore has proceeded on schedule.
The HUNTER is scheduled to be dry transported to the U.S. Gulf of Mexico during
the Company's third fiscal quarter for completion of upgrade and enhancement.
The HUNTER should commence its three year contract in the Company's fourth
fiscal quarter.
The ATWOOD FALCON, ATWOOD EAGLE and VICKSBURG are being bid for ongoing and
upgrade opportunities commencing after current contract commitments. With world
dayrates for semisubmersibles and jack-ups having increased, there remains
further upside potential for these rigs based on future contract expirations and
upgrade possibilities. Prevailing dayrates have, in certain instances, increased
beyond existing operating dayrates and daily margins for these units.
In January 1997, RIG-19 completed an inter-platform move and RIG-200
completed its initial offshore platform installation, with drilling operations
commencing for both operations. RIG-200 is the Company's newest state-of-the-art
rig owned in a 50%/50% joint venture with Helmerich Payne International Drilling
Co. and operated by an Atwood Oceanics affiliate.
Progress was again made during the quarter in the continuing development of
the Company's fleet-wide safety and quality management systems. Our first
quarter of fiscal year 1997 has been busy and productive for the Company and its
employees.
<PAGE>
PAGE 13
ATWOOD OCEANICS, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 Limited Waiver and Consent effective as of October 1, 1996
between Atwood Deep Seas, Ltd., Texas Commerce Bank, National
Association, Comac Partners and The Chase Manhattan Bank
10.2 Limited Guaranty dated as of October 1, 1996 by the Company in
favor of The Chase Manhattan Bank, as agent
10.3 Letter dated December 3, 1996 from Liberty Bank & Trust Company
of Oklahoma City, N.A. evidencing a credit facility
99.1 Press Release dated February 4, 1997
(b) Reports on Form 8-K
None
<PAGE>
PAGE 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ATWOOD OCEANICS, INC.
(Registrant)
Date: February 6, 1997 s/JAMES M. HOLLAND
James M. Holland
and Chief Accounting Officer
<PAGE>
PAGE 15
EXHIBIT INDEX
10.1 Limited Waiver and Consent effective as of October 1, 1996 between Atwood
Deep Seas, Ltd., Texas Commerce Bank, National Association, Comac Partners
and The Chase Manhattan Bank
10.2 Limited Guaranty dated as of October 1, 1996 by the Company in favor of The
Chase Manhattan Bank, as agent
10.3 Letter dated December 3, 1996 from Liberty Bank & Trust Company of Oklahoma
City, N. A. evidencing a credit facility
99.1 Press Release dated February 4, 1997
EXHIBIT 10.1
LIMITED WAIVER AND CONSENT
Reference is made to that certain Second Amended and Restated Master Loan
Restructuring Agreement, dated as of March 31, 1995, as amended by the First
Amendment thereto dated as of November 28, 1995 (as so amended, the "Agreement")
by and between ATWOOD DEEP SEAS, LTD., a Texas limited partnership (the
"Partnership"), TEXAS COMMERCE BANK, NATIONAL ASSOCIATION ("TCB"), COMAC
PARTNERS ("CoMac") and THE CHASE MANHATTAN BANK, formerly known as Chemical Bank
("Chase"; collectively with TCB and CoMac, referred to as the "Banks") and
CHASE, as agent (in such capacity, the "Agent"). Terms used and not defined
herein shall have the meanings given them in the Agreement.
The Partnership has requested that the Banks consent to the provisions
set forth herein in consideration for the covenants of the Partnership made
herein.
I. WAIVER AND CONSENT
Subject to the conditions and limitations set forth below, the Banks hereby
consent to, and waive any violation of the following provisions, for a period
commencing October 1, 1996 and ending September 30, 1997:
A. Section 9.8(iii) of the Agreement containing certain restrictions on the
Partnership's ability to make capital expenditures exceeding $1,200,000 in
any of the Partnership's Fiscal Years without the Bank's consent, resulting
from the Partnership's expenditure of an amount not to exceed $39,000,000
on the installation of certain equipment upgrades (the "Upgrades") to the
Hunter Vessel required pursuant to a Drilling Contract with British-Borneo
Petroleum Inc. dated June 20, 1996 (the "Contract"), as such Contract is in
effect on the date hereof a copy of such Contract has been previously
provided to the Banks;
B. Clause Sixth of the Hunter Mortgage and Section 9.6 of the Agreement
containing certain prohibitions on the Partnership's ability to sell any of
its property, business or assets, caused by the removal from the Hunter
Vessel and the sale to Atwood or an Affiliate of Atwood of (i) that certain
FMC Link Belt Crane with 120 feet of boom (the "Crane"), for $292,000, and
(ii) that certain 1,500 feet Vetco Riser with MR6C connectors (the
"Riser"), for $572,000;
C. Section 1.1 of the Agreement containing the definition of "Gross Cash
Receipts" caused by the exclusion of the proceeds of sale of the Crane and
the Riser for the values set forth in paragraph B above, from the
definition of "Gross Cash Receipts"; and
D. Section 1.1 of the Agreement containing the definition of "Gross Cash
Receipts" and "Cash Operating Expenses" caused by the exclusion of the
mobilization fee in an amount not in excess of $10,000,000 paid to the
Partnership under the Contract, from the definition of "Gross Cash
Receipts" and the exclusion of the actual mobilization costs paid by the
Partnership under the Contract from the definition of "Cash Operating
Expenses";
II. COVENANTS OF THE PARTNERSHIP AND ATWOOD
Atwood and the Partnership, in consideration of the waivers and consents
set forth above, hereby covenant and agree that:
A. Upon the execution of this Limited Waiver and Consent Agreement, the
Partnership shall pay the Banks, as a prepayment of the Term Loans,
$10,000,000;
<PAGE>
PAGE 2
B. Upon the execution of this Limited Waiver and Consent Agreement, Atwood
agrees to execute a Limited Guaranty Agreement in favor of and in a form
satisfactory to the Banks guaranteeing the Partnership's indebtedness for
the scheduled principal payments due during the calendar year ending on
December 31, 1997 under Section 3.1 of the Agreement as modified in clause
F below;
C. For the period commencing October 1, 1996 and ending December 31, 1997, no
advances by Atwood to the Partnership in connection with the Contract will
be characterized as Temporary Working Capital Loans pursuant to Sections
4.2 and 9.2 of the Agreement and all such advances will be characterized as
Partnership Advance Notes;
D. For the period commencing October 1, 1996 and ending the Termination Date,
(i) the Partnership shall not be entitled to any distribution of Excess
Cash, under Section 4.2 of the Agreement, upon the reduction of the
aggregate principal amount of the Term Loans below $20,000,000 and (ii) all
Excess Cash payable by the Partnership from and after such time (such time
being described in clause Third-(y) of subsection 4.2) shall be paid to the
Banks;
E. In the event the Contract is terminated prior to the completion of the
Upgrades required by such Contract, Atwood and the Partnership will, within
ninety days of such termination, cause the Hunter Vessel to be put back
into such drilling operating condition as is equivalent to, or better than,
the condition of the Hunter Vessel prior to the commencement of the
Upgrades;
F. Anything contained in the Loan Agreement to the contrary notwithstanding,
including clause (i) of subsection 4.2(b), all Excess Cash applied or to be
applied to the scheduled principal payments of the Term Loans due at any
time on or after January 1, 1997 shall be applied to the Term Loans in the
inverse order of maturity thereof. In furtherance thereof, the prepayments
of Excess Cash received by the Banks and heretofore applied to the
scheduled principal payments of the Term Loans due at the end of the first
two Fiscal Quarters in 1997 shall be reapplied to the Term Loans in the
inverse order of maturity thereof.
III. MISCELLANEOUS
A. The Partnership hereby represents and warrants to the Banks that
immediately after giving effect to this Limited Waiver and Consent there
shall exist no Default or Event of Default and immediately after giving
effect to this Limited Waiver and Consent all representations and
warranties contained herein, in the Agreement or otherwise made in writing
in connection herewith or therewith shall be true and correct in all
material respects with the same force and effect as if those
representations and warranties had been made on and as of the date hereof.
B. Subsection 10.1 of the Loan Agreement is hereby amending by adding thereto
a new clause (m) which shall read in its entirety as follows:
"(m) The Limited Guaranty dated the date hereof made by Atwood in favor of
the Banks shall cease to be in full force and effect or Atwood shall
so assert in writing."
C. Except as expressly waived or agreed herein, all covenants,
obligations and agreements of the Partnership contained in the
Agreement shall remain in full force and effect in accordance with
their terms. Without limitation of the foregoing, the consents,
waivers and agreements set forth herein are limited precisely to the
extent set forth herein and shall not be deemed to (1) be a consent or
agreement to, or waiver or modification of, any other term or
condition of the agreement or any of the documents referred to
therein, or (2) except as expressly set forth herein, prejudice any
right or rights which the Banks may now have or may have in the future
under or in connection with the Agreement or any of the documents
referred to therein. Except as expressly modified hereby, the terms
and provisions of the Agreement and any other documents or instruments
executed in connection with any of the foregoing, are and shall remain
in full force and effect, and the same are hereby ratified and
confirmed by the Partnership in all respects.
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PAGE 3
D. The Partnership agrees to reimburse and save the Banks harmless from
and against liabilities for the payment of all out-of-pocket costs and
expenses arising in connection with the preparation, execution,
delivery, amendment, modification, waiver and enforcement of, or the
preservation of any rights under, this Limited Waiver and Consent,
including, without limitation, the reasonable fees and expenses of
legal counsel to the Banks which may be payable in respect of, or in
respect of any modification of, this Limited Waiver and Consent.
E. This Limited Waiver and Consent and the rights and obligations of the
parties hereunder shall be construed in accordance with and be
governed by the laws of the State of New York.
F. This Limited Waiver and Consent and the documents referred to herein
represent the entire understanding of the parties hereto regarding the
subject matter hereof and supersede all prior and contemporaneous oral
and written agreements of the parties hereto with respect to the
subject matter hereof.
G. This Limited Waiver and Consent may be separately executed in
counterparts and by the different parties hereto in separate
counterparts, each of which when so executed shall be deemed to
constitute one and the same agreement.
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PAGE 4
IN WITNESS WHEREOF, the undersigned parties have executed this
Limited Waiver and Consent as of the 3rd day of February, 1997.
ATWOOD DEEP SEAS, LTD.
By: ATWOOD HUNTER CO., General Partner
By: /s/ James M. Holland
James M. Holland
Vice President
ATWOOD OCEANICS, INC.
By: /s/ James M. Holland
James M. Holland
Senior Vice President
THE CHASE MANHATTAN BANK, formerly known as
Chemical Bank, as Agent and as a Bank
By: /s/ Charles O. Freedgood
Charles O. Freedgood
Vice President
TEXAS COMMERCE BANK,
NATIONAL ASSOCIATION
By: /s/ James A. Flynn
Name: James A. Flynn
Title: Vice President
COMAC PARTNERS
By: /s/ Paul Coughlin
Name: Paul Coughlin
Title: General Partner
EXHIBIT 10.2
LIMITED GUARANTY
THIS LIMITED GUARANTY (this "Guaranty") is made as of the 1st day of
October, 1996, by ATWOOD OCEANICS, INC., a Texas corporation (the "Guarantor"),
in favor of THE CHASE MANHATTAN BANK, as agent ("Agent") for the Banks parties
to the Loan Agreement described below.
RECITALS
A. Atwood Deep Seas, Ltd., a Texas limited partnership (the "Borrower"),
has asked the Banks for certain waivers and consents concerning that
certain Term Loan (the "Loan") described in and to be made pursuant to
the terms and conditions of the Second Amended and Restated Master
Loan Restructuring Agreement, dated March 31, 1995 as amended by the
First Amendment thereto dated as of November 28, 1995 (as further
amended, substituted and restated from time to time, the "Loan
Agreement").
B. The Guarantor has requested the Banks to grant the waivers and
consents concerning the Loan to the Borrower pursuant to the Loan
Agreement and that certain Limited Waiver and Consent ("Limited
Waiver") dated of even date herewith.
C. It is a condition precedent, among others, to the Banks' consideration
of the Borrower's request for the waivers and consents regarding the
Loan set forth in that certain Limited Waiver that the Guarantor enter
into this Guaranty in order to guarantee the full and prompt payment
and performance by the Borrower of the Obligations (as defined below).
D. All capitalized terms that are used, but are not otherwise defined
herein, shall have the meanings ascribed to them in the Loan
Agreement.
E. In granting the waivers and consents set forth in the Limited Waiver,
each Bank is relying upon the agreements of the Guarantor, as set
forth in this Guaranty.
NOW THEREFORE, in consideration of the Banks' agreement to execute the
Limited Waiver and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the
Guarantor, the Guarantor agrees with Agent as follows:
1. Unconditional Guaranty. The Guarantor hereby unconditionally and
irrevocably guarantees to Agent for the ratable benefit of the
Banks and their respective successors and assigns the following:
(a) The due and punctual repayment, whether at stated maturity,
by acceleration or otherwise) in full (and not merely the
collection) of (1) the sum of the principal payments due to
each Bank under Section 3.1 of the Loan Agreement (as
modified by the Limited Waiver and Consent thereto dated the
date hereof) during the period commencing October 1, 1996
and ending December 31, 1997 pursuant to each of the
Borrower's Term Notes and the interest thereon, ("1997
Principal") and (2) any other obligations of Borrower to the
Banks, or any of them, under the Restructuring Documents, to
pay the 1997 Principal including, without limitation, late
charges, penalties, enforcement costs, indemnification
obligations and attorneys' fees specifically relating to the
payment or collection of the 1997 Principal (collectively,
the "Obligations"); in each case when due and payable,
whether on demand, on any installment payment date or at the
stated or accelerated maturity.
2. Primary Liability.
(a) The obligations and liabilities of the Guarantor under this
Guaranty are primary, direct, absolute, unlimited,
continuing, irrevocable and immediate and not conditional or
contingent upon the pursuit by Agent or any Bank of any
rights or remedies it may have against the Borrower or any
person or entity
<PAGE>
PAGE 2
otherthan the Borrower who may now or at any time hereafter
be primarily or secondarily liable for any or all of
the Obligations, including, without limitation, any
other maker, endorser, surety, or guarantor of all or a
portion of the Obligations or any person or entity who
is now or hereafter a party to any of the Restructuring
Documents (collectively, the "Obligors").
(b) Without limiting the generality of the foregoing, neither
Agent nor any Bank shall not be required to make any demand
on Borrower or the Obligors, sell at foreclosure or
otherwise pursue or exhaust its remedies against any
collateral or other security (or any part thereof) now or
hereafter pledged, assigned or granted to secure the
Obligations, before, simultaneously with or after enforcing
its rights and remedies hereunder against the Guarantor.
(c) The obligations and liabilities of the Guarantor hereunder
and under the other Restructuring Documents shall not be
subject to any counterclaim, recoupment, set-off, reduction,
or defense based upon any claim that the Guarantor may have
against Agent, any Bank, Borrower or any of the Obligors,
are independent of any other guaranty at any time in effect
with respect to the Obligations, and may be enforced
regardless of the existence of any other guaranty.
(d) Any one or more successive and/or concurrent actions may be
brought hereunder against the Guarantor either in the same
action, if any, brought against Borrower or any of the
Obligors, or in separate actions, as often as Agent or the
Banks may deem advisable.
(e) Agent and any Bank may, without notice to or consent of the
Guarantor or any other Obligor and with or without
consideration, release, compromise, settle with and proceed
against any Obligor and any security and collateral given by
such Obligor without affecting in any way the obligations
and liabilities of the Guarantor hereunder or under any of
the Restructuring Documents.
3. Indulgences. The Guarantor expressly agrees that Agent and each Bank
may, in its sole and absolute discretion, at any time and from time to
time, without notice to or further assent of the Guarantor and with or
without consideration, and without in any way releasing, modifying,
waiving, affecting or impairing any of the obligations and liabilities
of the Guarantor hereunder:
(a) waive compliance with, or any defaults under, or grant any other
indulgences with respect to, the Term Note or any of the other
Restructuring Documents (including, but not limited to, any
payment terms thereof);
(b) amend, substitute, extend, renew or modify any provision of the
Term Note or the other Restructuring Documents;
(c) effect any release, compromise or settlement in connection with
the Restructuring Documents;
(d) agree to the sale, substitution, exchange, release or other
disposition of all or any part of any collateral for the
Obligations and apply such collateral, and direct the order or
manner of sale thereof;
(e) make advances for the purpose of performing any term or covenant
contained in the Restructuring Documents with respect to which
the Borrower or any other party shall be in default;
(f) assign or otherwise transfer this Guaranty or any of the other
Restructuring Documents or any interest herein or therein;
(g) fail, omit, lack diligence, or delay to enforce, assert, or
exercise any right, power, privilege, or remedy conferred upon
Agent or any Bank under the provisions of any of the
Restructuring Documents or under applicable law; and
<PAGE>
PAGE 3
(h) deal in all respects with Borrower or any Obligor as if this
Guaranty were not in effect.
4. Waiver. The Guarantor hereby expressly waives:
(a) presentment, protest and demand, notice of acceleration, notice
of protest, notice of demand, notice of dishonor, notice of
non-payment and notice of acceptance with respect to the Term
Note, the Obligations and this Guaranty;
(b) notice of the execution and delivery of the Restructuring
Documents, the making of the Loan or of the creation of any of
the Obligations;
(c) notice of any default or Event of Default under this Guaranty or
any of the other Restructuring Documents and of all indulgences;
(d) demand for the observance, performance or enforcement of any term
or provision of this Guaranty or any of the other Restructuring
Documents;
(e) all other notices and demands otherwise required by law that the
Guarantor may lawfully waive. The Guarantor waives any defense
arising by reason of any disability or other defense of Borrower,
any lack of authority of Borrower with respect to the
Restructuring Documents, the illegality, invalidity, or lack of
enforceability of the Restructuring Documents from any cause
whatsoever, the failure of Agent or any Bank to perfect or
maintain perfection of any interest in any security given to
secure the Obligations, or the cessation from any cause
whatsoever of the liability of the Borrower (except for the
defense that the Borrower has duly performed in accordance with
the Restructuring Documents). The Guarantor specifically agrees
that the misuse or misapplication of any of the proceeds of the
Loan by the Borrower or any other person or entity shall not
affect, lessen, impair or release the Guarantor from its
obligations and liabilities hereunder.
5. Subordination: Subrogation. Any liability, indebtedness or obligation
of Borrower to the Guarantor or of any Obligor to the Guarantor of
every kind or nature, whether now existing or hereafter created, due
or to become due, direct or contingent, is hereby subordinated in all
respects to the payment of the Obligations to Agent and the Banks. The
Guarantor agrees not to accept or receive any payment with respect to
any such liability, indebtedness or obligation until the payment and
performance in full of all of the Obligations. Until payment in full
of the Obligations, the Guarantor hereby irrevocably waives:
(a) all rights the Guarantor may have at law or in equity to seek
subrogation, contribution, indemnification or any other form of
reimbursement from Borrower or any Obligor.
(b) any right to enforce any remedy that Agent or any Bank now has or
may hereafter have against Borrower or any Obligor; and
(c) the benefit of, and any right to participate in, any security for
the Obligations now or hereafter held by Agent or any Bank
6. Representations and Warranties. The Guarantor hereby represents and
warrants to Agent that:
(a) The Guarantor is a corporation, duly organized and validly
existing in good standing under the laws of the State of Texas
and has the requisite power and authority (A) to carry on its
business as presently conducted, (B) to enter into and perform
its obligations under each Restructuring Document to which the
Guarantor is a party, and (C) to guarantee the Loan.
<PAGE>
PAGE 4
(b) The execution, delivery and performance by the Guarantor of each
of the Restructuring Documents to which the Guarantor is a party,
have been duly authorized by all necessary corporate action, do
not require stockholder approval other than such as has been duly
obtained or given, do not or will not contravene any of the terms
of its articles of incorporation or by-laws, and will not violate
any provision of law or of any order of any court or Governmental
Authority or constitute (with or without notice or lapse of time
or both) a default under, or result in the creation of any
security interest, lien, charge or encumbrance upon any of the
properties or assets of the Guarantor pursuant to, any agreement,
indenture or other instrument to which the Guarantor is a party
or by which the Guarantor may be bound; each Restructuring
Document has been duly executed and delivered by the Guarantor
and constitutes the legal, valid and binding agreement or
instrument of the Guarantor, enforceable against the Guarantor in
accordance with the respective terms thereof. The enforceability
of the Restructuring Documents, however, is subject to all
applicable bankruptcy, insolvency, reorganization, moratorium and
other laws affecting the rights of creditors and to general
equity principles.
(c) There are no actions, suits or proceedings pending or, to the
knowledge of the Guarantor, threatened before any court,
arbitrator or Governmental Authority (A) under the Environmental
Laws, (B) that would prevent the execution or delivery of the
Restructuring Documents, or (C) that, either individually or in
the aggregate, might materially affect the Vessels, the financial
condition or operations of the Guarantor, the authority of the
Guarantor to enter into and perform this Guaranty and the other
Restructuring Documents, or the ability of the Guarantor to pay
the Obligations in full.
(d) Guarantor represents and warrants that the representations and
warranties of Borrower made in the Loan Agreement are true and
accurate in each and every respect.
7. Affirmative Covenants. Until payment in full and the performance of
all of the Obligations, the Guarantor shall comply with each of the
covenants set forth in the Loan Agreement as if it were a Borrower
thereunder.
8. Event of Default. The occurrence of any one or more of the following
events shall be "Events of Default" hereunder:
8.1 Failure to Pay. The Guarantor shall fail to perform or observe any of
its obligations under Section 1 of this Guaranty.
8.2 Failure to Perform. The Guarantor shall fail to perform or observe any
covenant, condition or agreement (other than those set forth in
Section 1 of this Guaranty) to be performed or observed by it
hereunder or under any of the other Restructuring Documents, which
failure shall continue unremedied after written notice thereof from
Agent.
8.3 Breach of Representations and Warranties. Any certificate, statement,
representation, warranty or audit contained herein or heretofore or
hereafter furnished with respect to this Guaranty or any of the other
Restructuring Documents by or on behalf of the Guarantor proves to
have been false in any material respect at the time as of which the
facts therein set forth were stated or certified, or omits any
substantial contingent or unliquidated liability or claim against the
Guarantor.
8.4 Event of Default Under Other Restructuring Documents. A default or an
Event of Default (as defined therein) occurs under any of the other
Restructuring Documents.
8.5. Bankruptcy. Any of the following events shall occur:
(i) The Guarantor commences a voluntary case under Title 11 of the
United States Code as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or
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PAGE 5
(ii) An involuntary case is commenced against the Guarantor under the
Bankruptcy Code and relief is ordered against the Guarantor or
the petition is controverted but is not dismissed or stayed
within sixty (60) days after the commencement of the case; or
(iii)A custodian (as defined in the Bankruptcy Code) or a similar
official is appointed for, or takes charge of, all or
substantially all of the property of the Guarantor and such
appointment is not terminated within sixty (60) days; or
(iv) The Guarantor commences any other proceeding under any
reorganization, arrangement, readjustment of debt, relief of
debtors, dissolution, insolvency, liquidation or similar law of
any jurisdiction relating to the Guarantor (whether now or
hereafter in effect), or there is commenced against the Guarantor
any such proceeding that remains undismissed or unstayed for a
period of sixty (60) days; or the Guarantor is adjudicated
insolvent or bankrupt; or the Guarantor fails to controvert in a
timely manner any such case under the Bankruptcy Code or any such
proceeding, or any order of relief or other order approving any
such case or proceeding is entered; or
(v) The Guarantor, by any act or failure to act, indicates its
consent to, approval of or acquiescence in any such case or
proceeding or in the appointment of any custodian of or for it or
any substantial part of its property or suffers any such
appointment to continue undischarged or unstayed for a period of
ninety (90) days; or
(vi) The Guarantor makes a general assignment for the benefit of
creditors; or
(vii)Any corporate action is taken by the Guarantor for the purpose
of effecting any of the foregoing.
8.6 Reorganization: Attachment. An order, judgment or decree shall be
entered, without the application, approval or consent of the
Guarantor, by any court of competent jurisdiction, approving a
petition seeking reorganization of the Guarantor or seizure or
attachment of all or a substantial part of the Guarantor's assets, and
such order, judgment or decree shall continue unstayed and in effect
for any period of sixty (60) consecutive days.
8.7 Judgments. Judgments or orders for the payment of monies in excess of
USD 500,000 in aggregate shall be rendered against the Guarantor and
such judgments or orders shall continue unsatisfied, unstayed or
unbonded for a period of thirty (30) days.
8.8 Cross Default. The Guarantor, any other guarantor of the Loan or any
affiliate of the Guarantor, shall be in default under any direct,
indirect or contingent material obligation or indebtedness now or
hereafter existing in favor any Bank or any other person or entity.
For purposes hereof, an "affiliate" of the Guarantor shall mean any
person or entity which controls, is controlled by or is under common
control with the Guarantor.
8.9 Anticipatory Repudiation. The Guarantor engages in a course of action
or dealing that causes Agent reasonably to believe that there is an
anticipatory repudiation of the Guarantor's obligations under this
Guaranty.
8.10 Termination of Guarantor. The corporate existence of the Guarantor is
terminated and its obligations hereunder are not assumed by a
successor in interest reasonably satisfactory to Agent.
9. Rights and Remedies. Upon the occurrence of an Event of Default
(whether or not declared to be such by Agent or the required Banks),
and in every such event and at any time thereafter, Agent may (but
shall
<PAGE>
PAGE 6
not be obligated to) do any one or more of the following at the sole
cost and expense of the Guarantor, all of which are hereby
authorized by the Guarantor:
(a) Declare the Obligations (whether then due or not) to be
immediately due and payable by the Guarantor, and the Guarantor
shall on demand pay the same to Agent for the ratable benefit of
the Banks in immediately available funds;
(b) Sue for and recover all liquidated damages, accelerated payments
and/or other sums otherwise recoverable from Borrower under the
Restructuring Documents (whether then due or not);
(c) Sue for and recover all damages then or thereafter incurred by
Agent and each Bank as a result of such Event of Default; and/or
(d) Seek specific performance of the Guarantor's obligations
hereunder and under the other Restructuring Documents.
10. Expenses. The Guarantor shall be liable for, and shall pay to Agent
and each Bank upon demand, all expenses incurred by or on behalf of
Agent and each Bank by reason of any Event of Default or the exercise
by Agent or any Bank of its rights or remedies hereunder and under any
of the other Restructuring Documents, including, but not limited to,
attorneys' fees and expenses.
11. Continuing Guaranty. This Guaranty is a continuing one and shall
terminate only upon payment in full of the Obligations and the
performance of all of the terms, covenants and conditions of the
Restructuring Documents, and satisfaction by the Guarantor of all of
his obligations hereunder. This Guaranty shall continue to be
effective, or be reinstated, as the case may be, if at any time any
payment, or any part thereof, of any of the Obligations is rescinded,
avoided, reduced or must otherwise be restored or returned by Agent or
any Bank upon the insolvency, Bankruptcy, receivership, dissolution,
liquidation or reorganization of any of the Borrower, the Guarantor or
the Obligors, or upon or as a result of the appointment of a receiver,
intervener or conservator of, or trustee or similar officer for, any
of the Borrower, the Guarantor or the Obligors or any of their
respective property, or otherwise, all as though such payment had not
been made and irrespective of whether such payment is returned to the
party who originally made it or to some other party.
12. Notice. All notices, requests and demands shall be in writing
(including telecopier transmission) given to or made upon the
respective parties hereto as follows:
In the case of the Guarantor:
Atwood Oceanics, Inc.
15835 Park Ten Place Drive
Houston, Texas 77084
Attention: Senior Vice President
Telecopier: (713) 492-0345
In the case of Agent:
The Chase Manhattan Bank
270 Park Avenue
New York, New York 10017
Attention: Charles O. Freedgood
Telecopier: (212) 661-8396
or in such other manner an any party hereto shall designate by written
notice to the other parties hereto. All such notices shall be
effective upon delivery or three (3) days after being deposited in the
United States mail with
<PAGE>
PAGE 7
postage prepaid certified, return receipt requested in a correctly
addressed wrapper, or upon receipt if delivered to Federal Express or
similar courier company or transmitted by telefax during normal
business hours, except that all notices, requests and demands to Agent
shall not be effective until received by Agent.
13. Cumulative Remedies: Waiver of Rights. Each right, power and remedy of
Agent and the Banks as provided for in this Guaranty or in any of the
other Restructuring Documents or now or hereafter existing at law, in
equity or otherwise shall be cumulative and concurrent and shall be in
addition to every other right, power or remedy provided for in this
Guaranty, in the other Restructuring Documents or now or hereafter
existing at law, in equity or otherwise. The exercise or beginning of
the exercise by Agent or any Bank of any one or more of such rights,
powers or remedies shall not preclude the simultaneous or later
exercise by Agent or any Bank of any or all such other rights, powers
or remedies. No delay or omission by Agent or any Bank in exercising
any such right or remedy shall operate as a waiver thereof. No waiver
of any rights and remedies hereunder, and no modification or amendment
hereof, shall be deemed made by Agent or any Bank unless in writing
and duly signed by Agent and such Bank. Any such written waiver shall
apply only to the particular instance specified therein and shall not
impair the further exercise of such right or remedy or of any other
right or remedy of Agent or any Bank.
14. Severability. In case any provision (or any part of any provision)
contained in this Guaranty shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision (or remaining
part of the affected provision) of this Guaranty, and this Guaranty
shall be construed as if such invalid, illegal or unenforceable
provision (or part thereof) had never been contained herein but only
to the extent it is invalid, illegal or unenforceable.
15. Survival of Terms. All covenants, agreements, representations and
warranties made by the Guarantor herein, in the Restructuring
Documents or in any other certificates, instruments or documents
delivered pursuant hereto shall survive the making by the Banks of the
Term Loans and the execution and delivery of the Term Notes, and shall
continue in full force and effect so long as any of the Obligations
are outstanding and unpaid.
16. Entire Agreement: Modification. This Guaranty, together with the other
Restructuring Documents, constitute the final and entire agreement and
understanding of the parties, and any term, condition, covenant or
agreement not contained herein or therein is not a part of the
agreement and understanding of the parties. Neither this Guaranty, nor
any term, condition, covenant or agreement hereof, may be changed,
waived, discharged or terminated orally, except by an instrument in
writing signed by the party against whom enforcement of the change,
waiver, discharge or termination is sought.
17. Construction. Whenever used herein, the singular number shall include
the plural, the plural the singular and the use of the masculine,
feminine or neuter gender shall include all genders. The headings in
this Guaranty are for convenience only and shall not limit or
otherwise affect any of the terms hereof.
18. Applicable Law and Jurisdiction. (a) THIS GUARANTY AND THE
RESTRUCTURING DOCUMENTS (INCLUDING, BUT NOT LIMITED TO, THE VALIDITY
AND ENFORCEABILITY HEREOF AND THEREOF SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, OTHER
THAN CONFLICT OF LAWS RULES THEREOF. ANY LEGAL ACTION OR PROCEEDING
AGAINST THE GUARANTOR WITH RESPECT TO THIS GUARANTY OR ANY
RESTRUCTURING DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF
NEW YORK, THE U.S. FEDERAL COURTS IN SUCH STATE, SITTING IN THE COUNTY
OF NEW YORK, OR IN THE COURTS OF ANY OTHER JURISDICTION WHERE SUCH
ACTION OR PROCEEDING MAY BE PROPERLY BROUGHT, AND THE GUARANTOR HEREBY
IRREVOCABLY ACCEPTS THE JURISDICTION OF SUCH COURTS FOR THE PURPOSE OF
ANY ACTION OR PROCEEDING. The Guarantor further irrevocably consents
to the service of process out of said courts by the mailing thereof by
Agent by U.S. registered or certified mail postage prepaid to the
party to be served at its address designated in
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PAGE 8
Section 12 hereof. The Guarantor agrees that a final judgment in any
action or proceeding shall be conclusive and may be enforced in any
other jurisdiction by suit on the judgment or in any other manner
provided by law. Nothing in this Section shall affect the right of
Agent or the Banks to serve legal process in any other manner
permitted by law or affect the right of Agent or the Banks to bring
any action or proceeding against the Guarantor or its properties in
the courts of any other jurisdiction. To the extent that the Guarantor
has or hereafter may acquire any immunity from jurisdiction of any
court or from any legal process (whether through service of notice,
attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to either itself or its property,
the Guarantor hereby irrevocably waives such immunity in respect of
its obligations under this agreement and the other Restructuring
Documents..
(b) THE AGENT, EACH BANK AND THE GUARANTOR HEREBY IRREVOCABLY WAIVE
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS GUARANTY OR ANY
OTHER RESTRUCTURING DOCUMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY OR THEREBY.
19. Assignment. The Agent and each Bank may, without notice to or consent
of the Guarantor, sell, assign or transfer to any one or more persons
or entities, all or any part of the Obligations or all or any part of
the Restructuring Documents and each such assignee or transferee shall
have the right to enforce the Obligations and such Restructuring
Documents as fully as the transferor, provided that such transferor
shall continue to have the unimpaired right to enforce the provisions
of the Restructuring Documents and the Obligations that it has not
sold, assigned or transferred. Additionally, each Bank may sell or
grant to any other one or more persons or entities participation in
all or any part of the Obligations or all or any part of the
Restructuring Documents. In connection with and prior to and after any
such sale, transfer, assignment or participation, and each selling
Bank may disclose and furnish to any prospective or actual purchaser,
transferee, assignee or participant, any and all reports, financial
statements and other information obtained by Agent or such Bank at any
time and from time to time in connection with the Term Loans, the
Obligations, the Restructuring Documents or otherwise. The Guarantor
shall fully cooperate with Agent and each selling Bank in connection
with any such assignment and shall execute and deliver such consents
and acceptances to any such assignment necessary or desirable, in
Agent's sole discretion, to effect any such assignment.
IN WITNESS WHEREOF, the Guarantor has caused this Limited Guaranty to be
duly executed as of the date first above written.
ATWOOD OCEANICS, INC.
By: /s/ James M. Holland
James M. Holland
Senior Vice President
EXHIBIT 10.3
(Liberty Logo)
December 3, 1996
James M. Holland, Senior Vice President
15835 Park Ten Place Drive
Houston, TX 77084
Dear Jim:
Pursuant to our telephone conversation this morning, this letter serves to
formally confirm our offer to provide Atwood Oceanics short-term funding through
repurchase agreement under the following terms.
Rate: Fixed at the then-current one-month LIBOR rate plus seventy five
basis points (priced at issuance).
Term: Renewable monthly at your discretion through August 31, 1997 (later
if mutually agreed).
Amount: Not to exceed $30,000,000.00 unless mutually agreed. Securities:
U.S. Treasury Billy, Notes or Bonds.
Repurchase Agreement: Subject to all terms and conditions of previously
executed contract.
Dale Ireland (Commercial Lending) will contact you with potential options
regarding a potential credit line for borrowing needs in excess of your
available securities.
Feel free to contact me at 1-800-688-8572 or 918-586-5955 (direct) if I can
answer any questions or provide additional help.
Sincerely,
/s/ John Mark Cassil
John Mark Cassil
Senior Vice President & Treasury Manager
cc: Sonya Tyau
Dale Ireland
Liberty Bank and Trust Company of Tulsa, N.A.
15 East Fifth Street - Tulsa, OK 74103
Liberty Bank and Trust Company of Oklahoma City, N.A.
P. O. Box 25848 - Oklahoma City, OK 73125
EXHIBIT 99
HOUSTON, TEXAS
FEBRUARY 4, 1997
FOR IMMEDIATE RELEASE
ATWOOD OCEANICS, INC., HOUSTON-BASED INTERNATIONAL DRILLING CONTRACTOR
ANNOUNCED TODAY THAT IT HAS FILED A REGISTRATION STATEMENT FOR THE OFFER AND
SALE OF 1.5 MILLION SHARES OF COMMON STOCK OF THE COMPANY. THE OFFERING WILL
BE UNDERWRITTEN BY CREDIT SUISSE FIRST BOSTON, HOWARD, WEIL, LABOUISSE,
FRIEDRICHS INCORPORATED AND RAUSCHER PIERCE REFSNES, INC. THE COMPANY INTENDS
TO USE THE PROCEEDS OF THE OFFERING FOR THE UPGRADE AND REFURBISHMENT OF
CERTAIN OF THE COMPANY'S DRILLING RIGS, TO REPAY AMOUNTS OUTSTANDING UNDER
CERTAIN BANK LOANS AND FOR GENERAL CORPORATE PURPOSES. HELMERICH & PAYNE,
INC., TOGETHER WITH ITS SUBSIDIARY, CURRENTLY OWNING APPROXIMATELY 23.8% OF THE
OUTSTANDING SHARES OF THE COMPANY, HAVE INDICATED THAT IT INTENDS TO PURCHASE
25% OF THE SHARES TO BE OFFERED (EXCLUDING THE UNDERWRITERS' OVER-ALLOTMENT
OPTION).
CONTACT: JIM HOLLAND
(281) 492-2929
