<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 27, 1998
REGISTRATION NUMBER 333-
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
OFFSHORE LOGISTICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 4522 72-0679819
(PRIMARY STANDARD (I.R.S. EMPLOYER
(STATE OR OTHER INDUSTRIAL IDENTIFICATION NO.)
JURISDICTION OF CLASSIFICATION CODE
INCORPORATION OR NUMBER)
ORGANIZATION)
224 RUE DE JEAN
P.O. BOX 5-C
LAFAYETTE, LOUISIANA 70505
(318) 233-1221
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
DRURY A. MILKE
VICE PRESIDENT, CHIEF FINANCIAL OFFICER,
TREASURER AND SECRETARY
224 RUE DE JEAN
P.O. BOX 5-C
LAFAYETTE, LOUISIANA 70505
(318) 233-1221
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
Copies to:
ARTHUR H. ROGERS
FULBRIGHT & JAWORSKI L.L.P.
1301 MCKINNEY, SUITE 5100
HOUSTON, TEXAS 77010-3095
(713) 651-5151
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement becomes
effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
CALCULATION OF REGISTRATION FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE (2) FEE
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
7 7/8% Series B Senior Notes due
2008............................ $100,000,000 100.1815% $100,181,500 $29,554
Senior Guarantees(3)............. -- -- -- --
</TABLE>
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- -------------------------------------------------------------------------------
(1) Pursuant to Rule 457(f) under the Securities Act of 1933, the registration
fee has been calculated based on the average of the bid price of 99.928%
and the ask price of 100.435% in the PORTAL market on March 24, 1998, of
the 7 7/8% Series A Senior Notes due 2008 of the Company, for which the
securities registered hereby will be exchanged.
(2) Estimated solely for the purpose of calculating the registration fee.
(3) The 7 7/8% Series B Senior Notes due 2008 are to be guaranteed by the
guarantors listed on the following page on a senior basis. No separate
consideration will be paid in respect of the guarantees. Pursuant to Rule
457(n) under the Securities Act of 1933, no separate fee is payable for
the guarantees.
---------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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<PAGE>
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
PRIMARY
STATE OR OTHER STANDARD
JURISDICTION OF INDUSTRIAL IRS EMPLOYER
INCORPORATION CLASSIFICATION IDENTIFICATION
NAME OR ORGANIZATION CODE NO. NO.
- ---- --------------- -------------- --------------
<S> <C> <C> <C>
Air Logistics, L.L.C............. Louisiana 4522 72-1412904
Air Logistics of Alaska, Inc..... Alaska 4522 92-0048121
Grasso Corporation............... Delaware 4522 72-1277694
Grasso Production Management,
Inc............................. Texas 1389 72-0271164
Medic Systems, Inc............... Delaware 4522 76-0482462
Pumpkin Air, Inc................. Texas 4522 75-1638151
</TABLE>
<PAGE>
*******************************************************************************
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
********************************************************************************
SUBJECT TO COMPLETION, DATED MARCH 27, 1998
PROSPECTUS OFFER FOR ALL OUTSTANDING
7 7/8% SERIES A SENIOR NOTES DUE 2008
IN EXCHANGE FOR
LOGO OF
7 7/8% SERIES B SENIOR NOTES DUE 2008
OFFSHORE LOGISTICS, INC.
[LOGO OF OFFSHORE LOGISTICS APPEARS HERE]
Offshore Logistics, Inc., a Delaware corporation (the "Company" or "OLOG"),
and the Guarantors (as defined herein) hereby offer, upon the terms and subject
to the conditions set forth in this Prospectus and the accompanying letter of
transmittal (the "Letter of Transmittal," and together with this Prospectus,
the "Exchange Offer"), to exchange $1,000 principal amount of registered 7 7/8%
Series B Senior Notes due 2008 of the Company (the "New Notes") for each $1,000
principal amount of unregistered 7 7/8% Series A Senior Notes due 2008 of the
Company (the "Old Notes"), of which an aggregate principal amount of
$100,000,000 is outstanding. The form and terms of the New Notes are identical
in all material respects to the form and terms of the Old Notes except that (i)
the New Notes are being registered under the Securities Act of 1933, as amended
(the "Securities Act"), and, therefore, will not bear any legends restricting
their transfer and (ii) holders of the New Notes, other than certain broker-
dealers, will not be entitled to the rights of holders of Transfer Restricted
Securities (as defined herein) under the Registration Rights Agreement (as
defined herein). The New Notes will evidence the same debt as the Old Notes and
will be issued pursuant to, and entitled to the benefits of, the Indenture (as
defined herein) governing the Old Notes. The New Notes and the Old Notes are
sometimes collectively referred to herein as the "Notes." See "The Exchange
Offer" and "Description of the Notes."
Interest on the New Notes will be payable semi-annually in arrears on January
15 and July 15 of each year, commencing July 15, 1998. Interest on the New
Notes will accrue from the date of issuance of the Old Notes, January 27, 1998.
The New Notes will be redeemable at the option of the Company, in whole or in
part, at any time on or after January 15, 2003 at the redemption prices set
forth herein, plus accrued and unpaid interest and Liquidated Damages (as
defined herein), if any, thereon, to the redemption date. Notwithstanding the
foregoing, on or prior to January 22, 2001, the Company may redeem up to 35% of
the aggregate principal amount of Notes originally issued at a redemption price
of 107 7/8% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon, to the redemption date, with the net
cash proceeds of one or more Qualified Equity Offerings (as defined herein),
provided that at least 65% of the aggregate principal amount of the Notes
originally issued remains outstanding following each such redemption. Upon the
occurrence of a Change of Control (as defined herein), the Company will be
required to make an offer to repurchase all or any part of each holder's New
Notes at a price equal to 101% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any, thereon, to the date of
repurchase. See "Description of the Notes."
The New Notes will be general unsecured obligations of the Company, ranking
pari passu in right of payment with all other future senior indebtedness of the
Company and senior in right of payment to all existing and future subordinated
indebtedness of the Company. The Indenture will permit the Company and its
subsidiaries to incur additional indebtedness, including additional secured
indebtedness, subject to certain conditions. The New Notes will be
unconditionally guaranteed ("Subsidiary Guarantees") on a senior basis by
certain of the Company's subsidiaries (the "Guarantors"). The Subsidiary
Guarantees will be general unsecured obligations of the Guarantors, ranking
pari passu in right of payment with all existing and future senior indebtedness
of the Guarantors and senior in right of payment to any subordinated
indebtedness of the Guarantors incurred in the future. See "Risk Factors--
Ranking of the Notes; Effective Subordination" and "Description of the Notes--
Certain Covenants--Incurrence of Indebtedness and Issuance of Preferred Stock."
SEE "RISK FACTORS" BEGINNING ON PAGE 8 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH THE EXCHANGE OFFER AND AN
INVESTMENT IN THE NEW NOTES OFFERED HEREBY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
<PAGE>
The Company and the Guarantors will accept for exchange any and all Old
Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on , 1998, unless extended (as so extended, the "Expiration
Date"). Tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m.
New York City time on the Expiration Date. The Exchange Offer is not
conditioned upon any minimum principal amount of Old Notes being tendered for
exchange; however, the Exchange Offer is subject to certain customary
conditions. Old Notes may be tendered only in denominations of $1,000
principal amount and integral multiples thereof. See "The Exchange Offer."
The Old Notes were sold by the Company on January 27, 1998 to Jefferies &
Company, Inc. (the "Initial Purchaser") in a private transaction not subject
to the registration requirements of the Securities Act. The Old Notes were
thereupon offered and sold by the Initial Purchaser only to "qualified
institutional buyers" (as defined in Rule 144A under the Securities Act) and
to a limited number of institutional "accredited investors" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act), each of whom agreed
to comply with certain transfer restrictions and other conditions.
Accordingly, the Old Notes may not be offered, resold or otherwise transferred
unless registered under the Securities Act or unless an applicable exemption
from the registration requirements of the Securities Act is available. The New
Notes are being offered hereunder in order to satisfy the obligations of the
Company and the Guarantors under the Registration Rights Agreement entered
into with the Initial Purchaser in connection with the offering of the Old
Notes. See "The Exchange Offer" and "Description of the Notes--Registration
Rights; Liquidated Damages."
Based on interpretations by the staff of the Securities and Exchange
Commission (the "Commission") set forth in no-action letters issued to third
parties, the Company and the Guarantors believe the New Notes issued pursuant
to the Exchange Offer in exchange for Old Notes may be offered for resale,
resold and otherwise transferred by any holder thereof (other than broker-
dealers, as set forth below, and any such holder that is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act) without
compliance with the registration and prospectus delivery provisions of the
Securities Act, provided that (i) the New Notes are acquired in the ordinary
course of such holder's business, (ii) the holder is not engaging in and does
not intend to engage in a distribution of the New Notes, and (iii) the holder
does not have an arrangement or understanding with any person to participate
in the distribution of the New Notes. Any holder who tenders in the Exchange
Offer with the intention to participate, or for the purpose of participating,
in a distribution of the New Notes or who is an affiliate of the Company may
not rely upon such interpretations by the staff of the Commission and, in the
absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
secondary resale transaction. Holders of Old Notes wishing to accept the
Exchange Offer must represent to the Company in the Letter of Transmittal that
such conditions have been met. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be
deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from
time to time, may be used by a broker-dealer in connection with resales of New
Notes received in exchange for Old Notes where such Old Notes were acquired by
such broker-dealer as a result of market-making activities or other trading
activities. The Company and the Guarantors have agreed, for a period of one
year after the effective date of the Registration Statement of which this
Prospectus forms a part, to make this Prospectus available to any broker-
dealer for use in connection with any such resale.
The Old Notes are eligible for trading in the National Association of
Securities Dealers' Private Offering, Resales and Trading through Automated
Linkages ("PORTAL") Market. The Company does not intend to list the New Notes
on any securities exchange.
Neither the Company nor the Guarantors will receive any proceeds from the
Exchange Offer.
i
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and
regulations thereunder, and in accordance therewith files periodic reports,
proxy and other information statements with the Commission. All reports, proxy
and information statements, and other information filed by the Company with
the Commission may be inspected at the public reference facilities maintained
by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the regional offices of the Commission located at 7 World Trade Center, 13th
Floor, New York, New York 10048, and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such material may be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission also maintains a
Web site (http://www.sec.gov) that contains reports, proxy and information
statements regarding registrants, such as the Company, that file
electronically with the Commission. The Company's Common Stock is traded on
the Nasdaq National Market and reports, proxy statements and other information
concerning the Company can also be inspected at the offices of the National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington,
D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's (i) Annual Report on Form 10-K for the transition period from
July 1, 1996 to March 31, 1997; (ii) Quarterly Reports on Form 10-Q for the
fiscal quarters ended June 30, 1997, September 30, 1997 and December 31, 1997;
and (iii) Current Reports on Form 8-K dated December 19, 1996, May 1, 1997,
July 30, 1997, January 28, 1998 and March 27, 1998, which have been filed by
the Company with the Commission pursuant to the Exchange Act, are by this
reference incorporated in and made a part of this Prospectus.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Exchange Offer shall be deemed to be incorporated by
reference in this Prospectus and to be part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or
is deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus has been delivered, upon the written or oral request of such
person, a copy of any and all of the documents which have been or may be
incorporated by reference in this Prospectus, except that exhibits to such
documents will not be provided unless they are specifically incorporated by
reference into such documents. Requests for copies of any such document should
be directed to Offshore Logistics, Inc., Attention: Corporate Secretary, 224
Rue de Jean, P.O. Box 5-C, Lafayette, Louisiana 70505 (telephone: (318) 233-
1221).
ii
<PAGE>
SUMMARY
The following summary is qualified in its entirety by and should be read in
conjunction with the more detailed information and financial statements,
including the notes thereto, appearing elsewhere herein or incorporated by
reference in this Prospectus. Unless the context indicates otherwise, any
reference in this Prospectus to "Bristow" refers to Bristow Aviation Holdings
Limited and its subsidiaries and any reference to "OLOG" or the "Company"
refers to Offshore Logistics, Inc. and its consolidated entities, including
Bristow. "Air Log" refers to Air Logistics, L.L.C., a wholly owned subsidiary
of OLOG. Unless otherwise defined herein, capitalized terms used in this
Summary have the respective meanings ascribed to them elsewhere in this
Prospectus or in the Indenture.
THE COMPANY
OLOG is a leading international provider of helicopter transportation
services to the oil and gas industry. Through Air Log, OLOG is the second
largest owner and operator of helicopters in the U.S., primarily in the Gulf of
Mexico, with a fleet of 145 aircraft. In December 1996, OLOG acquired a
significant economic interest in Bristow (the "Bristow Transaction"), making
Air Log and Bristow the largest owners and operators of helicopters in the
North Sea/Europe with a current fleet of 83 aircraft. Air Log and Bristow also
own and operate an additional 68 aircraft serving most other major offshore oil
and gas regions, including Australia, Brazil, Brunei, China, Colombia, Egypt,
the Falklands, Mexico, Nigeria and Trinidad. For the 12 months ended December
31, 1997, the Company generated pro forma total revenues and EBITDA of $414.5
million and $91.3 million, respectively. The Company estimates that the fair
market value of its fleet exceeds $500 million.
The Company charters its helicopters to a broad base of major oil and gas
companies to transport personnel and equipment from onshore bases to offshore
drilling rigs, platforms and other installations. The Company believes that its
helicopter revenues are primarily attributable to oil and gas production
activities which, during industry downturns, represent more stable sources of
revenue than exploration and development activities. In addition, the Company
believes that the geographic diversity of its operations makes it less
susceptible to regional economic downturns.
Although the ongoing operational requirements of offshore production
platforms create a baseline demand for helicopter services, incremental demand
is primarily driven by the level of offshore oil and gas drilling activity.
This level of drilling activity is influenced by a number of factors, including
oil and gas prices and drilling budgets of exploration and production
companies. The Company believes that strong demand for helicopter services will
continue due to (i) recent increases in capital expenditure budgets of many oil
and gas companies for offshore drilling and development, (ii) technological
advancements that have increased drilling success rates, (iii) the high level
of seismic activity and bidding for leases in the Gulf, and (iv) the increased
focus on deepwater exploration and production projects, particularly in the
U.S. Gulf. Since June 1996, the Company has increased flight rates in the Gulf
of Mexico three times, including an approximate 10% increase in November 1997.
INDUSTRY CONDITIONS
In recent years, improved technology such as 3-D seismic surveys and subsea
completions has stimulated offshore exploration and development activity. In
addition, this improved technology has resulted in increased drilling and
development activity in new, deeper water areas, a positive trend for
helicopter transportation service providers as these areas are typically
located farther offshore.
Although the Company's business is primarily dependent upon activity levels
in the offshore oil and gas industry, the existence of other markets for
helicopter services distinguishes the Company's business from other
1
<PAGE>
segments of the oil service industry. Other markets for helicopters include
emergency medical transportation, agricultural and forestry support, and
general aviation activities. These other markets enable the Company to better
manage its helicopter fleet by providing both a source of additional aircraft
during times of high demand and potential purchasers for excess Company
aircraft during times of reduced demand.
PRODUCTION MANAGEMENT SERVICES
In addition to its helicopter transportation services business, the Company's
wholly owned subsidiary Grasso Production Management, Inc. ("GPM") is the
leading independent operator of oil and gas production facilities in the Gulf
of Mexico. GPM operates oil and gas production facilities for major and
independent oil and gas companies and also provides contract personnel and
support services for such facilities. For the 12 months ended December 31,
1997, GPM generated total revenues and EBITDA of $40.1 million and $4.0
million, respectively.
BUSINESS STRATEGY
The Company's business strategy is to remain the world's premier provider of
helicopter services. The key elements of this strategy include:
INDUSTRY CONSOLIDATION. The Company has achieved its position as a leader
in the provision of helicopter services to the offshore oil and gas
industry primarily through a series of strategic acquisitions and
partnering arrangements which have contributed to the consolidation of this
industry over the past several years. The Company believes that the
consolidation trend in the oil and gas helicopter services industry will
continue due to the increasing difficulty of smaller operators in
maintaining an adequate shore-based infrastructure and providing the
working capital required to conduct such operations. The Company plans to
pursue these consolidation opportunities in its existing and selected
geographic markets.
GEOGRAPHIC DIVERSIFICATION. OLOG began domestic helicopter operations in
the Gulf of Mexico in 1972. Since such time, OLOG has expanded its presence
in certain domestic and international markets, including Alaska, Central
and South America, and Africa. With Bristow, the Company believes it has
the most geographically diverse helicopter fleet serving the worldwide
offshore oil and gas industry, with operations in most of the major oil and
gas exploration and production areas of the world. OLOG has primarily
expanded in international markets through alliances and joint ventures with
local helicopter operators in order to comply with governmental
restrictions on foreign ownership or operation of aircraft. The Company
believes that its presence in multiple markets enhances its asset
utilization by enabling it to deploy helicopters to different geographic
regions to take advantage of cyclical market opportunities, and reduces its
dependence on market conditions in individual regions.
COST-EFFICIENT OPERATIONS. OLOG has focused on maximizing profitability
through stringent cost controls and asset rationalization. The Company
believes that OLOG is the most profitable helicopter operator serving the
worldwide offshore oil and gas industry. The Company also believes that
further opportunities exist for profitability enhancements through
continued consolidation savings from Bristow and other operating
efficiencies.
FLEET CAPABILITIES. OLOG intends to continue to upgrade the Company's
fleet to meet market demands for newer, better equipped aircraft. Demand
for helicopters continues to be strong in the U.S. Gulf and the North Sea.
The Company plans on adding 12 aircraft to its fleet in calendar 1998, the
majority of which will be committed to contracts of at least 12 months. The
Company believes that it has the most diversified and extensive fleet of
any operator, which should allow the Company to meet customer requirements
regardless of the mission.
2
<PAGE>
THE ORIGINAL OFFERING AND USE OF PROCEEDS
The Old Notes were sold by the Company on January 27, 1998 to the Initial
Purchaser and were thereupon offered and sold by the Initial Purchaser only to
certain qualified buyers. The Company used $66.7 million of the $97.2 million
net proceeds from the Original Offering to repay certain indebtedness of
Bristow and $18.7 million to replace general corporate funds used to repay
certain indebtedness of Bristow in October 1997. The Company intends to use the
remaining net proceeds for general corporate purposes.
THE EXCHANGE OFFER
The Exchange Offer relates to the exchange of up to $100 million aggregate
principal amount of New Notes for up to $100 million aggregate principal amount
of the Old Notes. The form and terms of the New Notes are identical in all
material respects to the form and terms of the Old Notes except that (i) the
New Notes are being registered under the Securities Act and, therefore, will
not bear any legends restricting their transfer and (ii) holders of the New
Notes, other than certain broker-dealers, will not be entitled to the rights of
holders of Transfer Restricted Securities under the Registration Rights
Agreement. The New Notes will evidence the same debt as the Old Notes and will
be issued pursuant to, and entitled to the benefits of, the Indenture. The Old
Notes and the New Notes are sometimes referred to collectively herein as the
"Notes." See "Description of the Notes."
The Exchange Offer...... Pursuant to the Exchange Offer, $1,000 principal
amount of New Notes will be issued in exchange for
each $1,000 principal amount of Old Notes that are
validly tendered and not withdrawn. As of the date
hereof, Old Notes representing $100 million aggregate
principal amount are outstanding. The terms of the
New Notes and the Old Notes are substantially
identical.
Resales................. Based on interpretations by the staff of the
Commission set forth in no-action letters issued to
third parties unrelated to the Company and the
Guarantors, the Company and the Guarantors believe
that the New Notes issued pursuant to the Exchange
Offer in exchange for Old Notes may be offered for
resale, resold and otherwise transferred by any
holder thereof (other than broker-dealers, as set
forth below, and any such holder or such other person
that is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act),
without compliance with the registration and
prospectus delivery provisions of the Securities Act,
provided that (i) the New Notes are acquired in the
ordinary course of such holder's business, (ii) such
holder is not engaging in and does not intend to
engage in a distribution of the New Notes, and (iii)
such holder does not have an arrangement or
understanding with any person to participate in the
distribution of the New Notes. Any holder who tenders
in the Exchange Offer with the intention to
participate, or for the purpose of participating, in
a distribution of the New Notes or who is an
affiliate of the Company may not rely upon such
interpretations by the staff of the Commission and,
in the absence of an exemption therefrom, must comply
with the registration and prospectus delivery
requirements of the Securities Act in connection with
any secondary resale transaction. Failure to comply
with such requirements in such instance may result in
such holder incurring liabilities under the
Securities Act for which the holder is not
indemnified by the Company. Each broker-dealer that
receives New
3
<PAGE>
Notes for its own account in exchange for Old Notes,
where those Old Notes were acquired by the broker-
dealer as a result of its market-making activities or
other trading activities, must acknowledge that it
will deliver a prospectus in connection with any
resale of such New Notes. The Letter of Transmittal
states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning
of the Securities Act. The Company has agreed that,
for a period of one year after the effective date of
the Registration Statement of which this Prospectus
is a part, it will make this Prospectus available to
any broker-dealer for use in connection with any such
resale.
The Exchange Offer is not being made to, nor will the
Company accept surrenders for exchange from, holders
of Old Notes in any jurisdiction in which this
Exchange Offer or the acceptance thereof would not be
in compliance with the securities or blue sky laws of
such jurisdiction.
Expiration Date......... The Exchange Offer will expire at 5:00 p.m., New York
City time, on , 1998, unless extended, in
which case, the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is
extended. See "The Exchange Offer--Terms of the
Exchange Offer--Expiration Date; Extension;
Amendments."
Conditions to the
Exchange Offer.......... The Exchange Offer is subject to certain customary
conditions, certain of which may be waived by the
Company. See "The Exchange Offer--Terms of the
Exchange Offer--Conditions to the Exchange Offer."
The Exchange Offer is not conditioned upon any
minimum principal amount of Old Notes being tendered.
Procedures for
Tendering Old Notes.... Each holder of Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, in
accordance with the instructions contained herein and
therein, and mail or otherwise deliver the Letter of
Transmittal, or a facsimile, together with the Old
Notes and any other required documentation, to the
Exchange Agent (as defined herein) at the address set
forth herein and in the Letter of Transmittal.
Persons holding Old Notes through the Depository
Trust Company ("DTC") and wishing to accept the
Exchange Offer must do so pursuant to DTC's Automated
Tender Offer Program, by which each tendering
Participant will agree to be bound by the Letter of
Transmittal. By executing or agreeing to be bound by
the Letter of Transmittal, each holder will represent
to the Company that, among other things, (i) the New
Notes acquired pursuant to the Exchange Offer are
being acquired in the ordinary course of such
holder's business, (ii) such holder is not engaging
and does not intend to engage in a distribution of
such New Notes, (iii) such holder does not have an
arrangement or understanding with any person to
participate in the distribution of such New Notes,
and (iv) such holder is not an "affiliate," as
defined under Rule 405 promulgated under the
Securities Act, of the Company.
4
<PAGE>
Special Procedures for
Beneficial Owners...... Any beneficial owner whose Old Notes are registered
in the name of a broker, dealer, commercial bank,
trust company or other nominee and who wishes to
tender such Old Notes in the Exchange Offer should
contact such registered holder promptly and instruct
such registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to
tender on its own behalf, such owner must, prior to
completing and executing the Letter of Transmittal
and delivering its Old Notes, either make appropriate
arrangements to register ownership of the Old Notes
in such owner's name or obtain a properly completed
bond power from the registered holder. The transfer
of registered ownership may take considerable time
and may not be able to be completed prior to the
Expiration Date. See "The Exchange Offer--Terms of
the Exchange Offer--Procedures for Tendering Old
Notes."
Guaranteed Delivery
Procedures.............. Holders of Old Notes who wish to tender their Old
Notes and whose Old Notes are not immediately
available or who cannot deliver their Old Notes, the
Letter of Transmittal or any other documents required
by the Letter of Transmittal to the Exchange Agent
prior to the Expiration Date, must tender their Old
Notes according to the guaranteed delivery procedures
set forth in "The Exchange Offer--Terms of the
Exchange Offer--Guaranteed Delivery Procedures."
Withdrawal.............. The tender of Old Notes pursuant to the Exchange
Offer may be withdrawn at any time prior to 5:00
p.m., New York City time, on the Expiration Date. Any
Old Notes not accepted for exchange for any reason
will be returned without expense to the tendering
holder thereof as promptly as practicable after the
expiration or termination of the Exchange Offer. See
"The Exchange Offer--Terms of the Exchange Offer--
Withdrawal Rights."
Acceptance of Old Notes
and Delivery of New
Notes.................. Subject to certain conditions (as described more
fully in "The Exchange Offer--Terms of the Exchange
Offer--Conditions to the Exchange Offer"), the
Company will accept for exchange any and all Old
Notes which are properly tendered in the Exchange
Offer prior to 5:00 p.m., New York City time, on the
Expiration Date. The New Notes issued pursuant to the
Exchange Offer will be delivered promptly following
the Expiration Date. See "The Exchange Offer--Terms
of the Exchange Offer."
Interest on the New
Notes and the Old
Notes.................. Interest on each New Note will accrue from the date
of issuance of the Old Note for which the New Note is
exchanged.
Exchange Agent.......... State Street Bank and Trust Company is serving as
Exchange Agent in connection with the Exchange Offer.
The address, telephone number and facsimile number of
the Exchange Agent are set forth in "The Exchange
Offer--Exchange Agent."
Effect of Not
Tendering............... Old Notes that are not tendered or that are tendered
but not accepted will, following the completion of
the Exchange Offer, continue to be subject to the
existing restrictions upon transfer thereof. The
Company will have no
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further obligation (other than as described in
"Description of the Notes--Registration Rights;
Liquidated Damages" with respect to the Shelf
Registration Statement (as defined herein)) to
provide for the registration under the Securities Act
of such Old Notes.
TERMS OF NEW NOTES
Securities Offered...... $100.0 million aggregate principal amount of 7 7/8%
Series B Senior Notes due 2008.
Maturity................ January 15, 2008.
Interest Payment Dates.. Interest on the New Notes will be payable semi-
annually in arrears on January 15 and July 15 of each
year, commencing July 15, 1998.
Ranking................. The New Notes will be general unsecured obligations
of the Company, ranking pari passu in right of
payment with all future senior indebtedness of the
Company and senior in right of payment to all
existing and future subordinated indebtedness of the
Company. The Indenture will permit the Company and
its restricted subsidiaries to incur additional
indebtedness, subject to certain conditions. Although
the New Notes will be guaranteed by the Guarantors,
initially neither Bristow nor its subsidiaries will
guarantee the New Notes, with the result that the New
Notes will be structurally subordinated to all
existing and future indebtedness of Bristow and its
subsidiaries. As of December 31, 1997, after giving
pro forma effect to the Original Offering and the use
of proceeds therefrom, the New Notes would have been
effectively subordinated to approximately $43.6
million of indebtedness of Bristow and its
subsidiaries and to an additional $18.6 million of
indebtedness of a foreign subsidiary of OLOG that
also will not guarantee the New Notes (excluding
indebtedness owed to the Company).
Guarantees.............. The New Notes will be jointly and severally
guaranteed on a senior unsecured basis by certain of
the Company's present and future subsidiaries.
Initially, neither Bristow nor its subsidiaries will
be Guarantors. See "Description of the Notes--
Subsidiary Guarantees."
Optional Redemption..... The New Notes will be redeemable at the option of the
Company, in whole or in part, at any time on or after
January 15, 2003, at redemption prices set forth
herein, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the
redemption date. Notwithstanding the foregoing, on or
prior to January 22, 2001, the Company may redeem up
to 35% of the aggregate principal amount of the New
Notes originally issued at a redemption price of 107
7/8% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any,
thereon, to the redemption date, with the net cash
proceeds of one or more Qualified Equity Offerings,
provided that at least 65% of the aggregate principal
amount of New Notes remains outstanding following
each such redemption. See "Description of the Notes--
Optional Redemption."
Change of Control....... Upon the occurrence of a Change of Control, the
Company will be required to make an offer to
repurchase all or any part of each holder's New Notes
at a price equal to 101% of the principal amount
thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the date of
repurchase. See "Risk Factors--Potential Inability to
Fund a
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Change of Control Offer" and "Description of the
Notes--Repurchase at the Option of Holders--Change of
Control."
Certain Covenants....... The indenture pursuant to which the New Notes will be
issued (the "Indenture") contains certain covenants
that, among other things, limits the ability of the
Company and certain of its subsidiaries to incur
additional Indebtedness (as defined herein), pay
dividends or make other distributions, repurchase
Equity Interests (as defined herein) or subordinated
indebtedness, create certain liens, enter into
certain transactions with affiliates, issue or sell
capital stock of subsidiaries, engage in sale-and-
leaseback transactions, sell assets or enter into
certain mergers or consolidations. See "Description
of the Notes--Certain Covenants."
Exchange Offer;
Registration Rights.... Pursuant to a registration rights agreement by and
among the Company, the Guarantors and the Initial
Purchaser (the "Registration Rights Agreement"), the
Company and the Guarantors have agreed to file the
Registration Statement of which this Prospectus forms
a part (the "Exchange Offer Registration Statement")
with the Commission under the Securities Act with
respect to the Exchange Offer. If (a) the Company and
the Guarantors are not permitted to consummate the
Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy or
(b) any holder of Transfer Restricted Securities
notifies the Company prior to the 20th day following
consummation of the Exchange Offer that (i) it is
prohibited by law or Commission policy from
participating in the Exchange Offer or (ii) that it
may not resell the New Notes acquired by it in the
Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the
Exchange Offer Registration Statement would not be
available for such resales, the Company will file
with the Commission a shelf registration statement
(the "Shelf Registration Statement") to cover resales
of the Notes by holders thereof who satisfy certain
conditions relating to the provision of information
in connection with the Shelf Registration Statement.
If the Company fails to satisfy these registration
obligations, it will be required to pay liquidated
damages to the holders of the Old Notes under certain
circumstances ("Liquidated Damages"). See
"Description of the Notes--Registration Rights;
Liquidated Damages."
For further information regarding the Notes, see "Description of the Notes."
USE OF PROCEEDS
The Company will not receive any proceeds from the issuance of the New Notes
pursuant to this Prospectus.
RISK FACTORS
For a discussion of certain factors that should be considered in connection
with the Exchange Offer and an investment in the New Notes offered hereby, see
"Risk Factors."
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RISK FACTORS
In addition to the other information set forth elsewhere in this Prospectus,
the following factors relating to the Company and this Offering should be
considered by prospective investors when evaluating an investment in the New
Notes offered hereby.
SUBSTANTIAL INDEBTEDNESS
At December 31, 1997, on a pro forma basis, after giving effect to the sale
of the Old Notes (the "Original Offering") and the application of the net
proceeds therefrom, the Company would have had $260.3 million of indebtedness
and stockholders' equity of $266.6 million. In addition, the terms of the
Notes permit the Company to incur $50 million of indebtedness under the Credit
Facilities (as defined herein) and certain other indebtedness. See "Use of
Proceeds." The Company's level of indebtedness has several important effects
on its future operations, including (i) the Company's ability to obtain
additional financing in the future for working capital, capital expenditures,
acquisitions, general corporate purposes or other purposes may be impaired,
(ii) a reduction of funds available to the Company for its operations or for
capital expenditures as a result of the dedication of a substantial portion of
the Company's cash flow to the payment of principal of and interest on the
Company's indebtedness, including indebtedness under the Notes, (iii)
restrictions in the Indenture that limit the Company's ability to borrow
additional funds or to dispose of assets, which may affect the Company's
flexibility in planning for, and reacting to, changes in its business,
including possible acquisition activities, (iv) the possibility of an event of
default under the financial and operating covenants contained in the Company's
debt instruments, including the Indenture, which, if not cured or waived,
could have a material adverse effect on the Company and (v) an inability to
adjust to rapidly changing market conditions and consequent vulnerability in
the event that a downturn in general economic conditions or its business
because of the Company's reduced financial flexibility. Moreover, future
acquisitions may require the Company to alter its capitalization
significantly. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources" and
"Description of the Notes--Certain Covenants."
The Company's ability to meet its debt service obligations and to reduce its
total indebtedness will be dependent upon the Company's future performance,
which will be subject to levels of activity in offshore oil and gas
exploration, development and production, general economic conditions and to
financial, business and other factors affecting the operations of the Company,
many of which are beyond its control. There can be no assurance that the
Company's future performance will not be adversely affected by such economic
conditions and financial, business and other factors. See "Capitalization."
If the Company is unable to generate sufficient cash flow from operations in
the future to service its debt, it may be required to refinance all or a
portion of its existing debt, including the Notes, or to obtain additional
financing. There can be no assurance that any such refinancing would be
possible or that any additional financing could be obtained. The inability to
obtain additional financing could have a material adverse effect on the
Company. For example, a default by the Company under the terms of the
Indenture could result in a default under the terms of the Credit Facilities.
RESTRICTIONS IMPOSED BY TERMS OF THE COMPANY'S INDEBTEDNESS
The Indenture restricts, among other things, the ability of the Company and
its subsidiaries to incur additional indebtedness, pay dividends or make
certain other restricted payments, incur liens to secure pari passu or
subordinated indebtedness, apply net proceeds from certain asset sales, merge
or consolidate with any other person, sell, assign, transfer, lease, convey or
otherwise dispose of substantially all of the assets of the Company, or enter
into certain transactions with affiliates. In addition, the Credit Facilities
contain, and future credit facilities may contain, other and more restrictive
covenants and prohibits the Company from prepaying other indebtedness
(including the Notes) before indebtedness outstanding under the Credit
Facilities or such other credit facility. As a result of these covenants, the
ability of the Company to respond to changes in business and economic
conditions and to secure additional financing, if needed, may be significantly
restricted, and the
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<PAGE>
Company may be prevented from engaging in transactions that might otherwise be
considered beneficial to the Company. See "Description of the Notes--Certain
Covenants." The Credit Facilities also require, and future credit facilities
may require, the Company to maintain specified financial ratios and satisfy
certain financial condition tests. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Liquidity and Capital
Resources." The Company's ability to meet these financial ratios and tests can
be affected by events beyond its control, and there can be no assurance that
the Company will meet those tests. The breach of any of these covenants could
result in a default under the Credit Facilities or such other credit facility.
Upon the occurrence of an event of default under the Credit Facilities or such
other credit facility, the lenders thereunder could elect to declare all
amounts outstanding under such credit facilities, including accrued interest
or other obligations to be immediately due and payable. If the Company were
unable to repay those amounts, such lenders could proceed against the
collateral granted to them to secure that indebtedness. If amounts outstanding
under such credit facilities were to be accelerated, there can be no assurance
that the assets of the Company would be sufficient to repay in full that
indebtedness and other indebtedness of the Company, including the Notes.
RANKING OF THE NOTES; EFFECTIVE SUBORDINATION
The Old Notes are, and the New Notes will be, senior unsecured obligations
of the Company ranking pari passu with all existing or future senior
indebtedness of the Company. Although the Old Notes are, and the New Notes
will be, guaranteed by the Guarantors, initially neither Bristow nor its
subsidiaries will guarantee the Notes, with the result that the Old Notes are,
and the New Notes will be, structurally subordinated to all existing and
future indebtedness of Bristow and its subsidiaries. As of December 31, 1997,
after giving pro forma effect to the Original Offering and the use of proceeds
therefrom, the Notes would have been effectively subordinated to approximately
$43.6 million of indebtedness of Bristow and its subsidiaries and to an
additional $18.6 million of indebtedness of a foreign subsidiary of OLOG that
also will not guarantee the Notes (excluding indebtedness owed to the
Company).
POTENTIAL INABILITY TO FUND A CHANGE OF CONTROL OFFER
Upon a Change of Control (as defined in the Indenture), the Company will be
required to offer to repurchase all outstanding Notes at 101% of the principal
amount thereof, plus accrued and unpaid interest and Liquidated Damages, if
any, to the date of repurchase. Certain events involving a Change of Control
may result in an event of default under OLOG's Credit Facility and may result
in an event of default under certain other indebtedness of the Company that
may be incurred in the future. There can be no assurance that sufficient funds
will be available to the Company at the time of any Change of Control to make
any required repurchases of Notes tendered, pay its obligations under such
Credit Facility or other indebtedness upon the occurrence of a Change of
Control. These provisions may be deemed to have anti-takeover effects and may
delay, defer or prevent a merger, tender offer or other takeover attempt.
Notwithstanding these provisions, the Company could enter into certain
transactions, including certain recapitalizations, that would not constitute a
Change of Control but would increase the amount of debt outstanding at such
time. See "Description of the Notes--Repurchase at the Option of Holders."
DEPENDENCE ON OIL AND GAS INDUSTRY
The Company's operations are largely dependent upon the levels of activity
in oil and natural gas exploration, development and production. Such activity
levels are affected by trends in oil and natural gas prices. Historically, the
prices for oil and natural gas have been volatile and are subject to wide
fluctuations in response to changes in the supply of and demand for oil and
natural gas, market uncertainty and a variety of additional factors beyond the
control of the Company. The Company cannot predict future oil and natural gas
price movements with any certainty. Any prolonged reduction in oil and natural
gas prices, however, will depress the level of exploration, development and
production activity and result in a corresponding decline in the demand for
the Company's services and, therefore, have a material adverse effect on the
Company's revenues and profitability.
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<PAGE>
INTERNATIONAL OPERATIONS
The Company's international operations are focused in the North Sea,
Nigeria, Australia, Brazil, China, Colombia, Mexico, Trinidad and Egypt with
less significant operations in other international areas. Operations in
foreign countries generally are subject to various risks attendant to doing
business outside the United States, including risks of war, general strikes,
civil disturbances, guerilla activity, currency fluctuations and devaluations
and governmental activities that may limit or disrupt markets, restrict
payments or the movement of funds or result in the deprivation of contract
rights or the taking of property without fair compensation. No prediction can
be made as to what foreign governmental regulations may be enacted in the
future that could be applicable to helicopter operations.
EXCHANGE RATE RISKS
Bristow's revenues and expenses are reported in British Pounds Sterling. In
addition, a portion of the Company's revenues is denominated in other
currencies (including Australian Dollars, French Francs, Nigerian Naira and
Trinidad and Tobago Dollars) to cover expenses in the areas in which such
expenses are incurred. To the extent operating revenues are denominated in the
same currency as operating expenses, the Company can reduce its vulnerability
to exchange rate fluctuations. Because the Company maintains its financial
statements in U.S. Dollars, it is vulnerable to fluctuations in the exchange
rate between the pound and the dollar.
COMPETITION
The Company's helicopter business is highly competitive on a worldwide
basis. Chartering of helicopters is usually done on the basis of competitive
bidding among those having the necessary equipment and resources. The
technical requirements of operating helicopters offshore have increased as oil
and gas activities have moved into deeper water and more sophisticated
aircraft are required to service the market. The number of small helicopter
operators in the Gulf of Mexico has declined over the past several years, as
it has become increasingly difficult to maintain an adequate shore-based
infrastructure and provide the working capital required to conduct such
operations, especially when the associated costs must be spread over a
relatively small number of helicopters. One of the Company's competitors has
substantially more helicopters in service in the Gulf of Mexico. The Company
has two significant competitors in the North Sea.
GPM's business is highly competitive. There are a number of competitors that
are smaller than GPM but maintain a Gulf-wide presence. In addition, there are
many smaller operators that compete on a local basis or for single projects or
jobs.
UNION REPRESENTATION
On August 6, 1997, the domestic pilots at OLOG voted to become members of
the Office and Professional Employees International Union ("OPEIU"). As of
March 27, 1998, OLOG has not begun negotiations with the OPEIU. During the
nine months ended December 31, 1997, $85.3 million of operating revenues were
from OLOG's domestic operations. In January 1998, the National Mediation Board
("NMB") set aside the September 4, 1997, election in which the pilots for
OLOG's principal competitor elected not to be represented by the Union. The
NMB has called another election to be completed in late March 1998. In January
1998, the OPEIU petitioned the NMB to organize OLOG's mechanics. Certain
objections to this petition have been filed and the date of a possible
election has not been established. Similar efforts may also be taking place at
some of OLOG's competitors. The Company does not believe that the result of
these organizing efforts will place the Company at a competitive disadvantage
with its competitors as management believes that pay scales and work rules
will continue to be similar throughout the industry.
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INDUSTRY HAZARDS AND INSURANCE
Hazards, such as adverse weather and marine conditions, crashes, collisions,
and fires are inherent in the offshore transportation and supply industry, and
may result in losses of equipment, revenues or death of personnel. The Company
maintains hull and liability insurance which generally insures the Company
against certain legal liabilities to others, as well as to damage to its
aircraft. It is also the Company's policy to carry insurance for, or require
its customers to provide indemnification against, expropriation, war risk, and
confiscation of its helicopters employed in international operations. There is
no assurance that in the future the Company will be able to maintain its
existing coverage or that the premiums therefore will not increase
substantially.
GPM's operations are subject to the normal risks associated with working on
oil and gas production facilities. These risks could result in damage to or
loss of property and injury to or death of personnel. GPM carries normal
business insurance including general liability, worker's compensation,
automobile liability and property and casualty insurance coverages.
GOVERNMENT REGULATION
United States. As a commercial operator of small aircraft, Air Log is
subject to regulations pursuant to the Federal Aviation Act of 1958, as
amended, and other statutes. Air Log carries persons and property in its
helicopters pursuant to an Air Taxi Certificate granted by the Federal
Aviation Administration ("FAA").
The FAA regulates the flight operations of Air Log, and in this respect,
exercises jurisdiction over personnel, aircraft, ground facilities, and
certain technical aspects of its operations. The National Transportation
Safety Board is authorized to investigate aircraft and to recommend improved
safety standards. Air Log is also subject to the Communications Act of 1934
because of the use of radio facilities in its operations.
Under the Federal Aviation Act, it is unlawful to operate certain aircraft
for hire within the United States unless such aircraft are registered with the
FAA and the operator of such aircraft has been issued an operating certificate
by the FAA. As a general rule, aircraft may be registered under the Federal
Aviation Act only if the aircraft is owned or controlled by one or more
citizens of the United States, and an operating certificate may be granted
only to a citizen of the United States. For the purposes of these
requirements, a corporation is deemed to be a citizen of the United States
only if, among other things, at least 75% of the voting interest therein is
owned or controlled by United States citizens. In the event that persons other
than United States citizens should come to own or control more than 25% of the
voting interest in the Company, the Company has been advised that the
Company's aircraft may be subject to deregistration under the Federal Aviation
Act and loss of the privilege of operating within the United States. At March
31, 1997, the Company had 2,267,745 common shares held by persons with foreign
addresses representing approximately 10.8% of the 21,081,133 common shares
outstanding.
The Company's domestic operations are subject to federal, state, and local
laws and regulations controlling the discharge of materials into the
environment or otherwise relating to the protection of the environment. To
date, such laws and regulations have not had a material adverse effect on the
Company's business or financial condition. Increased public awareness and
concern over the environment, however, may result in future changes in the
regulation of the oil and gas industry, which in turn could adversely affect
the Company. See "Business--Other Matters--Legal Proceedings."
United Kingdom. As a commercial operator of aircraft, Bristow is subject to
the Licensing of Air Carriers Regulations 1992, and Regulations made under the
Civil Aviation Act 1992 and other statutes. Bristow carries persons and
property in its helicopters pursuant to an operating license issued by the
Civil Aviation Authority ("CAA").
The CAA regulates the flight operations of Bristow, and in this respect,
exercises jurisdiction over personnel, aircraft, ground facilities, and
certain technical aspects of Bristow's operations. Accident investigations are
carried out by the Accident Investigation Branch of the Department of
Transport. The CAA often imposes improved safety standards on the basis of a
report of the Inspector.
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Under the Licensing of Air Carriers Regulations 1992, it is unlawful to
operate certain aircraft for hire within the United Kingdom unless such
aircraft are approved by the CAA. The holder of an operating license must meet
the ownership and control requirements of Council Regulation 2407/92 (i.e.--
the entity that operates under the license must be owned directly or through
majority ownership by United Kingdom or European Economic Area nationals and
must at all times be effectively controlled by them).
Bristow's operations are subject to local laws and regulations controlling
the discharge of materials into the environment or otherwise relating to the
protection of the environment. To date, such laws and regulations have not had
a material adverse effect on Bristow's business or financial condition.
Increased public awareness and concern over the environment, however, may
result in future changes in the regulation of the oil and gas industry.
International. The Company's operations other than in the United States and
the United Kingdom are subject to local governmental regulations and to
uncertainties of economic and political conditions in those areas. Because of
the impact of local laws, these operations are conducted primarily through
entities (including joint ventures) in which local citizens own interests and
Air Log or Bristow holds only a minority interest, or pursuant to arrangements
under which the Company operates assets or conducts operations under contracts
with local entities. There can be no assurance that there will not be changes
in local laws, regulations or administrative requirements, or the
interpretation thereof, any of which could have a material adverse effect on
the business or financial condition of the Company or on its ability to
continue operations in certain regions.
FRAUDULENT TRANSFER CONSIDERATIONS
Under applicable provisions of the United States Bankruptcy Code or
comparable provisions of state fraudulent transfer or conveyance law, if a
Guarantor, at the time it incurred the Subsidiary Guarantee, (a) incurred such
indebtedness with the intent to hinder, delay or defraud creditors, or (b)(i)
received less than reasonably equivalent value or fair consideration and
(ii)(A) was insolvent at the time of such incurrence, (B) was rendered
insolvent by reason of such incurrence (and the application of the proceeds
thereof), (C) was engaged or was about to engage in a business or transaction
for which its remaining assets constituted unreasonably small capital to carry
on its business, or (D) intended to incur, or believed that it would incur,
debts beyond its ability to pay such debts as they mature, then, in each such
case, a court of competent jurisdiction could void, in whole or in part, such
Subsidiary Guarantee or, in the alternative, subordinate such Subsidiary
Guarantee to existing and future indebtedness of such Guarantor. Among other
things, a legal challenge of the Subsidiary Guarantees issued by any Guarantor
on fraudulent conveyance grounds may focus on the benefits, if any, realized
by such Guarantor as a result of the issuance by the Company of the Notes. To
the extent the Subsidiary Guarantee was voided as a fraudulent conveyance or
held unenforceable for any other reason, the holders of the Notes would cease
to have any claim against such Guarantor and would be creditors solely of the
Company and any Guarantor whose Subsidiary Guarantees were not voided or held
unenforceable. In such event, the claims of the holders of the Notes against
the issuer of an invalid Subsidiary Guarantee would be subject to the prior
payment of all liabilities of such Guarantor. There can be no assurance that,
after providing for all prior claims, there would be sufficient assets to
satisfy the claims of the holders of the Notes relating to any avoided
portions of any of the Subsidiary Guarantees.
The measure of insolvency for purposes of the foregoing would likely vary
depending upon the law applied in such case. Generally, however, a Guarantor
would be considered insolvent if the sum of its debts, including contingent
liabilities, was greater than all of its assets at a fair valuation, or if the
present fair saleable value of its assets was less than the amount that would
be required to pay the probable liabilities on its existing debts, including
contingent liabilities, as such debts become absolute and matured. The Company
believes that, for purposes of the United States Bankruptcy Code and state
fraudulent transfer or conveyance laws, the Subsidiary Guarantees will be
issued without the intent to hinder, delay or defraud creditors and for proper
purposes and in good faith, and that the Guarantors will receive reasonably
equivalent value or fair consideration therefor, and that after the issuance
of the Subsidiary Guarantees and the application of the net proceeds
therefrom, the Guarantors will be solvent, have sufficient capital for
carrying on their businesses and will be able to pay their debts as they
mature. However, there can be no assurance that a court passing on such issues
would agree with the determination of the Company.
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ABSENCE OF A PUBLIC MARKET FOR THE NOTES
The New Notes are a new issue of securities for which there currently is no
public market. The Company does not intend to list the New Notes on any
securities exchange. Although the Initial Purchaser has informed the Company
that it intends to make a market in the New Notes, the Initial Purchaser is
not obligated to make a market in the New Notes and any market making may be
discontinued at any time at the sole discretion of the Initial Purchaser. If a
market develops for the New Notes, there can be no assurance as to the
liquidity of such market, the ability of holders to sell their New Notes or
the prices at which holders would be able to sell the New Notes. If a market
for the New Notes does develop, the New Notes may trade at a discount to their
principal amount, depending on prevailing interest rates, the market for
similar securities, the performance of the Company, the performance of the oil
and gas industry and other factors. Pursuant to the Registration Rights
Agreement, the Company is required to commence the Exchange Offer for the New
Notes or file the Shelf Registration Statement covering resales of the New
Notes within specified time periods.
FORWARD LOOKING STATEMENTS
This Prospectus contains "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). All
statements included herein other than statements of historical fact are
forward-looking statements. Such forward-looking statements include, without
limitation, the statements herein, or incorporated by reference herein,
regarding the timing of future events regarding the Company's operations, the
statements under the captions "Summary," "Risk Factors," Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business" herein or incorporated by reference herein regarding, without
limitation, the ability of the Company to react to market conditions,
outsourcing and cost structure and the market for production management
operations, the effect of the Company's pilots electing to be represented by a
union, the Company's potential liability for environmental claims,
concentration and globalization of the helicopter industry, restructuring of
the oil and gas industry, increased levels of activity and their effects on
the Company's future prospects and the Company's anticipated future financial
position and cash requirements.
Although the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Important factors that could cause
actual results to differ materially from the Company's expectations
("Cautionary Statements") may include, but are not limited to, demand for
Company services, worldwide activity levels in oil and natural gas
exploration, development and production, fluctuations in oil and natural gas
prices, unionization and the response thereto of the Company's customers,
currency fluctuations, and international political conditions. All subsequent
written and oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
Cautionary Statements.
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USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the New
Notes offered hereby. In consideration for issuing the New Notes as
contemplated in this Prospectus, the Company will receive in exchange a like
principal amount of Old Notes, the terms of which are identical in all
material respects to the New Notes. The Old Notes surrendered in exchange for
the New Notes will be retired and canceled and cannot be reissued.
Accordingly, issuance of the New Notes will not result in any change in
capitalization of the Company. The Company used all the net proceeds of the
Original Offering (approximately $97.2 million) to repay certain indebtedness
of Bristow ($66.7 million) and to replace general corporate funds used to
repay certain indebtedness of Bristow in October 1997 ($18.7 million). The
Company intends to use the remaining net proceeds for general corporate
purposes.
CAPITALIZATION
The following table sets forth the consolidated unaudited cash and cash
equivalents, current portion of long-term debt and capitalization of the
Company as of December 31, 1997, and as adjusted to reflect the sale of the
Old Notes and the application of the net proceeds therefrom as described under
"Use of Proceeds." This table should be read in conjunction with the Company's
consolidated financial statements and notes thereto included elsewhere herein
or incorporated by reference into this Prospectus.
<TABLE>
<CAPTION>
DECEMBER 31, 1997
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................ $ 22,631 $ 51,154
======== ========
Current portion of long-term debt........................ $ 6,112 $ 6,112
======== ========
Long-term debt (less current maturities):
7 7/8% Senior Notes due 2008............................ $ -- $100,000
6% Convertible Subordinated Notes due 2003.............. 98,000 98,000
7.9% Term loan.......................................... 18,645 18,645
Bristow debt............................................ 104,212 37,513
-------- --------
Total long-term debt................................. 220,857 254,158
-------- --------
Stockholders' equity:
Common Stock, $.01 par value, authorized 35,000,000
shares; outstanding 21,854,921 at December 31, 1997
(exclusive of 517,550 treasury shares)(1)............. 219 219
Additional paid in capital............................. 123,061 123,061
Retained earnings...................................... 143,455 143,455
Cumulative translation adjustment...................... (112) (112)
-------- --------
Total stockholders' equity........................... 266,623 266,623
-------- --------
Total capitalization................................. $487,480 $520,781
======== ========
</TABLE>
- --------
(1) Excludes 690,500 shares of Common Stock reserved for issuance upon
exercise of employee and director stock options outstanding at December
31, 1997 and 4,286,964 shares reserved for issuance upon conversion of the
6% Convertible Subordinated Notes due 2003 (the "Convertible Notes").
14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA
The following table sets forth selected consolidated financial data for the
dates and periods indicated. The financial information for each of the years
ended June 30, 1993, 1994, 1995 and 1996 and the transition period ended
March 31, 1997 and as of June 30, 1994, 1995 and 1996 and March 31, 1997 is
derived from the Company's audited consolidated financial statements and notes
thereto. The selected consolidated financial data as of December 31, 1996 and
1997 and for the nine month periods then ended are derived from the unaudited
consolidated statements of the Company for such periods. In the opinion of
management, the unaudited financial statements of the Company reflect all
adjustments (consisting of only normal recurring adjustments) necessary for
fair presentation of the financial condition and results of operations for
these periods. This information should be read in conjunction with the
consolidated financial statements and notes thereto included elsewhere herein
and "Management's Discussion and Analysis of Financial Condition and Results
of Operations" set forth in the Company's Annual Report on Form 10-K for the
transition period from July 1, 1996 to March 31, 1997 and the Quarterly
Reports on Form 10-Q for the fiscal quarters ended June 30, 1997, September
30, 1997 and December 31, 1997 incorporated by reference into this Prospectus.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JUNE 30, DECEMBER 31,
------------------------------------ NINE MONTHS ENDED ------------------
1993 1994 1995 1996 MARCH 31, 1997 1996 1997
-------- -------- -------- -------- ----------------- -------- --------
(IN THOUSANDS, EXCEPT RATIOS AND PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Gross Revenue:
Operating revenue...... $ 80,201 $ 91,666 $118,336 $117,289 $167,128 $104,088 $320,969
Gain (loss) on disposal
of equipment.......... 1,675 3,018 586 (446) 1,222 392 (473)
-------- -------- -------- -------- -------- -------- --------
81,876 94,684 118,922 116,843 168,350 104,480 320,496
-------- -------- -------- -------- -------- -------- --------
Operating Expenses:
Direct cost............ 50,610 59,617 80,708 85,693 119,106 73,164 233,903
Depreciation and
amortization.......... 6,542 7,519 9,200 8,549 12,624 7,439 24,401
General and
administrative........ 5,461 6,576 8,745 9,235 11,406 7,479 20,517
-------- -------- -------- -------- -------- -------- --------
62,613 73,712 98,653 103,477 143,136 88,082 278,821
-------- -------- -------- -------- -------- -------- --------
Operating income........ 19,263 20,972 20,269 13,366 25,214 16,398 41,675
Earnings from
unconsolidated
entities............... 2,247 2,020 4,050 4,056 2,602 3,374 5,006
Interest income......... 1,443 1,771 2,947 4,025 3,300 3,373 2,151
Interest expense........ 1,501 1,138 569 300 5,528 810 15,584
-------- -------- -------- -------- -------- -------- --------
Income From Continuing
Operations Before
Provision for Income
Taxes and Extraordinary
Item................... 21,452 23,625 26,697 21,147 25,588 22,335 33,248
Provision for income
taxes.................. 5,409 6,378 7,735 6,123 7,675 6,965 9,973
Minority interest
expense................ -- -- -- -- (288) (34) (760)
-------- -------- -------- -------- -------- -------- --------
Income from Continuing
Operations Before
Extraordinary Item..... 16,043 17,247 18,962 15,024 17,625 15,336 22,515
Discontinued operations. -- -- (512) 252 (393) 178 154
-------- -------- -------- -------- -------- -------- --------
Income Before
Extraordinary Item..... 16,043 17,247 18,450 15,276 17,232 15,514 22,669
Extraordinary Item, Net
of Income Taxes....... 1,012 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income.............. $ 17,055 $ 17,247 $ 18,450 $ 15,276 $ 17,232 $ 15,514 $ 22,669
======== ======== ======== ======== ======== ======== ========
Earnings per common
share:
Basic:
Continuing operations
before extraordinary
item.................. $ 0.91 $ 0.98 $ 1.00 $ 0.77 $ 0.88 $ 0.78 $ 1.06
Discontinued
operations............ -- -- (0.03) 0.01 (0.02) 0.01 --
Extraordinary item..... .06 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income per common
share................. $ 0.97 $ 0.98 $ 0.97 $ 0.78 $ 0.86 $ $0.79 $ 1.06
======== ======== ======== ======== ======== ======== ========
Diluted:
Continuing operations
before extraordinary
item.................. $ 0.90 $ 0.96 $ 0.98 $ 0.76 $ 0.85 $ 0.77 $ 0.99
Discontinued
operations............ -- -- (0.02) 0.01 (0.02) 0.01 --
Extraordinary item..... .06 -- -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net income per common
share................. $ 0.96 $ 0.96 $ 0.96 $ 0.77 $ 0.83 $ 0.78 $ 0.99
======== ======== ======== ======== ======== ======== ========
</TABLE>
15
<PAGE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED JUNE 30, DECEMBER 31,
-------------------------------------- NINE MONTHS ENDED ------------------
1993 1994 1995 1996 MARCH 31, 1997 1996 1997
-------- -------- -------- -------- ----------------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
OTHER FINANCIAL DATA
(UNAUDITED):
EBITDA(1).............. $ 28,052 $ 30,511 $ 33,519 $ 25,971 $ 40,440 $ 27,211 $ 71,082
Capital expenditures... 4,291 11,510 3,208 12,535 10,106 4,290 59,260
Ratio of EBITDA to
interest expense(1)... 18.7x 26.8x 58.9x 86.6x 7.3x 33.6x 4.6x
Ratio of earnings to
fixed charges(2)...... 15.3x 21.8x 47.9x 71.5x 5.6x 28.6x 3.2x
Ratio of debt to
EBITDA................ .5x .2x .2x .2x 6.2x 9.2x 3.2x
BALANCE SHEET DATA (END
OF PERIOD):
Cash, cash equivalents
and investment in
marketable securities. $ 46,941 $ 47,175 $ 67,879 $ 76,906 $ 29,829 $ 26,692 $ 22,631
Property, plant and
equipment, net........ 70,432 73,917 67,163 71,741 436,382 450,661 464,488
Total assets........... 164,231 174,245 217,983 230,741 674,213 665,508 684,492
Total long-term debt... 9,322 2,000 -- -- 199,631 205,401 220,857
Total stockholders'
equity................ 123,919 141,567 183,851 199,683 234,906 236,911 266,623
</TABLE>
- --------
(1) EBITDA means earnings from continuing operations before extraordinary
item, interest, taxes, depreciation and amortization excluding minority
interest and including earnings from unconsolidated entities which are
accounted for on the cost method. EBITDA is commonly used by debt holders
and financial statement users as a measurement to determine the ability of
an entity to meet its interest obligations. EBITDA is not a measurement
presented in accordance with generally accepted accounting principles
("GAAP") and is not intended to be used in lieu of GAAP presentations of
results of operations and cash provided by operating activities.
(2) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income from continuing operations before extraordinary item,
and provision for income taxes plus interest expense; and fixed charges
consist of interest expense.
16
<PAGE>
THE EXCHANGE OFFER
PURPOSE AND EFFECT
The Old Notes were sold by the Company on January 27, 1998 to the Initial
Purchaser in a private transaction not subject to the registration
requirements of the Securities Act. The Initial Purchaser offered and sold the
Old Notes only (i) to "qualified institutional buyers" (as defined in Rule
144A) in compliance with Rule 144A and (ii) to a limited number of other
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3)
or (7) under the Securities Act) that, prior to their purchase of Old Notes,
delivered to the Initial Purchaser a letter containing certain representations
and agreements. In connection with the sale of the Old Notes, the Company
entered into the Registration Rights Agreement, which requires that the
Company and the Guarantors conduct the Exchange Offer. The Registration Rights
Agreement further provides that the Company and the Guarantors must use their
reasonable best efforts to (i) cause the Exchange Offer Registration Statement
to be declared effective on or before the 120th day after the date on which
the Old Notes were originally issued under the Indenture (the "Closing Date")
and (ii) consummate the Exchange Offer on or before the 180th day after the
Closing Date. Except as provided below, upon the completion of the Exchange
Offer, the Company's obligation with respect to the registration of the Old
Notes and the New Notes will terminate. The summary herein of certain
provisions of the Registration Rights Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference
thereto. Copies of the Registration Rights Agreement are available as set
forth under "Description of the Notes--Additional Information." As a result of
the filing and the effectiveness of the Exchange Offer Registration Statement,
certain Liquidated Damages provided for in the Registration Rights Agreement
will not become payable by the Company. Following the completion of the
Exchange Offer (except as set forth in the paragraph immediately below),
certain holders of Old Notes not tendered will not have any further
registration rights and those Old Notes will continue to be subject to certain
restrictions on transfer. Accordingly, the liquidity of the market for the Old
Notes could be adversely affected upon completion of the Exchange Offer.
In order to participate in the Exchange Offer, a holder must represent to
the Company, among other things, that (i) the New Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of such holder's
business, (ii) such holder is not engaging in and does not intend to engage in
a distribution of the New Notes, (iii) such holder does not have an
arrangement or understanding with any person to participate in the
distribution of the New Notes and (iv) such holder is not an "affiliate," as
defined under Rule 405 promulgated under the Securities Act, of the Company.
Pursuant to the Registration Rights Agreement, the Company is required to file
a Shelf Registration Statement for a continuous offering pursuant to Rule 415
under the Securities Act in respect of the Old Notes (and cause such shelf
registration statement to be declared effective by the Commission and keep it
continuously effective, supplemented and amended for prescribed periods) if
(i) the Company is not permitted to consummate the Exchange Offer because the
Exchange Offer is not permitted by applicable law or Commission policy, or
(ii) any holder of Transfer Restricted Securities notifies the Company prior
to the 20th day following consummation of the Exchange Offer (A) that such
holder is prohibited by law or Commission policy from participating in the
Exchange Offer or (B) that such holder may not resell the New Notes acquired
by it in the Exchange Offer to the public without delivering a prospectus and
the prospectus contained in the Exchange Offer Registration Statement would
not be available for such resale by such holder. Other than as set forth in
this paragraph, no holder will have the right to participate in the Shelf
Registration Statement nor otherwise to require that the Company register such
holder's shares of Old Notes under the Securities Act. See "Description of the
Notes--Registration Rights; Liquidated Damages."
The Company has not requested, and does not intend to request, an
interpretation by the staff of the Commission with respect to whether the New
Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may
be offered for sale, resold or otherwise transferred by any holder without
compliance with the registration and prospectus delivery provisions of the
Securities Act. Based on interpretations by the staff of the Commission set
forth in no-action letters issued to third parties unrelated to the Company
and the Guarantors, the Company and the Guarantors believe that New Notes
issued pursuant to the Exchange Offer in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by holders thereof (other than
any such
17
<PAGE>
holder or such other person that is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act), without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that (i) the New Notes are acquired in the ordinary course of such
holder's business, (ii) such holder is not engaging in and does not intend to
engage in a distribution of the New Notes, and (iii) such holder does not have
an arrangement or understanding with any person to participate in the
distribution of the New Notes. Any holder who tenders in the Exchange Offer
with the intention to participate, or for the purpose of participating, in a
distribution of the New Notes or who is an affiliate of the Company may not
rely upon such interpretation by the staff of the Commission and, in the
absence of an exemption therefrom, must comply with the registration and
prospectus delivery requirements of the Securities Act in connection with any
secondary resale transaction. Failure to comply with such requirements in such
instance may result in such holder incurring liabilities under the Securities
Act for which the holder is not indemnified by the Company. Each broker-dealer
that receives New Notes for its own account in exchange for Old Notes, where
those Old Notes were acquired by the broker-dealer as a result of its market-
making activities or other trading activities, must acknowledge that it will
deliver a prospectus in connection with any resale of these New Notes. The
Letter of Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act. The Company has agreed
that, for a period of one year after the effective date of the Exchange Offer
Registration Statement, it will make the Prospectus available to any broker-
dealer for use in connection with any such resale.
The Exchange Offer is not being made to, nor will the Company accept
surrenders for exchange from, holders of Old Notes in any jurisdiction in
which this Exchange Offer or the acceptance thereof would not be in compliance
with the securities or blue sky laws of such jurisdiction.
Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Old Notes are urged to
consult their financial and tax advisors in making their own decisions on
whether to participate in the Exchange Offer.
CONSEQUENCES OF FAILURE TO EXCHANGE
Old Notes which are not tendered for exchange in the Exchange Offer will
remain outstanding and interest thereon will continue to accrue. Following the
completion of the Exchange Offer (except as set forth above in the second
paragraph under "--Purpose and Effect"), holders of Old Notes not tendered
will not have any further registration rights and those Old Notes will remain
restricted securities within the meaning of Rule 144 of the Securities Act.
Accordingly, the liquidity of the market for a holder's Old Notes could be
adversely affected upon completion of the Exchange Offer if the holder does
not participate in the Exchange Offer.
TERMS OF THE EXCHANGE OFFER
General
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Old
Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date. The Company will issue $1,000 principal amount
of New Notes in exchange for each $1,000 principal amount of outstanding Old
Notes accepted in the Exchange Offer. Holders may tender some or all of their
Old Notes pursuant to the Exchange Offer. However, Old Notes may be tendered
only in integral multiples of $1,000 in principal amount.
The form and terms of the New Notes are identical in all material respects
to the form and terms of the Old Notes except that (i) the New Notes are being
registered under the Securities Act and, therefore, will not bear legends
restricting their transfer and (ii) holders of the New Notes, other than
certain broker-dealers, will not be entitled to the rights of holders of the
Transfer Restricted Securities under the Registration Rights Agreement. The
New Notes will evidence the same debt as the Old Notes, will be issued
pursuant to, and entitled to the benefits of, the Indenture pursuant to which
the Old Notes were issued and will be treated as a single class
18
<PAGE>
thereunder with any Old Notes that remain outstanding. The Exchange Offer is
not conditioned upon any minimum aggregate principle amount of Old Notes being
tendered for exchange.
As of March , 1998, the Old Notes representing $100,000,000 aggregate
principal amount were outstanding and there were registered holders. This
Prospectus, together with the Letter of Transmittal, is being sent to such
registered holders and to others believed to have beneficial interests in the
Old Notes. Holders of Old Notes do not have any appraisal or dissenters'
rights under the General Corporation Law of the State of Delaware or the
Indenture in connection with the Exchange Offer. The Company intends to
conduct the Exchange Offer in accordance with the applicable requirements of
the Exchange Act and the rules and regulations of the Commission promulgated
thereunder.
As of the date of this Prospectus, $100,000,000 aggregate principal amount
of Old Notes are issued and outstanding. In connection with the issuance of
the Old Notes, the Company arranged for the Old Notes to be eligible for
trading in the Private Offering, Resale and Trading through Automated Linkages
Market (PORTAL), the National Association of Securities Dealers' screen based,
automated market trading of securities eligible for resale under Rule 144A.
The Company will be deemed to have accepted validly tendered Old Notes when,
as and if the Company has given oral or written notice thereof to the Exchange
Agent. The Exchange Agent will act as agent for the tendering holders for the
purpose of receiving the New Notes from the Company and delivering the New
Notes to such holders. If any tendered Old Notes are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Old Notes will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Old
Notes pursuant to the Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes, in connection with the Exchange
Offer. See "--Fees and Expenses."
Expiration Date; Extensions; Amendments
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended. In order to extend the
Exchange Offer, the Company will notify the Exchange Agent and each registered
holder of any extension by oral or written notice prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date. During any extension of the Exchange Offer, all Old Notes previously
tendered pursuant to the Exchange Offer and not withdrawn will remain subject
to the Exchange Offer. The date of the exchange of the New Notes for Old Notes
will be the first Nasdaq National Market ("NNM") trading day following the
Expiration Date.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, to extend the Exchange Offer or, if any of the
conditions set forth under "--Conditions to the Exchange Offer" have not been
satisfied and have not been waived by the Company, to terminate the Exchange
Offer, by giving oral or written notice of such delay, extension or
termination to the Exchange Agent, or (ii) to amend the terms of the Exchange
Offer in any manner deemed by it to be advantageous to the holders of the Old
Notes. Any such delay in acceptance, extension, termination or amendment will
be followed as promptly as practicable by oral or written notice thereof to
the registered holders. If the Exchange Offer is amended in any manner
determined by the Company to constitute a material change, the Company will
promptly disclose such amendment by means of a prospectus supplement that will
be distributed to the registered holders, and the Company will extend the
Exchange Offer for a period of time, depending upon the significance of the
amendment and the manner of disclosure to the registered holders, if the
Exchange Offer would otherwise expire during such period.
19
<PAGE>
Interest on the New Notes
The New Notes will bear interest payable semi-annually in arrears on January
15 and July 15 of each year, commencing July 15, 1998. Holders of record of
New Notes on July 1, 1998 will receive interest on July 15, 1998 from the date
of issuance of the New Notes, plus an amount equal to the accrued interest on
the Old Notes from the date of issuance of the Old Notes, January 27, 1998, to
the date of exchange thereof. Consequently, assuming the Exchange Offer is
consummated prior to the record date in respect of the July 15, 1998 interest
payment for the Old Notes, holders who exchange their Old Notes for New Notes
will receive the same interest payment on July 15, 1998 that they would have
received had they not accepted the Exchange Offer. Interest on the Old Notes
accepted for exchange will cease to accrue upon issuance of the New Notes.
Procedures for Tendering Old Notes
The tender to the Company of Old Notes by a holder thereof pursuant to one
of the procedures set forth below will constitute an agreement between such
holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal. A holder of the
Old Notes may tender such Old Notes by (i) properly completing, signing and
dating a Letter of Transmittal or a facsimile thereof (all references in this
Prospectus to a Letter of Transmittal shall be deemed to include a facsimile
thereof) and delivering the same, together with any corresponding certificate
or certificates representing the Old Notes being tendered (if in certificated
form) and any required signature guarantees, to the Exchange Agent at its
address set forth in the Letter of Transmittal on or prior to the Expiration
Date (or complying with the procedure for book-entry transfer described
below), or (ii) complying with the guaranteed delivery procedures described
below.
If tendered Old Notes are registered in the name of the signer of the Letter
of Transmittal and the New Notes to be issued in exchange therefor are to be
issued (and any untendered Old Notes are to be reissued) in the name of the
registered holder (which term, for the purposes described herein, shall
include any participant in DTC (also referred to as a book-entry facility)
whose name appears on a security listing as the owner of Old Notes), the
signature of such signer need not be guaranteed. In any other case, the
tendered Old Notes must be endorsed or accompanied by written instruments of
transfer in form satisfactory to the Company and duly executed by the
registered holder and the signature on the endorsement or instrument of
transfer must be guaranteed by an eligible guarantor institution that is a
member of or a participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program, the Stock
Exchange Medallion Program or an "eligible guarantor institution" within the
meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"). If
the New Notes or Old Notes not exchanged are to be delivered to an address
other than that of the registered holder appearing on the note register for
the Old Notes, the signature in the Letter of Transmittal must be guaranteed
by an Eligible Institution.
THE METHOD OF DELIVERY OF OLD NOTES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND RISK OF THE
HOLDER. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL,
PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN ALL CASES,
SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT
BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE
SENT TO THE COMPANY. ONLY HOLDERS OF OLD NOTES MAY TENDER SUCH OLD NOTES IN
THE EXCHANGE OFFER. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS,
COMMERCIAL BANKS, TRUST COMPANIES, OR NOMINEES TO EFFECT THESE TRANSACTIONS
FOR SUCH HOLDERS.
Any beneficial owner whose Old Notes are registered in the name of a broker,
dealer, commercial bank, trust company, or other nominee and who wishes to
tender should contact the registered holder promptly and instruct the
registered holder to tender on the beneficial owner's behalf. If the
beneficial owner wishes to tender on the owner's own behalf, the owner must,
prior to completing and executing the Letter of Transmittal and delivering the
owner's Old Notes, either make appropriate arrangements to register ownership
of the Old Notes
20
<PAGE>
in the beneficial owner's name or obtain a properly completed bond power from
the registered holder. The transfer of registered ownership may take
considerable time.
The Company understands that the Exchange Agent has confirmed with DTC that
any financial institution that is a participant in DTC's system may utilize
DTC's Automated Tender Offer Program ("ATOP") to tender Old Notes. The Company
further understands that the Exchange Agent will request, within two business
days after the date the Exchange Offer commences, that DTC establish an
account with respect to the Old Notes for the purpose of facilitating the
Exchange Offer, and any participant may make book-entry delivery of Old Notes
by causing DTC to transfer such Old Notes into the Exchange Agent's account in
accordance with DTC's ATOP procedures for transfer. However, the exchange of
the Old Notes so tendered will only be made after timely confirmation (a
"Book-Entry Confirmation") of such book-entry transfer and timely receipt by
the Exchange Agent of an Agent's Message (as defined in the next sentence),
and any other documents required by the Letter of Transmittal. The term
"Agent's Message" means a message, transmitted by DTC and received by the
Exchange Agent and forming a part of Book-Entry Confirmation, which states
that DTC has received an express acknowledgment from a participant tendering
Old Notes which are the subject of such Book-Entry Confirmation and that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that the Company may enforce such agreement against such
participant.
A tender will be deemed to have been received as of the date when (i) the
tendering holder's properly completed and duly signed Letter of Transmittal
accompanied by the Old Notes (or a confirmation of book-entry transfer of such
Old Notes into the Exchange Agent's account at DTC), is received by the
Exchange Agent, or (ii) a Notice of Guaranteed Delivery or letter, telegram or
facsimile transmission to similar effect from an Eligible Institution is
received by the Exchange Agent. Issuances of New Notes in exchange for Old
Notes tendered pursuant to a Notice of Guaranteed Delivery or letter, telegram
or facsimile transmission to similar effect by an Eligible Institution will be
made only against submission of a duly signed Letter of Transmittal (and any
other required documents) and deposit of the tendered Old Notes.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance, and withdrawal of tendered Old Notes will be determined
by the Company, in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any or all tenders
not in proper form or the acceptance for exchange of which may, in the opinion
of counsel for the Company, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Exchange Offer or any
defect or irregularity in the tender of any Old Notes. The Company's
interpretation of the terms and conditions of the Exchange Offer (including
the instructions in the Letter of Transmittal) will be final and binding on
all parties. Unless waived, any defects or irregularities in connection with
tenders of Old Notes must be cured within such time as the Company shall
determine. Although the Company intends to notify holders of defects or
irregularities with respect to tenders of Old Notes, neither the Company, the
Exchange Agent, nor any other person shall be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give such notification. Tenders of Old Notes will not
be deemed to have been made until such defects or irregularities have been
cured or waived. Any Old Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering
holders, unless otherwise provided in the Letter of Transmittal, as soon as
practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to
purchase or make offers for any Old Notes that remain outstanding after the
Expiration Date or, as set forth under "Conditions to the Exchange Offer," to
terminate the Exchange Offer and, to the extent permitted by applicable law,
purchase Old Notes in the open market, in privately negotiated transactions,
or otherwise. The terms of any such purchases or offers could differ from the
terms of the Exchange Offer.
In all cases, issuance of New Notes for Old Notes that are accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of certificates for such Old Notes or a timely Book-
Entry Confirmation of such Old Notes into the Exchange Agent's account at DTC,
a properly completed
21
<PAGE>
and duly executed Letter of Transmittal (or, with respect to DTC and its
participants, electronic instructions in which the tendering holder
acknowledges its receipt of and agreement to be bound by the Letter of
Transmittal), and all other required documents. If any tendered Old Notes are
not accepted for any reason set forth in the terms and conditions of the
Exchange Offer or if Old Notes are submitted for a greater principal amount
than the holder desires to exchange, such unaccepted or non-exchanged Old
Notes will be returned without expense to the tendering Holder thereof (or, in
the case of Old Notes tendered by book-entry transfer into the Exchange
Agent's account at DTC pursuant to the book-entry transfer procedures
described below, such nonexchanged Old Notes will be credited to an account
maintained with such book-entry transfer facility) as promptly as practicable
after the expiration or termination of the Exchange Offer.
Each broker-dealer that receives New Notes for its own account in exchange
for Old Notes, where the Old Notes were acquired by such broker-dealer as a
result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes.
Guaranteed Delivery Procedures
If the holder desires to accept the Exchange Offer and time will not permit
a Letter of Transmittal or Old Notes to reach the Exchange Agent before the
Expiration Date or the procedure for book-entry transfer cannot be completed
on a timely basis, a tender may be effected if the Exchange Agent has received
at its office, on or prior to the Expiration Date, a letter, telegram or
facsimile transmission from an Eligible Institution setting forth the name and
address of the tendering holder, the name(s) in which the Old Notes are
registered and the certificate number(s) of the Old Notes to be tendered, and
stating that the tender is being made thereby and guaranteeing that, within
three NNM trading days after the date of execution of such letter, telegram or
facsimile transmission by the Eligible Institution, such Old Notes, in proper
form for transfer (or a confirmation of book-entry transfer of such Old Notes
into the Exchange Agent's account at DTC), will be delivered by such Eligible
Institution together with a properly completed and duly executed Letter of
Transmittal (and any other required documents). Unless Old Notes being
tendered by the above-described method are deposited with the Exchange Agent
within the time period set forth above (accompanied or preceded by a properly
completed Letter of Transmittal and any other required documents), the Company
may, at its option, reject the tender. Copies of a Notice of Guaranteed
Delivery which may be used by Eligible Institutions for the purposes described
in this paragraph are available from the Exchange Agent.
Terms and Conditions of the Letter of Transmittal
The Letter of Transmittal contains, among other things, certain terms and
conditions which are summarized below and are part of the Exchange Offer.
Each holder who participates in the Exchange Offer will be required to
represent that any New Notes received by it will be acquired in the ordinary
course of its business, that such holder is not participating in, and has no
arrangement with any person to participate in, the distribution (within the
meaning of the Securities Act) of the New Notes, and that such holder is not
an affiliate of the Company.
Old Notes tendered in exchange for New Notes (or a timely confirmation of a
book-entry transfer of such Old Notes into the Exchange Agent's account at
DTC) must be received by the Exchange Agent, with the Letter of Transmittal
and any other required documents, by the Expiration Date or within the time
periods set forth above pursuant to a Notice of Guaranteed Delivery from an
Eligible Institution. Each holder tendering the Old Notes for exchange sells,
assigns and transfers the Old Notes to the Exchange Agent, as agent of the
Company, and irrevocably constitutes and appoints the Exchange Agent as the
holder's agent and attorney-in-fact to cause the Old Notes to be transferred
and exchanged. The holder warrants that it has full power and authority to
tender, exchange, sell, assign and transfer the Old Notes and to acquire the
New Notes issuable upon the exchange of such tendered Old Notes, that the
Exchange Agent, as agent of the Company, will acquire good and unencumbered
title to the tendered Old Notes, free and clear of all liens, restrictions,
charges and encumbrances, and that the Old Notes tendered for exchange are not
subject to any adverse claims when accepted by the
22
<PAGE>
Exchange Agent, as agent of the Company. The holder also warrants and agrees
that it will, upon request, execute and deliver any additional documents
deemed by the Company or the Exchange Agent to be necessary or desirable to
complete the exchange, sale, assignment and transfer of the Old Notes. All
authority conferred or agreed to be conferred in the Letter of Transmittal by
the holder will survive the death, incapacity or dissolution of the holder and
any obligation of the holder shall be binding upon the heirs, personal
representatives, successors and assigns of such holder.
Withdrawal Rights
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date
unless previously accepted for exchange.
To withdraw a tender of Old Notes in the Exchange Offer, a written,
facsimile or (for DTC participation) electronic ATOP transmission notice of
withdrawal must be received by the Exchange Agent at its address set forth
herein prior to 5:00 p.m., New York City time, on the Expiration Date prior to
acceptance for exchange thereof by the Company. Any such notice of withdrawal
must (i) specify the name of the person having deposited the Old Notes to be
withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn
(including the certificate number or numbers and principal amount of such Old
Notes), (iii) contain a statement that such holder is withdrawing its election
to have such Old Notes exchanged, (iv) be signed by the holder in the same
manner as the original signature on the Letter of Transmittal by which such
Old Notes were tendered (including any required signature guarantees) or be
accompanied by documents of transfer sufficient to have the Trustee register
the transfer of such Old Notes in the name of the person withdrawing the
tender, and (v) specify the name in which any such Old Notes are to be
registered, if different from that of the Depositor. If Old Notes have been
tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at the book-entry
transfer facility. All questions as to the validity, form, and eligibility
(including time of receipt) of such notices will be determined by the Company,
whose determination shall be final and binding on all parties. Any Old Notes
so withdrawn will be deemed not to have been validly tendered for purposes of
the Exchange Offer and no Exchange Notes will be issued with respect thereto
unless the Old Notes so withdrawn are validly returned. Any Old Notes which
have been tendered but which are not exchanged for any reason will be returned
to the holder thereof without cost to such holder as soon as practicable after
withdrawal, rejection of tender, or termination of the Exchange Offer.
Properly withdrawn Old Notes may be retendered by following one of the
procedures (described above) under "--Procedures for Tendering Old Notes" at
any time on or prior to the Expiration Date.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provision of the Exchange Offer, the Company will
not be required to accept for exchange, or to issue New Notes in exchange for,
any Old Notes and may terminate or amend the Exchange Offer if at any time
before the acceptance of such Old Notes for exchange or the exchange of the
New Notes for such Old Notes, the Company determines that the Exchange Offer
violates applicable law or Commission policy.
If the Company determines that it may terminate the Exchange Offer, as set
forth above, the Company may (i) refuse to accept any Old Notes and return any
Old Notes that have been tendered to the holders thereof, (ii) extend the
Exchange Offer and retain all Old Notes tendered prior to the Expiration of
the Exchange Offer, subject to the rights of such holders of tendered Old
Notes to withdraw their tendered Old Notes or (iii) waive such termination
event with respect to the Exchange Offer and accept all properly tendered Old
Notes that have not been withdrawn. If such waiver constitutes a material
change in the Exchange Offer, the Company will disclose such change by means
of a supplement to this Prospectus that will be distributed to each registered
holder of Old Notes, and the Company will extend the Exchange Offer for a
period of time, depending upon the significance of the waiver and the manner
of disclosure to the registered holders of the Old Notes, if the Exchange
Offer would otherwise expire during such period. Holders of Old Notes will
have certain rights against the Company under the Registration Rights
Agreement should the Company fail to consummate the Exchange Offer. See
"Description of the Notes--Registration Rights; Liquidated Damages."
23
<PAGE>
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any
such condition or may be waived by the Company in whole or in part at any time
and from time to time in its sole discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver
of any such right and each such right shall be deemed an ongoing right which
may be asserted at any time and from time to time.
In addition, the Company will not accept for exchange any Old Notes
tendered, and no New Notes will be issued in exchange for, any such Old Notes,
if at such time any stop order shall be threatened or in effect with respect
to the Registration Statement of which this Prospectus constitutes a part of
the qualification of the Indenture under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"). In any such event the Company is required
to use every reasonable effort to obtain the withdrawal of any stop order at
the earliest possible time.
EXCHANGE AGENT
State Street Bank and Trust Company has been appointed as Exchange Agent for
the Exchange Offer. Questions and requests for assistance and requests for
additional copies of this Prospectus or of the Letter of Transmittal should be
directed to the Exchange Agent addressed as follows:
For Information by Telephone:
( )
or
( )
By Registered or Certified Mail: By Hand or Overnight Delivery
Service:
_____________________________________
Corporate Trust Services _____________________________________
_____________________________________ Corporate Trust Services
_____________________________________ _____________________________________
_____________________________________
By Facsimile Transmission (for Eligible Institutions only):
( )
(Facsimile Confirmation)
( )
or
( )
24
<PAGE>
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional
solicitations may be made by telecopy, telephone or in person by officers and
regular employees of the Company. No additional compensation will be paid to
any such officers and employees who engage in soliciting tenders. The Company
will not make any payments to brokers, dealers or other persons soliciting
acceptances of the Exchange Offer. The Company, however, will pay the Exchange
Agent reasonable and customary fees for its services and will reimburse the
Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith. The Company may also pay brokerage houses and other custodians,
nominees and fiduciaries the reasonable out-of-pocket expenses incurred by
them in forwarding copies of this Prospectus, Letters of Transmittal and
related documents to the beneficial owners of the Old Notes and in handling or
forwarding tenders for exchange.
The estimated cash expenses to be incurred in connection with the Exchange
Offer, including fees and expenses of the Exchange Agent, accounting, legal
and related fees and expenses, will be paid by the Company.
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<PAGE>
DESCRIPTION OF THE NOTES
GENERAL
The Old Notes were issued pursuant to an Indenture dated January 27, 1998
among the Company, the initial Guarantors (as defined below) and State Street
Bank and Trust Company, as trustee (the "Trustee"). The New Notes will be
issued under the Indenture, which will be qualified under the Trust Indenture
Act, upon the effectiveness of the Registration Statement of which this
Prospectus forms a part. The terms of the Notes will include those stated in
the Indenture and those made part of the Indenture by reference to the Trust
Indenture Act. The Notes will be subject to all such terms, and prospective
investors are referred to the Indenture and the Trust Indenture Act for a
statement thereof. The following summary of certain provisions of the
Indenture does not purport to be complete. Copies of the Indenture and the
Registration Rights Agreement are available as set forth under "--Additional
Information." The definitions of certain terms used in the following summary
are set forth below under "--Certain Definitions." As used in this
"Description of the Notes," the "Company" means Offshore Logistics, Inc., but
not any of its subsidiaries.
The Notes will be general unsecured obligations of the Company, ranking pari
passu in right of payment with all other future senior indebtedness of the
Company and senior in right of payment to all existing and future subordinated
indebtedness of the Company. The Notes will be unconditionally guaranteed on a
senior unsecured basis by certain of the Company's present and future
Significant Subsidiaries; provided, however, that initially neither Bristow
nor any of its Subsidiaries will guarantee the Notes. As a consequence, the
Notes will be structurally subordinated to all existing and future
indebtedness of Bristow and its Subsidiaries. As of December 31, 1997, after
giving pro forma effect to the Original Offering and the use of proceeds
therefrom, the Notes would have been effectively subordinated to approximately
$43.6 million of indebtedness of Bristow and its Subsidiaries and to an
additional $18.6 million of indebtedness of a foreign subsidiary of OLOG that
also will not guarantee the Notes (excluding indebtedness owed to the
Company). See "Risk Factors--Ranking of the Notes; Effective Subordination,"
"Use of Proceeds" and "Capitalization."
The Indenture provides for the issuance of up to $100.0 million of Old Notes
in connection with the Original Offering and an equal aggregate principal
amount of New Notes that may be issued in exchange for Old Notes pursuant to
the Exchange Offer. The Indenture also provides the Company the flexibility of
issuing additional Notes in the future in an unlimited amount; however, any
issuance of such additional Notes would be subject to the covenant described
in the first paragraph under "--Certain Covenants--Incurrence of Indebtedness
and Issuance of Preferred Stock." The Old Notes, the New Notes and any such
additional Notes are collectively referred to as the "Notes" in this
"Description of the Notes."
Any Old Notes that remain outstanding after the completion of the Exchange
Offer, together with the New Notes issued in connection with the Exchange
Offer, will be treated as a single class of securities under the Indenture.
As of the date of the Indenture, Bristow and all of the Company's principal
Subsidiaries are Restricted Subsidiaries. Under certain circumstances, the
Company will be able to designate current or future Subsidiaries as
Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be subject to
many of the restrictive covenants set forth in the Indenture.
PRINCIPAL, MATURITY AND INTEREST
The New Notes will be limited in aggregate principal amount to $100.0
million and will mature on January 15, 2008. Interest on the Notes will accrue
at the rate of 7 7/8% per annum and will be payable semi-annually in arrears
on January 15 and July 15 of each year, commencing on July 15, 1998, to
holders of record on the immediately preceding January 1 and July 1. Interest
on the Notes will accrue from the most recent date to which interest has been
paid or, if no interest has been paid, from the date of original issuance of
the Old Notes. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. Principal of and premium,
26
<PAGE>
interest and Liquidated Damages, if any, on the Notes will be payable at the
office or agency of the Company maintained for such purpose in New York, New
York or, at the option of the Company, payment of interest and Liquidated
Damages, if any, may be made by check mailed to holders of the Notes at their
respective addresses set forth in the register of holders; provided, however,
that all payments with respect to Notes the holders of which have given wire
transfer instructions to the Company will be required to be made by wire
transfer of immediately available funds to the accounts specified by the
holders thereof. Until otherwise designated by the Company, the Company's
office or agency in New York, New York will be the office of the Trustee
maintained for such purpose. The Notes will be issued in denominations of
$1,000 and integral multiples thereof.
SUBSIDIARY GUARANTEES
The Company's payment obligations under the Notes will be jointly and
severally guaranteed (the "Subsidiary Guarantees") by all of the Company's
present active domestic and certain future Subsidiaries (the "Guarantors").
Initially neither Bristow nor its Subsidiaries will be Guarantors. In the
circumstances described under "--Certain Covenants--Additional Subsidiary
Guarantees," the Indenture requires that Bristow and its Restricted
Subsidiaries execute Subsidiary Guarantees. The obligations of each Guarantor
under its Subsidiary Guarantee will be a general unsecured obligation of such
Guarantor, ranking pari passu in right of payment with all other current or
future senior indebtedness of such Guarantor and senior in right of payment to
any subordinated indebtedness, if any, incurred by such Guarantor in the
future.
The Indenture provides that no Guarantor may consolidate with or merge with
or into (whether or not such Guarantor is the surviving Person) another Person
(other than the Company or another Guarantor), whether or not affiliated with
such Guarantor, unless (i) subject to the provisions of the following
paragraph, the Person formed by or surviving any such consolidation or merger
(if other than such Guarantor) shall execute a Guarantee and deliver an
Opinion of Counsel in accordance with the terms of the Indenture; (ii)
immediately after giving effect to such transaction, no Default or Event of
Default exists; (iii) such Guarantor, or any Person formed by or surviving any
such consolidation or merger, would have Consolidated Net Worth (immediately
after giving effect to such transaction), equal to or greater than the
Consolidated Net Worth of such Guarantor immediately preceding the
transaction; and (iv) the Company would be permitted by virtue of the
Company's pro forma Consolidated Interest Coverage Ratio, immediately after
giving effect to such transaction, to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set
forth in the covenant described below the caption "--Certain Covenants--
Incurrence of Indebtedness and Issuance of Preferred Stock."
The Indenture provides that, in the event of a sale or other disposition
(including by way of merger or consolidation) of all or substantially all of
the assets or all of the Capital Stock of any Guarantor (or at least a
majority of the Capital Stock of any Guarantor that is primarily engaged in
the production management services business), then such Guarantor will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided, however, that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the Indenture. See "--
Repurchase at the Option of Holders--Asset Sales." In addition, the Indenture
provides that, in the event the Board of Directors designates a Guarantor to
be an Unrestricted Subsidiary, then such Guarantor will be released and
relieved of any obligations under its Subsidiary Guarantee, provided that such
designation is conducted in accordance with the applicable provisions of the
Indenture.
27
<PAGE>
OPTIONAL REDEMPTION
The Notes will not be redeemable at the Company's option prior to January
15, 2003. Thereafter, the Notes will be subject to redemption at any time at
the option of the Company, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) set forth below, plus accrued
and unpaid interest and Liquidated Damages, if any, thereon to the applicable
redemption date, if redeemed during the 12 month period beginning on January
15 of the years indicated below:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
2003............................................. 103.938%
2004............................................. 102.953
2005............................................. 101.969
2006............................................. 100.984
2007 and thereafter.............................. 100.000
</TABLE>
Notwithstanding the foregoing, on or prior to January 22, 2001, the Company
may redeem up to 35% of the aggregate principal amount of Notes originally
issued at a redemption price of 107 7/8% of the principal amount thereof, plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the
redemption date, with the net cash proceeds of one or more Qualified Equity
Offerings, provided that (a) at least 65% of the aggregate principal amount of
Notes originally issued remains outstanding immediately after the occurrence
of each such redemption and (b) each such redemption occurs within 60 days of
the date of the closing of each such Qualified Equity Offering.
SELECTION AND NOTICE
If less than all of the Notes are to be redeemed at any time, selection of
Notes for redemption will be made by the Trustee on a pro rata basis, by lot
or by such method as the Trustee shall deem fair and appropriate; provided,
however, that no Notes of $1,000 or less shall be redeemed in part. Notices of
redemption shall be mailed by first class mail at least 30 but not more than
60 days before the redemption date to each holder of Notes to be redeemed at
its registered address. Notices of redemption may not be conditional. If any
Note is to be redeemed in part only, the notice of redemption that relates to
such Note shall state the portion of the principal amount thereof to be
redeemed. A new Note in principal amount equal to the unredeemed portion
thereof will be issued in the name of the holder thereof upon cancellation of
the original Note. Notes called for redemption become due on the date fixed
for redemption. On and after the redemption date, interest ceases to accrue on
Notes or portions of them called for redemption.
MANDATORY REDEMPTION
Except as set forth below under "--Repurchase at the Option of Holders," the
Company is not required to make mandatory redemption or sinking fund payments
with respect to the Notes.
REPURCHASE AT THE OPTION OF HOLDERS
Change of Control
The Indenture provides that, upon the occurrence of a Change of Control, the
Company will be required to make an offer (a "Change of Control Offer") to
repurchase all or any part (equal to $1,000 or an integral multiple thereof)
of each holder's Notes at an offer price in cash equal to 101% of the
aggregate principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the date of repurchase (the "Change of
Control Payment"). Within 30 days following a Change of Control, the Company
will mail a notice to each holder of Notes and the Trustee describing the
transaction that constitutes the Change of Control and offering to repurchase
Notes on the date specified in such notice, which date shall be no earlier
than 30 days and
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<PAGE>
no later than 60 days from the date such notice is mailed (the "Change of
Control Payment Date"), pursuant to the procedures required by the Indenture
and described in such notice. The Company will comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable
in connection with the repurchase of Notes as a result of a Change of Control.
On or before the Change of Control Payment Date, the Company will, to the
extent lawful, (a) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (b) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (c) deliver or cause to be delivered to
the Trustee the Notes so accepted together with an Officers' Certificate
stating the aggregate principal amount of Notes or portions thereof being
purchased by the Company. The Paying Agent will promptly mail to each holder
of Notes so tendered the Change of Control Payment for such Notes, and the
Trustee will promptly authenticate and mail (or cause to be transferred by
book entry) to each holder a new Note equal in principal amount to any
unpurchased portion of the Notes surrendered, if any; provided, however, that
each such new Note will be in a principal amount of $1,000 or an integral
multiple thereof. The Company will publicly announce the results of the Change
of Control Offer on or as soon as practicable after the Change of Control
Payment Date.
Except as described above with respect to a Change of Control, the Indenture
does not contain provisions that permit the holders of the Notes to require
that the Company repurchase or redeem the Notes in the event of a takeover,
recapitalization or similar transaction. In addition, the Company could enter
into certain transactions, including acquisitions, refinancing or other
recapitalizations, that could affect the Company's capital structure or the
value of the Notes, but that would not constitute a Change of Control. The
occurrence of a Change of Control may result in a default under the Credit
Facilities and give the lenders thereunder the right to require the Company to
repay all outstanding obligations thereunder. The Company's ability to
repurchase Notes following a Change of Control may also be limited by the
Company's then existing financial resources.
The Company will not be required to make a Change of Control Offer following
a Change of Control if a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set
forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
A "Change of Control" will be deemed to have occurred upon the occurrence of
any of the following: (a) the sale, lease, transfer, conveyance or other
disposition (other than by merger or consolidation), in one or a series of
related transactions, of all or substantially all of the assets of the Company
and its Subsidiaries, taken as a whole, (b) the adoption of a plan relating to
the liquidation or dissolution of the Company, (c) the consummation of any
transaction (including, without limitation, any merger or consolidation) the
result of which is that any "person" (as such term is used in Section 13(d)
(3) of the Exchange Act) becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly through one or more intermediaries, of more than 50% of the voting
power of the outstanding voting stock of the Company or (d) the first day on
which more than a majority of the members of the Board of Directors are not
Continuing Directors; provided, however, that a transaction in which the
Company becomes a Subsidiary of another Person (other than a Person that is an
individual) shall not constitute a Change of Control if (i) the stockholders
of the Company immediately prior to such transaction "beneficially own" (as
such term is defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act),
directly or indirectly through one or more intermediaries, at least a majority
of the voting power of the outstanding voting stock of the Company immediately
following the consummation of such transaction and (ii) immediately following
the consummation of such transaction, no "person" (as such term is defined
above), other than such other Person (but including the holders of the Equity
Interests of such other Person), "beneficially owns" (as such term is defined
above), directly or indirectly through one or more intermediaries, more than
50% of the voting power of the outstanding voting stock of the Company.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors who (a) was a member of the Board of Directors on the
date of original issuance of the Notes or (b) was nominated
29
<PAGE>
for election to the Board of Directors with the approval of, or whose election
to the Board of Directors was ratified by, at least two-thirds of the
Continuing Directors who were members of the Board of Directors at the time of
such nomination or election.
Asset Sales
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, consummate an Asset Sale unless (a) the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (as determined in accordance with the definition of such term, the
results of which determination shall be set forth in an Officers' Certificate
delivered to the Trustee) of the assets or Equity Interests issued or sold or
otherwise disposed of and (b) at least 75% of the consideration therefor
received by the Company or such Restricted Subsidiary is in the form of cash
or Cash Equivalents; provided, however, that the amount of (i) any liabilities
(as shown on the Company's or such Restricted Subsidiary's most recent balance
sheet) of the Company or such Restricted Subsidiary (other than contingent
liabilities and liabilities that are by their terms subordinated to the Notes
or any guarantee thereof) that are assumed by the transferee of any such
assets pursuant to a customary novation agreement that releases the Company or
such Restricted Subsidiary from further liability and (ii) any securities,
notes or other obligations received by the Company or such Restricted
Subsidiary from such transferee that are converted within ten business days by
the Company or such Restricted Subsidiary into cash (to the extent of the cash
received) shall be deemed to be cash for purposes of this provision.
Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or any such Restricted Subsidiary may apply such Net Proceeds to
(a) permanently repay the principal of any Indebtedness of the Company ranking
in right of payment at least pari passu with the Notes or any Indebtedness of
Bristow or (b) to acquire (including by way of a purchase of assets or stock,
merger, consolidation or otherwise) Productive Assets. Pending the final
application of any such Net Proceeds, the Company or any such Restricted
Subsidiary may temporarily reduce outstanding revolving credit borrowings,
including borrowings under the Credit Facility, or otherwise invest such Net
Proceeds in any manner that is not prohibited by the Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph will be deemed to constitute "Excess
Proceeds."
When the aggregate amount of Excess Proceeds exceeds $5.0 million (or the
equivalent thereof in any other currency or currency units), the Company will
be required to make an offer to all holders of Notes (an "Asset Sale Offer")
to purchase the maximum principal amount of Notes that may be purchased out of
the Excess Proceeds at an offer price in cash in an amount equal to 100% of
the principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in the Indenture; provided, however, that, if the Company
is required to apply such Excess Proceeds to repurchase, or to offer to
repurchase, any Pari Passu Indebtedness, the Company shall only be required to
offer to repurchase the maximum principal amount of Notes that may be
purchased out of the amount of such Excess Proceeds multiplied by a fraction,
the numerator of which is the aggregate principal amount of Notes outstanding
and the denominator of which is the aggregate principal amount of Notes
outstanding plus the aggregate principal amount of Pari Passu Indebtedness
outstanding. To the extent that the aggregate principal amount of Notes
tendered pursuant to an Asset Sale Offer is less than the amount that the
Company is required to repurchase, the Company may use any remaining Excess
Proceeds for general corporate purposes. If the aggregate principal amount of
Notes surrendered by holders thereof exceeds the amount that the Company is
required to repurchase, the Trustee shall select the Notes to be purchased on
a pro rata basis. Upon completion of such offer to purchase, the amount of
Excess Proceeds shall be reset at zero.
CERTAIN COVENANTS
Restricted Payments
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any other payment or distribution on account
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of the Company's or any of its Restricted Subsidiaries' Equity Interests
(including, without limitation, any such payment in connection with any merger
or consolidation involving the Company) or to the direct or indirect holders
of the Company's Equity Interests in their capacity as such (other than
dividends or distributions payable in Equity Interests (other than
Disqualified Stock) of the Company); (b) purchase, redeem or otherwise acquire
or retire for value (including without limitation, in connection with any
merger or consolidation involving the Company) any Equity Interests of the
Company (other than any such Equity Interests owned by the Company or any
Wholly Owned Restricted Subsidiary of the Company); (c) make any payment on or
with respect to, or purchase, redeem, defease or otherwise acquire or retire
for value, any Indebtedness that is subordinated to the Notes, except a
payment of interest or principal at Stated Maturity; or (d) make any
Restricted Investment (all such payments and other actions set forth in
clauses (a) through (d) above being collectively referred to as "Restricted
Payments"), unless, at the time of and after giving effect to such Restricted
Payment:
(i) no Default or Event of Default shall have occurred and be continuing
or would occur as a consequence thereof;
(ii) the Company would, at the time of such Restricted Payment and after
giving pro forma effect thereto as if such Restricted Payment had been made
at the beginning of the applicable four-quarter period, have been permitted
to incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Interest Coverage Ratio test set forth in the first paragraph
of the covenant described under the caption "--Incurrence of Indebtedness
and Issuance of Preferred Stock"; and
(iii) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of the Indenture (excluding Restricted Payments
permitted by clauses (b), (c), (d) and (f), but including, without
duplication, Restricted Payments permitted by clauses (a) and (e), of the
next succeeding paragraph), is less than the sum of (A) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from January 1, 1998 to the end of the Company's most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated
Net Income for such period is a deficit, less 100% of such deficit), plus
(B) 100% of the aggregate net cash proceeds received by the Company from
the issue or sale since the date of the Indenture of Equity Interests of
the Company (other than Disqualified Stock) or of Disqualified Stock or
debt securities of the Company that have been converted into such Equity
Interests (other than any such Equity Interests, Disqualified Stock or
convertible debt securities sold to a Restricted Subsidiary of the Company
and other than Disqualified Stock or convertible debt securities that have
been converted into Disqualified Stock), plus (C) to the extent that any
Restricted Investment that was made after the date of the Indenture is sold
for cash or otherwise liquidated or repaid for cash, the lesser of (1) the
cash return of capital with respect to such Restricted Investment (less the
cost of disposition, if any) and (2) the initial amount of such Restricted
Investment, plus (D) in the event that any Unrestricted Subsidiary is
redesignated as a Restricted Subsidiary, the lesser of (1) an amount equal
to the fair market value of the Company's Investments in such Restricted
Subsidiary and (2) the amount of Restricted Investments previously made by
the Company and its Restricted Subsidiaries in such Unrestricted
Subsidiary, plus (E) $10.0 million.
The foregoing provisions will not prohibit any of the following: (a) the
payment of any dividend within 60 days after the date of declaration thereof
if at said date of declaration such payment would have complied with the
provisions of the Indenture; (b) the redemption, repurchase, retirement,
defeasance or other acquisition of any subordinated Indebtedness or Equity
Interests of the Company in exchange for, or out of the net cash proceeds of
the substantially concurrent sale (other than to a Subsidiary of the Company)
of, other Equity Interests of the Company (other than any Disqualified Stock),
provided that the amount of any such net cash proceeds that are utilized for
any such redemption, repurchase, retirement, defeasance or other acquisition
shall be excluded from clause (iii) (B) of the preceding paragraph; (c) the
defeasance, redemption, repurchase, retirement or other acquisition of
subordinated Indebtedness with the net cash proceeds from an incurrence of, or
in exchange for, Permitted Refinancing Indebtedness; (d) the payment of any
dividend or distribution by a Restricted Subsidiary of the Company to the
Company or any of its Wholly Owned Restricted Subsidiaries; (e) so long as no
Default or Event of Default shall have occurred and be continuing, the
repurchase, redemption or
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other acquisition or retirement for value of any Equity Interests of the
Company held by any employee of the Company's or any of its Restricted
Subsidiaries, provided that the aggregate price paid for all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed $500,000 (or
the equivalent thereof in any other currency or currency unit) in any calendar
year and (f) the acquisition of Equity Interests by the Company in connection
with the exercise of stock options or stock appreciation rights by way of
cashless exercise or in connection with the satisfaction of withholding tax
obligations.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash)
in the Subsidiary so designated will be deemed to be Restricted Payments at
the time of such designation. All such outstanding Investments will be deemed
to constitute Investments in an amount equal to the fair market value of such
Investments at the time of such designation. Such designation will only be
permitted if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined
in the manner contemplated by the definition of the term "fair market value,"
and the results of such determination shall be evidenced by an Officers'
Certificate delivered to the Trustee. Not later than five business days
following the date of making any Restricted Payment, the Company shall deliver
to the Trustee an Officers' Certificate stating that such Restricted Payment
is permitted and setting forth the basis upon which the calculations required
by the covenant "Restricted Payments" were computed.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur" or an
"incurrence") any Indebtedness and that the Company will not issue any
Disqualified Stock and will not permit any of its Restricted Subsidiaries to
issue any shares of preferred stock; provided, however, that the Company and
its Restricted Subsidiaries may incur Indebtedness, and the Company may issue
Disqualified Stock, if the Consolidated Interest Coverage Ratio for the
Company's most recently ended four full fiscal quarters for which internal
financial statements are available immediately preceding the date on which
such additional Indebtedness is incurred or such Disqualified Stock is issued
would have been at least 2.25 to 1, determined on a pro forma basis (including
a pro forma application of the net proceeds therefrom), as if the additional
Indebtedness or Disqualified Stock had been issued or incurred at the
beginning of such four-quarter period.
The foregoing provisions will not apply to:
(a) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness under the Credit Facilities in an aggregate principal amount
at any one time outstanding not to exceed $50.0 million (or the equivalent
thereof in any other currency or currency unit), plus any fees, premiums,
expenses (including costs of collection), indemnities and similar amounts
payable in connection with such Indebtedness, and less any amounts repaid
permanently in accordance with the covenant described under the caption "--
Repurchase at the Option of Holders--Asset Sales";
(b) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness;
(c) the incurrence by the Company and its Restricted Subsidiaries of
Hedging Obligations;
(d) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness represented by the Offered Notes, the Exchange Notes, the
Subsidiary Guarantees and the Indenture;
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(e) the incurrence of intercompany Indebtedness between or among the
Company and any of its Wholly Owned Restricted Subsidiaries, provided that
any subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a Wholly
Owned Restricted Subsidiary of the Company, or any sale or other transfer
of any such Indebtedness to a Person that is neither the Company nor a
Wholly Owned Restricted Subsidiary of the Company, shall be deemed to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(f) Indebtedness in respect of bid, performance or surety bonds issued
for the account of the Company or any Restricted Subsidiary thereof in the
ordinary course of business, including guarantees or obligations of the
Company or any Restricted Subsidiary thereof with respect to letters of
credit supporting such bid, performance or surety obligations (in each case
other than for an obligation for money borrowed); and
(g) the incurrence by the Company or any of its Restricted Subsidiaries
of Permitted Refinancing Indebtedness in exchange for, or the net proceeds
of which are used to extend, refinance, renew, replace, defease or refund
Indebtedness that was permitted by the Indenture to be incurred (other than
pursuant to clause (a) or (e) of this covenant).
The Indenture also provides that the Company will not, and will not permit
any Guarantor to, directly or indirectly, incur any Indebtedness which by its
terms (or by the terms of any agreement governing such Indebtedness) is
subordinated to any other Indebtedness of the Company or of such Guarantor, as
the case may be, unless such Indebtedness is also by its terms (or by the
terms of any agreement governing such Indebtedness) made expressly subordinate
to the Notes or the Subsidiary Guarantees of such Guarantor, as the case may
be, to the same extent and in the same manner as such Indebtedness is
subordinated pursuant to subordination provisions that are most favorable to
the holders of any other Indebtedness of the Company or of such Guarantor, as
the case may be.
Liens
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or suffer to exist any Lien on any asset now owned or hereafter acquired, or
any income or profits therefrom or assign or convey any right to receive
income therefrom, except Permitted Liens, to secure (a) any Indebtedness of
the Company or such Restricted Subsidiary (if it is not also a Guarantor),
unless prior to, or contemporaneously therewith, the Notes are equally and
ratably secured, or (b) any Indebtedness of any Guarantor, unless prior to, or
contemporaneously therewith, the Subsidiary Guarantees are equally and ratably
secured; provided, however, that if such Indebtedness is expressly
subordinated to the Notes or the Subsidiary Guarantees, the Lien securing such
Indebtedness will be subordinated and junior to the Lien securing the Notes or
the Subsidiary Guarantees, as the case may be, with the same relative priority
as such Indebtedness has with respect to the Notes or the Subsidiary
Guarantees.
Sale-and-Leaseback Transactions
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, enter into any sale-and-leaseback transaction;
provided, however, that the Company or any Restricted Subsidiary, as
applicable, may enter into a sale-and-leaseback transaction if (i) the Company
or such Restricted Subsidiary could have (a) incurred Indebtedness in an
amount equal to the Attributable Indebtedness relating to such sale-and-
leaseback transaction pursuant to the Consolidated Interest Coverage Ratio
test set forth in the first paragraph of the covenant described above under
the caption "--Incurrence of Indebtedness and Issuance of Preferred Stock" and
(b) incurred a Lien to secure such Indebtedness pursuant to the covenant
described under the caption "--Liens," (ii) the gross cash proceeds of such
sale-and-leaseback transaction are at least equal to the fair market value (as
determined in accordance with the definition of such term, the results of
which determination shall be set forth in an Officers' Certificate delivered
to the Trustee) of the property that is the subject of such sale-and-leaseback
transaction and (iii) the transfer of assets in such sale-and-leaseback
transaction is permitted
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by, and the Company applies the proceeds of such transaction in compliance
with, the covenant described above under the caption "--Repurchase at the
Option of Holders--Asset Sales."
Issuances and Sales of Capital Stock of Wholly Owned Restricted Subsidiaries
The Indenture provides that the Company (i) will not, and will not permit
any Wholly Owned Restricted Subsidiary of the Company to, transfer, convey,
sell, or otherwise dispose of any Capital Stock of any Wholly Owned Restricted
Subsidiary of the Company (other than any such Subsidiary that is primarily
engaged in the production management services business) to any Person (other
than the Company or a Wholly Owned Restricted Subsidiary of the Company),
unless (a) such transfer, conveyance, sale, or other disposition is of all the
Capital Stock of such Wholly Owned Restricted Subsidiary and (b) the Net
Proceeds from such transfer, conveyance, sale, or other disposition are
applied in accordance with the covenant described above under the caption "--
Repurchase at the Option of Holders--Asset Sales," and (ii) will not permit
any Wholly Owned Restricted Subsidiary of the Company to issue any of its
Equity Interests to any Person other than to the Company or a Wholly Owned
Restricted Subsidiary of the Company, except, in the case of both clauses (i)
and (ii) above, with respect to dispositions or issuances by a Wholly Owned
Restricted Subsidiary of the Company as contemplated in clauses (a) and (b) of
the definition of "Wholly Owned Restricted Subsidiary."
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly, create or otherwise
cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary to (a) (i) pay dividends or make any
other distributions to the Company or any of its Restricted Subsidiaries on
its Capital Stock or with respect to any other interest or participation in,
or measured by, its profits, or (ii) pay any Indebtedness owed to the Company
or any of its Restricted Subsidiaries, (b) make loans or advances to the
Company or any of its Restricted Subsidiaries or (c) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of
(1) the Credit Facilities or Existing Indebtedness, each as in effect on the
date of the Indenture, (2) the Indenture and the Notes, (3) applicable law,
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by the Company or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person or the properties
or assets of any Person, other than the Person, or the property or assets of
the Person, so acquired, provided that, in the case of Indebtedness, such
Indebtedness was permitted by the terms of the Indenture to be incurred, (5)
by reason of customary non-assignment provisions in leases entered into in the
ordinary course of business and consistent with past practices, (6) purchase
money obligations for property acquired in the ordinary course of business
that impose restrictions of the nature described in clause (c) above on the
property so acquired, (7) customary provisions in bona fide contracts for the
sale of property or assets or (8) Permitted Refinancing Indebtedness with
respect to any Indebtedness referred to in clauses (1) and (2) above, provided
that the restrictions contained in the agreements governing such Permitted
Refinancing Indebtedness are not materially more restrictive, taken as a
whole, than those contained in the agreements governing the Indebtedness being
refinanced.
Merger, Consolidation, or Sale of Assets
The Indenture provides that the Company may not consolidate or merge with or
into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially
all of its properties or assets in one or more related transactions, to
another Person unless (a) the Company is the surviving corporation or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, assignment, transfer, lease, conveyance or
other disposition shall have been made is a corporation organized or existing
under the laws of the United States, any state thereof or the District of
Columbia, (b) the Person formed by or surviving any such consolidation or
merger (if other than the Company) or the Person to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made assumes all the obligations of the Company under the Notes and the
Indenture pursuant to a
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supplemental indenture in a form reasonably satisfactory to the Trustee, (c)
immediately after such transaction no Default or Event of Default exists and
(d) except in the case of a merger of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, the Company or the Person formed by or
surviving any such consolidation or merger (if other than the Company), or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) will have Consolidated Net Worth immediately after
the transaction equal to or greater than the Consolidated Net Worth of the
Company immediately preceding the transaction and (B) will, at the time of
such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter
period, be permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Interest Coverage Ratio test set forth in the
first paragraph of the covenant described above under the caption "--
Incurrence of Indebtedness and Issuance of Preferred Stock."
Transactions with Affiliates
The Indenture provides that the Company will not, and will not permit any of
its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer
or otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for
the benefit of, any Affiliate (each of the foregoing, an "Affiliate
Transaction"), unless (a) such Affiliate Transaction is on terms that are no
less favorable to the Company or the relevant Restricted Subsidiary than those
that would have been obtained in a comparable transaction by the Company or
such Restricted Subsidiary with an unrelated Person or, if there is no such
comparable transaction, on terms that are fair and reasonable to the Company
or such Restricted Subsidiary, and (b) the Company delivers to the Trustee (i)
with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $1.0 million (or
the equivalent thereof in any other currency or currency unit), a resolution
of the Board of Directors set forth in an Officers' Certificate certifying
that such Affiliate Transaction complies with clause (a) above and that such
Affiliate Transaction has been approved by a majority of the disinterested
members of the Board of Directors and (ii) with respect to any Affiliate
Transaction or series of related Affiliate Transactions involving aggregate
consideration in excess of $5.0 million (or the equivalent thereof in any
other currency or currency unit), in each case other than any such
transactions with an Affiliate engaged in the business of providing helicopter
transportation services to the oil and gas industry (or a business that is
reasonably complementary or related thereto as determined in good faith by the
Board of Directors), an opinion as to the fairness to the Company or the
relevant Subsidiary of such Affiliate Transaction from a financial point of
view issued by an accounting, appraisal or investment banking firm that is, in
the judgment of the Board of Directors, qualified to render such opinion and
is independent with respect to the Company; provided, however, that the
following shall be deemed not to be Affiliate Transactions: (A) any employment
agreement or other employee compensation plan or arrangement entered into by
the Company or any of its Restricted Subsidiaries in the ordinary course of
business of the Company or such Restricted Subsidiary; (B) transactions
between or among the Company and its Restricted Subsidiaries; (C) Permitted
Investments and Restricted Payments that are permitted by the provisions of
the Indenture; (D) loans or advances to officers, directors and employees of
the Company or any Restricted Subsidiary made in the ordinary course of
business and consistent with past practices of the Company and its Restricted
Subsidiaries in an aggregate amount not to exceed $500,000 (or the equivalent
thereof in any other currency or currency unit) outstanding at any one time;
(E) indemnities of officers, directors and employees of the Company or any
Restricted Subsidiary permitted by bylaw or statutory provisions; (F) the
payment of reasonable and customary regular fees to directors of the Company
or any of its Restricted Subsidiaries who are not employees of the Company or
any Subsidiary; and (G) the payment to Caledonia of Existing Indebtedness of
Bristow.
Additional Subsidiary Guarantees
The Indenture provides that (a) if the Company or any of its Restricted
Subsidiaries (except, so long as Bristow is not a Guarantor, either Bristow or
any Subsidiary thereof) shall, after the date of the Indenture, acquire or
create another Significant Subsidiary, or (b) if, after such date, (1) a
Restricted Subsidiary (except, so long as Bristow is not a Guarantor, either
Bristow or any Subsidiary thereof) shall provide a guarantee under a Credit
Facility or incur any Funded Indebtedness, or (2) Bristow or any Restricted
Subsidiary thereof shall incur any
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Indebtedness (including any guarantee of Indebtedness of the Company) except
Permitted Bristow Indebtedness, then such newly acquired or created
Significant Subsidiary, in the case of clause (a) above, or such Restricted
Subsidiary described in clause (b)(1) above or Bristow and all of its
Restricted Subsidiaries, in the case of clause (b)(2) above, shall execute a
Subsidiary Guarantee and deliver an opinion of counsel in accordance with the
terms of the Indenture.
Reports
Whether or not the Company is required to do so by the rules and regulations
of the Commission, the Company will file with the Commission (unless the
Commission will not accept such a filing) and, within 15 days of filing, or
attempting to file, the same with the Commission, furnish to the holders of
the Notes (a) all quarterly and annual financial and other information with
respect to the Company and its Subsidiaries that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the
Company were required to file such forms, including a "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and, with
respect to the annual information only, a report thereon by the Company's
certified independent accountants, and (b) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. In addition, the Company and the Guarantors
will furnish to the holders of the Notes, prospective purchasers of the Notes
and securities analysts, upon their request, the information, if any, required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
EVENTS OF DEFAULT AND REMEDIES
The Indenture provides that each of the following constitutes an Event of
Default: (a) default for 30 days in the payment when due of interest or
Liquidated Damages on the Notes; (b) default in payment when due of the
principal of or premium, if any, on the Notes; (c) failure by the Company to
comply with the provisions described under the caption "--Repurchase at the
Option of Holders" or "--Certain Covenants--Merger, Consolidation, or Sale of
Assets"; (d) failure by the Company for 60 days after notice to comply with
any of its other agreements in the Indenture or the Notes; (e) default under
any mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed by
the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the date of the
Indenture, which default (i) is caused by a failure to pay principal of or
premium or interest on such Indebtedness prior to the expiration of any grace
period provided in such Indebtedness, including any extension thereof (a
"Payment Default") or (ii) results in the acceleration of such Indebtedness
prior to its express maturity and, in each case, the principal amount of any
such Indebtedness, together with the principal amount of any other such
Indebtedness under which there has been a Payment Default or the maturity of
which has been so accelerated, aggregates in excess of $5.0 million (or the
equivalent thereof in any other currency or currency unit) and provided,
further, that if any such default is cured or waived or any such acceleration
rescinded, or such Indebtedness is repaid, within a period of 10 days from the
continuation of such default beyond the applicable grace period or the
occurrence of such acceleration, as the case may be, such Event of Default and
any consequential acceleration of the Notes shall be automatically rescinded,
so long as such rescission does not conflict with any judgment or decree; (f)
failure by the Company or any of its Restricted Subsidiaries to pay final
judgments aggregating in excess of $5.0 million (or the equivalent thereof in
any other currency or currency unit), which judgments are not paid, discharged
or stayed for a period of 60 days; (g) failure by any Guarantor to perform any
covenant set forth in its Subsidiary Guarantee, or the repudiation by any
Guarantor of its obligations under its Subsidiary Guarantee or the
unenforceability of any Subsidiary Guarantee against a Guarantor for any
reason and (h) certain events of bankruptcy or insolvency with respect to the
Company, any Guarantor or any Significant Subsidiary.
If any Event of Default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of the then outstanding Notes may declare
all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Company, any Guarantor or any
Significant Subsidiary, all outstanding Notes will
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become due and payable without further action or notice. The holders of a
majority in principal amount of the then outstanding Notes by written notice
to the Trustee may on behalf of all of the holders rescind an acceleration and
its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal,
interest, premium or Liquidated Damages that have become due solely because of
the acceleration) have been cured or waived. Holders of the Notes may not
enforce the Indenture or the Notes except as provided in the Indenture.
Subject to certain limitations, holders of a majority in principal amount of
the then outstanding Notes may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from holders of the Notes notice of any
continuing Default or Event of Default (except a Default or Event of Default
relating to the payment of principal or interest) if it determines that
withholding notice is in their interest.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have
had to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes.
The holders of a majority in principal amount of the Notes then outstanding
by notice to the Trustee may on behalf of the holders of all of the Notes
waive any existing Default or Event of Default and its consequences under the
Indenture except a continuing Default or Event of Default in the payment of
the principal of or interest or Liquidated Damages on the Notes.
The Company will be required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company will be required,
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS
No director, officer, employee, incorporator, member, partner or stockholder
or other owner of Capital Stock of the Company or any Guarantor, as such,
shall have any liability for any obligations of the Company or any Guarantor
under the Notes, the Subsidiary Guarantees or the Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each holder of Notes by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance
of the Notes. Such waiver may not be effective to waive liabilities under the
federal securities laws, and it is the view of the Commission that such a
waiver is against public policy.
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
The Company may, at its option and at any time, elect to have all of the
obligations of itself and the Guarantors discharged with respect to the
outstanding Notes ("Legal Defeasance") except for (a) the rights of holders of
outstanding Notes to receive payments in respect of the principal of and
premium, interest and Liquidated Damages on such Notes when such payments are
due from the trust referred to below, (b) the Company's obligations with
respect to the Notes concerning issuing temporary Notes, registration of
Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an
office or agency for payment and money for security payments held in trust,
(c) the rights, powers, trusts, duties and immunities of the Trustee, and the
Company's obligations in connection therewith and (d) the Legal Defeasance
provisions of the Indenture. ln addition, the Company may, at its option and
at any time, elect to have the obligations of the Company released with
respect to certain covenants that are described in the Indenture ("Covenant
Defeasance"), and thereafter any omission to comply with such obligations
shall not constitute a Default or Event of Default with respect to the Notes.
In the event Covenant Defeasance occurs, certain other events (not including
non-payment, bankruptcy, receivership, rehabilitation and insolvency events)
described under "Events of Default and Remedies" will no longer constitute an
Event of Default with respect to the Notes.
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In order to exercise either Legal Defeasance or Covenant Defeasance, (i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit
of the holders of the Notes, cash in U.S. dollars, non-callable Government
Securities, or a combination thereof, in such amounts as will be sufficient,
in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and premium, interest and Liquidated
Damages, if any, on the outstanding Notes on the stated maturity or on the
applicable redemption date, as the case may be, and the Company must specify
whether the Notes are being defeased to maturity or to a particular redemption
date, (ii) in the case of Legal Defeasance, the Company shall have delivered
to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from,
or there has been published by, the Internal Revenue Service a ruling or (B)
since the date of the Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based thereon
such opinion of counsel shall confirm that, the holders of the outstanding
Notes will not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to federal income tax
on the same amounts, in the same manner and at the same times as would have
been the case if such Legal Defeasance had not occurred, (iii) in the case of
Covenant Defeasance, the Company shall have delivered to the Trustee an
opinion of counsel in the United States reasonably acceptable to the Trustee
confirming that the holders of the outstanding Notes will not recognize
income, gain or loss for federal income tax purposes as a result of such
Covenant Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such Covenant Defeasance had not occurred, (iv) no Default or Event of
Default shall have occurred and be continuing on the date of such deposit
(other than a Default or Event of Default resulting from the borrowing of
funds to be applied to such deposit), (v) such Legal Defeasance or Covenant
Defeasance will not result in a breach or violation of, or constitute a
default under any material agreement or instrument (other than the Indenture)
to which the Company or any of its Restricted Subsidiaries is a party or by
which the Company or any of its Restricted Subsidiaries is bound, (vi) the
Company must have delivered to the Trustee an opinion of counsel to the effect
that the trust funds will not be subject to the effect of any applicable
bankruptcy, insolvency, reorganization or similar laws affecting creditors'
rights generally, (vii) the Company must deliver to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the holders of Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others and (viii) the Company must deliver to the
Trustee an Officers' Certificate and an opinion of counsel, each stating that
all conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
TRANSFER AND EXCHANGE
A holder of Notes may transfer or exchange Notes in accordance with the
Indenture. The Registrar and the Trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company will not be required to transfer or
exchange any Note selected for redemption. Also, the Company will not be
required to transfer or exchange any Note for a period of 15 days before a
selection of Notes to be redeemed.
The registered holder of a Note will be treated as the owner of it for all
purposes, and all references to "holders" in this "Description of the Notes"
are to registered holders unless otherwise indicated.
AMENDMENT AND WAIVER
Except as provided below, the Indenture or the Notes may be amended with the
consent of the holders of at least a majority in principal amount of the Notes
then outstanding (including, without limitation, consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and any existing default or compliance with any provision of the Indenture or
the Notes may be waived with the consent of the holders of a majority in
principal amount of the then outstanding Notes (including consents obtained in
connection with a tender offer or exchange offer for Notes).
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Without the consent of each holder affected, an amendment or waiver may not
(with respect to any Notes held by a non-consenting holder): (a) reduce the
principal amount of Notes whose holders must consent to an amendment or
waiver, (b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (other
than provisions relating to the covenants described above under the caption
"--Repurchase at the Option of Holders"), (c) reduce the rate of or change the
time for payment of interest on any Note, (d) waive a Default or Event of
Default in the payment of principal of or premium, interest or Liquidated
Damages on the Notes (except a rescission of acceleration of the Notes by the
holders of at least a majority in principal amount of the Notes and a waiver
of the payment default that resulted from such acceleration), (e) make any
Note payable in money other than that stated in the Notes, (f) make any change
in the provisions of the Indenture relating to waivers of past defaults or the
rights of holders of Notes to receive payments of principal of or premium,
interest or Liquidated Damages on the Notes (except as permitted in clause (g)
hereof), (g) waive a redemption payment with respect to any Note (other than a
payment required by one of the covenants described above under the caption "--
Repurchase at the Option of Holders"), (h) make any change in the ranking of
the Notes relative to other Indebtedness of the Company or the Subsidiary
Guarantees, in either case in a manner adverse to the holders, or (i) make any
change in the foregoing amendment and waiver provisions.
Notwithstanding the foregoing, without the consent of any holder of Notes,
the Company, the Guarantors and the Trustee may amend or supplement the
Indenture or the Notes to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Company's obligations to holders
of Notes in the case of a merger or consolidation, to make any change that
would provide any additional rights or benefits to the holders of Notes or
that does not adversely affect the legal rights under the Indenture of any
such holder, to secure the Notes pursuant to the requirements of the "Liens"
covenant, to add any additional Guarantor or to release any Guarantor from its
Subsidiary Guarantee, in each case as provided in the Indenture, or to comply
with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
Neither the Company nor any of its Subsidiaries shall, directly or
indirectly, pay or cause to be paid any consideration, whether by way of
interest, fee or otherwise, to any holder of any Notes for or as an inducement
to any consent, waiver or amendment of any terms or provisions of the
Indenture or the Notes, unless such consideration is offered to be paid or
agreed to be paid to all holders of the Notes which so consent, waive or agree
to amend in the time frame set forth in solicitation documents relating to
such consent, waiver or agreement.
CONCERNING THE TRUSTEE
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Company, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage
in other transactions; however, if it acquires any conflicting interest it
must eliminate such conflict within 90 days, apply to the Commission for
permission to continue or resign.
The holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent man in the
conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the
Indenture at the request of any holder of Notes, unless such holder shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
State Street Bank and Trust Company is also the trustee under the
Convertible Notes Indenture. Pursuant to the Trust Indenture Act, should a
default occur with respect to either the Convertible Notes or the Notes, State
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Street Bank and Trust Company would be required to resign as trustee under one
of the indentures within 90 days of such default, unless such default were
cured, duly waived or otherwise eliminated.
GOVERNING LAW
The Indenture, the Notes and the Subsidiary Guarantees provide that they are
governed by the laws of the State of New York.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture and
Registration Rights Agreement without charge by writing to Offshore Logistics,
Inc., 224 Rue de Jean, P.O. Box 5-C, Lafayette, Louisiana 70505, Attention:
Corporate Secretary.
FORM, DENOMINATION AND REGISTRATION
Global Notes; Book Entry Form
Except as set forth in the next paragraph, the Notes will be evidenced
initially by one or more global notes (the "Global Note") which will be
deposited with, or on behalf of, The Depository Trust Company ("DTC") and
registered in the name of Cede & Co., as DTC's nominee. Except as set forth
below, record ownership of the Global Note may be transferred, in whole or in
part, only to another nominee of DTC or to a successor of DTC or its nominee.
Notes (i) originally purchased by or transferred to "foreign purchasers" or
Institutional Accredited Investors who are not Qualified Institutional Buyers
or (ii) held by Qualified Institutional Buyers who elect to take physical
delivery of their certificates instead of holding their interests through the
Global Note (and which are thus ineligible to trade through DTC) (collectively
referred to herein as the "Non-Global Purchasers") will be issued in
registered certificated form ("Certificated Notes"). Upon the transfer to a
Qualified Institutional Buyer of any Certificated Note initially issued to a
Non-Global Purchaser, such Certificated Note will, unless the transferee
requests otherwise or the Global Note has previously been exchanged in whole
for Certificated Notes as described below, be exchanged for an interest in the
Global Note.
Owners of beneficial interests in the Global Note may hold their interests
in the Global Note directly through DTC if such person is a participant in DTC
or indirectly through organizations that are participants in DTC (the
"Participants"). Persons who are not Participants may beneficially own
interests in the Global Note held by DTC only through Participants or certain
banks, brokers, dealers, trust companies and other parties that clear through
or maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). So long as Cede & Co., as the nominee of
DTC, is the registered owner of the Global Note, Cede & Co. for all purposes
will be considered the sole holder of the Global Note. Owners of beneficial
interests in the Global Note will be entitled to have certificates registered
in their names and to receive physical delivery of Certificated Notes.
Payment of principal of and premium, interest and Liquidated Damages, if
any, on the Global Note will be made to Cede & Co., the nominee for DTC, as
registered owner of the Global Note, by wire transfer of immediately available
funds on the applicable payment date. Neither of the Company nor the Trustee,
nor any agent of either of them, will have any responsibility or liability for
any aspect of the records relating to or payments made on account of
beneficial ownership interests in the Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interest.
The Company has been informed by DTC that, with respect to any payment of
principal of, or premium, interest or Liquidated Damages, if any, on the
Global Note, DTC's practice is to credit Participants' accounts on the
applicable payment date, with payments in amounts proportionate to their
respective beneficial interests in
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the Notes represented by the Global Note as shown on the records of DTC,
unless DTC has reason to believe that it will not receive payment on such
payment date. Payments by Participants to owners of beneficial interests in
the Notes represented by the Global Note held through such Participants will
be the responsibility of such Participants, as is now the case with securities
held for the accounts of customers registered in "street name."
Transfers between Participants will be effected in the ordinary way in
accordance with DTC's rules and will be settled in immediately available
funds. The laws of some states require that certain persons take physical
delivery of securities in definitive form. Consequently, the ability to
transfer beneficial interests in the Global Note to such persons may be
limited. Because DTC can only act on behalf of Participants, who in turn act
on behalf of Indirect Participants and certain banks and other parties, the
ability of a person having a beneficial interest in the Notes represented by
the Global Note to pledge such interest to persons or entities that do not
participate in the DTC system, or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate evidencing
such interest.
Neither the Company nor the Transfer Agent, nor any agent of either of them,
will have responsibility for the performance of DTC or its Participants or
Indirect Participants of their respective obligations under the rules and
procedures governing their operations. DTC has advised the Company that it
will take any action permitted to be taken by a holder of Notes (including,
without limitation, the presentation of Notes for exchange as described below)
only at the direction of one or more Participants to whose account with DTC
interests in the Global Note are credited, and only in respect of the Notes
represented by the Global Note as to which such Participant or Participants
has or have given such direction.
DTC has also advised the Company that DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions
of Section 17A of the Exchange Act. DTC was created to hold securities for its
Participants and to facilitate the clearance and settlement of securities
transactions between Participants through electronic book-entry changes to
accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers,
banks, trust companies and clearing corporations and may include certain other
organizations such as the Initial Purchaser. Certain of such Participants (or
their representatives), together with other entities, own DTC. Indirect access
to the DTC system is available to others such as banks, brokers, dealers and
trust companies that clear through, or maintain a custodial relationship with,
a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Note among Participants, it is under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. If DTC is at any time unwilling or
unable to continue as depositary and a successor depositary is not appointed
by the Company within 90 days, the Company will cause Certificated Notes to be
issued in exchange for the Global Notes.
Certificated Notes
Investors in the Notes may request that Certificated Notes be issued in
exchange for Notes represented by the Global Note. Furthermore, Certificated
Notes may be issued in exchange for Notes represented by the Global Note if no
successor depositary is appointed by the Company as set forth above.
Unless determined otherwise by the Company in accordance with applicable
law, Certificated Notes issued upon transfer or exchange of beneficial
interests in Notes represented by the Global Note will bear a legend setting
forth transfer restrictions under the Securities Act as set forth under
"Notice to Investors." Any request for the transfer of Certificated Notes
bearing the legend, or for removal of the legend from Certificated Notes, must
be accompanied by satisfactory evidence, in the form of an opinion of counsel,
that such transfer complies with the Securities Act or that neither the legend
nor the restrictions on transfer set forth therein are required to ensure
compliance with the provisions of the Securities Act, as the case may be.
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REGISTRATION RIGHTS; LIQUIDATED DAMAGES
Pursuant to the Registration Rights Agreement, the Company and the
Guarantors agreed to file the Exchange Offer Registration Statement with the
Commission with respect to the Exchange Offer. Upon the effectiveness of the
Exchange Offer Registration Statement, the Company will offer to the holders
of Old Notes pursuant to the Exchange Offer who are able to make certain
representations the opportunity to exchange their Old Notes for New Notes. If
(a) the Company and the Guarantors are not permitted to consummate the
Exchange Offer because the Exchange Offer is not permitted by applicable law
or Commission policy or (b) any holder of Transfer Restricted Securities
notifies the Company prior to the 20th day following consummation of the
Exchange Offer that (i) it is prohibited by law or Commission policy from
participating in the Exchange Offer or (ii) that it may not resell the New
Notes acquired by it in the Exchange Offer to the public without delivering a
prospectus and the prospectus contained in the Exchange Offer Registration
Statement is not available for such resales, the Company will file with the
Commission a Shelf Registration Statement to cover resales of the Old Notes by
the holders thereof who satisfy certain conditions relating to the provision
of information in connection with the Shelf Registration Statement. The
Company will use its reasonable best efforts to cause the applicable
registration statement to be declared effective as promptly as possible by the
Commission. For purposes of the foregoing, "Transfer Restricted Securities"
means each Old Note until (A) the date on which such Old Note has been
exchanged by a person other than a broker-dealer for New Note in the Exchange
Offer, (B) following the exchange by a broker-dealer in the Exchange Offer of
an Old Note for a New Note, the date on which such New Note is sold to a
purchaser who receives from such broker-dealer on or prior to the date of such
sale a copy of the prospectus contained in the Exchange Offer Registration
Statement, (C) the date on which such Old Note has been effectively registered
under the Securities Act and disposed of in accordance with the Shelf
Registration Statement or (D) the date on which such Old Note is distributed
to the public pursuant to Rule 144 under the Securities Act or may be
distributed to the public pursuant to Rule 144(k) under the Securities Act.
The Registration Rights Agreement provides that (a) the Company will file an
Exchange Offer Registration Statement with the Commission on or prior to 60
days after the date on which the Old Notes are originally issued under the
Indenture (the "Closing Date"), (b) the Company will use its reasonable best
efforts to have the Exchange Offer Registration Statement declared effective
by the Commission on or prior to 120 days after the Closing Date, (c) unless
the Exchange Offer would not be permitted by applicable law or Commission
policy, the Company will commence the Exchange Offer and use its reasonable
best efforts to issue, on or prior to 180 days after the Closing Date, New
Notes in exchange for all Old Notes tendered prior thereto in the Exchange
Offer and (d) if obligated to file the Shelf Registration Statement, the
Company will use its reasonable best efforts to file the Shelf Registration
Statement with the Commission on or prior to 60 days after such filing
obligation arises and to cause the Shelf Registration Statement to be declared
effective by the Commission on or prior to 120 days after such obligation
arises. If (i) the Company fails to file any of the Registration Statements
required by the Registration Rights Agreement on or before the date specified
for such filing, (ii) any of such Registration Statements is not declared
effective by the Commission on or prior to the date specified for such
effectiveness, (iii) the Company fails to consummate the Exchange Offer within
180 days of the Closing Date with respect to the Exchange Offer Registration
Statement or (iv) the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted
Securities during the periods specified in the Registration Rights Agreement
(each such event referred to in clauses (i) through (iv) above, a
"Registration Default"), then the Company will pay Liquidated Damages to each
holder of Transfer Restricted Securities with respect to the first 90-day
period immediately following the occurrence of the first Registration Default
in an amount equal to $.05 per week per $1,000 principal amount of Notes held
by such holder. The amount of Liquidated Damages will increase by an
additional $.05 per week per $1,000 principal amount of Transfer Restricted
Securities with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of Liquidated
Damages of $.20 per week per $1,000 principal amount of Transfer Restricted
Securities. All accrued Liquidated Damages with respect to Transfer Restricted
Securities will be paid by the Company on each Damages Payment Date (as
defined in the Registration Rights Agreement) to the Global Note holder by
wire transfer of immediately available funds or by federal funds check and to
holders of Certificated Securities by wire transfer to the accounts
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specified by them or by mailing checks to their registered addresses if no
such accounts have been specified. Following the cure of all Registration
Defaults, the accrual of Liquidated Damages will cease.
Holders of Old Notes will be required to make certain customary
representations to the Company (as described in the Registration Rights
Agreement) in order to participate in the Exchange Offer and will be required
to deliver information to be used in connection with the Shelf Registration
Statement and to provide comments on the Shelf Registration Statement within
the time periods set forth in the Registration Rights Agreement in order to
have their Notes included in the Shelf Registration Statement and benefit from
the provisions regarding Liquidated Damages set forth above.
CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a full disclosure of all such terms, as well as
any other capitalized terms used herein for which no definition is provided.
"Affiliate" of any specified Person means an "affiliate" of such Person, as
such term is defined for purposes of Rule 144 under the Securities Act.
"Asset Sale" means (a) the sale, lease, conveyance or other disposition (a
"disposition") of any assets or rights (including, without limitation, by way
of a sale and leaseback), excluding dispositions in the ordinary course of
business (provided that the disposition of all or substantially all of the
assets of the Company and its Subsidiaries taken as a whole will be governed
by the provisions of the Indenture described above under the caption "--
Repurchase at the Option of Holders--Change of Control" and the provisions
described above under the caption "--Certain Covenants--Merger, Consolidation,
or Sale of Assets" and not by the provisions of the Asset Sales covenant), (b)
the issue or sale by the Company or any of its Restricted Subsidiaries of
Equity Interests of any of the Company's Subsidiaries, and (c) any Event of
Loss, whether, in the case of clause (a), (b) or (c), in a single transaction
or a series of related transactions, provided that such transaction or series
of transactions (i) has a fair market value in excess of $1.0 million (or the
equivalent thereof in any other currency or currency unit) or (ii) results in
the payment of net proceeds (including insurance proceeds from an Event of
Loss) in excess of $3.0 million (or the equivalent thereof in any other
currency or currency unit). Notwithstanding the foregoing, the following
transactions will be deemed not to be Asset Sales: (A) a disposition of
obsolete or excess equipment or other assets; (B) a disposition of assets by
the Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned
Restricted Subsidiary to the Company or to another Wholly Owned Restricted
Subsidiary; (C) a disposition of Equity Interests by a Wholly Owned Restricted
Subsidiary to the Company or to another Wholly Owned Restricted Subsidiary;
(D) a Restricted Payment that is permitted by the Indenture or a Permitted
Investment; (E) a disposition of assets by the Company or any of its
Restricted Subsidiaries to a Person that is an Affiliate of the Company or
such Restricted Subsidiary and is engaged in the business of providing
helicopter transportation services to the oil and gas industry (or a business
that is reasonably complementary or related thereto as determined in good
faith by the Board of Directors), which Person is an Affiliate solely because
the Company or such Restricted Subsidiary has an Investment in such Person,
provided that such transaction complies with the covenant described under the
caption "--Certain Covenants--Transactions with Affiliates"; (F) any charter
or lease of any equipment or other assets entered into in the ordinary course
of business and with respect to which the Company or any Restricted Subsidiary
thereof is the lessor, except any such charter or lease that provides for the
acquisition of such assets by the lessee during or at the end of the term
thereof for an amount that is less than the fair market value thereof at the
time the right to acquire such assets occurs; (G) any trade or exchange by the
Company or any Restricted Subsidiary of equipment or other assets for
equipment or other assets owned or held by another Person, provided that the
fair market value of the assets traded or exchanged by the Company or such
Restricted Subsidiary (together with any cash or Cash Equivalents) is
reasonably equivalent to the fair market value of the assets (together with
any cash or Cash Equivalents) to be received by the Company or such Restricted
Subsidiary and (H) a disposition (whether by way of merger, sale of assets,
sale of Capital Stock or otherwise) of the Company's production management
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services business. The fair market value of any non-cash proceeds of a
disposition of assets and of any assets referred to in the foregoing clause
(G) of this definition shall be determined in the manner contemplated in the
definition of the term "fair market value," the results of which determination
shall be set forth in an Officers' Certificate delivered to the Trustee.
"Attributable Indebtedness" in respect of a sale-and-leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP)
of the obligation of the lessee for net rental payments during the remaining
term of the lease included in such sale-and-lease-back transaction (including
any period for which such lease has been extended or may, at the option of the
lessor, be extended). As used in the preceding sentence, the "net rental
payments" under any lease for any such period shall mean the sum of rental and
other payments required to be paid with respect to such period by the lessee
thereunder, excluding any amounts required to be paid by such lessee on
account of maintenance and repairs, insurance, taxes, assessments, water rates
or similar charges. In the case of any lease that is terminable by the lessee
upon payment of penalty, such net rental payment shall also include the amount
of such penalty, but no rent shall be considered as required to be paid under
such lease subsequent to the first date upon which it may be so terminated.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
"Capital Stock" means (a) in the case of a corporation, corporate stock, (b)
in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability
company, partnership or membership interests (whether general or limited) and
(d) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
the issuing Person.
"Cash Equivalents" means (a) United States dollars, (b) securities issued or
directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (c) certificates of deposit and
Eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any commercial bank organized
under the laws of any country that is a member of the Organization for
Economic Cooperation and Development having capital and surplus in excess of
$500 million (or the equivalent thereof in any other currency or currency
unit), (d) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (b) and (c) above
entered into with any financial institution meeting the qualifications
specified in clause (c) above, (e) commercial paper having the highest rating
obtainable from Moody's Investors Service, Inc. or Standard & Poor's Ratings
Services and in each case maturing within 270 days after the date of
acquisition, (f) deposits available for withdrawal on demand with any
commercial bank not meeting the qualifications specified in clause (c) above,
provided all such deposits do not exceed $3.0 million (or the equivalent
thereof in any other currency or currency unit) in the aggregate at any one
time, and (g) money market mutual funds substantially all of the assets of
which are of the type described in the foregoing clauses (a) through (e).
"Common Stock" means the Common Stock of the Company, par value $.01 per
share.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus, to the extent
deducted or excluded in calculating Consolidated Net Income for such period,
(a) an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (or any disposition described in clause (H) of
the definition of Asset Sale), (b) provision for taxes based on income or
profits of such Person and its Restricted Subsidiaries, (c) Consolidated
Interest Expense of such Person and its Restricted Subsidiaries, and (d)
depreciation and amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior
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period) of such Person and its Restricted Subsidiaries, in each case, on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Consolidated Interest Expense of such Person for such period;
provided, however, that the Consolidated Interest Coverage Ratio shall be
calculated giving pro forma effect to each of the following transactions as if
each such transaction had occurred at the beginning of the applicable four-
quarter reference period: (a) any incurrence, assumption, guarantee or
redemption by the Company or any of its Restricted Subsidiaries of any
Indebtedness (other than revolving credit borrowings) subsequent to the
commencement of the period for which the Consolidated Interest Coverage Ratio
is being calculated but prior to the date on which the event for which the
calculation of the Consolidated Interest Coverage Ratio is made (the
"Calculation Date"); (b) any acquisition that has been made by the Company or
any of its Restricted Subsidiaries, or approved and expected to be consummated
within 30 days of the Calculation Date, including, in each case, through a
merger or consolidation, and including any related financing transactions,
during the four-quarter reference period or subsequent to such reference
period and on or prior to the Calculation Date (in which case Consolidated
Cash Flow for such reference period shall be calculated without giving effect
to clause (c) of the proviso set forth in the definition of Consolidated Net
Income); and (c) any other transaction that may be given pro forma effect in
accordance with Article 11 of Regulation S-X as in effect from time to time;
provided further, however, that (i) the Consolidated Cash Flow attributable to
discontinued operations, as determined in accordance with GAAP, and operations
or businesses disposed of prior to the Calculation Date, shall be excluded and
(ii) the Consolidated Interest Expense attributable to discontinued
operations, as determined in accordance with GAAP, and operations or
businesses disposed of prior to the Calculation Date, shall be excluded, but
only to the extent that the obligations giving rise to such Consolidated
Interest Expense will not be obligations of the referent Person or any of its
Restricted Subsidiaries following the Calculation Date.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication, of (a) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid
or accrued (including, without limitation, amortization of original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions, discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations but excluding
amortization of debt issuance costs) and (b) the consolidated interest expense
of such Person and its Restricted Subsidiaries that was capitalized during
such period.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP,
provided that (a) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (b) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms
of its charter or any agreement, instrument, judgment, decree, order, statute,
rule or governmental regulation applicable to that Subsidiary or its
stockholders, (c) the Net Income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition
shall be excluded and (d) the cumulative effect of a change in accounting
principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (a) the consolidated equity of the common stockholders of such
Person and its consolidated Restricted Subsidiaries as of such date plus (b)
the respective amounts reported on such Person's balance sheet as of such date
with respect to any series of preferred stock (other than Disqualified Stock)
that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration
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and payment, but only to the extent of any cash received by such Person upon
issuance of such preferred stock, less (i) all write-ups (other than write-ups
resulting from foreign currency translations and write-ups of tangible assets
of a going concern business made within 12 months after the acquisition of
such business) subsequent to the date of the Indenture in the book value of
any asset owned by such Person or a consolidated Restricted Subsidiary of such
Person, (ii) all investments as of such date in unconsolidated Subsidiaries
and in Persons that are not Restricted Subsidiaries and (iii) all unamortized
debt discount and expense and unamortized deferred charges as of such date, in
each case determined in accordance with GAAP.
"Credit Facilities" means (a) the Restated and Amended Credit Agreement,
dated as of January 31, 1997, by and between the Company and First National
Bank of Lafayette and (b) the Credit Agreement, dated June 30, 1995, among
Bristow Helicopter Group Limited and certain of its English Subsidiaries, the
banks named therein and National Westminster Bank Plc, as Facility Agent and
Security Trustee, in each case as amended, restated, modified, supplemented,
extended, renewed, replaced, refinanced or restructured from time to time,
whether by the same or any other agent or agents, lender or group of lenders,
whether represented by one or more agreements and whether one or more
Subsidiaries are added or removed as borrowers or guarantors thereunder or as
parties thereto.
"Default" means any event that is or with the passage of time or the giving
of notice or both would be an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures (excluding any
maturity as a result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or
prior to the date that is 91 days after the date on which the Notes mature or
are redeemed or retired in full; provided, however, that any Capital Stock
that would constitute Disqualified Stock solely because the holders thereof
(or of any security into which it is convertible or for which it is
exchangeable) have the right to require the issuer to repurchase such Capital
Stock (or such security into which it is convertible or for which it is
exchangeable) upon the occurrence of any of the events constituting an Asset
Sale or a Change of Control shall not constitute Disqualified Stock if such
Capital Stock (and all such securities into which it is convertible or for
which it is exchangeable) provides that the issuer thereof will not repurchase
or redeem any such Capital Stock (or any such security into which it is
convertible or for which it is exchangeable) pursuant to such provisions prior
to compliance by the Company with the provisions of the Indenture described
under the caption "Repurchase at the Option of Holders--Change of Control" or
"Repurchase at the Option of Holders--Asset Sales," as the case may be.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Event of Loss" means, with respect to any property or asset of the Company
or any Restricted Subsidiary, (a) any damage to such property or asset that
results in an insurance settlement with respect thereto on the basis of a
total loss or a constructive or compromised total loss or (b) the
confiscation, condemnation or requisition of title to such property or asset
by any government or instrumentality or agency thereof. An Event of Loss shall
be deemed to occur as of the date of the insurance settlement, confiscation,
condemnation or requisition of title, as applicable.
"Existing Indebtedness" means Indebtedness of the Company and its Restricted
Subsidiaries (other than Indebtedness under the Credit Facilities) in
existence on the date of the Indenture (including, in the case of Bristow and
its Subsidiaries, any Indebtedness of Bristow and its Subsidiaries resulting
from the refinancing of Indebtedness of Bristow and its Subsidiaries in
existence on the date hereof that is completed prior to February 10, 1998),
until such amounts are repaid.
The term "fair market value" means, with respect to any asset or Investment,
the fair market value of such asset or Investment at the time of the event
requiring such determination, as determined in good faith by the
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<PAGE>
Board of Directors of the Company, or, with respect to any asset or Investment
in excess of $5.0 million (other than cash or Cash Equivalents), as determined
by a reputable appraisal firm that is, in the judgment of such Board of
Directors, qualified to perform the task for which such firm has been engaged
and independent with respect to the Company.
"Funded Indebtedness" means any Indebtedness for money borrowed that by its
terms matures at, or is extendible or renewable at the option of the obligor
to, a date more than 12 months after the date of the incurrence of such
Indebtedness.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (b) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates and (c) any foreign currency futures contract, option or similar
agreement or arrangement designed to protect such Person against fluctuations
in foreign currency rates, in each case to the extent such obligations are
incurred in the ordinary course of business of such Person.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced
by bonds, notes, debentures or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers' acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable,
if and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance
sheet of such Person prepared in accordance with GAAP. The amount of any
Indebtedness outstanding as of any date shall be (a) the accreted value
thereof, in the case of any Indebtedness that does not require current
payments of interest, and (b) the principal amount thereof, in the case of any
other Indebtedness.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees by the referent Person of, and Liens on
any assets of the referent Person securing, Indebtedness or other obligations
of other Persons), advances or capital contributions (excluding commission,
travel and similar advances to officers and employees made in the ordinary
course of business), purchases or other acquisitions for consideration of
Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP; provided, however, that the following shall not
constitute Investments: (i) extensions of trade credit or other advances to
customers on commercially reasonable terms in accordance with normal trade
practices or otherwise in the ordinary course of business, (ii) Hedging
Obligations and (iii) endorsements of negotiable instruments and documents in
the ordinary course of business. If the Company or any Restricted Subsidiary
of the Company sells or otherwise disposes of any Equity Interests of any
direct or indirect Restricted Subsidiary of the Company such that, after
giving effect to any such sale or disposition, such Person is no longer a
Restricted Subsidiary of the Company, the Company shall be deemed to have made
an Investment on the date of any such sale or disposition equal to the fair
market value of the Equity Interests of such Restricted Subsidiary not sold or
disposed of in an amount determined as provided in the final paragraph of the
covenant described above under the caption "--Certain Covenants--Restricted
Payments."
"Lien" means, with respect to any asset, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law (including
any conditional sale or other title retention agreement, any lease in the
nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any
47
<PAGE>
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction other than a precautionary financing statement respecting
a lease not intended as a security agreement).
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (a) any gain (but
not loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (i) any Asset Sale (including, without
limitation, dispositions pursuant to sale-and-leaseback transactions) or (ii)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any
of its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain
(but not loss), together with any related provision for taxes on such
extraordinary or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of
any non-cash consideration received in any Asset Sale), net of (without
duplication) (a) the direct costs relating to such Asset Sale (including,
without limitation, legal, accounting and investment banking fees, sales
commissions, recording fees, title transfer fees, title insurance premiums,
appraiser fees and costs incurred in connection with preparing such asset for
sale) and any relocation expenses incurred as a result thereof, (b) taxes paid
or estimated to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements), (c)
amounts required to be applied to the repayment of Indebtedness (other than
under the Credit Facilities) secured by a Lien on the asset or assets that
were the subject of such Asset Sale and (d) any reserve established in
accordance with GAAP or any amount placed in escrow, in either case for
adjustment in respect of the sale price of such asset or assets, until such
time as such reserve is reversed or such escrow arrangement is terminated, in
which case Net Proceeds shall include only the amount of the reserve so
reversed or the amount returned to the Company or its Restricted Subsidiaries
from such escrow arrangement, as the case may be.
"Non-Recourse Debt" means Indebtedness (a) as to which neither the Company
nor any of its Restricted Subsidiaries (i) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness) or is otherwise directly or indirectly liable (as a guarantor or
otherwise) or (ii) constitutes the lender, (b) no default with respect to
which (including any rights the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) the holders of Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity and
(c) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its
Restricted Subsidiaries.
"Pari Passu Indebtedness" means, with respect to any Net Proceeds from Asset
Sales, Indebtedness of the Company and its Restricted Subsidiaries the terms
of which require the Company or such Restricted Subsidiary to apply such Net
Proceeds to offer to repurchase such Indebtedness.
"Permitted Bristow Indebtedness" means (a) any Indebtedness incurred
pursuant to clauses (a) through (f) of the second paragraph of the covenant
entitled "--Incurrence of Indebtedness and Issuance of Preferred Stock" and
(b) any additional Indebtedness in an aggregate principal amount not in excess
of $10.0 million at any time outstanding.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company, (b) any Investment in Cash
Equivalents, (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person if as a result of such Investment (i) such Person
becomes a Wholly Owned Restricted Subsidiary of the Company or (ii) such
Person is merged, consolidated or amalgamated with or into, or transfers or
conveys all or substantially all of its assets to, or is liquidated into, the
Company or a Wholly Owned Restricted Subsidiary of the Company, (d) any
Investment made as a result of the receipt of non-cash consideration from (i)
an Asset Sale that was made pursuant to and in compliance with the
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<PAGE>
covenant described above under the caption "--Repurchase at the Option of
Holders--Asset Sales" or (ii) a disposition of assets that does not constitute
an Asset Sale, and (e) Investments in a Person engaged principally in the
business of providing helicopter transportation services to the oil and gas
industry or businesses reasonably complementary or related thereto, provided
that the aggregate amount of such Investments pursuant to this clause (e) in
Persons that are not Guarantors shall not exceed $20.0 million at any one
time.
"Permitted Liens" means (a) Liens securing Indebtedness incurred pursuant to
clause (a) of the second paragraph of the covenant entitled "--Incurrence of
Indebtedness and Issuance of Preferred Stock," (b) Liens in favor of the
Company and its Restricted Subsidiaries, (c) Liens on property of a Person
existing at the time such Person is merged into or consolidated with the
Company or any Restricted Subsidiary of the Company, provided that such Liens
were in existence prior to its contemplation of such merger or consolidation
and do not extend to any property other than those of the Person merged into
or consolidated with the Company or any of its Restricted Subsidiaries, (d)
Liens on property existing at the time of acquisition thereof by the Company
or any Restricted Subsidiary of the Company, provided that such Liens were in
existence prior to its contemplation of such acquisition and do not extend to
any other property, (e) Liens to secure the performance of statutory
obligations, surety or appeal bonds, bid or performance bonds, insurance
obligations or other obligations of a like nature incurred in the ordinary
course of business, (f) Liens securing Hedging Obligations, (g) Liens existing
on the date of the Indenture, (h) Liens securing Non-Recourse Debt, (i) any
interest or title of a lessor under a Capital Lease Obligation or an operating
lease, (j) Liens arising by reason of deposits necessary to obtain standby
letters of credit in the ordinary course of business, (k) Liens on real or
personal property or assets of the Company or a Restricted Subsidiary thereof
to secure Indebtedness incurred for the purpose of (i) financing all or any
part of the purchase price of such property or assets incurred prior to, at
the time of, or within 120 days after, the acquisition of such property or
assets or (ii) financing all or any part of the cost of construction of any
such property or assets, provided that the amount of any such financing shall
not exceed the amount expended in the acquisition of, or the construction of,
such property or assets and such Liens shall not extend to any other property
or assets of the Company or a Restricted Subsidiary (other than any associated
accounts, contracts and insurance proceeds) and (l) Liens securing Permitted
Refinancing Indebtedness with respect to any Indebtedness referred to in
clauses (c), (d), (g) and (k) above.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted
Subsidiaries; provided, however, that (a) the principal amount (or accreted
value, if applicable) of such Permitted Refinancing Indebtedness does not
exceed the principal amount of (or accreted value, if applicable), plus
premium, if any, and accrued interest on, the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded (plus the amount of
reasonable expenses incurred in connection therewith), (b) such Permitted
Refinancing Indebtedness has a final maturity date no earlier than the final
maturity date of, and has a Weighted Average Life to Maturity equal to or
greater than the Weighted Average Life to Maturity of, the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded, (c) if the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded is subordinated in right of payment to the Notes, such Permitted
Refinancing Indebtedness is subordinated in right of payment to the Notes on
terms at least as favorable, taken as a whole, to the holders of Notes as
those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded and (d) such
Indebtedness is incurred either by the Company or by the Restricted Subsidiary
that is the obligor on the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded; provided, however, that a Restricted
Subsidiary that is also a Guarantor may guarantee Permitted Refinancing
Indebtedness incurred by the Company, whether or not such Restricted
Subsidiary was an obligor or guarantor of the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded; provided further,
however, that if such Permitted Refinancing Indebtedness is subordinated to
the Notes, such guarantee shall be subordinated to such Restricted
Subsidiary's Subsidiary Guarantee to at least the same extent.
"Productive Assets" means aircraft or other assets (other than assets that
would be classified as current assets in accordance with GAAP) of the kind
used or usable by the Company or its Restricted Subsidiaries in the
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business of providing helicopter transportation services to the oil and gas
industry (or any business that is reasonably complementary or related thereto
as determined in good faith by the Board of Directors).
"Qualified Equity Offering" means (a) any sale of Equity Interests (other
than Disqualified Stock) of the Company pursuant to an underwritten offering
registered under the Securities Act or (b) any sale of Equity Interests (other
than Disqualified Stock) of the Company so long as, at the time of
consummation of such sale, the Company has a class of common equity securities
registered pursuant to Section 12(b) or Section 12(g) under the Exchange Act.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of such Person that
is not an Unrestricted Subsidiary.
"Significant Subsidiary" means any Restricted Subsidiary of the Company
incorporated or organized in any state of the United States that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of the Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations
to repay, redeem or repurchase any such interest or principal prior to the
date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (a) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of Capital Stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other Subsidiaries of that
Person (or a combination thereof), (b) any partnership (i) the sole general
partner or the managing general partner of which is such Person or a
Subsidiary of such Person or (ii) the only general partners of which are such
Person or of one or more Subsidiaries of such Person (or any combination
thereof) and (c) any other Person whose results for financial reporting
purposes are consolidated with those of such Person in accordance with GAAP.
"Unrestricted Subsidiary" means any Subsidiary that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a Board
Resolution, but only to the extent that such Subsidiary at the time of such
designation (a) has no Indebtedness other than Non-Recourse Debt, (b) is not
party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless such agreement,
contract, arrangement or understanding does not violate the terms of the
Indenture described under the caption "--Certain Covenants--Transactions with
Affiliates," and (c) is a Person with respect to which neither the Company nor
any of its Restricted Subsidiaries has any direct or indirect obligation (i)
to subscribe for additional Equity Interests or (ii) to maintain or preserve
such Person's financial condition or to cause such Person to achieve any
specified levels of operating results, in each case, except to the extent
otherwise permitted by the Indenture. Any such designation by the Board of
Directors shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the Board Resolution giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing conditions and was permitted by the covenant described above under
the caption "--Certain Covenants--Restricted Payments." If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such
Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the
Company as of such date (and, if such Indebtedness is not permitted to be
incurred as of such date under the covenant described under the caption "--
Incurrence of Indebtedness and Issuance of Preferred Stock," the Company shall
be in default of such covenant). The Board of Directors of the Company may at
any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary,
provided that such designation shall be deemed to be an incurrence of
Indebtedness by a
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Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (A)
such Indebtedness is permitted under the covenant described under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock," calculated on
a pro forma basis as if such designation had occurred at the beginning of the
four-quarter reference period, and (B) no Default or Event of Default would be
in existence following such designation.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at any date, the number of years obtained by dividing (a) the sum of the
products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii)
the number of years (calculated to the nearest one twelfth) that will elapse
between such date and the making of such payment, by (b) the then outstanding
principal amount of such Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person to the extent (a) all of the outstanding Capital
Stock or other ownership interests of which (other than directors' qualifying
shares) shall at the time be owned directly or indirectly by such Person or
(b) such Restricted Subsidiary is organized in a foreign jurisdiction and is
required by the applicable laws and regulations of such foreign jurisdiction
to be partially owned by the government of such foreign jurisdiction or
individual or corporate citizens of such foreign jurisdiction or another
foreign jurisdiction in order for such Restricted Subsidiary to transact
business in such foreign jurisdiction, provided that such Person, directly or
indirectly, owns the remaining Capital Stock or ownership interests in such
Restricted Subsidiary and, by contract or otherwise, derives the economic
benefits of ownership of such Restricted Subsidiary to substantially the same
extent as if such Restricted Subsidiary were a wholly owned Restricted
Subsidiary.
LEGAL MATTERS
The validity of the Notes will be passed upon for the Company by Fulbright &
Jaworski L.L.P., Houston, Texas. Howard Wolf, a partner in the firm of
Fulbright & Jaworski L.L.P. and a director of the Company, beneficially owns
16,990 shares of the Company's Common Stock.
EXPERTS
The audited Consolidated Financial Statements of Offshore Logistics, Inc. as
of March 31, 1997 and June 30, 1996, and for the nine month period ended March
31, 1997 and each of the two years ended June 30, 1996 and 1995 included in
this Prospectus, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included or incorporated by reference herein in reliance upon the authority of
said firm as experts in accounting and auditing in giving said reports.
The audited Consolidated Financial Statements of Bristow as of December 31,
1995 and 1994, and for each of the three years in the period ended December
31, 1995 incorporated by reference in this Prospectus, have been audited by
KPMG, chartered accountants, as indicated in their reports with respect
thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Consolidated Financial Statements:
Offshore Logistics, Inc. and Subsidiaries
Report of Independent Public Accountants.............................. F-2
Consolidated Balance Sheets as of March 31, 1997 and June 30, 1996.... F-3
Consolidated Statements of Income for the nine months ended March 31,
1997 and for the 12 months ended June 30, 1996 and 1995.............. F-4
Consolidated Statements of Stockholders' Investment for the nine
months ended March 31, 1997 and for the 12 months ended June 30, 1996
and 1995............................................................. F-5
Consolidated Statements of Cash Flows for the nine months ended March
31, 1997 and for the 12 months ended June 30, 1996 and 1995.......... F-6
Notes to Consolidated Financial Statements............................ F-7
Consolidated Financial Statements (Unaudited):
Offshore Logistics, Inc. and Subsidiaries
Consolidated Statement of Income for the nine months ended December
31, 1997 and 1996.................................................... F-33
Consolidated Balance Sheet as of December 31, 1997 and March 31, 1997. F-34
Consolidated Statement of Cash Flows for the nine months ended
December 31, 1997 and 1996........................................... F-35
Notes to Consolidated Financial Statements............................ F-36
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders of Offshore Logistics, Inc.:
We have audited the accompanying consolidated balance sheets of Offshore
Logistics, Inc. (a Delaware corporation) and subsidiaries as of March 31, 1997
and June 30, 1996, and the related consolidated statements of income,
stockholders' investment, and cash flows for the nine month period ended March
31, 1997 and each of the two years ended June 30, 1996 and 1995. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Offshore Logistics, Inc.
and subsidiaries as of March 31, 1997 and June 30, 1996, and the results of
their operations and their cash flows for the nine month period ended March
31, 1997 and each of the two years in the period ended June 30, 1996 in
conformity with generally accepted accounting principles.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana
May 23, 1997
(Except with respect to the matters
discussed in Note N as to which the
date is January 27, 1998)
F-2
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
ASSETS 1997 1996
------ --------- --------
(THOUSANDS OF
DOLLARS)
<S> <C> <C>
Current assets:
Cash and cash equivalents................................ $ 29,829 $ 56,939
Investment in marketable securities...................... -- 19,967
Accounts receivable...................................... 88,268 22,210
Inventories.............................................. 70,827 22,817
Net assets of discontinued operations.................... 6,686 7,221
Prepaid expenses......................................... 887 484
-------- --------
Total current assets................................... 196,497 129,638
Investments in unconsolidated entities..................... 9,250 8,792
Property and equipment--at cost
Land and buildings....................................... 13,175 2,977
Aircraft and equipment................................... 497,672 132,466
-------- --------
510,847 135,443
Less Accumulated depreciation and amortization........... (74,465) (63,702)
-------- --------
436,382 71,741
Other assets, primarily goodwill........................... 32,084 20,570
-------- --------
$674,213 $230,741
======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C>
Current liabilities:
Accounts payable......................................... $ 31,166 $ 1,404
Accrued liabilities...................................... 38,592 6,841
Deferred taxes........................................... 17,968 --
Current maturities of long-term debt..................... 51,240 --
-------- --------
Total current liabilities.............................. 138,966 8,245
Long-term debt, less current maturities.................... 199,631 --
Deferred credits........................................... 622 2,487
Deferred taxes............................................. 91,445 19,271
Minority interest.......................................... 8,643 1,055
Commitments and contingencies.............................. -- --
Stockholders' investment
Common stock, $.01 par value, authorized 35,000,000
shares; outstanding 21,081,133 in 1997 and 19,498,398 in
1996 (exclusive of 517,550 treasury shares)............. 211 195
Additional paid in capital............................... 115,346 95,934
Retained earnings........................................ 120,786 103,554
Cumulative translation adjustment........................ (1,437) --
-------- --------
234,906 199,683
-------- --------
$674,213 $230,741
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
NINE TWELVE TWELVE
MONTHS MONTHS MONTHS
MARCH JUNE 30, JUNE 30,
31, 1997 1996 1995
-------- -------- --------
(THOUSANDS OF DOLLARS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C>
Gross revenue:
Operating revenue.............................. $167,128 $117,289 $118,336
Gain (loss) on disposal of equipment........... 1,222 (446) 586
-------- -------- --------
168,350 116,843 118,922
-------- -------- --------
Operating expenses:
Direct cost.................................... 119,106 85,693 80,708
Depreciation and amortization.................. 12,624 8,549 9,200
General and administrative..................... 11,406 9,235 8,745
-------- -------- --------
143,136 103,477 98,653
-------- -------- --------
Operating income................................. 25,214 13,366 20,269
Earnings from unconsolidated entities............ 2,602 4,056 4,050
Interest income.................................. 3,300 4,025 2,947
Interest expense................................. 5,528 300 569
-------- -------- --------
Income from continuing operations before provi-
sion for income taxes........................... 25,588 21,147 26,697
Provision for income taxes....................... 7,675 6,123 7,735
Minority interest................................ (288) -- --
-------- -------- --------
Income from continuing operations................ 17,625 15,024 18,962
Discontinued operations:
Income (Loss) from CPS operations.............. (393) 252 (512)
-------- -------- --------
Net income....................................... $ 17,232 $ 15,276 $ 18,450
======== ======== ========
Income (Loss) per common share:
Continuing operations.......................... $ 0.86 $ 0.76 $ 0.98
Discontinued operations........................ (0.02) 0.01 (0.02)
-------- -------- --------
Net income per common share and common equivalent
share........................................... $ 0.84 $ 0.77 $ 0.96
======== ======== ========
Dividends per common share....................... $ -- $ -- $ --
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' INVESTMENT
<TABLE>
<CAPTION>
CUMULATIVE
FOREIGN
COMMON STOCK ADDITIONAL CURRENCY TOTAL
----------------- PAID IN TRANSLATION RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL ADJUSTMENT EARNINGS INVESTMENT
---------- ------ ---------- ----------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE-June 30, 1994... 17,602,379 $176 $ 71,563 $ -- $ 69,828 $141,567
Net income............ -- -- -- -- 18,450 18,450
Stock options......... 83,031 1 414 -- -- 415
Warrants exercised.... 200,000 2 1,635 -- -- 1,637
Stock issued for GPM.. 1,498,906 15 21,114 -- -- 21,129
GPM warrants exer-
cised................ 44,466 -- 480 -- -- 480
Restricted stock is-
sued................. 13,332 -- 173 -- -- 173
---------- ---- -------- ------- -------- --------
BALANCE-June 30, 1995... 19,442,114 194 95,379 -- 88,278 183,851
Net income............ -- -- -- -- 15,276 15,276
Stock options......... 24,460 -- 197 -- -- 197
GPM warrants exer-
cised................ 26,553 1 286 -- -- 287
Restricted stock is-
sued................. 5,271 -- 72 -- -- 72
---------- ---- -------- ------- -------- --------
BALANCE-June 30, 1996... 19,498,398 195 95,934 -- 103,554 199,683
Net income............ -- -- -- -- 17,232 17,232
Stock options......... 114,000 1 883 -- -- 884
GPM warrants exer-
cised................ 94,040 1 1,015 -- -- 1,016
Restricted stock is-
sued................. 306 -- 4 -- -- 4
Stock issued for
Bristow investment... 1,374,389 14 17,510 -- -- 17,524
Translation adjust-
ments................ -- -- -- (1,437) -- (1,437)
---------- ---- -------- ------- -------- --------
BALANCE-March 31, 1997.. 21,081,133 $211 $115,346 $(1,437) $120,786 $234,906
========== ==== ======== ======= ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS YEAR ENDED JUNE
ENDED 30,
MARCH 31, -----------------
1997 1996 1995
----------- -------- -------
(THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................... $ 17,232 $ 15,276 $18,450
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................ 13,196 9,230 9,670
Increase in deferred taxes................... 1,059 1,241 1,121
(Gain) Loss on asset dispositions............ (1,212) 537 (586)
Equity in earnings from unconsolidated enti-
ties over dividends received................ 145 -- (41)
Minority interest in earnings................ 67 (36) (415)
Change in assets and liabilities net of effects
from investment in Bristow, GPM, and CPS:
(Increase) Decrease in accounts receivable... (16,736) 12 897
Increase in inventories...................... (4,168) (558) (1,145)
(Increase) Decrease in prepaid expenses and
other....................................... (2,381) (63) 227
Increase in accounts payable................. 5,801 225 1,288
Increase (Decrease) in accrued liabilities... 4,833 (3,055) 1,309
Decrease in deferred credits................. (1,865) (13) --
--------- -------- -------
Net cash provided by operating activities...... 15,971 22,796 30,775
--------- -------- -------
Cash flows from investing activities:
Capital expenditures......................... (10,106) (12,535) (3,208)
Proceeds from asset dispositions............. 6,026 185 3,046
Investment in marketable securities.......... -- (11,952) --
Proceeds from sale or maturity of marketable
securities.................................. 20,001 11,988 --
Bristow investment........................... (155,451) -- --
Acquisitions, net of cash received........... (1,675) -- (8,234)
--------- -------- -------
Net cash used in investing activities.......... (141,205) (12,314) (8,396)
--------- -------- -------
Cash flows from financing activities:
Proceeds from borrowings..................... 96,636 -- --
Repayment of debt............................ (434) (2,000) (4,235)
Issuance of common stock..................... 1,899 556 2,532
--------- -------- -------
Net cash provided by (used in) financing activ-
ities......................................... 98,101 (1,444) (1,703)
--------- -------- -------
Effect of exchange rate changes in cash........ 23 -- --
Net increase (decrease) in cash and cash equiv-
alents........................................ (27,110) 9,038 20,676
Cash and cash equivalents at beginning of peri-
od............................................ 56,939 47,901 27,225
--------- -------- -------
Cash and cash equivalents at end of period..... $ 29,829 $ 56,939 $47,901
========= ======== =======
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A--SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation--The consolidated financial statements include the
accounts of Offshore Logistics, Inc., a Delaware corporation ("OLOG") and its
majority owned entities and non-majority owned entities including Bristow
Aviation Holdings Limited ("Bristow"), collectively referred to as "the
Company", after elimination of all significant intercompany accounts and
transactions. Investments in 50% or less owned affiliates over which the
Company has the ability to exercise significant influence are accounted for
using the equity method. Investments in which the Company does not exercise
significant influence are accounted for under the cost method.
Nature of Operations--The Company's most significant area of operation is a
major supplier of helicopter transportation services to the worldwide offshore
oil and gas industry. The Company also provides production personnel and
medical support services to the worldwide oil and gas industry.
Use of Estimates--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents--The Company's cash equivalents includes funds
invested in highly liquid debt instruments with original maturities of 90 days
or less.
Accounts Receivable--Trade and other receivables are stated at net
realizable value and the allowance for uncollectible accounts was $1,449,000
and $1,382,000 at March 31, 1997 and June 30, 1996, respectively. The Company
grants short-term credit to its customers, primarily major and independent oil
and gas companies.
Inventories--Inventories are stated at the lower of average cost or market
and consist primarily of spare parts. The valuation reserve related to
obsolete and excess inventory was $4,074,000 and $4,141,000 at March 31, 1997
and June 30, 1996. There were no related charges to operations in 1997, 1996,
or 1995.
Other Assets--In 1997, $22,283,000 of goodwill, net of accumulated
amortization of $2,890,000, was included in other assets. Goodwill is
amortized using the straight-line method over a period of 20 years. Goodwill
is recognized for the excess of the purchase price over the value of the
identifiable net assets. See Note E. Realization of goodwill is periodically
assessed by management based on the expected future profitability and
undiscounted future cash flows of acquired companies and their contribution to
the overall operations of the Company.
On July 1, 1996, the Company adopted the provisions of SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of." The adoption had no material effect on the Company's
results of operations or financial position.
Depreciation and Amortization--Depreciation and amortization are provided on
the straight-line method over the estimated useful lives of the assets.
Estimated residual value used in calculating depreciation of aircraft is
primarily 30% of cost.
Maintenance and repairs are expensed as incurred; betterments and
improvements are capitalized. The costs and related reserves of assets sold or
otherwise disposed of are removed from the accounts and resultant gains or
losses included in income.
F-7
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Income Taxes--Income taxes are accounted for in accordance with the
provisions of the SFAS No. 109, "Accounting for Income Taxes." Under this
statement, deferred income taxes are provided for by the asset and liability
method.
Earnings per Common Share--Earnings per common share is based on the
weighted average number of shares of common stock and common stock equivalents
outstanding during the years (20,476,825 in 1997; 19,767,039 in 1996; and
19,313,276 in 1995) computed on the treasury stock method.
The Company adopted a stockholder rights plan on February 9, 1996, designed
to assure that the Company's stockholders receive fair and equal treatment in
the event of any proposed takeover of the Company and to guard against partial
tender offers, squeeze-outs, open market accumulations, and other abusive
tactics to gain control without paying all stockholders a fair price. The
rights plan was not adopted in response to any specific takeover proposal.
Under the rights plan, the Company declared a dividend of one right ("Right")
on each share of the Company's common stock. Each Right will entitle the
holder to purchase one one-hundredth of a share of a new Series A Junior
Participating Preferred Stock, par value $1.00 per share, at an exercise price
of $50.00. Each Right will entitle its holder to purchase a number of common
shares of the Company having a market value of twice the exercise price. The
Rights are not currently exercisable and will become exercisable only in the
event a person or group acquires beneficial ownership of 10 percent or more of
the Company's common stock. The dividend distribution was made on February 29,
1996 to stockholders of record on that date. The Rights will expire on
February 26, 2006.
Foreign Currency Translation--Bristow maintains their accounting records in
their local currency (British Sterling). The currencies are converted to
United States Dollars with the effect of the foreign currency translation
reflected as a component of shareholders' investment in accordance with SFAS
No. 52, "Foreign Currency Translation." Foreign currency transaction gains or
losses are credited or charged to income; and such amounts are insignificant
for the periods presented.
Derivative Financial Instruments--The Company enters into forward exchange
contracts from time to time to hedge known transactional exposures denominated
in currencies other than the functional currency of the business. Foreign
currency positions mature at the anticipated currency requirement date and
rarely exceed three months. The purpose of the Company's foreign currency
hedging activities is to protect the Company from the risk that foreign
currency outflows resulting from payments for services and parts to foreign
suppliers will be adversely affected by changes in exchange rates.
Stock Compensation--On July 1, 1996, the Company elected to continue to use
the intrinsic value method of accounting for stock-based compensation
prescribed by Accounting Principles Board ("APB") Opinion No. 25 and,
accordingly, adopted the disclosure provisions of SFAS No. 123, "Accounting
for Stock-Based Compensation."
Fiscal-Year Change--On May 1, 1997, the Board of Directors approved a change
in the Company's fiscal year end from June 30 to March 31, effective for
fiscal year ended March 31, 1997. A nine month fiscal transition period from
July 1, 1996 through March 31, 1997 will precede the start of the new fiscal
year cycle. Other fiscal years presented and referred to in these consolidated
financial statements and notes thereto are on a June 30 fiscal year basis
unless otherwise indicated.
Effect of Recent Accounting Changes--In February 1997, the FASB issued SFAS
No. 128, "Earnings per Share" which establishes standards for computing and
presenting earnings per share ("EPS"). Under SFAS No. 128, primary EPS is
replaced with basic EPS. Basic EPS is computed by dividing income available to
common shareholders by the weighted average shares outstanding; no dilution
for any potentially convertible shares is included in the calculation. Fully
diluted EPS, now called diluted EPS, is still required; however, when applying
F-8
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
the treasury stock method, the average stock price is used rather than the
greater of the average or closing stock price for the period. The Company
expects that the basic EPS will be slightly higher than primary earnings per
share and that diluted EPS will not differ materially from primary earnings
per share. SFAS No. 128 is effective for financial statements issued for
periods ending after December 15, 1997.
In March 1997, the FASB issued SFAS No. 129, "Disclosure of Information
about Capital Structure." SFAS 129 is effective for the Company's fiscal year
ending March 31, 1998. Management believes that this pronouncement will not
have a material effect on the Company's financial statements taken as a whole.
B--LONG-TERM DEBT
Long-term debt at March 31, 1997 consisted of (thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31,
1997
---------
<S> <C>
6% Convertible Subordinated Notes due 2003............................ $ 98,000
Term Loan with a syndicate of United Kingdom banks.................... 40,983
Series A Guaranteed Deep Discount Loan Note 1997...................... 31,568
Series B Guaranteed Deep Discount Loan Note 1998...................... 18,413
Unsecured Subordinated Loan Stock..................................... 34,647
Revolving Credit Facility............................................. 8,197
Capital Lease Obligations............................................. 13,836
Management Fee Debt (see Note C)...................................... 4,910
Other................................................................. 317
--------
Total debt.......................................................... 250,871
Less current maturities............................................. 51,240
--------
Total long-term debt................................................ $199,631
========
</TABLE>
On December 17, 1996, the Company issued $98 million of 6% Convertible
Subordinated Notes ("6% Notes") due 2003. The 6% Notes are convertible at any
time into the Company's Common Stock at a conversion price of $22.86 per share
(equivalent to a conversion rate of approximately 43.74 shares per $1,000
principal amount of 6% Notes). The 6% Notes are redeemable at the option of
the Company beginning December 1999. The Company issued $7.5 million of the 6%
Notes to Caledonia (See Note C) in conjunction with the investment in Bristow.
Proceeds of $88.4 million, after debt issuance costs of $2.1 million, were
used to finance the investment in Bristow.
Bristow has a term loan with a syndicate of United Kingdom banks that is
repayable in semi-annual installments varying from $2.2 to $9.8 million
((Pounds)1.3 to (Pounds)6.0 million) through December 1, 2001, and can be
prepaid by Bristow in minimum increments of (Pounds)0.5 million upon 30 days
notice with no prepayment penalty. The term loan bears interest at 2.0% above
the three or six month London Interbank Offering Rate ("LIBOR"), limited to a
maximum rate of 10.8%. The average interest rate for the term loan during the
period from investment through March 31, 1997 was 8.8%. The term loan is
guaranteed by all United Kingdom subsidiaries of Bristow and is secured by a
negative pledge on all Bristow assets. The balance at March 31, 1997 was $41.0
million ((Pounds)25.0 million).
Bristow's Series A Guaranteed Deep Discount Loan Note 1997 ("A Note") yields
interest at 8.5% interest resulting in a face value at maturity of $33.9
million ((Pounds)20.7 million). There are no interest or principal payments
due on this debt until its maturity on November 7, 1997. This A Note is
guaranteed by Caledonia. (See Note C).
F-9
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Bristow's Series B Deep Discount Loan Note 1998 ("B Note") yields interest
at 8.5% interest resulting in a face value at maturity of $22.2 million
((Pounds)13.6 million). There are no interest or principal payments due on
this debt until its maturity on November 7, 1998.
Bristow's Subordinated Unsecured Loan Stock ("SULS") yields interest at 8.5%
and matures at various dates through November 7, 2001. Interest is payable
semi-annually. The SULS are held by Caledonia. OLOG and Caledonia have agreed
that OLOG, Bristow, or a designated affiliate can repurchase the SULS held by
Caledonia after the repayment of the A Note due on November 7, 1997.
The A Note, B Note, and SULS have contractual rates of 12.89%, 12.36%, and
18.8%, respectively. The Company, in applying the purchase method of
accounting, valued the yield on this debt at 8.5%.
Obligations under capital leases bear interest at various rates and require
quarterly payments. The leases are secured by the aircraft and the guarantee
of Bristow.
Bristow has a revolving credit facility, with the same syndicate of United
Kingdom banks, as with the term loan, which matures June 30, 1999, and is
available for working capital requirements and general corporate purposes.
Availability under the revolving credit facility is subject to certain
borrowing base limitations based on eligible United Kingdom accounts
receivable and inventory. All advances under the revolving credit facility
bear interest at 2.0% above one, three, or six month LIBOR rates. The
revolving credit facility is guaranteed by all United Kingdom subsidiaries of
Bristow and is secured by a negative pledge of all assets. The availability
under the revolving credit facility is $24.5 million ((Pounds)15 million) and
reduces to $16.4 million ((Pounds)10 million) on July 31, 1997. Bristow had
$8.2 million ((Pounds)5.0 million) drawn under this revolving credit facility
as of March 31, 1997.
As of March 31, 1997, the Company had a $20 million unsecured line of credit
with a U.S. bank that expires on January 31, 1998. There were no borrowings
under this line as of March 31, 1997. The rate of interest payable under the
line of credit is, at the Company's option, prime rate or LIBOR rate plus
1.25%. The agreement requires the Company to pay a quarterly commitment fee at
an annual rate of .025% on the average unused portion of the line.
Aggregate annual maturities for all long-term debt, including the
capitalized lease, for the next five years are as follows: 1998--$51,240,000;
1999 --$43,965,000; 2000--$17,278,000; 2001--$18,939,000; and 2002--
$15,322,000.
In May 1997, the Company acquired five aircraft (including four Super Pumas
which had previously been leased by Bristow under short-term operating leases)
for $32.3 million. The Company used existing cash and incurred an additional
$20.0 million of 7.9% fixed rate financing, that amortizes over five years, to
complete this transaction.
Interest paid during the year was $3,620,000; $300,000; and $569,000 for
1997, 1996, and 1995, respectively.
In the Company's opinion, based on the borrowing rates currently available
to the Company and Bristow for loans with similar terms and maturities, total
debt at March 31, 1997 approximates the fair value of the debt.
C--INVESTMENT IN BRISTOW
On December 19, 1996, OLOG acquired 49% of the common stock and a
significant amount of Bristow subordinated debt as detailed below. Bristow is
incorporated in England and holds all of the outstanding shares
F-10
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
in Bristow Helicopter Group Limited ("BHGL"). Bristow provides helicopter
services to the North Sea oil and gas industry. Services consist of short and
long range crew change flights, offshore-based and inter-platform shuttle
operations, and search and rescue missions. Bristow also operates aircraft in
Australia, Brunei, Cambodia, China, Nigeria, South America, and Vietnam among
others.
Bristow was organized with three different classes of ordinary shares
(common stock) having disproportionate voting rights. The Company, Caledonia
Investments plc and its subsidiary, Caledonia Industrial & Services Limited
(collectively, "Caledonia"), and a Norweign investor (the "E.U. Investor"),
own 49%, 49%, and 2%, respectively, of Bristow's total outstanding ordinary
shares.
The Company paid (Pounds)80.2 million (approximately $132 million) in cash
(funded from existing cash balances and the proceeds of the 6% Notes), issued
$7.5 million of the 6% Notes to Caledonia and issued 1,374,389 shares of
common stock on December 19, 1996. In addition, the Company acquired
(Pounds)5.0 million ($8.4 million) principal amount of BHGL's subordinated
debt for cash of approximately (Pounds)5.4 million ($8.9 million) including
accrued interest. Caledonia received 1,300,000 shares of the common stock and
BHGL's management received 74,389 shares.
In addition to its ownership of 49% of Bristow's outstanding ordinary shares
and (Pounds)5.0 million principal amount of Bristow's subordinated debt, the
Company acquired (Pounds)91.0 million (approximately $150 million) principal
amount of subordinated unsecured loan stock (debt) of Bristow bearing interest
at an annual rate of 13.5% and payable semi-annually. Bristow has the right to
defer payment of interest on such debt until January 31, 2002. Any such
deferred interest would also accrue interest at an annual rate of 13.5%.
The Company, Caledonia, the E.U. Investor, and Bristow entered into a
shareholders' agreement respecting, among other things, the composition of the
board of directors of Bristow. On matters coming before Bristow's board,
Caledonia's appointees have a total of five votes and the four other directors
have one vote each. So long as Caledonia has a significant interest in the
shares of Common Stock issued to it pursuant to the transaction or maintains
its voting control of Bristow, Caledonia will have the right to nominate two
persons to the board of directors of the Company and to replace any such
directors so nominated.
Caledonia, the Company, and the E.U. Investor also entered into a Put/Call
Agreement whereunder, upon giving specified prior notice, the Company has the
right to buy all the Bristow shares held by Caledonia and the E.U. Investor,
who, in turn, each has the right to sell such shares to the Company. Under
current United Kingdom law, the Company would be required, in order for
Bristow to retain its operating license, to find a qualified European investor
to own any Bristow shares it has the right to acquire under the Put/Call
Agreement. Any put or call of the Bristow shares will be subject to the
approval of the Civil Aviation Authority ("CAA"). Caledonia will receive
management fees from Bristow that will be payable semi-annually in advance
ranging from (Pounds)500,000 to (Pounds)900,000 annually for the next seven
years.
The investment was accounted for by the purchase method of accounting under
Accounting Principals Board Opinion No. 16, as amended, and accordingly, the
results of operations of Bristow for the period from December 19, 1996 are
included in the accompanying consolidated financial statements. The total
consideration has been allocated to Bristow's assets and liabilities based on
the estimated fair market value as of December 19, 1996. The purchase price
allocation is based on preliminary estimates of fair value and may be revised
at a later date.
The following unaudited pro forma financial information for the Company
gives effect to the Bristow investment as if it had occurred on July 1, 1995.
These pro forma results have been prepared for comparative purposes only and
do not purport to be indicative of the results of operations which actually
would have resulted
F-11
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
had the acquisitions occurred on the date indicated, or which may result in
the future. The pro forma results follow (in thousands, except per share
data):
<TABLE>
<CAPTION>
NINE MONTHS
MARCH 31, TWELVE MONTHS
1997 JUNE 30, 1996
----------- -------------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Gross revenue............. $296,094 $357,249
======== ========
Income from continuing
operations............... $ 19,348 $ 19,821
======== ========
Earnings per common share
and common equivalent
share
Income from continuing
operations:
Primary................. $ 0.91 $ 0.94
======== ========
Fully diluted........... $ 0.87 $ 0.93
======== ========
</TABLE>
D--INVESTMENTS IN UNCONSOLIDATED ENTITIES
The Company has two principal unconsolidated entities that are accounted for
on the cost method as the Company is unable to exert significant influence
over the operations.
The Company has a 49% investment in Hemisco Helicopters International, Inc.
("HHII") and related venture companies. The Company's investment in HHII was
$2,637,000 at March 31, 1997 and June 30, 1996. In the following unaudited
table, HHII represents $3,492,000 and $3,755,000 of the assets and $2,230,000
and $2,241,000 of the equity for March 31, 1997 and June 30, 1996,
respectively. HHII also represents $9,806,000; $10,727,000; and $13,685,000 of
revenues and $2,702,000; $1,834,000; and $(305,000) of net income for the nine
month period ended March 31, 1997 and the fiscal years ended June 30, 1996,
and 1995, respectively. During 1997, 1996, and 1995, $1,539,000; $1,556,000;
and $1,550,000, respectively, in dividends were received from HHII.
The Company has a 25% investment in an Egyptian helicopter venture. The
Company's investment in the venture was $5,986,000 at March 31, 1997 and at
June 30, 1996 and 1995. During 1997, 1996, and 1995, $1,827,000; $2,500,000;
and $2,500,000, respectively, in dividends were received from the venture.
During 1997, the venture's Board of Directors approved a cash dividend, of
which the Company's share applicable to fiscal year 1998 is approximately
$2,250,000.
A summary of unaudited financial information of these principal
unconsolidated entities is set forth below (thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Current assets.......................................... $58,162 $48,418
Non-current assets...................................... 26,858 29,521
------- -------
Total assets.......................................... $85,020 $77,939
======= =======
Current liabilities..................................... $10,063 $ 8,769
Non-current liabilities................................. 1,931 3,335
Equity.................................................. 73,026 65,835
------- -------
Total liabilities and equity.......................... $85,020 $77,939
======= =======
</TABLE>
F-12
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED
NINE MONTHS JUNE 30,
ENDED MARCH -----------------------
31, 1997 1996 1995
----------- ----------- -----------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Revenues.................................... $41,026 $51,629 $54,180
======= ======= =======
Gross profit................................ $14,122 $20,229 $18,859
======= ======= =======
Net income.................................. $ 9,918 $12,537 $11,135
======= ======= =======
</TABLE>
During 1997, 1996, and 1995, respectively, revenues of $4,673,000;
$5,169,000; and $5,295,000 were recognized for services provided to these
affiliates by the Company.
In 1996, Bristow, with two partners, formed FBS Limited ("FBS") which was
awarded a contract to provide pilot training and maintenance services to
Defense Helicopter Flying School ("DHFS"), a newly established training school
for all branches of the British military, under a fifteen year program valued
at approximately (Pounds)500 million. FBS will purchase and specially modify
47 aircraft and maintain a staff of approximately 600 employees dedicated to
conducting these training activities which began in May 1997. Each of the
partners owns one-third (33%) of FBS. Prior to FBS, Bristow had provided
similar pilot training and maintenance services to the British Army Air Corp.
since 1963. Bristow's partners in FBS had similar experience at providing
training service to other branches of the British military. At March 31, 1997,
Bristow had advanced FBS (Pounds)7.3 million ($11.9 million) for its share of
the acquisition of aircraft. Subsequent to year end, Bristow advanced FBS an
additional (Pounds)3.0 million ($4.9 million) to acquire aircraft for this
contract. FBS is finalizing its long term financing of these aircraft and
expects to repay this advance by August 31, 1997. Bristow and its partners
have given joint and several guarantees related to the performance of this
contract.
E--PRODUCTION MANAGEMENT SERVICES
The Company expanded its operations in July 1992 to include production
management services. During fiscal 1993 and until October 29, 1993, the
Company owned 50% of Seahawk Services Ltd. ("Seahawk"), a company which
provided platform and production management services, offshore medical support
services, and temporary personnel to the oil and gas industry. On October 29,
1993, the Company further expanded its interest in production management
services when the Company exchanged its 50% investment in Seahawk for a 27.5%
interest in Grasso Corporation whose wholly-owned subsidiary, Grasso
Production Management, Inc. ("GPM"), also was engaged in the production
management services business. Revenues of approximately $1,556,000 were
recognized for helicopter services provided to GPM during 1995, prior to
consolidation. The Company's share of net income related to production
management services was not material.
On September 16, 1994, GPM became a wholly-owned subsidiary of the Company
in a merger in which the Company acquired the remaining 72.5% interest in
Grasso Corporation by issuing .49 of a share of the Company's common stock for
each share of Grasso Corporation common stock owned. In addition, holders of
Grasso Corporation Class B Warrants received similar warrants for shares of
the Company's common stock. The warrants expired on December 22, 1996. The
merger was treated as a purchase for accounting purposes which resulted in
goodwill of approximately $22.3 million after stepping up the assets and
liabilities of Grasso Corporation. The goodwill is being amortized over a 20
year period.
F-13
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The following summarized unaudited income statement data reflects the impact
the GPM merger would have had on the Company's results of operations for 1995
had the transaction taken place on July 1, 1994:
<TABLE>
<CAPTION>
PRO FORMA RESULTS
FOR THE YEAR
ENDED JUNE 30,
1995
-----------------
(UNAUDITED)
<S> <C>
Gross Revenue................................................. $152,866
========
Income from continuing operations............................. $17,924
========
Earnings per common share and common equivalent share:
Income from continuing operations........................... $0.91
========
</TABLE>
F--DISCONTINUED OPERATIONS
In May 1997, the Company adopted a plan to discontinue its investment in
Cathodic Protection Services Company ("CPS"). CPS manufactures, installs and
maintains cathodic protection systems to arrest corrosion in oil and gas
drilling and production facilities, pipelines, oil and gas well casings,
hydrocarbon processing plants, and other metal structures. As a result of the
Company's adoption of the plan, the consolidated financial statements of the
Company and the related Notes to Consolidated Financial Statements and
supplemental data have been adjusted and restated to reflect the results of
operations and net assets of CPS as a discontinued operation in accordance
with generally accepted accounting principles. Assets and liabilities of CPS
at March 31, 1997 primarily consist of trade accounts receivable, inventory,
fixed assets and current payables, accruals and debt. Revenues of CPS totalled
$24.6 million, $39.5 million, and $25.3 million for 1997, 1996, and 1995,
respectively.
G--UNAUDITED SUPPLEMENTAL DATA FOR THE NINE MONTHS ENDED MARCH 31, 1996
During 1997, the Company changed its fiscal year end from June 30 to March
31. Therefore, the Company's fiscal year end for 1997 is a nine month period.
The following table represents unaudited data for the nine month period ended
March 31, 1996.
<TABLE>
<S> <C>
Operating revenue....................................................... $86,694
=======
Operating income........................................................ $ 9,774
=======
Income taxes............................................................ $ 4,494
=======
Income from continuing operations....................................... $10,991
=======
Net Income.............................................................. $11,226
=======
Earnings per common share............................................... $ 0.57
=======
</TABLE>
H--INVESTMENT IN MARKETABLE SECURITIES
Under the provisions of SFAS No. 115, investments in debt and equity
securities are required to be classified in one of three categories: held-to-
maturity, available-for-sale, or trading. As of March 31, 1997, the Company
had no such investments. There were $12,001,000 sales of investments in U.S.
Treasury investments during the nine month period ended March 31, 1997. The
proceeds approximated the carrying cost of the investments. There were
$3,985,000 sales of investments in U.S. Treasury investments for the year
ended June 30, 1996, and no sales of investments in U.S. Treasury investments
for the year ended June 30, 1995.
F-14
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
I--COMMITMENTS AND CONTINGENCIES
The Company has noncancelable operating leases in connection with the lease
of certain equipment, land, and facilities. Rental expense incurred under
these leases was $1,925,000 in 1997; $1,998,000 in 1996; and $2,195,000 in
1995. As of March 31, 1997, aggregate future payments under noncancelable
operating leases are as follows: 1998--$1,937,000; 1999--$1,858,000; 2000--
$1,798,000; 2001--$1,554,000; and 2002--$1,522,000. These amounts do not
include future payments related to the four aircraft under operating lease at
March 31, 1997 and purchased subsequent to that date.
The Company's employees are not represented by unions. However, in May 1997,
the Office and Professional Employees International Union filed with the
National Mediation Board an application for representation of Offshore
Logistics' pilots. A similar application has also been filed against Air Log's
principal competitor in the United States in what appears to be an effort to
organize the pilots of all major helicopter operators in the Gulf of Mexico.
The Company believes that if the pilots were to elect to be represented by a
union, the Company would be placed at a competitive disadvantage against
existing or future non-unionized competitors in the industry. This could have
a material adverse effect on its revenues from helicopter operations in the
Gulf of Mexico and on its results of operations. At this point, the Company is
unable to predict the probable outcome of any election.
J--INCOME TAXES
The components of deferred tax assets and liabilities are as follows
(thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31, JUNE 30,
1997 1996
--------- --------
<S> <C> <C>
Deferred Tax Assets:
Foreign tax credits...................................... $ 111,650 $ --
Other.................................................... 13,183 2,823
Valuation allowance...................................... (53,783) --
--------- --------
Total deferred tax assets.............................. 71,050 2,823
--------- --------
Deferred Tax Liabilities:
Property and equipment................................... (155,699) (17,518)
Inventories.............................................. (12,197) --
Accrual for repairs and maintenance...................... (5,771) --
Other.................................................... (6,796) (4,576)
--------- --------
Total deferred tax liabilities......................... (180,463) (22,094)
--------- --------
Net deferred tax liabilities............................... $(109,413) $(19,271)
========= ========
</TABLE>
A valuation allowance of $53,783,000 was established as of March 31, 1997
for the deferred tax asset related to foreign tax credits. Companies may use
foreign tax credits to offset the United States income taxes due on income
earned from foreign sources. However, the credit is limited by the total
income on the United States income tax return as well as by the ratio of
foreign source income in each statutory category to total income. Excess
foreign tax credits may be carried back two years and forward five years. As
of March 31, 1997, the Company did not believe it was more likely than not
that it would generate sufficient foreign sourced income within the
appropriate period to utilize all the foreign tax credits.
F-15
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Income before provision for income taxes for the nine months ended March 31,
1997 and the two years ended June 30, 1996 and 1995 was as follows (thousands
of dollars):
<TABLE>
<CAPTION>
NINE MONTHS FOR THE YEAR
ENDED ENDED JUNE 30,
MARCH 31, ---------------
1997 1996 1995
----------- ------- -------
<S> <C> <C> <C>
Domestic............................................ $13,774 $ 9,791 $16,295
Foreign............................................. 11,814 11,356 10,402
------- ------- -------
Total............................................... $25,588 $21,147 $26,697
======= ======= =======
</TABLE>
The provision for income taxes for the nine month period ended March 31,
1997 and the two years ended June 30, 1996 and 1995 consisted of the following
(thousands of dollars):
<TABLE>
<CAPTION>
FOR THE YEAR
NINE MONTHS ENDED JUNE
ENDED 30,
MARCH 31, -------------
1997 1996 1995
----------- ------ ------
<S> <C> <C> <C>
Current............................................... $5,005 $4,882 $6,614
Deferred.............................................. 2,670 1,241 1,121
------ ------ ------
Total................................................. $7,675 $6,123 $7,735
====== ====== ======
</TABLE>
The reconciliation of Federal statutory and effective income tax rates is
shown below:
<TABLE>
<CAPTION>
FOR THE
YEAR
ENDED
NINE MONTHS JUNE 30,
ENDED MARCH -----------
31, 1997 1996 1995
----------- ---- ----
<S> <C> <C> <C>
Statutory rate.......................................... 35% 35% 35%
Utilization of foreign tax credits...................... (3)% (5)% (7)%
Additional taxes on foreign source income............... 5% 2% 3%
Foreign source income not taxable....................... (6)% (7)% (4)%
State taxes provided.................................... 2% 2% 3%
Other, net.............................................. (3)% 2% (1)%
--- --- ---
Effective tax rate...................................... 30% 29% 29%
=== === ===
</TABLE>
The Internal Revenue Service has examined the Company's Federal income tax
returns for all years through 1994. The years have been closed through 1993,
either through settlement or expiration of the statute of limitations. The
Company believes that it has made adequate provision for income taxes that may
become payable with respect to open tax years.
Unremitted foreign earnings reinvested abroad upon which deferred income
taxes have not been provided aggregated approximately $18.8 million at March
31, 1997. Due to the timing and circumstances of repatriation of such
earnings, if any, it is not practicable to determine the unrecognized deferred
tax liability relating to such amounts. Withholding taxes, if any, upon
repatriation would not be significant.
Income taxes paid during 1997, 1996, and 1995 were $8,454,000; $5,656,000;
and $3,843,000, respectively.
K--EMPLOYEE BENEFIT PLANS
Savings and Retirement Plans
The Company currently has two qualified defined contribution plans which
cover substantially all employees other than Bristow employees.
F-16
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Offshore Logistics, Inc. Employee Savings and Retirement Plan ("OLOG
Plan") covers Corporate and Air Log employees. Under the OLOG Plan, except for
those employees working in the state of Alaska, the Company matches each
participant's contributions up to 3% of the employee's compensation. In
addition, if net income exceeds 10% of stockholders' investment at the
beginning of the year, the Company contributes funds to acquire Company stock
up to an additional 3% of the employee's compensation, subject to a scheduled
vesting period. Under the OLOG Plan, for Air Log employees working in the
state of Alaska, the Company matches each participant's contributions up to 4%
of the employee's compensation.
The Grasso Production Management, Inc. Thrift & Profit Sharing Trust covers
eligible GPM employees. The Company matches 25% of each participant's
contributions up to 6% of the employee's compensation.
Bristow has a defined benefit retirement plan which covers all full-time
employees of Bristow. The plan is funded by contributions partly from
employees and partly from Bristow. Members contribute up to 7.5% of
pensionable salary (as defined) and can pay additional voluntary contributions
to provide additional benefits. The benefits are based on the employee's
annualized average of employees' last three years pensionable salaries. Plan
assets are held in separate trustee administered funds which are primarily
invested in United Kingdom and other overseas equities and bonds.
The following table sets forth the plan's funded status and pension costs
recognized by the Company:
Actuarial Present Value of Benefit Obligations (thousands of dollars):
<TABLE>
<CAPTION>
MARCH 31,
1997
---------
<S> <C>
Vested benefit obligation............................................ $(164,750)
Accumulated benefit obligation....................................... $(164,750)
Projected benefit obligation......................................... $(179,995)
Plan assets at fair value............................................ 184,762
---------
Plan assets in excess of projected benefit obligation................ 4,767
Unrecognized net gain................................................ (4,767)
Prior service cost not yet recognized in net periodic pension cost... --
Unrecognized net obligation being recognized over 15 years........... --
---------
Accrued pension asset................................................ $ --
=========
</TABLE>
Net periodic pension cost for the nine months ended March 31, 1997 was
approximately $1,200,000.
Actuarial assumptions used to develop these components were as follows:
Discount rate--8%, expected long-term rate of return on assets--9.5%, and rate
of increase in Pension benefits over United Kingdom statutory benefits--3.5%.
The Company's contributions to the three plans were $2,575,000; $680,000;
and $1,074,000 for the nine month period ended March 31, 1997 and the years
ended June 30, 1996 and 1995, respectively.
Incentive and Stock Option Plans
Under the 1994 Long-Term Management Incentive Plan ("1994 Plan"), a total of
900,000 shares of Common Stock, or cash equivalents of Common Stock, are
available for awards to officers and key employees. Awards granted under the
1994 Plan may be in the form of stock options, stock appreciation rights,
restricted stock, deferred stock, other stock-based awards or any combination
thereof. Options become exercisable at such
F-17
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
time or times as determined at the date of grant, and expire no more than ten
years after the date of grant. Incentive stock option prices are determined by
the Board and cannot be less than fair market value at date of grant. Non-
qualified stock option prices cannot be less than 50% of the fair market value
at date of grant.
The Annual Incentive Compensation Plan ("Annual Plan") provides for an
annual award of cash bonuses to key employees based on pre-established
objective measures of Company performance. Participants are permitted to
receive all or any part of their annual incentive bonus in the form of shares
of Restricted Stock in accordance with the terms of the 1994 Plan. The amount
of bonuses related to this plan were $565,000; $124,000; and $407,000 for the
nine month period ended March 31, 1997 and the years ended June 30, 1996 and
1995, respectively. As of March 31, 1997 there were 18,908 shares of
Restricted Stock outstanding.
The 1991 Non-qualified Stock Option Plan for Non-employee Directors ("1991
Plan") provides for 200,000 shares of Common Stock to be reserved for issuance
pursuant to such plan. As of the date of each annual meeting each non-employee
director, who meets certain attendance criteria, will automatically be granted
an option to purchase 2,000 shares of the Company's Common Stock. The exercise
price of the options granted shall be equal to the fair market value of the
Common Stock on the date of grant and are exercisable not earlier than six
months after the date of grant.
Under the Company's stock option plans there were 1,650,000 shares of Common
Stock reserved for issue at March 31, 1997.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation," which is effective for the Company's fiscal year beginning July
1, 1995. Under SFAS No. 123, companies can either record expense based on the
fair value of stock-based compensation upon issuance or elect to remain under
the APB 25 method whereby no compensation cost is recognized upon grant if
certain requirements are met. The Company elected to continue to account for
its stock-based compensation under APB 25. However, pro forma disclosures as
if the Company adopted the cost recognition requirements under SFAS No. 123
are presented below.
Had compensation cost been determined based on the fair value at the grant
date consistent with the provisions of SFAS No. 123, the Company's net income
and earnings per common share would have approximated the pro forma amounts
below:
<TABLE>
<CAPTION>
NINE MONTHS TWELVE MONTHS
ENDED MARCH ENDED
31, 1997 JUNE 30, 1996
----------- -------------
<S> <C> <C>
Net Income (in thousands):
As reported........................................ $17,232 $15,276
Pro forma.......................................... $16,607 $14,800
Earnings per share:
As reported........................................ $ 0.84 $ 0.77
Pro forma.......................................... $ 0.81 $ 0.75
</TABLE>
The pro forma effect on net earnings for 1997 and 1996 is not representative
of the pro forma effect on net earnings in future years because it does not
take into consideration pro forma compensation expense related to grants prior
to July 1, 1995.
F-18
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
A summary of the Company's stock options as of March 31, 1997 and June 30,
1996 and 1995 and changes during the periods ended on those dates is presented
below:
<TABLE>
<CAPTION>
WEIGHTED-AVERAGE NUMBER OF
EXERCISE PRICE SHARES
---------------- ---------
<S> <C> <C>
Balance at June 30, 1994............................ $ 7.98 721,500
Granted........................................... 11.54 244,391
Exercised......................................... 5.00 (83,031)
Expired or cancelled.............................. 11.31 (19,900)
------ ---------
Balance at June 30, 1995............................ 9.20 862,960
Granted........................................... 12.70 164,000
Exercised......................................... 8.03 (24,460)
Expired or cancelled.............................. 10.97 (14,000)
------ ---------
Balance at June 30, 1996............................ 9.78 988,500
Granted........................................... 15.48 366,500
Exercised......................................... 7.75 (114,000)
Expired or cancelled.............................. 12.94 (10,000)
------ ---------
Balance at March 31, 1997........................... $11.64 1,231,000
====== =========
</TABLE>
As of March 31, 1997, June 30, 1996 and 1995, the number of options
exercisable under the stock option plans was 864,500; 838,500; and 699,960,
respectively; and the weighted average exercise price of those options was
$10.02, $9.25 and $8.32, respectively.
The weighted average fair value at date of grant for options granted during
1997 and 1996 was $5.30 and $4.35 per option, respectively. The fair value of
options granted during the periods presented is estimated on the date of grant
using the Black-Scholes option-pricing model with the following assumptions:
(a) dividend yield of 0.00%; (b) expected volatility of 40%; (c) risk-free
interest rate of 6.4%; and (d) expected life of 3 years.
The following table summarizes information about stock options outstanding
as of March 31, 1997:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
--------------------------------- ----------------------
WGTD. AVG.
REMAINING WGTD. AVG. WGTD. AVG.
NUMBER CONTR. EXERCISE NUMBER EXERCISE
RANGE OF EXERCISE PRICES OUTSTANDING LIFE PRICE EXERCISABLE PRICE
- ------------------------ ----------- ---------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
$ 6.75--$ 8.25.......... 416,500 4.05 $ 7.16 416,500 $ 7.16
$11.50--$13.00.......... 642,500 7.71 $12.53 438,000 $12.61
$15.44--$19.625......... 172,000 9.57 $19.16 10,000 $15.44
$ 6.75--$19.625......... 6.73 $11.64 $10.02
--------- -------
1,231,000 864,500
========= =======
</TABLE>
L--SEGMENT INFORMATION
The Company operates principally in two business segments: Helicopter
Activities and GPM. Air Log and Bristow are major suppliers of helicopter
transportation services to the worldwide offshore oil and gas industry. GPM
provides production management services, contract personnel, and medical
support services to the domestic and international oil and gas industry. The
information presented has been restated to reflect CPS as discontinued
operations. Identifiable assets include net assets relating to CPS of $6.7
million, $7.2 million, and $6.3 million
F-19
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
as of March 31, 1997 and June 30, 1996 and 1995, respectively. The following
shows industry segment information for the nine months ended March 31, 1997
and the twelve months ended June 30, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
TWELVE MONTHS
NINE MONTHS ------------------
MARCH 31, JUNE 30, JUNE 30,
1997 1996 1995
----------- -------- --------
<S> <C> <C> <C>
Operating Revenues: (1)
Helicopter Activities......................... $143,647 $ 86,080 $ 85,526
GPM........................................... 23,481 31,209 32,810
-------- -------- --------
Total....................................... $167,128 $117,289 $118,336
======== ======== ========
Operating Profit (loss):
Helicopter Activities......................... $ 27,142 $ 17,612 $ 24,079
GPM........................................... 1,182 (183) 223
-------- -------- --------
Total segment operating profit.............. $ 28,324 $ 17,429 $ 24,302
Corporate overhead.............................. (3,110) (4,063) (4,033)
Earnings from unconsolidated entities........... 2,602 4,056 4,050
Interest income, net............................ (2,228) 3,725 2,378
-------- -------- --------
Pretax income................................... $ 25,588 $ 21,147 $ 26,697
======== ======== ========
</TABLE>
- --------
(1) Net of Inter-Segment revenues of $2,246,000; $3,823,000 and $4,428,000 for
March 31, 1997 and June 30, 1996 and 1995, respectively.
<TABLE>
<CAPTION>
CAPITAL EXPENDITURES
---------------------
1997 1996 1995
------ ------- ------
<S> <C> <C> <C>
Helicopter Activities..................................... $9,835 $11,908 $2,609
GPM....................................................... 112 99 198
------ ------- ------
Total................................................... $9,947 $12,007 $2,807
====== ======= ======
</TABLE>
<TABLE>
<CAPTION>
DEPRECIATION AND
AMORTIZATION
---------------------
1997 1996 1995
------- ------ ------
<S> <C> <C> <C>
Helicopter Activities..................................... $11,531 $7,083 $7,357
GPM....................................................... 1,003 1,347 1,727
Corporate................................................. 90 119 116
------- ------ ------
Total................................................... $12,624 $8,549 $9,200
======= ====== ======
</TABLE>
<TABLE>
<CAPTION>
IDENTIFIABLE ASSETS
--------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
Helicopter Activities................................ $607,458 $164,560 $152,150
GPM.................................................. 26,279 26,684 30,529
Corporate and other.................................. 40,476 39,497 35,304
-------- -------- --------
Total.............................................. $674,213 $230,741 $217,983
======== ======== ========
</TABLE>
F-20
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Segment information by geographic areas for the nine month period ended
March 31, 1997 and the years ended June 30, 1996 and 1995 is as follows
(thousands of dollars):
<TABLE>
<CAPTION>
NINE MONTHS TWELVE MONTHS
ENDED ENDED JUNE 30,
MARCH 31, -----------------
1997 1996 1995
----------- -------- --------
<S> <C> <C> <C>
Operating Revenue:
United States................................... $ 83,875 $102,071 $104,545
United Kingdom/Europe........................... 41,736 -- --
International................................... 41,517 15,218 13,791
-------- -------- --------
$167,128 $117,289 $118,336
======== ======== ========
Operating Profit:
United States................................... $ 16,602 $ 12,655 $ 19,736
United Kingdom/Europe........................... 4,067 -- --
International................................... 7,655 4,774 4,566
-------- -------- --------
$ 28,324 $ 17,429 $ 24,302
======== ======== ========
Identifiable Assets:
United States................................... $163,766 $170,081 $165,510
United Kingdom/Europe........................... 336,693 -- --
International................................... 173,754 60,660 52,473
-------- -------- --------
$674,213 $230,741 $217,983
======== ======== ========
</TABLE>
During 1997, 1996, and 1995, Air Log and Bristow conducted operations in
approximately ten foreign countries as well as in the United States and the
United Kingdom. Due to the nature of the principal assets of the Company, they
are regularly and routinely moved between operating areas (both domestic and
foreign) to meet changes in market and operating conditions. Revenue earned
from any single customer did not exceed 10% of total revenues during 1997,
1996, or 1995. Equipment registered in one country is chartered to other
operating areas from time to time at rates sufficient to cover costs plus a
reasonable return. These revenues ($7,063,000 in 1997; $7,441,000 in 1996; and
$7,118,000 in 1995) have been eliminated in the amounts shown above.
F-21
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
M--QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
The following quarterly financial data has been restated to reflect CPS as
discontinued operations.
<TABLE>
<CAPTION>
QUARTER ENDED
---------------------------------
SEPT.
30 DEC. 31 MAR. 31 JUNE 30
------- ------- ------- -------
(THOUSANDS OF DOLLARS, EXCEPT
PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
1997
Gross revenue.............................. $32,872 $41,459 $94,019 N/A
Gross profit............................... 8,690 9,347 18,583 N/A
Income from continuing operations.......... 5,781 5,522 6,322 N/A
Income from discontinued operations........ 74 86 (553) N/A
Net income................................. $ 5,855 $ 5,608 $ 5,769 N/A
Net income (loss) per common share:
Income from continuing operations........ $ 0.30 $ 0.28 $ 0.29 N/A
Income from discontinued operations...... -- -- (0.02) N/A
------- ------- -------
Net income............................. $ 0.30 $ 0.28 $ 0.27 N/A
======= ======= ======= =======
1996
Gross revenue.............................. $28,959 $29,143 $28,592 $30,149
Gross profit............................... 6,001 4,877 5,883 5,840
Income from continuing operations.......... 3,693 3,238 4,060 4,033
Income from discontinued operations........ (34) 218 51 17
Net income................................. $ 3,659 $ 3,456 $ 4,111 $ 4,050
Net income (loss) per common share:
Income from continuing operations........ $ 0.19 $ 0.17 $ 0.21 $ 0.20
Income from discontinued operations...... -- 0.01 -- --
------- ------- ------- -------
Net income............................. $ 0.19 $ 0.18 $ 0.21 $ 0.20
======= ======= ======= =======
1995
Gross revenue.............................. $26,225 $32,561 $30,175 $29,961
Gross profit............................... 7,691 7,414 6,640 7,269
Income from continuing operations.......... 5,018 5,120 4,258 4,566
Income from discontinued operations........ -- 99 (377) (234)
Net income................................. $ 5,018 $ 5,220 $ 3,880 $ 4,332
Net income (loss) per common share:
Income from continuing operations........ $ 0.28 $ 0.26 $ 0.22 $ 0.23
Income from discontinued operations...... -- 0.01 (0.02) (0.01)
------- ------- ------- -------
Net income............................. $ 0.28 $ 0.27 $ 0.20 $ 0.22
======= ======= ======= =======
</TABLE>
F-22
<PAGE>
N--SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
On January 27, 1998, the Company completed the sale of $100 million 7 7/8%
Senior Notes due 2008, which were discounted to yield 7.915%. The net proceeds
to the Company were $97.2 million. In connection with the sale of the Senior
Notes, certain of the Company's subsidiaries (the "Guarantor Subsidiaries")
jointly, severally and unconditionally guaranteed the payment obligations
under the Senior Notes. The following supplemental financial information sets
forth, on an unconsolidated basis, the balance sheet, statement of income and
cash flow information for Offshore Logistics, Inc. ("Parent Company Only"),
for the Guarantor Subsidiaries and for Offshore Logistics, Inc.'s other
subsidiaries (the "Non-Guarantor Subsidiaries").
F-23
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
MARCH 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ASSETS ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ -------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash
equivalents.......... $ 21,459 $ 3,545 $ 4,825 $ -- $ 29,829
Accounts receivable... 1,383 20,036 71,034 (4,185) 88,268
Inventories........... -- 25,258 45,569 -- 70,827
Net assets of
discontinued
operations........... -- -- 6,338 348 6,686
Prepaid expenses...... 334 518 35 -- 887
-------- -------- -------- --------- --------
Total current
assets............. 23,176 49,357 127,801 (3,837) 196,497
Intercompany investment. 276,946 -- -- (276,946) --
Investments in
unconsolidated
entities............... 1,109 229 7,912 -- 9,250
Intercompany notes
receivable............. 36,691 (111) -- (36,580) --
Property and equipment--
at cost:
Land and buildings.... -- 2,983 10,192 -- 13,175
Aircraft and
equipment............ 3,486 122,593 371,593 -- 497,672
-------- -------- -------- --------- --------
3,486 125,576 381,785 -- 510,847
Less: accumulated
depreciation and
amortization........... (2,533) (60,625) (11,307) -- (74,465)
-------- -------- -------- --------- --------
953 64,951 370,478 -- 436,382
Other assets, primarily
goodwill............... 10,537 21,106 350 91 32,084
-------- -------- -------- --------- --------
$349,412 $135,532 $506,541 $(317,272) $674,213
======== ======== ======== ========= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C> <C> <C> <C>
Current Liabilities:
Accounts payable...... $ 151 $ 4,051 $ 26,964 $ -- $ 31,166
Accrued liabilities... 6,366 6,700 27,422 (1,896) 38,592
Deferred taxes........ -- -- 17,968 -- 17,968
Current maturities of
long-term debt....... -- -- 51,240 -- 51,240
-------- -------- -------- --------- --------
Total current
liabilities........ 6,517 10,751 123,594 (1,896) 138,966
Long-term debt, less
current maturities... 98,000 -- 101,631 -- 199,631
Intercompany notes
payable.............. -- -- 29,236 (29,236) --
Deferred credits...... -- -- 622 -- 622
Deferred taxes........ -- 19,572 80,162 (8,289) 91,445
Minority interests.... 8,643 -- 833 (833) 8,643
Stockholders'
Investment:
Common Stock.......... 211 1,041 4,033 (5,074) 211
Additional paid-in
capital.............. 115,346 24,269 123,362 (147,631) 115,346
Retained earnings..... 120,786 79,899 43,047 (122,946) 120,786
Cumulative translation
adjustment........... (91) -- 21 (1,367) (1,437)
-------- -------- -------- --------- --------
236,252 105,209 170,463 (277,018) 234,906
-------- -------- -------- --------- --------
$349,412 $135,532 $506,541 $(317,272) $674,213
======== ======== ======== ========= ========
</TABLE>
F-24
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
NINE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 18 $83,440 $83,670 $ -- $167,128
Intercompany revenue.... 105 7,463 3 7,571 --
Gain (loss) on disposal
of equipment........... 20 1,090 112 -- 1,222
------- ------- ------- ------- --------
143 91,993 83,785 7,571 168,350
OPERATING EXPENSES
Direct cost............. (1) 65,762 53,345 -- 119,106
Intercompany expense.... -- 3 7,568 (7,571) --
Depreciation and
amortization........... 90 5,849 6,685 -- 12,624
General and
administrative......... 3,110 3,839 4,457 -- 11,406
------- ------- ------- ------- --------
3,199 75,453 72,055 (7,571) 143,136
------- ------- ------- ------- --------
OPERATING INCOME........ (3,056) 16,540 11,730 -- 25,214
Earnings from
unconsolidated
entities............... 19,666 -- 2,784 19,848 2,602
Interest income......... 1,990 237 1,478 405 3,300
Interest expense........ 1,734 23 4,176 (405) 5,528
------- ------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES.................. 16,866 16,754 11,816 19,848 25,588
Allocation of
consolidated income
taxes.................. (1,040) 5,403 3,312 -- 7,675
Minority interest....... (281) -- (7) -- (288)
------- ------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 17,625 11,351 8,497 19,848 17,625
Discontinued operations:
Income (Loss) from CPS
operations........... (393) -- (890) (890) (393)
------- ------- ------- ------- --------
NET INCOME.............. $17,232 $11,351 $ 7,607 $18,958 $ 17,232
======= ======= ======= ======= ========
</TABLE>
F-25
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $ 9,120 $ 4,598 $ 1,319 $ 934 $ 15,971
Cash flows from
investing activities:
Capital expenditures.. (30) (7,108) (2,968) -- (10,106)
Proceeds from asset
dispositions......... 20 1,599 4,407 -- 6,026
Bristow investment.... (109,286) -- (46,165) -- (155,451)
Acquisitions, net of
cash received........ -- -- (1,675) -- (1,675)
Proceeds from maturity
of marketable
securities........... 5,000 -- 15,001 -- 20,001
--------- ------- -------- ------ ---------
Net cash used in
investing activities... (104,296) (5,509) (31,400) -- (141,205)
Cash flows from
financing activities:
Proceeds from
borrowings........... 89,094 -- 8,542 (1,000) 96,636
Repayment of debt..... -- -- (434) -- (434)
Issuance of common
stock................ 1,899 -- -- -- 1,899
--------- ------- -------- ------ ---------
Net cash provided by
(used in) financing
activities............. 90,993 -- 8,108 (1,000) 98,101
--------- ------- -------- ------ ---------
Effect of exchange rate
changes in cash........ -- -- 23 -- 23
--------- ------- -------- ------ ---------
Net decrease in cash and
cash equivalents....... (4,183) (911) (21,950) (66) (27,110)
Cash and cash
equivalents at
beginning of period.... 25,642 4,456 26,775 66 56,939
--------- ------- -------- ------ ---------
Cash and cash
equivalents at end of
period................. $ 21,459 $ 3,545 $ 4,825 $ -- $ 29,829
========= ======= ======== ====== =========
</TABLE>
F-26
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
JUNE 30, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ASSETS ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ -------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash
equivalents.......... $ 25,642 $ 4,456 $26,775 $ 66 $ 56,939
Investments in
marketable
securities........... 4,992 -- 14,975 -- 19,967
Accounts receivable... 909 20,347 3,521 (2,567) 22,210
Inventories........... -- 22,099 718 -- 22,817
Net assets of
discontinued
operations........... -- -- 7,221 -- 7,221
Prepaid expenses...... 71 358 55 -- 484
-------- -------- ------- --------- --------
Total current
assets............. 31,614 47,260 53,265 (2,501) 129,638
Intercompany investment. 147,618 -- -- (147,618) --
Investments in
unconsolidated
entities............... 1,276 229 7,287 -- 8,792
Intercompany note
receivables............ 19,894 (52) -- (19,842) --
Property and equipment--
at cost:
Land and buildings.... -- 2,977 -- -- 2,977
Aircraft and
equipment............ 3,456 116,967 12,043 -- 132,466
-------- -------- ------- --------- --------
3,456 119,944 12,043 -- 135,443
Less: accumulated
depreciation and
amortization........... (2,443) (56,526) (4,733) -- (63,702)
-------- -------- ------- --------- --------
1,013 63,418 7,310 -- 71,741
Other assets, primarily
goodwill............... 5 20,295 158 112 20,570
-------- -------- ------- --------- --------
$201,420 $131,150 $68,020 $(169,849) $230,741
======== ======== ======= ========= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C> <C> <C> <C>
Current Liabilities:
Accounts payable...... $ 79 $ 1,877 $ 234 $ (786) $ 1,404
Accrued liabilities... 1,658 5,307 1,433 (1,557) 6,841
-------- -------- ------- --------- --------
Total current
liabilities........ 1,737 7,184 1,667 (2,343) 8,245
Intercompany notes
payable.............. -- 693 19,083 (19,776) --
Deferred credits...... -- -- 2,487 -- 2,487
Deferred taxes........ -- 15,097 4,174 -- 19,271
Minority interest..... -- -- 1,055 -- 1,055
Stockholders'
Investment:
Common Stock.......... 195 1,041 3,541 (4,582) 195
Additional paid-in
capital.............. 95,934 24,269 413 (24,682) 95,934
Retained earnings..... 103,554 82,866 35,600 (118,466) 103,554
-------- -------- ------- --------- --------
199,683 108,176 39,554 (147,730) 199,683
-------- -------- ------- --------- --------
$201,420 $131,150 $68,020 $(169,849) $230,741
======== ======== ======= ========= ========
</TABLE>
F-27
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 18 $101,762 $15,509 $ -- $117,289
Intercompany revenue.... 124 7,714 -- 7,838 --
Gain (loss) on disposal
of equipment........... -- (446) -- -- (446)
------- -------- ------- ------- --------
142 109,030 15,509 7,838 116,843
OPERATING EXPENSES
Direct cost............. (14) 83,674 2,033 -- 85,693
Intercompany expense.... -- -- 7,838 (7,838) --
Depreciation and
amortization........... 119 7,663 767 -- 8,549
General and
administrative......... 3,614 5,516 105 -- 9,235
------- -------- ------- ------- --------
3,719 96,853 10,743 (7,838) 103,477
------- -------- ------- ------- --------
OPERATING INCOME........ (3,577) 12,177 4,766 -- 13,366
Earnings from
unconsolidated
entities............... 16,286 -- 4,056 16,286 4,056
Interest income......... 1,762 230 2,168 135 4,025
Interest expense........ 298 137 -- (135) 300
------- -------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES.................. 14,173 12,270 10,990 16,286 21,147
Allocation of
consolidated income
taxes.................. (851) 3,987 2,987 -- 6,123
------- -------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 15,024 8,283 8,003 16,286 15,024
Discontinued operations:
Income (Loss) from CPS
operations........... 252 -- (143) (143) 252
------- -------- ------- ------- --------
NET INCOME.............. $15,276 $ 8,283 $ 7,860 $16,143 $ 15,276
======= ======== ======= ======= ========
</TABLE>
F-28
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $ 5,398 $7,760 $ 9,572 $66 $ 22,796
Cash flows from
investing activities:
Capital expenditures.. -- (7,360) (5,175) -- (12,535)
Proceeds from asset
dispositions......... -- 128 57 -- 185
Investments in
marketable
securities........... (2,988) -- (8,964) -- (11,952)
Proceeds from maturity
of marketable
securities........... 2,997 -- 8,991 -- 11,988
------- ------ ------- --- --------
Net cash provided by
(used in) investing
activities............. 9 (7,232) (5,091) -- (12,314)
Cash flows from
financing activities:
Repayment of debt..... (2,000) -- -- -- (2,000)
Issuance of common
stock................ 556 -- -- -- 556
------- ------ ------- --- --------
Net cash provided by
(used in) financing
activities............. (1,444) -- -- -- (1,444)
------- ------ ------- --- --------
Net increase in cash and
cash equivalents....... 3,963 528 4,481 66 9,038
Cash and cash
equivalents at
beginning of year...... 21,679 3,928 22,294 -- 47,901
------- ------ ------- --- --------
Cash and cash
equivalents at end of
year................... $25,642 $4,456 $26,775 $66 $ 56,939
======= ====== ======= === ========
</TABLE>
F-29
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
FOR THE YEAR ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 99 $104,445 $13,792 $ -- $118,336
Intercompany revenue.... 160 6,686 -- 6,846 --
Gain (loss) on disposal
of equipment........... -- 586 -- -- 586
------- -------- ------- ------- --------
259 111,717 13,792 6,846 118,922
OPERATING EXPENSES
Direct cost............. (27) 78,472 2,263 -- 80,708
Intercompany expense.... -- -- 6,846 (6,846) --
Depreciation and
amortization........... 116 8,628 456 -- 9,200
General and
administrative......... 3,694 4,948 103 -- 8,745
------- -------- ------- ------- --------
3,783 92,048 9,668 (6,846) 98,653
------- -------- ------- ------- --------
OPERATING INCOME........ (3,524) 19,669 4,124 -- 20,269
Earnings from
unconsolidated
entities............... 20,501 -- 4,050 20,501 4,050
Interest income......... 1,300 68 1,785 206 2,947
Interest expense........ 537 237 1 (206) 569
------- -------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES.................. 17,740 19,500 9,958 20,501 26,697
Allocation of
consolidated income
taxes.................. (1,222) 6,212 2,745 -- 7,735
------- -------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 18,962 13,288 7,213 20,501 18,962
Discontinued operations:
Income (Loss) from CPS
operations........... (512) -- (1,228) (1,228) (512)
------- -------- ------- ------- --------
NET INCOME.............. $18,450 $ 13,288 $ 5,985 $19,273 $ 18,450
======= ======== ======= ======= ========
</TABLE>
F-30
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $20,972 $ 2,582 $ 7,221 $-- $30,775
Cash flows from
investing activities:
Capital expenditures.. (2,609) (199) (400) -- (3,208)
Proceeds from asset
dispositions......... -- 2,989 57 -- 3,046
Acquisitions, net of
cash received........ (608) -- (7,626) -- (8,234)
------- ------- ------- --- -------
Net cash used in
investing activities... (3,217) 2,790 (7,969) -- (8,396)
Cash flows from
financing activities:
Repayment of debt..... (2,000) (2,235) -- -- (4,235)
Issuance of common
stock................ 2,532 -- -- -- 2,532
------- ------- ------- --- -------
Net cash provided by
(used in) financing
activities............. 532 (2,235) -- -- (1,703)
------- ------- ------- --- -------
Net increase (decrease)
in cash and cash
equivalents............ 18,287 3,137 (748) -- 20,676
Cash and cash
equivalents at
beginning of year...... 3,392 791 23,042 -- 27,225
------- ------- ------- --- -------
Cash and cash
equivalents at end of
year................... $21,679 $ 3,928 $22,294 $-- $47,901
======= ======= ======= === =======
</TABLE>
F-31
<PAGE>
NOTES TO SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
(1) The supplemental condensed consolidating financial information has been
prepared pursuant to the rules and regulations for condensed financial
information and does not include all disclosures included in annual
financial statements, although the Company believes that the disclosures
made are adequate to make the information presented not misleading.
Certain reclassifications were made to conform all of the financial
information to the financial presentation on a consolidated basis. The
principal eliminating entries eliminate investments in subsidiaries,
intercompany balances and intercompany revenues and expenses.
(2) Subsequent to December 31, 1997, the Company formed a new wholly owned
subsidiary and contributed the Company's operating assets, separate from
its investment in its subsidiaries, to the newly formed subsidiary. The
subsidiary is a Guarantor Subsidiary. For purposes of the historical
supplemental financial information, the Company has presented the
aforementioned operating assets and related operating results together
with the operating assets and results of the other Guarantor Subsidiaries.
(3) The allocation of the consolidated income tax provision was allocated
using the with and without allocation method.
F-32
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
------------------
1997 1996
-------- --------
(THOUSANDS OF DOLLARS,
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
Gross revenue:
Operating revenue................................ $320,969 $104,088
Gain (loss) on disposal of equipment............. (473) 392
-------- --------
320,496 104,480
Operating expenses:
Direct cost...................................... 233,903 73,164
Depreciation and amortization.................... 24,401 7,439
General and administrative....................... 20,517 7,479
-------- --------
278,821 88,082
-------- --------
Operating income................................... 41,675 16,398
Earnings from unconsolidated entities.............. 5,006 3,374
Interest income.................................... 2,151 3,373
Interest expense................................... 15,584 810
-------- --------
Income from continuing operations before provision
for income taxes.................................. 33,248 22,335
Provision for income taxes......................... 9,973 6,965
Minority interest.................................. (760) (34)
-------- --------
Income from continuing operations.................. 22,515 15,336
Discontinued operations:
Income (Loss) from CPS operations................ (230) 178
Gain on sale of CPS.............................. 384 --
-------- --------
154 178
-------- --------
Net income......................................... $ 22,669 $ 15,514
======== ========
Basic:
Income per common share:
Continuing operations............................ $ 1.06 $ 0.78
Discontinued operations.......................... -- 0.01
-------- --------
Net income per common share.................... $ 1.06 $ 0.79
======== ========
Diluted:
Income per common share:
Continuing operations.......................... $ 0.99 $ 0.77
Discontinued operations........................ -- 0.01
-------- --------
Net income per common share.................. $ 0.99 $ 0.78
======== ========
</TABLE>
F-33
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
ASSETS 1997 1997
------ ------------ ---------
(THOUSANDS OF DOLLARS)
<S> <C> <C>
Current Assets:
Cash and cash equivalents............................. $ 22,631 $ 29,829
Accounts receivable................................... 79,456 88,268
Inventories........................................... 74,851 70,827
Net assets of discontinued operations................. -- 6,686
Prepaid expenses...................................... 1,994 887
--------- --------
Total current assets................................ 178,932 196,497
Investments in unconsolidated entities.................. 10,234 9,250
Property and equipment--at cost:
Land and buildings.................................... 13,033 13,175
Aircraft and equipment................................ 542,329 497,672
--------- --------
555,362 510,847
Less: accumulated depreciation and amortization......... (90,874) (74,465)
--------- --------
464,488 436,382
Other assets, primarily goodwill........................ 30,838 32,084
--------- --------
$ 684,492 $674,213
========= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C>
Current Liabilities:
Accounts payable...................................... $ 32,570 $ 31,166
Accrued liabilities................................... 37,497 38,592
Deferred taxes........................................ 18,105 17,968
Current maturities of long-term debt.................. 6,112 51,240
--------- --------
Total current liabilities........................... 94,284 138,966
Long-term debt, less current maturities............... 220,857 199,631
Deferred credits...................................... 1,187 622
Deferred taxes........................................ 92,063 91,445
Minority interest..................................... 9,478 8,643
Stockholders' Investment:
Common Stock, $.01 par value, authorized 35,000,000
shares; outstanding 21,854,921 and 21,081,133 at
December 31, and March 31, respectively (exclusive of
517,550 treasury shares)............................. 219 211
Additional paid-in capital............................ 123,061 115,346
Retained earnings..................................... 143,455 120,786
Cumulative translation adjustment..................... (112) (1,437)
--------- --------
266,623 234,906
--------- --------
$ 684,492 $674,213
========= ========
</TABLE>
F-34
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
------------------
1997 1996
-------- --------
(THOUSANDS OF
DOLLARS)
<S> <C> <C>
Cash flows from operating activities:
Net income.............................................. $ 22,669 $ 15,514
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization........................... 24,401 7,990
Increase (decrease) in deferred taxes................... 7,283 (162)
(Gain) loss on asset dispositions....................... 473 (344)
Equity in earnings from unconsolidated entities over
dividends received..................................... (666) --
Minority interest in earnings........................... 760 (1)
Discontinued operations................................. 230 (178)
(Increase) decrease in accounts receivable.............. 9,817 (5,500)
Increase in inventories................................. (3,454) (1,729)
Increase in prepaid expenses and other.................. (1,581) (2,887)
Decrease in accounts payable............................ (993) (1,900)
Increase (decrease) in accrued liabilities.............. (2,733) 10,269
Increase in deferred credits............................ 566 618
-------- --------
Net cash provided by operating activities................. 56,772 21,690
-------- --------
Cash flows from investing activities:
Capital expenditures.................................... (59,260) (4,290)
Proceeds from asset dispositions........................ 10,540 1,046
Proceeds from CPS disposal.............................. 5,700 --
Proceeds from maturity of marketable securities......... -- 20,001
Cash used in Bristow transaction, net of cash received.. -- (153,029)
Acquisitions, net of cash received...................... (353) --
-------- --------
Net cash used in investing activities..................... (43,373) (136,272)
-------- --------
Cash flows from financing activities:
Proceeds from borrowings................................ 27,120 88,418
Repayment of debt....................................... (55,844) (2,000)
Issuance of common stock................................ 7,723 1,576
-------- --------
Net cash provided by (used in) financing activities....... (21,001) 87,994
-------- --------
Effect of exchange rate changes in cash................... 404 7
Net decrease in cash and cash equivalents................. (7,198) (26,581)
Cash and cash equivalents at beginning of period.......... 29,829 53,273
-------- --------
Cash and cash equivalents at end of quarter............... $ 22,631 $ 26,692
======== ========
Supplemental disclosure of cash flow information
Cash paid during the period for:
Interest................................................ $ 16,514 $ 2,827
Income taxes............................................ 957 6,338
</TABLE>
F-35
<PAGE>
OFFSHORE LOGISTICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with the rules and regulations for condensed financial
statements and do not include all information and footnotes necessary for a
fair presentation of financial position, results of operations, and cash flows
in conformity with generally accepted accounting principles. In the opinion of
management, any adjustments considered necessary for a fair presentation have
been included. Operating results for the nine months ended December 31, 1997,
are not necessarily indicative of the results that may be expected for the
year ending March 31, 1998. For further information, refer to the consolidated
financial statements and footnotes included in the Company's Annual Report on
Form 10-K for the nine month period ended March 31, 1997.
NOTE B--INVESTMENT IN BRISTOW
On December 19, 1996, OLOG acquired 49% of the common stock and a
significant amount of Bristow Aviation Holdings, Ltd. ("Bristow") subordinated
debt as detailed below. Bristow is incorporated in England and holds all of
the outstanding shares in Bristow Helicopter Group Limited ("BHGL"). Bristow
provides helicopter services to the North Sea oil and gas industry. Services
consist of short and long range crew change flights, offshore-based and inter-
platform shuttle operations, and search and rescue missions. Bristow also
operates aircraft in Australia, Brunei, Cambodia, China, Nigeria, South
America and Vietnam among others.
The investment was accounted for by the purchase method of accounting under
Accounting Principals Board Opinion No. 16, as amended, and accordingly, the
results of operations of Bristow for the nine months ended December 31, 1997
are included in the accompanying consolidated financial statements. The total
consideration has been allocated to Bristow's assets and liabilities based on
the estimated fair market value as of December 19, 1996.
The following unaudited pro forma financial information for the Company
gives effect to the Bristow investment as if it had occurred on April 1, 1996.
These pro forma results have been prepared for comparative purposes only and
do not purport to be indicative of the results of operations which actually
would have resulted had the acquisitions occurred on the date indicated, or
which may result in the future. The pro forma results follow (in thousands,
except per share data):
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31, 1996
-----------------
(UNAUDITED)
<S> <C>
Gross revenue........................................... $293,168
========
Income from continuing operations....................... $ 17,521
========
Earnings per common share
Income from continuing operations:
Basic................................................. $ 0.84
========
Diluted............................................... $ 0.81
========
</TABLE>
NOTE C--EARNINGS PER SHARE
In 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 128, "Earnings Per Share". SFAS No.
128 replaced the previously reported primary and fully-diluted earnings per
share with basic and diluted earnings per share.
F-36
<PAGE>
Basic earnings per common share were computed by dividing net income by the
weighted average number of shares of common stock outstanding during the year.
Diluted earnings per common share for the three months and nine months ended
December 31, 1996 and 1997 were determined on the assumptions that the
convertible debt was converted upon issuance on December 17, 1996 and on April
1, 1997, respectively. The Company adopted SFAS No. 128, "Earnings per Share,"
effective December 15, 1997. All income per share amounts for all periods have
been presented, and where necessary, restated to conform to the requirements
of SFAS No. 128. The following table sets forth the computation of basic and
diluted income from continuing operations per share:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
DECEMBER 31,
---------------------
1997 1996
---------- ----------
<S> <C> <C>
Income from Continuing Operations (thousands of dollars):
Income available to common stockholders................ $ 22,669 $ 15,336
Interest on convertible debt, net of taxes............. 3,087 149
---------- ----------
Income available to common stockholders, plus assumed
conversions........................................... $ 25,756 $ 15,485
========== ==========
Shares:
Weighted average number of common shares outstanding... 21,355,546 19,572,791
Options................................................ 322,277 314,400
Warrants............................................... -- 26,174
Convertible debt....................................... 4,286,520 186,370
---------- ----------
Weighted average number of common shares outstanding,
plus assumed conversions.............................. 25,964,343 20,099,735
========== ==========
Income from Continuing Operations:
Basic earnings per share............................... $ 1.06 $ 0.78
========== ==========
Diluted earnings per share............................. $ 0.99 $ 0.77
========== ==========
</TABLE>
NOTE D--DISCONTINUED OPERATIONS
On July 16, 1997, the Company finalized the sale of its investment in
Cathodic Protection Services to Corrpro Companies, Inc. As a result of the
sale, the consolidated financial statements of the Company have been adjusted
and restated to reflect the results of operations and net assets of CPS as a
discontinued operation in accordance with generally accepted accounting
principles.
NOTE E--SENIOR NOTES
On January 27, 1998, the Company completed the sale of $100 million
aggregate principal amount of 7.875% Senior Notes due 2008 discounted to yield
7.915%, which resulted in net proceeds to the Company of $97.2 million. On
January 29, 1998, the Company repaid approximately (Pounds)40.9 million ($67.5
million) of Bristow debt outstanding as of December 31, 1997. The weighted
average of the stated rates of interest on the indebtedness retired was 16.6%,
but had been adjusted to 8.5% as a result of purchase accounting for the
Company's investment in Bristow.
In connection with the sale of the Senior Notes, certain of the Company's
subsidiaries (the "Guarantor Subsidiaries") jointly, severally and
unconditionally guaranteed the payment obligations under the Senior Notes. The
following supplemental financial information sets forth, on an unconsolidated
basis, the balance sheet, statement of income and cash flow information for
the Company ("Parent Company Only"), for the Guarantor Subsidiaries and for
the Company's other subsidiaries (the "Non-Guarantor Subsidiaries").
F-37
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEET
DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ASSETS ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------ -------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Current assets:
Cash and cash
equivalents.......... $ 3,334 $ 3,625 $ 15,672 $ -- $ 22,631
Accounts receivable... (487) 23,321 58,887 (2,265) 79,456
Inventories........... -- 30,525 44,326 -- 74,851
Prepaid expenses...... 272 748 974 -- 1,994
-------- -------- -------- --------- --------
Total current
assets............. 3,119 58,219 119,859 (2,265) 178,932
Intercompany investment. 306,963 -- -- (306,963) --
Investments in
unconsolidated
entities............... 1,108 229 8,897 -- 10,234
Intercompany notes
receivable............. 43,797 (108) -- (43,689) --
Property and equipment--
at cost:
Land and buildings.... -- 3,099 9,934 -- 13,033
Aircraft and
equipment............ 3,501 134,698 404,130 -- 542,329
-------- -------- -------- --------- --------
3,501 137,797 414,064 -- 555,362
Less: accumulated
depreciation and
amortization........... (2,626) (60,420) (27,828) -- (90,874)
-------- -------- -------- --------- --------
875 77,377 386,236 -- 464,488
Other assets, primarily
goodwill............... 10,378 22,528 375 (2,443) 30,838
-------- -------- -------- --------- --------
$366,240 $158,245 $515,367 $(355,360) $684,492
======== ======== ======== ========= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<S> <C> <C> <C> <C> <C>
Current Liabilities:
Accounts payable...... $ 89 $ 3,844 $ 28,637 $ -- $ 32,570
Accrued liabilities... 3,373 7,711 30,471 (4,058) 37,497
Deferred taxes........ -- -- 18,105 -- 18,105
Current maturities of
long-term debt....... -- -- 6,112 -- 6,112
-------- -------- -------- --------- --------
Total current
liabilities........ 3,462 11,555 83,325 (4,058) 94,284
Long-term debt, less
current maturities... 98,000 -- 122,857 -- 220,857
Intercompany notes
payable.............. -- -- 44,390 (44,390) --
Deferred credits...... -- -- 1,187 -- 1,187
Deferred taxes........ (11,415) 26,024 77,454 -- 92,063
Minority interests.... 9,478 -- -- -- 9,478
Stockholders'
Investment:
Common Stock.......... 219 1,041 3,796 (4,837) 219
Additional paid-in
capital.............. 123,061 24,269 124,654 (148,923) 123,061
Retained earnings..... 143,455 95,356 57,663 (153,019) 143,455
Cumulative translation
adjustment........... (20) -- 41 (133) (112)
-------- -------- -------- --------- --------
266,715 120,666 186,154 (306,912) 266,623
-------- -------- -------- --------- --------
$366,240 $158,245 $515,367 $(355,360) $684,492
======== ======== ======== ========= ========
</TABLE>
F-38
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 16 $106,135 $214,818 $ -- $320,969
Intercompany revenue.... -- 7,698 182 7,880 --
Gain (loss) on disposal
of equipment........... -- (688) 215 -- (473)
------- -------- -------- ------- --------
16 113,145 215,215 7,880 320,496
OPERATING EXPENSES
Direct cost............. 7 82,724 151,172 -- 233,903
Intercompany expense.... -- 182 7,698 (7,880) --
Depreciation and
amortization........... 402 6,640 17,359 -- 24,401
General and
administrative......... 4,518 3,793 12,206 -- 20,517
------- -------- -------- ------- --------
4,927 93,339 188,435 (7,880) 278,821
------- -------- -------- ------- --------
OPERATING INCOME........ (4,911) 19,806 26,780 -- 41,675
Earnings from
unconsolidated
entities............... 28,128 -- 5,000 28,122 5,006
Interest income......... 2,282 197 1,066 1,394 2,151
Interest expense........ 4,540 -- 12,438 (1,394) 15,584
------- -------- -------- ------- --------
Income before Taxes..... 20,959 20,003 20,408 28,122 33,248
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES..................
Alocation of
consolidated income
taxes.................. (2,321) 6,449 5,845 -- 9,973
Minority interest....... (765) -- 5 -- (760)
------- -------- -------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 22,515 13,554 14,568 28,122 22,515
Discontinued operations:
Income (Loss) from CPS
operations........... (230) -- (337) (337) (230)
Gain on sale of CPS... 384 -- 384 384 384
------- -------- -------- ------- --------
Income (loss) from
discontinued
operations............. 154 -- 47 47 154
------- -------- -------- ------- --------
NET INCOME.............. $22,669 $ 13,554 $14,615 $28,169 $ 22,669
======= ======== ======== ======= ========
</TABLE>
F-39
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
-------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $(27,348) $ 18,547 $ 44,134 $21,439 $ 56,772
Cash flows from
investing activities:
Capital expenditures.. -- (19,569) (39,691) -- (59,260)
Proceeds from asset
dispositions......... -- 1,102 9,438 -- 10,540
Proceeds from CPS
disposal............. -- -- 5,700 -- 5,700
Acquisitions, net of
cash received........ -- -- (353) -- (353)
-------- -------- -------- ------- --------
Net cash used in
investing activities. -- (18,467) (24,906) -- (43,373)
Cash flows from
financing activities:
Proceeds from
borrowings........... 1,500 -- 47,059 (21,439) 27,120
Repayment of debt..... -- -- (55,844) -- (55,844)
Issuance of common
stock................ 7,723 -- -- -- 7,723
-------- -------- -------- ------- --------
Net cash provided by
(used in) financing
activities............. 9,223 -- (8,785) (21,439) (21,001)
Effect of exchange rate
changes in cash........ -- -- 404 -- 404
-------- -------- -------- ------- --------
Net increase (decrease)
in cash and cash
equivalents............ (18,125) 80 10,847 -- (7,198)
Cash and cash
equivalents at
beginning of period.... 21,459 3,545 4,825 -- 29,829
-------- -------- -------- ------- --------
Cash and cash
equivalents at end of
period................. $ 3,334 $ 3,625 $ 15,672 $ -- $ 22,631
======== ======== ======== ======= ========
</TABLE>
F-40
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF INCOME
NINE MONTHS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
GROSS REVENUE
Operating revenue....... $ 17 $81,970 $22,101 $ -- $104,088
Intercompany revenue.... 124 6,901 -- 7,025 --
Gain (loss) on disposal
of equipment........... 19 373 -- -- 392
------- ------- ------- ------- --------
160 89,244 22,101 7,025 104,480
OPERATING EXPENSES
Direct cost............. (13) 65,047 8,130 -- 73,164
Intercompany expense.... -- -- 7,025 (7,025) --
Depreciation and
amortization........... 90 5,824 1,525 -- 7,439
General and
administrative......... 2,915 3,875 689 -- 7,479
------- ------- ------- ------- --------
2,992 74,746 17,369 (7,025) 88,082
------- ------- ------- ------- --------
OPERATING INCOME........ (2,832) 14,498 4,732 -- 16,398
Earnings from
unconsolidated
entities............... 16,997 -- 3,374 16,997 3,374
Interest income......... 1,508 212 1,738 85 3,373
Interest expense........ 306 41 548 (85) 810
------- ------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS BEFORE
PROVISION FOR INCOME
TAXES.................. 15,367 14,669 9,296 16,997 22,335
Allocation of
consolidated income
taxes.................. (3) 4,623 2,345 -- 6,965
Minority interest....... (34) -- -- -- (34)
------- ------- ------- ------- --------
INCOME FROM CONTINUING
OPERATIONS............. 15,336 10,046 6,951 16,997 15,336
Discontinued operations:
Income (Loss) from CPS
operations........... 178 -- (228) (228) 178
------- ------- ------- ------- --------
NET INCOME.............. $15,514 $10,046 $ 6,723 $16,769 $ 15,514
======= ======= ======= ======= ========
</TABLE>
F-41
<PAGE>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
NINE MONTHS ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION>
PARENT NON-
COMPANY GUARANTOR GUARANTOR
ONLY SUBSIDIARIES SUBSIDIARIES ELIMINATIONS CONSOLIDATED
--------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net cash provided by
operating activities... $ 9,528 $ 2,860 $ 9,302 $-- $ 21,690
Cash flows from
investing activities:
Capital expenditures.. -- (3,873) (417) -- (4,290)
Proceeds from asset
dispositions......... -- 1,022 24 -- 1,046
Proceeds from maturity
of marketable
securities........... 5,000 -- 15,001 -- 20,001
Cash used in Bristow
transaction, net of
cash received........ (106,864) -- (46,165) -- (153,029)
--------- ------- -------- --- ---------
Net cash used in
investing activities... (101,864) (2,851) (31,557) -- (136,272)
Cash flows from
financing activities:
Proceeds from
borrowings........... 88,418 -- -- -- 88,418
Repayment of debt..... (2,000) -- -- -- (2,000)
Issuance of common
stock................ 1,576 -- -- -- 1,576
--------- ------- -------- --- ---------
Net cash provided by
financing activities... 87,994 -- -- -- 87,994
Effect of exchange rate
changes in cash........ -- -- 7 -- 7
--------- ------- -------- --- ---------
Net decrease in cash and
cash equivalents....... (4,342) 9 (22,248) -- (26,581)
Cash and cash
equivalents at
beginning of period.... 27,080 1,836 24,357 -- 53,273
--------- ------- -------- --- ---------
Cash and cash
equivalents at end of
period................. $ 22,738 $ 1,845 $ 2,109 $-- $ 26,692
========= ======= ======== === =========
</TABLE>
F-42
<PAGE>
NOTE F--COMMITMENTS AND CONTINGENCIES
On August 6, 1997, the domestic pilots at Air Logistics ("Air Log") voted to
become members of the Office and Professional Employees International Union
("OPEIU"). As of March 27, 1998, the Company has not begun negotiations with
the OPEIU. During the nine months ended December 31, 1997, $85.3 million of
operating revenues were from Air Log's domestic operations. In January, 1998,
the National Mediation Board (NMB) set aside the September 4, 1997, election
in which the pilots for Air Log's principal competitor elected not to be
represented by the Union. The NMB has called another election to be completed
in late March, 1998. In January, 1998, the OPEIU petitioned the NMB to
organize Air Log's mechanics. Certain objections to this petition have been
filed and the date of a possible election has not been established. Similar
efforts may also be taking place at some of Air Log's competitors. The Company
does not believe that the result of these organizing efforts will place Air
Logistics at a competitive disadvantage with its competitors as management
believes that pay scales and work rules will continue to be similar throughout
the industry.
F-43
<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
NO DEALER, SALESMAN OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT IN, OR INCORPORATED IN, THIS
PROSPECTUS, IN CONNECTION WITH THE EXCHANGE OFFER COVERED BY THIS PROSPECTUS.
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITY OTHER
THAN THE NEW NOTES OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY OF THE NEW NOTES TO ANYONE OR BY ANYONE
IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT WOULD BE UNLAWFUL TO
MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS NOT BEEN A CHANGE IN THE INFORMATION SET FORTH IN
THIS PROSPECTUS OR INCORPORATED BY REFERENCE HEREIN OR IN THE AFFAIRS OF THE
COMPANY SINCE THE DATE HEREOF.
----------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information...................................................... ii
Incorporation of Certain Documents by Reference............................ ii
Summary.................................................................... 1
Risk Factors............................................................... 8
Use of Proceeds............................................................ 14
Capitalization............................................................. 14
Selected Consolidated Financial and Operating Data......................... 15
The Exchange Offer......................................................... 17
Description of the Notes................................................... 26
Legal Matters.............................................................. 51
Experts.................................................................... 51
Index to Consolidated Financial Statements................................. F-1
</TABLE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
$100,000,000
OFFSHORE LOGISTICS, INC.
----------------
OFFER FOR ALL OUTSTANDING
7 7/8% SERIES A SENIOR NOTES DUE 2008
IN EXCHANGE FOR
7 7/8% SERIES B SENIOR NOTES DUE 2008
----------------
PROSPECTUS
----------------
, 1998
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify its directors and officers in a variety of
circumstances, which may include liabilities under the Securities Act of 1933,
as amended (the "Securities Act"). In addition, the Registrant's bylaws
provide for the indemnification of directors and officers against expenses and
liabilities incurred in connection with defending actions brought against them
for negligence or misconduct in their official capacities. The Registrant also
has indemnity agreements with each of its directors that provide for
indemnification of such directors. The Registrant has purchased insurance
permitted by the Delaware General Corporation Law on behalf of directors and
officers, which may cover liabilities under the Securities Act.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following is a list of all exhibits filed as part of this Registration
Statement.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
------- -----------------------
<C> <C> <S>
4.1 -- Indenture, dated as of January 27, 1998, among the Company, the
Guarantors and State Street Bank and Trust Company.
4.2 -- Registration Rights Agreement, dated as of January 22, 1998, among
the Company, the Guarantors and Jefferies & Company, Inc.
5* -- Opinion of Fulbright & Jaworski L.L.P. as to the legality of the
Notes.
12 -- Statement regarding Ratio of Earnings to Fixed Charges.
23.1 -- Consent of Arthur Andersen LLP
23.2 -- Consent of KPMG
23.3* -- Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5).
24.1 -- Power of Attorney (included in Signature Pages to the Registration
Statement).
25.1* -- Statement of Eligibility of State Street Bank and Trust Company.
99.1 -- Form of Letter of Transmittal.
99.2 -- Form of Notice of Guaranteed Delivery.
</TABLE>
- --------
* To be filed by amendment.
ITEM 22. UNDERTAKINGS.
The Registrant hereby undertakes the following:
(a) For purposes of determining any liability under the Securities Act of
1933, each filing of the Registrant's annual report pursuant to Section 13(a)
or 15(d) of the Exchange Act that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrants pursuant to the foregoing provisions described under Item 20
or otherwise, each of the registrants has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by any of the registrants of expenses
incurred or paid by a director, officer, or controlling person of such
registrant in the successful defense of any action, suit, or proceeding) is
asserted by such director, officer, or controlling person in connection with
the securities being registered, the registrants will, unless in the opinion
of its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act of 1933 and
will be governed by the final adjudication of such issue.
II-1
<PAGE>
(c) Each of the undersigned registrants hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of
receipt of such request, and to send the incorporated document by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(d) Each of the undersigned registrants hereby undertakes to supply by means
of a post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lafayette, State of
Louisiana, on March 27, 1998.
OFFSHORE LOGISTICS, INC.
/s/ George M. Small
By: _________________________________
George M. Small
President
II-2
<PAGE>
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints George M. Small or Drury A. Milke
or any one of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George M. Small President and Director March 27, 1998
- ------------------------------------ (Principal Executive
George M. Small Officer)
/s/ Louis F. Crane Chairman of the Board March 27, 1998
- ------------------------------------
Louis F. Crane
/s/ Drury A. Milke Vice President, Chief March 27, 1998
- ------------------------------------ Financial Officer,
Drury A. Milke Treasurer and Secretary
(Principal Financial
Officer)
/s/ Patricia Como Controller and Assistant March 27, 1998
- ------------------------------------ Secretary (Principal
Patricia Como Accounting Officer)
Director March 27, 1998
- ------------------------------------
Peter N. Buckley
Director March 27, 1998
- ------------------------------------
Jonathan H. Cartwright
/s/ David M. Johnson Director March 27, 1998
- ------------------------------------
David M. Johnson
/s/ Kenneth M. Jones Director March 27, 1998
- ------------------------------------
Kenneth M. Jones
/s/ Harry C. Sager Director March 27, 1998
- ------------------------------------
Harry C. Sager
Director March 27, 1998
- ------------------------------------
Howard Wolf
</TABLE>
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lafayette, State of
Louisiana, on March 27, 1998.
AIR LOGISTICS, L.L.C.
By: Offshore Logistics, Inc.,
its sole member
/s/ Drury A. Milke
By: _________________________________
Drury A. Milke
Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints George M. Small or Drury A. Milke,
or any one of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George M. Small President and Manager March 27, 1998
- ------------------------------------ (Principal Executive
George M. Small Officer)
/s/ Drury A. Milke Vice President, Chief March 27, 1998
- ------------------------------------ Financial Officer,
Drury A. Milke Treasurer, Secretary and
Manager (Principal
Financial Officer and
Principal Accounting
Officer)
Manager March 27, 1998
- ------------------------------------
Gene Graves
</TABLE>
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lafayette, State of
Louisiana, on March 27, 1998.
AIR LOGISTICS OF ALASKA, INC.
/s/ Drury A. Milke
By: _________________________________
Drury A. Milke
Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints George M. Small or Drury A. Milke,
or any one of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George M. Small President and Director March 27, 1998
- ------------------------------------ (Principal Executive
George M. Small Officer)
/s/ Drury A. Milke Vice President, Chief March 27, 1998
- ------------------------------------ Financial Officer,
Drury A. Milke Treasurer, Secretary and
Director (Principal
Financial Officer and
Principal Accounting
Officer)
Director March 27, 1998
- ------------------------------------
L. Michael Rizk
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lafayette, State of
Louisiana, on March 27, 1998.
GRASSO CORPORATION
/s/ Drury A. Milke
By: _________________________________
Drury A. Milke
Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints George M. Small or Drury A. Milke,
or any one of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George M. Small President and Director March 27, 1998
- ------------------------------------ (Principal Executive
George M. Small Officer)
/s/ Drury A. Milke Vice President, Chief March 27, 1998
- ------------------------------------ Financial Officer,
Drury A. Milke Treasurer, Secretary and
Director (Principal
Financial Officer and
Principal Accounting
Officer)
Director March 27, 1998
- ------------------------------------
Bill Donaldson
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lafayette, State of
Louisiana, on March 27, 1998.
GRASSO PRODUCTION MANAGEMENT, INC.
/s/ Drury A. Milke
By: _________________________________
Drury A. Milke
Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints George M. Small or Drury A. Milke,
or any one of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George M. Small President and Director March 27, 1998
- ------------------------------------ (Principal Executive
George M. Small Officer)
/s/ Drury A. Milke Vice President, Chief March 27, 1998
- ------------------------------------ Financial Officer,
Drury A. Milke Treasurer, Secretary and
Director (Principal
Financial Officer and
Principal Accounting
Officer)
Director March 27, 1998
- ------------------------------------
Bill Donaldson
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lafayette, State of
Louisiana, on March 27, 1998.
MEDIC SYSTEMS, INC.
/s/ Drury A. Milke
By: _________________________________
Drury A. Milke
Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints George M. Small or Drury A. Milke,
or any one of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George M. Small President and Director March 27, 1998
- ------------------------------------ (Principal Executive
George M. Small Officer)
/s/ Drury A. Milke Vice President, Chief March 27, 1998
- ------------------------------------ Financial Officer,
Drury A. Milke Treasurer, Secretary and
Director (Principal
Financial Officer and
Principal Accounting
Officer)
Director March 27, 1998
- ------------------------------------
Bill Donaldson
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Lafayette, State of
Louisiana, on March 27, 1998.
PUMPKIN AIR, INC.
/s/ Drury A. Milke
By: _________________________________
Drury A. Milke
Vice President
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
immediately below constitutes and appoints George M. Small or Drury A. Milke,
or any one of them, his true and lawful attorney-in-fact and agent, with full
power of substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ George M. Small President and Director March 27, 1998
- ------------------------------------ (Principal Executive
George M. Small Officer)
/s/ Drury A. Milke Vice President, Chief March 27, 1998
- ------------------------------------ Financial Officer,
Drury A. Milke Treasurer, Secretary and
Director (Principal
Financial Officer and
Principal Accounting
Officer)
Director March 27, 1998
- ------------------------------------
Gene Graves
</TABLE>
II-9
<PAGE>
EXHIBIT 4.1
- --------------------------------------------------------------------------------
OFFSHORE LOGISTICS, INC.
AND
THE GUARANTORS NAMED ON THE SIGNATURE PAGE HERETO
SERIES A AND SERIES B
7-7/8% SENIOR NOTES DUE 2008
---------------
INDENTURE
DATED AS OF JANUARY 27, 1998
---------------
---------------
STATE STREET BANK
AND TRUST COMPANY
TRUSTEE
---------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
-------------- -----------------
310(a)(1)..................................................... 7.10
(a)(2)..................................................... 7.10
(a)(3)..................................................... N/A
(a)(4)..................................................... N/A
(a)(5)..................................................... 7.10
(b)........................................................ 7.10
(c)........................................................ N/A
311(a)........................................................ 7.11
(b)........................................................ 7.11
(c)........................................................ N/A
312(a)........................................................ 2.05
(b)........................................................ 11.03
(c)........................................................ 11.03
313(a)........................................................ 7.06
(b)(1)..................................................... 7.06
(b)(2)..................................................... 7.06, 7.07
(c)........................................................ 7.06, 11.02
(d)........................................................ 7.06
314(a)........................................................ 4.03, 11.02
(b)........................................................ N/A
(c)(1)..................................................... 11.04
(c)(2)..................................................... 11.04
(c)(3)..................................................... N/A
(d)........................................................ N/A
(e)........................................................ 11.05
(f)........................................................ N/A
315(a)........................................................ 7.01
(b)........................................................ 7.05, 11.02
(c)........................................................ 7.01
(d)........................................................ 7.01
(e)........................................................ 6.11
316(a)(last sentence)......................................... 2.09
(a)(1)(A).................................................. 6.05
(a)(1)(B).................................................. 6.04
(a)(2)..................................................... N/A
(b)........................................................ 6.07
(c)........................................................ 2.12
317(a)(1)..................................................... 6.08
(a)(2)..................................................... 6.09
(b)........................................................ 2.04
318(a)........................................................ 11.01
(b)........................................................ N/A
(c)........................................................ 11.01
- ----------
N/A means not applicable.
*This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATIONBY REFERENCE
Section 1.01. Definitions............................................ 1
Section 1.02. Other Definitions...................................... 16
Section 1.03. Incorporation by Reference of Trust Indenture Act...... 16
Section 1.04. Rules of Construction.................................. 16
ARTICLE 2 THE NOTES
Section 2.01. Form and Dating........................................ 17
Section 2.02. Execution and Authentication........................... 18
Section 2.03. Registrar and Paying Agent............................. 19
Section 2.04. Paying Agent to Hold Money in Trust.................... 20
Section 2.05. Holder Lists........................................... 20
Section 2.06. Transfer and Exchange.................................. 20
Section 2.07. Replacement Notes...................................... 27
Section 2.08. Outstanding Notes...................................... 28
Section 2.09. Treasury Notes......................................... 28
Section 2.10. Temporary Notes........................................ 29
Section 2.11. Cancellation........................................... 29
Section 2.12. Defaulted Interest..................................... 29
ARTICLE 3 REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee..................................... 29
Section 3.02. Selection of Notes to Be Redeemed...................... 30
Section 3.03. Notice of Redemption................................... 30
Section 3.04. Effect of Notice of Redemption......................... 31
Section 3.05. Deposit of Redemption Price............................ 31
Section 3.06. Notes Redeemed in Part................................. 32
Section 3.07. Optional Redemption.................................... 32
Section 3.08. Mandatory Redemption................................... 32
Section 3.09. Offer to Purchase by Application of Excess Proceeds.... 32
ARTICLE 4 COVENANTS
Section 4.01. Payment of Notes....................................... 34
Section 4.02. Maintenance of Office or Agency........................ 35
Section 4.03. Reports................................................ 35
Section 4.04. Compliance Certificate................................. 36
Section 4.05. Taxes.................................................. 36
Section 4.06. Stay, Extension and Usury Laws......................... 36
Section 4.07. Restricted Payments.................................... 37
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries........................................... 39
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred
Stock.................................................. 40
Section 4.10. Asset Sales............................................ 41
-i-
<PAGE>
Section 4.11. Transactions with Affiliates........................... 42
Section 4.12. Liens.................................................. 43
Section 4.13. Additional Subsidiary Guarantees....................... 43
Section 4.14. Corporate Existence.................................... 44
Section 4.15. Offer to Repurchase Upon Change of Control............. 44
Section 4.16. Issuances and Sales of Capital Stock of Wholly Owned
Restricted Subsidiaries................................ 45
Section 4.17. Sale-and-leaseback Transactions........................ 45
Section 4.18. No Inducements......................................... 46
ARTICLE 5 SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets............... 46
Section 5.02. Successor Corporation Substituted...................... 47
ARTICLE 6 DEFAULTS AND REMEDIES
Section 6.01. Events of Default...................................... 47
Section 6.02. Acceleration........................................... 49
Section 6.03. Other Remedies......................................... 49
Section 6.04. Waiver of Past Defaults................................ 50
Section 6.05. Control by Majority.................................... 50
Section 6.06. Limitation on Suits.................................... 50
Section 6.07. Rights of Holders of Notes to Receive Payment.......... 51
Section 6.08. Collection Suit by Trustee............................. 51
Section 6.09. Trustee May File Proofs of Claim....................... 51
Section 6.10. Priorities............................................. 51
Section 6.11. Undertaking for Costs.................................. 52
ARTICLE 7 TRUSTEE
Section 7.01. Duties of Trustee...................................... 52
Section 7.02. Rights of Trustee...................................... 53
Section 7.03. Individual Rights of Trustee........................... 54
Section 7.04. Trustee's Disclaimer................................... 54
Section 7.05. Notice of Defaults..................................... 54
Section 7.06. Reports by Trustee to Holders of the Notes............. 55
Section 7.07. Compensation and Indemnity............................. 55
Section 7.08. Replacement of Trustee................................. 56
Section 7.09. Successor Trustee by Merger, etc....................... 57
Section 7.10. Eligibility; Disqualification.......................... 57
Section 7.11. Preferential Collection of Claims Against Company...... 57
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance............................................. 57
Section 8.02. Legal Defeasance and Discharge......................... 57
Section 8.03. Covenant Defeasance.................................... 58
Section 8.04. Conditions to Legal or Covenant Defeasance............. 58
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions.................. 60
-ii-
<PAGE>
Section 8.06. Repayment to Company................................... 60
Section 8.07. Reinstatement.......................................... 61
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.................... 61
Section 9.02. With Consent of Holders of Notes....................... 62
Section 9.03. Compliance with Trust Indenture Act.................... 63
Section 9.04. Revocation and Effect of Consents...................... 63
Section 9.05. Notation on or Exchange of Notes....................... 63
Section 9.06. Trustee to Sign Amendments, etc........................ 64
ARTICLE 10 GUARANTEES OF NOTES
Section 10.01. Subsidiary Guarantees.................................. 64
Section 10.02. Execution and Delivery of Subsidiary Guarantee......... 65
Section 10.03. Guarantors May Consolidate, etc., on Certain Terms..... 65
Section 10.04. Releases Following Sale of Assets...................... 66
Section 10.05. Releases Following Designation as an Unrestricted
Subsidiary............................................. 67
Section 10.06. Limitation on Guarantor Liability...................... 67
Section 10.07. "Trustee" to Include Paying Agent...................... 67
ARTICLE 11 MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls........................... 67
Section 11.02. Notices................................................ 68
Section 11.03. Communication by Holders of Notes with Other Holders of
Notes.................................................. 69
Section 11.04. Certificate and Opinion as to Conditions Precedent..... 69
Section 11.05. Statements Required in Certificate or Opinion.......... 69
Section 11.06. Rules by Trustee and Agents............................ 69
Section 11.07. No Personal Liability of Directors, Officers, Employees
and Stockholders....................................... 70
Section 11.08. Governing Law.......................................... 70
Section 11.09. No Adverse Interpretation of Other Agreements.......... 70
Section 11.10. Successors............................................. 70
Section 11.11. Severability........................................... 70
Section 11.12. Counterpart Originals.................................. 70
Section 11.13. Table of Contents, Headings, etc....................... 70
EXHIBITS AND ANNEXES
EXHIBIT A-1 Form of Note.............................................. A-1-1
EXHIBIT A-2 Form Regulation S Temporary Global Note................... A-2-1
EXHIBIT B-1 Certificate of Transferor from 144A Global Note
to Regulation S Global Note............................... B-1-1
EXHIBIT B-2 Certificate of Transferor from Regulation S
Global Note to 144A Global Note........................... B-2-1
-iii-
<PAGE>
EXHIBIT B-3 Certificate of Transferor of Definitive Notes............. B-3-1
EXHIBIT B-4 Certificate of Transferor from Global Note to
Definitive Note........................................... B-4-1
EXHIBIT C Certificate of Institutional Accredited Investor.......... C-1
EXHIBIT D Form of Notation of Subsidiary Guarantee.................. D-1
EXHIBIT E Form of Supplemental Indenture............................ E-1
ANNEX A Registration Rights Agreement............................. 1
<PAGE>
This Indenture, dated as of January 27, 1998, is among Offshore Logistics,
Inc., a Delaware corporation (the "Company"), the guarantors listed on the
signature page hereto (each, a "Guarantor" and, collectively, the "Guarantors")
and State Street Bank and Trust Company, a Massachusetts trust company, as
trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the Holders of
the 7-7/8% Series A Senior Notes due 2008 (the "Series A Notes") and the 7-7/8%
Series B Senior Notes due 2008 (the "Series B Notes" and, together with the
Series A Notes, the "Notes"), without preference of one series of Notes over the
other:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a permanent global senior note that contains the
paragraph referred to in footnote 1 and the additional schedule referred to in
footnote 3 to the form of the Note attached hereto as Exhibit A-1, and that is
deposited with the Note Custodian and registered in the name of the Depository
or its nominee, representing a series of Notes sold in reliance on Rule 144A or
another exemption from the registration requirements of the Securities Act,
other than Regulation S.
"Affiliate" of any specified Person means an "affiliate" of such Person, as
such term is defined for purposes of Rule 144 under the Securities Act.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Procedures" means, with respect to any transfer or exchange of
beneficial interests in a Global Note, the rules and procedures of the
Depository that apply to such transfer and exchange.
"Asset Sale" means (a) the sale, lease, conveyance or other disposition (a
"disposition") of any assets or rights (including, without limitation, by way of
a sale and leaseback), excluding dispositions in the ordinary course of business
(provided that the disposition of all or substantially all of the assets of the
Company and its Restricted Subsidiaries taken as a whole will be governed by
Sections 4.15 and/or 5.01 of this Indenture and not by the provisions of Section
4.10 hereof), (b) the issue or sale by the Company or any of its Restricted
Subsidiaries of Equity Interests of any of the Company's Subsidiaries, and (c)
any Event of Loss, whether in the case of clause (a), (b) or (c), in a single
transaction or a series of related transactions, provided that such transaction
or series of transactions (i) has a fair market value in excess of $1.0 million
(or the equivalent thereof in any other currency or currency unit) or (ii)
results in the payment of net proceeds (including insurance proceeds from an
Event of Loss) in excess of $3.0 million (or the equivalent thereof in any other
currency or currency unit). Notwithstanding the foregoing, the following
transactions will be deemed not to be Asset
<PAGE>
Sales: (A) a disposition of obsolete or excess equipment or other assets;
(B) a disposition of assets by the Company to a Wholly Owned Restricted
Subsidiary or by a Wholly Owned Restricted Subsidiary to the Company or to
another Wholly Owned Restricted Subsidiary;
(C) a disposition of Equity Interests by a Wholly Owned Restricted Subsidiary to
the Company or to another Wholly Owned Restricted Subsidiary; (D) a Permitted
Investment or Restricted Payment that is permitted by this Indenture; (E) a
disposition of assets by the Company or any of its Restricted Subsidiaries to a
Person that is an Affiliate of the Company or such Restricted Subsidiary and is
engaged in the business of providing helicopter transportation services to the
oil and gas industry (or a business that is reasonably complementary or related
thereto as determined in good faith by the Board of Directors), which Person is
an Affiliate solely because the Company or such Restricted Subsidiary has an
Investment in such Person, provided that such transaction complies with Section
4.11 hereof; (F) any charter or lease of any equipment or other assets entered
into in the ordinary course of business and with respect to which the Company or
any Restricted Subsidiary thereof is the lessor, except any such charter or
lease that provides for the acquisition of such assets by the lessee during or
at the end of the term thereof for an amount that is less than the fair market
value thereof at the time the right to acquire such assets occurs; (G) any trade
or exchange by the Company or any Restricted Subsidiary of equipment or other
assets for equipment or other assets owned or held by another Person, provided
that the fair market value of the assets traded or exchanged by the Company or
such Restricted Subsidiary (together with any cash or Cash Equivalents) is
reasonably equivalent to the fair market value of the assets (together with any
cash or Cash Equivalents) to be received by the Company or such Restricted
Subsidiary; and (H) a disposition (whether by way of merger, sale of assets,
sale of Capital Stock or otherwise) of the Company's production management
services business. The fair market value of any non-cash proceeds of a
disposition of assets and of any assets referred to in the foregoing clause (G)
of this definition shall be determined in the manner contemplated in the
definition of the term "fair market value," the results of which determination
shall be set forth in an Officers' Certificate delivered to the Trustee.
"Attributable Indebtedness" in respect of a sale-and-leaseback transaction
means, at the time of determination, the present value (discounted at the rate
of interest implicit in such transaction, determined in accordance with GAAP) of
the obligation of the lessee for net rental payments during the remaining term
of the lease included in such sale-and-lease-back transaction (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended). As used in the preceding sentence, the "net rental
payments" under any lease for any such period shall mean the sum of rental and
other payments required to be paid with respect to such period by the lessee
thereunder, excluding any amounts required to be paid by such lessee on account
of maintenance and repairs, insurance, taxes, assessments, water rates or
similar charges. In the case of any lease that is terminable by the lessee upon
payment of penalty, such net rental payment shall also include the amount of
such penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
"Bankruptcy Law" means Title 11, United States Code, or any similar federal
or
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state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company, or any
authorized committee of the Board of Directors.
"Bristow" means Bristow Aviation Holdings Limited, a company incorporated
in England and Wales, and its successors.
"Business Day" means any day other than a Legal Holiday.
"Caledonia" means Caledonia Investments plc, a company incorporated in
England, and its subsidiary, Caledonia Industrial & Services Limited, and their
respective successors.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a capital lease that would
at such time be required to be capitalized on a balance sheet in accordance with
GAAP.
"Capital Stock" means (a) in the case of a corporation, corporate stock,
(b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a Person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
Person.
"Cash Equivalents" means (a) United States dollars, (b) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof having maturities of not more than six
months from the date of acquisition, (c) certificates of deposit and Eurodollar
time deposits with maturities of six months or less from the date of
acquisition, bankers' acceptances with maturities not exceeding six months and
overnight bank deposits, in each case with any commercial bank organized under
the laws of any country that is a member of the Organization for Economic
Cooperation and Development having capital and surplus in excess of $500 million
(or the equivalent thereof in any other currency or currency unit), (d)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (b) and (c) above entered into with
any financial institution meeting the qualifications specified in clause (c)
above, (e) commercial paper having the highest rating obtainable from Moody's
Investors Service, Inc. or Standard & Poor's Ratings Services and in each case
maturing within 270 days after the date of acquisition, (f) deposits available
for withdrawal on demand with any commercial bank not meeting the qualifications
specified in clause (c) above, provided all such deposits do not exceed $3.0
million (or the equivalent thereof in any other currency or currency unit) in
the aggregate at any one time, and (g) money market mutual funds substantially
all of the assets of which are of the type described in the foregoing clauses
(a) through (e).
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"Cedel" means Cedel bank, societe anonyme.
"Change of Control" means the occurrence of any of the following: (a) the
sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Subsidiaries, taken as a
whole, (b) the adoption of a plan relating to the liquidation or dissolution of
the Company, (c) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any
"person" (as such term is used in Section 13(d)(3) of the Exchange Act) becomes
the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5
under the Exchange Act), directly or indirectly through one or more
intermediaries, of more than 50% of the voting power of the outstanding voting
stock of the Company or (d) the first day on which more than a majority of the
members of the Board of Directors are not Continuing Directors; provided,
however, that a transaction in which the Company becomes a Subsidiary of another
Person (other than a Person that is an individual) shall not constitute a Change
of Control if (i) the stockholders of the Company immediately prior to such
transaction "beneficially own" (as such term is defined in Rule 13d-3 and Rule
13d-5 under the Exchange Act), directly or indirectly through one or more
intermediaries, at least a majority of the voting power of the outstanding
voting stock of the Company immediately following the consummation of such
transaction and (ii) immediately following the consummation of such transaction,
no "person" (as such term is defined above), other than such other Person (but
including the holders of the Equity Interests of such other Person),
"beneficially owns" (as such term is defined above), directly or indirectly
through one or more intermediaries, more than 50% of the voting power of the
outstanding voting stock of the Company.
"Common Stock" means the common stock of the Company, par value $0.01 per
share.
"Consolidated Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person for such period plus, to the extent
deducted or excluded in calculating Consolidated Net Income for such period, (a)
an amount equal to any extraordinary loss plus any net loss realized in
connection with an Asset Sale (or any disposition described in clause (H) of the
definition of Asset Sale), (b) provision for taxes based on income or profits of
such Person and its Restricted Subsidiaries, (c) Consolidated Interest Expense
of such Person and its Restricted Subsidiaries, and (d) depreciation and
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid in a prior
period) of such Person and its Restricted Subsidiaries, in each case, on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means with respect to any Person for
any period, the ratio of the Consolidated Cash Flow of such Person for such
period to the Consolidated Interest Expense of such Person for such period;
provided, however, that the Consolidated Interest Coverage Ratio shall be
calculated giving pro forma effect to each of the following transactions as if
each such transaction had occurred at the beginning of the applicable four-
quarter reference period: (a) any incurrence,
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assumption, guarantee or redemption by the Company or any of its
Restricted Subsidiaries of any Indebtedness (other than revolving credit
borrowings) subsequent to the commencement of the period for which the
Consolidated Interest Coverage Ratio is being calculated but prior to the date
on which the event for which the calculation of the Consolidated Interest
Coverage Ratio is made (the "Calculation Date"); (b) any acquisition that has
been made by the Company or any of its Restricted Subsidiaries, or approved and
expected to be consummated within 30 days of the Calculation Date, including, in
each case, through a merger or consolidation, and including any related
financing transactions, during the four-quarter reference period or subsequent
to such reference period and on or prior to the Calculation Date (in which case
Consolidated Cash Flow for such reference period shall be calculated without
giving effect to clause (c) of the proviso set forth in the definition of
Consolidated Net Income); and (c) any other transaction that may be given pro
forma effect in accordance with Article 11 of Regulation S-X as in effect from
time to time; provided, further, however, that (i) the Consolidated Cash Flow
attributable to discontinued operations, as determined in accordance with GAAP,
and operations or businesses disposed of prior to the Calculation Date, shall be
excluded and (ii) the Consolidated Interest Expense attributable to discontinued
operations, as determined in accordance with GAAP, and operations or businesses
disposed of prior to the Calculation Date, shall be excluded, but only to the
extent that the obligations giving rise to such Consolidated Interest Expense
will not be obligations of the referent Person or any of its Restricted
Subsidiaries following the Calculation Date.
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication, of (a) the consolidated interest expense
of such Person and its Restricted Subsidiaries for such period, whether paid or
accrued (including, without limitation, amortization of original issue discount,
non-cash interest payments, the interest component of any deferred payment
obligations, the interest component of all payments associated with Capital
Lease Obligations, commissions, discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations but excluding amortization of debt
issuance costs) and (b) the consolidated interest expense of such Person and its
Restricted Subsidiaries that was capitalized during such period.
"Consolidated Net Income" means, with respect to any Person for any period,
the aggregate of the Net Income of such Person and its Restricted Subsidiaries
for such period, on a consolidated basis, determined in accordance with GAAP,
provided that (a) the Net Income (but not loss) of any Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent Person or a Wholly Owned Restricted
Subsidiary thereof, (b) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Subsidiary or its stockholders,
(c) the Net Income of any Person
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acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded and (d) the cumulative effect of a change
in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as of any date,
the sum of (a) the consolidated equity of the common stockholders of such Person
and its consolidated Restricted Subsidiaries as of such date plus (b) the
respective amounts reported on such Person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
Person upon issuance of such preferred stock, less (i) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of this Indenture in the book value of
any asset owned by such Person or a consolidated Restricted Subsidiary of such
Person, (ii) all investments as of such date in unconsolidated Subsidiaries and
in Persons that are not Restricted Subsidiaries and (iii) all unamortized debt
discount and expense and unamortized deferred charges as of such date, in each
case determined in accordance with GAAP.
"Continuing Directors" means, as of any date of determination, any member
of the Board of Directors who (a) was a member of the Board of Directors on the
date of original issuance of the Series A Notes or (b) was nominated for
election to the Board of Directors with the approval of, or whose election to
the Board of Directors was ratified by, at least two-thirds of the Continuing
Directors who were members of the Board of Directors at the time of such
nomination or election.
"Corporate Trust Office of the Trustee" shall be at the address of the
Trustee specified in Section 11.02 hereof or such other address as to which the
Trustee may give notice to the Company.
"Credit Facilities" means (a) the Restated and Amended Credit Agreement,
dated as of January 31, 1997, by and between the Company and First National Bank
of Lafayette and (b) the Credit Agreement, dated June 30, 1995, among Bristow
Helicopter Group Limited and certain of its English Subsidiaries, the banks
named therein and National Westminster Bank Plc, as Facility Agent and Security
Trustee, in each case as amended, restated, modified, supplemented, extended,
renewed, replaced, refinanced or restructured from time to time, whether by the
same or any other agent or agents, lender or group of lenders, whether
represented by one or more agreements and whether one or more Subsidiaries are
added or removed as borrowers or guarantors thereunder or as parties thereto.
"Custodian" means any receiver, trustee, assignee, liquidator, sequestrator
or similar official under any Bankruptcy Law.
"Default" means any event that is or with the passage of time or the giving
of
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notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of Exhibit A-1 attached
hereto (but without including the text referred to in footnotes 1 and 3
thereto).
"Depository" means, with respect to the Notes issuable or issued in whole
or in part in global form, the Person specified in Section 2.03 hereof as the
Depository with respect to the Notes, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures (excluding any
maturity as a result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is 91 days after the date on which the Notes mature or are
redeemed or retired in full; provided, however, that any Capital Stock that
would constitute Disqualified Stock solely because the holders thereof (or of
any security into which it is convertible or for which it is exchangeable) have
the right to require the issuer to repurchase such Capital Stock (or such
security into which it is convertible or for which it is exchangeable) upon the
occurrence of any of the events constituting an Asset Sale or a Change of
Control shall not constitute Disqualified Stock if such Capital Stock (and all
such securities into which it is convertible or for which it is exchangeable)
provides that the issuer thereof will not repurchase or redeem any such Capital
Stock (or any such security into which it is convertible or for which it is
exchangeable) pursuant to such provisions prior to compliance by the Company
with Section 4.10 or 4.15 of this Indenture, as the case may be.
"Equity Interests" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system.
"Event of Loss" means, with respect to any property or asset of the Company
or any Restricted Subsidiary, (a) any damage to such property or asset that
results in an insurance settlement with respect thereto on the basis of a total
loss or a constructive or compromised total loss or (b) the confiscation,
condemnation or requisition of title to such property or asset by any government
or instrumentality or agency thereof. An Event of Loss shall be deemed to occur
as of the date of the insurance settlement, confiscation, condemnation or
requisition of title, as applicable.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Offer" means the offer that may be made by the Company pursuant
to
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a Registration Rights Agreement to exchange Series B Notes for Series A Notes.
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries (other than Indebtedness under the Credit Facilities) in
existence on the date of this Indenture (including, in the case of Bristow and
its Subsidiaries, any Indebtedness of Bristow and its Subsidiaries resulting
from the refinancing of Indebtedness of Bristow and its Subsidiaries in
existence on the date hereof that is completed prior to February 10, 1998),
until such amounts are repaid.
The term "fair market value" means, with respect to any asset or
Investment, the fair market value of such asset or Investment at the time of the
event requiring such determination, as determined in good faith by the Board of
Directors of the Company, or, with respect to any asset or Investment in excess
of $5.0 million (other than cash or Cash Equivalents), as determined by a
reputable appraisal firm that is, in the judgment of such Board of Directors,
qualified to perform the task for which such firm has been engaged and
independent with respect to the Company.
"Funded Indebtedness" means any Indebtedness for money borrowed that by its
terms matures at, or is extendible or renewable at the option of the obligor to,
a date more than 12 months after the date of the incurrence of such
Indebtedness.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"Global Note" means, individually and collectively, the Regulation S
Temporary Global Note, the Regulation S Permanent Global Note and the 144A
Global Note.
"Government Securities" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States is pledged.
"Guarantor" means (a) each Restricted Subsidiary of the Company named on
the signature page hereto, (b) any other Restricted Subsidiary of the Company
that executes a Subsidiary Guarantee in accordance with Sections 4.13 and 10.02
hereof and (c) the respective successors and assigns of such Restricted
Subsidiaries, as required under Article 10 hereof, in each case until such time
as any such Restricted Subsidiary shall be released and relieved of its
obligations pursuant to Section 10.04 or 10.05 hereof.
"Hedging Obligations" means, with respect to any Person, the obligations of
such Person under (a) interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements, (b) other agreements or
arrangements designed to protect such
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Person against fluctuations in interest rates and (c) any foreign currency
futures contract, option or similar agreement or arrangement designed to protect
such Person against fluctuations in foreign currency rates, in each case to the
extent such obligations are incurred in the ordinary course of business of such
Person.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, debentures, notes or similar instruments or letters of credit (or
reimbursement agreements in respect thereof) or bankers' acceptances or
representing Capital Lease Obligations or the balance deferred and unpaid of the
purchase price of any property or representing any Hedging Obligations, except
any such balance that constitutes an accrued expense or trade payable, if and to
the extent any of the foregoing indebtedness (other than letters of credit and
Hedging Obligations) would appear as a liability upon a balance sheet of such
Person prepared in accordance with GAAP. The amount of any Indebtedness
outstanding as of any date shall be (a) the accreted value thereof, in the case
of any Indebtedness that does not require current payments of interest, and (b)
the principal amount thereof, in the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented from time to
time.
"Indirect Participant" means a Person who holds an interest through a
Participant.
"Initial Purchaser" means Jefferies & Company, Inc.
"Institutional Accredited Investor" means an "accredited investor" as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
"Investments" means, with respect to any Person, all investments by such
Person in other Persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees by the referent Person of, and Liens on any
assets of the referent Person securing, Indebtedness or other obligations of
other Persons), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in accordance with
GAAP; provided, however, that the following shall not constitute Investments:
(i) extensions of trade credit or other advances to customers on commercially
reasonable terms in accordance with normal trade practices or otherwise in the
ordinary course of business, (ii) Hedging Obligations and (iii) endorsements of
negotiable instruments and documents in the ordinary course of business. If the
Company or any Restricted Subsidiary of the Company sells or otherwise disposes
of any Equity Interests of any direct or indirect Restricted Subsidiary of the
Company such that, after giving effect to any such sale or disposition, such
Person is no longer a Restricted Subsidiary of the Company, the Company shall be
deemed to have made an Investment on the date of any such sale or disposition
equal to the fair market value of the Equity Interests of such
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Restricted Subsidiary not sold or disposed of in an amount determined as
provided in Section 4.07 of this Indenture.
"Issue Date" means the first date on which the Series A Notes are issued
hereunder.
"Legal Holiday" means a Saturday, a Sunday or a day on which banking
institutions in the City of Lafayette, Louisiana, the City of Hartford,
Connecticut, the City of Boston, Massachusetts, the City of New York or at a
place of payment are authorized by law, regulation or executive order to remain
closed. If a payment date is a Legal Holiday at a place of payment, payment may
be made at that place on the next succeeding day that is not a Legal Holiday,
and no interest shall accrue for the intervening period.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction other
than a precautionary financing statement respecting a lease not intended as a
security agreement).
"Liquidated Damages" means all liquidated damages then owing pursuant to
Section 5 of the Registration Rights Agreement referred to in clause (a) of the
definition of "Registration Rights Agreement."
"Net Income" means, with respect to any Person, the net income (loss) of
such Person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (a) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (i) any Asset Sale (including, without
limitation, dispositions pursuant to sale-and-leaseback transactions) or (ii)
the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the Company or
any of its Restricted Subsidiaries in respect of any Asset Sale (including,
without limitation, any cash received upon the sale or other disposition of any
non-cash consideration received in any Asset Sale), net of (without duplication)
(a) the direct costs relating to such Asset Sale (including, without limitation,
legal, accounting and investment banking fees, sales commissions, recording
fees, title transfer fees, title insurance premiums, appraiser fees and costs
incurred in connection with preparing such asset for sale) and any relocation
expenses incurred as a result thereof, (b) taxes paid or estimated to be payable
as a result thereof (after taking into account any available tax credits or
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deductions and any tax sharing arrangements), (c) amounts required to be applied
to the repayment of Indebtedness (other than under the Credit Facilities)
secured by a Lien on the asset or assets that were the subject of such Asset
Sale and (d) any reserve established in accordance with GAAP or any amount
placed in escrow, in either case for adjustment in respect of the sale price of
such asset or assets, until such time as such reserve is reversed or such escrow
arrangement is terminated, in which case Net Proceeds shall include only the
amount of the reserve so reserved or the amount returned to the Company or its
Restricted Subsidiaries from such escrow arrangement, as the case may be.
"Non-Recourse Debt" means Indebtedness (a) as to which neither the Company
nor any of its Restricted Subsidiaries (i) provides credit support of any kind
(including any undertaking, agreement or instrument that would constitute
Indebtedness) or is otherwise directly or indirectly liable (as a guarantor or
otherwise) or (ii) constitutes the lender, (b) no default with respect to which
(including any rights that the holders thereof may have to take enforcement
action against an Unrestricted Subsidiary) would permit (upon notice, lapse of
time or both) the holders of Indebtedness of the Company or any of its
Restricted Subsidiaries to declare a default on such Indebtedness or cause the
payment thereof to be accelerated or payable prior to its stated maturity and
(c) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Company or any of its Restricted
Subsidiaries.
"Note Custodian" means the Trustee, as custodian with respect to the Notes
in global form, or any successor entity thereto.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer" means, with respect to any Person, the Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, the Chief
Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the
Secretary or any Vice-President of such Person.
"Officers' Certificate" means a certificate signed on behalf of the Company
by two Officers of the Company, one of whom must be the principal executive
officer, the principal financial officer, the treasurer or the principal
accounting officer of the Company, that meets the requirements of Section 11.05
hereof.
"Opinion of Counsel" means an opinion from legal counsel who is reasonably
acceptable to the Trustee, that meets the requirements of Section 11.05 hereof.
The counsel may be an employee of or counsel to the Company, any Subsidiary of
the Company or the Trustee.
"Original Notes" has the meaning set forth in Section 2.02 hereof.
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"Pari Passu Indebtedness" means, with respect to any Net Proceeds from
Asset Sales, Indebtedness of the Company and its Restricted Subsidiaries the
terms of which require the Company or such Restricted Subsidiary to apply such
Net Proceeds to offer to repurchase such Indebtedness.
"Participant" means with respect to DTC, Euroclear or Cedel, a Person who
has an account with DTC, Euroclear or Cedel, respectively (and, with respect to
DTC, shall include Euroclear and Cedel).
"Permitted Bristow Indebtedness" means (a) any Indebtedness incurred
pursuant to clauses (a) through (f) of the second paragraph of Section 4.09
hereof and (b) any additional Indebtedness in an aggregate principal amount not
in excess of $10.0 million at any time outstanding.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company, (b) any Investment in Cash
Equivalents, (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a Person if as a result of such Investment (i) such Person
becomes a Wholly Owned Restricted Subsidiary of the Company or (ii) such Person
is merged, consolidated or amalgamated with or into, or transfers or conveys all
or substantially all of its assets to, or is liquidated into, the Company or a
Wholly Owned Restricted Subsidiary of the Company, (d) any Investment made as a
result of the receipt of non-cash consideration from (i) an Asset Sale that was
made pursuant to and in compliance with Section 4.10 hereof or (ii) a
disposition of assets that does not constitute an Asset Sale, and (e)
Investments in a Person engaged principally in the business of providing
helicopter transportation services to the oil and gas industry or businesses
reasonably complementary or related thereto, provided that the aggregate amount
of such Investments pursuant to this clause (e) in Persons that are not
Guarantors shall not exceed $20.0 million at any one time.
"Permitted Liens" means (a) Liens (excluding Liens referred to in clauses
(b) through (k) hereof) securing Indebtedness incurred pursuant to clause (a) of
the second paragraph of Section 4.09 hereof, (b) Liens in favor of the Company
and its Restricted Subsidiaries, (c) Liens on property of a Person existing at
the time such Person is merged into or consolidated with the Company or any
Restricted Subsidiary of the Company, provided that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any property other than those of the Person merged into or consolidated with the
Company or any of its Restricted Subsidiaries, (d) Liens on property existing at
the time of acquisition thereof by the Company or any Restricted Subsidiary of
the Company, provided that such Liens were in existence prior to the
contemplation of such acquisition and do not extend to any other property, (e)
Liens to secure the performance of statutory obligations, surety or appeal
bonds, bid or performance bonds, insurance obligations or other obligations of a
like nature incurred in the ordinary course of business, (f) Liens securing
Hedging Obligations, (g) Liens securing any Existing Indebtedness, (h) Liens
securing Non-Recourse Debt, (i) any interest or title of a lessor under a
Capital Lease Obligation or an operating lease, (j) Liens
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arising by reason of deposits necessary to obtain standby letters of credit in
the ordinary course of business, (k) Liens on real or personal property or
assets of the Company or a Restricted Subsidiary thereof to secure Indebtedness
incurred for the purpose of (i) financing all or any part of the purchase price
of such property or assets incurred prior to, at the time of, or within 120 days
after, the acquisition of such property or assets or (ii) financing all or any
part of the cost of construction of any such property or assets, provided that
the amount of any such financing shall not exceed the amount expended in the
acquisition of, or the construction of, such property or assets and such Liens
shall not extend to any other property or assets of the Company or a Restricted
Subsidiary (other than any associated accounts, contracts and insurance
proceeds) and (l) Liens securing Permitted Refinancing Indebtedness with respect
to any Indebtedness referred to in clauses (c), (d), (g) and (k) above.
"Permitted Refinancing Indebtedness" means any Indebtedness of the Company
or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness of the Company or any of its Restricted Subsidiaries;
provided, however, that (a) the principal amount (or accreted value, if
applicable) of such Permitted Refinancing Indebtedness does not exceed the
principal amount of (or accreted value, if applicable), plus premium, if any,
and accrued interest on, the Indebtedness so extended, refinanced, renewed,
replaced, defeased or refunded (plus the amount of reasonable expenses incurred
in connection therewith), (b) such Permitted Refinancing Indebtedness has a
final maturity date no earlier than the final maturity date of, and has a
Weighted Average Life to Maturity equal to or greater than the Weighted Average
Life to Maturity of, the Indebtedness being extended, refinanced, renewed,
replaced, defeased or refunded, (c) if the Indebtedness being extended,
refinanced, renewed, replaced, defeased or refunded is subordinated in right of
payment to the Notes, such Permitted Refinancing Indebtedness is subordinated in
right of payment to the Notes on terms at least as favorable, taken as a whole,
to the Holders of Notes as those contained in the documentation governing the
Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded
and (d) such Indebtedness is incurred either by the Company or by the Restricted
Subsidiary who is the obligor on the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; provided, however, that a Restricted
Subsidiary that is also a Guarantor may guarantee Permitted Refinancing
Indebtedness incurred by the Company, whether or not such Restricted Subsidiary
was an obligor or guarantor of the Indebtedness being extended, refinanced,
renewed, replaced, defeased or refunded; provided, further, however, that if
such Permitted Refinancing Indebtedness is subordinated to the Notes, such
guarantee shall be subordinated to such Restricted Subsidiary's Subsidiary
Guarantee to at least the same extent.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or agency or political subdivision thereof (including
any subdivision or ongoing business of any such entity or substantially all of
the assets of any such entity, subdivision or business).
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"Productive Assets" means aircraft or other assets (other than assets that
would be classified as current assets in accordance with GAAP) of the kind used
or usable by the Company or its Restricted Subsidiaries in the business of
providing helicopter transportation services to the oil and gas industry (or any
business that is reasonably complementary or related thereto as determined in
good faith by the Board of Directors).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A under
the Securities Act.
"Qualified Equity Offering" means (a) any sale of Equity Interests (other
than Disqualified Stock) of the Company pursuant to an underwritten offering
registered under the Securities Act or (b) any sale of Equity Interests (other
than Disqualified Stock) of the Company so long as, at the time of consummation
of such sale, the Company has a class of common equity securities registered
pursuant to Section 12(b) or Section 12(g) under the Exchange Act.
"Registration Rights Agreement" means (a) the Registration Rights
Agreement, dated as of January 27, 1998, by and among the Company, the
Guarantors and the Initial Purchaser relating to the Original Notes, a copy of
which is attached hereto as Annex A, and (b) any similar agreement that the
Company and the Guarantors may enter into in relation to any other Series A
Notes, in each case as such agreement may be amended, modified or supplemented
from time to time.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" means a Regulation S Temporary Global Note or
Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global note that
contains the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 3 to the form of the Note attached hereto as Exhibit A-
1, and that is deposited with the Note Custodian and registered in the name of
the Depository, representing a series of Notes sold in reliance on Regulation S.
"Regulation S Temporary Global Note" means a single temporary global senior
note in the form of the Note attached hereto as Exhibit A-2 that is deposited
with the Note Custodian and registered in the name of the Depository,
representing a series of Notes sold in reliance on Regulation S.
"Responsible Officer," when used with respect to the Trustee, means any
officer within the Corporate Trust Department of the Trustee (or any successor
department of the Trustee) or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
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"Restricted Beneficial Interest" means any beneficial interest of a
Participant or Indirect Participant in a Restricted Global Note.
"Restricted Definitive Notes" means the Definitive Notes that are required
to bear the legend set forth in Section 2.06(f) hereof.
"Restricted Global Notes" means the 144A Global Note and the Regulation S
Global Note, each of which is required to bear the legend set forth in Section
2.06(f) hereof.
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of such Person
that is not an Unrestricted Subsidiary.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means any Restricted Subsidiary of the Company
incorporated or organized in any state of the United States that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date of this Indenture.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (a) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other Subsidiaries of that Person (or a combination
thereof), (b) any partnership (i) the sole general partner or the managing
general partner of which is such Person or a Subsidiary of such Person or (ii)
the only general partners of which are such Person or of one or more
Subsidiaries of such Person (or any combination thereof) and (c) any other
Person whose results for financial reporting purposes are consolidated with
those of such Person in accordance with GAAP.
"Subsidiary Guarantees" means the joint and several guarantees issued by
all of
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the Guarantors pursuant to Article 10 hereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. (S)(S) 77aaa-77bbbb)
as in effect on the date on which this Indenture is qualified under the TIA.
"Transfer Restricted Securities" means securities that bear or are required
to bear the legend set forth in Section 2.06(f) hereof.
"Trustee" means the party named as such above until a successor replaces it
in accordance with the applicable provisions of this Indenture and thereafter
means the successor serving hereunder.
"Unrestricted Global Notes" means one or more Global Notes that do not and
are not required to bear the legend set forth in Section 2.06(f) hereof.
"Unrestricted Subsidiary" means any Subsidiary that is designated by the
Board of Directors as an Unrestricted Subsidiary pursuant to a resolution of the
Board of Directors, but only to the extent that such Subsidiary at the time of
such designation (a) has no Indebtedness other than Non-Recourse Debt, (b) is
not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless such agreement,
contract, arrangement or understanding does not violate the terms of this
Indenture described in Section 4.11 hereof, and (c) is a Person with respect to
which neither the Company nor any of its Restricted Subsidiaries has any direct
or indirect obligation (i) to subscribe for additional Equity Interests or (ii)
to maintain or preserve such Person's financial condition or to cause such
Person to achieve any specified levels of operating results, in each case,
except to the extent otherwise permitted by this Indenture. Any such designation
by the Board of Directors shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolution of the Board of Directors giving
effect to such designation and an Officers' Certificate certifying that such
designation complied with the foregoing conditions and was permitted by Section
4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the
foregoing requirements as an Unrestricted Subsidiary, it shall thereafter cease
to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted
Subsidiary of the Company as of such date (and, if such Indebtedness is not
permitted to be incurred as of such date pursuant to Section 4.09 hereof, the
Company shall be in default of such covenant). The Board of Directors of the
Company may at any time designate any Unrestricted Subsidiary to be a Restricted
Subsidiary, provided that such designation shall be deemed to be an incurrence
of Indebtedness by a Restricted Subsidiary of the Company of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation shall only be
permitted if (A) such Indebtedness is permitted by Section 4.09 hereof,
calculated on a pro forma basis as if such designation had occurred at the
beginning of the four-quarter reference period, and (B) no Default or Event of
Default would be in existence following such designation.
"Weighted Average Life to Maturity" means, when applied to any Indebtedness
at
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any date, the number of years obtained by dividing (a) the sum of the products
obtained by multiplying (i) the amount of each then remaining installment,
sinking fund, serial maturity or other required payments of principal, including
payment at final maturity, in respect thereof, by (ii) the number of years
(calculated to the nearest one-twelfth) that will elapse between such date and
the making of such payment, by (b) the then outstanding principal amount of such
Indebtedness.
"Wholly Owned Restricted Subsidiary" of any Person means a Restricted
Subsidiary of such Person to the extent (a) all of the outstanding Capital Stock
or other ownership interests of which (other than directors' qualifying shares)
shall at the time be owned directly or indirectly by such Person or (b) such
Restricted Subsidiary is organized in a foreign jurisdiction and is required by
the applicable laws and regulations of such foreign jurisdiction to be partially
owned by the government of such foreign jurisdiction or individual or corporate
citizens of such foreign jurisdiction or another foreign jurisdiction in order
for such Restricted Subsidiary to transact business in such foreign
jurisdiction, provided that such Person, directly or indirectly, owns the
remaining Capital Stock or ownership interests in such Restricted Subsidiary
and, by contract or otherwise, derives the economic benefits of ownership of
such Restricted Subsidiary to substantially the same extent as if such
Restricted Subsidiary were a wholly owned Restricted Subsidiary.
Section 1.02. Other Definitions.
Defined in
Term Section
---- ----------
"Affiliate Transaction"........... 4.11
"Asset Sale Offer"................ 3.09
"Change of Control Offer"......... 4.15
"Change of Control Payment"....... 4.15
"Change of Control Payment Date".. 4.15
"Covenant Defeasance"............. 8.03
"DTC"............................. 2.03
"Event of Default"................ 6.01
"Excess Proceeds"................. 4.10
"incur" or "incurrence"........... 4.09
"Legal Defeasance"................ 8.02
"Offer Amount".................... 3.09
"Offer Period".................... 3.09
"Paying Agent".................... 2.03
"Payment Default"................. 6.01
"Purchase Date"................... 3.09
"Registrar"....................... 2.03
"Restricted Payments"............. 4.07
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Section 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. Any terms
incorporated in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by SEC rule under the TIA have the
meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular;
(5) provisions apply to successive events and transactions; and
(6) references to sections of or rules under the Securities Act or the
Exchange Act shall be deemed to include substitute, replacement or
successor sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
The Notes and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A-1 or Exhibit A-2 hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
usage. Each Note shall be dated the date of its authentication. The Notes
shall be issued in denominations of $1,000 and integral multiples thereof.
The Series A Notes and the Series B Notes shall be considered collectively
to be a single class for all purposes of this Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase.
The terms and provisions contained in the Notes shall constitute, and are
hereby expressly made, a part of this Indenture and the Company, the Guarantors
and the Trustee, by their execution and delivery of this Indenture, expressly
agree to such terms
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and provisions and to be bound thereby.
(a) Global Notes. Except as provided in Section 2.01(c), Series A Notes
offered and sold to QIBs in reliance on Rule 144A shall be issued initially in
the form of one or more 144A Global Notes, which shall be deposited on behalf of
the purchasers of the Series A Notes represented thereby with the Note Custodian
and registered in the name of the Depository or a nominee of the Depository,
duly executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of the 144A Global Notes may from time
to time be increased or decreased by adjustments made on the records of the
Trustee and the Depository or its nominee, as the case may be, in connection
with transfers of interests as hereinafter provided.
Series A Notes offered and sold in reliance on Regulation S, if any, shall
be issued initially in the form of the Regulation S Temporary Global Note, which
shall be deposited on behalf of the purchasers of the Series A Notes represented
thereby with the Note Custodian and registered in the name of the Depository or
the nominee of the Depository for the accounts of designated agents holding on
behalf of Euroclear or Cedel, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The "40-day restricted period" (as defined
in Regulation S) shall be terminated upon the receipt by the Trustee of (i) a
written certificate from the Depository, together with copies of certificates
from Euroclear and Cedel certifying that they have received certification of
non-United States beneficial ownership of 100% of the aggregate principal amount
of the Regulation S Temporary Global Note (except to the extent of any
beneficial owners thereof who acquired an interest therein pursuant to another
exemption from registration under the Securities Act and who will take delivery
of a beneficial ownership interest in a 144A Global Note, all as contemplated by
Section 2.06(a)(ii) hereof), and (ii) an Officers' Certificate from the Company.
Following the termination of the 40-day restricted period, beneficial interests
in the Regulation S Temporary Global Note shall be exchanged for beneficial
interests in one or more Regulation S Permanent Global Notes pursuant to the
Applicable Procedures. Simultaneously with the authentication of Regulation S
Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary
Global Note. The aggregate principal amount of the Regulation S Temporary
Global Note and the Regulation S Permanent Global Notes may from time to time be
increased or decreased by adjustments made on the records of the Trustee and the
Depository or its nominee, as the case may be, in connection with transfers of
interests as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes as shall be
specified therein and each shall provide that it shall represent the aggregate
amount of outstanding Notes from time to time endorsed thereon and that the
aggregate amount of outstanding Notes represented thereby may from time to time
be reduced or increased, as appropriate, to reflect exchanges, redemptions and
transfers of interests. Any endorsement of a Global Note to reflect the amount
of any increase or decrease in the amount of outstanding Notes represented
thereby shall be made by the Trustee or the Note Custodian, at the direction of
the Trustee, in accordance with instructions given by the Holder thereof as
required by Section 2.06 hereof.
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The provisions of the "Operating Procedures of the Euroclear System" and
"Terms and Conditions Governing Use of Euroclear" and the "Management
Regulations" and "Instructions to Participants" of Cedel shall be applicable to
interests in the Regulation S Temporary Global Note and the Regulation S
Permanent Global Notes, if any, that are held by Participants through Euroclear
or Cedel. The Trustee shall have no obligation to notify Holders of any such
procedures or to monitor or enforce compliance with the same.
(b) Book-Entry Provisions. Participants shall have no rights either under
this Indenture with respect to any Global Note held on their behalf by the
Depository or by the Note Custodian as custodian for the Depository or under
such Global Note, and the Depository may be treated by the Company, the Trustee
and any Agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any Agent of the Company or the
Trustee from giving effect to any written certification, proxy or other
authorization furnished by the Depository or impair, as between the Depository
and its Participants, the operation of customary practices of such Depository
governing the exercise of the rights of an owner of a beneficial interest in any
Global Note.
(c) Definitive Notes. Series A Notes offered and sold to Institutional
Accredited Investors who are not QIBs otherwise than in reliance on Regulation
S, if any, or to QIBs who elect to take their Series A Notes in definitive form
shall be issued initially in the form of Definitive Notes, duly executed by the
Company and authenticated by the Trustee as hereinafter provided.
Section 2.02. Execution and Authentication.
One Officer shall sign the Notes for the Company by manual or facsimile
signature. The Company's seal may be reproduced on the Notes and, if so, may be
in facsimile form.
If an Officer whose signature is on a Note no longer holds that office at
the time a Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature of an
authorized signatory of the Trustee. Such signature shall be conclusive
evidence that the Note has been authenticated under this Indenture. The form of
Trustee's certificate of authentication to be borne by the Notes shall be
substantially as set forth in Exhibit A-1 or Exhibit A-2 hereto.
Each Note shall be dated the date of its authentication.
The Trustee shall authenticate (i) the Series A Notes for original issue on
the Issue Date in the aggregate principal amount of $100,000,000 (the "Original
Notes"), (ii)
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additional Series A Notes for original issue from time to time after the Issue
Date in such principal amounts as may be set forth in a written order of the
Company described in this sentence and (iii) the Series B Notes from time to
time for issue only in exchange for a like principal amount of Series A Notes,
in each case upon a written order of the Company signed by one Officer, which
written order shall specify (a) the amount of Notes to be authenticated and the
date of original issue thereof, (b) whether the Notes are Series A Notes or
Series B Notes, and (c) the amount of Notes to be issued in global form or
definitive form. The aggregate principal amount of Notes outstanding at any time
may not exceed $100,000,000 plus such additional principal amounts as may be
issued and authenticated pursuant to clause (ii) of this paragraph, except as
provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Notes. An authenticating agent may authenticate Notes whenever
the Trustee may do so. Each reference in this Indenture to authentication by
the Trustee includes authentication by such agent. An authenticating agent has
the same rights as an Agent to deal with the Company, any Guarantor or an
Affiliate of the Company.
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may be presented
for registration of transfer or for exchange ("Registrar") and an office or
agency in New York City where Notes may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Notes and of their transfer
and exchange. The Company may appoint one or more co-registrars and one or more
additional paying agents. The term "Registrar" includes any co-registrar and
the term "Paying Agent" includes any additional paying agent. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
shall notify the Trustee in writing of the name and address of any Agent not a
party to this Indenture. If the Company fails to appoint or maintain another
entity as Registrar or Paying Agent, the Trustee shall act as such. The Company
shall enter into an appropriate agency agreement with any Agent not a party to
this Indenture, and such agreement shall incorporate the TIA's provisions of
this Indenture that relate to such Agent. The Company or any of its
Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company ("DTC") to act
as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the Registrar and
Paying Agent and to act as Note Custodian with respect to the Global Notes.
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Section 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to agree
in writing that the Paying Agent will hold in trust for the benefit of Holders
or the Trustee all money held by the Paying Agent for the payment of principal
of or premium, interest or Liquidated Damages, if any, on the Notes, and will
notify the Trustee of any default by the Company in making any such payment.
While any such default continues, the Trustee may require a Paying Agent to pay
all money held by it to the Trustee. The Company at any time may require a
Paying Agent to pay all money held by it to the Trustee. Upon payment over to
the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall
have no further liability for the money. If the Company or a Subsidiary acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders all money held by it as Paying Agent. Upon any
bankruptcy or reorganization proceedings relating to the Company, the Trustee
shall serve as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
all Holders and shall otherwise comply with TIA (S) 312(a). If the Trustee is
not the Registrar, the Company shall furnish to the Trustee at least seven
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of the Holders of
Notes and the Company shall otherwise comply with TIA (S) 312(a).
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. The transfer and exchange of
Global Notes or beneficial interests therein shall be effected through the
Depository, in accordance with this Indenture and the Applicable Procedures.
Beneficial interests in a Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Global Note in
accordance with the Applicable Procedures and, in the case of a Transfer
Restricted Security, the transfer restrictions set forth in the legend in
subsection (f) of this Section 2.06. Transfers of beneficial interests in the
Global Notes to Persons required to take delivery thereof in the form of an
interest in another Global Note shall be permitted as follows:
(i) 144A Global Note to Regulation S Global Note. If, at any time, an
owner of a beneficial interest in a 144A Global Note deposited with the
Depository (or the Trustee as custodian for the Depository) wishes to
transfer its beneficial interest in such 144A Global Note to a Person who
is required or permitted to take delivery thereof in the form of an
interest in a Regulation S Global Note, such owner shall, subject to the
Applicable Procedures, exchange or cause the exchange of such interest for
an equivalent beneficial interest in a Regulation S
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Global Note as provided in this Section 2.06(a)(i). Upon receipt by the
Trustee of (A) instructions given in accordance with the Applicable
Procedures from a Participant directing the Trustee to credit or cause to
be credited a beneficial interest in the Regulation S Global Note in an
amount equal to the beneficial interest in the 144A Global Note to be
transferred, (B) a written order given in accordance with the Applicable
Procedures containing information regarding the Participant account of the
Depository and the Euroclear or Cedel account to be credited with such
increase and, in the case of Global Notes that are Transfer Restricted
Securities, (C) a certificate in the form of Exhibit B-1 hereto given by
the owner of such beneficial interest stating that the transfer of such
interest has been made in compliance with the transfer restrictions
applicable to the Global Notes and pursuant to and in accordance with Rule
903 or Rule 904 of Regulation S, then the Trustee, as Registrar, shall
instruct the Depository to reduce or cause to be reduced the aggregate
principal amount of the applicable 144A Global Note and to increase or
cause to be increased the aggregate principal amount of the applicable
Regulation S Global Note by the principal amount of the beneficial interest
in the 144A Global Note to be transferred, to credit or cause to be
credited to the account of the Person specified in such instructions, a
beneficial interest in the Regulation S Global Note equal to the reduction
in the aggregate principal amount of the 144A Global Note, and to debit, or
cause to be debited, from the account of the Person making such transfer
the beneficial interest in the 144A Global Note that is being transferred.
(ii) Regulation S Global Note to 144A Global Note. If, at any time,
after the expiration of the 40-day restricted period, an owner of a
beneficial interest in a Regulation S Global Note deposited with the
Depository (or with the Trustee as custodian for the Depository) wishes to
transfer its beneficial interest in such Regulation S Global Note to a
Person who is required or permitted to take delivery thereof in the form of
an interest in a 144A Global Note, such owner shall, subject to the
Applicable Procedures, exchange or cause the exchange of such interest for
an equivalent beneficial interest in a 144A Global Note as provided in this
Section 2.06(a)(ii). Upon receipt by the Trustee of (A) instructions from
Euroclear or Cedel, if applicable, and the Depository, directing the
Trustee, as Registrar, to credit or cause to be credited a beneficial
interest in the 144A Global Note equal to the beneficial interest in the
Regulation S Global Note to be transferred, such instructions to contain
information regarding the Participant account with the Depository to be
credited with such increase, (B) a written order given in accordance with
the Applicable Procedures containing information regarding the participant
account of the Depository and, in the case of Global Notes that are
Transfer Restricted Securities, (C) a certificate in the form of Exhibit B-
2 attached hereto given by the owner of such beneficial interest stating
(1) if the transfer is pursuant to Rule 144A, that the Person transferring
such interest in a Regulation S Global Note reasonably believes that the
Person acquiring such interest in a 144A Global Note is a QIB and is
obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A, (2) that the transfer complies with the
requirements of Rule 144 under the Securities Act, (3) if the transfer is
pursuant to
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any other exemption from the registration requirements of the Securities
Act, that the transfer of such interest has been made in compliance with
the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with the requirements of the exemption claimed, such
statement to be supported by an Opinion of Counsel from the transferee or
the transferor in form reasonably acceptable to the Company and to the
Registrar and in each case of clause (1), (2) or (3) above, in accordance
with any applicable securities laws of any state of the United States or
any other applicable jurisdiction or (4) such transfer is being effected
pursuant to an effective registration statement under the Securities Act,
then the Trustee, as Registrar, shall instruct the Depository to reduce or
cause to be reduced the aggregate principal amount of such Regulation S
Global Note and to increase or cause to be increased the aggregate
principal amount of the applicable 144A Global Note by the principal amount
of the beneficial interest in the Regulation S Global Note to be
transferred, and the Trustee, as Registrar, shall instruct the Depository,
concurrently with such reduction, to credit or cause to be credited to the
account of the Person specified in such instructions a beneficial interest
in the applicable 144A Global Note equal to the reduction in the aggregate
principal amount of such Regulation S Global Note and to debit or cause to
be debited from the account of the Person making such transfer the
beneficial interest in the Regulation S Global Note that is being
transferred.
(b) Transfer and Exchange of Definitive Notes. When Definitive Notes are
presented by a Holder to the Registrar with a request to register the transfer
of the Definitive Notes or to exchange such Definitive Notes for an equal
principal amount of Definitive Notes of other authorized denominations, the
Registrar shall register the transfer or make the exchange as requested only if
the Definitive Notes are presented or surrendered for registration of transfer
or exchange, are endorsed or accompanied by a written instrument of transfer in
form satisfactory to the Registrar duly executed by such Holder or by his
attorney, duly authorized in writing and the Registrar receives the following
documentation (all of which may be submitted by facsimile):
(i) in the case of Definitive Notes that are Transfer Restricted
Securities, such request shall be accompanied by the following additional
information and documents, as applicable:
(A) if such Transfer Restricted Security is being delivered to
the Registrar by a Holder for registration in the name of such Holder,
without transfer, or such Transfer Restricted Security is being
transferred (1) to the Company or any of its Subsidiaries or (2)
pursuant to an effective registration statement under the Securities
Act, a certification to that effect from such Holder (in substantially
the form of Exhibit B-3 hereto);
(B) if such Transfer Restricted Security is being transferred to
a QIB in accordance with Rule 144A under the Securities Act or
pursuant to an exemption from registration in accordance with Rule 144
under the Securities Act or pursuant to an effective registration
statement under the
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Securities Act, a certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto);
(C) if such Transfer Restricted Security is being transferred to
a Non-U.S. Person in an offshore transaction in accordance with Rule
904 under the Securities Act, a certification to that effect from such
Holder (in substantially the form of Exhibit B-3 hereto but containing
the certification called for by clauses (1) through (4) of Exhibit B-1
hereto); or
(D) if such Transfer Restricted Security is being transferred to
an Institutional Accredited Investor in reliance on an exemption from
the registration requirements of the Securities Act other than those
listed in subparagraph (B) or (C) above, a certification to that
effect from such Holder (in substantially the form of Exhibit B-3
hereto), and a certification substantially in the form of Exhibit C
hereto from the transferee, and, if such transfer is in respect of an
aggregate principal amount of Notes of less than $100,000, an Opinion
of Counsel acceptable to the Company that such transfer is in
compliance with the Securities Act and any applicable blue sky laws of
any state of the United States.
(c) Transfer of a Beneficial Interest in a 144A Global Note or Regulation S
Permanent Global Note for a Definitive Note.
(i) Any Person having a beneficial interest in a 144A Global Note or
Regulation S Permanent Global Note may upon request, subject to the
Applicable Procedures, exchange such beneficial interest for a Definitive
Note, upon receipt by the Trustee of written instructions or such other
form of instructions as is customary for the Depository (or Euroclear or
Cedel, if applicable), from the Depository or its nominee on behalf of any
Person having a beneficial interest in a 144A Global Note or Regulation S
Permanent Global Note, and, in the case of a Transfer Restricted Security,
the following additional information and documents (all of which may be
submitted by facsimile):
(A) if such beneficial interest is being transferred to the
Person designated by the Depository as being the beneficial owner or
to the Company or any of its Subsidiaries, a certification to that
effect from such Person (in substantially the form of Exhibit B-4
hereto);
(B) if such beneficial interest is being transferred to a QIB in
accordance with Rule 144A under the Securities Act or pursuant to an
exemption from registration in accordance with Rule 144 under the
Securities Act or pursuant to an effective registration statement
under the Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B-4 hereto);
(C) if such beneficial interest is being transferred to a Non-
U.S.
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Person in an offshore transaction in accordance with Rule 904 under
the Securities Act, a certification to that effect from the transferor
(in substantially the form of Exhibit B-4 hereto but containing the
certification called for by clauses (1) through (4) of Exhibit B-1
hereto); or
(D) if such beneficial interest is being transferred to an
Institutional Accredited Investor, pursuant to a private placement
exemption from the registration requirements of the Securities Act
other than those listed in subparagraph (B) or (C) above, a
certification to that effect from such Holder (in substantially the
form of Exhibit B-4 hereto), a certification from the applicable
transferee (in substantially the form of Exhibit C hereto) and, if
such transfer is in respect of an aggregate principal amount of Notes
of less than $100,000, an Opinion of Counsel acceptable to the Company
that such transfer is in compliance with the Securities Act and any
applicable blue sky laws of any state of the United States.
in which case the Trustee or the Note Custodian, at the direction of the
Trustee, shall, in accordance with the standing instructions and procedures
existing between the Depository and the Note Custodian, cause the aggregate
principal amount of 144A Global Notes or Regulation S Permanent Global
Notes, as applicable, to be reduced accordingly and, following such
reduction, the Company shall execute and, the Trustee shall authenticate
and deliver to the transferee a Definitive Note in the appropriate
principal amount.
(ii) Definitive Notes issued in exchange for a beneficial interest in
a 144A Global Note or Regulation S Permanent Global Note, as applicable,
pursuant to this Section 2.06(c) shall be registered in such names and in
such authorized denominations as the Depository, pursuant to instructions
from its direct or Indirect Participants or otherwise, shall instruct the
Trustee. The Trustee shall deliver such Definitive Notes to the Persons in
whose names such Notes are so registered. Following any such issuance of
Definitive Notes, the Trustee, as Registrar, shall instruct the Depository
to reduce or cause to be reduced the aggregate principal amount of the
applicable Global Note to reflect the transfer.
(d) Restrictions on Transfer and Exchange of Global Notes. Notwithstanding
any other provision of this Indenture (other than the provisions set forth in
subsection (f) of this Section 2.06), a Global Note may not be transferred as a
whole except by the Depository to a nominee of the Depository or by a nominee of
the Depository to the Depository or another nominee of the Depository or by the
Depository or any such nominee to a successor Depository or a nominee of such
successor Depository.
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(e) Authentication of Definitive Notes in Absence of Depository. If at any
time the Depository for the Notes notifies the Company that the Depository is
unwilling or unable to continue as Depository for the Global Notes and a
successor Depository for the Global Notes is not appointed by the Company within
90 days after delivery of such notice then the Company shall execute, and the
Trustee shall, upon receipt of an authentication order in accordance with
Section 2.02 hereof, authenticate and deliver, Definitive Notes in an aggregate
principal amount equal to the principal amount of the Global Notes in exchange
for such Global Notes.
(f) Legends.
(i) Except as permitted by the following paragraphs (ii), (iii) and
(iv), each Note certificate evidencing a Global Note or a Definitive Note
(and all Notes issued in exchange therefor or substitution thereof) shall
bear a legend in substantially the following form:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON
THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A
PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES
ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF
COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE COMPANY OR (3)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
IN (A) ABOVE."
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(ii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
pursuant to Rule 144 under the Securities Act or pursuant to an effective
registration statement under the Securities Act:
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Note that
does not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted Security upon
certification from the transferring holder substantially in the form
of Exhibit B-3 hereto; and
(B) in the case of any Transfer Restricted Security represented
by a Global Note, such Transfer Restricted Security shall not be
required to bear the legend set forth in (i) above, but shall continue
to be subject to the provisions of Section 2.06(a) and (c) hereof;
provided, however, that with respect to any request for an exchange of
a Transfer Restricted Security that is represented by a Global Note
for a Definitive Note that does not bear the legend set forth in (i)
above, which request is made in reliance upon Rule 144 or pursuant to
an effective registration statement, the Holder thereof shall certify
in writing to the Registrar that such request is being made pursuant
to Rule 144 or pursuant to an effective registration statement (such
certification to be substantially in the form of Exhibit B-4 hereto).
(iii) Upon any sale or transfer of a Transfer Restricted Security
(including any Transfer Restricted Security represented by a Global Note)
in reliance on any exemption from the registration requirements of the
Securities Act (other than exemptions pursuant to Rule 144 under the
Securities Act) in which the Holder or the transferee provides an Opinion
of Counsel to the Company and the Registrar in form and substance
reasonably acceptable to the Company and the Registrar (which Opinion of
Counsel shall also state that the transfer restrictions contained in the
legend are no longer applicable):
(A) in the case of any Transfer Restricted Security that is a
Definitive Note, the Registrar shall permit the Holder thereof to
exchange such Transfer Restricted Security for a Definitive Note that
does not bear the legend set forth in (i) above and rescind any
restriction on the transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted Security represented
by a Global Note, such Transfer Restricted Security shall not be
required to bear the legend set forth in (i) above, but shall continue
to be subject to the provisions of Section 2.06(a) and (c) hereof.
(iv) Notwithstanding the foregoing, upon consummation of an Exchange
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Offer, the Company shall issue and, upon receipt of an authentication order
in accordance with Section 2.02 hereof, the Trustee shall authenticate one
or more Unrestricted Global Notes in aggregate principal amount equal to
the sum of (A) the principal amount of the Restricted Beneficial Interests
tendered for acceptance by Persons that are not (1) broker-dealers, (2)
Persons participating in the distribution of the Series B Notes or (3)
Persons who are Affiliates of the Company and accepted for exchange in the
Exchange Offer and (B) the principal amount of the Restricted Definitive
Notes accepted for exchange in the Exchange Offer, unless the Holders of
such Restricted Definitive Notes shall request the receipt of Definitive
Notes, in which case the Company shall execute and the Trustee shall
authenticate and deliver to the Persons designated by the Holders of such
Restricted Definitive Notes one or more Definitive Notes without the legend
set forth in Section 2.06(f) in the appropriate principal amount.
Concurrently with the issuance of such Unrestricted Global Notes, the
Trustee shall cause the aggregate principal amount of the applicable
Restricted Global Notes to be reduced accordingly.
(g) Cancellation and/or Adjustment of Global Notes. At such time as all
beneficial interests in Global Notes have been exchanged for Definitive Notes,
redeemed, repurchased or cancelled, all Global Notes shall be returned to or
retained and cancelled by the Trustee in accordance with Section 2.11 hereof.
At any time prior to such cancellation, if any beneficial interest in a Global
Note is exchanged for Definitive Notes, redeemed, repurchased or cancelled, the
principal amount of Notes represented by such Global Note shall be reduced
accordingly and an endorsement shall be made on such Global Note, by the Trustee
or the Note Custodian, at the direction of the Trustee, to reflect such
reduction.
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and exchanges, subject to
this Section 2.06, the Company shall execute and, upon the written order of
the Company signed by an Officer of the Company, the Trustee shall
authenticate Definitive Notes and Global Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for any
registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith (other than any such transfer taxes
or similar governmental charge payable upon exchange or transfer pursuant
to Sections 3.07, 4.10, 4.15 and 9.05 hereof).
(iii) The Registrar shall not be required to register the transfer of
or exchange any Note selected for redemption in whole or in part, except
the unredeemed portion of any Note being redeemed in part.
(iv) All Definitive Notes and Global Notes issued upon any
registration of
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transfer or exchange of Definitive Notes or Global Notes shall be the valid
obligations of the Company, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Definitive Notes or Global Notes
surrendered upon such registration of transfer or exchange.
(v) The Company and the Registrar shall not be required:
(A) to issue, to register the transfer of or to exchange Notes
during a period beginning at the opening of business 15 days before
the day of any selection of Notes for redemption under Section 3.02
hereof and ending at the close of business on the day of selection;
(B) to register the transfer of or to exchange any Note so
selected for redemption in whole or in part, except the unredeemed
portion of any Note being redeemed in part;
(C) to register the transfer of or to exchange a Note between a
record date and the next succeeding interest payment date; or
(D) to register the transfer of a Note other than in amounts of
$1,000 or multiple integrals thereof.
(vi) Prior to due presentment for the registration of a transfer of
any Note, the Trustee, any Agent and the Company may deem and treat the
Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of and interest on
such Notes, and neither the Trustee, any Agent nor the Company shall be
affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes and Global
Notes in accordance with the provisions of Section 2.02 hereof.
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Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the Company, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Note, the Company shall issue and the Trustee, upon the written order of
the Company signed by two Officers of the Company, shall authenticate a
replacement Note if the Trustee's requirements are met. If required by the
Trustee or the Company, an indemnity bond must be supplied by the Holder that is
sufficient in the judgment of the Trustee and the Company to protect the
Company, the Trustee, any Agent and any authenticating agent from any loss that
any of them may suffer if a Note is replaced. The Company may charge for its
expenses in replacing a Note. If, after the delivery of such replacement Note, a
bona fide purchaser of the original Note in lieu of which such replacement Note
was issued presents for payment or registration such original Note, the Trustee
shall be entitled to recover such replacement Note from the Person to whom it
was delivered or any Person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Company, the
Trustee, any Agent and any authenticating agent in connection therewith.
Subject to the provisions of the final sentence of the preceding paragraph
of this Section 2.07, every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, those reductions in the interest in a Global Note effected by the
Trustee in accordance with the provisions hereof, and those described in this
Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note
does not cease to be outstanding because the Company, any Subsidiary of the
Company or an Affiliate of the Company or any Subsidiary of the Company holds
the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the entire principal of and premium, interest and Liquidated Damages, if
any, on any Note are considered paid under Section 4.01 hereof, it ceases to be
outstanding and interest and Liquidated Damages, if any, on it cease to accrue.
If the Paying Agent (other than the Company, a Subsidiary of the Company or
an Affiliate of any thereof) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed
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to be no longer outstanding and shall cease to accrue interest and Liquidated
Damages, if any.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Company, a Subsidiary of the Company or an Affiliate, shall be considered as
though not outstanding, except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes that a Trustee knows are so owned shall be so disregarded.
Notwithstanding the foregoing, Notes that the Company, a Subsidiary of the
Company or an Affiliate offers to purchase or acquires pursuant to an offer,
exchange offer, tender offer or otherwise shall not be deemed to be owned by the
Company, a Subsidiary of the Company or an Affiliate until legal title to such
Notes passes to the Company, such Subsidiary or such Affiliate as the case may
be.
Section 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may prepare and
the Trustee shall authenticate temporary Notes upon a written order of the
Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall
prepare and the Trustee shall authenticate definitive Notes in exchange for
temporary Notes. Until such exchange, Holders of temporary Notes shall be
entitled to all of the benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for cancellation.
The Registrar and Paying Agent shall forward to the Trustee any Notes
surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and, at the request of
the Company, shall destroy cancelled Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
cancelled Notes shall be delivered to the Company. The Company may not issue
new Notes to replace Notes that it has paid or that have been delivered to the
Trustee for cancellation, other than as contemplated by the Exchange Offer.
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Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes, it shall pay
the defaulted interest in any lawful manner plus, to the extent lawful, interest
payable on the defaulted interest, to the Persons who are Holders on a
subsequent special record date, in each case at the rate provided in the Notes
and in Section 4.01 hereof. The Company shall notify the Trustee in writing of
the amount of defaulted interest proposed to be paid on each Note and the date
of the proposed payment. The Company shall fix or cause to be fixed each such
special record date and payment date, provided, however, that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional redemption
provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30
days but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the clause of this Indenture pursuant to which the
redemption shall occur, (ii) the redemption date, (iii) the principal amount of
Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time, the Trustee
shall select the Notes to be redeemed among the Holders of the Notes, on a pro
rata basis, by lot or in accordance with any other method the Trustee considers
fair and appropriate. In the event of partial redemption by lot, the particular
Notes to be redeemed shall be selected, unless otherwise provided herein, not
less than 30 days nor more than 60 days prior to the redemption date by the
Trustee from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
Notes selected shall be in amounts of $1,000 or whole multiples of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption.
The provisions of the two preceding paragraphs of this Section 3.02 shall
not apply with respect to any redemption affecting only a Global Note, whether
such Global Note is
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to be redeemed in whole or in part. In case of any such redemption in part, the
unredeemed portion of the principal amount of the Global Note shall be in an
authorized denomination.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30 days but not
more than 60 days before a redemption date, the Company shall mail or cause to
be mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in a principal amount
equal to the unredeemed portion shall be issued upon cancellation of the
original Note;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price;
(f) that, unless the Company defaults in making such redemption
payment, interest and Liquidated Damages, if any, on Notes called for
redemp tion cease to accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this Indenture
pursuant to which the Notes called for redemption are being redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
If any of the Notes to be redeemed is in the form of a Global Note, then
the Company shall modify such notice to the extent necessary to accord with the
procedures of the Depository applicable to redemption.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense; provided, however, that the Company
shall have delivered to the Trustee, at least 45 days (unless the Company and
the Trustee agree to a shorter period) prior to the redemption date, an
Officers' Certificate requesting that the Trustee give such notice and setting
forth the information to be stated in such notice as
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provided in the preceding paragraph.
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section 3.03 hereof,
Notes called for redemption become irrevocably due and payable on the redemption
date at the redemption price. A notice of redemption may not be conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company shall deposit
with the Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 2.04 hereof) money sufficient
to pay the redemption price of and accrued interest and Liquidated Damages, if
any, on all Notes to be redeemed on that date. The Paying Agent shall promptly
return to the Company any money deposited with the Paying Agent by the Company
in excess of the amounts necessary to pay the redemption price of and accrued
interest and Liquidated Damages, if any, on all Notes to be redeemed.
If the Company complies with the provisions of the preceding paragraph, on
and after the redemption date, interest and Liquidated Damages, if any, shall
cease to accrue on the Notes or the portions of Notes called for redemption. If
a Note is redeemed on or after an interest record date but on or prior to the
related interest payment date, then any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name such Note
was registered at the close of business on such record date. If any Note called
for redemption shall not be so paid upon surrender for redemption because of the
failure of the Company to comply with the preceding paragraph, interest shall be
paid on the unpaid principal, from the redemption date until such principal is
paid, and to the extent lawful on any interest and Liquidated Damages, if any,
not paid on such unpaid principal, in each case at the rate provided in the
Notes and in Section 4.01 hereof.
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company shall issue
and the Trustee shall authenticate for the Holder at the expense of the Company
a new Note equal in principal amount to the unredeemed portion of the Note
surrendered.
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Section 3.07. Optional Redemption.
(a) Except as set forth in clause (b) of this Section 3.07, the Company
shall not have the option to redeem the Notes pursuant to this Section 3.07
prior to January 15, 2003. Thereafter, the Company shall have the option to
redeem the Notes, in whole or in part, at the redemption prices (expressed as
percentages of principal amount) set forth below plus accrued and unpaid
interest and Liquidated Damages, if any, thereon, to the applicable redemption
date, if redeemed during the twelve-month period beginning on January 15 of the
years indicated below:
YEAR PERCENTAGE
---- ----------
2003 103.938%
2004 102.953%
2005 101.969%
2006 100.984%
2007 and thereafter 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.07, at
any time prior to January 22, 2001, the Company may redeem up to 35% of the
aggregate principal amount of Notes originally issued at a redemption price of
107.875% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the redemption date, with the net cash
proceeds of one or more Qualified Equity Offerings, provided that (i) at least
65% of the aggregate principal amount of Notes originally issued remains
outstanding immediately after the occurrence of each such redemption and (ii)
each such redemption shall occur within 60 days of the date of the closing of
each such Qualified Equity Offering.
(c) Any redemption pursuant to this Section 3.07 shall be made pursuant to
the provisions of Section 3.01 through Section 3.06 hereof.
Section 3.08. Mandatory Redemption.
Except as set forth under Sections 4.10 and 4.15 hereof, the Company shall
not be required to make mandatory redemption or sinking fund payments with
respect to the Notes.
Section 3.09. Offer to Purchase by Application of Excess Proceeds.
In the event that, pursuant to Section 4.10 hereof, the Company shall be
required to commence an offer to all Holders to purchase Notes (an "Asset Sale
Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business Days
following its commencement and no longer, except to the extent that a longer
period is required by
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applicable law (the "Offer Period"). No later than five Business Days after the
termination of the Offer Period (the "Purchase Date"), the Company shall
purchase the principal amount of Notes required to be purchased pursuant to
Section 4.10 hereof (the "Offer Amount") or, if less than the Offer Amount has
been tendered, all Notes validly tendered in response to the Asset Sale Offer.
Payment for any Notes so purchased shall be made in the same manner as interest
payments are made.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued and unpaid interest and
Liquidated Damages, if any, shall be paid to the Person in whose name a Note is
registered at the close of business on such record date, and no additional
interest or Liquidated Damages, if any, shall be payable to Holders who tender
Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company shall send, by
first class mail, a notice to each of the Holders, with a copy to the Trustee.
The notice shall contain all instructions and materials necessary to enable such
Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer
shall be made to all Holders. The notice, which shall govern the terms of the
Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this Section
3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer
shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrue interest and Liquidated Damages, if any;
(d) that, unless the Company defaults in making such payment, any Note
accepted for payment pursuant to the Asset Sale Offer shall cease to accrue
interest and Liquidated Damages, if any after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to an
Asset Sale Offer may only elect to have all of such Note purchased and may
not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to any
Asset Sale Offer shall be required to surrender the Note, with the form
entitled "Option of Holder to Elect Purchase" on the reverse of the Note
completed, to the Company or a Paying Agent at the address specified in the
notice at least three days before the Purchase Date;
(g) that Holders shall be entitled to withdraw their election if the
Company or the Paying Agent, as the case may be, receives, not later than
the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder
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delivered for purchase and a statement that such Holder is withdrawing his
election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Trustee shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased); and
(i) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered (or transferred by book-entry transfer).
If any of the Notes subject to an Asset Sale Offer is in the form of a
Global Note, then the Company shall modify such notice to the extent necessary
to accord with the procedures of the Depository applicable to repurchases.
On or before the Purchase Date, the Company shall, to the extent lawful,
accept for payment, on a pro rata basis to the extent necessary, the Offer
Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer,
or if less than the Offer Amount has been tendered, all Notes tendered, and
shall deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of this Section 3.09. The Company or the Paying Agent, as the case may
be, shall promptly (but in any case not later than five days after the Purchase
Date) mail or deliver to each tendering Holder an amount equal to the purchase
price of the Notes tendered by such Holder and accepted by the Company for
purchase, and the Company shall promptly issue a new Note, and the Trustee shall
authenticate and mail or deliver such new Note to such Holder, in a principal
amount equal to any unpurchased portion of the Note surrendered. Any Note not
so accepted shall be promptly mailed or delivered by the Company to the Holder
thereof. The Company shall publicly announce the results of the Asset Sale
Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Section 3.01 through Section 3.06 hereof.
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ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of and premium,
interest and Liquidated Damages, if any, on the Notes on the dates and in the
manner provided in the Notes. Principal, premium, interest and Liquidated
Damages, if any, shall be considered paid on the date due if the Paying Agent,
if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New
York time on the due date money deposited by the Company in immediately
available funds and designated for and sufficient to pay all principal, premium,
interest and Liquidated Damages, if any, then due.
The Company shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue principal at the rate equal to
the interest rate on the Notes to the extent lawful; it shall pay interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue installments of interest and Liquidated Damages, if any (without regard
to any applicable grace period), at the same rate to the extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain an office or agency (which may be an office of
the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where
Notes may be presented or surrendered for payment, where Notes may be
surrendered for registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company shall give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee.
The Company may also from time to time designate one or more other offices
or agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. Further, if at
any time there shall be no such office or agency in the City of New York where
the Notes may be presented or surrendered for payment, the Company shall
forthwith designate and maintain such an office or agency in the City of New
York, in order that the Notes shall at all times be payable in the City of New
York. The Company shall give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby designates the Corporate Trust Office of the Trustee as
one such office or agency of the Company in accordance with Section 2.03.
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Section 4.03. Reports.
(a) Whether or not the Company is required to do so by the rules and
regulations of the SEC, the Company will file with the SEC (unless the SEC will
not accept such a filing) and, within 15 days of filing, or attempting to file,
the same with the SEC, furnish to the holders of the Notes (i) all quarterly and
annual financial and other information with respect to the Company and its
Subsidiaries that would be required to be contained in a filing with the SEC on
Forms 10-Q and 10-K if the Company were required to file such forms, including a
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and, with respect to the annual information only, a report thereon
by the Company's certified independent accountants, and (ii) all current reports
that would be required to be filed with the SEC on Form 8-K if the Company were
required to file such reports. The Company shall at all times comply with TIA
(S) 314(a).
(b) The Company and the Guarantors shall furnish to the holders of the
Notes, prospective purchasers of the Notes and securities analysts, upon their
request, the information, if any, required to be delivered pursuant to Rule
144A(d)(4) under the Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days after the end
of each fiscal year, an Officers' Certificate stating that a review of the
activities of the Company and its Restricted Subsidiaries during the preceding
fiscal year has been made under the supervision of the signing Officers with a
view to determining whether the Company has kept, observed, performed and
fulfilled its obligations under this Indenture, and further stating, as to each
such Officer signing such certificate, that to the best of his or her knowledge
the Company has kept, observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the performance or
observance of any of the terms, provisions and conditions of this Indenture (or,
if a Default or Event of Default shall have occurred, describing all such
Defaults or Events of Default of which he or she may have knowledge and what
action the Company is taking or proposes to take with respect thereto) and that
to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the year-end financial
statements delivered pursuant to Section 4.03(a) above shall be accompanied by a
written statement of the Company's independent public accountants (who shall be
a firm of established national reputation) that in making the examination
necessary for certification of such financial statements, nothing has come to
their attention that would lead them to believe that the Company has violated
any provisions of Article 4 or Article 5 hereof or, if any
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such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Notes are outstanding, deliver
to the Trustee, forthwith upon any Officer becoming aware of any Default or
Event of Default, an Officers' Certificate specifying such Default or Event of
Default and what action the Company is taking or proposes to take with respect
thereto.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its Subsidiaries to pay,
prior to delinquency, all material taxes, assessments, and governmental levies
except such as are contested in good faith and by appropriate proceedings or
where the failure to effect such payment is not adverse in any material respect
to the Holders of the Notes.
Section 4.06. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do so) that it
shall not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that may affect the covenants or
the performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not, by resort to any such law, hinder, delay
or impede the execution of any power herein granted to the Trustee, but shall
suffer and permit the execution of every such power as though no such law has
been enacted.
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Section 4.07. Restricted Payments.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, (i) declare or pay any dividend or make
any other payment or distribution on account of the Company's or any of its
Restricted Subsidiaries' Equity Interests (including, without limitation, any
payment in connection with any merger or consolidation involving the Company) or
to the direct or indirect holders of the Company's Equity Interests in their
capacity as such (other than dividends or distributions payable in Equity
Interests (other than Disqualified Stock) of the Company); (ii) purchase, redeem
or otherwise acquire or retire for value (including without limitation, in
connection with any merger or consolidation involving the Company) any Equity
Interests of the Company (other than any such Equity Interests owned by the
Company or any Wholly Owned Restricted Subsidiary of the Company); (iii) make
any payment on or with respect to, or purchase, redeem, defease or otherwise
acquire or retire for value, any Indebtedness that is subordinated to the Notes,
except a payment of interest or principal at Stated Maturity; or (iv) make any
Restricted Investment (all such payments and other actions set forth in clauses
(i) through (iv) above being collectively referred to as "Restricted Payments"),
unless, at the time of and after giving effect to such Restricted Payment:
(a) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(b) the Company would, at the time of such Restricted Payment and
after giving pro forma effect thereto as if such Restricted Payment had
been made at the beginning of the applicable four-quarter period, have been
permitted to incur at least $1.00 of additional Indebtedness pursuant to
the Consolidated Interest Coverage Ratio test set forth in Section 4.09
hereof; and
(c) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by the Company and its Restricted
Subsidiaries after the date of this Indenture (excluding Restricted
Payments permitted by clauses (b), (c), (d) and (f), but including, without
duplication, Restricted Payments permitted by clauses (a) and (e), of the
next succeeding paragraph), is less than the sum of (A) 50% of the
Consolidated Net Income of the Company for the period (taken as one
accounting period) from January 1, 1998 to the end of the Company's most
recently ended fiscal quarter for which internal financial statements are
available at the time of such Restricted Payment (or, if such Consolidated
Net Income for such period is a deficit, less 100% of such deficit), plus
(B) 100% of the aggregate net cash proceeds received by the Company from
the issue or sale since the date of this Indenture of Equity Interests of
the Company (other than Disqualified Stock) or of Disqualified Stock or
debt securities of the Company that have been converted into such Equity
Interests (other than any such Equity Interests, Disqualified Stock or
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convertible debt securities sold to a Restricted Subsidiary of the Company
and other than Disqualified Stock or convertible debt securities that have
been converted into Disqualified Stock), plus (C) to the extent that any
Restricted Investment that was made after the date of this Indenture is
sold for cash or otherwise liquidated or repaid for cash, the lesser of (1)
the cash return of capital with respect to such Restricted Investment (less
the cost of disposition, if any) and (2) the initial amount of such
Restricted Investment, plus (D) in the event that any Unrestricted
Subsidiary is redesignated as a Restricted Subsidiary, the lesser of (1) an
amount equal to the fair market value of the Company's Investments in such
Restricted Subsidiary and (2) the amount of Restricted Investments
previously made by the Company and its Restricted Subsidiaries in such
Unrestricted Subsidiary, plus (E) $10.0 million.
The foregoing provisions will not prohibit any of the following: (a) the
payment of any dividend within 60 days after the date of declaration thereof, if
at said date of declaration such payment would have complied with the provisions
of this Indenture; (b) the redemption, repurchase, retirement, defeasance or
other acquisition of any subordinated Indebtedness or Equity Interests of the
Company in exchange for, or out of the net cash proceeds of the substantially
concurrent sale (other than to a Subsidiary of the Company) of, other Equity
Interests of the Company (other than any Disqualified Stock), provided that the
amount of any such net cash proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (iii)(B) of the preceding paragraph; (c) the defeasance, redemption,
repurchase, retirement or other acquisition of subordinated Indebtedness with
the net cash proceeds from an incurrence of, or in exchange for, Permitted
Refinancing Indebtedness; (d) the payment of any dividend or distribution by a
Restricted Subsidiary of the Company to the Company or any Wholly Owned
Restricted Subsidiary of the Company; (e) so long as no Default or Event of
Default shall have occurred and be continuing, the repurchase, redemption or
other acquisition or retirement for value of any Equity Interests of the Company
held by any employee of the Company's or any of its Restricted Subsidiaries,
provided that the aggregate price paid for all such repurchased, redeemed,
acquired or retired Equity Interests shall not exceed $500,000 (or the
equivalent thereof in any other currency or currency unit) in any calendar year;
and (f) the acquisition of Equity Interests of the Company in connection with
the exercise of stock options or stock appreciation rights by way of cashless
exercise or in connection with the satisfaction of withholding tax obligations.
The Board of Directors may designate any Restricted Subsidiary to be an
Unrestricted Subsidiary if such designation would not cause a Default. For
purposes of making such determination, all outstanding Investments by the
Company and its Restricted Subsidiaries (except to the extent repaid in cash) in
the Subsidiary so designated shall be deemed to be Restricted Payments at the
time of such designation. All such outstanding Investments will be deemed to
constitute Investments in an amount equal to the fair market value of such
Investments at the time of such designation. Such designation shall only be
permitted if such Restricted Payment would be permitted at such time and if such
Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
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The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary, provided that such
designation shall be deemed to be an incurrence of Indebtedness by a Restricted
Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation shall only be permitted if (a) such Indebtedness
is permitted under Section 4.09 hereof, calculated on a pro forma basis as if
such designation had occurred at the beginning of the four-quarter reference
period, and (b) no Default or Event of Default would be in existence following
such designation.
Any designation of a Subsidiary as an Unrestricted Subsidiary shall be
evidenced to the Trustee by filing with the Trustee a certified copy of a
resolution of the Board of Directors giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the terms
of the definition of Unrestricted Subsidiary set forth in this Indenture and
with this Section 4.07.
The amount of all Restricted Payments (other than cash) shall be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Company or such Restricted
Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair
market value of any non-cash Restricted Payment shall be determined in the
manner contemplated by the definition of the term "fair market value," and the
results of such determination shall be evidenced by an Officers' Certificate
delivered to the Trustee. Not later than five Business Days following the date
of making any Restricted Payment, the Company shall deliver to the Trustee an
Officers' Certificate stating that such Restricted Payment is permitted and
setting forth the basis upon which the calculations required by this Section
4.07 were computed.
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Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary to (a)(i) pay dividends or make any other distributions to
the Company or any of its Restricted Subsidiaries on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits,
or (ii) pay any Indebtedness owed to the Company or any of its Restricted
Subsidiaries, (b) make loans or advances to the Company or any of its Restricted
Subsidiaries or (c) transfer any of its properties or assets to the Company or
any of its Restricted Subsidiaries, except for such encumbrances or restrictions
existing under or by reason of (1) the Credit Facilities or Existing
Indebtedness, each as in effect on the date of this Indenture, (2) this
Indenture and the Notes, (3) applicable law, (4) any instrument governing
Indebtedness or Capital Stock of a Person acquired by the Company or any of its
Restricted Subsidiaries as in effect at the time of such acquisition (except to
the extent such Indebtedness was incurred in connection with or in contemplation
of such acquisition), which encumbrance or restriction is not applicable to any
Person, or the properties or assets of any Person, other than the Person, or the
property or assets of the Person, so acquired, provided that, in the case of
Indebtedness, such Indebtedness was permitted by the terms of this Indenture to
be incurred, (5) by reason of customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (6) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(c) above on the property so acquired, (7) customary provisions in bona fide
contracts for the sale of property or assets or (8) Permitted Refinancing
Indebtedness with respect to any Indebtedness referred to in clauses (1) and (2)
above, provided that the restrictions contained in the agreements governing such
Permitted Refinancing Indebtedness are not materially more restrictive, taken as
a whole, than those contained in the agreements governing the Indebtedness being
refinanced.
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Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable, contingently or otherwise,
with respect to (collectively, "incur" or an "incurrence") any Indebtedness and
that the Company will not issue any Disqualified Stock and will not permit any
of its Restricted Subsidiaries to issue any shares of preferred stock; provided,
however, that the Company and its Restricted Subsidiaries may incur
Indebtedness, and the Company may issue Disqualified Stock, if the Consolidated
Interest Coverage Ratio for the Company's most recently ended four full fiscal
quarters for which internal financial statements are available immediately
preceding the date on which such additional Indebtedness is incurred or such
Disqualified Stock is issued would have been at least 2.25 to 1, determined on a
pro forma basis (including a pro forma application of the net proceeds
therefrom), as if the additional Indebtedness or Disqualified Stock had been
issued or incurred at the beginning of such four-quarter period.
The foregoing provisions shall not apply to:
(a) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness under the Credit Facilities in an aggregate principal amount
at any one time outstanding not to exceed $50.0 million (or the equivalent
thereof in any other currency or currency unit), plus any fees, premiums,
expenses (including costs of collection), indemnities and similar amounts
payable in connection with such Indebtedness, and less any amounts repaid
permanently in accordance with Section 4.10;
(b) the incurrence by the Company and its Restricted Subsidiaries of
Existing Indebtedness;
(c) the incurrence by the Company and its Restricted Subsidiaries of
Hedging Obligations;
(d) the incurrence by the Company and its Restricted Subsidiaries of
Indebtedness represented by the Original Notes, any Series B Notes issued
in exchange for Series A Notes pursuant to an Exchange Offer, the
Subsidiary Guarantees and this Indenture;
(e) the incurrence of intercompany Indebtedness between or among the
Company and any of its Wholly Owned Restricted Subsidiaries, provided that
any subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a Wholly
Owned Restricted Subsidiary of the Company, or any sale or other transfer
of any such Indebtedness to a Person that is neither the Company nor a
Wholly Owned Restricted Subsidiary of the Company, shall be deemed to
constitute an
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incurrence of such Indebtedness by the Company or such Restricted
Subsidiary, as the case may be;
(f) Indebtedness in respect of bid, performance or surety bonds issued
for the account of the Company or any Restricted Subsidiary thereof in the
ordinary course of business, including guarantees or obligations of the
Company or any Restricted Subsidiary thereof with respect to letters of
credit supporting such bid, performance or surety obligations (in each case
other than for an obligation for money borrowed); and
(g) the incurrence by the Company or any of its Restricted
Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace,
defease or refund Indebtedness that was permitted by this Indenture to be
incurred (other than pursuant to clause (a) or (e) of this Section 4.09).
The Company shall not, and shall not permit any Guarantor to, directly or
indirectly, incur any Indebtedness which by its terms (or by the terms of any
agreement governing such Indebtedness) is subordinated to any other Indebtedness
of the Company or of such Guarantor, as the case may be, unless such
Indebtedness is also by its terms (or by the terms of any agreement governing
such Indebtedness) made expressly subordinate to the Notes or the Subsidiary
Guarantees of such Guarantor, as the case may be, to the same extent and in the
same manner as such Indebtedness is subordinated pursuant to subordination
provisions that are most favorable to the holders of any other Indebtedness of
the Company or of such guarantor, as the case may be.
Section 4.10. Asset Sales.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless (a) the Company or such
Restricted Subsidiary, as the case may be, receives consideration at the time of
such Asset Sale at least equal to the fair market value (as determined in
accordance with the definition of such term, the results of which determination
shall be set forth in an Officers' Certificate delivered to the Trustee) of the
assets or Equity Interests issued or sold or otherwise disposed of and (b) at
least 75% of the consideration therefor received by the Company or such
Restricted Subsidiary is in the form of cash or Cash Equivalents; provided,
however, that the amount of (i) any liabilities (as shown on the Company's or
such Restricted Subsidiary's most recent balance sheet) of the Company or such
Restricted Subsidiary (other than contingent liabilities and liabilities that
are by their terms subordinated to the Notes or any guarantee thereof) that are
assumed by the transferee of any such assets pursuant to a customary novation
agreement that releases the Company or such Restricted Subsidiary from further
liability and (ii) any securities, notes or other obligations received by the
Company or such Restricted Subsidiary from such transferee that are converted
within ten Business Days by the Company or such Restricted Subsidiary into cash
(to the extent of the cash received) shall be deemed to be cash for purposes of
this Section 4.10.
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Within 365 days after the receipt of any Net Proceeds from an Asset Sale,
the Company or any such Restricted Subsidiary may apply such Net Proceeds to (a)
permanently repay the principal of any Indebtedness of the Company ranking in
right of payment at least pari passu with the Notes or any Indebtedness of
Bristow or (b) to acquire (including by way of a purchase of assets or stock,
merger, consolidation or otherwise) Productive Assets. Pending the final
application of any such Net Proceeds, the Company or any such Restricted
Subsidiary may temporarily reduce outstanding revolving credit borrowings,
including borrowings under the Credit Facility, or otherwise invest such Net
Proceeds in any manner that is not prohibited by this Indenture. Any Net
Proceeds from Asset Sales that are not applied or invested as provided in the
first sentence of this paragraph shall be deemed to constitute "Excess
Proceeds." Within 30 days of each date on which the aggregate amount of Excess
Proceeds exceeds $5.0 million (or the equivalent thereof in any other currency
or currency unit), the Company shall commence a an Asset Sale Offer pursuant to
Section 3.09 hereof to purchase the maximum principal amount of Notes that may
be purchased out of Excess Proceeds at an offer price in cash in an amount equal
to 100% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon, to the date of purchase, in accordance with
the procedures set forth in Section 3.09 hereof; provided, however, that, if the
Company is required to apply such Excess Proceeds to repurchase, or to offer to
repurchase, any Pari Passu Indebtedness, the Company shall only be required to
offer to repurchase the maximum principal amount of Notes that may be purchased
out of the amount of such Excess Proceeds multiplied by a fraction, the
numerator of which is the aggregate principal amount of Notes outstanding and
the denominator of which is the aggregate principal amount of Notes outstanding
plus the aggregate principal amount of Pari Passu Indebtedness outstanding. To
the extent that the aggregate principal amount of Notes tendered pursuant to an
Asset Sale Offer is less than the amount that the Company is required to
repurchase, the Company may use any remaining Excess Proceeds for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
holders thereof exceeds the amount that the Company is required to repurchase,
the Trustee shall select the Notes to be purchased on a pro rata basis (with
such adjustments as may be deemed appropriate by the Trustee so that only Notes
in denominations of $1,000, or integral multiples thereof, shall be purchased).
Upon completion of such offer to purchase, the amount of Excess Proceeds shall
be reset at zero.
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Section 4.11. Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise
dispose of any of its properties or assets to, or purchase any property or
assets from, or enter into or make or amend any transaction, contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an "Affiliate Transaction"), unless
(a) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person or, if there is no such comparable
transaction, on terms that are fair and reasonable to the Company or such
Restricted Subsidiary, and (b) the Company delivers to the Trustee (i) with
respect to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $1.0 million (or the equivalent
thereof in any other currency or currency unit), a resolution of the Board of
Directors set forth in an Officers' Certificate certifying that such Affiliate
Transaction complies with clause (a) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors and (ii) with respect to any Affiliate Transaction or series of
related Affiliate Transactions involving aggregate consideration in excess of
$5.0 million (or the equivalent thereof in any other currency or currency unit),
in each case other than any such transactions with an Affiliate engaged in the
business of providing helicopter transportation services to the oil and gas
industry (or a business that is reasonably complementary or related thereto as
determined in good faith by the Board of Directors), an opinion as to the
fairness to the Company or the relevant Subsidiary of such Affiliate Transaction
from a financial point of view issued by an accounting, appraisal or investment
banking firm that is, in the judgment of the Board of Directors, qualified to
render such opinion and is independent with respect to the Company; provided,
however, that the following shall be deemed not to be Affiliate Transactions:
(A) any employment agreement or other employee compensation plan or arrangement
entered into by the Company or any of its Restricted Subsidiaries in the
ordinary course of business of the Company or such Restricted Subsidiary; (B)
transactions between or among the Company and its Restricted Subsidiaries; (C)
Permitted Investments and Restricted Payments that are permitted by the
provisions of this Indenture; (D) loans or advances to officers, directors and
employees of the Company or any Restricted Subsidiary made in the ordinary
course of business and consistent with past practices of the Company and its
Restricted Subsidiaries in an aggregate amount not to exceed $500,000 (or the
equivalent thereof in any other currency or currency unit) outstanding at any
one time; (E) indemnities of officers, directors and employees of the Company or
any Restricted Subsidiary permitted by bylaw or statutory provisions; (F) the
payment of reasonable and customary regular fees to directors of the Company or
any of its Restricted Subsidiaries who are not employees of the Company or any
Subsidiary; and (G) the payment to Caledonia of Existing Indebtedness of
Bristow.
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Section 4.12. Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, assume or suffer to
exist any Lien on any asset now owned or hereafter acquired, or any income or
profits therefrom or assign or convey any right to receive income therefrom,
except Permitted Liens, to secure (a) any Indebtedness of the Company or such
Restricted Subsidiary (if it is not also a Guarantor), unless prior to, or
contemporaneously therewith, the Notes are equally and ratably secured, or (b)
any Indebtedness of any Guarantor, unless prior to, or contemporaneously
therewith, the Subsidiary Guarantees are equally and ratably secured; provided,
however, that if such Indebtedness is expressly subordinated to the Notes or the
Subsidiary Guarantees, the Lien securing such Indebtedness will be subordinated
and junior to the Lien securing the Notes or the Subsidiary Guarantees, as the
case may be, with the same relative priority as such Indebtedness has with
respect to the Notes or the Subsidiary Guarantees.
Section 4.13. Additional Subsidiary Guarantees.
(a) If the Company or any of its Restricted Subsidiaries (except, so long
as Bristow is not a Guarantor, either Bristow or any Subsidiary thereof) shall,
after the date of this Indenture, acquire or create another Significant
Subsidiary, or (b) if, after such date, (1) a Restricted Subsidiary (except, so
long as Bristow is not a Guarantor, either Bristow or any Subsidiary thereof)
shall provide a guarantee under a Credit Facility or incur any Funded
Indebtedness, or (2) Bristow or any Restricted Subsidiary thereof shall incur
(as such term is defined in Section 4.09 hereof) any Indebtedness (including any
guarantee of Indebtedness of the Company) except Permitted Bristow Indebtedness,
then such newly acquired or created Significant Subsidiary, in the case of
clause (a) above, or such Restricted Subsidiary described in clause (b)(1)
above, or Bristow and all of its Restricted Subsidiaries, in the case of clause
(b)(2) above, shall execute a Subsidiary Guarantee and deliver an Opinion of
Counsel and an Officers' Certificate in accordance with the terms of Section
10.02 of this Indenture.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, and, subject to Article 10 hereof, the corporate, partnership or
other existence of each of its Restricted Subsidiaries, in accordance with the
respective organizational documents (as the same may be amended from time to
time) of the Company or any such Restricted Subsidiary; provided, however, that
the Company shall not be required to preserve the existence of any of its
Restricted Subsidiaries, if the Board of Directors shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Company and its Restricted Subsidiaries, taken as a whole.
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Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company shall make an
offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at an offer price
in cash equal to 101% of the aggregate principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any, thereon to the date of
repurchase (the "Change of Control Payment"). Within 30 days following a Change
of Control, the Company shall mail a notice to each Holder and the Trustee
stating: (1) that the Change of Control Offer is being made pursuant to this
Section 4.15 and that all Notes validly tendered and not withdrawn will be
accepted for payment; (2) the purchase price and the purchase date, which shall
be no earlier than 30 days but no later than 60 days from the date such notice
is mailed (the "Change of Control Payment Date"); (3) that any Note not tendered
will continue to accrue interest and Liquidated Damages, if any; (4) that,
unless the Company defaults in the payment of the Change of Control Payment, all
Notes accepted for payment pursuant to the Change of Control Offer shall cease
to accrue interest and Liquidated Damages, if any, after the Change of Control
Payment Date; (5) that Holders electing to have any Notes purchased pursuant to
a Change of Control Offer will be required to surrender the Notes, properly
endorsed for transfer, together with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed and such customary
documents as the Company may reasonably request, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. If any of
the Notes subject to a Change of Control Offer is in the form of a Global Note,
then the Company shall modify such notice to the extent necessary to accord with
the procedures of the Depository applicable to repurchases. Further, the Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes as a
result of a Change of Control.
(b) On or before 10:00 a.m. New York time on the Change of Control Payment
Date, the Company shall, to the extent lawful, (a) accept for payment all Notes
or portions thereof properly tendered pursuant to the Change of Control Offer,
(b) deposit with the Paying Agent an amount equal to the Change of Control
Payment in respect of all Notes or portions thereof so tendered and (c) deliver
or cause to be delivered to the Trustee the Notes so accepted together with an
Officers' Certificate stating the aggregate principal amount of Notes or
portions thereof being purchased by the Company. The Paying Agent
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shall promptly mail to each holder of Notes so tendered the Change of Control
Payment for such Notes, and the Trustee shall promptly authenticate and mail (or
cause to be transferred by book entry) to each Holder a new Note equal in
principal amount to any unpurchased portion of the Notes surrendered, if any;
provided, however, that each such new Note will be in a principal amount of
$1,000 or an integral multiple thereof. The Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
(c) The Change of Control provisions described above shall be applicable
whether or nor any other provisions of this Indenture are applicable.
(d) The Company shall not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control
Offer in the manner, at the time and otherwise in compliance with the
requirements set forth in this Indenture applicable to a Change of Control Offer
made by the Company and purchases all Notes validly tendered and not withdrawn
under such Change of Control Offer.
Section 4.16. Issuances and Sales of Capital Stock of Wholly Owned Restricted
Subsidiaries.
The Company (i) shall not, and shall not permit any Wholly Owned Restricted
Subsidiary of the Company to, transfer, convey, sell, or otherwise dispose of
any Capital Stock of any Wholly Owned Restricted Subsidiary of the Company
(other than any such Subsidiary that is primarily engaged in the production
management services business) to any Person (other than the Company or a Wholly
Owned Restricted Subsidiary of the Company), unless (a) such transfer,
conveyance, sale, or other disposition is of all the Capital Stock of such
Wholly Owned Restricted Subsidiary and (b) the Net Proceeds from such transfer,
conveyance, sale, or other disposition are applied in accordance with Section
4.10 hereof, and (ii) shall not permit any Wholly Owned Restricted Subsidiary of
the Company to issue any of its Equity Interests to any Person other than to the
Company or a Wholly Owned Restricted Subsidiary of the Company, except, in the
case of both clauses (i) and (ii) above, with respect to dispositions or
issuances by a Wholly Owned Restricted Subsidiary of the Company as contemplated
in clauses (a) and (b) of the definition of "Wholly Owned Restricted
Subsidiary."
Section 4.17. Sale-and-leaseback Transactions.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, enter into any sale-and-leaseback transaction; provided,
however, that the Company or any Restricted Subsidiary, as applicable, may enter
into a sale-and-leaseback transaction if (i) the Company or such Restricted
Subsidiary could have (a) incurred Indebtedness in an amount equal to the
Attributable Indebtedness relating to such sale-and-leaseback transaction
pursuant to the Consolidated Interest Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof and (b) incurred a Lien to secure such
Indebtedness pursuant to Section 4.12 hereof, (ii) the gross cash proceeds of
such sale-and-leaseback transaction are at least equal to the fair market value
(as determined in accordance with
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the definition of such term, the results of which determination shall be set
forth in an Officers' Certificate delivered to the Trustee) of the property that
is the subject of such sale-and-leaseback transaction and (iii) the transfer of
assets in such sale-and-leaseback transaction is permitted by, and the Company
applies the proceeds of such transaction in compliance with, Section 4.10
hereof.
Section 4.18. No Inducements.
The Company shall not, and the Company shall not permit any of its
Subsidiaries, either directly or indirectly, to pay (or cause to be paid) any
consideration, whether by way of interest, fee or otherwise, to any Holder for
or as an inducement to any consent, waiver, amendment or supplement of any terms
or provisions of this Indenture or the Notes, unless such consideration is
offered to be paid (or agreed to be paid) to all Holders which so consent, waive
or agree to amend or supplement in the time frame set forth on solicitation
documents relating to such consent, waiver or agreement.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not consolidate or merge with or into (whether or not the
Company is the surviving corporation), or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its properties or assets in
one or more related transactions to, another Person unless (a) the Company is
the surviving corporation or the Person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia, (b) the Person formed by or
surviving any such consolidation or merger (if other than the Company) or the
Person to which such sale, assignment, transfer, lease, conveyance or other
disposition shall have been made assumes all the obligations of the Company
under the Notes and this Indenture pursuant to a supplemental indenture in a
form reasonably satisfactory to the Trustee, (c) immediately after such
transaction no Default or Event of Default exists and (d) except in the case of
a merger of the Company with or into a Wholly Owned Restricted Subsidiary of the
Company, the Company or the Person formed by or surviving any such consolidation
or merger (if other than the Company), or to which such sale, assignment,
transfer, lease, conveyance or other disposition shall have been made (A) will
have Consolidated Net Worth immediately after the transaction equal to or
greater than the Consolidated Net Worth of the Company immediately preceding the
transaction and (B) will, at the time of such transaction and after giving pro
forma effect thereto as if such transaction had occurred at the beginning of the
applicable four-quarter period, be permitted to incur at least $1.00 of
additional Indebtedness pursuant to the Consolidated Interest Coverage Ratio
test set forth in the first paragraph of Section 4.09 hereof.
In connection with any consolidation, merger or disposition contemplated by
this
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provision, the Company shall deliver, or cause to be delivered, to the Trustee,
in form and substance reasonably satisfactory to the Trustee, (i) an Officers'
Certificate stating that such consolidation, merger or disposition and any
supplemental indenture in respect thereto comply with this provision and that
all conditions precedent in the Indenture provided for relating to such
transaction or transactions have been complied with and (ii) an Opinion of
Counsel stating that the requirements of Section 5.01(a) and (b) have been
satisfied.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the properties or
assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition, the provisions of this Indenture referring to
the "Company" shall refer instead to the successor corporation and not to the
Company), and may exercise every right and power of the Company under this
Indenture with the same effect as if such successor corporation had been named
as the Company herein; provided, however, that the predecessor Company shall not
be relieved from its obligations under this Indenture or the Notes in the case
of any such lease.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest on, or
Liquidated Damages, if any, with respect to, the Notes, and such default
continues for a period of 30 days;
(b) the Company defaults in the payment when due of principal of or
premium, if any, on the Notes;
(c) the Company fails to comply with any of the provisions of Section
4.10, 4.15 or 5.01 hereof;
(d) the Company fails to observe or perform any other covenant or
other agreement in this Indenture or the Notes for 60 days after notice to
the Company by the Trustee or the Holders of at least 25% in principal
amount of the Notes then outstanding of such failure;
(e) a default occurs under any mortgage, indenture or instrument under
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which there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by the Company or any
of its Restricted Subsidiaries), whether such Indebtedness or guarantee now
exists, or is created after the date of this Indenture, which default (i)
is caused by a failure to pay principal of or premium or interest on such
Indebtedness prior to the expiration of any grace period provided in such
Indebtedness, including any extension thereof (a "Payment Default") or (ii)
results in the acceleration of such Indebtedness prior to its express
maturity and, in each case, the principal amount of any such Indebtedness,
together with the principal amount of any other such Indebtedness under
which there has been a Payment Default or the maturity of which has been so
accelerated, aggregates in excess of $5.0 million (or the equivalent
thereof in any other currency or currency unit); and provided, further,
that if such default is cured or waived or any such acceleration rescinded,
or such Indebtedness is repaid, within a period of 10 days from the
continuation of such default beyond the applicable grace period or the
occurrence of such acceleration, as the case may be, an Event of Default
and any consequential acceleration of the Notes shall be automatically
rescinded, so long as such rescission does not conflict with any judgment
or decree;
(f) a final judgment or final judgments for the payment of money are
entered by a court or courts of competent jurisdiction against the Company
or any of its Restricted Subsidiaries and such judgment or judgments are
not paid or discharged for a period (during which execution shall not be
effectively stayed) of 60 days, provided that the aggregate of all such
undischarged judgments exceeds $5.0 million (or the equivalent thereof in
any other currency or currency unit);
(g) the failure of any Guarantor to perform any covenant set forth in
its Subsidiary Guarantee or the repudiation by any Guarantor of its
obligations under its Subsidiary Guarantee or the unenforceability of any
Subsidiary Guarantee for any reason;
(h) the Company, any Guarantor or any Significant Subsidiary pursuant
to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief against it in
an involuntary case,
(iii) consents to the appointment of a Custodian of it or for all
or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become due; or
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(i) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(i) is for relief against the Company, any Guarantor or
any Significant Subsidiary in an involuntary case;
(ii) appoints a Custodian of the Company, any Guarantor or
any Significant Subsidiary or for all or substantially all of the
property of the Company, or any Significant Subsidiary; or
(iii) orders the liquidation of the Company, any Guarantor
or any Significant Subsidiary;
and the order or decree remains unstayed and in effect for 60 consecutive
days.
Section 6.02. Acceleration.
If any Event of Default occurs and is continuing, the Trustee or the
Holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding
the foregoing, if an Event of Default specified in clause (h) or (i) of Section
6.01 hereof occurs with respect to the Company, any Guarantor or any Significant
Subsidiary, all outstanding Notes shall be due and payable immediately without
further action or notice. The Holders of a majority in principal amount of the
then outstanding Notes by written notice to the Trustee may on behalf of all of
the Holders rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
(except nonpayment of principal, interest, premium or Liquidated Damages, if
any, that have become due solely because of the acceleration) have been cured or
waived.
If an Event of Default occurs by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Company with the intention of
avoiding payment of the premium that the Company would have had to pay if the
Company then had elected to redeem the Notes pursuant to Section 3.07 hereof,
then, upon acceleration of the Notes, an equivalent premium shall also become
and be immediately due and payable, to the extent permitted by law, anything in
this Indenture or in the Notes to the contrary notwithstanding.
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee may pursue any
available remedy to collect the payment of principal of and premium, interest
and Liquidated Damages, if any, on the Notes or to enforce the performance of
any provision of the Notes or this Indenture.
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The Trustee may maintain a proceeding even if it does not possess any of
the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder of a Note in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of a majority in principal amount of the then outstanding Notes by
notice to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences hereunder, except a
continuing Default or Event of Default in the payment of the principal of or
premium, interest or Liquidated Damages, if any, on the Notes (including in
connection with an offer to purchase). Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other Default or impair any right consequent
thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then outstanding Notes may
direct the time, method and place of conducting any proceeding for exercising
any remedy available to the Trustee or exercising any trust or power conferred
on it. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or that the Trustee determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee in personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this Indenture or
the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice of a
continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the then
outstanding Notes make a written request to the Trustee to pursue the
remedy;
(c) such Holder of a Note or Holders of Notes offer and, if requested,
provide to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense;
(d) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer and, if requested, the provision of
indemnity; and
(e) during such 60-day period the Holders of a majority in principal
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amount of the then outstanding Notes do not give the Trustee a direction
incon sistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Note to receive payment of principal of and premium, interest and
Liquidated Damages, if any, on the Note, on or after the respective due dates
expressed in the Note (including in connection with an offer to purchase), or to
bring suit for the enforcement of any such payment on or after such respective
dates, shall not be impaired or affected without the consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount of
principal of, premium, interest and Liquidated Damages, if any, remaining unpaid
on the Notes and interest on overdue principal and, to the extent lawful,
interest and Liquidated Damages, if any, and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
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Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders of the Notes allowed in any judicial proceedings relative to the Company
(or any other obligor upon the Notes), its creditors or its property and shall
be entitled and empowered to collect, receive and distribute any money or other
property payable or deliverable on any such claims and any custodian in any such
judicial proceeding is hereby authorized by each Holder to make such payments to
the Trustee, and in the event that the Trustee shall consent to the making of
such payments directly to the Holders, to pay to the Trustee any amount due to
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 7.07 hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof out of the estate in
any such proceeding, shall be denied for any reason, payment of the same shall
be secured by a Lien on, and shall be paid out of, any and all distributions,
dividends, money, securities and other properties that the Holders may be
entitled to receive in such proceeding whether in liquidation or under any plan
of reorganization or arrangement or otherwise. Nothing herein contained shall
be deemed to authorize the Trustee to authorize or consent to or accept or adopt
on behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts due under
Section 7.07 hereof, including payment of all compensation, expense and
liabilities incurred, and all advances made, by the Trustee and the
Trustee's costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the Notes
for principal, premium, interest and Liquidated Damages, if any, ratably,
without preference or priority of any kind, according to the amounts due
and payable on the Notes for principal, premium, interest and Liquidated
Damages, if any, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
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The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this Indenture
or in any suit against the Trustee for any action taken or omitted by it as a
Trustee, a court in its discretion may require the filing by any party litigant
in the suit of an undertaking to pay the costs of the suit, and the court in its
discretion may assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in the suit, having due regard to the merits and good
faith of the claims or defenses made by the party litigant. This Section does
not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to
Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount
of the then outstanding Notes.
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in its exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Trustee need perform only
those duties that are specifically set forth in this Indenture and no
others, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However,
the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
(c) The Trustee may not be relieved from liabilities for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) this paragraph does not limit the effect of paragraph (b) of this
Section 7.01;
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(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every provision of this
Indenture that in any way relates to the Trustee is subject to paragraphs (a),
(b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers under this Indenture at the
request of any Holders, unless such Holder shall have offered to the Trustee
security and indemnity satisfactory to it against any loss, liability or
expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document believed by it to
be genuine and to have been signed or presented by the proper Person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be
liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and the written advice of such counsel or any Opinion of Counsel shall
be full and complete authorization and protection from liability in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
(c) The Trustee may act through its attorneys and agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within the rights or
powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Company shall be sufficient if signed by
an Officer of the Company.
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(f) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.
(g) The Trustee shall have no duty to inquire as to the performance of the
Company's covenants in Article 4 hereof. In addition, the Trustee shall not be
deemed to have knowledge of any Default or Event of Default except: (1) any
Event of Default occurring pursuant to Section 6.01(a) or 6.01(b) hereof; or (2)
any Default or Event of Default of which is Responsible Officer shall have
received written notification or obtained actual knowledge.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Notes and may otherwise deal with the Company, any Guarantor or any
Affiliate of the Company with the same rights it would have if it were not
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such conflict within 90 days, apply to the SEC for
permission to continue as trustee or resign. Any Agent may do the same with
like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11
hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no representation as to
the validity or adequacy of this Indenture or the Notes, it shall not be
accountable for the Company's use of the proceeds from the Notes or any money
paid to the Company or upon the Company's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than the Trustee, and it shall not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the
Default or Event of Default within 90 days after it occurs. Except in the case
of a Default or Event of Default in payment of principal of or premium, if any,
or interest on any Note, the Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of the Holders of the Notes.
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Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15 following the
date of this Indenture, and for so long as Notes remain outstanding, the Trustee
shall mail to the Holders of the Notes a brief report dated as of such reporting
date that complies with TIA (S) 313(a) (but if no event described in TIA (S)
313(a) has occurred within the twelve months preceding the reporting date, no
report need be transmitted). The Trustee also shall comply with TIA (S)
313(b)(2) and (S) 313(b)(1). The Trustee shall also transmit by mail all
reports as required by TIA (S) 313(c).
A copy of each report at the time of its mailing to the Holders of Notes
shall be mailed to the Company and filed with the SEC and each stock exchange on
which the Notes are listed in accordance with TIA (S) 313(d). The Company shall
promptly notify the Trustee when the Notes are listed on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Company and the Guarantors shall indemnify the Trustee against any and
all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture, including the costs and expenses of enforcing this Indenture against
the Company (including this Section 7.07) and defending itself against any claim
(whether asserted by the Company, any Guarantor or any Holder or any other
person) or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except to the extent any such loss, liability or
expense may be attributable to its negligence, bad faith or willful misconduct.
The Trustee shall notify the Company promptly of any claim for which it may seek
indemnity. Failure by the Trustee to so notify the Company shall not relieve the
Company or the Guarantors of their obligations hereunder. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this Section 7.07
shall survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section 7.07, the
Trustee
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shall have a Lien prior to the Notes on all money or property held or collected
by the Trustee, except that held in trust to pay principal and interest on
particular Notes. Such Lien shall survive the satisfaction and discharge of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(h) or (i) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
The Trustee shall comply with the provisions of TIA (S) 313(b)(2) to the
extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from the
trust hereby created by so notifying the Company. The Holders of Notes of a
majority in principal amount of the then outstanding Notes may remove the
Trustee by so notifying the Trustee and the Company in writing. The Company may
remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an order for
relief is entered with respect to the Trustee under any Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or its
property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the then outstanding Notes may appoint a
successor Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company, or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent jurisdiction for the appointment of a
successor Trustee.
If the Trustee, after written request by any Holder of a Note who has been
a Holder of a Note for at least six months, fails to comply with Section 7.10
hereof, such Holder of
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a Note may petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. The successor Trustee shall mail a notice of its succession to
Holders of the Notes. The retiring Trustee shall promptly transfer all property
held by it as Trustee to the successor Trustee, provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Company's obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or transfers all or
substantially all of its corporate trust business to, another corporation, the
successor corporation without any further act shall be the successor Trustee.
As soon as practicable, the successor Trustee shall mail a notice of its
succession to the Company and the Holders of the Notes.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a corporation
organized and doing business under the laws of the United States of America or
of any state thereof that is authorized under such laws to exercise corporate
trustee power, that is subject to supervision or examination by federal or state
authorities and that has a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the requirements
of TIA (S) 310(a)(1), (2) and (5). The Trustee is subject to TIA (S) 310(b).
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Section 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA (S) 311(a), excluding any creditor
relationship listed in TIA (S) 311(b). A Trustee who has resigned or been
removed shall be subject to TIA (S) 311(a) to the extent indicated therein.
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.
The Company may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers' Certificate, at any time, exercise its
rights under either Section 8.02 or 8.03 hereof with respect to all outstanding
Notes upon compliance with the conditions set forth below in this Article 8.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Company shall, subject to the satisfaction
of the conditions set forth in Section 8.04 hereof, be deemed to have discharged
its obligations with respect to all outstanding Notes, and each Guarantor shall
be deemed to have discharged its obligations with respect to its Subsidiary
Guarantee, on the date the conditions set forth in Section 8.04 below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, and each Guarantor shall be
deemed to have paid and discharged its Subsidiary Guarantee (which in each case
shall thereafter be deemed to be "outstanding" only for the purposes of Section
8.05 hereof and the other Sections of this Indenture referred to in (a) and (b)
below) and to have satisfied all its other obligations under such Notes or
Subsidiary Guarantee and this Indenture (and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging the
same), except for the following provisions which shall survive until otherwise
terminated or discharged hereunder: (a) the rights of Holders of outstanding
Notes to receive solely from the trust fund described in Section 8.04 hereof,
and as more fully set forth in such Section, payments in respect of the
principal of and premium, if any, interest and Liquidated Damages, if any, on
such Notes when such payments are due, (b) the Company's obligations with
respect to such Notes under Sections 2.03, 2.04, 2.07, 2.10 and 4.02 hereof, (c)
the rights, powers, trusts, duties and immunities of the Trustee hereunder and
the Company's obligations in connection therewith and (d) this Article 8.
Subject to compliance with this Article 8, the Company may exercise its option
under this Section 8.02 notwithstanding the prior exercise of its option under
Section 8.03 hereof.
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Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the option
applicable to this Section 8.03, the Company and each Guarantor shall, subject
to the satisfaction of the conditions set forth in Section 8.04 hereof, be
released from its obligations under the covenants contained in Article 4 (other
than those in Sections 4.01, 4.02, 4.06 and 4.14) and in clause (c) of Section
5.01 hereof on and after the date the conditions set forth below are satisfied
(hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed
not "outstanding" for the purposes of any direction, waiver, consent or
declaration or act of Holders (and the consequences of any thereof) in
connection with such covenants, but shall continue to be deemed "outstanding"
for all other purposes hereunder (it being understood that such Notes shall not
be deemed outstanding for accounting purposes). For this purpose, Covenant
Defeasance means that, with respect to the outstanding Notes, the Company and
any Guarantor may omit to comply with and shall have no liability in respect of
any term, condition or limitation set forth in any such covenant, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
covenant or by reason of any reference in any such covenant to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or an Event of Default under Section 6.01 hereof, but,
except as specified above, the remainder of this Indenture and such Notes shall
be unaffected thereby. In addition, upon the Company's exercise under Section
8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, Sections
6.01(e) through 6.01(g) hereof shall not constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in trust,
for the benefit of the Holders, cash in United States dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent
public accountants, to pay the principal of and premium, interest and
Liquidated Damages, if any, on the outstanding Notes on the stated maturity
thereof or on the applicable redemption date, as the case may be, and the
Company must specify whether the Notes are being defeased to maturity or to
a particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that (A) the Company
has received from, or there has been published by, the Internal Revenue
Service a ruling or (B) since the date of this Indenture, there has been a
change in the applicable federal income tax law, in either case to the
effect that, and based thereon such Opinion of Counsel shall confirm that,
the Holders of the outstanding
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Notes will not recognize income, gain or loss for federal income tax
purposes as a result of such Legal Defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.03 hereof, the Company
shall have delivered to the Trustee an Opinion of Counsel in the United
States reasonably acceptable to the Trustee confirming that the Holders of
the outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Covenant Defeasance
had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of
Default resulting from the incurrence of Indebtedness or the grant of Liens
securing such Indebtedness, all or a portion of the proceeds of which will
be used to defease the Notes pursuant to this Article 8 concurrently with
such incurrence or within 30 days thereof);
(e) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a default under, any material
agreement or instrument (other than this Indenture) to which the Company or
any of its Restricted Subsidiaries is a party or by which the Company or
any of its Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion of
Counsel (which may be based on such solvency certificates or solvency
opinions as counsel deems necessary or appropriate) to the effect that the
trust funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally;
(g) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the Holders over any other creditors of the Company or
with the intent of defeating, hindering, delaying or defrauding creditors
of the Company or others; and
(h) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for or relating to the Legal Defeasance or the Covenant
Defeasance have been complied with.
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Section 8.05. Deposited Money and Government Securities to be Held in Trust;
Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable Government
Securities (including the proceeds thereof) deposited with the Trustee pursuant
to Section 8.04 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal, premium, if any, and interest, but such money
need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or non-callable Government
Securities deposited pursuant to Section 8.04 hereof or the principal and
interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of the outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon the request of the
Company any money or non-callable Government Securities held by it as provided
in Section 8.04 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee (which may be the opinion delivered under Section
8.04(a) hereof), are in excess of the amount thereof that would then be required
to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.
Section 8.06. Repayment to Company.
Subject to applicable escheat and abandoned property laws, any money
deposited with the Trustee or any Paying Agent, or then held by the Company, in
trust for the payment of the principal of or premium or Liquidated Damages, if
any, or interest on any Note and remaining unclaimed for two years after such
principal, and premium or Liquidated Damages, if any, or interest has become due
and payable shall be paid to the Company on its request or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Note shall
thereafter, as a secured creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in the New York Times and The Wall Street Journal (national
edition), notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
notification or publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
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Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars
or non-callable Government Securities in accordance with Section 8.05 hereof, by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03
hereof until such time as the Trustee or Paying Agent is permitted to apply all
such money in accordance with Section 8.05 hereof; provided, however, that, if
the Company makes any payment of principal of or premium, if any, or interest on
any Note following the reinstatement of its obligations, the Company shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors
and the Trustee may amend or supplement this Indenture or the Notes without the
consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in place of
certificated Notes;
(c) to provide for the assumption of the Company's obligations to the
Holders of the Notes pursuant to Article 5 hereof;
(d) to secure the Notes pursuant to the requirements of Section 4.12
or otherwise;
(e) to make any change that would provide any additional rights or
benefits to the Holders of the Notes or that does not adversely affect the
legal rights hereunder of any Holder of the Note;
(f) to comply with Article 10 hereof; or
(g) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and
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upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee shall join with the Company and the Guarantors in the execution of
any amended or supplemental indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company, the Guarantors
and the Trustee may amend or supplement this Indenture and the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or Event of Default or compliance with any provision of
this Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
Upon the request of the Company accompanied by a resolution of its Board of
Directors authorizing the execution of any such amended or supplemental
indenture, and upon the filing with the Trustee of evidence satisfactory to the
Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by
the Trustee of the documents described in Section 9.06 hereof, the Trustee shall
join with the Company and the Guarantors in the execution of such amended or
supplemental indenture unless such amended or supplemental indenture affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, in
which case the Trustee may in its discretion, but shall not be obligated to,
enter into such amended or supplemental indenture.
It shall not be necessary for the consent of the Holders of Notes under
this Section 9.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section becomes
effective, the Company shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a
majority in principal amount of the Notes then outstanding may waive compliance
in a particular instance by the Company with any provision of this Indenture or
the Notes. However, without the consent of each Holder affected, an amendment,
supplement or waiver may not (with respect to any Notes held by a non-consenting
Holder):
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(a) reduce the principal amount of Notes whose Holders must consent to
an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any Note
or alter any of the provisions with respect to the redemption of the Notes
(except as provided in Sections 3.09, 4.10 and 4.15 hereof);
(c) reduce the rate of or change the time for payment of interest on
any Note;
(d) waive a Default or Event of Default in the payment of principal of
or premium, interest or Liquidated Damages, if any, on the Notes (except a
rescission of acceleration of the Notes by the Holders of at least a
majority in principal amount of the Notes and a waiver of the payment
default that resulted from such acceleration);
(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating to
waivers of past Defaults or Events of Default or the rights of Holders of
Notes to receive payments of principal of or premium, interest or
Liquidated Damages, if any, on the Notes (except as permitted in clause (g)
below);
(g) waive a redemption payment with respect to any Note (other than a
payment required by Sections 4.10 and 4.15 hereof);
(h) make any change in the ranking of the Notes relative to other
Indebtedness of the Company or in the Subsidiary Guarantees, in either case
in a manner adverse to the Holders of Notes; or
(i) make any change in the foregoing amendment, supplement and waiver
provisions.
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Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes shall be set
forth in a amended or supplemental Indenture that complies with the TIA as then
in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a consent to it
by a Holder of a Note is a continuing consent by the Holder of a Note and every
subsequent Holder of a Note or portion of a Note that evidences the same debt as
the consenting Holder's Note, even if notation of the consent is not made on any
Note. However, any such Holder of a Note or subsequent Holder of a Note may
revoke the consent as to its Note if the Trustee receives written notice of
revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Company in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental indenture authorized
pursuant to this Article 9 if the amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. The
Company may not sign an amendment or supplemental indenture until the Board of
Directors approves it. In executing any amended or supplemental indenture, the
Trustee shall be entitled to receive and (subject to Section 7.01) shall be
fully protected in relying upon, an Officers' Certificate and an Opinion of
Counsel stating that the execution of such amended or supplemental indenture is
authorized or permitted by this Indenture.
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ARTICLE 10
GUARANTEES OF NOTES
Section 10.01. Subsidiary Guarantees.
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Subject to Section 10.06 hereof, the Guarantors hereby, jointly and
severally, unconditionally guarantee to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of this Indenture, the Notes
held thereby and the Obligations of the Company hereunder and thereunder, that:
(a) the principal of and premium, interest and Liquidated Damages, if any, on
the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and premium, (to the extent permitted by
law) interest and Liquidated Damages, if any, on the Notes, and all other
payment Obligations of the Company to the Holders or the Trustee hereunder or
thereunder will be promptly paid in full and performed, all in accordance with
the terms hereof and thereof; and (b) in case of any extension of time of
payment or renewal of any Notes or any of such other Obligations, the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, subject to any applicable grace period, whether at
stated maturity, by acceleration, redemption or otherwise. Failing payment when
so due of any amount so guaranteed or any performance so guaranteed for whatever
reason the Guarantors will be jointly and severally obligated to pay the same
immediately. An Event of Default under this Indenture or the Notes shall
constitute an event of default under the Subsidiary Guarantees, and shall
entitle the Holders to accelerate the obligations of the Guarantors hereunder in
the same manner and to the same extent as the Obligations of the Company. The
Guarantors hereby agree that their obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder with respect to any provisions hereof or thereof, the recovery of
any judgment against the Company, any action to enforce the same or any other
circumstance (other than complete performance) which might otherwise constitute
a legal or equitable discharge or defense of a Guarantor. Each Guarantor
further, to the extent permitted by law, hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Company, any right to require a proceeding first against the
Company, protest, notice and all demands whatsoever and covenants that its
Subsidiary Guarantee will not be discharged except by complete performance of
the Obligations contained in the Notes and this Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, the
Guarantors, or any Custodian, Trustee or other similar official acting in
relation to either the Company or the Guarantors, any amount paid by the Company
or any Guarantor to the Trustee or such Holder, the Subsidiary Guarantees, to
the extent theretofore discharged, shall be reinstated in full force and effect.
Each Guarantor agrees that it shall not be entitled to, and hereby waives, any
right of subrogation in relation to the Holders in respect of any Obligations
guaranteed hereby. Each Guarantor further agrees that, as between the
Guarantors, on the one hand, and the Holders and the Trustee, on the other hand,
(a) the maturity of the Obligations guaranteed hereby may be accelerated as
provided in Article 6 hereof for the purposes of its Subsidiary Guarantee,
notwithstanding any stay, injunction or other prohibition preventing such
acceleration in respect of the Obligations guaranteed thereby, and (b) in the
event of any declaration of acceleration of such Obligations as provided in
Article 6 hereof, such Obligations (whether or not due and payable) shall
forthwith become due
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and payable by the Guarantor for the purpose of its Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantees.
Section 10.02. Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section 10.01 hereof,
each Guarantor hereby agrees that a notation of such Subsidiary Guarantee
substantially in the form of Exhibit D hereto shall be endorsed by manual or
facsimile signature by an Officer of such Guarantor on each Note authenticated
and delivered by the Trustee and that this Indenture shall be executed on behalf
of such Guarantor by an Officer of such Guarantor.
To the extent required by the provisions of Section 4.13 hereof, the
Company shall cause each of its Restricted Subsidiaries to execute a Subsidiary
Guarantee substantially in the form of Exhibit D. Such Subsidiary Guarantee
shall be accompanied by a supplemental indenture substantially in the form of
Exhibit E, along with the Opinion of Counsel and Officers' Certificate required
under Section 9.06 of this Indenture; provided, however, that any Subsidiary
that has been properly designated as an Unrestricted Subsidiary in accordance
with this Indenture need not execute a Subsidiary Guarantee for so long as it
continues to constitute an Unrestricted Subsidiary.
Each Guarantor hereby agrees that its Subsidiary Guarantee shall remain in
full force and effect notwithstanding any failure to endorse on each Note a
notation of such Subsidiary Guarantee.
If an Officer whose signature is on the Subsidiary Guarantee no longer
holds that office at the time the Trustee authenticates the Note on which a
Subsidiary Guarantee is endorsed, the Subsidiary Guarantee shall be valid
nevertheless.
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Subsidiary Guarantees on behalf
of the Guarantors.
Section 10.03. Guarantors May Consolidate, etc., on Certain Terms.
(a) Except as set forth in Articles 4 and 5 hereof, nothing contained in
this Indenture shall prohibit a merger between a Guarantor and another Guarantor
or a merger between a Guarantor and the Company.
(b) No Guarantor shall consolidate with or merge with or into (whether or
not such Guarantor is the surviving Person), another Person (other than the
Company or another Guarantor), whether or not affiliated with such Guarantor,
unless, (i) subject to the provisions of Section 10.04 hereof, the Person formed
by or surviving any such consolidation or merger (if other than such Guarantor)
assumes all the obligations of such
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Guarantor pursuant to a supplemental indenture, substantially in the form of
Exhibit E hereto, under the Notes and this Indenture; (ii) immediately after
giving effect to such transaction, no Default or Event of Default exists; (iii)
such Guarantor, or any Person formed by or surviving any such consolidation or
merger, would have Consolidated Net Worth (immediately after giving effect to
such transaction), equal to or greater than the Consolidated Net Worth of such
Guarantor immediately preceding the transaction; and (iv) the Company, at the
time of such transaction and after giving pro forma effect thereto as if such
transaction had occurred at the beginning of the applicable four-quarter period,
would be permitted to incur at least $1.00 of additional Indebtedness pursuant
to the Consolidated Interest Coverage Ratio test set forth in the first
paragraph of Section 4.09 hereof.
(c) In the case of any such consolidation or merger and upon the assumption
by the successor Person, by supplemental indenture, executed and delivered to
the Trustee and substantially in the form of Exhibit E hereto, of the Subsidiary
Guarantee and the due and punctual performance of all of the covenants of this
Indenture to be performed by the Guarantor, such successor Person shall succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor; provided, however, that, solely for purposes of
computing Consolidated Net Income for purposes of clause (c) of the first
paragraph of Section 4.07 hereof, the Consolidated Net Income of any Person
other than the Company and its Restricted Subsidiaries shall only be included
for periods subsequent to the effective time of such merger or consolidation.
Such successor Person thereupon may cause to be signed any or all of the
notations of Subsidiary Guarantees to be endorsed upon all of the Notes issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee. All of the Subsidiary Guarantees so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Subsidiary Guarantees theretofore and thereafter issued in accordance with the
terms of this Indenture as though all of such Subsidiary Guarantees had been
issued at the date of the execution hereof.
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Section 10.04. Releases Following Sale of Assets.
In the event of a sale or other disposition of all or substantially all of
the assets or all of the Capital Stock of any Guarantor (or at least a majority
of the Capital Stock of any Guarantor that is primarily engaged in the
production management services business), by way of merger, consolidation or
otherwise, then such Guarantor (in the event of a sale or other disposition, by
way of such a merger, consolidation or otherwise, of all of the Capital Stock of
such Guarantor) or the Person acquiring the assets (in the event of a sale or
other disposition of all or substantially all of the assets of such Guarantor)
shall be released and relieved of any obligations under its Subsidiary
Guarantee; provided, however, that (i) in the event such transaction constitutes
an Asset Sale, the Net Proceeds from such sale or other disposition are treated
in accordance with the provisions of Section 4.10 hereof and (ii) the Company is
in compliance with all other provisions of this Indenture applicable to such
disposition. Upon delivery by the Company to the Trustee of an Officers'
Certificate to the effect of the foregoing, the Trustee shall execute any
documents reasonably required in order to evidence the release of any Guarantor
from its obligations under its Subsidiary Guarantee. Any Guarantor not released
from its obligations under its Subsidiary Guarantee shall remain liable for the
full amount of principal of and premium, interest and Liquidated Damages, if
any, on the Notes and for the other Obligations of such Guarantor under this
Indenture as provided in this Article 10.
Section 10.05. Releases Following Designation as an Unrestricted Subsidiary.
In the event that the Company designates a Guarantor to be an Unrestricted
Subsidiary, then such Guarantor shall be released and relieved of any
obligations under its Subsidiary Guarantee; provided, however, that such
designation is conducted in accordance with this Indenture.
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Section 10.06. Limitation on Guarantor Liability.
For purposes hereof, each Guarantor's liability under its Subsidiary
Guarantee shall be limited to the lesser of (a) the aggregate amount of the
Obligations of the Company under the Notes and this Indenture and (b) the
amount, if any, which would not have (i) rendered such Guarantor "insolvent" (as
such term is defined in the Bankruptcy Law and in the Debtor and Creditor Law of
the State of New York) or (ii) left such Guarantor with unreasonably small
capital at the time its Subsidiary Guarantee of the Notes was entered into;
provided, however, that, it will be a presumption in any lawsuit or other
proceeding in which a Guarantor is a party that the amount guaranteed pursuant
to the Subsidiary Guarantee is the amount set forth in clause (a) above unless
any creditor, or representative of creditors of such Guarantor, or debtor in
possession or trustee in bankruptcy of the Guarantor, otherwise proves in such a
lawsuit that the aggregate liability of the Guarantor is the amount set forth in
clause (b) above. In making any determination as to solvency or sufficiency of
capital of a Guarantor in accordance with the previous sentence, the right of
such Guarantor to contribution from other Guarantors, and any other rights such
Guarantor may have, contractual or otherwise, shall be taken into account.
Section 10.07. "Trustee" to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 10 shall in each case (unless the context shall otherwise
require) be construed as extending to and including such Paying Agent within its
meaning as fully and for all intents and purposes as if such Paying Agent were
named in this Article 10 in place of the Trustee.
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with the
duties imposed by TIA (S)318(c), the imposed duties shall control.
Section 11.02. Notices.
Any notice or communication by the Company, any Guarantor or the Trustee to
the others is duly given if in writing (in the English language) and delivered
in person or mailed by first class mail (registered or certified, return receipt
requested), telecopier or overnight air courier guaranteeing next day delivery,
to the others' address:
If to the Company or the Guarantors:
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Offshore Logistics, Inc.
P. O. Box 5-C
224 Rue de Jean
Lafayette, Louisiana 70505
Attention: Chief Financial Officer
Telecopier No.: (318) 235-6678
If to the Trustee:
State Street Bank and Trust Company
Goodwin Square
225 Asylum Street
Hartford, Connecticut 06103
Telecopier No.: (860) 244-1889
Attention: Corporate Trust Administration
The Company, any of the Guarantors or the Trustee, by notice to the others
may designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to Holders) shall be
deemed to have been duly given: at the time delivered by hand, if personally
delivered; five Business Days after being deposited in the mail, postage
prepaid, if mailed; when receipt acknowledged, if telecopied; and the next
Business Day after timely delivery to the courier, if sent by overnight air
courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first class
mail, certified or registered, return receipt requested, or by overnight air
courier guaranteeing next day delivery to its address shown on the register kept
by the Registrar. Any notice or communication shall also be so mailed to any
Person described in TIA (S) 313(c), to the extent required by the TIA. Failure
to mail a notice or communication to a Holder or any defect in it shall not
affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Holders, it shall mail a
copy to the Trustee and each Agent at the same time.
Section 11.03. Communication by Holders of Notes with Other Holders of Notes.
Holders may communicate pursuant to TIA (S) 312(b) with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and anyone else shall have the protection of TIA (S)
312(c).
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Section 11.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Sec tion 11.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Sec tion 11.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants have been satisfied.
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than a certificate provided
pursuant to TIA (S) 314(a)(4)) shall comply with the provisions of TIA (S)
314(e) and shall include:
(a) a statement that the Person making such certificate or opinion has
read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been satisfied; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been satisfied.
Section 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a meeting of
Holders. The Registrar or Paying Agent may make reasonable rules and set
reasonable requirements for its functions.
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Section 11.07. No Personal Liability of Directors, Officers, Employees and
Stockholders.
No past, present or future director, officer, employee, incorporator,
member, partner or stockholder or other owner of Capital Stock of the Company or
any Guarantor, as such, shall have any liability for any obligations of the
Company or any Guarantor under the Notes, the Subsidiary Guarantees, this
Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder by accepting a Note waives and
releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
Section 11.08. Governing Law.
THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE AND
ENFORCE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES.
Section 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other indenture, loan or
debt agreement of the Company or its Restricted Subsidiaries or of any other
Person. Any such indenture, loan or debt agreement may not be used to interpret
this Indenture.
Section 11.10. Successors.
All agreements of the Company and the Guarantors in this Indenture and the
Notes shall bind their successors. All agreements of the Trustee in this
Indenture shall bind its successors.
Section 11.11. Severability.
In case any provision in this Indenture or in the Notes shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
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Section 11.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement.
Section 11.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of the Articles
and Sections of this Indenture have been inserted for convenience of reference
only, are not to be considered a part of this Indenture and shall in no way
modify or restrict any of the terms or provisions hereof.
[Signatures on following page]
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SIGNATURES
Offshore Logistics, Inc.
By /s/ Drury A. Milke
--------------------------------------
Drury A. Milke
Vice President, Chief Financial Officer
and Treasurer
Air Logistics, L.L.C.
By: Offshore Logistics, Inc.,
its Sole Member
By /s/ Drury A. Milke
--------------------------------------
Drury A. Milke
Vice President, Chief Financial Officer
and Treasurer
Air Logistics of Alaska, Inc.
Grasso Corporation
Grasso Production Management, Inc.
Medic systems, Inc.
Pumpkin air, Inc.
By /s/ Drury A. Milke
--------------------------------------
Drury A. Milke
Vice President
State Street Bank and Trust
Company, as Trustee
By /s/ Susan Merker
--------------------------------------
Susan Merker
Assistant Vice President
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EXHIBIT A-1
(Face of Note)
7-7/8% [SERIES A] [SERIES B] SENIOR NOTES DUE 2008
No. $_______________
CUSIP NO.
OFFSHORE LOGISTICS, INC.
promises to pay to __________ or registered assigns, the principal sum of
___________ Dollars on January 15, 2008.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
OFFSHORE LOGISTICS, INC.
By
--------------------------------
Name:
Title:
Trustee's Certificate of Authentication:
This is one of the Notes referred
to in the within-mentioned Indenture.
STATE STREET BANK
AND TRUST COMPANY, as Trustee
By
--------------------------------
Authorized Signatory
Dated: ______________________
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(Back of Note)
7-7/8% [SERIES A][SERIES B] SENIOR NOTES DUE 2008
[Unless and until it is exchanged in whole or in part for Notes in
definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) ("DTC"), to the issuer or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered in the name of Cede & Co.
or such other name as may be requested by an authorized representative of DTC
(and any payment is made to Cede & Co. or such other entity as may be requested
by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the
registered owner hereof, Cede & Co., has an interest herein.]/1/
[THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE
BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A,
(b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE SECURITIES ACT OR
(d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY
SO REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY
OF THE RESALE RESTRICTIONS SET FORTH IN (A) ABOVE.]/2/
- -------------------
/1/. This paragraph should be included only if the Note is issued in global
form.
/2/. This paragraph should be removed upon the exchange of Series A Notes for
Series B Notes in an Exchange Offer or upon the transfer of the Series A Notes
that have been sold pursuant to the terms of the shelf registration contemplated
by the Registration Rights Agreement.
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1. Interest. Offshore Logistics, Inc., a Delaware corporation (the
"Company"), promises to pay interest on the principal amount of this Note at
7-7/8% per annum from ___, ____ until maturity and shall pay the Liquidated
Damages payable pursuant to Section 5 of the Registration Rights Agreement
referred to below. The Company will pay interest and Liquidated Damages, if any,
semi-annually in arrears on January 15 and July 15 of each year, commencing ___,
______, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Notes will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance; provided that if
there is no existing Default or Event of Default in the payment of interest, and
if this Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date, except in the case of the original
issuance of Notes, in which case interest shall accrue from the date of
authentication. The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any, from time to time on demand at a rate that is the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages
(without regard to any applicable grace periods) from time to time on demand at
the same rate to the extent lawful. Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) and Liquidated Damages to the Persons who are registered
Holders of Notes at the close of business on the January 1 or July 1 next
preceding the Interest Payment Date, even if such Notes are cancelled after such
record date and on or before such Interest Payment Date, except as provided in
Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, premium, interest and Liquidated Damages, if
any, at the office or agency of the Company maintained for such purpose within
the City and State of New York, or, at the option of the Company, payment of
interest and Liquidated Damages may be made by check mailed to the Holders at
their addresses set forth in the register of Holders, and provided that payment
by wire transfer of immediately available funds will be required with respect to
principal of and interest, premium and Liquidated Damages on all Global Notes
and all other Notes the Holders of which shall have provided wire transfer
instructions to the Company or the Paying Agent. Such payment shall be in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts.
3. Paying Agent and Registrar. Initially, State Street Bank and Trust
Company, the Trustee under the Indenture, will act as Paying Agent and
Registrar. The Company may change any Paying Agent or Registrar without notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
4. Indenture. The Company issued the Notes under an Indenture dated as
of January 27, 1998 ("Indenture") among the Company, the Guarantors and the
Trustee. The terms of the Notes include those stated in the Indenture and those
made part of the
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Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S.
Code (S)(S) 77aaa-77bbbb). The Notes are subject to all such terms, and Holders
are referred to the Indenture and such Act for a statement of such terms. The
Notes are general unsecured obligations of the Company limited to $100,000,000
aggregate principal amount in the case of Notes issued on the Issue Date (as
defined in the Indenture).
5. Optional Redemption.
(a) Except as set forth in subparagraph (b) of this Paragraph 5, the
Company shall not have the option to redeem the Notes prior to January 15, 2003.
Thereafter, the Company shall have the option to redeem the Notes, in whole or
in part, upon not less than 30 nor more than 60 days' notice, at the redemption
prices (expressed as percentages of principal amount) set forth below plus
accrued and unpaid interest and Liquidated Damages thereon to the applicable
redemption date, if redeemed during the twelve-month period beginning on January
15 of the years indicated below:
YEAR PERCENTAGE
---- ----------
2003....................................... 103.938%
2004....................................... 102.953%
2005....................................... 101.969%
2006....................................... 100.984%
2007 and thereafter........................ 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5,
at any time prior to January 22, 2001, the Company may redeem up to 35% of the
aggregate principal amount of Notes originally issued at a redemption price of
107.875% of the principal amount thereof, plus accrued and unpaid interest and
Liquidated Damages, if any, thereon to the redemption date, with the net cash
proceeds of one or more Qualified Equity Offerings; provided that (a) at least
65% of the aggregate principal amount of Notes originally issued remains
outstanding immediately after the occurrence of each such redemption and (b)
each such redemption shall occur within 60 days of the date of the closing of
each such Qualified Equity Offering.
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6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall not be required
to make mandatory redemption or sinking fund payments with respect to the Notes.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be required to make
an offer (a "Change of Control Offer") to repurchase all or any part (equal to
$1,000 or an integral multiple thereof) of each Holder's Notes at a purchase
price equal to 101% of the aggregate principal amount thereof plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the date of purchase
(the "Change of Control Payment"). Within 30 days following any Change of
Control, the Company shall mail a notice to each Holder describing the
transaction that constitutes the Change of Control and setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any Asset Sales,
within 30 days of each date on which the aggregate amount of Excess Proceeds
exceeds $5.0 million, the Company shall commence an offer to all Holders of
Notes (an "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in the Indenture; provided, however, that, if the Company
is required to apply such Excess Proceeds to repurchase, or to offer to
repurchase, any Pari Passu Indebtedness, the Company shall only be required to
offer to repurchase the maximum principal amount of Notes that may be purchased
out of the amount of such Excess Proceeds multiplied by a fraction, the
numerator of which is the aggregate principal amount of Notes outstanding and
the denominator of which is the aggregate principal amount of Notes outstanding
plus the aggregate principal amount of Pari Passu Indebtedness outstanding. To
the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the Excess Proceeds, the Company (or such Subsidiary) may use
such deficiency for general corporate purposes. If the aggregate principal
amount of Notes surrendered by Holders thereof exceeds the amount of Excess
Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the Trustee so that only
Notes in denominations of $1,000, or integral multiples thereof, shall be
purchased). Holders of Notes that are the subject of an offer to purchase will
receive an Asset Sale Offer from the Company prior to any related purchase date
and may elect to have such Notes purchased by completing the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each Holder whose
Notes are to be redeemed at its registered address. Notes in denominations
larger than $1,000
-89-
<PAGE>
may be redeemed in part but only in whole multiples of $1,000, unless all of the
Notes held by a Holder are to be redeemed. On and after the redemption date
interest ceases to accrue on Notes or portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in registered form
without coupons in denominations of $1,000 and integral multiples of $1,000. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
10. Persons Deemed Owners. The registered Holder of a Note may be treated
as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture or the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, to add
any additional Guarantor or to release any Guarantor from its Subsidiary
Guarantee, in each case as provided in the Indenture, or to comply with the
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the Trust Indenture Act.
12. Defaults and Remedies. Events of Default include: (i) default for 30
days in the payment when due of interest or Liquidated Damages on the Notes;
(ii) default in payment when due of the principal of or premium, if any, on the
Notes; (iii) failure by the Company to comply with Section 4.10, 4.15 or 5.01 of
the Indenture; (iv) failure by the Company for 60 days after notice to comply
with any of its other agreements in the Indenture or the Notes; (v) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the date of the
Indenture, which default (a) is caused by a failure to pay principal of or
-90-
<PAGE>
premium or interest on such Indebtedness prior to the expiration of any grace
period provided in such Indebtedness, including any extension thereof (a
"Payment Default") or (b) results in the acceleration of such Indebtedness prior
to its express maturity and, in each case, the principal amount of any such
Indebtedness, together with the principal amount of any other such Indebtedness
under which there has been a Payment Default or the maturity of which has been
so accelerated, aggregates in excess of $5.0 million (or the equivalent thereof
in any other currency or currency unit), and provided, further, that if such
default is cured or waived or any such acceleration rescinded, or such
Indebtedness is repaid within a period of 10 days from the continuation of such
default beyond the applicable grace period or the occurrence of such
acceleration, as the case may be, an Event of Default and any consequential
acceleration of the Notes shall be automatically rescinded, so long as said
rescission does not conflict with any judgment or decree; (vi) failure by the
Company or any of its Restricted Subsidiaries to pay final judgments aggregating
in excess of $5.0 million (or the equivalent thereof in any other currency or
currency unit), which judgments are not paid, discharged or stayed for a period
of 60 days; (vii) failure by any Guarantor to perform any covenant set forth in
its Subsidiary Guarantee, or the repudiation by any Guarantor of its obligations
under its Subsidiary Guarantee or the unenforceability of any Subsidiary
Guarantee against a Guarantor for any reason; and (viii) certain events of
bankruptcy or insolvency with respect to the Company, any Guarantor or any
Significant Subsidiary. If any Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Trustee
may withhold from Holders of the Notes notice of any continuing Default or Event
of Default (except a Default or Event of Default relating to the payment of
principal or interest) if it determines that withholding notice is in their
interest. The Holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the Holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of the principal of or premium, interest or Liquidated Damages, if any,
on the Notes. The Company is required to deliver to the Trustee annually a
statement regarding compliance with the Indenture, and the Company is required
upon becoming aware of any Default or Event of Default, to deliver to the
Trustee a statement specifying such Default or Event of Default.
13. Defeasance. The Notes are subject to defeasance upon the terms and
conditions specified in the Indenture.
14. Trustee Dealings with Company. The Trustee, in its individual or any
other capacity, may make loans to, accept deposits from, and perform services
for the Company or its Affiliates, and may otherwise deal with the Company or
its Affiliates, as if it were not the Trustee.
-91-
<PAGE>
15. No Recourse Against Others. A director, officer, employee,
incorporator, member, partner or stockholder or other owner of capital stock of
the Company or any Guarantor, as such, shall not have any liability for any
obligations of the Company or any Guarantor under the Notes, the Subsidiary
Guarantees or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each Holder by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of the Notes.
16. Authentication. This Note shall not be valid until authenticated by
the manual signature of an authorized signatory of the Trustee or an
authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name of a
Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts
to Minors Act).
18. Additional Rights of Holders of Transfer Restricted Securities. In
addition to the rights provided to Holders of Notes under the Indenture, Holders
of Transfer Restricted Securities shall have all the rights set forth in the
Registration Rights Agreement dated as of January __, 1998, among the Company,
the Guarantors and the Initial Purchaser named on the signature page thereof
(the "Registration Rights Agreement").
19. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers
in notices of redemption as a convenience to Holders. No representation is made
as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture and/or the Registration Rights Agreement.
Requests may be made to:
Offshore Logistics, Inc.
P. O. Box 5-C
224 Rue de Jean
Lafayette, Louisiana 70505
Attention: Chief Financial Officer
-92-
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________ to transfer this Note on
the books of the Company. The agent may substitute another to act for him.
- --------------------------------------------------------------------------------
Date:
------------------
Your Signature:
----------------------------
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee:
-93-
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Note purchased by the Company pursuant to
Section 4.10 or 4.15 of the Indenture, check the box below:
[_]1 Section 4.10 [_]2 Section 4.15
If you want to elect to have only part of the Note purchased by the Company
pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you
elect to have purchased: $___________
Date: Your Signature:
------------------ ----------------------------
(Sign exactly as your name appears on the Note)
Soc. sec. or Tax Identification No.:_______
Signature Guarantee:
-94-
<PAGE>
SCHEDULE OF EXCHANGES OF NOTES/3/
THE FOLLOWING EXCHANGES OF A PART OF THIS GLOBAL NOTE FOR OTHER NOTES HAVE BEEN
MADE:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date of Amount of decrease Amount of increase Principal Amount of Signature of
Exchange in Principal Amount in Principal Amount this Global Note authorized officer of
of this Global Note of this Global Note following such Trustee or Note
decrease (or Custodian
increase)
-------- ------------------- ------------------- ------------------- ---------------------
</TABLE>
____________________
/3/. This should be included only if the Note is issued in global form.
-95-
<PAGE>
EXHIBIT A-2
(Face of Regulation S Temporary Global Note)
7-7/8% [SERIES A][SERIES B] SENIOR NOTES DUE 2008
No. $_______________
CUSIP NO.
OFFSHORE LOGISTICS, INC.
promises to pay to Cede & Co. or registered assigns, the principal sum of ______
Dollars on January 15, 2008.
Interest Payment Dates: January 15 and July 15
Record Dates: January 1 and July 1
OFFSHORE LOGISTICS, INC.
By
---------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION:
This is one of the Notes referred
to in the within-mentioned Indenture.
STATE STREET BANK
AND TRUST COMPANY, as Trustee
By:
---------------------------------
AUTHORIZED SIGNATORY
Dated:
------------------
A-2-1
<PAGE>
(Back of Regulation S Temporary Global Note)
7-7/8% [SERIES A][SERIES B] SENIOR NOTE DUE 2008
UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN
DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO
THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY
SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) ("DTC"),TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC
(AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN
A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY
EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH SECURITY
MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO
THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE
SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 OF THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO
REQUESTS), (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS
OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B)
THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER
FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN
(A) ABOVE.
THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE
CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR DEFINITIVE NOTES, ARE AS
SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).
NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY
GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON OR
LIQUIDATED DAMAGES PRIOR TO THE EXCHANGE OF THIS NOTE FOR A REGULATION S
PERMANENT GLOBAL NOTE AS CONTEMPLATED BY THE INDENTURE.
Offshore Logistics, Inc., a Delaware corporation (the "Company"), promises
to pay interest on the principal amount of this Note at the rate of 7-7/8% per
annum from _____________ until maturity and shall pay the Liquidated Damages
payable pursuant
A-2-2
<PAGE>
to Section 5 of the Registration Rights Agreement referred to in the Indenture.
The Company will pay interest and Liquidated Damages, if any, in United States
dollars semi-annually in arrears on January 15 and July 15, commencing on
______________, or if any such day is not a Business Day, on the next succeeding
Business Day (each an "Interest Payment Date"). Interest on the Notes shall
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance; provided that if
there is no existing Default or Event of Default in the payment of interest, and
if this Note is authenticated between a record date referred to on the face
hereof and the next succeeding Interest Payment Date, interest shall accrue from
such next succeeding Interest Payment Date, except in the case of the original
issuance of Notes, in which case interest shall accrue from the date of
authentication. The Company shall pay interest (including post-petition interest
in any proceeding under any Bankruptcy Law) on overdue principal and premium, if
any from time to time on demand at a rate equal to the then applicable interest
rate on the Notes; it shall pay interest (including post-petition interest in
any proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace period) from time to
time on demand at the same rate to the extent lawful. Interest shall be computed
on the basis of a 360-day year comprised of twelve 30-day months.
This Regulation S Temporary Global Note is issued in respect of an issue of
7-7/8% [Series A] [Series B] Senior Notes due 2008 (the "Notes") of the Company,
limited to, in the case of Notes issued on the Issue Date (as defined in the
Indenture), $100,000,000 in aggregate principal amount, plus amounts, if any,
sufficient to pay premium, if any, interest or Liquidated Damages, if any on
outstanding Notes. The Company has issued the Notes under an Indenture (the
"Indenture") dated as of January 27, 1998, among the Company, the Guarantors and
the Trustee. This Regulation S Temporary Global Note is governed by the terms
and conditions of the Indenture governing the Notes, which terms and conditions
are incorporated herein by reference and, except as otherwise provided herein,
shall be binding on the Company and the Holder hereof as if fully set forth
herein. Unless the context otherwise requires, the terms used herein shall have
the meanings specified in the Indenture.
Until this Regulation S Temporary Global Note is exchanged for Regulation S
Permanent Global Notes, the Holder hereof shall not be entitled to receive
payments of interest or Liquidated Damages, if any, hereon although interest and
Liquidated Damages, if any, will continue to accrue; until so exchanged in full,
this Regulation S Temporary Global Note shall in all other respects be entitled
to the same benefits as other Notes under the Indenture.
This Regulation S Temporary Global Note is exchangeable in whole or in part
for one or more Regulation S Permanent Global Notes only (i) on or after the
termination of the 40-day restricted period (as defined in Regulation S) and
(ii) upon presentation of certificates required by Article 2 of the Indenture.
Upon exchange of this Regulation S Temporary Global Note for one or more
Regulation S Permanent Global Notes, the Trustee shall cancel this Regulation S
Temporary Global Note.
This Regulation S Temporary Global Note shall not become valid or
obligatory until
A-2-3
<PAGE>
the certificate of authentication hereon shall have been duly manually signed by
an authorized signatory the Trustee in accordance with the Indenture. This
Regulation S Temporary Global Note shall be governed by and construed in
accordance with the laws of the State of the New York. All references to "$,"
"Dollars," "dollars" or "U.S. $" are to such coin or currency of the United
States of America as at the time shall be legal tender for the payment of public
and private debts therein.
A-2-4
<PAGE>
SCHEDULE OF EXCHANGES FOR GLOBAL NOTES
The following exchanges of a part of this Regulation S Temporary Global
Note for other Global Notes have been made:
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Date of Exchange Amount of decrease Amount of increase in Principal Amount of Signature of
in Principal Amount this Global Note authorized officer of
Principal Amount of this Global Note following such Trustee or Note
of this Global Note decrease Custodian
(or increase)
---------------- ------------------- --------------------- ------------------- ---------------------
</TABLE>
A-2-5
<PAGE>
EXHIBIT B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(i) of the Indenture)
State Street Bank and Trust Company,
as Trustee and Registrar
Re: 7-7/8% Senior Notes due 2008 of Offshore Logistics, Inc.
--------------------------------------------------------
Reference is hereby made to the Indenture, dated as of January 27, 1998
(the "Indenture"), among Offshore Logistics, Inc. (the "Company"), the
Guarantors named therein (the "Guarantors") and State Street Bank and Trust
Company, as trustee (the "Trustee"). Capitalized terms used but not defined
herein shall have the meanings given to them in the Indenture.
This letter relates to $ _______________ principal amount of Notes which
are evidenced by one or more 144A Global Notes and held with the Depository in
the name of_____________ (the "Transferor"). The Transferor has requested a
transfer of such beneficial interest in the Notes to a Person who will take
delivery thereof in the form of an equal principal amount of Notes evidenced by
one or more Regulation S Global Notes, which amount, immediately after such
transfer, is to be held with the Depository through Euroclear or Cedel or both.
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that such transfer has been effected in compliance
with the transfer restrictions applicable to the Global Notes and pursuant to
and in accordance with Rule 903 or Rule 904 under the United States Securities
Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor
hereby further certifies that:
(1) The offer of the Notes was not made to a person in the United
States;
(2) either:
(a) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on
its behalf reasonably believed and believes that the transferee was
outside the United States; or
(b) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the Transferor
nor any person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States;
B-1-1
<PAGE>
(3) no directed selling efforts have been made in contravention of the
requirements of Rule 904(b) of Regulation S;
(4) the transaction is not part of a plan or scheme to evade the
registration provisions of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest being
transferred as described above is to be held with the Depository through
Euroclear or Cedel or both.
Upon giving effect to this request to exchange a beneficial interest in a
144A Global Note for a beneficial interest in a Regulation S Global Note, the
resulting beneficial interest shall be subject to the restrictions on transfer
applicable to Regulation S Global Notes pursuant to the Indenture and the
Securities Act and, if such transfer occurs prior to the end of the 40-day
restricted period associated with the initial offering of Notes, the additional
restrictions applicable to transfers of interests in the Regulation S Temporary
Global Note.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Guarantors. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By__________________________________
Name:
Title:
Dated:
cc: Offshore Logistics, Inc.
B-1-2
<PAGE>
EXHIBIT B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO 144A GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
State Street Bank and Trust Company,
as Trustee and Registrar
Re: 7-7/8% Senior Notes due 2008 of Offshore Logistics, Inc.
--------------------------------------------------------
Reference is hereby made to the Indenture dated as of January 27, 1998 (the
"Indenture"), among Offshore Logistics, Inc. (the "Company"), the guarantors
named therein (the "Guarantors") and State Street Bank and Trust Company, as
trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $_________ principal amount of Notes which are
evidenced by one or more Regulation S Global Notes and held with the Depository
through Euroclear or Cedel in the name of ________ (the "Transferor"). The
Transferor has requested a transfer of such beneficial interest in the Notes to
a Person who will take delivery thereof in the form of an equal principal amount
of Notes evidenced by one or more 144A Global Notes, to be held with the
Depository.
In connection with such request and in respect of such Notes, the
Transferor hereby certifies that:
[CHECK ONE]
[_] such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the Notes for its own account,
or for one or more accounts with respect to which such Person exercises
sole investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A in a
transaction meeting the requirements of Rule 144A;
or
[_] such transfer is being effected pursuant to and in accordance with Rule 144
under the Securities Act;
or
[_] such transfer is being effected pursuant to an exemption from the
registration
B-2-1
<PAGE>
requirements of the Securities Act other than one described above, and the
Transferor hereby further certifies that the Notes are being transferred in
compliance with the transfer restrictions applicable to the Global Notes and
in accordance with the requirements of the exemption claimed, which
certification is supported by an Opinion of Counsel, provided by the
transferor or the transferee (a copy of which the Transferor has attached to
this certification) in form reasonably acceptable to the Company and to the
Registrar, to the effect that such transfer is in compliance with the
Securities Act and any applicable blue sky laws of any state of the United
States;
or
[_] such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
and such Notes are being transferred in compliance with any applicable blue sky
securities laws of any state of the United States or any other applicable
jurisdiction.
Upon giving effect to this request to exchange a beneficial interest in
Regulation S Global Notes for a beneficial interest in 144A Global Notes, the
resulting beneficial interest shall be subject to the restrictions on transfer
applicable to 144A Global Notes pursuant to the Indenture and the Securities
Act.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Guarantors.
[Insert Name of Transferor]
By__________________________________
Name:
Title:
Dated:
cc: Offshore Logistics, Inc.
B-2-2
<PAGE>
EXHIBIT B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE NOTES
(Pursuant to Section 2.06(b) of the Indenture)
State Street Bank and Trust Company,
as Trustee and Registrar
Re: 7-7/8% Senior Notes due 2008 of Offshore Logistics, Inc.
--------------------------------------------------------
Reference is hereby made to the Indenture dated as of January 27, 1998 (the
"Indenture"), among Offshore Logistics, Inc. (the "Company"), the guarantors
named therein (the "Guarantors") and State Street Bank and Trust Company, as
trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This relates to $ ___________ principal amount of Notes which are
evidenced by one or more Definitive Notes in the name of __________________
(the "Transferor"). The Transferor has requested an exchange or transfer of
such Definitive Note(s) in the form of an equal principal amount of Notes
evidenced by one or more Definitive Notes, to be delivered to the Transferor or,
in the case of a transfer of such Notes, to such Person as the Transferor
instructs the Trustee.
In connection with such request and in respect of the Notes surrendered to
the Trustee herewith (the "Surrendered Notes"), the Holder of such Surrendered
Notes hereby certifies that:
[CHECK ONE]
[_] the Surrendered Notes are being acquired for the Transferor's own account,
without transfer;
or
[_] the Surrendered Notes are being transferred to the Company or one of its
Subsidiaries;
or
[_] the Surrendered Notes are being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Surrendered Notes are being transferred to a Person that
the Transferor reasonably believes is purchasing the Surrendered Notes for
its own account, or
B-3-1
<PAGE>
for one or more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in each
case in a transaction meeting the requirements of Rule 144A;
or
[_] the Surrendered Notes are being transferred in a transaction permitted by
Rule 144 under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an exemption under
the Securities Act other than Rule 144A, Rule 144 or Rule 904 to Person who
is an Institutional Accredited Investor and the Transferor further
certifies that the transfer complies with the transfer restrictions
applicable to Definitive Notes bearing the legend set forth in Section
2.06(f) of the Indenture and the requirements of the exemption claimed,
which certification is supported by (a) if such transfer is in respect of a
principal amount of Notes at the time of transfer of $100,000 or more, a
certificate executed by the transferee in the form of Exhibit C to the
Indenture, or (b) if such transfer is in respect of a principal amount of
Notes at the time of transfer of less than $100,000, (i) a certificate
executed in the form of Exhibit C to the Indenture and (ii) an Opinion of
Counsel provided by the Transferor or the transferee (a copy of which the
Transferor has attached to this certification), to the effect that (1) such
transfer is in compliance with the Securities Act and (2) such transfer
complies with any applicable blue sky securities laws of any state of the
United States;
or
[_] the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States or any
other applicable jurisdiction.
B-3-2
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Guarantors.
[Insert Name of Transferor]
By
----------------------------
Name:
Title:
Dated:
cc: Offshore Logistics, Inc.
B-3-3
<PAGE>
EXHIBIT B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM 144A GLOBAL NOTE OR REGULATION S
PERMANENT GLOBAL NOTE
TO DEFINITIVE NOTE
(Pursuant to Section 2.06(c) of the Indenture)
State Street Bank and Trust Company,
as Trustee and Registrar
Re: 7-7/8% Senior Notes due 2008 of Offshore Logistics, Inc.
--------------------------------------------------------
Reference is hereby made to the Indenture dated as of January 27, 1998 (the
"Indenture"), among Offshore Logistics, Inc. (the "Company"), the guarantors
named therein (the "Guarantors") and State Street Bank and Trust Company, as
trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $__________ principal amount of Notes which are
evidenced by a beneficial interest in one or more 144A Global Notes or
Regulation S Permanent Global Notes in the name of ____________________ (the
"Transferor"). The Transferor has requested an exchange or transfer of such
beneficial interest in the form of an equal principal amount of Notes evidenced
by one or more Definitive Notes, to be delivered to the Transferor or, in the
case of a transfer of such Notes, to such Person as the Transferor instructs the
Trustee.
In connection with such request and in respect of the Notes surrendered to
the Trustee herewith (the "Surrendered Notes"), the Holder of such Surrendered
Notes hereby certifies that:
[CHECK ONE]
[_] the Surrendered Notes are being transferred to the beneficial owner of such
Notes;
or
[_] the Surrendered Notes are being transferred to the Company or one of its
Subsidiaries;
or
[_] the Surrendered Notes are being transferred pursuant to and in accordance
with Rule 144A under the United States Securities Act of 1933, as amended
(the "Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Surrendered Notes are being transferred to a Person that
the Transferor
B-4-1
<PAGE>
reasonably believes is purchasing the Surrendered Notes for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such account
is a "qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting they requirements of Rule 144A;
or
[_] the Surrendered Notes are being transferred in a transaction permitted by
Rule 144 under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
[_] the Surrendered Notes are being transferred pursuant to an exemption under
the Securities Act other than Rule 144A, Rule 144 or Rule 904 to a Person
who is an Institutional Accredited Investor and the Transferor further
certifies that the transfer complies with the transfer restrictions
applicable to beneficial interests in Global Notes bearing the legend set
forth in Section 2.06(f) of the Indenture and the requirements of the
exemption claimed, which certification is supported by (a) if such transfer
is in respect of a principal amount of Notes at the time of transfer of
$100,000 or more, a certificate executed by the transferee in the form of
Exhibit C to the Indenture, or (b) if such transfer is in respect of a
principal amount of Notes at the time of transfer of less than $100,000,
(i) a certificate executed in the form of Exhibit C to the Indenture and
(ii) an Opinion of Counsel provided by the Transferor or the transferee (a
copy of which the Transferor has attached to this certification), to the
effect that (1) such transfer is in compliance with the Securities Act and
(2) such transfer complies with any applicable blue sky securities laws of
any state of the United States;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States or any
other applicable jurisdiction.
B-4-2
<PAGE>
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Guarantors.
[Insert Name of Transferor]
By
----------------------------------
Name:
Title:
Dated:
cc: Offshore Logistics, Inc.
B-4-3
<PAGE>
EXHIBIT C
FORM OF CERTIFICATE TO BE DELIVERED BY
INSTITUTIONAL ACCREDITED INVESTORS
_______________, _____
State Street Bank and Trust Company,
as Trustee and Registrar
Ladies and Gentlemen:
We are delivering this letter in connection with an offering of 7-7/8%
Senior Notes due 2008 (the "Notes") of Offshore Logistics, Inc., a Delaware
corporation (the "Company"), all as described in the Offering Memorandum dated
January 22, 1998 (the "Offering Memorandum") relating to the offering of the
Notes. We hereby confirm that:
(i) we are an "accredited investor" within the meaning of Rule
501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the "Securities Act"), or an entity in which all of the equity owners are
accredited investors within the meaning of Rule 501(a)(1), (2), (3) or (7)
under the Securities Act (an "Institutional Accredited Investor");
(ii) any purchase of Notes by us will be for our own account or, if
we are buying for one or more institutional accounts for which we are
acting as fiduciary or agent and we are not a bank (as defined in Section
3(a)(2) of the securities Act) or a savings and loan association or other
institution (as defined in Section 3(a)(5)(A) of the Securities Act, each
such account is an Institutional Accredited Investor;
(iii) in the event that we purchase any Notes, we will acquire Notes
having a minimum purchase price of at least $100,000 for our own account
and for each separate account for which we are acting;
(iv) we have such knowledge and experience in financial and business
matters that we are capable of evaluating the merits and risks of
purchasing Notes and we, and any accounts for which we are acting, are able
to bear the economic risks of its or their investment;
(v) we are not acquiring Notes with a view to any distribution
thereof in a transaction that would violate the Securities Act or the
securities laws of any State of the United States or any other applicable
jurisdiction; provided, however, that the disposition of our property and
the property of any accounts for which we are acting as fiduciary shall
remain at all times within our control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such questions
of representatives of the Company and receive answers thereto, as we deem
necessary in connection with
C-1
<PAGE>
our decision to purchase Notes.
We understand that the Notes were offered in a transaction not involving
any public offering within the meaning of the Securities Act and that the Notes
have not been registered under the Securities Act, and we agree, on our own
behalf and on behalf of each account for which we acquire any Notes, that such
Notes may be offered, resold, pledged or otherwise transferred only (i) to a
person whom we reasonably believe to be a qualified institutional buyer (as
defined in Rule 144A under the Securities Act) in a transaction meeting the
requirements of Rule 144A under the Securities Act, in a transaction meeting the
requirements of Rule 144 under the Securities Act, outside the United States in
a transaction meeting the requirements of Rule 904 under the Securities Act, or
in accordance with another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel if the Company so
requests), (ii) to the Company or (iii) pursuant to an effective registration
statement, and, in each case, in accordance with any applicable securities laws
of any State of the United States or any other applicable jurisdiction, and we
will, and each subsequent holder of the Notes is required to, notify any
subsequent purchaser from us or it of the resale restrictions set forth in
clause (i) above. We acknowledge that the Notes will bear legends substantially
to the effect set forth in the Offering Memorandum under the "Notice to
Investors." We understand that the registrar will not be required to accept for
registration of transfer any Notes, except upon presentation of evidence
satisfactory to the Company that the foregoing restrictions on transfer have
been complied with.
We acknowledge that you and the Company will rely upon our confirmations,
acknowledgments and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
____________________________________
[Name of Purchaser]
By
----------------------------------
Name:
Title:
Address:
C-2
<PAGE>
EXHIBIT D
SUBSIDIARY GUARANTEE
Subject to Section 10.06 of the Indenture, each Guarantor has jointly and
severally, unconditionally guaranteed to each Holder of a Note authenticated and
delivered by the Trustee and to the Trustee and its successors and assigns,
irrespective of the validity and enforceability of the Indenture, the Notes and
the Obligations of the Company under the Notes or under the Indenture, that: (a)
the principal of and premium, if any, interest and Liquidated Damages, if any,
on the Notes will be promptly paid in full when due, subject to any applicable
grace period, whether at maturity, by acceleration, redemption or otherwise, and
interest on overdue principal of and premium, if any, (to the extent permitted
by law) interest on any interest, if any, and Liquidated Damages, if any, on the
Notes and all other payment Obligations of the Company to the Holders or the
Trustee under the Indenture or under the Notes will be promptly paid in full and
performed, all in accordance with the terms thereof; and (b) in case of any
extension of time of payment or renewal of any Notes or any of such other
payment Obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration,
redemption or otherwise. Failing payment when so due of any amount so guaranteed
or any performance so guaranteed for whatever reason, the Guarantors will be
jointly and severally obligated to pay the same immediately. An Event of Default
under the Indenture or the Notes shall constitute an event of default under the
Subsidiary Guarantees, and shall entitle the Holders to accelerate the
obligations of the Guarantors under the Indenture in the same manner and to the
same extent as the Obligations of the Company. The Guarantors have agreed that
their Obligations under the Indenture shall be unconditional, irrespective of
the validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor further, to the extent permitted by law, has waived
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that its Subsidiary Guarantee will not be discharged except by
complete performance of the Obligations contained in the Notes and the
Indenture. If any Holder or the Trustee is required by any court or otherwise to
return to the Company, the Guarantors, or any Note Custodian, Trustee,
liquidator or other similar official acting in relation to either the Company or
the Guarantors, any amount paid by the Company or any Guarantor to the Trustee
or such Holder, the Subsidiary Guarantees, to the extent theretofore discharged,
shall be reinstated in full force and effect. Each Guarantor has agreed that it
shall not be entitled to, and hereby has waived, any right of subrogation in
relation to the Holders in respect of any Obligations guaranteed under the
Indenture. Each Guarantor further has agreed that, as between the Guarantors, on
the one hand, and the Holders and the Trustee, on the other hand, (a) the
maturity of the Obligations guaranteed under the Indenture may be accelerated as
provided in Article 6 of the Indenture for the purposes of its Subsidiary
Guarantee, notwithstanding any stay, injunction or other prohibition
<PAGE>
preventing such acceleration in respect of the Obligations guaranteed thereby,
and (b) in the event of any declaration of acceleration of such Obligations as
provided in Article 6 of the Indenture, such Obligations (whether or not due and
payable) shall forthwith become due and payable by the Guarantor for the purpose
of its Subsidiary Guarantee. The Guarantors shall have the right to seek
contribution from any non-paying Guarantor so long as the exercise of such right
does not impair the rights of the Holders under the Subsidiary Guarantees.
The obligations of the Guarantors to the Holders and to the Trustee
pursuant to the Subsidiary Guarantees and the Indenture are expressly set forth
in Article 10 of the Indenture, and reference is hereby made to such Indenture
for the precise terms of the Subsidiary Guarantees. The terms of Article 10 of
the Indenture are incorporated herein by reference. The Subsidiary Guarantees
are subject to release as and to the extent provided in Sections 10.04 and 10.05
of the Indenture.
Each Subsidiary Guarantee is a continuing guarantee and shall remain in
full force and effect and shall be binding upon each Guarantor and its
respective successors and assigns to the extent set forth in the Indenture until
full and final payment of all of the Company's Obligations under the Notes and
the Indenture and shall inure to the benefit of the successors and assigns of
the Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges conferred in the
Indenture upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. Each
Subsidiary Guarantee is a guarantee of payment and not a guarantee of
collection.
The Subsidiary Guarantees shall not be valid or obligatory for any purpose
until the certificate of authentication on the Note upon which this notation of
Subsidiary Guarantee is endorsed shall have been executed by the Trustee or an
authenticating agent under the Indenture by the manual signature of one of its
authorized signatories.
For purposes hereof, each Guarantor's liability under its Subsidiary
Guarantee shall be limited to the lesser of (i) the aggregate amount of the
Obligations of the Company under the Notes and the Indenture and (ii) the
amount, if any, which would not have (A) rendered such Guarantor "insolvent" (as
such term is defined in the Bankruptcy Law and in the Debtor and Creditor Law of
the State of New York) or (B) left such Guarantor with unreasonably small
capital at the time its Subsidiary Guarantee of the Notes was entered into;
provided, however, that, it will be a presumption in any lawsuit or other
proceeding in which a Guarantor is a party that the amount guaranteed pursuant
to the Subsidiary Guarantee is the amount set forth in clause (i) above unless
any creditor, or representative of creditors of such Guarantor, or debtor in
possession or trustee in bankruptcy of such Guarantor, otherwise proves in such
a lawsuit that the aggregate liability of the Guarantor is limited to the amount
set forth in clause (ii) above. The Indenture provides that, in making any
determination as to the solvency or sufficiency of capital of a Guarantor in
accordance with the previous sentence, the right of such Guarantors to
contribution from other Guarantors and any other rights such Guarantors may
have, contractual or otherwise, shall be taken into account.
D-2
<PAGE>
Capitalized terms used herein have the same meanings given in the Indenture
unless otherwise indicated.
[GUARANTORS]
By
-----------------------------------
Name:
Title:
D-3
<PAGE>
EXHIBIT E
- --------------------------------------------------------------------------------
OFFSHORE LOGISTICS, INC.
and
the Guarantors named herein
________________________________________
SERIES A AND SERIES B
7-7/8% SENIOR NOTES DUE 2008
________________________________________
___________________
FORM OF SUPPLEMENTAL INDENTURE
AND AMENDMENT -- SUBSIDIARY GUARANTEE
DATED AS OF ________ ___, ____
___________________
STATE STREET BANK AND TRUST COMPANY
Trustee
___________________
- --------------------------------------------------------------------------------
E-1
<PAGE>
This SUPPLEMENTAL INDENTURE, dated as of __________ ___, ____, is among
Offshore Logistics, Inc., a Delaware corporation (the "Company"), each of the
parties identified under the caption "Guarantors" on the signature page hereto
(the "Guarantors") and State Street Bank and Trust Company, as Trustee.
RECITALS
WHEREAS, the Company, the Guarantors and the Trustee entered into an
Indenture, dated as of January 27, 1998 (the "Indenture"), pursuant to which
the Company has originally issued $______________ in principal amount of 7-7/8%
Senior Notes due 2008 (the "Notes"); and
WHEREAS, Section 9.01(f) of the Indenture provides that the Company and the
Trustee may amend or supplement the Indenture in order to execute and deliver a
guarantee (a "Subsidiary Guarantee") to comply with Section 10.02 thereof
without the consent of the Holders of the Notes; and
WHEREAS, all acts and things prescribed by the Indenture, by law and by the
Certificate of Incorporation and the Bylaws (or comparable constituent
documents) of the Company, of the Guarantors and of the Trustee necessary to
make this Supplemental Indenture a valid instrument legally binding on the
Company, the Guarantors and the Trustee, in accordance with its terms, have been
duly done and performed;
NOW, THEREFORE, to comply with the provisions of the Indenture and in
consideration of the above premises, the Company, the Guarantors and the Trustee
covenant and agree for the equal and proportionate benefit of the respective
Holders of the Notes as follows:
ARTICLE 1
Section 1.01. This Supplemental Indenture is supplemental to the Indenture
and does and shall be deemed to form a part of, and shall be construed in
connection with and as part of, the Indenture for any and all purposes.
Section 1.02. This Supplemental Indenture shall become effective
immediately upon its execution and delivery by each of the Company, the
Guarantors and the Trustee.
ARTICLE 2
From this date, in accordance with Section 10.02 and by executing this
Supplemental Indenture and the accompanying notation of Subsidiary Guarantee (a
copy of which is attached hereto), the Guarantors whose signatures appear below
are subject to the provisions of the Indenture to the extent provided for in
Article 10 thereunder.
E-2
<PAGE>
ARTICLE 3
Section 3.01. Except as specifically modified herein, the Indenture and
the Notes are in all respects ratified and confirmed (mutatis mutandis) and
shall remain in full force and effect in accordance with their terms with all
capitalized terms used herein without definition having the same respective
meanings ascribed to them as in the Indenture.
Section 3.02. Except as otherwise expressly provided herein, no duties,
responsibilities or liabilities are assumed, or shall be construed to be
assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.
Section 3.03. THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE AND ENFORCE THIS SUPPLEMENTAL INDENTURE.
Section 3.04. The parties may sign any number of copies of this
Supplemental Indenture. Each signed copy shall be an original, but all of such
executed copies together shall represent the same agreement.
[NEXT PAGE IS SIGNATURE PAGE]
E-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
OFFSHORE LOGISTICS, INC.
By
------------------------------------
Name:
Title:
GUARANTORS
[_____________________________]
By
------------------------------------
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By
------------------------------------
Name:
Title:
E-4
<PAGE>
EXHIBIT 4.2
- --------------------------------------------------------------------------------
OFFSHORE LOGISTICS, INC.
AND
THE GUARANTORS NAMED ON THE SIGNATURE PAGE HERETO
$100,000,000
7-7/8% SERIES A SENIOR NOTES DUE 2008
REGISTRATION RIGHTS AGREEMENT
DATED AS OF JANUARY 27, 1998
JEFFERIES & COMPANY, INC.
- --------------------------------------------------------------------------------
<PAGE>
This Registration Rights Agreement (this "Agreement") is made and entered
into as of January 27, 1998 by and among Offshore Logistics, Inc., a Delaware
corporation (the "Company"), Air Logistics, L.L.C., Air Logistics of Alaska,
Inc., Grasso Corporation, Grasso Production Management, Inc., Medic Systems,
Inc., and Pumpkin Air, Inc. (each a "Guarantor" and, collectively, the
"Guarantors"), and Jefferies & Company, Inc. (the "Initial Purchaser"), who has
agreed to purchase $100,000,000 aggregate principal amount of the Company's
7-7/8% Series A Senior Notes due 2008 (the "Series A Notes") pursuant to the
Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement, dated January
22, 1998 (the "Purchase Agreement"), by and among the Company, the Guarantors
and the Initial Purchaser. In order to induce the Initial Purchaser to purchase
the Series A Notes, the Company has agreed to provide the registration rights
set forth in this Agreement. The execution and delivery of this Agreement is a
condition to the obligations of the Initial Purchaser set forth in Section 3 of
the Purchase Agreement.
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have the
following meanings:
Act: The Securities Act of 1933, as amended.
Advice: As defined in Section 6.
Broker-Dealer: Any broker or dealer registered under the Exchange
Act.
Closing Date: The date on which the Series A Notes are originally
issued under the Indenture.
Commission: The Securities and Exchange Commission.
Consummate: The Exchange Offer shall be deemed "Consummated" for
purposes of this Agreement upon the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the Series B Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum
period required pursuant to Section 3(b) hereof, and (iii) the delivery by
the Company to the Registrar under the Indenture of Series B Notes in the
same aggregate principal amount as the aggregate principal amount of Series
A Notes that were tendered by Holders thereof pursuant to the Exchange
Offer.
Damages Payment Date: With respect to the Series A Notes, each
Interest Payment Date.
<PAGE>
Effectiveness Target Date: As defined in Section 5.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The registration by the Company under the Act of the
Series B Notes pursuant to a Registration Statement pursuant to which the
Company offers the Holders of all outstanding Transfer Restricted
Securities the opportunity to exchange all such outstanding Transfer
Restricted Securities held by such Holders for Series B Notes in an
aggregate principal amount equal to the aggregate principal amount of the
Transfer Restricted Securities tendered in such exchange offer by such
Holders.
Exchange Offer Registration Statement: The Registration Statement
relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial Purchaser
proposes to sell the Series A Notes (i) to certain "qualified institutional
buyers," as such term is defined in Rule 144A under the Act, (ii) to
certain institutional "accredited investors," as such term is defined in
Rule 501(a)(1), (2), (3) and (7) of Regulation D under the Act ("Accredited
Institutions") and (iii) outside the United States to certain non-U.S.
Persons meeting the requirements of Rule 904 under the Act.
Holders: As defined in Section 2(b) hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Indenture: The Indenture, dated as of even date herewith, among the
Company, State Street Bank and Trust Company, as trustee (the "Trustee"),
and the Guarantors, pursuant to which the Notes are to be issued, as such
Indenture is amended or supplemented from time to time in accordance with
the terms thereof.
Initial Purchaser: As defined in the preamble hereto.
Interest Payment Date: As defined in the Indenture and the Notes.
NASD: National Association of Securities Dealers, Inc.
Notes: The Series A Notes and the Series B Notes.
Person: An individual, partnership, corporation, trust, limited
liability company or unincorporated organization, or a government or agency
or political subdivision thereof.
Prospectus: The prospectus included in a Registration Statement, as
amended or supplemented by any prospectus supplement and by all other
amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
-2-
<PAGE>
Record Holder: With respect to any Damages Payment Date relating to Notes,
each Person who is a Holder of Notes on the record date with respect to the
Interest Payment Date on which such Damages Payment Date shall occur.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the Company
relating to (a) an offering of Series B Notes and the Subsidiary Guarantees
pursuant to an Exchange Offer or (b) the registration for resale of
Transfer Restricted Securities pursuant to the Shelf Registration
Statement, which is filed pursuant to the provisions of this Agreement, in
each case, including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all exhibits
and material incorporated by reference therein.
Series B Notes: The Company's 7-7/8% Series B Senior Notes due 2008
to be issued pursuant to the Indenture and the Exchange Offer.
Shelf Filing Deadline: As defined in Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
Subsidiary Guarantees: The joint and several guarantees of the
Company's payment obligations under the Notes by the Guarantors.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb)
as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Series A Note until (i) the date
on which such Series A Note has been exchanged by a Person other than a
Broker-Dealer for a Series B Note in the Exchange Offer, (ii) following the
exchange by a Broker-Dealer in the Exchange Offer of a Series A Note for a
Series B Note, the date on which such Series B Note is sold to a purchaser
who receives from such Broker-Dealer on or prior to the date of such sale a
copy of the Prospectus contained in the Exchange Offer Registration
Statement, (iii) the date on which such Series A Note has been effectively
registered under the Act and disposed of in accordance with the Shelf
Registration Statement or (iv) the date on which such Series A Note is
distributed to the public pursuant to Rule 144 under the Act or may be
distributed to the public pursuant to Rule 144(k) under the Act.
Underwritten Registration or Underwritten Offering: A registration in
which securities of the Company are sold to an underwriter for reoffering
to the public.
-3-
<PAGE>
SECTION 2. SECURITIES SUBJECT TO THIS AGREEMENT
(a) Transfer Restricted Securities. The securities entitled to the
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed to be a
holder of Transfer Restricted Securities (each, a "Holder") whenever such Person
owns Transfer Restricted Securities of record.
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permissible under applicable law
or Commission policy (after the procedures set forth in Section 6(a) below have
been complied with), the Company and the Guarantors shall (i) cause to be filed
with the Commission on or before the 60th day after the Closing Date, a
Registration Statement under the Act relating to the Series B Notes, the
Subsidiary Guarantees and the Exchange Offer, (ii) use their reasonable best
efforts to cause such Registration Statement to become effective on or before
the 120th day after the Closing Date, (iii) in connection with the foregoing,
file (A) all pre-effective amendments to such Registration Statement as may be
necessary in order to cause such Registration Statement to become effective, (B)
if applicable, a post-effective amendment to such Registration Statement
pursuant to Rule 430A under the Act and (C) cause all necessary filings in
connection with the registration and qualification of the Series B Notes and the
Subsidiary Guarantees to be made under the Blue Sky laws of such jurisdictions
as are necessary to permit the Exchange Offer to be Consummated, and (iv) upon
the effectiveness of such Registration Statement, commence the Exchange Offer.
The Exchange Offer Registration Statement shall be on the appropriate form under
the Act permitting registration of the Series B Notes to be offered in exchange
for the Transfer Restricted Securities and to permit resales of the Series B
Notes held by Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company and the Guarantors shall cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange
Offer open for a period of not less than the minimum period required under
applicable federal and state securities laws to Consummate the Exchange Offer;
provided, however, that in no event shall such period be less than 20 business
days. The Company and the Guarantors shall cause the Exchange Offer to comply
with all applicable federal and state securities laws. No securities other than
the Series B Notes and the Subsidiary Guarantees shall be included in the
Exchange Offer Registration Statement. The Company and the Guarantors shall use
their reasonable best efforts to cause the Exchange Offer to be Consummated on
the earliest practicable date after the Exchange Offer Registration Statement
has become effective, but in any event on or prior to the 180th day after the
Closing Date.
(c) The Company and the Guarantors shall indicate in a "Plan of
Distribution" section contained in the Exchange Offer Registration Statement
that any Broker-Dealer
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who holds Notes that are Transfer Restricted Securities and that were acquired
for its own account as a result of market-making activities or other trading
activities (other than Transfer Restricted Securities acquired directly from the
Company) may exchange such Series A Notes pursuant to the Exchange Offer;
however, such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with any resales of the Series B Notes
received by such Broker-Dealer in the Exchange Offer, which prospectus delivery
requirement may be satisfied by the delivery by such Broker-Dealer of the
Prospectus contained in the Exchange Offer Registration Statement. Such "Plan of
Distribution" section shall also contain all other information with respect to
such resales by Broker-Dealers that the Commission may require in order to
permit such resales pursuant thereto, but such "Plan of Distribution" shall not
name any such Broker-Dealer or disclose the amount of Notes held by any such
Broker-Dealer except to the extent required by the Commission as a result of a
change in policy after the date of this Agreement.
The Company and the Guarantors shall use their reasonable best efforts
to keep the Exchange Offer Registration Statement continuously effective,
supplemented and amended as required by the provisions of Section 6(c) below to
the extent necessary to ensure that it is available for resales of Notes
acquired by Broker-Dealers for their own accounts as a result of market-making
activities or other trading activities, and to ensure that it conforms with the
requirements of this Agreement, the Act and the policies, rules and regulations
of the Commission as announced from time to time, for a period of one year from
the date on which the Exchange Offer Registration Statement is declared
effective.
The Company and the Guarantors shall provide sufficient copies of the
latest version of such Prospectus to Broker-Dealers promptly upon request at any
time during such one-year period in order to facilitate such resales.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Company and the Guarantors are not
required to file an Exchange Offer Registration Statement or permitted to
Consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with) or (ii) any Holder of Transfer Restricted
Securities notifies the Company prior to the 20th day following the Consummation
of the Exchange Offer (A) that such Holder is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) that such
Holder may not resell the Series B Notes acquired by it in the Exchange Offer to
the public without delivering a prospectus and that the Prospectus contained in
the Exchange Offer Registration Statement is not available for such resales by
such Holder, then the Company and the Guarantors shall use their reasonable best
efforts to:
(x) cause to be filed a shelf registration statement pursuant to Rule
415 under the Act, which may be an amendment to the Exchange Offer
Registration
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Statement (in either event, the "Shelf Registration Statement") on or prior
to the earliest to occur of (1) the 60th day after the date on which the
Company determines that it is not required to file the Exchange Offer
Registration Statement and (2) the 60th day after the date on which the
Company receives notice from a Holder of Transfer Restricted Securities as
contemplated by clause (ii) above (such earliest date being the "Shelf
Filing Deadline"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities the Holders of which shall
have provided the information required pursuant to Section 4(b) hereof; and
(y) cause such Shelf Registration Statement to be declared effective
by the Commission on or before the 120th day after the Shelf Filing
Deadline.
The Company and the Guarantors shall use their reasonable best efforts to keep
such Shelf Registration Statement continuously effective, supplemented and
amended as required by the provisions of Sections 6(b) and (c) hereof to the
extent necessary to ensure that it is available for resales of Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a), and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of at least two years following the
Closing Date or, if earlier, until the Shelf Registration Statement terminates
when all Transfer Restricted Securities covered by such Shelf Registration
Statement have been sold.
(b) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 20 business days after receipt of a request
therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary
Prospectus included therein. No Holder of Transfer Restricted Securities shall
be entitled to Liquidated Damages pursuant to Section 5 hereof unless and until
such Holder shall have used its best efforts to provide all such reasonably
requested information. Each Holder as to which any Shelf Registration Statement
is being effected agrees to furnish promptly to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not materially misleading.
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SECTION 5. LIQUIDATED DAMAGES
If (i) any of the Registration Statements required by this Agreement to be
filed is not filed with the Commission on or prior to the date specified for
such filing in this Agreement, (ii) any of such Registration Statements has not
been declared effective by the Commission on or prior to the date specified for
such effectiveness in this Agreement (the "Effectiveness Target Date"), whether
or not the Company and the Guarantors have breached any obligations to use their
reasonable best efforts, to cause any such Registration Statement to be declared
effective, (iii) the Exchange Offer has not been Consummated within 180 days of
the Closing Date with respect to the Exchange Offer Registration Statement or
(iv) any Registration Statement required by this Agreement is filed and declared
effective but shall thereafter cease to be effective or fail to be usable for
its intended purpose without being succeeded immediately by a post-effective
amendment to such Registration Statement that cures such failure and that is
itself declared effective on or prior to the Effectiveness Target Date (each
such event referred to in clauses (i) through (iv), a "Registration Default"),
the Company and the Guarantors hereby jointly and severally agree to pay
liquidated damages to each Holder of Transfer Restricted Securities with respect
to the first 90-day period immediately following the occurrence of such
Registration Default in an amount equal to $.05 per week per $1,000 principal
amount of Transfer Restricted Securities held by such Holder for each week or
portion thereof that the Registration Default continues. The amount of the
liquidated damages shall increase by an additional $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum amount of liquidated damages of $.20 per week per $1,000 principal
amount of Transfer Restricted Securities. All accrued liquidated damages shall
be paid to Record Holders by the Company on each Damages Payment Date following
the accrual thereof, in the same manner as provided in the Indenture and the
Notes for the payment of interest on the Notes. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted Securities,
the accrual of liquidated damages with respect to such Transfer Restricted
Securities will cease.
All obligations of the Company and the Guarantors set forth in the
preceding paragraph that are outstanding with respect to any Transfer Restricted
Security at the time such security ceases to be a Transfer Restricted Security
shall survive until such time as all such obligations with respect to such
security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with the Exchange
Offer, the Company and the Guarantors shall comply with all of the provisions of
Section 6(c) below, shall use their reasonable best efforts to effect such
exchange to permit the sale of Transfer Restricted Securities being sold in
accordance with the intended method or methods of distribution thereof, and
shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Company there is a
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question as to whether the Exchange Offer is permitted by applicable law,
the Company and the Guarantors hereby agree to seek a no-action letter or
other favorable decision from the Commission allowing the Company and the
Guarantors to Consummate the Exchange Offer. The Company and the
Guarantors hereby agree to pursue the issuance of such a decision to the
Commission staff level but shall not be required to take commercially
unreasonable action to effect a change of Commission policy. The Company
and the Guarantors hereby agree, however, to (A) participate in telephonic
conferences with the Commission staff, (B) deliver to the Commission staff
an analysis prepared by counsel to the Company setting forth the legal
bases, if any, upon which such counsel has concluded that the Exchange
Offer should be permitted and (C) diligently pursue a resolution (which
need not be favorable) by the Commission staff of such submission.
(ii) The Initial Purchaser, for itself and on behalf of the Holders,
hereby acknowledges and agrees, and each Holder by its purchase of Transfer
Restricted Securities shall be deemed to have acknowledged and agreed, that
any Broker-Dealer and any such Holder using the Exchange Offer to
participate in a distribution of the securities to be acquired in the
Exchange Offer (1) could not under Commission policy as in effect on the
date of this Agreement rely on the position of the Commission enunciated in
Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted in the
Commission's letter to Shearman & Sterling dated July 2, 1993, and similar
no-action letters (including any no-action letter obtained pursuant to
clause (i) above), and (2) must comply with the registration and prospectus
delivery requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale transaction should be covered
by an effective registration statement containing the selling security
holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of Series B Notes obtained by such Holder
in exchange for Series A Notes acquired by such Holder directly from the
Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company and the Guarantors shall provide a supplemental
letter to the Commission (A) stating that the Company and the Guarantors
are registering the Exchange Offer in reliance on the position of the
Commission enunciated in Exxon Capital Holdings Corporation (available May
13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) and, if
applicable, any no-action letter obtained pursuant to clause (i) above and
(B) including a representation that neither the Company nor any Guarantor
has entered into any arrangement or understanding with any Person to
distribute the Series B Notes to be received in the Exchange Offer and
that, to the best of the Company's information and belief, each Holder
participating in the Exchange Offer is acquiring the Series B Notes in its
ordinary course of business and has no arrangement or understanding with
any Person to participate in the distribution of the Series B Notes
received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
Registration
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Statement, if required, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their reasonable best efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof and, pursuant thereto, the Company and the Guarantors will
prepare and file with the Commission in accordance with Section 4(a) hereof a
Shelf Registration Statement relating to the registration on any appropriate
form under the Act, which form shall be available for the sale of the Transfer
Restricted Securities in accordance with the intended method or methods of
distribution thereof.
(c) General Provisions. In connection with any Registration Statement and
any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Notes by
Broker-Dealers), the Company and the Guarantors shall:
(i) use their reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements (including, if required by the Act or any regulation thereunder,
financial statements of the Guarantors) for the period specified in Section
3(b) or 4 of this Agreement, as applicable; upon the occurrence of any
event that would cause any such Registration Statement or the Prospectus
contained therein (A) to contain a material misstatement or omission or (B)
not to be effective and usable for the resale of Transfer Restricted
Securities during the period required by this Agreement, the Company and
the Guarantors shall file promptly an appropriate amendment to such
Registration Statement, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A) or (B), use
their reasonable best efforts to cause such amendment to be declared
effective and such Registration Statement and the related Prospectus to
become usable for their intended purpose(s) as soon as practicable
thereafter;
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period set
forth in Section 3(b) or 4 hereof, as applicable, or such shorter period as
will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold; cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 under the Act, and to comply fully with
the applicable provisions of Rules 424 and 430A under the Act in a timely
manner; and comply with the provisions of the Act with respect to the
disposition of all securities covered by such Registration Statement during
the applicable period in accordance with the intended method or methods of
distribution by the sellers thereof set forth in such Registration
Statement or supplement to the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders promptly
and, if requested by any such Person, to confirm such advice in writing,
(A) when the
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Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any Registration Statement or any post-
effective amendment thereto, when the same has become effective, (B) of any
request by the Commission for amendments to the Registration Statement or
amendments or supplements to the Prospectus or for additional information
relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act or
of the suspension by any state securities commission of the qualification
of the Transfer Restricted Securities for offering or sale in any
jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, (D) of the existence of any fact or the happening of any event
that makes any statement of a material fact made in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
document incorporated by reference therein untrue, or that requires the
making of any additions to or changes in the Registration Statement or the
Prospectus in order to make the statements therein not misleading. If at
any time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order suspending
the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company
and the Guarantors shall use their reasonable best efforts to obtain the
withdrawal or lifting of such order at the earliest possible time;
(iv) furnish to each of the selling Holders and each of the
underwriter(s), if any, before filing with the Commission, copies of any
Registration Statement or any Prospectus included therein or any amendments
or supplements to any such Registration Statement or Prospectus (but
excluding any documents incorporated by reference as a result of the
Company's periodic reporting requirements under the Exchange Act), and
neither the Company nor any Guarantors shall file any such Registration
Statement or Prospectus or any amendment or supplement to any such
Registration Statement or Prospectus (excluding all such documents
incorporated by reference as a result of the Company's periodic reporting
requirements under the Exchange Act) to which a selling Holder of Transfer
Restricted Securities covered by such Registration Statement or the
underwriter(s), if any, shall reasonably object within five business days
after the receipt thereof. A selling Holder or underwriter, if any, shall
be deemed to have reasonably objected to such filing if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed
to be filed, contains a material misstatement or omission;
(v) promptly following the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Company's representatives available for
discussion of such document and other customary due diligence matters, and
include such information in such document prior to the filing thereof as
such selling Holders or underwriter(s), if any, reasonably may request;
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(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Registration Statement, and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), all relevant financial
and other records, pertinent corporate documents and properties of the
Company and the Guarantors and cause the Company's and the Guarantors'
officers, directors and employees to supply all information reasonably
requested by any such Holder, underwriter, attorney or accountant in
connection with such Registration Statement subsequent to the filing
thereof and prior to its effectiveness; provided, however, that the
foregoing inspection and information gathering (i) shall be coordinated on
behalf of the Selling Holders, underwriters, or any representative thereof,
by one counsel, who shall be Vinson & Elkins L.L.P. or such other counsel
as may be chosen by the Holders of a majority in principal amount of
Transfer Restricted Securities, and (ii) shall not be available for any
such Holder who does not agree in writing to hold such information in
confidence.
(vii) if requested by any selling Holders or the underwriter(s), if
any, promptly incorporate in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary, such
information as such selling Holders and underwriter(s), if any, may
reasonably request to have included therein, including, without limitation,
information relating to the "Plan of Distribution" of the Transfer
Restricted Securities, information with respect to the principal amount of
Transfer Restricted Securities being sold to such underwriter(s), the
purchase price being paid therefor and any other terms of the offering of
the Transfer Restricted Securities to be sold in such offering; and
make all required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment;
(viii) furnish to each selling Holder and each of the underwriter(s),
if any, without charge, at least one copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto, including
all documents incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
(ix) deliver to each selling Holder and each of the underwriter(s),
if any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Company and the Guarantors hereby
consent to the use of the Prospectus and any amendment or supplement
thereto by each of the selling Holders and each of the underwriter(s), if
any, in connection with the offering and the sale of the Transfer
Restricted Securities covered by the Prospectus or any amendment or
supplement thereto; provided that such use of the Prospectus and any
amendment or supplement thereto and such offering and sale conforms to the
Plan of Distribution set forth in the Prospectus and complies with the
terms of this Agreement and all applicable laws and regulations thereunder;
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(x) in the event of an Underwritten Registration, enter into such
customary agreements (including an underwriting agreement), make such
customary representations and warranties, deliver such customary documents
and certificates, and take all such other customary actions in connection
therewith in order to expedite or facilitate the disposition of the
Transfer Restricted Securities pursuant to any Shelf Registration Statement
contemplated by this Agreement, all to such extent as may be requested by
any Holder of Transfer Restricted Securities or underwriter in connection
with any sale or resale pursuant to any Shelf Registration Statement
contemplated by this Agreement; and, without limiting the generality of the
foregoing, the Company and the Guarantors shall:
(A) furnish to each underwriter upon the effectiveness of the
Shelf Registration Statement:
(1) a certificate, dated the date of effectiveness of the
Shelf Registration Statement, signed on behalf of the Company by
two senior officers, one of whom must be its Chief Financial
Officer, confirming, as of such date, the matters set forth in
paragraphs (a), (c) and (d) of Section 8 of the Purchase
Agreement with respect to the transactions contemplated by the
Shelf Registration Statement;
(2) an opinion, dated the date of effectiveness of the Shelf
Registration Statement, of counsel for the Company and the
Guarantors, covering the matters set forth in Exhibit A of the
Purchase Agreement with respect to the transactions contemplated
by the Shelf Registration Statement, and in any event including a
statement to the effect that such counsel has participated in
conferences with officers and other representatives of the
Company and the Guarantors, representatives of the independent
accountants of the Company and the Guarantors and representatives
of the Initial Purchaser at which the contents of the
Registration Statement and related matters were discussed and,
although it does not assume any responsibility for the accuracy,
completeness or fairness of the statements contained in the
Registration Statement during the course of such participation,
no facts came to its attention that caused such counsel to
believe that the Registration Statement, at the time such
Registration Statement or any post-effective amendment thereto
became effective, contained any untrue statement of a material
fact or omitted to state any fact required to be stated therein
or necessary to make the statements therein not misleading, or
that the Prospectus contained in such Registration Statement as
of its date contained an untrue statement of a material fact or
omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading (except as to financial statements
and related notes, the financial statement schedules and other
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financial and statistical data included therein); and
(3) a customary comfort letter, dated as of the date of
effectiveness of the Shelf Registration Statement, from the
Company's independent accountants if such comfort letter shall be
issuable to the underwriters in accordance with the relevant
accounting industry pronouncements, in the customary form and
covering matters of the type customarily covered in comfort
letters by underwriters in connection with primary underwritten
offerings, and affirming the matters set forth in the comfort
letters delivered pursuant to Section 8(g) of the Purchase
Agreement, without exception; and
(B) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with
clause (A) above.
If at any time the representations and warranties of the Company and the
Guarantors contemplated in clause (A)(1) above cease to be true and
correct, the Company shall so advise the Initial Purchasers and the
underwriter(s), if any, and each selling Holder promptly and, if requested
by any such Person, shall confirm such advice in writing;
(xi) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of
the Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as the selling Holders or underwriter(s) may request and
do any and all other acts or things reasonably necessary or advisable to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Shelf Registration Statement; provided, however,
that neither the Company nor the Guarantors shall be required to register
or qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits or
to taxation, other than as to matters and transactions relating to the
Registration Statement, in any jurisdiction where it is not now so subject;
(xii) issue, upon the request of any Holder of Series A Notes covered
by the Shelf Registration Statement, Series B Notes, having an aggregate
principal amount equal to the aggregate principal amount of Series A Notes
being sold by such Holder; such Series B Notes to be registered in the name
of the purchaser(s) of such Notes, as the case may be; in return, the
Series A Notes held by such Holder shall be surrendered to the Company for
cancellation;
(xiii) cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and
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registered in such names as the Holders or the underwriter(s), if any, may
reasonably request at least two business days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xiv) if any fact or event contemplated by clause (c)(iii)(D) above
shall exist or have occurred, prepare a supplement or post-effective
amendment to the Registration Statement or related Prospectus or any
document incorporated therein by reference or file any other required
document so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain any untrue statement
of a material fact or omit to state any material fact necessary to make the
statements therein not misleading;
(xv) provide a CUSIP number for all Series B Notes not later than
the effective date of the Registration Statement and provide the Trustee
under the Indenture with one or more global certificates for the Series B
Notes that are in a form eligible for deposit with The Depository Trust
Company;
(xvi) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter") that is
required to be retained in accordance with the rules and regulations of the
NASD;
(xvii) otherwise use their reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security holders, as soon as practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be
audited) for the twelve-month period (A) commencing at the end of any
fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm or best efforts Underwritten Offering or (B) if not
sold to underwriters in such an offering, beginning with the first month of
the Company's first fiscal quarter commencing after the effective date of
the Registration Statement;
(xviii) cause the Indenture to be qualified under the TIA not later
than the effective date of the first Registration Statement required by
this Agreement, and, in connection therewith, cooperate with the Trustee
and the Holders of Notes to effect such changes to the Indenture as may be
required for such Indenture to be so qualified in accordance with the terms
of the TIA; and execute and use their reasonable best efforts to cause the
Trustee to execute, all documents that may be required to effect such
changes and all other forms and documents required to be filed with the
Commission to enable such Indenture to be so qualified in a timely manner;
and
(xix) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13 or
Section 15 of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that,
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upon receipt of any notice from the Company of the existence of any fact of the
kind described in Section 6(c)(iii)(D) hereof, such Holder will keep such notice
confidential and forthwith discontinue disposition of Transfer Restricted
Securities pursuant to the applicable Registration Statement until such Holder's
receipt of the copies of the supplemented or amended Prospectus contemplated by
Section 6(c)(xiv) hereof, or until it is advised in writing (the "Advice") by
the Company that the use of the Prospectus may be resumed, and has received
copies of any additional or supplemental filings that are incorporated by
reference in the Prospectus. If so directed by the Company, each Holder will
deliver to the Company (at the Company's expense) all copies, other than
permanent file copies then in such Holder's possession, of the Prospectus
covering such Transfer Restricted Securities that was current at the time of
receipt of such notice. In the event the Company shall give any such notice, the
time period regarding the effectiveness of such Registration Statement set forth
in Section 3 or 4 hereof, as applicable, shall be extended by the number of days
during the period from and including the date of the giving of such notice
pursuant to Section 6(c)(iii)(D) hereof to and including the date when each
selling Holder covered by such Registration Statement shall have received the
copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xiv) hereof or shall have received the Advice.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's or the Guarantors' performance
of or compliance with this Agreement will be borne by the Company and the
Guarantors, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
(including filings made by the Initial Purchaser or Holder with the NASD (and,
if applicable, the fees and expenses of any "qualified independent underwriter"
and its counsel that may be required by the rules and regulations of the NASD));
(ii) all fees and expenses of compliance with federal securities and state Blue
Sky or securities laws; (iii) all expenses of printing (including printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantors and, subject to
Section 7(b) below, the Holders of Transfer Restricted Securities; (v) all
application and filing fees in connection with listing Notes on a national
securities exchange or automated quotation system, if any; and (vi) all fees and
disbursements of independent public accountants of the Company and the
Guarantors (including the expenses of any special audit and comfort letters
required by or incident to such performance).
The Company and the Guarantors will, in any event, bear their internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expenses of
any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company or any Guarantor. The Company shall not be
responsible for any other expenses or costs, including but not limited to
commissions, fees and discounts of underwriters, brokers, dealers and agents.
(b) In connection with any Registration Statement required by this
Agreement (excluding the Exchange Offer Registration Statement), the Company and
the Guarantors
-15-
<PAGE>
will reimburse the Initial Purchaser and the Holders of Transfer Restricted
Securities being tendered in the Exchange Offer and/or resold pursuant to the
"Plan of Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Vinson & Elkins L.L.P. or such other counsel as may be chosen by the Holders of
a majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors, jointly and severally, agree to
indemnify and hold harmless (i) each Holder, (ii) the Initial Purchaser, (iii)
each person, if any, who controls any Holder or the Initial Purchaser within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and (iii)
the respective officers, directors, partners, employees, representatives and
agents of any Holder or the Initial Purchaser or any controlling person (any
person referred to in clauses (i), (ii) or (iii) may hereinafter be referred to
as an "Indemnified Holder"), to the fullest extent lawful, from and against any
and all losses, liabilities, claims, damages and expenses whatsoever (including
but not limited to reasonable attorneys' fees and any and all reasonable
expenses whatsoever incurred in investigating, preparing or defending against
any investigation or litigation, commenced or threatened, or any claim
whatsoever, and any and all amounts paid in settlement of any claim or
litigation), joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus, or in any
supplement thereto or amendment thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that the Company and the Guarantors will not be liable in any such case to the
extent, but only to the extent, that any such loss, liability, claim, damage or
expense arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made therein in reliance upon
and in conformity with written information furnished to the Company by or on
behalf of the any of the Holders expressly for use therein. This indemnity
agreement will be in addition to any liability that the Company and the
Guarantors may otherwise have, including under this Agreement.
(b) Each Holder of Transfer Restricted Securities agrees, severally and not
jointly, to indemnify and hold harmless the Company, each of the Guarantors and
each person, if any, who controls the Company or any Guarantor within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each
of their respective officers, directors, employers, partners, representatives
and agents to the same extent as the foregoing indemnity from the Company and
the Guarantors to each of the Indemnified Holders, but only with respect to
information relating to such Holder furnished in writing by such Holder for use
in any Registration Statement, or in any amendment thereof or supplement
thereto; provided, however, that in no case shall any selling Holder be liable
-16-
<PAGE>
or responsible for any amount in excess of proceeds received by such Holder upon
the sale of the Notes giving rise to such indemnification obligation. This
indemnity will be in addition to any liability that the Holders may otherwise
have, including under this Agreement.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom indemnification is
to be sought in writing of the commencement thereof (but the failure so to
notify an indemnifying party shall not relieve it from any liability that it may
have under this Section 8 or otherwise except to the extent that it has been
prejudiced in any material respect by such failure). In case any such action is
brought against any indemnified party, and it notifies an indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein, and to the extent it may elect by written notice delivered to the
indemnified party promptly after receiving the aforesaid notice from such
indemnified party, to assume and control the defense thereof with counsel
reasonably satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel
shall be at the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such action within a reasonable time after notice of commencement of
the action, or (iii) such indemnified party or parties shall have reasonably
concluded that there may be defenses available to it that are different from or
additional to those available to one or all of the indemnifying parties (in
which case the indemnifying party shall not have the right to direct the defense
of such action on behalf of the indemnified party or parties), in any of which
events such fees and expenses of counsel shall be borne by the indemnifying
parties; provided, however, that the indemnifying party under subsection (a) or
(b) above shall only be liable for the legal expenses of one counsel (in
addition to any local counsel) for all indemnified parties. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or action effected without its prior
written consent; provided that such consent was not unreasonably withheld.
-17-
<PAGE>
SECTION 9. CONTRIBUTION
-18-
<PAGE>
In order to provide for contribution in circumstances in which the
indemnification provided for in Section 8 is for any reason held to be
unavailable or is insufficient to hold harmless a party indemnified thereunder,
the Company and the Guarantors, on the one hand, and the Holders on the other
hand, shall contribute to the aggregate losses, claims, damages, liabilities and
expenses of the nature contemplated by such indemnification provision (including
any investigation, legal and other expenses incurred in connection with, and any
amount paid in settlement of, any action, suit or proceeding or any claims
asserted, but after deducting in the case of losses, claims, damages,
liabilities and expenses suffered by the Company and the Guarantors, any
contribution received by the Company and the Guarantors from Persons, other than
a Holder, who may also be liable for contribution, including persons who control
the Company and the Guarantors within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) to which the Company, the Guarantors or any
Holder may be subject, (i) in such proportion as is appropriate to reflect the
relative fault of the Company and the Guarantors, on one hand, and each Holder,
on the other hand, in connection with the statements or omissions that resulted
in such losses, claims, damages, liabilities or expenses, or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative fault referred to
in clause (i) above but also other relevant equitable considerations. The
relative fault of the Company and the Guarantors, on one hand, and of each
Holder, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company, the Guarantors or such Holder and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Guarantors and each Holder of
Transfer Restricted Securities agree that it would not be just and equitable if
contribution pursuant to this Section 9 were determined by pro rata allocation
or by any other method of allocation that does not take into account the
equitable considerations referred to above. Notwithstanding the provisions of
this Section 9, (i) in no case shall any Holder be required to contribute any
amount in excess of the amount by which the proceeds received by such Holder
upon the sale of the Transfer Restricted Securities giving rise to such
obligation exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of any untrue or alleged untrue statement or omission
or alleged omission and (ii) no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 9, (A) each Person, if any, who
controls any of the Holders within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act and (B) the respective officers, directors,
partners, employees, representatives and agents of such Holder or any
controlling Person shall have the same rights to contribution as the Holders,
and each Person, if any, who controls the Company or any Guarantor within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as the Company and the Guarantors, subject in
each case to clauses (i) and (ii) of this Section 9. Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this Section 9,
notify such party or parties from whom contribution may be sought, but the
failure to so notify
-19-
<PAGE>
such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this
Section 9 or otherwise. No party shall be liable for contribution with respect
to any action or claim settled without its prior written consent; provided that
such written consent was not unreasonably withheld.
SECTION 10. RULE 144A
The Company and the Guarantors hereby agree with each Holder, for so long
as any Transfer Restricted Securities remain outstanding, to make available to
any Holder or beneficial owner of Transfer Restricted Securities in connection
with any sale thereof and any prospective purchaser of such Transfer Restricted
Securities from such Holder or beneficial owner, the information required by
Rule 144A(d)(4) under the Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A.
SECTION 11. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS
No Holder may participate in any Underwritten Registration hereunder unless
such Holder (a) agrees to sell such Holder's Transfer Restricted Securities on
the basis provided in any underwriting arrangements approved by the Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all reasonable questionnaires, powers of attorney, indemnities, underwriting
agreements, lock-up letters and other documents required under the terms of such
underwriting arrangements.
SECTION 12. SELECTION OF UNDERWRITERS
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, however, that such investment bankers and managers must
be reasonably satisfactory to the Company.
SECTION 13. MISCELLANEOUS
(a) [Intentionally omitted.]
(b) No Inconsistent Agreements. The Company and the Guarantors shall not,
on or after the date of this Agreement, enter into any agreement with respect to
its securities that is inconsistent with the rights granted to the Holders in
this Agreement or otherwise conflicts with the provisions hereof. The rights
granted to the Holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company's or any
Guarantor's securities under any agreement in effect on the date hereof.
(c) Adjustments Affecting the Notes. The Company and the Guarantors shall
not take any action with respect to the Notes that would materially and
adversely affect
-20-
<PAGE>
the ability of the Holders to Consummate the Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given unless the Company has obtained the
written consent of Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telecopier, or air courier
guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Indenture, with a copy to the Registrar under the
Indenture; and
(ii) if to the Company or any Guarantor:
Offshore Logistics, Inc.
P.O. Box 5-C
224 Rue de Jean
Lafayette, Louisiana 70505
Telecopier No.: (318) 235-6678
Attention: Corporate Secretary
with a copy to:
Fulbright & Jaworski L.L.P.
1301 McKinney, Suite 5100
Houston, Texas 77010
Telecopier No.: (713) 651-5246
Attention: Arthur H. Rogers
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
acknowledged, if telecopied; and on the next business day, if timely delivered
to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
-21-
<PAGE>
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, the
successors and assigns of subsequent Holders of Transfer Restricted Securities;
provided, however, that this Agreement shall not inure to the benefit of or be
binding upon a successor or assign of a Holder unless and to the extent such
successor or assign acquired Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(j) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
[Signature page to follow]
-22-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
Offshore Logistics, Inc.
By: /s/ Drury A. Milke
-------------------------------------
Drury A. Milke
Vice President, Chief Financial Officer and
Treasurer
Air Logistics of Alaska, Inc.
Grasso Corporation
Grasso Production Management, Inc.
Medic Systems, Inc.
Pumpkin Air, Inc.
By: /s/ Drury A. Milke
-------------------------------------
Drury A. Milke
Vice President
Air Logistics, L.L.C.
By: Offshore Logistics, Inc.,
its sole member
By: /s/ Drury A. Milke
-------------------------------------
Drury A. Milke
Vice President, Chief Financial Officer
and Treasurer
Accepted and agreed to as of
the date first above written:
Jefferies & Company, Inc.
By: /s/ David Frischkorn, Jr.
----------------------------
Name: David Frischkorn, Jr.
Title: Managing Director
-23-
<PAGE>
EXHIBIT 12
RATIO OF EARNINGS TO FIXED CHARGES
The following illustrates the computation of the historical ratio of earnings
to fixed charges:
<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS ENDED
YEAR ENDED JUNE 30, ENDED DECEMBER 31,
------------------- MARCH 31, ------------------
1995 1996 1997 1996 1997
--------- --------- ----------- -------- --------
<S> <C> <C> <C> <C> <C>
Fixed charges
Interest Expense on Debt
and Capitalized Leases.. $ 569 $ 300 $ 5,528 $ 810 $ 15,584
========= ========= ======= ======== ========
Earnings
Consolidated Net Income.. $18,450 $15,276 $17,232 $15,514 $22,669
Add back--
(Income) loss from
discontinued
operations............ 512 (252) 393 (178) 230
Gain on sale of
discontinued
operations............ -- -- -- -- 384
Consolidated provision
for income taxes...... 7,735 6,123 7,675 6,965 9,973
Minority interest...... -- -- 288 34 760
Fixed charges.......... 569 300 5,528 810 15,584
--------- --------- ------- -------- --------
Total earnings....... $27,266 $21,447 $31,116 $23,145 $49,600
========= ========= ======= ======== ========
Ratio of Earnings to Fixed
Charges................... 47.9 71.5 5.6 28.6 3.2
========= ========= ======= ======== ========
</TABLE>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our
report included in this registration statement and to the incorporation by
reference in this registration statement of our report dated May 23, 1997
included in Offshore Logistics, Inc.'s Form 10-K for the nine month period
ended March 31, 1997 and to all references to our Firm included in this
registration statement.
Arthur Andersen LLP
<PAGE>
EXHIBIT 23.2
The Board of Directors
Bristow Helicopter Group Limited:
We consent to the incorporation by reference in this registration statement on
Form S-4 (dated 27 March 1998) of Offshore Logistics, Inc. of our report dated
15 April 1996, with respect to the consolidated financial statements of the
Bristow Helicopter Group Limited, which report appears in the Current Report on
Form 8-K of Offshore Logistics, Inc. dated 4 January 1997.
KPMG
Chartered Accountants
Registered Auditors
Gatwick, England
27 March 1998
<PAGE>
EXHIBIT 99.1
OFFSHORE LOGISTICS, INC.
LETTER OF TRANSMITTAL
FOR
OFFER TO EXCHANGE
7 7/8% SERIES B SENIOR NOTES DUE 2008
FOR ALL OUTSTANDING
7 7/8% SERIES A SENIOR NOTES DUE 2008
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1998, UNLESS EXTENDED BY
OFFSHORE LOGISTICS, INC. (THE "EXPIRATION DATE").
THE EXCHANGE AGENT
FOR THE EXCHANGE OFFER IS:
STATE STREET BANK AND TRUST COMPANY
By Registered or Certified Mail: By Hand or Overnight Delivery
Service:
Corporate Trust Services
Corporate Trust Services
By Facsimile Transmission (for Eligible Institutions only):
( )
(Facsimile Confirmation)
( )
or
( )
(Originals of all documents sent by facsimile should be sent promptly by
registered or certified mail, by hand, or by overnight delivery service.)
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TRANSMISSION TO A NUMBER
OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE
INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
The undersigned hereby acknowledges receipt and review of the Prospectus
dated , 1998 (the "Prospectus") of Offshore Logistics, Inc., a
Delaware corporation (the "Company"), Air Logistics, L.L.C., a Louisiana
limited liability company, Air Logistics of Alaska, Inc., an Alaska
corporation, Grasso Corporation, a Delaware corporation, Grasso Production
Management, Inc., a Texas corporation, Medic Systems, Inc., a Delaware
corporation, and Pumpkin Air, Inc., a Texas corporation (collectively, the
"Guarantors"), and this Letter of Transmittal (the "Letter of Transmittal"),
which together describe the Company's offer (the "Exchange Offer") to exchange
its 7 7/8% Series B Senior Notes due 2008 (the "New Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), for a like principal amount of its issued and outstanding 7 7/8% Series
A Senior Notes due 2008 (the "Old Notes"). Capitalized terms used but not
defined herein have the respective meaning given to them in the Prospectus.
1
<PAGE>
The Company reserves the right, at any time or from time to time, to extend
the Exchange Offer at its discretion, in which event the term "Expiration
Date" shall mean the latest date to which the Exchange Offer is extended. The
Company shall notify the Exchange Agent and each registered holder of the Old
Notes of any extension by oral or written notice prior to 9:00 a.m., New York
City time, on the next business day after the previously scheduled Expiration
Date.
This Letter of Transmittal is to be used by a holder of Old Notes if
original Old Notes, if available, are to be forwarded herewith. An Agent's
Message (as defined in the next sentence) is to be used if delivery of Old
Notes is to be made by book-entry transfer to the account maintained by the
Exchange Agent at the Depository Trust Company (the "Book-Entry Transfer
Facility") pursuant to the procedures set forth in the Prospectus under the
caption "The Exchange Offer--Terms of the Exchange Offer--Procedures for
Tendering Old Notes." The term "Agent's Message" means a message, transmitted
by the Book-Entry Transfer Facility and received by the Exchange Agent and
forming a part of the confirmation of a book-entry transfer ("Book-Entry
Confirmation"), which states that the Book-Entry Transfer Facility has
received an express acknowledgment from a participant tendering Old Notes
which are the subject of such Book-Entry Confirmation and that such
participant has received and agrees to be bound by the terms of the Letter of
Transmittal and that the Company may enforce such agreement against such
participant. Holders of Old Notes whose Old Notes are not immediately
available, or who are unable to deliver their Old Notes and all other
documents required by this Letter of Transmittal to the Exchange Agent on or
prior to the Expiration Date, or who are unable to complete the procedure for
book-entry transfer on a timely basis, must tender their Old Notes according
to the guaranteed delivery procedures set forth in the Prospectus under the
caption "The Exchange Offer--Terms of the Exchange Offer--Guaranteed Delivery
Procedures." See Instruction 2. Delivery of documents to the Book-Entry
Transfer Facility does not constitute delivery to the Exchange Agent.
The term "holder" with respect to the Exchange Offer means any person in
whose name Old Notes are registered on the books of the Company or any other
person who has obtained a properly completed bond power from the registered
holder. The undersigned has completed, executed and delivered this Letter of
Transmittal to indicate the action the undersigned desires to take with
respect to the Exchange Offer. Holders who wish to tender their Old Notes must
complete this Letter of Transmittal in its entirety.
PLEASE READ THE ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY
BEFORE CHECKING ANY BOX BELOW.
THE INSTRUCTIONS INCLUDED WITH THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED.
QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE
PROSPECTUS AND THIS LETTER OF TRANSMITTAL MAY BE DIRECTED TO THE EXCHANGE
AGENT.
2
<PAGE>
List below the Old Notes to which this Letter of Transmittal relates. If the
space below is inadequate, list the registered numbers and principal amount on
a separate signed schedule and affix the list to this Letter of Transmittal.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF OLD NOTES TENDERED
- ------------------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED OWNER(S)
AS (IT/THEY) APPEAR(S) ON THE 7 1/8% SERIES A SENIOR NOTES
DUE 2008 (THE "OLD NOTES") AGGREGATE PRINCIPAL AMOUNT REPRESENTED BY OLD NOTES
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CERTIFICATE NUMBER(S) AMOUNT OF PRINCIPAL AMOUNT
OF OLD NOTES* OLD NOTES TENDERED TENDERED
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
-------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL**
- ------------------------------------------------------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Unless otherwise indicated, any tendering holder of Old Notes will be deemed to have tendered the entire aggregate
principal amount represented by such Old Notes. All tenders must be in integral multiples of $1,000.
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(If additional space is required, attach a continuation sheet in substantially
the above form.)
METHOD OF DELIVERY
[_]Check here if tendered Old Notes are enclosed herewith.
[_]Check here if tendered Old Notes are being delivered by book-entry transfer
made to an account maintained by the Exchange Agent with a Book-Entry
Transfer Facility and complete the following:
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
[_]Check here if tendered Old Notes are being delivered pursuant to a Notice
of Guaranteed Delivery and complete the following:
Name(s) of Registered Holder(s): ___________________________________________
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery: ________________________
Window Ticket Number (if available): _______________________________________
Name of Eligible Institution that guaranteed delivery: _____________________
Account Number (If delivered by book-entry transfer): ______________________
3
<PAGE>
SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
1. The undersigned hereby tenders to the Company the Old Notes described
above pursuant to the Company's offer of $1,000 principal amount of registered
New Notes, in exchange for each $1,000 principal amount of the Old Notes, upon
the terms and subject to the conditions contained in the Prospectus, receipt
of which is hereby acknowledged, and this Letter of Transmittal.
2. The undersigned hereby represents and warrants that it has full authority
to tender, exchange, assign and transfer the Old Notes described above. The
undersigned will, upon request, execute and deliver any additional documents
deemed by the Exchange Agent or the Company to be necessary or desirable to
complete the exchange, assignment and transfer of Old Notes.
3. The undersigned understands that the tender of the Old Notes pursuant to
all of the procedures set forth in the Prospectus will constitute an agreement
between the undersigned and the Company as to the terms and conditions set
forth in the Prospectus.
4. The undersigned acknowledge(s) that this Exchange Offer is being made in
reliance upon interpretations contained in no-action letters issued to third
parties by the staff of the Securities and Exchange Commission (the "SEC"),
including Exxon Capital Holdings Corporation, SEC No-Action (available April
13, 1989), Morgan Stanley & Co. Inc., SEC No-Action Letter (available June 5,
1991) (the "Morgan Stanley Letter") and Mary Kay Cosmetics, Inc., SEC No-
Action Letter (available June 5, 1991), that the Exchange Notes issued in
exchange for the Old Notes pursuant to the Exchange Offer may be offered for
resale, resold and otherwise transferred by holders thereof (other than a
broker-dealer who purchased Old Notes exchanged for such Exchange Notes
directly from the Company to resell pursuant to Rule 144A or any other
available exemption under the Securities Act and any such holder that is an
"affiliate" of the Company within the meaning of Rule 405 under the Securities
Act), without compliance with the registration and prospectus delivery
provisions of the Securities Act, provided that such Exchange Notes are
acquired in the ordinary course of such holders' business and such holders are
not participating in, and have no arrangement with any person to participate
in, the distribution of such Exchange Notes.
5. Unless the box under the heading "Special Registration Instructions" is
checked, the undersigned hereby represents and warrants that:
(i) the New Notes acquired pursuant to the Exchange Offer are being
obtained in the ordinary course of business of the holder;
(ii) the holder is not engaging in and does not intend to engage in a
distribution of such New Notes;
(iii) the holder does not have an arrangement or understanding with any
person to participate in the distribution of such New Notes; and
(iv) the holder is not an "affiliate," as such term is defined under Rule
405 promulgated under the Securities Act, of the Company.
6. The undersigned may, if, and only if, unable to make all of the
representations and warranties contained in Item 5 above, elect to have its
Old Notes registered in the shelf registration statement described in the
registration rights agreement (the "Registration Rights Agreement") dated as
of January 22, 1998 among the Company, the Guarantors and the Initial
Purchaser. Such election may be made by checking the box under "Special
Registration Instructions" on page 6. By making such election, the undersigned
agrees, as a holder of Transfer Restricted Securities participating in a shelf
registration, to indemnify and hold harmless the Company, each of the
Guarantors and each person, if any, who controls the Company or any of the
Guarantors within the meaning of either Section 15 of the Securities Act or
Section 20 of the Securities Exchange Act of 1934, as
4
<PAGE>
amended (the "Exchange Act"), and each of their respective officers,
directors, employees, partners, representatives and agents from and against
any and all losses, liabilities, claims, damages and expenses whatsoever
(including but not limited to reasonable attorneys' fees and any and all
reasonable expenses whatsoever incurred in investigating, preparing or
defending against any investigation or litigation, commenced or threatened, or
any claim whatsoever, and any and all amounts paid in settlement of any claim
or litigation), joint or several, to which they or any of them may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as
such losses, liabilities, claims, damages or expenses (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus, or in any supplement thereto or amendment thereof, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; but only with respect to information relating to the undersigned
furnished in writing by or on behalf of the undersigned expressly for use in
the Registration Statement, the Prospectus or any amendments or supplements
thereto. Any such indemnification shall be governed by the terms and subject
to the conditions set forth in the Registration Rights Agreement, including,
without limitation, the provisions regarding notice, retention of counsel,
contribution and payment of expenses set forth therein. The above summary of
the indemnification provision of the Registration Rights Agreement is not
intended to be exhaustive and is qualified in its entirety by the Registration
Rights Agreement.
7. If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
New Notes. If the undersigned is a broker-dealer that will receive New Notes
for its own account in exchange for Old Notes that were acquired as a result
of market-making activities or other trading activities, it acknowledges that
it will deliver a prospectus in connection with any resale of such New Notes;
however, by so acknowledging and delivering a prospectus, the undersigned will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. If the undersigned is a broker-dealer and Old Notes held for
its own account were not acquired as a result of market-making or other
trading activities, such Old Notes cannot be exchanged pursuant to the
Exchange Offer.
8. Any obligation of the undersigned hereunder shall be binding upon the
successors, assigns, executors, administrators, trustees in bankruptcy and
legal and personal representatives of the undersigned.
9. Unless otherwise indicated herein under "Special Delivery Instructions,"
please issue the certificates for the New Notes in the name of the
undersigned.
5
<PAGE>
- ------------------------------------ -------------------------------------
SPECIAL ISSUANCE INSTRUCTION SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5 AND 6) (SEE INSTRUCTIONS 5 AND 6)
To be completed only (i) if Old To be completed ONLY if the New
Notes in a principal amount not Notes are to be issued or sent to
tendered, or New Notes issued in someone other than the under-
exchange for Old Notes accepted signed or to the undersigned at
for exchange, are to be issued in an address other than as indi-
the name of someone other than cated above.
the undersigned, or (ii) if Old ----------------------------------
Notes tendered by book-entry Mail [_] Issue [_] (check ap-
transfer which are not exchanged propriate boxes) Certificates to:
are to be returned by credit to Name______________________________
an account maintained at the (TYPE OR PRINT)
Book-Entry Transfer Facility. Is- Address __________________________
sue Exchange Notes and/or Old __________________________________
Notes to: (ZIP CODE)
- ------------------------------------
Name _____________________________ __________________________________
(TYPE OR PRINT) (TAX IDENTIFICATION OR SOCIAL
Address __________________________ SECURITY NUMBER)
__________________________________ __________________________________
(ZIP CODE)
__________________________________
(TAX IDENTIFICATION OR SOCIAL
SECURITY NUMBER)
(COMPLETE SUBSTITUTE FORM W-9)
CREDIT UNEXCHANGED OLD NOTES
DELIVERED BY BOOK-ENTRY TRANSFER
TO THE BOOK-ENTRY TRANSFER
FACILITY SET FORTH BELOW:
__________________________________
BOOK-ENTRY TRANSFER FACILITY
ACCOUNT NUMBER:
__________________________________
___________________________________
6
<PAGE>
SPECIAL REGISTRATION INSTRUCTIONS
To be completed ONLY if (i) the undersigned satisfies the conditions set
forth in Item 6 above, (ii) the undersigned elects to register its Old Notes
in the shelf registration statement described in the Registration Rights
Agreement and (iii) the undersigned agrees to indemnify certain entities and
individuals as set forth in Item 6 above. (See Item 6).
[_]By checking this box the undersigned hereby (i) represents that it is
unable to make all of the representations and warranties set forth in Item
5 above, (ii) elects to have its Old Notes registered pursuant to the shelf
registration statement described in the Registration Rights Agreement and
(iii) agrees to indemnify certain entities and individuals identified in,
and to the extent provided in, Item 6 above.
SPECIAL BROKER-DEALER INSTRUCTIONS
[_]Check here if you are a broker-dealer and wish to receive 10 additional
copies of the Prospectus and 10 copies of any amendments or supplements
thereto.
Name _______________________________________________________________________
Address ____________________________________________________________________
(Zip Code) _________________________________________________________________
IMPORTANT
PLEASE SIGN HERE WHETHER OR NOT
OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY
(Complete Accompanying Substitute Form W-9 on Reverse Side)
(Signature(s) of Registered Holders of Old Notes) __________________________
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Dated , 1998
(The above lines must be signed by the registered holder(s) of Old Notes as
name(s) appear(s) on the Old Notes or on a security position listing, or by
person(s) authorized to become registered holder(s) by a properly completed
bond power from the registered holder(s), a copy of which must be transmitted
with this Letter of Transmittal. If Old Notes to which this Letter of
Transmittal relate are held of record by two or more joint holders, then all
such holders must sign this Letter of Transmittal. If signature is by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
then such person must (i) set forth his or her full title below and (ii)
unless waived by the Company, submit evidence satisfactory to the Company of
such person's authority so to act. See Instruction 5 regarding completion of
this Letter of Transmittal, printed below.)
Name(s) ____________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity: __________________________________________________________________
Address: ___________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number: ____________________________________________
7
<PAGE>
MEDALLION SIGNATURE GUARANTEE
(If Required by Instruction 5)
Certain signatures must be Guaranteed by an Eligible Institution.
Signature(s) Guaranteed by an Eligible Institution:.
(Authorized Signature) _____________________________________________________
(Title) ____________________________________________________________________
(Name of Firm) _____________________________________________________________
(Address, Include Zip Code) ________________________________________________
(Area Code and Telephone Number) ___________________________________________
Dated: , 1998
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND OLD NOTES OR BOOK-ENTRY
CONFIRMATIONS.
All physically delivered Old Notes or any confirmation of a book-entry
transfer to the Exchange Agent's account at the Book-Entry Transfer Facility
of Old Notes tendered by book-entry transfer (a "Book-Entry Confirmation"), as
well as a properly completed and duly executed copy of this Letter of
Transmittal or Agent's Message or facsimile hereof, and any other documents
required by this Letter of Transmittal, must be received by the Exchange Agent
at its address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date. The method of delivery of the tendered Old Notes, this Letter
of Transmittal and all other required documents to the Exchange Agent is at
the election and risk of the holder and, except as otherwise provided below,
the delivery will be deemed made only when actually received or confirmed by
the Exchange Agent. If such delivery is by mail, it is recommended that
registered mail, properly insured, with return receipt requested, be used.
Instead of delivery by mail, it is recommended that the holder use an
overnight or hand delivery service. In all cases, sufficient time should be
allowed to assure delivery to the Exchange Agent before the Expiration Date.
No Letter of Transmittal or Old Notes should be sent to the Company.
2. GUARANTEED DELIVERY PROCEDURES.
Holders who wish to tender their Old Notes and whose Old Notes are not
immediately available or who cannot deliver their Old Notes, this Letter of
Transmittal or any other documents required hereby to the Exchange Agent prior
to the Expiration Date or who cannot complete the procedure for book-entry
transfer on a timely basis and deliver an Agent's Message, must tender their
Old Notes according to the guaranteed delivery procedures set forth in the
Prospectus. Pursuant to such procedures a tender may be effected if the
Exchange Agent has received at its office, on or prior to the Expiration Date,
a letter, telegram or facsimile transmission from an Eligible Institution
setting forth the name and address of the tendering holder, the name(s) in
which the Old Notes are registered and the certificate number(s) of the Old
Notes to be tendered, and stating that the tender is being made thereby and
guaranteeing that, within three Nasdaq National Market trading days after the
date of execution of such letter, telegram or facsimile transmission by the
Eligible Institution, such Old Notes, in proper form for transfer (or a
confirmation of book-entry transfer of such Old Notes into the Exchange
Agent's account at DTC), will be delivered by such Eligible Institution
together with a properly completed and duly executed Letter of Transmittal
(and any other required documents). Unless Old Notes being tendered by the
above-described method are deposited with the Exchange Agent within the time
period set forth above (accompanied or preceded by a properly completed Letter
of Transmittal and any other required documents), the Company may, at its
option, reject the tender.
8
<PAGE>
Any holder of Old Notes who wishes to tender Old Notes pursuant to the
guaranteed delivery procedures described above must ensure that the Exchange
Agent receives the Notice of Guaranteed Delivery prior to 5:00 p.m., New York
City time, on the Expiration Date. Upon request of the Exchange Agent, a
Notice of Guaranteed Delivery will be sent to holders who wish to tender their
Old Notes according to the guaranteed delivery procedures set forth above. See
"The Exchange Offer--Terms of the Exchange Offer--Guaranteed Delivery
Procedures" section of the Prospectus.
3. TENDER BY HOLDER.
Only a holder of Old Notes may tender such Old Notes in the Exchange Offer.
Any beneficial holder of Old Notes who is not the registered holder and who
wishes to tender should arrange with the registered holder to execute and
deliver this Letter of Transmittal on his behalf or must, prior to completing
and executing this Letter of Transmittal and delivering his Old Notes, either
make appropriate arrangements to register ownership of the Old Notes in such
holder's name or obtain a properly completed bond power from the registered
holder.
4. PARTIAL TENDERS.
Tenders of Old Notes will be accepted only in integral multiples of $1,000.
If less than the entire principal amount of any Old Notes is tendered, the
tendering holder should fill in the principal amount tendered in the third
column of the box entitled "Description of Old Notes Tendered" above. The
entire principal amount of Old Notes delivered to the Exchange Agent will be
deemed to have been tendered unless otherwise indicated. If the entire
principal amount of all Old Notes is not tendered, then Old Notes for the
principal amount of Old Notes not tendered and New Notes issued in exchange
for any Old Notes accepted will be sent to the holder at his or her registered
address, unless a different address is provided in the appropriate box on this
Letter of Transmittal, promptly after the Old Notes are accepted for exchange.
5. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES.
If this Letter of Transmittal (or facsimile hereof) is signed by the record
holder(s) of the Old Notes tendered hereby, the signature must correspond with
the name(s) as written on the face of the Old Notes without alteration,
enlargement or any change whatsoever. If this Letter of Transmittal (or
facsimile hereof) is signed by a participant in the Book-Entry Transfer
Facility, the signature must correspond with the name as it appears on the
security position listing as the holder of the Old Notes.
If this Letter of Transmittal (or facsimile hereof) is signed by the
registered holder or holders of Old Notes listed and tendered hereby and the
New Notes issued in exchange therefor are to be issued (or any untendered
principal amount of Old Notes is to be reissued) to the registered holder, the
said holder need not and should not endorse any tendered Old Notes, nor
provide a separate bond power. In any other case, such holder must either
properly endorse the Old Notes tendered or transmit a properly completed
separate bond power with this Letter of Transmittal, with the signatures on
the endorsement or bond power guaranteed by an Eligible Institution.
If this Letter of Transmittal (or facsimile hereof) is signed by a person
other than the registered holder or holders of any Old Notes listed, such Old
Notes must be endorsed or accompanied by appropriate bond powers, in each case
signed as the name of the registered holder or holders appears on the Old
Notes.
If this Letter of Transmittal (or facsimile hereof) or any Old Notes or bond
powers are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing, and,
unless waived by the Company, evidence satisfactory to the Company of their
authority to act must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by this
Instruction 5 must be guaranteed by an Eligible Institution.
9
<PAGE>
No signature guarantee is required if (i) this Letter of Transmittal (or
facsimile hereof) is signed by the registered holder(s) of the Old Notes
tendered herein (or by a participant in the Book-Entry Transfer Facility whose
name appears on a security position listing as the owner of the tendered Old
Notes) and the New Notes are to be issued directly to such registered
holder(s) (or, if signed by a participant in the Book-Entry Transfer Facility,
deposited to such participant's account at such Book-Entry Transfer Facility)
and neither the box entitled "Special Delivery Instructions" nor the box
entitled "Special Registration Instructions" has been completed, or (ii) such
Old Notes are tendered for the account of an Eligible Institution. In all
other cases, all signatures on this Letter of Transmittal (or facsimile
hereof) must be guaranteed by an Eligible Institution.
6. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS.
Tendering holders should indicate, in the applicable box or boxes, the name
and address (or account at the Book-Entry Transfer Facility) to which New
Notes or substitute Old Notes for principal amounts not tendered or not
accepted for exchange are to be issued or sent, if different from the name and
address of the person signing this Letter of Transmittal. In the case of
issuance in a different name, the taxpayer identification or social security
number of the person named must also be indicated.
Tax law requires that a holder of any Old Notes which are accepted for
exchange must provide the Company (as payor) with its correct taxpayer
identification number ("TIN"), which, in the case of a holder who is an
individual is his or her social security number. If the Company is not
provided with the correct TIN, the holder may be subject to a $50 penalty
imposed by Internal Revenue Service. (If withholding results in an over-
payment of taxes, a refund may be obtained). Certain holders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. See the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional instructions.
To prevent backup withholding, each tendering holder must provide such
holder's correct TIN by completing the Substitute Form W-9 set forth herein,
certifying that the TIN provided is correct (or that such holder is awaiting a
TIN), and that (i) the holder has not been notified by the Internal Revenue
Service that such holder is subject to backup withholding as a result of
failure to report all interest or dividends or (ii) the Internal Revenue
Service has notified the holder that such holder is no longer subject to
backup withholding. If the Old Notes are registered in more than one name or
are not in the name of the actual owner, see the enclosed "Guidelines for
Certification of Taxpayer Identification Number of Substitute Form W-9" for
information on which TIN to report.
The Company reserves the right in its sole discretion to take whatever steps
are necessary to comply with the Company's obligations regarding backup
withholding.
7. VALIDITY OF TENDERS.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance, and withdrawal of tendered Old Notes will be determined
by the Company, in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any or all tenders
not in proper form or the acceptance for exchange of which may, in the opinion
of counsel for the Company, be unlawful. The Company also reserves the
absolute right to waive any of the conditions of the Exchange Offer or any
defect or irregularity in the tender of any Old Notes. The Company's
interpretation of the terms and conditions of the Exchange Offer (including
the instructions in the Letter of Transmittal) will be final and binding on
all parties. Unless waived, any defects or irregularities in connection with
tenders of Old Notes must be cured within such time as the Company shall
determine. Although the Company intends to notify holders of defects or
irregularities with respect to tenders of Old Notes, neither the Company, the
Exchange Agent, nor any other person shall be under any duty to give
notification of any defects or irregularities in tenders or incur any
liability for failure to give such notification. Tenders of Old Notes will not
be deemed to have been made until such defects or irregularities
10
<PAGE>
have been cured or waived. Any Old Notes received by the Exchange Agent that
are not properly tendered and as to which the defects or irregularities have
not been cured or waived will be returned by the Exchange Agent to the
tendering holders, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
8. WAIVER OF CONDITIONS.
The Company reserves the absolute right to waive, in whole or part, any of
the conditions to the Exchange Offer set forth in the Prospectus.
9. NO CONDITIONAL TENDER.
No alternative, conditional, irregular or contingent tender of Old Notes on
transmittal of this Letter of Transmittal will be accepted.
10. MUTILATED, LOST, STOLEN OR DESTROYED OLD NOTES.
Any holder whose Old Notes have been mutilated, lost, stolen or destroyed
should contact the Exchange Agent at the address indicated above for further
instructions.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES.
Requests for assistance or for additional copies of the Prospectus or this
Letter of Transmittal may be directed to the Exchange Agent at the address or
telephone number set forth on the cover page of this Letter of Transmittal.
Holders may also contact their broker, dealer, commercial bank, trust company
or other nominee for assistance concerning the Exchange Offer.
12. WITHDRAWAL.
Tenders may be withdrawn only pursuant to the limited withdrawal rights set
forth in the Prospectus under the caption "The Exchange Offer--Terms of the
Exchange Offer--Withdrawal Rights."
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE HEREOF
(TOGETHER WITH THE OLD NOTES DELIVERED BY BOOK-ENTRY TRANSFER OR IN ORIGINAL
HARD COPY FORM) MUST BE RECEIVED BY THE EXCHANGE AGENT, OR THE NOTICE OF
GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT, PRIOR TO THE
EXPIRATION DATE.
11
<PAGE>
- -------------------------------------------------------------------------------
PART 1--PLEASE PROVIDE YOUR Social Security Number
TIN IN THE BOX AT RIGHT AND OR Employer
CERTIFY BY SIGNING AND Identification Number
DATING BELOW.
SUBSTITUTE
FORM W-9
DEPARTMENT OF
THE TREASURY-- ----------------------
INTERNAL REVENUE --------------------------------------------------------
SERVICE PART 2--Certification Under penalties of perjury, I
certify that:
(1) The number shown on this form is my correct
Taxpayer Identification Number (or I am waiting
for a number to be issued to me) and
PAYER'S REQUEST (2) I am not subject to backup withholding either
FOR TAXPAYER because I have not been notified by the Internal
IDENTIFICATION Revenue Service ("IRS") that I am subject to
NUMBER (TIN) backup withholding as a result of failure to
report all interest or dividends, or the IRS has
notified me that I am no longer subject to backup
withholding.
Certificate Instructions--You must cross out item (2)
in Part 2 above if you have been notified by the IRS
that you are subject to backup withholding because of
under reporting interest or dividends on your tax
return. However, if after being notified by the IRS
that you were subject to backup withholding you
received another notification from the IRS stating
that you are no longer subject to backup withholding,
do not cross out item (2).
--------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN PART 3 --
THIS FORM MAY RESULT IN BACKUP Awaiting TIN [_]
WITHHOLDING OF 31% OF ANY PAY-
MENTS MADE TO YOU PURSUANT TO THE Please
OFFER. PLEASE REVIEW THE ENCLOSED complete the
GUIDELINES FOR CERTIFICATION OF Certificate
TAXPAYER IDENTIFICATION NUMBER ON of Awaiting
SUBSTITUTE FORM W-9 FOR ADDI- Taxpayer
TIONAL DETAILS. Identification
Number
below.
SIGNATURE ______________ DATE _ ,1998
- -------------------------------------------------------------------------------
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3
OF THE SUBSTITUTE FORM W-9
12
<PAGE>
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (a) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or
(b) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number to the
payor within 60 days, 31% of all reportable payments made to me thereafter
will be withheld until I provide a number.
- ------------------------------------------ ____________________________ , 1998
Signature Date
CERTIFICATE FOR FOREIGN RECORD HOLDERS
Under penalties of perjury, I certify that I am not a United States citizen
or resident (or I am signing for a foreign corporation, partnership, estate or
trust).
- ------------------------------------------ ____________________________ , 1998
Signature Date
13
<PAGE>
OFFSHORE LOGISTICS, INC.
LETTER TO CLIENTS
FOR
TENDER OF ALL OUTSTANDING
7 7/8% SERIES A SENIOR NOTES DUE 2008
IN EXCHANGE FOR
7 7/8% SERIES B SENIOR NOTES DUE 2008
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE").
NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON THE BUSINESS DAY PRIOR TO THE EXPIRATION
DATE UNLESS PREVIOUSLY ACCEPTED FOR EXCHANGE.
To Our Clients:
We are enclosing herewith a Prospectus, dated , 1998, of Offshore
Logistics, Inc., a Delaware corporation (the "Company"), and a related Letter
of Transmittal, which together constitute the Company's offer (the "Exchange
Offer") to exchange its 7 7/8% Series B Senior Notes due 2008 (the "New
Notes"), which have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), for a like principal amount of its issued and
outstanding 7 7/8% Series A Senior Notes due 2008 (the "Old Notes"), upon the
terms and subject to the conditions set forth in the Exchange Offer.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered.
We are the holder of record of Old Notes held by us for your own account. A
tender of such Old Notes can be made only by us as the record holder and
pursuant to your instructions. The Letter of Transmittal is furnished to you
for your information only and cannot be used by you to tender Old Notes held
by us for your account.
We request instructions as to whether you wish to tender any or all of the
Old Notes held by us for your account pursuant to the terms and conditions of
the Exchange Offer. We also request that you confirm that we may on your
behalf make the representations and warranties contained in the Letter of
Transmittal.
Very truly yours,
PLEASE RETURN YOUR INSTRUCTIONS TO US IN THE ENCLOSED ENVELOPE WITHIN AMPLE
TIME TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION
DATE.
14
<PAGE>
INSTRUCTION TO REGISTERED HOLDER AND/OR BOOK
ENTRY TRANSFER PARTICIPANT
To Registered Holder and/or Participant of the Book-Entry Transfer Facility:
The undersigned hereby acknowledges receipt of the Prospectus dated ,
1998 (the "Prospectus") of Offshore Logistics, Inc., a Delaware corporation
(the "Company"), and the accompanying Letter of Transmittal (the "Letter of
Transmittal"), that together constitute the Company's offer (the "Exchange
Offer") to exchange its 7 7/8% Series B Senior Notes due 2008 (the "New
Notes"), for all of its outstanding 7 7/8% Series A Senior Notes due 2008 (the
"Old Notes"). Capitalized terms used but not defined herein have the meanings
ascribed to them in the Prospectus.
This will instruct you, the registered holder and/or book-entry transfer
facility participant, as to the action to be taken by you relating to the
Exchange Offer with respect to the Old Notes held by you for the account of
the undersigned.
The aggregate face amount of the Old Notes held by you for the account of
the undersigned is (FILL IN AMOUNT):
$ of the 7 7/8% Series A Senior Notes due 2008.
With respect to the Exchange Offer, the undersigned hereby instructs you
(CHECK APPROPRIATE BOX):
[_]To TENDER the following Old Notes held by you for the account of the
undersigned (INSERT PRINCIPAL AMOUNT OF OLD NOTES TO BE TENDERED) (IF ANY):
$ .
[_]NOT to TENDER any Old Notes held by you for the account of the undersigned.
If the undersigned instructs you to tender the Old Notes held by you for the
account of the undersigned, it is understood that you are authorized to make,
on behalf of the undersigned (and the undersigned by its signature below,
hereby makes to you), the representations and warranties contained in the
Letter of Transmittal that are to be made with respect to the undersigned as a
beneficial owner, including but not limited to the representations, that (i)
the New Notes acquired in exchange for Old Notes pursuant to the Exchange
Offer are being acquired in the ordinary course of business of the person
receiving such New Notes, whether or not the undersigned, (ii) the undersigned
is not engaging in and does not intend to engage in a distribution of the New
Notes, (iii) the undersigned does not have any arrangement or understanding
with any person to participate in the distribution of New Notes, and (iv)
neither the undersigned nor any such other person is an "affiliate" (within
the meaning of Rule 405 under the Securities Act of 1933, as amended) of the
Company. If the undersigned is a broker-dealer that will receive New Notes for
its own account in exchange for Old Notes, it acknowledges that it will
deliver a prospectus in connection with any resale of such New Notes.
SIGN HERE
Name of beneficial owner(s):___________________________________________________
SIGNATURE(S)
Name(s): ______________________________________________________________________
------------------------------------------------------------------------
------------------------------------------------------------------------
(PLEASE PRINT)
Address: ______________________________________________________________________
Telephone number: _____________________________________________________________
Taxpayer Identification or Social Security Number: ____________________________
Date: _________________________________________________________________________
15
<PAGE>
OFFSHORE LOGISTICS, INC.
LETTER TO REGISTERED HOLDERS AND
DEPOSITORY TRUST COMPANY PARTICIPANTS
FOR
TENDER OF ALL OUTSTANDING
7 7/8% SERIES A SENIOR NOTES DUE 2008
IN EXCHANGE FOR
7 7/8% SERIES B SENIOR NOTES DUE 2008
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE").
OLD NOTES TENDERED IN THE EXCHANGE OFFER MAY BE WITHDRAWN AT ANY TIME PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON THE BUSINESS DAY PRIOR TO THE EXPIRATION
DATE UNLESS PREVIOUSLY ACCEPTED FOR EXCHANGE.
To Registered Holders and Depository Trust Company Participants:
We are enclosing herewith the material listed below relating to the offer by
Offshore Logistics, Inc., a Delaware corporation (the "Company"), to exchange
its 7 7/8% Series B Senior Notes due 2008 (the "New Notes"), which have been
registered under the Securities Act of 1933, as amended (the "Securities
Act"), for a like principal amount of its issued and outstanding 7 7/8% Series
A Senior Notes due 2008 (the "Old Notes") upon the terms and subject to the
conditions set forth in the Company's Prospectus, dated , 1998, and
the related Letter of Transmittal (which together constitute the "Exchange
Offer").
Enclosed herewith are copies of the following documents:
1. Prospectus dated , 1998;
2. Letter of Transmittal (together with accompanying Substitute Form W-9
Guidelines);
3. Notice of Guaranteed Delivery;
4. Letter which may be sent to your clients for whose account you hold
Old Notes in your name or in the name of your nominee; and
5. Letter which may be sent from your clients to you with such client's
instruction with regard to the Exchange Offer.
We urge you to contact your clients promptly. Please note that the Exchange
Offer will expire on the Expiration Date unless extended.
The Exchange Offer is not conditioned upon any minimum number of Old Notes
being tendered.
Pursuant to the Letter of Transmittal, each holder of Old Notes will
represent to the Company that (i) the New Notes acquired in exchange for Old
Notes pursuant to the Exchange Offer are being acquired in the ordinary course
of business of the person receiving such New Notes, whether or not the
undersigned, (ii) the undersigned is not engaging in and does not intend to
engage in a distribution of the New Notes, (iii) the undersigned does not have
any arrangement or understanding with any person to participate in the
distribution of New Notes, and (iv) neither the undersigned nor any such other
person is an "affiliate" (within the meaning of Rule 405 under the Securities
Act of 1933, as amended) of the Company. If the holder is a broker-dealer that
will receive New Notes for its own account in exchange for Old Notes, it
acknowledges that it will deliver a prospectus in connection with any resale
of such New Notes.
16
<PAGE>
The enclosed Letter to Clients contains an authorization by the beneficial
owners of the Old Notes for you to make the foregoing representations.
The Company will not pay any fee or commission to any broker or dealer to
any other persons (other than the Exchange Agent) in connection with the
solicitation of tenders of Old Notes pursuant to the Exchange Offer.
Additional copies of the enclosed material may be obtained from the
undersigned.
Very truly yours,
OFFSHORE LOGISTICS, INC.
17
<PAGE>
EXHIBIT 99.2
OFFSHORE LOGISTICS, INC.
NOTICE OF GUARANTEED DELIVERY OF 7 7/8% SERIES A SENIOR NOTES DUE 2008
As set forth in the Prospectus dated , 1998 (as the same may be
amended or supplemented from time to time, the "Prospectus") of Offshore
Logistics, Inc. (the "Issuer") and certain of its subsidiaries under the
caption "The Exchange Offer--Terms of the Exchange Offer--Procedures for
Tendering Old Notes" and in the Letter of Transmittal for Offer to Exchange
7 7/8% Series B Senior Notes due 2008 (the "Letter of Transmittal"), this form
or one substantially equivalent hereto must be used to accept the Exchange
Offer (as defined below) of the Issuer if: (i) certificates for the above-
referenced Notes (the "Old Notes") are not immediately available, (ii) time
will not permit all required documents to reach the Exchange Agent (as defined
below) on or prior to the Expiration Date (as defined in the Prospectus) or
(iii) the procedures for book-entry transfer cannot be completed on or prior
to the Expiration Date. Such form may be delivered by hand or transmitted by
telegram, telex, facsimile transmission or letter to the Exchange Agent.
To: State Street Bank and Trust Company (the "Exchange Agent")
By Registered or Certified Mail: By Hand or Overnight Delivery
- ------------------------------------ Service:
Corporate Trust Services -----------------------------
------------------------ Corporate Trust Services
------------------------ ------------------------
------------------------
By Facsimile Transmission (for Eligible Institutions only):
(___)_________________
(Facsimile Confirmation)
(___)_________________
or
( )
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OR NUMBER OTHER THAN THOSE SHOWN
ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH
ABOVE, WILL NOT CONSTITUTE VALID DELIVERY.
Ladies and Gentlemen:
The undersigned hereby tenders to the Issuer, upon the terms and conditions
set forth in the Prospectus and the Letter of Transmittal (which together
constitute the "Exchange Offer"), receipt of which are hereby acknowledged,
the principal amount of Old Notes set forth below pursuant to the guaranteed
delivery procedures described in the Prospectus and the Letter of Transmittal.
The undersigned understands and acknowledges that the Exchange Offer will
expire at 5:00 p.m., New York City time, on , 1998, unless extended
by the Issuer. With respect to the Exchange Offer, "Expiration Date" means
such time and date, or if the Exchange Offer is extended, the latest time and
date to which the Exchange Offer is so extended by the Issuer.
<PAGE>
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death or incapacity of the undersigned
and every obligation of the undersigned under this Notice of Guaranteed
Delivery shall be binding upon the heirs, personal representatives, executors,
administrators, successors, assigns, trustees in bankruptcy and other legal
representatives of the undersigned.
DESCRIPTION OF OLD NOTES TENDERED
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AGGREGATE PRINCIPAL
AMOUNT
CERTIFICATE NUMBER(S) (IF KNOWN) OF OLD NOTES OR REPRESENTED BY OLD PRINCIPAL AMOUNT
ACCOUNT NUMBER AT THE BOOK-ENTRY FACILITY NOTES TENDERED
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
Total:
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
PLEASE SIGN AND COMPLETE
Signature(s):_________________________________________ Name(s):______________
Capacity (full title), if signing
Address:__________________ in a representative capacity:_______________________
(ZIP CODE)
Area Code and Telephone Number:________________________________________________
Taxpayer Identification or Social
Dated:___________________ Security Number:____________________________________
GUARANTEE OF DELIVERY
The undersigned, a member of a recognized signature guarantee medallion
program within the meaning of Rule 17Ad-15 under the Securities Exchange Act
of 1934, as amended, hereby guarantees (a) that the above-named person(s)
own(s) the above-described securities tendered hereby within the meaning of
Rule 10b-4 under the Securities Exchange Act of 1934, (b) that such tender of
the above-described securities complies with Rule 10b-4, and (c) that delivery
to the Exchange Agent of certificates tendered hereby, in proper form for
transfer, or delivery of such certificates pursuant to the procedure for book-
entry transfer, in either case with delivery of a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) and any other required
documents, is being made within three Nasdaq National Market trading days
after the date of execution of a Notice of Guaranteed Delivery of the above-
named person.
(Name of Firm)
Sign here:____________________________________
(AUTHORIZED SIGNATURE)
Name:_________________________________________
(PLEASE TYPE OR PRINT)
(Area Code and Telephone Number)______________
Address_______________ Zip Code_______________
Dated: , 1998
