-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GOhD8H238DWZL9hTqaM3d8VR/7A067xS5Bu/GVo4oO5H5n0oGwtz3VR+IFNHIpVu 8iKw8O5A7pF3XqbBan6eVA== 0000073887-07-000061.txt : 20070802 0000073887-07-000061.hdr.sgml : 20070802 20070802170124 ACCESSION NUMBER: 0000073887-07-000061 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 20070630 FILED AS OF DATE: 20070802 DATE AS OF CHANGE: 20070802 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Bristow Group Inc CENTRAL INDEX KEY: 0000073887 STANDARD INDUSTRIAL CLASSIFICATION: AIR TRANSPORTATION, NONSCHEDULED [4522] IRS NUMBER: 720679819 STATE OF INCORPORATION: DE FISCAL YEAR END: 0426 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-31617 FILM NUMBER: 071021188 BUSINESS ADDRESS: STREET 1: 2000 W SAM HOUSTON PARKWAY SOUTH STREET 2: SUITE 1700 CITY: HOUSTON STATE: TX ZIP: 77042 BUSINESS PHONE: 7132677600 MAIL ADDRESS: STREET 1: 2000 W SAM HOUSTON PARKWAY SOUTH STREET 2: SUITE 1700 CITY: HOUSTON STATE: TX ZIP: 77042 FORMER COMPANY: FORMER CONFORMED NAME: OFFSHORE LOGISTICS INC DATE OF NAME CHANGE: 19920703 10-Q 1 form10q-080207.htm FORM 10-Q 1ST QUARTER FY 2008 form10q-080207.htm

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

Form 10-Q
 
R
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the quarterly period ended June 30, 2007
   
 
OR
   
£
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
   
 
For the transition period from          to
 
Commission File Number 001-31617
 
Bristow Group Inc.
 
(Exact name of registrant as specified in its charter)

Delaware
72-0679819
(State or other jurisdiction of
(IRS Employer
incorporation or organization)
Identification Number)
   
2000 W.  Sam Houston Pkwy. S.,
77042
Suite 1700
(Zip Code)
Houston, Texas
  
(Address of principal executive offices)
  

Registrant’s telephone number, including area code:
 
(713) 267-7600
 
None
(Former name, former address and former fiscal year, if changed since last report)
 
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes R     No £
 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.
Large accelerated filer R    Accelerated filer £   Non-accelerated filer £
 
Indicate by check mark whether the registrant is shell company (as defined in Rule 12b-2 of the Exchange Act).
£  Yes      R  No
 
Indicate the number shares outstanding of each of the issuer’s classes of Common Stock, as of July 27, 2007.
 
23,731,538 shares of Common Stock, $.01 par value




INDEX — FORM 10-Q

   
Page
PART I
  
     
Item 1.
2
  
     
Item 2.
27
  
     
Item 3.
45
  
     
Item 4.
45
  
     
PART II
  
     
Item 1.
46
  
     
Item 1A.
46
  
     
Item 2.
46
  
     
Item 4.
46
  
     
Item 6.
48
  
     
49
  


PART I — FINANCIAL INFORMATION

Item 1.  Financial Statements.

BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

 
Three Months Ended
June 30,
  
 
2006
    
2007
  
   
(Unaudited)
  
 
(In thousands, except per
share amounts)
Gross revenue:
              
Operating revenue from non-affiliates
$
181,786
    
$
212,454
  
Operating revenue from affiliates
  
12,079
      
11,097
  
Reimbursable revenue from non-affiliates
  
26,125
      
20,348
  
Reimbursable revenue from affiliates
  
1,072
      
1,103
  
   
221,062
      
245,002
  
Operating expense:
              
Direct cost
  
138,470
      
163,836
  
Reimbursable expense
  
26,898
      
21,241
  
Depreciation and amortization
  
10,283
      
11,373
  
General and administrative
  
15,349
      
19,262
  
Gain on disposal of assets
  
(998
)
    
(584
)
   
190,002
      
215,128
  
Operating income
  
31,060
      
29,874
  
Earnings from unconsolidated affiliates, net of losses
  
1,559
      
3,390
  
Interest income
  
1,290
      
2,198
  
Interest expense
  
(3,236
)
    
(2,933
)
Other income (expense), net
  
(4,785
)
    
426
  
Income before provision for income taxes and minority interest
  
25,888
      
32,955
  
Provision for income taxes
  
(8,543
)
    
(9,834
)
Minority interest
  
(116
)
    
(449
)
Net income
  
17,229
      
22,672
  
Preferred Stock dividends
  
—
      
(3,162
)
Net income available to common stockholders
$
17,229
    
$
19,510
  
Earnings per common share:
              
Basic
$
0.74
    
$
0.83
  
Diluted
$
0.73
    
$
0.75
  






The accompanying notes are an integral part of these financial statements.



BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets
   
March 31,
  
June 30,
  
   
2007
  
2007
  
       
(Unaudited)
  
   
(In thousands)
  
ASSETS
Current assets:
              
 
Cash and cash equivalents
  
$
184,188
  
$
339,542
  
 
Accounts receivable from non-affiliates, net of allowance for doubtful accounts of $2.0
million and $1.4 million, respectively 
    
158,770
    
187,836
  
 
Accounts receivable from affiliates, net of allowance for doubtful accounts of $3.2
million and $2.9 million, respectively
    
17,199
    
19,694
  
 
Inventories 
    
157,870
    
169,635
  
 
Prepaid expenses and other
    
17,947
    
17,768
  
   
Total current assets 
    
535,974
    
734,475
  
Investment in unconsolidated affiliates
    
46,828
    
47,561
  
Property and equipment – at cost:
              
 
Land and buildings 
    
51,850
    
56,339
  
 
Aircraft and equipment 
    
1,141,578
    
1,269,390
  
         
1,193,428
    
1,325,729
  
 
Less – Accumulated depreciation and amortization
    
(301,520
)
  
(308,258
)
         
891,908
    
1,017,471
  
Goodwill 
    
20,368
    
27,119
  
Other assets
    
10,725
    
17,814
  
       
$
1,505,803
  
$
1,844,440
  
                   
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
Current liabilities:
              
 
Accounts payable
  
$
42,343
  
$
43,556
  
 
Accrued wages, benefits and related taxes 
    
38,281
    
38,877
  
 
Income taxes payable
    
4,377
    
2,240
  
 
Other accrued taxes
    
9,084
    
9,944
  
 
Deferred revenues
    
16,283
    
17,372
  
 
Accrued maintenance and repairs 
    
12,309
    
13,083
  
 
Other accrued liabilities 
    
22,828
    
22,027
  
 
Deferred taxes 
    
17,611
    
17,962
  
 
Short-term borrowings and current maturities of long-term debt 
    
4,852
    
7,923
  
   
Total current liabilities 
    
167,968
    
172,984
  
Long-term debt, less current maturities 
    
254,230
    
553,382
  
Accrued pension liabilities
    
113,069
    
112,992
  
Other liabilities and deferred credits
    
17,345
    
15,112
  
Deferred taxes
    
76,089
    
81,795
  
Minority interest
    
5,445
    
5,267
  
Commitments and contingencies (Note 6)
              
Stockholders’ investment:
              
 
5.50% mandatory convertible preferred stock, $.01 par value, authorized and outstanding
4,600,000 shares; entitled in liquidation to $230 million; net of offering costs of
$7.4 million
    
222,554
    
222,554
  
 
Common stock, $.01 par value, authorized 35,000,000 shares; outstanding: 23,585,370 as
of March 31 and 23,723,345 as of June 30 (exclusive of 1,281,050 treasury shares)
    
236
    
237
  
 
Additional paid-in capital 
    
169,353
    
172,373
  
 
Retained earnings
    
515,589
    
535,099
  
 
Accumulated other comprehensive loss
    
(36,075
)
  
(27,355
)
       
871,657
    
902,908
  
       
$
1,505,803
  
$
1,844,440
  

The accompanying notes are an integral part of these financial statements.



BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

   
Three Months Ended
June  30,
  
   
2006
  
2007
  
   
(Unaudited)
  
   
(In thousands)
  
Cash flows from operating activities:
              
 
Net income
  
$
17,229
  
$
22,672
  
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
              
 
Depreciation and amortization
    
10,283
    
11,373
  
 
Deferred income taxes
    
1,407
    
5,857
  
 
Gain on asset dispositions
    
(998
)
  
(584
)
 
Stock-based compensation expense
    
752
    
1,514
  
 
Equity in earnings from unconsolidated affiliates under (over) dividends received
    
845
    
(180
)
 
Minority interest in earnings
    
116
    
449
  
 
Tax benefit related to exercise of stock options
    
(303
)
  
(410
)
Increase (decrease) in cash resulting from changes in:
              
 
Accounts receivable
    
(6,485
)
  
(29,861
)
 
Inventories
    
(3,273
)
  
(7,999
)
 
Prepaid expenses and other
    
(1,180
)
  
2,174
  
 
Accounts payable
    
5,847
    
105
  
 
Accrued liabilities
    
8,536
    
(2,089
)
 
Other liabilities and deferred credits
    
(599
)
  
(5,340
)
Net cash provided by (used in) operating activities
    
32,177
    
(2,319
)
Cash flows from investing activities:
              
 
Capital expenditures
    
(46,882
)
  
(121,780
)
 
Proceeds from asset dispositions
    
2,556
    
451
  
 
Acquisition, net of cash received
    
—
    
(12,926
)
Net cash used in investing activities
    
(44,326
)
  
(134,255
)
Cash flows from financing activities:
              
 
Proceeds from borrowings
    
—
    
300,000
  
 
Debt issuance costs
    
—
    
(4,249
)
 
Repayment of debt and debt redemption premiums
    
(3,957
)
  
(3,166
)
 
Partial prepayment of put/call obligation
    
(30
)
  
(37
)
 
Preferred Stock dividends paid
    
—
    
(3,163
)
 
Issuance of common stock
    
764
    
1,095
  
 
Tax benefit related to exercise of stock options
    
303
    
410
  
Net cash provided by (used in) financing activities
    
(2,920
)
  
290,890
  
Effect of exchange rate changes on cash and cash equivalents
    
2,221
    
1,038
  
Net increase (decrease) in cash and cash equivalents
    
(12,848
)
  
155,354
  
Cash and cash equivalents at beginning of period
    
122,482
    
184,188
  
Cash and cash equivalents at end of period
  
$
109,634
  
$
339,542
  
Supplemental disclosure of cash flow information:
              
Cash paid during the period for:
              
 
Interest, net of interest capitalized
  
$
6,357
  
$
7,504
  
 
Income taxes
  
$
2,562
  
$
6,144
  




The accompanying notes are an integral part of these financial statements.

 

BRISTOW GROUP INC. AND SUBSIDIARIES

Condensed Notes to Consolidated Financial Statements

NOTE 1 — BASIS OF PRESENTATION, CONSOLIDATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following consolidated financial statements include the accounts of Bristow Group Inc. and its consolidated entities (“Bristow Group,” the “Company,” “we,” “us,” or “our”) after elimination of all significant intercompany accounts and transactions. Pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), the information contained in the following condensed notes to consolidated financial statements is condensed from that which would appear in the annual consolidated financial statements; accordingly, the consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and related notes thereto contained in our fiscal year 2007 Annual Report (“fiscal year 2007 Financial Statements”).  Operating results for the interim period presented are not necessarily indicative of the results that may be expected for the entire fiscal year.
 
The condensed consolidated financial statements included herein are unaudited; however, they include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair presentation of the consolidated financial position of the Company as of June 30, 2007, the consolidated results of operations for the three months ended June 30, 2006 and 2007, and the consolidated cash flows for the three months ended June 30, 2006 and 2007.
 
Our fiscal year ends March 31, and we refer to fiscal years based on the end of such period.  Therefore, the fiscal year ending March 31, 2008 is referred to as fiscal year 2008.
 
Foreign Currency Translation
 
See “Foreign Currency Translation” in Note 1 to the fiscal year 2007 Financial Statements for a discussion of the related accounting policies.
 
The following table presents the applicable exchange rates (of one British pound sterling into U.S. dollars) for the indicated periods:
 
 
      Three Months Ended June 30, 
  
 
2006
    
2007
  
High
$
1.89
    
$
2.01
  
Average
  
1.83
      
1.99
  
Low
  
1.74
      
1.97
  

As of March 31 and June 30, 2007, the exchange rate was $1.96 and $2.01, respectively.
 

5
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      
 
On November 14, 2006, we entered into a derivative contract to mitigate our exposure to exchange rate fluctuations on our U.S. dollar-denominated intercompany loans.  This derivative contract provided us with a call option on £12.9 million and a put option on $24.5 million, with a strike price of 1.895 U.S. dollars per British pound sterling, and expired on May 14, 2007, resulting in a cumulative gain of $0.6 million, of which $0.1 million related to the three months ended June 30, 2007 and is included in other income (expense), net in our condensed consolidated statement of income.
 
On April 2, 2007, primarily as a result of changes in the manner in which certain of our consolidated subsidiaries create and manage intercompany balances, we changed the functional currency of two of our consolidated subsidiaries, Bristow Helicopters (International) Ltd. and Caledonia Helicopters Ltd., from the British pound sterling to the U.S. dollar, which reduced our exposure to U.S. dollar denominated intercompany loans and advances.  Additionally, in April 2007, we reduced our Euro-denominated intercompany loans, thereby reducing our exposure to fluctuations in exchange rates for this foreign currency.
 
Recent Accounting Pronouncements
 
In September 2006, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 157, “Fair Value Measurements.”  SFAS No. 157 defines fair value, establishes a framework for measuring fair value and requires enhanced disclosures about fair value measurements.  See “Recent Accounting Pronouncements” in Note 1 to our fiscal year 2007 Financial Statements for further information on the requirements of SFAS No. 157.  SFAS No. 157 is effective for fiscal year 2009 and interim periods therein.  We have not yet completed our evaluation of the impact of SFAS No. 157.
 
On April 1, 2007, we adopted FASB Staff Position AUG AIR-1, “Accounting for Planned Major Maintenance Activities,” which prohibits the accruing as a liability the future costs of periodic major overhauls and maintenance of plant and equipment.  Other previously acceptable methods of accounting for planned major overhauls and maintenance continue to be permitted.  Since we do not accrue as a liability the future costs related to periodic major overhauls and maintenance activities, the adoption of this staff position did not have a material impact on our consolidated results of operations, cash flows or financial position.
 
On April 1, 2007, we adopted the provisions of FASB Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109.”  FIN No. 48 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements in accordance with SFAS No. 109, “Accounting for Income Taxes.”  See Note 7 for discussion of FIN No. 48 and the related disclosures.
 
NOTE 2 ¾ ACQUISITION
 
On April 2, 2007, we acquired all of the common equity of Helicopter Adventures, Inc. (“HAI”), a leading flight training provider with operations located in Titusville, Florida, and Concord, California, for $15.0 million in cash.  We also assumed $5.7 million of debt as part of this transaction.  Upon purchase, HAI was renamed Bristow Academy, Inc. (“Bristow Academy”), which, when combined with our existing training facilities in Norwich, England, formed a central core of our new Global Training division within the Helicopter Services segment.  As of the acquisition date, Bristow Academy operated 51 aircraft (including 38 owned and 13 leased aircraft) and employed 122 people, including 48 flight instructors and is the only school approved to provide helicopter flight training to the Commercial Pilot level by both the U.S. Federal Aviation Administration (“FAA”) and the European Joint Aviation Authority.  The Global Training division will support, coordinate, standardize, and in the case of the Bristow Academy schools, directly manage all flight and maintenance training activities within the Helicopter Services segment.
 
The acquisition was accounted for under the purchase method, and we have consolidated the results of Bristow Academy from the date of acquisition.  The purchase price has been allocated based on preliminary estimates of the fair value of assets acquired and liabilities assumed as of the acquisition date and resulted in goodwill of approximately $6.7 million. The purchase price allocation is subject to adjustment as additional information becomes available and will be finalized by April 2008.
 

6
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
               Condensed Notes to Consolidated Financial Statements — (Continued)      

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition.
   
April 2, 2007
   
(In thousands)
Current assets
  
$
2,930
  
Property and equipment
    
8,656
  
Other assets
    
10,084
  
Total assets acquired
    
21,670
  
Current liabilities, including debt
    
6,639
  
Total liabilities assumed
    
6,639
  
Net assets acquired
  
$
15,031
  
 
The pro forma effect of operations of Bristow Academy presented as of the beginning of the periods presented was approximately 1% of our consolidated gross revenue, operating income and net income.
 
NOTE 3 — INVESTMENTS IN AFFILIATES
 
Consolidated Affiliates
 
Bristow Helicopters Leasing Ltd. and Sakhalin Bristow Air Services Ltd — On May 25, 2007, we acquired an additional 9% interest in Bristow Helicopters Leasing Ltd. and Sakhalin Bristow Air Services Ltd., two U.K. joint ventures whose primary purpose is to hold the contracts for our Russian operations and to lease aircraft to Aviashelf Aviation Co. (“Aviashelf”), for $300,000 in accordance with the put and call option agreement.  Aviashelf is our 48.5% owned Russian joint venture.  In addition, on May 25, 2007, we entered into an agreement for grant of a new call option under which we can acquire an additional 8.5% interest in Aviashelf.  This agreement replaces the previous put and call option.
 
Heliair Leasing Limited — Heliair Leasing Limited (“Heliair”) is a Cayman Islands company that as of March 31, 2007 owned two aircraft that it leased to BriLog Leasing Ltd. (“BriLog”), a wholly-owned subsidiary of ours.  In fiscal year 1999, Heliair purchased the aircraft with proceeds from two limited recourse term loans with a U.K. bank.  The term loans were secured by both aircraft and our guarantee of the underlying lease obligations.  In addition, we provided asset value guarantees totaling up to $3.8 million, which were payable at expiration of the leases depending on the value received for the aircraft at the time of disposition.  The sole purpose of Heliair was to finance the purchase of the two aircraft.  As a result of the guarantees and the terms of the underlying leases, for financial statement purposes, the aircraft and associated term loans had been reflected on our consolidated balance sheet, effectively consolidating Heliair.
 
As discussed in Note 5, in May 2007, we completed a long-term financing, the proceeds of which were used to purchase the two aircraft discussed above from Heliair in May and July 2007.  Heliair used the sales proceeds to repay the term loans concurrently.  As a result of the sale of the aircraft and repayment of the term loans, Heliair has no assets and liabilities and no longer leases any aircraft to BriLog.  Additionally, as we no longer guarantee any obligations of Heliair, we no longer consolidate this entity as of July 2, 2007 upon repayment of the second term loan.
 
Unconsolidated Affiliates
 
HC — After the conclusion of the contract with Petróleos Mexicanos (“PEMEX”) in February 2005, our 49% owned unconsolidated affiliates, Hemisco Helicopters International, Inc. and Heliservicio Campeche S.A. de C.V. (“Heliservicio” and collectively, “HC”), experienced difficulties during fiscal year 2006 in meeting their obligations to make lease rental payments to us and to another one of our unconsolidated affiliates, Rotorwing Leasing Resources, L.L.C. (“RLR”).  During fiscal year 2006, RLR and we made a determination that because of the uncertainties as to collectibility, lease revenues from HC would be recognized as they were collected.  As of June 30, 2007, $0.8 million of amounts billed but not collected from HC have not been recognized in our results, and our 49% share of the equity in earnings of RLR has been reduced by $2.7 million for amounts billed but not collected from HC.  During the three months ended June 30, 2007, we recognized revenue of $0.6 million upon receipt of payment from HC for amounts billed in fiscal year 2007 and recorded equity earnings from RLR of $0.8 million related to receipt of payment by RLR from HC for amounts billed in fiscal year 2007.
 

7
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      
 
Prior to June 30, 2006, we took several actions to improve the financial condition and profitability of HC, including relocating several aircraft to other markets, restructuring our profit sharing arrangement with our partner, and completing a recapitalization of Heliservicio on August 19, 2005.  In June 2006, Heliservicio began providing and operating three medium helicopters in support of PEMEX’s oil and gas operations under a two-year contract.  We will continue to evaluate the improving results for HC to determine if and when we will change our accounting for this joint venture from the cash to accrual basis.
 
NOTE 4 — PROPERTY AND EQUIPMENT
 
During the three months ended June 30, 2007, we disposed of three aircraft and certain other equipment and incurred a total loss from storm damage to one medium aircraft (which was fully insured), resulting in a net gain on asset disposals of $0.6 million.
 
Additionally, during the three months ended June 30, 2007, we made final payments in connection with the delivery of five medium and two large aircraft, progress payments on the construction of new aircraft to be delivered in future periods in conjunction with our aircraft commitments (see Note 6), and purchased two training aircraft and a fixed wing aircraft, for a total of $109.9 million.  Also, during the three months ended June 30, 2007, we spent $8.3 million to upgrade aircraft within our existing fleet and to customize new aircraft delivered for our operations, and spent $3.6 million for additions to land and buildings.
 
As of June 30, 2007, we had twelve aircraft held for sale and classified in other current assets in our condensed consolidated balance sheet.  We sold one of these aircraft subsequent to June 30, 2007.
 
NOTE 5 — DEBT
 
Debt as of March 31 and June 30, 2007 consisted of the following (in thousands):
 
 
March 31,
2007
  
June 30,
2007
  
7 ½% Senior Notes due 2017
$
—
  
$
300,000
  
6 ⅛% Senior Notes due 2013
  
230,000
    
230,000
  
Term loans
  
18,848
    
18,409
  
Hemisco Helicopters International, Inc. note
  
4,380
    
4,380
  
Short-term advance from customer
  
1,400
    
1,400
  
Note to Sakhalin Aviation Services Ltd.
  
389
    
336
  
Sakhalin debt
  
4,065
    
3,680
  
Bristow Academy aircraft loans
  
—
    
3,100
  
Total debt
  
259,082
    
561,305
  
Less short-term borrowings and current maturities of long-term debt
  
(4,852
)
  
(7,923
)
Total long-term debt                                                                                                          
$
254,230
  
$
553,382
  
 
7 ½% Senior Notes due 2017 — On June 13, 2007, we completed an offering of $300 million of 7 ½% Senior Notes due 2017 (the “7 ½% Senior Notes”).  These notes are unsecured senior obligations and rank effectively junior in right of payment to all of the Company’s existing and future secured indebtedness, rank equally in right of payment with our existing and future senior unsecured indebtedness and rank senior in right of payment to any of our existing and future subordinated indebtedness.  The 7 ½% Senior Notes are guaranteed by certain of our U.S. subsidiaries (the “Guarantor Subsidiaries”).  We intend to use the net proceeds from the offering to fund additional aircraft purchases, including aircraft under options, and for general corporate purposes.  The indenture to the 7 ½% Senior Notes restricts, among other things, our
 

8
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
          Condensed Notes to Consolidated Financial Statements — (Continued)      
 
ability to pay dividends or make other distributions to stockholders.  We will pay interest on the 7 ½% Senior Notes on March 15 and September 15 of each year, beginning on September 15, 2007, and the 7 ½% Senior Notes mature on September 15, 2017.  The 7 ½% Senior Notes are redeemable at our option; however, any payment or re-financing of these notes prior to September 15, 2012 is subject to a make-whole premium and any payment or re-financing after September 15, 2012 but prior to September 15, 2015 is subject to a prepayment premium (103.75%, 102.50% and 101.25% if redeemed during the twelve-month period beginning on September 15 of 2012, 2013 and 2014, respectively).
 
 
Senior Secured Credit Facilities — Our syndicated senior secured credit facilities consist of a $100 million revolving credit facility (with a subfacility of $25 million for letters of credit) and a $25 million letter of credit facility (the “Credit Facilities”). See Note 5 to the fiscal year 2007 Financial Statements for further information on the terms of these facilities.  As of June 30, 2007, we had $3.8 million in letters of credit outstanding under the letter of credit facility and no borrowings or letters of credit outstanding under the revolving credit facility.
 
 
Term Loans — Two limited recourse term loans were created in connection with sale and lease transactions for two aircraft entered into with Heliair in fiscal year 1999.  The limited recourse term loans were secured by both aircraft and our guarantee of the underlying lease obligations.  In addition, we provided asset value guarantees totaling up to $3.8 million, payable at expiration of the leases depending on the value received for the aircraft at the time of disposition.  As a result of these guarantees and the terms of the underlying leases, for financial statement purposes, the aircraft and associated limited recourse term loans were reflected on our consolidated balance sheet.  In May 2007, Brilog completed a new $18.7 million term loan financing, the proceeds of which were used by BriLog to purchase the two aircraft from Heliair in May and July 2007.  Heliair used the sales proceeds to repay the limited recourse term loans concurrently.  This financing and aircraft purchase did not involve the transfer of cash.  As a result of the completion of this financing, we have classified all but the current portion due under the new debt as long-term in our consolidated balance sheet as of June 30, 2007.  See Note 3 for a discussion of our relationship with Heliair.
 
 
The new term loan is repayable by BriLog in quarterly installments with the first payment of $0.3 million having been made in June 2007, which will be followed by thirty-two consecutive quarterly payments of $0.6 million beginning September 2007.  Interest is payable on the new term loan at LIBOR plus a margin of 1.25% (about 6.60% as of June 30, 2007).  The new term loan is secured by the two aircraft and we have provided a parent guarantee of the loan.
 
 
Aircraft Loans — In conjunction with the purchase of HAI on April 2, 2007 (see Note 2), we assumed various aircraft loans for an aggregate of $5.7 million, of which an aggregate of $3.1 million was outstanding as of June 30, 2007.  The remainder of these loans were repaid during July 2007 and were therefore classified in current liabilities as of June 30, 2007.
 

9
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
          Condensed Notes to Consolidated Financial Statements — (Continued)      

NOTE 6 — COMMITMENTS AND CONTINGENCIES
 
Aircraft Purchase Contracts — As shown in the table below, we expect to make additional capital expenditures over the next six fiscal years to purchase additional aircraft.  As of June 30, 2007, we had 32 aircraft on order and options to acquire an additional 52 aircraft.  Although a similar number of our existing aircraft may be sold during the same period, the additional aircraft on order will provide incremental fleet capacity in terms of revenue and operating margin.

   
Nine
 Months Ending
 March 31,
    
Fiscal Year Ending March 31,
      
   
2008
    
2009
    
2010
    
2011
    
2012-2013
  
Total
Commitments as of June 30, 2007:
                                            
Number of aircraft:
                                            
Small 
    
3
      
—
      
—
      
—
      
—
    
3
Medium 
    
8
      
3
      
—
      
—
      
—
    
11
Large 
    
6
      
6
      
—
      
—
      
—
    
12
Training 
    
6
      
—
      
—
      
—
      
—
    
6
     
23
(1)
    
9
(2)
    
—
      
—
      
—
    
32
Related expenditures (in thousands) (3)
  
$
165,030
    
$
89,956
    
$
—
    
$
—
    
$
—
  
$
254,986
                                             
Options as of June 30, 2007:
                                            
Number of aircraft:
                                            
Medium 
    
—
      
1
      
9
      
8
      
12
    
30
Large 
    
—
      
5
      
11
      
6
      
—
    
22
     
—
      
6
      
20
      
14
      
12
    
52
Related expenditures (in thousands) (3)
  
$
36,973
    
$
191,661
    
$
289,399
    
$
132,102
    
$
82,733
  
$
732,868
_________

(1)
Signed customer contracts are currently in place for 8 of the 17 non-training aircraft.
   
(2)
No signed customer contracts are currently in place for these 9 aircraft.
   
(3)
Includes progress payments on aircraft scheduled to be delivered in future periods.
 
The following chart presents an analysis of our aircraft orders and options during the three months ended June 30, 2007:

 
Three Months Ended
   
June 30, 2007
  
   
Orders
    
Options
  
Beginning of quarter                                                     
    
31
      
52
  
Aircraft delivered                                                
    
(7
)
    
—
  
Aircraft ordered                                                
    
2
      
—
  
Training aircraft                                                
    
6
      
—
  
End of quarter                                                     
    
32
      
52
  
 
As occurred during fiscal year 2007, we periodically order aircraft for which we have no options.
 
 
Collective Bargaining Agreements — We employ approximately 300 pilots in our North America operations who are represented by the Office and Professional Employees International Union (“OPEIU”) under a collective bargaining agreement.  We and the pilots represented by the OPEIU ratified an amended collective bargaining agreement on April 4, 2005.  The terms under the amended agreement are fixed until October 3, 2008 and include wage increases for the pilot group and improvements to several other benefit plans.
 

10
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
   
        Condensed Notes to Consolidated Financial Statements — (Continued)      
 
We are currently involved in negotiations with unions representing our pilots and engineers in the U.K.  As a result of the negotiations completed to date, labor rates under our existing contracts increased 4-5% starting in July 2007 and will continue through June 2008.  We expect to be able to pass these costs on to our customers through annual contract escalation charges built into existing contracts or through rate increases as customer contracts come up for renewal.
 
We are currently involved in annual contract negotiations with the unions in Nigeria and anticipate that we will increase certain benefits for union personnel as a result of these negotiations.
 
We are currently involved in discussions with the pilot’s union in Australia, and we expect that the labor rates on our existing contracts could increase 10-14% starting in fiscal year 2008.
 
Our ability to attract and retain qualified pilots, mechanics and other highly-trained personnel is an important factor in determining our future success.  For example, many of our customers require pilots with very high levels of flight experience. The market for these experienced and highly-trained personnel is competitive and will become more competitive if oil and gas industry activity levels increase.  In addition, some of our pilots, mechanics and other personnel, as well as those of our competitors, are members of the U.S. or U.K. military reserves and have been, or could be, called to active duty.  If significant numbers of such personnel are called to active duty, it would reduce the supply of such workers and likely increase our labor costs.
 
Restrictions on Foreign Ownership of Common Stock — Under the Federal Aviation Act, it is unlawful to operate certain aircraft for hire within the U.S. unless such aircraft are registered with the FAA and the FAA has issued an operating certificate to the operator.  As a general rule, aircraft may be registered under the Federal Aviation Act only if the aircraft are owned or controlled by one or more citizens of the U.S. and an operating certificate may be granted only to a citizen of the U.S.  For purposes of these requirements, a corporation is deemed to be a citizen of the U.S. only if, among other things, at least 75% of its voting interests are owned or controlled by U.S. citizens.  If persons other than U.S. citizens should come to own or control more than 25% of our voting interest, we have been advised that our aircraft may be subject to deregistration under the Federal Aviation Act, and we may lose our ability to operate within the U.S.  Deregistration of our aircraft for any reason, including foreign ownership in excess of permitted levels, would have a material adverse effect on our ability to conduct operations within our North America business unit.  Therefore, our organizational documents currently provide for the automatic suspension of voting rights of shares of our common stock owned or controlled by non-U.S. citizens, and our right to redeem those shares, to the extent necessary to comply with these requirements.  As of June 30, 2007, approximately 2,050,000 shares of our common stock were held by persons with foreign addresses.  These shares represented approximately 8.6% of our total outstanding common shares as of June 30, 2007.  Because a substantial portion of our common stock and our 5.50% mandatory convertible preferred stock (“Preferred Stock”) is publicly traded, our foreign ownership may fluctuate on each trading day.
 
Internal Review — In February 2005, we voluntarily advised the staff of the SEC that the Audit Committee of our board of directors had engaged special outside counsel to undertake a review of certain payments made by two of our affiliated entities in a foreign country.  The review of these payments, which initially focused on Foreign Corrupt Practices Act matters, was subsequently expanded by such special outside counsel to cover operations in other countries and other issues (the “Internal Review”).  In connection with this review, special outside counsel to the Audit Committee retained forensic accountants.  As a result of the findings of the Internal Review (which was completed in late 2005), our quarter ended December 31, 2004 and prior financial statements were restated.  We also provided the SEC with documentation resulting from the Internal Review, which eventually resulted in a formal SEC investigation.  For further information on the restatements, see our fiscal year 2005 Annual Report.
 
In October 2005, the Audit Committee reached certain conclusions with respect to findings from the Internal Review.  The Audit Committee concluded that, over a considerable period of time, (1) improper payments were made by, and on behalf of, certain foreign affiliated entities directly or indirectly to foreign officials, (2) improper payments were made by certain foreign affiliated entities to employees of certain customers, (3) inadequate employee payroll declarations and, in certain instances, tax payments were made by us or our affiliated entities in certain jurisdictions, (4) inadequate valuations for customs purposes may have been declared in certain jurisdictions resulting in the underpayment of import duties, and (5) an affiliated entity, with the assistance of our personnel, engaged in transactions which appear to have assisted in the circumvention of currency transfer restrictions and other regulations.  In addition, as a result of the Internal Review, the Audit Committee and management determined that there were deficiencies in our books and records and internal controls with respect to the foregoing and certain other activities.
 

11
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
   
        Condensed Notes to Consolidated Financial Statements — (Continued)      
 
Based on the Audit Committee’s findings and recommendations, the board of directors took disciplinary action with respect to our personnel who it determined bore responsibility for these matters.  The disciplinary actions included termination or resignation of employment (including of certain members of senior management), changes of job responsibility, reductions in incentive compensation payments and reprimands.  One of our affiliates also obtained the resignation of certain of its personnel.
 
We took remedial actions, including correcting underreported payroll taxes, disclosing to certain customers inappropriate payments made to customer personnel and terminating certain agency, business and joint venture relationships.  We also took steps to reinforce our commitment to conduct our business with integrity by creating an internal corporate compliance function, instituting a new code of business integrity, and developing and implementing a training program for all employees.  In addition to the disciplinary actions referred to above, we took steps to strengthen our control environment by hiring new key members of senior and financial management, including persons with appropriate technical accounting and legal expertise, expanding our corporate finance group and internal audit staff, realigning reporting lines within the accounting function so that field accounting reports directly to the corporate accounting function instead of operations management, and improving the management of our tax structure to comply with its intended design.  Our compliance program is in full operation, and clear corporate policies have been established and communicated to our relevant personnel.
 
We have communicated the Audit Committee’s conclusions with respect to the findings of the Internal Review to regulatory authorities in the jurisdictions in which the relevant activities took place where appropriate.  Until final resolution of all of these issues, such disclosure may result in legal and administrative proceedings, the institution of administrative, civil injunctive or criminal proceedings involving us and/or current or former employees, officers and/or directors who are within the jurisdictions of such authorities, the imposition of fines and other penalties, remedies and/or sanctions, including precluding us from participating in business operations in their countries.  To the extent that violations of the law may have occurred in countries in which we operate, related proceedings could also result in sanctions requiring us to curtail our business operations in one or more such countries for a period of time and affect or limit our ability to export our aircraft from such countries.
 
Although we recorded an accrual of $3.0 million for the expected outcome, we cannot predict the ultimate outcome of the SEC investigation, nor can we predict whether other applicable U.S. and foreign governmental authorities will initiate separate investigations.  The outcome of the SEC investigation and any related legal and administrative proceedings could include the institution of administrative, civil injunctive or criminal proceedings involving us and/or current or former employees, officers and/or directors, the imposition of fines and other penalties, remedies and/or sanctions, modifications to business practices and compliance programs and/or referral to other governmental agencies for other appropriate actions.  It is not possible to accurately predict at this time when matters relating to the SEC investigation will be completed, the final outcome of the SEC investigation, what if any actions may be taken by the SEC or by other governmental agencies in the U.S. or in foreign jurisdictions, or the effect that such actions may have on our consolidated financial statements.  As a result of the disclosure and remediation of a number of activities identified in the Internal Review, we may encounter difficulties conducting business in certain foreign countries and retaining and attracting additional business with certain customers.  We cannot predict the extent of these difficulties; however, our ability to continue conducting business in these countries and with these customers and through agents may be significantly impacted.  It is also possible that we may become subject to claims by third parties, possibly resulting in litigation.  The matters identified in the Internal Review and their effects could have a material adverse effect on our business, financial condition and results of operations.
 
As we continue to respond to the SEC investigation and other governmental authorities and take other actions relating to improper activities that have been identified in connection with the Internal Review, there can be no assurance that restatements, in addition to those reflected in our fiscal year 2005 Annual Report, will not be required or that our historical financial statements included in this Quarterly Report will not change or require further amendment.  In addition, as we continue to operate our compliance program, other situations involving foreign operations, similar to those matters disclosed to the SEC in February 2005 and described above, could arise that warrant further investigation and subsequent disclosures.  As a result, new issues may be identified that may impact our financial statements and the scope of the restatements described above and lead us to take other remedial actions or otherwise adversely impact us.
 
12
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
  
        Condensed Notes to Consolidated Financial Statements — (Continued)      
 
During fiscal years 2005, 2006 and 2007, and the three months ended June 30, 2006, we incurred approximately $2.2 million, $10.5 million, $3.1 million and $0.1 million, respectively, in legal and other professional costs in connection with the Internal Review.  During the three months ended June 30, 2007, we incurred no legal or other professional costs in connection with the Internal Review.
 
In addition, we face legal actions relating to remedial actions which we have taken as a result of the Internal Review, and may face further legal action of this type in the future.  In November 2005, two of our consolidated foreign affiliates were named in a lawsuit filed with the High Court of Lagos State, Nigeria by Mr. Benneth Osita Onwubalili and his affiliated company, Kensit Nigeria Limited, which allegedly acted as agents of our affiliates in Nigeria.  The claimants allege that an agreement between the parties was terminated without justification and seek damages of $16.3 million.  We have responded to this claim and are continuing to investigate this matter.
 
Document Subpoena from U.S. Department of Justice — In June 2005, one of our subsidiaries received a document subpoena from the Antitrust Division of the U.S. Department of Justice (the “DOJ”).  The subpoena related to a grand jury investigation of potential antitrust violations among providers of helicopter transportation services in the U.S. Gulf of Mexico.  The subpoena focused on activities during the period from January 1, 2000 to June 13, 2005.  We believe we have submitted to the DOJ substantially all documents responsive to the subpoena.  We have had discussions with the DOJ and provided documents related to our operations in the U.S., as well as internationally.  We intend to continue to provide additional information as required by the DOJ in connection with the investigation.  There is no assurance that, after review of any information furnished by us or by third parties, the DOJ will not ultimately conclude that violations of U.S. antitrust laws have occurred.  The period of time necessary to resolve the DOJ investigation is uncertain, and this matter could require significant management and financial resources that could otherwise be devoted to the operation of our business.
 
The outcome of the DOJ investigation and any related legal proceedings in other countries could include civil injunctive or criminal proceedings involving us or our current or former officers, directors or employees, the imposition of fines and other penalties, remedies and/or sanctions, including potential disbarments, and referrals to other governmental agencies.  In addition, in cases where anti-competitive conduct is found by the government, there is greater likelihood for civil litigation to be brought by third parties seeking recovery.  Any such civil litigation could have serious consequences for our company, including the costs of the litigation and potential orders to pay restitution or other damages or penalties, including potentially treble damages, to any parties that were determined to be injured as a result of any impermissible anti-competitive conduct.  Any of these adverse consequences could have a material adverse effect on our business, financial condition and results of operations.  The DOJ investigation, any related proceedings in other countries and any third-party litigation, as well as any negative outcome that may result from the investigation, proceedings or litigation, could also negatively impact our relationships with customers and our ability to generate revenue.
 
In connection with this matter, we incurred $2.6 million, $1.9 million and $0.6 million in legal and other professional fees in fiscal years 2006 and 2007, and the three months ended June 30, 2006, respectively.  We incurred no legal or other professional fees in connection with this matter for the three months ended June 30, 2007, however, significant expenditures may continue to be incurred in the future in connection with this matter.
 
Environmental Contingencies — The U.S. Environmental Protection Agency, also referred to as the EPA, has in the past notified us that we are a potential responsible party, or PRP, at four former waste disposal facilities that are on the National Priorities List of contaminated sites.  Under the federal Comprehensive Environmental Response, Compensation, and Liability Act, also known as the Superfund law, persons who are identified as PRPs may be subject to strict, joint and several liability for the costs of cleaning up environmental contamination resulting from releases of hazardous substances at National Priorities List sites.  We were identified by the EPA as a PRP at the Western Sand and Gravel Superfund site in Rhode Island in 1984, at the Sheridan Disposal Services Superfund site in Waller County, Texas, in 1989, at the Gulf Coast Vacuum Services Superfund site near Abbeville, Louisiana, in 1989, and at the Operating Industries, Inc. Superfund site in Monterey Park, California, in 2003.  We have not received any correspondence from the EPA with respect to the Western Sand and Gravel Superfund site since February 1991, nor with respect to the Sheridan Disposal Services Superfund site since 1989.  Remedial activities at the Gulf Coast Vacuum Services Superfund site were completed in September 1999 and the site was removed from the National Priorities List in July 2001.  The EPA has offered to submit a settlement offer to us in return
 

13
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
    
        Condensed Notes to Consolidated Financial Statements — (Continued)      

for which we would be recognized as a de minimis party in regard to the Operating Industries Superfund site, but we have not yet received this settlement proposal.  Although we have not obtained a formal release of liability from the EPA with respect to any of these sites, we believe that our potential liability in connection with these sites is not likely to have a material adverse effect on our business, financial condition or results of operations.
 
Hurricanes Katrina and Rita — As a result of hurricanes Katrina and Rita in the fall of 2005, several of our shorebase facilities located along the U.S. Gulf Coast sustained significant hurricane damage.  In particular, hurricane Katrina caused a total loss of our Venice, Louisiana, shorebase facility, and hurricane Rita severely damaged the Creole, Louisiana, base and flooded the Intracoastal City, Louisiana, base.  These facilities have since been reopened.  Based on estimates of the losses, discussions with our property insurers and analysis of the terms of our property insurance policies, we believe that it is probable that we will receive a total of $2.8 million in insurance recoveries ($1.9 million has been received thus far).  We recorded a $0.2 million net gain during fiscal year 2006, ($2.8 million in probable insurance recoveries offset by $2.6 million of involuntary conversion losses) related to property damage to these facilities.
 
Supply Agreement with Timken — In conjunction with the sale of certain of the assets of Turbo Engines, Inc. to Timken Alcor Aerospace Technologies, Inc. (“Timken”) in November 2006, we signed a supply agreement with Timken through which we are obligated to purchase parts and components, and obtain repair services, from Timken totaling $10.5 million over a three-year period beginning December 1, 2006 at prices consistent with prior arrangements with Timken.  Through June 30, 2007, we purchased $1.4 million under this agreement.
 
Guarantees — We have guaranteed the repayment of up to £10 million ($20.1 million) of the debt of FBS Limited and $11.7 million of the debt of RLR, both unconsolidated affiliates.  See discussion of these commitments in Note 3 to our fiscal year 2007 Financial Statements.  As of June 30, 2007, we have recorded a liability of $0.7 million representing the fair value of the RLR guarantee, which is reflected in our condensed consolidated balance sheet in other liabilities and deferred credits.  Additionally, we provided an indemnity agreement to Afianzadora Sofimex, S.A. to support issuance of surety bonds on behalf of HC from time to time; as of June 30, 2007, surety bonds denominated in Mexican pesos with an aggregate value of 40.8 million Mexican pesos ($3.8 million) and surety bonds denominated in U.S. dollars with an aggregate value of $1.7 million were outstanding.
 
The following table summarizes our commitments under these guarantees as of June 30, 2007:
 
Amount of Commitment Expiration Per Period
Total
  
Remainder
of Fiscal
Year 2008
  
Fiscal Years 2009-2010
  
Fiscal Years
2011-2012
  
Fiscal Year
2013 and Thereafter
(In thousands)
$
37,284
    
$
3,769
    
$
13,455
    
$
20,060
    
$
—
 
Other Matters — Although infrequent, aircraft accidents have occurred in the past, and the related losses and liability claims have been covered by insurance subject to a deductible.  We are a defendant in certain claims and litigation arising out of operations in the normal course of business.  In the opinion of management, uninsured losses, if any, will not be material to our financial position, results of operations or cash flows.
 
NOTE 7 — TAXES
 
Our effective income tax rates from continuing operations were 33.0% and 29.8% for the three months ended June 30, 2006 and 2007, respectively.  During the three months ended June 30, 2006 and 2007, we benefited from tax contingency related items totaling $0.8 million and $0.9 million, respectively.  Our effective tax rate was also impacted by the permanent reinvestment outside the U.S. of foreign earnings, upon which no U.S. tax has been provided, and by the amount of our foreign source income and our ability to realize foreign tax credits.
 
As discussed under “Recent Accounting Pronouncements” in Note 1, on April 1, 2007 we adopted FIN No. 48, which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.  FIN No. 48 requires enterprises to evaluate tax positions using a two-step process consisting of recognition and
 

14
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
 
        Condensed Notes to Consolidated Financial Statements — (Continued)      

measurement.  The effects of a tax position are recognized in the period in which we determine that it is more likely than not (defined as a more than 50% likelihood) that a tax position will be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position.  A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that is greater than 50% likely of being recognized upon ultimate settlement.
 
We have analyzed filing positions in the federal, state and foreign jurisdictions where we are required to file income tax returns for all open tax years.  The adoption of FIN No. 48 on April 1, 2007 did not affect our beginning retained earnings since we had previously reserved for uncertain tax positions.  Our policy is to accrue interest and penalties associated with uncertain tax positions in income tax expense.  As of March 31 and June 30, 2007, $0.3 million in interest and penalties were accrued in connection with uncertain tax positions.  The tax years that remain open to examination by the major taxing jurisdictions (the U.S., the U.K. and Nigeria) to which we are subject range from 2001 to 2007.
 
As of the April 1, 2007 date of adoption of FIN No. 48 and June 30, 2007, we had $6.3 million and $5.5 million, respectively, of unrecognized tax benefits, all of which would have an impact on our effective tax rate, if recognized.
 
NOTE 8 — EMPLOYEE BENEFIT PLANS
 
Pension Plans
 
The following table provides a detail of the components of net periodic pension cost:
 
 
Three Months Ended
June 30,
  
 
2006
    
2007
  
 
(In thousands)
  
Service cost for benefits earned during the period
$
63
    
$
71
  
Interest cost on pension benefit obligation
  
5,484
      
6,559
  
Expected return on assets
  
(5,674
)
    
(6,790
)
Amortization of unrecognized losses
  
879
      
1,024
  
Net periodic pension cost
$
752
    
$
864
  
 
The current estimate of our cash contributions to the pension plans for fiscal year 2008 is $14.7 million, $3.6 million of which was paid during the three months ended June 30, 2007.
 
Stock-Based Compensation
 
We have a number of incentive and stock option plans which are described in Note 8 to our fiscal year 2007 Financial Statements.
 
On May 3, 2007, the board of directors of the Company approved the Bristow Group Inc. 2007 Long Term Incentive Plan (the “2007 Plan”), which was approved by the Company’s stockholders at the Company’s annual meeting of stockholders held on August 2, 2007.  The number of shares of common stock reserved under the 2007 Plan and available for incentive awards under the 2007 Plan is 1,200,000. The primary purpose of the 2007 Plan is to provide a means whereby we may advance the best interests of the Company by providing outside directors, employees and consultants with additional incentives through the grant of stock options to purchase common stock of the Company, shares of restricted stock, other stock-based awards (payable in cash or common stock) and performance awards, thereby increasing the personal stake of such persons in the continued success and growth of the Company.
 
For the three months ended June 30, 2006 and 2007, total stock-based compensation expense, which includes both stock options and restricted stock units, totaled $0.8 million and $1.5 million, respectively.  Stock-based compensation expense has been allocated to our various business units.
 

15
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      

During the three months ended June 30, 2007, 191,800 stock options were granted at an average exercise price of $46.16 per share.  The key input variables used in valuing these options under the Black Scholes model were: risk-free interest rate of 4.74%; dividend yield of zero; stock price volatility of 45%; and expected option lives of 4 years.  Also during the three months ended June 30, 2007, we awarded 127,600 restricted stock units and 75,300 shares of restricted stock at an average grant date fair value of $44.84 per share.
 
NOTE 9 — STOCKHOLDERS’ EQUITY AND EARNINGS PER SHARE
 
On August 2, 2007, our stockholders approved an increase to the number of authorized shares of our common stock from 35,000,000 to 90,000,000.
 
Basic earnings per common share was computed by dividing net income available to common stockholders by the weighted average number of shares of common stock outstanding during the period.  Diluted earnings per common share for the three months ended June 30, 2006 excluded options to purchase 176,880 shares at a weighted average exercise price of $31.77, which were outstanding during the period but were anti-dilutive.  Diluted earnings per common share for the three months ended June 30, 2007 excluded options to purchase 339,331 shares at a weighted average exercise price of $35.74, which were outstanding during the period but were anti-dilutive.  Diluted earnings per common share for the three months ended June 30, 2007 also included weighted average shares resulting from the assumed conversion of our Preferred Stock at the conversion rate that results in the most dilution:  1.4180 shares of common stock for each share of Preferred Stock.  The following table sets forth the computation of basic and diluted net income per share.
 
   
Three Months Ended
June 30,
  
   
2006
    
2007
  
Net income (in thousands):
            
Income available to common stockholders – basic
$
17,229
  
$
19,510
  
Preferred Stock dividends
  
—
    
3,162
  
Income available to common stockholders - diluted
$
17,229
  
$
22,672
  
Shares:
            
Weighted average number of common shares outstanding – basic
  
23,393,010
    
23,602,696
  
Assumed conversion of Preferred Stock outstanding during the period
  
—
    
6,522,972
  
Net effect of dilutive stock options, restricted stock and restricted stock units
based on the treasury stock method
  
114,498
    
93,357
  
Weighted average number of common shares outstanding – diluted
  
23,507,508
    
30,219,025
  
Basic earnings per common share
$
0.74
  
$
0.83
  
Diluted earnings per common share
$
0.73
  
$
0.75
  
 

 

16
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      
 
NOTE 10 — SEGMENT INFORMATION
 
We conduct our business in two segments: Helicopter Services and Production Management Services.  The Helicopter Services segment operations are conducted through three divisions:  Western Hemisphere, Eastern Hemisphere and Global Training, and eight business units within those divisions. Western Hemisphere and Eastern Hemisphere operate through seven of the business units:  North America and South and Central America within the Western Hemisphere, and Europe, West Africa, Southeast Asia, Other International and Eastern Hemisphere (“EH”) Centralized Operations within the Eastern Hemisphere. Our EH Centralized Operations business unit is comprised of our technical services business and other non-flight services business (e.g., provision of maintenance and supply chain parts and services to other Eastern Hemisphere business units) in the Eastern Hemisphere and division level expenses for our Eastern Hemisphere businesses. These operations are not included within any other business unit as they are managed centrally by our Eastern Hemisphere management separate and apart from these other operations.  Bristow Academy is the only business unit within our Global Training division within the Helicopter Services segment.
 
We provide Production Management Services, contract personnel and medical support services in the U.S. Gulf of Mexico to the domestic oil and gas industry under the Grasso Production Management name.
 
The tables that follow show reportable segment information for the three months ended June 30, 2006 and 2007, reconciled to consolidated totals, and prepared on the same basis as our condensed consolidated financial statements.  Amounts presented in the identifiable assets table as of March 31, 2007 have been reclassified from our prior presentation.
 
   
Three Months Ended
June 30,
  
   
2006
    
2007
  
   
(In thousands)
  
Segment gross revenue from external customers:
                
Helicopter Services:
                
North America
  
$
59,073
    
$
57,339
  
South and Central America
    
13,012
      
16,036
  
Europe
    
70,594
      
82,927
  
West Africa
    
31,736
      
33,283
  
Southeast Asia
    
17,040
      
22,492
  
Other International
    
8,955
      
11,276
  
EH Centralized Operations
    
3,012
      
2,108
  
Bristow Academy
    
—
      
3,019
  
Total Helicopter Services
    
203,422
      
228,480
  
Production Management Services
    
17,665
      
16,522
  
Corporate
    
(25
)
    
—
  
Total segment gross revenue
  
$
221,062
    
$
245,002
  

Intersegment and intrasegment gross revenue:
                
Helicopter Services:
                
North America
  
$
4,295
    
$
3,600
  
South and Central America
    
—
      
—
  
Europe
    
1,387
      
430
  
West Africa
    
—
      
—
  
Southeast Asia
    
—
      
—
  
Other International
    
—
      
179
  
EH Centralized Operations
    
62
      
4,697
  
Bristow Academy
    
—
      
—
  
Total Helicopter Services
    
5,744
      
8,906
  
Production Management Services
    
19
      
21
  
Total intersegment and intrasegment gross revenue
  
$
5,763
    
$
8,927
  


17
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      


   
Three Months Ended
June 30,
  
   
2006
    
2007
  
   
(In thousands)
  
Consolidated gross revenue reconciliation:
                
Helicopter Services:
                
North America
  
$
63,368
    
$
60,939
  
South and Central America
    
13,012
      
16,036
  
Europe
    
71,981
      
83,357
  
West Africa
    
31,736
      
33,283
  
Southeast Asia
    
17,040
      
22,492
  
Other International
    
8,955
      
11,455
  
EH Centralized Operations
    
3,074
      
6,805
  
Bristow Academy
    
—
      
3,019
  
Intrasegment eliminations
    
(2,860
)
    
(6,235
)
Total Helicopter Services (1)
    
206,306
      
231,151
  
Production Management Services (2)
    
17,684
      
16,543
  
Corporate
    
(25
)
    
—
  
Intersegment eliminations
    
(2,903
)
    
(2,692
)
Total consolidated gross revenue
  
$
221,062
    
$
245,002
  

Consolidated operating income (loss) reconciliation:
                
Helicopter Services:
                
North America
  
$
9,233
    
$
10,714
  
South and Central America
    
3,970
      
3,685
  
Europe
    
14,096
      
14,575
  
West Africa
    
4,333
      
2,797
  
Southeast Asia
    
2,435
      
4,127
  
Other International
    
1,516
      
2,265
  
EH Centralized Operations
    
(1,767
)
    
(4,279
)
Bristow Academy
    
—
      
(91
)
Total Helicopter Services
    
33,816
      
33,793
  
Production Management Services
    
1,413
      
1,089
  
Gain on disposal of assets
    
998
      
584
  
Corporate
    
(5,167
)
    
(5,592
)
Total consolidated operating income
  
$
31,060
    
$
29,874
  

   
March 31,
    
June 30,
  
   
2007
    
2007
  
   
(In thousands)
  
Identifiable assets:
                
Helicopter Services:
                
North America
  
$
424,936
    
$
434,535
  
South and Central America
    
158,383
      
190,161
  
Europe
    
391,356
      
417,662
  
West Africa
    
134,128
      
173,353
  
Southeast Asia
    
42,458
      
58,825
  
Other International
    
71,679
      
85,182
  
EH Centralized Operations
    
157,565
      
163,158
  
Bristow Academy
    
—
      
22,059
  
Total Helicopter Services
    
1,380,505
      
1,544,935
  
Production Management Services
    
32,074
      
33,989
  
Corporate
    
93,224
      
265,516
  
Total identifiable assets
  
$
1,505,803
    
$
1,844,440
  


18
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
     
        Condensed Notes to Consolidated Financial Statements — (Continued)      
________
 
(1)
Includes reimbursable revenue of $23.3 million and $20.2 million for the three months ended June 30, 2006 and 2007, respectively.
 
(2)
Includes reimbursable revenue of $3.9 million and $1.3 million for the three months ended June 30, 2006 and 2007, respectively, net of intercompany eliminations.
 
 
NOTE 11 — COMPREHENSIVE INCOME
 
Comprehensive income is as follows:
 
 
Three Months Ended
June 30,
  
 
2006
  
2007
  
 
(In thousands)
  
Net income
$
17,229
  
$
22,672
  
Other comprehensive income (loss):
            
Currency translation adjustments
  
18,367
    
8,720
  
Comprehensive income (loss)
$
35,596
  
$
31,392
  
 
During the three months ended June 30, 2006, the U.S. dollar weakened against the British pound sterling, resulting in translation gains recorded as a component of stockholders’ investment as of June 30, 2006.  During the three months ended June 30, 2007, the U.S. dollar weakened against the British pound sterling, resulting in translation gains recorded as a component of stockholders’ investment as of June 30, 2007.  See discussion of foreign currency translation in Note 1.
 
NOTE 12 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
 
In connection with the sale of the 7 ½% Senior Notes and the 6 1/8% Senior Notes due 2013, the Guarantor Subsidiaries jointly, severally and unconditionally guaranteed the payment obligations under these notes.  The following supplemental financial information sets forth, on a consolidating basis, the balance sheet, statement of income and cash flow information for Bristow Group Inc.  (“Parent Company Only”), for the Guarantor Subsidiaries and for our other subsidiaries (the “Non-Guarantor Subsidiaries”).  We have not presented separate financial statements and other disclosures concerning the Guarantor Subsidiaries because management has determined that such information is not material to investors.
 
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 we believe that the disclosures made are adequate to make the information presented not misleading.  The principal eliminating entries eliminate investments in subsidiaries, intercompany balances and intercompany revenues and expenses.
 
The allocation of the consolidated income tax provision was made using the with and without allocation method.
 

19
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      

 Supplemental Condensed Consolidating Statement of Income
Three Months Ended June 30, 2006

 
Parent
      
Non-
          
 
Company
  
Guarantor
  
Guarantor
          
 
Only
  
Subsidiaries
  
Subsidiaries
  
Eliminations
  
Consolidated
  
               
(In thousands)
                
Revenue:
                                        
Gross revenue
  
$
(25
)
  
$
84,449
    
$
136,638
    
$
—
    
$
221,062
  
Intercompany revenue
    
—
      
2,926
      
2,365
      
(5,291
)
    
—
  
     
(25
)
    
87,375
      
139,003
      
(5,291
)
    
221,062
  
Operating expense:
                                        
Direct cost
    
67
      
62,327
      
102,974
      
—
      
165,368
  
Intercompany expenses
    
—
      
2,365
      
2,876
      
(5,241
)
    
—
  
Depreciation and amortization
    
26
      
4,250
      
6,007
      
—
      
10,283
  
General and administrative
    
5,049
      
4,366
      
5,984
      
(50
)
    
15,349
  
Gain on disposal of assets
    
—
      
(136
)
    
(862
)
    
—
      
(998
)
     
5,142
      
73,172
      
116,979
      
(5,291
)
    
190,002
  
Operating income (loss)
    
(5,167
)
    
14,203
      
22,024
      
—
      
31,060
  
Earnings (losses) from unconsolidated
affiliates, net
    
11,870
      
(272
)
    
1,885
      
(11,924
)
    
1,559
  
Interest income 
    
14,630
      
60
      
877
      
(14,277
)
    
1,290
  
Interest expense 
    
(3,283
)
    
—
      
(14,230
)
    
14,277
      
(3,236
)
Other income (expense), net
    
(89
)
    
(77
)
    
(4,619
)
    
—
      
(4,785
)
                                         
Income before provision for income
taxes and minority interest
    
17,961
      
13,914
      
5,937
      
(11,924
)
    
25,888
  
Allocation of consolidated income taxes
    
(693
)
    
(1,369
)
    
(6,481
)
    
—
      
(8,543
)
Minority interest 
    
(39
)
    
—
      
(77
)
    
—
      
(116
)
                                         
Net income (loss) 
  
$
17,229
    
$
12,545
    
$
(621
)
  
$
(11,924
)
  
$
17,229
  

 

20
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      

Supplemental Condensed Consolidating Statement of Income
Three Months Ended June 30, 2007

 
Parent
      
Non-
          
 
Company
  
Guarantor
  
Guarantor
          
 
Only
  
Subsidiaries
  
Subsidiaries
  
Eliminations
  
Consolidated
  
               
(In thousands)
                
Revenue:
                                        
Gross revenue 
  
$
—
    
$
88,159
    
$
156,843
    
$
—
    
$
245,002
  
Intercompany revenue
    
—
      
5,156
      
6,115
      
(11,271
)
    
—
  
     
—
      
93,315
      
162,958
      
(11,271
)
    
245,002
  
Operating expense:
                                        
Direct cost
    
—
      
60,127
      
124,950
      
—
      
185,077
  
Intercompany expenses
    
—
      
6,214
      
5,057
      
(11,271
)
    
—
  
Depreciation and amortization
    
71
      
5,446
      
5,856
      
—
      
11,373
  
General and administrative
    
5,493
      
3,944
      
9,825
      
—
      
19,262
  
Loss (gain) on disposal of assets
    
—
      
(708
)
    
124
      
—
      
(584
)
     
5,564
      
75,023
      
145,812
      
(11,271
)
    
215,128
  
Operating income (loss)
    
(5,564
)
    
18,292
      
17,146
      
—
      
29,874
  
Earnings (losses) from unconsolidated
affiliates, net
    
15,625
      
175
      
3,215
      
(15,625
)
    
3,390
  
Interest income
    
19,647
      
83
      
687
      
(18,219
)
    
2,198
  
Interest expense
    
(2,812
)
    
(5
)
    
(18,335
)
    
18,219
      
(2,933
)
Other income (expense), net
    
(25
)
    
(43
)
    
494
      
—
      
426
  
                                         
Income before provision for income
taxes and minority interest
    
26,871
      
18,502
      
3,207
      
(15,625
)
    
32,955
  
Allocation of consolidated income taxes
    
(4,152
)
    
(593
)
    
(5,089
)
    
—
      
(9,834
)
Minority interest
    
(47
)
    
—
      
(402
)
    
—
      
(449
)
                                         
Net income (loss)
  
$
22,672
    
$
17,909
    
$
(2,284
)
  
$
(15,625
)
  
$
22,672
  

 

21
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      

 Supplemental Condensed Consolidating Balance Sheet
As of March 31, 2007

 
Parent
      
Non-
          
 
Company
  
Guarantor
  
Guarantor
          
 
Only
  
Subsidiaries
  
Subsidiaries
  
Eliminations
  
Consolidated
  
       
(In thousands)
        
ASSETS
  
Current assets:
                                      
Cash and cash equivalents
$
133,010
    
$
3,434
    
$
47,744
    
$
—
    
$
184,188
  
Accounts receivable
  
32,103
      
62,493
      
123,453
      
(42,080
)
    
175,969
  
Inventories
  
—
      
72,834
      
85,036
      
—
      
157,870
  
Prepaid expenses and other
  
830
      
9,951
      
7,166
      
—
      
17,947
  
Total current assets
  
165,943
      
148,712
      
263,399
      
(42,080
)
    
535,974
  
Intercompany investment
  
297,113
      
1,046
      
—
      
(298,159
)
    
—
  
Investment in unconsolidated affiliates
  
4,643
      
1,611
      
40,574
      
—
      
46,828
  
Intercompany notes receivable
  
825,203
      
—
      
11,980
      
(837,183
)
    
—
  
Property and equipment – at cost:
                                      
Land and buildings
  
263
      
36,689
      
14,898
      
—
      
51,850
  
Aircraft and equipment
  
2,259
      
550,611
      
588,708
      
—
      
1,141,578
  
   
2,522
      
587,300
      
603,606
      
—
      
1,193,428
  
Less:  Accumulated depreciation and
amortization               
  
(1,471
)
    
(123,367
)
    
(176,682
)
    
—
      
(301,520
)
   
1,051
      
463,933
      
426,924
      
—
      
891,908
  
Goodwill
  
—
      
18,483
      
1,774
      
111
      
20,368
  
Other assets
  
9,348
      
224
      
1,153
      
—
      
10,725
  
 
$
1,303,301
    
$
634,009
    
$
745,804
    
$
(1,177,311
)
  
$
1,505,803
  
   
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
  
Current liabilities:
                                      
Accounts payable 
$
1,043
    
$
16,628
    
$
36,028
    
$
(11,356
)
  
$
42,343
  
Accrued liabilities
  
10,736
      
20,009
      
103,141
      
(30,724
)
    
103,162
  
Deferred taxes
  
217
      
—
      
17,394
      
—
      
17,611
  
Short-term borrowings and current
maturities of long-term debt
  
—
      
—
      
4,852
      
—
      
4,852
  
Total current liabilities
  
11,996
      
36,637
      
161,415
      
(42,080
)
    
167,968
  
Long-term debt, less current maturities
  
234,379
      
—
      
19,851
      
—
      
254,230
  
Intercompany notes payable
  
14,569
      
230,773
      
591,841
      
(837,183
)
    
—
  
Other liabilities and deferred credits
  
4,529
      
9,644
      
116,241
      
—
      
130,414
  
Deferred taxes
  
42,655
      
2,295
      
31,139
      
—
      
76,089
  
Minority interest
  
2,042
      
—
      
3,403
      
—
      
5,445
  
Stockholders’ investment:
                                      
5.50% mandatory convertible preferred
 stock 
  
222,554
      
—
      
—
      
—
      
222,554
  
Common stock
  
236
      
4,062
      
35,426
      
(39,488
)
    
236
  
Additional paid-in-capital
  
169,353
      
51,170
      
8,015
      
(59,185
)
    
169,353
  
Retained earnings 
  
515,589
      
299,428
      
(82,414
)
    
(217,014
)
    
515,589
  
Accumulated other comprehensive
income (loss) 
  
85,399
      
—
      
(139,113
)
    
17,639
      
(36,075
)
   
993,131
      
354,660
      
(178,086
)
    
(298,048
)
    
871,657
  
 
$
1,303,301
    
$
634,009
    
$
745,804
    
$
(1,177,311
)
  
$
1,505,803
  

 

22
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      

Supplemental Condensed Consolidating Balance Sheet
As of June 30, 2007
 
 
Parent
      
Non-
          
 
Company
  
Guarantor
  
Guarantor
          
 
Only
  
Subsidiaries
  
Subsidiaries
  
Eliminations
  
Consolidated
  
       
(In thousands)
        
ASSETS
  
Current assets:
                                        
Cash and cash equivalents
  
$
295,055
    
$
6,348
    
$
38,139
    
$
—
    
$
339,542
  
Accounts receivable
    
37,296
      
82,067
      
141,198
      
(53,031
)
    
207,530
  
Inventories
    
—
      
73,997
      
95,638
      
—
      
169,635
  
Prepaid expenses and other
    
665
      
8,907
      
8,196
      
—
      
17,768
  
Total current assets
    
333,016
      
171,319
      
283,171
      
(53,031
)
    
734,475
  
Intercompany investment
    
312,145
      
1,046
      
15,031
      
(328,222
)
    
—
  
Investment in unconsolidated affiliates
    
4,591
      
1,783
      
41,187
      
—
      
47,561
  
Intercompany notes receivable
    
946,008
      
—
      
(5,656
)
    
(940,352
)
    
—
  
Property and equipment – at cost:
                                        
Land and buildings
    
262
      
40,006
      
16,071
      
—
      
56,339
  
Aircraft and equipment 
    
2,310
      
631,486
      
635,594
      
—
      
1,269,390
  
     
2,572
      
671,492
      
651,665
      
—
      
1,325,729
  
Less:  Accumulated depreciation and
amortization 
    
(1,480
)
    
(127,309
)
    
(179,469
)
    
—
      
(308,258
)
     
1,092
      
544,183
      
472,196
      
—
      
1,017,471
  
Goodwill 
    
—
      
18,484
      
8,524
      
111
      
27,119
  
Other assets
    
13,881
      
239
      
3,694
      
—
      
17,814
  
   
$
1,610,733
    
$
737,054
    
$
818,147
    
$
(1,321,494
)
  
$
1,844,440
  
   
LIABILITIES AND STOCKHOLDERS’ INVESTMENT
  
Current liabilities:
                                        
Accounts payable 
  
$
2,736
    
$
18,677
    
$
42,161
    
$
(20,018
)
  
$
43,556
  
Accrued liabilities 
    
8,747
      
23,026
      
104,783
      
(33,013
)
    
103,543
  
Deferred taxes 
    
221
      
—
      
17,741
      
—
      
17,962
  
Short-term borrowings and current
maturities of long-term debt
    
—
      
—
      
7,923
      
—
      
7,923
  
Total current liabilities 
    
11,704
      
41,703
      
172,608
      
(53,031
)
    
172,984
  
Long-term debt, less current maturities
    
534,380
      
—
      
19,002
      
—
      
553,382
  
Intercompany notes payable
    
—
      
310,652
      
629,717
      
(940,369
)
    
—
  
Other liabilities and deferred credits
    
3,935
      
9,572
      
114,597
      
—
      
128,104
  
Deferred taxes
    
46,375
      
2,527
      
32,893
      
—
      
81,795
  
Minority interest 
    
2,089
      
—
      
3,178
      
—
      
5,267
  
Stockholders’ investment:
                                        
5.50% mandatory convertible preferred
stock
    
222,554
      
—
      
—
      
—
      
222,554
  
Common stock
    
237
      
4,062
      
69,992
      
(74,054
)
    
237
  
Additional paid-in-capital
    
172,373
      
51,201
      
8,045
      
(59,246
)
    
172,373
  
Retained earnings
    
535,099
      
317,337
      
(84,698
)
    
(232,639
)
    
535,099
  
Accumulated other comprehensive
income (loss)
    
81,987
      
—
      
(147,187
)
    
37,845
      
(27,355
)
     
1,012,250
      
372,600
      
(153,848
)
    
(328,094
)
    
902,908
  
   
$
1,610,733
    
$
737,054
    
$
818,147
    
$
(1,321,494
)
  
$
1,844,440
  

 

23
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      
 
Supplemental Condensed Consolidating Statement of Cash Flows
Three Months Ended June 30, 2006

 
Parent
      
Non-
          
 
Company
  
Guarantor
  
Guarantor
          
 
Only
  
Subsidiaries
  
Subsidiaries
  
Eliminations
  
Consolidated
  
       
(In thousands)
        
                                         
Net cash provided by (used in) operating
activities
  
$
(39,344
)
  
$
40,613
    
$
19,933
    
$
10,975
    
$
32,177
  
                                         
Cash flows from investing activities:
                                        
Capital expenditures
    
(228
)
    
(42,248
)
    
(4,406
)
    
—
      
(46,882
)
Proceeds from asset dispositions
    
—
      
1,700
      
856
      
—
      
2,556
  
                                         
Net cash used in investing activities
    
(228
)
    
(40,548
)
    
(3,550
)
    
—
      
(44,326
)
                                         
Cash flows from financing activities:
                                        
Proceeds from borrowings
    
5,000
      
—
      
7,195
      
(12,195
)
    
—
  
Repayment of debt and debt redemption
premiums
    
—
      
—
      
(3,957
)
    
—
      
(3,957
)
Repayment of intercompany debt
    
—
      
—
      
(1,220
)
    
1,220
      
—
  
Partial prepayment of put/call obligation
    
(30
)
    
—
      
—
      
—
      
(30
)
Issuance of common stock
    
764
      
—
      
—
      
—
      
764
  
Tax benefit related to exercise of stock
    options
    
303
      
—
      
—
      
—
      
303
  
Net cash provided by (used in) financing
activities
    
6,037
      
—
      
2,018
      
(10,975
)
    
(2,920
)
Effect of exchange rate changes on cash and
cash equivalents
    
105
      
—
      
2,116
      
—
      
2,221
  
Net increase (decrease) in cash and
cash equivalents
    
(33,430
)
    
65
      
20,517
      
—
      
(12,848
)
Cash and cash equivalents at beginning
of period
    
74,601
      
1,363
      
46,518
      
—
      
122,482
  
Cash and cash equivalents at end of
period
  
$
41,171
    
$
1,428
    
$
67,035
    
$
—
    
$
109,634
  



24
      
        BRISTOW GROUP INC. AND SUBSIDIARIES      
      
        Condensed Notes to Consolidated Financial Statements — (Continued)      

Supplemental Condensed Consolidating Statement of Cash Flows
Three Months Ended June 30, 2007

 
Parent
      
Non-
          
 
Company
  
Guarantor
  
Guarantor
          
 
Only
  
Subsidiaries
  
Subsidiaries
  
Eliminations
  
Consolidated
  
       
(In thousands)
        
                                         
Net cash provided by (used in) operating
activities
  
$
(30,235
)
  
$
1,517
    
$
15,157
    
$
11,242
    
$
(2,319
)
                                         
Cash flows from investing activities:
                                        
Capital expenditures
    
(105
)
    
(86,149
)
    
(35,526
)
    
—
      
(121,780
)
Proceeds from asset dispositions
    
—
      
573
      
(122
)
    
—
      
451
  
Acquisition, net of cash received
    
(15,031
)
    
—
      
2,105
      
—
      
(12,926
)
                                         
Net cash used in investing activities
    
(15,136
)
    
(85,576
)
    
(33,543
)
    
—
      
(134,255
)
                                         
Cash flows from financing activities:
                                        
Proceeds from borrowings
    
300,000
      
—
      
—
      
—
      
300,000
  
Debt issuance costs
    
(4,249
)
    
—
      
—
      
—
      
(4,249
)
Repayment of debt and debt redemption
premiums
    
—
      
—
      
(3,166
)
    
—
      
(3,166
)
Increases (decreases) in cash related to
intercompany advances and debt
    
(86,973
)
    
86,973
      
11,242
      
(11,242
)
    
—
  
Partial prepayment of put/call obligation
    
(37
)
    
—
      
—
      
—
      
(37
)
Preferred Stock dividends paid
    
(3,163
)
    
—
      
—
      
—
      
(3,163
)
Issuance of common stock
    
1,095
      
—
      
—
      
—
      
1,095
  
Tax benefit related to exercise of stock
    options
    
410
      
—
      
—
      
—
      
410
  
Net cash provided by (used in) financing
activities
    
207,083
      
86,973
      
8,076
      
(11,242
)
    
290,890
  
Effect of exchange rate changes on cash and
cash equivalents
    
333
      
—
      
705
      
—
      
1,038
  
Net increase (decrease) in cash and
cash equivalents
    
162,045
      
2,914
      
(9,605
)
    
—
      
155,354
  
Cash and cash equivalents at beginning
of period
    
133,010
      
3,434
      
47,744
      
—
      
184,188
  
Cash and cash equivalents at end of
period
  
$
295,055
    
$
6,348
    
$
38,139
    
$
—
    
$
339,542
  





Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Bristow Group Inc.:
 
We have reviewed the condensed consolidated balance sheet of Bristow Group Inc. and subsidiaries as of June 30, 2007 and the related condensed consolidated statements of income for the three-month periods ended June 30, 2006  and 2007, and the related condensed consolidated statements of cash flows for the three-month periods ended June 30, 2006 and 2007.  These condensed consolidated financial statements are the responsibility of the Company’s management.
 
We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.
 
Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.
 
 
/s/ KPMG LLP

Houston, Texas
August 2, 2007



 
Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the notes thereto as well as our Annual Report on Form 10-K for the fiscal year ended March 31, 2007 (the “fiscal year 2007 Annual Report”) and the MD&A contained therein.  In the discussion that follows, the terms “Comparable Quarter” and “Current Quarter” refer to the three months ended June 30, 2006 and 2007, respectively.  Our fiscal year ends March 31, and we refer to fiscal years based on the end of such period.  Therefore, the fiscal year ending March 31, 2008 is referred to as “fiscal year 2008.”
 
Forward-Looking Statements
 
This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”).  Forward-looking statements are statements about our future business, strategy, operations, capabilities and results; financial projections; plans and objectives of our management; expected actions by us and by third parties, including our customers, competitors and regulators; and other matters.  Some of the forward-looking statements can be identified by the use of words such as “believes”, “belief”, “expects”, “plans”, “anticipates”, “intends”, “projects”, “estimates”, “may”, “might”, “would”, “could” or other similar words; however, all statements in this Quarterly Report, other than statements of historical fact or historical financial results are forward-looking statements.
 
Our forward-looking statements reflect our views and assumptions on the date we are filing this Quarterly Report regarding future events and operating performance.  We believe that they are reasonable, but they involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements.  Accordingly, you should not put undue reliance on any forward-looking statements.  Factors that could cause our forward-looking statements to be incorrect and actual events or our actual results to differ from those that are anticipated include all of the following:
 
·  
the risks and uncertainties described under “Item 1A. Risk Factors” in the fiscal year 2007 Annual Report;
 
·  
the level of activity in the oil and natural gas industry is lower than anticipated;
 
·  
production-related activities become more sensitive to variances in commodity prices;
 
·  
the major oil companies do not continue to expand internationally;
 
·  
market conditions are weaker than anticipated;
 
·  
we are not able to re-deploy our aircraft to regions with the greater demand;
 
·  
we do not achieve the anticipated benefit of our fleet renewal program;
 
·  
the outcome of the United States Securities and Exchange Commission (“SEC”) investigation relating to the Foreign Corrupt Practices Act and other matters, or the Internal Review, has a greater than anticipated financial or business impact; and
 
·  
the outcome of the United States Department of Justice (“DOJ”) antitrust investigation, which is ongoing, has a greater than anticipated financial or business impact.
 
All forward-looking statements in this Quarterly Report are qualified by these cautionary statements and are only made as of the date of this Quarterly Report.  We do not undertake any obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 


Executive Overview
 
This Executive Overview only includes what management considers to be the most important information and analysis for evaluating our financial condition and operating performance.  It provides the context for the discussion and analysis of the financial statements which follows and does not disclose every item bearing on our financial condition and operating performance.
 
General
 
We are the leading provider of helicopter services to the worldwide offshore energy industry based on the number of aircraft operated.  We are one of two helicopter service providers to the offshore energy industry with global operations.  We have major operations in the U.S. Gulf of Mexico and the North Sea, and operations in most of the other major offshore oil and gas producing regions of the world, including Alaska, Australia, Mexico, Nigeria, Russia and Trinidad.  We have a long history in the helicopter services industry, with our two principal legacy companies,  Bristow Helicopters Ltd. and Offshore Logistics, Inc., having been founded in 1955 and 1969, respectively.
 
We conduct our business in two segments:  Helicopter Services and Production Management Services.  The Helicopter Services segment operations are conducted through three divisions, Western Hemisphere, Eastern Hemisphere and Global Training, and through eight business units within those divisions:
 
·  
Western Hemisphere
 
−  
North America
 
−  
South and Central America
 
·  
Eastern Hemisphere
 
−  
Europe
 
−  
West Africa
 
−  
Southeast Asia
 
−  
Other International
 
−  
Eastern Hemisphere (“EH”) Centralized Operations
 
·  
Global Training
 
−  
Bristow Academy
 
We provide helicopter services to a broad base of major, independent, international and national energy companies.  Customers charter our helicopters to transport personnel between onshore bases and offshore platforms, drilling rigs and installations.  A majority of our helicopter revenue is attributable to oil and gas production activities, which have historically provided a more stable source of revenue than exploration and development related activities.  As of June 30, 2007, we operated 403 aircraft (including 369 owned aircraft, 26 leased aircraft and 8 aircraft operated for one of our customers; 12 of the owned aircraft are held for sale) and our unconsolidated affiliates operated 142 aircraft in addition to those aircraft leased from us.  In the Current Quarter, our Helicopter Services segment contributed approximately 93% of our gross revenue.
 
On April 2, 2007, we acquired all of the common equity of Helicopter Adventures Inc. (“HAI”), a leading flight training provider with operations located in Titusville, Florida, and Concord, California, for $15.0 million in cash.  We also assumed $5.7 million in debt as part of this transaction.  Upon purchase, HAI was renamed Bristow Academy, Inc. (“Bristow Academy”), which, with our existing training facilities in Norwich, England, formed a central core of our new
 


Global Training division within the Helicopter Services segment beginning in the Current Quarter.  For further discussion of the acquisition see Note 2 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
 
We are also a leading provider of production management services for oil and gas production facilities in the U.S. Gulf of Mexico.  Our services include furnishing specialized production operations personnel, engineering services, production operating services, paramedic services and providing marine and helicopter transportation of personnel and supplies between onshore bases and offshore facilities.  In connection with these activities, our Production Management Services segment uses our helicopter services.  We also handle regulatory and production reporting for some of our customers.  As of June 30, 2007, we managed or had personnel assigned to 329 production facilities in the U.S. Gulf of Mexico.
 
The chart below presents (1) the number of helicopters in our fleet and their distribution among the business units of our Helicopter Services segment as of June 30, 2007; (2) the number of helicopters which we had on order or under option as of June 30, 2007; and (3) the percentage of gross revenues which each of our segments and business units provided during the Current Quarter.  For additional information regarding our commitments and options to acquire aircraft, see Note 6 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
 
 
Percentage of
  
Aircraft in Consolidated Fleet
      
 
Current
  
Helicopters
              
Helicopter Services
Quarter
Revenue
  
Small
  
Medium
  
Large
  
Fixed 
Wing
  
Total
  
Unconsolidated
Affiliates
  
Total
North America
23
%
  
136
  
29
  
4
  
1
  
170
  
—
  
170
South and Central America
7
%
  
2
  
33
  
1
  
—
  
36
  
14
  
50
Europe
34
%
  
1
  
10
  
39
  
—
  
50
  
30
  
80
West Africa
13
%
  
12
  
28
  
2
  
7
  
49
  
—
  
49
Southeast Asia
9
%
  
3
  
9
  
9
  
—
  
21
  
—
  
21
Other International
5
%
  
—
  
12
  
10
  
3
  
25
  
41
  
66
EH Centralized Operations
1
%
  
—
  
—
  
—
  
—
  
—
  
57
  
57
Bristow Academy
1
%
  
51
  
—
  
—
  
1
  
52
  
—
  
52
Production Management
  
7
%
  
—
  
—
  
—
  
—
  
—
  
—
    
—
Total (1)
  
100
%
  
205
  
121
  
65
  
12
  
403
  
142
    
545
Aircraft not currently in fleet:
                              
On order (2)
      
9
  
11
  
12
  
—
  
32
        
Under option
      
—
  
30
  
22
  
—
  
52
        
_________
 
(1)
Includes 12 aircraft held for sale.
   
(2)
Small aircraft on order include orders for six training aircraft.
 
We expect that the additional aircraft on order and any aircraft we acquire pursuant to options will generally be deployed evenly across our global business units, but with a bias towards those units where we expect higher growth, such as our Other International and Southeast Asia units.
 
See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Overview — General” in the fiscal year 2007 Annual Report for a more in depth overview of our operations.
 


Our Strategy
 
Our goal is to advance our position as the leading helicopter services provider to the offshore energy industry.  For discussion of the strategies we intend to employ to achieve this goal see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations — Executive Overview — Our Strategy” in the fiscal year 2007 Annual Report.
 
Consistent with our desire to maintain a conservative use of leverage to fund growth, we raised $222.6 million of capital through the sale of our 5.50% mandatory convertible preferred stock (“Preferred Stock”) completed in September and October 2006.  Additionally, we raised $295.8 million through the sale of 7 ½% Senior Notes due 2017 (the “7 ½% Senior Notes”) completed in June 2007.  As of June 30, 2007, we had commitments to purchase 12 large, 11 medium, 3 small and 6 training aircraft and options to purchase an additional 22 large aircraft and 30 medium aircraft.  Depending on market conditions, we expect to exercise some or all of these options to purchase aircraft and may elect to expand our business through acquisition, including acquisitions currently under consideration.  We intend to use the proceeds from the 7 ½% Senior Notes issued in June 2007 to fund these expenditures.
 
Market Outlook
 
We are currently experiencing significant demand for our helicopter services.  Based on our current contract level and discussions with our customers about their needs for aircraft related to their oil and gas production and exploration plans, we anticipate the demand for aircraft services will continue at a very high level for the near term.  Further, based on the projects planned by our customers in the markets in which we currently operate, we anticipate global demand for our services will grow in the long term and exceed the transportation capacity of the aircraft we and our competitors currently have in our fleets and on order.  In addition, this high level of demand has allowed us to increase the rates we charge for our services over the past several years.
 
We expect to see growth in demand for additional helicopter services, particularly in North and South America, West Africa and Southeast Asia.  We also expect that the relative importance of our other business units will continue to increase as the major oil and gas companies increasingly focus on prospects outside of North America and the North Sea.  This growth will provide us with opportunities to add new aircraft to our fleet, as well as opportunities to redeploy aircraft into markets that will sustain higher rates for our services.  Currently, helicopter manufacturers are indicating very limited supply availability during the next three years.  We expect that this tightness in aircraft availability from the manufacturers and the lack of suitable aircraft in the secondary market, coupled with the increase in demand for helicopter services, will result in upward pressure on the rates we charge for our services.  At the same time, we believe that our recent aircraft acquisitions and commitments position us to capture a portion of the upside created by the current market conditions.
 
We have made and are in the process of making a number of changes in our West Africa business unit operations in Nigeria.  This reorganization as well as periodic disruption to our operations related to civil unrest and violence have made and are expected to continue to make our operating results from Nigeria unpredictable through at least the end of calendar year 2007.
 
There has been a trend of major oil and gas companies outsourcing certain activities and transferring reserves located in the U.S. Gulf of Mexico to smaller, independent oil and gas producers.  These trends have generated, and are expected to continue to generate, additional demand for our production management services, as smaller producers are more likely to require the operational and manpower support that our Production Management Services segment provides.
 


Results of Operations
 
The following table presents our operating results and other income statement information for the applicable periods:
 
 
Three Months Ended
June 30,
  
 
2006
  
2007
  
 
(Unaudited)
 
(In thousands)
Gross revenue:
            
Operating revenue
$
193,865
  
$
223,551
  
Reimbursable revenue
  
27,197
    
21,451
  
Total gross revenue
  
221,062
    
245,002
  
Operating expense:
            
Direct cost
  
138,470
    
163,836
  
Reimbursable expense
  
26,898
    
21,241
  
Depreciation and amortization
  
10,283
    
11,373
  
General and administrative
  
15,349
    
19,262
  
Gain on disposal of assets
  
(998
)
  
(584
)
Total operating expense
  
190,002
    
215,128
  
Operating income
  
31,060
    
29,874
  
Earnings from unconsolidated affiliates, net of losses
  
1,559
    
3,390
  
Interest expense, net
  
(1,946
)
  
(735
)
Other income (expense), net
  
(4,785
)
  
426
  
Income before provision for income taxes and minority interest
  
25,888
    
32,955
  
Provision for income taxes
  
(8,543
)
  
(9,834
)
Minority interest
  
(116
)
  
(449
)
Net income
$
17,229
  
$
22,672
  
 



 
The following table presents the impact on pre-tax earnings, net income and diluted earnings per share of certain items related to corporate activities that affect the comparability of our results from the Comparable Quarter:

 
Three Months Ended June 30,
  
 
2006
  
2007
  
 
Pre-tax
Earnings
  
Net
Income
  
Diluted
Earnings
Per
Share
  
Pre-tax
Earnings
  
Net
Income
  
Diluted
Earnings
Per
Share
  
   
(In thousands, except per share amounts)
  
Investigations:
                                    
SEC  (1)
$
(108
)
$
(70
)
$
—
  
$
—
  
$
—
  
$
—
  
DOJ (1)
  
(591
)
  
(384
)
  
(0.02
)
  
—
    
—
    
—
  
Tax contingency related items (2)
  
—
    
800
    
0.03
    
—
    
918
    
0.03
  
7 ½% Senior Notes due 2017 (3)
  
—
    
—
    
—
    
(357
)
  
(232
)
  
(0.01
)
Foreign currency transaction gains (losses) (4)
  
(4,809
)
  
(3,126
)
  
(0.13
)
  
401
    
261
    
0.01
  
Preferred Stock (5)
  
—
    
—
    
—
    
826
    
537
    
(0.19
)
Total
$
(5,508
)
$
(2,780
)
$
(0.12
)
$
870
  
$
1,484
  
$
(0.16
)
_________
 
(1)
Included in general & administrative costs in our condensed consolidated statements of income.
   
(2)
Represents a direct reduction in our provision for income taxes in our condensed consolidated statements of income.
   
(3)
Represents the impact on interest expense, net of interest income earned on additional cash, resulting from the issuance of the 7 ½% Senior Notes in June 2007 (see discussion in Note 5 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report).
   
(4)
Included in other income (expense), net in our condensed consolidated statements of income.
   
(5)
Represents the impact on diluted earnings per share of the inclusion of weighted average shares resulting from the assumed conversion of Preferred Stock, partially offset by interest income earned on cash balances generated through the Preferred Stock offering in September and October 2006.  See Note 8 in the “Notes to Consolidated Financial Statements” in the fiscal year 2007 Annual Report for a further discussion of the Preferred Stock offering.
 
Current Quarter Compared to Comparable Quarter
 
Our gross revenue increased to $245.0 million for the Current Quarter from $221.1 million for the Comparable Quarter, an increase of 10.8%. Helicopter Services contributed to the increase in gross revenue with improvements for a majority of the business units within this segment as a result of increases in rates for helicopter services and the addition of new aircraft.  Our operating expense increased to $215.1 million for the Current Quarter from $190.0 million for the Comparable Quarter, an increase of 13.2%.  The increase primarily resulted from higher costs associated with higher activity levels, maintenance costs, and salaries and benefits (associated with the addition of personnel and salary increases), primarily within the West Africa and EH Centralized Operations business units.  Primarily as a result of these cost increases, our operating income and operating margin for the Current Quarter decreased to $29.9 million and 12.2%, respectively, compared to $31.1 million and 14.1%, respectively, for the Comparable Quarter.
 
Net income for the Current Quarter of $22.7 million represents a $5.4 million increase from the Comparable Quarter.  This increase in net income was driven by foreign currency exchange gains of $0.4 million in the Current Quarter compared to foreign currency exchange losses of $4.8 million in the Comparable Quarter, increases in earnings from unconsolidated affiliates and interest income and a decrease in interest expense in the Current Quarter, partially offset by the lower level operating income and an increase in our provision for income taxes (which resulted from an increase in pre-tax earnings, partially offset by a lower effective tax rate).
 


Business Unit Operating Results
 
The following tables set forth certain operating information, which forms the basis for discussion of our Helicopter Services and Production Management Services segments, and for the eight business units comprising our Helicopter Services segment.
 
Beginning with the fiscal year 2007 Annual Report, we made changes to the manner in which intercompany lease charges and depreciation are presented within our segments.  Intercompany lease revenues and expenses have been eliminated from our segment reporting, and depreciation expense of aircraft is presented in the segment that operates the aircraft.  Intercompany lease revenue was previously included in gross revenue for the segment leasing the aircraft to other segments with the related lease and operating expenses being included in the segment operating the aircraft during the period.  Also, depreciation expense associated with aircraft was previously included within operating expense of the segment leasing the aircraft to other segments versus the segment operating the aircraft.  Amounts presented for Comparable Quarter have been reclassified herein to conform to the Current Quarter presentation.

 
Three Months Ended
June 30,
  
 
2006
  
2007
  
Flight hours (excludes Bristow Academy and unconsolidated affiliates):
            
Helicopter Services:
            
North America (1)
  
42,609
    
40,271
  
South and Central America
  
9,285
    
11,367
  
Europe
  
10,170
    
10,821
  
West Africa
  
8,883
    
8,898
  
Southeast Asia
  
3,206
    
3,344
  
Other International
  
2,052
    
2,547
  
Consolidated total
  
76,205
    
77,248
  

 
Three Months Ended
June 30,
  
 
2006
  
2007
  
 
(In thousands)
  
Gross revenue:
            
Helicopter Services:
            
North America
$
63,368
  
$
60,939
  
South and Central America
  
13,012
    
16,036
  
Europe
  
71,981
    
83,357
  
West Africa
  
31,736
    
33,283
  
Southeast Asia
  
17,040
    
22,492
  
Other International
  
8,955
    
11,455
  
EH Centralized Operations
  
3,074
    
6,805
  
Bristow Academy
  
—
    
3,019
  
Intrasegment eliminations
  
(2,860
)
  
(6,235
)
Total Helicopter Services (2)
  
206,306
    
231,151
  
Production Management Services (3)
  
17,684
    
16,543
  
Corporate
  
(25
)
  
—
  
Intersegment eliminations
  
(2,903
)
  
(2,692
)
Consolidated total
$
221,062
  
$
245,002
  

See notes beginning on page 35.
 




 
Three Months Ended
June 30,
  
 
2006
  
2007
  
 
(In thousands)
Operating expense: (4)
            
Helicopter Services:
            
North America
$
54,135
  
$
50,225
  
South and Central America
  
9,042
    
12,351
  
Europe
  
57,885
    
68,782
  
West Africa
  
27,403
    
30,486
  
Southeast Asia
  
14,605
    
18,365
  
Other International
  
7,439
    
9,190
  
EH Centralized Operations
  
4,841
    
11,084
  
Bristow Academy
  
—
    
3,110
  
Intrasegment eliminations
  
(2,860
)
  
(6,235
)
Total Helicopter Services
  
172,490
    
197,358
  
Production Management Services
  
16,271
    
15,454
  
Gain on disposal of assets
  
(998
)
  
(584
)
Corporate
  
5,142
    
5,592
  
Intersegment eliminations
  
(2,903
)
  
(2,692
)
Consolidated total
$
190,002
  
$
215,128
  

 
Operating income:
            
Helicopter Services:
            
North America
$
9,233
  
$
10,714
  
South and Central America
  
3,970
    
3,685
  
Europe
  
14,096
    
14,575
  
West Africa
  
4,333
    
2,797
  
Southeast Asia
  
2,435
    
4,127
  
Other International
  
1,516
    
2,265
  
EH Centralized Operations
  
(1,767
)
  
(4,279
)
Bristow Academy
  
—
    
(91
)
Total Helicopter Services
  
33,816
    
33,793
  
Production Management Services
  
1,413
    
1,089
  
Gain on disposal of assets
  
998
    
584
  
Corporate
  
(5,167
)
  
(5,592
)
Consolidated operating income
  
31,060
    
29,874
  
Earnings from unconsolidated affiliates
  
1,559
    
3,390
  
Interest income
  
1,290
    
2,198
  
Interest expense
  
(3,236
)
  
(2,933
)
Other income (expense), net
  
(4,785
)
  
426
  
Income before provision for income taxes and minority interest
  
25,888
    
32,955
  
Provision for income taxes
  
(8,543
)
  
(9,834
)
Minority interest
  
(116
)
  
(449
)
Net income
$
17,229
  
$
22,672
  

 
See notes beginning on following page.
 



 
 
Three Months Ended
June 30,
  
 
2006
  
2007
  
Operating margin:(5)
              
Helicopter Services:
              
North America
  
14.6
  
%
17.6
  
%
South and Central America
  
30.5
  
%
23.0
  
%
Europe
  
19.6
  
%
17.5
  
%
West Africa
  
13.7
  
%
8.4
  
%
Southeast Asia
  
14.3
  
%
18.3
  
%
Other International
  
16.9
  
%
19.8
  
%
EH Centralized Operations
  
(57.5
)
%
(62.9
)
%
Bristow Academy
  
N/A
    
(3.0
)
%
Total Helicopter Services
  
16.4
  
%
14.6
  
%
Production Management Services
  
8.0
  
%
6.6
  
%
Consolidated total
  
14.1
  
%
12.2
  
%
               
__________

(1)
Our presentation of flight hours for North America has been changed from our Quarterly Report for the Comparable Quarter to reflect total flight hours, which is consistent with the presentation of flight hours for our other business units.  North America flight hours in the prior report reflected only billed hours.
   
(2)
Includes reimbursable revenue of $23.3 million and $20.2 million for the three months ended June 30, 2006 and 2007, respectively.
   
(3)
Includes reimbursable revenue of $3.9 million and $1.3 million for the three months ended June 30, 2006 and 2007, respectively, net of intercompany eliminations.
   
(4)
Operating expenses include depreciation and amortization in the following amounts for the periods presented:

   
Three Months Ended
June 30,
  
   
2006
    
2007
  
   
(In thousands)
  
Helicopter Services:
                
North America
  
$
2,765
    
$
3,056
  
South and Central America 
    
962
      
949
  
Europe
    
2,653
      
3,416
  
West Africa
    
1,576
      
1,600
  
Southeast Asia 
    
1,017
      
805
  
Other International
    
826
      
729
  
EH Centralized Operations 
    
411
      
329
  
Bristow Academy
    
—
      
376
  
Total Helicopter Services
    
10,210
      
11,260
  
Production Management Services
    
47
      
42
  
Corporate 
    
26
      
71
  
Consolidated total 
  
$
10,283
    
$
11,373
  

(5)
Operating margin is calculated as gross revenues less operating expenses divided by gross revenues.

 


Current Quarter Compared to Comparable Quarter
 
Set forth below is a discussion of operations of our segments and business units.  Our consolidated results are discussed under “Executive Overview — Overview of Operating Results” above.
 
Helicopter Services
 
Gross revenue for Helicopter Services increased to $231.2 million, an increase of 12.1%, for the Current Quarter from $206.3 million for the Comparable Quarter, and operating expense increased to $197.4 million, an increase of 14.4%, from $172.5 million for the Comparable Quarter.  This resulted in an operating margin of 14.6% for the Current Quarter compared to 16.4% for the Comparable Quarter, primarily impacted by our results for West Africa and EH Centralized Operations.  Helicopter Services results are further explained below by business unit.
 
North America
 
Gross revenue for North America decreased to $60.9 million for the Current Quarter from $63.4 million for the Comparable Quarter, and flight activity decreased by 5.5%.  The decrease in gross revenue is due to a reduction in technical services revenue from Turbo Engines, Inc. (“Turbo”), which was sold in November 2006, partially offset by a favorable shift in the mix of aircraft type utilized in the Current Quarter.  Despite an overall decrease in flight activity in the Current Quarter, revenue from flight operations were higher than the Comparable Quarter as a result of an increase in the usage of medium and large aircraft, which earn higher rates.  Additionally, a rate increase for certain contracts (which is being phased in beginning in March 2007) also contributed to the increase in revenue from flight operations in the Current Quarter.
 
Operating expense for North America decreased to $50.2 million for the Current Quarter from $54.1 million for the Comparable Quarter.  The decrease was primarily due to a $3.3 million reduction in operating expense attributable to Turbo and a reduction in costs associated with the DOJ investigation (see “Document Subpoena from U.S. Department of Justice” in Note 6 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report for further discussion), partially offset by higher labor costs associated with increases in salaries.  The North America business unit includes our Western Hemisphere (“WH”) Centralized Operations, which performs major maintenance on aircraft operated by our Western Hemisphere business units.  During the Current Quarter, WH Centralized Operations incurred lower maintenance costs than planned, which resulted in an increase in operating margin to 17.6% for the Current Quarter from 14.6% for the Comparable Quarter.
 
South and Central America
 
Gross revenue for South and Central America increased to $16.0 million for the Current Quarter from $13.0 million for the Comparable Quarter, primarily due to a 23.8% increase in flight activity in Trinidad (as a result of the addition of three aircraft in this market since the Comparable Quarter).  Flight activity also increased by 46.9% in Mexico, although it did not result in a corresponding increase in revenue.  As discussed in Note 3 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report, we recognize revenue on a cash basis from our 49% owned unconsolidated affiliates, Hemisco Helicopters International, Inc. and Heliservicio Campeche S.A. de C.V. (collectively, “HC”).  Cash receipts from HC totaled $1.6 million in the Current Quarter compared to $2.3 million in the Comparable Quarter.
 
Operating expense for South and Central America increased to $12.4 million for the Current Quarter from $9.0 million for the Comparable Quarter, primarily due to increased expenses in Trinidad and Mexico (as a result of the increase in flight activity in those markets).  Primarily as a result of the increase in operating expense in Mexico (including maintenance costs) for which there was no corresponding revenue increase (due to the lower level of cash receipts in the Current Quarter), the operating margin for this business unit decreased to 23.0% for the Current Quarter from 30.5% for the Comparable Quarter.
 


In March 2007, we sold our ownership interest in a joint venture that operates in Brazil to our partners in the joint venture.  We anticipate that once our existing agreements expire that we will evaluate the alternatives for these aircraft, which include leasing to other customers in Brazil, selling or relocating the aircraft.  Therefore, we may experience a substantial reduction in business activity in Brazil in future periods.
 
Europe
 
Gross revenue for Europe increased to $83.4 million for the Current Quarter from $72.0 million for the Comparable Quarter, primarily as a result of a 6.4% increase in flight activity.  The majority of the increase in flight hours related to the addition of three medium and four large aircraft in the North Sea since the Comparable Quarter.  Additionally, revenue also improved as a result of increases in monthly standing charge rates and annual rate escalations under certain of our contracts.
 
Operating expense for Europe increased to $68.8 million for the Current Quarter from $57.9 million for the Comparable Quarter primarily due to a $3.2 million increase in salaries and benefits (resulting from the increase in activity, additions in personnel and salary increases), a $2.9 million increase in maintenance expense (resulting from an increase in allocations of maintenance from EH Centralized Operations) and a $1.9 million increase in third-party lease costs.  As a result of additional personnel, salary increases and increased maintenance expense in the Current Quarter, all of which increased our operating expenses with no corresponding increase in revenue, operating margin for Europe decreased to 17.5% for the Current Quarter from 19.6% for the Comparable Quarter.
 
We are currently involved in negotiations with unions representing our pilots and engineers in this market.  As a result of the negotiations completed to date, labor rates under our existing contracts increased 4-5% starting in July 2007 and will continue through June 2008.  We expect to be able to pass these costs on to our customers through rate increases as customer contracts come up for renewal.
 
In October 2006, we were awarded an amendment and extension of our existing contract in the North Sea with Integrated Aviation Consortium for the provision of helicopter transportation services to offshore facilities both east and west of the Shetland Islands.  The amendment extends the contract until June 2010 and calls for the provision of five new Sikorsky S-92 helicopters to be delivered in the second and third quarters of fiscal year 2008 to replace the six AS332L Super Puma helicopters currently under contract, which we intend to re-deploy to other markets.  In December 2006, the provision for a sixth Sikorsky S-92 was confirmed and a related aircraft option was exercised.
 
We provide search and rescue services using seven S-61 aircraft and operate four helicopter bases for the U.K. Maritime and Coastguard Agency (“MCA”).  We expect that the transition of work and certain of the associated staff to a successor operator will take place, one base at a time, over a period of at least one year.  The first base was transferred on July 1, 2007.  The MCA has the option to extend the contract through July 2009.  At the end of the agreement and any transition period, we expect that we will either be able to employ these aircraft for other customers, trade the aircraft in as partial consideration towards the purchase of new aircraft or sell the aircraft.  In the Comparable Quarter and Current Quarter, we had $8.9 million and $8.1 million, respectively, in operating revenues associated with this contract.  In July 2006, we entered into a partnership with FB Heliservices Limited (“FBH”), an unconsolidated affiliate of ours, and a third party, Serco Limited, through which we will seek to obtain the future U.K.-wide search and rescue contract, including the provision of a significant number of aircraft, anticipated to start in 2012.
 
West Africa
 
Gross revenue for West Africa increased to $33.3 million for the Current Quarter from $31.7 million for the Comparable Quarter, primarily as a result of an increase in rates under our contract with a major customer in Nigeria (beginning October 1, 2006) and increases in certain of our standard monthly rates for other contracts, partially offset by a $1.9 million decrease in out-of-pocket expenses rebilled to our customers.  Although government-mandated national holidays (due to national elections) and a national labor strike contributed to a total of 14 non-operating days for our aircraft during the Current Quarter, flight activity remained mostly flat as many of those days were weekend days, and we were able to shift regular maintenance on our aircraft to these days.  In July 2007, we negotiated (but have not reached final agreement) to amend our contracts with two major customers in Nigeria for rate increases, extended terms,
 


expanded scope, and modification of other contract terms.  In each case the customers have proposed improved terms which we are continuing to negotiate.  All rate increases will be recognized beginning in the period that we reach final agreement with the customers.
 
Operating expense for West Africa increased to $30.5 million for the Current Quarter from $27.4 million for the Comparable Quarter.  The increase was primarily a result of $6.7 million in compensation related increases, including severance accruals, wage increases and additional pension costs, which was partially offset by decreases in out-of-pocket expenses rebilled to our customers ($1.9 million) and in other expenses, including freight charges and travel costs.  We are in negotiations with the unions in Nigeria and anticipate that we will increase salaries and certain benefits for union personnel.  Operating margin for West Africa decreased to 8.4% for the Current Quarter from 13.7% for the Comparable Quarter, primarily as a result of these increased compensation costs.
 
In  fiscal year 2007, we reorganized our Nigerian operations, which included increased security, consolidation of two former operating businesses, expansion of several hangar facilities, integration of finance and administrative functions, and repositioning of major maintenance operations into our two largest operating facilities.  This reorganization as well as periodic disruption to our operations related to civil unrest and violence have made and are expected to continue to make our operating results from Nigeria unpredictable through at least the end of calendar year 2007.
 
Southeast Asia
 
Gross revenue for Southeast Asia increased to $22.5 million in the Current Quarter from $17.0 million for the Comparable Quarter primarily due to higher revenue in Australia.  Australia’s flight activity and revenue increased 15.1% and 49.2%, respectively, from the Comparable Quarter, primarily due to the addition of two aircraft to this market since the Comparable Quarter and rate increases.
 
Operating expense increased to $18.4 million for the Current Quarter from $14.6 million for the Comparable Quarter as a result of costs associated with the increase in activity compared to the Comparable Quarter.  As a result of the increases in activity and rates in Australia during the Current Quarter, operating margin increased to 18.3% for the Current Quarter from 14.3% for the Comparable Quarter.
 
Other International
 
Gross revenue for Other International increased to $11.5 million for the Current Quarter from $9.0 million for the Comparable Quarter, primarily due to increases in flight activity in Egypt and India (which resulted from an additional aircraft operating in Egypt and an additional aircraft operating in India over the Comparable Quarter), rate increases for our operations in Russia and our commencement of operations in Libya since the Comparable Quarter.
 
Operating expense increased to $9.2 million for the Current Quarter from $7.4 million for the Comparable Quarter.  The increase in operating expense is primarily due to increased operational costs associated with the increases in flight activity and commencement of operations in Libya.  As a result of the additional aircraft operating in Egypt and India, rate increases in Russia and the commencement of operations in Libya, operating margin for Other International increased to 19.8% for the Current Quarter from 16.9% for the Comparable Quarter.
 
EH Centralized Operations
 
Our EH Centralized Operations business unit is comprised of our technical services business, other non-flight services business (e.g., provision of maintenance and supply chain parts and services to other Eastern Hemisphere business units) and division level expenses.  Operating expense reflects costs associated with other non-flight services net of the related charge to the other Eastern Hemisphere business units.
 
Gross revenue for EH Centralized Operations increased to $6.8 million for the Current Quarter from $3.1 million for the Comparable Quarter as a result of increased parts sales and increased intercompany charges to other business units for overhead costs.
 


Operating expense increased to $11.1 million for the Current Quarter from $4.8 million for the Comparable Quarter, primarily due to a $3.0 million increase in unrecovered maintenance costs and a $1.8 million increase in salaries and benefits resulting from additional personnel.  The level of billings to other business units in the Current Quarter did not fully recover all maintenance costs incurred as had been the case in the Comparable Quarter.
 
Bristow Academy
 
As discussed in Note 2 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report, on April 2, 2007 we acquired Bristow Academy and formed our Global Training division.
 
Gross revenue and operating expense for Bristow Academy were $3.0 million and $3.1 million, respectively, for the Current Quarter, resulting in essentially breakeven results.  The results for the Current Quarter were impacted by the stepped-up cost basis of assets resulting from purchase price accounting for this acquisition.  We expect the profitability of Bristow Academy to improve in future periods.
 
Production Management Services
 
Gross revenue for our Production Management Services segment decreased to $16.5 million for the Current Quarter, a decrease of 6.8%, from $17.7 million for the Comparable Quarter, primarily due to the previously announced reduction of the scope of our services under a contract with a major customer beginning in October 2006.  This has been partially offset by labor revenue associated with the addition of several new contracts.  Operating expense decreased to $15.5 million for the Current Quarter from $16.3 million for the Comparable Quarter, primarily due to a decrease in costs associated with the decrease in activity.  As a result of the reduction of the scope of our services with a major customer, our operating margin decreased to 6.6% for the Current Quarter from 8.0% in the Comparable Quarter.  Nevertheless, the operating margin for the Current Quarter has improved over the 4.4% margin experienced in the three months ended March 31, 2007 as a result of revenue associated with the new contracts.
 
General and Administrative Costs
 
Consolidated general and administrative costs increased by $3.9 million during the Current Quarter compared to the Comparable Quarter.  The increase is primarily due to the addition of corporate personnel and an overall increase in corporate general and administrative costs, primarily related to increased salaries and benefits.  The increase in costs in the Current Quarter was partially offset by the fact that we incurred no costs related to the Internal Review and DOJ investigation in the Current Quarter.  Professional fees in the Comparable Quarter included approximately $0.1 million and $0.6 million in connection with the Internal Review and DOJ investigations, respectively.
 
Earning from Unconsolidated Affiliates
 
Earnings from unconsolidated affiliates increased to $3.4 million during the Current Quarter compared to $1.6 million in the Comparable Quarter, primarily due to a $1.0 million increase in equity earnings from Norsk (primarily resulting from increases in ad hoc flying and lower salary expenses resulting from a salary holiday in Norway) and a $0.4 million increase in the equity earnings from RLR (resulting from an increase in the amount of cash received from HC during the Current Quarter compared to the Comparable Quarter).
 
In March 2007, FBH was awarded a £9 million extension to its contract to provide helicopters and support to British Forces Cyprus and the Sovereign Base Areas Administration until March 31, 2010.  Under the contract, FBH provides four highly modified Civil Owned Military Registered Bell 412EP helicopters together with associated engineering and logistics support.
 
Interest Expense, Net
 
Interest expense, net of interest income, decreased to $0.7 million during the Current Quarter compared to $1.9 million during the Comparable Quarter, primarily due to an increase in capitalized interest from $1.0 million in the Comparable Quarter to $2.5 million in the Current Quarter and increased interest income, partially offset by additional interest expense of $1.1 million associated with the 7 ½% Senior Notes issued in June 2007.  More interest was capitalized in the Current
 


Quarter as a result of the increase in capital expenditures discussed under “Liquidity and Capital Resources — Cash Flows — Investing Activities” below.  The increase in interest income primarily resulted from an increase in cash on hand during the Current Quarter as a result of the issuance of the 7 ½% Senior Notes.
 
Other Income (Expense), Net
 
Other income (expense), net, for the Current Quarter was income of $0.4 million compared to expense of $4.8 million for the Comparable Quarter, and primarily represents foreign currency transaction gains and losses.  The gains in the Current Quarter primarily resulted from revaluation of intercompany balances between our Nigerian entity, whose functional currency is the U.S. dollar, and our U.K. consolidated affiliates, whose functional currency is the British pound sterling, as the U.S. dollar weakened against the British pound sterling in the Current Quarter.  The losses in the Comparable Quarter primarily arose from operations performed by our U.K. consolidated affiliates and from operations which are outside the North Sea as a result of the weakening of the U.S. dollar in that period (see a discussion of foreign currency transactions in Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report).
 
Taxes
 
Our effective income tax rates from continuing operations were 33.0% and 29.8% for the Comparable Quarter and Current Quarter, respectively.  During the Comparable Quarter and the Current Quarter, we benefited from tax contingency related items totaling $0.8 million and $0.9 million, respectively.  Our effective tax rate was also reduced by the permanent reinvestment outside the U.S. of foreign earnings, upon which no U.S. tax has been provided, and by the amount of our foreign source income and our ability to realize foreign tax credits.
 
Liquidity and Capital Resources
 
Cash Flows
 
Operating Activities
 
Net cash flows used in operating activities totaled $2.3 million during the Current Quarter compared to net cash flows provided by operating activities of $32.2 million during the Comparable Quarter.  Changes in non-cash working capital used $37.7 million in cash flows from operating activities for the Current Quarter compared to providing $3.4 million in the Comparable Quarter.
 
The $34.5 million decrease in net cash flows from operating activities is primarily the result of a $29.9 million increase in accounts receivable as collections on accounts receivable declined during the Current Quarter, particularly in West Africa.  In July 2007, $20.6 million of the receivables outstanding as of June 30, 2007 related to West Africa were collected.
 


Investing Activities
 
Cash flows used in investing activities were $134.3 million and $44.3 million for the Current Quarter and Comparable Quarter, respectively, primarily for capital expenditures as follows:
 
Three Months Ended
 June 30,
  
   
2006
    
2007
  
Number of aircraft delivered:
            
Medium 
  
2
    
5
  
Large
  
—
    
2
  
Fixed wing
  
—
    
1
  
Total aircraft  
  
2
    
8
  
             
Capital expenditures (in thousands):
            
Aircraft and related equipment 
$
44,085
  
$
118,191
  
Other
  
2,797
    
3,589
  
Total capital expenditures
$
46,882
  
$
121,780
  
 
During the Comparable Quarter, we made final payments in connection with the delivery of two medium aircraft and progress payments on the construction of new aircraft to be delivered in future periods.  Also during the Comparable Quarter, we spent an additional $6.7 million to upgrade aircraft within our existing aircraft fleet and to customize new aircraft delivered for our operations.  During the Current Quarter, we made final payments in connection with the delivery of five medium and two large aircraft, progress payments on the construction of new aircraft to be delivered in future periods in conjunction with our aircraft commitments (discussed below), and purchased two training aircraft and a fixed wing aircraft, for a total of $109.9 million.  Also, during the Current Quarter, we spent $8.3 million to upgrade aircraft within our existing aircraft fleet and to customize new aircraft delivered for our operations.
 
During the Current Quarter, we received proceeds from the disposal of three aircraft and certain other equipment and incurred a total loss from storm damage to one medium aircraft (which was fully insured), resulting in a net gain on asset disposals of $0.6 million.  During the Comparable Quarter we received proceeds of $2.6 million primarily from the disposal of five aircraft, two airframes and certain other equipment, which together resulted in a net gain of $1.0 million.
 
Due to the significant investment in aircraft made in both the Comparable Quarter and Current Quarter, net capital expenditures exceeded cash flow from operations, and we expect this will continue to be the case through the end of fiscal year 2008.  Also in fiscal year 2008, we expect to invest approximately $50 million in various infrastructure enhancements, including aircraft facilities, training centers and technology.  Through June 30, 2007, we had incurred $3.6 million towards these projects.
 
As discussed further in “Executive Overview — General” above, during the Current Quarter we acquired all of the common equity of HAI for $15.0 million in cash.  We also assumed $5.7 million in debt as part of this transaction.
 
Historically, in addition to the expansion of our business through purchases of new and used aircraft, we have also established new joint ventures with local partners or purchased significant ownership interests in companies with ongoing helicopter operations, particularly in countries where we have no operations or our operations are limited in scope, and we continue to evaluate similar opportunities which could enhance our operations.
 
Financing Activities
 
Cash flows provided by financing activities were $290.9 million during the Current Quarter compared to cash flows used in financing activities of $2.9 million during the Comparable Quarter.  During the Current Quarter, cash was provided by our issuance of the 7 ½% Senior Notes resulting in net proceeds of $295.8 million and by our receipt of proceeds of $1.1 million from the exercise of options to acquire shares of our common stock by our employees.  Cash was used for the payment of Preferred Stock dividends of $3.2 million and the repayment of debt totaling $3.2 million.  See Note 5 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report for discussion of the issuance of the 7 ½% Senior Notes.
 


During the Comparable Quarter, cash was used for the repayment of debt totaling $4.0 million and was provided by our receipt of proceeds of $0.8 million from the exercise of options to acquire shares of our common stock by our employees.
 
 
Future Cash Requirements
 
Debt Obligations
 
As of June 30, 2007, total debt was $561.3 million, of which $7.9 million was classified as current.  Our outstanding debt obligations are described in Note 5 in the “Notes to Consolidated Financial Statements” in the fiscal year 2007 Annual Report and in Note 5 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
 
Capital Commitments
 
We expect to make additional capital expenditures over the next six fiscal years to purchase additional aircraft.  As of June 30, 2007, we had 32 aircraft on order and options to acquire an additional 52 aircraft.  As of June 30, 2007, expenditures associated with these aircraft, including progress payments on aircraft expected to be delivered in future periods, are expected to total $255.0 million and $732.9 million for those aircraft under commitments and under options, respectively.  Although a similar number of our existing aircraft may be sold during the same period, the additional aircraft on order are expected to provide incremental fleet capacity in terms of revenue and operating margin.  See Note 6 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report for a detail of the number of aircraft under commitments and the number of aircraft under options expected to be delivered in the current and subsequent five fiscal years by aircraft size along with the related expenditures, and for a rollforward of aircraft commitments and options for the Current Quarter.
 
Other Obligations
 
Preferred Stock— Annual cumulative cash dividends of $2.75 per share of Preferred Stock are payable quarterly on the fifteenth day of each March, June, September and December.  If declared, dividends on the 4,600,000 shares of Preferred Stock would be $3.2 million on each quarterly payment date through the conversion date on September 15, 2009.  For a further discussion of the terms and conditions of the Preferred Stock, see Note 9 in the “Notes to Consolidated Financial Statements” included in the fiscal year 2007 Annual Report.
 
 
Contractual Obligations, Commercial Commitments and Off Balance Sheet Arrangements
 
We have various contractual obligations which are recorded as liabilities in our consolidated financial statements.  Other items, such as certain purchase commitments, interest payments and other executory contracts are not recognized as liabilities in our consolidated financial statements but are included in the table below.  For example, we are contractually committed to make certain minimum lease payments for the use of property and equipment under operating lease agreements.
 


The following tables summarize our significant contractual obligations and other commercial commitments on an undiscounted basis as of June 30, 2007 and the future periods in which such obligations are expected to be settled in cash.  In addition, the table reflects the timing of principal and interest payments on outstanding borrowings.  Additional details regarding these obligations are provided in Note 6 in the “Notes to Consolidated Financial Statements” included in the fiscal year 2007 Annual Report and in Note 6 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report:
 
 
Payments Due by Period
   
Nine Months
    
   
Ending
  
Fiscal Year Ending March 31,
 
Total
  
March 31,
2008
  
2009 - 2010
  
2011 - 2012
  
2013 and
beyond
 
(In thousands)
Contractual obligations:
                                      
Long-term debt and short-term borrowings:
                                      
Principal
  
$
561,305
    
$
7,101
    
$
7,708
    
$
4,637
    
$
541,859
Interest
    
320,067
      
28,681
      
75,550
      
74,788
      
141,048
Aircraft operating leases  (1) 
    
60,575
      
4,725
      
12,830
      
14,471
      
28,549
Other operating leases (2) 
    
18,469
      
2,628
      
5,272
      
4,515
      
6,054
Pension obligations (3)
    
180,592
      
14,685
      
29,370
      
29,370
      
107,167
Aircraft purchase obligations
    
254,986
      
165,030
      
89,956
      
—
      
—
Other purchase obligations (4)
    
41,519
      
35,241
      
6,278
      
—
      
—
Total contractual cash obligations
  
$
1,437,513
    
$
258,091
    
$
226,964
    
$
127,781
    
$
824,677
Other commercial commitments:
                                      
Debt guarantees (5) 
  
$
31,776
    
$
—
    
$
11,716
    
$
20,060
    
$
—
Other guarantees (5) 
    
5,508
      
3,769
      
1,739
      
—
      
—
Letters of credit (6) 
    
4,437
      
4,437
      
—
      
—
      
—
Total other commercial commitments
  
$
41,721
    
$
8,206
    
$
13,455
    
$
20,060
    
$
—
_________

(1)
Represents nine aircraft that we sold on December 30, 2005 for $68.6 million in aggregate to a subsidiary of General Electric Capital Corporation and then leased back under separate operating leases with terms of ten years expiring in January 2016.  A deferred gain on the sale of the aircraft was recorded in the amount of approximately $10.8 million in aggregate, which is being amortized over the lease term.
   
(2)
Represents minimum rental payments required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year.
   
(3)
Represents expected funding for pension benefits in future periods.  These amounts are undiscounted and are based on the expectation that the pension will be fully funded in approximately 12 years.  As of June 30, 2007, we had recorded on our balance sheet a $113.0 million pension liability associated with this obligation.  Also, the timing of the funding is dependent on actuarial valuations and resulting negotiations with the plan trustees.
   
(4)
Other purchase obligations primarily represent unfilled purchase orders for aircraft parts, commitments associated with upgrading facilities at our bases and amounts committed under a supply agreement (See Note 6 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report).
   
(5)
See Note 6 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report for further details.  Additionally, the bank has an option to put to us the remaining amount of the RLR debt of $12.2 million, which we have guaranteed in the event of default of our partner in RLR.  This amount is not included in the table above.
   
(6)
In January 2006, a letter of credit was issued for $2.5 million in conjunction with the additional collateral for the sale and leaseback financing discussed in Note 6 in the “Notes to Consolidated Financial Statements” included in the fiscal year 2007 Annual Report.  The letter of credit expires January 27, 2008.

We do not expect the guarantees shown in the table above to become obligations that we will have to fund.
 


Financial Condition and Sources of Liquidity
 
Our future cash requirements include the contractual obligations discussed in the previous section and our normal operations. Normally our operating cash flows are sufficient to fund our cash needs.  Although there can be no assurances, we believe that our existing cash, future cash flows from operations and borrowing capacity under our revolving credit facility will be sufficient to meet our liquidity needs in the foreseeable future based on existing commitments.  However, the expansion of our business through purchases of additional aircraft and increases in flight hours from our existing aircraft fleet may require additional cash in the future to fund new aircraft purchases and working capital requirements.  Consistent with our desire to maintain a conservative use of leverage to fund growth, we raised capital through the sale of Preferred Stock in September and October 2006 and the issuance of the 7 ½% Senior Notes in June 2007.
 
As of June 30, 2007, we had options to acquire an additional 22 large aircraft and an additional 30 medium aircraft.  Depending on market conditions, we expect to exercise some or all of these additional options to acquire aircraft, purchase other aircraft or may elect to expand our business through acquisition, including acquisitions under consideration or negotiation.  Cash on hand, cash flow from operations and available borrowing capacity under the revolving credit facility are estimated to provide sufficient capital to exercise all of the aircraft purchase options and allow us to complete several small acquisitions (under $50 million) over the next five years without additional capital.  However, if we elect to make a major acquisition or purchase substantially more aircraft than available under the aircraft purchase options, additional capital may be necessary.
 
Cash and cash equivalents were $184.2 million and $339.5 million, as of March 31 and June 30, 2007, respectively.  Working capital as of March 31 and June 30, 2007, was $368.0 million and $561.5 million, respectively.  The increase in working capital during the Current Quarter was primarily a result of the $155.4 million increase in cash and cash equivalents resulting from the issuance of the 7 ½% Senior Notes, partially offset by capital expenditures for aircraft.
 
Critical Accounting Policies and Estimates
 
See Item 7.  “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” in the fiscal year 2007 Annual Report for a discussion of our critical accounting policies.  There have been no material changes to our critical accounting policies and estimates provided in the fiscal year 2007 Annual Report except for our adoption of Financial Accounting Standards Board (“FASB”) Interpretation (“FIN”) No. 48, “Accounting for Uncertainty in Income Taxes — an interpretation of FASB Statement No. 109,” on April 1, 2007.  See discussion of the adoption of FIN No. 48 in Notes 1 and 7 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
 
Recent Accounting Pronouncements
 
See Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report for discussion of recent accounting pronouncements.
 
Internal Review and Governmental Investigations
 
Internal Review
 
In February 2005, we voluntarily advised the staff of the SEC that the Audit Committee of our board of directors had engaged special outside counsel to undertake a review of certain payments made by two of our affiliated entities in a foreign country.  The review of these payments, which initially focused on Foreign Corrupt Practices Act matters, was subsequently expanded by such special outside counsel to cover operations in other countries and other issues.  In connection with this review, special outside counsel to the Audit Committee retained forensic accountants.  As a result of the findings of the Internal Review (which was completed in late 2005), our quarter ended December 31, 2004 and prior financial statements were restated.  We also provided the SEC with documentation resulting from the Internal Review, which eventually resulted in a formal SEC investigation.  For further information on the restatements, see our fiscal year 2005 Annual Report.
 


For additional discussion of the SEC investigation, the Internal Review, and related proceedings, see Note 6 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
 
Document Subpoena from U.S. Department of Justice
 
In June 2005, one of our subsidiaries received a document subpoena from the DOJ.  The subpoena related to a grand jury investigation of potential antitrust violations among providers of helicopter transportation services in the U.S. Gulf of Mexico.  The subpoena focused on activities during the period from January 1, 2000 to June 13, 2005. We believe we have submitted to the DOJ substantially all documents responsive to the subpoena.  We have had discussions with the DOJ and provided documents related to our operations in the U.S. as well as internationally.  We intend to continue to provide additional information as required by the DOJ in connection with the investigation.  There is no assurance that, after review of any information furnished by us or by third parties, the DOJ will not ultimately conclude that violations of U.S. antitrust laws have occurred.  The period of time necessary to resolve the DOJ investigation is uncertain, and this matter could require significant management and financial resources that could otherwise be devoted to the operation of our business.
 
For additional discussion of the DOJ investigation, see Note 6 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
 
 
We may be exposed to certain market risks arising from the use of financial instruments in the ordinary course of business. This risk arises primarily as a result of potential changes in the fair market value of financial instruments that would result from adverse fluctuations in foreign currency exchange rates, credit risk, and interest rates as discussed in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in the fiscal year 2007 Annual Report.  Significant matters concerning market risk arising during the three months ended June 30, 2007 are discussed below.
 
Foreign Currency Risk
 
On November 14, 2006, we entered into a derivative contract to mitigate our exposure to exchange rate fluctuations on our U.S. dollar-denominated intercompany loans.  This derivative contract provided us with a call option on £12.9 million and a put option on $24.5 million, with a strike price of 1.895 U.S. dollars per British pound sterling, and expired on May 14, 2007, resulting in a cumulative gain of $0.6 million, of which $0.1 million related to the three months ended June 30, 2007 and is included in other income (expense), net in our condensed consolidated statement of income.
 
 On April 2, 2007, primarily as a result of changes in the manner in which certain of our consolidated subsidiaries create and manage intercompany balances, we changed the functional currency of two of our consolidated subsidiaries, Bristow Helicopters (International) Ltd. and Caledonia Helicopters Ltd., from the British pound sterling to the U.S. dollar, which reduced our exposure to U.S. dollar denominated intercompany loans and advances.  Additionally, in April 2007 we reduced our Euro-denominated intercompany loans, thereby reducing our exposure to fluctuations in exchange rates for this foreign currency.
 
 
Evaluation of Disclosure Controls and Procedures
 
As of June 30, 2007, we carried out an evaluation, under the supervision of our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15.  Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2007 to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act was (i) accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure and (ii) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.
 


Changes in Internal Control Over Financial Reporting
 
There were no changes during the three months ended June 30, 2007 in our internal control over financial reporting that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
 
PART II — OTHER INFORMATION
 
Item 1.  Legal Proceedings.
 
We have certain actions or claims pending that have been discussed and previously reported in Part I. Item 3. “Legal Proceedings” in the fiscal year 2007 Annual Report.  Developments in these previously reported matters are described in Note 6 in the “Condensed Notes to Consolidated Financial Statements” in Part I. Item 1. “Financial Statements” of this Quarterly Report, which is incorporated herein by reference.
 
Item 1A.  Risk Factors
 
There have been no material changes during the three months ended June 30, 2007 in our “Risk Factors” as discussed in our fiscal year 2007 Annual Report on Form 10-K.
 
 
Period (1)
  
Total Number of Shares
Purchased (2)
  
Average Price
Paid Per Share
  
Total Number of Shares
Purchased as
Part of Publicly Announced
Program
  
Approximate
Dollar Value of
Shares That May
Yet Be
Purchased Under
the Program
  
                         
June 1, 2007 − June 30, 2007
  
9,113
  
$
51.50
    
—
  
$
—
  
________
 
(1)  No shares were purchased during the periods of April 1, 2007 - April 30, 2007 and May 1, 2007 - May 31, 2007. 
 
(2)  The total number of shares purchased in the period consists of shares withheld by us in satisfaction of withholding taxes due upon the vesting of restricted stock units granted to an employee under our 2004 Stock Incentive Plan.
 
 
The annual meeting of stockholders was held on August 2, 2007.  Matters voted on at the meeting consisted of:
 
1.  For the election of directors, all nominees were approved.  The results were as follows:
 
Nominee
  
For
  
Withheld
Thomas N.  Amonett
  
 21,810,852
    
 178,948
  
Charles F. Bolden, Jr.
  
21,046,955
    
942,845
  
Peter N.  Buckley
  
21,907,524
    
82,276
  
Stephen J.  Cannon
  
21,805,368
    
184,432
  
Jonathan H.  Cartwright
  
21,907,974
    
81,826
  
William E.  Chiles
  
21,922,647
    
67,153
  
Michael A.  Flick
  
21,816,365
    
173,435
  
Thomas C.  Knudson
  
 21,918,847
    
70,953
  
Ken C.  Tamblyn
  
 21,819,618
    
170,182
  




2.  Proposal to approve an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of common stock.  The results were as follows:

For
  
Against
  
Abstain
19,557,773
  
2,424,959
  
7,068

3.  Proposal to approve an amendment to the Company’s Certificate of Incorporation to eliminate the Series B Preference Shares.  The results were as follows:

For
  
Against
  
Abstain
21,958,930
  
21,667
  
9,203

4.  Proposal to approve the adoption of the Bristow Group Inc. 2007 Long Term Incentive Plan. The results were as follows:

For
  
Against
  
Abstain
  
 Broker No-Vote
16,707,661
  
3,543,442
  
16,144
  
 1,722,553

5.  Proposal to approve and ratify the selection of KPMG LLP as the Company’s independent auditors for the fiscal year ending March 31, 2008.  The results were as follows:

For
  
Against
  
Abstain
20,859,557
  
1,125,851
  
4,392



Item 6.  Exhibits.

The following exhibits are filed as part of this Quarterly Report:

Exhibit
Number
 
Description of Exhibit
   
Restated Certificate of Incorporation of Bristow Group Inc. dated August 2, 2007.
Indenture, dated June 13, 2007, among the Company, the Guarantors named therein and U.S. National Bank Association as Trustee relating to the
7 ½% Senior Notes due 2017.
4.2* 
Registration Rights Agreement, dated June 13, 2007, among the Company and Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, Banc of
America Securities LLC, J.P. Morgan Securities Inc., Suntrust Robinson Humphrey and Wells Fargo Securities, LLC.
Form of 144A Global Note representing $299,000,000 principal amount of 7 ½% Senior Notes due 2017.
4.4* 
Form of Regulation S Global Note representing $1,000,000 principal amount of 7 ½% Senior Notes due 2017.
15.1*  
Letter from KPMG LLP dated August 2, 2007, regarding unaudited interim information.
Rule 13a-14(a) Certification by President and Chief Executive Officer of Registrant.
Rule 13a-14(a) Certification by Executive Vice President and Chief Financial Officer of Registrant.
Certification of Chief Executive Officer of registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
Certification of Chief Financial Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
____________

*
Filed herewith.
**
Furnished herewith.



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BRISTOW GROUP INC.

By: /s/ Perry L Elders
Perry L.  Elders
Executive Vice President and Chief Financial Officer
 
By: /s/ Elizabeth D. Brumley
Elizabeth D. Brumley
Vice President and Chief Accounting Officer

August 2, 2007





Index to Exhibits

Exhibit
Number
 
Description of Exhibit
   
3.1* 
Restated Certificate of Incorporation of Bristow Group Inc. dated August 2, 2007.
4.1* 
Indenture, dated June 13, 2007, among the Company, the Guarantors named therein and U.S. National Bank Association as Trustee relating to the
7 ½% Senior Notes due 2017.
4.2* 
Registration Rights Agreement, dated June 13, 2007, among the Company and Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, Banc of
America Securities LLC, J.P. Morgan Securities Inc., Suntrust Robinson Humphrey and Wells Fargo Securities, LLC.
4.3* 
Form of 144A Global Note representing $299,000,000 principal amount of 7 ½% Senior Notes due 2017.
4.4* 
Form of Regulation S Global Note representing $1,000,000 principal amount of 7 ½% Senior Notes due 2017.
15.1*  
Letter from KPMG LLP dated August 2, 2007, regarding unaudited interim information.
31.1**
Rule 13a-14(a) Certification by President and Chief Executive Officer of Registrant.
31.2**
Rule 13a-14(a) Certification by Executive Vice President and Chief Financial Officer of Registrant.
32.1**
Certification of Chief Executive Officer of registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**
Certification of Chief Financial Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
____________
 
*
Filed herewith.
**
Furnished herewith.



EX-3.1 2 ex3w1-080207.htm RESTATED CERTICATE OF INCORPORATION ex3w1-080207.htm
EXHIBIT 3.1


RESTATED CERTIFICATE OF INCORPORATION
OF
BRISTOW GROUP INC.

Bristow Group Inc., a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware,
 
DOES HEREBY CERTIFY:
 
FIRST:                      The current name of the corporation is Bristow Group Inc.
 
SECOND:                 The name under which the corporation was originally incorporated is Offshore Logistics Delaware, Inc.  The date of filing of its original certificate of incorporation with the Secretary of State of the State of Delaware was December 3, 1987.
 
THIRD:                     This Restated Certificate of Incorporation was duly adopted by the board of directors of the corporation in accordance with Section 245 of the General Corporation Law of the State of Delaware.
 
FOURTH:                 This Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the corporation's certificate of incorporation as heretofore amended, supplemented or restated and there is no discrepancy between those provisions and the provisions of this Restated Certificate of Incorporation.
 
FIFTH:                      The text of the Certificate of Incorporation of the corporation as heretofore amended, supplemented or restated is hereby restated to read as herein set forth in full:
 
ARTICLE I

The name of the corporation is Bristow Group Inc.

ARTICLE II

The corporation shall have perpetual existence.

ARTICLE III

The purpose for which the corporation is organized is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware.

ARTICLE IV

1.1 Capitalization. The corporation has authority to issue 98,000,000 shares, of which 90,000,000 shares, of the par value of $.01 each, shall be designated Common Stock, and of which 8,000,000 shares, of the par value of $.01 each, shall be designated Preferred Stock.  The board of directors is hereby expressly authorized, by resolution or resolutions from time to time adopted, to provide, out of the unissued and undesignated Preferred Stock, for the issuance of serial Preferred Stock. Before any shares of any such series are issued, the board of directors shall fix and state, and hereby is expressly empowered to fix, by resolution or resolutions, the designations, preferences and relative, participating, optional or other special rights of the shares of each such series, and the qualifications, limitations or restrictions thereon, including but not limited to, determination of any of the following:
     
a)
  
the number of shares that shall constitute any such series and whether the aforesaid number of shares may be increased or decreased by action of the board of directors;
     
b)
  
whether the shares of any such series shall be convertible into or exchangeable for shares of stock of any other class or classes or shares of any other series of the same class;
     
c)
  
the price or prices, or the rate or rates, of conversion if the board determines that the shares of any such series shall be convertible;
     
d)
  
any limitations or restrictions to be effective while any shares of any such series are outstanding upon the payment of dividends or the making of other distributions or upon the acquisition in any manner by the corporation or any of its subsidiaries of any of the shares of the corporation’s common, preferred, or other class or classes of stock;
     
e)
  
any conditions or any restrictions upon the creation of indebtedness of the corporation or any of its subsidiaries or upon the issuance of any additional stock of any kind while the shares of any series are outstanding;
     
f)
  
the annual rate of dividends, it any, payable on the shares of any such series and the conditions upon which such dividends shall be payable;
     
g)
  
whether dividends, if authorized in accordance with subsection (f), shall be cumulative and, if so, the date from which such dividends shall be cumulative;
     
h)
  
voting rights, if any;
     
i)
  
when and at what price or prices (whether in cash or in debentures of the corporation) the shares of any such series shall be redeemable or, at the option of the corporation, exchangeable or both;
 
j)
  
whether the shares of any such series shall be subject to the operation of any purchase, retirement or sinking fund or funds and, if so, the terms and provisions relative to the operation of any such fund or funds;
     
k)
  
the amount payable on the shares of any such series in the event of voluntary liquidation, dissolution or winding up of the affairs of the corporation; and any other powers, preferences and relative, participating, option and other special rights, and any qualifications, limitations and restrictions thereof.
 
ARTICLE V

The street address of the registered office of the corporation in the State of Delaware is 1209 Orange Street, Corporation Trust Center, in the City of Wilmington, County of New Castle. The name of its registered agent at that address is The Corporation Trust Company.

ARTICLE VI

The business and affairs of the corporation shall be managed by or under the direction of a board of directors consisting of not less than three nor more than fifteen directors, the exact number of directors to be determined from time to time by resolution adopted by the affirmative vote of a majority of the entire board of directors. Any vacancy on the board of directors that results from an increase in the number of directors may be filed by a majority of the board of directors then in office, and any other vacancy occurring in the board of directors may be filled by a majority of the directors then in office, although less than a quorum, or by a sole remaining director.

                The board of directors is expressly authorized to adopt, amend and repeal the by-laws of the corporation.

ARTICLE VII

No director of the corporation shall be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (i) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit. If the Delaware General Corporation Law is subsequently amended to authorize corporate action further limiting or eliminating the personal liability of directors, then the liability of directors of the corporation shall be limited or eliminated to the fullest extent permitted by the Delaware General Corporation Law, as so amended. Neither the amendment nor repeal of this Article VII ,nor the adoption of any provision of this Certificate of Incorporation inconsistent with this Article VII, shall adversely affect any right or protection of a director of the corporation existing at the time of such amendment, repeal or adoption of an inconsistent provision.

ARTICLE VIII

Meetings of stockholders may be held within or without the State of Delaware, as the by-laws may provide. The books of the corporation may be kept (subject to any provisions contained in the statutes) outside the State of Delaware at such place or places as may be designated from time to time by the board of directors in the by-laws of the Corporation. Elections of directors at an annual or special meeting of stockholders shall be by written ballot unless the by-laws of the corporation shall otherwise provide.


ARTICLE IX

The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.

ARTICLE X

The provision of the original Certificate of Incorporation naming the incorporator is omitted pursuant to Section 245(c) of the General Corporation Law of the State of Delaware.

ARTICLE XI

Section One
Federal Aviation Act Compliance

      1.1   Definitions. The following definitions shall apply for purposes of this Article XI:

 
(a)   “Act” shall mean the Federal Aviation Act of 1958, as amended from time to time (Title 49 United States Code).

                    (b)   “Excess Shares” shall have the meaning set forth in Section 3.1 of this Article XI.

                    (c)   “Foreign Stock” shall mean the Voting Stock registered in the Foreign Stock Record.

                    (d)   “Foreign Stock Record” shall have the meaning set forth in Section 2.1 of this Article XI.

                    (e)   “Non-Citizen” shall mean any person or entity that is not a “citizen of the United States” as defined in Section 101 of the Act, including any agent, trustee or  representative of a Non-Citizen.

                    (f)   “Own or Control” or “Owned or Controlled,” when used in reference to Voting Stock, shall mean (i) ownership of record, (ii) beneficial ownership, or (iii) the power to direct, by agreement, agency or in any other manner, the voting of Voting Stock. Any determination by the board of directors as to whether Voting Stock is Owned or Controlled by a Non-Citizen shall be final.

                    (g)   “Permitted Foreign Ownership” shall mean the number of shares of Voting Stock that from time to time has in the aggregate twenty-five percent (25%) of the voting power then entitled to be exercised by the Voting Stock.

                    (h)   “Redemption Price” shall have the meaning set forth in Section Four of this Article XI.

                    (i)    “Voting Stock” shall mean the outstanding shares of capital stock of the corporation entitled to vote, including any such shares that would be entitled to vote but for the operation of this Article XI.

      1.2  Policy. It is the policy of the corporation that, consistent with the requirements of the Act, Non-Citizens shall not Own or Control more than the Permitted Foreign Ownership and, if Non-Citizens nonetheless at any time Own or Control more than the Permitted Foreign Ownership, the voting rights of the shares of Foreign Stock in excess of the Permitted Foreign Ownership shall be suspended in accordance with Section 3.1 below.


Section Two
Foreign Stock Record

2.1 Description. The corporation or any transfer agent designated by it shall maintain a separate stock record (the “Foreign Stock Record”) for purposes of registering Voting Stock Owned or Controlled by Non-Citizens. The Foreign Stock Record shall include (a) the name and nationality of each such Non-Citizen, (b) the number of shares of Voting Stock Owned or Controlled by such Non-Citizen, and (c) the date of registration of such shares in the Foreign Stock Record.

2.2 Registration. The corporation shall register in the Foreign Stock Record shares of Voting Stock that the corporation determines are Owned or Controlled by one or more Non-Citizens. Such shares shall be registered in the Foreign Stock Record in chronological order based on the date and time of such determination by the corporation. The corporation may rely on such certifications or other evidence it deems appropriate in determining the citizenship status of any person and, by way of illustration but not limitation, the corporation may presume that Voting Stock is Owned or controlled by a Non-Citizen and may register such Voting Stock in the Foreign Stock Record if the registered holder thereof has an address located outside the United States.

2.3 Confirmation of Citizenship. The corporation from time to time may require the holder of record of any Voting Stock to confirm the citizenship status of the person or persons who Own or Control that Voting Stock by executing such certificates and providing such other evidence that the corporation determines is reasonably necessary for that purpose. If the holder of record of shares of Voting Stock fails to confirm or provide evidence to the satisfaction of the corporation that such shares are not Owned or Controlled by one or more Non-Citizens, the corporation shall be entitled, but not obligated, to register those shares in the Foreign Stock Record.

Section Three
Suspension of Voting Rights

3.1 Suspension. If at any time the number of shares of Foreign Stock exceeds the Permitted Foreign ownership, the voting rights of shares of Foreign Stock shall automatically be suspended, in the reverse chronological order of the dates and times of registry of such shares in the Foreign stock Record, until the voting rights of a sufficient number thereof shall have been suspended so that the number of shares of Foreign Stock that continues to have voting rights equals the greatest whole number that is less than or equal to the Permitted Foreign Ownership. The particular shares of Foreign Stock that shall have their voting rights suspended are referred to collectively as the “Excess Shares”.

3.2 Reinstatement. If, while, the voting rights of any shares of Foreign Stock are suspended, the corporation determines that the number of shares of Foreign Stock that have voting rights is less than the Permitted Foreign Ownership, voting rights shall automatically be reinstated for shares of Foreign Stock as to which voting rights have been suspended, in the reverse order in which the voting rights thereof were suspended under Section 3.1, until the maximum number of shares of Foreign Stock, not exceeding the Permitted Foreign Ownership, shall have voting rights. Voting rights also shall automatically be reinstated for any shares of Foreign Stock that have suspended voting rights if such shares are transferred to a person or entity that is not a Non-Citizen.

Section Four
Redemption of Excess Shares

To the extant necessary for the corporation to comply with any present or future registration, licensing or other provisions of the Act, or regulations promulgated thereunder, the corporation shall have the power, but not the obligation, to redeem Excess Shares out of funds legally available therefor, subject to the following terms and conditions:

(a)    The per share redemption price (the “Redemption Price”) to be paid for the Excess Shares to be redeemed shall be the average closing sales price of such shares on the New York Stock Exchange Composite Tape during the 10 trading days immediately prior to the date the notice of redemption is given; or if such shares are not then traded on the New York Stock Exchange, then the closing sales prices of such shares on any other national securities exchange on which such shares are then listed; or if such shares are not then listed on any national securities exchange, then the closing sales prices as quoted in the NASDAQ National Market System; or if such shares are not then so quoted, then the mean between the representative bid and ask prices as quoted by NASDAQ or another generally recognized reporting system, on each of such 10 trading days.

(b)   The Redemption Price may be paid in cash or by delivery of a promissory note of the corporation, at the election of the corporation. Any such promissory note shall have a maturity of not more than ten years from the date of issuance and shall bear interest at the rate equal to the then current coupon rate of a 10-year Treasury note as such rate is published in the Wall Street Journal or comparable publication.

(c)    A notice of redemption shall be given by first class mail, postage prepaid, mailed not less than 10 days prior to the redemption date to each holder of record of the shares to be redeemed, at such holder’s address as the same appears on the stock register of the corporation. Each such notice shall state (i) the redemption date; (ii) the number of shares of Voting Stock to be redeemed from such holder, (iii) the Redemption Price, and the manner of payment thereof, (iv) the place where certificates for such shares are to be surrendered for payment of the Redemption Price, and (v) that dividends on the shares to be redeemed will cease to accrue on such redemption date.

(d)    From and after the redemption date, dividends on the shares of Voting Stock called for redemption shall cease to accrue and such shares shall no longer be deemed to be outstanding and all rights of the holders thereof as stockholders of the corporation (except the right to receive from the corporation the Redemption Price) shall cease. Upon surrender of the certificates for any shares so redeemed in accordance with the requirements of the notice of redemption (properly endorsed or assigned for transfer if the board of directors shall so require and the notice shall so state), such shares shall be redeemed by the corporation at the Redemption Price. In case fewer than all the shares represented by any such certificate are redeemed, a new certificate shall be issued representing the shares not redeemed without cost to the holder thereof.
.


IN WITNESS WHEREOF, said Bristow Group Inc. has caused this certificate to be executed in its corporate name by William E. Chiles, its President, Chief Executive Officer and Director, and its corporate seal to be hereunto affixed and attested by Randall A. Stafford, its Vice President, General Counsel and Corporate Secretary,  this 2nd day of August, 2007.

BRISTOW GROUP INC.


By:  /s/ William E, Chiles
William E. Chiles,
President, Chief Executive Officer
and Director

 
 
ATTEST:  /s/ Randall A. Stafford                                                           
Randall A. Stafford
Vice President, General Counsel
and Corporate Secretary

[SEAL]

 EX-4.1 3 ex4w1-080208.htm INDENTURE TO SENIOR NOTES DUE 2017 ex4w1-080208.htm
EXHIBIT 4.1

 


 
BRISTOW GROUP INC.
 
AND
 
THE GUARANTORS NAMED ON THE SIGNATURE PAGE HERETO
 
7½% SENIOR NOTES DUE 2017
 
__________________
 
INDENTURE
 
Dated as of June 13, 2007
 
__________________
 
U.S. BANK NATIONAL ASSOCIATION
 
As Trustee
 
__________________
 

 

 


      
                             
    
 
 
 

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.
 
 
 
 

 
TABLE OF CONTENTS
 
 
ARTICLE 1
 
 
DEFINITIONS AND INCORPORATION BY REFERENCE
 
Section 1.01
Definitions.
1
  
Section 1.02
Other Definitions
20
  
Section 1.03
Incorporation by Reference of Trust Indenture Act.
21
  
Section 1.04
Rules of Construction
21
  
     
ARTICLE 2
THE NOTES
  
     
Section 2.01
Form and Dating
21
  
Section 2.02
Execution and Authentication
21
  
Section 2.03
Registrar and Paying Agent
22
  
Section 2.04
Paying Agent to Hold Money in Trust
22
  
Section 2.05
Noteholder Lists
22
  
Section 2.06
Transfer and Exchange
22
  
Section 2.07
Replacement Notes
23
  
Section 2.08
Outstanding Notes
23
  
Section 2.09
Temporary Notes
23
  
Section 2.10
Cancellation
23
  
Section 2.11
Defaulted Interest.
23
  
Section 2.12
CUSIP Numbers
24
  
Section 2.13
Issuance of Additional Notes
24
  
       
ARTICLE 3
REDEMPTION AND PREPAYMENT
    
Section 3.01
Notices to Trustee
25
  
Section 3.02
Selection of Notes to Be Redeemed
25
  
Section 3.03
Notice of Redemption
25
  
Section 3.04
Effect of Notice of Redemption
26
  
Section 3.05
Deposit of Redemption Price
26
  
Section 3.06
Notes Redeemed in Part
27
  
Section 3.07
Optional Redemption
27
  
Section 3.08
Mandatory Redemption
28
  
Section 3.09
Offer to Purchase by Application of Excess Proceeds.
28
  
       
ARTICLE 3
COVENANTS
    
       
Section 4.01
Payment of Notes
29
  
Section 4.02
Maintenance of Office or Agency
30
  
Section 4.03
Reports
30
  
Section 4.04
Compliance Certificate
31
  
Section 4.05
Taxes
31
  
Section 4.06
Stay, Extension and Usury Laws.
32
  
Section 4.07
Limitation on Restricted Payments.
32
  
Section 4.08
Limitation on Dividend and Other Payment Restrictions Affecting Subsidiaries.
35
  
Section 4.09
Limitation on Incurrence of Indebtedness and Issuance of Preferred Stock
36
  
Section 4.10
Limitation on Asset Sales.
39
  
Section 4.11
Limitation on Transactions with Affiliates.
41
  
Section 4.12
Limitation on Liens
42
  
Section 4.13
Additional Subsidiary Guarantees.
42
  
Section 4.14
Corporate Existence
42
  
Section 4.15
Offer to Repurchase Upon Change of Control.
42
  
Section 4.16
No Inducements.
44
  
Section 4.17
Investment Grade Covenants
44
  
       
ARTICLE 5
SUCCESSORS
    
       
Section 5.01
Merger, Consolidation, or Sale of Assets
46
  
Section 5.02
Successor Corporation Substituted
46
  
       
ARTICLE 6
DEFAULTS AND REMEDIES
    
Section 6.01
Events of Default
47
  
Section 6.02
Acceleration
48
  
Section 6.03
Other Remedies
49
  
Section 6.04
Waiver of Past Defaults
49
  
Section 6.05
Control by Majority
49
  
Section 6.06
Limitation on Suits
49
  
Section 6.07
Rights of Holders of Notes to Receive Payment.
50
  
Section 6.08
Collection Suit by Trustee
50
  
Section 6.09
Trustee May File Proofs of Claim.
50
  
Section 6.10
Priorities.
51
  
Section 6.11
Undertaking for Costs..
51
  
       
ARTICLE 7
TRUSTEE
    
       
Section 7.01
Duties of Trustee
51
  
Section 7.02
Rights of Trustee
52
  
Section 7.03
Individual Rights of Trustee
53
  
Section 7.04
Trustee’s Disclaimer
53
  
Section 7.05
Notice of Defaults.
53
  
Section 7.06
Reports by Trustee to Holders of the Notes
53
  
Section 7.07
Compensation and Indemnity.
54
  
Section 7.08
Replacement of Trustee
54
  
Section 7.09
Successor Trustee by Merger, etc.
55
  
Section 7.10
Eligibility; Disqualification.
55
  
Section 7.11
Preferential Collection of Claims Against Company..
56
  
       
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
    
       
Section 8.01
Option to Effect Legal Defeasance or Covenant Defeasance..
56
  
Section 8.02
Legal Defeasance and Discharge..
56
  
Section 8.03
Covenant Defeasance..
56
  
Section 8.04
Conditions to Legal or Covenant Defeasance..
57
  
Section 8.05
Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions..
58
  
Section 8.06
Repayment to Company..
58
  
Section 8.07
Reinstatement..
59
  
Section 8.08
Discharge..
59
  
       
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
    
       
Section 9.01
Without Consent of Holders of Notes..
60
  
Section 9.02
With Consent of Holders of Notes..
60
  
Section 9.03
Compliance with Trust Indenture Act..
61
  
Section 9.04
Revocation and Effect of Consents..
62
  
Section 9.05
Notation on or Exchange of Notes..
62
  
Section 9.06
Trustee to Sign Amendments, etc.
62
  
       
ARTICLE 10
GUARANTEES OF NOTES
    
       
Section 10.01
Subsidiary Guarantees.
62
  
Section 10.02
[Reserved]
63
  
Section 10.03
Guarantors May Consolidate, etc., on Certain Terms.
63
  
Section 10.04
Releases Following Sale of Assets
64
  
Section 10.05
Releases Following Designation as an Unrestricted Subsidiary.
64
  
Section 10.06
Limitation on Guarantor Liability.
64
  
Section 10.07
“Trustee” to Include Paying Agent.
64
  
       
ARTICLE 11
MISCELLANEOUS
    
       
Section 11.01
Trust Indenture Act Controls
65
  
Section 11.02
Notices
65
  
Section 11.03
Communication by Holders of Notes with Other Holders of Notes
66
  
Section 11.04
Certificate and Opinion as to Conditions Precedent
66
  
Section 11.05
Statements Required in Certificate or Opinion.
66
  
Section 11.06
Rules by Trustee and Agents..
 66
  
Section 11.07
No Personal Liability of Directors, Officers, Employees and Stockholders.
 66
  
Section 11.08
Governing Law.
 67
  
Section 11.09
Section 11.09. No Adverse Interpretation of Other Agreements.
 67
  
Section 11.10
Successors.
 67
  
Section 11.11
Severability n.
 67
  
Section 11. 12
Table of Contents, Headings, etc.
 67
  
Section 11. 13
Counterparts.
 67
  
       

 
APPENDIX AND ANNEXES
 
RULE 144A/REGULATION S APPENDIXApp. - 1
EXHIBIT 1Form of Initial Note
EXHIBIT AForm of Exchange Note or Private Exchange Note
ANNEX AForm of Supplemental IndentureA - 1
ANNEX BRegistration Rights AgreementB - 1

 

 
 
 

This Indenture, dated as of June 13, 2007, is among Bristow Group Inc., a Delaware corporation (the “Company”), the guarantors listed on the signature page hereto (each, a “Guarantor” and, collectively, the “Guarantors”) and U.S. Bank National Association, 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 Company’s Initial Notes, Exchange Notes, Private Exchange Notes and Additional Notes:
 
ARTICLE 1
 
DEFINITIONS AND INCORPORATION
 
BY REFERENCE
 
Section 1.01  Definitions.
 
“Additional Assets” means:
 
(1)any Productive Assets;
 
(2)the Capital Stock of a Person that becomes a Restricted Subsidiary as a result of the acquisition of such Capital Stock by the Company or another Restricted Subsidiary; or
 
(3)Capital Stock constituting a minority interest in any Person that at such time is a Restricted Subsidiary;
 
provided, however, that any such Restricted Subsidiary described in clause (2) or (3) above is primarily engaged 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 of the Company).
 
“Additional Notes” means, subject to the Company’s compliance with Section 4.09, Notes issued from time to time after the Initial Issuance Date under the terms of this Indenture (other than pursuant to Section 2.06, 2.07, 2.09 or 3.06 of this Indenture and other than Exchange Notes or Private Exchange Notes issued pursuant to an exchange offer for other Notes outstanding under this Indenture).
 
“Additional Interest” means all Additional Interest then owing pursuant to Section 6 of the Registration Rights Agreement referred to in clause (1) of the definition of “Registration Rights Agreement” in the Appendix.
 
“Adjusted Treasury Rate” means, with respect to any redemption date, (a) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15(519)” or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under “Treasury Constant Maturities,” for the maturity corresponding to the Comparable Treasury Issue (if no maturity is within three months before or after September 15, 2012, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Adjusted Treasury Rate shall be interpolated or extrapolated from such yields on a straight line basis, rounding to the nearest month) or (b) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date, in each case calculated on the third Business Day immediately preceding the redemption date, plus 0.50%.
 
“Affiliate” of any specified Person means any other Person, directly or indirectly, controlling or controlled by or under direct or indirect common control with such specified Person.  For the purposes of this definition, “control” when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
 
“Agent” means any Registrar, Paying Agent or co-registrar.
 
“Agent Members” has the meaning provided in the Appendix.
 
“Applicable Law,” except as the context may otherwise require, means all applicable laws, rules, regulations, ordinances, judgments, decrees, injunctions, writs and orders of any court or governmental or congressional agency or authority and rules, regulations, orders, licenses and permits of any United States federal, state, municipal, regional, or other governmental body, instrumentality, agency or authority.
 
“Applicable Premium” means, with respect to a Note at any redemption date, the greater of (a) 1.00% of the principal amount of such Note and (b) the excess of (A) the present value at such redemption date of (1) the redemption price of such Note on September 15, 2012 (such redemption price as determined under Section 3.07(a)) plus (2) all required remaining scheduled interest payments due on such Note through September 15, 2012 (but excluding accrued and unpaid interest and Additional Interest, if any, to the redemption date), computed using a discount rate equal to the Adjusted Treasury Rate, over (B) the principal amount of such Note on such redemption date.
 
“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
 
(1)the sale, lease, conveyance or other disposition (a “disposition”) of any properties or assets (including, without limitation, by way of a Sale/Leaseback Transaction), excluding dispositions in the ordinary course of business (provided that the disposition of all or substantially all of the properties or assets of the Company and its Subsidiaries (on a consolidated basis) will be governed by Section 5.01 of this Indenture and not by the provisions of Section 4.10 hereof), and
 
(2)the issue or sale by the Company or any of its Restricted Subsidiaries of Equity Interests of any of the Company’s Subsidiaries,
 
whether in the case of clause (1) or (2), in a single transaction or a series of related transactions, provided that such transaction or series of transactions involves properties or assets having a Fair Market Value in excess of $15.0 million.  Notwithstanding the preceding, the following transactions will be deemed not to be Asset Sales:
 
(a)a disposition of obsolete or excess equipment or other properties or assets;
 
(b)a disposition of properties or assets by the Company to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;
 
(c)a disposition of Equity Interests by a Restricted Subsidiary to the Company or to another Restricted Subsidiary;
 
(d)a disposition of cash or Cash Equivalents or a disposition of properties or assets that constitutes a Restricted Payment that is permitted by this Indenture or a Permitted Investment;
 
(e)a disposition of properties or assets in the ordinary course of business 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 properties or 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 properties or assets by the lessee during or at the end of the term thereof for an amount that is less than their fair market value at the time the right to acquire such properties or assets occurs;
 
(g)any trade or exchange by the Company or any Restricted Subsidiary of equipment or other properties or assets for equipment or other properties or assets owned or held by another Person, provided that the Fair Market Value of the properties or 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 properties or assets (together with any cash or Cash Equivalents) to be received by the Company or such Restricted Subsidiary; provided further that any cash or Cash Equivalents received must be applied in accordance with Section 4.10 hereof;
 
(h)a disposition in the ordinary course of business of inventory, receivables or other current assets; and
 
(i)the creation or  perfection of a Lien (but not the sale or other disposition of the properties or assets subject to such Lien).
 
The Fair Market Value of any non-cash proceeds of a disposition of properties or assets and of any properties or assets referred to in the foregoing clause (g) of this definition shall be set forth in an Officers’ Certificate delivered to the Trustee.
 
“Attributable Indebtedness” in respect of a Sale/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/Leaseback 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, as may be amended from time to time, or any similar federal or state law for the relief of debtors.
 
“Board of Directors” means, as to any Person, the board of directors of such Person or any duly authorized committee thereof.
 
“Bristow Aviation” 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.
 
“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
 
(1)  in the case of a corporation, corporate stock;
 
(2)  in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;
 
(3)  in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and
 
(4)  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 but, in each case, excluding any debt securities convertible into such equity.
 
“Cash Equivalents” means
 
(1)  securities issued or directly and fully guaranteed or insured by the government of the United States or any other country whose sovereign debt has a rating of at least A3 from Moody’s and at least A- from S&P or any agency or instrumentality thereof having maturities of not more than twelve months from the date of acquisition;
 
(2)  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);
 
(3)  repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (1) and (2) above entered into with any financial institution meeting the qualifications specified in clause (2) above;
 
(4)  commercial paper having the highest rating obtainable from Moody’s or S&P, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of investments, and in each case maturing within 270 days after the date of acquisition;
 
(5)  deposits available for withdrawal on demand with any commercial bank not meeting the qualifications specified in clause (2) 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
 
(6)  money market mutual funds substantially all of the assets of which are of the type described in the foregoing clauses (1) through (4).
 
“Change of Control” means the occurrence of any of the following:
 
(1)  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 properties or assets of the Company and its Restricted Subsidiaries (determined on a consolidated basis);
 
(2)  the adoption of a plan relating to the liquidation or dissolution of the Company;
 
(3)  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
 
(4)  the first day on which more than a majority of the members of the Board of Directors are not Continuing Directors;
 
provided, however, that, with respect to clause (3) above 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
 
(a)  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
 
(b)  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.
 
“Change of Control Trigger Event” means the occurrence of both a Change of Control and, during the period beginning on the earlier of (i) the date of the first public notice or announcement with respect to a Change of Control and (ii) the occurrence of a Change of Control, and, in either case, ending 90 days after the occurrence of such Change of Control, a Ratings Event.
 
“Clearstream” means Clearstream Banking, société anonyme, or any successor securities clearing agency.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Common Stock” means the common stock of the Company, par value $0.01 per share.
 
“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the Notes from the redemption date to September 15, 2012, that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of a maturity most nearly equal to September 15, 2012.
 
“Comparable Treasury Price” means, with respect to any redemption date, if clause (b) of the Adjusted Treasury Rate is applicable, the average of three, or such lesser number as is obtained by the Trustee, Reference Treasury Dealer Quotations for such redemption date.
 
“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,
 
(1)  an amount equal to any extraordinary loss plus any net loss realized by such Person or any of its Restricted Subsidiaries in connection with an Asset Sale and gains from Asset Sales of aircraft in the ordinary course of business;
 
(2)  Consolidated Income Taxes of such Person and its Restricted Subsidiaries;
 
(3)  Consolidated Interest Expense of such Person and its Restricted Subsidiaries,
 
(4)  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; and
 
(5)  all other non-cash charges and non-cash write offs, including non-cash compensation expense and minority interest, of such Person and its Restricted Subsidiaries reducing Consolidated Net Income (excluding any such non-cash charge or write off to the extent that it represents an accrual of or reserve for cash expenditures in any future period or amortization of a prepaid cash expense that was paid in a prior period not included in the calculation),
 
in each case, on a consolidated basis and determined in accordance with GAAP.  Notwithstanding the preceding sentence, clauses (1), (2), (3), (4) and (5) relating to amounts of a Restricted Subsidiary of a Person will be added to Consolidated Net Income to compute Consolidated Cash Flow of such Person only to the extent (and in the same proportion) that the net income (loss) of such Restricted Subsidiary was included in calculating the Consolidated Net Income of such Person.
 
“Consolidated Income Taxes” means, with respect to any Person for any period, taxes imposed upon such Person or other payments required to be made by such Person by any governmental authority which taxes or other payments are calculated by reference to the income or profits of such Person or such Person and its Restricted Subsidiaries (to the extent such income or profits were included in computing Consolidated Net Income for such period), regardless of whether such taxes or payments are required to be remitted to any governmental authority.
 
“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:
 
(1)  any incurrence, assumption, guarantee, repayment, repurchase, defeasance or redemption by such Person 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”);
 
(2)  any acquisition that has been made by such Person or any of its Restricted Subsidiaries, including, 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; and
 
(3)  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 (A) 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 (B) 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.  For purposes of this definition, whenever pro forma effect is to be given to any calculation under this definition, the pro forma calculations will be determined in good faith by a responsible financial or accounting officer of the Company (including pro forma expense and cost reductions calculated on a basis consistent with Regulation S-X under the Securities Act). If any Indebtedness bears a floating rate of interest and is being given pro forma effect, the interest expense on such Indebtedness will be calculated as if the rate in effect on the date of determination had been the applicable rate for the entire period (taking into account any interest rate agreement applicable to such Indebtedness if such interest rate agreement has a remaining term in excess of 12 months).
 
“Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication, of
 
(1)  the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued (including 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
 
(2)  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:
 
(1)  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 its Restricted Subsidiaries;
 
(2)  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;
 
(3)  the cumulative effect of a change in accounting principles shall be excluded; and
 
(4)  solely for purposes of Section 4.07, all premiums paid in connection with any early extinguishment of Indebtedness will be excluded.
 
“Consolidated Net Tangible Assets” as of any date of determination, means the consolidated total assets of the Company and its Restricted Subsidiaries determined in accordance with GAAP, less the sum of:
 
(1)  all current liabilities (excluding the amount of those which are by their terms extendable or renewable at the option of the obligor to a date more than 12 months after the date as of which the amount is being determined); and
 
 (2)  all goodwill, trade names, trademarks, patents, organization expense, unamortized debt discount and expense and other similar intangibles properly classified as intangibles 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 Initial Issuance Date 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 a majority 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 one or more debt facilities or commercial paper facilities, in each case with banks or other institutional lenders or institutional investors providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from (or sell receivables to) such lenders against such receivables), or letters of credit, in each case as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time.
 
“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 notice or both would be an Event of Default.
 
“Depository” has the meaning provided in the Appendix.
 
“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:
 
(1)  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;
 
(2)  is convertible or exchangeable for Indebtedness or other Disqualified Stock (excluding Capital Stock which is convertible or exchange solely at the option of the issuer thereof); or
 
(3)  is redeemable at the option of the holder thereof, in whole or in part, in each case, 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 Euroclear Bank S.A./N.V. or any successor securities clearing agency.
 
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 
“Exchange Notes” has the meaning provided in the Appendix.
 
“Existing Indebtedness” means Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit Facilities) in existence on the Initial Issuance Date, until such amounts are repaid.
 
“Fair Market Value” means, with respect to any Asset Sale or Restricted Payment, the price that would be negotiated in an arm’s-length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction, as such price is determined in good faith by an officer of the Company (and evidenced by an Officers’ Certificate delivered to the Trustee) if such value is less than $15.0 million; provided if the value of such Asset Sale or Restricted Payment is $15.0 million or greater, such determination shall be made in good faith by the Board of Directors of the Company and evidenced by a board resolution delivered to the Trustee in the form of an Officers’ Certificate, provided further if the value of such Asset Sale or Restricted Payment is $25.0 million or greater, such determination shall be made by a reputable accounting, appraisal or investment banking firm that is, in the judgment of such Board of Directors of the Company, qualified to perform the task for which such firm has been engaged and independent with respect to the Company.
 
“GAAP” means generally accepted accounting principles in the United States as in effect from time to time.
 
“Global Note” has the meaning provided in the Appendix.
 
“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 supplement to this Indenture in accordance with Section 4.13 or 10.03 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 8.02, 8.03, 10.04 or 10.05 hereof.
 
“Hedging Obligations” means, with respect to any Person, the obligations of such Person under:
 
(1)  interest rate swap agreements, interest rate cap agreements and interest rate collar agreements;
 
(2)  other agreements or arrangements designed to protect such Person against fluctuations in interest rates; and
 
(3)  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”, “Noteholder” or “holder” means a Person in whose name a Note is registered.
 
“Indebtedness” means, with respect to any Person, on any date of determination (without duplication):
 
(1)  the principal of and premium (if any) in respect of indebtedness of such Person for borrowed money;
 
(2)  the principal of and premium (if any) in respect of obligations of such Person evidenced by bonds, debentures, notes or other similar instruments;
 
(3)  the principal component of all obligations of such Person in respect of letters of credit, bankers’ acceptances or other similar instruments (including reimbursement obligations with respect thereto except to the extent such reimbursement obligation relates to a trade payable and such obligation is satisfied within 30 days of incurrence);
 
(4)  the principal component of all obligations of such Person to pay the deferred and unpaid purchase price of property (except trade payables), which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, the amount of such price being that which would be negotiated in an arm’s length transaction for cash between a willing seller and a willing and able buyer, neither of which is under any compulsion to complete the transaction;
 
(5)  Capital Lease Obligations and all Attributable Indebtedness of such Person;
 
(6)  the principal component or liquidation preference of all obligations of such Person with respect to the redemption, repayment or other repurchase of any Disqualified Stock (but excluding, in each case, any accrued dividends);
 
(7)  the principal component of all Indebtedness of other Persons secured by a Lien on any asset of such Person, whether or not such Indebtedness is assumed by such Person; provided, however, that the amount of such Indebtedness will be the lesser of
 
(a)  the fair market value of such asset at such date of determination; and (b) the amount of such Indebtedness of such other Persons;
 
(8)  the principal component of Indebtedness of other Persons to the extent guaranteed by such Person; and
 
(9)  to the extent not otherwise included in this definition, Hedging Obligations of such Person (the amount of any such obligations to be equal at any time to the termination value of the agreement or arrangement giving rise to such obligation that would be payable by such Person at such time).
 
In addition, “Indebtedness” of any Person shall include Indebtedness described in the preceding paragraph that would not appear as a liability on the balance sheet of such Person if:
 
(1)  such Indebtedness is the obligation of a partnership or joint venture that is not a Restricted Subsidiary (a “Joint Venture”);
 
(2)  such Person or a Restricted Subsidiary of such Person is a general partner of the Joint Venture (a “General Partner”); and
 
(3)  there is recourse, by contract or operation of law, with respect to the payment of such Indebtedness to properties or assets of such Person or a Restricted Subsidiary of such Person; and then such Indebtedness shall be included in an amount not to exceed:
 
(a) the lesser of (x) the net assets of the General Partner and (y) the amount of such obligations to the extent that there is recourse, by contract or operation of law, to the properties or assets of such Person or a Restricted Subsidiary of such Person; or
 
(b) if less than the amount determined pursuant to clause (a) immediately above, the actual amount of such Indebtedness that is recourse to such Person or a Restricted Subsidiary of such Person, if the Indebtedness is evidenced by a writing and is for a determinable amount and the related interest expense shall be included in Consolidated Interest Expense to the extent actually paid by the Company or its Restricted Subsidiaries.
 
“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 Issuance Date” means June 13, 2007.
 
“Initial Notes” has the meaning provided in the Appendix.
 
“Initial Purchasers” has the meaning provided in the Appendix.
 
“Institutional Accredited Investor” means an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act.
 
“Investment Grade Rating” means:
 
(1)  a Moody’s rating of Baa3 or higher and an S&P rating of at least BB+ or
 
(2)  a Moody’s rating of Ba1 or higher and an S&P rating of at least BBB-;
 
provided, however, that if (a) either Moody’s or S&P changes its rating system, such ratings will be the equivalent ratings after such changes or (b) if S&P or Moody’s or both shall not make a rating of the Notes publicly available, the references above to S&P or Moody’s or both, as the case may be, shall be to a nationally recognized U.S. rating agency or agencies, as the case may be, selected by the Company and the references to the ratings categories above shall be to the corresponding rating categories of such rating agency or rating agencies, as the case may be.
 
“Investment Grade Rating Event” means the first day on which the Notes are assigned an Investment Grade Rating.
 
“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:
 
(1)  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;
 
(2)  Hedging Obligations; and
 
(3)  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 Section 4.07 of this Indenture.
 
“Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of Houston, Texas or  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).
 
“Marketable Securities” means, with respect to any Asset Sale, any readily marketable equity securities that are:
 
(1)  traded on the New York Stock Exchange, the American Stock Exchange or the Nasdaq National Market; and
 
(2)  issued by a corporation or limited partnership having a total equity market capitalization of not less than $250.0 million; provided that the excess of (a) the aggregate amount of securities of any one such corporation or limited partnership held by the Company and any Restricted Subsidiary over (b) ten times the average daily trading volume of such securities during the 20 immediately preceding trading days shall be deemed not to be Marketable Securities, as determined on the date of the contract relating to such Asset Sale.
 
“Moody’s” means Moody’s Investors Service, Inc. and its successors.
 
“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:
 
(1)  any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with (a) any Asset Sale (including, without limitation, dispositions pursuant to Sale/Leaseback Transactions) or (b) 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
 
(2)  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):
 
(1)  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 of such Asset Sale;
 
(2)  taxes paid or estimated to be payable as a result of the Asset Sale (after taking into account any available tax credits or deductions and any tax sharing arrangements);
 
(3)  amounts required to be applied to the repayment of Indebtedness (other than under the Credit Facilities) secured by a Lien on the properties or assets that were the subject of such Asset Sale; and
 
(4)  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 properties 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:
 
(1)  as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind that would constitute Indebtedness or is otherwise directly or indirectly liable (as a guarantor or otherwise) or (b) constitutes the lender;
 
(2)  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
 
(3)  the explicit terms of which provide that there is no recourse to the stock or assets of the Company or any of its Restricted Subsidiaries.
 
“Notes” means the Initial Notes, the Exchange Notes, the Private Exchange Notes and the Additional Notes issued under this Indenture.
 
“Notes 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.
 
“Pari Passu Indebtedness” means, with respect to any Net Proceeds from Asset Sales, Indebtedness of the Company and its Restricted Subsidiaries that ranks equal in right of payment with the Notes or the Subsidiary Guarantees, as the case may be, and the terms of which require the Company or such Restricted Subsidiary to apply such Net Proceeds to offer to repurchase such Indebtedness.
 
“Permitted Investments” means:
 
(1)  any Investment in the Company or in a Restricted Subsidiary of the Company;
 
(2)  any Investment in Cash Equivalents;
 
(3)  any Investment by the Company or any Restricted Subsidiary of the Company in a Person if as a result of such Investment (a) such Person becomes a Restricted Subsidiary of the Company or (b) 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 Restricted Subsidiary of the Company;
 
(4)  any Investment made as a result of the receipt of non-cash consideration from (a) an Asset Sale that was made pursuant to and in compliance with Section 4.10 hereof or (b) a disposition of properties or assets that does not constitute an Asset Sale;
 
(5)  receivables owing to the Company or any Restricted Subsidiary created or acquired in the ordinary course of business and payable or dischargeable in accordance with customary trade terms;
 
(6)  Investments in any Person (a) in exchange for an issue or sale by the Company of its Common Stock or (b) out of the net cash proceeds of an issue or sale by the Company of its Common Stock so long as such Investment pursuant to this clause (b) occurs within 90 days of the closing of such issuance or sale of Common Stock;
 
(7)  loans or advances to employees (other than executive officers) made in the ordinary course of business consistent with past practices of the Company or such Restricted Subsidiary; and
 
(8)  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 (8) in Persons shall not exceed the greater of (i) $50.0 million or (ii) 10% of Consolidated Net Tangible Assets at any one time.
 
“Permitted Liens” means:
 
(1)  Liens securing Indebtedness incurred pursuant to clause (1) of the second paragraph of Section 4.09 hereof;
 
(2)  Liens in favor of the Company and its Restricted Subsidiaries;
 
(3)  Liens on any property, asset or Capital Stock of a Person existing at the time such Person becomes a Restricted Subsidiary of the Company, provided that such Liens were not created or incurred in connection with, or in contemplation of, such other Person becoming a Restricted Subsidiary and do not extend to any other property or asset owned by the Company or any of its Restricted Subsidiaries;
 
(4)  Liens on any property or asset existing at the time of its acquisition by the Company or any Restricted Subsidiary of the Company, provided that such Liens were not created or incurred in connection with, or in contemplation of, such acquisition and do not extend to any other property or asset;
 
(5)  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;
 
(6)  Liens securing Hedging Obligations;
 
(7)  Liens existing on the Initial Issuance Date;
 
(8)  Liens securing Non-Recourse Debt;
 
(9)  any interest or title of a lessor under a Capital Lease Obligation or an operating lease;
 
(10)  Liens arising by reason of deposits necessary to obtain standby letters of credit in the ordinary course of business;
 
(11)  Liens on real or personal property or assets of the Company or a Restricted Subsidiary thereof to secure Indebtedness incurred for the purpose of (a) 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 (b) 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);
 
(12)  Liens securing Permitted Refinancing Indebtedness with respect to any Indebtedness referred to in clauses (3), (4), (7) and (11) above; provided that any such Lien is limited to all or part of the same property or assets (plus improvements, accessions, proceeds or dividends or distributions in respect thereof) that secured (or, under the written arrangements under which the original Lien arose, could secure) the Indebtedness being refinanced or is in respect of property or assets that are the security for a Permitted Lien hereunder; and
 
(13)  Liens not otherwise permitted by clauses (1) through (12) above securing Indebtedness not in excess of an aggregate of the greater of (a) $50.0 million or (b) 5% of Consolidated Net Tangible Assets at any one time outstanding.
 
“Permitted Non-Guarantor Indebtedness” means
 
(1)  any Indebtedness incurred pursuant to clauses (1) through (12) of the second paragraph of Section 4.09 hereof; and
 
(2)  any additional Indebtedness in an aggregate principal amount not in excess of $10.0 million at any time outstanding.
 
 “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:
 
(1)  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);
 
(2)(a)  if the Stated Maturity of the Indebtedness being refinanced is earlier than the Stated Maturity of the Notes, the Permitted Refinancing Indebtedness has a Stated Maturity no earlier than the Stated Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of the Indebtedness being refinanced is later than the Stated Maturity of the Notes, the Permitted Refinancing Indebtedness has a Stated Maturity at least 91 days later than the Stated Maturity of the Notes;
 
(3)  the Permitted Refinancing Indebtedness has a Weighted Average Life to Maturity at the time such Permitted Refinancing Indebtedness is incurred that is equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being extended, refinanced, renewed, replaced, deferred or refunded;
 
(4)  if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes or the Subsidiary Guarantees, such Permitted Refinancing Indebtedness is subordinated in right of payment to the Notes or the Subsidiary Guarantees 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
 
(5)  such Indebtedness is not incurred by a Restricted Subsidiary if the Company 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, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company, government or any agency or political subdivision hereof or any other entity.
 
“Preferred Stock,” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) which is preferred as to the payment of dividends, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such corporation, over shares of Capital Stock of any other class of such Person.
 
“Private Exchange Notes” has the meaning provided in the Appendix.
 
“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).
 
“Purchase Agreement” has the meaning provided in the Appendix.
 
“QIB” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.
 
“Qualified Equity Offering” means:
 
(1)  any sale of Equity Interests (other than Disqualified Stock) of the Company pursuant to an underwritten offering registered under the Securities Act; or
 
(2)  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,
 
in each case, other than public offerings with respect to the Company’s Common Stock, or options, warrants or rights, registered on Form S-4 or S-8.
 
“Quotation Agent” means the Reference Treasury Dealer selected by the Trustee after consultation with the Company.
 
“Ratings Event” means a reduction in the rating assigned to the Notes by either Moody’s or S&P to a rating below the rating assigned by such agency to the Notes as of the Initial Issuance Date (Ba2 for Moody’s and BB for S&P).
 
“Reference Treasury Dealer” means Goldman, Sachs & Co. and its successors and assigns, and two other nationally recognized investment banking firms selected by the Company that are primary U.S. Government securities dealers.
 
“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day immediately preceding such redemption date.
 
“Registered Exchange Offer” has the meaning provided in the Appendix.
 
“Registration Rights Agreement” has the meaning provided in the Appendix.
 
“Regulation S” has the meaning provided in the Appendix.
 
“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.
 
“Restricted Global Note” has the meaning provided in the Appendix.
 
“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” has the meaning provided in the Appendix.
 
“SEC” means the Securities and Exchange Commission.
 
“Securities Act” means the Securities Act of 1933, as amended.
 
“Sale/Leaseback Transaction” means an arrangement relating to property owned by the Company or a Restricted Subsidiary on the Initial Issuance Date or thereafter acquired by the Company or a Restricted Subsidiary whereby the Company or a Restricted Subsidiary transfers such property to a Person and the Company or a Restricted Subsidiary leases it from such Person.
 
“S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and its successors.
 
“Shelf Registration Statement” has the meaning provided in the Appendix.
 
“Significant Subsidiary” means any Restricted Subsidiary of the Company 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 Initial Issuance Date.
 
“Significant U.S. Subsidiary” means any Significant Subsidiary organized under the laws of the United States, any state thereof or the District of Columbia.
 
“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:
 
(1)  any corporation, association or other business entity of which more than 50% of the total voting power of its Voting Stock 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);
 
(2)  any partnership, joint venture limited liability company or similar entity of which more than 50% of the capital accounts, distribution rights, total equity and voting interests or general or limited partnership interests, as applicable, 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); and
 
(3)  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 the Guarantors pursuant to Article 10 hereof.
 
“TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) and the rules and regulations thereunder, as in effect on the date on which this Indenture is qualified under the TIA (except as provided in Section 9.01(i) and 9.03 hereof).
 
“Transfer Restricted Securities” has the meaning provided in the Appendix.
 
“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.
 
“Uniform Commercial Code” means the New York Uniform Commercial Code as in effect from time to time.
 
“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 and any Subsidiary of an Unrestricted Subsidiary, but only to the extent that each of such Subsidiary and its Subsidiaries at the time of such designation:
 
(1)  has no Indebtedness other than Non-Recourse Debt;
 
(2)  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;
 
(3)  is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) 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; and
 
(4)  such Subsidiary, either alone or in the aggregate with all other Unrestricted Subsidiaries, does not operate, directly or indirectly, all or substantially all of the business of the Company and its Subsidiaries.
 
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.
 
“U.S. Dollar Equivalent” means with respect to any monetary amount in a currency other than U.S. dollars, at any time for determination thereof, the amount of U.S. dollars obtained by converting such foreign currency involved in such computation into U.S. dollars at the spot rate for the purchase of U.S. dollars with the applicable foreign currency as published in The Wall Street Journal in the “Exchange Rates” column under the heading “Currency Trading” on the date two Business Days prior to such determination.
 
Except as described in Section 4.09 herein, whenever it is necessary to determine whether the Company has complied with any covenant in this Indenture or a Default has occurred and an amount is expressed in a currency other than U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent determined as of the date such amount is initially determined in such currency.
 
“Voting Stock” of a Person means all classes of Capital Stock of such Person then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees of such Person.
 
“Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing
 
(1)the sum of the products obtained by multiplying
 
(a)  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
 
(b)  the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment, by
 
(2)the then outstanding principal amount of such Indebtedness.
 
“Wholly Owned Restricted Subsidiary” of any Person means a Restricted Subsidiary of such Person, all of the Capital Stock of which (other than directors’ qualifying shares) is owned by the Company or another Wholly Owned Restricted Subsidiary.
 
Section 1.02  Other Definitions.
 
Term
  
Defined in Section
“Affiliate Transaction”
  
4.11
“Appendix”
  
2.01
“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
“Discharge”
  
8.08
“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
“Pari Passu Notes”
  
4.10
“Paying Agent”
  
2.03
“Payment Default”
  
6.01
“Purchase Date”
  
3.09
“Registrar”
  
2.03
“Restricted Payments”
  
4.07
     
     
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;
 
(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; and
 
(7)  “herein,” “hereof” and other words of similar import refer to this Indenture as a whole (as amended or supplemented from time to time) and not to any particular Article, Section or other subdivision
 
ARTICLE 2
 
THE NOTES
 
Section 2.01  Form and Dating.
 
Provisions relating to the Initial Notes, the Private Exchange Notes and the Exchange Notes are set forth in the Rule 144A/Regulation S Appendix attached hereto (the “Appendix”) which is hereby incorporated in and expressly made part of this Indenture. The Initial Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit 1 to the Appendix which is hereby incorporated in and expressly made a part of this Indenture.  The Exchange Notes, the Private Exchange Notes and the Trustee’s certificate of authentication shall be substantially in the form of Exhibit A to the Appendix, which is hereby incorporated in and expressly made a part of this Indenture.  The Notes may have notations, legends or endorsements required by law, stock exchange rule, agreements to which the Company is subject, if any, or usage (provided that any such notation, legend or endorsement is in a form acceptable to the Company).  Each Note shall be dated the date of its authentication.  The terms of the Notes set forth in the Appendix are part of the terms of this Indenture.
 
Section 2.02  Execution and Authentication. 
 
An Officer shall sign the Notes for the Company by manual or facsimile signature.
 
If the Officer whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note, the Note shall be valid nevertheless.
 
A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note.  The signature shall be conclusive evidence that the Note has been authenticated under this Indenture.
 
On the Initial Issuance Date, the Trustee shall authenticate and deliver $300 million principal amount of the Notes and, at any time and from time to time thereafter, the Trustee shall authenticate and deliver Notes for original issue in an aggregate principal amount specified in such order, in each case upon a written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company.  Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of an issuance of Additional Notes pursuant to Section 2.13 after the Initial Issuance Date, shall certify that such issuance is in compliance with Section 4.09.
 
The Trustee may appoint an authenticating agent reasonably acceptable to the Company to authenticate the Notes.  Unless limited by the terms of such appointment, 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 any Registrar, Paying Agent or agent for service of notices and demands.
 
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 (the “Registrar”) and an office or agency where Notes may be presented for payment (the “Paying Agent”).  The Registrar shall keep a register of the Notes and of their transfer and exchange.  The Company may have one or more co-registrars and one or more additional paying agents.  The term “Paying Agent” includes any additional paying agent.
 
The Company shall enter into an appropriate agency agreement with any Registrar, Paying Agent or co-registrar not a party to this Indenture, which shall incorporate the terms of the TIA.  The agreement shall implement the provisions of this Indenture that relate to such agent.  The Company shall notify the Trustee of the name and address of any such agent.  If the Company fails to maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be entitled to appropriate compensation therefor pursuant to Section 7.07.  The Company or any Wholly Owned Subsidiary incorporated or organized within The United States of America may act as Paying Agent, Registrar, co-registrar or transfer agent.
 
The Company initially appoints the Trustee as Registrar and Paying Agent in connection with the Notes.
 
Section 2.04  Paying Agent to Hold Money in Trust. 
 
Prior to 11:00 a.m. New York City time, on each due date of the principal and interest on any Note, the Company shall deposit with the Paying Agent a sum sufficient to pay such principal and interest when so becoming due.  The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Noteholders or the Trustee all money held by the Paying Agent for the payment of principal of or interest on the Notes and shall notify the Trustee of any default by the Company in making any such payment.  If the Company or a Subsidiary acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund.  The Company at any time may require a Paying Agent to pay all money held by it to the Trustee and to account for any funds disbursed by the Paying Agent.  Upon complying with this Section, the Paying Agent shall have no further liability for the money delivered to the Trustee.
 
Section 2.05  Noteholder 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 Noteholders.  If the Trustee is not the Registrar, the Company shall furnish to the Trustee, in writing at least five 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 Noteholders.
 
Section 2.06  Transfer and Exchange. 
 
The Notes shall be issued in registered form and shall be transferable only upon the surrender of a Note for registration of transfer.  When a Note is presented to the Registrar or a co-registrar with a request to register a transfer, the Registrar shall register the transfer as requested if the requirements of this Indenture and Section 8-401(1) of the Uniform Commercial Code are met.  When Notes are presented to the Registrar or a co-registrar with a request to exchange them for an equal principal amount of Notes of other denominations, the Registrar shall make the exchange as requested if the same requirements are met.  The Company may require payment of a sum sufficient to cover any taxes, assessments or other governmental charges in connection with any transfer or exchange pursuant to this Section (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant to Section 3.06, 4.10, 4.15 or 9.05).
 
Section 2.07  Replacement Notes. 
 
If a mutilated Note is surrendered to the Registrar or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken, the Company shall issue and the Trustee shall authenticate a replacement Note if the requirements of Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies any other reasonable requirements of the Trustee.  If required by the Trustee or the Company, such Holder shall furnish an indemnity bond sufficient in the judgment of the Company and the Trustee to protect the Company, the Trustee, the Paying Agent, the Registrar and any co-registrar from any loss which any of them may suffer if a Note is replaced.  The Company and the Trustee may charge the Holder for their expenses in replacing a Note.
 
Every replacement Note is an additional obligation of the Company.
 
Section 2.08  Outstanding Notes. 
 
Notes outstanding at any time are all Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation and those described in this Section as not outstanding.  A Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note.
 
If a Note is replaced pursuant to Section 2.07, it ceases to be outstanding unless the Trustee and the Company receive proof satisfactory to them that the replaced Note is held by a bona fide purchaser.
 
If the Paying Agent segregates and holds in trust, in accordance with this Indenture, by 11:00 a.m. New York time, on a redemption date or other maturity date money sufficient to pay all principal, premium, if any, interest and Additional Interest, if any, payable on that date with respect to the Notes (or portions thereof) to be redeemed or maturing, as the case may be, then on and after that date such Notes (or portions thereof) cease to be outstanding and interest and Additional Interest, if any, on them cease to accrue.
 
Section 2.09  Temporary Notes. 
 
Until definitive Notes are ready for delivery, the Company may prepare and the Trustee shall authenticate temporary Notes.  Temporary Notes shall be substantially in the form of definitive Notes but may have variations that the Company considers appropriate for temporary Notes.  Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate definitive Notes and deliver them in exchange for temporary Notes.
 
Section 2.10  Cancellation.
 
The Company at any time may deliver Notes to the Trustee for cancellation.  The Registrar and the 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 and destroy (subject to the record retention requirements of the Exchange Act) all Notes surrendered for registration of transfer, exchange, payment or cancellation and deliver a certificate of such destruction to the Company unless the Company directs the Trustee to deliver canceled Notes to the Company.  The Company may not issue new Notes to replace Notes it has redeemed, paid or delivered to the Trustee for cancellation.
 
Section 2.11  Defaulted Interest. 
 
If the Company defaults in a payment of interest on the Notes, the Company shall pay defaulted interest (plus interest on such defaulted interest to the extent lawful) in any lawful manner.  The Company may pay the defaulted interest to the persons who are Noteholders on a subsequent special record date.  The Company shall fix or cause to be fixed any such special record date and payment date to the reasonable satisfaction of the Trustee and shall promptly mail to each Noteholder a notice that states the special record date, the payment date and the amount of defaulted interest to be paid.
 
Section 2.12  CUSIP Numbers.
 
The Company in issuing the Notes may use “CUSIP” numbers and corresponding “ISINs” (if then generally in use) and, if so, the Trustee shall use “CUSIP” numbers and corresponding “ISINs” in notices of redemption as a convenience to Holders; provided, however, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such numbers.
 
Section 2.13  Issuance of Additional Notes. 
 
The Company shall be entitled, subject to its compliance with Section 4.09, to issue Additional Notes under this Indenture which shall have identical terms as the Initial Notes issued on the Initial Issuance Date, other than with respect to the date of issuance and issue price.  The Initial Notes issued on the Initial Issuance Date, any Additional Notes and all Exchange Notes or Private Exchange Notes issued in exchange therefor shall be treated as a single class for all purposes under this Indenture.
 
With respect to any Additional Notes, the Company shall set forth in a resolution of the Board of Directors and an Officers’ Certificate, a copy of each which shall be delivered to the Trustee, the following information:
 
(1)  the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to this Indenture;
 
(2)  the issue price, the issue date and the CUSIP number and corresponding ISIN of such Additional Notes; provided, however, that no Additional Notes may be issued at a price that would cause such Additional Notes to have “original issue discount” within the meaning of Section 1273 of the Code; and
 
(3)  whether such Additional Notes shall be Transfer Restricted Securities and issued in the form of Initial Notes as set forth in Exhibit 1 to the Appendix to this Indenture or shall be issued in the form of Exchange Notes as set forth in Exhibit A to the Appendix.
 
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 Section 3.07 pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed, (iv) the redemption price, and (v) whether it requests the Trustee to give notice of such redemption.  Any such notice may be cancelled at any time prior to the mailing of notice of such redemption to any Holder and shall thereby be void and of no effect.
 
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 by such method as the Trustee shall deem fair and appropriate; provided, however, that no Notes of $2,000 or less shall be redeemed in part.  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 $2,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed.  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 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 in the name of the Holder 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 Additional Interest, if any, on Notes called for redemption cease to accrue on and after the redemption date and the only remaining right of the Holders of such Notes is to receive payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed;
 
(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 provided in the second 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. 
 
Prior to 11:00 a.m. New York time on 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 in same day funds to pay the redemption price of and accrued interest and Additional Interest, 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 Additional Interest, 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 Additional Interest, if any, shall cease to accrue on the Notes or the portions of Notes called for redemption whether or not such Notes are presented for payment, and the only remaining right of the Holders of such Notes shall be to receive payment of the redemption price upon surrender to the Paying Agent of the Notes redeemed.  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 Additional Interest, 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 Additional Interest, 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 in the name of the Holder 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.
 
Section 3.07  Optional Redemption. 
 
(a)  Except as set forth in clauses (b) and (c) of this Section 3.07, the Company shall not have the option to redeem the Notes pursuant to this Section 3.07 prior to September 15, 2012.  On or after such date, 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 Additional Interest, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on September 15 of the years indicated below:
 
YEAR
PERCENTAGE
2012
103.750%
2013
102.500%
2014
101.250%
2015 and thereafter
100.000%
   
(b)  Notwithstanding the provisions of clause (a) of this Section 3.07, at any time on or prior to September 15, 2010, the Company may on one or more occasions redeem up to 35% of the aggregate principal amount of Notes (including any Additional Notes) issued at a redemption price of 107.500% of the principal amount thereof, plus accrued and unpaid interest and Additional Interest, if any, to the redemption date, with the net cash proceeds of one or more Qualified Equity Offerings, provided that:
 
(1)  at least 65% of the aggregate principal amount of Notes (including any Additional Notes) issued remains outstanding immediately after the occurrence of each such redemption; and
 
(2)  each such redemption occurs within 180 days of the date of the closing of each such Qualified Equity Offering.
 
(c)  Prior to September 15, 2012, the Company may at its option redeem all, but not less than all, of the Notes at a redemption price equal to 100% of the principal amount of the Notes plus the Applicable Premium as of, and accrued and unpaid interest and Additional Interest, if any, to, the redemption date.
 
(d)  Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through Section 3.06 hereof.
 
(e)  If the optional redemption date is on or after an interest payment record date and on or before the related interest payment date, the accrued and unpaid interest and Additional Interest, if any, will be paid to the Person in whose name the Note is registered at the close of business, on such record date, and no other interest will be payable to holders whose Notes will be subject to redemption by the Company.
 
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 or to repurchase the Notes at the option of the holders.
 
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 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 Additional Interest, 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 Additional Interest, 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 Additional Interest, 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 Additional Interest, 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 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, and Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Trustee shall select the Notes and Pari Passu Notes to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes (with such adjustments as may be deemed appropriate by the Trustee so that only Notes in denominations of $2,000, or integral multiples of $1,000, 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 Notes or portions thereof tendered pursuant to the Asset Sale Offer in the aggregate principal amount required by Section 4.10 hereof, 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 and Section 4.10.  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.
 
ARTICLE 4
 
COVENANTS
 
Section 4.01  Payment of Notes. 
 
The Company shall pay or cause to be paid the principal of, premium, if any, interest and Additional Interest, if any, on the Notes on the dates and in the manner provided in the Notes.  Principal, premium, if any, interest and Additional Interest, 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 11:00 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, if any, interest and Additional Interest, 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 Additional Interest, 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 U.S. Bank Trust National Association, 100 Wall Street, New York, NY 10005 as one such office or agency of the Company in accordance with Section 2.03.
 
Section 4.03  Reports. 
 
(a)  Notwithstanding that the Company may not be subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, the Company will file with the SEC (unless the SEC will not accept such a filing) within the time periods specified in the Exchange Act and, within 15 days of filing, or attempting to file, the same with the SEC, furnish to the Trustee and the holders of the Notes:
 
(1)  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
 
(2)  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 § 314(a).
 
So long as the Company is required to file periodic reports under Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as amended, the Company’s obligation to deliver the information referred to above shall be deemed satisfied upon the filing of such information in the EDGAR system and the giving of notice to the Trustee as to the public availability of such information from such source.
 
(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.
 
(c)  If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes to the financial statements and in Management’s Discussion and Analysis of Results of Operations and Financial Condition, of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the Unrestricted Subsidiaries.
 
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 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. 
 
Each of the Company and each of the Guarantors 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.
 
Section 4.07  Limitation on Restricted Payments. 
 
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly:
 
(1)  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 any of its Restricted Subsidiaries) or make any similar payment 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);
 
(2)  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 Restricted Subsidiary of the Company);
 
(3)  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 or any Subsidiary Guarantee, except a payment of interest or principal at Stated Maturity; or
 
(4)  make any Restricted Investment (all such payments and other actions set forth in clauses (1) through (4) 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 the first paragraph of 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 Initial Issuance Date (excluding Restricted Payments permitted by clauses (2), (3), (4), (6) and (7), but including, without duplication, Restricted Payments permitted by clauses (1), (5) and (8), of the next succeeding paragraph and clause (6)(b) of the definition of “Permitted Investment”), 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 April 1, 2007 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)  the sum of (x) 100% of the aggregate net cash proceeds received by the Company from the issue or sale since the Initial Issuance Date 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 (1) any such Equity Interests, Disqualified Stock or convertible debt securities sold to a Subsidiary of the Company or an employee stock ownership plan, option plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination and (2) Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock), (y) 100% of the Fair Market Value of property constituting Additional Assets received by the Company or a Restricted Subsidiary subsequent to the Initial Issuance Date in exchange for Capital Stock (other than Disqualified Stock and other than Capital Stock issued to a Subsidiary of the Company) and (z) 100% of any cash capital contribution received by the Company from its shareholders subsequent to the Initial Issuance Date; plus
 
(C)  to the extent that any Restricted Investment that was made after June 20, 2003 is sold for cash or otherwise liquidated or repaid for cash after the Initial Issuance Date, 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)  100% of the aggregate net cash proceeds received by the Company from the issue or sale of debt securities of the Company that are outstanding on the Initial Issuance Date and that have been converted into Equity Interests of the Company on or after the Initial Issuance Date; plus
 
(F)  the amount available for the payment of Restricted Payments, as of the Initial Issuance Date, under Section 4.07(4)(c) of the Indenture governing the Company’s 6⅛% Senior Notes due 2013.
 
The preceding provisions of this Section 4.07 will not prohibit any of the following:
 
(1)  the payment of any dividend within 60 days after the date of declaration thereof, if at the date of declaration such payment would have complied with the provisions of this Indenture;
 
(2)  the redemption, repurchase, retirement, defeasance or other acquisition of any Indebtedness subordinated to the Notes or the Subsidiary Guarantees 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 and other than Equity Interests issued or sold to a Subsidiary of the Company or an employee stock ownership plan or similar trust to the extent such sale to an employee stock ownership plan or similar trust is financed by loans from or guaranteed by the Company or any Restricted Subsidiary unless such loans have been repaid with cash on or prior to the date of determination), 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 (4)(c)(B) of the preceding paragraph;
 
(3)  the defeasance, redemption, repurchase, retirement or other acquisition of Indebtedness subordinated to the Notes or the Subsidiary Guarantees with the net cash proceeds from an incurrence of, or in exchange for, Permitted Refinancing Indebtedness;
 
(4)  the payment of any dividend or distribution by a Restricted Subsidiary of the Company to the Company or any of its Restricted Subsidiaries (and if such Restricted Subsidiary is not a Wholly Owned Restricted Subsidiary, to the other holders of its Capital Stock on a pro rata basis);
 
(5)  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 current or former employee or director of the Company 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 in any calendar year;
 
(6)  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;
 
(7)  so long as no Default or Event of Default has occurred and is continuing, any purchase or redemption of Indebtedness subordinated to the Notes or the Subsidiary Guarantees from Net Proceeds from an Asset Sale to the extent permitted by Section 4.10 hereof after the Company (or a Restricted Subsidiary, as the case may be) has made an offer to the holders of the Notes to purchase the Notes pursuant to such covenant; and
 
(8)  other Restricted Payments in an amount not to exceed $50.0 million.
 
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.
 
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 evidenced by an Officers’ Certificate delivered to the Trustee.  Not later than five Business Days following the date of making any Restricted Payment (excluding Restricted Payments permitted by clauses (2), (3), (4), (6) and (7) of the second preceding paragraph), 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.
 
Section 4.08  Limitation on 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 consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:
 
(1)  (a) pay dividends or make any other distributions to the Company or any of its Restricted Subsidiaries on its Capital Stock or (b) pay any Indebtedness or other obligations owed to the Company or any of its Restricted Subsidiaries;
 
(2)  make loans or advances to the Company or any of its Restricted Subsidiaries; or
 
(3)  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:
 
(a)  the Credit Facilities or any instrument governing Existing Indebtedness, each as in effect on the Initial Issuance Date;
 
(b)  this Indenture and the Notes;
 
(c)  applicable law;
 
(d)  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;
 
(e)  by reason of customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices;
 
(f)  any mortgages, pledges or other security agreements permitted under the Indenture securing Indebtedness of the Company or a Restricted Subsidiary to the extent the encumbrances or restrictions they contain restrict the transfer of the properties or assets subject to such mortgages, pledges or other security agreements;
 
(g)  purchase money obligations for properties or assets acquired in the ordinary course of business and Capital Lease Obligations permitted under this Indenture, in each case, that impose encumbrances or restrictions of the nature described in clause (3) of the first paragraph of this Section 4.08 on the properties or assets so acquired;
 
(h)  any encumbrance or restriction with respect to a Restricted Subsidiary (or any of its properties or assets) imposed pursuant to an agreement entered into for the direct or indirect sale or disposition of all or substantially all the Capital Stock or properties or assets of such Restricted Subsidiary (or the properties or assets that are subject to such restriction) pending the closing of such sale or disposition;
 
(i)  customary provisions in bona fide contracts for the sale of properties or assets;
 
(j)  customary provisions in joint venture agreements and similar agreements that restrict the transfer of interests in the joint venture; or
 
(k)  Permitted Refinancing Indebtedness with respect to any Indebtedness referred to in clauses (a) and (b) 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.
 
Section 4.09  Limitation on 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 the Company will not, and will not permit any Guarantor to, issue any Disqualified Stock and the Company will not permit any of its Restricted Subsidiaries that are not Guarantors to issue any shares of Preferred Stock; provided, however, that the Company and its Restricted Subsidiaries may incur Indebtedness, and the Company and any Guarantor 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 2.0 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:
 
(1)  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 the greater of (i) $150.0 million (or the equivalent thereof in any other currency or currency unit), or (ii) 30% of Consolidated Net Tangible Assets, plus any fees, premiums, expenses (including costs of collection), indemnities and similar amounts payable in connection with such Indebtedness;
 
(2)  the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness;
 
(3)  the incurrence by the Company and its Restricted Subsidiaries of Hedging Obligations in the ordinary course of business and not for speculation;
 
(4)  the incurrence by the Company and its Restricted Subsidiaries of Indebtedness represented by the Notes (other than Additional Notes), the Subsidiary Guarantees thereof and this Indenture;
 
(5)  guarantees by the Guarantors of Indebtedness incurred in accordance with the provisions of the Indenture;
 
(6)  the incurrence of intercompany Indebtedness between or among the Company and any of its 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 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 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; provided, however:
 
(a)  if the Company is the obligor on such Indebtedness and a Guarantor is not the obligee, such Indebtedness is expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes;
 
(b)  if a Guarantor is the obligor on such Indebtedness and the Company or a Guarantor is not the obligee, such Indebtedness is expressly subordinated in right of payment to the Subsidiary Guarantees of such Guarantor;
 
(7)  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);
 
(8)  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 (1), (6), (11) or (13) of this Section 4.09);
 
(9)  the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations with respect to assets other than Capital Stock or other Investments, in each case incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvements of property used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount not to exceed the greater of (i) $50.0 million or (ii) 5% of Consolidated Net Tangible Assets at any time outstanding;
 
(10)  Indebtedness of a Restricted Subsidiary incurred and outstanding on the date on which such Restricted Subsidiary was acquired by the Company, or Indebtedness incurred by the Company or a Restricted Subsidiary to provide all or any portion of the funds utilized to consummate the transaction or series of related transactions pursuant to which such Restricted Subsidiary becomes a Restricted Subsidiary or is otherwise acquired by the Company, provided, however, that at the time such Restricted Subsidiary is acquired by the Company, the Consolidated Interest Coverage Ratio for the Company’s most recent four quarters for which internal financial statements are available, after giving pro forma effect to the acquisition and the incurrence of any related Indebtedness, would be (a) at least 2.0 to 1.0 or (b) greater than the Consolidated Interest Coverage Ratio determined for such four quarter period without giving effect to such acquisition and incurrence of Indebtedness;
 
(11)  Indebtedness arising from agreements of the Company or a Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar obligations, in each case, incurred or assumed in connection with the disposition of any business, assets or Capital Stock of a Restricted Subsidiary, provided that the maximum aggregate liability in respect of all such Indebtedness shall at no time exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition;
 
(12)  Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business, provided, however, that such Indebtedness is extinguished within five business days of incurrence; and
 
(13)  in addition to the items referred to in clauses (1) through (12) above, Indebtedness of the Company and the Guarantors in an aggregate outstanding principal amount which, when taken together with the principal amount of all other Indebtedness incurred pursuant to this clause (13) and then outstanding, will not exceed the greater of (i) $50.0 million or (ii) 5% of Consolidated Net Tangible Assets at any one time outstanding.
 
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 Guarantee 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.
 
For purposes of determining compliance with, and the outstanding principal amount of any particular Indebtedness incurred pursuant to and in compliance with this Section 4.09:
 
(1)  in the event that Indebtedness meets the criteria of more than one of the types of Indebtedness described in the first and second paragraphs of this Section 4.09, the Company, in its sole discretion, will classify such item of Indebtedness on the date of incurrence (or later classify or reclassify such Indebtedness, in its sole discretion) and only be required to include the amount and type of such Indebtedness in one of such clauses (any Indebtedness under Credit Facilities on the Initial Issue Date shall be considered incurred under the first paragraph of this covenant);
 
(2)  guarantees of, or obligations in respect of letters of credit relating to, Indebtedness which is otherwise included in the determination of a particular amount of Indebtedness shall not be included;
 
(3)  the principal amount of any Disqualified Stock of the Company or a Guarantor will be equal to the greater of the maximum mandatory redemption or repurchase price (not including, in either case, any redemption or repurchase premium) or the liquidation preference thereof;
 
(4)  Indebtedness permitted by this Section 4.09 need not be permitted solely by reference to one provision permitting such Indebtedness but may be permitted in part by one such provision and in part by one or more other provisions of this Section 4.09 permitting such Indebtedness; and
 
(5)  the amount of Indebtedness issued at a price that is less than the principal amount thereof will be equal to the amount of the liability in respect thereof determined in accordance with GAAP.
 
Accrual of interest, accrual of dividends, the accretion of accreted value, the payment of interest in the form of additional Indebtedness and the payment of dividends in the form of additional shares of Preferred Stock or Disqualified Stock will not be deemed to be an incurrence of Indebtedness for purposes of this Section 4.09.  The amount of any Indebtedness outstanding as of any date shall be (a) the accreted value thereof in the case of any Indebtedness issued with original issue discount and (b) the principal amount or liquidation preference thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness.
 
In addition, the Company will not permit any of its Unrestricted Subsidiaries to incur any Indebtedness or issue any shares of Disqualified Stock, other than Non Recourse Debt.  If at any time an Unrestricted Subsidiary becomes a Restricted Subsidiary, 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 this Section 4.09, the Company shall be in Default of this Section 4.09).
 
For purposes of determining compliance with any U.S. dollar denominated restriction on the incurrence of Indebtedness, the U.S. dollar equivalent principal amount of Indebtedness denominated in a foreign currency shall be calculated based on the relevant currency exchange rate in effect on the date such Indebtedness was incurred, in the case of term Indebtedness, or first committed, in the case of revolving credit Indebtedness; provided that if such Indebtedness is incurred to refinance other Indebtedness denominated in a foreign currency, and such refinancing would cause the applicable U.S. dollar dominated restriction to be exceeded if calculated at the relevant currency exchange rate in effect on the date of such refinancing, such U.S. dollar dominated restriction shall be deemed not to have been exceeded so long as the principal amount of such refinancing Indebtedness does not exceed the principal amount of such Indebtedness being refinanced.  Notwithstanding any other provision of this Section 4.09, the maximum amount of Indebtedness that the Company may incur pursuant to this Section 4.09 shall not be deemed to be exceeded solely as a result of fluctuations in the exchange rate of currencies.
 
Section 4.10  Limitation on Asset Sales. 
 
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:
 
(1)  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 (provided such Fair Market Value shall be determined on the date of contractually agreeing to such Asset Sale) of the assets or Equity Interests issued or sold or otherwise disposed of; and
 
(2)  at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash, Cash Equivalents or Marketable Securities; provided, however, that the amount of (a) 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 Subsidiary Guarantee) 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 shall be deemed to be cash for purposes of this Section 4.10 and (b) any securities, notes or other obligations (other than Marketable Securities) received by the Company or such Restricted Subsidiary from such transferee that are converted within 180 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion) shall be deemed to be cash for purposes of this Section 4.10.
 
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:
 
(1)  permanently repay the principal of any Indebtedness of the Company or any Guarantor ranking in right of payment at least equal with the Notes or the Subsidiary Guarantees, as the case may be; or
 
(2)  to acquire (including by way of a purchase of assets or stock, merger, consolidation or otherwise) Productive Assets; provided that the requirements of this clause (2) will be deemed to be satisfied if an agreement committing to make the acquisitions referred to above is entered into by the Company or any of its Restricted Subsidiaries within 365 days after the receipt of such Net Proceeds with the good faith expectation that such Net Proceeds will be applied to satisfy such commitment in accordance with such agreement within 180 days after such 365-day period and if such Net Proceeds are not so applied within such 180-day period, then such Net Proceeds will constitute Excess Proceeds (as defined below).
 
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 Facilities, 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.”
 
As required by the preceding paragraph (or, at the Company’s option, such earlier date), if the aggregate amount of Excess Proceeds exceeds $30.0 million, the Company will be required to make an offer (an “Asset Sale Offer”) pursuant to Section 3.09 hereof to all holders of Notes and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale (“Pari Passu Notes”), to purchase the maximum principal amount of Notes and any such Pari Passu Notes to which the Asset Sale Offer applies 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 of the Notes and Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase, in accordance with the procedures set forth in Section 3.09 hereof or the agreements governing the Pari Passu Notes, as applicable, in each case in amounts of $2,000 and integral multiples of $1,000.  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 any purpose not prohibited by this Indenture.  If the aggregate principal amount of Notes surrendered by holders thereof and other Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount that the Company is required to repurchase, the Trustee shall select the Notes and Pari Passu Notes to be purchased on a pro rata basis on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes.  Upon completion of such offer to purchase, the amount of Excess Proceeds shall be reset at zero.
 
If the Asset Sale purchase date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no other interest will be payable to holders who tender Notes pursuant to the Asset Sale Offer.
 
The Company will comply, to the extent applicable, with the requirements of Section 14(e) of the Exchange Act and any other securities laws or regulations in connection with the repurchase of Notes pursuant to this Indenture. To the extent that the provisions of any securities laws or regulations conflict with provisions of this Section 4.10, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this Indenture by virtue of any conflict.
 
Section 4.11  Limitation on 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 properties 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:
 
(1)  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 in arm’s-length dealings 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
 
(2)  the Company delivers to the Trustee:
 
(a)  with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20.0 million, an Officers’ Certificate certifying that such Affiliate Transaction complies with clause (1) above; and
 
(b)  with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $40.0 million, in addition to the Officers’ Certificate referred to above, a resolution of the Board of Directors of the Company approved by a majority of the disinterested members thereof,
 
in each case described in clause (2) above other than any such transactions in the ordinary course of business 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); 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 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; and
 
(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.
 
Section 4.12  Limitation on 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 property or 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. 
 
(1)  If the Company or any of its Restricted Subsidiaries (except, so long as Bristow Aviation is not a Guarantor, either Bristow Aviation or any of its Subsidiaries) shall, after the Initial Issuance Date, acquire or create another Significant U.S. Subsidiary, or
 
(2)  if, after such date, any Restricted Subsidiary that is not a Guarantor shall incur (as such term is defined in Section 4.09 hereof) any Indebtedness (including any guarantee of Indebtedness of the Company) except Permitted Non-Guarantor Indebtedness,
 
then such newly acquired or created Significant U.S. Subsidiary, in the case of clause (1) above, or such Restricted Subsidiary described in clause (2) above shall execute a supplement to this Indenture substantially in the form of Annex A hereto providing for a Subsidiary Guarantee and deliver an Opinion of Counsel in accordance with the terms of Section 9.06 of this Indenture.
 
Section 4.14  Corporate Existence. 
 
Except as otherwise permitted pursuant to the terms 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 the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with its 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 and that the loss thereof is not adverse in any material respect to the Holders of the Notes.
 
Section 4.15  Offer to Repurchase Upon Change of Control. 
 
(1)  If a Change of Control Trigger Event occurs, 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, plus accrued and unpaid interest and Additional Interest, if any, to the date of repurchase (the “Change of Control Payment”).  Within 30 days following a Change of Control Trigger Event, the Company shall mail a notice to each Holder and the Trustee describing the transaction that constitutes the Change of Control  Trigger Event and stating:
 
(a)  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;
 
(b)  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”);
 
(c)  that any Note not tendered will continue to accrue interest and Additional Interest, if any;
 
(d)  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 Additional Interest, if any, after the Change of Control Payment Date;
 
(e)  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;
 
(f)  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;
 
(g)  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 $2,000 in principal amount or an integral multiple of $1,000, and
 
(h)  if the Change of Control Payment Date is on or after an interest payment record date and on or before the related interest payment date, any accrued and unpaid interest and Additional Interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no other interest will be payable to holders who tender pursuant to the Change of Control Offer.
 
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 Trigger Event.
 
(2)  On or before 11:00 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 (in integral multiples of $1,000) 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 of Notes being purchased by the Company.
 
The Paying Agent 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 $2,000 or an integral multiple of $1,000.  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.
 
(3)  The Change of Control Offer provisions described above shall be applicable whether or nor any other provisions of this Indenture are applicable.
 
(4)  The Company shall not be required to make a Change of Control Offer following a Change of Control Trigger Event 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.
 
(5)  To the extent that the provisions of any securities laws or regulations conflict with provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations described in this Indenture by virtue of the conflict.
 
Section 4.16  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.
 
Section 4.17  Investment Grade Covenants. 
 
If an Investment Grade Rating Event occurs and no Default or Event of Default has occurred and is continuing under this Indenture, then upon delivery to the Trustee of an Officers’ Certificate to the foregoing effect, each of the covenants contained in Articles 4 and 5 herein (except for Section 5.01 (but clause (d) of that Section will no longer apply) and Sections 4.01 through 4.06 and this Section 4.17) will cease to apply to the Company and each of its Restricted Subsidiaries.  Only upon and after the occurrence of an Investment Grade Rating Event, the following covenants will apply:
 
(a)  Restrictions on Secured Indebtedness
 
If the Company or any Restricted Subsidiary incurs any Indebtedness secured by a Lien (other than a Permitted Lien) on any asset or property or on any Capital Stock or Indebtedness of a Restricted Subsidiary, the Company or such Restricted Subsidiary will secure the Notes equally and ratably with (or at the Company’s option, prior to) such secured Indebtedness so long as such Indebtedness is so secured, unless the aggregate amount of all Indebtedness secured by Liens (other than Permitted Liens), together with all Attributable Indebtedness of the Company and the Restricted Subsidiaries with respect to any Sale/Leaseback Transactions (with the exception of such transactions which are excluded as described in clauses (1) through (4) under Section 4.17(b) below), would not exceed 10% of Consolidated Net Tangible Assets.
 
(b)  Restrictions on Sale/Leaseback Transactions
 
The Company will not, and will not permit any Restricted Subsidiary to, enter into any Sale/Leaseback Transaction, unless the aggregate amount of all Attributable Indebtedness with respect to such transaction plus all secured Indebtedness of the Company and the Restricted Securities (with the exception of Indebtedness secured by Permitted Liens) would not exceed 10% of Consolidated Net Tangible Assets.  This restriction shall not apply to, and there shall be excluded from Attributable Indebtedness in any computation under such restriction, any Sale/Leaseback Transaction if:
 
(1)  the lease is for a period, including renewal rights, not in excess of three years;
 
(2)  the sale of the asset or property subject to the Sale/Leaseback Transaction is made within 270 days after its acquisition, construction or improvements;
 
(3)  the transaction is between the Company and a Restricted Subsidiary; or
 
(4)  the Company, within 270 days after the sale is completed, applies to the retirement of its Indebtedness or that of a Restricted Subsidiary, or to the purchase of other assets or properties which will constitute Productive Assets, an amount not less than the greater of: (A) the net proceeds of the sale of the asset or property leased; or (B) the fair market value (as determined by the Company in good faith) of the asset or property leased.
 
The amount to be applied to the retirement of Indebtedness shall be reduced by:
 
(A)  the principal amount of any of the Company’s debentures or notes (including the Notes) or those of a Restricted Subsidiary surrendered within 270 days after such sale to the applicable trustee for retirement and cancellation;
 
(B)  the principal amount of Indebtedness, other than the items referred to in the preceding clause (A), voluntarily retired by the Company or a Restricted Subsidiary within 270 days after such sale; and
 
(C)  associated transaction expenses.
 

 
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, partnership or limited liability company organized or existing under the laws of the United States, any state 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;
 
(d)  except in the case of a merger of the Company with or into a Restricted Subsidiary of the Company, either (i) 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 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 or (ii) the Consolidated Interest Coverage Ratio of the Company or the Person surviving or formed by such transaction, calculated for the most recent four quarter period for which internal financial statements of the Company are available, after giving pro forma effect to such transaction and any related incurrence of Indebtedness, is (A) at least 2.0 to 1.0 or (B) greater than the Consolidated Interest Coverage Ratio of the Company determined for such period without giving effect to such transaction and incurrence of Indebtedness; and
 
(e)  the Company shall have delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation, merger or transfer and such supplemental indenture (if any) comply with this Indenture;
 
provided, however, that clause (d) shall no longer be applicable from and after the occurrence of any Investment Grade Rating Event.
 
For purposes of this covenant, the sale, assignment, transfer, lease, conveyance, or other disposition of all or substantially all of the properties or assets of one or more Subsidiaries of the Company, which properties or assets, if held by the Company instead of such Subsidiaries, would constitute all or substantially all of the properties or assets of the Company on a consolidated basis, shall be deemed to be the transfer of all or substantially all of the properties or assets of the Company.
 
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 and its Restricted Subsidiaries taken as a whole 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; and thereafter, if the Company is dissolved following a transfer of all or substantially all of its assets in accordance with this Indenture, the Company shall be discharged and released from all obligations and covenants under this Indenture and the Notes.  The Trustee shall enter into a supplemental indenture to evidence the succession and substitution of such successor Person and such discharge and release of the Company.
 
ARTICLE 6
 
DEFAULTS AND REMEDIES
 
Section 6.01  Events of Default. 
 
An “Event of Default” occurs if one of the following shall have occurred and be continuing:
 
(a)  the Company defaults in the payment when due of interest or Additional Interest, if any, with respect to, the Notes, and such default continues for a period of 30 days;
 
(b)  the Company defaults in the payment of the principal of or premium, if any, on the Notes when due at its Stated Maturity, upon optional redemption, upon required repurchase, upon declaration or otherwise;
 
(c)  the Company fails for 30 days after notice to comply with the provisions of Sections 4.10 or 4.15 (other than a failure to repurchase Notes when due) or 5.01 hereof;
 
(d)  the Company fails to comply with 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 (provided that, with respect to the covenant in Section 4.03, the Company shall in no event have less than 120 days from the failure to comply with such covenant to cure such failure);
 
(e)  a default occurs 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 Initial Issuance Date, which default:
 
(1)  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
 
(2)  results in the acceleration of such Indebtedness prior to its Stated 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 $25.0 million; 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, 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)  the Company or any of its Restricted Subsidiaries fails to pay final judgments aggregating in excess of $25.0 million (net of any amounts that a reputable and creditworthy insurance company has acknowledged liability for in writing), which judgments are not paid, discharged or stayed for a period of 60 days;
 
(g)  any Guarantor fails to perform any covenant set forth in its Subsidiary Guarantee or repudiates its obligations under its Subsidiary Guarantee, or any Subsidiary Guarantee becomes unenforceable against a Guarantor for any reason; and
 
(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)  admits in writing it generally is not paying its debts as they become due; or
 
(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 preceding, if an Event of Default specified in clause (h) or (i) of Section 6.01 hereof occurs with respect to the Company or any Significant Subsidiary, all outstanding Notes shall 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 with respect to nonpayment of principal, interest, premium or Additional Interest, 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, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes.
 
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 Additional Interest, if any, on the Notes or to enforce the performance of any provision of the Notes or this Indenture.
 
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 Additional Interest, 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 amount of the then outstanding Notes do not give the Trustee a direction inconsistent 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 Additional Interest, 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 Additional Interest, if any, remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and Additional Interest, 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.
 
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 Additional Interest, 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 Additional Interest, if any, respectively; and
 
Third:  to the Company or to such party as a court of competent jurisdiction shall direct.
 
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;
 
(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 has offered to the Trustee security and indemnity satisfactory to it in its sole discretion (which discretion shall be exercised in good faith) 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.
 
(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 Holder 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.
 
(h)  The permissive right of the Trustee to act hereunder shall not be construed as a duty.
 
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 (as defined in the TIA) after a Default has occurred and is continuing, 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, interest or Additional 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.
 
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 § 313(a) (but if no event described in TIA § 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted).  The Trustee also shall comply with TIA § 313(b)(2) and § 313(b)(1).  The Trustee shall also transmit by mail all reports as required by TIA § 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 § 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; provided that the Company will not be required to pay such fees and expenses if it assumes the Trustee’s defense with counsel acceptable to and approved by the Trustee (such approval not to be unreasonably withheld) and there is no conflict of interest between the Company and the Trustee in connection with such defense.  The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.  The Company need not reimburse the Trustee for any expense or indemnity against any liability or loss of the Trustee to the extent such expense, liability or loss is attributable to the negligence, bad faith or willful misconduct of the Trustee.
 
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 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 § 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 upon 60 days notice 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 and may appoint a successor trustee with the consent of the Company.  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 receiver, 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 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 § 310(a)(1), (2) and (5).  The Trustee is subject to TIA § 310(b).
 
Section 7.11  Preferential Collection of Claims Against Company. 
 
The Trustee is subject to TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b).  A Trustee who has resigned or been removed shall be subject to TIA § 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 Additional Interest, 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, 2.09 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) the Legal Defeasance provisions of 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.
 
If the Company exercises its Legal Defeasance option, each Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and any security for the Notes (other than the trust) will be released.
 
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 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 (d) 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.
 
If the Company exercises its Covenant Defeasance option, each Guarantor will be released and relieved of any obligations under its Subsidiary Guarantee and any security for the Notes (other than the trust) will be released.
 
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 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 Additional Interest, 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 Stated 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:
 
(1)  the Company has received from, or there has been published by, the Internal Revenue Service a ruling; or
 
(2)  since the Initial Issuance Date, 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;
 
(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.
 
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, interest or Additional Interest, if any, on any Note and remaining unclaimed for two years after such principal, premium, interest or Additional Interest, if any, 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.
 
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, interest, Additional Interest, if any, 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.
 
Section 8.08  Discharge. 
 
If (i) the Company shall deliver to the Trustee for cancellation all Notes theretofore authenticated and delivered (other than any Notes which shall have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore cancelled, or (ii) all Notes not theretofore surrendered or delivered to the Trustee for cancellation shall have become due and payable, or are by their terms to become due and payable within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee, and the Company shall irrevocably deposit with the Trustee, as trust funds solely for the benefit of the Holders for that purpose, an amount sufficient to pay at maturity or upon redemption all of the Notes (other than any Notes which shall have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore surrendered or delivered to the Trustee for cancellation, including principal, premium, if any, interest, Additional Interest, if any, due or to become due to such date of maturity or redemption date, as the case may be, then this Indenture shall cease to be of further force or effect (except as to rights of registration of transfer or exchange of the Notes provided in this Indenture) and, at the written request of the Company, accompanied by an Officers’ Certificate and Opinion of Counsel, each stating that all conditions precedent provided for herein relating to the satisfaction and discharge of this Indenture have been complied with, and upon payment of the costs, charges and expenses incurred or to be incurred by the Trustee in relation thereto or in carrying out the provisions of this Indenture, the Trustee shall satisfy and discharge this Indenture (“Discharge”).
 
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 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;
 
(f)  to provide for the issuance of Additional Notes in accordance with the limitations set forth in this Indenture;
 
(g)  to add additional Guarantors with respect to the Notes or to release any Guarantor from its Subsidiary Guarantee in accordance with Section 4.13 or Article 10 hereof; or
 
(h)  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 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 consents obtained in connection with a purchase of, or tender offer or exchange offer for, 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 purchase of, tender offer or exchange offer for 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):
 
(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 or repurchase of the Notes (except as provided in Sections 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 Additional Interest, 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 Additional Interest, if any, on the Notes (except as permitted in clause (g) below);
 
(g)  waive a redemption or repurchase 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 or the Subsidiary Guarantees relative to other Indebtedness of the Company or the Guarantors, respectively, in either case in a manner adverse to the Holders of Notes;
 
(i)   modify the Subsidiary Guarantees in any manner adverse to the holders of the Notes; or
 
(j)  make any change in the preceding amendment, supplement and waiver provisions.
 
Section 9.03  Compliance with Trust Indenture Act. 
 
Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect.
 
A consent to any amendment, supplement or waiver under this Indenture by any Holder given in connection with a purchase, tender or exchange of such Holder’s Notes shall not be rendered invalid by such purchase, tender or exchange.
 
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.
 
The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver.  If a record date is fixed, then notwithstanding the last sentence of the immediately preceding paragraph, those Persons who were Holders at such record date (or their duly designated proxies), and only those Persons, shall be entitled to consent to such amendment or waiver or revoke any consent previously given, whether or not such Persons continue to be Holders after such record date.  No consent shall be valid or effective for more than 90 days after such record date except to the extent that the requisite number of consents to the amendment, supplement or waiver have been obtained within such 90-day period or as set forth in the next paragraph of this Section 9.04.
 
After an amendment, supplement or waiver becomes effective, it shall bind every Holder, unless it makes a change described in any of clauses (a) through (j) of Section 9.02, in which case, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent Holder of a Note or portion of a Note that evidences the same indebtedness as the consenting Holder’s Note.
 
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.
 
ARTICLE 10
 
GUARANTEES OF NOTES
 
Section 10.01  Subsidiary Guarantees. 
 
Subject to this Article 10, each of the Guarantors hereby, jointly and severally, unconditionally guarantee, on a senior unsecured basis, 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 Additional Interest, 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 Additional Interest, 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 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   [Reserved]. 
 
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  Guarantor pursuant to a supplemental indenture, substantially in the form of Annex A hereto, under the Notes, this Indenture and the Registration Rights Agreement and delivers an Opinion of Counsel in accordance with the terms of this Indenture; (ii) immediately after giving effect to such transaction, no Default or Event of Default exists and (iii) no Default or Event of Default shall have occurred and be continuing.
 
(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 Annex A 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.
 
Section 10.04  Releases Following Sale of Assets. 
 
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 owned by the Company and its Subsidiaries, then such Guarantor shall be released and relieved of any obligations under its Subsidiary Guarantee; provided, however, that in the event such transaction constitutes an Asset Sale, the Net Proceeds from such sale or other disposition are applied in accordance with the provisions of Section 4.10 hereof.  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 Additional Interest, 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.
 
Section 10.06  Limitation on Guarantor Liability. 
 
The obligations of each Guarantor under its Subsidiary Guarantee will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Subsidiary Guarantee or pursuant to its contribution obligations under this Indenture, result in the obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law and not otherwise being void or voidable under any similar laws affecting the rights of creditors generally.
 
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 §318(c), such TIA-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), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others’ address:
 
If to the Company or the Guarantors:

Bristow Group Inc.
2000 West Sam Houston Parkway South
Suite 1700
Houston, Texas 77042
Attention: Chief Financial Officer
Fax No.:  (713) 267-7620 

If to the Trustee:

U.S. Bank National Association
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Telecopier No.:  (860) 241-6897
Attention: Corporate Trust Services
 
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 in each case to the address shown above.
 
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 § 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 § 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 § 312(c).
 
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 Section 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 Section 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 § 314(a)(4)) shall comply with the provisions of TIA § 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.
 
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 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.
 
Section 11.08  Governing Law. 
 
THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
Section 11.09  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 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.
 
Section 11.12  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.
 
Section 11.13  Counterparts. 
 
This Indenture may be signed in counterparts and by the different parties hereto in separate counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument.
 
[Signatures on following page]
 

 
 
 

SIGNATURES
 

 
BRISTOW GROUP INC.
 
By:/s/ Randall Stafford
Randall Stafford
 
Vice President, General Counsel
 
and Corporate Secretary


AIR LOGISTICS, LLC

By: /s/ Randall Stafford
Randall Stafford
Manager


 
AIR LOGISTICS OF ALASKA, INC
 
GRASSO PRODUCTION MANAGEMENT, INC.
 
AIRLOG INTERNATIONAL LTD.
 
MEDIC SYSTEMS, INC.
 
GRASSO CORPORATION

By: /s/ Joseph A. Baj
Joseph A. Baj
Treasurer and Secretary


 
 
 


U.S. BANK NATIONAL ASSOCIATION,
as TRUSTEE
 

 
By:/s/ Susan C. Merker
Authorized Signatory

 

 
 
 

RULE 144A/REGULATION S APPENDIX
 

 
PROVISIONS RELATING TO INITIAL NOTES,
 
PRIVATE EXCHANGE NOTES
 
AND EXCHANGE NOTES
 
1.Definitions
 
1.1Definitions.
 
For the purposes of this Appendix the following terms shall have the meanings indicated below:
 
“Depository” means The Depository Trust Company, its nominees and their respective successors.
 
“Exchange Notes” means (1) the Notes issued pursuant to the Indenture in connection with a Registered Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional Notes, if any, issued pursuant to a registration statement filed with the SEC under the Notes Act.
 
“Initial Purchasers” means (1) with respect to the Initial Notes issued on the Initial Issuance Date, Goldman, Sachs & Co., Credit Suisse Securities (USA) LLC, Banc of America Securities LLC, J.P. Morgan Securities Inc., Suntrust Robinson Humphrey, and Wells Fargo Securities, LLC, and (2) with respect to each issuance of Additional Notes, the Persons purchasing such Additional Notes under the related Purchase Agreement.
 
“Initial Notes” means (1) $300 million aggregate principal amount of Notes issued on the Initial Issuance Date and (2) Additional Notes, if any, issued in a transaction exempt from the registration requirements of the Securities Act.
 
“Notes” means the 7½% Senior Notes due 2017 issued under this Indenture, including the Initial Notes, the Additional Notes, the Exchange Notes and the Private Exchange Notes, treated as a single class.
 
“Notes Custodian” means the custodian with respect to a Global Note (as appointed by the Depository), or any successor Person thereto and shall initially be the Trustee.
 
“Private Exchange” means the offer by the Company, pursuant to a Registration Rights Agreement, to the Initial Purchasers to issue and deliver to each Initial Purchaser, in exchange for the Initial Notes held by the Initial Purchaser as part of its initial distribution, a like aggregate principal amount of Private Exchange Notes.
 
“Private Exchange Notes” means any Notes issued in connection with a Private Exchange.
 
“Purchase Agreement” means (1) with respect to the Initial Notes issued on the Initial Issuance Date, the Purchase Agreement dated June 7, 2007 among the Company, the Guarantors and the Initial Purchasers, and (2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Company and the Persons purchasing such Additional Notes.
 
“QIB” means a “qualified institutional buyer” as defined in Rule 144A.
 
“Registered Exchange Offer” means the offer by the Company, pursuant to a Registration Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act.
 
“Registration Rights Agreement” means (1) with respect to the Initial Notes issued on the Initial Issuance Date, the Registration Rights Agreement dated as of June 13, 2007 among the Company, the Guarantors and the Initial Purchasers, a copy of which is attached to this Indenture as Annex B, and (2) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Company and the Persons purchasing such Additional Notes under the related Purchase Agreement.
 
“Securities Act” means the Securities Act of 1933.
 
“Shelf Registration Statement” means the registration statement issued by the Company in connection with the offer and sale of Initial Notes or Private Exchange Notes pursuant to a Registration Rights Agreement.
 
“Transfer Restricted Securities” means Notes that bear or are required to bear the legend set forth in Section 2.3(b) hereof.
 
1.2Other Definitions.
 
Term
Defined in Section:
“Agent Members”
2.1(b)
“Global Note”
2.1(a)
“Regulation S”
2.1(a)
“Restricted Global Note”
2.1(a)
“Rule 144A”
2.1(a)

 
2.  The Notes.
 
2.1(a)  Form and Dating.  Initial Notes offered and sold to a QIB in reliance on Rule 144A under the Securities Act (“Rule 144A”) or in reliance on Regulation S under the Securities Act (“Regulation S”), in each case as provided in a Purchase Agreement, and Private Exchange Notes, as provided in a Registration Rights Agreement, shall be issued initially in the form of one or more permanent global Notes in definitive, fully registered form without interest coupons with the global Notes legend and restricted Notes legend set forth in Exhibit 1 hereto (each, a “Restricted Global Note”), which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Trustee, as custodian for the Depository (or with such other custodian as the Depository may direct), 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.  Prior to the 40th day after the Initial Issuance Date, beneficial interests in the Restricted Global Note representing Initial Notes sold in reliance on Regulation S may only be held through Euroclear or Clearstream, and any resale or transfer of such interests to U.S. persons (as defined in Regulation S) shall not be permitted during such period unless such resale or transfer is made pursuant to Rule 144A or Regulation S.  The aggregate principal amount of the 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 hereinafter provided.  Exchange Notes shall be issued in global form (with the global Notes legend set forth in Exhibit 1 hereto) or in certificated form as provided in Section 2.4 of this Appendix.  Exchange Notes issued in global form and Restricted Global Notes are sometimes referred to in this Appendix as “Global Notes”.
 
(b)  Book-Entry Provisions.  This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depository.
 
The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b), authenticate and deliver initially one or more Global Notes that (a) shall be registered in the name of the Depository for such Global Note or Global Notes or the nominee of such Depository and (b) shall be delivered by the Trustee to such Depository or pursuant to such Depository’s instructions or held by the Trustee as custodian for the Depository.
 
Members of, or participants in, the Depository (“Agent Members”) shall have no rights under this Indenture with respect to any Global Note held on their behalf by the Depository or by the Trustee as the custodian of the Depository or under such Global Note, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository 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 Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Note.
 
(c)  Certificated Notes.  Except as provided in this Section 2.1 or Section 2.3 or 2.4, owners of beneficial interests in Restricted Global Notes shall not be entitled to receive physical delivery of certificated Notes.
 
2.2  Authentication.  The Trustee shall authenticate and deliver:  (1) on the Initial Issuance Date, Notes having an aggregate principal amount of $300 million, (2) any Additional Notes for an original issue in an aggregate principal amount specified in the written order of the Company pursuant to Section 2.02 of the Indenture and (3) Exchange Notes or Private Exchange Notes for issue only in a Registered Exchange Offer or a Private Exchange, respectively, pursuant to a Registration Rights Agreement, for a like principal amount of Initial Notes, in each case upon a written order of the Company signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of the Company.  Such order shall specify the amount of the Notes to be authenticated and the date on which the original issue of Notes is to be authenticated and, in the case of any issuance of Additional Notes pursuant to Section 2.13 of the Indenture, shall certify that such issuance is in compliance with Section 4.03 of the Indenture.
 
2.3  Transfer and Exchange.
 
(a)Transfer and Exchange of Global Notes.  (i)  The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor.  A transferor of a beneficial interest in a Global Note shall deliver to the Registrar a written order given in accordance with the Depository’s procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Note.  The Registrar shall, in accordance with such instructions instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred.
 
(ii)  Notwithstanding any other provisions of this Appendix (other than the provisions set forth in Section 2.4), 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.
 
(iii)  In the event that a Restricted Global Note is exchanged for Notes in certificated registered form pursuant to Section 2.4 of this Appendix, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A or Regulation S, as the case may be) and such other procedures as may from time to time be adopted by the Company.
 
(b)  Legend.
 
(i)  Except as permitted by the following paragraphs (ii), (iii) and (iv), each Note certificate evidencing the Restricted Global Notes (and all Notes issued in exchange therefor or in substitution thereof) shall bear a legend in substantially the following form:
 
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
 
(ii)  Upon any sale or transfer of a Transfer Restricted Security (including any Transfer Restricted Security represented by a Restricted Global Note) pursuant to Rule 144 under the Securities Act, the Registrar shall permit the transferee thereof to exchange such Transfer Restricted Security for a certificated Note that does not bear the legend set forth above and rescind any restriction on the transfer of such Transfer Restricted Security, if the transferor thereof certifies in writing to the Registrar that such sale or transfer was made in reliance on Rule 144 (such certification to be in the form set forth on the reverse of the Note).
 
(iii)  After a transfer of any Initial Notes or Private Exchange Notes pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes or Private Exchange Notes, as the case may be, all requirements pertaining to legends on such Initial Note or such Private Exchange Note will cease to apply, the requirements requiring any such Initial Note or such Private Exchange Note issued to certain Holders be issued in global form will cease to apply, and a certificated Initial Note or Private Exchange Note or an Initial Note or Private Exchange Note in global form, in each case without restrictive transfer legends, will be available to the transferee of the Holder of such Initial Notes or Private Exchange Notes upon exchange of such transferring Holder’s certificated Initial Note or Private Exchange Note or directions to transfer such Holder’s interest in the Global Note, as applicable.
 
(iv)  Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form will be available to Holders that exchange such Initial Notes in such Registered Exchange Offer.
 
(v)  Upon the consummation of a Private Exchange with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Private Exchange Notes in global form with the global Notes legend and the Restricted Notes legend set forth in Exhibit 1 hereto will be available to Holders that exchange such Initial Notes in such Private Exchange.
 
(c)  Cancellation or Adjustment of Global Note.  At such time as all beneficial interests in a Global Note have either been exchanged for certificated Notes, redeemed, purchased or canceled, such Global Note shall be returned to the Depository for cancellation or retained and canceled by the Trustee.  At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for certificated Notes, redeemed, purchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Notes Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Notes Custodian, to reflect such reduction.
 
(d)  Obligations with Respect to Transfers and Exchanges of Notes.
 
(i)  To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate certificated Notes and Global Notes at the Registrar’s or co-registrar’s request.
 
(ii)  No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than any such transfer taxes, assessments or similar governmental charge payable upon exchange or transfer pursuant to Sections 3.06, 4.10, 4.15 and 9.05 and of the Indenture).
 
(iii)  The Registrar or co-registrar shall not be required to register the transfer of or exchange 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.
 
(iv)  Prior to the due presentation for registration of transfer of any Note, the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of, premium, if any, interest and Additional Interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Company, the Trustee, the Paying Agent, the Registrar or any co-registrar shall be affected by notice to the contrary.
 
(v)All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
 
(e)No Obligation of the Trustee.
 
(i)  The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes.  All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depository or its nominee in the case of a Global Note).  The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository.  The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.
 
(ii)  The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
 
2.4  Certificated Notes.
 
(a)  A Global Note deposited with the Depository or with the Trustee as custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of certificated Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Note or if at any time such Depository ceases to be a “clearing agency” registered under the Exchange Act and in either event a successor depositary is not appointed by the Company within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing and DTC notifies the Trustee of its decision to exchange the Global Notes, or (iii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of certificated Notes under this Indenture.
 
(b)  Any Global Note that is transferable to the beneficial owners thereof pursuant to this Section shall be surrendered by the Depository or the Notes Custodian to the Trustee located at its Corporate Trust Office to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of certificated Notes of authorized denominations.  Any portion of a Global Note transferred pursuant to this Section shall be executed, authenticated and delivered only in denominations of $2,000 principal amount and any integral multiple of $1,000 thereafter and registered in such names as the Depository shall direct.  Any certificated Note or Private Exchange Note delivered in exchange for an interest in the Global Note shall, except as otherwise provided by Section 2.3(b), bear the restricted Notes legend set forth in Exhibit 1 hereto.
 
(c)  Subject to the provisions of Section 2.4(b), the Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.
 
(d)  In the event of the occurrence of any of the events specified in Section 2.4(a), the Company shall promptly make available to the Trustee a reasonable supply of certificated Notes in definitive, fully registered form without interest coupons.
 

      
               
    
 
 
 

EXHIBIT 1 TO RULE 144A/REGULATION S APPENDIX
 

 
[FORM OF FACE OF INITIAL NOTE]
 
[Global Notes Legend]
 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS 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.
 
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
 
[Restricted Notes Legend]
 
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
 

 

 

      
               
      
        
      
    
 
 
 

7½% Senior Note due 2017
 
Bristow Group Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of              Dollars on September 15, 2017 [or such greater or lesser amount as may be indicated on Schedule A hereto].1
 
Interest Payment Dates:  March 15 and September 15.
 
Record Dates:  March 1 and September 1.
 
Additional provisions of this Note are set forth on the other side of this Note.
 
Dated:
 
BRISTOW GROUP INC.
 

 
By:
Name:
Title:
 
TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

U.S. BANK NATIONAL ASSOCIATION,
as Trustee, certifies that
this is one of the Notes
referred to in the Indenture.

 
By
Authorized Signatory
 

 

 

 
1  If this Note is a Global Note, add this provision.

      
              
      
        
      
    
 
 
 

[FORM OF REVERSE SIDE OF INITIAL NOTE]
 
7½% Senior Note due 2017
 
Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
 
1.Interest.  Bristow Group Inc., a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at 7½% per annum from June 13, 2007 until maturity and shall pay the Additional Interest payable pursuant to Section 6 of the Registration Rights Agreement referred to below.  The Company will pay interest and Additional Interest, if any, semi-annually in arrears on March 15 and September 15 of each year, commencing  September 15, 2007, 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 Additional Interest (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 Additional Interest to the Persons who are registered Holders of Notes at the close of business on the September 1 or March 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 2.11 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium, if any, interest and Additional Interest, 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 Additional Interest 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 Additional Interest 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, U.S. Bank National Association, 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 June 13, 2007 (“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 Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 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 senior unsecured obligations of the Company limited to $300,000,000 aggregate principal amount in the case of Notes issued on the Initial Issuance Date (as defined in the Indenture).
 
5.The Notes are redeemable as provided in Section 3.07 of the Indenture.
 
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 or repurchase the Notes at the option of the Holder.
 
7Repurchase at Option of Holder.
 
(a)Upon  the occurrence of a Change of Control Trigger Event, the Company shall make an offer (a “Change of Control Offer”) to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000) of each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (the “Change of Control Payment”).  Within 30 days following a Change of Control Trigger Event, 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 Section 4.15 of the Indenture.
 
(b)If the aggregate amount of Excess Proceeds exceeds $30.0 million, to the extent and in the manner required under Sections 3.09 and 4.10 of the Indenture, the Company shall commence an offer to all Holders of Notes (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale (“Pari Passu Notes”), to purchase the maximum principal amount of Notes and any such Pari Passu Notes to which the Asset Sale Offer applies 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 of the Notes and such Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase, in accordance with the procedures set forth in the Indenture or agreements governing the Pair Passu Notes, as applicable.  To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by the Indenture.  If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Trustee shall select the Notes and Pari Passu 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 $2,000, or integral multiples of $1,000, shall be purchased) on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes.  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 $2,000 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 and Additional Interest, if any, cease 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 $2,000 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 pursuant to Article 5 of the Indenture, to secure the Notes pursuant to Section 4.12 of the Indenture or otherwise, 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 provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to add any additional Guarantor with respect to the Notes 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 SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.
 
12.Defaults and Remedies.  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 preceding, in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Significant Subsidiary described in Section 6.01(h) or 6.01(i) of the Indenture, 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 conferred on it.  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, interest, premium or Additional 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 Additional Interest, if any, on the Notes.  The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and, so long as any Notes are outstanding, 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 and Discharge.  The Notes are subject to defeasance and discharge 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.
 
15.No Recourse Against Others.  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 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 June 13, 2007, among the Company, the Guarantors and the Initial Purchasers 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 and corresponding ISIN 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.
 
20.Governing Law.  THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
21.Successor Corporation.  In the event a successor assumes all the obligations of the Company under the Notes and the Indenture, pursuant to the terms thereof, the Company will be released from all such obligations.
 
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:
 
Bristow Group Inc.
2000 West Sam Houston Parkway South
Suite 1700
Houston, Texas 77042
Attention: Chief Financial Officer
Fax No.:   (713) 267-7620

 

      
              
        
      
    
 
 
 

ASSIGNMENT FORM
 
To assign this Note, fill in the form below:
 
I or we assign and transfer this Note to
 

Print or type assignee’s name, address and zip code)
 

(Insert assignee’s soc. sec. or tax I.D. No.)
 
and irrevocably appoint __________________ agent 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 other side of this Note.
 
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Notes Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Company or any Affiliate of the Company, the undersigned confirms that such Notes are being transferred in accordance with its terms:
 
CHECK ONE BOX BELOW
 
 
(1)oto the Company; or
 
 
(2)opursuant to an effective registration statement under the Securities Act of 1933; or
 
 
(3)oinside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
 
 
(4)ooutside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or
 
 
(5)opursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933.
 
Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced b this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (4) or (5) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.
 
Signature Guarantee:
Signature
Signature
Signature

 
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
 

      
         
      
        
      
    
 
 
 

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
 
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
 

 
Dated:
Notice:  To be executed by an executive officer
 

 

      
            
      
        
      
    
 
 
 

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:
 
o  Section 4.10o  Section 4.15
 

 
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $1,000 or integral multiples thereof) you elect to have purchased:  $____________
 
Dated:
(Sign exactly as your name appears on the Note)
 

 
Soc. Sec. or Tax Identification No.:
 

 
Signature Guarantee:
 

 

      
                
      
    
 
 
 

[TO BE ATTACHED TO GLOBAL NOTE]
 
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
 
The following increases or decreases in this Global Note have been made:
 
Date
 
Amount of decrease in Principal Amount of this Global Note
 
Amount of increase in Principal Amount of this Global Note
 
Principal Amount of this Global Note following such decrease or increase
 
Signature of authorized officer of Trustee or Notes Custodian
 
         
         

 

      
                
      
    
 
 
 

EXHIBIT A TO RULE 144A/REGULATION S APPENDIX
 
[FORM OF FACE OF EXCHANGE NOTE
 
OR PRIVATE EXCHANGE NOTE] ___*/**/
 
*/ If the Note is to be issued in global form add the Global Notes Legend from Exhibit 1 to Rule 144A/Regulation S Appendix and the attachment from such Exhibit 1 captioned “[TO BE ATTACHED TO GLOBAL NOTES] - SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE”.
 
**/ If the Note is a Private Exchange Note issued in a Private Exchange to an Initial Purchaser holding an unsold portion of its initial allotment, add the Restricted Notes Legend from Exhibit 1 to Rule 144A/Regulation S Appendix and replace the Assignment Form included in this Exhibit A with the Assignment Form included in such Exhibit 1.
 
All references to “Additional Interest” in the note shall be deleted unless if at the date of issuance of the Exchange Note or Private Exchange Note (as the case may be) any Registration Default (as defined in the Registration Rights Agreement) has occurred with respect to the related Initial Notes during the interest period in which such date of issuance occurs.
 

 

 

      
              
        
      
    
 
 
 

[FORM OF FACE OF EXCHANGE NOTE OR
 
PRIVATE EXCHANGE NOTE]
 
***
 
No.$    
CUSIP No.    
 
ISIN No.      
 
7½% Senior Note due 2017
 
Bristow Group Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of              Dollars on September 15, 2017 [or such greater or lesser amount as may be indicated on Schedule A hereto].2
 
Interest Payment Dates:  March 15 and September 15.
 
Record Dates:  March 1 and September 1.
 
Additional provisions of this Note are set forth on the other side of this Note.
 
Dated:
 
BRISTOW GROUP INC.
 

 
By:
Name:
Title:
 

 
TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

U.S. BANK NATIONAL ASSOCIATION,
as Trustee, certifies that
this is one of the Notes
referred to in the Indenture.

 
By
Authorized Signatory
 

 

 

 

 
2  If this Note is a Global Note, add this provision.

      
                
      
    
 
 
 

[FORM OF REVERSE SIDE OF EXCHANGE NOTE OR PRIVATE EXCHANGE NOTE]
 
7½% Senior Note due 2017
 
Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
 
1.  Interest.  Bristow Group Inc., a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at 7½% per annum from June 13, 2007 until maturity and shall pay the Additional Interest payable pursuant to Section 6 of the Registration Rights Agreement referred to below.  The Company will pay interest and Additional Interest, if any, semi-annually in arrears on March 15 and September 15 of each year, commencing  September 15, 2007, 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 Additional Interest (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 Additional Interest to the Persons who are registered Holders of Notes at the close of business on the March 1 or September 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 2.11 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium, if any, interest and Additional Interest, 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 Additional Interest 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 Additional Interest 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, U.S. Bank National Association, 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 June 13, 2007 (“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 Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 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 senior unsecured obligations of the Company limited to $300,000,000 aggregate principal amount in the case of Notes issued on the Initial Issuance Date (as defined in the Indenture).
 
5.  Optional Redemption.
 
The Notes are redeemable as provided in Section 3.07 of the Indenture.
 
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 or repurchase the Notes at the option of the Holder.
 
7.  Repurchase at Option of Holder.
 
(a)  Upon  the occurrence of a Change of Control Trigger Event, the Company shall make an offer (a “Change of Control Offer”) to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000) of each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (the “Change of Control Payment”).  Within 30 days following a Change of Control Trigger Event, 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 Section 4.15 of the Indenture.
 
(b)  If the aggregate amount of Excess Proceeds exceeds $30.0 million to the extent and in the manner required under Section 3.09 and 4.10 of the Indenture, the Company shall commence an offer to all Holders of Notes (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale (“Pari Passu Notes”), to purchase the maximum principal amount of Notes and any such Pari Passu Notes to which the Asset Sale Offer applies 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 of the Notes and such Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase, in accordance with the procedures set forth in the Indenture or agreements governing the Pair Passu Notes, as applicable.  To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by the Indenture.  If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Trustee shall select the Notes and Pari Passu 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 $2,000, or integral multiples of $1,000, shall be purchased) on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes.  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 $2,000 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 and Additional Interest, if any, cease 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 $2,000 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 pursuant to Article 5 of the Indenture, to secure the Notes pursuant to Section 4.12 of the Indenture or otherwise, 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 provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to add any additional Guarantor with respect to the Notes 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 SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.
 
12.  Defaults and Remedies.  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 preceding, in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Significant Subsidiary described in Section 6.01(h) or 6.01(i) of the Indenture, 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 conferred on it.  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, interest, premium or Additional 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 Additional Interest, if any, on the Notes.  The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and, so long as any Notes are outstanding, 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 and Discharge.  The Notes are subject to defeasance and discharge 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.
 
15.  No Recourse Against Others.  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 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.  CUSIP Numbers.  Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers and corresponding ISIN 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.
 
19.  Governing Law.  THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
20.  Successor Corporation.  In the event a successor assumes all the obligations of the Company under the Notes and the Indenture, pursuant to the terms thereof, the Company will be released from all such obligations.
 
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture.  Requests may be made to:
 
If to the Company or the Guarantors:

Bristow Group Inc.
2000 West Sam Houston Parkway South
Suite 1700
Houston, Texas 77042
Attention: Chief Financial Officer
Fax No.:  (713) 267-7620 

If to the Trustee:

U.S. Bank National Association
Goodwin Square
225 Asylum Street
Hartford, CT 06103
Telecopier No.:  (860) 241-6897
Attention: Corporate Trust Services
 

 

      
              
        
      
    
 
 
 

ASSIGNMENT FORM
 
To assign this Note, fill in the form below:
 
I or we assign and transfer this Note to
 

Print or type assignee’s name, address and zip code)
 

(Insert assignee’s soc. sec. or tax I.D. No.)
 
and irrevocably appoint __________________ agent 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 other side of this Note.
 

 

 

 

      
                
      
    
 
 
 

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:
 
o
 
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $1,000 or integral multiples thereof) you elected to have purchased:  $____________
 
Date:Your Signature:

 

 
Soc. Sec. or Tax Identification No.:
 

 
Signature Guarantee:
(Signature must be guaranteed)
 
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
 

 

      
              
      
        
      
    
 
 
 
      
        ANNEX A      
    

______________________________________________
 
BRISTOW GROUP INC.
 
And
 
the Guarantors named herein
 
______________________________________________
 
7½% SENIOR NOTES DUE 2017
 
______________________________________________
 
________________________
 
FORM OF SUPPLEMENTAL INDENTURE
 
AND AMENDMENT -- SUBSIDIARY GUARANTEE
 
DATED AS OF ____________ __, ____
 
__________________________
 
U.S. BANK NATIONAL ASSOCIATION
 
Trustee
 
__________________________
 

 

      
              
      
                                    
      
    
 
 
 
      
        ANNEX A      
    

This SUPPLEMENTAL INDENTURE, dated as of ___________ __, ____ is among Bristow Group Inc., a Delaware corporation (the “Company”), each of the parties identified under the caption “Guarantors” on the signature page hereto (the “Guarantors”) and U.S. Bank National Association, as Trustee.
 
RECITALS
 
WHEREAS, the Company, the initial Guarantors and the Trustee entered into an Indenture, dated as of June 13, 2007 (the “Indenture”), pursuant to which the Company has issued $_____________ in principal amount of 7½% Senior Notes due 2017 (the “Notes”); and
 
WHEREAS, Section 9.01(g) of the Indenture provides that the Company, the Guarantors and the Trustee may amend or supplement the Indenture in order to comply with Section 4.13 or 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 4.13 or 10.02 and by executing this Supplemental Indenture, the Guarantors whose signatures appear below are subject to the provisions of the Indenture to the extent provided for in Article 10 thereunder.
 
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.THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
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]
 

      
              
      
                                    
      
    
 
 
 

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date first written above.
 
BRISTOW GROUP INC.


By
Name:
Title:


GUARANTORS
[______________________]


By
Name:
Title:


 
U.S. BANK NATIONAL ASSOCIATION, as Trustee


By
Name:
Title:



      
            
      
        
      
    
 
 
 

 EX-4.2 4 ex4w2-080207.htm REGISTRATION RIGHTS AGREEMENT ex4w2-080207.htm
EXHIBIT 4.2


 
$300,000,000

BRISTOW GROUP INC.

7 ½% SENIOR NOTES DUE 2017


REGISTRATION RIGHTS AGREEMENT


June 13, 2007

Goldman, Sachs & Co.
Credit Suisse Securities (USA) LLC
Banc of America Securities LLC
J.P. Morgan Securities Inc.
Suntrust Robinson Humphrey
Wells Fargo Securities, LLC

c/o Goldman, Sachs & Co.
      85 Broad Street
      New York, New York 10004

Dear Sirs:

Bristow Group Inc., a Delaware corporation (the “Issuer”), proposes to issue and sell to you (collectively, the “Initial Purchasers”), upon the terms set forth in a purchase agreement, dated June 7, 2007 (the “Purchase Agreement”), $300,000,000 aggregate principal amount of its 7 1/2% Senior Notes due 2017 (the “Initial Securities”) to be unconditionally guaranteed (the “Guarantees”) by certain of the Issuer’s subsidiaries who are signatories hereto as guarantors (the “Guarantors” and together with the Issuer, the “Company”).  The Initial Securities will be issued pursuant to an Indenture, dated as of June 13, 2007 (the “Indenture”) among the Issuer, the Guarantors named therein and U.S. Bank N.A. (the “Trustee”).  As an inducement to the Initial Purchasers, the Company agrees with the Initial Purchasers, for the benefit of holders of the Initial Securities (including, without limitation, the Initial Purchasers), the Exchange Securities (as defined below) and the Private Exchange Securities (as defined below) (collectively the “Holders”), as follows:

1.  Registered Exchange Offer.  The Company shall, at its own cost, prepare and, not later than 360 days after (or if the 360th day is not a business day, the first business day thereafter) the date of original issue of the Initial Securities (the “Issue Date”), file with the Securities and Exchange Commission (the “Commission”) a registration statement (the “Exchange Offer Registration Statement”) on an appropriate form under the Securities Act of 1933, as amended (the “Securities Act”), with respect to a proposed offer (the “Registered Exchange Offer”) to the Holders of Transfer Restricted Securities (as defined in Section 6 hereof), who are not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer, to issue and deliver to such Holders, in exchange for the Initial Securities, a like aggregate principal amount of debt securities (the “Exchange Securities”) of the Company issued under the Indenture and identical in all material respects to the Initial Securities (except for the transfer restrictions relating to the Initial Securities and the provisions relating to the matters described in Section 6 hereof) that would be registered under the Securities Act.  The Company shall use its reasonable best efforts to cause such Exchange Offer Registration Statement to become effective under the Securities Act within 360 days (or if the 360th day is not a business day, the first business day thereafter) after the Issue Date of the Initial Securities and shall keep the Exchange Offer Registration Statement effective for not less than 20 business days (or longer, if required by applicable law) after the date notice of the Registered Exchange Offer is mailed to the Holders (such period being called the “Exchange Offer Registration Period”).  Notwithstanding the foregoing, the Company shall not be required to file the Exchange Offer Registration Statement or engage in the Registered Exchange Offer if there are no outstanding Transfer Restricted Securities (as defined in Section 6 hereof) on the 360th day after the Issue Day, provided that Company has either (a) (1)  acquired an unrestricted CUSIP number for the Securities; (2) executed a new unrestricted global note for the Securities and caused to be delivered all certificates, instruction letters and opinions required under the Indenture in connection therewith; and (3) instructed The Depository Trust Company to convert the Transfer Restricted Securities to freely tradable Securities with the above unrestricted CUSIP number and unrestricted global note, or (b) taken such other actions as are required in its reasonable judgment so that the Initial Securities are freely transferable by non-affiliates in the same manner as Exchange Securities, including through the facilities of The Depository Trust Corporation.

If the Company effects the Registered Exchange Offer, the Company will be entitled to close the Registered Exchange Offer 20 business days after the commencement thereof provided that the Company has accepted all the Initial Securities theretofore validly tendered and not withdrawn in accordance with the terms of the Registered Exchange Offer.

Following the declaration of the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Registered Exchange Offer, it being the objective of such Registered Exchange Offer to enable each Holder of Transfer Restricted Securities electing to exchange the Initial Securities for Exchange Securities (assuming that such Holder is not an affiliate of the Company within the meaning of the Securities Act, acquires the Exchange Securities in the ordinary course of such Holder’s business and has no arrangements with any person to participate in the distribution of the Exchange Securities and is not prohibited by any law or policy of the Commission from participating in the Registered Exchange Offer) to trade such Exchange Securities from and after their receipt without any limitations or restrictions under the Securities Act and without material restrictions under the securities laws of the several states of the United States; provided, however, that Exchanging Dealers (as defined below) will be required to deliver a prospectus in connection with resales of Exchange Securities.

The Company acknowledges that, pursuant to current interpretations by the Commission’s staff of Section 5 of the Securities Act, in the absence of an applicable exemption therefrom, (i) each Holder that is a broker-dealer electing to exchange Securities acquired for its own account as a result of market making activities or other trading activities for Exchange Securities (an “Exchanging Dealer”) is required to deliver a prospectus containing the information set forth in (a) Annex A hereto on the cover, (b) Annex B hereto in the “Exchange Offer Procedures” section and the “Purpose of the Exchange Offer” section, and (c) Annex C hereto in the “Underwriting” section of such prospectus in connection with a sale of any such Exchange Securities received by such Exchanging Dealer pursuant to the Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell Exchange Securities acquired in exchange for Initial Securities constituting any portion of an unsold allotment is required to deliver a prospectus containing the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in connection with such sale.
 
 
 

The Company shall use its reasonable best efforts to keep the Exchange Offer Registration Statement effective and to amend and supplement the prospectus contained therein, in order to permit such prospectus to be lawfully delivered by all persons subject to the prospectus delivery requirements of the Securities Act for such period of time as such persons must comply with such requirements in order to resell the Exchange Securities; provided, however, that (i) in the case where such prospectus and any amendment or supplement thereto must be delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be the lesser of 180 days and the date on which all Exchanging Dealers and the Initial Purchasers have sold all Exchange Securities held by them (unless such period is extended pursuant to Section 3(j) below) and (ii) the Company shall make such prospectus and any amendment or supplement thereto available to any broker-dealer for use in connection with any resale of any Exchange Securities for a period of not less than 90 days after the consummation of the Registered Exchange Offer.

If, upon consummation of the Registered Exchange Offer, any Initial Purchaser holds Initial Securities acquired by it as part of its initial distribution, the Company, simultaneously with the delivery of the Exchange Securities pursuant to the Registered Exchange Offer, shall issue and deliver to such Initial Purchaser upon the written request of such Initial Purchaser, in exchange (the “Private Exchange”) for the Initial Securities held by such Initial Purchaser, a like principal amount of debt securities of the Company issued under the Indenture and identical in all material respects (including the existence of restrictions on transfer under the Securities Act and the securities laws of the several states of the United States, but excluding provisions relating to the matters described in Section 6 hereof) to the Initial Securities (the “Private Exchange Securities”).  The Initial Securities, the Exchange Securities and the Private Exchange Securities are herein collectively called the “Securities”.

In connection with the Registered Exchange Offer, the Company shall:
     
(a)
  
mail to each Holder a copy of the prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents;
     
(b)
  
keep the Registered Exchange Offer open for not less than 20 business days (or longer, if required by applicable law) after the date notice thereof is mailed to the Holders;
     
(c)
  
utilize the services of a depositary for the Registered Exchange Offer, which may be the Trustee or an affiliate of the Trustee;
     
(d)
  
permit Holders to withdraw tendered Securities at any time prior to the close of business, New York time, on the last business day on which the Registered Exchange Offer shall remain open; and
     
(e)
  
otherwise comply with all applicable laws.

As soon as practicable after the close of the Registered Exchange Offer or the Private Exchange, as the case may be, the Company shall:

(x)  accept for exchange all the Securities validly tendered and not withdrawn pursuant to the Registered Exchange Offer and the Private Exchange; and

(y)  deliver to the Trustee for cancellation all the Initial Securities so accepted for exchange; and

(z)  cause the Trustee to authenticate and deliver promptly to each Holder of the Initial Securities, Exchange Securities or Private Exchange Securities, as the case may be, equal in principal amount to the Initial Securities of such Holder so accepted for exchange.


The Indenture will provide that the Exchange Securities will not be subject to the transfer restrictions set forth in the Indenture and that all the Securities will vote and consent together on all matters as one class and that none of the Securities will have the right to vote or consent as a class separate from one another on any matter.

Interest on each Exchange Security and Private Exchange Security issued pursuant to the Registered Exchange Offer and in the Private Exchange will accrue from the last interest payment date on which interest was paid on the Initial Securities surrendered in exchange therefor or, if no interest has been paid on the Initial Securities, from the date of original issue of the Initial Securities.

Each Holder participating in the Registered Exchange Offer shall be required to represent to the Company that at the time of the consummation of the Registered Exchange Offer (i) any Exchange Securities received by such Holder will be acquired in the ordinary course of business, (ii) such Holder will have no arrangements or understanding with any person to participate in the distribution of the Securities or the Exchange Securities within the meaning of the Securities Act, (iii) such Holder is not an “affiliate,” as defined in Rule 405 of the Securities Act, of the Company or if it is an affiliate, such Holder will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable, (iv) if such Holder is not a broker-dealer, that it is not engaged in, and does not intend to engage in, the distribution of the Exchange Securities and (v) if such Holder is a broker-dealer, that it will receive Exchange Securities for its own account in exchange for Initial Securities that were acquired as a result of market-making activities or other trading activities, and that it will be required to acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.

Notwithstanding any other provisions hereof, the Company will ensure that (i) any Exchange Offer Registration Statement and any amendment thereto and any prospectus forming part thereof and any supplement thereto complies in all material respects with the Securities Act and the rules and regulations thereunder, (ii) any Exchange Offer Registration Statement and any amendment thereto does not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any prospectus forming part of any Exchange Offer Registration Statement, and any supplement to such prospectus, does not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

2.  Shelf Registration.  If (A) the Company is required to effect a Registered Exchange Offer pursuant to Section 1 hereof and (B)(i) because of any change in law or in applicable interpretations thereof by the staff of the Commission, the Company is not permitted to effect a Registered Exchange Offer, as contemplated by Section 1 hereof, (ii) the Registered Exchange Offer is not consummated within 390 days of the Issue Date, (iii) any Initial Purchaser so requests with respect to the Initial Securities (or the Private Exchange Securities) not eligible to be exchanged for Exchange Securities in the Registered Exchange Offer and held by it following consummation of the Registered Exchange Offer or (iv) any Holder (other than an Exchanging Dealer) is not eligible to participate in the Registered Exchange Offer or, in the case of any Holder (other than an Exchanging Dealer) that participates in the Registered Exchange Offer, such Holder does not receive freely tradeable Exchange Securities on the date of the exchange, the Company shall take the following actions:

(a)  The Company shall, at its cost, as promptly as practicable (but in no event more than 30 days after so required pursuant to this Section 2) file with the Commission and thereafter shall use its reasonable best efforts to cause to be declared effective (unless it becomes effective automatically upon filing), a registration statement (the “Shelf Registration Statement” and, together with the Exchange Offer Registration Statement, a “Registration Statement”) on an appropriate form under the Securities Act relating to the offer and sale of the Transfer Restricted Securities (as defined in Section 6 hereof) by the Holders thereof from time to time in accordance with the methods of distribution set forth in the Shelf Registration Statement and Rule 415 under the Securities Act (hereinafter, the “Shelf Registration”); provided, however, that no Holder (other than an Initial Purchaser) shall be entitled to have the Securities held by it covered by such Shelf Registration Statement unless such Holder agrees in writing to be bound by all the provisions of this Agreement applicable to such Holder (an “Eligible Holder”).
 
 
 

(b)  The Company shall use its reasonable best efforts to keep the Shelf Registration Statement continuously effective in order to permit the prospectus included therein to be lawfully delivered by the Eligible Holders of the relevant Securities, for a period of two years (or for such longer period if extended pursuant to Section 3(j) below) from the Issue Date or such shorter period that will terminate when all the Securities covered by the Shelf Registration Statement (i) have been sold pursuant thereto or (ii) are no longer restricted securities (as defined in Rule 144 under the Securities Act, or any successor rule thereof) or (iii) are freely transferrable by non-affiliates pursuant to Rule 144(k) under the Securities Act.  The Company shall be deemed not to have used its reasonable best efforts to keep the Shelf Registration Statement effective during the requisite period if it voluntarily takes any action that would result in Eligible Holders of Securities covered thereby not being able to offer and sell such Securities during that period, unless such action is required by applicable law.

(c)  Notwithstanding any other provisions of this Agreement to the contrary, the Company shall cause the Shelf Registration Statement and the related prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement, amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission thereunder and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

3.  Registration Procedures.  In connection with any Shelf Registration contemplated by Section 2 hereof and, to the extent applicable, any Registered Exchange Offer contemplated by Section 1 hereof, the following provisions shall apply:

(a)  The Company shall (i) furnish to each Initial Purchaser, prior to the filing thereof with the Commission, a copy of the Registration Statement and each amendment thereof and each supplement, if any, to the prospectus included therein and, in the event that an Initial Purchaser (with respect to any portion of an unsold allotment from the original offering) is participating in the Registered Exchange Offer or the Shelf Registration Statement, the Company shall use its reasonable best efforts to reflect in each such document, when so filed with the Commission, such comments as such Initial Purchaser reasonably may propose; (ii) include the information set forth in Annex A hereto on the cover, in Annex B hereto in the “Exchange Offer Procedures” section and the “Purpose of the Exchange Offer” section and in Annex C hereto in the “Underwriting” section of the prospectus forming a part of the Exchange Offer Registration Statement and include the information set forth in Annex D hereto in the Letter of Transmittal delivered pursuant to the Registered Exchange Offer; (iii) if requested by an Initial Purchaser within a reasonable time after receipt of any such document, include the information required by Items 507 or 508 of Regulation S-K under the Securities Act, as applicable, in the prospectus forming a part of the Exchange Offer Registration Statement; (iv) include within the prospectus contained in the Exchange Offer Registration Statement a section entitled “Underwriting,” reasonably acceptable to the Initial Purchasers, which shall contain a summary statement of the positions taken or policies made by the staff of the Commission with respect to the potential “underwriter” status of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of Exchange Securities received by such broker-dealer in the Registered Exchange Offer (a “Participating Broker-Dealer”), whether such positions or policies have been publicly disseminated by the staff of the Commission or such positions or policies, in the reasonable judgment of the Initial Purchasers based upon advice of counsel (which may be in-house counsel), represent the prevailing views of the staff of the Commission; and (v) in the case of a Shelf Registration Statement, include in the prospectus included in the Shelf Registration Statement (or, if permitted by Commission Rule 430B(b), in a prospectus supplement that becomes a part thereof pursuant to Commission Rule 430B(f) that is delivered to any Eligible Holder pursuant to Section 3(d) and (f), the names of the Eligible Holders, who propose to sell Initial Securities pursuant to the Shelf Registration Statement, as selling securityholders; provided, however, that each such Eligible Holders shall have furnished to the Company on a timely basis such information regarding the Holder as the Company may require pursuant to Section 3(n) hereof.

(b)  The Company shall give written notice to the Initial Purchasers, the Holders of the Securities and any each Participating Broker-Dealer from whom the Company has received prior written notice that it will be a Participating Broker-Dealer in the Registered Exchange Offer (which notice pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction to suspend the use of the prospectus until the requisite changes have been made):

(i)  when the Registration Statement or any amendment thereto has been filed with the Commission and when the Registration Statement or any post-effective amendment thereto has become effective;

(ii)  of any request by the Commission for amendments or supplements to the Registration Statement or the prospectus included therein or for additional information;
(iii)  of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose, of the issuance by the Commission of a notification of objection to the use of the form on which the Registration Statement has been filed, or of the happening of any event that causes the Company to become an “ineligible issuer,” as defined in Commission Rule 405.

(iv)  of the receipt by the Company or its legal counsel of any notification with respect to the suspension of the qualification of the Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose; and

(v)  of the happening of any event that requires the Company to make changes in an effective Registration Statement or the prospectus in order that such Registration Statement or the prospectus does not contain an untrue statement of a material fact nor omit to state a material fact required to be stated therein or necessary to make the statements therein (in the case of the prospectus, in light of the circumstances under which they were made) not misleading.

(c)  The Company shall make every reasonable effort to obtain the withdrawal at the earliest possible time, of any order suspending the effectiveness of the Registration Statement.

(d)  The Company shall furnish to each Eligible Holder of Securities included within the coverage of the Shelf Registration, without charge, at least one copy of the Shelf Registration Statement and any post-effective amendment or supplement thereto, including financial statements and schedules, and, if the Holder so requests in writing, all exhibits thereto (including those, if any, incorporated by reference).  The Company shall not, without the prior consent of the Initial Purchasers, make any offer relating to the Securities that would constitute a “free writing prospectus,” as defined in Commission Rule 405.

(e)  The Company shall deliver to each Exchanging Dealer and each Initial Purchaser, and to any other Holder who so requests, without charge, at least one copy of the Exchange Offer Registration Statement and any post-effective amendment thereto, including financial statements and schedules, and, if any Initial Purchaser or any such Holder requests, all exhibits thereto (including those incorporated by reference).

(f)  The Company shall, during the Shelf Registration Period, deliver to each Eligible Holder of Securities included within the coverage of the Shelf Registration, without charge, as many copies of the prospectus (including each preliminary prospectus) included in the Shelf Registration Statement and any amendment or supplement thereto as such person may reasonably request. The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by each of the selling Eligible Holders of the Securities in connection with the offering and sale of the Securities covered by the prospectus, or any amendment or supplement thereto, included in the Shelf Registration Statement.
 
 
 

(g)  The Company shall deliver to each Initial Purchaser, any Exchanging Dealer, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer, without charge, as many copies of the final prospectus included in the Exchange Offer Registration Statement and any amendment or supplement thereto as such persons may reasonably request.  The Company consents, subject to the provisions of this Agreement, to the use of the prospectus or any amendment or supplement thereto by any Initial Purchaser, if necessary, any Participating Broker-Dealer and such other persons required to deliver a prospectus following the Registered Exchange Offer in connection with the offering and sale of the Exchange Securities covered by the prospectus, or any amendment or supplement thereto, included in such Exchange Offer Registration Statement.

(h)  Prior to any public offering of the Securities pursuant to any Registration Statement the Company shall, if required, register or qualify or cooperate with the Holders of the Securities included therein and their respective counsel in connection with the registration or qualification of the Securities for offer and sale under the securities or “blue sky” laws of such states of the United States as any Holder of the Securities reasonably requests in writing and do any and all other acts or things reasonably necessary or advisable to enable the offer and sale in such jurisdictions of the Securities covered by such Registration Statement; provided, however, that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it is not then so qualified,  (ii) take any action that would subject it to general service of process or to taxation in any jurisdiction where it is not then so subject, (iii) qualify as a dealer in securities in any jurisdiction in which it is not so qualified or (iv) make any changes to its certificate of incorporation, by-laws or any agreement between it and its stockholders;.

(i)  The Company shall cooperate with the Holders of the Securities to facilitate the timely preparation and delivery of certificates representing the Securities to be sold pursuant to any Registration Statement free of any restrictive legends and in such denominations and registered in such names as the Holders may request a reasonable period of time prior to sales of the Securities pursuant to such Registration Statement.

(j)  Upon the occurrence of any event contemplated by paragraphs (ii) through (v) of Section 3(b) above during the period for which the Company is required to maintain an effective Registration Statement, the Company shall promptly prepare and file a post-effective amendment to the Registration Statement or a supplement to the related prospectus and any other required document so that, as thereafter delivered to Holders of the Securities or purchasers of Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.  If the Company notifies the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer in accordance with paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the prospectus until the requisite changes to the prospectus have been made, then the Initial Purchasers, the Holders of the Securities and any such Participating Broker-Dealers shall suspend use of such prospectus, and the period of effectiveness of the Shelf Registration Statement provided for in Section 2(b) above and the Exchange Offer Registration Statement provided for in Section 1 above shall each be extended by the number of days from and including the date of the giving of such notice to and including the date when the Initial Purchasers, the Holders of the Securities and any known Participating Broker-Dealer shall have received such amended or supplemented prospectus pursuant to this Section 3(j) or the Company shall have notified such Holders that disposition of such Securities may resume under the existing prospectus.

(k)  Not later than the effective date of the applicable Registration Statement, the Company will provide a CUSIP number for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, and provide the applicable trustee with printed certificates for the Initial Securities, the Exchange Securities or the Private Exchange Securities, as the case may be, in a form eligible for deposit with The Depository Trust Company.

(l)  The Company will comply with all rules and regulations of the Commission to the extent and so long as they are applicable to the Registered Exchange Offer or the Shelf Registration and will make generally available to its security holders (or otherwise provide in accordance with Section 11(a) of the Securities Act) an earnings statement satisfying the provisions of Section 11(a) of the Securities Act, no later than 45 days after the end of a 12-month period (or 90 days, if such period is a fiscal year) beginning with the first month of the Company’s first fiscal quarter commencing after the effective date of the Registration Statement, which statement shall cover such 12 month period.

(m)  The Company shall cause the Indenture to be qualified under the Trust Indenture Act of 1939, as amended, in a timely manner and containing such changes, if any, as shall be necessary for such qualification.  In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.

(n)  The Company may require each Eligible Holder of Securities to be sold pursuant to the Shelf Registration Statement to furnish to the Company such information regarding the Eligible Holder and the distribution of the Securities as the Company may from time to time reasonably require for inclusion in the Shelf Registration Statement, and the Company may exclude from such registration the Securities of any Eligible Holder that unreasonably fails to furnish such information within a reasonable time after receiving such request.

(o)  The Company shall enter into such customary agreements (including, if requested, an underwriting agreement in customary form) and take all such other action, if any, as the Eligible Holders of not less than a majority of the aggregate principal amount of the Securities to be included in the Shelf Registration Statement shall reasonably request in order to facilitate the disposition of the Securities pursuant to any Shelf Registration.

(p)  In the case of any Shelf Registration, the Company shall (i) make reasonably available for inspection by the Eligible Holders of the Securities, any underwriter participating in any disposition pursuant to the Shelf Registration Statement and any attorney, accountant or other agent retained by the Eligible Holders of the Securities or any such underwriter all relevant financial and other records, pertinent corporate documents and properties of the Company and (ii) cause the Company’s officers, directors, employees, accountants and auditors to supply all relevant information reasonably requested by the Eligible Holders of the Securities or any such underwriter, attorney, accountant or agent in connection with the Shelf Registration Statement, in each case, as shall be reasonably necessary to enable such persons, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that the foregoing inspection and information gathering shall be coordinated on behalf of the Initial Purchasers by you and on behalf of the other parties, by one counsel designated by and on behalf of such other parties as described in Section 4 hereof and shall be subject to any confidentiality procedures reasonably instituted by the Company.
 
 
 

(q)  In the case of any Shelf Registration, the Company, if requested by the Eligible Holders of at least a majority of the Securities covered thereby, shall cause (i) its counsel to deliver an opinion and updates thereof relating to the Securities in customary form addressed to such Holders and the managing underwriters, if any, thereof and dated, in the case of the initial opinion, the effective date of such Shelf Registration Statement (it being agreed that the matters to be covered by such opinion shall include, without limitation but subject to reasonable qualifications and exceptions, the due incorporation and good standing of the Company and its subsidiaries; the qualification of the Company and its subsidiaries to transact business as foreign corporations; the due authorization, execution and delivery of the relevant agreement of the type referred to in Section 3(o) hereof; the due authorization, execution, authentication and issuance, and the validity and enforceability, of the applicable Securities; the absence of material legal or governmental proceedings involving the Company and its subsidiaries; the absence of governmental approvals required to be obtained in connection with the Shelf Registration Statement, the offering and sale of the applicable Securities, or any agreement of the type referred to in Section 3(o) hereof; the compliance as to form of such Shelf Registration Statement and any documents incorporated by reference therein with the requirements of the Securities Act or the Exchange Act, as applicable, and of the Indenture with the requirements of the  Trust Indenture Act; and (A) as of the date of the opinion and as of the effective date of the Shelf Registration Statement or most recent post-effective amendment thereto, as the case may be, the absence from such Shelf Registration Statement and the prospectus included therein and (B) as of an applicable time identified by such Holders or managing underwriters, the absence from such prospectus taken together with any other documents identified by such Holders or managing underwriters, in the case of (A) and (B), as then amended or supplemented, and from any documents incorporated by reference therein of an untrue statement of a material fact or the omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any such incorporated documents, in the light of the circumstances existing at the time that such documents were filed with the Commission under the Exchange Act); (ii) its officers to execute and deliver all customary documents and certificates and updates thereof requested by any underwriters of the applicable Securities and (iii) its independent public accountants to provide to the selling Holders of the applicable Securities and any underwriter therefor a comfort letter in customary form and covering matters of the type customarily covered in comfort letters in connection with primary underwritten offerings, subject to receipt of appropriate documentation as contemplated, and only if permitted, by Statement of Auditing Standards No. 72.

(r)  In the case of the Registered Exchange Offer, if requested by any Initial Purchaser or any known Participating Broker-Dealer, the Company shall cause (i) its counsel to deliver to such Initial Purchaser or such Participating Broker-Dealer signed opinions in the forms set forth in Sections 8(b) and (c) of the Purchase Agreement with such changes as are customary in connection with the preparation of a Registration Statement and (ii) its independent public accountants to deliver to such Initial Purchaser or such Participating Broker-Dealer a comfort letter, in customary form, meeting the requirements as to the substance thereof as set forth in Section 8(d) of the Purchase Agreement, with appropriate date changes.

(s)  If a Registered Exchange Offer or a Private Exchange is to be consummated, upon delivery of the Initial Securities by Holders to the Company (or to such other Person as directed by the Company) in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be, the Company shall mark, or caused to be marked, on the Initial Securities so exchanged that such Initial Securities are being canceled in exchange for the Exchange Securities or the Private Exchange Securities, as the case may be; in no event shall the Initial Securities be marked as paid or otherwise satisfied.

(t)  The Company will use its reasonable best efforts to, (a) if the Initial Securities have been rated prior to the initial sale of such Initial Securities, confirm such ratings will apply to the Securities covered by a Registration Statement, or (b) if the Initial Securities were not previously rated, cause the Securities covered by a Registration Statement to be rated with the appropriate rating agencies, but in each case only if so requested by Holders of a majority in aggregate principal amount of Securities covered by such Registration Statement, or by the managing underwriters, if any.

(u)  In the event that any broker-dealer registered under the Exchange Act shall underwrite any Securities or participate as a member of an underwriting syndicate or selling group or “assist in the distribution” (within the meaning of the Conduct Rules (the “Rules”) of the National Association of Securities Dealers, Inc. (“NASD”)) thereof, whether as a Holder of such Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, the Company will assist such broker-dealer in complying with the requirements of such Rules, including, without limitation, by (i) if such Rules, including Rule 2720, shall so require, engaging a “qualified independent underwriter” (as defined in Rule 2720) to participate in the preparation of the Registration Statement relating to such Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Securities, (ii) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 5 hereof and (iii) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Rules.

(v)  The Company shall use its reasonable best efforts to take all other steps necessary to effect the registration of the Securities covered by a Registration Statement contemplated hereby.

4.  Registration Expenses.  The Company shall bear all fees and expenses incurred in connection with the performance of its obligations under Sections 1 through 3 hereof (including the reasonable fees and expenses, if any, of Vinson & Elkins L.L.P., counsel for the Initial Purchasers, incurred in connection with the Registered Exchange Offer), whether or not the Registered Exchange Offer or a Shelf Registration is filed or becomes effective, and, in the event of a Shelf Registration, shall bear or reimburse the Holders of the Securities covered thereby for the reasonable fees and disbursements of one firm of counsel, who will be Vinson & Elkins L.L.P. unless another firm shall be chosen by the Holders of a majority in principal amount of the Initial Securities covered thereby, to act as counsel for the Holders of the Initial Securities in connection therewith.

5.  Indemnification and Contribution.

(a)  Indemnification by the Company and the Guarantors.  The Company and the Guarantors, jointly and severally, will indemnify and hold harmless each of the Holders of Securities included in an Exchange Offer Registration Statement and each of the Holders of Securities included in the Shelf Registration against any losses, claims, damages or liabilities, joint or several, to which such Holder may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Exchange Offer Registration Statement or Shelf Registration, as the case may be, under which such Securities were registered under the Securities Act, or any preliminary, final or summary prospectus (including, without limitation, any “issuer free writing prospectus” as defined in Rule 433) contained therein or furnished by the Company to any such Holder, or any amendment or supplement thereto, 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 not misleading, and will reimburse such Holder for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Company nor the Guarantors shall be liable to any such person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, or preliminary, final or summary prospectus (including, without limitation, any “issuer free writing prospectus” as defined in Rule 433), or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein.

(b)           Indemnification by the Holders.  Each Holder of Securities, severally and not jointly, will (i) indemnify and hold harmless the Company, the Guarantors, and all other Holders of Securities, against any losses, claims, damages or liabilities to which the Company, the Guarantors or such other Holders of Securities may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such registration statement, or any preliminary, final or summary prospectus (including, without limitation, any “issuer free writing prospectus” as defined in Rule 433) contained therein or furnished by the Company to any such Holder, or any amendment or supplement thereto, 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 not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Holder expressly for use therein, and (ii) reimburse the Company and the Guarantors for any legal or other expenses reasonably incurred by the Company and the Guarantors in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that no such Holder shall be required to undertake liability to any person under this Section 6(b) for any amounts in excess of the dollar amount of the proceeds to be received by such Holder from the sale of such Holder’s Securities pursuant to such registration.
 
 
 

(c)           Notices of Claims, Etc.  Promptly after receipt by an indemnified party under subsection (a) or (b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 5, notify such indemnifying party in writing of the commencement of such action; but the omission so to notify the indemnifying party shall not relieve it from any liability hereunder to the extent it is not  materially prejudiced as a result thereof and in any event which it may have to any indemnified party otherwise than under the indemnification provisions of or contemplated by Section 5(a) or Section 5(b).  In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation.  No indemnifying party shall, without the prior written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to, or an admission of, fault, culpability or a failure to act by or on behalf of any indemnified party.

(d)           Contribution.  If for any reason the indemnification provisions contemplated by Section 5(a) or Section 5(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations.  The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.  The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 5(d) were determined by pro rata allocation (even if the holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 5(d).  The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim.  Notwithstanding the provisions of this Section 5(d), no Holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such Holder from the sale of any Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Holders’ obligations in this Section 5(d) to contribute shall be several in proportion to the principal amount of Securities registered by them and not joint.

(e)           The obligations of the Company and the Guarantors under this Section 5 shall be in addition to any liability which the Company or the Guarantors may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of each Holder and each person, if any, who controls any Holder within the meaning of the Securities Act; and the obligations of the Holders contemplated by this Section 5 shall be in addition to any liability which the respective holder may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company or the Guarantors (including any person who, with his consent, is named in any registration statement as about to become a director of the Company or the Guarantors) and to each person, if any, who controls the Company within the meaning of the Securities Act.

6.  Additional Interest Under Certain Circumstances.  (a)  Additional interest (the “Additional Interest”) with respect to the Initial Securities shall be assessed as follows if any of the following events occur (each such event in clauses (i) through (iii) below a “Registration Default”):

(i) If, by  June 6, 2008, neither the Exchange Offer Registration Statement nor a Shelf Registration Statement has been filed with the Commission and declared effective;

(ii)  If, by June 6, 2008, neither the Registered Exchange Offer is consummated nor, if required in lieu thereof, the Shelf Registration Statement is declared effective by the Commission; or

(iii)  If, after either the Exchange Offer Registration Statement or the Shelf Registration Statement is declared (or becomes automatically) effective, (A) such Registration Statement thereafter ceases to be effective during periods specified herein during which it is required to be effective; or (B) such Registration Statement or the related prospectus ceases to be usable (except as permitted in paragraph (b)) in connection with resales of Transfer Restricted Securities during the periods specified herein because either (1) any event occurs as a result of which the related prospectus forming part of such Registration Statement would include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (2) it shall be necessary to amend such Registration Statement or supplement the related prospectus, to comply with the Securities Act or the Exchange Act or the respective rules thereunder, or (3) such Registration Statement is a Shelf Registration Statement that has expired before a replacement Shelf Registration Statement has become effective.

Additional Interest shall accrue on the Initial Securities over and above the interest set forth in the title of the Securities from and including the date on which any such Registration Default shall occur to but excluding the date on which all such Registration Defaults have been cured, at a rate of 0.25% per annum (the “Additional Interest Rate”) for the first 90-day period immediately following the occurrence of such Registration Default.  The Additional Interest Rate shall increase by an additional 0.25% per annum with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum Additional Interest Rate of 1.0% per annum.  Following the cure of all Registration Defaults, the accrual of Additional Interest will cease and the interest rate will revert to the original rate.  The Company shall not be required to pay Additional Interest for more than one Registration Default at any given time.


(b)  A Registration Default referred to in Section 6(a)(iii)(B) hereof shall be deemed not to have occurred and be continuing in relation to a Shelf Registration Statement or the related prospectus if (i) such Registration Default has occurred solely as a result of (x) the filing of a post-effective amendment to such Shelf Registration Statement to incorporate annual audited financial information with respect to the Company where such post-effective amendment is not yet effective and needs to be declared effective to permit Holders to use the related prospectus or (y) other material events with respect to the Company that would need to be described in such Shelf Registration Statement or the related prospectus and (ii) in the case of clause (y), the Company is proceeding promptly and in good faith to amend or supplement such Shelf Registration Statement and related prospectus to describe such events; provided, however, that in any case if such Registration Default occurs for a continuous period in excess of 60 days, Additional Interest shall be payable in accordance with the above paragraph from the day such Registration Default occurs until such Registration Default is cured.

(c)  Any amounts of Additional Interest due pursuant to clause (i), (ii) or (iii) of Section 6(a) above will be payable in cash on the regular interest payment dates with respect to the Initial Securities. The amount of Additional Interest will be determined by multiplying the applicable Additional Interest rate by the principal amount of the Initial Securities, multiplied by a fraction, the numerator of which is the number of days such Additional Interest rate was applicable during such period (determined on the basis of a 360-day year consisting of twelve 30-day months), and the denominator of which is 360.
 
 
 

(d)   “Transfer Restricted Securities” means each Security until (i) the date on which such  Security has been exchanged by a person other than a broker-dealer for a freely transferable Exchange Security in the Registered Exchange Offer, (ii) following the exchange by a broker-dealer in the Registered Exchange Offer of an Initial Security for an Exchange Security, the date on which such Exchange Security 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 Initial Security has been effectively registered under the Securities Act and disposed of in accordance with the Shelf Registration Statement or (iv) the date on which such Initial Security is distributed to the public pursuant to Rule 144 under the Securities Act.


7.  Rules 144 and 144A.  The Company shall use its reasonable best efforts to file the reports required to be filed by it under the Securities Act and the Exchange Act in a timely manner and, if at any time the Company is not required to file such reports, it will, upon the request of any Holder of Initial Securities, make publicly available other information so long as necessary to permit sales of their securities pursuant to Rules 144 and 144A.  The Company covenants that it will take such further action as any Holder of Initial Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Initial Securities without registration under the Securities Act within the limitation of the exemptions provided by Rules 144 and 144A (including the requirements of Rule 144A(d)(4)).  The Company will provide a copy of this Agreement to prospective purchasers of Initial Securities identified to the Company by the Initial Purchasers upon request.  Upon the request of any Holder of Initial Securities, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements. Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to require the Company to register any of its securities pursuant to the Exchange Act.

8.  Underwritten Registrations.  If any of the Transfer Restricted Securities covered by any Shelf Registration are to be sold in an underwritten offering, the investment banker or investment bankers and manager or managers that will administer the offering (“Managing Underwriters”) will be selected by the Holders of a majority in aggregate principal amount of such Transfer Restricted Securities to be included in such offering.

No person may participate in any underwritten registration hereunder unless such person (i) agrees to sell such person’s Transfer Restricted Securities on the basis reasonably provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.  Except as provided in Section 4, the Holders participating in any underwritten offering shall be responsible for any expenses customarily borne by selling securityholders, including underwriting discounts and commissions and fees and expenses of counsel to selling securityholders.

9.  Miscellaneous.

(a)  Amendments and Waivers.  The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, except by the Company and the written consent of the Holders of a majority in principal amount of the Securities affected by such amendment, modification, supplement, waiver or consents.

(b)  Notices.  All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, first-class mail, facsimile transmission, or air courier which guarantees overnight delivery:

(1)  if to a Holder of the Securities, at the most current address given by such Holder to the Company.

(2)  if to the Initial Purchasers:

Goldman, Sachs & Co.
One New York Plaza
42nd Floor
New York, New York 10004
Attention: Registration Department

with a copy to:

Vinson & Elkins L.L.P.
2500 First City Tower
1001 Fannin
Houston, TX 77002
Fax No.: (713) 615-5725
Attention: Douglas McWilliams

(3)           if to the Company, at its address as follows:

Bristow Group Inc.
2000 W. Sam Houston Parkway South
Suite 1700
Houston, TX  77042
Fax No.: (713) 267-7620
Attention: Chief Financial Officer

with a copy to:

Baker Botts LLP
One Shell Plaza
910 Louisiana
Houston, TX  77002-4995
Fax No.: (713) 229-2713
Attention: John D. Geddes

All such notices and communications shall be deemed to have been duly given:  at the time delivered by hand, if personally delivered; three business days after being deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged by recipient’s facsimile machine operator, if sent by facsimile transmission; and on the day delivered, if sent by overnight air courier guaranteeing next day delivery.

(c)  No Inconsistent Agreements.  The Company has not, as of the date hereof, entered into, nor shall it, on or after the date hereof, enter into, any agreement with respect to its securities that is inconsistent with the rights granted to the Holders herein or otherwise conflicts with the provisions hereof.

(d)  Successors and Assigns.  This Agreement shall be binding upon the Issuer, the Guarantors and their respective successors and assigns.

(e)  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.

(f)  Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

(g)  Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.

(h)  Severability.  If 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.

(i)  Securities Held by the Company.  Whenever the consent or approval of Holders of a specified percentage of principal amount of Securities is required hereunder, Securities held by the Company or its affiliates (other than subsequent Holders of Securities if such subsequent Holders are deemed to be affiliates solely by reason of their holdings of such Securities) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.

(j)   Submission to Jurisdiction.  By the execution and delivery of this Agreement, the Company submits to the nonexclusive jurisdiction of any competent federal or state court in the Borough of Manhattan, the City and State of New York, in any suit or proceeding arising out of or relating to this Agreement or brought under federal or state securities laws.

If the foregoing is in accordance with your understanding of our agreement, please sign and return to the Issuer a counterpart hereof, whereupon this instrument, along with all counterparts, will become a binding agreement among the several Initial Purchasers, the Issuer and the Guarantors in accordance with its terms.

 
 
 

Very truly yours,

 
BRISTOW GROUP INC.
 
By__/s/ Randall Stafford_____________________
 
Randall Stafford
 
Vice President, General Counsel
 
and Corporate Secretary
 
AIR LOGISTICS, LLC
 
By__/s/ Randall Stafford_____________________
 
Randall Stafford
 
Manager
 
AIR LOGISTICS OF ALASKA, INC
 
GRASSO PRODUCTION MANAGEMENT, INC.
 
AIRLOG INTERNATIONAL LTD.
 
MEDIC SYSTEMS, INC.
 
GRASSO CORPORATION
 
By_/s/ Joseph A. Baj _________________
 
Joseph A. Baj
 
Treasurer and Secretary
 

      
        Registration Rights Agreement Signature Page      
    
 
 
 
      
        
    

The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.

Goldman, Sachs & Co.
Credit Suisse Securities (USA) LLC
Bank of America Securities LLC
J.P. Morgan Securities Inc.
Suntrust Robinson Street
Wells Fargo Securities, LLC

Acting on behalf of themselves
and as the Representatives of
the several Initial Purchasers


By  Goldman, Sachs & Co.



By:_/s/ Goldman, Sachs & Co._________________
     Name:
Title:


 
 
 
ANNEX A




Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.  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 Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired by such broker-dealer as a result of market-making activities or other trading activities.  The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this Prospectus available to any broker-dealer for use in connection with any such resale.  See “Underwriting.”
 

 
 
 
ANNEX B




Each broker-dealer that receives Exchange Securities for its own account in exchange for Securities, where such Initial Securities 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 Exchange Securities.  See “Underwriting.”

 
 
 
 
ANNEX C




UNDERWRITING

Each broker-dealer that receives Exchange Securities for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such Exchange Securities.  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 Exchange Securities received in exchange for Initial Securities where such Initial Securities were acquired as a result of market-making activities or other trading activities.  The Company has agreed that, for a period of 180 days after the Expiration Date, it will make this prospectus, as amended or supplemented, available to any broker-dealer for use in connection with any such resale.  In addition, until                   , 200 ,  all dealers effecting transactions in the Exchange Securities may be required to deliver a prospectus.(1)

The Company will not receive any proceeds from any sale of Exchange Securities by broker-dealers.  Exchange Securities received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the Exchange Securities or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices.  Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer or the purchasers of any such Exchange Securities.  Any broker-dealer that resells Exchange Securities that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such Exchange Securities may be deemed to be an “underwriter” within the meaning of the Securities Act and any profit on any such resale of Exchange Securities and any commission or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act.  The Letter of Transmittal states that, by acknowledging that it will deliver 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.

For a period of 180 days after the Expiration Date the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any broker-dealer that requests such documents in the Letter of Transmittal.  The Company has agreed to pay all expenses incident to the Exchange Offer (including the expenses of one counsel for the Holders of the Securities) other than commissions or concessions of any brokers or dealers and will indemnify the Holders of the Securities (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act.

 
(1)  In addition, the legend required by Item 502(e) of Regulation S-K will appear on the back cover page of the Exchange Offer prospectus.
 

 
 
 
ANNEX D



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 Exchange Securities.  If the undersigned is a broker-dealer that will receive Exchange Securities for its own account in exchange for Initial Securities 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 Exchange Securities; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act.


 
 
 

 
 
 
 
 
 
 EX-4.3 5 ex4w3-080207.htm REGULATION 144A GLOBAL NOTE ex4w3-080207.htm
EXHIBIT 4.3

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS 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.
 
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
 
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
 

 
 
 

No. 1                                                                                                                                          $299,000,000  
 
CUSIP No.  110394AA17   
ISIN No.  US110394AA17   
 
7½% Senior Note due 2017
 
Bristow Group Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of two hundred ninety-nine million Dollars ($299,000,000) on September 15, 2017 or such greater or lesser amount as may be indicated on Schedule A hereto.
 
Interest Payment Dates:  March 15 and September 15.
 
Record Dates:  March 1 and September 1.
 
Additional provisions of this Note are set forth on the other side of this Note.
 
Dated:  June 13, 2007
 
BRISTOW GROUP INC.
 

 
By:           /s/ Joseph A. Baj
Joseph A. Baj
Vice President and Treasurer
 
TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

U.S. BANK NATIONAL ASSOCIATION,
as Trustee, certifies that
this is one of the Notes
referred to in the Indenture.

 
By           /s/ Susan C. Merker                                                                
Authorized Signatory
 

 

 

 
 
 

7½% Senior Note due 2017
 
Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
 
1.           Interest.  Bristow Group Inc., a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at 7½% per annum from June 13, 2007 until maturity and shall pay the Additional Interest payable pursuant to Section 6 of the Registration Rights Agreement referred to below.  The Company will pay interest and Additional Interest, if any, semi-annually in arrears on March 15 and September 15 of each year, commencing  September 15, 2007, 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 Additional Interest (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 Additional Interest to the Persons who are registered Holders of Notes at the close of business on the September 1 or March 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 2.11 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium, if any, interest and Additional Interest, 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 Additional Interest 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 Additional Interest 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, U.S. Bank National Association, 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 June 13, 2007 (“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 Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 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 senior unsecured obligations of the Company limited to $300,000,000 aggregate principal amount in the case of Notes issued on the Initial Issuance Date (as defined in the Indenture).
 
5.           The Notes are redeemable as provided in Section 3.07 of the Indenture.
 
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 or repurchase the Notes at the option of the Holder.
 
7           Repurchase at Option of Holder.
 
(a)           Upon  the occurrence of a Change of Control Trigger Event, the Company shall make an offer (a “Change of Control Offer”) to repurchase all or any part (equal to $2,000 or an integral multiple of) $1,000 of each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (the “Change of Control Payment”).  Within 30 days following a Change of Control Trigger Event, 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 Section 4.15 of the Indenture.
 
(b)           If the aggregate amount of Excess Proceeds exceeds $30.0 million to the extent and in the manner required under Sections 3.09 and 4.10 of the Indenture, the Company shall commence an offer to all Holders of Notes (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale (“Pari Passu Notes”), to purchase the maximum principal amount of Notes and any such Pari Passu Notes to which the Asset Sale Offer applies 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 of the Notes and such Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase, in accordance with the procedures set forth in the Indenture or agreements governing the Pair Passu Notes, as applicable.  To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by the Indenture.  If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Trustee shall select the Notes and Pari Passu 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 $2,000, or integral multiples of $1,000, shall be purchased) on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes.  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 $2,000 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 and Additional Interest, if any, cease 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 $2,000 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 pursuant to Article 5 of the Indenture, to secure the Notes pursuant to Section 4.12 of the Indenture or otherwise, 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 provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to add any additional Guarantor with respect to the Notes 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 SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.
 
12.           Defaults and Remedies.  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 preceding, in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Significant Subsidiary described in Section 6.01(h) or 6.01(i) of the Indenture, 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 conferred on it.  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, interest, premium or Additional 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 Additional Interest, if any, on the Notes.  The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and, so long as any Notes are outstanding, 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 and Discharge.  The Notes are subject to defeasance and discharge 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.
 
15.           No Recourse Against Others.  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 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 June 13, 2007, among the Company, the Guarantors and the Initial Purchasers 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 and corresponding ISIN 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.
 
20.           Governing Law.  THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
21.           Successor Corporation.  In the event a successor assumes all the obligations of the Company under the Notes and the Indenture, pursuant to the terms thereof, the Company will be released from all such obligations.
 
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:
 
Bristow Group Inc.
2000 West Sam Houston Parkway South
Suite 1700
Houston, Texas 77042
Attention: Chief Financial Officer
Fax No.:   (713) 267-7620

 
 
 

ASSIGNMENT FORM
 
To assign this Note, fill in the form below:
 
I or we assign and transfer this Note to
 

Print or type assignee’s name, address and zip code)
 

(Insert assignee’s soc. sec. or tax I.D. No.)
 
and irrevocably appoint __________________ agent 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 other side of this Note.
 
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Notes Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Company or any Affiliate of the Company, the undersigned confirms that such Notes are being transferred in accordance with its terms:
 
CHECK ONE BOX BELOW
 
 
(1)
o
to the Company; or
 
 
(2)
o
pursuant to an effective registration statement under the Securities Act of 1933; or
 
 
(3)
o
inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
 
 
(4)
o
outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or
 
 
(5)
o
pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933.
 
Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced b this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (4) or (5) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.
 
Signature Guarantee:
Signature
Signature
Signature

 
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
 

 
 
 

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
 
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
 

 
Dated:                      
Notice:  To be executed by an executive officer
 

 

 
 
 

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:
 
o  Section 4.10                                                                           o  Section 4.15
 

 
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $1,000 or integral multiples thereof) you elect to have purchased:  $____________
 
Dated:                      
(Sign exactly as your name appears on the Note)
 

 
Soc. Sec. or Tax Identification No.:                                                                           
 

 
Signature Guarantee:
 

 

 

 
 
 

SCHEDULE A
 
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
 
The following increases or decreases in this Global Note have been made:
 
Date
 
Amount of decrease in Principal Amount of this Global Note
 
Amount of increase in Principal Amount of this Global Note
 
Principal Amount of this Global Note following such decrease or increase
 
Signature of authorized officer of Trustee or Notes Custodian
 
         
         

 

 
 
 

 EX-4.4 6 ex4w4-080207.htm REGULATION S GLOBAL NOTE ex4w4-080207.htm
EXHIBIT 4.4

 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE COMPANY 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS 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.
 
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
 
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (4) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
 

 

 

 
 
 

No. 2                                                                                                                                          $1,000,000  
 
CUSIP No.  U1104MAA9   
ISIN No.  USU1104MAA90   
 
7½% Senior Note due 2017
 
Bristow Group Inc., a Delaware corporation, promises to pay to Cede & Co., or registered assigns, the principal sum of one million Dollars ($1,000,000) on September 15, 2017 or such greater or lesser amount as may be indicated on Schedule A hereto.
 
Interest Payment Dates:  March 15 and September 15.
 
Record Dates:  March 1 and September 1.
 
Additional provisions of this Note are set forth on the other side of this Note.
 
Dated:  June 13, 2007
 
BRISTOW GROUP INC.
 

 
By:           /s/ Joseph A. Baj
Joseph A. Baj
Vice President and Treasurer
 
TRUSTEE’S CERTIFICATE OF
AUTHENTICATION

U.S. BANK NATIONAL ASSOCIATION,
as Trustee, certifies that
this is one of the Notes
referred to in the Indenture.

 
By           /s/ Susan C. Merker                                                                
Authorized Signatory
 

 

 

 
 
 

7½% Senior Note due 2017
 
Capitalized terms used herein but not defined shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.
 
1.           Interest.  Bristow Group Inc., a Delaware corporation (the “Company”), promises to pay interest on the principal amount of this Note at 7½% per annum from June 13, 2007 until maturity and shall pay the Additional Interest payable pursuant to Section 6 of the Registration Rights Agreement referred to below.  The Company will pay interest and Additional Interest, if any, semi-annually in arrears on March 15 and September 15 of each year, commencing  September 15, 2007, 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 Additional Interest (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 Additional Interest to the Persons who are registered Holders of Notes at the close of business on the September 1 or March 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 2.11 of the Indenture with respect to defaulted interest.  The Notes will be payable as to principal, premium, if any, interest and Additional Interest, 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 Additional Interest 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 Additional Interest 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, U.S. Bank National Association, 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 June 13, 2007 (“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 Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 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 senior unsecured obligations of the Company limited to $300,000,000 aggregate principal amount in the case of Notes issued on the Initial Issuance Date (as defined in the Indenture).
 
5.           The Notes are redeemable as provided in Section 3.07 of the Indenture.
 
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 or repurchase the Notes at the option of the Holder.
 
7           Repurchase at Option of Holder.
 
(a)           Upon  the occurrence of a Change of Control Trigger Event, the Company shall make an offer (a “Change of Control Offer”) to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000) of each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount plus accrued and unpaid interest and Additional Interest, if any, to the date of purchase (the “Change of Control Payment”).  Within 30 days following a Change of Control Trigger Event, 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 Section 4.15 of the Indenture.
 
(b)           If the aggregate amount of Excess Proceeds exceeds $30.0 million to the extent and in the manner required under Sections 3.09 and 4.10 of the Indenture, the Company shall commence an offer to all Holders of Notes (an “Asset Sale Offer”) pursuant to Section 3.09 of the Indenture and to the extent required by the terms of other Pari Passu Indebtedness, to all holders of other Pari Passu Indebtedness outstanding with similar provisions requiring the Company to make an offer to purchase such Pari Passu Indebtedness with the proceeds from any Asset Sale (“Pari Passu Notes”), to purchase the maximum principal amount of Notes and any such Pari Passu Notes to which the Asset Sale Offer applies 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 of the Notes and such Pari Passu Notes plus accrued and unpaid interest and Additional Interest, if any, thereon to the date of purchase, in accordance with the procedures set forth in the Indenture or agreements governing the Pair Passu Notes, as applicable.  To the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale Offer is less than the amount the Company is required to repurchase, the Company may use any remaining Excess Proceeds for any purpose not prohibited by the Indenture.  If the aggregate principal amount of Notes surrendered by Holders thereof and other Pari Passu Notes surrendered by holders or lenders, collectively, exceeds the amount the Company is required to repurchase, the Trustee shall select the Notes and Pari Passu 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 $2,000, or integral multiples of $1,000, shall be purchased) on the basis of the aggregate principal amount of tendered Notes and Pari Passu Notes.  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 $2,000 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 and Additional Interest, if any, cease 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 $2,000 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 pursuant to Article 5 of the Indenture, to secure the Notes pursuant to Section 4.12 of the Indenture or otherwise, 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 provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, to add any additional Guarantor with respect to the Notes 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 SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act.
 
12.           Defaults and Remedies.  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 preceding, in the case of an Event of Default arising from certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Significant Subsidiary described in Section 6.01(h) or 6.01(i) of the Indenture, 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 conferred on it.  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, interest, premium or Additional 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 Additional Interest, if any, on the Notes.  The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and, so long as any Notes are outstanding, 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 and Discharge.  The Notes are subject to defeasance and discharge 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.
 
15.           No Recourse Against Others.  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 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 June 13, 2007, among the Company, the Guarantors and the Initial Purchasers 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 and corresponding ISIN 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.
 
20.           Governing Law.  THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
 
21.           Successor Corporation.  In the event a successor assumes all the obligations of the Company under the Notes and the Indenture, pursuant to the terms thereof, the Company will be released from all such obligations.
 
The Company will furnish to any Holder upon written request and without charge a copy of the Indenture.  Requests may be made to:
 
Bristow Group Inc.
2000 West Sam Houston Parkway South
Suite 1700
Houston, Texas 77042
Attention: Chief Financial Officer
Fax No.:   (713) 267-7620

 

 
 
 

ASSIGNMENT FORM
 
To assign this Note, fill in the form below:
 
I or we assign and transfer this Note to
 

Print or type assignee’s name, address and zip code)
 

(Insert assignee’s soc. sec. or tax I.D. No.)
 
and irrevocably appoint __________________ agent 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 other side of this Note.
 
In connection with any transfer of any of the Notes evidenced by this certificate occurring prior to the expiration of the period referred to in Rule 144(k) under the Notes Act after the later of the date of original issuance of such Notes and the last date, if any, on which such Notes were owned by the Company or any Affiliate of the Company, the undersigned confirms that such Notes are being transferred in accordance with its terms:
 
CHECK ONE BOX BELOW
 
 
(1)
o
to the Company; or
 
 
(2)
o
pursuant to an effective registration statement under the Securities Act of 1933; or
 
 
(3)
o
inside the United States to a “qualified institutional buyer” (as defined in Rule 144A under the Securities Act of 1933) that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that such transfer is being made in reliance on Rule 144A, in each case pursuant to and in compliance with Rule 144A under the Securities Act of 1933; or
 
 
(4)
o
outside the United States in an offshore transaction within the meaning of Regulation S under the Securities Act in compliance with Rule 904 under the Securities Act of 1933; or
 
 
(5)
o
pursuant to the exemption from registration provided by Rule 144 under the Securities Act of 1933.
 
Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced b this certificate in the name of any person other than the registered holder thereof; provided, however, that if box (4) or (5) is checked, the Trustee shall be entitled to require, prior to registering any such transfer of the Securities, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act of 1933, such as the exemption provided by Rule 144 under such Act.
 
Signature Guarantee:
Signature
Signature
Signature

 
Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
 

 
 
 

TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
 
The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
 

 
Dated:                      
Notice:  To be executed by an executive officer
 

 

 
 
 

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:
 
o  Section 4.10                                                                           o  Section 4.15
 

 
If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount (in minimum denomination of $1,000 or integral multiples thereof) you elect to have purchased:  $____________
 
Dated:                      
(Sign exactly as your name appears on the Note)
 

 
Soc. Sec. or Tax Identification No.:                                                                           
 

 
Signature Guarantee:
 

 

 

 
 
 

SCHEDULE A
 
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL NOTE
 
The following increases or decreases in this Global Note have been made:
 
Date
 
Amount of decrease in Principal Amount of this Global Note
 
Amount of increase in Principal Amount of this Global Note
 
Principal Amount of this Global Note following such decrease or increase
 
Signature of authorized officer of Trustee or Notes Custodian
 
         
         

 

 

 
 
 

 EX-15.1 7 ex15w1-080207.htm LETTER FROM KPMG LLP ex15w1-080207.htm
EXHIBIT 15.1


Bristow Group Inc.
Houston, Texas

Re:  Registration Statement No. 333-115473 and No. 333-121207 on Form S-8

 
With respect to the subject registration statements, we acknowledge our awareness of the use therein of our report dated August 2, 2007 related to our review of interim financial information.
 
Pursuant to Rule 436 under the Securities Act of 1933 (the “Act”), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.
 

/s/ KPMG LLP
 
Houston, Texas
August 2, 2007
 EX-31.1 8 ex31w1-080207.htm RULE 13A-14A CERTIFICATION BY PRESIDENT AND CEO ex31w1-080207.htm
EXHIBIT 31.1

Certification of Chief Executive Officer
Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a)

I, William E. Chiles, President and Chief Executive Officer, certify that:

1.  
I have reviewed this Quarterly Report on Form 10-Q of Bristow Group Inc.;

2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.  
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15(d)-(f)) for the registrant and have:
   
 
(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
  
 
(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
  
 
(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
  
 
(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
 
5.  
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
   
 
(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
  
 
(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:  August 2, 2007
  
 
/s/ William E. Chiles
  
 
 
 
William E. Chiles
 
President and Chief Executive Officer
EX-31.2 9 ex31w2-080207.htm RULE 13A-14A CERTIFICATION BY EVP AND CFO ex31w2-080207.htm
EXHIBIT 31.2

Certification of Chief Financial Officer
Pursuant to Exchange Act Rule 13a-14(a) or 15d-14(a)

I, Perry L. Elders, Executive Vice President and Chief Financial Officer, certify that:
 

1.  
I have reviewed this Quarterly Report on Form 10-Q of Bristow Group Inc.;
 

2.  
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
 

3.  
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 

4.  
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13(a)-15(f) and 15(d)-(f)) for the registrant and have:
   
 
(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
  
 
(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
  
 
(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
  
 
(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
 
5.  
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing equivalent functions):
   
 
(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
  
 
(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

   
Dated:  August 2, 2007
  
 
/s/ Perry L. Elders
  
 
 
 
Perry L. Elders
 
Executive Vice President and Chief Financial Officer
EX-32.1 10 ex32w1-080207.htm CERTIFICATION OF CEO PURSUANT TO SECTION 906 ex32w1-080207.htm

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Bristow Group Inc. (the “Company”) for the period ended June 30, 2007, as filed with the Securities and Exchange Commission as of the date hereof, (the “Report”) I, William E. Chiles, President and Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
   
 
(1)  the Report fully complies with the requirements of Section 13(a) or 15(d), as appropriate, of the Securities Exchange Act of 1934, as amended; and
 
  
 
(2)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 

   
 
  /s/ William E. Chiles
  
Name:
Title:
Date:
 
  William E. Chiles
  President and Chief Executive Officer
  August 2, 2007
 
 
EX-32.2 11 ex32w2-080207.htm CERTIFICATION OF CFO PURSUANT T OSECTION 906 ex32w2-080207.htm
EXHIBIT 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Bristow Group Inc. (the “Company”) for the period ended June 30, 2007, as filed with the Securities and Exchange Commission as of the date hereof, (the “Report”)  I, Perry L. Elders, Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
   
 
(1)  the Report fully complies with the requirements of Section 13(a) or 15(d), as appropriate, of the Securities Exchange Act of 1934, as amended; and
 
  
 
(2)  the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 

   
 
  /s/ Perry L. Elders
  
Name:
Title:
Date:
 
  Perry L. Elders
  Executive Vice President and Chief Financial Officer
  August 2, 2007
 
 
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