EXHIBIT 2
OFFSHORE LOGISTICS, INC.
000 Xxx xx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
December 19, 1996
Supplemental Letter Agreement to the
Master Agreement, made on December 12, 1996,
among Caledonia Investments plc, Caledonia Industrial &
Services Limited and the Other Parties Named Therein
(the "Master Agreement")
Caledonia Industrial & Services Limited
Xxxxxx Xxxxx
0 Xxxxxx Xxxx Xxxxxx
Xxxxxx, X0 0XX
Xxxxxxx
Gentlemen and Ladies:
Reference is made to the captioned Master Agreement. Capitalized terms
used herein and not otherwise herein defined shall have the meanings ascribed to
such terms in the Master Agreement.
Each of CIS and OLOG wish to supplement the Master Agreement as provided
herein.
1. Representations and warranties of OLOG. OLOG represents and warrants
to CIS as follows:
A. OLOG has been duly incorporated, is validly existing as a
corporation and is in good standing under the laws of the State of Delaware.
B. Each of this letter agreement, the Master Agreement and the
Registration Rights Agreement, dated the date hereof, between OLOG and CIS (the
"Registration Rights Agreement") has been duly authorized, executed and
delivered by OLOG; and OLOG has full corporate power and authority necessary to
enter into this letter agreement, the Master Agreement and the Registration
Rights Agreement and to perform its obligations hereunder and thereunder.
C. The Rights Agreement, dated as of February 29, 1996 (the
"Rights Agreement"), between OLOG and Xxxxx Xxxxxx Shareholder Services L.L.C.
has been duly authorized, executed and delivered by OLOG, the Rights (as defined
in the Rights Agreement) to be issued upon issuance of the OLOG Common Stock to
be issued under the Master Agreement and to be issued upon issuance of shares of
Common Stock ("Conversion Shares") of OLOG issuable upon conversion of any OLOG
Loan Stock to be issued under the Master Agreement have been duly authorized and
the Series A Junior Participating Preferred Stock to be issued upon exercise of
the Rights has been duly authorized. Upon issuance of the OLOG Common Stock to
be issued under the Master Agreement and/or upon issuance of any Conversion
Shares (including one Right for each such share of OLOG Common Stock and each
such Conversion Share, as the case may be), CIS (and each of its transferees of
any such shares of OLOG Common Stock or Conversion Shares) will have all rights
and powers and be subject to all other terms, conditions and restrictions as are
available and applicable to a Rights holder under the Rights Agreement and no
further action pursuant to the Rights Agreement on the part of OLOG or CIS is
required to give effect to the foregoing.
D. All corporate action required to be taken for the
authorization, issuance and sale of the OLOG Common Stock to be issued under the
Master Agreement (including one Right for each such share of OLOG Common Stock)
has been validly and sufficiently taken. The shares of OLOG Common Stock to be
issued under the Master Agreement and the Rights appertaining thereto have been
duly authorized for issuance and sale to CIS pursuant to the Master Agreement
and, against payment of the consideration set forth therein, such shares of OLOG
Common Stock and such Rights will be validly issued, fully paid and
nonassessable, and no holder thereof will be subject to personal liability
solely by reason of being such a holder.
E. The execution and delivery by OLOG of, and the full and
timely performance by OLOG of its obligations under, each of this letter
agreement, the Master Agreement and the Registration Rights Agreement, and the
consummation of each of the transactions contemplated herein and therein:
1. have been duly authorized by all necessary corporate
action on the part of OLOG;
2. do not and will not result in any violation of the
certificate of incorporation or bylaws of OLOG; and
3. do not and will not conflict with, or result in a
breach or violation of, any of the terms or provisions of, or constitute a
default under (or an event which, with notice or lapse of time, or both, would
constitute a default
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under), or give rise to any right to accelerate the maturity or require the
prepayment of any indebtedness under, or result in the creation or imposition of
any lien, charge or encumbrance upon any material property or assets of OLOG
under;
a. any indenture, mortgage, loan agreement, note,
lease, license, partnership agreement, franchise agreement or other agreement or
instrument to which OLOG is a party or by which it may be bound or affected or
to which any of its properties or assets may be subject, other than any such
conflict, breach, default, acceleration, prepayment, lien, charge, encumbrance
that could not, individually or in the aggregate, reasonably be expected to
result in a material adverse effect on the consolidated business or operations
of OLOG;
b. any existing applicable law, rule or regulation;
or
c. any judgment, order or decree of any government,
governmental instrumentality or court, domestic or foreign, having jurisdiction
over OLOG or any of its properties.
F. The shares of OLOG Common Stock to be issued pursuant to the
Master Agreement:
1. will not have been, individually and collectively,
issued or sold in violation of any preemptive or other similar rights of the
holders of any securities of OLOG; and
2. are listed on, and will be, following the completion
of the Restricted Period (as defined below), eligible for trading on, the
National Association of Securities Dealers Automated Quotations system
("NASDAQ").
G. OLOG is a reporting issuer and has filed all reports required
to be filed by Section 13(a) or 15(d) of the United States Securities and
Exchange Act of 1934, as amended (the "Exchange Act") during the preceding 12
months. None of such reports contains any untrue statement of a material fact or
omits to state any material fact necessary in order to make the statements
contained therein not misleading.
H. The issuance and sale of the shares of OLOG Common Stock
pursuant to the Master Agreement will be made in accordance with the provisions
and requirements of Regulations S ("Regulation S") under the United States
Securities Act of 1933, as amended (the "Securities Act"), and any applicable
state law.
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I. No offer to buy the shares of OLOG Common Stock to be issued
pursuant to the Master Agreement was made to OLOG by any person in the United
States.
J. None of OLOG, any affiliate of OLOG, or any person acting on
behalf of OLOG or any such affiliate has engaged, or will engage, in any
Directed Selling Efforts (as such term is defined under Regulation S) with
respect to the shares of OLOG Common Stock to be issued pursuant to the Master
Agreement.
K. OLOG has not issued, and after the Completion Date will not
issue, any stop transfer order or other order impeding the sale and delivery of
the shares of OLOG Common Stock to be issued pursuant to the Master Agreement
except for a stop order restricting the sale of such shares into the United
States or to, or for the account or benefit of, U.S. Persons during the
Restricted Period. Notwithstanding the foregoing provision, OLOG may place the
following legend on the certificate(s) representing the shares of OLOG Common
Stock to be issued pursuant to the Master Agreement:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), and have been
sold in reliance on the exemption from registration provided by
Regulation S under the Act ("Regulation S"). During the period prior to
January 29, 1997 (the "Restricted Period"), the shares represented by
this certificate may not be offered or sold, directly or indirectly,
within the United States (as defined under Regulation S), to a U.S.
Person (as defined under Regulation S) or for the account or benefit of
a U.S. Person. The preceding sentence shall have no further effect
subsequent to the expiration of the Restricted Period and thereafter
this legend may be removed upon presentation of this certificate to the
transfer agent for Offshore Logistics, Inc.
L. OLOG has not offered to sell or sold any warrants convertible
into shares of its common stock in a transaction involving Regulation S in the
past year; and there are no outstanding warrants convertible into shares of its
common stock which have been sold in a transaction involving Regulation S.
M. OLOG hereby extends and makes to CIS, with respect to (i) the
OLOG Loan Stock to be issued under the Master Agreement, (ii) each of the
Conversion Shares and (iii) the Indenture, dated as of December 15, 1996 (the
"Indenture") between OLOG and Fleet National Bank, as Trustee, the same
representations and warranties as are made with respect thereto to the
Purchasers (as such term is defined in the Purchase Agreement, dated December
11, 1996 (the "Purchase Agreement"), among OLOG and Xxxxxxxxx & Company, Inc.,
Xxxxxxx & Company
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International and Xxxxxxx Xxxx & Company L.L.C.) under paragraph 1 of the
Purchase Agreement
2. Covenants of OLOG. OLOG covenants and agrees with CIS to:
A. continue to comply with all applicable reporting requirements
of the Exchange Act;
B. except for the sale of $87.5 million aggregate principal
amount (subject to increase up to $98 million aggregate principal amount upon
exercise of an overallotment option) of OLOG's 6% Convertible Subordinated Notes
due 2006 as contemplated by that certain Offering Circular, dated December 11,
1996 (the "Offering Circular"), refrain from offering to sell or selling any
shares of common stock, or warrants or other securities convertible into its
common stock, in a transaction involving Regulation S for a period of 180 days
following the Completion Date;
C. ensure, to the extent such is within its control, that all
Offering Restrictions (as such term is defined under Regulation S) applicable to
the sale of shares of OLOG Common Stock to be issued pursuant to the Master
Agreement are thoroughly complied with and satisfied;
D. refrain from engaging, and ensure, to the extent such is
within its control, that none of its affiliates will engage, in any Directed
Selling Efforts with respect to the shares of OLOG Common Stock to be issued
pursuant to the Master Agreement;
E. cause its Board of Directors to take action prior to the
close of business on the Completion Date to cause the number of directors
constituting the full Board of Directors of OLOG at the Completion Date to be
increased to ten persons, and to elect Xxxxx X. Xxxxxxx and Xxxxxxxx X.
Xxxxxxxxxx to the Board of Directors of OLOG (such increase and such elections
to be subject to the consummation of the transactions under the Master
Agreement). If during the period that CIS is entitled to have two designees on
the Board of Directors of OLOG, any CIS designated director shall decline or be
unable to serve as a director of OLOG, the remaining CIS designated director
shall designate another person to serve in such person's stead. If during such
period, any OLOG designated director shall decline or be unable to serve as a
director of OLOG, a majority of the remaining OLOG designated directors shall
designate another person to serve in such person's stead. OLOG shall take all
appropriate action during such period to assist in the nomination for election
as directors of OLOG of the CIS designees named above (or any successor chosen
pursuant to this subsection 2(E)). The provisions of this subsection 2(G) shall
remain applicable,
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and CIS shall be entitled under this subsection 2(E) to have two of its
designees on the Board of Directors of OLOG, for so long as either (i) CIS shall
own at least 1,000,000 shares of OLOG Common Stock or (ii) CIS shall own at
least 49% of the total outstanding ordinary shares of Newco.
OLOG shall promptly pay all reasonably out-of-pocket costs and
expenses incurred by each of the CIS designees serving as directors of OLOG in
attending meetings of OLOG's Board of Directors (it being understood and agreed
by OLOG that first-class, round trip air fare and the cost of first-class hotel
accommodations constitute reasonable out-of-pocket costs and expenses). Further
OLOG shall (i) at OLOG's sole cost and expenses, maintain directors liability
insurance coverage for the benefit of CIS's designees to the same extent, and on
terms no less favorable, than such insurance coverage is maintained for the
benefit of other OLOG directors and (ii) pay directors' fees to CIS's designees
on terms (including as to amount and the timing of payment) no less favorable
than those pursuant to which directors' fees are paid to other OLOG directors.
F. indemnify and hold harmless CIS and each other person, if any,
who controls CIS within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which CIS or such
controlling person 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 any untrue statement or alleged untrue
statement of any material fact contained in the Offering Circular, the
Preliminary Offering Circular, any Additional Issuer Information or any Exchange
Act Reports (as each of such terms is defined in the Offering Circular), or any
amendment or supplement thereof, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse CIS and each such controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action. OLOG acknowledges and agrees (i)
that neither CIS nor any person who controls CIS has furnished any information
in writing for use in the Offering Circular, the Preliminary Offering Circular,
any Additional Issuer Information or any Exchange Act Reports and (ii)
accordingly, that OLOG shall at all times refrain from alleging or stating
otherwise for any reason whatsoever (including, without limitation, for the
reason of exculpating OLOG from, or otherwise diminishing, OLOG's indemnity
obligations hereunder and any contribution obligations OLOG may have under the
third succeeding paragraph of this subsection 2(F)).
Promptly after receipt by an indemnified party hereunder of notice of
the commencement of any action, such indem-
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nified party shall, if a claim in respect thereof is to be made against OLOG
hereunder, notify OLOG in writing thereof, but the omission so to notify OLOG
shall not relieve it from any liability which it may have to any indemnified
party other than under this subsection 2(F). In case any such action shall be
brought against any indemnified party and it shall notify OLOG of the
commencement thereof, OLOG shall be entitled to participate in and, to the
extent it shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from OLOG to such
indemnified party of its election so to assume and undertake the defense
thereof, OLOG shall not be liable to such indemnified party under this
subsection 2(F) for any legal expenses subsequently incurred by such indemnified
party in connection with the defense thereof; provided, however, that, if the
defendants in any such action include both the indemnified party and OLOG and
the indemnified party shall have reasonably concluded that there may be
reasonable defense available to it which are different from or additional to
those available to OLOG, or if the interests of the indemnified party reasonably
may be deemed to conflict with the interests of OLOG, the indemnified party
shall have the right to select a separate counsel and to assume such legal
defenses and otherwise to participate in the defense of such action, with the
expenses and fees of such separate counsel and other expenses related to such
participation to be reimbursed by OLOG as incurred.
Notwithstanding the foregoing, any indemnified party shall have the
right to retain its own counsel in any such action, but the fees and
disbursements of such counsel shall be at the expense of such indemnified party
unless (i) OLOG shall have failed to retain counsel for the indemnified person
as aforesaid or (ii) OLOG and such indemnified party shall have mutually agreed
to the retention of such counsel. It is understood that OLOG shall not, in
connection with any action or related actions in the same jurisdiction, be
liable for the fees and disbursements of more than one separate firm qualified
in such jurisdiction to act as counsel for the indemnified party. OLOG shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, OLOG agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in the first paragraph of this
subsection 2(H) is unavailable or insufficient to hold harmless an indemnified
party under such paragraph in respect of any losses, claims, damages or
liabilities or actions in respect thereof referred to therein, then OLOG shall
in lieu of indemnifying such indemnified party contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or actions as appropriate to
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reflect the fault on the part of OLOG, on the one hand, and the absence of any
fault on part of the indemnified party, on the other hand, in connection with
the statements or omissions which resulted in such losses, claims, damages,
liabilities or actions. The relative fault shall be determined by reference to,
among other things, the fact that any such untrue or alleged untrue statement of
a material in no way relates to information supplied by the indemnified party.
OLOG and CIS agree that it would not be just and equitable if contributions
pursuant to this paragraph were determined by any method of allocation which did
not take account of the equitable considerations referred to above in this
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or action in respect thereof, referred to
above in this paragraph, shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act),
shall be entitled to contribution from any person who is not guilty of such
fraudulent misrepresentation.
3. Representation and Warranty of CIS. CIS represents and warrants to
OLOG that none of CIS, any affiliate of CIS or any person acting on behalf of
CIS or any such affiliate has engaged, or will engage, in any Directed Selling
Efforts with respect to the shares of OLOG Common Stock to be issued pursuant
to the Master Agreement.
4. Covenant of CIS. CIS covenants and agrees with OLOG to:
A. ensure, to the extent such is within its control, that all
Offering Restrictions applicable to the sale of shares of OLOG Common Stock to
be issued pursuant to the Master Agreement are thoroughly complied with and
satisfied; and
B. refrain from engaging, and ensure, to the extent such is
within its control, that none of its affiliates will engage, in any Directed
Selling Efforts with respect to the shares of OLOG Common Stock to be issued
pursuant to the Master Agreement.
5. Governing Law, Etc. This letter agreement shall be governed by, and
construed in accordance with, English law. Each party irrevocably agrees that
the Courts of England shall have exclusive jurisdiction in relation to any
claim, dispute of difference concerning this letter agreement and any matter
arising therefrom. Each party irrevocably waives any right to claim that the
action has been brought in an inconvenient forum,or to claim that those Courts
do not have jurisdiction. Each of the parties agrees that any document in
an action (including, but not limited to, any writ of summons or other
originating process
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or any third or other party notice) may be served on any party by being
delivered to or left at its address for service of notices under Clause 12 of
the Master Agreement.
If the foregoing correctly sets forth our understanding of the subject
matter hereof, kindly so indicate by signing this letter agreement and the
accompanying duplicate copy hereof and returning such signed duplicate to the
undersigned, whereupon this letter agreement will constitute our binding
agreement concerning it subject matter.
Very truly yours,
OFFSHORE LOGISTICS, INC.
By: [Signature appears here]
--------------------------------
AGREED AND ACCEPTED
as of the date first
above written:
CALEDONIA INDUSTRIAL &
SERVICES LIMITED
By: [Signature appears here]
------------------------------
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