UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended April 30, 1994
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 No. 0-9827
PETROLEUM HELICOPTERS, INC.
(Exact name of registrant as specified in its charter)
Delaware 72-0395707
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5728 Jefferson Highway
P.O. Box 23502, New Orleans, Louisiana 70183
(Address of principal (Zip Code)
executive offices)
Registrant's telephone number, including area code: (504) 733-6790
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
Voting Common Stock, $.08-1/3 Par Value
Non-Voting Common Stock, $.08-1/3 Par Value
(Title of Each Class)
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 X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's knowledge
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. *
State the aggregate market value of the voting stock held
by non-affiliates of the registrant.
Date Amount
June 22, 1994 $12,405,000
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date.
Voting Common stock, $.08-1/3 par value ....3,278,068 shares
outstanding as of July 19, 1994.
Non-Voting Common Stock, $.08-1/3 par value ...2,200,000 shares
outstanding as of July 19, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's definitive proxy statement to
be used in connection with its 1994 Annual Meeting of
Stockholders will be, upon filing with the Commission,
incorporated by reference into Part III of this Form 10-K.
<PAGE>
PART I
Item 1. Business.
General
The Company was incorporated as a Delaware corporation in
1949 and since that time its primary business has been to
transport personnel, and to a lesser extent parts and equipment,
to, from, and among offshore platforms for customers engaged in
the oil and gas exploration, development and production industry.
During the most recent fiscal year approximately 73% of the
Company's operating revenues was generated by oil and gas
transportation services in federal and state waters offshore of
the States of Louisiana, Texas, Florida, Alabama, Mississippi and
California (the "domestic Gulf"). Approximately 77% and 82% of
operating revenues were derived from these services in the
domestic Gulf in fiscal 1993 and 1992, respectively.
The Company's aeromedical transportation services for
hospitals and medical programs accounted for 13% of operating
revenues in fiscal 1994. Aeromedical transportation services
generated 10% and 8% of operating revenues in fiscal 1993 and
1992, respectively.
The remaining 14% of 1994 operating revenues was generated
primarily from aircraft maintenance services provided to outside
parties and the Company's international business. The
international business consists of onshore and offshore
helicopter transportation services and fixed-wing services for
the international oil and gas industry.
Demand for the Company's helicopter services is strongly
influenced by offshore oil and gas exploration, development and
production activities in the areas in which it operates, which in
turn is influenced primarily by oil and gas prices. In general,
helicopters perform a useful service when their expense can be
justified by the labor and other cost savings resulting from
their faster transportation times. Each of the Company's ten
principal types of helicopters is available on an hourly, daily
or monthly basis.
The Company maintains master operating agreements with each
of its major customers, which set forth general rights and duties
of the Company and the customer. Although the Company is a party
to a limited number of contracts with a term of one year,
services to the domestic Gulf are generally provided pursuant to
monthly extensions of these operating agreements, and prices are
fixed for each contract extension. Contracts for aeromedical and
foreign business are generally entered into for longer terms.
Charges under operating agreements are generally based on
fixed monthly fees and additional hourly charges for actual
flight time. Because the Company is compensated in part by
flight hour, prolonged adverse weather conditions that result in
reduced flight hours can adversely affect results of operations.
See "- Weather and Seasonal Aspects."
The Company has historically realized substantial gains
from the sales of its helicopters.
<PAGE>
Weather and Seasonal Aspects
Poor visibility, high winds and heavy precipitation can
affect the safe use of helicopters and result in a reduced number
of flight hours. Since a significant portion of the Company's
revenues is dependent on actual flight hours and a substantial
portion of the Company's costs is fixed, prolonged periods of
adverse weather can materially and adversely affect the Company's
operating revenues and net earnings.
In the domestic Gulf, the months of December through
February have more days of adverse weather conditions and fewer
hours of daylight than the other months of the year.
Consequently, flight hours are generally lower than at other
times of the year, which typically results in a reduction in
revenues from operations during those months.
The Company currently operates 44 aircraft equipped to fly
pursuant to instrument flight rules (IFR) in the domestic Gulf,
which enables these aircraft, when manned by IFR rated pilots and
co-pilots, to make flights at times when poor visibility prevents
flights by aircraft that can fly only by visual flight rules
(VFR). Poor visibility is the most common of the adverse weather
conditions that affect the Company's operations.
Hazards and Insurance
The operation of helicopters inherently involves a degree
of risk. Hazards, such as aircraft accidents, collisions, fire
and adverse weather, are inherent in the business of providing
helicopter services to the offshore oil and gas industry and
others and may result in losses of equipment and revenues. The
Company's safety record is favorable in comparison to the record
for all United States operators as reflected in industry
publications.
The Company maintains hull and liability insurance on its
helicopters, which generally insures the Company against physical
loss of, or damage to, its helicopters and against certain legal
liabilities to others. In addition, the Company carries war
risk, expropriation, confiscation and nationalization insurance
for helicopters involved in international operations. In some
limited instances the Company is covered by indemnity agreements
from large oil companies in lieu of or in addition to its
insurance. The Company's helicopters are not insured for loss of
use. While the Company believes it is adequately covered by
insurance and indemnification arrangements, the loss,
expropriation or confiscation of, or severe damage to, a material
number of its helicopters could adversely affect revenues and
profits.
Government Regulation
As a commercial operator of helicopters, the Company's
flight and maintenance operations are subject to regulation by
the Federal Aviation Administration (the "FAA") pursuant to the
Federal Aviation Act of 1958 (the "Federal Aviation Act"). The
FAA has authority to exercise jurisdiction over personnel,
aircraft, ground facilities and other aspects of the Company's
business.
<PAGE>
The Company transports personnel and property in its
helicopters pursuant to an FAR 135 Air Taxi certificate granted
by the FAA. This certificate contains operating specifications
that allow the Company to conduct its present operations but are
subject to amendment, suspension and revocation in accordance
with procedures set forth in the Federal Aviation Act. The
Company is not required to file tariffs showing rates, fares and
other charges with the FAA. The FAA's regulations, as currently
in effect, also require that not less than 75% of the Company's
voting securities be owned or controlled by citizens of the
United States or one of its possessions, and that the president
and at least two-thirds of the directors of the Company are
United States citizens. The Company's chief executive officer
and all of its directors are United States citizens and its
organizational documents provide for the automatic reduction in
voting power of each share of voting common stock owned or
controlled by a non-United States citizen if necessary to comply
with these regulations.
The National Transportation Safety Board is authorized to
investigate aircraft accidents and to recommend improved safety
standards. The Company is also subject to the Communications Act
of 1934 because of its ownership and operation of a radio
communications flight following network throughout the domestic
Gulf.
Numerous federal statutes and rules regulate the offshore
operations of the Company and the Company's customers, pursuant
to which the federal government has the ability to suspend,
curtail or modify certain or all offshore operations. A
suspension or substantial curtailment of offshore oil and gas
operations for any prolonged period would have an immediate and
materially adverse effect on the Company. A substantial
modification of current offshore operations could adversely
affect the economics of such operations and also result in
reduced demand for helicopter services.
Competition
The Company's business is highly competitive. Many of the
Company's contracts are awarded after competitive bidding, and
the principal methods of competition are price, reliability,
availability, and safety.
The Company believes it operates one of the largest
commercial helicopter fleets in the world. At April 30, 1994,
the Company had 266 aircraft in operation. The Company operated
240 helicopters in the United States, of which 181 were operated
in the domestic Gulf, 26 were operated in the Company's
aeromedical program, 16 were in the hangar for maintenance, 13
were parked for sale and 4 were used for training. The Company
is the largest operator of helicopters in the domestic Gulf and
believes there are approximately 6 competitors operating in the
Gulf market.
Certain of the Company's customers and potential customers
in the oil industry operate their own helicopter fleets; however,
oil companies traditionally contract for most specialty services
associated with offshore operations, including helicopter
services.
<PAGE>
Employees
As of April 30, 1994, the Company employed a total of 1,697
people including 552 pilots, 727 mechanics and 418 in flight
operations and administration.
The Company believes its employee relations to be
excellent, and it has never experienced a work stoppage. None of
the Company's employees is covered by union contracts. Union
organization campaigns in 1970, 1974 and 1980 failed.
Unionization of some or all of the Company's employees could have
a material adverse effect on its business.
Customers
The Company's principal customers are major oil companies.
The Company also serves smaller exploration and production
concerns, oil and gas service companies, hospitals and medical
programs. The Company's largest customer, Shell Oil Company,
accounted for approximately 10% of the Company's operating
revenues in fiscal 1994. The Company's five largest customers
were oil and gas related and accounted for 34% of operating
revenues in fiscal 1994, and each of 38 customers including 8
aeromedical customers, accounted for more than $1 million in
operating revenues during fiscal 1994.
Division managers of customer oil companies, who are
responsible for a majority of contract services in connection
with offshore oil activities, generally contract for helicopter
services. Many oil companies also employ directors of aviation
to evaluate the capabilities and safety performance of companies
providing helicopter services and make recommendations to
division managers. Company management, along with customer
relations specialists, are in frequent contact with division
managers and directors of aviation in connection with both
existing service contracts and potential new business.
Environmental and Safety Matters
General. The Company is subject to federal, state and
local environmental laws and regulations that impose limitations
on the discharge of pollutants into the environment and establish
standards for the treatment, storage and disposal of toxic and
hazardous wastes.
The Company is also subject to the federal Occupational
Safety and Health Act ("OSHA") and similar state statutes. The
Company has an extensive health and safety program and employs a
safety staff, including a certified safety professional in the
field of comprehensive practice, who is also a registered
environmental professional. The primary functions of the safety
staff are to develop Company policies that meet or exceed the
safety standards set by OSHA, train Company personnel and make
daily inspections of safety procedures to insure their compliance
with Company policies on safety. All personnel are required to
attend safety training meetings at which the importance of full
compliance with safety procedures is emphasized. The Company
believes that it meets or exceeds all OSHA requirements and that
its operations do not expose its employees to unusual health
hazards.
<PAGE>
Waste Disposal. The Company's operations produce a limited
amount of industrial waste products and certain hazardous
materials. The Company's industrial waste products, which
consist principally of residual petroleum and metal refinishing
waste, are shipped to third party disposal sites that are
licensed to handle such materials.
Item 2. Properties
Fleet Utilization
As of April 30, 1994 76% of the Company's aircraft were
actively assigned as compared with 76% and 71% as of April 30,
1993 and 1992, respectively.
Equipment
Certain information as of April 30, 1994 regarding the
Company's fleet is set forth in the following table:
<TABLE>
<CAPTION>
Number Cruise Appr.
Manufacturer Type in Fleet Engine Passengers Speed Range
(mph) (miles)
<S> <C> <C> <C> <C> <C> <C>
Bell 206L 105 Turbine 6 130 310
206B 32 Turbine 4 120 300
212<FN1> 9 Twin Turbine 13 115 300
214ST<FN1> 1 Twin Turbine 18 155 450
230<FN1> 1 Twin Turbine 8 160 370
412<FN1> 17 Twin Turbine 13 135 335
Boelkow BK-117 8 Twin Turbine 6 135 255
BO-105 39 Twin Turbine 4 135 270
Aerospatiale
AS355F Twin Star 20 Twin Turbine 5 135 385
AS350 B2 3 Twin Turbine 5 140 385
Sikorsky S-76<FN1> 20 Twin Turbine 12 150 400
255
</TABLE>
______________
<FN1> Equipped to fly under instrument flight rules (IFR).
All other types listed can only fly under visual flight
rules (VFR). See Item 1. "Business - Weather and
Seasonal Aspects."
______________________
<PAGE>
The following tables set forth additional information
regarding the helicopters owned and leased by the Company (in
thousands, except the number of helicopters):
Number of
Company Owned Net Book
Helicopters Cost Value
183 $ 159,375 $ 73,994<FN1>
Number of Total Rents
Company Leased Over Life Remaining
Helicopters of Leases Rents
72 $ 103,450 $ 66,281
_____________
<FN1> Information regarding the Company's depreciation policy is
set forth under Item 8. "Financial Statements and
Supplementary Data - Notes to Consolidated Financial
Statements, Note 1(c)."
____________________
The Company operates eleven helicopters that are owned
or leased by customers which are not reflected in the
information set forth above. The Company also owns four
fixed-wing aircraft two of which are currently under
contract to customers.
As of April 30, 1994, the Company's commitment for
principal payments and lease payments for its present
helicopter fleet averaged $16 million each year for the next
five years and an aggregate of $28 million thereafter.
Under most leases the Company is responsible for all
insurance, taxes and maintenance expenses associated with
the helicopters, and within certain limitations, the Company
can either substitute equipment or terminate the leases in
the event the leased equipment becomes obsolete or is no
longer suited for the Company's needs. All of the foregoing
leases are considered operating leases for accounting and
tax purposes.
The Company also maintains an inventory of fuel and an
inventory of spare parts and components for use in repair
and maintenance of the Company's fleet. This inventory had
a book value of approximately $25 million on April 30, 1994.
The Company is a distributor or dealer for many of these
parts and components, thereby allowing it to realize
significant cost savings for its purchases. However, the
Company has no long-term contractual rights to continue such
relationships.
<PAGE>
Equipment on Order
The Company has agreed to purchase two helicopters in
1995 for $5 million. The Company also plans to lease five
helicopters with a lease value of $9 million. The lease
term is 60 months with monthly payments of $67,000 or $0.8
million per year. At the end of the lease term, the Company
may purchase the aircraft for 88% of the original lease, or
$7.9 million, or return the aircraft and pay the lessor 13%
of the original lease amount, or $1.2 million. The Company
also has non-binding agreements to purchase 15 additional
aircraft none of which are expected to be purchased in 1995.
Equipment Sales
The Company sells aircraft whenever they (i) become
obsolete, (ii) do not fit into future fleet plans, (iii) are
subject to unusually strong and specific demand in the
resale market, or (iv) are surplus to the Company's needs.
The Company typically sells its helicopters for more
than their book value. The Company cannot predict, however,
whether these results will continue or whether such prices
would be realized if the Company were to sell large numbers
of helicopters in a short period of time.
Facilities
The Company leases 4,362 square feet of office space
in a building owned by Offshore Navigation, Inc., (owner of
12.6% of the Company's voting common stock), in Jefferson
Parish (Metropolitan New Orleans), Louisiana, on a
month-to-month basis, for the Company's executive offices.
The Company believes that it will be able to occupy this
space for as long as necessary because of its relationship
with Offshore Navigation, Inc.
The Company's principal operational facility is
located on property leased from The Lafayette Airport
Commission at the Lafayette Regional Airport in Lafayette
Parish, Louisiana. The leases cover approximately 28.2
acres and 17 buildings, with an aggregate of approximately
135,000 square feet, housing the Company's main operational
and administrative office and main repair and maintenance
facility. The Company has options to extend this lease
until 2006.
In addition, the Company leases property for 18
additional bases to service the oil and gas industry
throughout the domestic Gulf and two bases in California.
Those bases that represent a significant investment by the
Company in leasehold improvements or which are particularly
important to the Company's operations are:
A. Morgan City Base (Louisiana) - containing
approximately 53 acres, is under a lease that expired on
June 30, 1994 and was extended by the Company through June
30, 1998. The Company has built a variety of operational
and maintenance facilities on this property, including
<PAGE>
landing pads for 46 helicopters. The Company believes that
this facility is the largest commercial heliport in the
world.
B. Intracoastal City Base (Louisiana) - containing
approximately 22.5 acres under several leases in Vermillion
Parish, all with options to extend through 2001. The
Company has built a variety of operational and maintenance
facilities on this property, including landing pads for 45
helicopters.
C. Houma-Terrebonne Airport (Louisiana) -
containing approximately 13.6 acres and certain buildings
leased under four leases from the Houma-Terrebonne Airport
Commission, which have options allowing extension of the
lease through 1999. The Company has landing pads for 30
helicopters on this property.
D. Sabine Pass (Texas) - containing approximately
22 acres under two leases, one of which, for 1.6 acres, will
expire February 28, 1995, and the other of which will expire
September 30, 1997 with an option to extend through
September 30, 2002. The Company has built a variety of
operational and maintenance facilities on this property,
including landing pads for 24 helicopters.
E. New Orleans (Louisiana) - containing
approximately 1.5 acres, is under a lease through April 30,
2004. The location contains significant leasehold
improvements including landing pads for 14 helicopters.
F. Venice (Louisiana) - containing approximately 8
acres, is under a lease expiring March 31, 1995. The
original lease was executed April 1, 1973 for one year and
has been extended annually since that time. The location
contains landing pads for 27 helicopters.
G. Fourchon (Louisiana) - containing approximately
8 acres, is under original lease expiring April 30, 1996.
The property has 10 landing pads.
The Company's other operations related bases in the
United States are located along the domestic Gulf in
Louisiana at Cameron, Grand Isle, Lake Charles and
Schriever; in Texas at Bay City, Brazoria, Corpus Christi,
Galveston, Port O'Connor and Rockport; in Mississippi at
Pascagoula; and in California at Huntington Beach and Santa
Barbara.
The Company operates from offshore platforms which are
provided free of charge by the owners of the platforms,
although in certain instances the Company is required to
indemnify the owners against loss in connection with the
Company's use.
Bases of operations for the Company's foreign and
aeromedical operations are generally furnished by the
customer. The Company's foreign operations are currently
conducted in Angola, Argentina, Canada, Colombia, Kenya,
Philippines, Portugal, Trinidad, Venezuela and Zaire.
Aeromedical operations are currently conducted in Arizona,
Arkansas, California, Florida, Illinois, Kentucky,
Louisiana, North Carolina, Ohio and Texas.
<PAGE>
Item 3. Legal Proceedings
The Company is named as a defendant in various legal
actions arising out of incidents related to its helicopter
operations. The amount, if any, of ultimate liability with
respect to such matters cannot be determined; however, after
consulting with legal counsel, the Company believes any such
liability will not have a material effect on the Company's
financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security
holders during the fourth quarter of the fiscal year ended
April 30, 1994.
Item 4. (a) Executive Officers of the Registrant
Certain information about the executive officers of
PHI is set forth in the following table and accompanying
text:
<TABLE>
<CAPTION>
Name Age Position
<S> <C> <C>
Carroll W. Suggs 55 Chairman of the Board of Directors and
Chief Executive Officer
Vernon E. Albert 52 Vice President and Chief Pilot
Robert D. Cummiskey, Jr. 52 Vice President - Risk Management
and Secretary
Gerald T. Golden 51 Vice President and
Director of Operations
David P. Milling 50 Vice President and General Manager of IHTI
Ben Schrick 53 Vice President and General Manager
Harold L. Summers 56 Vice President - Engineering/Quality
Assurance and Materiels
John H. Untereker 44 Vice President, Chief Financial
Officer and Treasurer
Gary J. Weber 47 Vice President -
International Operations
</TABLE>
Mrs. Suggs became Chairman of the Board in March 1990 and Chief
Executive Officer in July 1992. From 1989 until March 1990, she served as
Vice Chairman of the Board.
Mr. Albert has served as the Vice President and Chief Pilot since
1984.
Mr. Cummiskey has served as Secretary since June 1992 and as Vice
President of Risk Management since October 1991. Prior to that time, Mr.
Cummiskey was a Vice President/Account Executive of Johnson & Higgins
(insurance brokers and consultants).
<PAGE>
Mr. Golden was named Vice President and Director of Operations in
March 1993. Prior to that time he served as Vice President of Corporate
Development since 1991 and as Director of Training since 1982.
Mr. Milling has served as Vice President since September 1989,
General Manager of International Helicopter Transport, Inc. (IHTI), a
wholly-owned subsidiary, since 1988, and as Facility Security Officer since
1990. From 1979 until 1988, Mr. Milling served as marketing representative
and administrative assistant to the Chief Executive Officer.
Mr. Schrick has served as Vice President and General Manager since
January 1993 and as Vice President of Maintenance since 1990. Prior to
that time he served as Superintendent of Maintenance. Since 1984 Mr.
Schrick has also served as Vice President of Evangeline Airmotive, Inc., a
wholly-owned subsidiary.
Mr. Summers has served as Vice President of Engineering/Quality
Assurance since 1990 and Vice President of Materiels since 1994. Prior to
that time he served as Vice President of Maintenance.
Mr. Untereker has served as Vice President, Chief Financial Officer
and Treasurer since July 1992. From December 1987 until July 1992, he
served as Executive Vice President and Chief Financial Officer of Lend
Lease Trucks, Inc. (truck leasing, rental and finance)/Bastion Industries
(manufacturer and distributor of packaging materials). Prior to that time,
Mr. Untereker served as controller of NL Industries, Inc. and Vice
President-Finance of NL Baroid (petroleum services and products).
Mr. Weber has served as Vice President of International Operations
since September 1989. From July 1987 until September 1989, he served as
Director of International Operations.
PART II
Item 5. Market Price for Registrant's Common Equity and
Related Stockholder Matters
The Company's voting and non-voting common stock trades on the NASDAQ
System ("NASDAQ Small Cap Issuers") under the symbols PHEL and PHELK,
respectively. The following table sets forth the range of high and low per
share bid prices, as reported by NASDAQ, and dividend information for the
Company's voting and non-voting common stock for the fiscal quarters
indicated. The quotations represent prices in the over the counter market
between dealers in securities, do not include retail markup, markdown or
commission and may not necessarily represent actual transactions:
<PAGE>
<TABLE>
<CAPTION>
Voting Common Stock Non-Voting Common Stock Dividends
Fiscal Quarter High Low High Low Per Share
<S> <C> <C> <C> <C> <C>
1992-93
1st Quarter 12 10 11 1/2 10 .01
2nd Quarter 13 10 1/8 12 1/2 10 -
3rd Quarter 13 3/4 10 3/4 13 3/4 10 1/2 -
4th Quarter 16 11 1/4 16 11 -
1993-94
1st Quarter 18 15 1/2 18 15 1/2 -
2nd Quarter 17 3/4 15 3/4 17 3/4 15 1/2 -
3rd Quarter 17 8 3/4 16 3/4 9 -
4th Quarter 12 3/4 9 1/2 13 9 3/4 -
</TABLE>
The declaration and payment of dividends is at the discretion of the
Board of Directors, which evaluates the Company's dividend policy
quarterly. Future dividends are dependent upon, among other things, the
Company's results of operations, financial condition, cash requirements,
future prospects and other factors deemed relevant by the Board. A credit
agreement to which the Company is a party generally restricts the
declaration or payment of dividends to 20% of net earnings for the previous
four fiscal quarters. See Item 8. "Financial Statements and Supplementary
Data - Notes to Consolidated Financial Statements, Note 2."
As of July 19, 1994 there were approximately 1,576 holders of record
of the Company's voting common stock and 133 holders of record of the
Company's non-voting common stock.
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
(Thousands of Dollars, Except Per Share Amounts)
<S> <C> <C> <C> <C> <C>
Year Ended April 30:
Operating revenues $ 172,069 $ 171,865 $ 191,867 $ 200,313 $ 184,178
Net earnings $ 3,333 $ 2,049 $ 1,290 $ 9,106 $ 9,549
Net earnings
per share $ .61 $ .37 $ .24 $ 1.58 $ 1.57
Cash dividends paid
per share $ - $ .01 $ .08 $ .08 $ .08
At April 30:
Total assets $ 146,312 $ 141,100 $ 142,173 $ 146,359 $ 139,272
Long-term debt $ 31,849 $ 30,950 $ 38,000 $ 40,000 $ 30,000
Working capital $ 30,572 $ 31,419 $ 38,590 $ 46,439 $ 47,964
Stockholders'
equity $ 75,309 $ 71,976 $ 69,982 $ 68,915 $ 78,041
</TABLE>
<PAGE>
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Operating results for the three years ended April 30, 1994 are as
follows (in thousands of dollars, except flight hours):
Years Ended April 30
1994 1993 1992
Revenues
Operating revenues $172,069 $171,865 $191,867
Gain (loss) on equipment
disposals 475 2,064 (1,112)
Gain on sale of investments - - 521
Equity in net earnings
(losses) of investee
companies - (18) 95
172,544 173,911 191,371
Expenses
Direct expenses 155,599 156,698 176,958
Selling, general and
administrative expenses 8,715 11,601 7,819
Interest expense 2,676 2,271 3,804
166,990 170,570 188,581
Earnings before income taxes 5,554 3,341 2,790
Income taxes 2,221 1,292 1,500
Net earnings $ 3,333 $ 2,049 $ 1,290
Flight Hours 207,000 207,000 242,000
Demand for the Company's offshore oil and gas transportation
services began to decline during fiscal 1991 due to reduced exploration
and production activity in the U.S. Gulf. This trend continued in fiscal
1992 and into the first quarter of fiscal 1993 before reversing in the
second quarter of fiscal 1993 due in part to rising natural gas prices.
The offshore drilling rig count is summarized in the following table:
May May June June
1994 1993 1992 1991
Active Rigs in U.S. Gulf 125 102 60 119
<PAGE>
While the rig count has recovered since June 1992, the Company's
management believes the rig count could trend downward as a reflection of
the oil and gas industry's concerns over unstable domestic oil, and to a
lesser extent, gas prices combined with strict U.S. environmental
legislation. These concerns have caused exploration companies to shift
much of their activities from the U.S. market to the international market
where less strict environmental policies make drilling for minerals more
economically viable. Although the active rig count in the Gulf increased
during this past fiscal year, the Company's domestic Gulf revenues
declined by 5% from $132.7 million to $126.1 million. This decline
evidences that competitive pricing pressures have increased and that
customers are increasingly sharing aircraft or employing aircraft on a
shorter term hourly basis. The $20 million decline in operating revenues
between fiscal 1992 and 1993 was consistent with the slower domestic oil
and gas market.
Management has continued to respond to these conditions by expanding
marketing efforts in the domestic aeromedical and the international oil
and gas markets. This marketing emphasis increased the Company's name
recognition as a leader in both markets and currently provides more
opportunities to bid for new business. Presently there is uncertainty
related to Federal regulation of the health care industry and the
stability of the international oil and gas industry; however, management
will continue to search for new opportunities that warrant the risk in
these markets. The result of the Company's efforts is reflected in the
increase of total revenues from aeromedical and international flights of
23% to $35.6 million and 15% to $29 million in fiscal years 1994 and 1993,
respectively. The Company also made significant reductions in its
workforce and helicopter fleet which had a positive impact on expenses.
The following tables provide selected information regarding the results of
management's efforts:
Approximate Percentage of Operating Revenue
Years Ended April 30
1994 1993 1992
Domestic Gulf. . . . . . . . 73% 77% 82%
Aeromedical . . . . . . . . 13 10 8
International and Technical
Services. . . . . . . . . 14 13 10
As of April 30
1994 1993 1992
Number of helicopters
owned/leased. . . . . . . . 255 258 285
Number of employees . . . . . .1,697 1,838 2,062
____________________
<PAGE>
Direct expenses declined $1.1 million in fiscal 1994 due to a $1
million decrease in helicopter rent, a $0.5 million reduction in
depreciation and a $0.5 million decline in taxes. Salaries were $0.8
million higher due to a 4% cost of living increase in July 1993 which was
offset by staffing reductions later in the fiscal year. Helicopter
insurance expense increased by $0.7 million due to an increase in rates.
Direct expenses in fiscal 1993 were reduced $20.3 million as payroll and
related costs declined approximately $12 million and helicopter
depreciation and rental, fuel, parts usage and outside maintenance
declined in response to reduced flight hours and helicopter fleet
reductions.
The Company's selling, general and administrative expense decreased
$2.9 million in fiscal 1994 primarily as a result of $2.1 million spent in
fiscal 1993 related to senior management transition. Reductions of $0.3
million in bad debt expense and $0.6 million in salaries were also
realized. The increase in fiscal 1993, when compared to fiscal 1992, was
also related to the senior management transition charges and increased
compensation and sales promotion expenses associated with the Company's
expanded sales and marketing programs.
Equipment disposal results in fiscal 1993 were greater than 1994 and
1992 as the Company disposed of more aircraft in 1993 than 1994 and
casualty losses charged to this account declined in 1993 as compared to
1992. The Company disposed of six, nine and ten aircraft in fiscal years
1994, 1993 and 1992, respectively.
The Company's borrowing costs increased $0.4 million in fiscal 1994
due to higher average borrowing levels incurred for the purchase of three
additional aircraft for the Company's aeromedical program. Higher
interest rates were also a factor in 1994. The Company's borrowing costs
in 1993 were $1.5 million lower than 1992 due to lower average borrowing
levels and declining interest rates.
PHI's effective tax rate was 40%, 39%, and 54% in the 1994, 1993 and
1992 fiscal years, respectively. The rate in fiscal 1992 was higher
because of certain non-deductible expenses and increased state income
taxes.
Liquidity and Capital Resources
Cash generated from operating activities in 1994 and 1993 was
essentially constant at $16.3 million and $16.1 million, respectively as
compared to $19.8 million in 1992. Cash flow generated by working capital
was $3.8 million, $5.9 million and $7.8 million for the fiscal years ended
1994, 1993 and 1992, respectively. These trends are consistent with
operating levels for the periods presented. The Company's use of cash in
1994 included a net investment in equipment, primarily helicopters, of
$12.7 million and a reduction in long-term debt of $0.2 million.
In response to reduced operating cash flow, dividends were limited
to $55,000 in 1993 and discontinued after the first quarter of fiscal
1993. See Item 5. "Market Price for Registrant's Common Equity and
Related Stockholder Matters."
<PAGE>
In July 1993, the Company amended its agreements with its principal
lenders to, among other things, increase borrowing capacity for helicopter
purchases during the next two years. In addition, approximately $9
million of borrowings under the Company's revolving credit facility were
refinanced on a long-term basis. In April 1994, the Company further
amended its agreements to permit London Inter-bank Borrowings ("LIBOR") at
LIBOR rates plus a floating spread. The spread (currently 2.625%) will
float up or down based on the Company's performance. The Company believes
this change will result in a lower effective rate. As of June 22, 1994,
the Company had $11 million and $15 million of available credit capacity
under the term and revolving credit facilities, respectively. The Company
believes it is in full compliance with its financing agreements. See Item
8. "Financial Statements and Supplemental Data - Notes to Consolidated
Financial Statements, Note 2."
The Company currently has outstanding capital commitments of
approximately $5 million, primarily for helicopter purchases. See Item 2.
- "Properties - Equipment on Order."
In July 1994, the Company entered into an agreement (the
"Agreement") with American Eurocopter Corporation (AEC) to acquire up to
25 emergency medical service (EMS) contracts and the related helicopters
and certain other assets that service these contracts from Rocky Mountain
Helicopters (RMH). RMH is presently operating under Chapter 11 of the
U.S. Bankruptcy Code. PHI's agreement with AEC, one of the largest
creditors of RMH, is conditional upon, among other things, bankruptcy
court confirmation of AEC's plan. RMH has filed its own plan of
reorganization and is currently expected to oppose the AEC plan and the
closing of the Agreement.
Management estimates annual revenues associated with the EMS
contracts are $27 million. If these contracts and assets are ultimately
acquired, PHI would pay AEC a portion of the contract revenues received as
reimbursement of the purchase price and assume certain post closing
obligations under the EMS contracts and the helicopter leases and
financing instruments. While the acquisition of these contracts and
assets may have a material impact on future operations, management does
not believe that such event would have a materially unfavorable effect on
the Company's liquidity or capital resources.
The Company believes its cash flow from operations in conjunction
with its credit capacity is sufficient to meet its planned requirements
for the forthcoming fiscal year.
<PAGE>
Item 8. Financial Statements and Supplementary Data
Independent Auditors' Report
The Board of Directors and Stockholders
Petroleum Helicopters, Inc.:
We have audited the consolidated balance sheets of Petroleum Helicopters,
Inc. and subsidiaries as of April 30, 1994 and 1993, and the related
consolidated statements of earnings, stockholders' equity , and cash flows
for the years then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Petroleum Helicopters, Inc. and subsidiaries as of April 30, 1994 and
1993, and the results of their operations and their cash flows for the
years then ended in conformity with generally accepted accounting
principles.
KPMG PEAT MARWICK
New Orleans, Louisiana
June 20, 1994
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors and Stockholders
Petroleum Helicopters, Inc.
Harahan, Louisiana
We have audited the consolidated statements of earnings, stockholders'
equity and cash flows of Petroleum Helicopters, Inc. and wholly-owned
subsidiaries for the year ended April 30, 1992 (none of which are
presented herein). These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the results of operations and cash flows of
Petroleum Helicopters, Inc. and wholly-owned subsidiaries for the year
ended April 30, 1992 in conformity with generally accepted accounting
principles.
DELOITTE & TOUCHE
New Orleans, Louisiana
July 17, 1992
<PAGE>
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets
April 30, 1994 and 1993
(Thousands of dollars)
<TABLE>
<CAPTION>
Assets 1994 1993
<S>
Current assets: <C> <C>
Cash and cash equivalents $ 5,452 $ 2,309
Accounts receivable - net of allowance:
Trade 26,174 30,182
Investee companies 513 250
Notes and other 1,072 365
Inventory of spare parts and aviation fuel -
at lower of average cost or market 24,850 24,592
Prepaid expenses 1,446 2,221
Refundable income taxes 196 789
Total current assets 59,703 60,708
Notes receivable 290 -
Investments 597 158
Property and equipment, at cost:
Flight equipment 176,300 167,461
Other 18,510 18,535
194,810 185,996
Less accumulated depreciation (109,171) (105,762)
85,639 80,234
Other 83 -
Total assets $146,312 $141,100
</TABLE>
(Continued)
<PAGE>
<TABLE>
<CAPTION>
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(Thousands of dollars)
Liabilities and Stockholders' Equity 1994 1993
<S> <C> <C>
Current liabilities:
Accounts payable - trade $ 5,319 $ 8,815
Accrued expenses 10,421 7,399
Accrued vacation pay 4,687 4,525
Current portion of long-term debt 8,704 8,550
Total current liabilities 29,131 29,289
Long-term debt 31,849 30,950
Deferred income taxes 10,023 8,885
Stockholders' equity:
Voting common stock - $.08 1/3 par value;
authorized 7,200,000 shares; issued shares
of 4,198,872 in 1994 and 1993 350 350
Less shares in treasury of 920,804 in 1994
and 1993 (77) (77)
273 273
Non-voting common stock - $.08 1/3 par value
authorized 7,200,000 shares; issued shares
of 2,200,000 in 1994 and 1993 183 183
Total common stock 456 456
Additional paid-in capital 11,027 11,027
Retained earnings 63,826 60,493
75,309 71,976
Total liabilities and stockholders'
equity $146,312 $141,100
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Consolidated Statements of Earnings
Years ended April 30, 1994, 1993 and 1992
(Thousands of dollars and shares, except per share amounts)
1994 1993 1992
<S> <C> <C> <C>
Revenues:
Operating revenues $ 172,069 $171,865 $191,867
Gain (loss) on equipment
disposals 475 2,064 (1,112)
Gain on sale of investment - - 521
Equity in net earnings
(losses) of
investee companies - (18) 95
172,544 173,911 191,371
Expenses:
Direct expenses 155,599 156,698 176,958
Selling, general and
administrative 8,715 11,601 7,819
Interest expense 2,676 2,271 3,804
166,990 170,570 188,581
Earnings before income taxes 5,554 3,341 2,790
Income taxes 2,221 1,292 1,500
Net earnings $ 3,333 $ 2,049 $ 1,290
Net earnings per share $ 0.61 $ 0.37 $ .24
Weighted average common
shares outstanding 5,478 5,478 5,470
Dividends paid per common share $ - $ 0.01 $ 0.08
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
Consolidated Statements of Stockholders' Equity
(Thousands of dollars and shares)
Voting Non-Voting
Voting Non-Voting Common Stock Common Stock Add.
Common Stock Common Stock Held in Treasury Held in Treasury Paid-in Retained
Shares Amount Shares Amount Shares Amount Shares Amount Capital Earnings
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance
5/1/91 4,199 $ 350 2,200 $ 183 921 $ 77 23 $ 2 $ 10,815 $ 57,647
Sale of
treasury
stock
for $214 - - - - - - (23) (2) 212 -
Net earnings - - - - - - - - - 1,290
Dividends - - - - - - - - - (438)
Balance
4/30/92 4,199 350 2,200 183 921 77 - - 11,027 58,499
Net earnings - - - - - - - - - 2,049
Dividends - - - - - - - - - (55)
Balance
4/30/93 4,199 350 2,200 183 921 77 - - 11,027 60,493
Net earnings - - - - - - - - - 3,333
Balance
4/30/94 4,199 $ 350 2,200 $ 183 921 $ 77 - $ - $ 11,027 $ 63,826
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Years ended April 30, 1994, 1993 and 1992
(Thousands of dollars)
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Operating activities:
Net earnings $ 3,333 $ 2,049 $ 1,290
Adjustments to reconcile net
earnings to net cash
provided by operating
activities:
Depreciation 8,573 9,215 11,984
Deferred income taxes 1,138 933 (1,699)
Loss (gain) on equipment
disposals (475) (2,064) 1,112
Gain on sale of investment - - (521)
Equity in net (earnings)
losses of investee
companies - 18 (95)
Changes in operating assets
and liabilities:
Decrease in accounts receivable 3,038 554 7,674
Decrease (increase) in inventory (258) 2,533 4,783
Decrease (increase) in prepaid
expenses and refundable income
taxes 1,368 340 (3,157)
Increase (decrease) in accounts
payable -
trade and other accrued
expenses (312) 3,284 875
Decrease in income taxes
payable - (784) (2,416)
Increase in other assets (83) - -
Net cash provided by
operating activities 16,322 16,078 19,830
Investing activities:
Purchase of property and equipment (14,330) (17,328) (24,812)
Proceeds from sales of property
and equipment 1,672 7,111 6,367
Other (290) - 750
Net cash used in
investing activities (12,948) (10,217) (17,695)
Financing activities:
Proceeds from long-term debt 32,780 50,000 88,000
Payments on long-term debt (33,011) (56,500) (90,000)
Sale of treasury stock - - 214
Dividends paid - (55) (438)
Net cash used in
financing activities (231) (6,555) (2,224)
Increase (decrease) in cash and
cash equivalents 3,143 (694) (89)
Cash and cash equivalents at
beginning of year 2,309 3,003 3,092
Cash and cash equivalents at
end of year $ 5,452 $ 2,309 $ 3,003
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
PETROLEUM HELICOPTERS, INC.
AND SUBSIDIARIES
Notes to Consolidated Financial Statements
April 30, 1994, 1993 and 1992
(1) Summary of Significant Accounting Policies
(a) Principles of Consolidation
The consolidated financial statements include the accounts
of Petroleum Helicopters, Inc. and its wholly-owned
subsidiaries after the elimination of all significant
intercompany accounts and transactions. Investments in 20
percent to 50 percent owned affiliates are accounted for by
the equity method and consist primarily of investments in
foreign affiliates.
(b) Cash Equivalents
The Company considers cash equivalents to include demand
deposits and investments with original maturity dates of
three months or less.
(c) Property and Equipment
Property and equipment are carried at cost less accumulated
depreciation. Depreciation is computed using the straight-
line method based upon estimated useful lives of ten years
for flight equipment and four to ten years for other
equipment. A residual value of 25% of cost is used in the
calculation of depreciation of flight equipment and other
equipment. When property and equipment is sold or otherwise
disposed of, the cost and accumulated depreciation are
removed from the accounts and any resulting gain or loss is
reflected in earnings at the time of sale or other
disposition, except in the case of long-term sale and
leaseback transactions.
(d) Income Taxes
A consolidated federal income tax return is filed by the
Company and its subsidiaries. Income taxes have not been
provided on the undistributed net earnings of the investee
companies since, among other things, the amount of taxes
involved are not significant.
Income taxes are accounted for in accordance with the
provisions of Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes. Under the asset and
liability method of Statement 109, deferred tax assets and
<PAGE>
liabilities are recognized for the future tax consequences
attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and
their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to
apply to taxable income in the years in which those
temporary differences are expected to be recovered or
settled. Under Statement 109, the effect on deferred tax
assets and liabilities of a change in tax rates is
recognized in income in the period that included the
enactment date.
(e) Self-Insurance
The Company maintains a self-insurance program for a portion
of its health care costs. The Company is liable for claims
up to $200,000 per covered individual annually, and
aggregate claims up to $5,800,000 annually. Self-insurance
costs are accrued based upon the aggregate of the liability
for reported claims and the estimated liability for claims
incurred but not reported.
The Company does not presently have any significant
obligations for post employment benefits.
(f) Concentration of Credit Risk
The Company's financial instruments that are exposed to
concentrations of credit risk consist primarily of cash and
cash equivalents and trade accounts receivable. The Company
places its cash and temporary cash investments with high
quality financial institutions and currently invests
primarily in U.S. government obligations with maturities of
less than three months.
A majority of the Company's business is conducted with major
oil and gas exploration companies with operations in the
Gulf of Mexico. The Company continually evaluates the
financial strength of its customers but does not require
collateral to support the customer receivables. The Company
establishes an allowance for doubtful accounts based upon
factors surrounding the credit risk of specific customers,
current market conditions and other information.
(g) Reclassifications
Certain reclassifications have been made to the prior years
financial statements in order to conform with the
classifications adopted for reporting in 1994.
<PAGE>
(2) Long-Term Debt
1994 1993
(Thousands of dollars)
Secured term loan note due in
quarterly installments of
$2,000,000 commencing
January 31, 1991, with
interest (April 30, 1994
- 7.0% and April 30, 1993
- 6.0%) fluctuating with
prime $ 29,040 $ 28,000
Secured note due October 31,
1995, under a revolving
credit agreement totaling
$15,000,000 with interest
(April 30, 1994 -
7.0% and April 30, 1993
- 6.0%) fluctuating
with prime 1,500 11,500
Secured 10 year promissory
notes due in monthly
installments of
$107,746.73 commencing
July 9, 1993 with a
fixed interest rate of
7.0% 8,729 -
Secured promissory notes due
at the earlier of
in-service date of
the helicopters or
December 31, 1994 1,284 -
40,553 39,500
Less current portion 8,704 8,550
Long-term portion $ 31,849 $ 30,950
Subsequent to year end, the Company, upon placing the related
helicopters in service, retired the promissory notes due
December 31, 1994. The debt was satisfied through
additional borrowings of $2 million under the Company's term
loan facility. The $1.3 million is not reflected in the
current portion of long-term debt.
<PAGE>
Scheduled maturities of long-term debt are as follows:
(Thousands of
dollars)
1995 $ 8,704
1996 10,255
1997 8,810
1998 7,192
1999 931
Thereafter 4,661
$ 40,553
At April 30, 1994, the following assets and their related
book values are pledged as collateral on notes aggregating
$39.3 million:
(Thousands of
dollars)
Equipment, net of depreciation $ 54,640
Inventory 24,609
Accounts receivable, net 25,725
$104,974
The loan agreements require the Company to maintain certain levels
of working capital and stockholders' equity and contain other
provisions some of which restrict expenditures for the purchase of
the Company's stock, for capital expenditures and for payment of
dividends. Such agreements also limit the creation, incurrence or
assumption of Funded Debt (as defined, which includes long-term
debt), and the acquisition of investments. At April 30, 1994, the
Company's working capital exceeded the amount required by
approximately $8.7 million, and stockholders' equity exceeded the
required level by approximately $3.6 million. Dividends are
generally limited to 20% of net earnings.
In April 1994, the Company amended its agreements concerning the
term loan note and revolving credit agreement with its principal
lenders to, among other things, permit London Inter-bank
Borrowings ("LIBOR") at LIBOR rates plus a floating spread. The
spread for LIBOR and/or prime rate borrowings will float up or
down based on the Company's performance as determined by a
leverage ratio. There were no LIBOR borrowings at April 30, 1994.
At April 30, 1994, the Company was in compliance with the
provisions of its loan agreements.
<PAGE>
Interest paid was $2,136,000, $2,231,000 and $3,725,000 for the
years ended April 30, 1994, 1993 and 1992, respectively.
(3) Income Taxes
Income tax expense (benefit) for the three years ended April 30,
1994, is composed of the following:
<TABLE>
<CAPTION>
1994 1993 1992
(Thousands of dollars)
<S> <C> <C> <C>
Current:
Federal $ 853 $ 150 $ 2,570
State 148 153 600
Foreign 82 56 29
Deferred - principally Federal 1,138 933 (1,699)
$ 2,221 $ 1,292 $ 1,500
Deferred income taxes (benefit) result from the following:
1994 1993 1992
(Thousands of dollars)
Accelerated depreciation $ 1,496 $ 388 $(1,200)
Accrued vacation and other
liabilities (636) (831) (762)
Effect of tax credits 278 1,376 263
$ 1,138 $ 933 $(1,699)
</TABLE>
Income tax expense as a percentage of pre-tax earnings varies
from the effective Federal statutory rate of 34% for the
reasons explained below:
<TABLE>
<CAPTION>
Years ended April 30
1994 1993 1992
Amount % Amount % Amount %
<S> <C> <C> <C> <C> <C> <C>
Income taxes at
statutory rate $ 1,888 34% $ 1,136 34% $ 949 34%
Increase (decrease)
in taxes resulting
from:
Equity in net
(earnings) loss
of consolidated
investee
companies - - 6 - (32) (1)
Effect of
state income
taxes 98 2 101 4 396 14
Other items -
net 235 4 49 1 187 7
$ 2,221 40% $ 1,292 39% $ 1,500 54%
</TABLE>
<PAGE>
For income tax purposes, the Company had approximately $3,383,000
of investment tax credit carryforwards. These investment tax
credit carryforwards will expire between 1995 and 2001. The
Company also has approximately $725,000 of alternative minimum tax
credit carryforwards available to reduce future Federal regular
income taxes over an indefinite period.
The tax effects of temporary differences which give rise to
significant portions of the deferred tax assets and deferred tax
liabilities at April 30, 1994 and 1993 are presented below:
1994 1993
(Thousands of dollars)
Deferred tax assets:
Tax credits $ 4,108 $ 4,386
Vacation accrual 1,594 1,539
Self-insurance reserve 224 386
Inventory valuation 727 624
Workman's compensation reserve 455 171
Other 696 31
Total deferred tax assets 7,804 7,137
Deferred tax liabilities:
Tax depreciation in excess of book
depreciation 16,868 15,372
Other 959 650
Total deferred tax liabilities 17,827 16,022
Net deferred tax liability $10,023 $ 8,885
No valuation allowance was recorded against the net deferred tax
assets because management believes that the deferred tax assets
will be realized in full.
Income taxes paid were approximately $470,000, $1,971,000 and
$5,500,000 for the years ended April 30, 1994, 1993 and 1992,
respectively.
(4) Employee Savings Plan
The Company established, effective July 1, 1989, an Employee
Savings Plan under Section 401(k) of the Internal Revenue Code.
The Plan provides that the Company match up to 3% of employee
contributions. The Company's contribution was $1,604,000,
$1,410,000 and $1,500,000 for the years ended April 30, 1994, 1993
and 1992, respectively.
<PAGE>
(5) Stock Option Plans
Effective May 1, 1992, the Company's Board of Directors adopted
the Petroleum Helicopters, Inc. 1992 Non-Qualified Stock Option
and Stock Appreciation Rights Plan (the "Plan"). The Plan was
approved at the Annual Meeting of Stockholders on September 30,
1992. The Company is authorized to grant non-qualified stock
options and stock appreciation rights (Sar) to selected employees
to purchase up to 100,000 shares of the Company's non-voting
common stock at an exercise price of not less than 25% of their
Fair Market Value at the date of grant. The options may be
exercised any time after one year from the date of grant until
their expiration at five years from such date.
During fiscal 1993 an officer of the Company was granted non-
qualified options to purchase 15,000 shares of voting common stock
at the fair market value of the stock at the date of grant. The
options were not granted under the 1992 Plan. The options expire
five years from the date of grant.
A summary of the Plans' activities for the years ended April 30,
1994 and 1993 is as follows:
<TABLE>
<CAPTION>
1992 Plan
Non-Voting Voting
Total Options Sar Options
<S> <C> <C> <C> <C>
Balance outstanding at
May 1, 1992 - - - -
Options granted at
$10.00 per share 15,000 - - 15,000
Balance outstanding at
April 30, 1993 15,000 - - 15,000
Options granted at
$15.50 87,000 87,000 - -
Options canceled (6,000) (6,000) - -
Balance outstanding at
April 30, 1994 96,000 81,000 - 15,000
Shares exercisable at
April 30, 1993 - - - -
Shares exercisable at
April 30, 1994 - - - -
Shares available for
future grant at
April 30, 1994 19,000
</TABLE>
(6) Supplemental Cash Flow Information and Financing Activities
During 1994, the Company acquired two aircraft for $1,284,000.
The purchases were financed with the seller.
Additionally in 1994, the Company entered into an agreement to
acquire up to 28% of a corporate joint venture. In 1994 the
Company acquired a 13.6% interest of the corporate joint
venture in exchange for a helicopter and equipment with net
values totaling $439,000. The Company further has a note
receivable for $290,000 from the joint venture which the
Company has the option to convert into an additional 9.3% of
the common stock of the corporate joint venture.
(7) Commitments and Contingencies
The Company leases certain aircraft used in its operations.
The Company generally pays all insurance, taxes and maintenance
expenses associated with these aircraft, and some of these
leases contain renewal and purchase options.
Aggregate rental commitments to lease aircraft under operating
leases are due in years subsequent to April 30, 1994, as
follows:
(Thousands of dollars)
1995 $ 9,672
1996 8,311
1997 8,301
1998 8,301
1999 8,256
Thereafter 23,440
$ 66,281
<PAGE>
Rental expense consisted of the following:
Years ended April 30
1994 1993 1992
(Thousands of dollars)
Aircraft $ 12,369 $ 13,433 $ 14,680
Other 1,637 1,576 1,683
$ 14,006 $ 15,009 $ 16,363
The Company has agreed to purchase two helicopters in 1995 for $5
million. The Company also plans to lease five helicopters with a lease
value of $9 million. The lease term is 60 months with monthly payments of
$67,000 or $0.8 million per year. At the end of the lease term, the
Company may purchase the aircraft for 88% of the original lease, or $7.9
million, or return the aircraft and pay the lessor 13% of the original
lease amount, or $1.2 million. The Company also has non-binding
agreements to purchase 15 additional aircraft none of which are expected
to be purchased in 1995.
The Company is subject to certain legal proceedings which have
arisen in the ordinary course of its business and have not been finally
adjudicated. In connection with this litigation, the Company has accrued
estimated amounts which it believes adequately provide for the settlement
of such litigation.
<PAGE>
SELECTED QUARTERLY FINANCIAL DATA
UNAUDITED
The summarized quarterly results of operations for the years ended
April 30, 1994 and 1993 (in thousands of dollars, except per share data)
are as follows:
<TABLE>
<CAPTION>
Quarter Ended
July 31, October 31, January 31, April 30,
1993 1993 1994 1994
<S> <C> <C> <C> <C>
Revenues $ 45,552 $ 46,204 $ 41,482 $ 39,306
Gross profit $ 5,068 $ 3,393 $ 3,599 $ 4,410
Net earnings $ 1,251 $ 473 $ 412 $ 1,197
Net earnings per share $ .23 $ .08 $ .08 $ .22
<CAPTION>
Quarter Ended
July 31, October 31, January 31, April 30,
1992 1992 1993 1993
<S> <C> <C> <C> <C>
Revenues $ 44,009 $ 43,751 $ 43,858 $ 42,293
Gross profit $ 1,363 $ 6,103 $ 1,619 $ 6,082
Net earnings $ 173 $ 887 $ 263 $ 726
Net earnings per share $ .03 $ .16 $ .05 $ .13
</TABLE>
<PAGE>
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosures
During the past two years there were no disagreements between the
Company and its independent certified public accountants on accounting and
financial disclosure matters. Information regarding changes in the
Company's independent certified public accountants has been previously
reported on Commission Form 8-Ks dated March 31, 1993 and December 18,
1992.
Part III
Item 10. Directors and Executive Officers of the Registrant
Information concerning Directors required by this item will be
included in the Company's definitive proxy statement in connection with
its 1994 Annual Meeting of Shareholders and is incorporated herein by
reference. Information concerning Executive Officers is included as Item
4.(a) "Executive Officers of the Registrant."
Item 11. Executive Compensation
Information required by this item will be included in the Company's
definitive proxy statement in connection with its 1994 Annual Meeting of
Shareholders and is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and Management
Information required by this item will be included in the Company's
definitive proxy statement in connection with its 1994 Annual Meeting of
Shareholders and is incorporated herein by reference.
Item 13. Certain Relationships and Related Transactions
Information required by this item will be included in the Company's
definitive proxy statement in connection with its 1994 Annual Meeting of
Shareholders and is incorporated herein by reference.
<PAGE>
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) 1. Financial Statements
Included in Part II of this report:
Independent Auditors' Reports
Consolidated Balance Sheets at April 30, 1994 and 1993
Consolidated Statements of Earnings for each of the three years
in the period ended April 30, 1994
Consolidated Statements of Stockholders' Equity for each of the
three years in the period ended April 30, 1994
Consolidated Statements of Cash Flows for each of the three
years in the period ended April 30, 1994
Notes to Consolidated Financial Statements
(a) 2. Financial Statement Schedules
Included in Part II of this report:
Selected Quarterly Financial Data - for the years ended April
30, 1994 and 1993
Included in Part IV of this report:
Independent Auditors' Reports on Financial Statement Schedules
For each of the three years in the period ended April 30, 1994
Schedule V -- Property and Equipment
Schedule VI -- Accumulated Depreciation and
Amortization of Property and Equipment
Schedule X -- Supplementary Earnings Statement Information
Schedules other than those listed above are omitted because they are
either not required or not applicable, or because the required information
is shown in the Consolidated Financial Statements or Notes thereto.
<PAGE>
Columns have been omitted from schedules in instances in which the
information required therein is applicable.
(a) 3. Exhibits
3.1 Restated Certificate of Incorporation of PHI dated
March 2, 1988, as amended by Certificate of
Amendment dated September 10, 1987 and by
Certificate of Amendment dated October 19, 1990
(incorporated by reference to Exhibit No. 3.1 to
PHI's Report on Form 10-K dated April 30, 1993).
3.2 Bylaws of PHI as of July 12, 1993 (incorporated by
reference to Exhibit No. 3.2 to PHI's Report on
Form 10-K dated April 30, 1993).
10.1 Master Helicopter Lease Agreement dated May 29,
1991 between AT&T Systems Leasing Corporation and
PHI (incorporated by reference to Exhibit No. 10.1
(2) to PHI's Report on Form 10-K dated April 30,
1992).
10.2 Master Helicopter Lease Agreement dated February
14, 1991 between General Electric Capital
Corporation and PHI (incorporated by reference to
Exhibit No. 10.1 (1) to PHI's Report on Form 10-K
dated April 30, 1991).
10.3 Amended and Restated Loan Agreement originally
dated as of January 31, 1986 Amended and Restated
in its entirety as of July 9, 1993 among Petroleum
Helicopters, Inc., Whitney National Bank, First
National Bank of Commerce, NationsBank of Texas,
N.A. and NationsBank of Texas, N.A., as agent
(incorporated by reference to Exhibit No. 10.3 to
PHI's Report on Form 10-K dated April 30, 1993).
10.4 Installment promissory note dated June 4, 1993 by
PHI payable to debis Financial Services, Inc. in
the original principal amount of $3,122,441.56,
secured by Aircraft Security Agreement dated June
4, 1993 between PHI and debis Financial Services,
Inc. (incorporated by reference to Exhibit No.
10.4 to PHI's Report on Form 10-K dated April 30,
1993).
10.5 Installment Promissory Note dated June 4, 1993 by
PHI payable to debis Financial Services, Inc. in
the original principal amount of $3,078,695.58,
secured by Aircraft Security Agreement dated June
4, 1993 between PHI and debis Financial Services,
Inc.
<PAGE>
(incorporated by reference to Exhibit No. 10.5 to
PHI's Report on Form 10-K dated April 30, 1993).
10.6 Installment Promissory Note dated June 4, 1993 by
PHI payable to debis Financial Services, Inc. in
the original principal amount of $3,078,695.58,
secured by Aircraft Security Agreement dated June
4, 1993 between PHI and debis Financial Services,
Inc. (incorporated by reference to Exhibit No.
10.6 to PHI's Report on Form 10-K dated April 30,
1993).
10.7 The Petroleum Helicopters, Inc. 401(k) Retirement
Plan effective July 1, 1989 (incorporated by
reference to Exhibit No. 10.4 to PHI's Report on
Form 10-K dated April 30, 1990).
10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified
Stock Option and Stock Appreciation Rights Plan
adopted by PHI's Board effective May 1, 1992 and
approved by the stockholders of PHI on September
30, 1992 (incorporated by reference to Exhibit No.
10.8 to PHI's Report on Form 10-K dated April 30,
1993).
10.9 Form of Stock Option Agreement for the Grant of
Non-Qualified Stock Options Under the Petroleum
Helicopters, Inc. 1992 Non-Qualified Stock Option
and Stock Appreciation Rights Plan dated June 2,
1993 between PHI and certain of its key employees
(incorporated by reference to Exhibit No. 10.9 to
PHI's Report on Form 10-K dated April 30, 1993).
10.10 Employment Agreement between PHI and John H.
Untereker dated June 15, 1992 (incorporated by
reference to Exhibit No. 10.10 to PHI's Report on
Form 10-K dated April 30, 1993).
10.11 Stock Option Agreement between PHI and John H.
Untereker dated April 12, 1993, but effective as
of July 20, 1992 (incorporated by reference to
Exhibit No. 10.11 to PHI's Report on Form 10-K
dated April 30, 1993).
10.12 Asset Purchase Agreement by and among, among
others, Rocky Mountain Helicopters, Inc., American
Eurocopter Corporation and PHI.
21 Subsidiaries of the Registrant (incorporated by
reference to Exhibit No. 21 to PHI's Report on
Form 10-K dated April 30, 1993).
23.1 Consent of KPMG Peat Marwick
<PAGE>
23.2 Consent of Deloitte and Touche
(b) Reports on Form 8-K
None
(d) Financial Statement Schedules
Financial statements or information regarding 50%
or less owned entities accounted for by the equity
method have been omitted because such entities,
considered in the aggregate as a single subsid-
iary, would not constitute a significant
subsidiary.
<PAGE>
Independent Auditors' Report
The Board of Directors and Stockholders
Petroleum Helicopters, Inc.:
Under date of June 20, 1994, we reported on the consolidated balance
sheets of Petroleum Helicopters, Inc. and subsidiaries as of April 30,
1994 and 1993, and the related consolidated statements of earnings,
stockholders' equity, and cash flows for the years then ended, which are
included elsewhere in this Form 10-K. In connection with our audits of
the aforementioned consolidated financial statements, we also audited the
related financial statement schedules as listed in Item 14(a) 2. These
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statement schedules based on our audit.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth
therein.
KPMG PEAT MARWICK
New Orleans, Louisiana
June 20, 1994
<PAGE>
INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENT SCHEDULES
Board of Directors and Stockholders
Petroleum Helicopters, Inc.
Harahan, Louisiana
We have audited the consolidated statements of earnings, stockholders'
equity and cash flows of Petroleum Helicopters, Inc. and wholly-owned
subsidiaries for the year ended April 30, 1992 (none of which are
presented herein), and have issued our report thereon dated July 17, 1992;
such report is included elsewhere in this Form 10-K. Our audit also
included the financial statement schedules listed in Item 14(a)2. These
financial statement schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion based on our
audit. In our opinion, such financial statement schedules, when
considered in relation to the basic financial statements taken as a whole,
present fairly in all material respects the information set forth therein.
DELOITTE & TOUCHE
New Orleans, Louisiana
July 17, 1992
<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Balance at Balance at
beginning Retirements end of
of period Additions and Sales period
(Thousands of dollars)
<S> <C> <C> <C> <C>
Year Ended April 30, 1992
Flight equipment $149,370 $ 25,740 $(13,782) $ 161,328
Other 18,552 (928)* (165) 17,459
$167,922 $ 24,812 $(13,947) $ 178,787
Year Ended April 30, 1993
Flight equipment $161,328 $ 16,143 $(10,010) $ 167,461
Other 17,459 1,185 (109) 18,535
$178,787 $ 17,328 $(10,119) $ 185,996
Year Ended April 30, 1994
Flight equipment $167,461 $ 15,132 $ (6,293) $ 176,300
Other 18,535 481 (506) 18,510
$185,996 $ 15,613 $ (6,799) $ 194,810
* Net of $1,705 of transfers from other equipment to flight equipment.
</TABLE>
<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION OF PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Balance at Balance at
beginning Retirements end of
of period Additions and sales period
(Thousands of Dollars)
<S> <C> <C> <C> <C>
Year Ended April 30, 1992
Flight equipment $ 83,210 $ 11,064 $(6,322) $ 87,952
Other 12,894 920 (147) 13,667
$ 96,104 $ 11,984 $(6,469) $ 101,619
Year Ended April 30, 1993
Flight equipment $ 87,952 $ 8,331 $(4,904) $ 91,379
Other 13,667 884 (168) 14,383
$101,619 $ 9,215 $(5,072) $ 105,762
Year Ended April 30, 1994
Flight equipment $ 91,379 $ 7,715 $(4,756) $ 94,338
Other 14,383 858 (408) 14,833
$105,762 $ 8,573 $(5,164) $ 109,171
</TABLE>
<PAGE>
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY EARNINGS STATEMENT INFORMATION
<TABLE>
<CAPTION>
Year Ended April 30,
1994 1993 1992
(Thousands of dollars)
<S> <C> <C> <C>
Charged to direct expenses:
Maintenance and repairs,
including salaries $55,982 $ 60,125 $ 75,564
</TABLE>
<PAGE>
Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
PETROLEUM HELICOPTERS, INC.
By: /s/ Carroll W. Suggs
Carroll W. Suggs
Chairman of the Board
Chief Executive Officer and Director
Pursuant to the requirements of the Securities Exchange Act
of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/ Carroll W. Suggs Chairman of the Board, 07/27/94
Carroll W. Suggs Chief Executive Officer
and Director (Principal
Executive Officer)
/s/ John H. Untereker Vice President and 07/27/94
John H. Untereker Chief Financial Officer
(Principal Financial and
Accounting Officer)
/s/ Robert E. Perdue Director 07/27/94
Robert E. Perdue
/s/ Leonard M. Horner Director 07/27/94
Leonard M. Horner
</TABLE>
<PAGE>
EXHIBITS
3.1 Restated Certificate of Incorporation of PHI dated March
2, 1988, as amended by Certificate of Amendment dated
September 10, 1987 and by Certificate of Amendment dated
October 19, 1990 (incorporated by reference to Exhibit
No. 3.1 to PHI's Report on Form 10-K dated April 30,
1993).
3.2 Bylaws of PHI as of July 12, 1993 (incorporated by
reference to Exhibit No. 3.2 to PHI's Report on Form 10-
K dated April 30, 1993).
10.1 Master Helicopter Lease Agreement dated May 29, 1991
between AT&T Systems Leasing Corporation and PHI
(incorporated by reference to Exhibit No. 10.1 (2) to
PHI's Report on Form 10-K dated April 30, 1992).
10.2 Master Helicopter Lease Agreement dated February 14,
1991 between General Electric Capital Corporation and
PHI (incorporated by reference to Exhibit No. 10.1 (1)
to PHI's Report on Form 10-K dated April 30, 1991).
10.3 Amended and Restated Loan Agreement originally dated as
of January 31, 1986 Amended and Restated in its entirety
as of July 9, 1993 among Petroleum Helicopters, Inc.,
Whitney National Bank, First National Bank of Commerce,
NationsBank of Texas, N.A. and NationsBank of Texas,
N.A., as agent (incorporated by reference to Exhibit No.
10.3 to PHI's Report on Form 10-K dated April 30, 1993).
10.4 Installment promissory note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,122,441.56, secured by
Aircraft Security Agreement dated June 4, 1993 between
PHI and debis Financial Services, Inc. (incorporated by
reference to Exhibit No. 10.4 to PHI's Report on Form
10-K dated April 30, 1993).
10.5 Installment Promissory Note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,078,695.58, secured by
Aircraft Security Agreement dated June 4, 1993 between
PHI and debis Financial Services, Inc.
<PAGE>
(incorporated by reference to Exhibit No. 10.5 to PHI's
Report on Form 10-K dated April 30, 1993).
10.6 Installment Promissory Note dated June 4, 1993 by PHI
payable to debis Financial Services, Inc. in the
original principal amount of $3,078,695.58, secured by
Aircraft Security Agreement dated June 4, 1993 between
PHI and debis Financial Services, Inc. (incorporated by
reference to Exhibit No. 10.6 to PHI's Report on Form
10-K dated April 30, 1993).
10.7 The Petroleum Helicopters, Inc. 401(k) Retirement Plan
effective July 1, 1989 (incorporated by reference to
Exhibit No. 10.4 to PHI's Report on Form 10-K dated
April 30, 1990).
10.8 Petroleum Helicopters, Inc. 1992 Non-Qualified Stock
Option and Stock Appreciation Rights Plan adopted by
PHI's Board effective May 1, 1992 and approved by the
stockholders of PHI on September 30, 1992 (incorporated
by reference to Exhibit No. 10.8 to PHI's Report on Form
10-K dated April 30, 1993).
10.9 Form of Stock Option Agreement for the Grant of Non-
Qualified Stock Options Under the Petroleum Helicopters,
Inc. 1992 Non-Qualified Stock Option and Stock
Appreciation Rights Plan dated June 2, 1993 between PHI
and certain of its key employees (incorporated by
reference to Exhibit No. 10.9 to PHI's Report on Form
10-K dated April 30, 1993).
10.10 Employment Agreement between PHI and John H. Untereker
dated June 15, 1992 (incorporated by reference to
Exhibit No. 10.10 to PHI's Report on Form 10-K dated
April 30, 1993).
10.11 Stock Option Agreement between PHI and John H. Untereker
dated April 12, 1993, but effective as of July 20, 1992
(incorporated by reference to Exhibit No. 10.11 to PHI's
Report on Form 10-K dated April 30, 1993).
10.12 Asset Purchase Agreement by and among, among others,
Rocky Mountain Helicopters, Inc., American Eurocopter
Corporation and PHI.
21 Subsidiaries of the Registrant (incorporated by
reference to Exhibit No. 21 to PHI's Report on Form 10-K
dated April 30, 1993).
23.1 Consent of KPMG Peat Marwick
23.2 Consent of Deloitte and Touche
<PAGE>
Exhibit 10.12
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of July 15, 1994, is by
and among Rocky Mountain Helicopters, Inc., RMH Aerologging, Inc.,
Western Helicopters, Inc., RMH Aeromedical, Inc., American Eurocopter
Corporation and Petroleum Helicopters, Inc. (the "Operator").
In consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the
parties hereby agree as follows.
SECTION 1. DEFINITIONS
1.1 Defined Terms. For all purposes of this Agreement, except
as otherwise expressly provided herein, each of the following terms
shall have the meanings set forth below:
"Accounts Receivable" means the rights of any of the Debtors to
payment for services rendered by the Debtors prior to the Effective
Date relating to the EMS Business as reflected on the billing records
of the Debtors.
"Active Employee" has the meaning set forth in subsection 6.8.
"Adjustment Certificate" has the meaning set forth in subsection
2.3.
"Administrative Claim" means a Claim for payment of any
administrative expense of the Chapter 11 Cases entitled to priority
under Sections 503(b) and 507(a)(1) of the Bankruptcy Code,
including, without limitation, any actual and necessary expenses
incurred after the Petition Date of preserving, maintaining or
operating each Debtor's estate and of operating each Debtor's
business, including any loans or other advances to the Debtors, any
Fee Claim, and any fees or charges assessed against the Debtors'
estates under 28 U.S.C. Section 1930.
"Administrative Claim Application" means an application to the
Bankruptcy Court of any Person for the allowance of an Administrative
Claim to the extent such application is required pursuant to the
terms of the Plan.
"AEC" means American Eurocopter Corporation.
"AEC Lease" means one of the five leases in effect on the
Petition Date pursuant to which AEC, as Lessor, leases EMS Aircraft
to one of the Debtors.
<PAGE>
"Affiliate" means any "affiliate," "insider" or "relative" as
defined in Sections 101(2), (31) and (45) of the Bankruptcy Code.
"Agreement" means this Asset Purchase Agreement by and among the
Parties.
"Aircraft Equity" has the meaning set forth in subsection 9.2.
"Allowed Claim" means any Claim (a) proof of which was timely
and properly filed (or deemed filed under applicable law or by order
of the Court), or that was listed by the Debtors on their schedules
filed under Section 521(1) of the Bankruptcy Code as liquidated in
amount and not disputed or contingent, and, in any case, as to which
(i) no objection to the allowance thereof has been interposed by a
party in interest entitled to do so on or prior to the sixtieth
(60th) day after the Effective Date or (ii) any objection has been
determined by a Final Order to the extent such objection is
determined in favor of the holder of the Claim, (b) based on an
Administrative Claim Application to the extent such application is
approved by a Final Order, (c) that is an Ordinary Course
Administrative Claim, or (d) allowed under the Plan or by a Final
Order.
"Allowed EMS Secured Claim" means an EMS Secured Claim that (a)
pursuant to Section 506(a) of the Bankruptcy Code is determined by a
Final Order, not to be an Unsecured Claim, and (b) is an Allowed
Claim.
"Allowed Secured Claim" means a Secured Claim that (a) pursuant
to Section 506(a) of the Bankruptcy Code is determined by a Final
Order not to be an Unsecured Claim, and (b) is an Allowed Claim.
"Allowed Unsecured Claim" means an Unsecured Claim that is an
Allowed Claim.
"Application" has the meaning set forth in subsection 6.1.
"Assets" means all property and related rights and interests of
the Debtors or of the Debtors' estates immediately prior to the
occurrence of the Effective Date, including, without limitation, any
proceeds, products, offspring, rents or profits thereof.
"Bankruptcy Code" means the Bankruptcy Reform Act of 1978,
Section 101 et. seq., Title 11, United States Code, as amended from
time to time.
"Bankruptcy Court" means The United States Bankruptcy Court for
the District of Utah, or such other court as may have jurisdiction
over the Chapter 11 Cases or any proceedings arising therein or
related thereto.
"Bankruptcy Rules" means the Federal Rules of Bankruptcy
Procedure and local rules applicable to cases pending before the
<PAGE>
Bankruptcy Court, as the same may from time to time be in effect and
applicable to proceedings under the Plan.
"Business Day" means Monday through Friday, but excluding any
legal holiday listed in Bankruptcy Rule 9006(a).
"Cash Purchase Price" has the meaning set forth in subsection
2.3.
"Chapter 11 Cases" means the cases commenced by the Debtors
pursuant to Chapter 11 of the Bankruptcy Code on the Petition Date
and pending in the Bankruptcy Court as Bankruptcy Case Nos. 93C-25447
through 93C-25450.
"CJI" means Corporate Jets, Inc., a Pennsylvania corporation.
"Claim" means any right to payment or performance of any
obligation from any of the Debtors that arose on or before the
Confirmation Date, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, disputed, undisputed,
secured, unsecured, matured, unmatured, equitable or legal,
including, without limitation, any right that arose on or before the
Confirmation Date to an equitable remedy for breach of performance if
such breach gives rise to a right of payment from a Debtor, whether
or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
"Closing" has the meaning set forth in subsection 8.1.
"Collection Period" has the meaning set forth in subsection 6.9.
"Confirmation Date" means the date on which the Confirmation
Order is entered by the Bankruptcy Court.
"Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan and approving the transactions contemplated
therein and herein.
"Contested Claim" means any Claim as to which any of the
Debtors, the Creditors' Committee or any other Person has timely
interposed an objection in accordance with the Bankruptcy Code and
the Bankruptcy Rules, the Plan or orders of the Bankruptcy Court,
which objection has not been withdrawn or determined by a Final
Order.
"Contract" means any contract, agreement, lease, license,
commitment or instrument, including any purchase order, for any sale,
lease or other disposition of goods or the rendering of services with
respect to the Assets, whether by or to any Debtor.
"Creditor" means any Person that is the holder of a Claim.
<PAGE>
"Creditors' Committee" means the Official Committee of Unsecured
Creditors appointed in the Chapter 11 Cases by the Office of the
United States Trustee for the District of Utah pursuant to Section
1102 of the Bankruptcy Code.
"DCC" means Deutsche Credit Corporation.
"DCC Appeal" means the bankruptcy appeal styled Deutsche Credit
Corporation, DRL Enterprises, Inc., MDFC Equipment Leasing
Corporation, and State Street Bank and Trust Company v. Rocky
Mountain Helicopters, Inc., RMH Aerologging, Inc., Western
Helicopters, Inc., and RMH Aeromedical, Inc., Case No. 94CV-323-B,
pending before the United States District Court for the District of
Utah, Central Division (Judge Dee V. Benson).
"DCC Lease" means one of the twenty-seven leases in effect on
the Petition Date pursuant to which one of DCC, DRL Leasing, Inc.,
State Street Bank and Trust Company, or MDFC Equipment Leasing
Corporation, as Lessor, leases EMS Aircraft to one of the Debtors.
"Debtors" means collectively Rocky Mountain Helicopters, Inc., a
Utah corporation, RMH Aerologging, Inc., a Utah corporation, Western
Helicopters, Inc., a California corporation, and RMH Aeromedical,
Inc., a Utah corporation, and each individually a Debtor, both prior
to the Petition Date and during the period when the Debtors act or
acted as debtors in possession in the Chapter 11 case.
"Disallowed Claim" means a Claim (a) to the extent that such
Claim was (i) not listed by any of the Debtors on their schedules
filed pursuant to Section 521(1) of the Bankruptcy Code or listed on
such schedules as disputed, contingent or unliquidated, and (ii) as
to which no proof of claim was timely filed in accordance with the
Bankruptcy Code and the Bankruptcy Rules or order of the Bankruptcy
Court, or (b) which was or is disallowed by either (i) a Final Order,
or (ii) the consent of the Creditor holding such Claim.
"DOJ" means the U.S. Department of Justice.
"Effective Date" has the meaning set forth in subsection 8.1.
"EMS Aircraft" means the helicopters specified on Schedule I
hereto directly applicable to the EMS Contracts that have been
designated by an "x" on Schedule II as being acquired by the
operator.
"EMS Assets" means the EMS Aircraft, EMS Contracts, EMS Leases,
EMS Other Property and FAA Certificate.
"EMS Asset Purchase Agreements" means the asset purchase
agreements among the Debtors, AEC and each of PHI, CJI and KHC
pursuant to which certain Assets used in connection with, or related
to, the Debtors' operation of the EMS Business shall be transferred
to PHI, CJI or KHC.
<PAGE>
"EMS Business" means the emergency medical service business of
the Debtors related to the EMS Assets.
"EMS Contracts" means the contracts specified on Schedule II
hereto that have been designated by an "x" as being acquired by the
Operator except to the extent excluded pursuant to subsection 6.1.
"EMS Contract Cure Amount" means the amount required to be paid
to cure defaults and otherwise to comply with the requirements of
Section 365(b) of the Bankruptcy Code with respect to each EMS
Contract and EMS Lease to be assumed by a Debtor and assigned to the
Operator pursuant to this Agreement and the Plan.
"EMS Leases" means the leases applicable to the EMS Aircraft
except to the extent any such lease is excluded pursuant to
subsection 6.1.
"EMS Other Property" means the other property specified on
Schedule I hereto.
"EMS Secured Claim" means a Secured Claim to the extent
purportedly secured by an EMS Asset, but excluding any EMS Lease.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"FAA" means the Federal Aviation Administration.
"FAA Certificate" means the operating certificate issued to the
Debtors by the FAA under Part 135 of the Federal Aviation Regulations
14 C.F.R. Section 135.
"Fee Claim" means a Claim under Section 330, 331 or 503 of the
Bankruptcy Code for allowance of compensation and reimbursement of
expenses in the Chapter 11 Cases.
"Final Fee Application" means a final application of a
Professional Person under Sections 330 or 503 of the Bankruptcy Code
for allowance of compensation and reimbursement of expenses in the
Chapter 11 Cases.
"Final Order" means an order or a judgment of the Bankruptcy
Court as entered on the docket (a) that has not been reversed,
stayed, modified or amended, (b) as to which the time to appeal or
seek review or rehearing has expired and as to which no appeal or
petition for certiorari, review or rehearing is pending, and (c) that
shall have become final and nonappealable in accordance with
applicable law.
"FTC" means the Federal Trade Commission.
"Governmental Entity" means any court or tribunal in any
jurisdiction (domestic or foreign) or any public, governmental,
legislative or regulatory body, agency, department, commission,
<PAGE>
board, bureau, or other authority or instrumentality (domestic or
foreign), including, without limitation, the DOJ, FAA and FTC.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.
"HSR Notification" means the notification and report forms
required to be filed pursuant to the HSR Act.
"IER" means the Individual Equipment Record.
"KHC" means Keystone Helicopter Corporation, a Pennsylvania
corporation.
"Lien" means any mortgage, pledge, lien, encumbrance, charge,
option, deed of trust, security interest, claim, restriction,
easement, title defect or any other encumbrance of any type
whatsoever, whether imposed by law, contract or otherwise.
"Liquidating Trust" means the trust to be established pursuant
to Section 4.6(a) of the Plan.
"Liquidating Trustee" means the Person designated by the
Creditors' Committee on or before the Effective Date to act as
trustee of the Liquidating Trust.
"Operator" has the meaning set forth in the first paragraph of
this Agreement.
"Ordinary Course Administrative Claim" means a Claim for goods
delivered or services rendered to any of the Debtors in the ordinary
course of business of any Debtor, from and after the Petition Date.
"Parties" means collectively, the Debtors, AEC and the Operator.
"Person" means any individual, corporation, partnership, limited
liability company, trust (including any beneficiary thereof),
incorporated or unincorporated association, joint venture, joint
stock company, unincorporated organization, Governmental Entity or
other entity.
"Petition Date" means October 13, 1993.
"PHI" means Petroleum Helicopters, Inc., a Delaware corporation.
"Plan" means the Liquidating Plan of Reorganization proposed by
AEC in the Chapter 11 Cases, either in its present form or as it may
be amended or modified from time to time in accordance with the
Bankruptcy Code or the terms thereof.
<PAGE>
"Priority Claim" means any Claim, other than an Administrative
Claim or a Tax Claim, entitled to priority under Section 507(a) of
the Bankruptcy Code.
"Purchase Price" has the meaning set forth in subsection 2.3.
"Secured Claim" means a Claim of a Creditor arising on or before
the Petition Date that is purported to be secured by a Lien on any
Asset of the Debtor, except to the extent that the Claim is a
Disallowed Claim, and excluding any EMS Secured Claim and Washington
Square Capital Claim.
"Tax Claim" means any Claim that, if allowed, would be entitled
to priority under Section 507(a)(7) of the Bankruptcy Code.
"Transactions" means all of the transactions contemplated by
this Agreement, including the purchase and sale of the EMS Assets.
"Unsecured Claim" means an unsecured Claim that is not (a) an
Administrative Claim, (b) a Priority Claim or (c) a Tax Claim.
"Washington Square Capital Claim" means any Claim of Washington
Square Capital, Inc. against any of the Debtors, including Claims
arising under (i) the Loan and Security Agreement dated as of August
24, 1987, (ii) the Bankruptcy Court's Order Authorizing Use of Cash
Collateral During First Extended Period dated February 11, 1994, and
(iii) the Bankruptcy Court's Order Authorizing Use of Cash
Collateral During Second Extended Period dated June 14, 1994.
1.2 Singular and Plural. Defined terms in this Agreement shall
also mean in the singular number the plural, and in the plural number
the singular.
1.3 Capitalized Terms. In addition to such terms as are
defined in subsection 1.1, any other capitalized term appearing
herein shall have the meaning ascribed to it in the section or
subsection in which it is defined.
SECTION 2. SALE AND PURCHASE OF ASSETS
1 Purchase and Sale of Assets. On the terms and subject to
the conditions of this Agreement, on the Effective Date, the Debtors
shall sell, transfer, assign, convey and deliver to the Operator, and
the Operator shall purchase from the Debtors, the EMS Assets free and
clear of any and all Liens, Claims, encumbrances, and other claims or
interests of any nature whatsoever, except for Allowed EMS Secured
Claims.
2 Assumption of Liabilities and Obligations. Neither the
Operator nor AEC assumes or agrees to pay, perform or otherwise be
responsible for any Claims, debts, liabilities, Contracts,
commitments, obligations, losses, fines, costs, deficiencies or
damages of any of the Debtors, whether absolute, accrued, contingent,
conditional or otherwise, whether or not resulting from
<PAGE>
third party claims, whether or not arising or accruing before the
Effective Date, and whether or not associated with the EMS Assets or
the EMS Business, including, without limitation, obligations and
liabilities relating to the EMS Contract Cure Amounts (except in the
case of AEC, to the extent provided in Section 6.1(a) of the Plan),
taxes, breach of any Contract, or breach of warranty relating
thereto, operation of any EMS Aircraft, any product liability, any
employee compensation, collective bargaining agreements, pension,
profit-sharing, vacation, health insurance, disability insurance or
other "employee welfare benefit plan" or "employee pension benefit
plan" as those terms are defined in Sections 3(1) and 3(3) of ERISA,
and worker's compensation; except that on the Effective Date the
Operator shall, on the terms and subject to the conditions of this
Agreement, assume, pay, discharge and perform (i) all obligations and
liabilities under each EMS Contract and EMS Lease insofar as they
arise or accrue on or after the Effective Date or which by the terms
thereof are to be performed, observed, paid or discharged after the
Effective Date and in either case only to the extent allowed by the
Bankruptcy Court pursuant to subsection 6.1 of this Agreement; (ii)
all Allowed EMS Secured Claims; and (iii) all obligations and
liabilities arising out of events occurring after the Effective Date
related to the ownership of the EMS Assets after the Effective Date;
except to the extent any such duty or obligation accrues or arises as
a result of a breach by the Debtors of any representation, warranty,
covenant or agreement contained herein or in the Plan.
3 Purchase Price. (a) In consideration of the Debtors' sale
of the EMS Assets to the Operator on the Effective Date, (i) AEC
shall (A) pay to the Liquidating Trustee for deposit in the
Liquidating Trust the aggregate sum of $2,000,000, which shall
represent the total cash consideration to be paid to the Debtors
pursuant to all EMS Asset Purchase Agreements and which amount may be
adjusted as provided in this subsection (the "Cash Purchase Price"),
(B) pay the EMS Contract Cure Amount with respect to the EMS Leases
for the period ending on the first to occur of the Effective Date or
September 30, 1994, as more fully described in Section 4.1 of the
Plan, and (C) release and discharge or cause the release and
discharge of the Debtors from and against the claims set forth on
Schedule III; and (ii) the Operator shall assume, pay, discharge and
perform the Allowed EMS Secured Claims and the other obligations and
liabilities described in subsection 2.2 of this Agreement
(collectively, the "Purchase Price").
(b) The Cash Purchase Price shall be adjusted as necessary
to reflect all prepaid and deferred revenues and expenses arising
from the EMS Assets and the conduct of the EMS Business, which shall
be recorded as of the Effective Date in accordance with generally
accepted accounting principles and prorated between the Debtors and
the Operator so that the Debtors shall receive the benefit of all
revenues and all refunds and deposits held by third parties and be
responsible for all expenses, costs and obligations allocable to the
conduct of the EMS Business and relating to the EMS Assets for the
period prior to the Effective Date and the
<PAGE>
Operator shall receive the benefit of all revenues and be responsible
for all expenses, costs and obligations allocable to the conduct of
the EMS Business and relating to the EMS Assets for the period after
the Effective Date.
(c) At least five Business Days prior to the Effective
Date, AEC and the Operator shall deliver to the Debtors and the
Creditors' Committee a certificate (the "Adjustment Certificate")
setting forth the amount of any Cash Purchase Price adjustments
necessary to reflect the prorations described in subsection 2.3(b).
Prior to the Effective Date, the Debtors and the Creditors' Committee
may notify AEC and the Operator in writing of any objections that it
may have to the Adjustment Certificate. If no written objection is
raised prior to the Effective Date, the Debtors shall certify the
Adjustment Certificate on the Effective Date and the Cash Purchase
Price paid to the Liquidating Trustee on the Effective Date shall
conclusively be deemed to have been agreed upon by the Parties and
shall be final, binding and conclusive with respect to all Parties
and shall not be subject to judicial review. If, on the other hand,
the Debtors or the Creditors' Committee give timely notice of their
objections to the Adjustment Certificate, the Parties shall attempt
to resolve any disputed adjustments by negotiating in good faith and
attempting to agree in writing as to the actual amount of the
adjustments. If the Parties are unable to agree, then the portion of
the Cash Purchase Price representing the disputed amount shall be
placed in escrow on the Effective Date and the Parties shall submit
the disputed matters to the Bankruptcy Court for resolution. Upon
the Bankruptcy Court's final determination of the actual amount of
the disputed adjustments, the proceeds in escrow shall be released to
the appropriate Party or Parties in amounts as directed by the
Bankruptcy Court.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF DEBTORS
The Debtors hereby represent and warrant as of the Effective
Date to AEC and the Operator as follows:
1 EMS Aircraft. (a) The Debtors either own or have a valid
leasehold interest in each EMS Aircraft.
(b) Each EMS Aircraft meets (i) the IER noted in its EMS
Lease or EMS Contract and (ii) the FAA 135 airworthiness criteria.
(c) All of the EMS Aircraft, in the aggregate, shall have
been maintained to aircraft maintenance conditions of at least fifty
(50%) percent time/life remaining.
2 EMS Contracts and EMS Leases. Each EMS Contract and EMS
Lease shall be validly assumed by the Debtor and assigned to the
Operator on the Effective Date and all EMS Contract Cure Amounts
<PAGE>
shall be paid or adequately reserved by the Debtor or the Liquidating
Trustee as of the Effective Date (or by AEC to the limited extent
provided in Section 4.1(a) of the Plan). Each EMS Contract and EMS
Lease is in full force and effect and enforceable in accordance with
its terms and other than defaults that will be cured by payment by
the Debtor (or by AEC to the limited extent provided in Section
6.1(a) of the Plan) of the EMS Contract Cure Amounts, there exists no
default or event of default or event, occurrence, condition or act
that, with the giving of notice, the lapse of time or the happening
of any other event or condition, would become a default or event of
default thereunder. Other than failures to make payments that will
be cured by payment of the EMS Contract Cure Amounts, none of the
Debtors has violated any of the terms or conditions of any EMS
Contract or EMS Lease and all of the covenants to be performed by any
other party to any EMS Contract or EMS Lease have been fully
performed.
3 EMS Other Property. The Debtors are the sole and exclusive
record owners of all of the EMS Other Property.
4 Environmental Matters. The Debtors are and have been in
compliance with, in all material respects, and there has been no
violation of, any laws or regulations with respect to pollution or
protection of the environment arising out of the Debtors' past or
present ownership or use of the EMS Assets or in connection with the
conduct of the EMS Business. There is no pending or threatened
lawsuit or administrative proceeding before any Governmental Entity
against the Debtors with respect to environmental compliance, control
or liability relating to the EMS Assets or EMS Business and the
Debtors have no knowledge of any facts or circumstances that could
form the basis of a claim, citation or allegation against any of the
Debtors for a violation of, or alleging liability under, any
environmental laws. No tank for the storage of hazardous substances
or wastes or petroleum products is located on or under any EMS Asset
other than on EMS Aircraft, and no Debtor has any knowledge of the
existence of any liabilities or potential liabilities against any
Debtor associated with any such tank located on or under any property
that is not an EMS Asset.
5 Employment Relations and Benefits. (a) There is no labor
union that claims to represent the employees of any Debtor and no
collective bargaining agreement currently being negotiated by any
Debtor with respect to its employees.
(b) None of the Debtors maintains nor has ever maintained
any employee benefit plan that is a multi- employer plan as defined
in Section 3(37) of ERISA or a plan under Title IV of ERISA.
6 Insurance. The Debtors maintain in full force and effect
fire, comprehensive general liability, aircraft liability, product
liability, aircraft replacement and hull, helipad, workers'
compensation, and other insurance policies that, with respect to
their amounts and types of coverage, are adequate to insure fully
against risks to which the EMS Assets are normally exposed in the
<PAGE>
operation of the EMS Business and comply with all insurance
maintenance requirements in the EMS Contracts and EMS Leases. All
premiums payable under such policies have been paid in full, no
notice of cancellation of any such policy has been received, and
there is no existing default or event that, with the giving of notice
or lapse of time or both, would constitute a default thereunder.
There are no claims in existence or pending under such policies and
no circumstances likely to give rise to any such claim.
7 Ability to Conduct the Business. Except as contemplated by
the Plan, there is no Contract, or other agreement or arrangement of
any kind, nor any judgment, order, writ, injunction or decree that by
its terms prevents or would reasonably be expected to prevent the use
by the Operator of the EMS Assets or the conduct by the Operator of
EMS Business after the Effective Date.
8 No Changes Prior to Effective Date. During the period from
the date hereof to and including the Effective Date, the EMS Business
has been conducted in the ordinary course of business consistent with
past practice and there has not been:
(a) any event, occurrence, development or state of
circumstances or facts that has had or could reasonably be expected
to result in a material adverse effect on the EMS Business or EMS
Assets taken as a whole;
(b) any creation or other incurrence of any Lien on any of
the EMS Assets except for the Allowed EMS Secured Claims;
(c) any sale, transfer, lease or other disposition of any
EMS Assets;
(d) any transaction or any contract or agreement entered
into, by any of the Debtors relating to the EMS Business or EMS
Assets (including the acquisition or disposition of any EMS Assets)
other than transactions and commitments in the ordinary course of
business consistent with past practice, and the EMS Asset Purchase
Agreements;
(e) any damage, destruction, or casualty loss, whether or
not covered by insurance, to any of the EMS Assets that has or could
reasonably be expected to result in a material adverse effect to the
EMS Business; or
(f) any agreement, whether or not in writing, to do any of
the foregoing.
9 "As is, Where is" Sale. Except as expressly provided
herein, no representations or warranties, either expressed or
implied, are made with respect to the EMS Assets, including, without
limitation, any implied or expressed warranty of merchantability.
Except as expressly provided herein, the EMS
<PAGE>
Assets shall be sold on an "as is, where is" basis, and the Operator
shall accept delivery of the EMS Assets in such condition.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF AEC
AEC hereby represents and warrants to the Debtors and the
Operator as follows:
1 Existence and Good Standing. AEC is a corporation duly
organized, validly existing and in good standing under the laws of
the state of its incorporation, with all requisite corporate power
and authority to own its property and to carry on its business as it
is now being conducted.
2 Authorization. AEC has full corporate power and authority
to execute and deliver this Agreement and all instruments to be
delivered by it hereunder and to consummate the Transactions and AEC
has taken all requisite corporate action to execute, deliver and
perform this Agreement.
3 Enforceable Agreement. This Agreement and each instrument
to be delivered hereunder is, or upon execution by each party thereto
will be, a legal, valid and binding obligation of AEC, enforceable
against it in accordance with its terms. This Agreement shall, upon
execution by AEC and the Operator, be a legal, valid and binding
obligation of AEC, enforceable against it by the Operator in
accordance with its terms. Neither the execution, delivery nor
performance of this Agreement will (a) (i) violate, conflict with, or
result in a breach of any provisions of, (ii) constitute a default
(or an event which, with notice or lapse of time or both, would
constitute a default) under, (iii) result in the termination of or
accelerate the performance required by, or (iv) result in the
creation of any adverse claim against any of its properties or assets
under, any of the provisions of the articles of incorporation or
by-laws of AEC or any note, lease, license, agreement or other
instrument or obligation to which it is a party, or by which it or
its assets are bound; (b) violate any applicable law of any
Governmental Entity to which AEC is subject or by which it is bound;
or (c) require the approval, consent or authorization of, or the
making of the any declaration, filing or registration with, any
Governmental Entity or any third party that transacts business with
AEC, except as provided herein.
4 No Other Representations. Except as expressly set forth in
this Section, AEC makes no other representation or warranty of any
kind in connection with or related to the provisions of this
Agreement or the Transactions.
<PAGE>
SECTION 5. REPRESENTATIONS AND WARRANTIES OF OPERATOR
The Operator hereby represents and warrants to the Debtors and
AEC as follows:
1 Existence and Good Standing. The Operator is a corporation
duly organized, validly existing and in good standing under the laws
of the state of its incorporation, with all requisite corporate power
and authority to own its property and to carry on its business as it
is now being conducted.
2 Authorization. The Operator has full corporate power and
authority to execute and deliver this Agreement and all instruments
to be delivered by it hereunder and to consummate the Transactions
and the Operator has taken all requisite corporate action to execute,
deliver and perform this Agreement.
3 Enforceable Agreement. This Agreement and each instrument
to be delivered hereunder is, or upon execution by each party thereto
will be, a legal, valid and binding obligation of the Operator,
enforceable against it in accordance with its terms. This Agreement
shall, upon execution by AEC and the Operator, be a legal, valid and
binding obligation of the Operator, enforceable against it by AEC in
accordance with its terms. Neither the execution, delivery nor
performance of this Agreement will (a) (i) violate, conflict with, or
result in a breach of any provisions of, (ii) constitute a default
(or an event which, with notice or lapse of time or both, would
constitute a default) under, (iii) result in the termination of or
accelerate the performance required by, or (iv) result in the
creation of any adverse claim against any of its properties or assets
under, any of the provisions of the articles of incorporation or
by-laws of the Operator or any note, lease, license, agreement or
other instrument or obligation to which it is a party, or by which it
or its assets are bound; (b) violate any applicable law of any
Governmental Entity to which the Operator is subject or by which it
is bound; or (c) require the approval, consent or authorization of,
or the making of the any declaration, filing or registration with,
any Governmental Entity or any third party that transacts business
with the Operator, except as provided herein.
4 No Other Representations. Except as expressly set forth in
this Section, the Operator makes no other representation or warranty
of any kind in connection with or related to the provisions of this
Agreement or the Transactions.
SECTION 6. ADDITIONAL COVENANTS OF THE PARTIES
1 EMS Contracts and EMS Leases. (a) Within twenty days after
the Confirmation Date, the Operator shall, in accordance with Section
6.1 of the Plan, file an application for assumption and assignment
(the "Application") and any other appropriate pleadings with the
Bankruptcy Court, in the name of the appropriate Debtor, for the
Debtors to assume and to assign to the Operator each EMS Contract and
EMS Lease except any EMS Contract or EMS Lease
<PAGE>
excluded by AEC and the Operator. Except to the extent provided in
Section 4.1 of the Plan, the Debtors shall bear the entire cost of
all such assignments, including without limitation, the payment of
any EMS Contract Cure Amounts. The Application shall include a
statement of the EMS Contract Cure Amounts proposed by the Operator
to be paid and shall further provide a date by which the contracting
party may object to the Application. The Debtors or the Liquidating
Trustee shall cure all defaults and otherwise comply with the
requirements of Section 365(b) of Bankruptcy Code with respect to
each such EMS Contract and EMS Lease and shall (except to the extent
provided in Section 4.1 of the Plan), pay all EMS Contract Cure
Amounts.
(b) On the Effective Date, the Debtors shall be deemed to
have assumed each such EMS Contract or EMS Lease. The EMS Contract
Cure Amounts relating to each such EMS Contract or EMS Lease shall
conclusively be determined to be the amount set forth in the
Application to the extent no objection is filed thereto, or if such
an objection is filed, as set forth in the Final Order approving the
Application in accordance with Section 6.1 of the Plan.
2 Determination of Allowed EMS Secured Claims. The
Bankruptcy Court shall determine the extent to which each EMS Secured
Claim shall be an Allowed EMS Secured Claim. Such determinations
shall be made pursuant to (i) actions previously commenced by the
Debtors, provided that the Operator shall be entitled to participate
in any such actions as a party in interest, and at the sole option of
the Operator, after the Confirmation Date the Operator shall be
substituted for the Debtor as the true party in interest in any such
pending actions, or (ii) motions filed by the Operator pursuant to
Bankruptcy Rule 3012 and Section 506(a) of the Bankruptcy Code. The
Debtors shall cooperate with the Operator in connection with the
Bankruptcy Court's determination of the extent to which each EMS
Secured Claim shall be an Allowed EMS Secured Claim.
3 Treatment of AEC and DCC Leases. Notwithstanding any other
provision of this Agreement, pursuant to the Plan each EMS Lease that
is an AEC Lease or a DCC Lease shall be assumed and assigned to the
Operator, such assignment to be effective on the Effective Date, and
the Operator shall thereafter perform all the obligations of the
lessee thereunder.
4 Due Diligence Review. For the period from the date of this
Agreement to the Effective Date, the Debtors shall make or cause to
be made available at Debtors' offices for examination and reproduc-
tion by the officers, attorneys, accountants and other authorized
representatives of AEC and each Operator during normal business
hours, all documents of every kind and character in Debtors'
possession or to which Debtors have access relating or in any way
pertaining to the EMS Business or EMS Assets, including, without
limitation, all EMS Contracts and EMS Leases, and the IER and other
maintenance records for each EMS Aircraft. The Debtors shall furnish
the representatives with all information that the
<PAGE>
representatives may reasonably request and Debtors shall cause their
employees, accountants and attorneys to cooperate fully with
the representatives in connection with their review and examination
and to make full disclosure of all material facts affecting the EMS
Business and EMS Assets. The representatives shall be entitled to
inspect each EMS Aircraft and, in connection with such inspection,
perform a flight test to determine that all systems and equipment are
in proper working order. During such investigation, AEC and the
Operator shall have the right to make copies of such records, files
and other materials as they may reasonably deem advisable.
5 Governmental Approvals. (a) The Parties shall cooperate in
good faith and take all actions necessary or appropriate to
expeditiously and diligently file all applications and documents with
the FAA and the Department of Transportation in order to assign and
transfer the FAA Certificate to the Operator and take such other
necessary or appropriate actions to obtain the FAA's and the
Department of Transportation's approval of the Transactions and of
the assignment of the FAA Certificate to the Operator.
(b) The Debtors and the Operator shall each file and
maintain or cause to be filed and maintained with the FTC and the DOJ
any HSR Notifications required to be filed by their "ultimate parent"
companies under the HSR Act and the rules and regulations promulgated
thereunder with respect to the Transactions. Each Party shall make
such filings as soon as practicable but in no event later than five
Business Days after the Confirmation Date, shall cooperate with the
other Parties in accomplishing such filings, respond promptly to any
request for additional information made by either the FTC or DOJ,
shall keep the other Parties apprised of the status of any inquiries
made by the DOJ or FTC and shall use its best efforts to cause the
waiting periods under the HSR Act to terminate or expire at the
earliest possible date. Each Party shall also use all reasonable
efforts to resist vigorously at its cost and expense any assertion
that the Transactions constitute a violation of the antitrust laws.
(c) To the extent permitted by applicable law, each Party
shall promptly provide the other Parties with copies of all written
communications, letters, reports or other documents delivered to or
received from Governmental Entities in connection with the filings
contemplated by this subsection, and copies of any written memorandum
relating to discussions with such Governmental Entities with respect
to such filings.
6 Confidentiality of Information. If this Agreement is
terminated prior to the Effective Date for any reason, AEC and each
Operator shall, to the extent reasonably practicable, destroy or
cause to be delivered to the Debtors all documents and other material
obtained by it in connection with the transactions contemplated
hereby (and copies thereof), whether obtained before or after the
execution hereof, and no Party shall use or disclose, directly or
indirectly, any information so obtained, or otherwise obtained by it
hereunder or in connection herewith, and shall cause all such
information to be kept confidential and not used in any
<PAGE>
way detrimental to any other Party. AEC and each Operator shall use
its best efforts to keep confidential the documents and information
furnished that are designated as "confidential" by Debtors and, if
this Agreement is terminated, such confidence shall be maintained and
all such documents and all copies thereof shall immediately
thereafter be returned to Debtors; provided, however, that AEC and
each Operator shall not be obligated to use its best efforts to keep
confidential any document or information that (a) was or becomes
generally available to the public other than as a result of
disclosure by Debtors or (b) was or becomes available to AEC or any
Operator other than as a result of disclosure by Debtors.
7 Conduct of Debtors' EMS Business; Use of EMS Assets. At
all times prior to the Effective Date, the Debtors shall (i) conduct
the EMS Business in the ordinary course consistent with past
practices, keep available the services of its officers and employees
and maintain good relationships with its customers, suppliers,
distributors, vendors, agents, representatives, consultants and
others having business relationships with them; (ii) not commit or
omit to do any act that would cause them to breach any of the
agreements, commitments or covenants contained in this Agreement;
(iii) continue to operate and maintain the EMS Assets diligently and
substantially in the same manner as heretofore conducted so as to
minimize risk of material deterioration, damage and loss to any of
the EMS Assets; (iv) maintain in full force and effect the insurance
policies carried on the EMS Assets existing on the date hereof; and
(v) not institute any new methods of purchase, sale, lease,
management, accounting or operation or engage in any transaction or
activity, enter into any agreement or make any commitment that will
affect the operation or use of the EMS Assets after the Effective
Date, except in the ordinary course consistent with past practices.
8 Employees. On the Effective Date, the Operator may offer
employment, in the same or similar position and with the same or
similar responsibilities as with Debtors, to substantially all active
employees of the Debtors performing services directly assigned to the
EMS Contracts who meet or exceed the Operator's employee requirements
for such position. For purposes of this subsection 6.7, the term
"active employee" shall mean any person who, on the Effective Date,
is actively employed by any Debtor or who is on short-term disability
leave, vacation, jury duty leave, sick leave, or other authorized
leave of absence, military service or lay-off with a reasonable
expectation of recall as of the Effective Date but shall exclude any
inactive or former employee, including any person who has been on
long-term disability leave or unauthorized leave of absence or who
has terminated his or her employment (voluntarily or involuntarily),
retired or died on or before the Effective Date. Nothing herein
shall be deemed to require the Operator to offer employment to any
particular employee.
<PAGE>
9 Accounts Receivable. (a) At the Closing, the Debtors
shall assign to the Operator, for purposes of collection only, all
Accounts Receivable. The Debtors or the Liquidating Trustee shall
deliver to the Operator on, or as soon as practicable after, the
Effective Date a complete and detailed statement showing the name,
amount and age of each Accounts Receivable. The Operator shall use
its best efforts to collect the Accounts Receivable for a period of
ninety days after the Effective Date (the "Collection Period").
(b) During the Collection Period, the Operator shall remit
to the Liquidating Trustee on a monthly basis any accounts receivable
collected by the Operator relating to any services rendered in
connection with the conduct of the EMS Business prior to the
Effective Date. The Operator shall credit sums to the oldest
outstanding balance due from any account debtor unless the Operator
receives other remittance instructions from the account debtors
specifically identified in the invoices being paid. The Operator
shall not be obligated to use any extraordinary efforts to collect
any of the accounts receivable relating to the EMS Assets prior to
the Effective Date or refer any such accounts receivable to a
collection agency or to an attorney for collection and the Operator
shall not make any such referral or compromise nor settle or adjust
the amount of any such accounts receivable except with the approval
of the Liquidating Trustee. The Operator shall incur no liability to
the Debtors or the Liquidating Trustee for any uncollected account.
None of the Debtors, the Liquidating Trustee, or the agents of either
of them shall make any solicitation of these accounts during the
Collection Period.
(c) On or before the fifteenth day after the end of the
Collection Period, the Operator shall (i) furnish the Debtors or the
Liquidating Trustee a list of all Accounts Receivable that then
remain uncollected, together with any files concerning the collection
or attempts to collect such Accounts Receivable and payment of any
remaining unremitted amounts and (ii) reassign to the Debtors or the
Liquidating Trustee any uncollected Accounts Receivable. Thereafter,
the Operator shall have no further obligation or liability with
respect to Accounts Receivable, except that the Operator shall
immediately pay over to the Debtors or the Liquidating Trustee any
amount subsequently paid to the Operator and determined in accordance
with the foregoing procedures to be a payment of any such reassigned
Accounts Receivable.
10 Mail and Other Communications. (a) The Debtors hereby
authorize the Operator from and after the Effective Date to receive
and open all mail and other communications addressed to the Debtors
received by the Operator, and to act with respect to such mail and
other communications in such manner as the Operator may elect if such
mail and other communications relate to the EMS Business or EMS
Assets, or if such mail and other communications do not so relate, to
forward such mail and other communications promptly to the Debtors or
the Liquidating Trustee.
<PAGE>
(b) After the Effective Date, the Debtors shall promptly
deliver to the Operator the original of any mail or other
communication received by it relating to operations of the EMS
Business or EMS Assets after the Effective Date, including
specifically invoices related to such period, and any monies, checks
or other instruments of payment to which the Operator is
entitled, and the Operator shall promptly deliver to the Debtors or
the Liquidating Trustee the original of any mail or other
communication received by it relating to operations of the EMS
Business or EMS Assets prior to the Effective Date, including
specifically invoices related to such period, and any monies, checks
or instruments of payment to which the Debtors are entitled, other
than Accounts Receivable, which will be handled pursuant to
subsection 6.9 of this Agreement.
11 Notification of Changes. Debtors shall promptly notify AEC
and the Operator of (i) any event that could adversely affect the
ability of Debtors to perform any of its agreements, commitments or
covenants contained herein, or (ii) any event or condition that could
be reasonably expected to results in a material adverse change in the
EMS Business or EMS Assets.
12 Cooperation and Best Efforts. Each Party shall cooperate
with the others and use its best efforts to (a) procure upon
reasonable terms and conditions all necessary consents and approvals,
(b) complete all necessary filings, registrations and certificates,
(c) satisfy all requirements prescribed by law for, and all
conditions set forth in this Agreement to, the consummation of the
Transactions and (d) effect the Transactions at the earliest
practicable date.
SECTION 7. CONDITIONS PRECEDENT
1 Conditions to All Parties. The obligations of each Party
are subject to the satisfaction of the following conditions:
(a) HSR Act. The Parties shall have received confirmation
or notice that any waiting periods under the HSR Act with respect to
the Transactions shall have terminated or expired, with no
outstanding requests for additional information to be supplied in
connection with the HSR Notifications and no outstanding notice from
either the FTC or DOJ that further action will be taken by either of
them with respect to the Transactions.
(b) No Injunctions or Restraints. No temporary
restraining order, stay pending appeal, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the
consummation of the Transactions shall be in effect and no
Governmental Entity shall have given notice to any Party to the
effect that consummation of the Transactions would constitute a
violation of any applicable law.
<PAGE>
2 Additional Conditions to the Obligations of AEC and the
Operator. The obligations of AEC and the Operator to consummate the
Transactions are also subject to the satisfaction (or the waiver by
AEC and the Operator) of the following conditions:
(a) Final Order. The Bankruptcy Court shall have entered
a Confirmation Order authorizing and approving the terms
and conditions of the Plan and this Agreement and authorizing the
Debtors to perform all acts necessary to consummate the Transactions,
and such Confirmation Order shall be a Final Order.
(b) Allowed EMS Secured Claims. The Bankruptcy Court
shall have entered an order determining all Allowed EMS Secured
Claims and such order shall be a Final Order.
(c) Plan Conditions. All conditions precedent specified
in Article IX of the Plan shall have been duly satisfied.
(d) FAA Certificate. The Parties shall have received
approval from the FAA with respect to the assignment of the FAA
Certificate by the Debtors to the Operator.
(e) Other Governmental Approvals. The Parties shall have
received the approval, consent or authorization of, or completed any
filings or notifications with, any other Governmental Entity that are
required by law to consummate the Transactions and the terms of such
orders, consents, approvals or authorizations of any Governmental
Entity shall permit the Transactions to be consummated without
imposing any material adverse conditions with respect to the EMS
Business or EMS Assets taken as a whole.
(f) Representations, Warranties and Covenants. The
representations and warranties of the Debtors contained in this
Agreement shall be true and correct as of the date hereof and the
Effective Date and the Debtors shall have performed all covenants and
agreements required by this Agreement to be performed by them at or
prior to the Effective Date.
(g) EMS Contracts and EMS Leases. The Bankruptcy Court
shall have issued an order or orders pursuant to Section 6.1 of the
Plan authorizing the assumption by the Debtor and the assignment to
the Operator pursuant to the Plan and this Agreement of each EMS
Lease and EMS Contract.
(h) Contract Matters. The Operator, in its reasonable
discretion, shall have determined that the EMS Contracts, in the
aggregate, generate revenue that, when added to Aircraft Equity, if
any, exceeds the sum of (i) financing and/or lease payments of the
EMS Aircraft, (ii) direct and reasonable indirect costs of performing
such EMS Contracts and (iii) the payments referred to in subsections
9.1, 9.2 and 9.4 of this Agreement.
(i) Conditions under Other Asset Purchase Agreements. The
transactions contemplated by the other EMS Asset Purchase Agreements
shall have been consummated.
<PAGE>
3 Additional Conditions to the Obligations of the Debtors.
The Debtors' obligations to consummate the Transactions are also
subject to the satisfaction (or the waiver by the Creditors'
Committee or the Debtor) of the following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of AEC and the Operator contained
in this Agreement shall be true and correct on the Effective Date and
AEC and the Operator shall have performed in all material respects
all covenants and agreements required by this Agreement to be
performed by them at or prior to the Effective Date.
SECTION 8. CLOSING
1 Closing. The closing of the Transactions (the "Closing")
shall take place at the offices of __________ commencing at 9:00 a.m.
local time on the day on which all conditions specified in Section 7
(other than conditions with respect to actions the Parties will take
at the Closing) have been satisfied or waived or such other date as
the Parties may mutually determine (the "Effective Date").
2 Deliveries by the Debtors. At the Closing the Debtors
shall make the following deliveries in form and substance
satisfactory to AEC, the Operator and their counsel:
(a) A Bill of Sale in the form attached hereto as Exhibit
A executed by the Debtors;
(b) FAA Bills of Sale for each EMS Aircraft in the form
prescribed by the Department of Transportation or FAA at the
Effective Date, a currently required example of which is attached as
Exhibit B, executed by the Debtors;
(c) Cash deeds and acts of sale conveying all real estate
included in the EMS Assets executed by the Debtors;
(d) Assignments of all intellectual property included in
the EMS Assets executed by the Debtors;
(e) Assignments of the EMS Contracts and EMS Leases in the
form attached hereto as Exhibit C executed by the Debtors;
(f) All certificates and other documents necessary to
transfer the FAA Certificate to the Operator executed by the Debtors;
(g) Assignment of the joint right to use the STC interiors
and equipment contained in or on the EMS Aircraft in the conduct of
the EMS Business executed by the Debtors;
(h) Such other bills of sale, assignments and other
instruments of sale, transfer, conveyance and assignment executed by
the Debtors, accompanied by such consents, releases, endorsements and
other instruments as may be required or as may be
<PAGE>
desirable in order to vest effectively in the Operator good and
marketable title to the EMS Assets free and clear of all Liens and
Claims, except for Allowed EMS Secured Claims;
(i) Possession of the EMS Assets to the Operator;
(j) Assignment for Collection of Accounts Receivable in
the form of Exhibit D hereto executed by the Debtors;
(k) The Adjustment Certificate executed by the Debtors;
(l) A Release of AEC and the Operator in the form of
Exhibit E hereto executed by the Debtors; and
3 Deliveries by AEC and the Operator. At the Closing AEC and
the Operator shall make the following deliveries:
(a) AEC shall pay to the Debtors the Cash Purchase Price
by wire transfer or delivery of other immediately available funds;
(b) An Assumption of EMS Contracts and EMS Leases in the
form of Exhibit F hereto executed by the Operator; and
(c) A General Release of the Debtors in the form of
Exhibit G hereto executed by AEC and the Operator.
SECTION 9. COVENANTS BETWEEN AEC AND THE OPERATOR
1 Reimbursement of Cash Purchase Price. Within 45 days of
the last day of each calendar quarter ending after the Effective
Date, the Operator shall pay to AEC or its designee five (5%) percent
of gross revenues under each EMS Contract for services actually
rendered (including any renewal, extension, restatement and/or
replacement thereof) during such calendar quarter until the first to
occur of (i) the fifth anniversary of the Effective Date or (ii)
termination of such EMS Contract (including any renewal, extension,
restatement and/or replacement thereof) (and thereafter to the extent
attributable to gross revenue prior to such anniversary or
termination); provided that in no event shall the payments under this
subsection 9.1 as to any such EMS Contract exceed five (5%) percent
of projected gross revenue under such EMS Contract, as projected
prior to the Effective Date by AEC and the Operator, such projection
to be based upon then (pre-Effective Date) current gross revenues
under such EMS Contract, assuming a term ending on the fifth
anniversary of the Effective Date and escalated on each interim
anniversary date by 2.74%; and provided further, that in the event
Operator voluntarily agrees to an amendment or modification of an EMS
Contract prior to the fifty anniversary of the Effective Date that
results in a diminution or deferral of the gross revenues otherwise
earnable by or payable to Operator under such EMS Contract, for which
the Operator will be compensated in a manner that is not subject to
the royalty provision of this Section 9.1, then and in such event the
Operator will pay to AEC or its designee the greater of (i) the gross
<PAGE>
revenues under such EMS Contract or (ii) the amount of royalty that
it would otherwise have paid to AEC under this Section 9.1 based on
gross revenue under such EMS Contract for the calendar quarter
immediately prior to the amendment or modification of the EMS
Contract. Payments under this subsection 9.1 shall be reduced to the
extent all net adjustments pursuant to subsection 2.3(b) of
this Agreement attributable to the EMS Assets result in a reduction
to the Cash Purchase Price, such reduction to be made beginning with
the first such quarterly payment and shall continue with each
subsequent quarterly payment until the full amount of such adjustment
has been recouped. If the adjustments pursuant to subsection 2.3(b)
of this Agreement attributable to the EMS Assets result in an
increase to the Cash Purchase Price, such increase shall be paid by
the Operator to AEC within five (5) business days after the Effective
Date.
2 Aircraft Equity. If an EMS Contract terminates prior to
the expiration of the five year period referred to in subsection 9.1,
then to the extent (i) the fair market value (determined prior to the
Effective Date pursuant to a single appraiser jointly selected by AEC
and the Operator) of any financed EMS Aircraft directly related to
such EMS Contract exceeds (ii) the Allowed EMS Secured Claim and
similar or related obligations attributable to such EMS Aircraft
computed as of the Effective Date (such excess amount, the "Aircraft
Equity"), then the Operator will continue to pay to AEC or its
designee the amounts that would have been paid under subsection 9.1
(based on payments made immediately prior to such termination if such
EMS Contract had not terminated prior to the expiration of the five
year period referred to in subsection 9.1), and a final payment at
the expiration of such five year period, if necessary, in the amount
of any shortfall from the projections referred to in subsection 9.1,
provided that in no event will the aggregate payments under this
subsection 9.2 exceed the amount of the Aircraft Equity.
3 Lease Rates. From and after the Effective Date, each EMS
Aircraft previously leased to the Debtors pursuant to an EMS Lease
that is an AEC Lease or DCC Lease shall be leased by AEC or DCC to
the Operator at rates and on other terms and conditions equivalent to
the pre-bankruptcy, pre-default lease rates applicable to such EMS
Aircraft.
4 Return of EMS Aircraft. If any EMS Contract is
unilaterally terminated by the hospital or expires or terminates
pursuant to the terms of such contract within 18 months of the
Effective Date for any reason other than the malfeasance of the
Operator, then the Operator shall have the right (exercisable without
penalty on or after the first year anniversary of the date of such a
termination) to cancel each lease instrument in respect of each AEC
or DCC leased EMS Aircraft directly related to such EMS Contract and
return such EMS Aircraft to AEC, DCC or its designee. Upon such
return, the EMS Aircraft will comply in all material respects with
the maintenance return conditions contained in the applicable lease.
During such one year interim period, the Operator shall be free to
redeploy and modify such EMS Aircraft in
<PAGE>
an effort to mitigate the cost incurred during such period, provided
that such EMS Aircraft will be returned in the original lease IER
configuration.
5 Right of First Offer. To the extent permitted by
applicable law, if an EMS Contract is not assigned, for any reason
whatsoever, to any other operator pursuant to another EMS Asset
Purchase Agreement, or otherwise, the Operator shall be entitled to
access to information regarding, and to evaluate, such EMS Contract
and the related EMS Assets and to make an initial proposal regarding
such EMS Contract.
6 Audit Rights. In connection with the preparation of the
Operator's audited annual financial statements the Operator's
independent auditors shall provide AEC and its auditors with (i) a
letter certifying the accuracy of the gross revenues received and
royalty payments made pursuant to Section 9 hereof in connection with
each EMS Contract and (ii) the opportunity to meet and discuss such
revenues and payments; provided, that if the Operator does not engage
independent auditors at any time during the term of this Agreement,
the Operator shall provide, at its expense, AEC and its auditors
reasonable access to its books and records relating to the EMS
Contract on an annual basis.
7 Confirmation of the Plan. (a) AEC shall, with the
reasonable cooperation of the Operator, use its best efforts to file
and prosecute to confirmation the Plan and shall not, without the
prior written consent of the Operator, which consent shall not be
unreasonably withheld, (i) withdraw or modify the Plan, (ii) support
the confirmation of any other plan of reorganization, plan of
liquidation or motion to convert to Chapter 7 filed in the Chapter 11
Cases, or (iii) take any action in the Chapter 11 Cases that
diminishes the value of the Plan or this Agreement to the Operator.
(b) If at any time after filing and prior to the Confirmation
Date the Plan is determined (in the reasonable judgment of AEC, the
Operator, and the operators under the other EMS Asset Purchase
Agreements) to provide funds available for payment to the class of
Unsecured Creditors (as defined in the Plan) in an amount less than
that provided pursuant to any other confirmable plan of
reorganization (as determined in the reasonable judgment of AEC, the
Operators and the operators under the other EMS Asset Purchase
Agreement) then on file and being prosecuted by its proponents in the
Chapter 11 Cases, then:
(i) AEC shall commence discussions with the Operator
and/or the other operators that are parties to the other EMS Asset
Purchase Agreements for the purpose of increasing the funds available
for payment to such class of Unsecured Creditors; and
<PAGE>
(ii) if such discussions do not result in an increase in
the funds so available for such class of unsecured creditors to an
amount at least equivalent to all other such plans in the Chapter 11
Cases, then either AEC or the Operator may elect to terminate this
Agreement by notice to the other, such termination to be effective
three (3) business days after receipt of such notice.
SECTION 10. TERMINATION AND ABANDONMENT
1 Termination. This Agreement may, by notice given on or
prior to the Effective Date, be terminated:
(a) Mutual Consent. By the mutual written consent of the
Parties.
(b) Material Breach by AEC or the Operator. By Debtors if
there has been a material breach by AEC or any of the Operator of any
of their representations, warranties or covenants contained in this
Agreement, which is not or cannot be cured within 10 days after
written notice of such breach is given to such Party, provided that
the right to effect such cure shall not extend beyond the date set
forth in subparagraph (f) below.
(c) Material Breach by Debtors. By AEC and the Operator
if there has been a material breach by Debtors of any of their
representations, warranties or covenants contained in this Agreement,
which is not or cannot be cured within 10 days after written notice
of such breach is given to Debtors, provided that the right to effect
such cure shall not extend beyond the date set forth in subparagraph
(f) below.
(d) Material Adverse Change. By AEC and the Operator if
there shall have been a material adverse change in the EMS Business
or the EMS Assets taken as a whole.
(e) Vacate Confirmation Order. By AEC and the Operator if
the Confirmation Order is vacated by the Bankruptcy Court or appealed
by any Person and such Person obtains an order staying consummation
of the Transactions.
(f) By the Operator or AEC pursuant to subsection 9.7(b).
(g) Abandonment. By all of the Operator, AEC, and the
operators under the other EMS Asset Purchase Agreements, acting
jointly, if (i) any condition to consummating the Transactions
specified in Section 7 has not been met or waived by the appropriate
Party by December 31, 1994, (ii) any such condition cannot be met by
such date and has not been waived or (iii) the Transactions have not
occurred by such date.
2 Effect of Termination; Survival. Upon termination of this
Agreement pursuant to this Section, this Agreement shall be void and
there shall be no liability by reason of this Agreement, or the
termination thereof, on the part of any Party or their
<PAGE>
respective directors, officers, employees, agents, affiliates or
shareholders except for any liability of a Party arising out of a
breach of any covenant in this Agreement prior to the date of
termination or any covenant that survives pursuant to the following
sentence. Subsection 6.6, this subsection 10.2 and Section 11 shall
survive any termination of this Agreement.
SECTION 11. MISCELLANEOUS
1 Further Assurances. On and after the Effective Date, the
Parties shall execute, acknowledge and deliver such further bills of
sale, assignments, conveyances, leases and other assurances,
documents and instruments of transfer, and shall take such other
action consistent with the terms of this Agreement, as may be
appropriate to effectuate the terms of this Agreement or to carry out
the purposes hereof.
2 Notices. All notices, requests, claims, demands or other
communications hereunder shall be in writing and shall be given by
hand delivery, by overnight mail delivery service, or by telex or
telecopier (provided no error is reported in transmission) to the
respective addresses as set forth opposite each Party's name on the
signature page hereof or such substituted addresses as any Party may,
from time to time, designate in a written notice given in like
manner. Notices shall be deemed given upon receipt by the addressee.
3 Waiver. The failure by any Party to enforce any of its
rights hereunder shall not be deemed to be a waiver of such rights,
unless such waiver is an express written waiver signed by the waiving
party. Waiver of any one breach shall not be deemed to be a waiver
of any other breach of the same or any other provision hereof.
4 Expenses. Except as otherwise set forth herein or in the
Plan, each Party shall pay its own expenses incident to this
Agreement and any other agreements, documents or other instruments to
be executed and delivered pursuant hereto, including all legal and
accounting fees; provided, however, that, unless exempted pursuant to
Section 1146(c) of the Bankruptcy Code, the Debtors or the
Liquidating Trustee shall pay all sales, use, transfer, purchase,
recordation and documentary taxes and fees, if any, arising out of
the Transactions.
5 Survival. The representations and warranties made by the
Parties in this Agreement shall not survive the Effective Date.
6 Integrated Agreement. The Plan, this Agreement and the
exhibits and schedules thereto and hereto constitute the entire
understanding and agreement among the Parties with respect to the
subject matter thereof and hereof, and there are no agreements,
understandings or restrictions, among the Parties other than those
set forth or provided for therein or herein, all prior agreements and
understandings being superseded thereby and hereby.
<PAGE>
7 Choice of Law. The validity of this Agreement, the
construction of its terms and the determination of the rights and
duties of the parties hereto hereunder shall be governed by and
construed in accordance with the laws of the State of Louisiana.
8 Successors and Assigns. This Agreement shall bind and
inure to the benefit of the Parties and their respective successors,
including any duly appointed trustee in any Chapter 11 Case or any
duly appointed trustee in any superseding case under
Chapter 7 of the Bankruptcy Code. No Party may assign its rights or
obligations hereunder without the prior written consent of the other
Parties, except for assignments by the Operator to a subsidiary of
which it owns all of the outstanding capital stock, provided that the
Operator shall not thereby be relieved of the obligations set forth
in Section 9 of this Agreement and shall guarantee the payment and
performance by such wholly-owned subsidiary of its obligations under
any EMS Lease that is an AEC Lease or DCC Lease. Nothing in this
Agreement is intended or shall be construed to confer upon or to give
any Person other than the Parties any rights or remedies under or by
reason of this Agreement, except as expressly provided for herein.
9 Amendment. This Agreement may be amended only by an
agreement in writing signed by each Party.
10 Headings. The headings in this Agreement have been
included solely for reference and shall not be considered in the
interpretation or construction of this Agreement.
11 Counterparts. This Agreement may be executed by the
Parties in one or more counterparts, all of which shall be deemed an
original, but all of which taken together shall constitute one and
the same instrument.
* * * * *
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
DEBTORS:
Debtors' address is: ROCKY MOUNTAIN HELICOPTERS, INC.
RMH AEROLOGGING, INC.
P. O. Box 1337 WESTERN HELICOPTERS, INC.
Provo, Utah 84603 RMH AEROMEDICAL, INC.
By:
Name:
Title:
AEC's address is: AMERICAN EUROCOPTER CORPORATION
2701 Forum Drive
Grand Prairie, Texas 65053 By:
Name:
Title:
OPERATOR:
Operator's address is: PETROLEUM HELICOPTERS, INC.
5728 Jefferson Highway
Harahan, Louisiana 70123
By:
Name:
Title:
Signature page to Asset Purchase Agreement
dated as of ___________, 1994
<PAGE>
Schedule I
Page 1 of 3
EMS OTHER ASSETS
1. Real property, improvements and fixtures associated with and
essential to ongoing field operations applicable to the programs
that have been designated by an "X" in the applicable operator's
column in Schedule II.
2. All rights to use the name Rocky Mountain Helicopters, Inc., any
derivative thereof, and the initials RMH.
3. Rights to use the STC interiors and equipment contained in or on
the EMS Aircraft in the conduct of the EMS Business.
4. All records, files and other documents related to the EMS
Assets, including but not limited to aircraft, engine and
component maintenance records, maintenance plans and other
historical records and any related software and programs.
5. All parts and equipment inventory located at the EMS Contract
site and used or useful in the conduct of the EMS Business,
other than duplicate parts having a value in excess of $500 and
all engines and component assemblies.
Note: The EMS Assets set forth on these Schedules I & II reflect all
EMS Assets known to the Operator as of the date hereof, and these
Schedules are subject to amendment to the extent necessary or
appropriate to reflect changes to the EMS Assets identified prior to
the Confirmation Date.
<PAGE>
Schedule I
Page 1 of 3
EMS OTHER ASSETS
1. Rights to use the STC interiors and equipment contained in or on
the EMS Aircraft in the conduct of the EMS Business.
2. All records, files and other documents related to the EMS
Assets, including but not limited to aircraft, engine and
component maintenance records, maintenance plans and other
historical records and any related software and programs.
3. All parts and equipment inventory located at the EMS Contract
site and used or useful in the conduct of the EMS Business,
other than duplicate parts having a value in excess of $500 and
all engines and component assemblies.
Note: The EMS Assets set forth on these Schedules I & II reflect all
EMS Assets known to the Operator as of the date hereof, and these
Schedules are subject to amendment to the extent necessary or
appropriate to reflect changes to the EMS Assets identified prior to
the Confirmation Date.
<PAGE>
Schedule I
Page 2 of 3
Item No. Owner Type Serial No.Hospital
Contract
1 GMAC 222 47044 Souix Falls
2 Fleet Credit (Via Western Heli) 441 441-0076Tuscon
3 GE Capital 441 441-0092 St. George, Ut.
4 Midlantic 441 441-0066 Omaha
5 WSC 441 441-0143 Redding, Ca.
6 GMAC Allstar 1621 Des Moines
7 New England Capital Allstar 1024 Tupelo
8 AEC AS350B 1101 Waterloo
9 AEC AS350B 1173 Iowa City
10 AEC AS350B 1035 Kansas City
11 AEC AS350B 1273 Traverse City
12 Burr/First Security AS350B 1472 Eagle Rescue
13 First Security AS350B 1178 Kansas City
14 Fleet Credit AS350B 1602 Little Rock
15 GE Capital AS350B 1369 Huntington
16 Jim Burr AS350B 1674 Osage Beach
17 Key Bank of Utah AS350B 1434 Eagle Rescur
18 Concord AS350B2 2575 Frisco, Co.
19 Hasson AS350B2 2404 Columbia, S.C.
20 Hasson AS350B2 2389 West Slope, Co.
21 Norwest Equip. Finance AS350B2 2728 Albuquerque
22 Norwest Equip. Finance AS350B2 2654 Colorado
23 AEC AS355F1 5093 LaCrosse
24 N/A Augusta N/A Salt Lake City
(Helicopter)
25 N/A Augusta N/A Salt Lake City
(Helicopter)
26 DCC/MDFC BK117 7036 Hartford
27 DCC/MDFC BK117 7060 Hartford
28 DCC/SSB BK117 7115 Charleston
29 DCC/MDFC BK117 7143 Lexington
30 DCC/SSB BK117 7077 Louisville
31 DCC/SSB BK117 7125 Omaha
32 DCC/SSB BK117 7082 Pittsburg
33 DCC/SSB BK117 7088 Pittsburg
34 DCC/MDFC BK117 7154 Pittsburg
35 DCC/SSB BK117 7111 Redding, Ca.
36 DCC/SSB BK117 7129 Sacremento
37 DCC/MDFC BK117 7163 Tuscon
38 DCC/MDFC BK117 7169 Tuscon
39 DCC/DRL BK117 7104 Tulsa
40 DCC/SSB BK117 7110 Valhalla
41 DCC/DRL BK117 7107 Worchester
42 DCC/MDFC BK117 7173 Worchester
43 DCC/MDFC BK117 7141 Nashville
44 DEBIS BK117 7231 Columbus, Mo.
45 DEBIS/MERCEDES BENZ BK117 7230 Omaha
46 DCC/? BK117 Morgantown
47 DCC/? BK117 St. Petersburg
<PAGE>
Schedule I
Page 3 of 3
Item No. Owner Type Serial No.Hospital
Contract
48 DCC/State Street Equity B0105 754 Greenville
49 DCC/SSB B0105 796 Jacksonville
50 DCC/? B0105 Pensacola
51 N/A B0105 N/A Springfield, Mo.
52 DCC/? B0105 790 Asheville
53 Salt Lake City (Fixed
Wing)
54 Salt Lake City (Fixed
Wing)
55 RMH SA316B 1910 Reno
If any EMS Aircraft is not subject to a "true" lease, such lease will
be subject to subsection 6.2 of the Agreement rather than subsection
6.1.
<PAGE>
Schedule II
Acquisition of Rocky Mountain Helicopter's
Emergency Medical Services Programs
Programs Aircraft KHC CJI PHI
1 Albuquerque, NM 1 x AStar X
2 Colorado Springs, CO 1 x AStar X
3 Denver, CO 2 x AStar X
4 Redding, CA 1 x BK117 X
1 x C-441
5 Reno, NV 1 x Alouette X
6 Sacramento, CA 1 x BK117 X
7 Salt Lake City, UT 2 x A109K2 X
(aircraft are hospital-owned)
1 x 441
8 Tucson, AR 2 x BK117 X
1 x 441
9 Eagle Rescue (Phoenix, AR)2 x AStars X
10 Healthnet (West Virginia) 2 x BK117 X
1 x AStar
11 Hartford, CT 2 x BK117 X
12 Lexington, KY 1 x BK117 X
13 Louisville, KY 1 x BK117 X
14 Worcester, MA 2 x BK117 X
15 Pittsburgh, PA 3 x BK117 X
16 Valhalla (New York City) 1 x BK117 X
17 Iowa City, IA 2 x AStar X
18 Des Moines, IA 1 x AStar X
19 LaCrosse, WI 1 x TwinStar X
20 Omaha, NE (University) 1 x BK117 X
21 Omaha, NE (St. Joseph's) 1 x BK117 X
1 x 441
22 Sioux Falls, IA 1 x 222 X
23 Columbia, MO 1 x BK117 X
1 x AStar
24 Kansas City, MO 2 x AStar X
25 Little Rock, AR 1 x AStar X
26 Springfield, MO 1 x BO105 X
(aircraft is hospital-owned)
27 Traverse City, MI 1 x AStar X
28 Tulsa, OK 1 x BK117 X
29 Tupelo, MS 1 x AStar (C30) X
30 Jacksonville, FL 1 x BO105 X
31 Columbia, SC 1 x AStar X
32 Asheville, NC 1 x BO105 X
33 Nashville, TN 1 x BK117 X
34 Greenville, NC 1 x BO105 X
35 Pensacola, FL 1 x BO105 X
36 St. Petersburg, FL 1 x BK117 X
6/24/94 rocky/sched-2
<PAGE> Exhibit A
to Asset Purchase Agreement
BILL OF SALE
Rocky Mountain Helicopters, Inc., a Utah corporation, RMH
Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a
California corporation and RMH Aeromedical, Inc., a Utah corporation
(collectively, the "Debtors") as debtors-in- possession under Case
Nos. 93C-25447 through 93C-25450 in the United States Bankruptcy Court
for the District of Utah, pursuant to that certain Asset Purchase
Agreement (the "Agreement"), dated as of ___________________, 1994, by
and among the Debtors, American Eurocopter Corporation, a
__________________ corporation and
________________________________________ (the "Operator"), and under
authority of Confirmation Order dated __________________, 1994
approving the transactions contemplated by the Agreement, do hereby
sell, convey, assign, transfer and deliver to the Operator, its
successors and assigns, those certain assets listed on Schedules A and
B attached hereto and the Operating Certificate issued to the Debtors
by the Federal Aviation Administration under Part 135 of the Federal
Aviation Regulations 14 C.F.C. Section 135 (collectively, the
"Conveyed Assets"), free and clear of any and all liens, mortgages,
pledges, security interests, restrictions, prior assignments,
liabilities, obligations, encumbrances, charges, tenancies,
licenses, encroachments, covenants, rights-of-way, easements,
successor or transferee liabilities, and claims of any and every kind,
nature and description whatsoever, including any "interest in
property" within the meaning of that term as it is used in the United
States Bankruptcy Code, except for Allowed EMS Secured Claims (as
defined in the Agreement); to have and to hold unto the Operator,
its successors and assigns, forever.
The Debtors do hereby agree to execute and deliver to the
Operator, its successors and assigns, such further documents and
instruments of conveyance, assignment, transfer, endorsement,
direction or authorization, and take such other action as the Operator
shall reasonably request in order to convey, transfer to, enforce and
confirm in the Operator all or any of the Conveyed Assets transferred
hereby or to be transferred to the Operator by the Debtors pursuant to
the provisions of the Agreement and to assist the Operator in reducing
the Conveyed Assets to its possession.
IN WITNESS WHEREOF, the Debtors have executed this Bill of Sale
this ________ day of ________________________, 1994.
DEBTORS:
Rocky Mountain Helicopters, Inc.
RMH Aerologging, Inc.
Western Helicopters, Inc.
RMH Aeromedical, Inc.
By:
Name:
Title:
34
<PAGE> Exhibit A
to Asset Purchase Agreement
BILL OF SALE
Rocky Mountain Helicopters, Inc., a Utah corporation, RMH
Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a
California corporation and RMH Aeromedical, Inc., a Utah corporation
(collectively, the "Debtors") as debtors-in- possession under Case
Nos. 93C-25447 through 93C-25450 in the United States Bankruptcy Court
for the District of Utah, pursuant to that certain Asset Purchase
Agreement (the "Agreement"), dated as of ___________________, 1994, by
and among the Debtors, American Eurocopter Corporation, a
__________________ corporation and __________________ (the
"Operator"), and under authority of Confirmation Order dated
__________________, 1994 approving the transactions contemplated by
the Agreement, do hereby sell, convey, assign, transfer and deliver to
the Operator, its successors and assigns, those certain assets listed
on Schedules A and B attached hereto (collectively, the "Conveyed
Assets"), free and clear of any and all liens, mortgages, pledges,
security interests, restrictions, prior assignments, liabilities,
obligations, encumbrances, charges, tenancies, licenses,
encroachments, covenants, rights-of-way, easements, successor or
transferee liabilities, and claims of any and every kind, nature and
description whatsoever, including any "interest in property" within
the meaning of that term as it is used in the United States Bankruptcy
Code, except for Allowed EMS Secured Claims (as defined in the
Agreement); to have and to hold unto the Operator, its successors and
assigns, forever.
The Debtors do hereby agree to execute and deliver to the
Operator, its successors and assigns, such further documents and
instruments of conveyance, assignment, transfer, endorsement,
direction or authorization, and take such other action as the Operator
shall reasonably request in order to convey, transfer to, enforce and
confirm in the Operator all or any of the Conveyed Assets transferred
hereby or to be transferred to the Operator by the Debtors pursuant to
the provisions of the Agreement and to assist the Operator in reducing
the Conveyed Assets to its possession.
IN WITNESS WHEREOF, the Debtors have executed this Bill of Sale
this ________ day of ________________________, 1994.
DEBTORS:
Rocky Mountain Helicopters, Inc.
RMH Aerologging, Inc.
Western Helicopters, Inc.
RMH Aeromedical, Inc.
By:
Name:
Title:
35
<PAGE> Exhibit A
to Asset Purchase Agreement
BILL OF SALE
Rocky Mountain Helicopters, Inc., a Utah corporation, RMH
Aerologging, Inc., a Utah corporation, Western Helicopters, Inc., a
California corporation and RMH Aeromedical, Inc., a Utah corporation
(collectively, the "Debtors") as debtors-in- possession under Case
Nos. 93C-25447 through 93C-25450 in the United States Bankruptcy Court
for the District of Utah, pursuant to that certain Asset Purchase
Agreement (the "Agreement"), dated as of ___________________, 1994, by
and among the Debtors, American Eurocopter Corporation, a
__________________ corporation and __________________ (the
"Operator"), and under authority of Confirmation Order dated
__________________, 1994 approving the transactions contemplated by
the Agreement, do hereby sell, convey, assign, transfer and deliver to
the Operator, its successors and assigns, those certain assets listed
on Schedules A and B attached hereto (collectively, the "Conveyed
Assets"), free and clear of any and all liens, mortgages, pledges,
security interests, restrictions, prior assignments, liabilities,
obligations, encumbrances, charges, tenancies, licenses,
encroachments, covenants, rights-of-way, easements, successor or
transferee liabilities, and claims of any and every kind, nature and
description whatsoever, including any "interest in property" within
the meaning of that term as it is used in the United States Bankruptcy
Code, except for Allowed EMS Secured Claims (as defined in the
Agreement); to have and to hold unto the Operator, its successors and
assigns, forever.
The Debtors do hereby agree to execute and deliver to the
Operator, its successors and assigns, such further documents and
instruments of conveyance, assignment, transfer, endorsement,
direction or authorization, and take such other action as the Operator
shall reasonably request in order to convey, transfer to, enforce and
confirm in the Operator all or any of the Conveyed Assets transferred
hereby or to be transferred to the Operator by the Debtors pursuant to
the provisions of the Agreement and to assist the Operator in reducing
the Conveyed Assets to its possession.
IN WITNESS WHEREOF, the Debtors have executed this Bill of Sale
this ________ day of ________________________, 1994.
DEBTORS:
Rocky Mountain Helicopters, Inc.
RMH Aerologging, Inc.
Western Helicopters, Inc.
RMH Aeromedical, Inc.
By:
Name:
Title:
36
<PAGE>
Exhibit B
to Asset Purchase Agreement
United States of America FORM APPROVED
DEPARTMENT OF TRANSPORTATION FEDERAL AVIATION ADMINISTRATION OMB NO.2120-0042
AIRCRAFT BILL OF SALE
FOR AND IN CONSIDERATION OF $ THE
UNDERSIGNED OWNER(S) OF THE FULL LEGAL
AND BENEFICIAL TITLE OF THE AIRCRAFT DES-
CRIBED AS FOLLOWS:
UNITED STATES
REGISTRATION NUMBER N
AIRCRAFT MANUFACTURER & MODEL
AIRCRAFT SERIAL No.
DOES THIS DAY OF 19
HEREBY SELL, GRANT, TRANSFER AND
DELIVER ALL RIGHTS, TITLE AND INTERESTS Do Not Write In This Block
IN AND TO SUCH AIRCRAFT UNTO: FOR FAA USE ONLY
NAME AND ADDRESS
(IF INDIVIDUAL(S), GIVE LAST NAME, FIRST NAME AND MIDDLE INITIAL.)
P
U
R
C
H
A
S
E
R
DEALER CERTIFICATE NUMBER
AND TO EXECUTORS, ADMINISTRATORS, AND ASSIGNS TO HAVE AND TO HOLD
SINGULARLY THE SAID AIRCRAFT FOREVER, AND WARRANTS THE TITLE THEREOF.
IN TESTIMONY WHEREOF HAVE SET HAND AND SEAL THIS DAY OF 19
NAME(S) OF SELLER SIGNATURE(S) TITLE
(TYPED OR PRINTED) (IN INK) (IF EXECUTED (TYPED OR PRINTED)
FOR CO-OWNERSHIP, ALL MUST
SIGN.)
S
E
L
L
E
R
ACKNOWLEDGMENT (NOT REQUIRED FOR PURPOSES OF FAA RECORDING:
HOWEVER, MAY BE REQUIRED BY LOCAL LAW FOR VALIDITY OF THE
INSTRUMENT.)
ORIGINAL: TO FAA
AC FORM 8050-2 (8-85) (0052-00-629-0002)
38
<PAGE>
Exhibit C
to Asset Purchase Agreement
ASSIGNMENT OF EMS CONTRACTS AND EMS LEASES
This Assignment of Contracts and Leases (the
"Assignment"), is by and between Rocky Mountain Helicopters,
Inc., a Utah corporation, RMH Aerologging, Inc., a Utah
corporation, Western Helicopters, Inc., a California
corporation and RMH Aeromedical, Inc., a Utah corporation
(collectively, the "Debtors") as debtors-in-possession under
Case Nos. 93C-25447 through 93C-25450 in the United States
Bankruptcy Court for the District of Utah and
______________________ (the "Operator").
Reference is made to the Asset Purchase Agreement dated
as of _________________, 1994 (the "Agreement"), by and
among the Debtors, American Eurocopter Corporation, a
__________________ corporation ("AEC"), and the Operator.
All capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Agreement.
In accordance with and subject to the terms of the
Agreement and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and
under authority of Confirmation Order dated
____________________, 1994 approving the transactions
contemplated by the Agreement, the Debtors and the Operator
hereby agree:
(a) The Debtors hereby sell, convey, assign, transfer
and deliver to the Operator, its successors and assigns,
those certain contracts listed on Schedule A attached hereto
(the "EMS Contracts") and those certain leases listed on
Schedule B attached hereto (the "EMS Leases"), each of which
is in full force and effect and enforceable in accordance
with its terms and, other than defaults that will be cured
by payment by Debtors of the EMS Contract Cure Amounts,
there exists no default or event of default or event,
occurrence, condition or act that, with the giving of
notice, the lapse of time or the happening of any other
event or condition, would become a default or event of
default thereunder; to have and to hold unto the Operator,
its successors and assigns, forever.
(b) The liabilities and obligations assumed by the
Operator are only those provided in that certain Assumption
of Contracts, Liabilities and Obligations by and between the
Debtors and the Operator dated as of this date.
(c) The Debtors do hereby agree to execute and deliver
to the Operator, its successors and assigns, such further
documents and instruments of assignment, conveyance,
transfer, endorsement, direction or authorization, and take
such other action as the Operator shall reasonably request
in order to convey, transfer to, enforce and confirm in the
Operator all or any of the EMS Contracts and EMS Leases
transferred hereby or to be transferred to the Operation by
the Debtors pursuant to the provisions of the Agreement and
to assist the Operator in reducing the EMS Contracts and EMS
Leases to its possession.
-39-
<PAGE>
IN WITNESS WHEREOF, the Debtor and the Operator have
caused this Assignment to be duly executed as of
_______________________, 1994.
WITNESSES DEBTORS:
Rocky Mountain
Helicopters, Inc.
RMH Aerologging, Inc.
Western Helicopters, Inc.
RMH Aeromedical, Inc.
By:
Name:
Title:
OPERATOR:
By:
Name:
Title:
-40-
<PAGE>
Exhibit D
to Asset Purchase Agreement
ASSIGNMENT FOR COLLECTION OF ACCOUNTS RECEIVABLE
This Assignment for Collection of Accounts Receivable
(the "Assignment"), is by and between Rocky Mountain
Helicopters, Inc., a Utah corporation, RMH Aerologging,
Inc., a Utah corporation, Western Helicopters, Inc., a
California corporation and RMH Aeromedical, Inc., a utah
corporation, (collectively, the "Debtors"), and
_____________________ (the "Operator").
Reference is made to the Asset Purchase Agreement dated
as of ____________________, 1994 (the "Agreement"), by and
among the Debtors, American Eurocopter Corporation, a
_________________ corporation ("AEC"), and the Operator.
All capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them in the Agreement.
In accordance with and subject to the terms of the
Agreement and for and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged,
the Debtors and the Operator hereby agree:
(d) For purposes of collection only, the Debtors
hereby assign to the Operator all Accounts Receivable as of
the Effective Date and the Operator accepts such assignment
on the terms set forth in Subsection 6.8 of the Agreement.
(e) The covenants regarding the procedures with
respect to Accounts Receivable in Subsection 6.8 of the
Agreement shall survive the execution, delivery and
acceptance of this Assignment on the terms set forth in the
Agreement and this Assignment will in no way expand or limit
the rights and obligations of the Operator, the Debtors or
AEC under the Agreement.
(f) This Assignment shall inure to the benefit of and
shall be binding upon the parties hereto, their successors,
transferees and assigns.
-41-
<PAGE>
IN WITNESS WHEREOF, the Debtors and the Operator have
caused this Assignment to be duly executed as of
__________________, 1994.
WITNESSES DEBTORS:
Rocky Mountain
Helicopters, Inc.
RMH Aerologging, Inc.
Western Helicopters, Inc.
RMH Aeromedical, Inc.
By:
Name:
Title:
OPERATOR:
By:
Name:
Title:
-42-
<PAGE>
Exhibit E
to Asset Purchase Agreement
RELEASE OF AEC AND OPERATOR
(TO COME)
-43-
<PAGE>
Exhibit F
to Asset Purchase Agreement
ASSUMPTION OF CONTRACTS, LIABILITIES AND OBLIGATIONS
This Assumption of Contracts, Liabilities and
Obligations (the "Assumption"), is by and between Rocky
Mountain Helicopters, Inc., a Utah corporation, RMH
Aerologging, Inc., a Utah corporation, Western Helicopters,
Inc., a California corporation and RMH Aeromedical, Inc., a
Utah corporation (the "Debtors"), and
________________________, a ___________________ corporation
(the "Operator").
Reference is made to the Asset Purchase Agreement dated
as of __________________, 1994 (the "Agreement"), by and
among the Debtors, American Eurocopter Corporation, a
_________________________ corporation ("AEC"), and the
Operator. All capitalized terms used but not otherwise
defined herein shall have the meanings ascribed to them in
the Agreement.
In accordance with and subject to the terms of the
Agreement and for and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged,
the Debtors and the Operator hereby agree:
(g) The Operator hereby assumes and agrees to pay,
discharge and perform (a) all the obligations and
liabilities under each EMS Contract and EMS Lease insofar as
they arise or accrue on or after the Effective Date or which
by the terms thereof are to be performed, observed, paid or
discharged after the Effective Date and in either case only
to the extent allowed by the Bankruptcy Court pursuant to
Subsection 6.1 of the Agreement; (b) all Allowed EMS Secured
Claims; and (c) all obligations and liabilities arising out
of events occurring after the Effective Date related to the
ownership of the EMS Assets after the Effective Date;
except to the extent any such duty or obligation accrues or
arises as a result of a breach by the Debtors of any
representation, warranty, covenant or agreement contained in
the Agreement or in the Plan.
(h) This Assumption will in no way expand or limit the
rights and obligations of the Operator, the Debtors or AEC
under the Agreement.
(i) This Assumption shall inure to the benefit of and
shall be binding upon the parties hereto, their successors,
transferees and assigns.
-44-
<PAGE>
IN WITNESS WHEREOF, the Operator and the Debtors have
caused this Assumption to be duly executed as of
_______________________, 1994.
WITNESSES DEBTORS:
Rocky Mountain
Helicopters, Inc.
RMH Aerologging, Inc.
Western Helicopters, Inc.
RMH Aeromedical, Inc.
By:
Name:
Title:
OPERATOR:
By:
Name:
Title:
-45-
<PAGE>
Exhibit G
to Asset Purchase Agreement
GENERAL RELEASE OF DEBTORS BY AEC OPERATOR
(TO COME)
-46-
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
The Board of Directors
Petroleum Helicopters, Inc.:
We consent to incorporation by reference in registration
statements No. 33-51605 on Form S-3 and No. 33-51617 on Form S-8
of Petroleum Helicopters, Inc. of our reports dated June 20,
1994, relating to the consolidated balance sheets of Petroleum
Helicopters, Inc. and subsidiaries as of April 30, 1994 and 1993,
and the related consolidated statements of earnings,
stockholders' equity, and cash flows for the years then ended,
and all related schedules, which reports appear in the April 30,
1994, annual report on Form 10-K of Petroleum Helicopters, Inc.
KPMG PEAT MARWICK
New Orleans, Louisiana
July 25, 1994
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration
Statement of Petroleum Helicopters, Inc. on Form S-8 (No. 33-
51617) and on Form S-3 (No. 33-51605) of our reports dated July
19, 1992 included in this Annual report on Form 10-K for the year
ended April 30, 1994.
DELOITTE & TOUCHE
New Orleans, Louisiana
July 25,1994
