United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: October 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-9827
PETROLEUM HELICOPTERS, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-0395707
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2121 Airline Highway, Suite 400
P. O. Box 578
Metairie, Louisiana 70001-5979
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (504) 828-3323
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
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the Issuer's classes
of common stock, as of the latest practicable date.
Class Outstanding at November 29, 1996
Voting Common Stock 2,799,761
Non-Voting Common Stock 2,278,093
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
In thousands October 31, April 30,
(Current period unaudited) 1996 1996 (1)
----------------- --------------
ASSETS
Current assets:
Cash and cash equivalents $ 3,009 $ 1,899
Accounts receivable - net of allowance 35,829 28,725
Refundable income taxes - 737
Inventory 29,737 25,947
Prepaid expenses 1,444 1,159
Notes receivable - investee companies 585 1,166
------- --------
Total current assets 70,604 59,633
------- --------
Notes receivable 358 358
Investments 5,753 4,890
Property and equipment:
Cost 238,335 212,801
Less accumulated depreciation (120,928) (116,469)
-------- --------
117,407 96,332
-------- --------
Other 215 102
-------- --------
$ 194,337 $ 161,315
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 20,643 $ 19,467
Accrued vacation pay 4,796 4,813
Income taxes payable 703 -
Current portion of long-term debt 8,839 8,810
-------- --------
Total current liabilities 34,981 33,090
-------- --------
Long-term debt 55,034 28,522
Deferred income taxes 14,966 14,966
Other long-term liabilities 3,698 3,336
Shareholders' equity:
Voting common stock 280 280
Non-voting common stock 228 227
Additional paid-in capital 10,402 10,220
Retained earnings 74,748 70,674
-------- --------
85,658 81,401
-------- --------
$ 194,337 $ 161,315
======== ========
(1)The balance sheet at April 30, 1996 is condensed from the audited
financial statements at that date. See accompanying notes to condensed
consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Three Months Six Months
In thousands, except per Ended October 31, Ended October 31,
share amounts 1996 1995 1996 1995
(unaudited) ---- ---- ---- ----
REVENUES:
Operating revenues $ 55,161 $ 47,901 $ 105,401 $ 94,280
Gain on equipment
disposals 46 417 50 748
Equity in net earnings 171 100 200 100
------- ------- ------- -------
55,378 48,418 105,651 95,128
------- ------- ------- -------
EXPENSES:
Direct expenses 47,086 41,495 89,489 82,567
Selling, general and
administrative expenses 3,425 2,907 6,567 5,364
Interest expense 1,152 758 2,019 1,535
------- ------- ------- -------
51,663 45,160 98,075 89,466
------- ------- ------- -------
Earnings before income taxes 3,715 3,258 7,576 5,662
Income taxes 1,430 1,324 3,013 2,337
------- ------- ------- -------
Net earnings $ 2,285 $ 1,934 $ 4,563 $ 3,325
======= ======= ======= =======
Net earnings per share $ 0.45 $ 0.39 $ 0.90 $ 0.66
======= ======= ======= =======
Weighted average common
shares outstanding 5,076 5,065 5,076 5,065
======= ======= ======= =======
Dividends declared per common
share $ 0.05 $ 0.05 $ 0.10 $ 0.07
======= ======= ======= =======
See accompanying notes to condensed consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
In thousands Six Months Ended October 31,
(unaudited) 1996 1995
---- ----
OPERATING ACTIVITIES:
Net earnings $ 4,563 $ 3,325
Depreciation 4,717 4,026
Gain on equipment disposals (50) (748)
Equity in net earnings
of investee companies (200) (100)
Changes in operating assets
and liabilities (7,239) 3,725
Other 108 118
------- -------
Net cash provided by operating
activities 1,899 10,346
------- -------
INVESTING ACTIVITIES:
Investments (657) (3,003)
Purchases of property and equipment (26,445) (7,142)
Proceeds from asset dispositions 280 1,413
------- -------
Net cash used in investing activities (26,822) (8,732)
------- -------
FINANCING ACTIVITIES:
Proceeds from long-term debt 30,925 7,000
Payments on long-term debt (4,384) (8,406)
Dividends paid (508) (355)
------- -------
Net cash provided (used) by
financing activities 26,033 (1,761)
------- -------
Increase (decrease) in cash
and cash equivalents 1,110 (147)
Cash and cash equivalents
at beginning of period 1,899 2,506
------- -------
Cash and cash equivalents
at end of period $ 3,009 $ 2,359
======= =======
See accompanying notes to condensed consolidated financial statements.
PETROLEUM HELICOPTERS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SIX MONTHS ENDED OCTOBER 31, 1996 AND 1995
(UNAUDITED)
A. These financial statements, except for the April 30, 1996 condensed
consolidated balance sheet, have been prepared without audit as
permitted by the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally
included in the financial statements have been condensed or omitted
pursuant to such rules and regulations; however, the Company believes
that this information is fairly presented. These condensed
consolidated financial statements should be read in conjunction
with the financial statements contained in the Company's Annual
Report on Form 10-K for the year ended April 30, 1996 and the
accompanying notes and Management's Discussion and Analysis of
Financial Condition and Results of Operations.
B. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements contain all adjustments, consisting
of only normal, recurring adjustments, necessary to fairly present
the financial results for the interim periods presented.
C. The Company's financial results, particularly as it relates to its
domestic oil and gas operations, are influenced by seasonal
fluctuations. During the winter, there are more days of adverse
weather conditions and fewer hours of daylight than the other months
of the year. Consequently, flight hours are generally lower during
the Company's third fiscal quarter than at other times of the year.
This produces a seasonal aspect to the Company's business and
typically results in reduced revenues from operations during those
months. Therefore, the results of operations for interim periods are
not necessarily indicative of the operating results that may be
expected for the full fiscal year.
D. Primary earnings per share are computed based on the weighted average
number of shares and dilutive equivalent shares of common stock
(stock options) outstanding during each year using the treasury stock
method.
E. Certain reclassifications have been made to the prior year's
financial statements in order to conform with the classifications
adopted for reporting in fiscal 1997.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Company is engaged in providing helicopter transportation and related
services. The predominant portion of its revenue is derived from
transporting offshore oil and gas production and drilling workers on a
worldwide basis. The Company also performs helicopter transportation
services for a variety of hospital and medical programs and aircraft
maintenance to outside parties.
RESULTS OF OPERATIONS
The following is a comparison of the second quarter and the first six months
of the fiscal year ending April 30, 1997 with the comparable period of the
prior fiscal year.
Second Quarter Fiscal 1997 to Fiscal 1996
Revenues
The Company generates revenues from both ongoing service contracts with
established customers and non-contract flights referred to as Specials.
Domestic Oil and Gas contracts are generally on a month to month basis and
consist of a fixed fee plus an hourly charge for actual flight time.
Specials are customer flights, primarily domestic oil and gas, provided on an
as needed basis that are not provided pursuant to ongoing contracts and which
generally carry higher rates.
International and aeromedical contracts also provide for fixed and hourly
charges, but are generally for longer terms. These contracts impose early
cancellation fees to encourage customers to fulfill the contract term and
cover the Company's additional upfront costs in the event of early
termination.
The following table summarizes and compares the Company's revenues by certain
market segments for the quarters ended October 31, 1996 and 1995:
(Thousands of dollars, except Revenues for the Quarter Ended October 31,
percentages and flight hours) ------------------------------------------
Increase
1996 1995 $ %
---- ---- - --
Domestic Oil and Gas $ 37,608 $ 34,594 $ 3,014 9
Aeromedical Services 7,479 6,581 898 14
International and Technical 10,074 6,726 3,348 50
Services ------ ------ ------
Total Operating Revenues $ 55,161 $ 47,901 $ 7,260 15
====== ====== ====== ===
Total Flight Hours 64,948 56,243 8,705 15
====== ====== ====== ===
Domestic Oil and Gas
Domestic Oil and Gas revenues increased $3 million, or 9%, to $ 37.6
million for the quarter.The Company attributes this increase to better
economic conditions in the Gulf of Mexico. As of October 31, 1996 the
Company had thirty more aircraft under contract than last year at
October 31, 1995. Domestic flight hours increased 10% to 48,072 hours from
43,724 hours, as compared to the quarter ended October 31, 1995.
Aeromedical Services
Aeromedical revenues increased to $ 7.5 million, or 14%, from $ 6.6
million. This increase is due primarily to the addition of two new programs
and the utilization of five additional aircraft bringing the total
Aeromedical contracts and aircraft to fourteen and thirty-eight, respectively.
EMS flight hours increased 12% to 3,739 hours from 3,344 hours.
International and Technical Services
International Oil and Gas revenues increased $ 2.6 million, or 68%, to
$ 6.4 million.International flight hours increased 60% to 7,951 hours from
4,984 hours. The increase in revenue and flight hours is due primarily to
the addition of two new contracts which utilize thirteen dedicated aircraft.
Technical Services and other revenues increased $ 0.8 million from
$ 2.9 million to $ 3.7 million.
Direct Expenses
Direct expenses increased $ 5.6 million, or 13%, to $ 47.1 million
primarily as a result of increased activity levels. Direct expenses did not
increase proportionately with the increase in revenues which improved the
Company's operating margin to 15% compared to 13% in the prior years
comparable quarter. Direct expenses that did not show a proportional increase
were primarily spare parts usage, depreciation expense, and helicopter rent.
Human Resources costs, including employee benefit costs, increased $ 2.7
million, or 16%.This increase is due primarily to the hiring of additional
personnel which were needed to support higher levels of flight activity.
Helicopter expenses increased $ 0.9 million, or 5%, to $ 20.4 million.
Fuel expense, spare parts usage, and depreciation expense increased $ 0.8
million, $ 0.2 million, and $ 0.2 million, respectively. These increases
were primarily the result of increased fuel costs, increased flight activity,
and the purchase of additional aircraft, respectively. The average fuel cost
per gallon increased by $ 0.18 which accounted for $ 0.5 million of the fuel
cost increase. These costs were offset by a decrease in insurance costs and
helicopter rent of $ 0.3 million and $ 0.2 million, respectively.
Other expenses and Technical Services cost of goods sold increased $ 1.1
million and $0.7 million, respectively.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased by $ 0.5 million
to $ 3.4 million for the quarter. This increase was primarily a result of
consultant fees related to information system upgrades.
First Six Months Fiscal 1997 to First Six Months Fiscal 1996
The following table summarizes and compares the Company's revenues by certain
market segments for the six months ended October 31, 1996 and 1995:
Revenues
(Thousands of dollars, except Revenues for the Six Months Ended
percentages and flight hours) October 31,
----------------------------------
Increase
1996 1995 $ %
---- ---- - --
Domestic Oil and Gas $ 73,110 $ 67,088 $ 6,022 9
Aeromedical Services 15,115 12,884 2,231 17
International and Technical 17,176 14,308 2,868 20
Services
------- ------- -------
Total Operating Revenues $ 105,401 $ 94,280 $ 11,121 12
======= ======= ======= ==
Total Flight Hours 127,824 111,757 16,067 14
======= ======= ======= ==
Domestic Oil and Gas
For the first six months Domestic Oil and Gas revenues increased 9%,
or $ 6 million, to $ 73 million due primarily to increased activity in the
Gulf of Mexico. The Company attributes the increase to better economic
conditions in the Gulf of Mexico; a result of rising crude oil and natural
gas prices and increased drilling activity. These factors produced a 10%
increase in Domestic Oil and Gas flight hours. The company maintained its
market share at 52% for the current and prior year period.
Aeromedical Services
Aeromedical revenues increased to $ 15.1 million, or 17%, from $ 12.9
million. This increase is due primarily to the addition of two new programs
and the utilization of five additional aircraft bringing the total
Aeromedical contracts and aircraft to fourteen and thirty-eight,
respectively. EMS flight hours increased 18% to 7,691 hours from 6,518
hours.
International and Technical Services
International Oil and Gas revenues increased substantially to $ 11.4
million, or 39%, due primarily to the addition of two new contracts which
utilize thirteen aircraft. Flight hours increased 42% to 14,650 hours.
Technical Services and other revenues decreased slightly to $ 5.8 million
from $ 6.1 million, or 5%.
Direct Expenses
Direct expenses increased $ 6.9 million, or 8%, to $ 89.5 million
primarily as a result of increased flight activity. Direct expenses did not
increase proportionately with the increase in revenues which improved the
Company's operating margin to 15% compared to 12% in the prior years
comparable period. Direct expenses that did not show a proportional
increase were primarily spare parts usage and helicopter rent.
Human resources costs increased $ 3.3 million from $ 33.2 million to
$ 36.5 million. This increase is due primarily to the hiring of additional
personnel which were needed to support higher levels of flight activity.
Helicopter expenses increased $ 1.2 million, or 3%, to $ 39.5 million from
$ 38.3 million. Fuel expense, depreciation expense, and spare parts usage
increased $ 1.2 million, $ 0.4 million, and $ 0.1 million, respectively.
Fuel costs increased due to a $ 0.15 average cost per gallon increase and an
increase in flight activity. Depreciation expense and spare parts usage
increased due to the purchase of additional aircraft and higher maintenance
requirements associated with increased flight activity, respectively.
These costs were partially offset by a decrease in insurance expense of $ 0.6
million and a decrease in helicopter rent of $ 0.2 million.
Other expenses and Technical Services cost of goods sold increased $ 1.9
million and $ 0.2 million, respectively.
Selling, General, and Administrative Expenses
Selling, general, and administrative expenses increased $ 1.2 million
from $ 5.4 million to $ 6.6 million. The increase was primarily a result of
consultant fees related to information systems upgrades.
LIQUIDITY AND CAPITAL RESOURCES
The following is comparison of the first six months of the fiscal year
ending April 30, 1997 with the period ending April 30, 1996.
The Company's cash position as of October 31, 1996 was $ 3 million
compared to $ 1.9 million at April 30, 1996, the Company's fiscal year end.
Working capital increased $ 9.1 million from $ 26.5 million at fiscal year
end to $ 35.6 million. The increase was primarily related to an increase in
accounts receivable of $ 7.1 million and an increase in inventory of $ 3.8
million, offset by an increase in accounts payable of $ 1.2 million.
Total long-term debt increased $ 26.5 million to $ 55 million. On
August 13, 1996 the Company and its principal lending group ratified a loan
agreement that amended and restated its original loan agreement dated January
1, 1986. The new agreement increased the Company's credit capacity to $ 65
million from $ 55 million. In addition, the new agreement lowers the
Company's effective interest rate on its outstanding debt under this
facility. The annual projected interest expense reduction for the fiscal
year ended April 30, 1997, using the total debt outstanding under this
facility at October 31, 1996, is $0.1 million. The Company's current debt
obligation totals $ 8.8 million, due in equal quarterly installments, which
the Company intends to pay with cash flow from operations. At
November 29, 1996, the Company had $ 10 million credit capacity available
under its revolving credit facility. The Company is in compliance with all
provisions of its loan agreement.
Cash generated from operating activities and financing activities was
$ 1.9 million and $ 26 million, respectively. The Company utilized its cash
flow from operating activities and financing activities to fund $ 26.8
million in investing activities. Investing activities primarily included
the purchase of twenty-two aircraft for $ 17.7 million, and $ 5.2 million
in aircraft capital improvements. The Company paid dividends totaling
$ 0.5 million or $ 0.10 per share.
The Company continues to review selected domestic bases for possible
fuel contamination resulting from routine flight operations, and to date the
company has identified known or suspected fuel contamination at five of its
bases. Although the full extent of contamination has not been determined,
based on this preliminary information, a provision of $ 1.7 million was made
for remediation costs through the fiscal year ended April 30, 1996 and an
additional $ 0.8 million provision was made in the first six months of fiscal
1997. The company will make additional provisions to the extent necessary as
reliable estimates of these costs become available.
In the first quarter of fiscal year 1996, the Company acquired a 49%
interest in Irish Helicopters Limited (IHL) based in Dublin Ireland. IHL
was recently notified that its principal service contract will not be renewed
and will therefore terminate on December 31, 1996. As a result, IHL is
reviewing a number of alternatives including the possibility that it will
not continue as a going concern. Based on the final determination of IHL's
plans, PHI will evaluate and adjust, as necessary its investment which
currently aggregates $3.7 million.
RESULTS AT A GLANCE (Unaudited)
The following table provides a summary of critical operating and financial
statistics (thousands of dollars, except per share amounts, financial ratios,
flight hours and general statistics):
Six Months Ended October 31,
Operations 1996 1995
---- ----
Operating revenues $ 105,401 $ 94,280
Net earnings 4,563 3,325
Net earnings per share .90 .66
Annualized return on
shareholders' equity 10.9% 8.6%
Total flight hours 127,824 111,757
Financial Summary October 31, 1996 April 30, 1996
----------------- ---------------
Net working capital $ 35,623 $ 26,543
Net book value of
property and equipment 117,407 96,332
Long-term debt 55,034 28,522
General Statistics
Helicopters Operated 294 266
Employees 1,757 1,677
PART II - OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 (i) Articles of Incorporation of the Company
(incorporated by reference to Exhibit No. 3.1(i) to PHI's
Report on Form 10-Q for the quarterly period ended
October 31, 1994).
(ii) By-laws of the Company (incorporated by reference to Exhibit
No. 3.1 (ii) to PHI's Report on Form 10-Q for the quarterly
period ended July 31, 1996).
10.1 Amended and restated Loan Agreement originally dated as of
January 31, 1986 amended and restated in its entirety as of
August 13, 1996.
10.2 Form of Restricted Stock Agreement under the Amended and
Restated Petroleum Helicopters, Inc. 1995 Incentive
Compensation Plan, as amended.
10.3 Non-qualified Stock Option Agreement under the amended and
Restated Petroleum Helicopters, Inc. 1995 Incentive
compensation Plan, as amended between PHI and
Carroll W. Suggs.
27 Financial Data Schedule.
(b) Reports on Form 8-K
No reports were filed on Form 8-K for the quarter ending
October 31, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Petroleum Helicopters, Inc.
December 2, 1996 By: /s/ Carroll W. Suggs
--------------------
Carroll W. Suggs
Chairman of the Board, President
and Chief Executive Officer
(duly authorized officer)
December 2 , 1996 By: /s/ John H. Untereker
--------------------
John H. Untereker
Vice President and
Chief Financial Officer
(principal financial
officer)
AMENDED AND RESTATED LOAN AGREEMENT
ORIGINALLY DATED AS OF JANUARY 31, 1986
AMENDED AND RESTATED IN ITS ENTIRETY AS OF AUGUST 13, 1996
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
<PAGE>
TABLE OF CONTENTS
Page
1. DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . . . . . . . . . .1
1.01 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . .1
1.02 Other Definitional Provisions. . . . . . . . . . . . . . . . . 21
2. THE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.01 Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.02 Borrowing Procedure. . . . . . . . . . . . . . . . . . . . . . 22
2.03 Rates of Interest. . . . . . . . . . . . . . . . . . . . . . . 23
2.04 Increased Costs - Reserve Requirements, Etc. . . . . . . . . . 24
2.05 Recapture. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
2.06 Commitment Fees; Agent's Fees. . . . . . . . . . . . . . . . . 25
2.07 Payments, Notice of Certain Repayments, and Computations . . . 26
2.08 Set-Off, Counterclaims and Taxes . . . . . . . . . . . . . . . 26
2.09 Termination or Reduction of Commitments. . . . . . . . . . . . 27
2.10 Application of Proceeds. . . . . . . . . . . . . . . . . . . . 27
2.11 Conversion and Continuation. . . . . . . . . . . . . . . . . . 27
2.12 Provisions Relating to LIBOR Loans . . . . . . . . . . . . . . 28
2.13 Permitted Letters of Credit. . . . . . . . . . . . . . . . . . 30
2.14 Issuance of Permitted Letters of Credit. . . . . . . . . . . . 31
2.15 Reimbursement Obligations; Duties of Issuing Bank. . . . . . . 32
2.16 Participations . . . . . . . . . . . . . . . . . . . . . . . . 32
2.17 Payment of Reimbursement Obligations . . . . . . . . . . . . . 34
2.18 Exoneration. . . . . . . . . . . . . . . . . . . . . . . . . . 34
2.19 Reporting Requirements . . . . . . . . . . . . . . . . . . . . 35
2.20 Compensation for Permitted Letters of Credit . . . . . . . . . 36
3. PREPAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.01 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . 37
3.02 Mandatory Prepayments. . . . . . . . . . . . . . . . . . . . . 38
4. PAYMENTS MADE ON BUSINESS DAYS. . . . . . . . . . . . . . . . . . . 38
5. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . 38
5.01 Organization and Qualification . . . . . . . . . . . . . . . . 38
5.02 Financial Statements . . . . . . . . . . . . . . . . . . . . . 39
5.03 Actions Pending. . . . . . . . . . . . . . . . . . . . . . . . 39
5.04 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . 39
5.05 Warranty of Title; Leases. . . . . . . . . . . . . . . . . . . 40
5.06 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . 40
5.07 Conflicting or Adverse Agreements or Restrictions. . . . . . . 40
5.08 Purpose of Borrowings. . . . . . . . . . . . . . . . . . . . . 41
5.09 Patents, Etc.. . . . . . . . . . . . . . . . . . . . . . . . . 41
5.10 Authorization, Validity, Etc.. . . . . . . . . . . . . . . . . 41
5.11 Franchises, Permits, Etc.. . . . . . . . . . . . . . . . . . . 41
5.12 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 41
5.13 Description of and Title to Helicopters and Engines. . . . . . 42
5.14 Registered Office of Company, Etc. . . . . . . . . . . . . . . 42
5.15 Title to Parts and Receivables . . . . . . . . . . . . . . . . 42
5.16 Section 1110 of Bankruptcy Reform Act of 1978. . . . . . . . . 42
5.17 Environmental Protection Statutes. . . . . . . . . . . . . . . 43
6. CONDITIONS OF LENDING . . . . . . . . . . . . . . . . . . . . . . . 44
6.01 Conditions Precedent to this Agreement . . . . . . . . . . . . 44
6.02 Conditions Precedent to each Borrowing . . . . . . . . . . . . 45
7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 46
7.01 Financial Statements and Information . . . . . . . . . . . . . 46
7.02 Books and Records. . . . . . . . . . . . . . . . . . . . . . . 49
7.03 General Insurance. . . . . . . . . . . . . . . . . . . . . . . 49
7.04 Maintenance of Property. . . . . . . . . . . . . . . . . . . . 49
7.05 Inspection of Property and Records . . . . . . . . . . . . . . 49
7.06 Existence, Laws, Obligations, etc. . . . . . . . . . . . . . . 49
7.07 Notification of Defaults . . . . . . . . . . . . . . . . . . . 50
7.08 Election and Incumbency Certificate. . . . . . . . . . . . . . 51
7.09 Registration, Maintenance, Operation, Foreign Operations and
Marking. . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.10 Insurance with Respect to the Aircraft . . . . . . . . . . . . 53
7.11 Recording, Etc.. . . . . . . . . . . . . . . . . . . . . . . . 55
7.12 Material Adverse Change. . . . . . . . . . . . . . . . . . . . 56
7.13 Further Assurances . . . . . . . . . . . . . . . . . . . . . . 56
7.14 Change of Control. . . . . . . . . . . . . . . . . . . . . . . 56
8. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 57
8.01 Current Ratio; Consolidated Tangible Net Worth . . . . . . . . 57
8.02 Restricted Payments. . . . . . . . . . . . . . . . . . . . . . 57
8.03 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . 58
8.04 Modified Cash Flow Coverage. . . . . . . . . . . . . . . . . . 58
8.05 Liens, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.06 Limitations on Indebtedness for Money Borrowed and
Long-Term Leases . . . . . . . . . . . . . . . . . . . . . . . 59
8.07 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.08 Nature of Business . . . . . . . . . . . . . . . . . . . . . . 60
8.09 Stock of Subsidiaries, Merger, Sale of Assets, Etc.. . . . . . 60
8.10 Change in Accounting Method. . . . . . . . . . . . . . . . . . 60
8.11 Sale of Receivables and Parts. . . . . . . . . . . . . . . . . 61
8.12 Tax Consolidation. . . . . . . . . . . . . . . . . . . . . . . 61
8.13 Chief Executive Office; Registered Office. . . . . . . . . . . 61
8.14 Transactions with Affiliates . . . . . . . . . . . . . . . . . 61
8.15 Leasing. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.16 Limitation on Amount of Loans and Permitted Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.17 Limitation on Prepayments on Funded Indebtedness . . . . . . . 61
8.18 Loans and Advances to Other Persons. . . . . . . . . . . . . . 61
8.19 Hazardous Materials. . . . . . . . . . . . . . . . . . . . . . 62
9. POSSESSION, USE, VALUATION AND RELEASE OF
COLLATERAL; APPLICATION OF PROCEEDS THEREOF;
ADDITIONS TO COLLATERAL . . . . . . . . . . . . . . . . . . . . . . 62
9.01 Possession and Use of Collateral . . . . . . . . . . . . . . . 62
9.02 Loss, Restriction, Requisition, Etc. . . . . . . . . . . . . . 63
9.03 Valuation of Aircraft, Etc.. . . . . . . . . . . . . . . . . . 67
9.04 Protection of Purchasers . . . . . . . . . . . . . . . . . . . 68
9.05 Other Additions to Collateral; Releases of Collateral. . . . . 69
10. EVENTS OF DEFAULT AND REMEDIES. . . . . . . . . . . . . . . . . . . 71
10.01 Events of Default . . . . . . . . . . . . . . . . . . . . 71
10.02 Acceleration of Maturity. . . . . . . . . . . . . . . . . 73
10.03 Right of Set-off. . . . . . . . . . . . . . . . . . . . . 74
10.04 Sharing of Payments, Etc. . . . . . . . . . . . . . . . . 74
10.05 Application of Proceeds of Collateral . . . . . . . . . . 75
11. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.01 Appointment of Agent; Authority . . . . . . . . . . . . . 76
11.02 Indemnification of Agent. . . . . . . . . . . . . . . . . 77
11.03 Liability of Agent. . . . . . . . . . . . . . . . . . . . 77
11.04 Independent Credit Decision . . . . . . . . . . . . . . . 78
11.05 Agent and Affiliates; Multiple Capacities . . . . . . . . 78
11.06 Successor Agent . . . . . . . . . . . . . . . . . . . . . 79
12. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
12.01 No Waiver; Remedies . . . . . . . . . . . . . . . . . . . 79
12.02 Amendments, Etc.. . . . . . . . . . . . . . . . . . . . . 79
12.03 Duty With Respect to Collateral . . . . . . . . . . . . . 80
12.04 Performance of Company's Covenants. . . . . . . . . . . . 80
12.05 Indemnities . . . . . . . . . . . . . . . . . . . . . . . 80
12.06 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 83
12.07 Binding Effect. . . . . . . . . . . . . . . . . . . . . . 84
12.08 Interest. . . . . . . . . . . . . . . . . . . . . . . . . 84
12.09 Survival of Representations and Warranties. . . . . . . . 85
12.10 Severability. . . . . . . . . . . . . . . . . . . . . . . 85
12.11 Descriptive Headings. . . . . . . . . . . . . . . . . . . 85
12.12 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 85
12.13 Governing Law . . . . . . . . . . . . . . . . . . . . . . 85
Schedule I Description of Aircraft
Schedule II Liens of the Company and the Subsidiaries
Existing on August 13, 1996
Schedule III Indebtedness of the Company and the
Subsidiaries Existing on August 13, 1996
Exhibit A Form of Note
Exhibit B Subsidiaries
Exhibit C Form of Borrowing Base Certificate
Exhibit D-1 Form of Opinion of Correro, Fishman, Haygood, Phelps, Weiss,
Walmsley & Casteix, L.L.P.
Exhibit D-2 Form of Opinion of Lytle, Soule & Curlee
Exhibit E Form of Officer's Certificate as to Release of Collateral
<PAGE>
AMENDED AND RESTATED LOAN AGREEMENT
THIS AMENDED AND RESTATED LOAN AGREEMENT, dated as of
August 13, 1996 (the "Effective Date"), by and among PETROLEUM
HELICOPTERS, INC., a Louisiana corporation (hereinafter referred to as the
"Company"), NATIONSBANK OF TEXAS, N.A. (formerly known as NCNB Texas
National Bank) ("NationsBank"), WHITNEY NATIONAL BANK (formerly known as
Whitney National Bank of New Orleans) ("Whitney"), and FIRST NATIONAL BANK
OF COMMERCE ("FNBC"), (hereinafter individually referred to as a "Bank"
and collectively referred to as the "Banks") and NationsBank, as agent for
the Banks under this Agreement (hereinafter in such capacity referred to
as the "Agent"),
W I T N E S S E T H:
WHEREAS, NationsBank, Whitney, FNBC, NationsBank as agent for
the foregoing, and the Company entered into an Amended and Restated Loan
Agreement dated as of July 9, 1993, as amended as of October 31, 1993,
April 15, 1994, July 31, 1994, October 25, 1994, February 27, 1995 and
October 31, 1995 (as so amended, the "Prior Amended and Restated Loan
Agreement"); and
WHEREAS, the Company has requested the Banks to amend certain
provisions of the Prior Amended and Restated Loan Agreement by, among
other things, (i) combining the credit facilities thereunder into a
revolving credit facility which will convert to a five-year term loan and
(ii) increasing the availability to the Company thereunder; and
WHEREAS, the Banks are willing to amend and restate the Prior
Amended and Restated Loan Agreement and to modify the indebtedness
outstanding thereunder as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements herein contained, the parties hereto agree
as follows:
1. DEFINITIONS AND ACCOUNTING TERMS.
1.01 Certain Definitions. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural form of the terms defined).
"1988 Loan Agreement" shall mean that certain Amended and
Restated Loan Agreement dated as of August 1, 1988, as amended as of
December 19, 1988, July 28, 1989, October 17, 1989, February 1, 1990,
June 1, 1990 and October 24, 1990 among NCNB Texas National Bank, Whitney,
FNBC, NCNB Texas National Bank as agent for the forgoing, and the Company.
"Affiliate" shall mean a person (other than the Company)
which directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the
Company or any Subsidiary, which beneficially owns or holds 5% or more of
the shares of any class of Voting Stock of the Company or any Subsidiary
or 5% or more of the shares of any class of Voting Stock of which is
beneficially owned or held by the Company or any Subsidiary. "Control"
shall mean the possession, direct or indirect, of the power to direct or
cause the direction of the management and policies of a person, whether
through the ownership of Voting Stock, by contract or otherwise.
"Agent" shall have the meaning given such term in the
introductory paragraph of this Agreement.
"Agreement" shall mean this Amended and Restated Loan
Agreement, as the same may be amended, supplemented, extended, restated or
otherwise modified from time to time.
"Aircraft" shall mean the helicopters described in Schedule I
of this Agreement, together with all aircraft engines, airframes,
propellers, rotors, appliances, instruments, mechanisms, equipment
(including communications equipment), parts, apparatus, appurtenances and
accessories (including without limitation property which consists of, or
which may from time to time hereafter consist of, one or more aircraft
engines of 750 or more rated takeoff horsepower or the equivalent of that
horsepower, and one or more propellers capable of absorbing 750 or more
rated takeoff shaft horsepower) now or from time to time hereafter
incorporated or installed in or attached or appertaining to one or more of
said helicopters, in each case so long as the same shall be subject or
required or intended to be subject to the Security Interest, including
without limitation those aircraft engines described in Schedule I of this
Agreement, and shall include any helicopters or other Aviation Units from
time to time hereafter subject or required or intended to be subject to
the Security Interest, together with all aircraft engines, airframes,
propellers, rotors, appliances, instruments, mechanisms, equipment
(including communications equipment), parts, apparatus, appurtenances and
accessories (including property which consists of, or which may from time
to time hereafter consist of, one or more aircraft engines of 750 or more
rated takeoff horsepower or the equivalent of that horsepower, and one or
more propellers capable of absorbing 750 or more rated takeoff shaft
horsepower) from time to time incorporated or installed in or attached or
appertaining to any thereof and subject or required or intended to be
subject to the Security Interest.
"Aircraft Registry" shall mean the Federal Aviation
Administration Aircraft Registry located in Oklahoma City, Oklahoma, or
such different office or location of said Registry, or the office of any
successor to said Registry, as may be duly designated by the Secretary of
Transportation (or his successor or designee) for receipt and recording of
"conveyances" (as defined in the Federal Aviation Act) to preserve and
protect their validity as against, and to publish notice to, third
parties.
"Applicable Prime Rate" shall mean in respect of any Prime
Rate Borrowing a fluctuating rate per annum (based on a year of 365 or 366
days, as the case may be, and actual days elapsed) equal to the sum of the
Prime Rate plus (i) 0.50% per annum for so long as the Leverage Ratio is
greater than 4.50, or (ii) 0% for so long as the Leverage Ratio is less
than or equal to 4.50.
"Appraised Value" shall mean (i) with respect to any of the
Aircraft that shall at the time be new or not more than one year old, the
purchase price thereof, as certified by the Company in Officers'
Certificates delivered to the Agent and the Banks at the times and under
the circumstances contemplated by this Agreement and (ii) with respect to
any of the Aircraft that shall at the time be more than one year old, the
purchase price thereof that would be agreed to in an arm's-length
transaction between an informed and willing buyer-user (other than a user
currently in possession or a used equipment or scrap dealer) and an
informed and willing seller under no compulsion to sell or lease (the
costs of removal from the location of current use being deductions from
such value), as specified by the Independent Appraiser (after consultation
with the Company and after such physical inspection, if any, of such
Aircraft as the Independent Appraiser shall deem to be necessary or
appropriate) in written opinions addressed and delivered to the Agent and
the Banks at the times and under the circumstances contemplated by this
Agreement. For the purpose of determining whether clause (i) or (ii) of
the first sentence of this definition of "Appraised Value" shall apply to
any particular Aircraft, the Aircraft in question shall be deemed to be
one year old upon the expiration of one year from the delivery by the
original manufacturer to, and acceptance by, the first user thereof (or
the person anticipated to be the first user thereof), whether or not the
Company shall have been such first user or other person. For the purpose
of determining the "Appraised Value" of any Aircraft that shall be new or
not more than one year old, the term "purchase price" with respect thereto
shall mean the actual purchase price thereof that shall appear on the
invoice issued by the manufacturer of said Aircraft and by the
manufacturer or distributor of any instruments or other equipment added
thereto after the date of the invoice issued by the manufacturer of said
Aircraft (excluding, however, any freight or transportation charges,
erection costs or other charges or costs that do not reflect the price of
materials and components used in the manufacture of said Aircraft or
instruments or equipment, whether or not such charges or costs shall be
separately stated on the invoice).
"Appropriate Actions" shall mean, with respect to the
inclusion of an Aviation Unit in the Security Interest, (a) filing or
causing to be filed a proper bill or bills of sale covering said Aviation
Unit (on FAA Form 8050-2, "Aircraft Bill of Sale", or on any other
appropriate form) in the Aircraft Registry and in any other public office
necessary for full compliance by the Company with the terms hereof; (b)
causing said Aviation Unit to be free and clear of all Liens (other than
Permitted Liens), making the appropriate filings, registrations and
recordings (including the filing of FAA Form 8050-41 and any appropriate
termination statements or releases) necessary to release any existing
Liens of record and otherwise causing said Aviation Unit to be in full
compliance with all the terms and provisions of this Agreement with the
same effect as if the same were a portion of the original Aircraft
described in this Agreement; (c) executing and delivering any
registration, recordation or filing documents and any other appropriate
security documentation as the Agent or any Bank through the Agent may
request for the purpose of describing said Aviation Unit (including all
aircraft engines, airframes, propellers, rotors, appliances, instruments,
mechanisms, equipment (including communications equipment), parts,
apparatus, appurtenances and accessories) in reasonable detail, and
expressly and specifically subjecting the same to the Security Interest;
(d) delivering or causing to be delivered to the Agent and each Bank an
opinion of counsel (dated the date of the filing for recordation in the
Aircraft Registry of the security documentation referred to in clause (c)
above) to the effect that the Company has good and marketable title to
said Aviation Unit free of all Liens (other than Permitted Liens) and that
said Aviation Unit has been duly subjected to the Security Interest and
constitutes a portion of the Collateral; and (e) delivering to the Agent
and each Bank an Officers' Certificate certifying that the Company is in
full compliance with all provisions of this Agreement with respect to the
same.
"Aviation Unit" shall mean any engine-powered device that is
used or intended to be used for flight in the air and shall include within
each such device all aircraft engines, airframes, propellers, rotors,
appliances, instruments, mechanisms, equipment (including without
limitation communications equipment), parts, apparatus, appurtenances and
accessories from time to time incorporated or installed therein or
attached or appertaining thereto.
"Bank" and "Banks" shall have the meanings given such terms in
the introductory paragraph of this Agreement.
"Borrowing" shall mean a borrowing consisting of a
simultaneous Loan from each Bank.
"Borrowing Base" shall mean at any time an amount equal to
(i) 80% of the amount of Eligible Receivables plus (ii) 50% of the
Appraised Value of the Aircraft, plus (iii) the Value of Pledged
Investment Securities, in which each of the Banks shall have a valid equal
and ratable perfected first priority Security Interest, pursuant to the
Security Documents.
"Borrowing Base Certificate" shall mean an Officers'
Certificate in the form of Exhibit C attached hereto and made a part
hereof, with the blanks appropriately completed.
"Borrowing Date" shall mean, with respect to a Borrowing, the
date designated in a Notice of Borrowing with respect thereto upon which
the proceeds of such Borrowing are to be paid or delivered to the Company.
"Business Day" shall mean (a) for all purposes other than as
provided in clause (b) below, any day other than a Saturday, Sunday or
other day on which banking institutions in Dallas, Texas or New Orleans,
Louisiana are permitted or required by law or executive order to be closed
and (b) with respect to all notices and determinations in connection with
any borrowings consisting of payments of principal and interest in respect
of LIBOR Loans, any day that is a Business Day described in clause (a)
above and that is also a day for trading between prime banks in the London
interbank market.
"Capital Lease" shall mean with respect to any person any
lease which should, in accordance with generally accepted accounting
principles, be required to be capitalized on a balance sheet of the lessee
or, if not so capitalized, for which the amounts of the asset and
liability (had such lease been capitalized) be required to be disclosed in
a note to such a balance sheet.
"CERCLA" shall have the meaning given in the definition of
"Environmental Protection Statute."
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and all regulations promulgated thereunder.
"Collateral" shall mean (a) the Aircraft, including all
substitutions, renewals and replacements of any portion thereof and all
additions, improvements, accessions and accumulations to any portion
thereof, whether now owned or held or hereafter acquired or now or from
time to time hereinafter incorporated or installed in or attached or
appertaining to any portion of the Aircraft (whether or not the same shall
be or remain incorporated or installed in or attached to any portion of
such property), whether now owned or held or hereafter acquired, (b) the
Receivables of the Company, (c) the Parts, (d) all Pledged Investment
Securities, (e) all estates, rights, power and privileges of the Company,
whether now held or enjoyed or hereafter acquired, in respect of any of
the foregoing and (f) any and all proceeds of the conversion, voluntary or
involuntary, of any portion of the property now or from time to time
hereafter subject or required or intended to be subject to the Security
Interest, into cash, negotiable instruments or other instruments for the
payment of money, chattel paper, security agreements, documents,
liquidated claims or any other form of proceeds, including proceeds of
insurance and of any governmental takings, subject, however, to the
further provisions of this Agreement and the Security Documents (it being
understood and agreed that the inclusion of proceeds in the Collateral
does not authorize the Company to sell, dispose of or otherwise use the
Collateral in a manner that is not expressly permitted by this Agreement
or the Security Documents).
"Collateral Chattel Mortgage (Parts)" shall mean that certain
Act of Collateral Chattel Mortgage (Parts) dated April 16, 1986 by the
Company affecting certain aircraft parts of the Company and recorded in
the chattel mortgage records of Lafayette Parish, Louisiana under Entry
No. 300228, in the chattel mortgage records of Jefferson Parish, Louisiana
under Entry No. 108980, in the chattel mortgage records of Cameron Parish,
Louisiana under Entry No. 199328, in the chattel mortgage records of
Vermilion Parish, Louisiana under Entry No. 861783, in the chattel
mortgage records of St. Mary Parish, Louisiana under Entry No. 276914, in
the chattel mortgage records of Terrebonne Parish, Louisiana under Entry
No. 779432, in the chattel mortgage records of Plaquemines Parish,
Louisiana in Chattel Mortgage Book 42, folio 2001, and in the chattel
mortgage records of Lafourche Parish, Louisiana under Entry No. 646530,
together with any and all supplements, modifications or amendments thereto
or restatements thereof.
"Collateral Mortgage Note (Parts)" shall mean that certain
Collateral Mortgage Note (Parts) made by the Company on April 16, 1986 in
the principal sum of $30,000,000.00, payable to Bearer, due on demand, and
secured by and paraphed for identification with the Collateral Chattel
Mortgage (Parts).
"Commitment" shall mean for each Bank, that Bank's Ratable
Share of $65,000,000, as such amount is reduced from time to time pursuant
to Section 2.9, less the amount of such Bank's Ratable Share of the
Permitted Letter of Credit Amount at such time.
"Commitment Fee" means a fee payable by the Company pursuant
to Subsection 2.06(a) in the amount of (i) 0.50% per annum for so long as
the Leverage Ratio is greater than 4.50, or (ii) 0.375% for so long as the
Leverage Ratio is less than or equal to 4.50 (in each case based on a year
of 365 or 366 days, as the case may be, and actual days elapsed) on the
daily average unused amounts of the Commitments.
"Company" shall have the meaning given such term in the
introductory paragraph of this Agreement.
"Consolidated Current Assets" shall mean, as of the date of
determination thereof, the following assets of the Company and
Consolidated Subsidiaries, after eliminating all offsetting debits and
credits among the Company and Consolidated Subsidiaries and all other
items to be eliminated in the process of consolidation effected in
accordance with generally accepted accounting principles consistently
applied and after deducting from the value thereof appropriate reserves
against any thereof required to be created or maintained in accordance
with generally accepted accounting principles consistently applied: (a)
cash and cash items in any bank or trust company, on hand and in transit,
(b) spare parts and supplies (whether or not held for sale to customers in
the ordinary course of business), stated at the lower of average cost or
fair market value, (c) direct obligations of the United States Government
having a final maturity of not more than one year from the date of
original issuance thereof, stated at the lower of cost or current market
value, (d) commercial paper rated "Prime-1" by Moody's Investors Service,
Inc. or "A-1" by Standard & Poor's Ratings Group (or comparably rated by
either such organization or any successor thereto if the rating system of
such organization is changed or there is such a successor) and having a
final maturity of not more than nine months from the date of original
issuance thereof, stated at the lower of cost or current market value, (e)
time deposits in any bank or trust company organized under the laws of the
United States of America, any state thereof or the District of Columbia
(provided, however, that such bank or trust company is a member of the
Federal Reserve System and has a combined capital, surplus and undivided
profits in excess of $80,000,000), stated at the lower of cost or current
market value, (f) customers' accounts, bills and notes receivable, not
more than 90 days overdue, (g) such other Tangible Assets (but excluding
investments other than those included in Consolidated Current Assets by
clauses (c), (d) and (e) above and excluding real property in the process
of development or sale), and such insurance proceeds receivable within one
year after the date of determination of "Consolidated Current Assets", as,
in accordance with generally accepted accounting principles consistently
applied, would be included in current assets and (h) prepaid interest,
rents, insurance premiums and taxes which, in accordance with generally
accepted accounting principles consistently applied, would be included in
current assets.
"Consolidated Current Liabilities" shall mean, as of the date
of determination thereof, the following obligations of the Company and
Consolidated Subsidiaries, after eliminating all offsetting debits and
credits among the Company and Consolidated Subsidiaries and all other
items to be eliminated in the process of consolidation effected in
accordance with generally accepted accounting principles consistently
applied: (a) all Indebtedness thereof payable on demand or maturing
within one year from the date of determination and not renewable or
extendible at the option of the obligor, under a revolving credit
agreement or otherwise, to a date more than one year from the date of
creation thereof, (b) final maturities, prepayments, sinking fund payments
and other payments required to be made within one year from the date of
determination in respect of any Indebtedness thereof (including the
Notes), (c) accounts, bills and notes payable and (d) all other items
(including taxes accrued as estimated) which, in accordance with generally
accepted accounting principles consistently applied, would be included in
current liabilities.
"Consolidated Current Ratio" shall mean, for any accounting
period, the ratio obtained by dividing Consolidated Current Assets by
Consolidated Current Liabilities.
"Consolidated Indebtedness" shall mean, as of the date of
determination thereof, Indebtedness of the Company and Consolidated
Subsidiaries, after eliminating all offsetting debits and credits among
the Company and Consolidated Subsidiaries and all other items to be
eliminated in the process of consolidation effected in accordance with
generally accepted accounting principles consistently applied.
"Consolidated Interest Charges" shall mean, for any accounting
period, the total of interest and amortization of debt discount expense
and premium of all Consolidated Indebtedness, excluding, however,
obligations of the Company and the Consolidated Subsidiaries under all
Operating Leases.
"Consolidated Net Income" and "Consolidated Net Loss" shall
mean, for any accounting period, the consolidated net income or loss, as
the case may be, of the Company and Consolidated Subsidiaries determined
in accordance with generally accepted accounting principles consistently
applied, but in any event excluding (a) in calculating "Consolidated Net
Income", the following items:
(i) the earnings of any person (other than a Consolidated
Subsidiary) predecessor to the Company or any Consolidated
Subsidiary through merger, consolidation, sale of assets or
otherwise during the period prior to the date of determination, or
the earnings of any Consolidated Subsidiary prior to the date it
shall have become a Consolidated Subsidiary;
(ii) all items properly classified as extraordinary in
accordance with generally accepted accounting principles (provided,
however, that, irrespective of the classification of earnings or
losses derived from resales of helicopters by the Company or any
Consolidated Subsidiaries, such earnings or losses shall not be
considered as extraordinary for the purposes of this definition);
(iii) any equity in the earnings of any person other than a
Consolidated Subsidiary, except to the extent of any dividend
actually received by the Company from such person in cash or in
other tangible property (valued at the fair market value thereof at
the time of receipt thereof by the Company); and
(iv) any fees payable by the Company under Section 2.06(a);
and
(b) in calculating "Consolidated Net Loss", losses of any person other
than the Company or a Consolidated Subsidiary.
"Consolidated Subsidiary" or "Consolidated Subsidiaries" shall
mean a Subsidiary or Subsidiaries, respectively, whose financial
statements are prepared on a consolidated basis with those of the Company
in accordance with generally accepted accounting principles.
"Consolidated Tangible Net Worth" shall mean, as of the date
of determination thereof, the sum of (a) the par value (or value stated on
the books of the Company) of all classes of the capital stock of the
Company and (b) the amount of the consolidated surplus, whether capital or
earned, of the Company and Consolidated Subsidiaries less all deferred
charges, patents, trade names, copyrights, licenses, franchises, goodwill,
acquisition expenses, unamortized debt discount and expense and other
intangible items, all determined in accordance with generally accepted
accounting principles consistently applied.
"Conversion Date" shall mean October 31, 1997.
"Default" shall mean any of the events specified in
Subsections 10.01(a) through 10.01(m), whether or not any requirement in
connection with such event for the giving of notice, or the lapse of time,
or the happening of any further condition, event or act has been
satisfied.
"Direct Expenses" shall mean all expenses incurred by the
Company and the Consolidated Subsidiaries in the operation of their
respective helicopter fleets determined in accordance with generally
accepted accounting principles consistently applied excluding (a)
depreciation and amortization, (b) lease rental expense arising under
Operating Leases, (c) general and administrative expenses, (d) interest
expense and (e) profit sharing plan contributions.
"Dollars" and "$" shall mean lawful currency of the United
States of America.
"Effective Date" shall have the meaning given such term in the
introductory paragraph of this Agreement.
"Eligible Receivables" shall mean Receivables of the Company
carried on its books of account which, on the date as of which the
determination is being made (a) arose in the ordinary course of business,
(b) arose from the sale or lease of goods or performance of services by
the Company, (c) are evidenced by an "Invoice" (i.e., an invoice, shipping
order or similar writing) dated no later than the last day of the calendar
month in which the sale or lease of goods or performance of services
occurred, and which Invoice provides for payment within 30 days or less
from the date of such Invoice, (d) are not subject to set-off,
counterclaim or defense, (e) are not more than 90 days old, (f) are
payable by persons other than any person who is an officer or a director
of the Company or an officer or director of an Affiliate, (g) are not
payable by the United States of America or any agency or department
thereof, and (h) does not by its terms prohibit the assignment thereof or
require the consent of the obligor thereon to any assignment thereof;
provided, however, Receivables of the Company due from persons who are
Affiliates or persons located outside the United States shall not
constitute in the aggregate more than 10% of the Eligible Receivables; and
further, provided, that if any Receivable of the Company is more than 90
days old, upon receipt by the Company of a notice from the Agent, acting
at the request of the Majority Banks, specifying that no Receivables of
the Company due from the obligor of such Receivable be included as an
Eligible Receivable, no such Receivable of the Company shall be included
as an Eligible Receivable unless the prior written consent of the Majority
Banks is obtained. For purposes of this Agreement, a Receivable is 90
days old on the 90th day after the date of the Invoice evidencing such
Receivable, and the age of any other Receivable is likewise the number of
days since the date of its Invoice.
"Environmental Protection Statute" means (a) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (as amended
by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.A.
S 9601 et seq.), as amended from time to time, and any and all rules and
regulations issued or promulgated thereunder ("CERCLA"); (b) the Resource
Conservation and Recovery Act, (as amended by the Hazardous and Solid
Waste Amendment of 1984, 42 U.S.C.A. S 6901 et seq.), as amended from time
to time, and any and all rules and regulations promulgated thereunder
("RCRA"); (c) the Clean Air Act, 42 U.S.C.A. S 7401 et seq., as amended
from time to time, and any and all rules and regulations promulgated
thereunder; (d) the Clean Water Act of 1977, 33 U.S.C.A. S 1251 et seq.,
as amended from time to time, and any and all rules and regulations
promulgated thereunder; (e) the Toxic Substances Control Act, 15 U.S.C.A.
S 2601 et seq., as amended from time to time, and any and all rules and
regulations promulgated thereunder; or (f) any other federal or state law,
statute, rule, or regulation enacted in connection with or relating to the
protection or regulation of the environment (including, without
limitation, those laws, statutes, rules, and regulations regulating the
disposal, removal, production, storing, refining, handling, transferring,
processing, or transporting of Hazardous Materials) and any rules and
regulations issued or promulgated in connection with any of the foregoing
by any governmental authority, and "Environmental Protection Statutes"
means each of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"ERISA Affiliate" shall mean any Subsidiary or trade or
business (whether or not incorporated) which is a member of a group of
which the Company is a member and which is under common control within the
meaning of Section 414 of the Code (such rules and regulations shall also
be deemed to apply to foreign corporations and entities).
"Event of Default" shall mean any of the events specified in
Subsections 10.01(a) through 10.01(m), provided that there has been
satisfied any requirement in connection with such event for the giving of
notice, or the lapse of time, or the happening of any further condition,
event or act.
"Event of Loss" shall mean any of the following events: (a)
the total destruction of any helicopter or other Aviation Unit
constituting a portion of the Aircraft, or damage thereto to an extent
which, in the opinion of the Company (as evidenced by an Officers'
Certificate to such effect delivered to the Agent with a copy to each
Bank, together with, if requested by any Bank, a certificate of the
Independent Appraiser addressed and delivered to the Agent with a copy to
each Bank), shall render repair impracticable or uneconomical; or (b) the
condemnation, confiscation, theft or seizure of, or the requisition of
title to or use of, any such helicopter or other Aviation Unit
constituting a portion of the Aircraft, or any portion thereof, as shall
result in the loss of use or possession of such helicopter or other
Aviation Unit by the Company for a period of 90 days or longer.
"Federal Aviation Act" shall mean the Federal Aviation Act of
1958, as amended and in effect at the particular time, or comparable
provisions of any successor statute.
"FNBC" shall have the meaning given such term in the
introductory paragraph of this Agreement.
"Funded Indebtedness" shall mean, with respect to any person,
all Indebtedness for Money Borrowed of such person which has a final
maturity (or, pursuant to the terms of the agreement under which it has
been issued, an anticipated maturity) more than one year after the date of
creation thereof (or which is renewable or extendible at the option of the
obligor for more than one year from the date of creation thereof), and
shall include the obligation of such person to make payments in respect
thereof required to be made less than one year after the date of creation
thereof, notwithstanding the fact that the obligation of such person to
make such payments may at the time also be included in current liabilities
under generally accepted accounting principles.
"General Assignment of Accounts Receivable" shall mean that
certain General Assignment of Accounts Receivable dated April 16, 1986,
executed by the Company as Assignor, which constituted a pledge and
assignment by the Company to the Original Banks of all of the Company's
Receivables then existing and all future anticipated Receivables, together
with all proceeds thereof, together with any and all supplements,
modifications or amendments thereto or restatements thereof.
"Guaranty" shall mean, with respect to any person, without
duplication for such person, all obligations of such person guaranteeing
or in effect guaranteeing any Indebtedness, dividend or other obligation
of any other person (the "primary obligor") in any manner, whether
directly or indirectly, including obligations incurred through an
agreement, contingent or otherwise, by such person (a) to purchase such
Indebtedness or obligation or any property or assets constituting security
therefor, (b) to advance or supply funds (i) for the purchase or payment
of such Indebtedness or obligation or (ii) to maintain working capital or
equity capital, or otherwise to advance or make available funds for the
purchase or payment of such Indebtedness or obligation, (c) to purchase
property, securities or services primarily for the purpose of assuring the
owner of such Indebtedness or obligation of the ability of the primary
obligor to make payment of such Indebtedness or obligation or (d)
otherwise to assure the owner of such Indebtedness or obligation against
loss in respect thereof; provided, however, that, with respect to the
Company, the term "Guaranty" shall not be construed to include obligations
of the Company under provisions of any flight service agreement between
the Company and a customer whereby the Company indemnifies such customer
against tort claims for injury to persons or loss of property arising
thereunder, or against contract claims where the maximum amount of the
Company's liability is not indicated (whether directly or by implication).
"Hazardous Materials" shall mean (a) any "hazardous waste" as
defined by RCRA, (b) any "hazardous substance" as defined by CERCLA,
(c) asbestos, (d) polychlorinated biphenyls, (e) any substance the
presence of which on any of the Company's or any of the Subsidiaries'
properties is prohibited by any government, board, court, agency, or
political subdivision thereof, and (f) any other substance which requires
special handling pursuant to any Environmental Protection Statute.
"Hibernia" shall mean Hibernia National Bank (formerly known
as Hibernia National Bank in New Orleans).
"Highest Lawful Rate" shall mean, as of a particular date and
with respect to any Bank, the maximum nonusurious interest rate that may
under applicable Federal and Texas law then be contracted for, charged,
received, taken or reserved by such Bank in connection with the
Borrowings.
"Indebtedness" shall mean, with respect to any person, all
items (other than capital stock and surplus) which, in accordance with
generally accepted accounting principles consistently applied, would be
shown on the liability side of a balance sheet of such person as of the
date on which Indebtedness is to be determined. Except as otherwise
agreed in writing by the Majority Banks, "Indebtedness" shall also mean,
whether or not so reflected, (a) all debt, obligations and liabilities
secured by any Lien existing on property owned by such person if such
property shall be subject to such Lien, whether or not the debt,
obligations or liabilities secured thereby shall have been assumed; (b)
all obligations of such person under any lease which is a Capital Lease or
any lease which, whether or not such lease is a Capital Lease, contains
terms that require the payment of lease rentals whether or not the
property leased thereunder shall exist or can be used for the purpose for
which it shall have been leased, or provide for a termination payment
calculated to be sufficient to retire any debt, obligations or liabilities
secured by a Lien on such lease or on the property leased thereunder; (c)
all guaranties by such person; (d) all obligations of such person to
purchase any materials, supplies or other property, or to obtain the
services of any other person, if the relevant contract or other related
document requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether or not
delivery of such materials, supplies or other property is ever made or
tendered or such services are ever performed or tendered; and (e) all
obligations of such person (contingent or direct) in respect of letters of
credit issued for the account of such person or other extensions of credit
to such person.
"Indebtedness for Money Borrowed" shall mean, with respect to
any person, all Indebtedness of such person (a) in respect of money
borrowed or evidenced by a promissory note, debenture or other like
written obligation to pay money, (b) in respect of letters of credit
issued for the account of such person or other extensions of credit to
such person, (c) in respect of obligations under any lease of Aviation
Units which is a Capital Lease or any lease of Aviation Units which,
whether or not such lease is a Capital Lease, contains terms that require
the payment of lease rentals whether or not the property leased thereunder
shall exist or can be used for the purpose for which it shall have been
leased, or provide for a termination payment calculated to be sufficient
to retire any debt, obligations or liabilities secured by a Lien on such
lease or on the property leased thereunder, (d) representing all or part
of the purchase price of any assets acquired by such person, other than
any such purchase price payable to a trade creditor in the ordinary course
of business the full payment of which may be deferred for a period
customary in the particular trade (but in any event not exceeding 60 days)
and which is not rendered delinquent by nonpayment before the expiration
of such period and (e) in respect of obligations of such person to
purchase any Aviation Units if the relevant contract or other related
document requires that payment for such Aviation Units shall be made
regardless of whether or not delivery of such Aviation Units is ever made
or tendered.
"Independent Appraiser" shall mean (a) Air Associates, Inc.,
so long as the same shall not be an Affiliate or have as an officer or
director any Affiliate, an officer or director of the Company or an
officer, director or partner of any Affiliate, or (b) such other person
who or which is neither an Affiliate, an officer or director of the
Company nor an officer, director or partner of any Affiliate and which, if
other than an individual, does not have as an officer, director or partner
any Affiliate, an officer or director of the Company or an officer,
director or partner of any Affiliate, if the same shall have been selected
by the Company and shall be acceptable to the Majority Banks; provided,
however, that the Majority Banks may for cause shown at any time and from
time to time remove any person serving as the Independent Appraiser
hereunder by an instrument in writing delivered to the Company, such
removal to become effective at the time (which shall be after the date of
delivery of such instrument to the Company) designated in such instrument.
"Interest Payment Date" shall have the meaning set forth in
Section 2.03.
"Investment Securities" shall mean direct certificated
obligations of the United States Government maturing within three months
of issue, or such other certificated obligations of, or guaranteed by, the
United States Government which are acceptable to the Banks.
"Issuing Bank" means NationsBank, in its capacity as issuer of
the Permitted Letters of Credit.
"Letter of Credit Reimbursement Agreement" means, with respect
to a Permitted Letter of Credit, such form of application therefor and
form of reimbursement agreement therefor (whether in a single or several
documents, taken together) as the Issuing Bank may employ in the ordinary
course of business for its own account, whether or not providing for
collateral security, with such modifications thereto as may be agreed upon
by such Issuing Bank and the account party and as are not materially
adverse to the interests of any Bank or the Agent; provided, however, in
the event of any conflict between the terms of any Letter of Credit
Reimbursement Agreement and this Agreement, the terms of this Agreement
shall control.
"Leverage Ratio" means, for any period of four consecutive
fiscal quarters of the Company, a quotient equal to (a) the sum of (i)
Funded Debt of the Company and the Consolidated Subsidiaries as of the
last day of such period, and (ii) the product of (A) eight and (B) Rent
Expense for such period, divided by (b) the greater of $1 or the sum of
(i) Consolidated Net Income (or Consolidated Net Loss, as the case may be)
for such period, and, (ii) to the extent actually deducted in computing
such Consolidated Net Income (or Consolidated Net Loss), (A) Consolidated
Interest Charges for such period, (B) depreciation and amortization
expense of the Company and the Consolidated Subsidiaries for such period,
(C) tax expense of the Company and the Consolidated Subsidiaries for such
period, and (D) Rent Expense for such period.
"LIBOR" means, with respect to any Rate Period relating to a
LIBOR Loan, a per annum rate equal to the annual rate of interest
determined by the Agent two Business Days prior to the first day of such
Rate Period to be the annual rate of interest at which deposits in Dollars
and in an amount substantially equal to such LIBOR Loan are offered by the
principal office of the Agent to prime banks in the London interbank
market for such Rate Period.
"LIBOR Interest Payment Date" shall have the meaning set forth
in Section 2.03.
"LIBOR Loan" means the outstanding principal amount of any
Loan that, during the Rate Period relating thereto, bears interest at the
lesser of (i) the LIBOR Rate applicable during such Rate Period, and (ii)
the Highest Lawful Rate in effect from time to time during such Rate
Period.
"LIBOR Margin" means a rate per annum equal to (i) 2.00% per
annum for so long as the Leverage Ratio is greater than 4.50, (ii) 1.50%
per annum for so long as the Leverage Ratio is greater than 4.25 but less
than or equal to 4.50, (iii) 1.375% per annum for so long as the Leverage
Ratio is greater than 4.00 but less than or equal to 4.25, or (iv) 1.25%
per annum for so long as the Leverage Ratio is less than or equal to 4.00.
"LIBOR Rate" means, with respect to any Rate Period, a per
annum rate equal to the sum of (i) (x) LIBOR for such Rate Period divided
by (y) 100% minus the LIBOR Reserve Percentage, and (ii) the LIBOR Margin
applicable two Business Days prior to the first day of such Rate Period.
"LIBOR Reserve Percentage" means, with respect to any Rate
Period, the percentage determined by the Agent to be the reserve
requirement in effect for the Agent from time to time during such Rate
Period, including any basic, supplemental and emergency reserves
(expressed as a percentage) applicable to a member bank of the Federal
Reserve System in respect of "eurocurrency liabilities" under Regulation D
of the Board of Governors of the Federal Reserve System.
"Lien" shall mean any interest in property securing an
obligation owed to, or a claim by, any person other than the owner of the
property, whether such interest shall be based on the common law, statute
or contract, and including the security interest lien arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt, or from
a lease, consignment or bailment for security purposes. "Lien" shall also
include reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting property. For the purposes of this Agreement, the
Company or any Subsidiary, as the case may be, shall be deemed to be the
owner of any property which it shall have acquired or shall hold subject
to a conditional sale agreement or other arrangement pursuant to which
title to the property shall have been retained by or vested in some other
person for security purposes.
"Loan" shall have the meaning given such term in Subsection
2.01(a).
"Louisiana Security Agreement" shall mean that certain
Security Agreement, dated as of September 25, 1990, executed by the
Company, as Grantor, to the Agent as Secured Party, for the equal and
ratable benefit of NCNB Texas National Bank (now known as NationsBank),
Whitney and FNBC, granting a security interest in the collateral described
therein, then existing or thereafter acquired, wherever located, with any
and all supplements, modifications or amendments thereto or restatements
thereof.
"Majority Banks" shall mean, as of the date of determination
thereof, Banks holding 100% of both (a) the Ratable Shares and (b) any
unreimbursed Permitted Letter of Credit Amounts.
"Modified Cash Flow Coverage" shall mean, for any accounting
period, Consolidated Net Income, plus Federal and state taxes measured on
income of the Company and Consolidated Subsidiaries, plus Consolidated
Interest Charges, plus lease expense of the Company and Consolidated
Subsidiaries, plus depreciation and amortization of the Company and
Consolidated Subsidiaries, for such period, determined in accordance with
generally accepted accounting principles, divided by an amount equal to
the sum of all payments of principal on Consolidated Indebtedness, plus
Consolidated Interest Charges, plus lease expense of the Company and
Consolidated Subsidiaries, required to be made during such period under
the terms governing such Consolidated Indebtedness, Consolidated Interest
Charges and lease expense, regardless of whether such payments or expenses
were actually paid by the Company or its Consolidated Subsidiaries during
such period or instead were prepaid during an earlier period or postponed
until a later period.
"Multiemployer Plan" shall mean a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA, Section 414 of the Code or
Section 3(37) of ERISA (or any similar type of plan established or
regulated under the laws of any foreign country) to which the Company or
any ERISA Affiliate is making or accruing, or has made or accrued an
obligation to make, contributions.
"Multiple Employer Plan" shall mean any employer benefit plan
within the meaning of Section 3(3) of ERISA, other than a Multiemployer
Plan, subject to Title IV of ERISA, to which the Company or any ERISA
Affiliate and an employer other than an ERISA Affiliate or the Company
contribute.
"Note" shall mean a note, substantially in the form attached
hereto as Exhibit A, evidencing the Loans made by a Bank, including all
renewals, extensions, modifications, amendments, rearrangements and
replacements thereof.
"Notice of Assignment" shall mean that certain Notice of
Assignment dated April 16, 1986 executed by the Company, as Assignor, and
Republic, TCB, FNBC, Whitney and Hibernia, as Assignee, and recorded in
the Conveyance Book 1455, Folio 0042 of the records of Jefferson Parish,
Louisiana, and in the conveyance records of Lafayette Parish, Louisiana
under file number 86-12558, together with any and all supplements,
modifications, or amendments thereto or restatements thereof.
"Notice of Borrowing" shall have the meaning given such term
in Section 2.02.
"Notice of Conversion or Continuation" shall have the meaning
set forth in Subsection 2.11(b).
"Notice of Election" shall have the meaning given such term in
Subsection 9.02(a).
"Office of the Agent" shall mean the office of the Agent
located at 901 Main Street, Dallas, Texas 75201, or at such other office
of the Agent as the Agent may from time to time specify in a notice to the
parties hereto.
"Officers' Certificate" shall mean a certificate signed in the
name of the Company by the Chairman of the Board, the Vice Chairman of the
Board, the President or any Vice President and by any other Vice
President, the Treasurer, the Secretary or any Assistant Secretary or
Assistant Treasurer of the Company.
"Operating Lease" shall mean any lease other than a Capital
Lease.
"Original Banks" shall mean TCB, Hibernia and Republic,
collectively.
"Parts" shall mean, until installed in any Aviation Unit, all
aircraft propellers, rotors, tires, airframes, radios and other
communication equipment together with all other aircraft appliances,
instruments, mechanisms, apparatus, appurtenances, accessories and parts
or components thereof, of the Company wherever located, now or hereafter
existing, whether acquired by purchase or otherwise and whether held by
the Company for use in its business or held by the Company for sale or
lease or to be furnished by the Company under contracts of service, and
all proceeds and products thereof and accessions thereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any successor thereto.
"PBGC Plan" shall mean any Plan subject to Title IV of ERISA.
"Permitted Letter of Credit Amount" shall mean that amount
which any Bank has paid, or may be required to pay, to the beneficiary of
any Permitted Letter of Credit, pursuant to the terms thereof when issued.
"Permitted Letters of Credit" shall have the meaning given
such term in Section 2.13.
"Permitted Liens" shall have the meaning set forth in Section
8.05.
"person" shall mean an individual, partnership, corporation,
trust, unincorporated organization or a government or any department or
agency thereof.
"Pledge of Collateral Mortgage Note (Parts)" shall mean that
Act of Pledge of the Collateral Mortgage Note (Parts) by the Company dated
April 16, 1986, together with any and all supplements, modifications or
amendments thereto or restatements thereof.
"Pledged Investment Securities" shall mean all Investment
Securities of the Company now or from time to time hereafter delivered to
the Agent and in which the Agent for the equal and ratable benefit of the
Banks shall have a valid and perfected first priority security interest
pursuant to a Security Pledge Agreement.
"Prime Rate" shall mean a fluctuating rate per annum (based on
a year of 365 or 366 days, as the case may be, and actual days elapsed)
equal on any given day to the prime rate most recently announced by the
Agent, which Prime Rate shall automatically fluctuate, without special
notice to the Company or any other person, upward and downward as and in
the amount by which such prime rate shall fluctuate. The Prime Rate is
set by the Agent as a general reference rate of interest, taking into
account such factors as the Agent may deem appropriate. The Prime Rate is
not necessarily the lowest or best rate actually charged to any customer,
and such rate may not correspond with future increases or decreases in
interest rates charged by other lenders or market rates in general. The
Agent and any of the Banks may make various business or other loans at
rates of interest having no relationship to the Prime Rate. Without
notice to the Company or any other person, the Prime Rate shall change
automatically from time to time, as determined by the Agent, subject
always to limitation to the Highest Lawful Rate.
"Prime Rate Interest Payment Date" shall have the meaning set
forth in Section 2.03.
"Prime Rate Loan" means the outstanding principal amount of
any Loan that bears interest at the lesser of (i) the Applicable Prime
Rate and (ii) the Highest Lawful Rate in effect from time to time.
"Prior Amended and Restated Loan Agreement" shall have the
meaning set forth in the recitals to this Agreement.
"Ratable Share" shall mean, in the case of NationsBank, 40%;
in the case of Whitney, 40%, and in the case of FNBC, 20%.
"Rate Period" means with respect to any LIBOR Loan, the period
commencing on the date of Borrowing applicable to such LIBOR Loan under
Section 2.02 (or with respect to the outstanding principal amount of any
Loan that is to be converted to, or continued as, a LIBOR Loan, the date
of such conversion or continuation) and ending 1, 2, 3, 4, 6, 9 or 12
months thereafter, as the Company may specify in the Request for Borrowing
or the Notice of Conversion or Continuation, as the case may be;
provided, all of the foregoing provisions relating to Rate
Periods are subject to the following:
(1) if any Rate Period would otherwise end on a day that is
not a Business Day, such Rate Period shall be extended to the next
succeeding Business Day unless the result of such extension would be
to carry such Rate Period into another calendar month in which event
such Rate Period shall end on the immediately preceding Business
Day;
(2) any Rate Period that would otherwise extend beyond the
Termination Date shall end on the Termination Date;
(3) any Rate Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Rate
Period) shall end on the last Business Day of a calendar month;
(4) the Company shall use reasonable efforts to select Rate
Periods so as not to require a payment or prepayment of any LIBOR
Loan during a Rate Period for such Loan;
(5) the early termination provisions set forth in Subsection
2.12(e); and
(6) the Company may not select any Rate Period which ends
after any quarterly payment of principal pursuant to Section 2.01(b)
unless, after giving effect to such selection, the Company would be
able to make such payment without violation of the next to the last
sentence of Subsection 3.01(b).
"RCRA" shall have the meaning given in the definition of
"Environmental Protection Statute".
"Receivables" shall mean, with respect to any person, all
Indebtedness presently existing or hereafter owing to such person in
connection with such person's business, profession, occupation, or
undertaking that is carried on wholly or partly in the State of Louisiana,
including, but not limited to the sale of goods or the performance of
services or the leasing of property, together with all proceeds thereof;
excluding, however any indebtedness due to or arising out of claims in
tort and indebtedness evidenced by a promissory note or a negotiable
instrument.
"Reimbursement Obligations" means the reimbursement or
repayment obligations of the Company to the Issuing Banks pursuant to
this Agreement or the Letter of Credit Reimbursement Agreements with
respect to Permitted Letters of Credit issued for the account of the
Company.
"Rent Expense" means, for any period, all rental expenses of
the Company and the Consolidated Subsidiaries for such period (other than
rental expenses under Capital Leases), including without limitation,
rental expense for leases of real, personal or intangible property of the
Company and each Consolidated Subsidiary.
"Reportable Event" shall have the meaning assigned to that
term in Section 4043 (excluding Subsection (b)(7) and (b)(9)) of ERISA.
"Republic" shall mean First RepublicBank Houston, N.A.
(formerly known as RepublicBank Houston, N.A.)
"Request for Borrowing" shall have the meaning given such term
in Section 6.02.
"Responsible Officer" means any Senior Vice President within
the Southwest Corporate Division of the Agent.
"Restricted Payment" shall mean any payment in cash, property
or other assets upon or in respect of any shares of any class of capital
stock of the Company, including payments as dividends and payments for the
purpose of purchasing, retiring or redeeming any such shares of stock (or
any warrants or options evidencing a right to purchase any such shares of
stock) or making any other distribution in respect of any such shares of
stock, excluding, however, any dividends payable solely in common stock of
the Company and excluding any stock split whereby the issued shares of any
existing class or series of common stock of the Company are changed into
a greater or smaller number of shares of the same class or series and no
other consideration is distributed to shareholders; provided, however,
that the amount of any Restricted Payment in the nature of a dividend
declared or other payment or distribution made in property other than cash
shall be deemed to be the greater of net book value or fair market value
of such property at the time of declaration (in the case of dividends) or,
in other cases, at the time of payment or distribution, as the case may
be.
"Securities Pledge Agreement" shall have the meaning given
such term in Section 9.02(a)(i).
"Security Agreement - Parts" shall mean that certain Security
Agreement dated as of April 16, 1986, executed by the Company, as Grantor,
to First RepublicBank Houston, N.A., the predecessor of the Agent, as
Secured Party, for the equal and ratable benefit of Republic, TCB,
Whitney, FNBC and Hibernia covering all of the Parts then existing or
thereafter acquired and located within the State of Texas, together with
any and all supplements, modifications or amendments thereto or
restatements thereof.
"Security Documents" shall mean the Collateral Chattel
Mortgage (Parts), the Collateral Mortgage Note (Parts), the General
Assignment of Accounts Receivable, the Notice of Assignment, the Pledge of
the Collateral Mortgage Note (Parts), the Security Agreement - Parts, each
Securities Pledge Agreement, the Louisiana Security Agreement, and all
other documents, agreements, instruments, financing statements, financing
statement changes and continuation statements heretofore, now or hereafter
executed or delivered by any person in connection with, or as security for
the payment of the Loans.
"Security Interest" means, with reference to the Collateral
(or any portion thereof), mortgages, liens, security interests, charges or
other encumbrances created by the Company in favor of the Banks and held
by the Agent for their equal and ratable benefit pursuant to the Security
Documents.
"Subsidiary" shall mean any corporation of which at least a
majority of the Voting Stock is at the time directly or indirectly owned
by the Company. Anything to the contrary herein notwithstanding, the
ownership of Voting Stock of another corporation by any officers or
directors of the Company shall not, of itself, constitute indirect
ownership of such Voting Stock by the Company.
"Tangible Assets" shall mean, with respect to any person, all
assets of such person (after deducting applicable reserves for
depreciation and all other reserves properly deductible from the value of
such assets in accordance with generally accepted accounting principles)
except (a) deferred assets, (b) patents, copyrights, trademarks, trade
names, franchises and goodwill, (c) unamortized debt discount and expense
and (d) all other items generally regarded as intangibles in accordance
with generally accepted accounting principles.
"TCB" shall mean Texas Commerce Bank National Association.
"Termination Date" shall have the meaning given such term in
Subsection 2.01(b).
"Trade Payables" shall mean, with respect to any person, the
accounts payable or trade indebtedness payable by such person in respect
of goods or services acquired by such person on a recurring basis and
classified as accounts or trade indebtedness payable on the balance sheet
of such person in accordance with generally accepted accounting principles
consistently applied.
"Value of Pledged Investment Securities" shall mean the value
of all Pledged Investment Securities valued at the lower of cost or market
value as of the date of the applicable Borrowing Base Certificate.
"Voting Stock" shall mean the stock of a corporation the
holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or persons performing
similar functions).
"Whitney" shall have the meaning given such term in the
introductory paragraph.
"Wholly-owned Subsidiary" shall mean any Subsidiary 100% of
the stock of every class of which (except for directors' qualifying
shares) at the time as of which any determination is being made, is owned,
directly or indirectly, by the Company.
1.02 Other Definitional Provisions. All accounting terms used in
this Agreement which are not expressly defined herein shall be construed
in accordance with generally accepted accounting principles in the United
States consistently applied, and all financial data submitted pursuant to
this Agreement shall be prepared in accordance with such principles. All
references to "Sections", "Subsections", "Articles", "Exhibits" and
"Schedules" shall be to sections, subsections, articles, exhibits and
schedules, respectively, of this Agreement unless otherwise specifically
provided. Unless otherwise specifically provided for herein, the term
"or" shall not be deemed to be exclusive.
2. THE LOANS.
2.01 Loans.
(a) Upon the terms and conditions set forth in this
Agreement, each Bank agrees to renew, modify and extend the loans made by
it to the Company pursuant to the Prior Amended and Restated Loan
Agreement and to convert such loans to principal outstanding under a
revolving credit facility that will be used for general corporate purposes
and for funding the Company's purchase of additional Aviation Units and
that will convert into a term facility on the Conversion Date (the
"Loans"), and to make additional Loans to the Company as part of
Borrowings hereunder on any one or more Business Days on or after the
Effective Date to but not including the Conversion Date, up to an
aggregate principal amount not exceeding at any one time outstanding its
Commitment, subject to the provisions of Section 8.16. After giving
effect to the foregoing, each Bank's Loans shall be evidenced by a single
Note, payable to the order of such Bank in installments and bearing
interest payable (except as otherwise provided in Article 3) on each
Interest Payment Date and on the date when such Loan is paid in full at
the rate or rates set forth in Section 2.03. Within the limits set forth
above and subject to the terms and conditions of this Agreement, the
Company may prior to, but not on or after the Conversion Date, borrow
under this Subsection 2.01(a), repay or prepay the Loans pursuant to
Article 3 and reborrow under this Subsection 2.01(a). On and after the
Conversion Date, the Commitments of the Banks are no longer revolving in
nature and amounts repaid or prepaid may not be reborrowed. The
conversion of the indebtedness due to each Bank under the loans made to
the Company pursuant to the Prior Amended and Restated Loan Agreement into
the Loans under the terms of this Agreement, shall not effect a novation
of, but shall be, to the fullest extent applicable, in modification,
renewal, extension, rearrangement and replacement of the term loans made
by the Banks to the Company pursuant to the Prior Amended and Restated
Loan Agreement.
(b) The aggregate principal amount of the Loans shall be
payable in quarterly installments each in an amount equal to the lesser of
(i) the greater of (x) $1,500,000 and (y) 3.75% of the aggregate principal
amount of the Loans outstanding as of the immediately preceding October 31
and (ii) the aggregate principal amount of the Loans outstanding as of
such date, which quarterly installments shall be payable on the last day
of each January, April, July and October of each year, commencing October
31, 1996 and ending on the first such date (after the Conversion Date) on
which the aggregate unpaid principal amount of the Loans shall be paid in
full by reason of quarterly installments paid as aforesaid and any
prepayments made pursuant to Article 3 or otherwise (but in any event no
later than October 31, 2002) (the "Termination Date").
(c) Each Bank shall post on a schedule attached to its Note
or in records relating to its Note (i) the date and principal amount of
each Loan, (ii) the rate of interest each such Loan will bear, and
(iii) each payment of principal and interest thereon; provided, however,
that neither the failure to make any such postings nor any inaccuracy
therein shall affect the Company's obligations under any Note or this
Agreement. The information set forth on such schedule shall be rebuttably
presumptive evidence of the matters described in the immediately preceding
sentence.
2.02 Borrowing Procedure.
(a) The Prime Rate Loans and the LIBOR Loans shall be made
upon at least three (3) full Business Days' prior notice from the Company
to the Agent and each Bank (a "Notice of Borrowing"). Each such Notice of
Borrowing shall specify (i) the Borrowing Date, (ii) the total amount of
the proposed Loans (which shall be for not less than $1,000,000 and in an
integral multiple of $250,000), and (iii) whether such Loans are to be
Prime Rate Loans or LIBOR Loans, and if such Loans are to be LIBOR Loans,
the Rate Period applicable thereto.
(b) In connection with each Borrowing to be used to fund the
Company's purchase of additional Aviation Units, the Company shall (i)
deliver, prior to the Borrowing Date set forth in the Notice of Borrowing
related to such Borrowing, to the Agent, with a copy to each Bank,
invoices, receipts, or other evidence of purchase (such evidence to be
within seven (7) days prior to such Borrowing Date) showing an aggregate
value thereof that is greater than or equal to the amount of the Borrowing
referred to in such Notice of Borrowing and (ii), pursuant to, and within
the time periods specified by, Section 9.05(a), subject such helicopters
or other Aviation Units to the Security Interest and execute and deliver
to the Agent Security Documents, satisfactory to the Agent, to subject
such helicopters or other Aviation Units to the Security Interest, and
(iii) comply with each of the requirements set forth in clause (a) of the
second paragraph of Section 7.11 in relation to such helicopters or other
Aviation Units.
(c) The failure of any Bank to make the Loan to be made by
it as part of any Borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make its Loan on the date of such
Borrowing, but no Bank shall be responsible for the failure of any other
Bank to make the Loan to be made by such other Bank on the date of any
Borrowing.
(d) Not later than 11:00 a.m. (Dallas time) on the Borrowing
Date for each Borrowing, each Bank shall make its Ratable Share of such
Borrowing available at the Office of the Agent in immediately available
funds. On each Borrowing Date, provided each Bank shall have made its
Ratable Share of the applicable Borrowing available to the Agent as
required by the immediately preceding sentence, the Agent shall pay the
proceeds of such Borrowing in immediately available funds to or upon the
order of the Company no later than 2:00 p.m. (Dallas time).
(e) Unless the Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available
to the Agent such Bank's Ratable Share of such Borrowing, the Agent may
assume that such Bank has made such Ratable Share available to the Agent
on the date of such Borrowing in accordance with Subsection 2.02(c), and
the Agent may, in reliance upon such assumption, make available to the
Company on such date a corresponding amount. If and to the extent such
Bank shall not have so made such Ratable Share available to the Agent,
such Bank, upon demand, and the Company, within three (3) Business Days
after demand, severally agree to repay to the Agent such corresponding
amount together with interest thereon, for each day from the date such
amount is made available to the Company until the date such amount is
repaid to the Agent, at the federal funds rate. If such Bank shall repay
to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan as part of such Borrowing for purposes of this
Agreement.
2.03 Rates of Interest. The Loans shall bear interest on the
unpaid principal amount thereof from time to time outstanding at a rate or
rates per annum as follows:
(a) The Loans shall bear interest prior to maturity (by
acceleration or otherwise) at (i) for the Loans maintained as Prime Rate
Loans at the lesser of (A) the Applicable Prime Rate and (B) the Highest
Lawful Rate in effect from time to time and (ii) for the Loans maintained
as LIBOR Loans, at the lesser of (A) the LIBOR Rate applicable during such
Rate Period, and (B) the Highest Lawful Rate in effect from time to time
during such Rate Period. Interest on the Prime Rate Loans shall be due
and payable quarterly on (each a "Prime Rate Interest Payment Date") the
last day of each January, April, July and October commencing on the last
day of October, 1996, and on each such date thereafter until the date
(after the Conversion Date) when all principal amounts outstanding under
the Notes shall be paid in full and until the obligation of each Bank to
make Loans shall be terminated. Interest on each LIBOR Loan shall be due
and payable on each Prime Rate Interest Payment Date, and, if not a Prime
Rate Interest Payment Date, the last day of each Rate Period for such
LIBOR Loan (each a "LIBOR Interest Payment Date" and, together with each
Prime Rate Interest Payment Date, an "Interest Payment Date").
(b) Overdue amounts of principal and interest on the Notes
shall bear interest payable on demand at a rate per annum (based on a year
of 365 or 366 days and actual days lapsed) equal to the lesser of the
Highest Lawful Rate or 3% per annum above the Prime Rate, but in no event
to exceed the maximum rate allowed by La. R.S. S 9:3509.1 if and to the
extent applicable.
(c) (i) If the Applicable Prime Rate, the LIBOR Rate or the
Commitment Fee should become subject to adjustment in accordance with the
definition of the term Applicable Prime Rate, LIBOR Margin or Commitment
Fee, respectively, in Section 1.01, such adjustment shall:
(A) be made upon receipt by the Banks of the quarterly
financial statements required to be delivered pursuant to
Section 7.01,
(B) be effective as of the first day of the fiscal quarter
of the Company following the fiscal quarter reported upon in
such financial statements, and
(C) remain effective for each day thereafter until the first
day of the fiscal quarter of the Company following the failure
to meet or the exceeding of the requirements of the applicable
clause of the definition of the term Applicable Prime Rate,
LIBOR Margin or Commitment Fee, as applicable, in
Section 1.01.
(ii) In the event any such adjustment to the Applicable
Prime Rate, the LIBOR Rate or the Commitment Fee, respectively,
shall result in the amount of interest or fees paid to any Bank on
a previous Interest Payment Date being more or less than the amount
due on such Interest Payment Date calculated at the adjusted level,
the amount of any overpayment or underpayment, as the case may be,
to such Bank resulting therefrom shall be deducted from or added to,
respectively, the amount of interest or fees due to such Bank on the
next Interest Payment Date succeeding such adjustment to the
Applicable Prime Rate, the LIBOR Rate or the Commitment Fee,
respectively; provided, however that no deductions or additions
shall occur after the Termination Date with respect to interest or
fees paid on any Loan, or the Conversion Date with respect to any
fees paid with respect to the unused portion of the Commitments, and
any adjustment to the Applicable Prime Rate, the LIBOR Rate or the
Commitment Fee, respectively, that would otherwise require such
deduction or addition after such date shall be of no effect.
(iii) All adjustments to the Applicable Prime Rate, the
LIBOR Rate or the Commitment Fee, respectively, provided for in this
Subsection 2.03(c) and in the definition of Applicable Prime Rate,
LIBOR Margin and Commitment Fee, respectively, in Section 1.01 shall
be adequately supported, in the sole but reasonable discretion of
the Banks, by the quarterly financial statements required to be
delivered from the Company to the Banks pursuant to Section 7.01.
2.04 Increased Costs - Reserve Requirements, Etc.
(a) If any Bank determines that compliance with any law or
regulation or any guideline or request from any central bank or other
governmental authority (whether or not having the force of law) affects or
would affect the amount of capital required or expected to be maintained
by such Bank or any corporation controlling such Bank and that the amount
of such capital is increased by or based upon the existence of such Bank's
Loans or Commitment and other loans or commitments of this type then, upon
demand by such Bank (with a copy of such demand to the Agent), the Company
shall immediately pay to such Bank from time to time as specified by such
Bank, additional amounts sufficient to compensate such Bank or such
corporation in the light of such circumstances, to the extent that such
Bank reasonably determines such increase in capital to be allocable to the
existence of any of such Bank's Loans or Commitment hereunder.
(b) The Company shall pay immediately upon demand by the
Agent any applicable stamp and registration taxes, duties, official and
sealed paper taxes or similar charges due, or which under applicable law
could in the future become due, or which may in the future become due as
a result of any change in applicable law, the interpretation thereof, or
otherwise, in connection with any Borrowing or the Notes or this Agreement
or in connection with the enforcement hereof or thereof.
(c) A certificate of any Bank seeking direct payment,
compensation or reimbursement under this Section 2.04 and setting forth a
computation of the amount or amounts to be paid by the Company shall be
delivered to the Company and shall be conclusive in the absence of
manifest error.
2.05 Recapture. Notwithstanding anything in this Agreement to the
contrary, if the rate of interest applicable to any Borrowing or portion
thereof (the "Applicable Rate") would, but for the limitation of the rate
herein to the Highest Lawful Rate, for any period of time exceed the
Highest Lawful Rate, the rate of interest to accrue on such Borrowing or
portion thereof during such period shall be limited to the Highest Lawful
Rate, but such Borrowing shall bear interest thereafter at the Highest
Lawful Rate until the total amount of interest accrued thereon equals the
amount of interest which would have accrued thereon if the Applicable Rate
would have at all times been in effect during such period.
2.06 Commitment Fees; Agent's Fees.
(a) The Company agrees to pay to the Agent for the account
of each Bank the Commitment Fee, from and including the Effective Date to
and including the Termination Date. The Commitment Fee shall be due and
payable on each Prime Rate Interest Payment Date, and shall be computed
for the period commencing with the day on which the Commitment Fee was
last paid, as the case may be, to but not including the day the Commitment
Fee is due and payable.
(b) In addition to the Commitment Fees described above, the
Company agrees to pay to the Agent for the period from and including the
Effective Date to and including the date upon which all obligations of the
Company under this Agreement, the Notes and the Security Documents have
been paid in full and neither the Agent nor any Bank has any commitment
hereunder, an agent's fee for its services as Agent in an amount equal to
(a) $25,000 on the first day of May in each year in which this Agreement
shall be in effect as of such date, and (b) on the date on which all such
obligations are paid in full and neither the Agent nor any Bank has any
commitment hereunder, an amount equal to $25,000 times a fraction, the
numerator of which is the number of days that has elapsed from but not
including the date on which such Agent's fee was last paid to and
including the date on which such obligations are paid in full and neither
the Agent nor any Bank has any commitment hereunder, and the denominator
of which is 365.
2.07 Payments, Notice of Certain Repayments, and Computations.
(a) All payments by the Company of principal, interest and
Commitment Fees hereunder and under the Notes shall be made in Dollars to
the Agent at the Office of the Agent for the account of each of the
respective Banks in immediately available funds not later than 11:00 a.m.
(Dallas time) on the date when due. The Company hereby authorizes each
Bank, if and to the extent payment is not made within three (3) days of
the date when due pursuant to any Note held by such Bank or the provisions
of this Agreement, to debit any account of the Company with such Bank in
an amount equal to the principal, interest, expenses, reimbursements,
compensation, Commitment Fees, and any other amount from time to time due
under any Note payable to such Bank or hereunder or under any Security
Document. Any Bank which so debits an account of the Company shall give
the Company and the Agent prompt notice of such debit, the amount thereof
and the obligations of the Company to which the amount so debited was
applied.
All payments by the Company of agent's fees hereunder
shall be made in Dollars to the Agent at the Office of the Agent in
immediately available funds not later than 11:00 a.m. (Dallas time) on the
date when due.
(b) Interest shall be calculated on Prime Rate Loans on the
basis of a year of 365 or 366 days, as applicable, and on LIBOR Loans on
the basis of a year of 360 days. The Agent shall determine each interest
rate applicable to the Loans in accordance with this Agreement, and the
Agent's determination thereof shall be conclusive in the absence of
clearly demonstrated error.
2.08 Set-Off, Counterclaims and Taxes. All payments of principal,
interest, expenses, reimbursements, compensation and any other amount from
time to time due hereunder or under the Notes shall be made by the Company
without set-off or counterclaim and shall be made free and clear of and
without deduction for any present or future tax, levy, impost or any other
charge, if any, of any nature whatsoever now or hereafter imposed by any
taxing authority, excluding income and franchise taxes of the United
States and any political subdivision thereof. If the making of such
payments is prohibited by law unless such a tax, levy, impost or other
charge is deducted or withheld therefrom, the Company shall pay to the
Agent, on the date of each such payment, such additional amounts as may be
necessary in order that the net amounts received by the Agent after such
deduction or withholding shall equal the amounts which would have been
received if such deduction or withholding were not required. A
certificate of the Agent seeking payment of such additional amounts under
this Section 2.08 and setting forth a computation of the amount or amounts
to be paid to it by the Company shall be delivered to the Company and
shall be conclusive in the absence of manifest error. The Company shall
confirm that all applicable taxes, if any, imposed on this Agreement or on
any transaction hereunder, shall have been properly and legally paid by it
to the appropriate taxing authorities, by sending official tax receipts or
notarized copies of such receipts to the Agent within 30 days after
payment of the payment evidenced thereby.
2.09 Termination or Reduction of Commitments.
The Company may at any time, upon at least five (5) full
Business Days' notice to the Agent and each Bank, terminate in whole or
reduce ratably in part the unused portions of the respective Commitments
of the Banks, provided that such termination and each such partial
reduction shall be irrevocable and that each such partial reduction shall
be in the aggregate amount of $1,000,000 or an integral multiple thereof,
and provided, further, that the Company shall not reduce the sum of the
Commitments at any time to an amount less than the aggregate unpaid
principal amount of the Notes and the Permitted Letter of Credit Amounts,
then outstanding. On the date specified in such notice, the respective
Commitments of the Banks shall be deemed reduced or terminated, as the
case may be, as provided in such notice.
2.10 Application of Proceeds. The proceeds of any Borrowings under
this Agreement shall, as of the Effective Date and at all times hereafter,
be used for working capital, equipment purchases and for general corporate
purposes of the Company.
2.11 Conversion and Continuation.
(a) With respect to the principal amount of the Loans
outstanding from time to time, subject to the terms and provisions of this
Agreement, the Company shall have the option, to (a) convert on any
Business Day all or any part of such outstanding principal amount
maintained as a Prime Rate Loan at such time to a LIBOR Loan; provided,
however, that each such LIBOR Loan shall be in a principal amount greater
than or equal to $1,000,000 or an integral multiple of $500,000 in excess
thereof, (b) convert all or any part of such outstanding principal amount
maintained as a LIBOR Loan to a Prime Rate Loan on the last day of the
Rate Period relating to such LIBOR Loan, or (c) effective as of the last
day of any Rate Period during which the outstanding principal amount of a
Loan is maintained as a LIBOR Loan, continue all or a portion of such
outstanding principal amount as a LIBOR Loan and the succeeding Rate
Period of each such continued LIBOR Loan shall commence on the last day of
the Rate Period then ended; provided, however, that each such continued
LIBOR Loan shall be in a principal amount greater than or equal to
$1,000,000 or an integral multiple of $500,000 in excess thereof.
Notwithstanding anything set forth herein, none of the outstanding
principal amount of the Loans shall be converted to, or continued as, a
LIBOR Loan if (y) the last day of the Rate Period relating to such LIBOR
Loan does not occur on or before the Termination Date or (z) a Default or
an Event of Default has occurred and is continuing.
(b) In the event the Company shall elect to convert or
continue all or any part of the outstanding principal amount of a Loan as
provided in the immediately preceding Subsection 2.11(a), the Company
shall deliver a written notice to the Agent (each such notice, a "Notice
of Conversion or Continuation") (x) with respect to the conversion of all
or any part of a Loan to a LIBOR Loan or the continuation of any LIBOR
Loan, no later than 11:00 a.m., Dallas, Texas time three Business Days in
advance of the proposed conversion or continuation date, and (y) with
respect to the conversion of all or any part of a LIBOR Loan to a Prime
Rate Loan, no later than 11:00 a.m., Dallas, Texas time on the Business
Day immediately preceding the proposed conversion date, specifying in each
case (i) the amount of the outstanding principal amount of each Loan that
is to be converted or continued, (ii) the date of such proposed conversion
or continuation, which date shall be a Business Day, (iii) whether the
proposed conversion is of (A) Prime Rate Loan(s) to LIBOR Loan(s), or (B)
LIBOR Loan(s) to Prime Rate Loan(s), (iv) in the case of a conversion to,
or continuation of, a LIBOR Loan, the requested Rate Period, (v) the
aggregate principal amount of the Loans outstanding after giving effect to
such conversion or continuation, and (vi) that no Default or Event of
Default has occurred and is continuing. Each Notice of Conversion or
Continuation shall be irrevocable and the Company shall be bound to
convert or continue in accordance therewith.
(c) If with respect to all or any part of the outstanding
principal amount of any LIBOR Loan the Company fails to timely submit a
Notice of Conversion or Continuation, such outstanding principal amount
shall, effective as of the last day of the Rate Period relating thereto,
automatically and without notice of any kind be converted to a Prime Rate
Loan.
2.12 Provisions Relating to LIBOR Loans.
(a) Notwithstanding anything set forth this Agreement, the
Banks shall not be obligated to convert all or any part of the outstanding
principal amount of any Loan maintained as a LIBOR Loan to a Prime Rate
Loan until the last day of the Rate Period relating to such LIBOR Loan.
(b) If the Company shall have requested a LIBOR Loan or
requested that all or any part of the outstanding principal amount of any
Loan be converted to, or continued as, a LIBOR Loan and the Agent in good
faith determines (which determination shall be conclusive) that
extraordinary circumstances make it impossible or impracticable to
ascertain the applicable LIBOR Rate for the applicable Rate Period, such
Loan or portion thereof shall instead be funded, converted into or
continued, as the case may be, as a Prime Rate Loan.
(c) Notwithstanding anything set forth in this Agreement, if
at any time the Agent in good faith determines (which determination shall
be final and conclusive) that the introduction of, or any change in, any
applicable law, rule, regulation or treaty or any change in the
interpretation, application or administration thereof by any governmental
or other regulatory authority charged with the interpretation, application
or administration thereof shall make it unlawful for any of the Banks to
maintain or fund any LIBOR Loan, the Agent shall give notice thereof to
the Company and effective as of the date of such notice, and
notwithstanding Subsection 2.12(a), the outstanding principal amount of
such LIBOR Loan shall be converted to a Prime Rate Loan. Within five (5)
Business Days after any Bank's written notice and demand therefor, the
Company shall pay to such Bank such amount or amounts (to the extent that
such amount or amounts would not be usurious under applicable Law and to
the extent such amount or amounts have not been included in the
determination of the LIBOR Rate) as may be necessary to compensate such
Bank for any direct or indirect costs and losses incurred by it under, in
connection with or as a result of such conversion, but otherwise without
penalty. If notice with respect to any LIBOR Loan has been given by the
Agent pursuant to the foregoing provisions of this Subsection 2.12(c)
then, unless and until the Agent notifies the Company that the
circumstances giving rise to such notice no longer apply, the Banks shall
have no obligation to make or convert all or any part of the outstanding
principal amount of any Loan into a LIBOR Loan. Any claim by the Banks
for compensation under this Subsection 2.12(c) shall be accompanied by a
certificate setting forth the computation upon which such claim is based
and such certificate shall be conclusive and binding for all purposes
absent manifest error.
(d) In the event that any law, regulation, treaty or
directive or any change therein or in the interpretation, application or
administration thereof or compliance by any Bank with any request or
directive (whether or not having the force of law) from any central bank
or other governmental authority, agency or instrumentality, does or shall,
as a result of, or with respect to, any LIBOR Loan:
(i) subject such Bank to any tax, duty or other charge
of any kind whatsoever with respect to this Agreement, any
other Loan Document or all or any part of the outstanding
principal amount of any Loan, or change the basis of taxation
of payments to such Bank of principal, interest or any other
amount payable hereunder or under any other Loan Document
(except for changes in the rate of any tax presently imposed
on such Bank);
(ii) impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement
against assets held by, or deposits or other liabilities in or
for the account of, advances or loans by, or other credit
extended by, or any other acquisition of funds by, any office
of such Bank; or
(iii) impose on such Bank any other condition;
and the result of any of the foregoing is to increase the cost to such
Bank of making, renewing or maintaining advances or extensions of credit
to the Company or to reduce any amount receivable from the Company
thereunder then, in any such case (and to the extent not already included
in the calculation of the applicable LIBOR Rate), the Company shall
promptly pay to such Bank, within five (5) Business Days after such Bank's
written notice and demand therefor, any amounts necessary to compensate
such Bank for such additional cost or reduced amount receivable. Any
claim by a Bank for compensation under this Subsection 2.12(d) shall be
accompanied by a certificate setting forth the computation upon which such
claim is based and such certificate shall be conclusive and binding for
all purposes absent manifest error.
(e) In the event any prepayment under Section 3.02 requires
the Company to prepay a LIBOR Loan, or any part thereof, prior to the last
day of the Rate Period relating thereto, within five (5) Business Days
after the Agent's demand therefor the Company shall pay to the Agent such
amount or amounts (to the extent that such amount or amounts would not be
usurious under applicable Law) as may be necessary to compensate the Banks
for any costs and losses incurred by it under, in connection with or as a
result of such prepayment. Any claim by the Agent for compensation under
this Subsection 2.12(e) shall be accompanied by a certificate setting
forth the computation upon which such claim is based and such certificate
shall be conclusive and binding for all purposes absent manifest error.
(f) The Company may not prepay any LIBOR Loan before the
last day of the Rate Period relating thereto, except for payments required
under Section 3.02(b).
2.13 Permitted Letters of Credit. Subject to the terms and
conditions of this Agreement, the Company may request that the Issuing
Bank issue, from time to time during the period commencing on the
Effective Date, and ending on the Business Day immediately prior to the
Conversion Date, for the account of the Company through such of the
Issuing Bank's branches as it and the Company may jointly agree, one or
more letters of credit in accordance with this Section 2.13 and subject to
the provisions of Section 8.16 (each such letter of credit issued in
accordance with this Section 2.13, being individually referred to as a
"Permitted Letter of Credit" and collectively referred to as the
"Permitted Letters of Credit"). Notwithstanding the foregoing, the
Issuing Bank shall not have any obligation to issue any Permitted Letter
of Credit at any time.
The Company may request issuances of Permitted Letters of
Credit only if:
(a) the aggregate undrawn face amount of Permitted Letters
of Credit theretofore issued by the Issuing Bank, after giving effect to
all requested but unissued Letters of Credit, does not exceed any limit
imposed by law or regulation upon the Issuing Bank;
(b) immediately after giving effect to the issuance of such
Permitted Letter of Credit, the aggregate amount of Permitted Letter of
Credit Amounts would not exceed $5,000,000 and the amount available for
Loans under the Commitments would not be less than $0;
(c) such Permitted Letter of Credit has an expiration date
on or before the Business Day immediately preceding the Conversion Date;
(d) the Company shall have satisfied in full the conditions
precedent set forth in Section 6.02 as though such Permitted Letter of
Credit constituted a Loan in the face amount thereof;
(e) the Company shall have delivered to the Issuing Bank, at
such times and in such manner as the Issuing Bank may prescribe, a
Permitted Letter of Credit application, a Letter of Credit Reimbursement
Agreement, and such other documents and materials as may be required
pursuant to the terms thereof;
(f) the terms of the proposed Permitted Letter of Credit
shall not be inconsistent with any term or provision of this Agreement and
otherwise shall be reasonably satisfactory to the Issuing Bank; and
(g) as of the date of issuance of such Permitted Letter of
Credit, no order, judgment, or decree of any court, arbitrator, or
Governmental Authority shall purport by its terms to enjoin or restrain
the Issuing Bank from issuing such Permitted Letter of Credit, and no law,
rule, or regulation applicable to the Issuing Bank, and no request or
directive (whether or not having the force of law) from any Governmental
Authority having jurisdiction over the Issuing Bank, shall prohibit or
request that the Issuing Bank refrain from the issuance of letters of
credit generally or the issuance of such Permitted Letter of Credit.
2.14 Issuance of Permitted Letters of Credit.
(a) The Company shall give the Issuing Bank written notice
in an Officers' Certificate of its request for the issuance of a Permitted
Letter of Credit no later than 10:00 a.m. three (3) Business Days prior to
the date such Permitted Letter of Credit is requested to be issued. Such
notice shall be irrevocable and shall specify, with respect to such
requested Permitted Letter of Credit, the face amount, beneficiary,
effective date of issuance, expiry date (which effective date and expiry
date shall be a Business Day and, with respect to the expiry date, shall
be no later than the Business Day immediately preceding the Conversion
Date), and the currency in which, and the purpose for which, such
Permitted Letter of Credit is to be issued. The Issuing Bank may issue
such Permitted Letter of Credit on the date requested by the Company,
unless (i) on or before the Business Day prior to such issuance date, the
Issuing Bank shall have received written notice from any Bank that the
conditions precedent to the Company's request for an issuance of a
Permitted Letter of Credit as set forth in Section 2.13 have not been met;
or (ii) on the requested issuance date, the officer of the Issuing Bank
executing such Permitted Letter of Credit has actual knowledge that such
conditions precedent to the Company's request for an issuance of a
Permitted Letter of Credit as set forth in Section 2.13 have not been met.
If the Issuing Bank receives written notice, or such officer has actual
knowledge that the conditions precedent to the Company's request for an
issuance of a Permitted Letter of Credit have not been met, then the
Issuing Bank shall not issue any Permitted Letter of Credit until (a) such
notice is withdrawn; (b) the condition(s) described in such notice have
been waived in accordance with the provisions of this Agreement, or (c)
such officer shall have actual knowledge of the satisfaction of all
conditions precedent having been met.
(b) The Issuing Bank shall not extend or amend any Permitted
Letter of Credit unless the requirements of this Section 2.14 are met as
though a new Permitted Letter of Credit was being requested and issued.
2.15 Reimbursement Obligations; Duties of Issuing Bank.
(a) Notwithstanding any provisions to the contrary in any
Letter of Credit Reimbursement Agreement:
(i) The Company shall reimburse the Issuing Bank for
a drawing under a Permitted Letter of Credit issued by the
Issuing Bank no later than the earlier of (A) the time
specified in the related Letter of Credit Reimbursement
Agreement; or (B) one (1) Business Day after the Issuing Bank
has provided notice (which notice may be in writing or oral,
including without limitation oral notice by telephone) of any
payment of such drawing by the Issuing Bank; and
(ii) the Company's Reimbursement Obligation with
respect to a drawing under a Permitted Letter of Credit shall
bear interest from the date of such drawing to the date paid
in full at the Applicable Prime Rate.
(b) No action taken or omitted to be taken by the Issuing
Bank in connection with any Permitted Letter of Credit shall (i) result in
any liability on the part of the Issuing Bank to any other Bank, unless
the Issuing Bank's action or omission constitutes willful misconduct or
gross negligence; or (ii) relieve any Bank of any of its obligations to
the Issuing Bank hereunder, unless the Permitted Letter of Credit in
question was issued at a time during which a notice, described in Section
2.14, from such Bank to the Issuing Bank remained in effect. Each Bank
agrees that, prior to making any payment to a beneficiary with respect to
a drawing under a Permitted Letter of Credit, the Issuing Bank shall be
responsible only to confirm that documents required by the terms of such
Permitted Letter of Credit to be delivered as a condition precedent to
such drawing have been delivered and that the same appear on their face to
conform with the requirements thereof. Each Bank further agrees that the
Issuing Bank may assume that documents appearing on their face to be the
documents required to be delivered as a condition precedent to a drawing
do in fact comply.
2.16 Participations.
(a) Immediately upon the issuance by the Issuing Bank of any
Permitted Letter of Credit in compliance with the provisions of Section
2.13, each Bank, other than the Issuing Bank, shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing
Bank, without recourse or warranty, an undivided interest and
participation to the extent of such Bank's Ratable Share in such Permitted
Letter of Credit, including, without limitation, all obligations of the
Company with respect thereto and any security therefor or guaranty
pertaining thereto.
(b) The Issuing Bank shall promptly notify each other Bank,
if the Company fails to reimburse the Issuing Bank for payments made by
the Issuing Bank in respect of drawings by a beneficiary under a Permitted
Letter of Credit. Upon such Bank's receipt of such notice, such Bank
shall unconditionally pay to the Agent, for the account of the Issuing
Bank, an amount equal to such Bank's Ratable Share of the unreimbursed
payment made by the Issuing Bank under the Permitted Letter of Credit.
Such payment shall be made by such Bank in the same currency in which the
applicable Permitted Letter of Credit was denominated and in same day
funds on the day such Bank receives notice from the Agent that such
payment is owing, if such notice is received by such Bank prior to 10:00
a.m. (Dallas, Texas time) on a Business Day; if such notice is not
received by such time, then such Bank shall remit its payment on the next
Business Day following the day such notice is received. Any amount
payable by a Bank under this Subsection 2.16(b) which is not paid when due
pursuant to the terms hereof, shall be payable on demand, together with
interest thereon at the federal funds rate from the date such payment was
due until paid in full. The failure of any Bank to make any payment owing
by it under this Subsection 2.16(b) shall neither relieve nor increase the
obligation of any other Bank to make any payment owing by it under this
Subsection 2.16(b). The Agent shall promptly remit to the Issuing Bank
all amounts received by the Agent, for the account of the Issuing Bank,
from each other Bank pursuant to this Subsection 2.16(b).
(c) Whenever the Issuing Bank receives a payment with
respect to a Reimbursement Obligation (including any interest thereon) for
which the Issuing Bank has received payments from another Bank pursuant to
Subsection 2.16(b), the Issuing Bank shall promptly remit to each Bank
which has funded its participating interest therein, in the currency and
in the kind of funds so received, an amount equal to such Bank's Ratable
Share thereof. Each such payment shall be made by the Issuing Bank on the
Business Day on which such person receives the funds paid to such person
pursuant to the preceding sentence, if received prior to 10:00 a.m.
(Dallas, Texas time) on such Business Day, and otherwise on the next
succeeding Business Day.
(d) The obligations of a Bank under Subsection 2.16(b) to
make payments to the Agent for the account of the Issuing Bank with
respect to a Permitted Letter of Credit shall be irrevocable, not subject
to any qualification or exception whatsoever, and shall be made in
accordance with, but not subject to, the terms and conditions of this
Agreement under all circumstances (assuming that the Issuing Bank has
issued such Permitted Letter of Credit in compliance with the provisions
of Section 2.13), including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any Note or Security Document;
(ii) the existence of any claim, setoff, defense, or
other right which the Company may have at any time against a
beneficiary named in a New Permitted Letter of Credit or any
transferee of any Permitted Letter of Credit (or any person
for whom any such transferee may be acting), the Agent, any
Bank, the Issuing Bank, or any person, whether in connection
with this Agreement, any Permitted Letter of Credit, the
transactions contemplated herein, or any unrelated
transactions (including any underlying transactions between
the Company and the beneficiary named in any Permitted Letter
of Credit);
(iii) any draft, certificate, or any other document
presented under the Permitted Letter of Credit proving to be
forged, fraudulent, invalid, or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any Loan
Document; or
(v) the occurrence of any Default or Event of Default.
2.17 Payment of Reimbursement Obligations.
(a) The Company agrees to pay to the Issuing Bank the amount
of all Reimbursement Obligations, interest and other amounts payable to
the Issuing Bank under or in connection with any Permitted Letter of
Credit immediately when due, irrespective of any claim, set-off, defense,
or other right which the Company may have at any time against the Issuing
Bank or any other person.
(b) In the event any payment by the Company received by the
Issuing Bank with respect to a Permitted Letter of Credit and distributed
to the Banks on account of their respective participation is thereafter
set aside, avoided, or recovered from the Issuing Bank in connection with
any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or other liquidation law of any jurisdiction, each Bank
which received such distribution shall, upon demand by the Issuing Bank,
contribute such Bank's Ratable Share of the amount set aside, avoided, or
recovered together with interest at the rate required to be paid by the
Issuing Bank upon the amount required to be repaid by it.
2.18 EXONERATION. As between the Company, the Issuing Bank, each
other Bank and the Agent, the Company assumes all risks of the acts and
omissions of, or misuse of the Permitted Letter of Credit issued by the
Issuing Bank by, the respective beneficiaries of such Permitted Letter of
Credit. In furtherance and not in limitation of the foregoing, subject to
the provisions of the Permitted Letter of Credit applications, each of
the Issuing Bank, the other Banks and the Agent, in the absence of gross
negligence or intentional misconduct on its part, shall not be
responsible:
(a) for the form, validity, sufficiency, accuracy,
genuineness, or legal effect of any document submitted by any party in
connection with the application for and issuance of a Permitted Letter of
Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent, or forged;
(b) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign a Permitted
Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, which may prove to be invalid or ineffective for any
reason;
(c) for failure of the beneficiary of a Permitted Letter of
Credit to comply duly with conditions required in order to draw upon such
Permitted Letter of Credit;
(d) for errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or otherwise, whether or not they be in cipher;
(e) for errors in interpretation of technical terms;
(f) for any loss or delay in the transmission or otherwise
of any document required in order to make a drawing under any Permitted
Letter of Credit or of the proceeds thereof;
(g) for the misapplication by the beneficiary of such
Permitted Letter of Credit; or
(h) for any consequences arising from causes beyond the
control of the Agent or any Bank (including the Issuing Bank) including,
without limitation, any act or omission, whether rightful or wrongful, of
any present or future de jure or de facto government or Governmental
Authority.
IN FURTHERANCE AND EXTENSION AND NOT IN LIMITATION OF THE
SPECIFIC PROVISIONS HEREINABOVE SET FORTH, ANY ACTION TAKEN OR
OMITTED BY
THE ISSUING BANK UNDER OR IN CONNECTION WITH THE PERMITTED LETTERS
OF
CREDIT OR ANY RELATED CERTIFICATES, IF TAKEN OR OMITTED IN GOOD FAITH
AND
NOT CONSTITUTING GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, SHALL NOT
PUT THE
AGENT, THE ISSUING BANK OR ANY OTHER BANK UNDER ANY RESULTING
LIABILITY TO
THE COMPANY OR RELIEVE THE COMPANY OF ANY OF ITS OBLIGATIONS
HEREUNDER TO
ANY SUCH PERSON.
2.19 Reporting Requirements. In addition to the reports required
by Section 7.01, the Company shall, no later than the tenth Business Day
following the last day of each month, provide to each Bank separate
schedules for each Permitted Letter of Credit, in form and substance
satisfactory to the Agent, showing the date of issue, beneficiary, face
amount, expiration date, and the reference number of each Permitted
Letter of Credit issued by the Issuing Bank which was outstanding at any
time during such month and the aggregate amount payable by the Company
during the month pursuant to Section 2.20.
2.20 Compensation for Permitted Letters of Credit.
(a) Letter of Credit Fee. The Company agrees to pay to the
Agent, for the account of each Bank, in the case of each Permitted Letter
of Credit, a letter of credit fee (the "Letter of Credit Fee") payable
quarterly in arrears equal to the greater of (i) the LIBOR Margin
multiplied by the average amount available to be drawn under such
Permitted Letter of Credit during the quarter then ending multiplied by
the actual number of days during such quarter on which such Permitted
Letter of Credit was outstanding, divided by 360 and (ii) the actual
number of days during such quarter on which such Permitted Letter of
Credit was outstanding multiplied by $300, divided by 360. The Company
shall also pay to the Agent, in the event of any extension or modification
of a Permitted Letter of Credit which extends the expiration date or
increases the maximum amount available for drawing thereunder an
additional fee calculated and payable on the same basis as that set forth
in the first sentence of this Subsection 2.20(a) with respect to any such
extension or additional amount. Whenever the Issuing Bank receives a
payment from the Company with respect to any fees incurred in connection
with any Permitted Letter of Credit issued by the Issuing Bank, the
Issuing Bank shall promptly remit to the Agent, and the Agent shall
promptly remit to each Bank which has funded its participation in such
Permitted Letter of Credit, in the currency provided for in such
Permitted Letter of Credit and in same day funds, an amount equal to such
Bank's Ratable Share of such fees.
(b) Issuing Bank's Charges. The Issuing Bank shall have the
right to receive, solely for its own account, such amounts as it and the
Company may agree, in writing, to compensate the Issuing Bank with respect
to issuance fees and the Issuing Bank's out-of-pocket costs of issuing and
servicing Permitted Letters of Credit.
(c) Increased Capital. If either (i) the introduction of or
any change in or in the interpretation of any law or regulation, or (ii)
compliance by the Issuing Bank or any other Bank with any guideline or
request from any central bank or other Governmental Authority (whether or
not having the force of law) affects or would affect the amount of capital
required or expected to be maintained by it or any corporation controlling
it, and the Issuing Bank or such other Bank determines, on the basis of
reasonable allocations, that the amount of such capital is increased by or
is based upon its issuance or maintenance of or participation in, the
Permitted Letters of Credit then, upon demand by such Bank, the Company
shall immediately pay to the Agent (for the account of such Bank), from
time to time as specified by the Issuing Bank or such other Bank,
additional amounts sufficient to compensate such Bank therefor. A
certificate as to such amounts submitted to the Company by such Bank
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
3. PREPAYMENT.
3.01 Optional Prepayments. The Company at any time and from time
to time on any Business Day may prepay the principal amount of any
Borrowings in whole or in part, without premium or penalty; provided that:
(a) The Company shall give to the Agent and each Bank not
less than five (5) full Business Days prior notice of each prepayment
specifying the aggregate principal amount of such Borrowings to be prepaid
and the prepayment date. The Company's notice of such prepayment having
been given as aforesaid, the principal amount of the Loans comprising such
Borrowings specified in the notice, together with interest thereon to the
date of prepayment, shall become due and payable on such prepayment date;
and
(b) Prepayments of Loans made under this Section 3.01 on or
after the Conversion Date shall be applied, ratably, to such principal
installments of the Loans as the Company shall designate in its notice of
prepayment given pursuant to Subsection 3.01(a); provided that:
(i) if the Company does not so designate the principal
installments of the Loans to which any of such prepayments is
to be applied, such prepayment shall be applied ratably
(according to each Bank's Ratable Share) to the principal
installments due under the Loans in the inverse order of their
respective due dates (the "Back End Installments");
(ii) the Company may not designate the principal
installments of the Loans to which any of such prepayment is
to be applied, other than the Back End Installments, except in
an amount that, when added to the sum of all other prepaid
principal installments applied other than to the Back End
Installments and for which, as of the date of determination
thereof, the respective due dates of such prepaid principal
installments shall not yet have passed, shall not exceed
$6,000,000; and
(iii) the Company may not designate installments of the
Loans, other than the Back End Installments, to which any of
such prepayments is to be applied, more than two times in any
one fiscal quarter of the Company.
Notwithstanding the foregoing, the Company may not prepay any
LIBOR Loan under this Section 3.01 before the last day of the Rate Period
relating thereto. Each partial prepayment made under this Section 3.01
designated to be applied to the Back End Installments (unless made
pursuant to the sale of one or more Aircraft under Subsection 9.05(b)(i)
or pursuant to an Event of Loss under Section 9.02) shall be in the
aggregate principal amount of not less than $500,000 and in an integral
multiple of $250,000.
3.02 Mandatory Prepayments.
(a) The Company shall prepay the Loans in whole at the
option of the Majority Banks, under the circumstances specified in Section
7.14.
(b) In the event of a Default under Section 8.16, the
Company will, within three (3) Business Days of the date upon which the
Company or any Bank determines that such Default has occurred, either (i)
make a prepayment on the Loans in the amount by which the aggregate
principal then outstanding under the Loans and the aggregate Permitted
Letter of Credit Amounts exceeds the Borrowing Base or (ii) comply with
the provisions of clause (i) or (ii) of Subsection 9.03(b); provided,
however, if the sole cause of such Default is the occurrence of an Event
of Loss and so long as no other Default or any Event of Default has
occurred and is continuing, the Company may comply with the provisions of
Subsection 9.02(a) within the time periods provided therein, further
provided, however, that at no time while any Default under Section 8.16 is
continuing may the Company request any Borrowings hereunder.
(c) The Company shall prepay the Loans under the
circumstances specified in Subsection 9.05(b). Prepayments of Loans made
under this Subsection 3.02(c) on or after the Conversion Date shall be
applied to the principal installment due under the Loans according to the
terms and conditions of Subsection 3.01(b).
(d) In the event the Company makes a prepayment pursuant to
this Section 3.02 or pursuant to a Notice of Election, the Company shall
designate in a notice to the Agent and each Bank the amount of such
prepayment. Except as provided in Subsection 3.02(c), the amount of any
such prepayment shall be applied ratably to the principal installments of
the Loans in inverse order of maturity. All prepayments under this
Section 3.02 or pursuant to a Notice of Election shall be without premium
or penalty, except as provided in Subsection 2.12(e).
4. PAYMENTS MADE ON BUSINESS DAYS. If any payment of principal,
interest, Commitment Fees, agent's fees or other amounts hereunder, under
any Security Document or any Note shall become due on a day that is not a
Business Day, such payment shall be made on the next succeeding Business
Day, and such extension of time shall in such case be included in
computing interest in connection with such payment provided, however, if
such extension would cause payment of interest on or principal of LIBOR
Loans to be made in the next following calendar month, such payment shall
be made on the next preceding Business Day.
5. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants:
5.01 Organization and Qualification. The Company and each
Subsidiary (a) are corporations duly organized and in good standing under
the laws of the state of their respective incorporation, have the
corporate power to own their respective property and to carry on their
respective business as now conducted, and (c) are duly qualified as a
foreign corporation to do business and are in good standing in every
jurisdiction where the failure to be so qualified would have a material
adverse effect on the business, prospects, earnings, properties or
condition, financial or otherwise, of the Company or such Subsidiary, as
the case may be. The Company is a Louisiana corporation and is a "citizen
of the United States" within the meaning of Section 101(13) of the Federal
Aviation Act and is an "air carrier" duly qualified as an "air taxi
commercial operator" within the meaning of said Act and the regulations
issued thereunder. The corporations named in Exhibit B are the only
Subsidiaries of the Company on the Effective Date, and such Exhibit
accurately reflects the percentage of (x) the issued and outstanding
capital stock, and (y) the Voting Stock of each class of each Subsidiary
on the Effective Date and accurately identifies the Consolidated
Subsidiaries and the percentage of the Company's and each other
Subsidiary's ownership of the outstanding Voting Stock of each Subsidiary.
The shares of capital stock of each Subsidiary owned by the Company have
been validly issued, are outstanding, fully-paid and non-assessable shares
of such Subsidiary and are owned by the Company free and clear of all
Liens (except statutory liens for taxes not yet due and for salaries of
clerical employees, none of which liens has been filed or perfected).
5.02 Financial Statements. The Company has furnished the Banks
with the following financial statements: consolidated financial
statements as at and for the fiscal year of the Company ended April 30,
1995 included in the Company's Annual Report on Form 10-K for the fiscal
year of the Company ended April 30, 1995 and accompanied by the report of
KPMG Peat Marwick, and unaudited consolidated financial statements as at
and for the fiscal quarter of the Company ended January 31, 1996,
certified by the principal financial officer of the Company. These
statements have been prepared in conformity with generally accepted
accounting principles consistently followed throughout the periods
involved and present fairly the consolidated financial condition of the
Company and the Consolidated Subsidiaries and the consolidated results of
operations of the Company and the Consolidated Subsidiaries as at the
dates and for the periods indicated, and neither the Company nor any
Consolidated Subsidiary has any material obligations or liabilities,
contingent or otherwise, not disclosed in the financial statements
described in clause (a) of this Section 5.02. There has been no material
adverse change in the consolidated condition or operations, financial or
otherwise, of the Company and the Subsidiaries since April 30, 1995.
5.03 Actions Pending. There is no action or proceeding pending or,
to the knowledge of the Company, threatened against the Company or any
Subsidiary before any court or administrative agency which might result in
a material adverse change in the business or condition of the Company and
the Subsidiaries when taken as a whole. There are no outstanding
judgments or awards against the Company or any Subsidiary.
5.04 No Default. Neither the Company nor any Subsidiary is in
default in any respect under the provisions of any instrument evidencing
any Indebtedness of the Company or such Subsidiary or of any agreement
relating thereto, or in default in any respect under any order, writ,
injunction or decree of any court, or in default in any respect under or
in violation of any order, regulation or demand of any governmental
instrumentality, which defaults or violations might have consequences
which would materially adversely affect the business, prospects, earnings,
properties or condition, financial or otherwise, of the Company and the
Subsidiaries, taken as a whole.
5.05 Warranty of Title; Leases. The Company and each Subsidiary
have good and marketable title to their real property and valid and
indefeasible ownership interests in their other properties, free and clear
of all Liens other than Permitted Liens. The Company has good and
marketable title to all the Collateral and has good right and full power
and authority to subject the Collateral to the Security Interest. The
Collateral is free and clear of all Liens other than Permitted Liens. The
Security Documents do, as of the Effective Date, constitute a first
mortgage on and first priority perfected security interest in the
Collateral subject only to Permitted Liens. There is no financing
statement, chattel mortgage or notice thereof (including FAA Form 905,
"Aircraft Chattel Mortgage") or other security agreement or instrument or
notice thereof in which the Company (or any predecessor person) or any
Subsidiary is named as debtor or mortgagor, or which the Company (or any
predecessor person) or any Subsidiary has signed as debtor or mortgagor,
now on file in any public office (including the Aircraft Registry) and not
canceled covering any of the Collateral other than those previously filed,
the effect of which has been terminated by termination statements or
releases (including FAA Form 8050-41) duly filed prior to the time of the
filing of any of the Security Documents for recordation in the Aircraft
Registry. The Company and each Subsidiary have the right to, and do,
enjoy peaceful and undisturbed possession under all leases to which any of
them is a party or under which any of them is operating. All such leases
are valid and subsisting, and no default exists under any such lease.
5.06 Payment of Taxes. The Company and each Subsidiary have filed
all federal and state income and franchise tax returns which are required
to be filed and have paid all taxes shown on said returns and all
assessments which are due. The respective federal income tax returns of
the Company and each of its Consolidated Subsidiaries have been examined
and reported on by the Internal Revenue Service for all fiscal years to
and including the fiscal year ended April 30, 1992. The Company and its
officers know of no claims by any governmental authority for any unpaid
taxes. There are no tax sharing agreements between the Company and any of
the Subsidiaries.
5.07 Conflicting or Adverse Agreements or Restrictions. Neither
the Company nor any Subsidiary is a party to any contract or agreement or
subject to any restriction which materially and adversely affects the
business or assets or financial condition of the Company and the
Subsidiaries when taken as a whole. Neither the execution nor delivery of
this Agreement or the Notes nor compliance with the terms and provisions
hereof or of the Notes or any of the Security Documents will be contrary
to the provisions of, or constitute a default under, the charter or
by-laws of the Company or any Subsidiary or any law or any regulation,
order, writ, injunction or decree of any court or governmental
instrumentality or any agreement or instrument to which the Company or any
Subsidiary is a party or by which it is bound or to which it is subject.
5.08 Purpose of Borrowings. Neither the Company nor any Subsidiary
owns any "margin stock" within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System (herein called "margin stock").
No part of the proceeds of any Borrowing will be used for the purpose of
purchasing or carrying any margin stock or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or
carry any margin stock. No part of the proceeds of any Borrowing shall be
used for any purpose which might constitute the transactions contemplated
by this Agreement a "purpose" credit within the meaning of said Regulation
U, as now in effect or as it may hereafter be amended. Neither the
Company nor any agent acting on its behalf has taken or will take any
action which might cause this Agreement, any Note or any Borrowing
hereunder to violate Regulation U, Regulation T or any other regulation of
the Board of Governors of the Federal Reserve System or to violate the
Securities Exchange Act of 1934, as amended, in each case as in effect now
or as the same may hereafter be in effect on the date of any Borrowing.
5.09 Patents, Etc. The Company and each Subsidiary have all
patents, patent rights or licenses, trademarks, trademark rights, trade
names, trade name rights, and copyrights which are required in order for
the Company or such Subsidiary to conduct its business as now conducted
without conflict with the rights of others.
5.10 Authorization, Validity, Etc. The Company has the corporate
power and authority to make and carry out this Agreement, to make the
Borrowings provided for herein, to execute and deliver the Notes and to
perform its obligations hereunder and under the Notes and the Security
Documents; and all such action has been duly authorized by all necessary
corporate proceedings on its part. This Agreement has been duly and
validly executed and delivered by the Company and constitutes a valid and
legally binding agreement of the Company enforceable in accordance with
its terms, and the Notes, when duly executed and delivered by the Company
pursuant to the provisions hereof, will constitute the valid and binding
obligations of the Company enforceable in accordance with the respective
terms thereof and of this Agreement, except as limited by bankruptcy,
insolvency or other laws of general application relating to or affecting
the enforcement of creditors' rights.
5.11 Franchises, Permits, Etc. The Company and each Subsidiary
hold free from materially burdensome restrictions all municipal consents,
franchises, permits, licenses, rights-of-way, easements, consents and
other rights which, together with their respective corporate and charter
powers, are sufficient for the proper and efficient operation as a whole
of their respective businesses as presently conducted and as presently
proposed to be conducted.
5.12 Governmental Approvals. No consent, approval or authorization
of, registration with or notice to any federal, state or local
governmental or public authority or agency or any third party creditor or
supplier is or will be required for the valid execution and delivery of
the Notes or this Agreement (except for the registrations and filings
referred to in Article 6, which, except to the extent otherwise stated
therein, have been made prior hereto) or for the valid performance of this
Agreement, the Security Documents or the Notes.
5.13 Description of and Title to Helicopters and Engines. Schedule
I to this Agreement contains a correct and complete description of all of
the helicopters and other Aviation Units subject to the Security Interest
as of the Effective Date, and a correct and complete description of each
aircraft engine of 750 or more rated takeoff horsepower, or the equivalent
of that horsepower, installed in or attached or appertaining to any such
helicopters or other Aviation Units. Without limiting the generality of
the representations and warranties contained in Sections 5.05 and 5.12,
the Company has made all filings, registrations and recordings (including,
without limitation, the filing for recordation in the Aircraft Registry of
FAA Form 8050-2, "Aircraft Bill of Sale", or other comparable forms,
covering each such helicopter, other Aviation Unit and engine), necessary
or advisable in order to establish, protect and preserve its title to and
interest in such helicopters, other Aviation Units and engines as against
the respective sellers thereof and all third parties, and each such
helicopter, other Aviation Unit and engine has been duly registered in the
name of the Company pursuant to the Federal Aviation Act. There are not
now any Liens on such helicopters, other Aviation Units and engines other
than Permitted Liens and those security interests created by the Security
Documents in favor of the Agent. Except for the filing of UCC
Continuation Statements in accordance with the recording provisions of
Louisiana and Texas law, no further action, including, without limitation,
any filing or recording of any documents (whether under Article 9 of the
Uniform Commercial Code of any applicable jurisdiction, or otherwise), is
necessary or advisable in order to establish, protect, perfect or preserve
the Company's title to and interest in such helicopters, other Aviation
Units and engines, and the first priority, perfected, security interest of
the Banks in such helicopters, other Aviation Units and engines created by
the Security Documents in such helicopters, other Aviation Units and
engines (subject only to Permitted Liens), and in the proceeds thereof as
against the respective sellers thereof and all third parties.
5.14 Registered Office of Company, Etc. The registered office of
the Company (as shown on the records of the Secretary of State of the
State of Louisiana) and its chief executive office is 2121 Airline
Highway, Suite 400, Metairie, Louisiana 70001-5979.
5.15 Title to Parts and Receivables. There are no Liens on the
Parts (except for Permitted Liens) or on the Company's Receivables (except
for Permitted Liens of the type described in Subsection 8.05(b)). Except
for the filing of UCC Continuation Statements, in accordance with the
recording provisions of the laws of the States of Louisiana and Texas, no
further action, including, without limitation, the filing or recording of
any additional documents (whether under Article 9 of the Uniform
Commercial Code of any applicable jurisdiction, or otherwise), is
necessary or advisable in order to establish, protect or preserve the
prior perfected Security Interest in the Parts and the Company's
Receivables created by the Security Documents as against third parties.
5.16 Section 1110 of Bankruptcy Reform Act of 1978. The Company is
"a citizen of the United States of America holding an air carrier
operating certificate issued by the Secretary of Transportation," within
the meaning of the United States Bankruptcy Code, as amended, and it is
the intention of the Company and the Banks that the Agent, for the equal
and ratable benefit of the Banks, upon the execution and delivery of this
Agreement, will be a "secured party with a purchase-money equipment
security interest", within the meaning of Section 1110, in the Aircraft
and each portion thereof now or from time to time hereafter subjected to
the Security Interest to the extent that the Security Interest constitutes
a "purchase-money equipment security interest" therein, with the result
that the Agent, for the equal and ratable benefit of the Banks, may take
the full benefit of the provisions of said Section 1110 with respect to
such Aircraft and each such portion thereof.
5.17 Environmental Protection Statutes.
(a) Neither the Company nor any of the Subsidiaries has: (i)
received any summons, citation, directive, letter, notice, or other form
of communication, or otherwise learned of any claim, demand, action,
event, condition, report, or investigation indicating or concerning any
potential or actual liability which would individually, or in the
aggregate, have a material adverse effect on the financial condition,
business, properties or operations of the Company and the Subsidiaries
taken as a whole, or on the ability of the Company to perform its
obligations under this Agreement, the Notes or any of the Security
Documents, arising in connection with (A) any non-compliance with, or
violation of, the requirements of any Environmental Protection Statute;
(B) the release, or threatened release, of any Hazardous Materials which
the Company or any Subsidiary would have a duty to report to any
governmental authority under any Environmental Protection Statute; (C) the
existence of any environmental lien on any property of the Company or any
of the Subsidiaries resulting from the presence of such Hazardous
Materials; (ii) obtained knowledge of any threatened or actual liability
in connection with the release or threatened release of any Hazardous
Materials which would individually, or in the aggregate, have a material
adverse effect on the financial condition, business, properties or
operations of the Company and the Subsidiaries taken as a whole, or on the
ability of the Company to perform its obligations under this Agreement,
the Notes or any of the Security Documents; (iii) received any notice of,
or otherwise learned of, any federal or state investigation evaluating
whether any remedial action is needed to respond to a release or
threatened release of any Hazardous Materials for which the Company or any
of the Subsidiaries may be liable; or (iv) received any notice that the
Company or any the Subsidiaries is or may be liable to any person under
any Environmental Protection Statute.
(b) The Company and each Subsidiary have obtained all
permits, licenses and authorizations which are required under all
Environmental Protection Statutes, (including, without limitation, laws
relating to emissions, discharges, releases, or threatened releases of
Hazardous Materials (including, without limitation, ambient air, surface
water, ground water, or land) or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling of Hazardous Materials), except to the extent that failure to
have or obtain any such permit, license or authorization does not have a
material adverse effect on the financial condition, business, properties
or operations of the Company and the Subsidiaries taken as a whole, or on
the ability of the Company to perform its obligations under this
Agreement, the Notes or any of the Security Documents. The Company and
each of the Subsidiaries is in compliance with all terms and conditions of
the permits, licenses and authorizations required to be obtained by it,
and is also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules,
and timetables contained in those laws or contained in any regulations,
code, plan, order, injunction, notice, or demand letter issued, entered,
promulgated, or approved thereunder, except to the extent that failure to
comply does not have a material adverse effect on the financial condition,
business, properties or operations of the Company and the Subsidiaries
taken as a whole, or on the ability of the Company to perform its
obligations under this Agreement, the Notes or any of the Security
Documents.
6. CONDITIONS OF LENDING.
6.01 Conditions Precedent to this Agreement. This Agreement shall
be effective between the parties hereto and the Banks shall be obligated
to make Loans hereunder upon, and shall not be effective between the
parties hereto and the Banks shall not be obligated to make Loans
hereunder until, satisfaction of the conditions precedent that the Agent
shall have received for the account of the Banks all of the following,
each dated (unless otherwise indicated) the Effective Date, in form, scope
and substance satisfactory to the Banks:
(a) The favorable signed opinions of Correro, Fishman,
Haygood, Phelps, Weiss, Walmsley & Casteix, L.L.P., counsel for the
Company, and Lytle, Soule & Curlee, a professional corporation, special
Federal Aviation Act counsel for the Company, as to the matters set forth
in Exhibits D-1 and D-2, respectively, with such changes as approved by
the Banks in their sole discretion, and as to such other matters as any
Bank may reasonably require.
(b) The Notes, duly authorized, executed and delivered by
the Company, renewing, extending and modifying the Capital Loan Notes and
Revolving Credit Notes (both as defined in the Prior Amended and Restated
Loan Agreement) executed and delivered under the Prior Amended and
Restated Loan Agreement and the amendments thereto.
(c) This Agreement, duly authorized, executed and delivered
by the Company, together with all Schedules and Exhibits hereto.
(d) A certificate of the president or a vice president and
of the secretary or an assistant secretary of the Company certifying,
inter alia, (i) true and correct copies of resolutions adopted by the
Board of Directors of the Company (A) authorizing the execution, delivery
and performance by the Company of this Agreement, the Notes and the
borrowings hereunder, (B) approving the forms of this Agreement and the
Notes, and (C) authorizing officers of the Company to execute and deliver
this Agreement, the Notes and any related documents, including, without
limitation, any agreement or security document contemplated by this
Agreement, (ii) the incumbency and specimen signatures of the officers of
the Company executing any documents on behalf of the Company and (iii) the
absence of any proceedings for the dissolution or liquidation of the
Company.
(e) The assignment to FNBC of 1.6667% interests in the Loans
from each of NationsBank and Whitney in exchange for payment by FNBC in
immediately available funds to each of NationsBank and Whitney.
(f) All accrued and unpaid interest and fees owing under the
Prior Amended and Restated Loan Agreement (allocated in accordance with
the definition of "Ratable Share" contained therein) whether or not
otherwise then due and payable.
(g) The Articles of Incorporation of the Company, as in
effect on the Effective Date, certified by the Secretary of State of the
State of Louisiana and dated a date within 10 days prior to the Effective
Date.
(h) The Bylaws of the Company, including all amendments
thereto, certified by the secretary or an assistant secretary of the
Company.
(i) Certificates of the appropriate government officials of
the State of Louisiana as to the Company's existence and good standing,
and certificates of the appropriate government officials in each state
where the Company does business and where failure to qualify as a foreign
corporation would have a material adverse effect on the business,
prospects, earnings, properties, operations or condition, financial or
otherwise of the Company, as to the Company's good standing and due
qualification to do business in such state, each dated a date within
10 days prior to the Effective Date, together with a telegram or facsimile
bearing the signature of the appropriate government official of the State
of Louisiana, certifying to the existence and good standing of the Company
as of the Effective Date.
6.02 Conditions Precedent to each Borrowing. The obligation of
each Bank to make each Loan shall be subject to the following conditions
precedent that on the date of the Borrowing consisting of the Loans then
being made by the Banks (a) the following statements shall be true and the
Agent and each Bank shall have received an Officers' Certificate
requesting such Borrowing (a "Request for Borrowing") stating that (i) the
representations and warranties contained in Article 5, in Section 7.14 and
in the Security Documents are true on and as of the date of such Borrowing
with the same effect as though such representations and warranties had
been made on and as of such Borrowing, (ii) the Banks have a valid equal
and ratable perfected first priority Security Interest in the Collateral,
subject only to Permitted Liens, (iii) there exists on the date of such
Borrowing no Event of Default or Default, (iv) since April 30, 1995, no
material adverse change has occurred with respect to the business,
prospects, earnings, properties or condition, financial or otherwise, of
the Company or the Company and the Subsidiaries taken as a whole
(including, without limitation, any material downward valuation by the
Company or any Subsidiary of the Aviation Units or any determination by
the Company or any Subsidiary that a significant portion of its
Receivables is uncollectible), and (v) the business and operations of the
Company and all of the Subsidiaries as conducted at all times relevant to
the transactions contemplated hereby to and including the close of
business on the date of such Borrowing have been and are in compliance
with applicable state and Federal laws, regulations and orders affecting
the Company and each Subsidiary and its business and operations, or any of
them, (b) for each Borrowing, the Agent and each Bank shall have received
a Borrowing Base Certificate dated as of the date of such Borrowing, and
(c) the Agent shall have received such other approvals, opinions or
documents as the Agent, or any Bank through the Agent, may reasonably
request.
7. AFFIRMATIVE COVENANTS. So long as the principal amount of any
Borrowing or any amount of interest accrued under the Notes or any
commitment or Agent's fees, or any expense, compensation, reimbursement or
other amounts payable by the Company shall remain unpaid or the Agent or
any Bank shall have any commitment hereunder, the Company will, unless the
Majority Banks shall otherwise consent in writing:
7.01 Financial Statements and Information. Deliver to each Bank:
(a) as soon as available after the end of each fiscal year
of the Company, and in any event within 120 days thereafter, a copy of (i)
a consolidated balance sheet of the Company and the Consolidated
Subsidiaries as of the end of such fiscal year and consolidated statements
of earnings, stockholders' equity and cash flows of the Company and the
Consolidated Subsidiaries for such fiscal year, setting forth, in each
case in comparative form, the figures for the previous fiscal year, all in
reasonable detail and certified by independent public accountants of
recognized national standing selected by the Company in an unqualified
written opinion which shall state that such financial statements have been
prepared in accordance with generally accepted accounting principles
consistently applied and that the examination by such accountants in
connection with such financial statements has been made in accordance with
generally accepted auditing standards and, accordingly, included such
tests of the accounting records and such other auditing procedures as were
considered necessary under the circumstances, and (ii) a consolidating
balance sheet of the Company and the Consolidated Subsidiaries as of the
end of such fiscal year and consolidating statements of earnings,
stockholders' equity and changes in the financial position of the Company
and the Consolidated Subsidiaries for such fiscal year, setting forth, in
each case in comparative form, the figures for the previous fiscal year,
all in reasonable detail and certified as complete and correct by the
principal financial officer of the Company;
(b) as soon as available after the end of each of the first
three fiscal quarters of the Company, and in any event within 60 days
thereafter, a copy of (i) a consolidated balance sheet of the Company and
the Consolidated Subsidiaries as of the end of such fiscal quarter and
(ii) consolidated statements of earnings and cash flows of the Company and
the Consolidated Subsidiaries for such fiscal quarter and (in the case of
the second and third fiscal quarters of the Company) for the portion of
the fiscal year ending with such fiscal quarter, setting forth, in each
case in comparative form, the figures for the corresponding periods in the
previous fiscal year, all in reasonable detail and certified as complete
and correct, subject to changes resulting from year-end adjustments, by
the principal financial officer of the Company;
(c) within 45 days after the end of each of the first,
second, fourth, fifth, seventh, eighth, tenth and eleventh months of each
fiscal year of the Company, a copy of (i) a consolidated balance sheet of
the Company and the Consolidated Subsidiaries as of the end of such month,
and (ii) a consolidated statement of earnings of the Company and the
Consolidated Subsidiaries for such month and for the portion of the fiscal
year ending with such month, setting forth, in each case in comparative
form, the figures for the corresponding periods in the previous fiscal
year, all in reasonable detail;
(d) promptly upon receipt thereof, one copy of each other
report submitted to the Company or any Subsidiary by independent
accountants in connection with any annual, interim or special audit made
by them of the books of the Company or such Subsidiary (other than any
auditors' comment letter to management, unless the same shall have been
requested by any Bank through the Agent);
(e) promptly upon their becoming available, one copy of each
financial statement, report, notice or proxy statement sent by the Company
or any Subsidiary to stockholders generally, and one copy of each regular
or periodic report, registration statement or prospectus, or written
communication (other than transmittal letters) in respect thereof, filed
by the Company or any Subsidiary with, or received by the Company or any
Subsidiary from any securities exchange or the Securities and Exchange
Commission, or any successor to either;
(f) with each set of financial statements delivered pursuant
to Subsections 7.01(a) and (b), an Officers' Certificate (i) setting forth
computations demonstrating compliance with the financial covenants
contained herein as of the date of such financial statements and for the
period then ended and setting forth computations demonstrating the amount
of the Leverage Ratio as of the date of such financial statements and (ii)
certifying that the signers have reviewed the relevant terms of this
Agreement (including Section 7.09) and have made, or have caused to be
made under their supervision, a review of the transactions and condition
of the Company and the Subsidiaries from the beginning of the accounting
period covered by the statement of earnings being delivered therewith to
the date of the certificate, and that such review has not disclosed the
existence during such period of any Event of Default or Default or, if any
such Event of Default or Default existed or exists, specifying the nature
and period of existence thereof and the action the Company has taken or
proposes to take with respect thereto; in addition, with each set of
financial statements delivered pursuant to Subsection 7.01(a), an
Officers' Certificate specifying (x) the insured value of the Aircraft,
(y) the existence and nature of any changes in the insurance coverage
required to be maintained by the Company under Section 7.10 and (z) if any
Aviation Unit constituting a portion of the Aircraft is then being leased
by the Company to another person, or operated by the Company under
contract with another person, the name of such person and the term of the
relevant lease or contract;
(g) with each set of financial statements delivered pursuant
to Subsection 7.01(a), a report of the accountants who have examined such
financial statements, stating that, in connection with their examination,
nothing came to their attention that caused them to believe that the
Company was not in compliance with the terms, covenants, provisions and
conditions of Sections 8 (except 8.05, 8.08, 8.11-16 and 8.18), 10.01(a)
and 10.01(b) (as to Subsection 10.01(b), limited to payment terms and
other financial terms, financial covenants, financial provisions and
financial conditions), or, if anything did come to their attention that
they believed to constitute noncompliance with any of those Sections,
specifying the nature and period of existence thereof;
(h) as soon as available after the end of each fiscal
quarter of the Company, and in any event within 60 days after the end of
each of the first three fiscal quarters of the Company and within 120 days
after the end of the fourth fiscal quarter of the Company (i) a schedule
of the Direct Expenses incurred by the Company and the Consolidated
Subsidiaries during such quarter in such form and containing such
information and detail as the Agent, or any Bank through the Agent, may
request, (ii) a summary description of the Parts, by type of Aviation Unit
to which such Part are applicable, (iii) a list of the Receivables of the
Company as at the end of such quarter, (iv) a list of the Trade Payables
of the Company and the Consolidated Subsidiaries as at the end of such
quarter, each such schedule, description and list to be in such form and
contain such information and detail as the Agent, or any Bank through the
Agent, may reasonably request, including, without limitation, as to such
Receivables, agings thereof in the customary manner, identifying each
obligor thereon and designating each such Receivable that is 90 days old,
and as to such summary description of the Parts, the opening balance,
withdrawals, additions and closing balance, and as to such Trade Payables,
agings thereof in the customary manner, the supplier and the designation
of each Trade Payable not paid pursuant to its payment terms and (iv) a
written confirmation of the make and model, manufacturer's serial number
and United States registration number of each Aviation Unit constituting
a portion of the Aircraft, the month and year of purchase of each such
Aviation Unit and the parish (or county) and state (or, if such Aviation
Unit shall at the time be situated outside the United States, the country
and province) of the current location of each thereof;
(i) with each set of financial statements delivered pursuant
to Subsection 7.01(b) with respect to each third fiscal quarter of the
Company, a copy of a pro forma consolidated balance sheet of the Company
and the Consolidated Subsidiaries for the next succeeding fiscal year of
the Company and pro forma consolidated statements of earnings,
stockholder's equity and cash flows of the Company and the Consolidated
Subsidiaries for the next succeeding fiscal year of the Company;
(j) within 45 days after the end of each month of each
fiscal year of the Company, and within 45 days after each Event of Loss,
a Borrowing Base Certificate;
(k) on or before June 15 in each calendar year, the written
opinion of the Independent Appraiser as to the Appraised Value of the
Aircraft, as contemplated by Subsection 9.03(a); and
(l) promptly upon request, such additional financial or
other information as the Agent, or any Bank through the Agent, may
reasonably request.
7.02 Books and Records. Maintain, and cause the Subsidiaries to
maintain, proper books of record and account in accordance with generally
accepted accounting practices in which true, full and correct entries will
be made of all its dealings and business affairs.
7.03 General Insurance. Maintain, and cause the Subsidiaries to
maintain insurance with responsible companies in such amounts and against
such risks as is customarily carried on comparable businesses and
properties, and furnish to any Bank, upon request, an Officers'
Certificate containing full information as to the insurance carried; and
promptly after notice in writing from the Agent, or any Bank through the
Agent, obtain such additional insurance as the Agent, or any Bank through
the Agent, may reasonably request and which is customarily carried on
comparable businesses or properties. All policies of insurance maintained
by the Company on the Parts shall name the Agent as an additional insured
and any payment of claims thereunder shall be made payable to the Agent
(without the necessity for the Company's joining in endorsing any check or
otherwise accepting any payment) under a standard mortgagee loss payable
clause satisfactory to the Agent and the Banks; provided, however, that
such policies may provide that, with respect to proceeds of any particular
claim in an amount not exceeding $50,000, such proceeds may be paid by the
insurers directly to the Company rather than to the Agent unless an Event
of Default or Default shall have occurred and is continuing and the Agent
shall have notified the insurer thereof.
7.04 Maintenance of Property. Cause its property and the property
of the Subsidiaries to be maintained, preserved, protected and kept in
good repair, working order and condition so that the business carried on
in connection therewith may be conducted properly and efficiently.
7.05 Inspection of Property and Records. Permit any employee of
any Bank or any other person designated by such Bank in writing to visit
and inspect any of the properties, corporate books and financial records
of the Company and the Subsidiaries and make copies and extracts therefrom
and discuss the respective affairs and finances of the Company and the
Subsidiaries with the officers, employees and independent public
accountants (who are hereby so authorized), all at such times as such Bank
may reasonably request.
7.06 Existence, Laws, Obligations, etc. (a) Maintain, and cause
each of the Subsidiaries to maintain, its corporate existence and its good
standing and qualification to do business as a foreign corporation in each
jurisdiction where the failure to be so qualified would have a material
adverse effect upon the business, prospects, earnings, properties or
condition (financial or otherwise) of the Company or such Subsidiary, as
the case may be; (b) pay and cause the Subsidiaries to pay all claims for
labor, supplies, rent and other obligations which if unpaid might become
a Lien against the property of the Company or a Subsidiary, except
liabilities being contested in good faith by appropriate proceedings, and
with respect to which adequate reserves shall have been established; (c)
remain a citizen of the United States within the meaning of Section
101(16) of the Federal Aviation Act and an "air carrier" duly qualified as
an "air taxi commercial operator" (or equivalent status permitting the
Company to continue to conduct its business as presently conducted) under
said Act; (d) defend its title to the Collateral against the claims and
demands of all persons whomsoever other than the Agent and the Banks; (e)
from time to time, at its own cost and expense, promptly take such action
as may be necessary duly to discharge any Liens on the Collateral other
than Permitted Liens; (f) pay or cause to be paid all taxes (including
documentary stamp taxes), assessments and any other governmental charges
lawfully levied or assessed upon the Notes or upon the Collateral or any
portion thereof, upon the income from the Collateral, or upon the interest
of the Agent or any Bank in the Collateral, prior to the time when any
fine, penalty, interest or cost may be added thereto or charged for the
nonpayment thereof; (g) duly observe and conform to all requirements of
any governmental authority relative to any portion of the Collateral and
all covenants, terms and conditions upon or under which any portion of the
Collateral shall at any time be held (except that the Company shall not be
required to observe or conform to any such requirements of any
governmental authority or to pay or cause to be paid any such tax,
assessment or governmental charge so long as (i) the validity thereof
shall be contested by it in good faith by proceedings which, in an opinion
of counsel delivered to the Agent with a copy to each Bank by counsel for
the Company in any case involving an amount in excess of $25,000, are
appropriate, (ii) book reserves which, in the opinion of the Company's
independent public accountants, are adequate have been established with
respect thereto and (iii) the Company's title to the affected portion of
the Collateral shall not be divested thereby and its right to use the
affected portion of the Collateral shall not be adversely affected
thereby); and (h) subject to the further provisions of this Section 7.06
to the extent that it is not legally prohibited from doing so, PAY, AND
SAVE THE AGENT AND THE BANKS HARMLESS AGAINST any and all liability with
respect to, any intangible personal property tax or other similar tax, now
or hereafter in effect, of any jurisdiction in which any portion of the
Collateral is or may be located, to the extent that the same may be
payable by the Agent or any Bank in respect of the Notes or the Security
Documents; provided, however, that the Company shall not have any
obligation to pay, or to indemnify the Agent or any Bank against, any
particular taxes, assessments or other governmental charges of the nature
referred to above which arise solely by reason of the business, operations
or activities conducted by the Agent or such Bank in a particular
jurisdiction or jurisdictions (other than any actions contemplated,
required or permitted to be taken by the Agent or such Bank by or pursuant
to this Agreement or the Security Documents, including the execution,
delivery and recording of the Security Documents, the creation of the
Security Interest and any actions taken by the Agent or such Bank or in
respect of the Collateral, the Notes, the Security Documents or this
Agreement, whether before or after the occurrence of a Default or Event of
Default). The obligations of the Company under this Section 7.06 shall
survive the payment or transfer of the Notes or any interest therein and
the discharge of this Agreement, and, without limiting the generality of
Section 12.09, said obligations are herein assumed expressly for the
benefit of, and shall be enforceable by, the Agent, the Banks or any other
holder of an interest in any Note.
7.07 Notification of Defaults. Promptly, and in any case within 5
days after the Chairman of the Board, Vice Chairman of the Board, the
Secretary or the Treasurer of the Company learns thereof, notify the Agent
and each Bank in writing of the occurrence of a Default or an Event of
Default hereunder and of the default of the Company or any Subsidiary
under any other Indebtedness for Money Borrowed of the Company or such
Subsidiary or any contract and of the nature thereof and what action the
Company proposes to take with respect thereto.
7.08 Election and Incumbency Certificate. Promptly after the
annual meeting of the Company's stockholders, send to each Bank an
Officers' Certificate of the election and incumbency of the Company's
officers and directors in form and substance satisfactory to the Agent,
and each Bank.
7.09 Registration, Maintenance, Operation, Foreign Operations and
Marking.
(a) At its own cost and expense: (i) forthwith upon the
delivery thereof, cause each portion of the Aircraft to be duly
registered, and at all times thereafter to remain duly registered, in the
name of the Company, under the Federal Aviation Act; it will not register
any portion of the Aircraft under the laws of any country other than the
United States of America as aforesaid and it will cause the Security
Documents to be duly recorded and maintained of record in the Aircraft
Registry and any other appropriate public offices as a first mortgage on,
and as creating a prior perfected security interest in, the Aircraft and
each portion thereof (including each portion which consists of an aircraft
engine of 750 or more rated takeoff horsepower, or the equivalent of that
horsepower, or a propeller capable of absorbing 750 or more rated takeoff
shaft horsepower); (ii) maintain, service, repair, overhaul and test the
Aircraft so as to maintain the Aircraft in such condition as may be
necessary to enable the airworthiness certification of the Aircraft to be
maintained in good standing at all times under the Federal Aviation Act,
and, in any event, in good repair, working order and operating condition,
ordinary wear and tear excepted, and in compliance with any applicable
requirements of law and of any governmental authority having jurisdiction
(regardless of upon which person such requirements shall, by their terms,
be nominally imposed), and from time to time it will make or cause to be
made all necessary or appropriate repairs, restorations, replacements and
renewals thereof and additions or improvements thereto, and in furtherance
thereof (subject to Section 9.01 and the provisions of this Agreement
specifying the obligations of the Company upon the occurrence of Events of
Loss) will promptly replace aircraft engines and all Parts of whatever
nature which, originally or from time to time, have been incorporated in
or installed as part of the Aircraft, or any portion thereof, and which
may from time to time become worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or permanently rendered unfit for use
for any reason whatsoever, and each replacement portion shall be free and
clear of all Liens (other than Permitted Liens) and rights of others and
shall be in as good operating condition as, and shall have a value and
utility at least equal to that of, the replaced portion (assuming that
such replaced portion shall have been in the condition and state of repair
required to be maintained under the terms hereof); (iii) maintain all
records, logs and other materials required by the Federal Aviation
Administration, and any other governmental authority having jurisdiction,
to be maintained in respect of the Aircraft, regardless of upon which
person any such requirements shall, by their terms, be nominally imposed,
and the Company will comply with all applicable maintenance, service,
repair and overhaul manuals and service bulletins published by or on
behalf of the manufacturers of the Aircraft; (iv) at such times as any
Bank may reasonably request, through the Agent, furnish to the Agent, with
a copy to each Bank, statements regarding the condition and state of
repair of the Aircraft, in such detail as such Bank, through the Agent,
may reasonably request; and (v) procure and pay for all permits,
franchises, inspections and licenses necessary or appropriate in
connection with the Aircraft or any repair, restoration, replacement,
renewal, addition or improvement with respect to the Aircraft, the failure
to procure which might have an adverse effect on any Aviation Unit or
Units constituting a portion of the Aircraft, or any interest of the Banks
therein or in respect thereof. The Company further covenants that the
Aircraft will not be (x) maintained, used or operated in violation of any
law or any rule, regulation or order of any governmental authority having
jurisdiction, or in violation of any airworthiness certification, license
or registration relating to the Aircraft issued by any such governmental
authority or (y) used or operated at any time that the full amount of
insurance required by Section 7.10 to be carried with respect thereto
shall not be in effect. The Company further covenants (A) that no portion
of the Aircraft, the Appraised Value of which is used to determine the
Borrowing Base will be used, operated or situated at any time or for any
period outside the continental United States; and (B)(1) the Company shall
maintain with respect to the Aircraft used, operated or situated outside
the continental United States hull war risk insurance (including insurance
against war, strikes, riots, civil commotion, acts of persons for
political or terrorist purposes, malicious acts, acts of sabotage,
hijacking, confiscation and nationalization, except confiscation and
nationalization by the United States), extending throughout the world,
which insurance shall be made payable to the Agent, for the benefit of the
Banks under a standard mortgagee loss payable clause satisfactory to the
Agent and each Bank, or (2) the Company shall have entered into such other
protective arrangements with respect to such Aircraft used, operated or
situated outside the continental United States as shall be acceptable to
the Agent and each Bank.
(b) At all times affix to and maintain in each portion of
the Aircraft consisting of an Aviation Unit, adjacent to the airworthiness
certification therein, a metal nameplate bearing the following inscription
in plain, distinct and conspicuous lettering:
"THIS EQUIPMENT IS OWNED BY PETROLEUM HELICOPTERS, INC. SUBJECT TO
A MORTGAGE IN FAVOR OF NATIONSBANK OF TEXAS, N.A., WHITNEY
NATIONAL
BANK AND, FIRST NATIONAL BANK OF COMMERCE (THE "BANKS"). ANY
BUYER
OR OTHER ENCUMBRANCER OF THIS EQUIPMENT IS HEREBY PUT ON NOTICE
THAT
THE SALE OR CREATION OF AN ENCUMBRANCE BY PETROLEUM
HELICOPTERS,
INC. TO OR IN FAVOR OF SUCH BUYER OR ENCUMBRANCER IS IN VIOLATION
OF
THE AFORESAID MORTGAGE UNLESS AND UNTIL SUCH BUYER OR
ENCUMBRANCER
SHALL HAVE RECEIVED FROM SAID NATIONSBANK OF TEXAS, N.A., AS AGENT
FOR THE BANKS, A WRITTEN STATEMENT TO THE EFFECT THAT SUCH
EQUIPMENT
HAS BEEN DULY RELEASED FROM THE SECURITY INTEREST OF SAID
MORTGAGE."
The Company will promptly replace any part of such nameplate which may be
removed, defaced or destroyed, and in the event that any person shall, in
accordance with the terms of this Agreement, succeed to the position of
the Company or the Banks named on any such nameplate, the Company will
promptly replace such nameplate with a nameplate inscribed with the name
of such successor. Except as above provided, the Company will not permit
or suffer the name of any person other than the Company to be placed on
any portion of the Aircraft as a designation that might be interpreted as
a claim of ownership or a right to the possession or use thereof.
(c) Hangar the Aircraft principally in Lafayette Parish,
Louisiana, and although any Aviation Unit may from time to time, and for
various periods of time, operate in the normal course of business outside
said parish and state, it is intended and agreed that such Aviation Unit
shall remain principally hangared, and in that sense located, in Lafayette
Parish, Louisiana.
7.10 Insurance with Respect to the Aircraft.
(a) Without limiting the generality of Section 7.03, at its
own cost and expense, maintain, with insurers of recognized national
stature and responsibility satisfactory to the Agent and the Banks,
insurance policies insuring against loss or damage to the Aircraft from
such risks and in such amounts as a prudent person would maintain on
similar properties; provided, however, that, without the prior written
consent of the Agent and the Banks, the Company will not permit or suffer
the Aircraft to be insured on any basis or to any extent other than that
upon which the other Aviation Units in the Company's fleet shall be
insured, and, in any event, the Company will not permit or suffer the
amount of such insurance for each occurrence, less the deductible, if any,
with respect thereto, at any time to be less than the Appraised Value of
the Aircraft. The policies required by this Subsection 7.10(a) to be
maintained shall name the Agent as an additional insured with respect to
the Aircraft and any payment of claims thereunder shall be made payable to
the Agent (without the necessity for the Company's joining in endorsing
any check or otherwise accepting any payment) under a standard mortgagee
loss payable clause satisfactory to the Agent and the Banks; provided,
however, that such policies may provide that, with respect to proceeds of
any particular claim in an amount not exceeding $50,000, such proceeds may
be paid by the insurers directly to the Company rather than to the Agent
unless an Event of Default or Default shall have occurred and be
continuing and the Agent shall have notified the insurer thereof. To the
extent that such insurance coverage shall be available, such policies
shall further provide that (v) in respect of the interest of the Agent and
the Banks in such policies, the insurance shall not be invalidated by any
action or inaction of the Company or any other person, (w) the Agent's and
Banks' interest shall be insured regardless of any breach or violation by
the Company of any warranties, declarations or conditions contained in
such policies, (x) the insurers waive all rights of subrogation against
the Company, the Agent and each Bank, (y) the insurers waive any right to
any set-off, counterclaim or deduction, whether by attachment or
otherwise, in respect of any liability of the Company and (z) such
insurance will not be invalidated by any foreclosure or other remedial
proceedings or notices thereof relating to the Aircraft or any portion
thereof or interest therein, or by any change in the title to or ownership
of the Aircraft or any portion thereof or interest therein, or by the use
or operation of the Aircraft or any portion thereof for purposes more
hazardous, or in a manner more hazardous, than shall have been permitted
by such policies. No such policy shall contain a provision reducing or
eliminating the liability of the insurer thereunder for any loss by reason
of the existence of other insurance policies covering the Aircraft or any
portion thereof against the peril involved, whether collectible or not.
As between the Agent and the Banks and the Company, all insurance proceeds
received as the result of the occurrence of an Event of Loss shall be
applied in accordance with Subsection 9.02(a), and all insurance proceeds
received as the result of loss or damage not constituting an Event of Loss
shall be applied in accordance with Subsection 9.02(b).
(b) At its own cost and expense, maintain, with insurers of
recognized national stature and responsibility satisfactory to the Agent
and the Banks, insurance policies with respect to the Aircraft insuring
against loss or damage to the person and property of others from such
risks and in such amounts as a prudent person would maintain in similar
circumstances (including passenger legal liability insurance); provided,
however, that the Company will maintain public liability (including
passenger legal liability) and property damage insurance applicable to the
Aircraft in an amount which shall not be less than $20,000,000 per
accident, subject to a deductible not in excess of $50,000. The policies
required by this Subsection 7.10(b) to be maintained shall name the Agent
for the equal and ratable benefit of the Banks as an additional insured
with respect to the Aircraft, and, to the extent available, shall insure
the Agent's and Banks' interest regardless of any breach of or violation
by the Company of any warranties, declarations or conditions contained in
such policies and shall provide that the insurers waive all rights of
subrogation against the Company, the Agent and each Bank and that the
insurers waive any right to any set-off, counterclaim or deduction,
whether by attachment or otherwise, in respect of any liability of the
Company. No such policy shall contain a provision reducing or eliminating
the liability of the insurer thereunder for any loss by reason of the
existence of other insurance policies covering the Aircraft or any portion
thereof against the peril involved, whether collectible or not.
Each insurance policy required by this subsection (b) to be
maintained by the Company shall expressly provide that all the provisions
thereof, except the limits of liability (which shall be applicable to all
insureds as a group) and liability for premiums (which shall be solely a
liability of the Company), shall operate in the same manner as if there
were a separate policy covering each insured.
(c) Upon request, furnish to the Agent, with a copy to each
Bank, and in any event within 120 days after the end of each fiscal year
of the Company, a certificate signed by the Company's independent
insurance broker or consultant summarizing the insurance then maintained
by the Company pursuant to this Section 7.10 and stating that, in the
opinion of said broker or consultant, such insurance complies with the
terms hereof.
The Company will, and every insurance policy required by this
Section 7.10 to be maintained by the Company shall provide that the
insurer will, (i) advise the Agent and each Bank in writing promptly of
any default in the payment of any premiums or of any other act or omission
on the part of the Company of which it shall have knowledge and which
might invalidate or render unenforceable, in whole or in part, any such
insurance and (ii) advise the Agent and each Bank in writing, at least
thirty days prior thereto, of the expiration or cancellation or any
reduction or any material change in the coverage of any such insurance
(each such policy to provide that no such cancellation, reduction or
change will be effective until thirty days after such notice is given).
The Company will advise the Agent and each Bank in writing promptly of any
notice or other communication received from any insurer by which such
insurer indicates that it may seek to suspend, terminate or change any
insurance required by this Section 7.10 to be maintained by the Company.
7.11 Recording, Etc. Forthwith upon the execution and delivery of
this Agreement and thereafter from time to time, cause the Security
Documents and all other documents and notices with respect thereto
(including financing statements and continuation statements, if any), to
be promptly filed, registered or recorded (and the Company will cause any
such filing, registration and recording to be continued in effect) to such
extent, in such manner and in such places (including the Aircraft
Registry) as may be necessary or appropriate under any present or future
law in order to publish notice of and fully to preserve and protect the
validity and priority of the Security Interest, and the interest of the
Agent and the Banks, in the property comprising or intended to comprise
the Collateral (including any portion of the Aircraft or any Part which
consists of an aircraft engine of 750 or more rated takeoff horsepower, or
the equivalent of that horsepower, or a propeller capable of absorbing 750
or more rated takeoff shaft horsepower), and from time to time will
perform or cause to be performed any and all other actions, and will
execute and deliver or cause to be executed and delivered and filed,
registered or recorded any and all other documents, that may be required
by applicable law or requested by any Bank for such publication,
preservation and protection. The Company will pay or cause to be paid all
filing, registration and recording taxes and fees incident to such filing,
registration and recording, and all expenses incident to the preparation,
execution, delivery and acknowledgment of this Agreement, the Security
Documents, financing statements, continuation statements, if any, and
other such documents, and all stamp taxes and other taxes, duties,
imposts, assessments and charges arising out of or in connection with the
execution and delivery of this Agreement, the Security Documents,
financing statements, continuation statements and other such documents.
The Company will deliver to the Agent (a) promptly after the
execution and delivery of any Security Document which subjects additional
Collateral to the Security Interest, an opinion of legal counsel
satisfactory to the Banks stating either (i) that such Security Document
and all other documents have been properly filed, registered and recorded
to the extent required by this Section 7.11, and reciting the details of
such action or referring to prior opinions of counsel in which such
details are given, or (ii) that no such action is necessary to maintain
the Security Interest, as so required, and (b) within 45 days after a
written request from the Agent or any Bank, but in no event more than once
during each calendar year, an opinion of legal counsel satisfactory to the
Banks (i) stating that all action has been taken with respect to the
filing, registration, recording, refiling, re-registration and
re-recording of the Security Documents and all other documents as is
necessary to maintain the Security Interest, as required under this
Agreement and the Security Documents (including the Security Interest on
any property acquired by the Company after the date of execution and
delivery of the Security Documents and owned on the date of such request
which is intended to be subject to the Security Interest), and reciting
the details of such action or referring to prior opinions of counsel in
which such details are given, and (ii) describing what if any action of
the foregoing character may reasonably be expected to become necessary in
the future to maintain the Security Interest, as so required, in the
Collateral.
7.12 Material Adverse Change. Notify each Bank promptly of the
occurrence of any material adverse change with respect to the business,
prospects, earnings, properties or condition, financial or otherwise, of
the Company or of the Company and the Subsidiaries taken as a whole since
April 30, 1995 (including, without limitation, any downward valuation by
the Company or any Subsidiary of the Aviation Units or any determination
by the Company or any Subsidiary that a significant portion of its
Receivables is uncollectible). If at any time any Bank notifies the
Company through the Agent that it believes that the value of the Aircraft
to be less than the Appraised Value of the Aircraft, the Company will, at
its own cost and expense, forthwith submit to the Agent, with a copy to
each Bank, such new written opinions of the Independent Appraiser as the
Agent, or such Bank through the Agent, shall reasonably require.
7.13 Further Assurances. At any time and from time to time,
promptly, at its own cost and expense, the Company will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and
delivered, any and all such further acts, instruments, mortgages, security
agreements, financing statements, continuation statements and assurances
as the Agent or any Bank through the Agent shall reasonably require to
obtain the full benefits of the estates, interests, rights, powers,
privileges, and immunities granted herein and in the Security Documents
and for the better mortgaging, hypothecating, pledging, assuring and
confirming to or with the Banks, or for the protection or continuance of
protection of the validity and priority of the Security Interest in, all
or any portion of the Collateral by the Security Documents mortgaged,
hypothecated or pledged, or intended hereby or thereby to be mortgaged,
hypothecated or pledged, to or with the Banks or which the Company may be
or may hereafter become bound to mortgage, hypothecate or pledge to or
with the Banks.
7.14 Change of Control. Notify the Agent and each Bank forthwith
if at any time Carroll Wilson Suggs ("C.W. Suggs") shall cease to own the
Control Stock (hereinafter defined), and at any time thereafter, upon the
written demand of the Agent given at the request of the Majority Banks,
pay to the Agent, for the ratable account of the Banks, the entire unpaid
principal amount of the Notes, together with accrued interest thereon on
the date specified in such demand, which date shall not be less than 30
days after the date of such demand; provided, however, if C.W. Suggs shall
cease to own the Control Stock solely because of the death of C.W. Suggs,
then, if and so long as the Control Stock is owned by the estate of C.W.
Suggs and the successor trustees of trusts created under the will of
Robert L. Suggs (the "Successor Trustees") (collectively, the "Substitute
Control Group"), such demand by the Agent shall be given only during the
period from and including the date that is 273 days after the death of
C.W. Suggs to and including the date that is 365 days after her death;
provided further that if at any time after the death of C.W. Suggs the
Control Stock shall cease to be owned by the Substitute Control Group, the
terms of the preceding proviso shall thereupon cease to apply and such
demand for payment may thereupon and at any time thereafter be given. As
used in this Section 7.14, the term "Control Stock" shall mean that number
of shares of the capital stock of the Company which is sufficient to give
the holder or holders thereof the power to elect all of the members of the
board of directors of such corporation; Control Stock shall be deemed
"owned" only if owned both legally and beneficially; provided that in the
case of stock owned by the estate of C.W. Suggs, the interest therein of
heirs and devisees shall be disregarded until any of such stock is
transferred from the estate to any such heir or devisee; provided further
that for purposes of this Section 7.14, including for purposes of the
representation and the warranty given in the next sentence, C.W. Suggs or
the Successor Trustees, as the case may be, shall be deemed to own stock
which is owned by Carroll W. Suggs, Robert L. Suggs, and Frank A. Suggs or
any trust created under the will of Robert L. Suggs for so long as C.W.
Suggs or the Successor Trustees, as appropriate, has the right to vote
such stock. Subject to the last proviso of the immediately preceding
sentence, the Company represents and warrants that according to the stock
records of the Company, and to the best of the Company's knowledge, C.W.
Suggs owns the Control Stock.
8. NEGATIVE COVENANTS. So long as the principal amount of any
Borrowing or any amount of interest accrued under the Notes or any
commitment or Agent's fees, or any expense, compensation, reimbursement or
other amounts payable by the Company shall remain unpaid or any Bank shall
have any Commitment hereunder, the Company will not, unless the Majority
Banks shall otherwise consent in writing:
8.01 Current Ratio; Consolidated Tangible Net Worth. At the end of
any fiscal quarter of the Company, permit the Consolidated Current Ratio
to be less than 1.75 to 1.0 or permit Consolidated Tangible Net Worth to
be less than an amount equal to the greater of (i) $69,600,000, or
(ii) the sum of $69,600,000 plus 50% of Consolidated Net Income for the
period commencing on May 1, 1994 and terminating at the end of the fiscal
quarter most recently ended.
8.02 Restricted Payments. Directly or indirectly, through any
Subsidiary or otherwise, declare or make or incur any liability to make
any Restricted Payment; provided, however, the Company may, so long as no
Default or Event of Default has occurred and is continuing or would result
from the making of such Restricted Payment (unless any such Default or
Event of Default has been waived in the manner required by Section 12.02)
(a) pay or declare cash dividends in an aggregate amount not in excess of
20% of the average of the quarterly Consolidated Net Income after taxes
(excluding from the computation of Consolidated Net Income extraordinary
gains) for the immediately preceding four consecutive fiscal quarters of
the Company, and (b) acquire its stock from its employees who are leaving
the employ of the Company, provided that the aggregate purchase price of
all such stock acquired by the Company during any fiscal year of the
Company shall not exceed $50,000.
8.03 Capital Expenditures. Approve, incur or commit to incur, or
permit any Consolidated Subsidiary to approve, incur or commit to incur,
any capital expenditures if, after giving effect thereto, the aggregate
amount of all such expenditures for the Company and the Consolidated
Subsidiaries in any fiscal year would exceed the sum of (a) the cash
proceeds, net of direct selling expenses, received by the Company or any
Consolidated Subsidiary from the sale of any plant, property, equipment or
other capital asset during such fiscal year, plus (b) $25,000,000.
Notwithstanding any of the foregoing, the Company will not approve, incur
or commit to incur, or permit any Consolidated Subsidiary to approve,
incur or commit to incur, any capital expenditures during the continuance
of an Event of Default.
8.04 Modified Cash Flow Coverage. Permit Modified Cash Flow
Coverage for any four consecutive fiscal quarters of the Company to be
less than (a) for any such period of four consecutive fiscal quarters
ending during the period from the Effective Date to and including July 31,
1997, 1.15 and (b) for any such period of four consecutive fiscal quarters
ending after July 31, 1997, 1.25.
8.05 Liens, Etc. Create or permit to exist or permit any
Subsidiary to create or permit to exist any Liens (including, with respect
to the Collateral, any Lien subordinate to the Security Interest) on any
of its property or assets, real or personal, except the following (the
following being sometimes in this Agreement collectively referred to as
the "Permitted Liens"):
(a) the Security Interest;
(b) liens for taxes either not yet delinquent or being
contested in accordance with the provisions of Section 7.06;
(c) materialmen's, mechanics', workmen's, repairmen's,
vendor's, employees' or other like liens arising in the ordinary course of
business for amounts the payment of which shall not be delinquent, or
which shall have been bonded, or the enforcement of which shall have been
suspended (but then only for the duration of such suspension);
(d) liens arising out of judgments or awards against the
Company or a Subsidiary (provided, however, that any such lien is
discharged within 60 days after entry, or that the Company or such
Subsidiary at the time shall in good faith be prosecuting an appeal or
proceedings for review of such judgment or award and a stay of execution
shall have been granted pending such appeal or proceedings, or that such
lien shall have been bonded);
(e) leases of the Aircraft permitted by Section 8.15 and
leases, other than Capital Leases, of any Aviation Unit not constituting
a portion of the Aircraft;
(f) liens created by statute or lease agreement in favor of
the landlord, as such, of any land upon which any portion of the
Collateral is or may be located, which liens arise in the ordinary course
of business and secure amounts the payment of which shall not be
delinquent; provided, however, that any such lien created by or in respect
of (i) any lease agreement executed and delivered after February 1, 1983
or (ii) any extension or renewal of any lease agreement in force and
effect on February 1, 1983, which extension or renewal is effected
pursuant to the exercise by the Company or any Affiliate after February 1,
1983 of an option to extend or renew any such lease agreement (other than
by way of failure to terminate any lease agreement containing provisions
for automatic extension or renewal), shall not be permitted under this
Section 8.05 unless, by contract or by operation of law, such lien shall
be junior and subordinate to the Security Interest;
(g) liens described on Schedule II attached hereto, provided
that as long as this Agreement shall remain in effect, (i) the
Indebtedness secured by such liens shall not increase in amount or in the
actual or implicit interest rate payable thereon and shall not have the
maturity of any principal payment due thereunder shortened and (ii) no
such lien shall extend to or cover any property other than the property
subject to such lien on the Effective Date; and
(h) a lien in favor of Fleet Credit Corporation, solely with
respect to that certain Sikorsky S-76 helicopter bearing serial number
760096, not constituting a portion of the Aircraft, provided, however,
that the value of said Aviation Unit, including its engine, shall not
exceed $950,000, said value to be determined in the manner provided herein
for the determination of "Appraised Value," notwithstanding that the
subject Aviation Unit does not constitute a portion of the Aircraft.
The Company covenants that if it or any Subsidiary shall create or assume
any mortgage, pledge, security interest, encumbrance, lien or charge of
any kind upon any of its property or assets, whether now owned or
hereafter acquired, other than Permitted Liens, it will make or cause to
be made effective provisions whereby the Notes will be secured by such
mortgage, pledge, security interest, encumbrance, lien or charge equally
and ratably with any and all other Indebtedness thereby secured as long as
any such other Indebtedness shall be so secured.
8.06 Limitations on Indebtedness for Money Borrowed and Long-Term
Leases. Create, assume, incur, guarantee or in any manner become liable,
or permit any Subsidiary to create, assume, incur, guarantee or in any
manner become liable, contingently or otherwise, in respect of any
Indebtedness for Money Borrowed, except for (a) the Notes,
(b) Indebtedness for Money Borrowed existing on the Effective Date and
listed on Schedule III, provided that as long as this Agreement shall
remain in effect, such Indebtedness for Money Borrowed shall not increase
in amount or in the actual or implicit interest rate payable thereon and
shall not have the maturity of any principal payment due thereunder
shortened, and (c) to the extent not described in Schedule III, Permitted
Letters of Credit.
8.07 Investments. Make or acquire, or permit any Subsidiary to
make or acquire, any investment in shares of the capital stock of any
person which is neither a Subsidiary nor a corporation "Controlled" by the
Company within the meaning of the second sentence of the definition of
"Affiliate" in Article 1, or any options, warrants or other rights to
purchase or acquire such shares, or any securities convertible into or
exchangeable for such shares (whether or not with additional
consideration). Notwithstanding the foregoing, this Section 8.07 shall
not prohibit (i) investments by the Company in the capital stock (or
comparable equity or partnership interests) of one or more joint ventures,
other than that described in clause (iii) of this Section 8.07, that are
neither Subsidiaries nor corporations "Controlled" by the Company within
the meaning of the second sentence of the definition of "Affiliate" in
Article 1, provided that (x) the Company shall not make or suffer to exist
any investment in any such joint venture in which 50% or more of the
capital stock (or comparable equity or partnership interests) is owned by
the Company and (y) the aggregate book value of all such investments,
together with the book value of all loans and advances permitted under
Subsection 8.18(i), shall not at any time exceed 3% of the Consolidated
Tangible Net Worth of the Company at such time, (ii) the 1990 Stock
Purchase Transaction as defined in the Sixth Amendment to the 1988 Loan
Agreement, dated as of October 24, 1990, or (iii) the investment by the
Company in up to 49% of the capital stock (or comparable equity
securities) of Irish Helicopters, Limited, a corporation organized under
the laws of the Republic of Ireland, the amount of such investment not to
exceed $4,000,000.
8.08 Nature of Business. Engage, or permit any Subsidiary to
engage, in any line of business materially different from any line of
business carried on by the Company or such Subsidiary on the Effective
Date.
8.09 Stock of Subsidiaries, Merger, Sale of Assets, Etc. Permit
any Subsidiary to issue or dispose of its stock (other than directors
qualifying shares) except to the Company or to another Subsidiary, and the
Company will not, and will not permit any Subsidiary to, sell or otherwise
dispose of any shares of stock of, or obligation (howsoever evidenced)
from, any Subsidiary, or merge or consolidate with any other corporation
or sell, lease or transfer or otherwise dispose of all or a substantial
part of its assets, except that
(a) any corporation may merge or consolidate with the
Company or a Subsidiary provided that the Company or such Subsidiary shall
be the continuing or surviving corporation and shall not be a subsidiary
of another person, and
(b) any Subsidiary may sell, lease, transfer or otherwise
dispose of any of its assets to the Company or another Subsidiary, or may
merge or consolidate with the Company or with another Subsidiary.
8.10 Change in Accounting Method. Make, or permit any Subsidiary
to make, any change in accounting principles or methods or in the
application thereof from those followed in the financial statements
referred to in Subsection 5.02(a) if any such change would affect any
computation or calculation made pursuant to this Agreement, except for
changes in which the Company's independent public accountants shall concur
and with respect to which the Banks shall have given their prior written
consent; provided, however, if no such consent is given by the Banks, the
Company may make such changes so long as it shall maintain separate
financial statements for purposes of this Agreement that are consistent in
accounting principle, method and application with those followed in the
preparation of the financial statements referred to in Subsection 5.02(a).
8.11 Sale of Receivables and Parts. Sell, or permit any
Subsidiary to sell, any of its Receivables or notes receivable or sell
any of the Parts other than in the ordinary course of business.
8.12 Tax Consolidation. File or permit or suffer to be filed any
consolidated income tax return with any person other than a Subsidiary.
8.13 Chief Executive Office; Registered Office. Move either its
chief executive office or registered office in the State of Louisiana from
the location set forth in Section 5.14.
8.14 Transactions with Affiliates. Enter into or be a party to, or
permit any Subsidiary to enter into or be a party to, any transaction
(including the purchase, sale or exchange of any property or the rendering
of any services) with any Affiliate except in the ordinary course of
business of the Company or such Subsidiary and except upon fair and
reasonable terms no less favorable to the Company or such Subsidiary than
would obtain in a comparable arm's-length transaction with a person not an
Affiliate.
8.15 Leasing. Lease, or permit or suffer to be leased, any portion
of the Aircraft except pursuant to a written lease which shall contain
terms expressly subjecting and subordinating the leasehold interest to the
Security Interest and to the rights of the Agent and the Banks hereunder
(a copy of which lease agreement shall have been furnished to each Bank),
and the Company will not assign or otherwise transfer to any person any of
its rights under any such lease. Flight service agreements between the
Company (alone or together with one or more Subsidiaries) and its
customers, pursuant to which a crew, as well as a helicopter, is
furnished, shall not be considered "leases" for purposes of this
Section 8.15.
8.16 Limitation on Amount of Loans and Permitted Letters of Credit.
Permit at any time the sum of the aggregate outstanding principal amount
of the Loans and the aggregate amount of Permitted Letter of Credit
Amounts to exceed the Borrowing Base.
8.17 Limitation on Prepayments on Funded Indebtedness. Prepay, or
permit any Consolidated Subsidiary to prepay, any Funded Indebtedness
prior to its due date (except the Funded Indebtedness evidenced by the
Notes).
8.18 Loans and Advances to Other Persons. Make or permit to remain
outstanding, or permit any Subsidiary to make or permit to remain
outstanding, any loan or advance to any person, except for (i) loans by
the Company to joint ventures, and provided that the aggregate book value
of all such loans and advances, together with the book value of all
investments permitted under Subsection 8.07(i), shall not at any time
exceed 3% of the Consolidated Tangible Net Worth of the Company at such
time, or (ii) travel advances to employees in the ordinary course of
business and other loans and advances to non-officers as is normal and
customary; provided, however the aggregate amount of all such travel
advances and other loans and advances permitted under this Subsection
8.18(ii) shall not at any time exceed $200,000.
8.19 Hazardous Materials. Cause or permit, or allow any of
the Subsidiaries to cause or permit, any Hazardous Materials to be placed,
held, used, located or disposed of on, under or at any of such person's
property or any part thereof by any person in a manner which could
reasonably be expected to have a material adverse effect upon the
financial condition, business, properties or operations of the Company and
the Subsidiaries taken as a whole or the ability of the Company to perform
its obligations under this Agreement, the Notes or any of the Security
Documents, or cause or permit any part of any of such person's property to
be used as a manufacturing, storage or dump site for Hazardous Materials,
where such action could reasonably be expected to have a material adverse
effect upon the financial condition, business, properties or operations of
the Company and the Subsidiaries taken as a whole or the ability of the
Company to perform its obligations under this Agreement, the Notes or any
of the Security Documents, or cause or suffer any Lien to be recorded
against any of such person's property as a consequence of, or in any way
related to, the presence, remediation, or disposal of Hazardous Materials
in or about any of such person's property, including any so-called state,
federal or local "superfund" Lien relating to such matters, which,
together with all other such Liens, secures obligations which in the
aggregate exceed $500,000.
9. POSSESSION, USE, VALUATION AND RELEASE OF COLLATERAL; APPLICATION
OF
PROCEEDS THEREOF; ADDITIONS TO COLLATERAL.
9.01 Possession and Use of Collateral. Unless and until an Event
of Default shall have occurred and be continuing, the Company may remain
in full possession, enjoyment and control of the Collateral (except any
Investment Securities deposited as security for the Notes with, and held
by, the Agent in accordance with the provisions of this Agreement), may
manage, operate and use the same and each portion thereof (except the
aforesaid Investment Securities) and may take and use the tolls, rents,
issues, profits, receipts, products, revenues and other income thereof,
except as otherwise expressly provided in this Agreement or any Security
Document; provided, however, that, as a condition to the foregoing
privilege of the Company, the possession, enjoyment, control, management,
operation and use of the Collateral shall at all times be maintained and
conducted in accordance with the requirements of this Agreement and the
Security Documents.
Anything in this Agreement or the Security Documents to the
contrary notwithstanding, the Company may, at its own cost and expense,
remove from any Aviation Unit constituting a portion of the Aircraft, in
the ordinary course of maintenance, service, repair, overhaul or testing,
any aircraft engine or any Parts, whether or not worn out, destroyed,
seized, confiscated, damaged beyond repair or permanently rendered unfit
for use; provided, however, that the Company shall have fully complied
with the provisions of Subsection 7.09(a) of this Agreement as if such
removed aircraft engine or Parts shall have been worn out, lost, stolen,
destroyed, seized, confiscated, damaged beyond repair or permanently
rendered unfit for use. Any aircraft engine and all Parts at any time
removed from any Aviation Unit constituting a portion of the Aircraft
shall, no matter where located, remain subject to the Security Interest
until the Company shall have fully complied with the provisions of Section
7.11 with respect to each such aircraft engine and such Part.
It is expressly agreed that, anything herein contained to the
contrary notwithstanding, the Company shall remain liable under any and
all purchase orders and contracts relating to the construction or
acquisition of the Aircraft or any portion thereof to perform all its
obligations thereunder, all in accordance with and pursuant to the terms
and provisions thereof, and neither the Agent or any Bank shall have
liability under any of the foregoing by reason of or arising out of the
action taken by the Company in the granting of the Security Interest, nor
shall the Agent or any Bank be required or obligated in any manner to
perform or fulfill any obligation of the Company under or pursuant to any
such purchase orders or contracts.
Upon, but not before, (a) the occurrence of an Event of
Default and the automatic acceleration of the Notes pursuant to clause (a)
of Section 10.02 or the making of the request or the granting of the
consent required by clause (b) of Section 10.02, the Agent may, with the
consent of the Majority Banks and shall upon the request of the Majority
Banks, notify any and all account debtors or obligors on the Receivables
of the Company to make payment on all such Receivables to the Agent for
application as provided in Section 10.05, and, subsequent to the
occurrence of an Event of Default, any proceeds of Receivables received by
the Company shall be held in trust by the Company for the account of the
Agent and the Banks, shall not be commingled with any other funds,
accounts, monies or property of the Company and, upon receipt thereof by
the Company shall be promptly accounted for, paid over, transmitted and
delivered to the Agent for the benefit of the Banks in the form received
by the Company. The Company agrees to assist the Agent in all such
collection efforts.
The Company hereby agrees that it will not, except as
expressly permitted by this Agreement, take, suffer or omit to take any
action the taking, suffering or omission of which might result in an
impairment of the Collateral or any portion thereof, or the Security
Interest therein. Without limiting the generality of the foregoing, the
Company agrees that it will not sell, transfer or otherwise dispose of,
lease, or create or suffer to exist any Lien on, all or any portion of the
Collateral except as and to the extent permitted by the express terms of
this Agreement.
9.02 Loss, Restriction, Requisition, Etc.
(a) If an Event of Loss shall occur, the Company shall
forthwith (and, in any event, within 20 days after such occurrence) give
the Agent and each Bank notice of such Event of Loss. Any amounts
received by the Agent representing payment of insurance proceeds or
payment from any governmental authority or other person with respect to
any condemnation, requisition, confiscation, theft or seizure of, or
requisition of title to or use of, or loss or damage to, the Aircraft or
any portion thereof resulting in the occurrence of such Event of Loss, net
of the direct expenses of collecting such insurance proceeds or other
payments and net of the taxes payable upon or occasioned by such Event of
Loss, shall be paid, ratably, to the Banks for application to the
principal installments due under the Loans in the inverse order of their
respective due dates. If, as a result of such Event of Loss, the Company
shall not be in compliance with Subsection 8.16, the Company also shall,
within 40 days after the occurrence of such Event of Loss, (x) elect to
take one or more of the following actions in respect of such Event of Loss
and (y) give the Agent and each Bank notice of which action it has elected
to take (said written notice being hereinafter in this Subsection 9.02(a)
called the "Notice of Election"):
(i) the Company may deposit with the Agent for the
equal and ratable benefit of the Banks, as security for the
Notes and as a portion of the Collateral subject to the
Security Interest, Pledged Investment Securities in an
aggregate amount equal to the Appraised Value (determined
prior to such Event of Loss) of the Aircraft affected by such
Event of Loss and in respect of which Aviation Units shall not
have been subjected to the Security Interest pursuant to
clause (ii) below or the Notes shall not have been prepaid
pursuant to clause (iii) below; and, in the event of the
Company's election to take such action, the Company shall,
within 30 days after the delivery of the Notice of Election,
deposit such Pledged Investment Securities with the Agent at
its principal office in Dallas, Texas (any such Investment
Securities to be deposited and pledged with the Agent in such
manner and pursuant to a pledge and security agreement, in
form and substance satisfactory to all of the Banks, executed
by the Company in favor of the Banks) (each such pledge and
security agreement, together with all supplements,
modifications and amendments thereto, herein referred to as a
"Securities Pledge Agreement"); or
(ii) the Company may subject to the Security Interest
one or more helicopters or one or more other Aviation Units
(provided, however, that any such other Aviation Units must be
acceptable to the Agent and each Bank), having an aggregate
Appraised Value (in the case of helicopters or other Aviation
Units more than one year old, as specified by the Independent
Appraiser in a written opinion addressed and delivered to the
Agent and each Bank) at least equal to the Appraised Value
(determined prior to such Event of Loss) of the Aircraft
affected by such Event of Loss and in respect of which
Investment Securities shall not have been pledged with the
Bank pursuant to clause (i) above or the Notes shall not have
been prepaid pursuant to clause (iii) below; and, in the event
of the Company's election to take such action, the Company
shall, within 45 days after the delivery of the Notice of
Election, take Appropriate Actions; or
(iii) the Company may prepay principal on the Notes in
an amount equal to the amount necessary to cause the Company
to be in compliance with Subsection 8.16; and in the event of
the Company's election to take such action, the Company shall,
in the Notice of Election, specify the principal amount of the
Loans to be repaid and designate a date for prepayment which
shall be no later than 45 days after the date of the
occurrence of such Event of Loss, and on such date such
aggregate principal amount of the Loans, together with
interest thereon to the date of such prepayment, shall become
due and payable. All such prepayments shall be applied as set
forth in Subsection 3.02(d) and shall be paid without any
premium or penalty except as provided in Subsection 3.02(d).
Upon or concurrently with full compliance by the Company with the
foregoing provisions of this Subsection 9.02(a), the Company may make
written request of the Agent to release from the Security Interest in
accordance with Subsection 9.05(b) any Aircraft which is the subject of an
Event of Loss.
In the event that the Company shall deposit Pledged Investment
Securities with the Agent pursuant to clause (i) above, the Agent shall
deal with the same in accordance with the provisions of Subsection 9.02(c)
and the other provisions of this Agreement. In the event that the Agent
shall receive any insurance proceeds or payments from any governmental
authority or other person in connection with the occurrence of such Event
of Loss, such amounts shall be held by the Agent as a portion of the
Collateral and may be invested in accordance with the provisions of
Subsection 9.02(c). Such amounts shall be paid to the Company upon
written request by the Company, but only after the Company shall have
fully complied with the foregoing provisions of this Subsection 9.02(a)
and only if, at the time of such payment, the Agent or any Bank shall not
have any knowledge or notice that any Default or Event of Default shall
have occurred and then be continuing, or will exist immediately after such
payment.
(b) If any Aircraft or any portion thereof shall be
condemned, requisitioned, confiscated, stolen, seized, lost or damaged or
its title or use requisitioned, and such action shall not result in an
Event of Loss, the Company will promptly take the action required by
Section 7.09 with respect to the repair and replacement thereof, and, in
the event of any such condemnation, requisition, confiscation, requisition
of title or use, the Company will forthwith (and, in any event, upon the
earlier of the Business Day next preceding the date upon which a Borrowing
Base Certificate is to be delivered hereunder or 10 days after such
occurrence) notify the Banks in writing and, forthwith upon receipt by the
Company, will deposit with the Agent any award or purchase price received
by the Company in connection therewith (the Company hereby assigning to
the Agent for the equal and ratable benefit of the Banks all its rights
and interest in and to any and all such awards or purchase price and
hereby agreeing to execute and deliver, upon the request of the Agent or
any Bank, any and all assignments and other instruments deemed by the
Agent or such Bank to be necessary or desirable for the purpose of
confirming or further evidencing the assignment by the Company of the
aforesaid awards or purchase price to the Agent for the benefit of the
Banks free and clear of any and all Liens of any kind or nature whatsoever
created by the Company). Any amounts received by the Agent representing
payment of insurance proceeds or payment from any governmental authority
or other person with respect to any condemnation, requisition,
confiscation, theft or seizure of, or requisition of title to or use of,
or loss or damage to, the Aircraft or any portion thereof that shall not
result in an Event of Loss will be applied by the Agent to reimburse the
Company for (but only after its completion of) the repair or replacement
of the affected portion of the Aircraft, but such reimbursement shall be
made only if no Default or Event of Default shall have occurred and be
continuing and upon receipt by each Bank, in form and substance
satisfactory to such Bank, of an Officers' Certificate requesting such
reimbursement, describing the costs incurred by the Company for which it
is requesting reimbursement and certifying that (i) there is not any
outstanding Indebtedness for the purchase price or construction of said
repairs or replacements, or for labor, wages, materials or supplies in
connection with the making thereof, which, if unpaid, might become the
basis for a vendor's, mechanic's, laborer's, materialman's, statutory or
other similar lien upon said repairs or replacements or any portion
thereof, or which might materially impair the security afforded by said
repairs or replacements; (ii) no Default or Event of Default has occurred
and is then continuing, or will exist immediately after such
reimbursement; (iii) no part of the amount requested for reimbursement has
been or is being made the basis, in any previous or then pending
application, for the withdrawal of any other proceeds under this
subsection (b); and (iv) the affected portion of the Aircraft, as so
repaired or replaced, is of a value not less than the value thereof
immediately preceding such condemnation, requisition, confiscation, theft,
seizure, requisition of title or use, loss or damage and, in any event, is
in the condition required by Section 7.09 to be maintained. With respect
to any particular loss as to which the insurance proceeds shall not exceed
$50,000 and which shall have been paid to the Company, such proceeds shall
be applied by the Company (and the Company, by acceptance of such
proceeds, covenants so to apply such proceeds) to the cost of repairing,
restoring or replacing the property destroyed or damaged; and any portion
of such proceeds remaining after such application may be retained by the
Company.
(c) All Pledged Investment Securities deposited with the
Agent as security for the Notes, pursuant to Subsection 9.02(a)(i) or any
other provision of this Agreement, and all insurance proceeds and payments
from any governmental authority or other person received by the Agent in
connection with any loss or taking of, or damage to, the Collateral, shall
be held by the Agent for the benefit of the Banks as a portion of the
Collateral. Any such proceeds and payments shall be invested and
reinvested by the Agent in Investment Securities in accordance with
written instructions received from the Company, and Investment Securities
purchased with such proceeds and payments shall also be held by the Agent
for the benefit of the Banks as Pledged Investment Securities constituting
a portion of the Collateral. The interest accruing on all Pledged
Investment Securities held by the Agent, and any profit realized from the
investment of such proceeds and payments or the sale of Pledged Investment
Securities held by the Agent (hereinafter, net of commissions and
expenses, collectively called "Pledged Investment Securities Gains"),
shall be held by the Agent for the account of the Company (but subject to
the Security Interest), and shall be paid to or at the direction of the
Company from time to time upon written request by the Company if, at such
time, neither the Agent nor any Bank shall have any knowledge or notice
that a Default or Event of Default shall have occurred and then be
continuing, or will exist immediately after such payment. Amounts equal
to losses, if any, attributable to such Pledged Investment Securities
deposited with the Agent and specified in any report delivered by the
Agent to the Company pursuant to the next sentence shall be paid to the
Agent, to be held as a portion of the Collateral, by the Company within 5
days after the delivery to the Company by the Agent of such report.
Within 15 days after the end of each calendar month during which any
Pledged Investment Securities shall be held by the Agent as a portion of
the Collateral, the Agent shall deliver to the Company a written report of
the earnings and losses, if any, attributable to such Pledged Investment
Securities during the preceding calendar month, or the portion thereof
during which such Pledged Investment Securities shall have been held by
the Agent as a portion of the Collateral. Upon the payment by the Agent
to the Company of any Pledged Investment Securities Gains in accordance
with the foregoing provisions of this subsection (c), the amount of such
Pledged Investment Securities Gains so paid shall be deemed to have been
released from the Security Interest.
In addition to the payment of Pledged Investment Securities
Gains and the release thereof from the Security Interest in accordance
with the preceding paragraph, and without limiting the generality of any
other provisions of this Agreement, the Agent may, with the consent of the
Banks, make payment of and deliver Pledged Investment Securities to or at
the direction of the Company, and may, with the consent of the Banks,
release the same from the Security Interest, upon the written request of
the Company, the presentation to the Agent and the Banks of any documents
(including appropriate termination statements or releases), in form and
substance satisfactory to the Agent and each Bank, presented to the Agent
and each Bank by the Company and necessary to release the same from the
Security Interest, and the taking by the Company of all the actions
specified in Subsection 9.02(a)(ii) to subject to the Security Interest
one or more additional helicopters or other Aviation Units having an
aggregate Appraised Value equal to or greater than the aggregate amount of
the Pledged Investment Securities to be released from the Security
Interest.
Any Aircraft subject to an Event of Loss or subject to the
provisions of Subsection 9.02(b) shall not be included in Aircraft for the
purpose of determining the Borrowing Base.
9.03 Valuation of Aircraft, Etc.
(a) The Company will deliver or cause to be delivered to the
Agent and each Bank on or before June 15 in each calendar year,
commencing June 15, 1996, (i) with respect to any Aircraft that shall at
the time be new or not more than one year old, an Officers' Certificate
certifying the purchase price thereof, and having attached thereto a
schedule of all the Aircraft showing the Appraised Value of each Aviation
Unit constituting a portion thereof for that year and the immediately
prior year and (ii) with respect to any Aircraft that shall at the time be
more than one year old, a written opinion of the Independent Appraiser,
dated as of a date after April 30 of that year and addressed to the Agent
and each Bank, specifying the "purchase price" (as referred to in and
determined in accordance with clause (ii) of the definition of "Appraised
Value" set forth herein) of such Aircraft as of such date. The written
opinion referred to in clause (ii) of the preceding sentence shall (x)
state that the Independent Appraiser has, on or after April 30 of that
year, made such a physical inspection, if any, of each helicopter or other
Aviation Unit covered by said written opinion as he deems necessary or
appropriate for the purposes of such opinion; (y) indicate, for each such
helicopter or other Aviation Unit, (aa) the make and model, manufacturer's
serial number and the United States registration number thereof, (bb) the
month and year of purchase thereof by the Company, (cc) the original
purchase price thereof and (dd) the "purchase price" thereof referred to
in and determined in accordance with clause (ii) of the definition of
"Appraised Value" set forth herein; and (z) otherwise be satisfactory in
form and substance to the Agent and each Bank. In the event that, after
receiving any such annual written opinion of the Independent Appraiser,
any Bank shall deliver to the Company and the Agent a written request for
a new written opinion and a written statement of the reasons for its
objection to the annual opinion, the Company shall cause the Independent
Appraiser to deliver to the Agent, with a copy to each Bank, within 30
days after the receipt by the Company of such written request, a new
written opinion, dated as of a date within such 30-day period, with
respect to the matters referred to in clause (ii) of the first sentence of
this Subsection 9.03(a); provided, however, that, if the Company shall
not, within 45 days after the delivery to the Agent and the Banks of any
annual written opinion, have received a written request for a new written
opinion pursuant to the preceding sentence, the Agent and the Banks shall
be deemed to have permitted the Company to use such annual written opinion
as the basis for determining the "Appraised Value" of Aircraft for
purposes of this Agreement, including, without limitation, as the basis
for complying with its obligations under Subsection 9.03(b). In the event
any Bank shall request a new written opinion pursuant to the preceding
sentence, the Agent and the Banks shall be deemed to have permitted the
Company to use the most recent annual written opinion delivered by the
Independent Appraiser as the basis for determining the "Appraised Value"
of Aircraft for purposes of this Agreement until such new written opinion
is delivered.
(b) In the event that for any reason, other than the
occurrence of an Event of Loss, the aggregate outstanding principal
amounts of the Loans and the aggregate amount of Permitted Letter of
Credit Amounts shall, at any time, exceed the Borrowing Base as shown on
the most recently delivered Borrowing Base Certificate, then, the Company
may, in lieu of the mandatory prepayment required pursuant to Subsection
3.02(b): (i) take all the actions described in Subsection 9.02(a)(ii) for
the purpose and with the effect of subjecting to the Security Interest one
or more helicopters or one or more other Aviation Units (provided,
however, that any such other Aviation Units must be acceptable to the
Agent and the Banks) having an aggregate Appraised Value in an amount
which, when added to the aggregate Appraised Value of the Aircraft then
subject to the Security Interest, the amount of Pledged Investment
Securities then held by the Agent subject to the Security Interest and 80%
of the amount of Eligible Receivables, would cause the Company to be in
compliance with the provisions of Section 8.16; or (ii) deposit Pledged
Investment Securities with the Agent pursuant to a Securities Pledge
Agreement in such an amount that will cause the Company to be in
compliance with Section 8.16; provided, however, notwithstanding the time
periods set forth in Subsection 9.02(a)(ii), any action taken by the
Company pursuant to this Subsection 9.03(b) must be taken within 3
Business Days of the date upon which the Company or any Bank determines
that the Company is not in compliance with Section 8.16.
9.04 Protection of Purchasers. No purchaser of property purporting
to be released under this Agreement shall be bound to ascertain the
authority of the Agent and the Banks to execute any documents effecting
such release, or to inquire as to any facts required by the provisions of
this Agreement to exist as a condition to the proper exercise of such
authority.
9.05 Other Additions to Collateral; Releases of Collateral
(a) Other Additions to Collateral. Within 30 days after
purchasing any Aviation Unit that the Company desires or is required by
Subsection 2.02(b) to include in the calculation of the Borrowing Base,
the Company will grant a first priority security interest in such Aviation
Unit to the Banks to secure the Company's obligations hereunder and under
any other documents executed in connection herewith or contemplated
hereby, whereupon such Aviation Unit shall constitute a portion of the
Collateral subject to the Security Interest. Without limitation on the
foregoing, within 30 days after the purchase of such Aviation Unit, the
Company shall take Appropriate Actions.
(b) Releases of Collateral. (i) If the Company determines
that it is in the best interest of the Company to transfer ownership of
one or more Aviation Units that comprise a portion of the Aircraft or
exchange one or more Aviation Units that comprise a portion of the
Aircraft for one or more other Aviation Units, then upon the delivery of
an Officers' Certificate stating the United States registration number of
the Aviation Unit to be transferred or exchanged and the date (which shall
not be less than 14 nor more than 90 days from the date of such Officers'
Certificate) that the Company intends to consummate such transaction, the
Company may request that the Agent, on behalf of the Banks, release from
the Security Interest the Aircraft to be transferred or exchanged and the
Agent, on behalf of the Banks, within a reasonable time after such request
and in any event on or before the date on which the Company consummates
such transaction, shall execute all documents (including all appropriate
termination statements and releases) required to effect such release,
provided that (A) (I) the Company shall provide the Aviation Unit to be
received by it in any such exchange for inclusion in the Security Interest
pursuant to Subsection 9.05(b)(ii), and the sum of the Appraised Value of
said Aviation Unit, as reflected on a certificate of an Independent
Appraiser, in form and substance acceptable to the Agent, plus the amount
of any cash to be received by the Company as additional consideration for
the Aviation Unit being transferred, shall be greater than or equal to the
Appraised Value, as reflected on a certificate of an Independent
Appraiser, in form and substance acceptable to the Agent, of the Aviation
Unit to be released, and the Company shall pay to the Agent for the
ratable benefit of the Banks all proceeds, if any, from such sale, net of
direct expenses of, and taxes payable upon or occasioned by, such sale, to
be applied to the principal installments due under the Loans according to
the terms and conditions of Subsection 3.02(c), or (II) in the event the
Company is selling one or more Aircraft, the Company shall pay to the
Agent for the ratable benefit of the Banks the proceeds of such sale, net
of direct expenses of, and taxes payable upon or occasioned by, such sale
to be applied to the principal installments due under the Loans according
to the terms and conditions of Subsection 3.02(c), and (B) no Default or
Event of Default has occurred and is continuing or would result from the
release of the Aircraft to be transferred or exchanged by the Company, and
the Company shall have delivered to the Agent an Officers' Certificate to
such effect in the form of Exhibit E to this Agreement.
(ii) For each Aviation Unit that the Company desires or
is required to include in the Security Interest as a
substitute for an Aviation Unit to be released pursuant to
Subsection 9.05(b)(i), the Company shall, upon its acquisition
thereof, grant a first priority security interest in such
Aviation Unit to the Banks to secure the Company's obligations
hereunder and under any other documents executed in connection
herewith or contemplated hereby, whereupon such Aviation Unit
shall constitute a portion of the Collateral subject to the
Security Interest. Without limitation on the foregoing,
within 30 days after the earlier of the Company's acquiring
the Aviation Unit to be subjected to the Security Interest or
the Agent's release of the Aircraft pursuant to Subsection
9.05(b)(i), the Company shall take Appropriate Actions.
(iii) The Agent shall be absolutely entitled to rely on
the Officers' Certificates and certificates of Independent
Appraisers and opinions of counsel referred to in the
definition of "Appropriate Actions" and (b) for the veracity
of each of the statements made therein absent actual knowledge
to the contrary on the part of the officer of the Agent
executing the documents relating to such release or addition.
The Agent shall not be required to investigate or verify any
statement made in such Officers' Certificates and certificates
of Independent Appraisers and opinions of counsel and any
investigation that the Agent shall elect to undertake shall
not affect its ability to rely on such Officers' Certificates
and Certificates of Independent Appraisers and opinions of
counsel.
(iv) As long as there is no Default or Event of
Default, each of the Banks hereby authorizes the Agent to
execute and deliver (and, where appropriate, as determined by
the Agent in its sole and independent discretion, to authorize
others to execute and deliver on its behalf) on behalf of the
Banks, all documents required to effect the release of the
Aviation Unit and the addition of one or more substitute
Aviation Unit received by the Company, if any, under the
Security Interest.
(v) At no one time shall there be more than three (3)
Aircraft that are the subject of releases from the Security
Interest unless all requirements set forth in this Subsection
9.05(b) with respect thereto and with respect to the Aviation
Units to be subjected to the Security Interest in place
thereof have been satisfied.
10. EVENTS OF DEFAULT AND REMEDIES.
10.01 Events of Default. The following shall constitute Events of
Default hereunder:
(a) The Company shall fail to pay or prepay any principal
of or interest on any Note when due or any commitment fee, agent's fee,
additional fee, expense, compensation or reimbursement or any other amount
payable by the Company hereunder, or under any Security Document when due
(including, without limitation, any payment required by Subsection 3.02(b)
or Section 7.14), and such failure in either case, shall continue for
three (3) days after the date such payment or prepayment is due; or
(b) The Company or any Subsidiary shall fail to pay any
Indebtedness for Money Borrowed in excess of $100,000 in principal amount
(other than Indebtedness for Money Borrowed evidenced by the Notes) owing
by the Company or such Subsidiary, as the case may be, or any interest or
premium thereon, when due (whether by scheduled maturity, mandatory
prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such Indebtedness if the effect of
such failure is to permit the holder of such Indebtedness for Money
Borrowed to declare such Indebtedness for Money Borrowed due prior to its
stated maturity, or any other condition shall exist or event occur
permitting any Indebtedness for Money Borrowed (other than Indebtedness
evidenced by the Notes) owing by the Company or any Subsidiary to become
or be declared due prior to its stated maturity; or
(c) Any material representation or warranty made by the
Company herein or in any Security Document or in any writing furnished in
connection with this Agreement or any Security Document shall be false in
any material respect when made; or
(d) The Company violates any covenant, agreement or
condition contained in Section 7.06, 7.07, 7.09, 7.10, 7.11 (first
paragraph), 7.12 (first sentence), Article 8 (except Section 8.16),
Section 9.02 or Subsection 9.03(b); or
(e) The Company violates any covenant, agreement or
condition contained in Subsection 7.01(g) and such violation shall not
have been remedied within five (5) days; or
(f) The Company violates any other covenant, agreement or
condition contained herein, or any covenant, agreement or condition
contained in any Security Document and such violation shall not have been
remedied within 30 days; or
(g) The Company or any Subsidiary makes an assignment for
the benefit of creditors; or
(h) The Company or any Subsidiary applies to any tribunal
for the appointment of a trustee or receiver or custodian of any
substantial part of the assets of the Company or any Subsidiary, or
commences any proceedings relating to the Company or any Subsidiary under
any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or other liquidation law of any jurisdiction; or
(i) Any such application is filed, or any such proceedings
are commenced, against the Company or any Subsidiary, and the Company or
such Subsidiary indicates its approval, consent or acquiescence, or an
order is entered appointing a trustee or receiver or custodian, or
adjudicating the Company or any Subsidiary bankrupt or insolvent, or
approving the petition in any such proceedings, and such order remains in
effect for 60 days; or
(j) Any order is entered in any proceeding against the
Company or any Subsidiary decreeing the dissolution or split-up of the
Company or such Subsidiary, and such order remains in effect for 60 days;
or
(k) Final judgment for the payment of money in excess of
$100,000 shall be rendered against the Company or any Subsidiary and the
same shall remain undischarged for a period of 30 days during which
execution shall not be effectively stayed by the posting of an appeal bond
or otherwise; or
(l) (i) the Company, any Subsidiary, or any agents or
representatives of either the Company or any Subsidiary shall engage in
any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code) which can be expected to result in a material
liability to the Company; (ii) any material "accumulated funding
deficiency" (as defined in Section 302 of ERISA or Section 412 of the
Code), whether or not waived, shall exist with respect to any PBGC Plan or
Multiple Employer Plan, if in the reasonable judgment of the Majority
Banks, such accumulated funding deficiency would give rise to a material
liability of the Company; (iii) the Company, any Subsidiary or any ERISA
Affiliate shall apply for or be granted a funding waiver under Section 302
of ERISA or Section 412 of the Code, which waiver or request for waiver is
for a material amount; (iv) a Reportable Event (other than a Reportable
Event not subject to the provision for thirty-day notice to the PBGC under
applicable PBGC regulations) shall occur with respect to any PBGC Plan or
Multiple Employer Plan, which Reportable Event is, in the reasonable
opinion of the Majority Banks, likely to result in the termination of such
PBGC Plan or Multiple Employer Plan for purposes of Title IV of ERISA and
to give rise to a material liability of the Company or any Subsidiary; (v)
proceedings shall commence to have a trustee appointed or a trustee shall
be appointed to terminate or administer a PBGC Plan or a Multiple Employer
Plan which proceeding is, in the opinion of the Majority Banks, likely to
result in the termination of such PBGC Plan or Multiple Employer Plan and
to give rise to a material liability of the Company or any Subsidiary with
respect to such termination; (vi) a notice of intent to terminate a PBGC
Plan or Multiple Employer Plan under Section 4041(c) is filed with the
PBGC if such termination would give rise to a material liability of the
Company, any Subsidiary or any ERISA Affiliate; (vii) any Multiemployer
Plan is in reorganization or is insolvent and the circumstances are such
that, in the opinion of the Majority Banks, there could be a material
liability incurred by or imposed upon the Company, any Subsidiary or any
ERISA Affiliate; (viii) there is a complete or partial withdrawal from a
Multiemployer Plan under circumstances which, in the opinion of the
Majority Banks, would likely subject the Company, any Subsidiary or any
ERISA Affiliate to material liability; or (ix) any event or condition
described in (i) through (viii) above (determined without regard to
whether the event or condition taken alone would or could result in a
material liability) shall occur or exist with respect to a PBGC Plan, a
Multiple Employer Plan or a Multiemployer Plan which individually or in
combination with one or more of any events described in clauses (i)
through (viii) above (determined without regard to whether the event or
condition taken alone would or could result in a material liability), if
any, in the opinion of the Majority Banks would likely, subject the
Company, any Subsidiary or any ERISA Affiliate to any material tax,
penalty or other liability; provided that for the purposes of this
Subsection 10.01(l), an obligation or liability shall be considered
material if it equals or exceeds $500,000; or
(m) The Company does not pay any dividend on any of its
capital stock as declared or permits any dividend to accumulate on any of
its capital stock in respect of which cumulative dividends are provided
for.
10.02 Acceleration of Maturity. Upon (a) the occurrence of any
Event of Default described in Subsection 10.01(g), 10.01(h), 10.01(i) or
10.01(j) with respect to the Company, the unpaid principal amount of and
accrued interest on the Notes and the Loans shall automatically become
immediately due and payable, together with all other amounts payable under
this Agreement or any Security Document, and the obligation of each Bank
to make Loans and the capacity of NationsBank to issue Permitted Letters
of Credit shall automatically terminate, without presentment, demand,
protest or further notice (including, without limitation, notice of
acceleration and notice of intent to accelerate) of any kind, all of which
are hereby expressly waived by the Company and (b) the occurrence of any
other Event of Default, the Agent shall at the request, and may with the
consent, of the Majority Banks, by notice to the Company, (i) declare the
obligation of each Bank to make Loans and the ability of NationsBank to
issue Permitted Letters of Credit to be terminated whereupon the same
shall forthwith terminate, and (ii) declare the unpaid principal amount of
and accrued and unpaid interest on the Notes and the Loans, together with
all other amounts payable under this Agreement or any Security Document,
to be forthwith due and payable, whereupon the principal amount of and
accrued and unpaid interest on the Notes and the Loans, and all such other
amounts, shall become and be forthwith due and payable, without
presentment, demand, protest or further notice (including, without
limitation, notice of acceleration and notice of intent to accelerate) of
any kind, all of which are hereby expressly waived by the Company. Upon
the occurrence of any such Event of Default and the acceleration of the
unpaid principal amount of and accrued and unpaid interest on the Notes
and the Loans and all other amounts due hereunder and under the Security
Documents, the Agent shall at the request, and may with the consent, of
the Majority Banks, proceed to protect and enforce the rights of the Banks
either by suit in equity or by action at law or both, whether for the
specific performance of any covenant or agreement contained in this
Agreement or in any Security Document or in aid of the exercise of any
power granted in this Agreement or in any Security Document; or may
proceed to enforce the payment of the indebtedness outstanding under the
Notes, hereunder and under or secured by the Security Documents and
interest thereon in the manner set forth therein; it being intended that
no remedy conferred herein or in any other Security Document shall be
exclusive but shall be in addition to every other remedy given hereunder
and under the Security Documents or now or hereafter existing at law or in
equity or by statute or otherwise.
10.03 Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) either automatic acceleration
of the Notes pursuant to clause (a) of Section 10.02 or the making of the
request or the granting of the consent required by clause (b) of Section
10.02 to declare the Notes due and payable pursuant to the provisions of
Section 10.02, each Bank is hereby authorized, to the extent permitted by
applicable law, at any time and from time to time, without notice to the
Company (any such notice being expressly waived by the Company), to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness (whether or
not then due and payable) at any time owing by such Bank to or for the
credit or the account of the Company, against any and all of the
obligations of the Company now or hereafter existing under this Agreement,
the Notes or any of the Security Documents, irrespective of whether or not
such Bank shall have made any demand for satisfaction of such obligations
and although such obligations may be unmatured or portions thereof may be
owing to Banks other than the Banks effecting such set-off and
application. Each Bank agrees to notify the Company and the Agent
promptly after any such set-off and application made by such Bank,
provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Bank under
this Section 10.03 are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such Bank
may have hereunder, under any of the other Security Documents or under any
applicable law.
10.04 Sharing of Payments, Etc. If at any time, whether before or
after the occurrence of an Event of Default, any Bank shall obtain any
payment (whether voluntary, involuntary, through the exercise of any right
of set-off or otherwise) of principal, interest or Commitment Fees on
account of the Notes held by it in excess of its Ratable Share of such
payments, such Bank shall purchase from the other Banks such
participations in the Notes held by them as shall be necessary to cause
such purchasing Bank to share the excess payment ratably with each of
them, provided, however, that if all or any portion of such excess payment
is thereafter recovered from such purchasing Bank, such purchase from each
Bank shall be rescinded and such Bank shall repay to the purchasing Bank
the purchase price to the extent of such recovery together with an amount
equal to such Bank's ratable share (according to the proportion of the
amount of such Bank's required repayment to the total amount so recovered
from the purchasing Bank) of any interest or Commitment Fee paid or
payable by the purchasing Bank in respect of the total amount so
recovered. The Company agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 10.04 may exercise all its
rights of payment (including the right of set-off) with respect to such
participation, at any time, as fully as if such Bank were the direct
creditor of the Company in the amount of such participation.
10.05 Application of Proceeds of Collateral. (a) All moneys
received by the Agent as a result of the enforcement of the rights and
remedies of the Agent or the Banks pursuant to the Security Documents
shall be distributed by the Agent on the dates fixed by the Agent
(individually a "Distribution Date" and collectively, the "Distribution
Dates") as follows:
FIRST: to the Agent in payment of the amount of any and all
unreimbursed expenses of the Agent, including, without
limitation, the fees and disbursements of its counsel
and of any agents and experts employed by the Agent,
incurred by the Agent prior to the relevant Distribution
Date in connection with (w) the administration of this
Agreement and the Security Documents, (x) the custody,
preservation, use or operation of, or the sale of,
collection from, or other realization upon any assets of
the Company pursuant to the Security Documents (y) the
exercise or enforcement of any of the rights of the
Agent hereunder or under the Security Documents or (z)
the failure by the Company to perform or observe any of
the provisions of this Agreement or any Security
Document;
SECOND: to the Banks in an amount equal to the sum of the unpaid
principal of and interest on the Notes plus the
aggregate amount of Permitted Letter of Credit Amounts
(excluding all such Amounts which the issuing Bank of
any Permitted Letters of Credit has paid to the
beneficiary thereof and has been reimbursed therefor by
the Company), and accrued interest thereon, if any, and,
in the event such moneys shall be insufficient to pay in
full such amount, then to the payment thereof ratably to
each Bank in the same proportion which (x) the sum of
aggregate unpaid principal of and interest on the Notes
held by such Bank plus the aggregate amount of
unreimbursed Permitted Letter of Credit Amounts and
accrued interest thereon (excluding therefrom an amount
equal to that portion of such interest calculated at a
rate per annum in excess of the rate per annum provided
for under Subsection 2.03(b), such excluded amount being
the "Excess Interest"), if any, in respect of Permitted
Letters of Credit issued by such Bank bears to (y) the
sum of the aggregate unpaid principal of and interest on
the Notes plus the aggregate amount of Permitted Letter
of Credit Amounts and accrued interest thereon
(excluding therefrom an amount equal to the aggregate
Excess Interest), if any, on the relevant Distribution
Date (all such partial prepayments to be applied by each
Bank first to the payment of accrued and unpaid interest
on the Notes and Permitted Letter of Credit Amounts, if
any, of such Bank, then to the payment of principal
thereon and finally pursuant to the documents evidencing
the Permitted Letter of Credit Amounts, if any, of such
Bank); provided, however, in the event any Bank that has
issued a Permitted Letter of Credit does not for any
reason apply its portion of the proceeds of the
Collateral as provided herein within 30 days after the
expiration date of such Permitted Letter of Credit, such
Bank shall return all such unapplied proceeds to the
Agent for distribution to the Banks for the ratable
application to any unpaid obligations held by the Banks
in respect of the Notes and any other Permitted Letters
of Credit;
THIRD: to the Banks in an amount equal to the sum of unpaid
commitment and agent's fees payable under this Agreement
plus the fees, if any, due in respect of any Permitted
Letters of Credit (collectively the "Fees"), whether
matured or unmatured, and, in the event such moneys
shall be insufficient to pay in full such amount, then
to the payment thereof ratably to each Bank in the same
proportion which the aggregate amount of Fees due to
such Bank bears to the aggregate unpaid Fees due to all
the Banks on the relevant Distribution Date;
FOURTH: to the Banks in an amount equal to the aggregate Excess
Interest plus all other amounts due under this Agreement
and the Security Documents (collectively the "Other
Amounts"), and in the event such moneys shall be
insufficient to pay in full such amount, then to the
payment thereof ratably to each Bank in the same
proportion which the aggregate amount of Other Amounts
due such Bank bears to the aggregate unpaid Other
Amounts due to all the Banks on the relevant
Distribution Date; and
FIFTH: any surplus then remaining shall be paid to the Company,
or to its successors and assigns, or to whomsoever may
be lawfully entitled to receive the same, or as a court
of competent jurisdiction may direct.
(b) The term "unpaid" as used in this Section 10.05 shall
mean all obligations outstanding as of a Distribution Date as to which
prior distributions have not been made, after giving effect to any
adjustments which are made pursuant to Section 10.04 and of which the
Agent shall have been notified.
11. THE AGENT.
11.01 Appointment of Agent; Authority. Each of the Banks
irrevocably appoints and authorizes the Agent to act on its behalf under
this Agreement and under the Security Documents, and to exercise such
powers hereunder and thereunder as are specifically delegated to or
required of the Agent by the terms hereof and thereof, together with such
powers as may be reasonably incidental thereto. As to (i) any action
which is discretionary with the Agent under the provisions hereof or of
the Notes or the Security Documents or (ii) any action not expressly
required of the Agent by this Agreement, the Notes and the Security
Documents (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of all of the Banks, and such instructions shall be binding
upon all Banks and all holders of Notes; provided, however, that the Agent
shall not be required to take any action which, in the reasonable opinion
of the Agent, either exposes the Agent to personal liability or is
contrary to this Agreement, any Note, any Security Document or applicable
law.
11.02 INDEMNIFICATION OF AGENT. The Agent shall not be required to
take any action hereunder or to prosecute or defend any suit in respect of
this Agreement, the Notes or the Security Documents, unless indemnified to
its satisfaction by the Banks against loss, cost, liability and expense.
If any indemnity furnished to the Agent shall become impaired, it may call
for additional indemnity and cease to do the acts indemnified against
until such additional indemnity is given. In addition EACH OF THE BANKS
AGREES TO INDEMNIFY the Agent, its officers, directors, employees,
attorneys and agents (each an "Indemnified Party") (to the extent not
reimbursed by the Company), ratably according to such Bank's Ratable
Share, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against such Indemnified Party in any way
relating to or arising out of this Agreement, the Security Documents, or
the Notes, or any of them, or any action taken or omitted by such
Indemnified Party under this Agreement, the Security Documents or the
Notes, or any of them, provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from
such Indemnified Party's gross negligence or willful misconduct, provided
further, that IT IS THE INTENTION OF THE BANKS TO INDEMNIFY EACH
INDEMNIFIED PARTY FROM AND AGAINST THE CONSEQUENCES OF ITS OWN
NEGLIGENCE.
Without limiting the generality of the foregoing, each Bank agrees to
reimburse each Indemnified Party promptly upon demand for its Ratable
Share of any out-of-pocket expenses (including counsel fees) incurred by
such Indemnified Party in connection with the preparation, execution,
administration or enforcement of, or the preservation of any rights
hereunder or under the Notes or the Security Documents to the extent such
Indemnified Party is not reimbursed by the Company.
The payment obligations and indemnities contained in this
Section 11.02 shall survive the payment or sale or transfer of the Notes,
and the termination of this Agreement (i) with respect to all events,
facts, conditions or other circumstances occurring or existing prior to
such sale, transfer or termination, and (ii) with respect to all
liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs, charges, expenses and disbursements, whenever the same shall
be imposed, incurred or asserted (whether before or after such sale,
transfer, resignation, removal or termination), arising out of the events,
facts, conditions or other circumstances referred to in the first
paragraph of this Section 11.02. The aforesaid payment obligations and
indemnities are made expressly for the benefit of, and shall be
enforceable by, any Indemnified Party.
11.03 LIABILITY OF AGENT. NEITHER THE AGENT NOR ANY OTHER
INDEMNIFIED PARTY SHALL BE LIABLE FOR ANY ACTION TAKEN OR OMITTED
BY IT OR
THEM HEREUNDER, OR IN CONNECTION HEREWITH, (i) with the consent or at the
request of the Banks, or (ii) in the absence of its or their own gross
negligence or willful misconduct. Without limitation of the generality of
the foregoing, the Agent: (i) may treat the payee of any Note as the
holder thereof until the Agent receives written notice of the assignment
or transfer thereof signed by such payee and in form satisfactory to the
Agent; (ii) may consult with legal counsel (including counsel for the
Company), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any
Bank and shall not be responsible to any Bank for any statements,
warranties or representations made in or in connection with this
Agreement, any Security Document or any Note; (iv) shall not have any duty
to ascertain or to inquire as to the performance or observance or any of
the terms, covenants or conditions of this Agreement, the Security
Documents or any Note, or to inspect the property (including the books and
records) of the Company or any Subsidiary; (v) shall not be deemed to have
notice of any Default or Event of Default absent actual knowledge thereof
by a Responsible Officer of the Agent; (vi) shall not be responsible to
any Bank for the due execution, legality, validity, enforceability or
genuineness of this Agreement, any Security Document or any Note, or any
other instrument or document furnished pursuant thereto; and (vii) shall
incur no liability under or in respect of the Agreement, any Security
Document or any Note by acting upon any notice or consent (whether oral or
written and whether by telephone, telegram, cable, telex or facsimile),
certificate or other instrument or writing (which may be by telegram,
cable, telex or facsimile) believed by it to be genuine and communicated,
signed or sent by the proper person or persons.
11.04 Independent Credit Decision. Each Bank agrees that it has
relied solely upon its independent review of the financial statements of
the Company and all other representations and warranties made by the
Company herein or otherwise in making the credit decisions preliminary to
entering into this Agreement and agrees that it will continue to rely
solely upon its independent review of the facts and circumstances of the
Company in making future decisions with respect to this Agreement and the
Borrowings. Each Bank agrees that it has not relied and will not rely
upon the Agent or any other Bank respecting the ability of the Company to
perform its obligations pursuant to this Agreement, the Notes or any
Security Document.
11.05 Agent and Affiliates; Multiple Capacities. With respect to its
Commitment, the Loans made by it and the Notes payable to it, NationsBank
shall have the same rights and powers under this Agreement, the Security
Documents and the Notes as any other Bank and may exercise the same as
though it were not the Agent; and the term "Bank" or "Banks" shall, unless
otherwise expressly indicated, include NationsBank in its individual
capacity. NationsBank and its affiliates may accept deposits from, lend
money to, act as trustee under indentures of and generally engage in any
kind of business with, the Company, any of the Subsidiaries and any person
or entity who may do business with or own securities of any of them or of
their subsidiaries, all as if NationsBank were not the Agent and without
any duty to account therefor to the Banks. No exercise or failure to
exercise by NationsBank of any of its discretionary powers, rights or
remedies in one capacity shall constitute, or be deemed to constitute, a
breach of any duty of loyalty, fiduciary duty or other duty which
NationsBank has, or may have, in any other capacity. If at any time any
other Bank shall serve as Agent, the foregoing provisions of this Section
11.05 shall apply to such Bank mutatis mutandis.
11.06 Successor Agent. The Agent or any successor or successors
hereunder may at any time, by giving 30 days' prior written notice to the
Company and the Banks, resign and be discharged of the responsibilities
under this Agreement, the Security Documents and the Notes, such
resignation to become effective upon the earlier of (i) 30 days from the
date of such notice or (ii) the appointment of a successor agent, and the
approval of such successor agent by the Majority Banks and the Company
(which consent of the Company will not be unreasonably withheld). The
Agent may be removed at any time and a successor agent appointed, with the
consent of the Company (which consent shall not be unreasonably withheld),
by the affirmative vote of all of the Banks (other than the Agent);
provided that the Agent so removed shall be entitled to its fees and
expenses to the date of removal. If no successor agent shall be appointed
and accepted within 30 days from the date of the giving of the aforesaid
notice of resignation or within 30 days from the date of such removal, the
Bank that is an original party to this Agreement (excluding the Agent that
has resigned or been removed) having the largest Ratable Share shall
become the Agent. Any such successor agent shall immediately and without
further act be superseded by any successor agent appointed by the Banks as
above provided. Upon the acceptance of any appointment as Agent under
this Agreement by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent. After any retiring Agent's resignation or
removal as Agent under this Agreement, the Security Documents and the
Notes, the provisions of this Article 11 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under
this Agreement, the Security Documents and the Notes.
12. MISCELLANEOUS.
12.01 No Waiver; Remedies. No failure or delay on the part of the
Agent or any Bank in exercising any power or right hereunder or under the
Notes or any Security Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any
other right or power. The remedies herein are cumulative and not
exclusive of any remedies provided by law.
12.02 Amendments, Etc. Except for amendments to the Security
Documents to effect the addition or release of certain Collateral pursuant
to Sections 9.02, 9.03, or 9.05, no modification or waiver of any
provision of this Agreement, any of the Security Documents or the Notes
and no consent to the departure by the Company therefrom shall in any
event be effective unless the same shall be in writing and signed by the
Majority Banks, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Majority Banks, affect the rights
or duties of the Agent hereunder or under any Security Document. No
notice to or demand on the Company in any case shall entitle the Company
to any other or further notice or demand in similar or other
circumstances.
12.03 Duty With Respect to Collateral. The duty of the Agent and
any Bank with respect to the Collateral shall be solely to use reasonable
care in the custody and preservation of Collateral in its possession, and
neither the Agent nor any Bank shall be required to take any steps to
preserve rights against prior parties.
12.04 Performance of Company's Covenants. If the Company shall fail
to perform or cause to be performed any of the covenants contained in
Subsections 7.06(b)-(h), 7.09, 7.10 and 7.11, any Bank may, but shall be
under no obligation to, advance sums to perform the same on its behalf;
and sums so advanced by such Bank shall be repaid by the Company on demand
and shall bear interest at the rate of the lesser of the Highest Lawful
Rate or the Prime Rate plus 3% per annum until paid, and shall be secured
hereby, having the benefit of the Security Interest. No such advance
shall be deemed to relieve the Company from any default under this
Agreement.
12.05 INDEMNITIES. Any provision hereof to the contrary
notwithstanding, and whether or not the transactions contemplated by this
Agreement shall be consummated:
(a) The Company agrees to pay on demand (i) all reasonable
costs and expenses of the Agent and the Banks paid to third parties in
connection with the preparation, execution, delivery and administration of
this Agreement, the Notes and the Security Documents, and also in
connection with any future amendment or supplement to or waiver or release
with respect to (whether or not given) any of the foregoing (including,
without limitation, the reasonable fees and out-of-pocket expenses of
Baker & Botts, L.L.P., special counsel for the Agent and the Banks, and
Liskow & Lewis, special Louisiana counsel for the Agent and the Banks),
and (ii) all reasonable costs and expenses of the Agent and the Banks
(including reasonable counsel fees and expenses), if any, in connection
with the enforcement of, and preservation of any rights under this
Agreement, the Notes and the Security Documents.
(b) THE COMPANY HEREBY ASSUMES LIABILITY FOR, AND AGREES TO
INDEMNIFY, PROTECT, SAVE AND KEEP HARMLESS the Agent and each Bank and
their respective successors and assigns and any of their respective
officers, directors, employees, attorneys and agents, and any of them
(hereinafter for purposes hereof called an "Indemnified Bank Party"), from
and against, any and all liabilities, obligations, losses, damages,
penalties, claims, causes of action, suits, demands, judgments, costs,
charges, expenses and disbursements (including legal fees and expenses),
of whatsoever kind and nature (hereinafter for the purposes hereof
collectively called "Expenses"), imposed on, asserted against or incurred
or suffered by any Indemnified Bank Party and in any way relating to or
arising out of this Agreement, any of the Security Documents or the
construction, manufacture, installation, purchase, acceptance,
non-acceptance, rejection, ownership, delivery, non-delivery, possession,
use, occupancy, transportation, operation, insurance, condition, safety,
return, sale, exchange or other disposition of or in respect of the
Collateral or any portion thereof or interest therein, including latent
and other defects, whether or not discoverable by the Company or any
Indemnified Bank Party, any claim for patent, trademark or copyright
infringement, any claim arising under the strict liability doctrine in
tort or any claim arising from (a) injury to persons or property growing
out of or in connection with the ownership or use of the Collateral, or
any portion thereof or interest therein, or resulting from the condition
or safety thereof or (b) violation or breach by the Company of any
representation, warranty, covenant, agreement or condition contained in
this Agreement or any of the Security Documents or of conditions,
agreements, laws, regulations, requirements and rules affecting or
relating to the Collateral, or any portion thereof or interest therein;
provided, however, that the Company shall not be required to indemnify any
Indemnified Bank Party against Expenses incurred by an Indemnified Bank
Party attributable to its gross negligence or willful misconduct;
provided, further, THAT IT IS THE INTENT OF THE PARTIES HERETO THAT THE
COMPANY INDEMNIFY EACH INDEMNIFIED BANK PARTY AGAINST EXPENSES
INCURRED BY
AN INDEMNIFIED BANK PARTY ATTRIBUTABLE TO THE CONSEQUENCES OF ITS
OWN
NEGLIGENCE, WHETHER SOLE, CONCURRENT, CONTRIBUTORY OR OTHERWISE.
If the
Company shall have knowledge of any Expense hereby indemnified against, it
will give prompt written notice thereof to every Indemnified Bank Party
concerned. All amounts payable by the Company under this Subsection
12.05(b) shall be paid directly to the Indemnified Bank Party or Parties
entitled to indemnification. The Company shall be obligated under this
Subsection 12.05(b) as primary obligor whether or not any Indemnified Bank
Party shall also be indemnified with respect to the same matter under any
other agreement by any other person, and any Indemnified Bank Party
seeking to enforce the indemnification by the Company may proceed directly
against the Company under this Subsection 12.05(b) without first resorting
to any such other rights of indemnification. If any action, suit or
proceeding shall be brought against any Indemnified Bank Party in
connection with any claim indemnified against under this Subsection
12.05(b), the Company may (and, upon such Indemnified Bank Party's
request, will), at the Company's own cost and expense, resist and defend
such action, suit or proceeding, or cause the same to be resisted and
defended, by counsel selected by the Company and approved by such
Indemnified Bank Party, and, in the event of any failure by the Company to
do so, the Company will pay all costs and expenses (including legal fees
and expenses) incurred by such Indemnified Bank Party in connection with
such action, suit or proceeding. In the event that the Company shall be
required to make any payment under this Subsection 12.05(b), the amount
payable (and which the Company hereby covenants to pay) shall be an amount
which, after deduction of all taxes required to be paid by the particular
Indemnified Bank Party in respect of the receipt thereof under the laws of
the United States of America or of any political subdivision thereof
(after giving credit for any savings in respect of any such taxes by
reason of deductions, credits or allowances in respect of the payment of
the expense indemnified against, and of any such taxes), shall be equal to
the amount of such payment. Upon the payment in full by the Company of
any indemnities under this Subsection 12.05(b), the Company shall be
subrogated to any right of such Indemnified Bank Party in respect of the
matter against which indemnity shall have been given. Thereafter, and so
long as no Default or Event of Default has occurred and is continuing, any
payment received by any Indemnified Bank Party from any person (except the
Company) as a result of any matter with respect to which such Indemnified
Bank Party has been indemnified by the Company under this Subsection
12.05(b) shall be paid over to the Company to the extent necessary to
reimburse the Company for indemnification payments previously made.
Without limiting the generality of the foregoing, THE COMPANY
HEREBY ASSUMES LIABILITY FOR, AND AGREES TO INDEMNIFY, PROTECT, SAVE
AND
KEEP HARMLESS each Indemnified Bank Party from and against, any and all
liabilities, obligations, losses, damages, penalties, claims, causes of
action, suits, demands, judgments, costs, charges, expenses and
disbursements (including legal fees and expenses), which any of the
Indemnified Bank Parties may sustain or incur by reason of or arising out
of any and all claims or proceedings (whether brought by a private party,
governmental authority, or otherwise) for bodily injury, property damage,
abatement, remediation, environmental damage, or impairment or any other
injury or damage resulting from or relating to any Hazardous Materials
located upon, migrating into, from, or through or otherwise relating to
any property of the Company or any Subsidiary (whether or not the release
of such Hazardous Materials was caused by the Company, any Subsidiary, a
tenant, or subtenant of the Company or any Subsidiary, a prior owner, a
tenant or subtenant of any prior owner or any other party and whether or
not the alleged liability is attributable to the handling, storage,
generation, transportation, or disposal of any Hazardous Materials or the
mere presence of any Hazardous Materials on such property; provided that
the Company shall not be liable to the Indemnified Bank Parties where the
release of such Hazardous Materials occurs at any time after which the
Company or any Subsidiary has ceased to own such property), which any
Indemnified Bank Party may incur due to the making of Loans or the
Commitments hereunder, the exercise of any of its rights under this
Agreement, the Notes, the Security Documents, or otherwise, provided that
no Indemnified Bank Party shall be entitled to the benefits of this
paragraph to the extent its own gross negligence or willful misconduct
contributed to its loss, provided, further, THAT IT IS THE INTENT OF THE
PARTIES HERETO THAT THE COMPANY INDEMNIFY EACH INDEMNIFIED BANK
PARTY FROM
AND AGAINST THE CONSEQUENCES OF SUCH INDEMNIFIED BANK PARTY'S OWN
NEGLIGENCE, WHETHER SOLE, CONCURRENT, CONTRIBUTORY OR OTHERWISE.
If any
action, suit or proceeding shall be brought against any Indemnified Bank
Party in connection with any claim indemnified against under this
paragraph of this Subsection 12.05(b), the Company may (and, upon such
Indemnified Bank Party's request, will), at the Company's own cost and
expense, resist and defend such action, suit or proceeding, or cause the
same to be resisted and defended, by counsel selected by the Company and
approved by such Indemnified Bank Party, and, in the event of any failure
by the Company to do so, the Company will pay all costs and expenses
(including legal fees and expenses) incurred by such Indemnified Bank
Party in connection with such action, suit or proceeding. Upon the
payment in full by the Company of any indemnities under this Subsection
12.05(b), the Company shall be subrogated to any right of such Indemnified
Bank Party in respect of the matter against which indemnity shall have
been given. Thereafter, and so long as no Default or Event of Default has
occurred and is continuing, any payment received by any Indemnified Bank
Party from any person (except the Company) as a result of any matter with
respect to which such Indemnified Bank Party has been indemnified by the
Company under this Subsection 12.05(b) shall be paid over to the Company
to the extent necessary to reimburse the Company for indemnification
payments previously made.
(c) The payment obligations and indemnities contained in
this Section 12.05 shall survive the payment or sale or transfer of the
Notes, and the termination of this Agreement with respect to all events,
facts, conditions or other circumstances occurring or existing prior to
such sale, transfer or termination, and with respect to all liabilities,
obligations, losses, damages, penalties, claims, actions, suits, costs,
charges, expenses and disbursements, whenever the same shall be imposed,
incurred or asserted (whether before or after such sale, transfer,
resignation, removal or termination), arising out of the events, facts,
conditions or other circumstances referred to in clause (i) of this
Subsection 12.05(c). The aforesaid payment obligations and indemnities
are made expressly for the benefit of, and shall be enforceable by, any
Indemnified Bank Party.
12.06 Notices. Notices and other communications provided for
herein shall be in writing (including telegraphic, telex, cable or
facsimile communication) and shall be delivered, mailed, telegraphed,
telexed or cabled addressed as follows:
(a) If to the Company, to it at:
Mr. John H. Untereker
Petroleum Helicopters, Inc.
113 Borman Drive
Municipal Airport
Lafayette, LA 70508
Telecopy: (504) 828-8333
(b) If to the Agent or NationsBank, to it at:
901 Main St., Suite 6700
Dallas, Texas 75202
Attention: Mr. Thomas Blake
Telecopy No.: (214) 508-0980
(c) If to Whitney, to it at:
228 St. Charles
New Orleans, Louisiana 70130
Attention: Mr. Harry Stahel
Telecopy No.: (504) 599-3073
(d) If to FNBC, to it at:
210 Baronne Street
New Orleans, Louisiana 70130
Attention: Mr. J. Charles Freel, Jr.
Telecopy No.: 504-561-1316
All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have
been given (a) when deposited in the United States mail, when sent by
registered or certified mail, return receipt requested, and with proper
postage prepaid; (b) when sent (after receipt of confirmation or answer
back), if sent by telecopy, telex or other similar facsimile transmission;
(c) when deposited with a reputable overnight courier with all charges
prepaid; or (d) when delivered, if hand-delivered by messenger; and in
each case addressed to such party as provided in this Section 12.06 or in
accordance with the latest unrevoked direction from such party, except for
Notices of Borrowing, Notices of Election and notices of prepayment of
Loans hereunder, each of which shall be deemed to have been given only
when actually received by the Agent.
12.07 Binding Effect. This Agreement shall become effective when it
shall have been executed by the Company, the Agent and the Banks, and
thereafter shall be binding upon and inure to the benefit of the Company,
the Agent and each Bank and their respective successors and assigns,
except that the Company shall not have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Banks.
12.08 Interest. No provision of this Agreement or of the Notes, any
Security Document or any other instrument is intended or shall be
construed to require or permit the payment or collection of interest at a
rate that exceeds the Highest Lawful Rate (and, to the extent that the
Highest Lawful Rate is at any time determined by Texas law, such rate
shall be the "indicated rate ceiling" described in Section (a)(1) of
Article 1.04 of Chapter 1, Subtitle 1, Title 79, of the Revised Civil
Statutes of Texas, 1925, as amended; provided, however, to the extent
permitted by such Article, the Banks from time to time by notice through
the Agent to the Company may revise the aforesaid election of such
interest rate ceiling as such ceiling affects the then current or future
balances of the Borrowings outstanding under the Notes). Accordingly, if
the maturity of the Notes is accelerated for any reason, or in the event
of voluntary prepayment of all or any portion of the Notes by the Company,
or in any other event, earned interest for any Bank on each Borrowing may
never exceed the Highest Lawful Rate, computed from the Borrowing Date of
each such Borrowing until payment, and any unearned interest otherwise
payable under any Note which is in excess of the Highest Lawful Rate shall
be canceled automatically as of the date of such acceleration or
prepayment or other such event and (if theretofore paid) shall, at the
option of the holder of such Note, be either refunded to the Company or
credited on the principal of such Note. In determining whether or not the
interest paid or payable, under any specific contingency, exceeds the
Highest Lawful Rate, the Company and the Banks shall, to the maximum
extent permitted by applicable law, (a) characterize any nonprincipal
payment as an expense, fee or premium rather than as interest, and (b)
amortize, prorate, allocate and spread, in equal parts during the period
of the full stated term of the borrowing in question, all interest at any
time contracted for, charged, received or reserved in connection with such
Borrowing.
12.09 Survival of Representations and Warranties. All
representations, warranties and covenants contained herein or made in
writing by the Company in connection herewith shall survive the execution
and delivery of this Agreement and of the Notes, and will bind and inure
to the benefit of the respective successors and assigns of the parties
hereto, whether so expressed or not, provided that the undertaking of the
Banks to make the Loans to the Company shall not inure to the benefit of
any successor or assign of the Company.
12.10 Severability. Should any clause, sentence, paragraph,
subsection or section of this Agreement be judicially declared to be
invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Agreement, and the parties
hereto agree that the part or parts of this Agreement so held to be
invalid, unenforceable or void will be deemed to have been stricken
herefrom and the remainder will have the same force and effectiveness as
if such part or parts had never been included herein.
12.11 Descriptive Headings. The section headings in this Agreement
have been inserted for convenience only and shall be given no substantive
meaning or significance whatever in construing the terms and provisions of
this Agreement.
12.12 Counterparts. This Agreement may be executed in several
counterparts, and by the parties hereto on separate counterparts. When
counterparts executed by all the parties shall have been delivered to the
Agent, this Agreement shall become effective, and at such time the Agent
shall notify the Company and each Bank. Each counterpart, when so
executed and delivered, shall constitute an original instrument, and all
such separate counterparts shall constitute but one and the same
instrument.
12.13 GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
INTERPRETED AND GOVERNED BY, AND THE RIGHTS, OBLIGATIONS AND
LIABILITIES
OF THE PARTIES HERETO AND THERETO SHALL BE DETERMINED IN
ACCORDANCE WITH,
THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW. Without
limitation of the foregoing, nothing in this Agreement or in the Notes
shall be deemed to constitute a waiver of any rights which any Bank may
have under applicable federal legislation relating to the rate of interest
which such Bank may contract for, take, reserve, receive or charge in
respect of any borrowing. Chapter 15, Subtitle 3, Title 79, of the
Revised Civil Statutes of Texas, 1925, as amended (relating to revolving
loan and revolving triparty accounts), shall not apply to this Agreement
or the Notes hereunder or the transactions contemplated hereby.
THIS WRITTEN "LOAN AGREEMENT" (AS DEFINED IN SECTION 26.02 OF
THE TEXAS BUSINESS AND COMMERCE CODE, AS IN EFFECT ON THE EFFECTIVE
DATE
AND AS THE SAME MAY THEREAFTER BE AMENDED AT ANY TIME AND FROM
TIME TO
TIME), TOGETHER WITH THE NOTES AND THE SECURITY DOCUMENTS,
REPRESENTS THE
FINAL AGREEMENT BETWEEN THE COMPANY, THE BANKS AND THE AGENT AND
MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL
AGREEMENTS OF SAID PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS
BETWEEN SAID PARTIES.
<PAGE>
IN WITNESS WHEREOF, the parties hereto, by their officers
thereunto duly authorized, have executed this Agreement as of the day and
year first above written.
PETROLEUM HELICOPTERS, INC.
By:
Name:
Title:
NATIONSBANK OF TEXAS, N.A.,
individually and as Agent
By:
Name:
Title:
WHITNEY NATIONAL BANK
By:
Name:
Title:
FIRST NATIONAL BANK OF COMMERCE
By:
Name:
Title:
EXHIBIT A
PETROLEUM HELICOPTERS, INC.
Revolving Credit and Term Note
$ August ___, 1996
FOR VALUE RECEIVED, the undersigned, Petroleum Helicopters, Inc., a
Louisiana corporation (successor by merger to Petroleum Helicopters, Inc.,
a Delaware corporation) (herein called the "Company"), hereby promises to
pay to the order of (herein called the "Bank") in lawful money of the United
States of America on or before the Termination Date unless the maturity is
earlier accelerated, the principal sum of and ___/100 Dollars ($ )
or, if less, the aggregate unpaid principal amount of all Loans made by the
Bank to the Company and outstanding on the Termination Date, at such times
and upon the terms set forth in that certain Amended and Restated Loan
Agreement dated as of August [__], 1996 (as the same heretofore has been
amended and as the same hereafter from time to time may be supplemented,
amended, restated, extended or otherwise modified, the "Amended and Restated
Loan Agreement") among the Company, the Bank, the other Banks and NationsBank
of Texas, N.A., as Agent thereunder. The Company also agrees to pay interest
on the unpaid principal balance of this note from the date hereof until
maturity, whether by acceleration or otherwise, payable on each Interest
Payment Date during such period and at maturity, at the rate or rates per
annum provided for in the Amended and Restated Loan Agreement. Capitalized
terms used but not otherwise defined herein shall have the respective
meanings assigned to them in the Amended and Restated Loan Agreement.
If any payment or prepayment of principal or interest on this note shall
become due on a day that is not a Business Day, such payment or prepayment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in computing interest in connection with such
payment or prepayment provided, however, if such extension would cause payment
of interest on or principal of LIBOR Loans to be made in the next following
calendar month, such payment shall be made on the next preceding Business Day.
All past due principal and interest on this note shall bear interest at
a rate equal to the lesser of (i) the Prime Rate plus 3% per annum or (ii)
the Highest Lawful Rate.
Payments of both principal and interest are to be made in immediately
available funds at the Office of the Agent or such other place as the Agent
shall designate in writing to the Company.
This note is one of the Notes provided for in, and is entitled to the
benefits of, the Amended and Restated Loan Agreement which Amended and
Restated Loan Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain stated
events, for prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified and to the effect that
no provision of the Amended and Restated Loan Agreement, the Security
Documents or this note shall be construed to require or permit the payment or
collection of interest at a rate that exceeds the Highest Lawful Rate. This
note is secured by and entitled to the benefits of the Security Documents.
Furthermore, this note does not effect a novation but is given, to
the fullest extent applicable, in modification, renewal, extension,
rearrangement and replacement of (i) that certain Capital Loan Note dated as
of October 31, 1995, in the principal face amount of $______, executed by
the Company, payable to the order of the Bank (the "1995 Capital Loan Note"),
which 1995 Capital Loan Note modified, renewed, extended, rearranged and
replaced certain indebtedness evidenced by that certain Capital Loan Note of the
Company dated as of October 31, 1994 (the "1994 Capital Loan Note"), which
1994 Capital Loan Note modified, renewed, extended, rearranged and replaced
certain indebtedness evidenced by that certain Capital Loan Note of the
Company dated as of July 9, 1993 (the "1993 Capital Loan Note"), which 1993
Capital Loan Note modified, renewed, extended, rearranged and replaced
certain indebtedness evidenced by that certain Term Note of the Company dated
October 29, 1991 (the "1991 Term Note"), which 1991 Term Note modified,
renewed, extended, rearranged and replaced certain indebtedness evidenced by
certain Term Notes of the Company dated as of December 28, 1990 (the "1990
Term Notes"), which 1990 Term Notes modified, renewed, extended, rearranged
and replaced certain indebtedness originally evidenced by certain Term Notes
of the Company dated as of April 22, 1986, and (ii) that certain Revolving
Credit Note dated as of October 31, 1995 in the principal face amount of
$_______________, executed by the Company, payable to the order of the Bank
(the "October 1995 Note"), which October 1995 Note modified, renewed, extended,
rearranged and replaced certain indebtedness evidenced by that certain
Revolving Credit Note dated as of October 31, 1994 (the "October 1994 Note"),
which October 1994 Note modified, renewed, extended, rearranged and replaced
certain indebtedness evidenced by that certain Revolving Credit Note dated
as of October 31, 1993 (the "October 1993 Note"), which October 1993 Note
modified, renewed, extended, rearranged and replaced certain indebtedness
evidenced by that certain Revolving Credit Note dated as of July 9, 1993
(the "July 1993 Note"), which July 1993 Note modified, renewed, extended,
rearranged and replaced certain indebtedness originally evidenced by certain
Revolving Credit Notes of the Company dated as of April 22, 1986 (the "1986
Notes"), and delivered pursuant to that certain Loan Agreement originally
dated as of January 31, 1986, as amended and restated in its entirety as of
August 1, 1988, amended and restated in its entirety as of December 28, 1990
and amended and restated in its entirety as of July 9, 1993, of which said
Loan Agreement the Amended and Restated Loan Agreement is an amendment and
restatement in its entirety. All liens and security interests securing
payment of the 1995 Capital Loan Note and the October 1995 Note (including,
without limitation, those securing payment of the 1994 Capital Loan Note,
the 1993 Capital Loan Note, the 1991 Term Note, the 1990 Term Notes, the
October 1994 Note, the October 1993 Note, the July 1993 Note, and the 1986
Notes) are hereby collectively renewed, extended, rearranged, ratified and
brought forward as security for the payment and performance of this note.
The Company hereby agrees that this modification, renewal, extension,
rearrangement, and replacement shall in no manner affect, release, cancel,
terminate, extinguish or otherwise impair the liens and security interests
securing payment of the 1995 Capital Loan Note and the October 1995 Note and
that said liens and security interests shall not in any manner be waived.
The Company and any and all endorsers, guarantors and sureties severally
waive grace, demand, presentment for payment, notice of dishonor or default,
protest, notice of intent to accelerate, notice of acceleration and notice of
protest and diligence in collecting and bringing of suit against any party
hereto, and agree to all renewals, extensions or partial payments hereon, in
whole or in part, with or without notice, before or after maturity.
THIS NOTE SHALL BE INTERPRETED AND GOVERNED BY, AND THE
RIGHTS, OBLIGATIONS AND LIABILITIES OF THE PARTIES HERETO SHALL BE
DETERMINED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS AND
APPLICABLE FEDERAL LAW.
PETROLEUM HELICOPTERS, INC.
By:
Name:
Title:
EXHIBIT C
BORROWING BASE CERTIFICATE
The undersigned [Carroll W. Suggs or John H. Untereker] the [Chairman of the
Board or the Treasurer, respectively] of Petroleum Helicopters, Inc., a
Louisiana corporation (the "Company"), on my behalf and on behalf of the
Company, hereby certifies as to the matters set forth in the numbered
paragraphs below. The capitalized terms used and not defined herein are used
with the same meaning assigned thereto in that certain Amended and Restated
Loan Agreement among the Company and NationsBank of Texas, N.A., individually
and as agent, Whitney National Bank, and First National Bank of Commerce
dated as of August 9, 1996.
1. As of the date hereof, the Borrowing Base is [$___________], which
consists of (i) 80% of Eligible Receivables ([$___________]), as
more fully set forth on Annex 1 attached hereto and made a part hereof,
(ii) 50% of the Appraised Value of the Aircraft ([$___________]),
as more fully set forth on Annex 2 attached hereto and made a part
hereof, and (iii) the Value of Pledged Securities ([$___________]), as
more fully set forth on Annex 3 attached hereto and made a part hereof.
2. [After giving effect to the Borrowing contemplated in the Notice of
Borrowing dated [_______________], the] The aggregate principal amount
of the Loans and the aggregate amount of Permitted Letter of Credit
Amounts does not [will not] exceed the Borrowing Base.
IN TESTIMONY WHEREOF, I hereunto set over my hand and affix the
corporate seal of the Company on this ___ day of _____________, ____.
[Carroll W. Suggs or John H. Untereker]
[Chairman of the Board or Treasurer,respectively]
EXHIBIT E
OFFICER'S CERTIFICATE AS TO RELEASE OF COLLATERAL
The undersigned [Carroll W. Suggs or John H. Untereker] the [Chairman of the
Board or the Treasurer, respectively] of Petroleum Helicopters, Inc., a
Lousiana corporation (the "Company"), on my behalf and on behalf of the
Company, hereby certifies as to the matters set forth in the numbered
paragraphs below. The capitalized terms used and not defined herein are
used with the same meaning assigned thereto in that certain Amended and
Restated Loan Agreement among the Company and NationsBank of Texas, N.A.,
individually and as agent, Whitney National Bank, and First National Bank of
Commerce dated as of August ___, 1996 (the "Loan Agreement").
1. The Company is currently and will be, immediately after giving effect to
Amendment No. ____ dated ________, ____, to the Louisiana Security
Agreement (the "Amendment"), in full compliance with all of the
provisions of the Loan Agreement.
2. The helicopters to be released consist of one or more complete helicopters
or other Aviation Units.
3. The portion of the Aircraft remaining subject to the Security Interest
consists of complete helicopters or other Aviation Units in the
operating condition required by Section 7.09 of the Loan Agreement to
be maintained by the Company.
4. The Company has satisfied, or promptly hereafter will satisfy, the
requirements of the proviso of Subsection 9.05(b) of the Loan Agreement.
5. There are no more than three (3) Aircraft that are the subject of
releases from the Security Interest with respect to which all the
requirements set forth in Subsection 9.05(b), including those with
respect to the Aviation Units to be subjected to the Security Interest
in place thereof, have not been satisfied.
6. There is currently no Default or Event of Default under the Loan
Agreement, no such Default or Event of Default is imminent and no such
Default or Event of Default will be precipitated or continued by the
transactions contemplated herein. The Company is currently, and
immediately after giving effect to the Amendment will be, in full
compliance with each of the Security Documents.
IN TESTIMONY WHEREOF, I hereunto set over my hand and affix the
corporate seal of the Company on this ___ day of _____________, ____.
[Carroll W. Suggs or John H. Untereker]
[Chairman of the Board or Treasurer,respectively]
FORM OF
RESTRICTED STOCK AGREEMENT
UNDER THE AMENDED AND RESTATED
PETROLEUM HELICOPTERS, INC.
1995 INCENTIVE COMPENSATION PLAN, AS AMENDED
THIS AGREEMENT is entered into as of July 30, 1996, by and between
Petroleum Helicopters, Inc., a Louisiana corporation ("PHI"), and
______________ (the "Award Recipient").
WHEREAS, under the Amended and Restated Petroleum Helicopters, Inc.
1995 Incentive Compensation Plan, as amended (the "Plan"), the Compensation
Committee of the PHI Board of Directors (the "Committee") may, among other
things, award options to purchase shares of the non-voting common stock,
$.10 par value per share, of PHI (the "Common Stock") to a key employee of
PHI or one of its subsidiaries (collectively, the "Company"); and
WHEREAS, pursuant to the Plan, on July 30, 1996, the Committee awarded
Restricted Stock to the Award Recipient, subject to the attainment of
specific performance goals and other terms, conditions, and restrictions set
forth in the Plan and this Agreement;
NOW, THEREFORE, in consideration of the premises, it is agreed as
follows:
1.
Conditional Award of Restricted Stock
Pursuant to the terms of the Plan, the Award Recipient is hereby
awarded, subject to the attainment of the performance goals contained in
Section 2 hereof and the other terms, conditions, and restrictions contained
herein, the number of shares of Restricted Stock calculated in accordance
with the terms of Section 2 hereof, which shall be issuable to the Award
Recipient on the date set forth in Section 2.
2.
Performance Conditions for Issuance of Restricted Stock
2.1 Effective July 31, 1997, the Committee shall determine the
number of shares of Restricted Stock that will be issued as of that date to
the Award Recipient, which number shall be equal to the sum of (i) the
number of shares of Restricted Stock calculated based on Company performance
in accordance with Section 2.1(a) below, (ii) the number of shares of
Restricted Stock calculated based on the performance of the __________ Unit
(the "Unit") in accordance with Section 2.1(b) below, and (iii) the number
of shares of Restricted Stock determined based on individual performance in
accordance with Section 2.1(c) below. In no event shall such total number
of shares of Restricted Stock exceed __________.
(a) Company Performance Goals. The number of shares of
Restricted Stock calculated based on Company performance shall not exceed
__________ and shall be determined as follows:
(1) If the consolidated earnings of the Company before
income taxes for the fiscal year ending April 30, 1997, as adjusted
by the Committee for extraordinary items ("Actual Company Operating
Income"), equals the consolidated earnings before income taxes
reflected in the annual budget of the Company for the fiscal year
ending April 30, 1997 ("Budgeted Company Operating Income"), the
Award Recipient shall be issued __________ shares of Restricted
Stock.
(2) If Actual Company Operating Income exceeds Budgeted
Company Operating Income, the Award Recipient shall be issued, in
addition to the number of shares of Restricted Stock calculated in
accordance with paragraph (1) of this Section 2.1(a), __________
shares of Restricted Stock for each 1% or fraction of 1% by which
Actual Company Operating Income exceeds Budgeted Company Operating
Income, up to a maximum of __________ additional shares of Restricted
Stock.
(3) If Actual Company Operating Income is less than
Budgeted Company Operating Income, but is at least 90% of Budgeted
Company Operating Income, the Award Recipient shall be issued a
number of shares of Restricted Stock equal to (a) __________ minus
(b) __________ for each 1% or fraction of 1% by which Actual Company
Operating Income is less than Budgeted Company Operating Income.
(4) If Actual Company Operating Income is less than 90%
of Budgeted Company Operating Income, the Award Recipient shall not
be issued any shares of Restricted Stock based on Company performance
pursuant to this Section 2.1(a).
(b) Unit Performance Goals. The number of shares of
Restricted Stock calculated based on Unit performance shall not exceed
__________ and shall be determined as follows:
(1) If the consolidated earnings of the Company before
income taxes for the fiscal year ending April 30, 1997 attributable
to the Unit, as adjusted by the Committee for extraordinary items
("Actual Unit Operating Income"), equals the consolidated earnings
before income taxes reflected in the annual budget of the Company for
the fiscal year ending April 30, 1997 for the Unit ("Budgeted Unit
Operating Income"), the Award Recipient shall be issued __________
shares of Restricted Stock.
(2) If Actual Unit Operating Income exceeds Budgeted
Unit Operating Income, the Award Recipient shall be issued, in
addition to the number of shares of Restricted Stock calculated in
accordance with paragraph (1) of this Section 2.1(b), __________
shares of Restricted Stock for each 1% or fraction of 1% by which
Actual Unit Operating Income exceeds Budgeted Unit Operating Income,
up to a maximum of __________ additional shares of Restricted Stock.
(3) If Actual Unit Operating Income is less than
Budgeted Unit Operating Income, but is at least 90% of Budgeted Unit
Operating Income, the Award Recipient shall be issued a number of
shares of Restricted Stock equal to (a) __________ minus (b)
__________ for each 1% or fraction of 1% by which Actual Unit
Operating Income is less than Budgeted Unit Operating Income.
(4) If Actual Unit Operating Income is less than 90%
of Budgeted Unit Operating Income, the Award Recipient shall not be
issued any shares of Restricted Stock based on Unit performance
pursuant to this Section 2.1(b).
(c) Individual Performance. The number of shares of
Restricted Stock determined based on an evaluation of the Award Recipient's
individual performance for the fiscal year ended April 30, 1997, shall be
at the discretion of the Committee and shall not exceed __________ shares
of Restricted Stock. In evaluating the individual performance of the Award
Recipient, the Committee may take into consideration the recommendation of
the Chief Executive Officer of the Company with respect thereto.
2.2 No fractional shares of Restricted Stock shall be issuable
pursuant to Section 2.1. If the sum of the calculations under Sections
2.1(a), 2.1(b), and 2.1(c) results in a fraction, such sum shall be rounded
up to the next highest whole number, provided the total number of shares of
Restricted Stock issuable under Section 2.1 shall not exceed the limit
specified in the first paragraph of Section 2.1.
2.3 If the Award Recipient's employment with the Company should
terminate for any reason on or before April 30, 1997, the Award Recipient
shall not be issued any shares of Restricted Stock pursuant to Section 2.1.
All shares of Restricted Stock not issued in accordance with the terms and
conditions of Section 2.1 shall be forfeited.
3.
Award Restrictions
3.1 The shares of Restricted Stock issued to the Award Recipient in
accordance with the provisions of Section 2.1 hereof as of the date
specified in such Section 2.1 and the right to vote such shares of
Restricted Stock and to receive dividends thereon may not be sold, assigned,
transferred, exchanged, pledged, hypothecated or otherwise encumbered until
such time as such shares of Restricted Stock vest and the restrictions
imposed thereon lapse, as provided below.
3.2 The shares of Restricted Stock issued to the Award Recipient in
accordance with the provisions of Section 2.1 hereof will vest and the
restrictions imposed thereon will lapse on July 31, 2000, if the Award
Recipient remains in the employ of the Company on that date. The period
during which the restrictions imposed on such shares of Restricted Stock by
the Plan and this Agreement are in effect is referred to herein as the
"Restricted Period." During the Restricted Period, the Award Recipient
shall be entitled to all rights of a shareholder of PHI, including the right
to vote such shares of Restricted Stock and to receive dividends thereon.
3.3 All restrictions on the Restricted Stock issued to the Award
Recipient in accordance with the provisions of Section 2.1 hereof shall
immediately lapse and the shares shall vest (a) if the Award Recipient dies
while he is employed by the Company, (b) if the Award Recipient becomes
disabled within the meaning of Section 22(e)(3) of the Internal Revenue Code
of 1986, as amended, while employed by the Company, (c) if the Award
Recipient retires from employment with the Company on or after attaining the
age of 65 or is granted early retirement by a vote of the PHI Board of
Directors, or (d) pursuant to the provisions of the Plan, during the
Restricted Period.
4.
Stock Certificates
4.1 The stock certificates evidencing the Restricted Stock issued
to the Award Recipient in accordance with the provisions of Section 2.1
hereof shall be retained by PHI until the termination of the Restricted
Period and the lapse of restrictions under the terms hereof. PHI shall
place a legend on the stock certificates restricting the transferability of
such shares of Restricted Stock.
4.2 Upon the lapse of restrictions on shares of Restricted Stock
issued to the Award Recipient in accordance with the provisions of Section
2.1, PHI shall cause a stock certificate without a restrictive legend
representing such shares of Restricted Stock to be issued in the name of the
Award Recipient or his nominee within 30 days after the end of the
Restricted Period. Upon receipt of such stock certificate, the Award
Recipient is free to hold or dispose of the shares of Common Stock
represented by such certificate subject to applicable securities laws.
5.
Dividends
Any dividends paid on the shares of Restricted Stock issued to the
Award Recipient in accordance with the provisions of Section 2.1 hereof
shall be paid to the Award Recipient currently.
6.
Withholding Taxes
At any time that an Award Recipient is required to pay to the Company
an amount required to be withheld under the applicable income tax laws in
connection with the lapse of restrictions on shares of Restricted Stock, the
Award Recipient may, subject to the approval of the Committee, satisfy this
obligation in whole or in part by electing that the Company withhold shares
of Common Stock having a value equal to the amount required to be withheld
in accordance with the terms of the Plan currently in effect or as it may
be amended.
7.
Additional Conditions
Anything in this Agreement to the contrary notwithstanding, if at any
time PHI further determines, in its sole discretion, that the listing,
registration or qualification (or any updating of any document) of the
shares of Common Stock issued or issuable pursuant hereto is necessary on
any securities exchange or under any federal or state securities or blue sky
law, or that the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the
issuance of shares of Common Stock pursuant hereto, or the removal or any
restrictions imposed on such shares, such shares of Common Stock shall not
be issued, in whole or in part, or the restrictions thereon removed, unless
such listing, registration, qualification, consent or approval shall have
been effected or obtained free of any conditions not acceptable to PHI.
8.
No Contract of Employment Intended
Nothing in this Agreement shall confer upon the Award Recipient any
right to continue in the employment of the Company or to interfere in any
way with the right of the Company to terminate the Award Recipient's em-
ployment relationship with the Company at any time.
9.
Binding Effect
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators and
successors.
10.
Inconsistent Provisions
The shares of Restricted Stock covered hereby are subject to the
provisions of the Plan. If any provision of this Agreement conflicts with
a provision of the Plan, the Plan provision shall control.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
PETROLEUM HELICOPTERS, INC.
By:
Carroll W. Suggs, Chairman of the Board
and Chief Executive Officer
____________________
Award Recipient
NON-QUALIFIED STOCK OPTION AGREEMENT
UNDER THE AMENDED AND RESTATED
PETROLEUM HELICOPTERS, INC.
1995 INCENTIVE COMPENSATION PLAN, AS AMENDED
THIS AGREEMENT is entered into as of July 30, 1996, by and between
Petroleum Helicopters, Inc., a Louisiana corporation ("PHI"), and Carroll
W. Suggs (the "Optionee").
WHEREAS, under the Amended and Restated Petroleum Helicopters, Inc.
1995 Incentive Compensation Plan, as amended (the "Plan"), the Compensation
Committee of the PHI Board of Directors (the "Committee") may, among other
things, award options to purchase shares of the non-voting common stock,
$.10 par value per share, of PHI (the "Common Stock") to a key employee of
PHI or one of its subsidiaries (collectively, the "Company"); and
WHEREAS, pursuant to the Plan, on July 30, 1996, the Committee awarded
an option to purchase Common Stock to the Optionee.
NOW, THEREFORE, in consideration of the premises, it is agreed as
follows:
1.
Grant of Option
1.1 PHI hereby grants to the Optionee effective July 30, 1996 (the
"Date of Grant") the right, privilege and option to purchase 23,200 shares
of Common Stock (the "Option") at an exercise price of $14.875 per share
(the "Exercise Price"). The Option shall vest, become exercisable and
expire as provided in Sections 2 and 3 below.
1.2 The Option is a non-qualified stock option and shall not be
treated as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended.
2.
Vesting of Option
2.1 Effective July 31, 1997, the Compensation Committee of the Board
of Directors of PHI (the "Committee") shall make a determination as to the
portion of the Option that is vested as follows:
(a) Company Performance Goals
(1) If the Company's consolidated earnings before
income taxes for the fiscal year ending April 30, 1997, as adjusted
by the Committee for extraordinary items ("Actual Operating Income"),
equals the consolidated earnings before income taxes reflected in the
Company's annual budget for the fiscal year ending April 30, 1997
("Budgeted Operating Income"), the Option shall vest with respect to
16,000 of the shares covered thereby.
(2) If Actual Operating Income exceeds Budgeted
Operating Income, the Option shall vest with respect to an additional
160 shares for each 1% by which Actual Operating Income exceeds
Budgeted Operating Income, up to a maximum of 3,200 additional
shares.
(3) If Actual Operating Income is less than Budgeted
Operating Income, but is between 90% and 100% of Budgeted Operating
Income, then the Option shall vest with respect to 16,000 shares,
less 320 shares for each 1% or fraction of 1% by which Actual
Operating Income is less than Budgeted Operating Income.
(4) If Actual Operating Income is less than 90% of
Budgeted Operating Income, no portion of the Option shall vest based
upon Company performance.
(b) Individual Performance
The Option may vest with respect to up to an additional 4,000 shares
in the discretion of the Compensation Committee based on an evaluation of
the Optionee's performance for the year.
2.2 All unvested Options or portions thereof shall be forfeited.
3.
Time of Exercise
3.1 Subject to the provisions of the Plan and Section 2 hereof, the
Optionee shall be entitled to exercise the vested portion of the Option with
respect to 50% of the shares beginning July 31, 1997 and with respect to the
remaining 50% of the shares beginning July 31, 1998.
3.2 The Option shall expire and may not be exercised later than ten
years following the Date of Grant.
3.3 Notwithstanding the foregoing, the Option shall become
accelerated and immediately exercisable to the extent vested if (a.) the
Optionee dies while she is employed by the Company, (b.) the Optionee
becomes disabled within the meaning of Section 22(e)(3) of the Code
("Disability") while she is employed by the Company, (c.) the Optionee
retires from employment with the Company on or after attaining the age of
65 or is granted early retirement by a vote of the Board of Directors
("Retirement") or (d.) pursuant to the provisions of the Plan.
4.
Conditions for Exercise of Option
During the Optionee's lifetime, the Option may be exercised only by
her or by her guardian or legal representative. The Option must be exer-
cised while the Optionee is employed by the Company, or, to the extent
exercisable at the time of termination of employment, within 190 days of the
date on which she ceases to be an employee, except that (a.) if she ceases
to be an employee because of Retirement or Disability, the Option may be
exercised within three years from the date on which she ceases to be an
employee, (b.) if the Optionee's employment is terminated for cause, the
unexercised portion of the Option is immediately terminated, and (c.) in the
event of the Optionee's death, the Option may be exercised by her estate,
or by the person to whom such right devolves from her by reason of her death
within two years after the date of her death; provided, however, that no
Option may be exercised later than 10 years after the Date of Grant.
5.
Additional Conditions
Anything in this Agreement to the contrary notwithstanding, if at any
time PHI further determines, in its sole discretion, that the listing,
registration or qualification (or any updating of any such document) of the
shares of Common Stock issuable pursuant to the exercise of an Option is
necessary on any securities exchange or under any federal or state
securities or blue sky law, or that the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of,
or in connection with the issuance of shares of Common Stock pursuant
thereto, or the removal of any restrictions imposed on such shares, such
shares of Common Stock shall not be issued, in whole or in part, unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to PHI.
6.
No Contract of Employment Intended
Nothing in this Agreement shall confer upon the Optionee any right to
continue in the employ of the Company or to interfere in any way with the
right of PHI to terminate the Optionee's employment relationship with the
Company at any time.
7.
Taxes
The Company may make such provisions as it may deem appropriate for
the withholding of any federal, state and local taxes that it determines are
required to be withheld on the exercise of the Option.
8.
Binding Effect
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators and
successors.
9.
Inconsistent Provisions
The Option granted hereby is subject to the provisions of the Plan.
If any provision of this Agreement conflicts with a provision of the Plan,
the Plan provision shall control.
10.
Adjustments to Options
Appropriate adjustments shall be made to the number and class of
shares of Common Stock subject to the Option and to the Exercise Price in
certain situations described in Section 12.6 of the Plan.
11.
Termination of Option
The Committee, in its sole discretion, may terminate the Option.
However, no termination may adversely affect the rights of the Optionee to
the extent that the Option is currently vested on the date of such
termination.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
PETROLEUM HELICOPTERS, INC.
By: /s/ Leonard M. Horner
Leonard M. Horner, Chairman,
Compensation Committee
/s/ Carroll W. Suggs
Carroll W. Suggs
Optionee
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM CONDENSED FINANCIAL
STATEMENTS FOR THE PERIOD ENDED OCTOBER 31, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> OCT-31-1996
<CASH> 3009
<SECURITIES> 0
<RECEIVABLES> 35829
<ALLOWANCES> 0
<INVENTORY> 29737
<CURRENT-ASSETS> 70604
<PP&E> 238335
<DEPRECIATION> 120928
<TOTAL-ASSETS> 194337
<CURRENT-LIABILITIES> 34981
<BONDS> 0
0
0
<COMMON> 508
<OTHER-SE> 85150
<TOTAL-LIABILITY-AND-EQUITY> 194337
<SALES> 105401
<TOTAL-REVENUES> 105651
<CGS> 89489
<TOTAL-COSTS> 96056
<OTHER-EXPENSES> 0
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<INTEREST-EXPENSE> 2019
<INCOME-PRETAX> 7576
<INCOME-TAX> 3013
<INCOME-CONTINUING> 4563
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4563
<EPS-PRIMARY> .90
<EPS-DILUTED> .90
</TABLE>
