EXHIBIT 4.4
[WHITNEY NATIONAL
BANK LOGO]
================================================================================
LOAN AGREEMENT DATED AS OF APRIL 23, 2002 BY AND AMONG
PETROLEUM HELICOPTERS, INC., ACADIAN COMPOSITES, LLC,
AIR EVAC SERVICES, INC., EVANGELINE AIRMOTIVE, INC., AND INTERNATIONAL
HELICOPTER TRANSPORT, INC. AND WHITNEY NATIONAL BANK
This Agreement is dated as of April 23, 2002, and is entered into by
and among PETROLEUM HELICOPTERS, INC. ("PHI"), ACADIAN COMPOSITES, LLC
("ACADIAN"), AIR EVAC SERVICES, INC. ("AIR EVAC"), EVANGELINE AIRMOTIVE, INC.
("EVANGELINE"), AND INTERNATIONAL HELICOPTER TRANSPORT, INC,. ("INTERNATIONAL
HELICOPTER") (FOR CONVENIENCE OF REFERENCE, ACADIAN, AIR EVAC, EVANGELINE AND
INTERNATIONAL HELICOPTER MAY SOMETIMES HEREINAFTER BE REFERRED INDIVIDUALLY,
COLLECTIVELY, AND INTERCHANGEABLY AS "SUBSIDIARY GUARANTORS"), AND WHITNEY
NATIONAL BANK ("Whitney"). For convenience of reference, Whitney may hereinafter
sometimes be referred to as "BANK". This Agreement refers to all present and
future loans collectively as the "LOANS", with each separate advance of funds
being a "LOAN".
A. THE LOAN OR LOANS. Provided PHI performs all obligations in favor of
Bank contained in this Agreement and in any other agreement, whether
now existing or hereafter arising:
Bank shall make available to PHI a secured revolving line of
credit (the "REVOLVING LINE OF CREDIT") in the principal
amount of FIFTY MILLION AND NO/100 ($50,000,000.00) DOLLARS,
that may be drawn upon by PHI on any business day of Bank
during the period hereof until and including July 31, 2004, on
at least one day's telephonic notice to Bank. The Revolving
Line of Credit shall be evidenced by a commercial note,
payable to Bank (the "NOTE") and shall contain additional
terms and conditions and be identified with this Agreement.
A sublimit of FIVE MILLION AND NO/100 ($5,000,000.00) DOLLARS
is hereby established for the issuance of letters of credit
with a maturity not exceeding that of the Note, which may be
issued by Bank upon application by PHI.
B. USE OF PROCEEDS. The proceeds from the Revolving Line of Credit are to
refinance existing debt and/or for capital expenditures, and for
general corporate purposes. PHI is not engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U). No proceeds of any advance will
be used to purchase or carry any margin stock.
C. REPRESENTATIONS, WARRANTIES AND COVENANTS. PHI represents, warrants and
covenants to Bank that as of the date hereof and so long as the Loans
shall be outstanding, except for matters that could not reasonably be
expected to have a material adverse effect on PHI:
(1) ORGANIZATION AND AUTHORIZATION. PHI is a Louisiana corporation
which is duly organized, validly existing and in good standing
under Louisiana law. PHI's execution, delivery and performance
of this Agreement and all other documents delivered to Bank
has been duly authorized and does not violate its articles of
incorporation (or other governing documents), material
contracts or any applicable law or regulations.
(2) COMPLIANCE WITH TAX AND OTHER LAWS.
(a) PHI shall comply with all laws that are applicable to
its business activities, including, without
limitation, all laws regarding (i) the collection,
payment and deposit of employees' income,
unemployment, Social Security, sales and excise
taxes; (ii) the filing of returns and payment of
taxes; (iii) pension liabilities including ERISA
requirements, (iv) environmental protection, and (iv)
occupational safety and health.
(b) PHI shall not permit or suffer any violation of any
Environmental Law (as defined below) affecting the
property it owns or leases, (collectively, the
"PROPERTY"), and agrees that upon discovery, or in
the event, of any discharge, spill, injection,
escape, emission, disposal, leak or any other release
of hazardous substances on, in, under, onto or from
the Property, which is not authorized by a currently
valid permit or other approval issued by the
appropriate governmental agencies, promptly notify
Bank, and the appropriate governmental agencies, and
shall take all steps necessary to promptly clean-up
such discharge, spill, injection, escape, emission,
disposal, leak or any other release in accordance
with the provisions of all applicable Environmental
Laws, and shall receive a certification from the
Louisiana Department of Environmental Quality or
federal
Environmental Protection Agency, that the Property
and any other property affected has been cleaned-up
to the satisfaction of those agencies. The terms
"Environmental Law" or "Environmental Laws" as used
in this Agreement include any and all current and
future federal, state and local environmental laws,
statutes, rules, regulations and ordinances, as the
same shall be amended and modified from time to time,
including but not limited to the federal
Comprehensive Environmental Response, Compensation
and Liability Act, as amended from time to time, the
Federal Resource Conservation and Recovery Act, as
amended from time to time, and the federal Toxic
Substances Control Act, as amended from time to time.
(3) OFFERING MEMORANDUM, NOTES, AND INDENTURE. The Loans to be
made to PHI under, and the terms and conditions of, this
Agreement do not violate the offering memorandum (the
"Offering Memorandum") dated April 17, 2002, respecting
promissory notes in the aggregate principal amount of TWO
HUNDRED MILLION AND NO/100 ($200,000,000.00) DOLLARS, and
additional promissory notes in an aggregate principal amount
of TWO HUNDRED SEVENTY-FIVE MILLION AND NO/100
($275,000,000.00) DOLLARS, under an Indenture dated as of
April 23, 2002, among PHI, the Guarantors (as defined in the
Offering Memorandum), and The Bank of New York, as Trustee, or
any other document executed or to be executed in connection
therewith, as all of the foregoing may be amended from time to
time (individually, collectively, and interchangeably, the
"Indenture Notes and Documents").
(4) LITIGATION. To the best of PHI's knowledge, after due inquiry,
no litigation or governmental proceedings are pending or
threatened against PHI or any of its subsidiaries, the results
of which might materially affect PHI or such subsidiaries'
financial condition or operations. Other than any liability
incident to such litigation or proceedings or provided for or
disclosed in the financial statements submitted to Bank, PHI
does not have any material contingent liabilities. No
subsidiaries have any material contingent liability other than
those imposed by the security documents granted by PHI in
favor of Whitney and the Indenture Notes and Documents.
(5) PENSION PLANS. Each of PHI and its subsidiaries are in
compliance with all statutes and governmental rules and
regulations applicable to it, including, without limitation,
the Employee Reimbursement Income Security Act of 1974, as
amended ("ERISA"). No Termination Event (as defined herein)
has occurred with respect to any Plan (as defined herein),
and, except for any failure that could not reasonably be
expected to cause a material adverse change, each Plan has
complied with and been administered in all material respects
in accordance with applicable provisions of ERISA and the
Internal Revenue Code of 1986, as amended (the "CODE"), and no
condition exists or event or transaction has occurred in
connection with any Plan, maintained by PHI or its
subsidiaries, which could result in PHI or its subsidiaries
incurring any material liabilities, fine, or penalty. No
"accumulated funding deficiency" (as defined in Section 302 of
ERISA) has occurred with respect to any Plan and there has
been no excise tax imposed with respect to any Plan under
Section 4971 of the Code. The present value of all benefits
vested under each Plan (based on the assumptions used to fund
such Plan) did not, as of the last annual valuation date
applicable thereto, exceed the value of the assets of such
Plan allocable to such vested benefits in any amount that
would reasonably be expected to cause a material adverse
change. Based upon GAAP existing as of the effective date of
this agreement and current factual circumstances, PHI has no
reason to believe that the annual cost during the term of this
Agreement to PHI for post-retirement benefits to be provided
to the current and former employees of PHI under welfare
benefit plans (as defined in Section 3(1) of ERISA) could, in
the aggregate, reasonably be expected to cause a material
adverse change.
For purposes of this section, the term "Plan" means an
employee benefit plan covered by Title IV of ERISA or subject
to minimum funding standards under Section 412 of the Code and
the term "Termination Event" means (a) the occurrence of a
reportable event with respect to a Plan, as described in
Section 4043 of ERISA and the regulations issued thereunder
(other than a reportable event not subject to the provision
for 30-day notice to the PBGC under such regulations); (b) the
giving of a notice of intent to terminate a Plan under Section
4041(c) of ERISA; (c) the institution of proceedings to
terminate a Plan by the PBGC; or (d) any other event or
condition which constitutes grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee
to administer, any Plan.
(6) FINANCIAL INFORMATION. From the date of this Agreement and so
long as the Loans shall be outstanding, unless compliance
shall have been waived in writing by Bank, PHI shall furnish
to Bank:
2
(a) promptly after the sending or filing thereof, copies
of all reports which PHI sends to any of its public
security holders, and copies of all Forms 10-K, 10-Q
and 8-K, Schedules 13E-4 (including all exhibits
filed therewith) and registration statements, and any
other filings or statements that PHI files with the
Securities and Exchange Commission or any national
securities exchange;
(b) together with all Forms 10-K, 10-Q and 8-K, a
certificate of the president or chief financial
officer of PHI to the effect that no Default with
respect to PHI, or event which might mature into a
Default with respect to PHI, has occurred;
(c) upon the occurrence of a Default, a certificate of
the president or chief financial officer of PHI
specifying the nature and the period of existence
thereof and what action PHI proposes to take with
respect thereto;
(d) written notice of any and all litigation affecting
PHI, directly or indirectly; provided, however, this
requirement shall not apply to litigation involving
PHI and any other party if such litigation involves,
in the aggregate, less than $500,000; and
(e) from time to time, such other information as Bank may
reasonably request.
(7) INSURANCE. Each of PHI and its subsidiaries shall maintain,
with financially sound and reputable insurance companies
workmen's compensation insurance, liability insurance and
insurance on PHI's and its subsidiaries' property, assets and
business at least to such extent and against such hazards and
liabilities as is commonly maintained by similar companies
and, in addition to the foregoing insurance, such insurance as
may be reasonably required by Bank. In the case of property
(whether owned by PHI or its subsidiaries) on which Bank has a
lien, PHI shall provide Bank with duplicate originals or
certified copies of such policies of insurance naming Bank as
additional mortgages-loss payee and as additional insured as
its interests may appear, and providing that such policies
will not be canceled without thirty (30) days' prior written
notice to Bank.
(8) FINANCIAL COVENANTS AND RATIOS.
(a) CURRENT ASSETS/CURRENT RATIO. PHI will not at any
time permit the ratio of consolidated current assets
to consolidated current liabilities to be less than
2.00 to 1.00;
(b) FUNDED DEBT/NET WORTH. PHI will not at any time after
June 30, 2002, permit the ratio of Funded Debt
(defined as all indebtedness under this Agreement
plus the amount of any capital or operating leases
and any other monetary obligation payable over time)
to PHI's consolidated net worth to be more than 2.50
to 1.00.
(c) CONSOLIDATED NET WORTH. From and after the date of
this Agreement through December 31, 2002, PHI, shall
not at any time, permit its consolidated net worth,
to be less than NINETY MILLION ($90,000,000.00)
DOLLARS. From and after December 31, 2002, PHI shall
not, at any time permit consolidated net worth to be
less than ONE HUNDRED MILLION ($100,000,000.00)
DOLLARS.
(9) MERGERS, ETC. Without the prior written consent of Bank, PHI
shall not consolidate with, or merge into, any other
corporation, or permit any other corporation to merge into it,
or sell or lease all, or substantially all, of its assets, or
acquire all or a substantial part of the assets or capital
stock of any other partnership, firm or corporation, or enter
into any other transaction that would substantially alter the
balance sheet of PHI. PHI will not permit any material changes
to be made in the character of its business as carried on at
the date of this Agreement.
(10) STOCK REDEMPTION. PHI will not purchase, retire or redeem any
shares of its capital stock (other than pursuant to executive
or employee compensation plans) without the prior written
consent of Bank.
(11) INDEBTEDNESS AND LIENS. Except as contemplated in this
Agreement and as permitted in the Indenture Notes and
Documents, neither PHI nor any of its subsidiaries (i) shall
create any additional obligations for borrowed money, or (ii)
mortgage or encumber any of their assets or suffer any liens
or indebtedness to exist on any of their assets.
3
(12) OTHER LIABILITIES. PHI shall not lend to or guarantee, endorse
or otherwise become contingently liable in connection with the
obligations, stock or dividends of any person, firm or
corporation.
(13) CHANGE OF CONTROL. Without the prior written consent of
Whitney, there shall not be a Change of Control (as defined in
the Offering Memorandum).
(14) ADDITIONAL DOCUMENTATION. Upon the written request of Bank,
PHI shall promptly and duly execute and deliver all such
further instruments and documents and take such further action
as Bank, may deem reasonably necessary to obtain the full
benefits of this Agreement and of the rights and powers
granted in this Agreement.
(15) NOTICE OF DEFAULT. PHI shall notify Bank immediately upon
becoming aware of the occurrence of any event constituting, or
which with the passage of time or the giving of notice, could
constitute, a Default.
(16) INDEMNITY. PHI shall indemnify, defend and hold Bank and its
respective directors, officers, agents, attorneys and
employees harmless from and against all claims, demands,
causes of action, liabilities, losses, costs and expenses
(including, without limitation, costs of suit, reasonable
legal fees and fees of expert witnesses) arising from or in
connection with (a) the presence in, on or under any property
of PHI (including, without limitation, the Property) of any
hazardous substance or solid waste, or any releases or
discharges (as the terms "release" and "discharge" are defined
under any applicable environmental law) of any hazardous
substance or solid waste on, under or from such property, (b)
any activity carried on or undertaken on or off such property
of PHI, whether prior to or during the term of this Agreement,
and whether PHI or any predecessor in title to PHI's property
or any officers, employees, agents, contractors or
subcontractors of PHI or any predecessor in title to the
property of PHI, or any third persons at any time occupying or
present on such property, in connection with the handling,
use, generation, manufacture, treatment, removal, storage,
decontamination, clean-up, transportation or disposal of any
hazardous substance or solid waste at any time located or
present on or under any of the aforedescribed property, or (c)
any breach of any representation, warranty or covenant under
the terms of this Agreement or applicable security agreements.
The foregoing indemnity shall further apply to any residual
contamination on or under any or all of the aforedescribed
property, or affecting any natural resources, and to any
contamination of any property or natural resources arising in
connection with the use, handling, storage, transportation or
disposal of any hazardous substance or solid waste, and
irrespective of whether any of such activities were or will be
undertaken in accordance with applicable laws, regulations,
codes and ordinances. The indemnity described in this Section
shall survive the termination of this Agreement for any reason
whatsoever.
D. COLLATERAL. As security for payment and performance of the Loans, PHI
will provide to Bank security for all of its obligations due to Bank,
whether now existing or hereafter arising, through valid recorded
security documents creating a first lien and security interest in all
of PHI and its subsidiaries' inventory, including Parts (as herein
defined), and Eligible Receivables (as defined herein) supported by a
Borrowing Base Certificate (as herein defined) delivered monthly to
Bank in form satisfactory to Bank.
"Borrowing Base Certificate" means a report to Bank by the President or
Chief Financial Officer certifying the level of borrowing authorized
under this Agreement which is and shall be an amount (not exceeding
$50,000,000) equal to the sum of (a) 80% of the amount of Eligible
Receivables (defined as trade receivables less than 90 days of age) of
PHI and its subsidiaries in which Bank shall have a valid perfected
first priority security interest, plus (b) 50% of the value of Parts of
PHI and its subsidiaries (valued at the lower of average cost or
market), in which Bank shall have a valid perfected first priority
security interest. For the purpose of this section, the term "Parts"
means, until installed in any aviation unit, all aircraft engines,
propellers, rotors, appliances, tires, airframes, spare parts, radios
and other communication equipment together with all other aircraft
appliances, instruments, mechanisms, appurtenances, accessories and
parts or components thereof, of such person wherever maintained, now or
hereafter existing, whether acquired by purchase or otherwise and
whether held by such person for use in its business or held by such
person for sale or lease or to be furnished by such person under
contracts of service, and all proceeds thereof and accessories thereto.
E. EACH EXTENSION OF CREDIT. Each request by PHI for a Loan shall
constitute a warranty and representation by PHI to Bank that there
exists no Default or any condition, event or act which constitutes, or
with notice or lapse of time (or both) would constitute a Default as
defined by this Agreement.
F. GUARANTIES. The Revolving Line of Credit shall be guaranteed by each of
the Subsidiary Guarantors.
4
G. RATE OF INTEREST AND APPLICABLE FEES. Borrowing made pursuant to the
Note shall accrue interest at Whitney Prime rate and may be advanced or
repaid at any time upon one day's notice, interest shall be payable
quarterly; or in the alternative, LIBOR borrowings may be arranged for
fixed periods of 30, 60, 90 or 180 days with interest payable at the
respective maturity at the LIBOR rate as quoted on the business day
prior to borrowing plus an applicable margin as follows:
o 300 points when Funded Debt to Net Worth equals or
exceeds 150%
o 250 points when Funded Debt to Net Worth is between
125% and 150%
o 200 points when Funded Debt to Net Worth equals or is
less than 125%
as calculated by referring to the last 10-K or 10-Q filing.
As used in this Agreement the term "Whitney Prime" shall mean the rate
of interest as recorded by Whitney from time to time as its prime
lending rate with the rate of interest to change when and as such prime
lending rate changes.
As used in this Agreement the term "LIBOR" shall mean the London
Interbank Offered Rate ("LIBOR") for the referenced rate period as set
and published as of the first day of each month by the British Banker's
Association ("BBA") and obtained by Bank from a wire that is sent
through Bloomberg, L.P. which rate is based by BBA on an average of the
Interbank offered rates for dollar deposits in the London market based
on quotes from designated banks in the London market, provided,
however, that Bank reserves the right to adjust the LIBOR rate by the
percentage, if any, that may be specified by the Board Of Governors of
the Federal Reserve system (or an successor), from time to time, for
determining the maximum reserve requirement (including, but not limited
to, any marginal reserve requirement) with respect to liabilities
consisting of or including "Eurocurrency Liabilities" (as defined in
Regulation D of the Board of Governors of the Federal Reserve system).
In determining the percentage for the LIBOR reserve requirement, Bank
may use any reasonable averaging and attribution methods.
Unused fees on the daily amount undrawn under the Revolving Line of
Credit shall accrue at the rate of 3/8 of 1% per annum payable
quarterly.
Any letters of credit issued pursuant to this Agreement shall bear
interest at 1/8 of 1% per month on any part thereof, plus standard
issuing fees.
Upon PHI's execution of this Agreement, PHI shall pay to Bank a fee for
its commitment of 1/4 of 1% of $50,000,000.00.
H. PREPAYMENT AND REDUCTION. Any advance may be prepaid in any amount at
any time, and PHI may incrementally reduce or cancel the Revolving Line
of Credit at any time without penalty upon giving Bank one day's
notice.
I. CONDITIONS PRECEDENT TO LOAN. Bank shall have no obligation to advance
funds under this Agreement until and unless the following conditions
have been satisfied:
(1) Bank shall have received this agreement and all collateral
documents contemplated by this Agreement in form and substance
satisfactory to Bank, including a certificate from the Chief
Financial Officer containing a description of assets owned by
each of the Subsidiary Guarantors, and certifying that each of
the Subsidiary Guarantors is free of liabilities except as
disclosed in the Certificate;
(2) Bank shall have received satisfactory opinions of counsel
relating, among other things, to due authorization and
enforceability of this Agreement, the Loans and all
collateral;
(3) All representations and warranties made by PHI to Bank shall
be true and correct as of the date of the Loans' funding;
(4) Except as otherwise provided herein, PHI's business must be in
a condition satisfactory to Bank, the management and ownership
of PHI must not have changed and no material adverse change
(from that reflected in the last financial statements
delivered to, and accepted by, Bank prior to execution of this
Agreement) has occurred in the financial condition of PHI; and
(5) There exists no Default (or event which with notice or lapse
of time or both could constitute a Default) under this
Agreement or any other agreement between PHI and Bank.
5
J. DEFAULT. The occurrence of any one or more of the following events
shall constitute a default (a "DEFAULT") under this Agreement:
(1) A default under a note evidencing a Loan;
(2) The failure of PHI to observe or perform promptly when due any
covenant, agreement or obligation due to Bank under this
Agreement or otherwise;
(3) The inaccuracy at any time, in any material respect, of any
warranty, representation or statement made to Bank by PHI
under this Agreement or otherwise;
(4) the filing by or against PHI of a proceeding for bankruptcy,
reorganization, arrangement, or any other relief afforded
debtors or affecting the rights of creditors generally under
the law of any state or country or under the United States
Bankruptcy Code;
(5) should any default occur in any other material credit
agreement or evidence of indebtedness, including, without
limitation, the Indenture Notes and Documents;
Upon the occurrence of a Default, except for payment of principal at maturity,
and such Default continues for a period of fifteen (15) days, after Bank has
mailed written notice of such Default to PHI specifying the nature of the
Default and the steps necessary to cure the Default (but with no notice or delay
required in the event of a Default under paragraphs (1) and (5) of Section (J),
Bank, at its option, may declare all of the Loans and all other obligations of
PHI to Bank to be immediately due and payable without further notice.
K. CONSENT TO PARTICIPATION. Bank may sell all or a portion of its
interest in the Loans and the security therefor. Bank shall give PHI
notice of any sale of all or a portion of its interests in the Loans,
upon which PHI shall perform all of its obligations hereunder in favor
of each participant or assignee as though such participant or assignee
were a party or parties to this Agreement.
L. MISCELLANEOUS PROVISIONS. PHI agrees to pay all of the costs, expenses
and fees incurred in connection with the Loans, including attorneys
fees, appraisal fees, and environmental assessment fees. This Agreement
is not assignable by PHI and no party other than PHI is entitled to
rely on this Agreement. In no event shall PHI or Bank be liable to the
other for indirect, special or consequential damages, including the
loss of anticipated profits that may arise out of or are in any way
connected with the issuance of this Agreement. This Agreement, all
promissory notes evidencing Loans under this Agreement and all
documents creating security interests shall be governed by Louisiana
law.
PETROLEUM HELICOPTERS, INC. WHITNEY NATIONAL BANK
BY: /s/ MICHAEL J. McCANN BY: /s/ HARRY C. STAHEL
-------------------------------- --------------------------------
NAME: MICHAEL J. McCANN NAME: HARRY C. STAHEL
TITLE: CHIEF FINANCIAL OFFICER TITLE: SENIOR VICE PRESIDENT
SUBSIDIARY GUARANTORS:
ACADIAN COMPOSITES, LLC EVANGELINE AIRMOTIVE, INC.
BY: /s/ MICHAEL J. McCANN BY: /s/ MICHAEL J. McCANN
-------------------------------- --------------------------------
NAME: MICHAEL J. McCANN NAME: MICHAEL J. McCANN
TITLE: CHIEF FINANCIAL OFFICER TITLE: CHIEF FINANCIAL OFFICER
AIR EVAC SERVICES, INC. INTERNATIONAL HELICOPTER TRANSPORT, INC.
BY: /s/ MICHAEL J. McCANN BY: /s/ MICHAEL J. McCANN
-------------------------------- --------------------------------
NAME: MICHAEL J. McCANN NAME: MICHAEL J. McCANN
TITLE: CHIEF FINANCIAL OFFICER TITLE: CHIEF FINANCIAL OFFICER
6