THIRD AMENDMENT TO LOAN AGREEMENT
Exhibit 10.4
THIRD AMENDMENT TO LOAN AGREEMENT
This THIRD AMENDMENT TO LOAN AGREEMENT (this “Amendment”), entered into as of March 21, 2006
and effective upon the Amendment Effective Date (as defined below), is entered into by and among
PHI, Inc. (formerly Petroleum Helicopters, Inc.), a Louisiana corporation (the “Borrower”), Air
Evac Services, Inc. (“Air Evac”), PHI Tech Services, Inc. (formerly Xxxxxxxxxx Airmotive, Inc.)
(“PHI Tech Services”) and International Helicopter Transport, Inc. (“IHT”, together with Air Evac
and PHI Tech Services, the “Subsidiary Guarantors”) and Whitney National Bank (the “Bank”).
Recitals:
A. The Borrower, the Subsidiary Guarantors and the Bank are parties to that certain Loan
Agreement, dated as of April 23, 2002, as amended by the First Amendment to the Loan Agreement,
dated June 18, 2004, and the Second Amendment to the Loan Agreement, dated September 20, 2005 (as
amended, the “Loan Agreement”).
B. The Borrower is a party to that certain Indenture, dated as of April 23, 2002
(collectively, as amended and supplemented, the “2002 Indenture”), entered into between the
Borrower as issuer, the subsidiary guarantors party thereto and The Bank of New York, as trustee,
providing for the issuance of $200 million outstanding principal
amount of 9 3/8% Senior Notes due
2009 (the “2002 Notes”).
C. The Borrower proposes to commence an offer or series of offers (the “Tender Offer”) to
purchase or redeem any or all of the 2002 Notes from the holders thereof pursuant to the terms of a
Tender Offer and Consent Solicitation and related documents (the “Solicitation Materials”).
D. Simultaneous with the Tender Offer, the Borrower proposes to make certain amendments as are
deemed necessary, appropriate or desirable (the “Proposed Amendments”) to the 2002 Indenture
relating to the 2002 Notes, which Proposed Amendments would, among other things, remove
substantially all the restrictive covenants, certain events of default and other provisions
contained in the 2002 Indenture.
E. The Borrower proposes to finance the Tender Consideration through some combination of the
following: (i) cash on hand; (ii) the issuance and sale of up to a maximum of $200 million in
principal aggregate amount of new senior notes (the “New Notes”) in an offering (the “Note
Offering”) exempt from registration under the Securities Act of 1933, as amended (the “Securities
Act”), and providing for resale pursuant to Rule 144A and Regulation S under the Securities Act;
and (iii) proceeds from the Equity Offering (as defined below).
F. The Borrower proposes to issue the New Notes pursuant to an indenture (the “New Indenture”)
to be executed by and among the Borrower, the subsidiary guarantors named therein (the “New
Indenture Guarantors”) and the trustee under the New Indenture.
G. Under the terms of the New Indenture, the New Indenture Guarantors will guarantee the
payment of all amounts due under the New Indenture and the New Notes.
H. The Borrower will sell the New Notes pursuant to a purchase agreement (the “Purchase
Agreement”) to be executed by the Borrower, the New Indenture Guarantors and the purchasers party
thereto.
I. As a condition to the purchase of the New Notes, the Borrower will be required to agree,
subject to certain conditions, to issue, pursuant to an exchange offer registered under the
Securities Act (the “Exchange Offer”), a separate series of the Senior Notes due 2013 (the
“Exchange Notes”) having substantially the same terms as the New Notes (except that the Exchange
Notes will not contain transfer restrictions).
J. In order to finance the Tender Consideration, the Borrower also proposes the offer,
issuance and sale (the “Equity Offering”) of up to 4,931,108 shares of Non-Voting Common Stock (the
“Shares”) under the shelf registration statement filed by the Borrower with the Securities and
Exchange Commission and declared effective on March 31, 2005 (the “Shelf Registration Statement”),
which includes up to 15% of such shares that may be sold pursuant to the exercise of an
overallotment option (the “Overallotment Option”) by the Underwriters (as hereinafter defined).
K. The Borrower proposes to offer, issue and sell the Shares to a group of underwriters (the
“Underwriters”) led by UBS Investment Bank, Xxxxxx Xxxx Incorporated and other investment banks,
including the Overallotment Option, in the Equity Offering all at a price to be determined.
L. Pursuant to the Loan Agreement, the Borrower may not enter into any transaction that would
substantially alter the balance sheet or create any additional obligations for borrowed money
without the prior written consent of Bank.
M. The Borrower would like to amend the Loan Agreement to allow for, among other things, the
following: (i) the Tender Offer for the 2002 Notes; (ii) the Proposed Amendments to the 2002
Indenture; (iii) the offering and issuance of the New Notes pursuant to the New Indenture; (iv) the
entering into the New Indenture; (v) the guarantees granted by the subsidiaries pursuant to the New
Indenture; (vi) the offering and issuance of the Exchange Notes pursuant to the Exchange Offer; and
(vii) the offering of the Shares pursuant to the Equity Offering, including the related granting of
the Overallotment Option to the Underwriters.
N. The Borrower, Subsidiary Guarantors and the Bank have agreed to enter into this Amendment
to amend and modify the Loan Agreement, among other things, to reflect the changes relating to the
transactions described above.
NOW, THEREFORE, in consideration of the premises and the respective representations,
warranties, covenants and agreements set forth in this Amendment, and intending to be legally
bound, the parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
DEFINITIONS
1.1. Defined Terms.
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(a) Capitalized terms that are defined in this Amendment shall have the meanings ascribed in
this Amendment to such terms. All other capitalized terms shall have the meanings ascribed to such
terms in the Loan Agreement as amended by this Amendment. Unless the context of this Amendment
clearly requires otherwise, references to the plural include the singular; references to the
singular include the plural; the words “include,” “includes,” and “including” will be deemed to be
followed by “without limitation”; and the term “or” has, except where otherwise indicated, the
inclusive meaning represented by the phrase “and/or.”
(b) Each reference to “hereof,” “hereunder,” “herein” and “hereby” and each other similar
reference contained in the Loan Agreement, each reference to “this Agreement”, “the Loan Agreement”
and each other similar reference contained in the Loan Agreement and each reference contained in
this Amendment to the “Loan Agreement” shall on and after the Amendment Effective Date refer to the
Loan Agreement as amended by this Amendment. Any notices, requests, certificates and other
instruments executed and delivered on or after the Amendment Effective Date may refer to the Loan
Agreement without making specific reference to this Amendment but nevertheless all such references
shall mean the Loan Agreement as amended by this Amendment unless the context otherwise requires.
This Amendment constitutes a “Loan Document” as defined in the Loan Agreement.
ARTICLE 2
AMENDMENTS AND LIMITED WAIVER
AMENDMENTS AND LIMITED WAIVER
2.1. (a) Amendment to Section C(3) of the Loan Agreement: Offering Memorandum, Notes and
Indenture. Section C(3) of the Loan Agreement is hereby deleted and replaced in its entirety with
the following:
“(i) The Loans to be made to PHI under, and the terms and conditions of, this Agreement
do not violate the offering memorandum (the “2002 Offering Memorandum”) dated April 17,
2002, respecting promissory notes in the aggregate principal amount of TWO HUNDRED MILLION
and NO/100 DOLLARS, under an Indenture dated as of April 23, 2002 (the “2002 Indenture”),
among PHI, the Guarantors (as defined in the 2002 Offering Memorandum), and the Bank of New
York, as Trustee, or therewith, as all of the foregoing may be amended from time to time
(individually and collectively, the “2002 Indenture Notes and Documents”); and
(ii) The Loans to be made to PHI under, and the terms and conditions of, this Agreement
do not violate the offering memorandum (the “2006 Offering Memorandum”) respecting senior
notes in the aggregate principal amount of up to TWO HUNDRED MILLION and NO/100 DOLLARS,
under an Indenture related thereto (the “2006 Indenture”), among PHI, the Guarantors (as
defined in the 2006 Offering Memorandum), and The Bank of New York Trust Company, N.A., as
Trustee, or therewith, as all of the foregoing may be amended from time to time
(individually and collectively, the “2006 Indenture Notes and Documents” and together with
the 2002 Indenture Notes and Documents, the “Indenture Notes and Documents”).”
(b) Amendment to Section C(4) of the Loan Agreement: Litigation. Section C(4) of the Loan
Agreement is hereby deleted and replaced in its entirety with the following:
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“Except as set forth on Schedule C(4) attached hereto, 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.”
2.2. Consent. The Bank hereby consents to the (i) the Tender Offer of the 2002 Notes, (ii)
the Proposed Amendments to the 2002 Indenture, (iii) the offering and issuance of the New Notes
pursuant to the New Indenture, (iv) the entering into the New Indenture, (v) the guarantees granted
by the subsidiaries pursuant to the New Indenture, (vi) the offering and issuance of the Exchange
Notes pursuant to the Exchange Offer, and (vii) the offering of the Shares pursuant to the Equity
Offering, including the related granting of the Overallotment Option to the Underwriters.
2.3. Effectiveness. This Amendment shall become effective as of the first date (the
“Amendment Effective Date”) on which each of the following conditions is satisfied:
| (a) | there shall have been delivered to the Bank in accordance with Section 4.5 counterparts of this Amendment executed by each of the Borrower, the Subsidiary Guarantors and the Bank; and | ||
| (b) | the Bank shall have received all fees and accrued and unpaid costs and expenses (including reasonable legal fees and expenses) incurred in connection with the preparation and execution of this Amendment. |
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties. To induce the Bank to enter into this Amendment, the
Borrower represents and warrants to the Bank that:
(a) The representations and warranties of the Borrower in Section C of the Loan Agreement, as
modified herein, are on the date of execution and delivery of this Amendment, and will be on the
Amendment Effective Date, true, correct and complete in all material respects with the same effect
as though made on and as of such respective date (or, to the extent such representations and
warranties expressly relate to an earlier date, on and as of such earlier date).
(b) The execution, delivery and performance by the Borrower and the Subsidiary Guarantors of
this Amendment:
| (i) | are within such Person’s corporate powers; and | ||
| (ii) | have been duly authorized by all necessary corporate or other entity |
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action, including the consent of the holders of its equity interests where required.
(c) This Amendment has been duly executed and delivered by the Borrower and the Subsidiary
Guarantors. Each of this Amendment and the Loan Agreement constitutes the legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with its terms, except
as may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or limiting creditors’ rights generally or by equitable principles relating to
enforceability.
ARTICLE 4
MISCELLANEOUS
MISCELLANEOUS
4.1. No Other Amendments; Reservation of Rights; No Waiver. Other than as otherwise expressly
provided herein, this Amendment shall not be deemed to operate as an amendment or waiver of, or to
prejudice, any right, power, privilege or remedy of any Secured Party under the Loan Agreement or
any other Loan Document, nor shall the entering into of this Amendment preclude any Secured Party
from refusing to enter into any further amendments with respect to the Loan Agreement or any other
Loan Document. Except as specified in Section 2.2, this Amendment shall not constitute a waiver of
(i) compliance with any covenant or other provision in the Loan Agreement or any other Loan
Document or (ii) of the occurrence or continuance of any present or future Default or Event of
Default.
4.2. Ratification and Confirmation. Except as expressly set forth in this Amendment, the
terms, provisions and conditions of the Loan Agreement and the other Loan Documents are hereby
ratified and confirmed and shall remain unchanged and in full force and effect without interruption
or impairment of any kind.
4.3. Governing Law. This Amendment will be governed by and construed in accordance with the
laws of the State of Louisiana.
4.4. Headings. The article and section headings contained in this Amendment are inserted for
convenience only and will not affect in any way the meaning or interpretation of this Amendment.
4.5. Counterparts. This Amendment may be executed in two or more counterparts, each of which
will be deemed an original but all of which together will constitute one and the same instrument.
This Amendment may be delivered by exchange of copies of the signature page by facsimile
transmission.
4.6. Severability. The provisions of this Amendment will be deemed severable and the
invalidity or unenforceability of any provision will not affect the validity or enforceability of
the other provisions hereof; provided that if any provision of this Amendment, as applied to any
party or to any circumstance, is judicially determined not to be enforceable in accordance with its
terms, the parties agree that the court judicially making such determination may modify the
provision in a manner consistent with its objectives such that it is enforceable, and/or to delete
specific words or phrases, and in its modified form, such provision will then be enforceable and
will be enforced.
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4.7. Costs and Expenses. Regardless of whether the transactions contemplated by this
Amendment are consummated, the Borrower agrees to pay to the Bank on demand all reasonable
out-of-pocket costs and expenses of the Bank incurred in connection with the preparation, execution
and delivery of this Amendment, including the reasonable fees and expenses of legal counsel to the
Bank.
4.8. Assignment; Binding Effect. No party may assign either this Amendment or any of its
rights, interests or obligations hereunder except in the manner specified for an assignment in the
Loan Agreement. All of the terms, agreements, covenants, representations, warranties and
conditions of this Amendment are binding upon, and inure to the benefit of and are enforceable by,
the parties and their respective successors and permitted assigns.
4.9. Entire Agreement. The Loan Agreement as amended by this Amendment, together with the
Exhibits and Schedules thereto that are delivered pursuant thereto, constitutes the entire
agreement and understanding of the parties in respect of the subject matter of the Loan Agreement
as amended by this Amendment and supersedes all prior understandings, agreements or representations
by or among the parties, written or oral, to the extent they relate in any way to the subject
matter of the Loan Agreement as amended by this Amendment.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have executed this Amendment, or caused this Amendment to be
executed by their authorized representatives, as of the date stated in the introductory paragraph
of this Amendment.
| BORROWER: | PHI, INC. | |||||
| f/k/a Petroleum Helicopters, Inc. | ||||||
| By: | /s/ Xxxxxxx X. XxXxxx | Dated:4/12/2006 | ||||
| Name: | ||||||
| Title: | Chief Financial Officer, Treasurer and Secretary | |||||
| BANK: | WHITNEY NATIONAL BANK | |||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: | ||||||
| Title: | Senior Vice President | |||||
| SUBSIDIARY GUARANTORS: | AIR EVAC SERVICES, INC. | |||||
| By: | /s/ Xxxxxxx X. XxXxxx | Dated:4/12/2006 | ||||
| Name: | ||||||
| Title: | Chief Financial Officer, Treasurer and Secretary | |||||
| PHI TECH SERVICES, INC. (formerly | ||||||
| XXXXXXXXXX AIRMOTIVE, INC.) | ||||||
| By: | /s/ Xxxxxxx X. XxXxxx | Dated:4/12/2006 | ||||
| Name: | ||||||
| Title: | Chief Financial Officer, Treasurer and Secretary | |||||
| INTERNATIONAL HELICOPTER | ||||||
| TRANSPORT, INC. | ||||||
| By: | /s/ Xxxxxxx X. XxXxxx | Dated:4/12/2006 | ||||
| Name: | ||||||
| Title: | Chief Financial Officer, Treasurer and Secretary | |||||
Signature Page to
Third Amendment to Loan Agreement
Third Amendment to Loan Agreement
Schedule C(4)
In June 2005, we received a document subpoena from the Antitrust Division of the Department of
Justice (“DOJ”). The subpoena relates to a grand jury investigation of potential antitrust
violations among providers of helicopter transportation services in the U.S. Gulf of Mexico. We
have provided the DOJ with all information that has been requested to date and intend to comply
with future requests, if any, for information from the DOJ in connection with this investigation.
Schedule C(4) to
Third Amendment to Loan Agreement
Third Amendment to Loan Agreement
