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# sHApIROLLP 1825 Eye Street NW I Washington, DC**20006~5403** TEL (202) 420-2200 I FAX (202)**420~2201** [ dicksteinshapiro.com



### November 6, 2008 CONTAINS CONFIDENTIAL INFORMATION DO NOT DISCLOSE

VIA E-MAIL AND FEDERAL EXPRESS William Wagner, Esq. United States Department ofTransportation Office ofthe Secretary ofTransportation Office ofthe General Counsel Aviation Enforcement and Proceedings 1200 NewJersey Avenue, S.E. Washington, DC 20590 Re: VIH Aviation Group DearMr. Wagner: We are providing you the information in this letter to supplement the information contained in ourletter to you ofJune 20, 2008 in response to your office's letter dated April 24, 2008 (received May 14, 2008) to VIH Aviation Group, regarding certain air service operations in the GulfofMexico that are alleged to have been conducted by VIH Aviation Group, Ltd. ("VIHAG"), CougarHelicopters, Inc. ("Cougar") orVIH Cougar Helicopters, Inc. ("VIH Cougar") (collectively the "VIH Parties") between January I, 2007 and April, 2008. In providing this letter and information (including the enclosed letter and documents), none of the VIH Parties waive their corporate attorney-client and work productprivileges. Moreover, we request that all ofthese documents be treated as confidential and exempt from disclosure under the Freedom oflnformation Act, 5 U.S.C. 

### § 552(b), and otherdisclosure statutes, and that the documents be used only for purposes ofevaluating the issues raised in this matter. In our letter to you ofJune 20, 2008 we provided you with background information regarding the structure and ownership ofVIHAG and VIH Cougar. We are now writing to inform you of proposed changes to the ownership ofVIHAG and VIH Cougar.

Washington, DC 

### I New York, NY 

### I LosAngeles, CA

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VIHAviation Group Ltd. Information Update VIHAG is a corporation organized under the laws ofBritish Columbia, Canada, with its principal place ofbusiness in Victoria, British Columbia, Canada. Mr. Kenneth Norie, a Canadian and also a resident ofVictoria, British Columbia, owns all ofthe voting and equity interests in VIHAG indirectly through his holding company, Kenlor Investments Ltd. ("Kenlor"). Mr. Norie is the sole director and the president ofVIHAG. In May 2007, VIHAG engaged Scotia Capital Inc. ("Scotia Capital"), an investment bank wholly-owned by the BankofNova Scotia, to canvass potential investors to finance VIHAG's growth initiatives. In the course ofits canvass ofpotential investors, Scotia Capital approached over 50 potential investors in Canada and the United States, and received several expressions of interest. As a result ofthis process, VIHAG received a proposal from Charlesbank Capital Partners LLC ("Charlesbank") ofBoston, Massachusetts to finance VIHAG's planned expansion by providing equity capital, management and additional business expertise. Charlesbank is a 17- year old private equity firm that has aproven track record ofinvesting over $1.7 billion in more than 50 companies. The investment will be made, indirectly, by Charlesbank Equity Fund VI, Limited Partnership and certain otherrelated investment funds affiliated with, and managed by, Charlesbank. The limited partners ofthe investment funds are pension funds, university endowment funds andprivate investors, primarily organized and resident in the United States. Negotiations with Charlesbank extended overthe summer of2008, and on September23, 2008, Kenlor, Kenneth Norie, VIHAG and CB-VIH Acquisition B.V. (the "Charlesbank investor"), a Dutch limited liability company formed by Charlesbank for the purpose ofthe transaction, entered into an agreement (the "InvestmentAgreement") for the proposed investment in VIHAG by the Charlesbank investor. Pursuant to the InvestmentAgreement:
• The Charlesbank investor is to invest up to approximately $60.1 million in preferred shares and voting shares ofVIHAG, resulting in the acquisition by the Charlesbank investor, ofa minority interest in VIHAG consisting ofapproximately 25% ofthe voting shares of, and approximately 49% ofthe equity interests in, VIHAG. Kenneth Norie will continue to own, indirectly through Kenlor, 75% ofthe voting shares of, and a 51% equity interest in, VIHAG. Concurrentlywith the completion ofthe transactions contemplated by the Investment Agreement, and as a condition to the completion ofsuch transactions, VIHAG is to obtain new debt facilities from arms' length institutional lenders to finance its operations, capital assets and growth.

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• The Charlesbank investor, Kenlor, and Kenneth Norie are to enter into a shareholders agreement in respect oftheir respective interests in VIHAG.
• The completion ofthe transactions contemplated by the Investment Agreement is also subject to confirmations from the pertinent Canadianregulatory agency (the Canadian Transportation Agency or "CT A") to the effect that the transaction will not affect the licenses held by VIHAG related to the operation ofaircraft in Canada. Appropriate application has been made to the CT A.
• Ifthe conditions to the transaction are satisfied, the transaction is expected to be completed in early 2009. Aftercompletion ofthe transactions contemplated by the Investment Agreement, VIHAG will continue its current status ofnotbeing an air carrier, and not being engaged in the performance ofair services, in the United States. Charlesbank (through CB-VIH CougarHoldings LLC, a wholly-owned Delaware limited liability company) has also agreed to purchase the majority (76%) interest in VIH Cougarfrom VIH Western LLC. CB-VIH Cougar Holdings LLC is a U.S. Citizen. This purchase is to be made pursuantto a Stock Purchase Agreement (the "StockPurchaseAgreement") between CBVIH Cougar Holdings LLC and VIH Western LLC. The closing ofthe purchase ofthe 76% interest in VIH Cougar is subject to the closing ofthe transaction contemplated by the Investment Agreement and is to be completed contemporaneously with the completion ofthe transactions contemplated by the Investment Agreement. On closing, CB-VIH Cougar Holdings LLC and VIH Helicopters USA, Inc., the holder of24% ofthe shares ofVIH Cougar, will enter into a shareholders agreement in respect oftheir respective interests in VIH Cougar. 

### VIHCougarInformation Update VIH Cougar is an Idaho corporation that was formed on January 5, 1995, and was previously known as Western Airways, Inc. William Steeper, a U.S. citizen, is the sole director and the president ofVIH Cougar. VIH Western, LLC owns 76 common shares (76%) and VIH Helicopters USA, Inc. ("VIHUSA") owns 24 common shares (24%) ofVIH Cougar. VIH Cougaris a U.S. air carrier authorized to conduct Part 133 VFR external load operations

.(CertificateNo. KHSL958J, 

### see Tab 1ofJune 20, 2008 submission) and VFR helicopter flights transporting internal cargo and passengers (fewer than 10 passengers) pursuant to Part 135 authority (CertificateNo. KHSA958J, 

### see id). On October 28, 2008 VIH Cougar Helicopters Inc. received FAA approval for a Part 135, 10 ormorepassenger, day and night VFR flight, Operations Specification for the Sikorsky S61 helicopter, together with the FAA's approval ofa

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new General Operations Manual, General Maintenance Manual, Training Manual, and related ancillary manuals. VIH Western LLC is a limited liability company organized under Idaho law that serves as a holding company and is not an air carrier. Mr. Steeperis the sole director, president and owner ofVIH Western LLC. VIHUSA is an Idaho corporation that serves as a holding company. VIHUSA owns aircraft and aircraft support facilities and is not an aircarrier. Mr. Steeper and Mr. Norie are the directors ofVIHUSA, and Mr. Norie is its president. VIHUSA is owned 100% byVIHAG. VIH Cougarhas provided the Federal Aviation Administration Flight Standards District Office in Seattle, Washington with advance notice ofthe changes in ownership ofVIH Cougarflowing from the Stock Purchase Agreement. VIH Cougaris, and after the closing ofthe transaction contemplated bythe Stock Purchase Agreement, will be, in compliance with the Title 49 U.S.C. 

### §40102(a)(l5) definition ofU.S. citizenship and the U.S. citizenshiprequirement found in Title 14 C.F.R. Part 119.33. Theproposed changes to the majority shareholderand the directors of VIH Cougar will not alterthe status ofVIH Cougaras a U.S. citizen, as its newmajority shareholder (CB-VIH CougarHoldings LLC) will own 76% ofthe voting stock and is a U.S. citizen, two-thirds ofits Board ofDirectors will be U.S. citizens, and its managing officers will continueto be U.S. citizens. Further information regarding that transaction is set forth in the letterdatedNovember 6, 2008 from VIH Cougarto the FAA FSDO in Seattle, a copy ofwhich is enclosedhereto as Exhibit A. Copies ofthe Stock Purchase Agreement pertaining to VIH Cougarand the InvestmentAgreement pertaining to VIHAG are included as attachments to the FAA letter. Please let us know ifthere is further information you require. Thank you for your attention to this matter. 

# !JJ:tAJd Jy DavidM. Nadler

# ¥ I
David Y. Yang (202) 420-2281 (direct dial) (202) 420-2201 (fax) nadlerd@dicksteinshapiro.com 

### Counsel to VIHAviation Group

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Enclosure

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# EXHIBIT A

FILED CONFIDENTIAL