EXHIBIT 10.1

                       LOAN AGREEMENT

                           AMONG

                 AIR EVAC SERVICES, INC.,

                  WHITNEY NATIONAL BANK,

              FIRST NATIONAL BANK OF COMMERCE,

                 NATIONSBANK OF TEXAS, N.A.

                            AND

                NATIONSBANK OF TEXAS, N.A.,
                        as the Agent

          Dated Effective as of December 31, 1997





                     TABLE OF CONTENTS

                                                        Page


1.   DEFINITIONS AND ACCOUNTING TERMS                      1
     1.01 Certain Definitions                              1
     1.02 Other Definitional Provisions                   17

2.   THE LOANS                                            18
     2.01 Term Loans                                      18
     2.02 Revolving Credit Loans                          18
     2.03 Borrowing Procedure                             19
     2.04 Rates of Interest                               20
     2.05 Increased Costs - Reserve Requirements, Etc.    21
     2.06 Recapture                                       22
     2.07 Commitment Fees                                 22
     2.08 Payments, Notice of Certain Repayments, and
          Computations                                    22
     2.09 Set-Off, Counterclaims and Taxes                23
     2.10 Termination or Reduction of Commitments         23
     2.11 Application of Proceeds                         23
     2.12 Conversion and Continuation                     23
     2.13 Provisions Relating to LIBOR Loans              24

3.   PREPAYMENT.                                          26
     3.01 Optional Prepayments                            26
     3.02 Mandatory Prepayments                           27

4.   PAYMENTS MADE ON BUSINESS DAYS                       28

5.   REPRESENTATIONS AND WARRANTIES                       28
     5.01 Organization and Qualification                  28
     5.02 Capitalization                                  29
     5.03 Actions Pending                                 29
     5.04 No Default                                      29
     5.05 Warranty of Title; Leases                       29
     5.06 Payment of Taxes                                30
     5.07 Conflicting or Adverse Agreements or Restrictions30
     5.08 Purpose of Borrowings                           30
     5.09 Patents, Etc.                                   30
     5.10 Authorization, Validity, Etc.                   30
     5.11 Franchises, Permits, Etc.                       31
     5.12 Governmental Approvals                          31
     5.13 Description of and Title to Single-Wing Aircraft
          and Engines                                     31
     5.14 Registered Office of Company, Etc.              32
     5.15 Title to Parts and Receivables                  32
     5.16 Section 1110 of Bankruptcy Reform Act of 1978   32
     5.17 Environmental Protection Statutes               32
     5.18 EMTALA                                          33
     5.19 Medicare and Medicaid Programs; Licensure, etc. 33
     5.20 Fraud and Abuse and Stark Law                   34

6.   CONDITIONS OF LENDING                                35
     6.01 Conditions Precedent to this Agreement          35
     6.02 Conditions Precedent to each Borrowing          36

7.   AFFIRMATIVE COVENANTS                                37
     7.01 Financial Statements and Information            37
     7.02 Books and Records                               39
     7.03 General Insurance                               39
     7.04 Maintenance of Property                         39
     7.05 Inspection of Property and Records              39
     7.06 Existence, Laws, Obligations, etc.              39
     7.07 Notification of Defaults                        41
     7.08 Election and Incumbency Certificate             41
     7.09 Registration, Maintenance, Operation, Foreign
          Operations and Marking                          41
     7.10 Insurance with Respect to the Aircraft          43
     7.11 Recording, Etc.                                 45
     7.12 Material Adverse Change                         46
     7.13 Further Assurances                              46
     7.14 Change of Control                               46
     7.15 Location of Parts                               47

8.   NEGATIVE COVENANTS                                   47
     8.01 Limitation on Amendments                        47
     8.02 Restricted Payments                             47
     8.03 Capital Expenditures                            47
     8.04 Intentionally Deleted                           48
     8.05 Liens, Etc                                      48
     8.06 Limitations on Indebtedness for Money Borrowed  49
     8.07 Investments                                     49
     8.08 Nature of Business                              49
     8.09 Stock of Subsidiaries, Merger, Sale of Assets,
          Etc.                                            49
     8.10 Change in Accounting Method                     49
     8.11 Sale of Receivables and Parts                   50
     8.12 Tax Consolidation                               50
     8.13 Chief Executive Office; Registered Office       50
     8.14 Transactions with Affiliates                    50
     8.15 Leasing                                         50
     8.16 Limitation on Amount of Revolving Credit Loans  50
     8.17 Limitation on Prepayments on Funded Indebtedness50
     8.18 Loans and Advances to Other Persons             51
     8.19 Hazardous Materials                             51

9.   POSSESSION, USE, VALUATION AND RELEASE OF COLLATERAL;
     APPLICATION OF PROCEEDS THEREOF; ADDITIONS TO
     COLLATERAL                                           51
     9.01 Possession and Use of Collateral                51
     9.02 Loss, Restriction, Requisition, Etc.            52
     9.03 Valuation of Aircraft, Etc.                     55
     9.04 Protection of Purchasers                        56
     9.05 Other Additions to Collateral; Releases of
          Collateral                                      57

10.  EVENTS OF DEFAULT AND REMEDIES                       58
     10.01 Events of Default                              58
     10.02 Acceleration of Maturity                       61
     10.03 Right of Set-off                               62
     10.04 Sharing of Payments, Etc.                      62
     10.05 Application of Proceeds of Collateral          62

11.  THE AGENT                                            64
     11.01 Appointment of Agent; Authority                64
     11.02 INDEMNIFICATION OF AGENT                       64
     11.03 LIABILITY OF AGENT                             65
     11.04 Independent Credit Decision                    66
     11.05 Agent and Affiliates; Multiple Capacities      66
     11.06 Successor Agent                                66

12.  MISCELLANEOUS                                        67
     12.01 No Waiver; Remedies                            67
     12.02 Amendments, Etc.                               67
     12.03 Duty With Respect to Collateral                67
     12.04 Performance of Company's Covenants             67
     12.05 INDEMNITIES                                    67
     12.06 Notices                                        70
     12.07 Binding Effect                                 71
     12.08 Interest                                       71
     12.09 Survival of Representations and Warranties     72
     12.10 Severability                                   72
     12.11 Descriptive Headings                           72
     12.12 Counterparts                                   72
     12.13 GOVERNING LAW                                  73



Schedule I     Description of Aircraft

Schedule II    Liens of the Company and the Subsidiaries
               Existing on December 31, 1997


Exhibit A-1    Form of Term Note
Exhibit A-2    Form of Revolving Credit Note
Exhibit B      Subsidiaries
Exhibit C      Form of Borrowing Base Certificate
Exhibit D-1    Form of Opinion of Locke Purnell Rain Harrell
                 (A Professional Corporation)
Exhibit D-2    Form of Opinion of Correro, Fishman, Haygood,
                 Phelps, Weiss, Walmsley & Casteix, L.L.P.
Exhibit D-3    Form of Opinion of Lytle, Soule & Curlee
Exhibit E      Form  of  Officer's Certificate as to  Release  of
                 Collateral

                       LOAN AGREEMENT


          THIS  LOAN  AGREEMENT, dated as  of  December  31,
1997,  (the  "Effective  Date"),  by  and  among  AIR   EVAC
SERVICES,   INC.,   a  Louisiana  corporation   (hereinafter
referred  to  as the "Company"), NATIONSBANK OF TEXAS,  N.A.
("NationsBank"),  WHITNEY  NATIONAL  BANK  ("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  Creditors (as hereinafter defined) under this Agreement
(hereinafter in such capacity referred to as the "Agent"),

                    W I T N E S S E T H:

          WHEREAS,  the Company has requested the  Banks  to
furnish the extensions of credit provided for herein,  which
shall be used by the Company (a) to finance (i) the purchase
of  certain assets and properties relating to an air medical
transport  business (the "Business") operated  by  Samaritan
Health    System,   an   Arizona   non-profit    corporation
("Samaritan"),   pursuant  to  the   Acquisition   Agreement
(hereinafter defined) and (ii) working capital needs and (b)
for general corporate purposes.

          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.

     1.1   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).

          "Acquisition  Agreement" shall mean  that  certain
Asset  Purchase Agreement between Samaritan and the Company,
dated  as  of December 15, 1997, as the same may be  amended
from time to time.

          "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 Loan Agreement, as the
same  may  be  amended, supplemented, extended, restated  or
otherwise modified from time to time.

          "Aircraft"  shall  mean the 6 fixed-wing  aircraft
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 fixed-wing aircraft, 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 fixed-wing aircraft or
other  Aviation Units from time to time hereafter  owned  by
the  Company  and  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 Margin" shall mean, at the time of any
determination thereof, for purposes of all Loans, the margin
of  interest over the Prime Rate or the LIBOR Rate,  as  the
case  may  be,  which  is applicable  at  the  time  of  any
determination of interest rates under this Agreement,  which
Applicable Margin shall be subject to adjustment (upwards or
downwards, as appropriate) based on the Leverage  Ratio,  as
follows:

                                          
                        Applicable Margin   Applicable Margin
     Leverage Ratio       for Prime Rate     for LIBOR Loans
                              Loans
                                          
   Greater than 4.75        0.500%             1.500%
                                          
   Less than or equal                     
   to 4.75 to 1.00 but      0.000%             1.375%
   greater than 4.50
   to 1.00
                                          
   Less than or equal                     
   to 4.50 to 1.00 but      0.000%             1.250%
   greater than 4.25
   to 1.00
                                          
   Less than or equal                     
   to 4.25 to 1.00 but      0.000%             1.125%
   greater than 4.00
   to 1.00
                                          
   Less than or equal       0.000%             1.000%
   to 4.00


     For  the  purposes of this definition,  the  Applicable
     Margin shall be determined as at the end of each of the
     first  three quarterly periods of each fiscal  year  of
     PHI and as at the end of each fiscal year of PHI, based
     on the relevant financial statements delivered pursuant
     to  the  PHI  Loan Agreement; changes in the Applicable
     Margin shall become effective on the date which is  the
     earlier  of  (i) two Business Days after the  date  the
     Agent  receives such financial statements and (ii)  the
     60th  day  after  the end of each of  the  first  three
     quarterly periods of each fiscal year or the 120th  day
     after the end of each fiscal year, as the case may  be,
     and shall remain in effect until the next change to  be
     effected  pursuant to this definition;  provided,  that
     (a)  until  the  first  such financial  statements  are
     delivered after the date hereof, the Applicable  Margin
     shall  be determined by reference to the last Officers'
     Certificate  delivered to the Agent by PHI pursuant  to
     the  PHI  Loan  Agreement pursuant to  Section  7.01(f)
     thereof and (b) if any financial statements referred to
     above   are  not  delivered  within  the  time  periods
     specified  above,  then,  for  the  period   from   and
     including  the date on which such financial  statements
     are  required  to  be  delivered  under  the  PHI  Loan
     Agreement, to but not including the date on which  such
     financial  statements  are  delivered,  the  Applicable
     Margin  as  at the end of the fiscal period that  would
     have  been  covered thereby shall be deemed to  be  the
     Applicable  Margin which would be applicable  when  the
     Leverage Ratio is greater than 4.75 to 1.00.

          "Applicable  Prime Rate" means 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 the Applicable Margin.

          "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  Creditor 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 Creditor 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
Creditor  an  Officers'  Certificate  certifying  that   the
Company  is in full compliance with all provisions  of  this
Agreement with respect to the same.

          "Available PHI Borrowing Base" shall mean  at  any
time  an  amount  equal to the difference  between  (a)  the
Borrowing  Base  (as such term is defined in  the  PHI  Loan
Agreement) under the PHI Loan Agreement, minus (b)  the  sum
of  (i)  the then aggregate outstanding principal amount  of
all  Revolving  Credit Loans (as such term is defined  under
the  PHI Loan Agreement) under the PHI Loan Agreement,  plus
(ii)  the  aggregate amount of Permitted  Letter  of  Credit
Amounts  (as  such  term  is  defined  under  the  PHI  Loan
Agreement) under the PHI Loan Agreement.

          "Aviation  Unit"  shall  mean  any  engine-powered
device  that is owned by the Company and 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 Term Loan Borrowing or  a
Revolving Credit Borrowing.

          "Borrowing Base" shall mean at any time an  amount
equal  to (a) (i) 50% of the amount of Eligible Receivables,
plus  (ii) 50% of the Appraised Value of the Aircraft,  plus
(iii)   50%  of  the  value  of Eligible  Parts  (valued  at
the  lower of average cost or market), in which each of  the
Creditors  shall  have a valid equal and  ratable  perfected
first  priority Security Interest, pursuant to the  Security
Documents, minus (b) the aggregate principal amount  of  the
Term Loans, at the time of such determination.

          "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"  shall have the meaning given such term
in the introductory paragraph of this Agreement.

          "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 estates, rights,  power
and  privileges of the Company, whether now held or  enjoyed
or  hereafter acquired, in respect of any of the  foregoing,
but  specifically excluding licenses and permits that cannot
be  encumbered or assigned under applicable law, and (e) 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).

          "Commitment" shall mean for each Bank, that Bank's
Ratable Share of $5,000,000, as such amount is reduced  from
time to time pursuant to Section 2.10 and Section 3.02.

          "Commitment  Fee"  means  a  fee  payable  by  the
Company  pursuant  to Subsection 2.07(a) in  the  amount  of
0.375% (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    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.

          "Conversion Date" shall mean October 31, 1999.

          "Creditors" shall mean the Banks.

          "Default"  shall mean any of the events  specified
in Subsections 10.01(a) through 10.01(o), 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 single-wing aircraft  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 Parts" shall mean all Parts on the books
of  account of the Company on the date any determination  is
made, located within the State of Arizona, and in which  the
Agent   shall  have  a  perfected  first  priority  security
interest for the benefit of the Creditors.

          "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 210 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,  provided,
however,  that  Receivables owing by the  United  States  of
America  or any agency or department thereof to the  Company
shall  not  be  so  excluded  if (i)  such  Receivables  are
assignable  under the Assignment of Claims Act  of  1940  as
amended,  and  in  effect  from  time  to  time,   and   all
regulations issued pursuant thereto (the "Act"),   or  if  a
valid  security  interest therein may be created  under  all
other  applicable  laws and regulations, including,  without
limitation, those applicable to Government Receivables, (ii)
Agent  receives  appropriate  documentation,  in  form   and
substance satisfactory to the Agent for the ratable  benefit
of   the  Banks  and  under  the  other  loan  documents  in
compliance  with the notification and other  provisions  for
assignment  set  forth  in  such  Act  and  other  laws  and
regulations, and (iii) agreement, acknowledgment and consent
to  such assignment by the appropriate contracting agent(s),
disbursing  agent(s),  if  any,  and  surety(ies)  upon  the
bond(s), if any, 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 210 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 210 days old on the 210th 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.
  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.  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.
  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.  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.  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  PHI,   any   PHI
Subsidiary  and  any  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(o), 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  single-wing
aircraft  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  single-wing
aircraft  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 single-wing aircraft  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.

          "Government  Receivables" shall  mean  Receivables
now  or hereafter owing from the United States or from State
Medicaid programs.

          "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).

          "Guaranty  Agreement"  shall  mean  that   certain
Guaranty Agreement, of even date herewith, executed by  PHI,
as  guarantor, in favor of the Agent for the benefit of  the
Banks, guaranteeing the unpaid principal of and interest  on
the  Loans and all other obligations and liabilities of  the
Company  to  the Agent and the Banks, in form and  substance
satisfactory to the Banks.

          "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.

          "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 2.04.

          "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.

          "Letter Agreement" shall mean that certain  letter
agreement,  dated December 31, 1997, among the Company,  the
Banks and the Agent relating to the Term Loan.

          "Leverage Ratio" shall have the meaning set  forth
in the PHI Loan Agreement.

          "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 2.04.

          "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  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 Applicable Margin which  is
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.

          "Loans"   shall  mean  the  Term  Loans  and   the
Revolving Credit Loans.

          "Majority  Banks" shall mean, as of  the  date  of
determination  thereof, Banks holding 100%  of  the  Ratable
Shares.

          "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 Term Note  or  a  Revolving
Credit Note.

          "Notice of Borrowing" shall have the meaning given
such term in Section 2.03.

          "Notice of Conversion or Continuation" shall  have
the meaning set forth in Subsection 2.12(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.

          "Overadvance Amount" shall have the meaning  given
such term in Section 8.16.

          "Parts"  shall  mean,  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,      apparatus,
appurtenances, accessories and parts or components  thereof,
of   the  Company  wherever  maintained,  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 accessories 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 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.

          "PHI"  shall mean Petroleum Helicopters,  Inc.,  a
Louisiana corporation.

          "PHI  Loan  Agreement"  shall  mean  that  certain
Amended and Restated Loan Agreement, originally dated as  of
January 31, 1986, amended and restated in its entirety as of
March  31, 1997, among Petroleum Helicopters, Inc.,  Whitney
National  Bank, First National Bank of Commerce, NationsBank
of Texas, N.A. and NationsBank of Texas, N.A., as the agent,
and  as  the  same  may  from time to  time  be  amended  in
accordance with the provisions thereof.

          "PHI  Subsidiary"  shall mean any  Subsidiary  (as
such  term is defined in the PHI Loan Agreement) other  than
the Company or a Subsidiary of the Company.

          "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 2.04.

          "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.

          "Ratable  Share"  shall  mean,  in  the  case   of
NationsBank,  37.5%, in the case of Whitney, 37.5%,  and  in
the case of FNBC, 25%.

          "Rate  Period"  means with respect  to  any  LIBOR
Loan,  the  period  commencing  on  the  date  of  Borrowing
applicable  to such LIBOR Loan under Section 2.03  (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 2.13(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) or Section 2.02(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, 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.

          "Reportable Event" shall have the meaning assigned
to  that  term in Section 4043 (excluding Subsection  (b)(7)
and (b)(9)) of ERISA.

          "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,  (a) any dividends  payable  solely  in
common stock of the Company, (b) any dividends on the Series
A  Cumulative  Accruing Pay-in-Kind Preferred Stock  of  the
Company payable solely in other shares of the same series of
preferred  stock  of the Company, and (c)  any  stock  split
whereby the issued shares of any existing class or series of
common  stock or preferred 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.

          "Revolving   Credit  Borrowing"   shall   mean   a
borrowing consisting of a simultaneous Revolving Credit Loan
from each Bank.

          "Revolving  Credit Loan" shall  have  the  meaning
given such term in Subsection 2.02(a).

          "Revolving  Credit  Note"  shall  mean   a   note,
substantially  in the form attached hereto as  Exhibit  A-2,
evidencing  the  Revolving Credit  Loans  made  by  a  Bank,
including    all    renewals,   extensions,   modifications,
amendments, rearrangements and replacements thereof.

          "Revolving Credit Termination Date" shall have the
meaning given such term in Subsection 2.02(b).

          "Samaritan" shall have the meaning given such term
in the introductory paragraph of this Agreement.

          "Security  Agreement"  shall  mean  that   certain
Security Agreement, of even date herewith, executed  by  the
Company,  as  grantor, to Agent, as Secured Party,  for  the
equal  and  ratable  benefit of  itself,  Whitney  and  FNBC
covering  all  of the Collateral (as defined  therein)  then
existing  or thereafter acquired, wherever located, together
with  any  and all supplements, modifications or  amendments
thereto or restatements thereof.

          "Security  Documents"  shall  mean  the   Security
Agreement,  the Guaranty 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.

          "Services  Agreement" means that certain  Services
Agreement  entered into between the Company  and  Samaritan,
effective January 1, 1998, as the same may from time to time
be amended.

          "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.

          "Term  Loan  Borrowing"  shall  mean  a  borrowing
consisting of a simultaneous Term Loan from each Bank.

          "Term  Loan Note" shall mean a note, substantially
in  the form attached hereto as Exhibit A-1, evidencing  the
Term   Loan   made  by  a  Bank,  including  all   renewals,
extensions,  modifications, amendments,  rearrangements  and
replacements thereof.

          "Term  Loans"  shall have the meaning  given  such
term in Subsection 2.01(a).

          "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.

          "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.

     1.2   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.

     2.1  Term Loans.

          (a)   Upon  the terms and conditions set forth  in
this  Agreement,  each Bank agrees to make a  one-time  term
loan to the Company on the Effective Date in an amount equal
to  such  Bank's  Ratable Share of  $6,250,000   (the  "Term
Loan").  Each Bank's Term Loan shall be evidenced by a  Term
Loan 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 Term Loan is paid in full at the rate or rates set
forth in Section 2.04.

          (b)   The  aggregate principal amount of the  Term
Loans shall be payable in quarterly installments each in  an
amount  equal to (i) for the first 23 quarterly installments
prior   to  November  10,  2003  (the  "Termination  Date"),
$223,214 and (ii) on the Termination Date, $1,116,078, which
quarterly installments shall be payable on the tenth  (10th)
day of each February, May, August and November of each year,
commencing  February 10, 1998 and ending on the  first  such
date  on which the aggregate unpaid principal amount of  the
Term  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 the Termination Date).

          (c)   Each  Bank shall post on a schedule attached
to  its  Term Loan Note or in records relating to  its  Term
Loan  Note (i) the rate of interest such Term Loan will bear
and  (ii)  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 Term  Loan  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.

     2.2  Revolving Credit Loans.

          (a)   Upon  the terms and conditions set forth  in
this  Agreement,  each Bank agrees to make revolving  credit
loans  to the Company from time to time to but not including
the Conversion Date, up to an aggregate principal amount not
exceeding   at   any  one  time  outstanding   such   Bank's
Commitment, subject to the provisions of Section 8.16 to  be
used for working capital and general corporate purposes (the
"Revolving  Credit  Loans").  Each Bank's  Revolving  Credit
Loans shall be evidenced by a Revolving Credit 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
Revolving Credit Loan is paid in full at the rate  or  rates
set  forth  in  Section 2.04.  Within the limits  set  forth
above  and  subject  to  the terms and  conditions  of  this
Agreement,  the  Company may repay or prepay  the  Revolving
Credit Loans pursuant to Article 3 and prior to, but not  on
or after the Conversion Date, borrow and reborrow under this
Subsection 2.02(a).  On and after the Conversion  Date,  the
Revolving Credit Loans will automatically convert to a  term
facility and the Commitments of the Banks will terminate  so
that  amounts so converted which are repaid or  prepaid  may
not be reborrowed.

          (b)    The  aggregate  principal  amount  of   the
Revolving  Credit  Loans  shall  be  payable  in  20   equal
quarterly installments of the aggregate principal amount  of
the  Revolving Credit Loans outstanding as of the Conversion
Date,  which quarterly installments shall be payable on  the
tenth  (10th) day of each February, May, August and November
of each year, commencing February 10, 2000 and ending on the
first  such  date (after the Conversion Date) on  which  the
aggregate  unpaid  principal amount of the Revolving  Credit
Loans   shall  be  paid  in  full  by  reason  of  quarterly
installments  paid  as  aforesaid and any  prepayments  made
pursuant to Subsection 3.02(b) and 3.02(c) or otherwise, but
in any event no later than November 10, 2004 (the "Revolving
Credit Termination Date").

          (c)   Each  Bank shall post on a schedule attached
to  its Revolving Credit Note or in records relating to  its
Revolving  Credit Note (i) the date and principal amount  of
each  Revolving Credit Loan, (ii) the rate of interest  each
such Revolving Credit 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  Revolving  Credit 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.

     2.3  Borrowing Procedure.

          (a)   With the exception of the Loans made on  the
Effective Date, the Loans under Sections 2.01 and 2.02 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
$250,000 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  Revolving  Credit
Borrowing,  the  Company shall (i)  deliver,  prior  to  the
Borrowing Date set forth in the Notice of Borrowing  related
to  such  Revolving Credit Borrowing, to the Agent,  with  a
copy  to  each Bank, a Borrowing Base Certificate showing  a
Borrowing  Base that is greater than or equal to the  amount
of the Revolving Credit Borrowing referred to in such Notice
of  Borrowing plus the principal amount of Revolving  Credit
Loans outstanding on such date.

          (c)   The  failure of any Bank to make the Loan(s)
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(s) on the date of such Borrowing, but no Bank shall
be responsible for the failure of any other Bank to make the
Loan(s)  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
2.03(d),   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.

     2.4   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 February,  May,  August  and
November commencing on the tenth day of February, 1998,  and
on  each  such  date thereafter until the  date  (after  the
Conversion  Date)  when  all principal  amounts  outstanding
under  the Notes shall have been paid in full and until  the
obligation of each Bank to make Revolving Credit Loans shall
be terminated.  Interest on each LIBOR Loan shall be due and
payable  on the last day of each Rate Period (or  if  longer
than  three  months,  each date which  is  the  third  month
anniversary of such 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.   9:3509.1  if
and to the extent applicable.

          (c)   Each adjustment to the Applicable Prime Rate
and  the  LIBOR  Rate shall be made in accordance  with  the
definition of the term Applicable Margin in Section 1.01.

          (d)   In  the  event  any such adjustment  to  the
Applicable Prime Rate or the LIBOR Rate, 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  or  the LIBOR  Rate,  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
or  the  LIBOR  Rate,  respectively,  that  would  otherwise
require such deduction or addition after such date shall  be
of no effect.

          (e)   All adjustments to the Applicable Prime Rate
or  the  LIBOR  Rate,  respectively, provided  for  in  this
Subsection  2.04(c)  and  in the  definition  of  Applicable
Margin 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.

     2.5  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
2.05  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.

     2.6    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.

     2.7  Commitment Fees.  The Company agrees to pay to the
Agent for the account of the Banks the Commitment Fee,  from
and  including  the  Effective Date  to  and  including  the
Conversion  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.

     2.8    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.

     2.9  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 2.09 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.

     2.10  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 Revolving
Credit  Loans, 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.

     2.11  Application  of Proceeds.  The  proceeds  of  all
Borrowings under this Agreement shall be used solely for (a)
with  respect to the Term Loans, the acquisition  of  assets
relating  to  the  EMS business of Samaritan  and  (b)  with
respect  to  Revolving  Credit Loans,  working  capital  and
general corporate purposes of the Company.

     2.12 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 $250,000 or an integral multiple of
$250,000 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 $250,000  or  an  integral
multiple  of  $250,000  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 2.12(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.

     2.13 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 2.13(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 2.13(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 2.13(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 2.13(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  2.13(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).

3.   PREPAYMENT.

     3.1  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 type of Borrowing  (i.e.,
Term Loan Borrowing or Revolving Credit Borrowings) and  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 Revolving Credit  Loans  made
under this Section 3.01 on or after the Conversion Date  and
prepayments  of the Term Loans made under this Section  3.01
shall be applied, ratably, to such principal installments of
such  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  Revolving  Credit
          Loans  or Term Loans, as the case may be, to which
          any  of  such prepayments are to be applied,  such
          prepayments shall be applied ratably (according to
          each   Bank's  Ratable  Share)  to  the  principal
          installments due under such 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  Revolving  Credit
          Loans  or Term Loans, as the case may be, 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
          $892,857; and

               (iii)       the  Company  may  not  designate
          installments of the Revolving Credit Loans or Term
          Loans, as the case may be, 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.

     3.2  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  Term  Loans  in  the  amount  by  which  the  aggregate
principal then outstanding under the Revolving Credit  Loans
exceeds   the   lesser  of  (x)  $5,000,000  and   (y)   the
Borrowing Base, provided, however, if, at the time  of  such
prepayment,   there   is  no  aggregate   principal   amount
outstanding under the Term Loans, the Company may prepay the
Revolving Credit Loans and the respective Commitment of each
Bank  shall be permanently and ratably reduced by the amount
of  such  prepayment, 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).    Such
prepayments  of  Loans  made under this  Subsection  3.02(c)
shall be applied to the principal installment due under  the
Term  Loans  according  to  the  terms  and  conditions   of
Subsection 3.01(b) , provided, however, if, at the  time  of
such  prepayment,  there  is no aggregate  principal  amount
outstanding under the Term Loans, the Company may prepay the
Revolving Credit Loans and the respective Commitment of each
Bank  shall be permanently and ratably reduced by the amount
of such prepayment.

          (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 2.13(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:

     5.1   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 (b) 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).

     5.2   Capitalization.  (a) The authorized capital stock
of the Company consists of (a) 7,000 shares of common stock,
without par value, 1,000 shares of which are outstanding and
are   owned,  both  beneficially  and  of  record,  by   PHI
Aeromedical Services, Inc., a Louisiana corporation (all  of
the  issued and outstanding shares of capital stock of which
are  owned,  beneficially and of record, by  PHI),  and  (b)
3,000  shares of preferred stock, par value $100 per  share,
1,000  shares  of  which are outstanding and  are  owned  of
record   and,   to  the  best  knowledge  of  the   Company,
beneficially by Samaritan.

     5.3  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.

     5.4    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.

     5.5   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.

     5.6  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 Company and its officers know of no claims by any
governmental authority for any unpaid taxes.

     5.7  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.

     5.8   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.

     5.9   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   material  municipal  consents,  franchises,   permits,
licenses,  rights-of-way,  easements,  consents  and   other
rights  which, together with their respective corporate  and
charter  powers  and  the rights of the  Company  under  the
Services  Agreement,  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,  except  that  in  the  case   of
Governmental Receivables the Agent or the Banks must  obtain
a court order in compliance with applicable federal or state
anti-assignment laws in order for the Agent or the Banks  to
receive payment thereon.

     5.13  Description of and Title to Single-Wing  Aircraft
and  Engines.   Schedule  I  to this  Agreement  contains  a
correct  and  complete description of all of the single-wing
aircraft  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  single-wing aircraft 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
single-wing  aircraft,  other  Aviation  Unit  and  engine),
necessary  or advisable in order to establish,  protect  and
preserve  its  title  to and interest  in  such  single-wing
aircraft,  other Aviation Units and engines as  against  the
respective sellers thereof and all third parties,  and  each
such  single-wing aircraft, 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  single-wing aircraft, 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   single-wing
aircraft,  other Aviation Units and engines, and  the  first
priority,  perfected, security interest of the Creditors  in
such  single-wing aircraft, other Aviation Units and engines
created  by  the  Security  Documents  in  such  single-wing
aircraft, 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)   is
2121  Airline Highway, Suite 400, Metairie, Louisiana 70001-
5979.   The  chief executive office of the Company  is  2121
Airline  Highway, Suite 400, Metairie, Louisiana 70001,  and
the  principal place of business of the Company is 2630  Sky
Harbor Boulevard, Phoenix, Arizona  85034.

     5.15  Title  to Parts and Receivables.   There  are  no
Liens on the Parts (except for Permitted Liens and the  Lien
resulting  from  the  sale  and subsequent  leasing  by  the
Company from Samaritan of certain radio equipment) or on the
Company's  Receivables (except for Permitted  Liens  of  the
type   described  in  Subsection  8.05(b)).   The   Security
Agreement  contains  a  complete  listing  of  all  of   the
locations  at which Parts are located in the United  States.
Except  for  the  filing of UCC Continuation Statements,  in
accordance with the recording provisions of the laws of  the
States  of  Arizona and Louisiana, the Agent  or  the  Banks
obtaining  a  court  order  in  compliance  with  applicable
federal  or  state  anti-assignment  laws  in  the  case  of
Government Receivables in order for the Agent or  the  Banks
to  receive  payment  thereon, and  state  law  requirements
relating  to  the perfection of and giving  of  notice  with
respect  to  the  Security Interest in  Receivables  arising
under  private insurance coverage arrangements,  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  of the Creditors 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 Creditors that the  Agent,
for the equal and ratable benefit of the Creditors, 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 Creditors, 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.

     5.18  EMTALA.  The Company is not subject to  Emergency
Medical Treatment and Labor Act requirements.

     5.19  Medicare  and Medicaid Programs; Licensure,  etc.
The  Company  has  made all necessary  filings  and  similar
applications that are necessary in order that  each  of  the
Company,   and  the  Company's  medical  director,   nurses,
licensed  employees  and  other  individuals  providing  air
ambulance and patient care services on behalf of the Company
will   become  qualified,  credentialed  and  licensed   for
participation in the Medicare and Medicaid programs  and  as
otherwise required under applicable state law, so that  each
will  be  so qualified, credentialed and licensed  prior  to
providing air ambulance and patient care services on  behalf
of  the  Company.   The  Company  is  a  party  to  supplier
agreements  under the Medicare and Medicaid  programs  which
are  in  full  force  and  effect with  no  defaults  having
occurred  thereunder.   The Company  has  timely  filed  all
claims or other reports required to be filed with respect to
the  services provided to Medicare, Medicaid and third party
payors,  and  all  such claims or reports are  complete  and
accurate, and the Company has no liability to any payor with
respect  thereto.  There are no pending appeals, overpayment
determinations, adjustments, challenges, audit litigation or
notices  of  intent to open Medicare or Medicaid,  or  third
party  claim determinations or other reports required to  be
filed by the Company.

          Neither  the  Company, nor any  medical  director,
nurses,  licensed  employees or other individuals  providing
patient  care  services on behalf of the  Company  has  been
convicted of, or pled guilty to nolo contendere to,  patient
abuse  or  negligence,  or any other  Medicare  or  Medicaid
program  related offense and none has committed any  offense
which  may  serve as the basis for suspension  or  exclusion
from the Medicare and Medicaid programs.

     5.20  Fraud and Abuse and Stark Law.  The Company,  its
officers,  directors, employees and agents have not  engaged
in  any  activities which are prohibited under  1320a-7b  or
1395nn  of  Title  42  of  the United  States  Code  or  the
regulations  promulgated thereunder,  or  related  state  or
local  statutes or regulations, or which are  prohibited  by
rules of professional conduct including, but not limited to,
the  following:   (a)  knowingly  and  willfully  making  or
causing to be made a false statement or representation of  a
material fact in any application for any benefit or payment,
(b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use
in  determining  rights to any benefit or payment,  (c)  any
failure  by  a  claimant  to  disclose  knowledge   of   the
occurrence  of any event affecting the initial or  continued
right  to  any  benefit or payment on its own behalf  or  on
behalf  of  another, with the intent to fraudulently  secure
such  benefit  or payment, and (d) knowingly  and  willfully
soliciting  or  receiving  any remuneration  (including  any
kickback,  bribe or rebate) directly or indirectly,  overtly
or  covertly,  in  cash or in kind, or offering  to  pay  or
receive  such  remuneration (i) in return for  referring  an
individual  to a person for the furnishing or arranging  for
the  furnishing of any item or service for which payment may
be made in whole or in part by Medicare or Medicaid, or (ii)
in  return  for purchasing, leasing or ordering or arranging
for,  or  recommending, purchasing, leasing or ordering  any
good,  facility, service or item for which  payment  may  be
made  in  whole or in part by Medicare or Medicaid,  or  (e)
referring  a  patient for designated health services  to  or
providing  designated  health services  to  a  patient  upon
referral  from an entity or person with which the  physician
or  an immediate family member has a financial relationship,
and  to  which no exception under 1395nn of Title 42 of  the
United States Code applies.

6.   CONDITIONS OF LENDING.

     6.1   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  Locke
Purnell  Rain Harrell (A Professional Corporation), Correro,
Fishman, Haygood, Phelps, Weiss, Walmsley & Casteix, L.L.P.,
counsel  for  PHI, 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,  D-2
and  D-3,  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.

          (c)  This Agreement, duly authorized, executed and
delivered  by  the Company, together with all Schedules  and
Exhibits hereto.

          (d)   The  Security  Documents,  duly  authorized,
executed  and  delivered by the Company, together  with  any
necessary financing statement changes.

          (e)   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.

          (f)   Copies  of each legal opinion  delivered  in
connection with the Acquisition Agreement.

          (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 Arizona and  each  other
state  where the Company does or intends to do 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.

          (j)   Evidence satisfactory to the Agent  and  the
Banks  of  the consummation of the transactions contemplated
by the Acquisition Agreement.

          (k)   Evidence satisfactory to the Agent  and  the
Banks that PHI, through PHI Aeromedical Services, Inc.,  has
contributed at least $2,150,000 in equity to the Company.

     6.2   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 Creditors 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, 1997, no  material  adverse
change has occurred with respect to the business, prospects,
earnings,  properties or condition, financial or  otherwise,
of  PHI  or  PHI and the PHI Subsidiaries taken as  a  whole
(including,   without  limitation,  any  material   downward
valuation  by  PHI  or any PHI Subsidiary  of  the  Aviation
Units, as such term is defined in the PHI Loan Agreement, or
any  determination  by  PHI or any  PHI  Subsidiary  that  a
significant  portion of its Receivables,  as  such  term  is
defined  in  the PHI Loan Agreement, is uncollectible),  (v)
since  the  Effective Date 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 its Subsidiaries taken as a whole
(including,   without  limitation,  any  material   downward
valuation  by  the  Company of the  Aviation  Units  or  any
determination by the Company that a significant  portion  of
its Receivables is uncollectible), and (vi) 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:

     7.1  Financial Statements and Information.  Deliver  to
each Bank:

          (a)  within 45 days after the end of each month 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  and certified as complete  and  correct,
subject  to changes resulting from year-end adjustments,  by
the principal financial officer of the Company;;

          (b)   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);

          (c)   promptly upon their becoming available,  one
copy  of  each financial statement, report, notice or  proxy
statement  sent by the Company or any Subsidiary  to  public
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;

          (d)    with   each  set  of  financial  statements
delivered pursuant to Subsection 7.01(a) with respect to the
third, sixth, ninth and twelfth month of each fiscal year of
the  Company, an Officers' Certificate 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)  with  respect to the twelfth month of  each  fiscal
year of the Company, 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;

          (e)   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  Parts  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 210 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;

          (f)    with   each  set  of  financial  statements
delivered pursuant to Subsection 7.01(a) with respect to the
ninth month of each fiscal year 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;

          (g)  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;

          (h)   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

          (i)    promptly  upon  request,  such   additional
financial  or other information as the Agent,  or  any  Bank
through the Agent, may reasonably request.

     7.2   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.

     7.3   General Insurance.  (a) 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, such
proceeds  not  in  excess of $500,000 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.

          (b)   Cause  Samaritan to perform its  obligations
under  Section IC of the Services Agreement relating to  the
arrangement of professional liability and general  corporate
liability insurance, or maintain on its own behalf  in  full
force  and  effect  policies of professional  liability  and
general  corporate  liability insurance  comparable  to  the
insurance to be provided by Samaritan, as aforesaid, and  at
comparable cost.

     7.4   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.

     7.5   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.

     7.6    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  Creditors; (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 Creditor 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  Creditor 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 CREDITORS 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
Creditor  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 Creditor
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  Creditor  in  a
particular  jurisdiction or jurisdictions  (other  than  any
actions  contemplated, required or permitted to be taken  by
the  Agent or such Creditor 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
Creditor  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 Creditors  or  any  other
holder of an interest in any Note.

     7.7   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.

     7.8   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.

     7.9    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  Creditors 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; provided  that  such
Aircraft may be taken from the continental United States  to
Mexico or Canada for the purpose of transporting individuals
requiring  medical  care but only if the  Security  Interest
with  respect  to such Aircraft is not jeopardized  thereby;
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  Creditors under a standard mortgagee  loss
payable  clause satisfactory to the Agent and each Creditor,
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 Creditor.

          (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 AIR EVAC  SERVICES,  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 AIR EVAC
     SERVICES,  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
Creditors  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  Phoenix,
Arizona,  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 city  and  state,  it  is
intended  and  agreed that such Aviation Unit  shall  remain
principally hangared, and in that sense located, in Phoenix,
Arizona.

     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  Creditors,  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
Creditors,  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  Creditors;  provided,
however,  that such policies may provide that, with  respect
to  proceeds of any particular claim, such proceeds  not  in
excess  of $500,000 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 Creditors 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  Creditors' 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 Creditor, (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 Creditors 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  Creditors,  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 Creditors  as  an  additional
insured  with  respect to the Aircraft, and, to  the  extent
available, shall insure the Agent's and Creditors'  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  Creditor 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 or on behalf of 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  Creditor, 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 or on behalf of 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  or  on
behalf  of the Company shall provide that the insurer  will,
(i)  advise the Agent and each Creditor 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  or  any
other  person  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
Creditor 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  Creditor  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 or on behalf of 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 Creditors, 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 Creditor  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 other  than  Aviation
Units  to the Security Interest, an opinion of legal counsel
satisfactory to the Creditors 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  Creditor,  but in no event more than once  during  each
calendar  year, an opinion of legal counsel satisfactory  to
the  Creditors  (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   the   Effective  Date  (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,
lockbox   or   similar  agreements,  financing   statements,
continuation statements and assurances as the Agent  or  any
Creditor  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  Creditors,  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 Creditors or which the Company  may
be or may hereafter become bound to mortgage, hypothecate or
pledge to or with the Creditors.

     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 PHI 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.

     7.15  Location of Parts.  Notify each Creditor and  the
Agent promptly in the event that $50,000 of Parts (valued at
the  lower  of  average cost or market) are located  at  any
location   other  than  those  enumerated  in  the  Security
Agreement,  and take such actions as the Creditors  and  the
Agent  may reasonably request to subject such Parts  to  the
Security Interest.

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:

     8.1  Limitation on Amendments.  Enter into any material
amendment,  modification or waiver of any term or  provision
of  the Services Agreement without the prior written consent
of the Majority Banks.

     8.2   Restricted  Payments.   Directly  or  indirectly,
through  any  Subsidiary or otherwise, declare  or  make  or
incur any liability to make any Restricted Payment.

     8.3  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)    $2,000,000.
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.

     8.4  Intentionally Deleted.

     8.5   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 shall be  junior  and
subordinate to the Security Interest; and

          (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)    to   the  extent  that  the  same  may   be
characterized as constituting a Lien, any statutory or other
rights  of offset or seizure in favor of the federal or  any
state government in connection with Government Receivables.

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.

     8.6   Limitations  on Indebtedness for Money  Borrowed.
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 the Notes.

     8.7   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).

     8.8    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.

     8.9   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)
of  the  PHI Loan Agreement 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) of the PHI Loan Agreement.

     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 PHI and a Subsidiary.

     8.13  Chief  Executive Office; Registered Office.  Move
either its chief executive office or registered office  from
the respective locations 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.

     8.16  Limitation on Amount of Revolving  Credit  Loans.
Permit  at  any  time  the aggregate  outstanding  principal
amount of the Revolving Credit Loans to exceed the lesser of
(i)  $5,000,000  and  (ii)  the  Borrowing  Base;  provided,
however, that the Company may have Revolving Credit Loans in
an  aggregate  principal amount (the  "Overadvance  Amount")
which  is in excess of the Borrowing Base (but not in excess
of  the $5,000,000 representing the Banks' Commitments)  and
which does not at any time exceed  an additional 26% of  the
Appraised Value of the Aircraft (for a total of 76% of  such
Appraised Value), but only so long as the Overadvance Amount
does not exceed the Available PHI 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 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
shall not at any time exceed $100,000.

     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.

     9.1   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, may manage, operate
and  use the same and each portion thereof 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
nor  any  Creditor  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 Creditor 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,  other   than   Government
Receivables, to make payment on all such Receivables to  the
Agent for application as provided in Section 10.05, and take
such  action as is permitted by law to have payment made  to
the  Agent on Government Receivables, 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
Creditors,  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 Creditors 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.

     9.2  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 Term
Loans  in  the inverse order of their respective due  dates,
provided, however, if, at the time of such prepayment, there
is  no aggregate principal amount outstanding under the Term
Loans, the Company may prepay the Revolving Credit Loans and
the  respective Commitment of each Bank shall be permanently
and  ratably reduced by the amount of such prepayment.   If,
as  a result of such Event of Loss, the Company shall not be
in  compliance  with Section 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 subject to the Security
          Interest  one  or  more Aviation Units  (provided,
          however,  that any such other Aviation Units  must
          be  acceptable  to the Agent and  each  Creditor),
          having  an aggregate Appraised Value (in the  case
          of  single-wing  aircraft 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
          Creditor)  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 the Notes shall not  have  been
          prepaid pursuant to clause (ii) 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

               (ii) the Company may prepay principal on  the
          Term  Loan Notes in an amount equal to the  amount
          necessary to cause the Company to be in compliance
          with  Subsection 8.16, provided, however,  if,  at
          the time of such prepayment, there is no aggregate
          principal amount outstanding under the Term Loans,
          the  Company may prepay the Revolving Credit Loans
          and  the respective Commitment of each Bank  shall
          be  permanently and ratably reduced by the  amount
          of  such  prepayment;  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 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  shall  not have any actual  knowledge  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 Creditors 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 Creditor, any and  all
assignments  and other instruments deemed by  the  Agent  or
such  Creditor 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 Creditors 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 (x)  if,
at  the time of such reimbursement, the Agent shall not have
any  actual  knowledge that any Default or Event of  Default
shall  have  occurred and then be continuing, or will  exist
immediately  after such reimbursement, and (y) 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.   If,
with  respect  to any particular loss, the Agent  shall  not
have  notified  the insurers that any Default  or  Event  of
Default   has  occurred  and  is  continuing,  the  proceeds
attributable to such loss not in excess of $500,000  may  be
paid  by  the  insurers directly to the  Company,  provided,
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.  All proceeds attributable to  such
loss  in  excess  of  $500,000 shall  be  directly  paid  by
the   insurers,   or,   if   the   Company   shall   receive
such   proceeds,   the  Company  shall  promptly   surrender
such  proceeds,  to  the Agent for the  ratable  benefit  of
the Creditors.  In all instances, other than those described
in  the  two immediately preceding sentences, such  proceeds
shall  be directly paid by the insurers, or, if the  Company
shall  receive  such  proceeds, the Company  shall  promptly
surrender  such  proceeds,  to the  Agent  for  the  ratable
benefit of the Creditors.

          (c)   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  Creditors  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 Creditors as Collateral.

          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.

     9.3  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,  1998,  (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
single-wing aircraft 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 single-
wing  aircraft  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)   Subject to Section 8.16, the event that  for
any  reason, other than the occurrence of an Event of  Loss,
the aggregate outstanding principal amounts of the Revolving
Credit  Loans  shall,  at any time,  exceed  the  lesser  of
$5,000,000  and  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),  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  Aviation  Units  (provided,  however,  that  any  such
Aviation  Units  must be acceptable to  the  Agent  and  the
Creditors) 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, 80%  of  the
amount  of  Eligible Receivables and 50% of  the  amount  of
Eligible  Parts  (valued at the lower  of  average  cost  or
market),  would  cause the Company to be in compliance  with
the   provisions   of   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.

     9.4    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  Creditors  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.

     9.5    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 2.03(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 Agent for the ratable benefit  of  the
Creditors 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 Creditors, release from the Security Interest
the  Aircraft to be transferred or exchanged and the  Agent,
on  behalf of the Creditors, 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 Agent for the ratable benefit
          of   the   Creditors  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  Creditors   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 Creditors, all documents required to
          effect  the release of the Aviation Unit  and  the
          addition of one or more substitute Aviation  Units
          received  by  the  Company,  if  any,  under   the
          Security Interest.

               (v)   At no one time shall there be more than
          one  (1) Aircraft that is the subject of a release
          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.

     10.1 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,  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 for Money  Borrowed
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  for  Money Borrowed 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 7.03, 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)  [intentionally omitted]; 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)   If  at  any  time Samaritan  shall  fail  to
continue  all existing policies of insurance (or  comparable
insurance)  in full force and effect covering  the  Business
and  naming  the  Company,  the  Banks  and  the  Agent   as
additional  insureds  thereunder and the  Company  fails  to
obtain  or  is  unable  to  obtain comparable  insurance  at
comparable cost; or

          (n)   If at any time a default or event of default
shall exist under the PHI Loan Agreement; or

          (o)   The  Company at any time revokes or attempts
to  revoke  its appointment of Agent as its attorney-in-fact
under Section 9 of the Security Agreement.

     10.2 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 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 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  Creditors 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.

     10.3  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.

     10.4 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.

     10.5  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  Creditors
pursuant to the Security Documents and otherwise in  respect
of  the Collateral 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 and, in the event such moneys shall  be
               insufficient  to  pay in full  such  amounts,
               then  to the payment thereof ratably to  each
               Creditor in the same proportion which (x) the
               sum  of  aggregate  unpaid principal  of  and
               interest on the Notes held by such Bank bears
               to  (y)  the  sum  of  the  aggregate  unpaid
               principal of and interest on the Notes on the
               relevant   Distribution   Date   (all    such
               prepayments  to be applied by  each  Creditor
               first  to  the payment of accrued and  unpaid
               interest,  if  any, owing by the  Company  to
               such   Creditor,  then  to  the  payment   of
               principal on the Notes);

     THIRD:    to  the  Creditors in an amount equal to  the
               sum  of  unpaid commitment and  agent's  fees
               payable  under  this Agreement  (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
               Creditor  in  the same proportion  which  the
               aggregate amount of Fees due to such Creditor
               bears to the aggregate unpaid Fees due to all
               the  Creditors  on the relevant  Distribution
               Date;

     FOURTH:   to  the Banks in an amount equal to 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
               Creditor  in  the same proportion  which  the
               aggregate  amount of Other Amounts  due  such
               Creditor   to  the  aggregate  unpaid   Other
               Amounts  due  to  all the  Creditors  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.

     11.1  Appointment  of Agent; Authority.   Each  of  the
Creditors 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  Creditors,  and   such
instructions  shall be binding upon all  Creditors  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.

     11.2 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 Creditors 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
CREDITORS  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  Creditor's  pro  rata
interest  in  the  Secured Obligations (as  defined  in  the
Security   Agreement),  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 Creditor 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  CREDITORS  TO  INDEMNIFY  EACH
INDEMNIFIED PARTY FROM AND AGAINST THE CONSEQUENCES  OF  ITS
OWN  NEGLIGENCE.   Without limiting the  generality  of  the
foregoing,   each   Creditor  agrees   to   reimburse   each
Indemnified  Party promptly upon demand  for  its  pro  rata
percentage 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.

     11.3  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
Creditors, 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
Creditor  and  shall not be responsible to any Creditor  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 Creditor 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.

     11.4 Independent Credit Decision.  Each Creditor 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 Creditor respecting the ability
of  the Company to perform its obligations pursuant to  this
Agreement, the Notes or any Security Document.

     11.5  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 Creditors.  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.

     11.6  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  Creditors,
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.

     12.1  No Waiver; Remedies.  No failure or delay on  the
part  of  the Agent or any Creditor 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.

     12.2  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.

     12.3 Duty With Respect to Collateral.  The duty of  the
Agent  and any Creditor 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 Creditor shall be required to  take  any
steps to preserve rights against prior parties.

     12.4  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.

     12.5 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 Creditors
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 any  local
counsel  for  the  Agent  and  the  Banks),  and  (ii)   all
reasonable costs and expenses of the Agent and the Creditors
(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 Creditor 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
Credit  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  Credit
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 Credit 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 Credit  Party  against  Expenses
incurred by an Indemnified Credit 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 CREDIT PARTY  AGAINST  EXPENSES
INCURRED BY AN INDEMNIFIED CREDIT 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
Credit  Party concerned.  All amounts payable by the Company
under this Subsection 12.05(b) shall be paid directly to the
Indemnified   Credit   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  Credit  Party shall also  be  indemnified  with
respect to the same matter under any other agreement by  any
other  person, and any Indemnified Credit 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 Credit Party in  connection
with    any    claim   indemnified   against   under    this
Subsection  12.05(b),  the  Company  may  (and,  upon   such
Indemnified Credit 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  Credit 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  Credit  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  Credit  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 Credit 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 Credit Party from  any  person
(except  the Company) as a result of any matter with respect
to  which such Indemnified Credit 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
Credit  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 Credit 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  Credit
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  Credit
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 Credit 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
CREDIT  PARTY  FROM  AND AGAINST THE  CONSEQUENCES  OF  SUCH
INDEMNIFIED  CREDIT  PARTY'S OWN NEGLIGENCE,  WHETHER  SOLE,
CONCURRENT, CONTRIBUTORY OR OTHERWISE.  If any action,  suit
or  proceeding  shall  be  brought against  any  Indemnified
Credit  Party  in  connection  with  any  claim  indemnified
against  under  this paragraph of this Subsection  12.05(b),
the  Company may (and, upon such Indemnified Credit  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 Credit  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 Credit 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 Credit 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  Credit  Party  from  any  person  (except   the
Company)  as  a result of any matter with respect  to  which
such  Indemnified Credit 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
Credit Party.

     12.6   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
               c/o 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 Street, 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:

               201 St. Charles, 28th Floor
               New Orleans, Louisiana 70170
               Attention:  Mr. J. Charles Freel, Jr.
               Telecopy No.: 504-623-1316

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.

     12.7  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  Creditor 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  Creditors  and  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.

     12.8  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 "weekly ceiling" described  in  Section
303.301  of  the  Texas Finance Code, 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.

     12.9  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.

     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   Creditor.    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 346 of the Texas Finance
Code,  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, THE LETTER AGREEMENT 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.


[Remainder of Page Intentionally Left Blank; Signature  Page
Follows.]
          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.


                              AIR EVAC SERVICES, 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: