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EXHIBIT 4.4(d)
Revolving Credit Agreement dated as of June 1, 1996 among Hudson General
Corporation and The First National Bank of Boston, European American Bank, The
Chase Manhattan Bank, N.A. and The First National Bank of Boston, as agent.
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REVOLVING CREDIT AGREEMENT
AMONG
HUDSON GENERAL CORPORATION
AND
THE FIRST NATIONAL BANK OF BOSTON
EUROPEAN AMERICAN BANK
THE CHASE MANHATTAN BANK, N.A.
THE FIRST NATIONAL BANK OF BOSTON,
AS AGENT
DATED AS OF JUNE 1, 1996
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HUDSON GENERAL CORPORATION
REVOLVING CREDIT AGREEMENT
TABLE OF CONTENTS
Page
----
1. THE REVOLVING CREDIT FACILITY; LETTERS OF CREDIT.............. 1
1.1. Commitment to Lend..................................... 1
1.2. Notes to Evidence Revolving Credit Loans............... 1
1.3. Election of Form of Revolving Credit Loan.............. 2
1.4. Aggregate Loan Limit................................... 2
1.5. Repayment of Revolving Credit Loans.................... 3
1.6. Revolving Credit Loans Commitment Fee.................. 4
1.7. Letters of Credit...................................... 4
1.8. Drawings ............................................ 5
1.9. Letter of Credit Loan Obligations Absolute............. 5
1.10. Banks' Obligations in Respect of Letters of Credit..... 6
1.11. Letter of Credit Fee................................... 6
2. CERTAIN GENERAL PROVISIONS.................................... 7
2.1. Agent's Fee............................................ 7
2.2. Facility Fee........................................... 7
2.3. Interest ............................................ 7
2.4. Place and Mode of Payments............................. 7
2.5. Inability of Agent to Determine LIBO Rates; Illegality. 8
2.6. Indemnification for Losses............................. 8
2.7. Payments to be Free of Deductions...................... 9
2.8. Change in Circumstances; Additional Costs.............. 10
2.9. Additional Amounts Payable on Account of Credit
Facilities............................................. 11
2.10. Certificates........................................... 12
2.11. Delinquent Banks....................................... 12
3. REPRESENTATIONS AND WARRANTIES................................ 12
3.1. Organization and Qualification; Authority.............. 12
3.2. Valid Obligation....................................... 13
3.3. Governmental Approvals................................. 13
3.4 Title to Properties; Absence of Liens.................. 14
3.5. Financial Statements................................... 14
3.6. Changes ............................................ 14
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3.7. Taxes ............................................ 14
3.8. Litigation ............................................ 15
3.9. Use of Proceeds; Regulations U and X................... 15
3.10. Offering by the Company................................ 15
3.11. No Default or Violation of Law......................... 15
3.12. No Default ............................................ 16
3.13. Franchises, Patents, Copyrights........................ 16
3.14. No Materially Adverse Contracts........................ 16
3.15. Holding Company and Investment Company Acts............ 16
3.16. Certain Transactions................................... 16
3.17. Employee Benefit Plans................................. 17
3.18. Environmental Compliance............................... 17
3.19. Insurance ............................................ 19
3.20. Loans as Senior Indebtedness........................... 19
3.21. Perfection of Security Interest........................ 19
3.22. Hudson General LLC Representations and Warranties...... 19
4A. EFFECTIVE DATE; CONDITIONS TO EFFECTIVENESS................... 20
4A.1. Loan Documents......................................... 20
4A.2. Representations and Warranties True.................... 20
4A.3. Corporate Standing and Action.......................... 20
4A.4. Opinion of HGC's Counsel............................... 20
4A.5. Payment of Fees........................................ 21
4A.6. Validity of Liens...................................... 21
4A.7. Perfection Certificates and UCC Search Results......... 21
4A.8. Hudson General LLC Credit Agreement.................... 21
4B. CONDITIONS OF LOANS AND LETTERS OF CREDIT..................... 21
4B.1 Notice ............................................ 21
4B.2. Representations and Warranties True................... 22
4B.3. No Adverse Change..................................... 22
4B.4. Legality ............................................ 22
5. COVENANTS ............................................ 22
5.1. Punctual Payment....................................... 22
5.2. Financial Statements and Other Written Materials....... 22
5.3. Inspection ............................................ 24
5.4. Conduct of Business.................................... 24
5.5. Maintenance and Insurance.............................. 24
5.6. Taxes ............................................ 25
5.7. Ratio of Consolidated Liabilities to
Consolidated Tangible Net Worth...................... 25
5.8. Consolidated Tangible Net Worth........................ 25
5.9. Minimum Liquidity...................................... 25
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5.10. Limitation on Borrowing................................. 25
5.11. Restriction on Liens.................................... 26
5.12. Limitation on Lease Commitments......................... 27
5.13. Investments and Contingent Liabilities.................. 28
5.14. Merger and Sale of Assets............................... 29
5.15. Limitation on Dividends................................. 30
5.16. Subordinated Debt....................................... 31
5.17. Notices ............................................ 31
5.18. Existence; Maintenance of Properties.................... 32
5.19. Compliance with Laws, Contracts, Licenses,
and Permits.......................................... 32
5.20. Employee Benefit Plans.................................. 33
5.21. Cash Investment in the Kohala Joint
Venture ............................................ 33
5.22. Use of Proceeds......................................... 33
5.23. Collateral Security..................................... 34
5.24. Limited Liability Agreement............................. 34
5.25. Further Assurances...................................... 34
6. DEFAULTS ............................................ 34
7. AGENT'S RELATIONSHIP WITH BANKS; AGENT'S DUTIES............... 37
8. SETOFF ............................................ 39
9. INDEMNIFICATION ............................................ 39
10. SECURITY AND GUARANTIES....................................... 40
11. MISCELLANEOUS ............................................ 41
11.1. Notices ............................................ 41
11.2. Copies of Certificates, Etc........................... 41
11.3. No Waivers............................................ 42
11.4. Massachusetts Law..................................... 42
11.5. Expenses; Taxes....................................... 42
11.6. Confidentiality of Information........................ 42
11.7. Changes, Waivers...................................... 42
11.8. Binding Effect of Agreement........................... 43
11.9. Counterparts.......................................... 43
11.10. Entire Agreement...................................... 43
11.11. Assignments or Participations by Banks or Affiliates.. 43
11.12. Term of Agreement..................................... 44
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Exhibits:
Exhibit A - Definitions
Exhibit B - Form of Revolving Credit Note
Exhibit C - Form of Pledge Agreement
Exhibit D - Form of Opinion
Schedules:
Schedule 3.1 - Subsidiaries
Schedule 3.8 - Litigation
Schedule 3.18(b) - Environmental Notices
Schedule 3.18(c) - Underground Tanks
Schedule 3.19 - Insurance
Schedule 5.10 - Indebtedness
Schedule 5.11 - Liens
Schedule 5.13 - Investments
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HUDSON GENERAL CORPORATION
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT (the "Agreement") dated as of June 1,
1996, among Hudson General Corporation ("HGC"), a Delaware corporation having
its principal place of business at 111 Great Neck Road, Great Neck, New York
11022, The First National Bank of Boston, 100 Federal Street, Boston,
Massachusetts 02110, in its individual capacity ("FNB"), European American Bank,
1 EAB Plaza, Uniondale, New York 11555 ("EAB"), The Chase Manhattan Bank, N.A.,
135 Pinelawn Street, Melville, New York 11747 ("Chase") and such other banks as
may become parties hereto from time to time in accordance with the provisions
hereof (each singly, a "Bank" and collectively, the "Banks"), and The First
National Bank of Boston as agent for the Banks (the "Agent"). Capitalized terms
used in this Agreement shall have the meanings set forth in Exhibit A attached
hereto or in the sections of this Agreement referred to in Exhibit A. All
accounting terms shall, unless otherwise specified, be given the meanings
ascribed to them by generally accepted accounting principles.
Section 1. THE REVOLVING CREDIT FACILITY; LETTERS OF CREDIT.
Section 1.1. Commitment to Lend. Subject to the terms and conditions of
this Agreement, including, without limitation, the conditions precedent set
forth in Paragraph 4B hereof, and upon prior notice given to the Agent by HGC,
as provided in Paragraph 1.3, each Bank severally agrees from time to time to
make loans to HGC (individually, a "Revolving Credit Loan" and collectively, the
"Revolving Credit Loans") in an aggregate principal amount requested by HGC from
time to time between the Effective Date and the Revolving Credit Loan Maturity
Date, up to a maximum aggregate amount outstanding (after giving effect to all
amounts requested) at any one time equal to such Bank's Commitment Percentage of
the Aggregate Loan Limit, provided that the sum of the aggregate outstanding and
unpaid principal amount of all Revolving Credit Loans (after giving effect to
all amounts requested) plus the aggregate Maximum Drawing Amount of all
outstanding Letters of Credit shall at no time exceed the Aggregate Loan Limit.
Promptly upon receipt of a request for Revolving Credit Loans by HGC, the Agent
will notify the Banks thereof, and each Bank will make the proceeds of its
Revolving Credit Loan available in United States dollars in immediately
available funds on the requested date at the head office of the Agent, 100
Federal Street, Boston, Massachusetts 02110. The Revolving Credit Loans shall be
made pro rata in accordance with each Bank's Commitment Percentage. The Banks'
obligations hereunder shall be several and not joint, and except as otherwise
specifically provided in this Agreement, no Bank's obligation to lend shall be
affected by any other Bank's failure to make any Revolving Credit Loan.
Section 1.2. Notes to Evidence Revolving Credit Loans. The Revolving
Credit Loans will be evidenced by separate promissory notes of HGC in the form
of Exhibit B attached hereto (each a "Revolving Credit Note") appropriately
completed, executed and delivered by HGC to the Banks on the Effective Date.
Prior to any transfer of a
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Revolving Credit Note, each Bank shall record thereon any appropriate notations
evidencing each Revolving Credit Loan and payment of principal made thereunder.
The outstanding amount of the Revolving Credit Loans recorded on each Bank's
Revolving Credit Note shall be prima facie evidence of the principal amount
thereof owing and unpaid to such Bank, but the failure to record, or any error
in so recording, any such amount shall not limit or otherwise affect the
obligations of HGC hereunder or under any Revolving Credit Note to make payments
of principal or interest on any Revolving Credit Note when due.
Section 1.3. Election of Form of Revolving Credit Loan. (a) As long as no
Default has occurred and is continuing and no condition which would, with either
or both the giving of notice or the lapse of time, result in a Default has
occurred and is continuing, the Banks agree from time to time between the
Effective Date and the Revolving Credit Loan Maturity Date to make Revolving
Credit Loans as either Base Rate Loans or LIBO Rate Loans, to permit conversion
of Revolving Credit Loans that are Base Rate Loans or LIBO Rate Loans to
Revolving Credit Loans of the other Type subject where applicable to Paragraph
2.6 hereof or to continue a Revolving Credit Loan as a LIBO Rate Loan for the
same Interest Period or a different Interest Period, provided that no Interest
Period shall extend beyond the Revolving Credit Loan Maturity Date. Each Base
Rate Loan made on any single occasion shall be in the minimum aggregate
principal amount of $100,000 or an integral multiple thereof. Each LIBO Rate
Loan, or a conversion thereto or a continuation thereof, made on any single
occasion shall be in the minimum aggregate principal amount of $1,000,000 or if
higher, in integral multiples of $250,000.
(b) Each Revolving Credit Loan shall be made, each conversion of a
Revolving Credit Loan from one Type to another Type and each continuation of a
Revolving Credit Loan as a LIBO Rate Loan for the same Interest Period or a
different Interest Period shall occur, upon notice (confirmed in writing, if
oral) given to the Agent by HGC no later than:
(i) if a Base Rate Loan, the same Business Day prior to 10:00
a.m. (Boston time); or
(ii) if a LIBO Rate Loan, 11:00 a.m. (Boston time), three Business
Days prior to commencement of the applicable Interest Period.
In its notice, HGC shall specify the amount of such Revolving Credit Loan and,
if a LIBO Rate Loan, the applicable Interest Period. Each notice with regard to
borrowing or a conversion to or a continuation of a LIBO Rate Loan shall be
irrevocable and binding upon HGC. Any LIBO Rate Loan shall automatically convert
to a Base Rate Loan at the end of the applicable Interest Period unless HGC in
accordance with the procedures set forth in this Paragraph 1.3 shall give the
requisite notice to continue such LIBO Rate Loan for the same or a different
Interest Period.
Section 1.4. Aggregate Loan Limit. (a) The "Aggregate Loan Limit" shall
initially be $6,000,000 and shall be irrevocably reduced (i) by such amounts by
which HGC may from time to time, upon three Business Days' prior written notice
to the Banks, elect to
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reduce the same (in integral multiples of $100,000 or in the full remaining
amount of the Aggregate Loan Limit), (ii) from time to time in accordance with
the parenthetical of Paragraph 5.11(f)(ii) hereof and (iii) from time to time in
accordance with Paragraph 5.14(a)(iv) hereof. On the effective date of any
reduction, there shall become due and payable and HGC will pay or cause to be
paid the amount, if any, by which the sum of the aggregate outstanding and
unpaid principal amount of all Revolving Credit Loans plus the aggregate Maximum
Drawing Amount of all outstanding Letters of Credit, exceeds the reduced
Aggregate Loan Limit on the effective date of such reduction. Each repayment of
Revolving Credit Loans shall be made ratably among the Banks in accordance with
their Commitment Percentages and each reduction in the Aggregate Loan Limit
shall be made ratably among the Banks in accordance with their Commitment
Percentages.
(b) Upon the written request by HGC to the Banks received by the
Banks no later than 90 days prior to the Revolving Credit Loan Maturity Date and
the written consent of all of the Banks (such consent to be given at the sole
discretion of each Bank), the Initial Revolving Period may be extended for
successive annual periods and the Revolving Credit Loan Maturity Date shall be
reset accordingly. In the event that any revolving period is extended, HGC shall
(A) (i) execute and deliver to each of the Banks restated Revolving Credit Notes
reflecting the extended Revolving Credit Loan Maturity Date and each of the
Banks shall return to HGC the existing Revolving Credit Notes, or (ii) execute
and deliver to each of the Banks a letter authorizing such Bank to change the
Revolving Credit Loan Maturity Date set forth in such Bank's existing Revolving
Credit Note to the extended Revolving Credit Loan Maturity Date and (B) provide
each Bank with such evidence of existence and due authorization of such extended
period of borrowing, including an opinion of counsel to HGC as to the due
execution, delivery, validity and binding effect of such Revolving Credit Note
as restated or extended, as such Bank reasonably may request. In no event shall
any revolving period be extended unless at the time of such extension each of
the conditions precedent to the making of a Revolving Credit Loan set forth in
Paragraph 4B of this Agreement has been satisfied.
Section 1.5. Repayment of Revolving Credit Loans. The sum of the aggregate
outstanding and unpaid principal amounts of all Revolving Credit Loans plus the
aggregate Maximum Drawing Amounts of all outstanding Letters of Credit shall at
no time exceed the Aggregate Loan Limit, and HGC will make or cause to be made
such payments on account of principal as are necessary to comply with the
foregoing limitation, with accrued interest to the date of prepayment on the
principal amount prepaid. Payment in full of all obligations on or with respect
to the Revolving Credit Notes shall be due on the Revolving Credit Loan Maturity
Date and HGC promises to pay in full on the Revolving Credit Loan Maturity Date
all Obligations on or with respect to the Revolving Credit Notes. HGC may at any
time upon three Business Days' prior written notice to the Agent make or cause
to be made full or partial prepayment of the Revolving Credit Loans in an
integral multiple of $100,000, with accrued interest to the date of such
prepayment on the principal amount prepaid, for pro-rata application to the
Revolving Credit Loans outstanding under the Revolving Credit Notes, with
adjustments to the extent practicable to equalize any prior prepayment not
exactly in proportion, without premium or penalty, provided that
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LIBO Rate Loans may be prepaid only on the last day of the Interest Period
applicable thereto (or otherwise with the consequences set forth in Paragraph
2.6). Subject to the terms and conditions of this Agreement, HGC may reborrow
any amount so prepaid.
Section 1.6. Revolving Credit Loans Commitment Fee. HGC agrees to pay to
the Agent, for the account of the Banks in accordance with their respective
Commitment Percentages, quarterly in arrears on the last day of each calendar
quarter commencing June 30, 1996, a commitment fee, computed from the Effective
Date at the rate of 1/2 of 1% per annum on the aggregate daily unused portion of
the Aggregate Loan Limit.
Section 1.7. Letters of Credit. Subject to the terms and conditions set
forth in this Agreement, upon written request of HGC to the Letter of Credit
Bank in accordance with this Paragraph 1.7, the Letter of Credit Bank shall
issue, with pro rata participation by all of the Banks, at any time between the
Effective Date and the Revolving Credit Loan Maturity Date and subject to the
satisfaction of the conditions precedent set forth in Paragraph 4B hereof,
Letters of Credit in such form as HGC and the Letter of Credit Bank may agree
for the account of HGC, provided that at no time shall the aggregate Maximum
Drawing Amounts of all outstanding Letters of Credit exceed $2,000,000, and
provided further that at no time shall the sum of the aggregate outstanding and
unpaid principal balance of all outstanding Revolving Credit Loans plus the
aggregate Maximum Drawing Amounts of all outstanding Letters of Credit exceed
the Aggregate Loan Limit. Letters of Credit shall be issued only for the
following purposes: (i) to support HGC's insurance policies, and (ii) for HGC's
business purposes in the ordinary course of HGC's business. Each request for
issuance of a Letter of Credit shall be in writing and shall be received by the
Letter of Credit Bank at least three Business Days prior to the proposed date of
issuance. The expiry dates, amounts and beneficiaries of the Letters of Credit
will be as designated by HGC and reasonably approved by the Letter of Credit
Bank. The Letter of Credit Bank promptly shall notify the Banks of the amounts
of all Letters of Credit issued hereunder and of any extension, reduction or
termination thereof, and the Letter of Credit Bank shall send the Banks copies
of all Letters of Credit issued hereunder as soon as reasonably practicable
after the issuance thereof. HGC may request, and the Letter of Credit Bank, upon
terms and conditions approved by HGC, shall issue, with pro rata participation
by all of the Banks, substitute Letters of Credit for the Letters of Credit to
reflect reductions in the amount of HGC's obligations supported by such Letters
of Credit. Each Letter of Credit issued by the Letter of Credit Bank hereunder
shall identify: (i) the dates of issuance and expiry of such Letter of Credit,
(ii) the amount of such Letter of Credit (which shall be a sum certain), (iii)
the beneficiary and account party of such Letter of Credit, and (iv) the drafts
and other documents necessary to be presented to the Letter of Credit Bank upon
drawing thereunder. No Letter of Credit issued hereunder shall expire after the
first anniversary of its date of issuance (provided that, at HGC's request,
Letters of Credit may contain provisions for extension or renewal, which such
extension or renewal shall be at the Banks' option, for additional terms not in
excess of one year), and in no event shall any Letter of Credit issued hereunder
expire after the Revolving Credit Loan Maturity Date. HGC agrees to execute and
deliver to the Letter of Credit Bank such further documents and instruments in
connection with any Letter of Credit issued hereunder as the Letter of Credit
Bank in accordance with its customary practices may request.
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Section 1.8. Drawings. HGC hereby absolutely and unconditionally promises
to pay the Letter of Credit Bank as soon as possible but in any event within one
Business Day after any drawing under a Letter of Credit, in immediately
available funds, the amount of such drawing under such Letter of Credit, plus
interest thereon from the date of such drawing until repaid in full at an annual
rate equal to the Base Rate in effect from time to time. If HGC so requests in
accordance with Paragraph 4B.1 and if each of the conditions precedent to the
making of a Revolving Credit Loan set forth in Paragraph 4B of this Agreement
has been satisfied on the Business Day following a drawing under a Letter of
Credit, the amount of such drawing, plus interest thereon, for which the Letter
of Credit Bank has not been reimbursed by HGC shall become a Revolving Credit
Loan made by the Banks to HGC on such day as provided in Paragraph 1.1 hereof
bearing interest at an annual rate equal to the Base Rate in effect from time to
time. The Letter of Credit Bank shall give written notice (which written notice
shall be by facsimile transmission or telex) to HGC and the Banks of the
occurrence and amount of each drawing under a Letter of Credit promptly upon the
occurrence thereof. Each Bank agrees that on the second Business Day after any
such drawing, such Bank will immediately make available to the Letter of Credit
Bank at its head office in Boston, Massachusetts, in Federal or other
immediately available funds, its ratable share of any such drawing, plus any
interest which shall have accrued thereon, provided that each Bank's obligation
shall be reduced by its pro rata share of any reimbursement by HGC in respect of
such drawing pursuant to this Paragraph 1.8. Paragraph 1.9 hereof shall govern
HGC's obligations with respect to drawings under Letters of Credit.
Section 1.9. Letter of Credit Loan Obligations Absolute. (a) The
obligation of HGC to reimburse the Letter of Credit Bank as provided hereunder
in respect of drawings under Letters of Credit shall rank pari passu with the
obligation of HGC to repay the Revolving Credit Loans hereunder, and shall be
absolute and unconditional under any and all circumstances and shall be secured
pro rata with the other Obligations pursuant to the Security Documents. Without
limiting the generality of the foregoing, HGC's obligation to reimburse the
Letter of Credit Bank in respect of drawings under Letters of Credit shall not
be subject to any defense based on the non-application or misapplication by the
beneficiary of the proceeds of any such payment or the legality, validity,
regularity or enforceability of the Letters of Credit or any related document or
any dispute between or among HGC, the beneficiary of any Letter of Credit or any
financing institution or other party to which any Letter of Credit may be
transferred. The Letter of Credit Bank may accept or pay any draft presented to
it under any Letter of Credit regardless of when drawn or made and whether or
not negotiated, if such draft, accompanying certificate or documents and any
transmittal advice are presented or negotiated on or before the expiry date of
the Letter of Credit, or any renewal or extension thereof then in effect.
Furthermore, neither the Letter of Credit Bank nor any of its correspondents
shall be responsible, as to any document presented under a Letter of Credit
which appears to be regular on its face, and appears on its face to conform to
the terms of the Letter of Credit, for the validity or sufficiency of any
signature or endorsement, for delay in giving any notice or failure of any
instrument to bear adequate reference to the Letter of Credit, or for failure of
any person to note the amount of any draft on the reverse of the Letter of
Credit.
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(b) Any action, inaction or omission on the part of the Letter of
Credit Bank or any of its correspondents under or in connection with any Letter
of Credit or the related instruments, documents or property, if in good faith
and in conformity with such laws, regulations or customs as are applicable,
shall be binding upon HGC and shall not place the Letter of Credit Bank or any
of its correspondents under any liability to HGC, in the absence of (i) gross
negligence or willful misconduct by the Letter of Credit Bank or its
correspondents or (ii) the failure by the Letter of Credit Bank to pay under a
Letter of Credit after presentation of a draft and documents strictly complying
with such Letter of Credit. The Letter of Credit Bank's rights, powers,
privileges and immunities specified in or arising under this Agreement are in
addition to any heretofore or at any time hereafter otherwise created or
arising, whether by statute or rule of law or contract. All Letters of Credit
issued hereunder will, except to the extent otherwise expressly provided
hereunder, be governed by the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce, Publication No. 500,
and any subsequent revisions thereof.
Section 1.10. Banks' Obligations in Respect of Letters of Credit. Each
Bank acknowledges that each Letter of Credit issued by the Letter of Credit Bank
pursuant to this Agreement is issued by the Letter of Credit Bank on behalf of
and with the pro rata participation of all of the Banks, agrees to make the
payments required by Paragraph 1.8 hereof and agrees to be responsible for its
pro rata share of all liabilities incurred by the Letter of Credit Bank in
respect of each Letter of Credit opened or extended by the Letter of Credit Bank
hereunder for the account of HGC. Each Bank agrees with the Letter of Credit
Bank and the other Banks that its obligation to make the payments required by
Paragraph 1.8 hereof shall not be affected in any way by any circumstances
(other than the gross negligence or willful misconduct of the Letter of Credit
Bank) occurring before or after the making of any payment by the Letter of
Credit Bank pursuant to any Letter of Credit, including, without limitation:
(a) any modification or amendment of, or any consent, waiver,
release or forbearance with respect to, any of the terms of this Agreement
or any other instrument or document referred to herein;
(b) the existence of any Default; or
(c) any change of any kind whatsoever in the financial position
or creditworthiness of HGC.
Section 1.11. Letter of Credit Fee. HGC shall pay to the Letter of Credit
Bank for its own account a fee in respect of each Letter of Credit issued
pursuant to Paragraph 1.7 hereof calculated at the rate of 1/4% per annum on the
Maximum Drawing Amount of each such Letter of Credit, payable quarterly in
advance during the term of such Letter of Credit, commencing upon the date of
issuance thereof. HGC also shall pay to the Letter of Credit Bank for the
accounts of the Banks (including FNB) in accordance with their Commitment
Percentages a fee in respect of each such Letter of Credit calculated at the
rate of 1-3/8% per annum on the Maximum Drawing Amount thereof, payable
quarterly in advance during the term of such Letter of Credit, commencing
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upon the date of issuance thereof (the foregoing fees are referred to
collectively as the "Letter of Credit Fee"). In addition (but without
duplication), HGC shall pay to the Letter of Credit Bank for its own account its
standard processing, negotiating, amendment and administrative fees, as
determined in accordance with the Letter of Credit Bank's customary fees and
charges for similar facilities.
Section 2. CERTAIN GENERAL PROVISIONS.
Section 2.1. Agent's Fee. HGC shall pay to the Agent annually in advance,
for the Agent's own account, an Agent's fee in the amount of $7,500 on the
Effective Date and an Agent's fee of $5,000 on each anniversary of the Effective
Date during the term of this Agreement.
Section 2.2. Facility Fee. HGC agrees to pay to the Agent for the pro rata
accounts of the Banks on the Effective Date a facility fee in the amount of
$18,750.
Section 2.3. Interest. Except as otherwise provided in the last sentence
of this Paragraph 2.3, the Revolving Credit Notes shall bear interest on the
unpaid principal amount thereof not then due and payable, computed as follows:
(a) for Base Rate Loans, at a rate per annum equal to the Base
Rate as in effect from time to time; and
(b) with respect to LIBO Rate Loans, at a rate per annum equal to
1-3/8% above the LIBO Rate determined for the applicable Interest Period;
provided that notwithstanding anything to the contrary contained in this
Agreement or in the Revolving Credit Notes, the Banks shall not charge nor shall
HGC be required to pay interest in an amount in excess of that permitted by
applicable law. All payments of interest on Base Rate Loans shall be made
quarterly in arrears on the last day of each calendar quarter commencing June
30, 1996, and on the date when any Base Rate Loan is paid in full. Interest on
each LIBO Rate Loan shall be payable (i) on the last day of each Interest Period
relating thereto, and (ii) if any Interest Period is longer than three months,
also on the last day of each three-month period following the commencement of
such Interest Period. Any change in the Base Rate shall result in an immediate
corresponding change in the rate of interest payable on Base Rate Loans. The
Agent shall promptly notify HGC of any change in the Base Rate. Overdue
principal of and, to the extent permitted by law, overdue interest on each
Revolving Credit Note shall bear interest at a rate which is two percentage
points (2%) per annum above the Base Rate in effect from time to time,
compounded monthly whether before or after judgment. All computations of
interest and commitment fees shall be made on the basis of the actual number of
days elapsed divided by 360.
Section 2.4. Place and Mode of Payments. All payments due hereunder shall
be made, in immediately available funds in United States dollars, by HGC to the
Agent at its head office at 100 Federal Street, Boston, Massachusetts 02110.
Promptly upon receipt by the Agent of any payment, it shall wire, in immediately
available funds, to each Bank its applicable share (taking into account the
provisions of Paragraph 2.11
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hereof) of such payment. Whenever a payment becomes due on a day which is not a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day, and interest and commitment fees shall accrue during such
extension. HGC hereby requests and authorizes the Agent to charge HGC's deposit
account with the Agent for all interest on the Revolving Credit Loans and all
fees payable hereunder on the dates when any such amounts are due.
Section 2.5. Inability of Agent to Determine LIBO Rates; Illegality. (a)
If the Agent shall in good faith determine that it is unable to ascertain the
LIBO Rate prior to any Interest Period, the Agent shall promptly notify HGC of
such determination (which shall be conclusive and binding on HGC and the Banks).
In such event (i) any loan request with respect to a LIBO Rate Loan to which
such Interest Period would otherwise relate shall be deemed to be a request for
a Base Rate Loan (unless HGC withdraws its request therefor), (ii) each LIBO
Rate Loan will automatically, on the last day of the then current Interest
Period relating thereto, become a Base Rate Loan, and (iii) the obligations of
the Banks to make LIBO Rate Loans or convert Base Rate Loans to LIBO Rate Loans
shall be suspended until the Agent determines that the circumstances giving rise
to such suspension no longer exist, whereupon the Agent shall so notify HGC and
the Banks. Such determination shall be made by the Agent on the day preceding
the first day of the applicable Interest Period.
(b) Notwithstanding any other provisions herein, if any present or
future law, regulation, treaty or directive or in the interpretation or
application thereof shall make it unlawful for any Bank to make or maintain LIBO
Rate Loans, such Bank shall forthwith give notice of such circumstances to HGC
and the other Banks and thereupon (i) the obligation of such Bank to make LIBO
Rate Loans or convert Base Rate Loans to LIBO Rate Loans shall forthwith be
suspended and such Bank shall have no obligation to make LIBO Rate Loans for
purposes of Paragraph 2.11 hereof but shall make Base Rate Loans in like amount
(HGC hereby agreeing to accept such Base Rate Loans), and (ii) such LIBO Rate
Loans, if any, shall be converted automatically to Base Rate Loans on the last
day of the then current Interest Period applicable to such LIBO Rate Loans or
within such earlier period as may be required by law. HGC hereby agrees promptly
to pay the Agent for the account of such Bank, upon demand by such Bank, any
additional amounts necessary to compensate such Bank for any costs incurred by
such Bank in making any conversion in accordance with this Paragraph 2.5,
including any interest or fees payable by such Bank to lenders of funds obtained
by it in order to make or maintain its LIBO Rate Loans hereunder.
Section 2.6. Indemnification for Losses. Without prejudice to any of the
other provisions of this Agreement, HGC will, on demand by any Bank, at any time
and from time to time and as often as the occasion therefor may arise, indemnify
such Bank against any losses, costs or expenses which such Bank may at any time
and from time to time sustain or incur as a consequence of:
(a) the failure by HGC to borrow any LIBO Rate Loan, convert any
Base Rate Loan to a LIBO Rate Loan or continue any LIBO Rate Loan on the
date of borrowing, conversion or continuation designated by HGC; or
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(b) the failure by HGC to pay, punctually on the due date thereof,
any amount payable by HGC with respect to or on account of any LIBO Rate
Loan; or
(c) repayment or conversion by HGC of all or any portion of any LIBO
Rate Loan prior to the last day of the applicable Interest Period, whether
due to acceleration of the maturity of the Revolving Credit Loans or due
to any other reason;
such losses, costs or expenses to include, without limitation:
(i) any costs incurred by such Bank in carrying funds which
were to have been borrowed by HGC (net of any interest or other
amounts received in any redeployment of such funds) or in carrying
funds to cover the amount of any overdue principal of or overdue
interest on any of the LIBO Rate Loans;
(ii) any interest payable by such Bank to lenders of the funds
borrowed by such Bank in order to carry the funds referred to in the
immediately preceding subclause (i) (net of any interest or other
amounts received in any redeployment of such funds); and
(iii) any losses (excluding losses of anticipated profit)
incurred by such Bank in liquidating or reemploying funds acquired
from third parties to effect or maintain all or any part of any LIBO
Rate Loan.
Section 2.7. Payments to be Free of Deductions. (a) All payments by HGC
hereunder shall be made without setoff or counterclaim, and free and clear of
and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein (excluding in the case
of the Agent and each Bank, net income and profit and franchise taxes imposed on
the Agent or such Bank by the jurisdiction under the laws of which the Agent or
such Bank is organized or any subdivision or taxing authority thereof or therein
or by the United States of America or any taxing authority thereof), unless HGC
is compelled by law to make such deduction or withholding. If any such
obligation is imposed upon HGC with respect to any amount payable by it
hereunder, it will pay to the Banks on the date on which such amount becomes due
and payable hereunder, such additional amount as shall be necessary to enable
the Banks to receive the same net amount which they would have received on such
due date had no such obligation been imposed upon HGC. If HGC shall be required
by law to make such deduction or withholding, it will deliver to the Banks tax
receipts or other appropriate evidence of payment.
(b) Each Bank organized under the laws of a jurisdiction outside the
United States, on or prior to the Effective Date, and from time to time
thereafter if requested in writing by HGC, shall provide HGC with two original
Internal Revenue Service forms 1001, 4224 or W-8 as appropriate, or any
successor or other form
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prescribed by the Internal Revenue Service, certifying that such Bank is exempt
from or entitled to a reduced rate of United States withholding tax on payments
pursuant to this Agreement. If a Bank provides a form W-8 (or any successor or
related form) to the Agent and HGC pursuant to this Paragraph 2.7, such Bank
shall also provide a certificate stating that such Bank is not a "bank" within
the meaning of Section 881(c) (3) (A) of the Internal Revenue Code of 1986 and
shall promptly notify the Agent and HGC if such Bank determines that it is no
longer able to provide such certification. Upon the reasonable request of HGC or
the Agent, each Bank that has not provided the forms or other documents, as
provided above, on the basis of being a United States person shall submit to HGC
and the Agent a certificate to the effect that it is such a "United States
person" (as defined in Section 7701 (a) (30) of the Internal Revenue Code).
(c) For any period with respect to which a Bank has failed to
provide HGC with the appropriate form described in Paragraph 2.7(b) (other than
if such failure is due to a change in law occurring subsequent to the date on
which such Bank became a party hereunder), such Bank shall not be entitled to
indemnification under this Agreement with respect to taxes imposed by the United
States.
Section 2.8. Change in Circumstances; Additional Costs. Anything herein to
the contrary notwithstanding, if any present or future applicable law (which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof, and requests, directives, instructions and notices at
any time or from time to time hereafter made upon or otherwise issued to any
Bank or the Agent by any central bank or other fiscal, monetary or other
authority, whether or not having the force of law) shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature with respect to this
Agreement, any Letters of Credit, such Bank's Commitment or the Revolving
Credit Loans (other than taxes based upon or measured by the income or
profits of such Bank or the Agent), or
(b) materially change the basis of taxation of (except for changes
in taxes on income or profits) payments to any Bank or the Agent of the
principal of or the interest on any Revolving Credit Loans or any other
amounts payable to any Bank or the Agent hereunder with respect to the
Revolving Credit Loans, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements, whether or not having the force of law, against assets held
by, or deposits in or for the account of, or loans by, or letters of
credit issued by, or commitments of a class of banks including an office
of any Bank, or
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(d) impose on a class of banks including any Bank or the Agent any
other conditions or requirements with respect to this Agreement, any
Revolving Credit Note, any Letters of Credit, the Revolving Credit Loans,
such Bank's Commitment, or any class of loans, letters of credit or
commitments of which the Revolving Credit Loans, the Letters of Credit or
such Bank's Commitment forms a part;
and the result of any of the foregoing is:
(i) to increase the cost to any Bank or the Agent of making,
funding, issuing, renewing, extending or maintaining any of the
Revolving Credit Loans or such Bank's Commitment or any Letter of
Credit, or
(ii) to reduce the amount of principal, interest or other
amount payable to any Bank or the Agent hereunder, on account of
such Bank's Commitment, any Letter of Credit or any of the Revolving
Credit Loans, or
(iii) to require any Bank or the Agent to make any payment or
to forego any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated by
reference to the gross amount of any sum receivable or deemed
received by such Bank or the Agent from HGC hereunder,
then, and in each case, HGC will, promptly upon demand made by such Bank or (as
the case may be) the Agent, at any time and from time to time and as often as
the occasion therefor may arise, pay or cause to be paid to such Bank or the
Agent such additional amounts as will be sufficient to compensate such Bank or
the Agent for such additional cost, reduction, payment or foregone interest or
other sum.
Section 2.9. Additional Amounts Payable on Account of Credit Facilities.
If any present or future law, governmental rule, regulation, policy, guideline
or directive (whether or not having the force of law) or the interpretation
thereof by any court or by any governmental or other regulatory body or official
charged with the administration or interpretation thereof affects the amount of
capital required to be maintained by any Bank or the Agent or any corporation
controlling such Bank or the Agent and such Bank or the Agent determines that
the amount of capital required to be maintained by it is increased by or based
upon the existence of such Banks' or the Agent's Commitment with respect to any
Revolving Credit Loans or Letters of Credit, in any case, other than any change
already reflected in the Reserve Rate then in effect, then such Bank or the
Agent shall notify HGC of such fact (the "Notice Date"), and, in the case of a
Bank, shall send a copy of such notice to the Agent. HGC and such Bank or (as
the case may be) the Agent shall thereafter attempt to negotiate an adjustment
to the compensation payable hereunder which will adequately compensate such Bank
or (as the case may be) the Agent in light of these circumstances. If HGC and
such Bank or (as the case may be) the Agent are unable to agree to such
adjustment within thirty days of the day on which HGC receives such notice, then
commencing on the 90th day
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after the Notice Date, the fees and interest payable hereunder shall increase by
an amount which will, in such Bank's or (as the case may be) the Agent's
reasonable determination, provide adequate compensation.
Section 2.10. Certificates. A certificate signed by an officer of any Bank
or the Agent, setting forth any additional amount required to be paid to such
Bank or the Agent under Paragraphs 2.6 through 2.9 hereof, and the computations
made by such Bank or the Agent to determine such additional amount, shall be
submitted by the Bank or the Agent to HGC (and, with respect to demands made by
a Bank, to the Agent) in connection with each such demand, and each such
certificate shall, save for manifest error, constitute prima facie evidence of
the additional amount due. A claim by any Bank or the Agent for all or any part
of any additional amount due may be made promptly before and/or after the end of
the Interest Period to which such claim relates or during which such claim has
arisen, and before and/or after any repayment to which such claim relates.
Section 2.11. Delinquent Banks. Notwithstanding anything to the contrary
contained in this Agreement, any Bank that fails (i) to make available to the
Agent its pro rata share of any Revolving Credit Loan or any drawing under any
Letter of Credit or (ii) to comply with the provisions of Paragraph 8 with
respect to making dispositions and arrangements with the other Banks, where such
Bank's share of any payment received, whether by setoff or otherwise, is in
excess of its pro rata share of such payments due and payable to all of the
Banks, in each case as, when and to the full extent required by the provisions
of this Agreement, shall be deemed delinquent (a "Delinquent Bank") and shall be
deemed a Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments due to it
from HGC, whether on account of outstanding Revolving Credit Loans, interest,
fees or otherwise, to the remaining nondelinquent Banks for application to, and
reduction of, their respective pro rata shares of all outstanding Revolving
Credit Loans (it being understood that any such assignment shall not affect the
obligation of any Bank, including the Delinquent Bank, to make the percentage of
the Revolving Credit Loans or to participate in the issuance of Letters of
Credit requested by HGC hereunder equal to such Bank's Commitment Percentage).
The Delinquent Bank hereby authorizes the Agent to distribute such payments to
the nondelinquent Banks in proportion to their respective pro rata shares of all
outstanding Revolving Credit Loans. A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Revolving Credit Loans of the nondelinquent
Banks, the Banks' respective pro rata shares of all outstanding Revolving Credit
Loans have returned to those in effect immediately prior to such delinquency and
without giving effect to the nonpayment causing such delinquency.
Section 3. REPRESENTATIONS AND WARRANTIES. HGC represents and warrants
that:
Section 3.1. Organization and Qualification; Authority. (a) Each of HGC
and its Subsidiaries (i) is a corporation or, in the case of Hudson General LLC
or any other limited liability company, a limited liability company, duly
organized, validly existing
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and in good standing under the laws of the state of its incorporation or
formation, as applicable, (ii) has all requisite power to own its property and
conduct its business as now conducted and as presently contemplated, and (iii)
is duly qualified and in good standing as a foreign entity and is duly
authorized to do business in each jurisdiction where the nature of its
properties or its business requires such qualification except for jurisdictions
in which the failure to qualify has no material adverse effect on the business,
assets or financial condition of HGC and its Subsidiaries, taken as a whole, or
on HGC's ability to perform its obligations under the Loan Documents.
(b) The execution, delivery and performance by HGC of this Agreement
and the other Loan Documents and the borrowings hereunder and the transactions
contemplated under this Agreement and the other Loan Documents (i) are within
the corporate authority of HGC, (ii) have been duly authorized by all necessary
corporate proceedings, (iii) will not contravene any provision of HGC's charter
documents or bylaws, or contravene any provision of, or result in the creation
of any mortgage, lien, pledge, charge, security interest or other encumbrance
upon any of the property of HGC (other than the Liens created under the Security
Documents) under, any other agreement, instrument or undertaking binding upon
HGC or any property of HGC, and (iv) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation to
which HGC is subject or any judgment, order, writ, injunction, license or permit
applicable to HGC.
(c) Schedule 3.1 attached hereto is a complete and correct list of
all the presently existing Subsidiaries of HGC and the percentage of the capital
stock thereof owned by HGC or a Subsidiary of HGC, as such schedule may be
supplemented from time to time by written notice from HGC to the Banks. Except
for the Joint Ventures, none of HGC nor any Restricted Subsidiary of HGC is
engaged in any joint venture or partnership with any other entity.
Section 3.2. Valid Obligation. Each of this Agreement and the other Loan
Documents has been duly executed and delivered by HGC, and each of this
Agreement and the other Loan Documents constitutes a valid and legally binding
obligation of HGC, enforceable against HGC in accordance with its terms, except
as the enforcement of remedies may be limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights.
Section 3.3. Governmental Approvals. The execution, delivery and
performance of this Agreement and the other Loan Documents, the borrowings
hereunder and the transactions contemplated hereby and thereby do not require,
except as set forth in clauses (a) and (b) of Section 12 of the Pledge Agreement
and clauses (a) through (d) of Section 18 of the Security Agreement and except
for the consents to the assignment of permits and licenses assigned to Hudson
General LLC in connection with the Contribution which, if not obtained on or
before the Effective Date, will not have a material adverse effect on HGC and
its Subsidiaries, taken as a whole, any approval or consent of, or filing by HGC
with, any governmental or other agency or authority or any other party, or the
giving of notice to any governmental or other agency or authority or any other
party, or the recording or the delivery to other persons of an environmental
disclosure document or statement.
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Section 3.4. Title to Properties; Absence of Liens. Except for liens
permitted by Paragraph 5.11 hereof, each of HGC and its Restricted Subsidiaries
has good and merchantable title to all of its properties, assets and rights of
every name and nature now purported to be owned by it, free from all defects,
liens, charges and encumbrances whatsoever.
Section 3.5. Financial Statements. (a) HGC has previously furnished to the
Banks (i) a consolidated balance sheet and income statement of HGC and its
Subsidiaries as at June 30, 1995, and related statements of income and cash
flows for the fiscal year then ended, certified by HGC's independent public
accountants and (ii) an unaudited consolidated balance sheet and income
statement of HGC and its Subsidiaries as at March 31, 1996, and related
unaudited statements of income and cash flows for the fiscal period then ended.
Each of the foregoing were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
specified and fairly present (subject, in the case of the unaudited financial
statements, to normal, recurring adjustments) the financial position of HGC and
its Subsidiaries as of the dates thereof and the results of the operations and
cash flows of HGC and its Subsidiaries for the fiscal periods then ended. There
were no contingent liabilities of HGC and its Subsidiaries as of such dates
involving material amounts, known to the officers of HGC which were not
disclosed in such balance sheets and the notes related thereto.
(b) HGC has also previously furnished to the Banks unaudited pro
forma consolidated financial statements of HGC and its Subsidiaries for the
fiscal year ended June 30, 1995, and at December 31, 1995, and for the six-month
period ended on such date. Such financial statements give effect to the
Contribution and the other transactions contemplated under the Purchase
Agreement, were prepared on the basis described in the notes to them, were
prepared in accordance with generally accepted accounting principles and fairly
present the pro forma consolidated assets and liabilities of HGC and its
Subsidiaries and the consolidated results of operations of HGC and its
Subsidiaries, at the dates, and for the periods, to which they relate.
Section 3.6. Changes. Since June 30, 1995, there have been no changes in
the assets, liabilities, financial condition or business of HGC or its
Subsidiaries, other than changes in the ordinary course of business and the
Contribution, the effect of which has not, in the aggregate, been materially
adverse to the business or financial condition of HGC and its Subsidiaries,
taken as a whole.
Section 3.7. Taxes. HGC and each of its Subsidiaries has filed all
federal, state and other tax returns required to be filed, and all taxes,
assessments and other such governmental charges due from each such entity have
been fully paid except for taxes which are being contested in good faith by
appropriate proceedings. HGC and each of its Subsidiaries has established on its
books reserves adequate for the payment of all federal, state and other income
tax liabilities, including those being contested as aforesaid.
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Section 3.8. Litigation. Except as described in Schedule 3.8 attached
hereto (as such Schedule may be supplemented by HGC from time to time with the
consent of the Majority Banks), there is no litigation pending or, to the
knowledge of HGC's officers, threatened against HGC or any Subsidiary of HGC
before any court, tribunal or administrative agency or board which is of a
substantial amount and which, if adversely determined, might reasonably be
expected to materially adversely affect the ability of HGC to perform its
obligations hereunder or under any of the other Loan Documents or in respect of
the Revolving Credit Loans (after taking into account any applicable insurance
coverage).
Section 3.9. Use of Proceeds; Regulations U and X. The proceeds of the
Revolving Credit Loans will be used for general corporate purposes. No portion
of any Revolving Credit Loan is to be used, and no portion of any Letter of
Credit is to be obtained, for the purpose, whether immediate or ultimate, of
purchasing or carrying any "margin security" or "margin stock," as such terms
are used in Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224 in violation of such regulations. Neither
HGC nor any of its Subsidiaries is engaged principally in or has as one of its
important activities the business of extending credit for the purposes of
purchasing or carrying any such "margin stock".
Section 3.10. Offering by HGC. Neither HGC nor anyone acting on HGC's
behalf has directly or indirectly offered any interest hereunder or in the
Revolving Credit Notes or any similar security for sale to, or solicited any
offer to buy any thereof from or otherwise negotiated with respect thereto with,
anyone other than the Banks and other banks. Each Bank represents to HGC that it
will not sell or otherwise dispose of any interest in its Revolving Credit Notes
so as to bring the execution and delivery of this Agreement within the
provisions of Section 5 of the Securities Act of 1933, as now in effect or as
later amended. HGC hereby notifies each of the Banks that (a) the transactions
pursuant to which the Revolving Credit Notes will be issued hereunder will not
be registered pursuant to the Securities Act of 1933 or pursuant to any state
statute or regulations governing the sale of securities generally and unless an
exemption from such registration is available, the Revolving Credit Notes must
be held indefinitely, and (b) HGC has no intention to so register in the future.
Section 3.11. No Default or Violation of Law. Neither HGC nor any of its
Subsidiaries is in violation of any provision of its charter documents or
limited liability company agreement, as the case may be, or by-laws or operating
agreement, as the case may be, or in default in any material respect under any
contract, agreement or obligation to which it may be subject or by which it or
any of its properties may be bound, which default or violation might reasonably
be expected to result in a material impairment of the ability of HGC to fulfill
its obligations hereunder or under the other Loan Documents or a material
impairment of the financial condition or business of HGC and its Subsidiaries,
taken as a whole. Neither HGC nor any Subsidiary of HGC is in violation of any
law, decree, order, judgment, statute, license, rule or regulation applicable to
it or its properties or business operations, which violation might reasonably be
expected to have a material adverse effect on the financial condition or
business of HGC and its Subsidiaries, taken as a whole.
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Section 3.12. No Default. No Default or event which, with notice or lapse
of time or both, would constitute a Default has occurred and is continuing.
Section 3.13. Franchises, Patents, Copyrights. HGC and each of its
Subsidiaries possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
Section 3.14. No Materially Adverse Contracts. Neither HGC nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation that is expected in the future
to have a materially adverse effect on the business, assets or financial
condition of HGC and its Subsidiaries, taken as a whole. Neither HGC nor any of
its Subsidiaries is a party to any contract or agreement that is expected, in
the judgment of HGC's officers, to have any materially adverse effect on the
business of HGC and its Subsidiaries, taken as a whole.
Section 3.15. Holding Company and Investment Company Acts. Neither HGC nor
any of its Subsidiaries is a "holding company", or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
Section 3.16. Certain Transactions. Except for arm's length transactions
pursuant to which HGC or any of its Subsidiaries makes payments in the ordinary
course of business upon terms no less favorable than such entity could obtain
from third parties and for transactions disclosed in HGC's financial statements
or public filings, none of the officers, directors, Shareholders (as defined
below), or employees of HGC or any of its Subsidiaries is presently a party to
any transaction with HGC or any of its Subsidiaries (other than as Shareholders,
or for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director, Shareholder, or employee
or, to the knowledge of HGC, any corporation, partnership, trust or other entity
in which any officer, director, Shareholder, or any such employee has a
substantial interest or is an officer, director, trustee or partner. For
purposes hereof, the term "Shareholder" shall mean, with respect to HGC and its
Subsidiaries other than Hudson General LLC, those shareholders of such entity
who have filed with the Securities and Exchange Commission Schedules 13D or 13G
pursuant to the Securities Exchange Act of 1934, as amended and, with respect to
Hudson General LLC, any Member of Hudson General LLC (as defined in such
entity's Limited Liability Company Agreement) and those shareholders of any
Member of Hudson General LLC who have filed with the Securities and Exchange
Commission Schedules 13D or 13G with respect to the securities of such Member of
Hudson General LLC pursuant to the Securities Exchange Act of 1934, as amended.
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Section 3.17. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan has been maintained and
operated in compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions.
(b) Terminability of Welfare Plans. Under each Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of Section 3(1) or
Section 3(2)(B) of ERISA, no benefits are due unless the event giving rise to
the benefit entitlement occurs prior to plan termination (except as required by
Title I, Part 6 of ERISA). HGC or an ERISA Affiliate, as appropriate, may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of HGC or
such ERISA Affiliate without liability to any Person.
(c) Guaranteed Pension Plans. Each contribution required to be made
to a Guaranteed Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice or lien provisions
of Section 302(f) of ERISA, or otherwise, has been timely made. No waiver of an
accumulated funding deficiency or extension of amortization periods has been
received with respect to any Guaranteed Pension Plan. Except for any ERISA
Reportable Event arising in connection with the Hudson General Corporation
Pension Plan terminated as of June 30, 1992, no liability to the PBGC (other
than required insurance premiums, all of which have been paid) has been incurred
by HGC or any ERISA Affiliate with respect to any Guaranteed Pension Plan and
there has not been any ERISA Reportable Event. Based on the latest valuation of
each Guaranteed Pension Plan (which in each case occurred within twelve months
of the date of this representation), and on the actuarial methods and
assumptions employed for that valuation, the aggregate benefit liabilities of
all such Guaranteed Pension Plans within the meaning of Section 4001 of ERISA
did not exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets of any
Guaranteed Pension Plan with assets in excess of benefit liabilities, by more
than $1,000,000.
(d) Multiemployer Plans. Neither HGC nor any ERISA Affiliate has
incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under Section 4201 of ERISA or as a result of a sale of
assets described in Section 4204 of ERISA. Neither HGC nor any ERISA Affiliate
has been notified that any Multiemployer Plan is in reorganization or insolvent
under and within the meaning of Section 4241 or Section 4245 of ERISA or that
any Multiemployer Plan intends to terminate or has been terminated under
Section 4041A of ERISA.
Section 3.18. Environmental Compliance. (a) None of HGC, its Subsidiaries
or any operator of the Real Estate is in material violation, or alleged material
violation, of any judgment, decree, order, law, license, rule or regulation
pertaining to environmental matters, including without limitation, those arising
under the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund
24
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Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
federal, state or local statute, regulation, ordinance, order or decree relating
to health, safety or the environment (hereinafter "Environmental Laws"), which
violation could reasonably be expected to have a material adverse effect on the
business, assets or financial condition of HGC and its Subsidiaries, taken as a
whole, other than those violations which have been concluded prior to the date
hereof.
(b) Except as set forth on Schedule 3.18(b) attached hereto (as such
Schedule may be supplemented by HGC from time to time with the consent of the
Majority Banks), neither HGC nor any of its Subsidiaries has received notice
from any third party including, without limitation, any federal, state or local
governmental authority: (i) that any one of them has been identified by the
United States Environmental Protection Agency ("EPA") as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that any hazardous
waste, as defined by 42 U.S.C. Section 9601(5), any hazardous substances as
defined by 42 U.S.C. Section 9601(14), any pollutant or contaminant as defined
by 42 U.S.C. Section 9601(33) and any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated, transported or
Disposed of has been found at any site at which a federal, state or local agency
or other third party has conducted or has ordered that HGC or any of its
Subsidiaries conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a named party
to any claim, action, cause of action, complaint, or legal or administrative
proceeding (in each case, contingent or otherwise) arising out of any third
party's incurrence of costs, expenses, losses or damages of any kind whatsoever
in connection with the Release of Hazardous Substances which might reasonably be
expected to have a material adverse effect on the assets, business or financial
condition of HGC and its Subsidiaries, taken as a whole.
(c) Each of HGC and its Subsidiaries have handled the processing,
storage or Disposal of Hazardous Substances in material compliance with all
applicable Environmental Laws; and, (i) except as set forth on Schedule 3.18(c)
attached hereto (as such Schedule may be supplemented by HGC from time to time
(A) with respect to disclosure of new underground tanks installed in accordance
with applicable law, without the consent of the Majority Banks and (B) with
respect to disclosure of all other matters, with the consent of the Majority
Banks), no underground tanks or other underground storage receptacles for
Hazardous Substances are located on any portion of the Real Estate owned by HGC
or any of its Subsidiaries or where HGC any of its Subsidiaries is responsible
for the maintenance or replacement of any such tanks; (ii) in the course of any
activities conducted by HGC, Subsidiaries of HGC or operators of its Real
Estate, no Hazardous Substances have been generated or are being used on the
Real Estate except in material compliance with all applicable Environmental
Laws; (iii) to the best of HGC's knowledge, there have been no Releases on,
upon, from or into any Real Estate or real property in the vicinity of any of
the Real Estate which, through soil or groundwater contamination, may have come
to be located on any of the Real Estate, and which might reasonably be
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expected to have a material adverse effect on the value of, all of the Real
Estate or on the business or financial condition of HGC and its Subsidiaries,
taken as a whole; and (iv) in addition, any Hazardous Substances that have been
generated by HGC or any of its Subsidiaries on any of the Real Estate have in
all material respects to the extent required by law or regulation been
transported offsite for treatment or disposal and, to the best of HGC's
knowledge, without having made any special investigation other than to review
the information and documents supplied to HGC by carriers employed by HGC with
respect to such matters, have been transported only by carriers having an
identification number issued by the EPA and have been treated or disposed of
only by treatment or disposal facilities maintaining permits as required under
applicable Environmental Laws.
Section 3.19. Insurance. Schedule 3.19 attached hereto (as such Schedule
may be supplemented from time to time by written notice from HGC to the Agent)
lists the policies and types and amounts of coverage (including all deductibles)
of theft, fire, liability, life, property, casualty, environmental impairment
and accidental spill insurance and other insurance owned or held by HGC and its
Subsidiaries as of May 1, 1996. Such policies of insurance are maintained with,
to the best of HGC's knowledge, financially sound and reputable insurance
companies, funds or underwriters. Such policies of insurance are of the kinds
and cover such risks and are in such amounts and with such deductibles and
exclusions as are consistent with the customary business practice of
corporations of established reputations engaged in the same or similar
businesses and similarly situated. All such policies are in full force and
effect; are sufficient for compliance by HGC and its Subsidiaries with all
requirements of law and of all agreements to which such Persons are parties; are
valid, outstanding and enforceable policies and provide that they will remain in
full force and effect through the respective dates set forth in such schedule;
and coverage thereunder will not be reduced by or terminate or lapse by reason
of, the transactions contemplated by or referred to in this Agreement or the
other Loan Documents.
Section 3.20. Loans as Senior Indebtedness. All indebtedness of HGC to the
Banks in respect of the principal of and interest on the Revolving Credit Notes
and all contingent liabilities of HGC in respect of Letters of Credit constitute
and will constitute "Superior Indebtedness" under the terms of the 7% Notes and
senior debt however defined under any other instrument evidencing indebtedness
which purports to be Subordinated Debt.
Section 3.21. Perfection of Security Interest. On the Effective Date, all
filings, assignments, pledges and deposits of documents or instruments shall
have been made and all other actions shall have been taken that are necessary or
advisable, under applicable law, to establish and, to the extent enumerated in
clauses (a) through (d) of Section 18 of the Security Agreement and clauses (a)
and (b) of Section 12 of the Pledge Agreement, perfect the Collateral Agent's
security interest in the Collateral. The Collateral and the Collateral Agent's
rights with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses except as arising under applicable law.
Section 3.22. Hudson General LLC Representations and Warranties. For so
long as the Hudson General LLC Credit Agreement is in full force and effect,
each of the
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representations and warranties of Hudson General LLC and its Subsidiaries set
forth in the Hudson General LLC Credit Agreement and each of the documents and
instruments executed by Hudson General LLC and its Subsidiaries in connection
therewith, along with the definitions contained in such representations and
warranties, are hereby incorporated as if set forth herein.
Section 4A. EFFECTIVE DATE; CONDITIONS TO EFFECTIVENESS. This Agreement
shall not become effective unless and until the date (the "Effective Date") that
each of the following conditions precedent is satisfied, provided that if the
Effective Date does not occur on or before July 31, 1996 this Agreement shall be
of no further effect.
Section 4A.1. Loan Documents. (a) Each of the Loan Documents shall have
been duly executed and delivered as contemplated hereby and shall be in full
force and effect.
(b) Executed original counterparts of each of the Loan Documents
shall have been furnished to the Agent.
Section 4A.2. Representations and Warranties True. The representations and
warranties contained in Paragraph 3 shall be true and accurate on and as of the
date of this Agreement and as though made on and as of the Effective Date, no
Default shall have occurred and be continuing, and no condition shall exist, or
would result from the consummation of the transactions on the Effective Date
which, with lapse of time or the giving of notice or both, would constitute a
Default. The Banks shall have received from HGC a certificate dated the
Effective Date and signed by the President or Chief Financial Officer of HGC as
to the matters set forth in this Paragraph 4A.2 and Paragraph 4A.3 hereof.
Section 4A.3. Corporate Standing and Action. The Agent shall have
received, with copies for each Bank (a) a certificate of the Secretary of State
of the State of Delaware as to the due good standing of HGC dated as of a recent
date, (b) certificates of the Secretary of State of the State of New York and of
each other state in which HGC is required to qualify to do business as a foreign
corporation as to the good standing of HGC as a foreign corporation dated as of
a recent date and (c) a certificate of the Secretary or Assistant Secretary of
HGC, dated the Effective Date, certifying (i) that attached thereto is a true
and complete copy of the Certificate of Incorporation and the bylaws of HGC,
each as amended to the Effective Date, or that such documents have not been
amended or supplemented since November 25, 1992, (ii) that attached thereto is a
true and complete copy of resolutions of the Board of Directors of HGC
authorizing the execution and delivery of this Agreement, the borrowings
hereunder and the execution and delivery of the other Loan Documents, which
resolutions are in full force and effect without modification on the Effective
Date, and (iii) the incumbency and signatures of the officers of HGC executing
the Loan Documents and any other instrument or document delivered by HGC in
connection herewith or therewith.
Section 4A.4. Opinion of HGC's Counsel. The Agent shall have received an
opinion, dated the Effective Date, addressed to the Banks from Noah Rockowitz,
Vice President
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- - General Counsel, counsel for HGC, substantially in the form attached hereto as
Exhibit D.
Section 4A.5. Payment of Fees. HGC shall have authorized (in writing or
verbally) the Agent to charge HGC's account on the Effective Date for the
facility fee, the Agent's fee, and, if applicable, the Letter of Credit Fee,
pursuant to Paragraphs 2.1, 2.2, and 1.11 hereof.
Section 4A.6. Validity of Liens. The Security Documents shall be effective
to create in favor of the Collateral Agent for the benefit of the Banks a legal,
valid and enforceable first priority security interest in the Collateral. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Collateral Agent to protect and preserve such
security interests shall have been duly effected. The Collateral Agent shall
have received evidence thereof in form and substance satisfactory to the
Collateral Agent.
Section 4A.7. Perfection Certificate and UCC Search Results. The
Collateral Agent shall have received from HGC, a completed and fully executed
Perfection Certificate (as defined in the HGC Pledge Agreement) and the results
of UCC searches with respect to the Collateral, indicating no liens other than
liens permitted under Paragraph 5.11 hereof or for which UCC lien releases
satisfactory to the Collateral Agent have been delivered to the Collateral Agent
and otherwise in form and substance satisfactory to the Collateral Agent.
Section 4A.8. Hudson General LLC Credit Agreement. The Hudson General LLC
Credit Agreement and all other Loan Documents (as defined in the Hudson General
LLC Credit Agreement) shall have been duly executed and delivered as
contemplated thereby and shall be in full force and effect. The conditions set
forth in Paragraph 4A of the Hudson General LLC Credit Agreement shall have been
satisfied or waived pursuant to the terms thereof.
Section 4B. CONDITIONS OF REVOLVING CREDIT LOANS AND LETTERS OF CREDIT.
The obligation of the Banks to make any Revolving Credit Loan on or after the
Effective Date and the obligation of the Letter of Credit Bank, with the pro
rata participation of the Banks, to issue any Letter of Credit on or after the
Effective Date, is subject to the following conditions precedent.
Section 4B.1. Notice. In the case of Revolving Credit Loans, the Agent
shall have received from HGC in accordance with Paragraph 1.3 a written,
telegraphic or telephonic (confirmed in writing) request for Revolving Credit
Loans, signed by the President or the Chief Financial Officer of HGC. Such
request, without more, will constitute a certification by HGC and such officers
as to the matters set forth in Paragraphs 4B.2 and 4B.3 hereof. In the case of a
Letter of Credit, the Letter of Credit Bank shall have received from HGC in
accordance with Paragraph 1.7 a written, telegraphic or telephonic (confirmed in
writing) request for the issuance of a Letter of Credit and a signed letter of
credit application in form and substance satisfactory to the Letter of Credit
Bank (which will not contain any terms which are inconsistent with the terms of
this Agreement), each signed by the President or the Chief Financial
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Officer of HGC. Such request, without more, will constitute a certification by
HGC and such officer as to the matters set forth in Paragraphs 4B.2 and 4B.3
hereof.
Section 4B.2. Representations and Warranties True. The representations and
warranties contained in Paragraph 3 shall be true and accurate in all material
respects on and as of the date of this Agreement and as though made on and as of
the date of the Revolving Credit Loan or Letter of Credit, as the case may be
(except to the extent that such representations and warranties relate to an
earlier date), no Default shall have occurred and be continuing, or would result
from the proposed Revolving Credit Loan or Letter of Credit, as the case may be,
and no condition shall exist, or would result from the proposed Revolving Credit
Loan or Letter of Credit, as the case may be, which, with lapse of time or the
giving of notice or both, would constitute a Default.
Section 4B.3. No Adverse Change. As of the date of any Revolving Credit
Loan or Letter of Credit, as the case may be, there shall have been no material
adverse change since June 30, 1995 in the business or financial affairs of HGC
and its Subsidiaries, taken as a whole.
Section 4B.4. Legality. The making of the Revolving Credit Loan or Letter
of Credit, as the case may be, shall not contravene any law or rule or
regulation thereunder binding upon HGC, any Subsidiary of HGC or any Bank.
Section 5. COVENANTS. During the term of this Agreement and so long as any
Revolving Credit Loan, Letter of Credit or Revolving Credit Note is outstanding
or any amounts are owed hereunder or any Bank has any obligation to make
Revolving Credit Loans or the Letter of Credit Bank has any obligation to issue,
extend or renew any Letters of Credit with the pro rata participation of the
Banks, HGC agrees that:
Section 5.1. Punctual Payment. It will duly and punctually pay or cause to
be paid the principal and interest on the Revolving Credit Loans, the amount of
any drawing under a Letter of Credit, the commitment fees, the Agent's fee, the
Letter of Credit Fee and all other amounts provided for in this Agreement or in
any other Loan Document, all in accordance with the terms of this Agreement and
such other Loan Documents.
Section 5.2. Financial Statements and Other Written Materials. It will
furnish to each Bank:
(a) as soon as available but in any event within ninety days after
the end of each of its fiscal years, consolidated and consolidating
balance sheets of HGC and its Subsidiaries as at the end of, and the
related consolidated and consolidating statements of income and
consolidated statements of cash flows for, such year, and all such
statements shall be in reasonable detail, prepared in accordance with
generally accepted accounting principles and accompanied by the opinion
(as to consolidated statements only) of (in form and substance reasonably
satisfactory to the Banks) independent public accountants of nationally
recognized standing selected by HGC and, concurrently with such financial
statements, a written statement by such accountants that, in the making of
the audit necessary for their report and opinion upon such financial
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statements (but without any special or additional audit procedures for the
purpose), they have obtained no knowledge of any Default, or if in the
opinion of such accountants any Default exists, they shall disclose in
such written statement the nature and status thereof, and in either case
such statement shall set forth calculations showing compliance or
noncompliance with Paragraphs 5.7 through 5.9 and 5.23 hereof (it being
understood, however, that such accountants shall not be liable, directly
or indirectly, to anyone for failure to obtain knowledge of any Default or
the status thereof);
(b) as soon as available but in any event within sixty days after
the end of each of the first three fiscal quarters of each fiscal year of
HGC and its Subsidiaries, consolidated and consolidating balance sheets as
at the end of such fiscal quarter, and consolidated and consolidating
statements of income and consolidated cash flows for the portion of the
fiscal year then ended, all in reasonable detail and prepared in
accordance with generally accepted accounting principles, certified by the
Chief Financial Officer of HGC, subject, however, to audit and year-end
adjustments;
(c) as soon as available and if prepared in the normal course, but
in any event within 15 days of its preparation, the budget report for the
portion of the fiscal period then ended, in reasonable detail and prepared
in a manner consistent with past practices;
(d) promptly upon receipt by HGC, copies of all management letters
and other reports of substance submitted to HGC or any Subsidiary of HGC
by independent public accountants in connection with any annual or interim
audit of the books of HGC or such Subsidiary by such accountants;
(e) promptly as they become available, (i) copies of all such
financial statements, reports and proxy statements as it shall send to or
make available to its stockholders, and (ii) copies of all reports filed
by it with the Securities and Exchange Commission;
(f) concurrently with each delivery of financial statements pursuant
to clauses (a) or (b) of this Paragraph 5.2, a certificate signed by the
Chief Financial Officer of HGC setting forth calculations showing, when
required, compliance with Paragraphs 5.7 through 5.9 and 5.23 hereof, and
stating that a review of the activities of HGC and its Subsidiaries during
the period covered by such financial statements has been made under the
immediate supervision of the signer with a view to determining whether,
during such period, HGC has kept, observed, performed and fulfilled each
and every covenant and condition of this Agreement and either (i) stating
that, to the best of his knowledge and belief, there neither exists on the
date of such certificate, nor existed during such period, any Default, or
(ii) if any such Default existed or exists, specifying the nature thereof,
the period of existence thereof and what action HGC has taken, is taking
or proposes to take with respect thereto; and
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(g) with reasonable promptness, such other information, including,
without limitation, quarterly reports as to the aging of accounts
receivable, as any Bank may reasonably request.
Section 5.3. Inspection. It will permit any representative or
representatives designated by any Bank, at such Bank's expense and subject to
applicable laws and regulations, to visit and inspect any of the properties of
HGC and its Subsidiaries and on request to examine the books of account,
records, reports and other papers of HGC and its Subsidiaries (and to make
copies thereof and extracts therefrom) and to discuss the affairs and finances
of HGC and its Subsidiaries with its officers, all at such reasonable times and
as often as may be reasonably requested.
Section 5.4. Conduct of Business. It and each of its Subsidiaries will:
(a) do or cause to be done all things necessary to keep in full
force and effect its existence, rights and franchises and will maintain
and keep in full force and effect all licenses and permits necessary to
the proper conduct of its business;
(b) not change the nature or character of its business from that
described in the Proxy, after giving effect to the Contribution and the
other transactions contemplated under the Purchase Agreement, except that
HGC or any Subsidiary of HGC, as the case may be, may withdraw from any
business activity which it deems unprofitable or unsound; and
(c) not, except for arm's length transactions pursuant to which HGC
or such Subsidiary makes payments in the ordinary course of business upon
terms no less favorable than such entity could obtain from third parties
and for transactions disclosed in HGC's financial statements or public
filings, enter into any transaction with any officer, director,
Shareholder or employee of HGC or any Subsidiary of HGC (other than as
Shareholders or for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any
officer, director, Shareholder or employee or any corporation,
partnership, trust or other entity in which to the knowledge of HGC any
officer, director, Shareholder, or any employee has a substantial interest
or is an officer, director, trustee or partner.
Section 5.5. Maintenance and Insurance. It will maintain and keep its
properties, and will cause each of its Subsidiaries to maintain and keep its
properties, in good repair, working order and condition, and from time to time
HGC will make and will cause each of its Subsidiaries to make all needed and
proper repairs, renewals, replacements, additions and improvements thereto so
that its business may be properly and advantageously conducted at all times in
accordance with the terms of this Agreement. It will maintain and will cause
each of its Subsidiaries to maintain, with financially sound and reputable
insurers, insurance with respect to its properties and business against such
casualties and contingencies, of such types and in such
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amounts as is customary in the case of corporations of established reputations
engaged in the same or similar businesses and similarly situated.
Section 5.6. Taxes. It will pay or cause to be paid and discharged all
taxes, assessments or governmental charges on or against it or any of its
Subsidiaries or its or their properties, sales and activities, or any part
thereof, or upon the income or profits therefrom prior to the time when they
become delinquent, as well as all claims for labor, materials or supplies that
if unpaid might by law become a lien or charge upon any of its or their
properties provided that this covenant shall not apply to any tax, assessment,
charge, levy or claim which is being contested in good faith and with respect to
which adequate reserves have been established and are being maintained, and
provided further that each of HGC and its Subsidiaries will pay all taxes,
assessments, charges, levies and claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.
Section 5.7. Ratio of Consolidated Liabilities to Consolidated Tangible
Net WORTH. HGC will not, as at the end of each fiscal quarter in each fiscal
year of HGC, permit the ratio of (a) Consolidated Liabilities plus, without
duplication, Subordinated Debt less (as at June 30, 1996 and September 30, 1996
only) the aggregate amount of cash of Hudson General LLC as at such date
intended to be used for the repayment of the Subordinated Debt to (b)
Consolidated Tangible Net Worth to equal or exceed 1.0 to 1.0.
Section 5.8. Consolidated Tangible Net Worth. HGC will not, as at the end
of each fiscal quarter in each fiscal year of HGC, permit Consolidated Tangible
Net Worth to be less than $28,000,000.
Section 5.9. Minimum Liquidity. HGC will not at any time permit the sum of
the cash and cash equivalents held by HGC at such time plus the unused portion
of the Aggregate Loan Limit at such time to be less than $1,000,000.
Section 5.10. Limitation on Borrowing. Neither HGC nor any of its
Restricted Subsidiaries will assume, incur or suffer to exist any indebtedness
for borrowed money, except:
(a) the indebtedness existing on the date of this Agreement and
shown on Schedule 5.10 attached hereto and extensions, renewals and
refinancings thereof provided that neither the aggregate principal amount
of such indebtedness nor the interest rate applicable thereto is increased
as a result of such extension, renewal or refinancing;
(b) the Revolving Credit Loans;
(c) Subordinated Debt consisting of not more than $29,000,000
in aggregate principal amount of 7% Notes;
(d) indebtedness of Restricted Subsidiaries to HGC;
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(e) (i) indebtedness on account of capitalized leases permitted by
Paragraph 5.12 or 5.14(a)(iv) hereof, and (ii) additional indebtedness of
HGC and its Restricted Subsidiaries (including the amount of indebtedness
from time to time outstanding in transactions permitted by Paragraph
5.11(f)(ii) hereof) of not more than $5,000,000 in the aggregate
outstanding at any one time; and
(f) (i) unsecured guaranties by HGC of obligations of Subsidiaries
(other than any Subsidiary, direct or indirect, of HGC not organized under
the laws of a State of the United States of America (the "Foreign
Subsidiaries")) aggregating no more than $5,000,000 at any one time
outstanding and (ii) unsecured guaranties executed and delivered by HGC of
the obligations of Hudson General LLC under operating agreements to which
HGC, a Subsidiary of HGC (other than Aviation) or Hudson General LLC is a
party on the date of this Agreement.
Section 5.11. Restriction on Liens. Neither HGC nor any of its Restricted
Subsidiaries will create, incur, assume or suffer to exist any mortgage, pledge,
security interest, lien or other charge or encumbrance upon or with respect to
any of its property or assets, or assign or otherwise convey any right to
receive income, except:
(a) liens for taxes, fees, assessments and other governmental
charges to the extent that payment of the same may be postponed or is not
required in accordance with the provisions of Paragraph 5.6;
(b) landlords' liens in respect of rent not in default or liens in
respect of pledges or deposits under worker's compensation, unemployment
insurance, social security laws or similar legislation or in connection
with appeal and similar bonds incidental to litigation, mechanics',
laborers' and materialmen's and similar liens, if the obligations secured
by such liens are not then delinquent, and liens securing the performance
of bids, tenders, contracts (other than for the payment of money) and
statutory obligations incidental to the conduct of the business of HGC and
its Restricted Subsidiaries and which do not in the aggregate materially
detract from the value of the property of HGC and Restricted its
Subsidiaries, or materially impair the use thereof in the operation of
their businesses;
(c) judgment liens which shall not have been in existence for a
period longer than thirty days after the creation thereof or, if a stay of
execution shall have been obtained, for a period longer than thirty days
after the expiration of such stay;
(d) liens securing indebtedness permitted by Paragraph 5.10(d)
hereof;
(e) liens securing the Obligations;
(f) (i) liens in existence on the date of this Agreement, all of the
same of any materiality being shown on Schedule 5.11 attached hereto, (ii)
mortgages on real property now owned or hereafter acquired (provided that
if any such
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mortgage is not created in connection with the purchase of or
acquisition of an interest in real property and secures indebtedness
exceeding an aggregate of $750,000 incurred in any single fiscal year
or $1,500,000 incurred during the term of this Agreement, then the
Aggregate Loan Limit shall be reduced by an amount equal to such
excess, with such reductions to be applied in accordance with the
provisions of Paragraph 1.4 hereof), and (iii) similar liens securing
any renewals, extensions or refinancings of the indebtedness secured by
the foregoing permitted liens, provided that the amount of such
indebtedness is not increased and such liens are not extended to cover
assets or properties (other than real property) not covered on the date
of this Agreement;
(g) liens held by vendors on personal property sold by such
vendors under conditional sales contracts or other similar security
agreements;
(h) liens and encumbrances incidental to the conduct of its
business or the ownership of its assets which were not incurred in
connection with the borrowing of money or the obtaining of advances of
credit, and which do not in the aggregate materially detract from the
value of its assets or materially impair the use thereof in the
operation of its business; and
(i) liens incurred to secure indebtedness of the type and
amount permitted by Paragraph 5.10(e) hereof, provided that the lesser
of the aggregate fair market value or the aggregate net book value of
the assets of HGC and its Restricted Subsidiaries used to secure such
indebtedness shall at no time exceed $7,500,000.
HGC will not and will not permit any of its Restricted Subsidiaries to
enter into or permit to exist or be binding on any of such persons any contract
or agreement which prohibits HGC or any Restricted Subsidiary of HGC from
granting a lien on any or all of its property or assets to the Banks except for
(A) revenue and service contracts or agreements concerning a single asset or
group of assets which contain usual and customary terms for contracts or
agreements of such type and which prohibit the granting of any lien on or
security interest in such asset or group of assets, (B) other agreements
permitted under Paragraph 5.11(f) hereof, provided that such agreements secure
purchase money indebtedness permitted by Paragraph 5.10 hereof incurred in
connection with the acquisition of such property and such agreements cover only
the property so acquired, (C) encumbrances and restrictions arising under
applicable law, (D) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of HGC or any of its Restricted
Subsidiaries, (E) customary restrictions on dispositions of real property
interests found in reciprocal easement agreements of HGC or any of its
Restricted Subsidiaries, and (F) any agreement relating to permitted
indebtedness incurred by a Restricted Subsidiary of HGC prior to the date on
which such Restricted Subsidiary was acquired by HGC or any other Restricted
Subsidiary of HGC and outstanding on such acquisition date.
Section 5.12. Limitation on Lease Commitments. The aggregate of the
rental payments of HGC and its Restricted Subsidiaries with respect to leases of
personal property having original terms of three years or more, other than
leases on which a
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Restricted Subsidiary of HGC is lessee and HGC is lessor, shall not exceed
$5,000,000 at any time.
Section 5.13. Investments and Contingent Liabilities. Neither HGC nor
any of its Restricted Subsidiaries will make or have outstanding at any time any
investments or contingent liabilities, whether by way of loan, advance,
guaranty, letter of credit exposure, extension of credit, purchase of stocks,
notes, bonds or other securities or evidences of indebtedness, or acquisition of
limited or general partnership interests, other than:
(a) those in existence on the date of this Agreement and shown
on Schedule 5.13 attached hereto, and any renewals, extensions or
refinancings thereof, provided that the amount thereof is not
increased;
(b) investments in marketable, investment grade, direct or
guaranteed obligations of the United States of America or any State or
municipality thereof which mature within ten years from the date of
purchase;
(c) investments in demand deposits, certificates of deposits,
time deposits and notes of any Bank or any United States bank having
total capital and unimpaired surplus of at least $1,000,000,000;
(d) securities commonly known as "commercial paper", or
corporate bonds which mature within ten years from the date of
purchase, in each case issued by a corporation organized and existing
under the laws of the United States of America or any state thereof
which at the time of purchase have been rated by either or both of
Moody's Investors Service, Inc. and Standard and Poor's Ratings Group
and the ratings for such commercial paper are, not less than "P-1" if
rated by Moody's Investors Service, Inc. and not less than "A-1" if
rated by Standard and Poor's Ratings Group or, for such bonds are not
less than "Aa" if rated by Moody's Investors Service, Inc. and not less
than "AA" if rated by Standard & Poor's Ratings Group;
(e) (i) unsecured guaranties by HGC of obligations of
Subsidiaries (other than any Foreign Subsidiary,) aggregating no more
than $5,000,000 at any one time outstanding and (ii) unsecured
guaranties by HGC of the obligations of Hudson General LLC under
operating agreements to which HGC, a Subsidiary of HGC (other than
Aviation) or Hudson General LLC is a party on the date of this
Agreement;
(f) those arising in the ordinary course of business or
consistent with the past business practices of HGC and its Restricted
Subsidiaries;
(g) investments in Subsidiaries (other than the Foreign
Subsidiaries and, except to the extent permitted by Paragraph
5.13(h)(i) hereof, Hudson Kohala Inc.);
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(h) (i) participation in a certain real estate joint venture
(the "Kohala Joint Venture") with respect to land located in the State
of Hawaii, subject, however, to the provisions of Paragraph 5.21 and
(ii) participation in Joint Ventures other than the Kohala Joint
Venture, provided that the aggregate amount of investments in such
Joint Ventures does not exceed $5,000,000 during the term of the
Agreement;
(i) letters of credit (including Letters of Credit) of not
more than $2,000,000 in the aggregate at any one time outstanding;
(j) contingent liabilities incurred by the Kohala Joint
Venture not exceeding $15,000,000 in the aggregate at any one time
outstanding and arising in connection with sales of installment paper
or other receivables to financial institutions by the Kohala Joint
Venture (for purposes of this subparagraph (j) only, joint and several
contingent liabilities incurred in connection with the Kohala Joint
Venture shall be calculated at 75% of their gross amount);
(k) investments in Foreign Subsidiaries which do not exceed
$3,000,000 in the aggregate at any one time outstanding;
(l) investments by HGC in LAGS or an affiliate of LAGS in an
amount not to exceed the deferred purchase price owed to HGC under
Paragraph 1.3 of the Purchase Agreement;
(m) investments by HGC in a passenger handling services entity
which is an affiliate of LAGS or Deutsche Lufthansa AG, as set forth in
Paragraph 10.3 of the Purchase Agreement;
(n) investments of HGC in respect of indebtedness owing to HGC
from Hudson General LLC as a result of the conversion of all or a
portion of the 7% Notes into common stock of HGC in an amount not to
exceed the principal amount of the 7% Notes so converted and any
principal, premium, if any, interest and other payments made by HGC in
respect of the 7% Notes; and
(o) in addition to the foregoing, investments by HGC and its
Restricted Subsidiaries (other than investments by HGC in the Kohala
Joint Venture) which do not exceed $3,000,000 in the aggregate at any
one time outstanding.
Section 5.14. Merger and Sale of Assets. (a) HGC will not and will not
permit any of its Restricted Subsidiaries to liquidate, consolidate or merge
with or into any other corporation, or sell, lease, transfer or otherwise
dispose of any material portion of its assets, other than in the ordinary course
of business, provided that:
(i) a Restricted Subsidiary of HGC may be liquidated, merged
or consolidated with HGC if HGC shall be the surviving corporation, or
with any one or more other Subsidiaries of HGC if the successor formed
by or resulting from such liquidation, merger or consolidation shall be
a Subsidiary of HGC;
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(ii) any Restricted Subsidiary of HGC may sell, lease,
transfer or otherwise dispose of its assets to HGC or another
Subsidiary of HGC, if after giving effect to such merger,
consolidation, sale, lease, transfer or other disposition, no Default
exists;
(iii) HGC or any Restricted Subsidiary of HGC may liquidate,
consolidate or merge with any other corporation if (A) HGC or the
Restricted Subsidiary of HGC is the survivor in such transaction, (B)
the transaction qualifies as a tax-free reorganization under Section
368 of the Internal Revenue Code of 1986, as amended, and (C) after
giving effect to such transaction, no Default exists or would result
from such consolidation or merger;
(iv) HGC or any of its Restricted Subsidiaries may enter into
sale and leaseback transactions and may sell assets (other than
Collateral) at reasonable commercial prices in the ordinary course of
business, provided that all cash proceeds of any sale and leaseback
transaction and cash proceeds in excess of $500,000 from the sale of
any single asset shall, as received, but after deducting all direct
out-of-pocket expenses resulting from the transaction, be used by HGC
to reduce the Aggregate Loan Limit by such amount, with such reductions
to be applied in accordance with the provisions of Paragraph 1.4
hereof; and
(v) HGC or any Restricted Subsidiary may dispose of equipment
of such corporation, provided that (A) such equipment is no longer
needed and is not used in the operation of such corporation's
businesses, (B) such disposition is in the ordinary course of business,
consistent with past practices, and (C) the aggregate net book value of
such equipment and all other equipment disposed of by the HGC and the
Restricted Subsidiaries pursuant to this Paragraph 5.14(a)(v) (other
than equipment that has been sold by HGC or any Restricted Subsidiary
pursuant to this Paragraph 5.14(a)(v) to HGC or any Subsidiary) does
not exceed $1,000,000 in any fiscal year.
(b) Each of the Banks and the Agent hereby consents to the transfer by
HGC and its Subsidiaries to Hudson General LLC of all of the assets of the
Aviation Services Business of HGC and its Subsidiaries, including, without
limitation, the transfer to Hudson General LLC of the stock of Aviation, in
accordance with the terms of the Purchase Agreement (the "Contribution").
Section 5.15. Limitation on Dividends. HGC may declare and pay
dividends or purchase, redeem or otherwise retire any of its shares so long as
(a) no Default has occurred and is continuing and no condition which would, with
either or both the giving of notice or the lapse of time, result in a Default
has occurred and is continuing at the time such dividend is declared or paid or
such shares are purchased, redeemed or otherwise retired and (b) no Default or
condition which would, with either or both the giving of notice or the lapse of
time, result in a Default shall result from the payment of such dividend or the
purchase, redemption or retirement of such shares.
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Section 5.16. Subordinated Debt. (a) Notwithstanding any other
provision of this Agreement, HGC may without the consent of the Majority Banks,
redeem, prepay, convert or otherwise purchase all outstanding 7% Notes, provided
that in each case of redemption, prepayment, conversion or purchase no Default
has occurred and is continuing and no condition which would, with either or both
the giving of notice or lapse of time, result in a Default has occurred and is
continuing and, after giving effect to any such redemptions, prepayments,
conversions or purchases, no Default will occur and be continuing and no
condition which would, with either or both the giving of notice or the lapse of
time, result in a Default will occur or be continuing.
(b) HGC will not amend, modify or waive any term of, or permit
the amendment, modification or waiver of any term of, any Subordinated Debt if
such amendment, modification or waiver would in the reasonable judgment of the
Agent have any material adverse effect on the interests of the Banks hereunder.
Section 5.17. Notices.
(a) Defaults. HGC will promptly notify the Agent and each of
the Banks in writing of the occurrence of any Default. If any party shall give
any notice or take any other action in respect of a claimed default (whether or
not constituting a Default) under this Agreement or any other note, evidence of
indebtedness, indenture or other obligation in an aggregate principal amount of
$1,500,000 or more to which or with respect to which HGC or any of its
Subsidiaries is a party or obligor, whether as principal, guarantor, surety or
otherwise, HGC shall forthwith give written notice thereof to the Agent and each
of the Banks, describing the notice or action and the nature of the claimed
default.
(b) Environmental Events. HGC will promptly give notice to the
Agent and each of the Banks (i) upon HGC's obtaining knowledge of any material
violation of any Environmental Law regarding the Real Estate or operations of
HGC or any Subsidiary of HGC; (ii) upon HGC's obtaining knowledge of any
material known Release of any Hazardous Substances at, from, or into the Real
Estate which it reports in writing or is reportable by it in writing (or for
which any written report supplemental to any oral report is made) to any
governmental authority and which might reasonably be expected to materially
adversely affect the business or financial condition of HGC and its
Subsidiaries, taken as a whole; (iii) upon becoming aware of any inquiry
relating to a material environmental liability or a material potential
environmental liability, including any notice of material violation of any
Environmental Laws or of any material Release of Hazardous Substances, including
a notice or claim of material liability or material potential responsibility
from any third party (including without limitation any federal, state or local
governmental officials), or any formal inquiry, proceeding, demand or
investigation with regard to (A) HGC's or any person's operation of the Real
Estate, (B) material contamination on, from or into the Real Estate, or (C)
investigation or remediation of offsite locations at which HGC, any Subsidiary
of HGC or any such person's predecessors are alleged to have directly or
indirectly Disposed of material quantities of Hazardous Substances, or (D) upon
HGC's obtaining knowledge that any material expense or loss has been incurred by
such governmental authority in connection with the assessment, containment,
removal
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or remediation of any Hazardous Substances with respect to which HGC or
any Subsidiary may be liable or for which a lien may be imposed on the Real
Estate.
(c) Notice of Litigation and Judgments. HGC will, and will
cause each of its Subsidiaries to, give notice to the Agent and each of the
Banks in writing within fifteen (15) days of becoming aware of any material
litigation or proceedings threatened in writing or any pending litigation and
proceedings or any material change in any existing litigation affecting HGC or
any of its Subsidiaries or to which HGC or any of its Subsidiaries is or becomes
a party involving an uninsured claim against HGC or any of its Subsidiaries that
could reasonably be expected to have a materially adverse effect on HGC and its
Subsidiaries, taken as a whole and stating the nature and status of such
litigation or proceedings or nature of the material change in such existing
litigation or proceedings, as the case may be. HGC will, and will cause each of
its Subsidiaries to, give notice to the Agent and each of the Banks, in writing,
in form and detail satisfactory to the Agent, within ten (10) days of any
judgment not covered by insurance, final or otherwise, against HGC or any of its
Subsidiaries in an amount in excess of $500,000.
(d) Proceeds. HGC will promptly notify the Agent and each of
the Banks of the receipt of any proceeds realized by HGC or its Restricted
Subsidiaries from (i) sales of assets and leaseback transactions permitted by
Paragraph 5.14(a)(iv), and (ii) mortgages contemplated by the first
parenthetical of clause (ii) of Paragraph 5.11(f).
Section 5.18. Existence; Maintenance of Properties. HGC (a) will cause
all of its properties and those of its Subsidiaries used or useful in the
conduct of its business or the business of its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and (b) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
HGC may be necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times; provided that nothing in
this Paragraph 5.18 shall prevent HGC from discontinuing the operation and
maintenance of any of its properties or any of those of its Subsidiaries if such
discontinuance is, in the judgment of HGC, desirable in the conduct of its or
their business and that do not in the aggregate materially adversely affect the
business of HGC and its Subsidiaries on a consolidated basis.
Section 5.19. Compliance with Laws, Contracts, Licenses, and Permits.
HGC will, and will cause each of its Subsidiaries to, comply in all material
respects with (a) the applicable laws and regulations wherever its business is
conducted, including all Environmental Laws, (b) the provisions of its
organizational documents and by-laws or operating agreement, as applicable, (c)
all material agreements and instruments by which it or any of its properties may
be bound and (d) all applicable decrees, orders, and judgments. If any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that HGC or any of its Subsidiaries may fulfill any of its obligations hereunder
or in any document or instrument executed and delivered in connection with this
Agreement to which HGC or such Subsidiary is a party, HGC will, or (as the case
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may be) will cause such Subsidiary to, immediately take or cause to be taken all
reasonable steps within the power of the HGC or such Subsidiary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
Section 5.20. Employee Benefit Plans. (a) HGC will (i) promptly upon
request by any Bank or the Agent, furnish to the Agent and such Bank a copy of
the most recent actuarial statement required to be submitted under Section
103(d) of ERISA and Annual Report, Form 5500, with all required attachments, in
respect of each Guaranteed Pension Plan and (ii) promptly upon receipt or
dispatch, furnish to the Agent any notice, report or demand sent or received in
respect of a Guaranteed Pension Plan under Sections 302, 4041, 4042,
4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a Multiemployer Plan,
under Sections 4041A, 4202, 4219, 4242, or 4245 of ERISA.
(b) Neither HGC nor any ERISA Affiliate will:
(i) engage in any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code which could
result in a material liability for HGC or any of its Subsidiaries; or
(ii) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in Section
302 of ERISA, whether or not such deficiency is or may be waived; or
(iii) fail to contribute to any Guaranteed Pension
Plan to an extent which, or terminate any Guaranteed Pension Plan in a
manner which, could result in the imposition of a lien or encumbrance
on the assets of HGC or any of its Subsidiaries pursuant to Section
302(f) or Section 4068 of ERISA; or
(iv) permit or take any action which would result in
the aggregate benefit liabilities (with the meaning of Section 4001 of
ERISA) of all Guaranteed Pension Plans exceeding the value of the
aggregate assets of such Plans, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in excess
of benefit liabilities, by more than the amount set forth in Paragraph
3.17(c).
Section 5.21. Cash Investment in the Kohala Joint Venture. It will not,
as at the end of any fiscal year, permit the Net Cash Investment for the fiscal
year ending on such date to exceed the Net Cash Investment as at the end of the
immediately preceding fiscal year for the fiscal year ending on such date by
more than $2,000,000; and it will not, at any time during the term of this
Agreement, permit the Net Cash Investment for the period commencing on July 1,
1996 and ending on such date of determination to exceed the Net Cash Investment
on July 1, 1996 by more than $5,000,000.
Section 5.22. Use of Proceeds. HGC will use the proceeds of the
Revolving Credit Loans solely for the purposes set forth in Paragraph 3.9
hereof. HGC will obtain Letters of Credit solely for the purposes set forth in
Paragraph 1.7 hereof.
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Section 5.23. Collateral Security. At all times prior to the Collateral
Release Date, the Obligations shall be secured by all of the membership units of
Hudson General LLC owned directly or indirectly by HGC. From and after the
Collateral Release Date, the Computed Value (as defined below) of the Pledged
Units plus the aggregate amount of cash collateral and marketable securities
pledged by HGC to the Collateral Agent pursuant to Paragraph 10(c) hereof shall
not at any time be less than 250% of the Aggregate Loan Limit. For purposes of
this Paragraph 5.23 and Paragraph 10 hereof, the Computed Value of each Pledged
Unit on any date of determination shall be the "Computed Value" of Hudson
General LLC and its Subsidiaries on such date, as calculated pursuant to
Paragraph 3.3(b) of the Purchase Agreement as in effect on the Effective Date,
divided by the number of units of Hudson General LLC outstanding on such date,
provided that if all of the Banks and the Agent reasonably determine at any time
that the calculation of the Computed Value of Hudson General LLC as set forth in
the Purchase Agreement does not accurately reflect the Computed Value of Hudson
General LLC at such time, then the Banks and the Agent shall notify HGC of such
fact. HGC, the Banks and the Agent shall thereafter attempt to negotiate a
formula to determine the Computed Value of Hudson General LLC. If HGC, the Banks
and the Agent are unable to agree on a new formula within sixty days of the day
on which HGC receives such notice, then commencing on such date the Computed
Value of the Pledged Units shall be the net book value of such units, determined
in accordance with generally accepted accounting principles.
Section 5.24. Limited Liability Agreement. HGC will not, and will not
permit Hudson General LLC to, effect or permit any change in or amendment to the
terms of its Limited Liability Company Agreement if such change or amendment
would have a material adverse effect on HGC or the interests of the Banks
hereunder or under any of the other Loan Documents.
Section 5.25. Further Assurances. HGC will, and will cause each of its
Subsidiaries to, execute and deliver any and all such instruments and documents,
and take all such other action, as may reasonably be required by the Agent in
order to perfect, insure and continue the rights, interests and powers of the
Agent in respect of any collateral for the Revolving Credit Loans and the
Revolving Credit Notes and the rights and interests of the Banks under this
Agreement.
Section 6. DEFAULTS. If any of the following events (each a "Default")
shall occur:
Section 6.1. HGC shall fail to pay any principal of the Revolving
Credit Loans when due (whether at any stated maturity date therefor or upon
declaration or acceleration or otherwise), or shall fail to pay any fee or any
interest on the Revolving Credit Loans or any other amount due hereunder (other
than the Agent's fee due under Paragraph 2.1 hereof) in connection with the
Revolving Credit Loans within ten days after the due date thereof, or HGC shall
fail to reimburse the Letter of Credit Bank on the Business Day after any
drawing under a Letter of Credit, or HGC shall fail to pay the Letter of Credit
Fee or any other amounts in respect of Letters of Credit within ten days after
the due date thereof, or HGC shall fail to pay the Agent's fee payable pursuant
to
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Paragraph 2.1 hereof when due and such failure shall continue for ten days
after written notice thereof has been given to HGC by the Agent;
Section 6.2. HGC shall fail to perform or violate any covenant
contained in any of Paragraphs 5.5 through 5.17 hereof or 5.21, 5.23 or 5.24
hereof;
Section 6.3. HGC shall fail to perform or violate any term, covenant or
agreement herein contained (other than those specified in Paragraphs 6.1 and
6.2) and such failure shall continue for five days as to a failure under
Paragraph 5.2 or as to a failure under Paragraph 5.25 and thirty days as to a
failure under other paragraphs, in each case after written notice thereof has
been given to HGC by any Bank;
Section 6.4. HGC shall fail to perform any term, covenant or agreement
contained in any of the Security Documents;
Section 6.5. any representation or warranty of HGC in Paragraph 3
hereof or in any other Loan Document, shall prove to have been false in any
material respect upon the date when made or deemed to have been made or
repeated;
Section 6.6. HGC or any Subsidiary of HGC shall fail to pay at
maturity, or within any applicable period of grace, any obligation or
obligations for borrowed monies or advances, or fail to observe or perform
(within any appropriate grace period, if any) any term, covenant or agreement
contained in any agreement by which it is bound, evidencing or securing borrowed
monies or advances in an aggregate principal amount of $1,500,000 or more;
Section 6.7. any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended), other than
any employee benefit plan or plans (within the meaning of Section 3(3) of ERISA)
of HGC or any of its Subsidiaries and other than shareholders of HGC which have
filed with the Securities and Exchange Commission prior to the date of the Proxy
Schedules 13D or 13G pursuant to the Securities Exchange Act of 1934, as
amended, with respect to the securities of HGC, shall hereafter have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said act) more than 50% in voting power
of the outstanding voting stock of HGC, or during any period of twelve
consecutive calendar months, individuals who were directors of HGC on the first
day of such period shall cease to constitute a majority of the board of
directors of HGC, other than because of replacement as a result of death or
disability of one or more such directors or replacement with the approval of a
majority of those individuals who were members of the board of directors of HGC
on the first day of such period or a majority of the directors of HGC appointed
thereafter with the approval of such individuals;
Section 6.8. HGC or any Subsidiary of HGC shall make an assignment for
the benefit of creditors, or admit in writing its inability to pay or generally
fail to pay its debts as they mature or become due, or shall petition or apply
for the appointment of a trustee or other custodian, liquidator or receiver of
HGC or any Subsidiary of HGC or of any substantial part of the assets of HGC or
any Subsidiary of HGC or shall commence any
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case or other proceeding relating to HGC or any Subsidiary of HGC under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, or shall take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or any such
case or other proceeding shall be commenced against HGC or any Subsidiary of HGC
and HGC or any of its Subsidiaries shall indicate its approval thereof, consent
thereto or acquiescence therein;
Section 6.9. a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating HGC or any Subsidiary of HGC
bankrupt or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of HGC or any
Subsidiary of HGC in an involuntary case under federal bankruptcy laws as now or
hereafter constituted;
Section 6.10. HGC or any Subsidiary of HGC shall suffer any judgment in
excess of $1,500,000 which is not covered by insurance to be entered against it,
or any writ of attachment or execution or any similar process to be issued or
levied against a substantial part of its property, which judgment, writ or
process is not discharged, released, stayed, bonded or vacated within thirty
days after its entry, issue or levy;
Section 6.11. if this Agreement or any of the other Loan Documents
shall be cancelled, terminated, revoked or rescinded otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any action at law or in equity or other
legal proceeding to cancel, revoke or rescind any of this Agreement or any of
the other Loan Documents shall be commenced by or on behalf of HGC or any
Subsidiary of HGC party thereto or any of their respective stockholders, or any
court or any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order, decree
or ruling to the effect that, any one or more of this Agreement or any of the
other Loan Documents is illegal, invalid or unenforceable in accordance with the
terms hereof or thereof;
Section 6.12. with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Majority Banks shall have
determined in their reasonable discretion that such event reasonably could be
expected to result in liability of HGC or any of its Subsidiaries to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding $1,000,000 and
such event in the circumstances occurring reasonably could constitute grounds
for the termination of such Guaranteed Pension Plan by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Guaranteed Pension Plan; or a trustee shall have been appointed
by the United States District Court to administer such Plan; or the PBGC shall
have instituted proceedings to terminate such Guaranteed Pension Plan;
Section 6.13. the occurrence of a Default under and as defined in the
Aviation Revolving Credit Agreement; or
Section 6.14. the occurrence of a Default under and as defined in the
Hudson General LLC Credit Agreement;
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then (a) if such event is a Default under Paragraph 6.7, the Aggregate Loan
Limit shall automatically be reduced to an amount equal to the principal balance
of the Revolving Credit Loans then outstanding, (b) if such event is a Default
under any of Paragraph 6.8 or Paragraph 6.9, the Banks' Commitment shall
automatically terminate, the Letter of Credit Bank with the pro rata
participation of the Banks shall be relieved of all further obligations to
issue, extend or renew Letters of Credit and all amounts owing with respect to
the Revolving Credit Notes and under this Agreement shall forthwith become due
and payable, and (c) in every other such event, and so long as such Default is
continuing, the Agent shall, if so directed by the Majority Banks, by notice in
writing to HGC, terminate immediately the Banks' Commitment and the obligation
of the Letter of Credit Bank with the pro rata participation of the Banks, to
issue, extend or renew Letters of Credit and declare all amounts owing with
respect to the Revolving Credit Notes and under this Agreement to be, and the
Revolving Credit Notes and such amounts shall thereupon forthwith become, due
and payable. If any Letters of Credit are outstanding upon the occurrence of a
Default the Agent may demand that cash or other readily marketable securities
acceptable to it in an amount equal to the Maximum Drawing Amount of all then
outstanding Letters of Credit be deposited with the Agent in pledge pursuant to
pledge agreements in form and substance satisfactory to the Agent, as collateral
security for all obligations of HGC to the Banks hereunder. HGC agrees to either
make such deposit with the Agent immediately upon such demand or cause such
Letters of Credit to be cancelled and returned to the Letter of Credit Bank
undrawn. Except as expressly provided above in this Paragraph 6, presentment,
demand, protest or other notice of any kind are hereby expressly waived. Nothing
herein contained shall in any way impair the right of any Bank to enforce
payment of its Revolving Credit Note when due. In case any one or more of the
Defaults shall have occurred and be continuing, and whether or not the Banks
shall have accelerated the maturity of the Revolving Credit Loans pursuant to
this Paragraph 6, each Bank, if owed any amount with respect to the Revolving
Credit Loans, may proceed to protect and enforce its rights by suit in equity,
action at law or other appropriate proceeding, whether for the specific
performance of any covenant or agreement contained in this Agreement and the
other Loan Documents or any instrument pursuant to which the Obligations to such
Bank are evidenced, including as permitted by applicable law the obtaining of
the ex parte appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
other legal or equitable right of such Bank. No remedy herein conferred upon any
Bank or the Agent or the holder of any Revolving Credit Note is intended to be
exclusive of any other remedy and each and every remedy shall be cumulative and
shall be in addition to every other remedy given hereunder or now or hereafter
existing at law or in equity or by statute or any other provision of law.
Section 7. AGENT'S RELATIONSHIP WITH BANKS; AGENT'S DUTIES. Each of the
Banks irrevocably authorizes the Agent to receive all payments of principal of
and interest on the Revolving Credit Loans and of commitment fees, and to take
all other action delegated to it hereunder or reasonably incidental thereto. The
Agent may exercise its powers and execute its duties by or through employees or
agents and shall be entitled to take, and to rely on, advice of counsel
concerning all matters pertaining to its rights and duties under this Agreement
and the other Loan Documents. Neither
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the Agent nor any of its shareholders, directors, officers or employees nor any
other person assisting it in its duties nor any agent or employee thereof shall
be liable for any waiver, consent or approval given or any action taken or
omitted to be taken in good faith by it or them in connection herewith, or be
responsible for the consequence of any oversight or error of judgment
whatsoever, except that the Agent or such other person, as the case may be,
shall be liable for losses due to its own gross negligence or willful
misconduct. The Agent shall not be responsible for the execution or validity or
enforceability of this Agreement or any of the other Loan Documents, or for any
recitals or statements, warranties or representations herein or made in any
certificate or instrument hereafter furnished to it by or on behalf of HGC, or
be bound to ascertain or inquire as to the performance or observance of any of
the terms, conditions, covenants or agreements herein or in any other Loan
Document. The Agent shall not be bound to ascertain whether any notice, consent,
waiver or request delivered to it by HGC or by any Bank owed amounts with
respect to the Loans shall have been duly authorized or is true, accurate or
complete. HGC shall certify to the Agent the names and signatures of its
officers authorized to execute certificates and otherwise act in respect hereof,
and the Agent may conclusively rely thereon until receipt by it of notice to the
contrary. The Agent has not made nor does now make any representations or
warranties, express or implied, nor does it assume any liability to the Banks,
with respect to the credit worthiness or financial condition of HGC or any
Subsidiary of HGC. Each Bank acknowledges that it has, independently and without
reliance upon the Agent or any other Bank, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. If in the opinion of the Agent the
distribution of any amount received by it in such capacity hereunder might
involve it in a dispute resulting in its liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or pay over the same in such manner and to such persons as shall be
determined by such court. FNB shall have the same obligations and the same
rights, powers and privileges with respect to its Commitment and the Revolving
Credit Loans as it would have were it not also the Agent. The Agent may resign
as Agent for the Banks upon thirty days' written notice to HGC and each Bank,
whereupon a new agent shall be appointed by the Banks. The Agent may be removed
as Agent for the Banks upon thirty days' written notice to HGC and the Agent
from the Majority Banks, whereupon a new Agent shall be appointed by the Banks.
The Banks (including FNB) ratably agree hereby to indemnify and hold harmless
the Agent from and against any and all claims, actions and suits (whether
groundless or otherwise), losses, damages, costs, expenses (including any
expenses for which the Agent has not been reimbursed by HGC as required by
Paragraph 11.5), and liabilities of every nature and character arising out of or
related to this Agreement or the other Loan Documents, or the transactions
contemplated or evidenced hereby or thereby, or the Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent's willful misconduct or gross negligence. The Agent
shall not take any actions with respect to any Default unless it shall have
received such instructions from the Majority Banks. The Collateral Agent shall
not exercise any remedy under
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any Security Document unless it shall have received such instructions as are
required by the Intercreditor Agreement.
Section 8. SETOFF. HGC grants to each of the Banks, as security for the
full and punctual payment and performance of its obligations hereunder, a
continuing lien and security interest in all deposits or other sums credited by
or due from any Bank to HGC and all securities or other property of HGC in the
possession of such Bank and, regardless of the adequacy of any collateral, such
sums at any time may be applied to or set off by such Bank against any and all
liabilities, direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of HGC to such Bank. The offsetting Bank
shall provide HGC with prompt notice of any such action. Each Bank agrees with
the other Banks that (a) if any deposits or other sums credited by or due from
such Bank to HGC are applied to indebtedness of HGC to such Bank, other than
amounts owing with respect to the Revolving Credit Loans, such amount shall be
applied ratably to such other indebtedness and to the amounts owing with respect
to the Revolving Credit Loans, and (b) if such Bank (i) shall receive any
payment from HGC, whether by distributions made by the Agent, voluntary payment,
exercise of the right of setoff (including, but not limited to, a secured claim
under Section 506 of Title II of the United States Code or other security or
interest arising from, or in lieu of, such secured claim, received by such Bank
under any applicable bankruptcy, insolvency or other similar law), counterclaim,
cross action or enforcement of any claim with respect to the Revolving Credit
Loans by proof thereof in bankruptcy, reorganization, liquidation, receivership
or similar proceedings, or otherwise, and (ii) shall retain and apply to the
payment of such Bank's Revolving Credit Loans any amount in excess of its
ratable portion of the payments received by all Banks with respect to the
Revolving Credit Loans as contemplated hereby, such Bank will make such
disposition and arrangements with the other Banks with respect to such excess,
either by way of distribution, pro tanto assignment of claims, subrogation or
otherwise, as shall result in each Bank's receiving in respect of the Revolving
Credit Loans its proportionate payment as contemplated hereby.
Section 9. INDEMNIFICATION. HGC agrees to indemnify and hold harmless
the Agent and the Banks from and against any and all claims, actions and suits
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of this
Agreement or any of the other Loan Documents or the transactions contemplated
hereby or thereby including, without limitation, (a) any actual or proposed use
by HGC or any Subsidiary of HGC of the proceeds of any of the Revolving Credit
Loans or Letters of Credit, (b) HGC or any Subsidiary of HGC entering into or
performing this Agreement or any of the other Loan Documents or (c) with respect
to HGC and Subsidiaries of HGC and their respective properties and assets, (i)
the violation of any Environmental Law, (ii) the presence, Disposal, escape,
seepage, leakage, spillage, discharge, emission, Release or threatened Release
of any Hazardous Substances, (iii) the investigation or remediation of offsite
locations at which HGC, any Subsidiary of HGC or any of such Person's
predecessors are alleged to have directly or indirectly Disposed of Hazardous
Substances or (iv) any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case
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including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding (but excluding any such
liabilities, losses, damages and expenses incurred by any of the Agent or any
Bank by reason of the gross negligence or willful misconduct of the Agent or any
Bank). In litigation, or the preparation therefor, the Banks and the Agent shall
be entitled to select their own counsel and, in addition to the foregoing
indemnity, HGC agrees to pay promptly the reasonable fees and expenses of such
counsel. If, and to the extent that the obligations of HGC under this Paragraph
9 are unenforceable for any reason, HGC hereby agrees to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The covenants contained in this Paragraph 9
shall survive payment or satisfaction in full of all other Obligations.
Section 10. SECURITY AND GUARANTIES. (a) The Obligations shall be
secured by a perfected first priority security interest in and pledge of all of
the membership units of Hudson General LLC (or, from and after the Collateral
Release Date, solely by cash and marketable securities or that number of
membership units of Hudson General LLC necessary for compliance by HGC with
Paragraph 5.23 hereof) owned directly or indirectly by HGC (the "Pledged Units")
and the other Collateral pursuant to and to the extent required by the terms of
the Security Documents.
(b) The Banks acknowledge and agree that, subject to the provisions of
Paragraph 5.23 hereof, upon receipt of evidence satisfactory to them that (i)
all litigation against HGC and Aviation resulting from or relating to the
acquisition in 1984 of certain assets of the airport ground services business of
Innotech Aviation Limited has been fully and finally dismissed (which dismissal
is not appealable) or settled in full, (ii) HGC and Aviation have satisfied in
full all of their payment obligations, if any, with respect to such litigation,
(iii) the payment thereof has not resulted in the occurrence of any Default or
condition which would, with either or both the giving of notice or lapse of
time, result in a Default, and (iv) no Default or condition which would, with
either or both the giving of notice or the lapse of time, result in a Default,
then exists, they shall execute and deliver to the Collateral Agent a letter
acknowledging receipt of such evidence in accordance with Section 18 of the
Pledge Agreement and Section 28(a) of the Security Agreement.
(c) If the Banks at any time shall receive (i) a written notice from
HGC that LAGS or an affiliate of LAGS has delivered to HGC a Notice of Exercise
pursuant to Paragraph 3.2 of the Purchase Agreement with respect to its option
to purchase units of Hudson General LLC as described in Article III of the
Purchase Agreement, (ii) a copy of such Notice of Exercise and (iii) a written
request from HGC for the Banks to direct the Collateral Agent to release its
lien on those Pledged Units that will be purchased by LAGS or such affiliate of
LAGS, the Banks shall execute and deliver to the Collateral agent a letter
directing the Collateral Agent, on the date on which such purchase is to take
place, to release its lien on those Pledged Units to be sold to LAGS or an
affiliate of LAGS, provided that, subject to Paragraph 5.23 hereof, HGC deposits
with the Collateral Agent, in pledge pursuant to pledge agreements in form and
substance satisfactory to the Banks and the Collateral Agent, on or before such
release, cash or other readily marketable securities acceptable to the Banks and
the Collateral
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Agent in an amount equal to the Computed Value of the Pledged Units to be
released, along with all such documents and instruments, including, without
limitation, corporate authority documents and opinions of counsel, as the
Collateral Agent and the Banks may reasonably request.
(d) The Banks hereby acknowledge and agree that upon receipt of
evidence satisfactory to them from and after the Collateral Release Date that
the Computed Value of the Pledged Units plus the aggregate amount of cash
collateral and marketable securities pledged by HGC to the Collateral Agent
exceeds 250% of the Aggregate Loan Limit, they shall execute and deliver to the
Collateral Agent a letter acknowledging receipt of such evidence in accordance
with Section 18 of the Pledge Agreement and, subject to Paragraph 5.23 hereof,
directing the Collateral Agent to release its lien on such Pledged Units, cash
collateral, marketable securities or other Collateral as HGC may request.
(e) In the event that, following the occurrence or during the
continuance of any Default, the Collateral Agent or any Bank, as the case may
be, receives any monies in connection with the enforcement of any of the
Security Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
(i) first, to the payment of expenses incurred with respect to
the maintenance and protection of the Collateral and expenses incurred with
respect to the sale of or realization upon any of the Collateral or the
perfection, enforcement or protection of the rights of the Collateral Agent
(including reasonable attorney's fees and expenses of every kind);
(ii) second, equally and ratably to all amounts of principal,
interest, expenses and fees outstanding which constitute the Obligations (as
defined in the Security Documents) (after making provision for amounts not then
due and payable), in such order or preference as the Majority Banks may
determine; and
(iii) third, the balance, if any, shall be returned to HGC or
to such other persons as are entitled thereto.
Section 11. MISCELLANEOUS.
Section 11.1. Notices. Unless provided elsewhere in this Agreement to
the contrary, all written notices hereunder to any party hereto shall be
delivered in hand, sent by telegraph, telex, telecopy or overnight courier or
mailed by certified mail, and if so mailed shall be deemed to have been given
three calendar days after the same shall have been properly deposited in the
mails, addressed to such party at its address given at the beginning of this
Agreement, or at any other address specified by such party in writing to the
person giving such notice.
Section 11.2. Copies of Certificates, Etc. Whenever HGC is required to
deliver notices, certificates, opinions, statements or other information
hereunder to the Agent, it shall do so in such reasonable number of copies as
the Agent shall specify.
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Section 11.3. No Waivers. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
failure or delay by the Agent or any Bank in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided are cumulative and not exclusive of any rights or remedies otherwise
provided by law.
Section 11.4. Massachusetts Law. THIS AGREEMENT AND THE REVOLVING
CREDIT NOTES SHALL BE DEEMED TO BE A CONTRACT MADE UNDER SEAL AND SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW) AND
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
Section 11.5. Expenses; Taxes. Whether or not the transactions
contemplated hereby shall be consummated, HGC will pay the reasonable fees,
expenses and disbursements of the Banks' and the Agent's special counsel
incurred in connection with the review of this Agreement and the other Loan
Documents, the closings hereunder and thereunder, amendments, modifications,
approvals, consents or waivers hereto and thereto, and all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and costs) incurred
by the Agent and by each Bank in connection with the preparation,
administration, interpretation or enforcement of this Agreement and the other
Loan Documents and in connection with any so-called "workout" of the Revolving
Credit Loans, including as to any "workout" or in the event of acceleration,
losses or expenses associated with foreign exchange conversions or transactions.
To the extent the Agent is not reimbursed by HGC for the foregoing fees,
expenses and disbursements, each Bank shall pay to the Agent, promptly upon
notice by the Agent, its pro-rata share of such fees, expenses and
disbursements, provided that the Majority Banks requested such action be
undertaken by the Agent. The covenants of this Paragraph 11.5 shall survive
payment or satisfaction of payment of amounts owing with respect to the
Revolving Credit Loans. HGC agrees to indemnify the Banks and the Agent from,
and hold them harmless against, any taxes, assessments, charges or penalties
made by any governmental authority by reason of the execution and delivery of
this Agreement or any of the other Loan Documents, unless any such assessment,
charge or penalty shall be the result of the negligence or misconduct of any
Bank.
Section 11.6. Confidentiality of Information. Each Bank agrees that any
reports or other information furnished to it by HGC under this Agreement and not
disclosed by HGC to the public will be held in confidence by it for use only in
connection with the purposes contemplated by this Agreement, except to the
extent that disclosure is required by law (whether by appropriate regulatory
authorities, judicial process or otherwise).
Section 11.7. Changes, Waivers. For all purposes of this Agreement, a
Default shall be deemed to be continuing until such time as it has been waived
by the Banks in accordance with this Paragraph 11.7. None of this Agreement or
the Revolving Credit
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Notes or any provision hereof or thereof may be changed, waived, discharged or
terminated orally but only by a statement in writing. Any waiver or amendment of
any provision of this Agreement or the Revolving Credit Notes may be granted or
effected, with the consent of HGC, by one or more substantially concurrent
written instruments signed by the Majority Banks; provided, however, that no
such consent shall be effective to (a) increase the Aggregate Loan Limit or any
Bank's Commitment without the consent of such Bank, or (b) reduce the amount of
any payment of principal or rate of interest on any Revolving Credit Note or
postpone any date fixed for the payment of any principal of or interest on any
Revolving Credit Note without the consent of the holder thereof (except by
waiver after acceleration pursuant to Paragraph 6), or (c) modify this Paragraph
11.7 or (d) amend the definition of Majority Banks, without the consent of all
the Banks, or (e) modify or waive any of the conditions precedent set forth in
Paragraphs 4A and 4B hereof, or (f) notwithstanding anything contained above,
amend or waive any of the last three sentences of Paragraph 6 hereof.
Section 11.8. Binding Effect of Agreement. This Agreement shall be
binding upon and inure to the benefit of HGC, the Banks and their respective
successors and assigns, provided that HGC may not assign or transfer its rights
hereunder.
Section 11.9. Counterparts. This Agreement and any amendment hereof may
be signed in any number of counterparts with the same effect as if the
signatures hereto and thereto were upon the same instrument. Complete sets of
counterparts shall be lodged with HGC and the Agent. In proving this Agreement
it shall not be necessary to produce or account for more than one counterpart
signed by the party against whom enforcement is sought.
Section 11.10. Entire Agreement. This Agreement and the other Loan
Documents express the entire understanding of the parties with respect to the
transactions contemplated hereby.
Section 11.11. Assignments or Participations by Banks or Affiliates.
Each Bank may assign to one or more banks or other financial institutions having
total capital and surplus of $100,000,000 or more, and otherwise reasonably
acceptable to HGC (which acceptance shall be in writing) all or any part of, or
(without the consent of HGC) may grant participations to one or more of such
banks or financial institutions in or to all or any part of, any Revolving
Credit Loan or Revolving Credit Loans owing to such Bank and the Revolving
Credit Notes held by such Bank, provided that, following the consummation of any
such assignment or participation, such Bank's or bank's Commitment Percentage
shall not be less than 10%, and to the extent of any such assignment or
participation (unless otherwise stated therein), the assignee or participant of
such assignment or participation shall have the same rights and benefits
hereunder and under such Revolving Credit Note as it would have if it were such
Bank hereunder. In the event of such assignment HGC will consent, such consent
not to be unreasonably withheld, to release the assigning Bank from the
obligations hereunder to the extent of such assignment and to sign and deliver
any releases or documents necessary to effectuate such assignment as such Bank
shall reasonably request. Notwithstanding Paragraph 11.6 hereof, each Bank may
disclose any information concerning HGC or the credit facilities to any such
bank or financial institution,
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provided that such bank or financial institution agrees to be bound by the
provisions of Paragraph 11.6 hereof. It shall be a condition of any assignment
as described in this Paragraph 11.11, that (a) such assignee provide a written
acknowledgment, in form and substance reasonably acceptable to the Agent and its
special counsel and HGC and its counsel, that such assignee assumes the
obligations and the rights of the assigning Bank under this Agreement and the
other Loan Documents and, if such assignee is not organized under the laws of
the United States or any state thereof, that such assignee shall provide the
Agent and HGC with satisfactory evidence that any payments made to the assignee
hereunder may be made free and clear of any withholding taxes and (b) such
assignee or an affiliate thereof accepts an assignment from the assigning Bank
(or an affiliate thereof) of a pro rata portion of such Bank's interest in the
Aviation Loans and the revolving credit loans made to Hudson General LLC under
the Hudson General LLC Credit Agreement. Notwithstanding anything contained in
this Paragraph 11.11 to the contrary, upon the occurrence and during the
continuance of a Default, each Bank may make assignments or grant participations
hereunder without the consent of HGC. HGC agrees, at its own expense, to execute
and deliver to the assignee Bank, in exchange for each surrendered Revolving
Credit Note of the assigning Bank, a new Revolving Credit Note to the order of
such assignee Bank in an amount equal to the amount assumed by such Bank and, if
the assigning Bank has retained some portion of its obligations hereunder, a new
Revolving Credit Note to the order of the assigning Bank in an amount equal to
the amount retained by it hereunder. Such new Revolving Credit Notes shall
provide that they are replacements for the surrendered Revolving Credit Notes,
shall be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Revolving Credit Notes, shall be dated the effective
date of such assignment and shall otherwise be in substantially the form of the
assigned Revolving Credit Notes.
Section 11.12. Term of Agreement. This Agreement shall continue in full
force and effect from the date hereof so long as any commitment to lend any
principal with respect to the Revolving Credit Loans or any commitment to issue
any Letter of Credit or any obligation of HGC for any interest or commitment or
other fee or obligation hereunder or on the Revolving Credit Notes shall be
outstanding.
[The remainder of this page has been intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the date
first above written.
HUDSON GENERAL CORPORATION
By:/s/ [Illegible]
_______________________________
Title: Exec. V.P.
THE FIRST NATIONAL BANK OF
BOSTON, AS AGENT
By: /s/ Michael J. Blake
_______________________________
Title:
THE FIRST NATIONAL BANK
OF BOSTON
By: /s/ Michael J. Blake
_______________________________
Title:
EUROPEAN AMERICAN BANK
By:/s/ [Illegible]
_______________________________
Title: V.P.
THE CHASE MANHATTAN BANK, N.A.
By:/s/ [Illegible]
_______________________________
Title: Vice President
52
EXHIBIT A
DEFINITIONS
Agent - See the introductory paragraph.
Aggregate Loan Limit - See Paragraph 1.4.
Agreement - See the introductory paragraphs.
Aviation - Hudson General Aviation Services Inc./Societe de Services
Hudson General (Aviation) Inc., a wholly owned subsidiary of Hudson General LLC.
Aviation Loans - Revolving credit loans made to Aviation under the
Aviation Revolving Credit Agreement.
Aviation Revolving Credit Agreement - That certain Revolving Credit
Agreement, dated as of November 25, 1992, among Aviation and the lenders that
are or may become parties thereto, as amended and in effect from time to time.
Banks - See the introductory paragraphs.
Base Rate - The higher of (a) the annual rate of interest publicly
announced by the Agent from time to time at its head office in Boston,
Massachusetts as its "base rate" and (b) 1/2% above the overnight federal funds
effective rate, as published by the Board of Governors of the Federal Reserve
System, as in effect from time to time.
Base Rate Loan - Any Revolving Credit Loan bearing interest at a rate
determined by reference to the Base Rate.
Business Day - Any day on which banking institutions in Boston,
Massachusetts and New York, New York are open for the transaction of banking
business and, in the case of LIBO Rate Loans, any day on which commercial banks
are open for international business in London or such other eurodollar interbank
market as may be selected by the Agent in its sole discretion acting in good
faith.
CERCLA - See Paragraph 3.18.
Chase - See the introductory paragraph.
Code - The Internal Revenue Code of 1986, as amended and in effect from
time to time.
Collateral - All of the property, rights and interests of HGC that are
or are intended to be subject to the security interests created by the Security
Documents.
Collateral Agent - As defined in the Security Documents.
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Collateral Release Date - The date on which the Banks deliver a letter
to the Collateral Agent in accordance with Paragraph 10(b) hereof.
Commitment - The agreement of each Bank, subject to the terms and
conditions of the Agreement, to make Revolving Credit Loans to, and to
participate in the issuance, extension or renewals of Letters of Credit for the
account of HGC.
Commitment Percentage - With respect to each Bank, the percentage set
forth opposite its name below as such Bank's percentage of the aggregate
Commitments of all of the Banks (subject to adjustments permitted by the terms
of the Agreement):
Commitment
Bank Percentage
The First National Bank of Boston 60%
The Chase Manhattan Bank, N.A. 20%
European American Bank 20%
---
Total 100%
Computed Value - See Paragraph 5.23.
Consolidated Liabilities - The consolidated liabilities of HGC and its
Subsidiaries, including, without limitation, all consolidated liabilities of HGC
and its Subsidiaries in respect of letters of credit but excluding therefrom an
amount equal to the consolidated deferred tax debits of HGC and its
Subsidiaries, all as determined in accordance with generally accepted accounting
principles.
Consolidated Tangible Net Worth - The consolidated capital and surplus
accounts of HGC and its Subsidiaries, determined in accordance with generally
accepted accounting principles, however excluding all amounts representing
adjustments resulting from foreign currency translation, whether any such
adjustment is expressed as a positive or negative number and eliminating all
assets of HGC and its Subsidiaries properly classified as intangible assets
under generally accepted accounting principles except for leasehold rights of
HGC used in its operations.
Contribution - See Paragraph 5.14(b).
Default - See Paragraph 6.
Delinquent Bank - See Paragraph 2.11.
Disposal; Dispose(d) - Disposal or dispose(d) as such term is defined
in RCRA and the regulations promulgated thereunder; provided that to the extent
the laws of a state wherein the subject property lies establishes a meaning for
such term that is broader than that specified in RCRA and the regulations
promulgated thereunder, such broader meaning shall apply.
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EAB - See the introductory paragraph.
Effective Date - See Paragraph 4A.
Employee Benefit Plan - Any employee benefit plan within the meaning of
Section 3(3) of ERISA maintained or contributed to by HGC or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws - See Paragraph 3.18.
EPA - See Paragraph 3.18.
ERISA - The Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time.
ERISA Affiliate - Any individual or legal entity which is treated as a
single employer with HGC under Section 414 of the Code.
ERISA Reportable Event - A reportable event with respect to a
Guaranteed Pension Plan within the meaning of Section 4043 of ERISA and the
regulations promulgated thereunder other than a reportable event as to which the
provisions of the 30 day notice to the PBGC is waived under applicable
regulations.
FNB - See the introductory paragraph.
Foreign Subsidiaries - See Paragraph 5.10(f).
generally accepted accounting principles - (a) When used in Paragraph
5.7, 5.8 or 5.9, whether directly or indirectly through reference to a
capitalized term used therein means (i) principles that are consistent with the
principles promulgated or adopted by the Financial Accounting Standards Board
and its predecessors, in effect for the fiscal year ended on June 30, 1995, and
(ii) to the extent consistent with such principles, the accounting practice of
HGC reflected in its financial statements for the fiscal year ended on June 30,
1995, and (b) when used in general, other than as provided above, principles
that are (i) consistent with the principles promulgated or adopted by the
Financial Accounting Standards Board and its predecessors, in effect from time
to time, and (ii) consistently applied with past financial statements of HGC
adopting the same principles, provided that in each case a certified public
accountant would, insofar as the use of such accounting principles is pertinent,
be in a position to deliver an unqualified opinion (other than a qualification
regarding changes in generally accepted accounting principles) as to financial
statements in which such principles have been properly applied.
Guaranteed Pension Plan - Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by HGC or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
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Hazardous Substances - See Paragraph 3.18.
HGC - See the introductory paragraph.
Hudson General LLC - Hudson General LLC, a Delaware limited liability
company and Subsidiary of HGC.
Hudson General LLC Credit Agreement - That certain Amended and Restated
Revolving Credit Agreement, dated as of November 25, 1992 and amended and
restated as of June 1, 1996, among HGC, Hudson General LLC and the lenders which
are or may become parties thereto, as amended and in effect from time to time.
Initial Revolving Period - The period commencing on the Effective Date
and ending on June 30, 1999.
Interest Period - A period commencing on the date of making of, or
renewal of, or conversion of a Loan to, a LIBO Rate Loan, and expiring one, two,
three or six months thereafter, as designated by HGC in the notice given the
Agent under Paragraph 1.3; provided that,
(i) the initial Interest Period for any LIBO Rate Loan shall
commence on the date of the making of such Loan (including the date of
any conversion from a Base Rate Loan) and each Interest Period
occurring thereafter in respect of such LIBO Rate Loan shall commence
on the date on which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, provided, however, that if any Interest
Period would otherwise expire on a day which is not a Business Day but
is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(iii) if any Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month; and
(iv) no Interest Period in respect of any Revolving Credit
Loan shall extend beyond the Revolving Credit Loan Maturity Date.
Joint Ventures - Collectively, (i) the Kohala Joint Venture and (ii)
joint ventures entered into by HGC or any of its Restricted Subsidiaries after
the date of this Agreement in the ordinary course of its business.
Kohala Joint Venture - See Paragraph 5.13(h).
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LAGS - Lufthansa Airport and Ground Services GmbH, a German
corporation.
Letter(s) of Credit - Any United States dollar-denominated irrevocable
standby letter(s) of credit issued from time to time pursuant to the terms
hereof by the Letter of Credit Bank for the account of HGC.
Letter of Credit Bank - FNB, in its capacity as issuer of the Letter(s)
of Credit.
Letter of Credit Fee - See Paragraph 1.11.
LIBO Bid Rate - The annual rate of interest determined by the Agent, at
or about 11 a.m., London time, on the second Business Day prior to the first day
of an Interest Period, as being that at which deposits of United States dollars
during such Interest Period are offered to the Agent by prime banks in the
London interbank market at the time of determination and in accordance with the
usual practice in such market, for delivery on the first day of such Interest
Period and for the number of days comprised therein, in amounts equal (as nearly
as may be) to the amount of the unpaid principal of a Revolving Credit Loan to
which such Interest Period shall relate.
LIBO Rate - The rate of interest (rounded upwards to the nearest 1/16th
of one percent) equal to the following (with the LIBO Bid Rate and the Reserve
Rate expressed as decimals);
(LIBO Bid Rate)
--------------------
(1 - Reserve Rate)
LIBO Rate Loan - Any Revolving Credit Loan bearing interest at a rate
determined by reference to the LIBO Rate pursuant to Paragraph 2.3(b) of the
Agreement.
Loan Documents - Collectively, this Agreement, the Revolving Credit
Notes and the Security Documents, and all other instruments and documents
delivered and to be delivered pursuant to any such agreements.
Majority Banks - Those Banks which are owed or participate in 75% or
more of the sum of aggregate principal amount of Revolving Credit Loans at the
time outstanding and unpaid plus the aggregate Maximum Drawing Amount of all
outstanding Letters of Credit, or, if no Revolving Credit Loans or Letters of
Credit are outstanding, those Banks having 75% or more of the outstanding
Commitment to make Revolving Credit Loans.
Maximum Drawing Amount - As at any date of determination, with respect
to any Letter of Credit issued pursuant to the terms hereof, the maximum amount
which the beneficiary thereof may draw under such Letter of Credit as at such
date pursuant to the terms of such Letter of Credit, plus any amounts previously
drawn thereunder and not yet reimbursed by HGC, whether from the proceeds of
Revolving Credit Loans or otherwise.
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Multiemployer Plan - Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by HGC or any ERISA
Affiliate.
Net Cash Investment - As at any date of determination, (i) the
aggregate amount of cash directly or indirectly invested by HGC in the Kohala
Joint Venture during the applicable period, minus (ii) the aggregate amount of
cash proceeds directly or indirectly received by HGC with respect to the Kohala
Joint Venture during the applicable period.
Net Cash Proceeds - As at any date of determination, (i) the aggregate
amount of cash proceeds directly or indirectly received by HGC with respect to
the Kohala Joint Venture during the applicable period, minus (ii) the aggregate
amount of cash directly or indirectly invested by HGC in the Kohala Joint
Venture during the applicable period.
7% Notes - The 7% Convertible Subordinated Debentures Due 2011 issued
pursuant to the Indenture dated as of July 1, 1986, between HGC and Chemical
Bank Delaware, as Trustee, as amended by the First Supplemental Indenture
thereto.
Notice Date - See Paragraph 2.9.
Obligations - All indebtedness, obligations and liabilities of HGC to
any of the Banks and the Agent, individually or collectively, existing on the
date of this Agreement or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement or any of the other Loan
Documents or in respect of any of the Revolving Credit Loans or any of the
Revolving Credit Notes or other instruments at any time evidencing any thereof.
PBGC - The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Pledge Agreement - The Pledge Agreement, dated as of the date hereof,
between HGC and the Collateral Agent substantially in the form attached hereto
as Exhibit C, as the same may be amended and in effect from time to time.
Pledged Units - See Paragraph 10(a).
Proxy - The definitive Proxy Statement dated April 25, 1996 relating to
the meeting of HGC's stockholders for the purpose of voting upon a proposal to
approve the transactions contemplated by the Purchase Agreement, as filed by HGC
with the Securities and Exchange Commission.
Purchase Agreement - That certain Unit Purchase and Option Agreement,
dated February 27, 1996, between LAGS and HGC, as such agreement is in effect on
the Effective Date as supplemented by a letter agreement dated May 31, 1996.
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RCRA - See Paragraph 3.18.
Real Estate - All real property at any time owned, leased (as lessee or
sublessee), operated or managed by HGC or any Subsidiary of HGC.
Release - A release as defined in CERCLA and the regulations
promulgated thereunder; provided that to the extent the laws of a state wherein
the subject property lies establishes a meaning for such term that is broader
than that specified in CERCLA and the regulations promulgated thereunder, such
broader meaning shall apply.
Reserve Rate - For any day with respect to a LIBO Rate Loan, the
maximum rate at which the Agent would be required to maintain reserves under
Regulation D of the Board of Governors of the Federal Reserve System (or any
successor or similar regulation relating to such reserve requirements) against
"Eurocurrency Liabilities" (as that term is used in Regulation D) regardless of
whether there are such liabilities outstanding. The Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in the
Reserve Rate and promptly thereafter the Agent shall provide HGC with written
notice of such adjustment.
Restricted Subsidiary - Each Subsidiary of HGC other than Hudson
General LLC and each Subsidiary of Hudson General LLC.
Revolving Credit Loan Maturity Date - June 30, 1999, or, if earlier,
such date on which the Commitments are terminated in accordance with the
provisions of the Agreement.
Revolving Credit Loans - Revolving credit loans made or to be made by
the Banks to HGC pursuant to Paragraph 1.1.
Revolving Credit Note(s) - See Paragraph 1.2.
SARA - See Paragraph 3.18.
Security Agreement - The Amended and Restated Security Agreement, dated
as of December 28, 1992 and amended and restated as of the Effective Date,
between HGC, Hudson General LLC and the Collateral Agent substantially in the
form of Exhibit E attached to the Hudson General LLC Credit Agreement, as the
same may be amended and in effect from time to time.
Security Documents - The Security Agreement, the Pledge Agreement, any
and all pledge agreements delivered under Paragraph 10(c) hereof, and any and
all instruments and documents required to be delivered pursuant thereto, in each
case as originally executed, or if amended, restated, modified or supplemented
from time to time, as so amended, restated, modified or supplemented.
Shareholder - See Paragraph 3.16.
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Subordinated Debt - The indebtedness of HGC referred to in Paragraph
5.10(c) hereof and any other indebtedness that is subordinated to the Revolving
Credit Loans, the Letters of Credit and the Revolving Credit Notes in form and
substance reasonably satisfactory to the Majority Banks.
Subsidiary - With respect to any entity, any corporation, association,
joint stock company, business trust or other similar organization of whose
voting stock such entity owns or controls, directly or indirectly, more than
50%.
Type - As to any Revolving Credit Loan, its nature as a Base Rate Loan
or a LIBO Rate Loan.
60
EXHIBIT B
FORM OF REVOLVING CREDIT NOTE
HUDSON GENERAL CORPORATION
$[INSERT AMOUNT] __________________, 1996
FOR VALUE RECEIVED, the undersigned, HUDSON GENERAL CORPORATION, a
Delaware corporation ("HGC"), hereby absolutely and unconditionally promises to
pay to the order of [INSERT NAME OF PAYEE BANK] (the "Bank") at the office of
the Agent (as defined in the Credit Agreement referred to below) at 100 Federal
Street, Boston, Massachusetts 02110 and in United States dollars in immediately
available funds:
(a) the principal amount of [INSERT BANK'S COMMITMENT PERCENTAGE OF
AGGREGATE LOAN LIMIT] Dollars ($____) or, if less, the aggregate unpaid
principal amount of Revolving Credit Loans made by the Bank pursuant to the
Revolving Credit Agreement, dated as of ______________, 1996, as the same is
amended and in effect from time to time (such agreement, as amended and in
effect from time to time, the "Credit Agreement"), among HGC, the Bank, the
other lenders named therein, such other lenders as may become parties thereto
from time to time and The First National Bank of Boston as Agent, payable at the
times and in accordance with the terms and conditions of the Credit Agreement
but in no event later than the Revolving Credit Loan Maturity Date (which shall
be no later than June 30, 1999); and
(b) interest on the principal balance hereof from time to time
outstanding from the date hereof through the date on which such principal amount
is paid in full at the rates provided in the Credit Agreement, payable as
provided in the Credit Agreement.
This Note evidences borrowings under, is subject to the terms and
conditions of, and has been issued by HGC in accordance with the terms of, the
Credit Agreement and is secured by the collateral described in the Pledge
Agreement. The Bank and any holder hereof are entitled to the benefits of the
Credit Agreement and may enforce the agreements of HGC contained therein.
Capitalized terms which are used in this Note without definition and which are
defined in the Credit Agreement shall have the same meanings herein as in the
Credit Agreement.
The Bank shall endorse, and is hereby irrevocably authorized by HGC to
endorse, on the schedule attached to this Note or a continuation of such
schedule attached hereto and made a part hereof, an appropriate notation
evidencing advances and repayments of principal of this Note, provided that
failure by the Bank to make any such notations shall not affect any of HGC's
obligations in respect of this Note.
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HGC has the right in certain circumstances and the obligation in certain
other circumstances to prepay the whole or part of the principal of this Note on
the terms and conditions specified in the Credit Agreement.
If any one or more Defaults shall occur, the entire unpaid principal
amount of this Note and all of the unpaid interest accrued thereon may become or
be declared due and payable in the manner and with the effect provided in the
Credit Agreement.
HGC and every endorser and guarantor of this Note or the obligation
represented hereby waive presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance,
default or enforcement of this Note, assent to any extension or postponement of
the time of payment or any other indulgence, to any substitution, exchange or
release of collateral and to the addition or release of any other party or
person primarily or secondarily liable.
THIS NOTE SHALL BE DEEMED TO TAKE EFFECT AS A SEALED INSTRUMENT UNDER
THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND FOR ALL PURPOSES SHALL BE
CONSTRUED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, Hudson General Corporation has caused this Note to
be signed on its behalf by its duly authorized officer as a sealed instrument as
of the day and year first above written.
HUDSON GENERAL CORPORATION
By:
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Title:
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Amount of
Principal Balance of
Amount of Paid or Principal Notation
Date Loan Prepaid Unpaid Made By
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63
EXHIBIT C
FORM OF PLEDGE AGREEMENT
This PLEDGE AGREEMENT dated as of June 1, 1996, is between HUDSON
GENERAL CORPORATION (the "Pledgor"), a Delaware corporation, and THE FIRST
NATIONAL BANK OF BOSTON, a national banking association, as collateral agent
(the "Collateral Agent") for the Banks (as hereinafter defined).
WHEREAS, the Pledgor has entered into a Revolving Credit Agreement,
dated as of the date hereof (as amended and in effect from time to time, the
"HGC Credit Agreement"), with The First National Bank of Boston, European
American Bank, The Chase Manhattan Bank, N.A., certain other financial
institutions (collectively, the "Banks") and The First National Bank of Boston
as agent, pursuant to which the Banks, subject to the terms and conditions
contained therein, have agreed to make loans or otherwise to extend credit to
the Pledgor; and
WHEREAS, the Pledgor has entered into an Amended and Restated Revolving
Credit Agreement, dated as of November 25, 1992 and amended and restated as of
the date hereof (as amended and in effect from time to time, the "LLC Credit
Agreement"), with Hudson General LLC (the "Company"), the Banks and The First
National Bank of Boston, as agent, pursuant to which the Banks, subject to the
terms and conditions contained therein, have agreed to make loans or otherwise
to extend credit to the Pledgor and the Company; and
WHEREAS, it is a condition precedent to the Banks' making any loans or
otherwise extending any credit to the Pledgor under the HGC Credit Agreement or
the LLC Credit Agreement that the Pledgor execute and deliver to the Collateral
Agent, for the benefit of the Banks and the Collateral Agent, a pledge agreement
in substantially the form hereof; and
WHEREAS, the Pledgor wishes to grant security interests in favor of the
Collateral Agent as herein provided;
NOW, THEREFORE, in consideration of the promises contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION 1. DEFINITIONS. The term "Collateral" as used herein means the
Pledged Interests (as defined below) and other property at any time, whether now
or hereafter, pledged to the Collateral Agent hereunder and all income
therefrom, increases therein and proceeds thereof. The term "Default" as used
herein means a Default under the HGC Credit Agreement or, prior to the
Collateral Release Date, under the LLC Credit Agreement. All other capitalized
terms which are used herein without definition and which are defined in the HGC
Credit Agreement shall have the same meanings herein as in the HGC Credit
Agreement.
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SECTION 2. PLEDGE OF INTERESTS. (a) To secure the due and prompt payment
and performance of the Obligations (as defined below), the Pledgor hereby
pledges, assigns, grants a continuing security interest in and lien on, and
delivers to the Collateral Agent, all right, title and interest of the Pledgor,
whether now existing or hereafter arising, in and to the Company as a member of
the Company, including, without limitation, the membership interests described
on Schedule 1 attached hereto (the "Pledged Interests") (as such schedule may be
amended and supplemented from time to time by the Pledgor with the consent of
the Banks in accordance with Paragraph 5.23 and Paragraphs 10(c) and 10(d) of
the HGC Credit Agreement), and, in each case, all rights to receive any
distributions or payments due or to become due to the Pledgor in respect of the
Pledged Interests under the terms of the Company's certificate of formation and
Limited Liability Company Agreement and all other economic benefits of the
Pledgor's interest in the Company, whether cash, property or otherwise, at any
time owing or payable to the Pledgor on account of the Pledged Interests, and
the right, but not the obligation to become a substitute member of the Company.
This pledge and security interest is for collateral purposes only, and the
Collateral Agent shall not, by virtue of this Agreement, or its receipt of any
distributions or other amounts from the Company, be deemed to be a member of the
Company, or to have assumed or become liable for any obligation of the Company
or the Pledgor.
(b) In case the Pledgor shall acquire, prior to the Collateral
Release Date, any additional membership interests of the Company (other than
membership interests received from the Company in order for the Pledgor to
satisfy its obligations under Article III of the Purchase Agreement) or any
securities exchangeable for or convertible into membership interests of the
Company, whether by purchase, dividend, distribution of capital or otherwise,
the Pledgor shall forthwith deliver to and pledge such membership interests or
other securities to the Collateral Agent under this Agreement. The Pledgor
agrees that the Collateral Agent may from time to time attach as Schedule 1
hereto an updated list of the membership interests at such time pledged
hereunder.
SECTION 3. PRO-RATA SECURITY FOR OBLIGATIONS. (a) This Agreement and
the pledge of the Collateral hereunder is made with the Collateral Agent as
security for (i) all obligations of the Pledgor to the Banks and the Agent under
or in relation to the HGC Credit Agreement, the promissory notes executed and
delivered by the Pledgor to the Banks in connection therewith and the other Loan
Documents, as such instruments are originally executed or as modified, amended,
restated, supplemented or extended, (ii) prior to the Collateral Release Date,
all of the obligations of the Pledgor and the Company (whether or not the HGC
Release Date (as defined in the LLC Credit Agreement) has occurred) to the Banks
and the Agent under or in relation to the LLC Credit Agreement, the promissory
notes executed and delivered by HGC and the Company to the Banks in connection
therewith and the other Loan Documents (as defined in the LLC Credit Agreement),
as such instruments are originally executed or as modified, amended, restated,
supplemented or extended, and (iii) all obligations of the Pledgor to the Banks
arising out of any extension, refinancing or refunding of any of the foregoing
obligations, whether such obligations are now existing or hereafter acquired or
arising, direct or indirect, joint or several, absolute or contingent, due or to
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become due, matured or unmatured, liquidated or unliquidated, arising by
contract, operation of law or otherwise (the foregoing obligations shall be
referred to herein, collectively, as the "Obligations").
(b) All amounts owing with respect to the Obligations shall be
secured pro rata by the Collateral without distinction as to whether some
Obligations are then due and payable and other Obligations are not then due and
payable. Upon any realization upon the Collateral by the Collateral Agent,
whether by receipt of dividends pursuant to Section 7 hereof or upon sale of all
or part of the Collateral pursuant to Section 8 hereof or otherwise, the Pledgor
agrees that the proceeds thereof shall be applied as set forth in Paragraph
10(e) of the HGC Credit Agreement (whether or not such agreement is then in
effect).
SECTION 4. LIQUIDATION, RECAPITALIZATION. Any sums paid upon or with
respect to any of the Pledged Interests upon the liquidation or dissolution of
the Company shall be paid over to the Collateral Agent to be held by it as
security for the Obligations; and in case any distribution of capital shall be
made on or in respect of any of the Pledged Interests or any property shall be
distributed upon or with respect to any of the Pledged Interests pursuant to the
recapitalization or reclassification of the capital of the issuer thereof or
pursuant to the reorganization of such issuer, the property so distributed shall
be delivered to the Collateral Agent to be held by it as security for the
Obligations. All sums of money and property paid or distributed in respect of
the Pledged Interests upon such a liquidation, dissolution, recapitalization or
reclassification which are received by the Pledgor shall, until paid or
delivered to the Collateral Agent, be held in trust for the Collateral Agent as
security for the Obligations.
SECTION 5. WARRANTY OF OWNERSHIP; CAPITALIZATION. (a) The Pledgor
warrants that it is the sole record and beneficial owner of the Pledged
Interests described in Section 2 hereof, subject to no pledges, liens, security
interests, charges, options, restrictions or other encumbrances except for the
security interest created by this Agreement and the option granted to LAGS as
set forth in the Purchase Agreement, and that it has the power, authority and
legal right to pledge all of such Pledged Interests pursuant to this Agreement.
(b) The Pledgor covenants that it will not, and will not
permit the Company to, authorize, issue or sell any membership interests in the
Company, or grant any options, warrants or other rights to purchase any
membership interests in the Company except for the option granted to LAGS (or an
affiliate of LAGS) under Article III of the Purchase Agreement and the issuance
by the Company of membership interests to LAGS (or an affiliate of LAGS) in
connection therewith.
(c) The Pledgor covenants that it will defend the Collateral
Agent's rights and security interest in such Pledged Interests against the
claims and demands of all persons whomsoever; and the Pledgor covenants that it
will have the like title to and right to pledge any other Collateral and will
likewise defend the Collateral Agent's rights and security interest therein.
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SECTION 6. CORPORATE POWER, AUTHORITY. The execution and delivery of
this Agreement and pledging of the Pledged Interests described in Section 2
hereof are within the Pledgor's corporate power and have been duly authorized by
all necessary corporate action and such execution and delivery and the pledging
of such Pledged Interests do not contravene any law or any rule or regulation
thereunder or any provision of the charter documents or by-laws of the Pledgor
or of any judgment, decree or order of any tribunal or of any agreement or
instrument to which the Pledgor is a party or by which it or any of its property
is bound or constitute a default thereunder.
SECTION 7. DISTRIBUTIONS, PRINCIPAL, INTEREST AND VOTING PRIOR TO
DEFAULT. Unless and until a Default shall have occurred and be continuing, the
Pledgor shall be entitled (a) to receive all cash distributions paid in respect
of the Pledged Interests and (b) to vote the Pledged Interests and to give
consents, waivers and ratifications in respect of the Pledged Interests;
provided, however, that no vote shall be cast, or consent, waiver or
ratification given or action taken which would be inconsistent with or violate
any provision of the HGC Credit Agreement, the LLC Credit Agreement (prior to
the Collateral Release Date), any other Security Document or this Agreement.
SECTION 8. REMEDIES. (a) Upon the occurrence and during the continuance
of a Default, the Collateral Agent shall thereafter have the following rights
and remedies (to the extent permitted by applicable law and subject to
compliance by the Collateral Agent with the provisions of the Company's Limited
Liability Company Agreement) in addition to the rights and remedies of a secured
party under the Uniform Commercial Code of Massachusetts, all such rights and
remedies being cumulative, not exclusive, and enforceable alternatively,
successively or concurrently:
(i) if the Collateral Agent so elects and gives notice of such
election to the Pledgor, the Collateral Agent may vote any or all of
the Pledged Interests possessing voting rights (whether or not the same
shall have been transferred into its name or the name of its nominee or
nominees) and give all consents, waivers and ratifications in respect
of the Pledged Interests and otherwise act with respect thereto as
though it were the outright owner thereof, the Pledgor hereby
irrevocably constituting and appointing the Collateral Agent the proxy
and attorney-in-fact of the Pledgor, with full power of substitution,
to do so;
(ii) the Collateral Agent may demand, sue for, collect or make
any compromise or settlement in respect of any Collateral held by it
hereunder that it deems suitable;
(iii) after ten (10) days' notice to the Pledgor and
compliance by the Collateral Agent with the terms of the Company's
Limited Liability Company Agreement, the Collateral Agent may sell,
resell, assign and deliver, or otherwise dispose of any or all of the
Collateral, for cash and/or credit and upon such terms at such place or
places and at such time or times and to such persons, firms, companies
or corporations as the Collateral Agent shall approve, all without
demand for performance by the Pledgor or advertisement or any further
notice whatsoever except such as may be required by law; and
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(iv) the Collateral Agent may at any time, at its option,
cause all or any part of the Pledged Interests held by it to be
transferred into its name or the name of its nominee or nominees,
receive any income thereon and hold such income as additional
collateral or apply it to the Obligations.
(b) Except as otherwise provided herein and in the Company's Limited
Liability Company Agreement, the Collateral Agent may enforce its rights
hereunder without any other notice and without compliance with any other
condition precedent now or hereafter imposed by statute, rule of law or
otherwise (all of which are hereby expressly waived by the Pledgor, to the
fullest extent permitted by law). If any of the Collateral is sold by the
Collateral Agent upon credit or for future delivery, the Collateral Agent shall
not be liable for the failure of the purchaser to pay the same and, in such
event, the Collateral Agent may resell such Collateral. The Collateral Agent may
buy any part or all of the Collateral at any public sale and, if any part or all
of the Collateral is of a type customarily sold in a recognized market or is of
a type which is the subject of widely-distributed standard price quotations, the
Collateral Agent may buy at private sale and may make payments therefor by any
means. The Collateral Agent shall apply the cash proceeds actually received from
any sale or other disposition to the reasonable expenses of retaking, holding,
preparing for sale, selling and the like, to reasonable attorneys' fees, and all
legal expenses, travel and other expenses which may be incurred by the
Collateral Agent in attempting to collect the Obligations or to enforce this
Agreement or in the prosecution or defense of any action or proceeding related
to the subject matter of this Agreement; and then to the Obligations as set
forth in Paragraph 10(e) of the HGC Credit Agreement (whether or not such
agreement is then in effect) and any surplus shall be paid to the Pledgor.
(c) The Pledgor recognizes that the Collateral Agent may be unable to
effect a public sale of the Pledged Interests by reason of certain prohibitions
contained in the Securities Act of 1933, as amended, but may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
consistent with applicable laws. The Pledgor agrees that any such private sales
may be at prices and other terms less favorable to the seller than if sold at
public sales and that such private sales shall not by reason thereof be deemed
not to have been made in a commercially reasonable manner. The Collateral Agent
shall be under no obligation to delay a sale of any of the Pledged Interests for
the period of time necessary to permit the issuer of such securities to register
such securities for public sale under the Securities Act of 1933, as amended,
even if the issuer would agree to do so.
SECTION 9. MARSHALLING. The Collateral Agent shall not be required to
marshal any present or future security for (including but not limited to this
Agreement and the Collateral pledged hereunder), or guaranties of, the
Obligations or any of them, or to resort to such security or guaranties in any
particular order; and all of its rights hereunder and in respect of such
securities and guaranties shall be cumulative and in addition to all other
rights, however existing or arising. To the extent that it lawfully may, the
Pledgor hereby agrees that it will not invoke any law relating to the
marshalling of collateral which might cause delay in or impede the enforcement
of the Collateral Agent's rights under this Agreement or under any other
instrument
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evidencing any of the Obligations or under which any of the Obligations is
outstanding or by which any of the Obligations is secured or guaranteed, and, to
the extent that it lawfully may, the Pledgor hereby irrevocably waives the
benefits of all such laws.
SECTION 10. PLEDGOR'S OBLIGATIONS NOT AFFECTED. The obligations of the
Pledgor hereunder shall remain in full force and effect without regard to, and
shall not be impaired by (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of the Pledgor;
(b) any exercise or nonexercise, or any waiver, by the Collateral Agent of any
right, remedy, power or privilege under or in respect of any of the Obligations
or any security thereof (including this Agreement); (c) any amendment to or
modification of the HGC Credit Agreement, the other Loan Documents, the LLC
Credit Agreement, the other Loan Documents (as defined in the LLC Credit
Agreement) or any of the Obligations; (d) any amendment to or modification of
any instrument (other than this Agreement) securing any of the Obligations; or
(e) the taking of additional security for, or any guaranty of, any of the
Obligations or the release or discharge or termination of any security or
guaranty for any of the Obligations; and whether or not the Pledgor shall have
notice or knowledge of any of the foregoing.
SECTION 11. TRANSFER BY PLEDGOR. Without the prior written consent of
the Collateral Agent, the Pledgor will not sell, assign, transfer or otherwise
dispose of, grant any option with respect to, or pledge or grant any security
interest in or otherwise encumber any of the Collateral or any interest therein,
except for the pledge thereof provided for in this Agreement and except as
provided in the Purchase Agreement.
SECTION 12. NO FURTHER ACTIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or other
regulatory body or other person that has not been received, taken or made is
required for the grant by the Pledgor of the security interests granted hereby
or for the execution, delivery or performance of this Agreement by the Pledgor,
or, except for (a) the filing of financing statements and continuation
statements with respect thereto and (b) the delivery of the certificates
representing the Pledged Interests along with the appropriate instruments of
assignment duly executed in blank, for (i) the perfection and maintenance of the
security interests hereunder (including the first priority nature of such
security interests) or (ii) the exercise by the Collateral Agent of the rights
or the remedies in respect of the Collateral pursuant to this Agreement (other
than the authorization of the requisite Banks).
SECTION 13. FURTHER ASSURANCES. The Pledgor will do all such acts, and
will furnish to the Collateral Agent all such financing statements,
certificates, legal opinions and other documents and will obtain all such
governmental consents and corporate approvals and will do or cause to be done
all such other things as the Collateral Agent may reasonably request from time
to time in order to give full effect to this Agreement and to secure the rights
of the Collateral Agent hereunder.
SECTION 14. PLEDGEE'S EXONERATION. Under no circumstances shall the
Collateral Agent be deemed to assume any responsibility for, or obligation or
duty with
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respect to, any part or all of the Collateral of any nature or kind, other than
the physical custody thereof, or any matters or proceedings arising out of or
relating thereto. The Collateral Agent shall not be required to take any action
of any kind to collect, preserve or protect its or the Pledgor's rights in the
Collateral or against other persons asserting rights in the Collateral. The
Collateral Agent's prior recourse to any part or all of the Collateral shall not
constitute a condition of any demand, suit or proceeding for payment or
collection of the Obligations.
SECTION 15. POWER OF ATTORNEY. (a) The Pledgor acknowledges the
Collateral Agent's right, to the extent permitted by applicable law, singly to
execute and file financing or continuation statements and similar notices
required by applicable law, and amendments thereto, concerning the Collateral
without execution by the Pledgor. A carbon, photographic or other reproduction
of this Agreement or any financing statement covering the Collateral or any part
thereof shall be sufficient as a financing statement where permitted by law.
(b) The Pledgor hereby irrevocably appoints the Collateral Agent as its
attorney-in-fact, effective at all times subsequent to the occurrence and during
the continuance of a Default with full authority in the place and stead of the
Pledgor and in the name of the Pledgor or otherwise, to take any action and to
execute any instrument which the Collateral Agent may reasonably deem necessary
or advisable to accomplish the purpose of this Agreement, including, without
limitation, the power and right (i) to endorse the Pledgor's name on any checks,
notes, acceptances, money orders, drafts, filings or other forms of payment or
security that may come into the Collateral Agent's possession; and (ii) to do
all other things which the Collateral Agent then determines to be necessary to
carry out the terms of this Agreement. The power conferred on the Collateral
Agent hereunder is solely to protect the Collateral Agent's interests in the
Collateral and shall not impose any duty upon the Collateral Agent to exercise
such power.
SECTION 16. NO WAIVER. No act, failure or delay by the Collateral Agent
shall constitute a waiver of its rights and remedies hereunder or otherwise, nor
shall any single or partial exercise by the Collateral Agent of any right,
remedy or power hereunder preclude any other exercise or future exercise of any
other right, remedy or power. No single or partial waiver by the Collateral
Agent of any default or right or remedy which it may have shall operate as a
waiver of any other default, right or remedy or of the same default, right or
remedy on a future occasion. The Pledgor hereby waives presentment, notice of
dishonor and protest of all instruments included in or evidencing any of the
Obligations or the Collateral, and any and all other notices and demands
whatsoever (except as expressly provided herein).
SECTION 17. NOTICES. Except as otherwise expressly provided herein, all
notices and other communications made or required to be given pursuant to this
Agreement shall be given in the manner and delivered to addresses of the Pledgor
and the Collateral Agent specified in the HGC Credit Agreement.
SECTION 18. TERMINATION. (a) Notwithstanding any other provision of
this Agreement and subject to Paragraph 5.23 of the HGC Credit Agreement, the
Pledgor
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shall be entitled to the return, at the Pledgor's expense, of the Collateral
provided by the Pledgor in the possession or control of the Collateral Agent
either (i) upon delivery of a letter addressed to the Collateral Agent and
signed by each of the Banks specifying that the Banks have received evidence
satisfactory to them that (A) all litigation against HGC and Aviation resulting
from or relating to the acquisition in 1984 of certain assets of the airport
ground services business of Innotech Aviation Limited has been fully and finally
dismissed (and such dismissal is not appealable) or settled in full, (B) HGC and
Aviation have satisfied in full all of their payment obligations, if any, with
respect to such litigation, (C) the payment thereof has not resulted in the
occurrence of any Default or condition which would, with either or both the
giving of notice or lapse of time, result in a Default, and (D) no Default or
condition which would, with either or both the giving of notice or lapse of
time, result in a Default then exists or (ii) upon the indefeasible payment and
performance of the Obligations in full.
(b) Upon the delivery of a letter addressed to the Collateral Agent
signed by the Banks specifying that the Banks have received evidence that the
release of certain of the Collateral is permitted under Paragraph 5.23 and
Paragraph 10(d) of the HGC Credit Agreement (from and after the Collateral
Release Date) or Paragraph 10(c) of the HGC Credit Agreement (subject to the
provisions of such paragraph), the Collateral Agent shall return such Collateral
to the Pledgor and execute and deliver to the Pledgor such releases with respect
to the lien hereof as the Pledgor may reasonably request with respect to such
Collateral.
SECTION 19. CONSENTS, AMENDMENTS, WAIVERS. Any term of this Agreement
may be amended, and the performance or observance by the Pledgor of any of the
terms of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only in accordance with
Paragraph 11.7 of the HGC Credit Agreement or, if the HGC Credit Agreement is no
longer in effect, Paragraph 11.7 of the LLC Credit Agreement.
SECTION 20. PARTIES IN INTEREST. This Agreement and all obligations of
the Pledgor shall be binding upon the successors and assigns of the parties
hereto, provided, that the Pledgor may not assign or transfer its rights
hereunder without the prior written consent of the Collateral Agent.
SECTION 21. GOVERNING LAW. This Agreement and the obligations of the
Pledgor hereunder shall be deemed to be a contract under seal and shall for all
purposes be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts (excluding the laws applicable to conflicts or
choice of law).
SECTION 22. MISCELLANEOUS PROVISIONS. If any term of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity of all other
terms hereof shall be in no way affected thereby, and this Agreement shall be
construed and be enforceable as if such invalid, illegal or unenforceable term
had not been included herein. The Pledgor acknowledges receipt of a copy of this
Agreement. The descriptive
71
-9-
section headings have been inserted for convenience of reference only and do not
define or limit the provisions hereof. Terms used herein without definition
which are defined in the Uniform Commercial Code of Massachusetts have such
defined meanings herein, unless the context otherwise indicates or requires.
This Agreement and any amendment hereof may be executed in several counterparts
and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.
IN WITNESS WHEREOF, the Pledgor and the Collateral Agent have caused
this Agreement to be duly executed as an instrument under seal as of the date
first above written.
HUDSON GENERAL
CORPORATION
By:
---------------------------
Title:
THE FIRST NATIONAL BANK
OF BOSTON, AS COLLATERAL AGENT
By:
---------------------------
Title:
72
SCHEDULE 1
PLEDGED INTERESTS
Number of Membership
Certificate Number Date of Issuance Interests
- ------------------ ---------------- ---------
Number A-1 May 31, 1996 740 Units
(effective as of June 1,
1996)
73
EXHIBIT D
[Letterhead of Hudson General Corporation]
June 1, 1996
The First National Bank of Boston
100 Federal Street
Boston, MA 02110
European American Bank
1 EAB Plaza
Uniondale, NY 11555
The Chase Manhattan Bank, N.A.
135 Pinelawn Street
Melville, NY 11747
Re: Hudson General Corporation
Ladies and Gentlemen:
I am Vice President-General Counsel of Hudson General
Corporation, a Delaware corporation ("HGC"), and have acted as counsel for HGC
in connection with the execution and delivery by HGC of the Revolving Credit
Agreement, dated as of June 1, 1996 (the "Credit Agreement") among HGC, The
First National Bank of Boston ("FNB"), in its individual capacity, European
American Bank ("EAB"), The Chase Manhattan Bank, N.A. ("Chase", and collectively
with FNB and EAB, the "Banks") and The First National Bank of Boston, as agent
for the Banks (the "Agent"), the Pledge Agreement, dated as of June 1, 1996 (the
"Pledge Agreement"), between HGC and The First National Bank of Boston, as
collateral agent (the "Collateral Agent"), and certain other agreements,
instruments and documents related to the Credit Agreement. This opinion is being
delivered pursuant to Paragraph 4A.4 of the Credit Agreement. Capitalized terms
used and not otherwise defined herein shall have the same meanings herein as in
the Credit Agreement.
In rendering the opinions set forth herein, I have examined
originals or copies, certified or otherwise identified to my satisfaction, of
the following:
(a) the Credit Agreement;
(b) the Revolving Credit Notes, each dated as of June 1, 1996,
issued by HGC to the respective Banks (each a "Note" and collectively, the
"Notes");
74
The First National Bank of Boston
European American Bank
The Chase Manhattan Bank, N.A.
June 1, 1996
Page 2
(c) the Pledge Agreement;
(d) the Amended and Restated Revolving Credit Agreement, dated
as of November 25, 1992 and amended and restated as of June 1, 1996 (the "LLC
Credit Agreement") among HGC, Hudson General LLC, a Delaware limited liability
company ("Hudson LLC"), the Banks and the Agent named therein (the "LLC Credit
Agreement Secured Parties");
(e) certified copies of the Certificate of Incorporation and
By-Laws of HGC;
(f) a certified copy of certain resolutions of the Board of
Directors of HGC adopted on May 17, 1996;
(g) certificates from public officials in the State of
Delaware and in the State of New York as to the good standing of HGC in each
such jurisdiction;
(h) unfiled, but signed copies of financing statements naming
Hudson General Corporation, as debtor, and The First National Bank of Boston, as
Collateral Agent, as secured party, which I understand will be filed within ten
(10) days of the transfer of the security interest recited therein in the
offices of the Secretary of State of the State of New York and Nassau County,
New York (such filing offices, the "Filing Offices" and such financing
statements, the "Financing Statements");
(i) the Perfection Certificate of HGC (the "Perfection
Certificate"); and
(j) such other documents as I have deemed necessary or
appropriate as a basis for the opinions set forth below.
In my examination I have assumed the genuineness of all
signatures, including indorsements (other than those on behalf of HGC, with all
of which I am familiar), the legal capacity of natural persons, the authenticity
of all documents submitted to me as originals, the conformity to original
documents of all documents submitted to me as certified, conformed or
photostatic copies, and the authenticity of the originals of such copies. As to
any facts material to this opinion which I did not independently establish or
verify, I have relied upon statements and representations of officers and other
representatives of HGC and others.
Unless otherwise indicated, references in this opinion to the
"Relevant UCC" shall mean the Uniform Commercial Code as in effect on the date
hereof in each of the State of New York and the Commonwealth of Massachusetts.
References to the "New York UCC" shall mean the Uniform Commercial Code as in
effect on the date hereof in the State of New York and references to the "Mass.
UCC" shall mean the Uniform Commercial Code as in effect on the date hereof in
the Commonwealth of Massachusetts. The Credit Agreement, the Notes and the
Pledge Agreement shall hereinafter be referred to as the "Loan Documents". The
Banks, the Agent, the Collateral Agent, and the LLC Credit Agreement Secured
Parties shall hereinafter be referred to as the "Secured Parties".
75
The First National Bank of Boston
European American Bank
The Chase Manhattan Bank, N.A.
June 1, 1996
Page 3
I am admitted to the Bar in the State of New York, and I
express no opinion as to the laws of any jurisdiction other than (i) the laws of
the State of New York, (ii) the General Corporation Law of the State of
Delaware, (iii) the federal laws of the United States of America, other than
such federal laws which relate to the creation and perfection of security
interests or the assignment of rights, including, without limitation, the
Federal Assignment of Claims Act of 1940, as amended and (iv) the Mass. UCC to
the extent necessary to express the opinions set forth in paragraphs 7 and 8
hereof. Each of the Loan Documents provides that it is governed by, and to be
construed in accordance with, the laws of the Commonwealth of Massachusetts. For
purposes of my opinion with respect to the laws of the Commonwealth of
Massachusetts, I have assumed with your consent and without any inquiry that the
applicable laws of the Commonwealth of Massachusetts are the same as those of
the State of New York.
My opinions are also subject to the following qualifications:
(a) I have assumed that the Credit Agreement and the Pledge
Agreement have been duly authorized, executed and delivered by the applicable
Secured Parties and are enforceable against such parties in accordance with
their respective terms;
(b) enforcement of the Loan Documents may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by general principles of equity
(regardless of whether enforcement is sought in equity or at law);
(c) certain of the remedial provisions contained in the Pledge
Agreement, including waivers, with respect to the exercise of remedies against
the collateral may be unenforceable in whole or in part, but the inclusion of
such provisions does not affect the validity of the Pledge Agreement, and the
Pledge Agreement taken as a whole, together with applicable law, contains
adequate provisions for the practical realization of the benefits of the
security created thereby; and
(d) I express no opinion as to the effect on the opinions
expressed herein of (i) the compliance or non-compliance of any party (other
than HGC) to the Loan Documents with any state, federal or other laws or
regulations applicable to any of them, (ii) the legal or regulatory status or
the nature of the business of any of the Secured Parties, (iii) the sale or
other disposition by any of the Secured Parties of all or any portion of any
securities pledged by HGC (which will require compliance with applicable federal
and state securities laws), or (iv) any fraudulent transfer or similar laws.
Based upon the foregoing and subject to the limitations,
qualifications, exceptions and assumptions set forth herein, I am of the opinion
that:
1. HGC is a corporation which has been duly
incorporated and is subsisting and in good standing under the laws of the State
of Delaware, and has all requisite
76
The First National Bank of Boston
European American Bank
The Chase Manhattan Bank, N.A.
June 1, 1996
Page 4
corporate power to own its property and conduct its business as now conducted
and as presently contemplated.
2. To the best of my knowledge, HGC is duly qualified
and in good standing as a foreign corporation and is duly authorized to do
business in each jurisdiction where the nature of its properties or its business
requires such qualification except for the State of Alabama.
3. The execution and delivery by HGC of the Loan
Documents, and the performance by HGC of its obligations under the Loan
Documents, are within the corporate authority of HGC, have been duly authorized
by proper corporate proceedings, will not contravene any provision of HGC's
Certificate of Incorporation or By-Laws, or contravene any provision of, or
result in the creation of any mortgage, lien, pledge, charge, security interest
or other encumbrance upon any of the property of HGC (other than liens created
under or permitted by the terms of the Loan Documents) under, any other
agreement, instrument or undertaking binding upon HGC or any property of HGC,
and do not conflict with or result in any breach or contravention of any
provision of any law, statute, rule or regulation to which HGC is subject or any
judgment, order, writ, injunction, license or permit applicable to HGC. HGC has
duly executed and delivered each of the Loan Documents.
4. Each of the Loan Documents constitutes the valid
and legally binding obligation of HGC, enforceable against HGC in accordance
with its terms. With respect to the foregoing, I express no opinion, however, as
to rights to indemnification and rights of contribution provided for in any of
the Loan Documents to the extent such rights are violative of federal or state
securities laws, rules or regulations or public policy.
5. To the best of my knowledge, except as described
in Schedule 3.8 to the Credit Agreement, there is no litigation pending or
threatened against HGC before any court, tribunal or administrative agency or
board which is of a substantial amount and which, if adversely determined, might
reasonably be expected to materially adversely affect the ability of HGC to
perform its obligations under the Loan Documents, or in respect of the Revolving
Credit Loans, after taking into account any applicable insurance coverage.
6. The execution and delivery by HGC of each of the
Loan Documents and the performance by HGC of its obligations under each of the
Loan Documents, each in accordance with its terms, do not require any approval
or consent of, or filing with, any governmental or other agency or authority
except for (a) approvals, consents and filings specified in the Loan Documents
and (b) those already obtained or made. Notwithstanding the foregoing, except as
expressly set forth in paragraphs 7 and 8 hereof, I express no opinion as to the
validity, perfection or priority of any security interest created by the Pledge
Agreement.
7. I note that the proper legal characterization of
an interest in a limited liability company is a matter not entirely free from
doubt. Accordingly, I express no opinion as
77
The First National Bank of Boston
European American Bank
The Chase Manhattan Bank, N.A.
June 1, 1996
Page 5
to the proper characterization of HGC's interest in Hudson LLC. To the extent
that such interest is characterized as a "general intangible" (as defined in
Section 9-106 of the Relevant UCC) then my opinion in this paragraph 7 shall be
applicable. To the extent that such interest is characterized as a "certificated
security" (as defined in Section 8-102 of the Relevant UCC) my opinion in
paragraph 8 shall be applicable.
To the extent that HGC's interest in Hudson LLC is
characterized as a "general intangible" (as defined in Section 9-106 of the
Relevant UCC) then the provisions of the Pledge Agreement are effective to
create, in favor of the Collateral Agent for the benefit of the Secured Parties
to secure the Obligations (as defined in the Pledge Agreement), a valid security
interest under the Mass. UCC in HGC's rights in Class A units (the "Pledged
Units") of Hudson LLC identified in Schedule I hereto (the "Intangible
Collateral"). The Financing Statements are in appropriate form for filing in
each of the Filing Offices under the New York UCC. The security interest in
favor of the Collateral Agent for the benefit of the Secured Parties the
Intangible Collateral which is described in the Financing Statements will be
perfected upon the filing of the Financing Statements in the respective Filing
Offices.
My opinion in paragraph 7 with respect to the security
interest of the Collateral Agent for the benefit of the Secured Parties in the
Pledged Units is subject to the following qualifications:
(a) The security interest opinions are limited to Article 9 of
the Relevant UCC, and therefore such opinions do not address (i) laws of
jurisdictions other than the State of New York or the Commonwealth of
Massachusetts, and of the State of New York and the Commonwealth of
Massachusetts except for Article 9 of the Relevant UCC, (ii) collateral of a
type not subject to Article 9 of the Relevant UCC, and (iii) under Section 9-103
of the Relevant UCC, what law governs perfection of the security interests
granted in the collateral covered by this opinion. In addition, as noted above,
I have assumed without any inquiry that the Mass. UCC is identical in all
respects to the New York UCC;
(b) I call to your attention that under the Relevant UCC,
events occurring subsequent to the date hereof may affect any security interest
subject to the Relevant UCC including, but not limited to, factors of the type
identified in Section 9-306 with respect to proceeds; Section 9-402 with respect
to changes in name, structure and corporate identity of the debtor; Section
9-103 with respect to changes in the location of the collateral and the location
of the debtor; Section 9-316 with respect to subordination agreements; Section
9-403 with respect to continuation statements; and Sections 9-307, 9-308 and
9-309 with respect to subsequent purchasers of the collateral. In addition,
actions taken by a secured party (e.g., releasing or assigning the security
interest, delivering possession of the collateral to the debtor or another
person and voluntarily subordinating a security interest) may affect the
validity, perfection or priority of a security interest;
(c) I express no opinion with respect to the priority of the
security interest of the Collateral Agent for the benefit of the Secured Parties
in any of the Pledged Units; and
78
The First National Bank of Boston
European American Bank
The Chase Manhattan Bank, N.A.
June 1, 1996
Page 6
(d) I call to your attention that becoming a member of Hudson
LLC may require compliance with the terms of the Limited Liability Company
Agreement, dated as of June 1, 1996 (the "LLC Agreement") among HGC, Hudson LLC
and the other parties named therein, or other action.
8. To the extent that HGC's interest in Hudson LLC is
characterized as a "certificated security" (as defined in Section 8-102 of the
Relevant UCC), the delivery to the Collateral Agent for the benefit of the
Secured Parties in the Commonwealth of Massachusetts of the certificates for the
Class A units of Hudson LLC identified in Schedule I hereto, together with the
Pledge Agreement, is effective under the Mass. UCC to create in favor of the
Collateral Agent for the benefit of the Secured Parties, a valid and perfected
security interest in the Pledged Units to secure the Obligations (as defined in
the Pledge Agreement). Under the Mass. UCC, no interest of any other creditor of
HGC is equal or prior to the security interest of the Collateral Agent for the
benefit of the Secured Parties in the Pledged Units.
My opinion in paragraph 8 with respect to the security
interest of the Collateral Agent for the benefit of the Secured Parties in the
Pledged Units is subject to the following qualifications:
(a) The security interest opinions are limited to Article 8 of
the Mass. UCC, and therefore such opinions do not address (i) laws of
jurisdictions other than the Commonwealth of Massachusetts, and of the
Commonwealth of Massachusetts except for Article 8 of the Mass. UCC, (ii)
collateral of a type not subject to Article 8 of the Mass. UCC, and (iii) under
Section 9-103 of the Mass. UCC, what law governs perfection of the security
interests granted in the collateral covered by this opinion. In addition, as
noted above, I have assumed without any inquiry that the Mass. UCC is identical
in all respects to the New York UCC;
(b) I call to your attention that under the Mass. UCC, events
occurring subsequent to the date hereof may affect any security interest subject
to the Mass. UCC including, but not limited to, factors of the type identified
in Section 9-306 with respect to proceeds; Section 9-402 with respect to changes
in name, structure and corporate identity of the debtor; Section 9-103 with
respect to changes in the location of the collateral and the location of the
debtor; Section 9-316 with respect to subordination agreements; Section 9-403
with respect to continuation statements; and Sections 9-307, 9-308 and 9-309
with respect to subsequent purchasers of the collateral. In addition, actions
taken by a secured party (e.g., releasing or assigning the security interest,
delivering possession of the collateral to the debtor or another person and
voluntarily subordinating a security interest) may affect the validity,
perfection or priority of a security interest;
(c) I express no opinion with respect to proceeds of, or
distributions on the Pledged Units;
(d) I have assumed that each of the Secured Parties acquired
its interest in the Pledged Units for value and in good faith and that none of
the Secured Parties has notice prior to
79
The First National Bank of Boston
European American Bank
The Chase Manhattan Bank, N.A.
June 1, 1996
Page 7
or on the later of the date of delivery and the date hereof of an adverse claim
with respect to the Pledged Units;
(e) I have assumed that each of the Pledged Units is indorsed
to or registered in the name of the Collateral Agent for the benefit of the
Secured Parties or is indorsed in blank;
(f) I express no opinion with respect to the priority of the
security interests of the Collateral Agent for the benefit of the Secured
Parties in the Pledged Units against a lien creditor (as such term is defined in
Section 9-301(3) of the Mass. UCC) with respect to future advances to the extent
set forth in Section 9-301(4) of the Mass. UCC; and
(g) I call to your attention that becoming a member of Hudson
LLC may require compliance with the terms of the LLC Agreement or other action.
9. Upon the consummation of the transactions
contemplated by the Purchase Agreement, HGC shall be the registered owner of the
Pledged Units.
10. The Notes constitute "Superior Indebtedness"
under the Indenture, dated as of July 1, 1986 (the "Indenture") between HGC and
Chemical Bank Delaware, as trustee (the "Trustee") as amended by the First
Supplemental Indenture, dated as of April 22, 1996, among HGC, Hudson LLC and
the Trustee, relating to HGC's 7% Convertible Subordinated Debentures Due 2011
(the "Debentures"). The Notes are entitled to the benefits of the provisions of
such Indenture which subordinate such Debentures to "Superior Indebtedness".
This opinion is being furnished only to you and is solely for
your benefit, and is not to be used, circulated, relied upon or otherwise
referred to for any other purpose without my prior written consent provided that
the LLC Credit Agreement Secured Parties on the date hereof may rely on this
opinion on and as of the date hereof.
Very truly yours,
/s/ Noah E. Rockowitz
Noah E. Rockowitz
Vice President & General Counsel
80
Schedule I to
Opinion Letter of
Noah E. Rockowitz
Dated June 1, 1996
Certificates for the Class A Units
of Hudson General LLC
---------------------
Number of Certificate Date of
Registered Owner Membership Units Number Issuance
- ---------------- ---------------- ------ --------
Hudson General 740 A-1 May 31, 1996
Corporation (effective as of
June 1, 1996)
81
HUDSON GENERAL CORPORATION
SUBSIDIARIES
SCHEDULE 3.1
Percentage
Jurisdiction of
of Capital
Incorporation Stock Owned
------------- -----------
Hudson Aviation Services, Inc. California California 100%
Hudson General Coach Lines, Inc. (1) California 100%
Hudson Aviation Services, Inc. Delaware Delaware 100%
Hudson Aviation Services, Inc. Massachusetts 100%
Hudson Aviation Services-Oakland, Inc. California 100%
Hudson Kohala Inc. Delaware 100%
Hudson General LLC Delaware 74%
(1) Owned by Hudson Aviation Services, Inc. California
82
HUDSON GENERAL CORPORATION
LITIGATION
SCHEDULE 3.8
1. Texaco Canada Inc. (now McColl-Frontenac Inc.) v.
Petro-Canada Inc., Hudson General Aviation Services Inc.
and Hudson General Corporation
In 1988, Texaco Canada Inc. ("Texaco") (now McColl-Frontenac Inc.)
instituted a lawsuit in the Supreme Court of Ontario, Canada against HGC,
Aviation and Petro-Canada Inc., the corporation which supplied aviation fuel for
Aviation's fixed base operations. The suit's allegations, as amended, are that
the defendants interfered with contractual and fiduciary relations, conspired to
injure, and induced the breach of a fuel supply agreement between Texaco and
Innotech Aviation Limited ("Innotech") in connection with the purchase by
Aviation from Innotech in 1984 of certain assets of Innotech's airport ground
services business. The suit seeks compensatory and punitive damages totaling
$110,000,000 (Canadian) plus all profits earned by the defendants subsequent to
the alleged breach. The trial of this suit commenced on May 6, 1996 and is
anticipated to be lengthy. Innotech (which due to a name change is now called
Aerospace Realties (1986) Limited ("Aerospace")) had agreed to defend and
indemnify HGC and Aviation against claims of whatever nature asserted in
connection with, arising out of or resulting from the fuel supply agreement with
Texaco. By a letter dated February 15, 1996, HGC was notified by Aerospace that
Aerospace has entered into a liquidation phase and can no longer defray the cost
of defending this lawsuit or pay for any damages resulting therefrom. HGC's
management believes, and counsel for HGC and Aviation has advised based on
available facts, that HGC and Aviation will successfully defend this action.
2. Michael and Kerri Balletta, Melody and Jeffrey Gross, James and Bari
Rodgers v. Russell Worrell, et. al.
These three lawsuits, which have been consolidated, were commenced in
1991 by the parents of three children and allege that the children were sexually
abused by the driver and matron of a school bus operated by Valley Transit
("Valley") used to transport handicapped children to special schools under
contract with the County of Nassau, N.Y. (the "County"). Besides the driver and
matron, the defendants include Valley, the County, the local school district of
each child and HGC. HGC provides management services to the County with respect
to the County's program to transport handicapped school children, but does not
itself operate the transportation services. The lawsuits seek a total of
$150,000,000 of compensatory and $150,000,000 of punitive damages.
The alleged intentional torts (which were not committed by HGC) and
punitive damages may not be covered by insurance. In the Management Services
Agreement between HGC and the County, the County has agreed to indemnify HGC,
and to cause the transportation contractor to indemnify HGC, against claims
arising out of or in connection with the conduct or operation of the
transportation services and any acts of the contractor and its employees. The
insurance company for Valley is defending HGC pursuant to an insurance policy
under which HGC is an additional insured.
83
HUDSON GENERALCORPORATION
ENVIRONMENTAL NOTICES
SCHEDULE 3.18(b)
1. Salt Lake City-County Health Department
Notice of Violation and Order of Compliance
HDWQR 21/2-14-91
This Notice and Order results from a spill on February 13, 1991 of
approximately 4,500 gallons of jet fuel at the Company's fuel farm at Salt Lake
City International Airport. The spill occurred when the driver of an
unaffiliated company's fuel delivery truck overfilled one of the Company's fuel
storage tanks. No fine or other penalty has been assessed against the Company.
The Company took immediate action to remove surface contamination and
is cooperating with the Salt Lake City Airport authorities in the environmental
investigation to determine the impact of the spill on subsurface soil and ground
water. The Company has also brought a lawsuit against the fuel delivery company
which caused the spill.
2. Vancouver International Airport Authority
Aviation is in the process of cleaning up soil contaminated by two
leaking underground waste oil tanks on one of its former leaseholds at Vancouver
International Airport, which tanks were negligently installed by a preceding
leaseholder. Aviation has reserved its rights against this leaseholder.
3. Massport Environmental Claim
In April 1994, a law firm representing the Massachusetts Port Authority
("Massport") sent a letter (the "Original Demand") to thirty-seven (37)
companies, including HGC, notifying the addressees that Massport believed that
they were liable for contamination of soil and groundwater at Logan
International Airport in East Boston, Massachusetts (the "Airport"). Massport
claimed that it was performing response actions at the Airport, and stated that
it was seeking "contribution, reimbursement and payment of an equitable share of
the costs of past, current and future response actions undertaken by
Massport...".
The Original Demand identified twenty-four (24) spills of fuel, oil and
hydraulic fluid at various places at the Airport which allegedly had been caused
by HGC between January 1982 and September 1992. In addition, the Original Demand
proposed a settlement by which HGC would pay a per capita share of past response
costs (such share to be a minimum of $311,761) and agree to pay a per capita
share of all future response costs or undertake to perform all necessary future
response actions at locations where it had releases.
84
HUDSON GENERAL CORPORATION
ENVIRONMENTAL NOTICES
SCHEDULE 3.18(B)
In July 1994, HGC responded to the Original Demand, raising numerous
objections to Massport's allegations and requesting considerable additional
information in Massport's possession.
Following an informational meeting held by Massport in September 1994
for all parties which had received the Original Demand, Massport sent a letter
dated October 5, 1994 to HGC (the "Massport Proposal") clarifying its position
and proposing a greatly reduced settlement payment. The Massport Proposal first
proposed a cash-out payment by HGC for past response costs of $29,968 in respect
of a reduced total of twenty-two (22) spills. (By contrast, Massport alleged a
grand total of 2,462 spills at the Airport since 1953.) The Massport Proposal
further limited Massport's claim against HGC for future response costs to three
sites where HGC allegedly had a total of only ten (10) spills. The proposed
settlement in respect of these future response costs was $526,154, bringing
Massport's aggregate settlement proposal to $556,122.
After obtaining additional information from Massport, HGC responded to
the Massport Proposal by letter dated January 20, 1995, reiterating objections
made previously and stating additional objections. However, HGC offered to pay
Massport $75,000 in return for a complete release and a mutually acceptable
settlement agreement that would include indemnification by Massport against any
claims brought against HGC by any other party, including government agencies.
HGC did not hear further from Massport until it received a letter dated
March 5, 1996 (the "Massport 1996 Letter") in which Massport stated that it had
now identified a grand total of 2,593 spills at the Airport prior to March 9,
1994. The Massport 1996 Letter proposed a revised cash-out payment by HGC for
past response costs of $32,334, and expanded Massport's claim against HGC for
future response costs to a total of twenty-seven (27) spills at five (5) sites.
Massport's proposed settlement in respect of these future response costs totaled
$1,500,347, for an aggregate settlement demand of $1,532,681.
HGC is considering how it will respond to the new Massport proposal.
4. Notices Referred to in Paragraph 3.18(b) of this Agreement Relating to
Violations, Claims, Proceedings and Other Matters Which Have Been Concluded.
85
HUDSON GENERAL CORPORATION
UNDERGROUND STORAGE TANKS
SCHEDULE 3.18(c)
BRANCH LOCATION CAPACITY/GALLONS
- ------ -------- ----------------
U.S.
- ----
JFK Building 69 4,000
4,000
350
EWR Julia Street 5,000
LAX Imperial Highway 10,000
10,000
500
HOU Fuel Farm 20,000
20,000
20,000
20,000
20,000
BOS Delta Fuel Farm Twelve (12)
(operated @ 30,000
for
Delta)
CANADA
- ------
Toronto Maintenance 500
Calgary Maintenance 200
86
HUDSON GENERAL CORPORATION
SCHEDULE OF INSURANCE
SCHEDULE 3.19
POLICY TYPE LIMITS DEDUCTIBLE
- ----------- ------ ----------
Commercial Blanket Bond $ 3Mill $25,000
Airport Liability 500Mill 10,000(PD)
Excess Auto * 25Mill 0
Directors & Officers Liability 10Mill 5-100,000
Excess Directors & Officers Liability 10Mill 0
Fiduciary Liability 4Mill 1,000
General/Auto Liability 2Mill 500,000
Worker's Compensation (U.S.) Statutory 500,000
Worker's Compensation (Canada) Statutory 0
Pollution Liability 2Mill 100,000
Property - Primary 10Mill 50/100,000(PP/Real)
Property - Excess 10Mill 0
Cargo Legal Liability * 25Mill 10,000
Warehouseman's LL (JFK) 20Mill 50,000
Warehouseman's LL (Orlando) 5Mill 2,500
Contractor's Environmental Impairment Liability 10Mill 100,000
General/Auto Liability (Buses) 1Mill 50,000
General/Auto Liability Excess (Buses) 1Mill 0
* Included under Airport Liability Policy.
87
HUDSON GENERAL CORPORATION
SCHEDULE OF INDEBTEDNESS
SCHEDULE 5.10
7% Convertible Subordinated Debentures due 2011.............. $ 28,901,000
Revolving Credit Agreement dated as of June 1,
1996......................................................... 0
88
HUDSON GENERAL CORPORATION
SCHEDULE OF LIENS
SCHEDULE 5.11
Pursuant to a certain agreement with the Port Authority of New York and New
Jersey, the Port Authority has the right to purchase certain motor coaches
(buses) upon the conditions set forth in such agreements.
Mortgage Lien on certain property in Hawaii acquired by a joint venture, of
which the Company or one of its subsidiaries is a partner.
Pursuant to certain agreements with USAir, America West and Southwest Airlines
(the "Airlines"), the Airlines have the right to purchase certain hydrant
fueling carts upon the conditions set forth in such agreements.
89
HUDSON GENERAL CORPORATION
SCHEDULE OF INVESTMENTS AND CONTINGENT LIABILITIES
SCHEDULE 5.13
Indemnity agreement executed on behalf of American International Group related
to a Bond for Phase III of the Kohala Ranch subdivision of Kohala
Joint Venture........................................................................... $ 1,700,000 (1)
Note receivable related to the sale of certain
property in Fort Lauderdale, Florida.................................................... $ 212,000 (4)
Advances to and accrued interest from Kohala Joint
Venture................................................................................. $ 24,963,151 (3)
Investment in Hawaii Joint Venture - net................................................ $ 15,791,821 (1)
Note receivable related to the sale of the FBO
located at Long Island MacArthur Airport................................................ $ 2,458,368 (4)
Letter of Credit drawn on Royal Bank of Canada in
favor of Vancouver Airport Authority.................................................... $ 100,000 (2)
On the Books of:
(1) Hudson General Corporation and/or Hudson Kohala Inc.
(2) Hudson General Aviation Services Inc. - in Canadian dollars.
(3) Hudson Kohala Inc.
(4) Hudson General LLC