EXHIBIT 10.42
MEZZANINE LOAN RESTRUCTURING AGREEMENT
MEZZANINE LOAN RESTRUCTURING AGREEMENT
THIS AGREEMENT, dated as of June 2, 2000, is by and among RHD CAPITAL
VENTURES LLC, a Delaware limited liability company having an office at 000
Xxxxxxxxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxx,
Manager, Telefax Number (000) 000-0000 (together with its successors and
assigns, "Lender"), HUDSON HOTELS PROPERTIES CORP., a New York corporation, with
an address of c/x Xxxxxx Hotels Corporation, 000 Xxxxxx & Xxxx Xxxxx, Xxxxxxxxx,
Xxx Xxxx 00000, Attention: President, Telefax Number: (000) 000-0000 ("HHPC")
and HUDSON HOTELS CORPORATION, a New York corporation, with an address of 000
Xxxxxx & Xxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 Attention: E. Xxxxxxx Xxxxxx,
Chairman, Telefax Number: (000) 000-0000 ("HHC"). HHPC and HHC are referred to
herein individually as "Borrower" and collectively as "Borrowers".
R E C I T A L S:
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WHEREAS, Borrowers and Nomura Asset Capital Corporation ("Nomura")
entered into that certain Mezzanine Loan Agreement, dated as of November 27,
1996, which was amended and restated by that certain Amended and Restated
Mezzanine Loan Agreement, dated as of October 31, 1997, by and among Borrowers
and Nomura (such mezzanine loan agreement, as amended and restated, the
"Mezzanine Loan Agreement"), pursuant to which Borrowers obtained a loan in the
principal amount of $35,000,000 (the "Mezzanine Loan") from Nomura; and
WHEREAS, the Mezzanine Loan is evidenced by that certain Mezzanine
Note, dated November 27, 1996, made by Borrowers payable to the order of Nomura
in the face amount of $17,000,000, as amended, restated and increased by that
certain Amended and Restated Mezzanine Note, dated as of October 31, 1997, made
by Borrowers payable to the order of Nomura in the face amount of $35,000,000
(as amended, restated and increased, the "Mezzanine Note"); and
WHEREAS, Lender has purchased the Mezzanine Loan from Nomura, and
Nomura has endorsed the Mezzanine Note to Lender by Allonge, dated April 14,
2000, and assigned the Mezzanine Loan Agreement and the other documents
evidencing and securing the Mezzanine Loan (collectively, the "Mezzanine Loan
Documents") to Lender pursuant to a certain Assignment of Asset Documents, dated
April 14, 2000, from Nomura to Lender (the "Assignment of Asset Documents"); and
WHEREAS, Nomura and Borrowers also entered into a certain Agreement,
dated as of April 14, 1999, whereby Nomura agreed to forbear from exercising its
rights and remedies under the Mezzanine Loan Documents in respect of certain
existing defaults, which agreement was assigned by Nomura to Lender pursuant to
the Assignment of Assets Documents and was extended by Lender pursuant to the
terms of a certain Forbearance Extension Agreement by and between Lender and
Borrowers, dated as of April 14, 2000 (as assigned and extended, the
"Forbearance Agreement"); and
WHEREAS, on May 24, 2000 HHC issued to Mezzanine Lender a warrant to
purchase 5,000,000 common shares of stock of HHC for a consideration of
$1,000,000 pursuant to the terms of a certain Agreement and Warrant to Purchase
5,000,000 Common Shares (the "Warrant"); and
WHEREAS, as a condition to purchasing the Warrant from HHC, Mezzanine
Lender required that HHC enter into a certain Put and Call Agreement, dated as
of May 24, 2000, with Mezzanine Lender (the "Put and Call Agreement") providing
for (a) an option exercisable by HHC to purchase the Warrant from Mezzanine
Lender and
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(b) an option exercisable by Mezzanine Lender to require HHC to purchase the
Warrant from Mezzanine Lender on the terms and conditions set forth in the Put
and Call Agreement; and
WHEREAS, Lender is indebted to HHC in the principal amount of $750,000
pursuant to the terms of a certain Promissory Note, dated May 24, 2000, made by
Lender payable to the order of HHC in the principal amount of $750,000 (the
"Lender Note"); and
WHEREAS, Borrowers have requested that Lender agree to a reduction in
the outstanding principal amount of the Mezzanine Loan, as evidenced by the
Mezzanine Note, from $35,000,000 to $25,000,000 by: (a) forgiving $9,250,000 of
the principal amount of the Mezzanine Loan, as evidenced by the Mezzanine Note
and (b) offsetting the obligations of Lender to HHC under the Lender Note
against $750,000 of the principal amount of the Mezzanine Loan, as evidenced by
the Mezzanine Note; and
WHEREAS, Borrowers have also requested that Lender agree to a
termination of the Forbearance Agreement; and
WHEREAS, Lender is willing to agree to a reduction in the outstanding
principal amount of the Mezzanine Loan and a termination of the Forbearance
Agreement as aforesaid, provided that Borrowers agree to a restructuring of the
Mezzanine Loan, as provided in this Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Lender and Borrowers do hereby agree as follows:
8. DEFINITIONS. All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed
thereto in the Mezzanine Loan Agreement.
9. OUTSTANDING INDEBTEDNESS. Subject to the satisfaction of the
conditions set forth in Section 4 hereof, the outstanding principal amount of
the Mezzanine Loan, as evidenced by the Mezzanine Note, shall be reduced from
$35,000,000 to $25,000,000 as follows:
(a) $9,250,000 of the principal amount of the Mezzanine Loan, as
evidenced by the Mezzanine Note, shall be forgiven by Lender; and
(b) the obligations of Lender to HHC under the Lender Note shall
be offset against $750,000 of the principal amount of the Mezzanine Loan, as
evidenced by the Mezzanine Note, and the Lender Note shall be cancelled,
discharged and returned by HHC to Lender.
10. TERMINATION OF FORBEARANCE AGREEMENT. Subject to the satisfaction of the
conditions set forth in Section 4 hereof, the Forbearance Agreement shall be
terminated and shall hereafter have no further force or effect, and the
"Existing Defaults" (as such term is defined in the Forbearance Agreement) shall
be deemed to be cured by the execution of this Agreement and the satisfaction of
the conditions precedent set forth in Section 4 hereof.
11. CONDITIONS PRECEDENT. Lender's agreement (y) to reduce the outstanding
principal amount of the Mezzanine Loan, as evidenced by the Mezzanine Note, as
provided in Section 2 hereof and (z) to terminate the Forbearance Agreement as
provided in Section 3 hereof, shall be subject to satisfaction of the following
conditions precedent:
(a) SECOND AMENDED AND RESTATED MEZZANINE NOTE. Borrowers shall
have executed and delivered to Lender a Second Amended and Restated Mezzanine
Note in form and substance satisfactory to Mezzanine Lender in its sole
discretion, which amends and restates in its entirety the Mezzanine Note.
(b) SECOND AMENDED AND RESTATED MEZZANINE LOAN AGREEMENT.
Borrowers shall have executed and delivered to Lender a Second Amended and
Restated Mezzanine Loan Agreement in form and substance satisfactory to
Mezzanine Lender in its sole discretion, which amends and restates in its
entirety the Mezzanine Loan Agreement.
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(c) AMENDMENT TO COLLATERAL DOCUMENTS. Borrowers shall have
executed and delivered to Lender an Amendment to Collateral Documents in form
and substance satisfactory to Mezzanine Lender in its sole discretion, which
amends certain of the Mezzanine Loan Documents to provide, among other things,
that such Mezzanine Loan Documents, as so amended, secure (i) FIRST the
Indebtedness and (ii) SECOND, after the Indebtedness shall have been paid and
discharged in full, all obligations and liabilities of HHC to Lender under the
Put and Call Agreement.
(d) SECOND AMENDMENT TO MEZZANINE COLLECTION ACCOUNT AGREEMENT.
Borrowers shall have executed and delivered to Lender a Second Amendment to
Mezzanine Collection Account Agreement in form and substance satisfactory to
Mezzanine Lender in its sole discretion, which amends the Mezzanine Collection
Account Agreement in certain respects.
(e) SECOND AMENDMENT TO MEZZANINE CASH COLLATERAL ACCOUNT
AGREEMENT. Borrowers shall have executed and delivered to Lender a Second
Amendment to Mezzanine Cash Collateral Account Agreement in form and substance
satisfactory to Mezzanine Lender in its sole discretion, which amends the
Mezzanine Cash Collateral Account Agreement in certain respects.
12. SEVERABILITY. If any clause or provision of this Agreement is determined to
be illegal, invalid or unenforceable under any present or future law by the
final judgment of a court of competent jurisdiction, the remainder of this
Agreement will not be affected thereby. It is the intention of the parties that,
if any such provision is held to be invalid, illegal or unenforceable, there
will be added in lieu thereof a provision as similar in terms to such provision
as is possible, and that such added provision will be legal, valid and
enforceable.
13. HEADINGS. All headings contained in this Agreement are for
reference purposes only and are not intended to affect in any way the meaning or
interpretation of this Agreement.
14. GOVERNING LAW. This Agreement shall be construed, interpreted,
enforced and governed by and in accordance with the internal laws of the State
of New York, without regard to principles of conflicts of laws.
15. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which will be deemed to be an original document, but all of which will
constitute a single document.
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IN WITNESS WHEREOF, the undersigned have caused this Agreement to be
executed and delivered effective as of the date and year first above written.
LENDER:
RHD CAPITAL VENTURES LLC,
a Delaware limited liability company
By
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Name: Xxxxxxx Xxxxx
Title: Manager
BORROWERS:
HUDSON HOTELS PROPERTIES CORP., a New York
corporation
By
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Name: E. Xxxxxxx Xxxxxx
Title: Chairman
HUDSON HOTELS CORPORATION, a New York
corporation
By
------------------------------------------
Name: E. Xxxxxxx Xxxxxx
Title: Chairman
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