SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): MAY 24, 2000
----------------------------
HUDSON HOTELS CORPORATION
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
NEW YORK 33-26780-NY 16-1312167
- --------------------------------------------------------------------------------
(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
300 BAUSCH & LOMB PLACE, ROCHESTER, NEW YORK 14604
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including (716)-454-3400
area code: -------------------------------------
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS.
On May 24, 2000, Hudson Hotels Corporation (the "Company") sold to RHD
Capital Ventures LLC ("RHD") for an aggregate consideration of $1,000,000, a
Warrant to purchase 5,000,000 common shares of Company stock for a per share
exercise price of $1.00. The Warrant is exercisable at any time until May 23,
2005. The purchaser paid $250,000 in cash and delivered a Note for the balance
of the purchase price of $750,000. RHD Capital Ventures LLC is an affiliate of
MLR & R, a large shareholder of the Company. Upon exercise of the Warrant, and
assuming no other exercise of outstanding options or warrants (including those
held by MLR & R), RHD and its affiliates would own approximately 48% of the
outstanding common stock of the Company.
Simultaneously with the sale of the Warrant, the Company and RHD
entered into a Put and Call Agreement, pursuant to which the Company has the
right to purchase the Warrants from RHD upon payment in full of any and all
outstanding debt obligations to RHD, and RHD has the right to require the
Company to repurchase the Warrants upon repayment in full of all debt of the
Company to RHD, or upon the occurrence of an Event of Default, as defined in
any document or instrument evidencing or securing any debt from the Company
to RHD. The purchase price for the repurchase of the Warrants is calculated
by a formula taking into account the amount of debt outstanding to RHD, a
scheduled repayment amount, and the average market price of Hudson common
stock, as related to a target stock price. The Warrant purchase price
increases over time.
On June 2, 2000, the Company entered into a Mezzanine Loan
Restructuring Agreement with RHD Capital Ventures LLC, and in connection
therewith a Second Amended and Restated Mezzanine Note, a Second Amended and
Restated Mezzanine Loan Agreement, and related amendments to collateral
documents. The Restructuring Agreement reduced the stated principal of the
Mezzanine Loan from $35,000,000 to $25,000,000 (including offset of the $750,000
Note given by RHD to the Company as partial consideration for the Warrant),
reduced the stated interest rate to 6.53%, and fixed a maturity date of February
2, 2002. The security interest in the Company's assets was spread to cover the
amounts which may become due under the Put and Call Agreement as well.
Due to the interaction of the restructured Mezzanine Loan and the Put
and Call Agreement, for accounting purposes the Company will not recognize the
full debt reduction at closing. The recorded debt will be reduced to $34,250,000
to reflect the offset of the Note, and the Warrant recorded at $1,000,000. The
accretion of the amount potentially due upon put or call of the Warrant shall be
recorded by a transfer from the outstanding debt principal to the carrying
amount of the Warrant, using the effective rate method.
Attached to this Form is an unaudited PRO FORMA balance sheet of the
Company as of May 31, 2000, showing the effect of the issuance of the Warrant,
the Put and Call Agreement, and the Mezzanine Loan Restructuring Agreement, as
well as the results of operation of the Company from April 1, 2000 to May 31,
2000.
2
ITEM 7. PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
PRO FORMA FINANCIAL INFORMATION
PRO FORMA BALANCE SHEET AS OF MAY 31, 2000
EXHIBITS
10.40 Agreement and Warrant to Purchase 5,000,000 Common Shares
10.41 Put and Call Agreement
10.42 Mezzanine Loan Restructuring Agreement
10.43 Second Amended and Restated Mezzanine Note
10.44 Second Amended and Restated Mezzanine Loan Agreement
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HUDSON HOTELS CORPORATION
------------------------------------------
(Registrant)
Date : JULY 7, 2000 /s/ E. ANTHONY WILSON
-----------------------------------------
E. Anthony Wilson, President
4
PRO FORMA BALANCE SHEET AS OF MAY 31, 2000
HUDSON HOTELS CORPORATION AND SUBSIDIARIES
MAY 31, 2000
ASSETS
TOTAL
----------
Cash and Cash Equivalents 395,727
Cash and Cash Equiv-Restricted 5,024,137
-----------
-----------
5,419,864
-----------
Accounts Receivable 2,065,207
-----------
Investments 1,078,456
Intercompany -
-----------
-----------
1,078,456
-----------
Inventories 349,843
-----------
Prepaid Expenses 1,035,712
-----------
Land & Land Improvements 18,102,663
Building & Building Improvements 99,481,523
Furniture & Equipment 19,212,511
Vehicles 23,478
-----------
136,820,175
Accumulated Depreciation (16,660,374)
-----------
120,159,801
-----------
Other Intangibles 4,894,445
Other Assets 910,653
-----------
5,805,098
-----------
Total Assets 135,913,981
===========
LIABILITIES & EQUITY
Accounts Payable 2,913,933
Accrued Expenses 2,530,303
Sales Taxes Payable 478,766
Accrued Payroll 288,131
Accrued Vacation 323,468
Accrued Interest 969,386
Deferred Membership Dues 544,977
-----------
8,048,964
-----------
Long Term Debt
Debt 122,058,899
Capitalized Leases 630,729
Line of Credit 400,000
-----------
123,089,628
-----------
Deferred Revenue 185,055
-----------
Callable/Puttable Warrant 1,000,000
-----------
Capital Stock 8,490
Additional Paid in Capital 24,979,844
Retained Earnings (19,795,721)
Treasury Stock (41,250)
Income/ (Loss) Year to Date (1,561,029)
-----------
3,590,334
-----------
Total Liabilities & Equity 135,913,981
============
5