Hudson 1701/1706 LLC - Chapter 11 DIP Terms

DIP Terms

Borrower(s) / Guarantor(s)

• Hudson 1701/1706, LLC and Hudson 1702, LLC, as Debtors
• All obligations under the facility are joint and several

Agent / Lender(s)

• Parkview Financial REIT, LP, as DIP Lender

DIP Commitments

• $32.8 million senior secured, priming, first-lien, and superpriority multi-draw term loan facility comprised of:
  • $12.3 million available in a single draw on an interim basis
  • $20.5 million available in multiple draws on a final basis
• The facility features a dollar-for-dollar roll-up of prepetition secured obligations into DIP loans simultaneous with the funding of any new money draws, up to the aggregate facility cap of $32.8 million

Cash Collateral

• The debtors are authorized to use cash collateral in accordance with the approved budget
• With the exception of DIP loan proceeds, all cash and cash equivalents constitute prepetition collateral

Interest Rate

• 12.0% per annum, payable in kind monthly in arrears
• Default Rate Increase: 2.0%

Fees

• Reimbursement of all reasonable pre- and postpetition fees and expenses incurred by the DIP lender, including legal and financial advisor costs
• The 2.0% early termination fee initially approved in the interim order has been irrevocably waived and is void pursuant to the final order

Maturity

• The earliest to occur of:
  • 12 months after the petition date (extendable with DIP lender consent)
  • The consummation of a sale of all or substantially all assets
  • The effective date of a Chapter 11 plan
  • The occurrence of an uncured event of default

Carve Out

• Post-Carve-Out Trigger Notice Cap: $1 million for allowed professional fees
• Chapter 7 Trustee Fee: $75,000
• Clerk of the Court and U.S. Trustee fees
• Upon a trigger notice, the DIP lender shall fund any unfunded portion of the post-trigger cap into a segregated professional fee reserve

Use of Proceeds

• Fund day-to-day working capital needs and case expenditures
• Pay professional fees and expenses
• Proceeds may not be used to challenge or investigate the validity or priority of the DIP or prepetition liens, except as provided in the investigation budget

Credit Bid

• The DIP lender and the prepetition lender (subject to committee objection) retain the right to credit bid the full amount of their respective obligations in connection with any asset sale

Avoidance Actions

• DIP liens and collateral explicitly exclude any claims or causes of action arising under Chapter 5 of the Bankruptcy Code

Challenge Period and Budget

• The deadline to commence a challenge is 120 days after the appointment of the Creditors' Committee (i.e., March 25, 2026)
• The Committee is allocated an investigation budget of up to $150,000 solely to investigate potential claims and liens

Securities and Priorities

• The DIP obligations constitute allowed superpriority administrative expense claims against the debtors
• The DIP lender is granted valid, perfected, first priority priming liens on all DIP collateral, subject only to the carve-out and mechanics' liens, with the following priorities:
  • Senior to all prepetition liens and permitted liens
  • Senior to the adequate protection liens granted to prepetition lenders

Adequate Protection

Prepetition Senior Lender

• Superpriority administrative expense claims, junior to the DIP superpriority claims and the carve-out
• Postpetition replacement liens on DIP collateral, junior to the DIP liens, permitted liens, and the carve-out
• Payment of reasonable fees and out-of-pocket expenses

Other Prepetition Lienholders

• Replacement liens on postpetition collateral, pari passu with the prepetition senior lender's replacement liens and junior to the DIP liens

Waivers

• Subject to entry of the final order:
  • Section 506(c): Waiver of the right to surcharge collateral for costs of preservation or disposal
  • Section 552(b): Waiver of the "equities of the case" exception
  • Waiver of the equitable doctrine of marshaling

Permitted Variance

• Actual operating disbursements (excluding professional fees) may not exceed the approved budget by more than 15% during any variance testing period
• Net positive variances may be carried forward on a cumulative basis