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| SRZ > SEC Filings for SRZ > Form 8-K on 20-Oct-2009 | All Recent SEC Filings |
20-Oct-2009
Entry into a Material Definitive Agreement
On October 19, 2009, Sunrise Senior Living, Inc. ("Sunrise" or the "Company") entered into a Thirteenth Amendment (the "Amendment") to its Credit Agreement, dated as of December 2, 2005 (as previously amended, the "Credit Agreement"), by and among Sunrise, certain subsidiaries of Sunrise that are parties thereto, the lenders that are parties thereto from time to time (the "Lenders") and Bank of America, N.A., as administrative agent (the "Administrative Agent") and in its capacity as Swingline Lender and letter of credit issuer (the "L/C Issuer").
The Amendment, among other matters, extends the maturity date of the Credit Agreement from December 2, 2009 to December 2, 2010 (the "Extended Maturity Date") and provides that the current aggregate commitments of approximately $92 million (before giving effect to the $6 million principal repayment discussed below) shall be permanently reduced by any future principal repayments or cancellations of letters of credit. Consistent with prior amendments to the Credit Agreement, this Amendment (i) extends the suspension of the obligation of the Lenders and the L/C Issuer to (1) advance any additional proceeds of the loans to the borrowers or (2) issue any new letters of credit for the accounts of any of the obligors (which include the borrowers and the guarantors under the Credit Agreement) or their subsidiaries, and (ii) provides for the renewal of certain scheduled letters of credit in accordance with the annual renewal provisions of such letters of credit, for up to twelve months beyond the expiration dates of such letters of credit; provided that the borrowers under the Credit Agreement shall be required to cash collateralize any letters of credit with expiration dates beyond November 25, 2010, on or before November 25, 2010.
The Amendment also (i) provides that the principal payments previously due on
October 31, 2009 and November 30, 2009 are no longer due; (ii) modifies the
minimum liquidity covenant under the Credit Agreement to require that not less
than $10 million of unrestricted cash be on hand on the last day of each month
(subject to a 15-day cure period) through the Extended Maturity Date; and (iii)
modifies a covenant restricting Sunrise's ability to dispose of real estate,
improvements or material assets of Sunrise or its subsidiaries, to permit the
disposition of certain assets as long as 50% of the net sales proceeds are
allocated to the Lenders.
As previously disclosed, the sale of 21 wholly owned assisted living communities (the "BLC Properties") to an affiliate of Brookdale Senior Living Inc. (the closing date of such sale, the "BLC Closing Date") was conditioned upon receiving consent to the transaction from the requisite Lenders under the Credit Agreement by October 19, 2009. In connection with the Amendment, the requisite Lenders under the Credit Agreement consented to the sale of the BLC Properties and Sunrise agreed to make the BLC Closing Payment (as defined below) to the Administrative Agent for the benefit of the Lenders on the BLC Closing Date. Sunrise also agreed to deposit on the BLC Closing Date $20 million of the proceeds from the BLC Properties sale (the "BLC Additional Proceeds") into a collateral account held by and pledged to the Administrative Agent for the benefit of the Lenders. The requisite Lenders under the Credit Agreement consented to the use of such BLC Additional Proceeds and the disposition of various properties by the Company for the purpose of settling claims of other creditors of the Company.
In connection with the execution of the Amendment, Sunrise made a $6 million principal repayment to the Lenders, and agreed to pay the Lenders an amendment fee of $500,000, of which $250,000 was paid upon the execution of the Amendment. The remaining $250,000 will be paid on the earlier to occur of (a) the BLC Closing Date and (b) January 4, 2010.
As of October 19, 2009, after the $6 million repayment, Sunrise had outstanding borrowings of approximately $62.9 million under the Credit Agreement and outstanding letters of credit of approximately $23.1 million.
From time to time, Sunrise has had customary commercial banking relationships with certain of the Lenders under the Credit Agreement, including other commercial lending and banking arrangements. In addition, Sunrise has engaged and may in the future engage, from time to time, one or more of the Lenders or their affiliates to provide investment banking and other advisory and financial services to Sunrise.
The Credit Agreement was filed as Exhibit 10.1 to Sunrise's Current Report on Form 8-K filed on December 8, 2005. The foregoing description of the terms of the Amendment does not purport to be complete and is qualified in its entirety by reference to the Amendment, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
On October 19, 2009, Sunrise issued a press release announcing the execution of the Amendment. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
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