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| SRZ > SEC Filings for SRZ > Form 8-K on 28-Oct-2009 | All Recent SEC Filings |
28-Oct-2009
Entry into a Material Definitive Agreement, Creation of a Direct Financ
Restructure Term Sheet
On October 22, 2009, Sunrise Senior Living, Inc. ("Sunrise") entered into a restructuring agreement, in the form of a binding term sheet (the "Restructure Term Sheet"), with Capmark Finance Inc. and Natixis, London Branch, two lenders to Sunrise and certain of its affiliates (collectively, the "Electing Lenders"). The Restructure Term Sheet settles and compromises their claims against Sunrise and certain of its affiliates, under operating deficit and principal repayment guarantees provided by Sunrise and certain of its affiliates in support of Sunrise's German subsidiaries. Capmark Finance Inc. and Natixis contended that these claims had an aggregate value of approximately $121.6 million.
The Restructure Term Sheet contemplates that certain other identified creditors of Sunrise (the "Non-Electing Lenders") may elect to participate, with respect to their asserted claims (together with the Electing Lenders' claims, the "Claims"), in the restructure transactions contemplated by the Restructure Term Sheet (the "Restructure Transactions") by executing the Restructure Term Sheet or the definitive restructure documents (the "Restructure Documentation"), on or before the first anniversary of the first execution date of the Restructure Documentation (such first execution date, the "Restructure Effective Date"). If any such Non-Electing Lender shall execute the Restructure Documentation, it shall become an Electing Lender for purposes of the Restructure Documentation. The Claims being settled by the Electing Lenders represent approximately 77.5 percent of the aggregate amount of Claims asserted by the Electing Lenders and Non-Electing Lenders collectively.
Pursuant to the Restructure Term Sheet, in satisfaction of all of the Electing Lenders' Claims, Sunrise shall, three business days after receipt of the consent to the Restructure Transactions from Bank of America, (i) issue to the Electing Lenders that elect to participate in the Restructure Transactions on or before the Restructure Effective Date, their pro rata share of up to an aggregate of five million shares of Sunrise common stock, and (ii) grant mortgages for the benefit of all the Electing Lenders on certain unencumbered North American real property owned by Sunrise or its affiliates. After the Restructure Effective Date, Sunrise shall pursue the sale of such mortgaged properties and distribute the net proceeds of such sale to the Electing Lenders. No shares of Sunrise common stock shall be issued to any Non-Electing Lender that becomes an Electing Lender after the Restructure Effective Date.
Pursuant to the Restructure Term Sheet, on the Restructure Effective Date, the Electing Lenders shall release and discharge Sunrise from all of the Claims such Electing Lenders may have against Sunrise. However, Sunrise shall remain liable to the Electing Lenders for certain material misrepresentations, surviving indemnities, misappropriation of funds, fraud or similar types of misconduct.
The completion of the Restructure Transactions, including the execution of the Restructure Documentation, the release of the Electing Lenders' Claims and the issuance of Sunrise common stock, is conditioned upon receipt, on or before November 11, 2009, of the
Pursuant to the Restructure Term Sheet, Sunrise shall (i) grant mortgages in favor of a collateral trustee for the benefit of all the Electing Lenders on certain unencumbered North American real property owned by Sunrise or its affiliates (the "Collateral"), (ii) pursue the sale of the Collateral, and (iii) distribute all net sale proceeds of the Collateral (the "Net Sale Proceeds") to the Electing Lenders.
In addition, Sunrise has guaranteed that, on or before the date that is 30
months after the Restructure Effective Date (the "Collateral Sale Deadline"),
the Electing Lenders shall have received Net Sale Proceeds of approximately
$58.3 million (the "Guaranteed Minimum Distribution"), which is equal to 80% of
the most recent aggregate appraised value of the Collateral. If the Electing
Lenders have not received the Guaranteed Minimum Distribution by the Collateral
Sale Deadline, Sunrise shall, at the election of the Electing Lenders, either:
(i) make cash payment to the Electing Lenders to cover any shortfall in respect
of the Guaranteed Minimum Distribution, in which case any remaining unsold
Collateral shall be released from the Electing Lenders' mortgages, or (ii)
convey the remaining unsold Collateral to the Electing Lenders.
Pursuant to the Restructure Term Sheet, Sunrise shall be released from any obligations that Sunrise may owe to any Electing Lenders under operating deficit and principal repayment guarantees provided by Sunrise as support for borrowings made by Sunrise's German subsidiaries (the "German Borrowers"). However, the obligations of the German Borrowers to their lenders that are Electing Lenders (the "German Lenders") shall not be reduced or otherwise affected by the Restructure Documentation. Pursuant to the Restructure Term Sheet, Sunrise shall market for sale the German assisted living communities that are collateral for the German Lenders, and the proceeds of any such sale shall be paid to the German Lenders in accordance with the German loan documents. Sunrise shall remain responsible for all costs of operating, preserving and maintaining the German communities subject to loan agreements with the German Lenders until the earlier of (i) their sale and (ii) December 31, 2010.
With respect to the Claims of the Non-Electing Lenders, Sunrise may use the Non-Electing Lenders' pro rata share of any Net Sale Proceeds to settle or compromise such Non-Electing Lenders' Claims at any time on or prior to the first anniversary of the Restructure Effective Date. If no such settlement or compromise is made by such date, all Net Sale Proceeds shall be for the exclusive benefit of the Electing Lenders.
The information relating to the Restructure Term Sheet set forth under Item 1.01 to this Current Report on Form 8-K is hereby incorporated by reference.
The information relating to the Restructure Term Sheet set forth under Item 1.01 to this Current Report on Form 8-K is hereby incorporated by reference. Sunrise currently expects to issue approximately 3.88 million shares of common stock in a private placement to Capmark Finance Inc. and Natixis, two accredited investors (as such term is defined in Rule 501 of Regulation D) acquiring the stock for investment purposes only. The issuance of the common stock did not involve any form of general solicitation. The common stock will not be registered under the Securities Act of 1933, and will be issued and sold in reliance upon the exemption from registration contained in Section 4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated thereunder. The common stock may not be offered or sold in the United States in the absence of an effective registration statement or an applicable exemption from registration requirements.
(a) Not applicable
(b) Not applicable
(c) Not applicable
(d) Exhibits.
10.1 Restructure Term Sheet, dated October 22, 2009, by and among Sunrise Senior Living, Inc. and the creditors party thereto.
10.2 Settlement Agreement, dated as of October 26, 2009, by and among Sunrise Senior Living Investments, Inc., Senior Living Management, Inc., Sunrise Senior Living, Inc., US Senior
10.3 Settlement Agreement, dated as of October 26, 2009, by and among Sunrise Senior Living Investments, Inc., Sunrise Senior Living, Inc., Fountains Senior Living Holdings, LLC, Sunrise Senior Living Management, Inc., US Senior Living Investments, LLC and HSH Nordbank AG, New York Branch.
99.1 Press Release of Sunrise Senior Living, Inc., dated October 27, 2009.
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