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Sunrise Senior Living Inc. Message Board

  • isce_ille_iste isce_ille_iste Dec 24, 2008 5:34 PM Flag

    GmbH Standstill Agreement . . .

    I can't imagine Tiffany in a 'standstill' mode . . .


    Entry into a Material Definitive Agreement, Triggering Events That Acce

    Item 1.01. Entry into a Material Definitive Agreement
    On December 24, 2008, Sunrise Senior Living, Inc. (the "Company") entered into a Pre-Negotiation and Standstill Agreement (the "Standstill Agreement") by and among the Company, two of its subsidiaries, Sunrise Hannover Senior Living GmbH & Co. KG ("PropCo") and Sunrise Hannover GmbH ("OpCo," and collectively with PropCo, the "Borrower"), and Natixis, London Branch, in its capacity as agent and security trustee (the "Agent") for certain lenders under (i) a loan agreement, dated March 13, 2006, by and among the Agent, OpCo and certain lenders thereto (the "OpCo Loan") and (ii) a loan agreement, dated March 13, 2006, by and among the Agent, PropCo and certain lenders thereto (the "PropCo Loan," and collectively with the OpCo Loan, the "Loans"). In connection with the Loans, the Company and the Agent entered into (i) a funding obligation agreement, dated June 26, 2006, with PropCo (the "PropCo Funding Obligation") and (ii) a funding obligation agreement, dated June 26, 2006, with OpCo (the "OpCo Funding Obligation," and collectively with the PropCo Funding Obligation, the "Funding Obligations") pursuant to which the Company provided certain guarantees to the Agent in respect of the Loans.

    On December 18, 2008, the Agent sent to the Company a demand letter requesting that the Company pay an amount equal to the cash flow deficit of EUR 11,224,376 (the "Cash Flow Deficit") pursuant to the Funding Obligations.

    Pursuant to the terms of the Standstill Agreement, the Agent agreed, inter alia, to commence discussions and negotiations with the Company and the Borrower relating to certain obligations of the Company and the Borrower under the Loans and the Funding Obligations, and to not commence or prosecute any action or proceeding to enforce its demand for payment by the Company of the Cash Flow Deficit during the period commencing on December 24, 2008, and ending on the later of (i) 60 calendar days after the date of the Standstill Agreement and
    (ii) the termination date of an agreement, if any, that the Company intends to enter into with Bank of America, N.A. relating to its credit facility with such bank. In any event, the Standstill Agreement shall automatically terminate upon the occurrence of an event of default, as defined in the Standstill Agreement, and shall expire on March 31, 2009 at the latest.

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    • Seems like bad news but some silver linings.
      Dec. 18th they demand full payment.
      Dec. 22 new COO of European operations. Doesn't seem like a coincidence now.
      Dec. 24 standstill agreement. New COO is good.
      I guess Ordan did not like this coming up while negotiation is going on.
      Did we know a credit facility was being sought with Bank of America? I guess we know now.
      And I don't think they would have agreed to a standstill agreement if they did not think a refinance was possible.
      Market will probably react negatively to this news, but its intriguing to know a few more details about refinance.

      • 2 Replies to drkookiee
      • Drkookiee:

        I personally don't see the subject agreement as bad news but rather neutral news with a very slight bias to the positive side. It basically buys time for the effected parties while CEO Mark Ordan gets his financial ducks in a row. But with that said, I think the investment community will over react, as you have commented, and will use this announcement to drive the shares of SRZ downward once again perhaps to the $.90 to $1.10 level but no further. If that happens, I'll once again be a strong buyer as I have confidence we are eventually going to see this outfit resurrected back to good health over the longer term. Its simply time to hang on tightly and not to get rattled by these intermediate time frame announcements. Just my two cents worth at this point. It would be nice to hear the comments of some of our other chatboarders on this matter.

        Cheers and good investing,

      • Would someone explain this document in lay men's terms for me? I am having trouble following exactly what the meaning is and what it's potential ramifications are?

        Thanks in advance.


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