DJ Sunrise Senior Living Gets Demand Notice From Natixis London
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DOW JONES NEWSWIRES
Sunrise Senior Living Inc. (SRZ) said Friday that it has received a demand letter from Natixis London in connection with two loan agreements.
The loan agreements were executed in March 2006 by two Sunrise subsidiaries, Sunrise Munchen-Thalkirchen Senior Living GmbH & Co. KG and Sunrise München-Thalkirchen GmbH, according to a filing with the Securities and Exchange Commission.
In connection with the loans, Sunrise had entered into funding obligation agreements, requiring the company to pay certain cash flow deficits, including in the event that the borrowers failed to pay certain amounts under the loans.
In the demand letter, Natixis requested Sunrise pay EUR8.1 million as a result of the failure by the borrowers to pay certain amounts under the loans, according to the filing.
The parties involved entered into two standstill agreements, pursuant to which the companies agreed to commence discussions and negotiations relating to obligations under the loans and Naxtixis agreed not to enforce its claims for payments that have become due or will become due and payable during the term of the loan standstill, according to the filing.
Also Friday, Sunrise reported that the company is, and expects to be, in default under a number of its financial obligations to its lenders and venture partners. The company said it is negotiations with its lenders.
The company also said that it and some current or former officers and directors have entered into an agreement to settle two putative stockholder derivative actions brought by certain stockholders of the company.
Under the settlements, which must be approved by the courts, Sunrise has agreed to implement a minimum two-year vesting period, with appropriate exceptions, for stock option awards to employees.
Also in the proposal, the company will re-price 700,000 stock options granted to non-executive Chairman Paul J. Klaassen to $13.09 a share from $8.50 a share.
Shares of McLean, Va.-based Sunrise closed Friday at 75 cents, down 1 cent.
-By Brian Kalish, Dow Jones Newswires; 202-862-1350; brian.kalish@dowjones.com
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