SRZ: 8K Filing: NATIXIS

SRZ has filed an SEC 8K report
1. With regards to new "Standstill Agreements" with NATIXIS.
2. Stockholder Derivative litigation settlement.

Standstill Agreements with NATIXIS:

There are 4 Players:
Player 1: Sunrise München-Thalkirchen Senior Living GmbH & Co. KG (Property Company for the German Asset under consideration for SRZ)
Player 2: Sunrise München-Thalkirchen GmbH, (Operations Company for the German assets under consideration for SRZ)
Player 3: Sunrise Senior Living Inc (Guarantor for the German assets under consideration for SRZ)
Player 4: NATIXIS London Branch (Agent on behalf of the other finance parties)

There are 2 loan agreement in place between NATIXIS and SRZ.
1. Loan Agreement for the property between Sunrise München-Thalkirchen Senior Living GmbH & Co. KG and NATIXIS
2. Loan Agreement for the Operations between Sunrise München-Thalkirchen GmbH and NATIXIS

SRZ is the guarantor of these loans as the parent company.

NATIXIS and SRZ have come to two standstill agreement till March 31,2009.
Standstill Agreement 1: "Funding Standstill Agreement"
Standstill Agreement 2: "Loan Standstill Agreement"

The following are some of the salient points for "Funding Standstill Agreement :

- NATIXIS has demanded that Euros 8,076,878 be paid for non compliance to Loan To Value (LTV) ratio. The LTV ratio is 119.8% as per evaluations done by Atrisreal.
- SRZ is of the opinion that the LTV ratio has not been violated and there are discussion going on between SRZ and NATIXIS to determine the course of action.
-NATIXIS has agreed not to commence any action to demand the Cash flow Deficit
- SRZ is not in "Default" till the "parties" agree on the amount of default
- Once Agreement is reached about the cash flow deficit amount and SRZ does not pay the same the "Funding Standstill Agreement" will automatically terminate.
- Other loans that come due during the Standstill agreement, NATIXIS will not serve request for interest payments on the demands
Interest under Loan Agreement on Feb 27,2009
Interest under Loan Agreement on March 31,2009

The following are the salient features of the "Loan Standstill Agreement"

- No request for prepayment due to LTV breach.
- NATIXIS will not enforce any claims for payment that are due as per original Loan Agreement namely:
Operating company Loan: EUR 56,981.28 (interest & principal) on Jan 29,2009
Property Company Loan: EUR 347,522.91 (interest & principal) on Jan 29,2009
- "Loan Standstill Agreement" will terminate if:
a) End date of March 31,2009.
b) Negotiations end between SRZ and NATIXIS
c) Commencement of insolvency proceedings against SRZ or its German affiliates by anyone.
d) Termination of "Funding Standstill Agreement"
e) NATIXIS has provided its agreement to selling of the Munich business.

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Conclusion:
1. More breathing space for SRZ to fix itself.
2. All agreements are ending on March 31,2009 as everyone wants to be at the table during discussions, it really does not make sense to have an agreement beyond March 31,2009 for NATIXIS as SRZ would be at default with other parties on March 31,2009.
3. SRZ can sell off the Munich property and NATIXIS is in agreement
4. Companies finances are improving for the Munich property as the LTV ratio was 204.7% and the Cash flow deficit was Euro 11,224,376 in Dec 18 2008 filing. for the Feb20,2009 filing the LTV ratio is 119.8% and Cash Flow Deficit is Euro 8,076,878.
5. SRZ has resident properties in German at the following locations: Frankfurt, Konigstein, Oberursel, Weisbaden, Bonn, Klein-Flottbek and Munchen . Only Munich (Munchen) property is being mentioned so its not all german operations but some specific location.

Its an operations game and with Tiffany heading Europe, hopefully we should see better days in Europe.
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Shareholder Derivative Litigation:

- The shareholder derivatives litigation has been settled, there are no payments to be made by the company as there was liability insurance for the directors of the company.
- Paul Klaassen 700,000 stock options have been repriced from USD 8.50 to USD13.09.

Here is the link to the 8k report.