SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 1, 2012
SABRA HEALTH CARE REIT, INC.
(Exact name of registrant as specified in its charter)
Registrant's telephone number including area code: (888) 393-8248
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Effective December 1, 2012, in connection with the closing of the previously announced acquisition of Sun Healthcare Group, Inc. (“Sun”) by Genesis HealthCare LLC (“Genesis”), subsidiaries of Sabra Health Care REIT, Inc. (“Sabra”) obtained a guaranty from Genesis to replace the guaranty from Sun of the lease obligations of its subsidiaries that are tenants under Sabra's lease agreements. Additionally, Sabra amended its lease agreements with Sun.
Amendments to Lease Agreements
Effective December 1, 2012, subsidiaries of Sun, subsidiaries of Sabra, and Genesis entered into amendments to the multiple leases and master lease agreements (the “Lease Agreements”) that set forth the terms pursuant to which subsidiaries of Sun lease 86 properties from subsidiaries of Sabra. The Lease Agreements were originally entered into in October and November 2010 in connection with the restructuring of Sabra's former parent, Sun Healthcare Group, Inc. (“Old Sun”) into two separate publicly traded companies, Sabra and Sun.
The amendments modify the rent escalator in the Lease Agreements to a fixed 2.5% increase annually. In addition, the amendments provide that a default under Genesis' term loan would constitute a default under the applicable Lease Agreement.
The form of the amendment to the Lease Agreements is filed as Exhibit 10.1 to this Form 8-K, and such form is incorporated herein by this reference. This description of the material terms of the amendments to the Lease Agreements is qualified in its entirety by reference to such exhibit.
Also effective December 1, 2012, subsidiaries of Sabra and Genesis entered into guaranties of the Lease Agreements (the “Guaranties”) whereby Genesis guaranties the obligations of the tenants under the Lease Agreements. The Guaranties replace the existing Sun guaranties of the lease obligation of its subsidiaries. The Guaranties also include a tangible net worth covenant requiring Genesis to maintain a tangible net worth of at least $60 million, which amount increases incrementally commencing January 1, 2013 through the remainder of the term of the Lease Agreements, capping at $300 million commencing October 1, 2015.
The form of the Guaranty of the Lease Agreements by Genesis is filed as Exhibit 10.2 to this Form 8-K, and such form is incorporated herein by this reference. This description of the material terms of the Guaranties is qualified in its entirety by reference to such exhibit.
Also effective December 1, 2012, in connection with the entry by Genesis into the Guaranties, subsidiaries of Sun and subsidiaries of Sabra terminated the guaranties that subsidiaries of Sun and subsidiaries of Sabra had entered into in October and November 2010 in connection with the entry into the Lease Agreements.
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: December 6, 2012