Five Star Quality Care 8-K 2005
Documents found in this filing:
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
CURRENT REPORT PURSUANT TO SECTION
13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): June 9, 2005 (June 3, 2005)
FIVE STAR QUALITY CARE, INC.
(Exact Name of Registrant as Specified in Its Charter)
(State or other jurisdiction
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:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
On June 3, 2005, Five Star Quality Care, Inc., or Five Star, completed its acquisition of six assisted living communities from Franciscan Manor Associates, LLC, Muirfield Associates, LLC, Prestwicke Associates, LLC, Royal Aberdeen Associates, LLC, Troon Associates, LLC and Turnberry Associates, LLC, subsidiaries of Gordon Health Ventures, LLC, or Gordon, as more fully described in the copy of Five Stars press release attached hereto as Exhibit 99.1, or the Press Release, which is incorporated herein by reference. Five Star funded the purchase price of this acquisition with borrowings under a line of credit provided by Senior Housing Properties Trust, or Senior Housing, as further described below, the proceeds of a sale-leaseback transaction with Senior Housing, as further described below, drawings under its revolving credit facility and cash on hand.
Senior Housing provided Five Star with a line of credit for up to $43.5 million pursuant to a Promissory Note and a Loan Agreement, both dated June 3, 2005. At closing, Five Star borrowed $24 million under this line of credit. The line of credit is secured by mortgages on the six Gordon communities, and Five Stars obligations under the line of credit are guaranteed by certain of its subsidiaries who are also party to the Loan Agreement. No principal payment on the line of credit is due until maturity which is June 30, 2007. The line of credit also provides for acceleration of payment of all amounts payable upon the occurrence and continuation of certain events of default. The line of credit is more fully described in the Press Release.
On June 3, 2005, Five Star entered into a sale-leaseback transaction with Senior Housing, as more fully described in the Press Release. In connection with this sale-leaseback transaction, Five Star amended one of its existing leases with Senior Housing to add all of the properties subject to the sale-leaseback transaction. Five Star and Senior Housing also amended certain documents securing Five Stars obligations under the lease in order to account for the additional properties that are part of the sale-leaseback transaction. Please see Five Stars Annual Report on Form 10-K for the year ended December 31, 2004 for a description of the material terms of the lease and the security documents relating to the lease, which remain unchanged by the amendments discussed above except for changes to reflect the additional properties subject to the sale-leaseback transaction.
Five Star also borrowed approximately $10 million under its revolving credit facility to fund a portion of the purchase price of the Gordon acquisition.
Five Star was a subsidiary of Senior Housing prior to its spin-off in 2001, and Senior Housing owns and is the landlord of 131 of Five Stars 155 communities. Five Star has material relationships with Senior Housing that are more fully described in paragraphs one through five of the section titled Certain Relationships and Related Transactions of Five Stars Definitive Proxy Statement for Five Stars annual meeting of shareholders held May 11, 2005, as filed with the Securities and Exchange Commission, or the SEC, and the section titled Related Party
Transactions of Item 2 of Five Stars Quarterly Report on Form 10-Q filed with the SEC for the quarter ended March 31, 2005, which portions of such filings Five Star collectively incorporates by reference into these Items 1.01, 2.01 and 2.03.
The financial statements required by Item 9.01(a) are not included in this initial report on Form 8-K and will be filed by amendment no later than 71 days after the date of filing of this report.
The financial statements required by Item 9.01(b) are not included in this initial report on Form 8-K and will be filed by amendment no later than 71 days after the date of filing of this report.
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 hereunto duly authorized.
FIVE STAR QUALITY CARE, INC.
By: /s/ Bruce J. Mackey Jr.
Name: Bruce J. Mackey Jr.
Title: Treasurer and Chief Financial
Date: June 9, 2005