----------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 18, 2000
Commission File Number: 0-18249
ILM SENIOR LIVING, INC.
-----------------------
(Exact name of registrant as specified in its charter)
VIRGINIA 04-3042283
- ------------------------ -----------------------------------
(State of organization) (I.R.S. Employer Identification No.)
1750 TYSONS BOULEVARD, SUITE 1200, TYSONS CORNER, VIRGINIA 22102
- ---------------------------------------------------------- ------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (888) 357-3550
(Page 1 of 5 pages
Exhibit Index Appears on Page 5
<PAGE>
ITEM 5. OTHER EVENTS
On April 18, 2000, ILM Senior Living, Inc., a Virginia finite-life
corporation (the "Company"), entered into a First Amendment to the Amended and
Restated Agreement and Plan of Merger dated October 19, 1999 (as so amended)
(the "Amended Merger Agreement") with Capital Senior Living Corporation, a
Delaware corporation ("CSLC") and Capital Senior Living Acquisition, LLC, a
Delaware limited liability company and wholly owned subsidiary of CSLC ("Merger
Sub").
The Company was advised by CSLC that, due to deteriorating conditions in
the senior living industry and a decline in the loan value of the Company's
properties, Capital was informed by its prospective lenders that they would not
be able to raise sufficient financing to fund the $97,018,000 purchase price
contemplated at the time of the original transaction.
Upon the terms and subject to the conditions of the Amended Merger
Agreement, the Company will be merged with and into Merger Sub, and Merger Sub
will be the surviving corporation in the merger (the "Merger"). Pursuant to the
Merger, among other things, each share of the Company's common stock, $.01 par
value ("Company Common Stock"), outstanding immediately prior to the effective
time of the Merger (the "Effective Time"), other than shares of Company Common
Stock owned by the Company, CSLC or Merger Sub (or any other subsidiary of the
Company or CSLC), automatically will be converted into the right to receive
approximately $11.63 in cash. The previous merger consideration announced in
October 1999 was $12.90 per share in cash. Holders of Company Common Stock will
have no dissenters' rights in the Merger. The Merger is intended to be reported
as a fully taxable acquisition by CSLC of the Company and will be recorded by
CSLC as a purchase for accounting purposes.
In connection with entering into the amended Merger Agreement, the Company
required CSLC to agree to pay the Company increased termination fees in certain
circumstances. In addition, the Company required CSLC to agree to reduce the
amount of fees and expenses it would receive upon termination of the merger in
certain circumstances.
In connection with the Merger, CSLC reported to the Company that it has
obtained the signed commitment of GMAC Commercial Mortgage Corporation to
provide CSLC with substantially all of the cash funds necessary to pay the
merger consideration. The GMAC financing commitment contains customary funding
and termination conditions and market "outs," and expires by its terms on July
31, 2000.
The Company has agreed that immediately prior to the Effective Time it
will cause its direct subsidiary and record owner of the Company's senior living
facilities, ILM Holding, Inc. ("ILM Holding"), to exercise its right to
terminate the Facilities Lease Agreement (the "Lease Agreement") dated September
1, 1995, between ILM Holding and ILM Lease Corporation, an affiliate of the
Company ("ILM LeaseCo"). The Lease Agreement provides, among other things, for
the lease by ILM LeaseCo of the senior housing facilities from ILM Holding and
the payment to ILM Holding of certain rents
(Page 2 of 5 pages)
<PAGE>
and fees in respect of such lease. The Lease Agreement presently expires by its
terms on December 31, 2000, subject to earlier termination by ILM Holding in
connection with the sale of the senior housing facilities to an unaffiliated
purchaser.
Consummation of the Merger is subject to certain conditions, including,
without limitation, (i) approval and adoption of the Amended Merger Agreement
and the Merger by the holders of not less than 66-2/3% of the outstanding
Company Common Stock, (ii) the receipt of all requisite consents and approvals
by public and governmental authorities, (iii) the transfer to the Company of the
senior housing facilities owned by ILM Holding (together with cancellation of
the intercompany mortgage indebtedness thereon) and the liquidation of ILM
Holding pursuant to Section 332 of the Internal Revenue Code of 1986, as
amended, (iv) the absence or nonoccurrence of certain material conditions and
events, and (v) certain other conditions to consummation customary in
transactions such as the Merger.
Simultaneously with entering into the Amended Merger Agreement, ILM II
Senior Living, Inc., a Virginia finite-life corporation and an affiliate of the
Company ("ILM II"), entered into a first amendment to the amended and restated
agreement and plan of merger with CSLC and Merger Sub providing for the merger
of ILM II with and into Merger Sub, (the "ILM II Merger Agreement"), for
aggregate cash consideration of approximately $13.04 per outstanding share of
ILM II common stock, $.01 par value (the "ILM II Merger"). Consummation of the
ILM II Merger is not a condition to consummation of the Merger. If, however, the
ILM II merger is consummated but the Merger is not consummated, the Company has
agreed to cause ILM Holding to transfer its 25% fee simple interest in a certain
California senior housing facility to ILM II (or one of its wholly owned
subsidiaries) at the fair market value of such property. ILM II has made the
reciprocal agreement (with respect to its 75% fee simple interest in such
property) in the ILM II Merger Agreement.
There can be no assurance whether the Merger (or any of the transactions
contemplated thereby) will be consummated or, if consummated, as to the timing
thereof.
Item. 7 Financial Statements, Pro Forma Financial Information
and Exhibits.
(a) Not Applicable
(b) Not Applicable
(c) The following Exhibits are filed as part of this Current Report on
Form 8-K:
2. First Amendment to the Amended and Restated Agreement and
Plan of Merger, dated April 18, 2000, among the Company,
CSLC and Merger Sub (including all exhibits and schedules
thereto).
99.1. Press Release of the Company dated April 18, 2000
(Page 3 of 5 pages)
<PAGE>
SIGNATURES
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.
ILM SENIOR LIVING, INC.
By: /s/ J. WILLIAM SHARMAN, JR.
-------------------------
J. William Sharman, Jr.
Chairman of the Board of Directors,
President and Chief Executive Officer
Dated: April 24, 2000
(Page 4 of 5 pages)
<PAGE>
EXHIBIT INDEX
Page No.
2. First Amendment to the Amended and Restated
Agreement and Plan of Merger dated April 18,
2000, among the Company, CSLC and Merger Sub
(including schedules and exhibits thereto).
99.1 Press Release of the Company dated April 18,
2000.
(Page 5 of 5 pages)
<PAGE>
FIRST AMENDMENT TO
AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
FIRST AMENDMENT TO AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER dated
April 18, 2000 (this "Amendment"), among CAPITAL SENIOR LIVING CORPORATION, a
Delaware corporation ("CSLC"); CAPITAL SENIOR LIVING ACQUISITION, LLC, a
Delaware limited liability company, all of the outstanding membership interests
in which are wholly-owned by CSLC ("Sub"); and ILM SENIOR LIVING, INC., a
Virginia finite-life corporation (the "Company").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, CSLC, Sub and the Company entered into an Amended and Restated
Agreement and Plan of Merger dated October 19, 1999 (the "Original Agreement");
WHEREAS, the parties to the Original Agreement desire to amend certain
terms of the Original Agreement as hereinafter set forth;
WHEREAS, the respective Boards of Directors of CSLC and the Company have
determined that it is fair to and in the best interests of their respective
stockholders to consummate the acquisition of the Company by CSLC, by means of a
cash out merger of the Company with and into Sub, upon the terms and subject to
the conditions set forth in the Original Agreement as amended by this Amendment
(the "Merger");
WHEREAS, the respective Boards of Directors of CSLC and the Company, and
CSLC as sole member of Sub, have approved the Merger and the Original Agreement
as amended by this Amendment and the transactions contemplated hereby and
thereby;
NOW, THEREFORE, in consideration of the mutual premises and the
representations, warranties, agreements and covenants herein contained, the
parties hereto, intending to be legally bound, hereby agree as follows:
1. The Original Agreement is hereby amended as follows:
(a) The Merger Consideration set forth in Section 2.1(c) of the
Original Agreement is hereby amended by deleting the number "$12.901158" and
inserting in its place "$11.626042";
(b) The termination fee (to CSLC) set forth in both the second and
third paragraphs of Section 5.6(b) of the Original Agreement is hereby amended
by deleting the number "$3,835,600" in each of such second and third paragraphs
and inserting in its place "$2,404,300";
<PAGE>
(c) The termination fee (to the Company) set forth in Section 5.6(e)
of the Original Agreement is hereby amended by deleting the number "$850,000"
and inserting in its place "$1,540,000";
(d) Section 3.1(m) of the Original Agreement is hereby amended by
deleting therefrom the words "October 6, 1999" and inserting in their place
"April 17, 2000."
(e) Section 3.2(j) of the Original Agreement is hereby amended by
deleting the provisions thereof in their entirety and inserting in their place;
"(j) Receipt of Financing Commitment. CSLC has paid for and
obtained, and heretofore has provided the Company with true and
complete executed copies of, that certain commitment letter of GMAC
Commercial Mortgage Corporation ("GMAC") dated April 14, 2000 and
addressed to CSLC, pursuant to which GMAC has committed, upon the
terms and subject to the conditions specified therein, to provide to
CSLC an aggregate sum in cash which, together with funds segregated
by CSLC, will be sufficient in amount to pay, in full at the
Effective Time, but not later than July 31, 2000, to the holders of
Company Common Stock, the Exchange Funds (the "Financing
Commitment")."
(f) Section 5.6(c) of the Original Agreement is hereby amended by
deleting the second sentence thereof in its entirety.
(g) Section 5.17 of the Original Agreement is hereby amended by
deleting the provisions thereof in their entirety.
(h) Section 6.3(d) of the Original Agreement is hereby amended by
deleting the provisions thereof in their entirety and inserting in their place;
"(d) Payment of Exchange Funds. CSLC shall have received the
proceeds of the Financing Commitment, or otherwise shall have
obtained and segregated for payment to the Company sufficient cash
funds, to pay in full at the Effective Time to the holders of the
Company Common Stock, the Exchange Funds."
(i) All references to the Original Agreement shall hereafter refer
to the Original Agreement as amended by this Amendment.
2. Except as amended in this Amendment, the Original Agreement remains in
full force and effect. All capitalized terms used in this Amendment which are
not otherwise defined in this Amendment shall be as defined in the Original
Agreement.
2
<PAGE>
3. This Amendment may be executed one or more counterparts (including by
facsimile transmission), all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by all of the parties hereto and delivered to the other parties; it being
hereby understood that all parties need not sign the same counterpart.
IN WITNESS WHEREOF, CSLC, Sub, and the Company have caused this Agreement
to be executed and delivered by their respective officers thereunto duly
authorized, all on this 18th day of April, 2000.
CAPITAL SENIOR LIVING CORPORATION
By: /s/JAMES A. STROUD
-----------------------------------------
Name: JAMES A. STROUD
Title: Chairman of the Company
CAPITAL SENIOR LIVING ACQUISITION, LLC
By: /s/LAWRENCE A. COHEN
-----------------------------------------
Name: LAWRENCE A. COHEN
Title: Chief Executive Officer
ILM SENIOR LIVING, INC.
By: /s/J. WILLIAM SHARMAN, JR.
-----------------------------------------
Name: J. WILLIAM SHARMAN, JR.
Title: Chairman of the Board of Directors,
President and Chief Executive Officer
3
ILM SENIOR LIVING, INC.
AND
CAPITAL SENIOR LIVING CORPORATION
AMEND
PENDING MERGER AGREEMENT
FOR IMMEDIATE RELEASE:
April 18, 2000, Tysons Corner, Virginia: ILM Senior Living, Inc. ("ILM I")
announced today that it has entered into an amendment to the existing merger
agreement with Capital Senior Living Corporation (NYSE: SCU) whereby ILM I and
Capital have agreed that ILM I will be acquired by Capital for $87,429,000 (or
$11.63 per ILM I share) in cash, pursuant to a merger of ILM I into a wholly
owned subsidiary of Capital. The previous merger consideration announced in
October 1999 was $97,018,000 (or $12.90 per ILM I share) in cash.
Capital reported to ILM I that it has obtained the signed commitment of
GMAC Commercial Mortgage Corporation and its affiliates to provide Capital with
substantially all of the cash funds necessary to pay the merger consideration.
The GMAC financing commitment contains customary funding and termination
conditions and market "outs", and expires by its terms on July 31, 2000.
ILM I reported that it recently had been advised by Capital that, due to
deteriorating conditions in the senior living industry and decline in the
combined loan value of ILM I properties, Capital was informed by its prospective
lenders that they would not be able to raise sufficient financing to fund the
original $97,018,000 purchase price.
In connection with the amendment, Capital has agreed to pay ILM I certain
increased termination fees in certain circumstances. In addition, Capital has
agreed to reduce the amount of fees and expenses it would receive upon
termination of the merger in certain circumstances.
Consummation of the merger is subject to a variety of conditions,
including: (i) approval by the holders of not less than 66-2/3% of the
outstanding ILM I common stock; (ii) the receipt of requisite approvals from all
public and governmental authorities; (iii) the transfer to ILM I of certain
assets owned by ILM I's wholly owned subsidiary together with the cancelation of
related mortgage indebtedness, and the tax liquidation of such subsidiary; (iv)
the closing having occurred not later than September 30, 2000; and (v) certain
additional conditions to closing customary in transactions of this nature. There
is no assurance that consummation of the merger will occur.
Simultaneously with entering into the amended ILM I merger agreement, ILM
II Senior Living, Inc. ("ILM II") entered into an amended merger agreement with
Capital providing for the merger of ILM II into a wholly owned subsidiary of
Capital for $67,571,000 in cash (or $13.04 per ILM II share). The previous ILM
II merger consideration was $74,982,000 in cash (or $14.47 per ILM II share).
Consummation of the ILM II Merger is not a condition to consummation of ILM I
Merger.
ILM Senior Living Inc., together with ILM II Senior Living, Inc. and
their affiliates, own 13 senior living communities in nine states with a
capacity for approximately 2,100 residents.
Capital is one of the largest providers of senior living services in the
United States in terms of resident capacity. Capital has served as the manager
of ILM I's senior living communities for three years.
THIS PRESS RELEASE CONTAINS "FORWARD-LOOKING STATEMENTS" BASED ON OUR
CURRENT EXPECTATIONS AND PROJECTIONS AND FUTURE EVENTS. THESE FORWARD-LOOKING
STATEMENTS ARE SUBJECT TO A NUMBER OF RISKS AND UNCERTAINTIES WHICH COULD CAUSE
OUR ACTUAL RESULTS TO DIFFER MATERIALLY FROM HISTORICAL RESULTS OR THOSE
ANTICIPATED AND CERTAIN OF WHICH ARE BEYOND OUR CONTROL. THE WORDS "BELIEVE,"
"EXPECT," "ANTICIPATE" AND SIMILAR EXPRESSIONS IDENTIFY FORWARD-LOOKING
STATEMENTS. WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY
FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE
EVENTS OR OTHERWISE.
