<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 1, 2000
FILE NO. 0-19516
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13E-3
RULE 13E-3 TRANSACTION STATEMENT
(Under Section 13(e) of the Securities Exchange Act of 1934)
(Amendment No. 1)
------------------------------------
SUNRISE INTERNATIONAL LEASING CORPORATION
(Name of the Issuer)
SUNRISE INTERNATIONAL LEASING CORPORATION,
PETER J. KING,
THE KING MANAGEMENT CORPORATION,
STEPHEN D. HIGGINS, AS CO-TRUSTEE UNDER THE
WILLIAM B. KING STOCK TRUST UA DATED NOVEMBER 21, 1989 FBO WILLIAM B. KING,
STEPHEN D. HIGGINS, AS CO-TRUSTEE UNDER THE
RUSSELL S. KING STOCK TRUST UA DATED NOVEMBER 11, 1989 FBO
RUSSELL S. KING, AND PETER J. KING, AS SOLE TRUSTEE UNDER
THE VOTING TRUST UA DATED MAY 27, 1998
(Names of the Persons Filing Statement)
------------------------------------
COMMON STOCK, $.01 PAR VALUE
(Title of Class of Securities)
86769K-10-5
(CUSIP Number of Class of Securities)
PETER J. KING
CHIEF EXECUTIVE OFFICER
SUNRISE INTERNATIONAL LEASING CORPORATION
5500 WAYZATA BLVD., SUITE 750
GOLDEN VALLEY, MINNESOTA 55416
612-593-1904
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications on Behalf of Persons Filing Statement)
COPIES TO:
THOMAS R. KING BRUCE A. MACHMEIER
FREDRIKSON & BYRON, P.A. OPPENHEIMER WOLFF & DONNELLY LLP
1100 INTERNATIONAL CENTRE 45 SOUTH SEVENTH STREET
900 SECOND AVENUE SOUTH SUITE 3300
MINNEAPOLIS, MINNESOTA 55402 MINNEAPOLIS, MINNESOTA 55402
This statement is filed in connection with (check the appropriate box):
a. [x] The filing of solicitation materials or an information
statement subject to Regulation 14A (17 CFR 240.14a-1 to
240.14b-1), Regulation 14C (17 CFR 240.14c-1 to 240.14c-101)
or Rule 13e-3(c) (ss. 240.13e-3(c)) under the Securities
Exchange Act of 1934.
b. [ ] The filing of a registration statement under the Securities
Act of 1933.
c. [ ] A tender offer.
d. [ ] None of the above.
<PAGE> 2
Check the following box if the soliciting materials or information statement
referred to in checking box (a) are preliminary copies: [x]
CALCULATION OF FILING FEE
================================================================================
Transaction Valuation Amount of Filing Fee
$14,000,000* $2,800**
================================================================================
* The "Transaction Valuation" amount referred to above is approximately
the sum of (i) the product of 2,481,627 outstanding shares of Common
Stock (excluding 4,154,626 shares owned by King Management and its
affiliates) and $5.25, the cash price per share to be paid in the
merger, plus (ii) cash consideration of up to $792,430 to be paid for
options to purchase 400,116 shares of Common Stock being surrendered in
connection with the merger.
** In accordance with Rule 0-11 under the Securities Exchange Act of 1934,
as amended, the filing fee is determined by multiplying the Transaction
Valuation by 1/50th of 1%.
[x] Check box if any part of the fee is offset as provided by Rule 0-11
(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: $2,800
Form or Registration No.: Preliminary Proxy Statement on Schedule 14A
Filing Party: Sunrise International Leasing Corporation
Date Filed: March 10, 2000
================================================================================
2
<PAGE> 3
INTRODUCTION
This Amendment No. 1 to Rule 13e-3 Transaction Statement on Schedule
13E-3 ("Statement") is being filed jointly by Sunrise International Leasing
Corporation, a Delaware corporation ("Sunrise"), The King Management
Corporation, a Minnesota corporation ("King Management"), Peter J. King, Chief
Executive Officer and Chairman of the Board of both Sunrise and King Management
("King") Stephen D. Higgins, as co-trustee under the William B. King Stock Trust
UA dated November 21, 1989 FBO William B. King, Stephen D. Higgins, as
co-trustee under the Russell S. King Stock Trust UA dated November 11, 1989 FBO
Russell S. King and Peter J. King, as sole voting trustee under the Voting Trust
UA dated May 27, 1998 in connection with a proposed merger ("Merger") of Sunrise
with and into King Management, with King Management as the surviving entity,
pursuant to an Agreement and Plan of Merger, dated January 31, 2000, between
Sunrise and King Management (the "Merger Agreement"). The Merger Agreement and
the Merger have already been approved by a special committee of Sunrise's Board
of Directors and Sunrise's Board of Directors. Sunrise's stockholders will be
asked to vote upon the approval of the Merger Agreement at a Special Meeting of
the Stockholders of Sunrise (the "Special Meeting"). Copies of the Merger
Agreement have been filed by Sunrise as Exhibit 2.1 to Sunrise's Current Report
on Form 8-K ("Form 8-K") filed with the Securities and Exchange Commission on
February 3, 2000.
This Statement is intended to satisfy the reporting requirements of
Section 13(e) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Concurrently with the filing of this Statement, Sunrise is filing a
an amended preliminary proxy statement (the "Proxy Statement") under Regulation
14A of the Exchange Act pursuant to which the stockholders of Sunrise will be
given notice of, and an opportunity to vote on, the Merger at the Special
Meeting. The Proxy Statement is incorporated herein by reference. Except as
otherwise set forth below, the information set forth in the Proxy Statement,
including all appendices thereto, is hereby expressly incorporated herein by
reference in response to the items of this Schedule 13E-3, and the responses to
each item in this Statement are qualified in their entirety by the information
contained in the Proxy Statement and the appendices thereto. Capitalized terms
used but not defined herein shall have the meanings ascribed to such terms in
the Proxy Statement.
ITEM 1. SUMMARY TERM SHEET.
The information set forth in the Proxy Statement under the captions
"SUMMARY TERM SHEET" and "QUESTIONS AND ANSWERS ABOUT THE SPECIAL
MEETING" is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) The information set forth on the cover page of the Proxy
Statement and in the Proxy Statement under the caption
"SUMMARY TERM SHEET - The Companies" is incorporated herein by
reference.
(b) The information set forth in the Proxy Statement under the
caption "INFORMATION CONCERNING THE SPECIAL MEETING - Record
Date and Quorum Requirement" and on the cover page of the
Proxy Statement is incorporated herein by reference.
(c)-(d) The information set forth in the Proxy Statement under
the caption "COMMON STOCK MARKET PRICE AND DIVIDEND
INFORMATION" is incorporated herein by reference.
3
<PAGE> 4
(e) The information set forth in the Proxy Statement under the
caption "SPECIAL FACTORS - Public Offerings and Repurchases of
Common Stock" is incorporated herein by reference.
(f) The information set forth in the Proxy Statement under the
caption "COMMON STOCK PURCHASE INFORMATION" is incorporated
herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSONS.
(a)-(c) The information set forth in the Proxy Statement under
the captions "SUMMARY TERM SHEET - The Companies;" "CURRENT
MANAGEMENT OF SUNRISE;" "KING MANAGEMENT;" "SPECIAL FACTORS -
Interests of Certain Persons in the Merger; - Consequences of
the Merger; - Plans for Surviving Company After the Merger"
and "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT" is incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) The information set forth in the Proxy Statement and under the
captions "SUMMARY TERM SHEET;" "INFORMATION CONCERNING THE
SPECIAL MEETING - Vote Required;" "SPECIAL FACTORS" and "THE
MERGER AGREEMENT" is incorporated herein by reference and
Appendices A and B to the Proxy Statement are also
incorporated herein by reference.
(c) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET;" "INFORMATION CONCERNING THE
SPECIAL MEETING - Agreement to Facilitate the Merger;"
"SPECIAL FACTORS - Interests of Certain Persons in the
Merger;" "THE MERGER AGREEMENT - The Merger; - Treatment of
Stock Options; - Agreement to Facilitate the Merger" and
"SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERSHIP AND
MANAGEMENT" is incorporated herein by reference and Appendices
A and B to the Proxy Statement are also incorporated herein by
reference.
(d)-(e) The information set forth in the Proxy Statement under
the caption "APPRAISAL RIGHTS" is incorporated herein by
reference and Appendix D to the Proxy Statement is also
incorporated herein by reference.
(f) Not applicable.
ITEM 5. PAST CONTACTS, TRANSACTIONS OR NEGOTIATIONS AND AGREEMENTS.
(a) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET;" "INFORMATION CONCERNING THE
SPECIAL MEETING - Agreement to Facilitate the Merger;"
"SPECIAL FACTORS - Background of the Merger; - Interests of
Certain Persons in the Merger;" "THE MERGER AGREEMENT -
Agreement to Facilitate the Merger" and "RELATED PARTY
TRANSACTIONS" is incorporated herein by reference and Appendix
B to the Proxy Statement is also incorporated herein by
reference.
4
<PAGE> 5
(b)-(c) The information set forth in the Proxy Statement under
the caption "SPECIAL FACTORS - Background of the Merger" is
incorporated herein by reference.
(e) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET - The Merger; - Agreement to
Facilitate the Merger; - Security Ownership of Management; -
Interests of Certain Persons in the Merger;" "INFORMATION
CONCERNING THE SPECIAL MEETING - Agreement to Facilitate the
Merger;" "THE MERGER AGREEMENT;" "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" and "RELATED PARTY
TRANSACTIONS" is incorporated herein by reference and
Appendices A and B to the Proxy Statement are also
incorporated herein by reference.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(b) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET - Consequences of the Merger" and
"SPECIAL FACTORS - Interests of Certain Persons in the Merger;
- Consequences of the Merger; - Plans for Surviving Company
After the Merger" is incorporated herein by reference.
(c)(1)-(8) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET - Consequences of the Merger;"
"SPECIAL FACTORS - Interests of Certain Persons in the Merger;
- Consequences of the Merger; - Plans for Surviving Company
After the Merger" and "KING MANAGEMENT" is incorporated herein
by reference.
ITEM 7. PURPOSES, ALTERNATIVES, REASONS AND EFFECTS.
(a)-(d) The information set forth in the Proxy Statement under
the captions "SUMMARY TERM SHEET - Consequences of the Merger;
- Recommendation of the Special Committee and Sunrise's Board
of Directors; Reasons for the Merger; - Interests of Certain
Persons in the Merger; - Material Federal Income Tax
Consequences;" "SPECIAL FACTORS - Background of the Merger; -
Recommendations of the Special Committee and the Board of
Directors; Reasons for the Merger; - King Management's
Purpose; Reasons for and Structure of the Merger; - Benefits
and Detriments of the Merger to Sunrise and Sunrise's
Stockholders; - Interests of Certain Persons in the Merger; -
Consequences of the Merger; - Plans for the Surviving Company
After the Merger; - U.S. Federal Income Tax Consequences" and
"THE MERGER AGREEMENT" is incorporated herein by reference.
5
<PAGE> 6
ITEM 8. FAIRNESS OF THE TRANSACTION.
(a)-(e) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET - Fairness Opinion of U.S.
Bancorp Piper Jaffray;" "INFORMATION CONCERNING THE SPECIAL
MEETING - Vote Required; - Agreement to Facilitate the
Merger;" "SPECIAL FACTORS - Background of the Merger; -
Recommendations of the Special Committee and Sunrise's Board
of Directors; Reasons for the Merger; - Opinion of the
Financial Advisor for the Special Committee; - Position of
King Management as to the Fairness of the Merger;" "THE MERGER
AGREEMENT;" "SELECTED HISTORICAL CONSOLIDATED FINANCIAL
INFORMATION;" "FINANCIAL PROJECTIONS;" "COMMON STOCK MARKET
PRICE AND DIVIDEND INFORMATION" and "SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT" is incorporated
herein by reference and Appendices B and C to the Proxy
Statement are also incorporated herein by reference.
(f) Not applicable.
ITEM 9. REPORTS, OPINIONS, APPRAISALS AND CERTAIN NEGOTIATIONS.
(a)-(c) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET - Fairness Opinion of U.S.
Bancorp Piper Jaffray;" and "SPECIAL FACTORS - Background of
the Merger; - Recommendations of the Special Committee and
Sunrise's Board of Directors; Reasons for the Merger; -
Opinion of the Financial Advisor for the Special Committee; -
Position of King Management as to the Fairness of the Merger"
is incorporated herein by reference and Appendix C to the
Proxy Statement is also incorporated herein by reference.
ITEM 10. SOURCE AND AMOUNTS OF FUNDS OR OTHER CONSIDERATION.
(a)-(b) The information set forth in the Proxy Statement under
the captions "SUMMARY TERM SHEET - The Merger; - Financing;
Source of Funds;" "SPECIAL FACTORS - Financing; Source of
Funds" and "THE MERGER AGREEMENT" is incorporated herein by
reference.
(c) The information set forth in the Proxy Statement under the
captions "INFORMATION CONCERNING THE SPECIAL MEETING -
Solicitation, Revocation and Use of Proxies" and "SPECIAL
FACTORS - Fees and Expenses" is incorporated herein by
reference.
(d) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET - Financing; Source of Funds;"
"SPECIAL FACTORS - Financing; Source of Funds" and "THE MERGER
AGREEMENT" is incorporated herein by reference.
ITEM 11. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET - Interests of Certain Persons in
the Merger;" "SPECIAL FACTORS - Interests of Certain Persons
in the Merger;" "SECURITY OWNERSHIP OF CERTAIN
6
<PAGE> 7
BENEFICIAL OWNERS AND MANAGEMENT" and "COMMON STOCK
PURCHASE INFORMATION" is incorporated herein by reference.
(b) The information set forth in the Proxy Statement under the
caption "COMMON STOCK PURCHASE INFORMATION - Recent
Transactions" is incorporated herein by reference.
ITEM 12. THE SOLICITATION OR RECOMMENDATION.
(d) The information set forth in the Proxy Statement under the
captions "QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING;"
"INFORMATION CONCERNING THE SPECIAL MEETING" and "THE MERGER
AGREEMENT" is incorporated herein by reference.
(e) The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET - Recommendation of the Special
Committee and Sunrise's Board of Directors; Reasons for the
Merger;" "INFORMATION CONCERNING THE SPECIAL MEETING -
Solicitation, Revocation and Use of Proxies;" and "SPECIAL
FACTORS - Background of the Merger; - Recommendations of the
Special Committee and the Board of Directors; Reasons for the
Merger; - King Management's Purpose; Reasons for and
Structure of the Merger; - Position of King Management as to
Fairness of the Merger" is incorporated herein by reference.
ITEM 13. FINANCIAL STATEMENTS.
(a) The information set forth in the Proxy Statement under the
captions "SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA" and
"DOCUMENTS INCORPORATED BY REFERENCE" is incorporated herein
by reference.
(b) The information set forth in the Proxy Statement under the
caption "PRO FORMA FINANCIAL INFORMATION" is incorporated
herein by reference.
ITEM 14. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
(a)and(b) The information set forth in the Proxy Statement under
the caption "INFORMATION CONCERNING THE SPECIAL MEETING -
Solicitation, Revocation and Use of Proxies" is incorporated
herein by reference.
ITEM 15. ADDITIONAL INFORMATION.
The information set forth in the Proxy Statement under the
captions "SUMMARY TERM SHEET - Stockholder Lawsuit Challenging
the Merger;" "FINANCIAL PROJECTIONS" and "SPECIAL FACTORS -
Stockholder Lawsuit Challenging the Merger" is incorporated
herein by reference.
7
<PAGE> 8
ITEM 16. EXHIBITS.
(a) Preliminary Proxy Statement, including all appendices thereto,
and related Notice of Special Meeting of Stockholders, as
amended (incorporated herein by reference to the Preliminary
Proxy Statement, as amended, filed concurrently with this
Statement).
(b) Letter dated April 27, 2000 from LaSalle Bank N.A. relating to
loan commitment.
(c)(1) Fairness Opinion of U.S. Bancorp Piper Jaffray dated January
27, 2000 (incorporated herein by reference to Appendix C to
the Proxy Statement filed as Exhibit (a) to this Statement).
(c)(2) Fairness Opinion Presentation to the Special Committee of the
Board of Directors of Sunrise prepared and presented by U.S.
Bancorp Piper Jaffray dated January 27, 2000 (filed herewith).
(d)(1) Agreement and Plan of Merger, dated January 31, 2000, between
Sunrise and King Management (incorporated herein by reference
to Exhibit 2.1 to Sunrise's Current Report on Form 8-K filed
with the SEC on February 3, 2000).
(d)(2) Agreement to Facilitate Merger, dated January 31, 2000, by
and among King Management, Peter J. King, Stephen D. Higgins,
as trustee under each of the William B. King Stock Trust UA
Dated November 21, 1989 FBO William B. King and the Russell S.
King Stock Trust UA Dated November 11, 1989 FBO Russell S.
King, and Stephen D. Higgins, as sole trustee under each of
the Separate Trust FBO William B. King UA Dated April 28,
1995, the Separate Trust FBO Russell S. King UA Dated April
28, 1995, the GST Trust FBO William B. King UA Dated April 28,
1995 and the GST Trust FBO Russell S. King UA Dated April 28,
1995 (incorporated herein by reference to Exhibit 2.2 to
Sunrise's Current Report on Form 8-K filed with the SEC on
February 3, 2000).
(d)(3) Voting Trust Agreement dated May 27, 1998 among Peter J.
King, The King Management Corporation, the William B. King
Stock Trust, the Russell S. King Stock Trust and the Peter J.
King 1996 Grantor Retained Annuity Trust (incorporated herein
by reference to Exhibit 1 contained in Amendment No. 5 to
Schedule 13D dated May 28, 1998 filed by Peter J. King (File
No. 5-42174)).
(f) Statement of Appraisal Rights and Procedures (incorporated
herein by reference to Appendix D to the Proxy Statement filed
as Exhibit (a) to this Statement).
(g) None.
8
<PAGE> 9
SIGNATURE
After due inquiry and to the best of our knowledge and belief, we certify
that the information set forth in this statement is true, complete and correct.
SUNRISE INTERNATIONAL LEASING CORPORATION
By /s/ Peter J. King
--------------------------------------
Peter J. King
Chief Executive Officer
THE KING MANAGEMENT CORPORATION
By /s/ Peter J. King
--------------------------------------
Peter J. King
Chief Executive Officer
/s/ Peter J. King
-----------------------------------------
Peter J. King
THE WILLIAM B. KING STOCK TRUST UA
DATED NOVEMBER 21, 1989 FOR THE
BENEFIT OF WILLIAM B. KING
/s/ Stephen D. Higgins
-----------------------------------------
Stephen D. Higgins
Co-Trustee
/s/ William B. King
-----------------------------------------
William B. King
Co-Trustee
THE RUSSELL S. KING STOCK TRUST UA
DATED NOVEMBER 11, 1989 FOR THE
BENEFIT OF RUSSELL S. KING
/s/ Stephen D. Higgins
-----------------------------------------
Stephen D. Higgins
Co-Trustee
/s/ Russell S. King
-----------------------------------------
Russell S. King
Co-Trustee
9
<PAGE> 10
VOTING TRUST UA DATED MAY 27, 1998
/s/ Peter J. King
-----------------------------------------
Peter J. King
Sole Voting Trustee
Dated: May 1 , 2000
--
10
<PAGE> 11
EXHIBIT INDEX
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT FILING METHOD
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(a) Preliminary Proxy Statement, including all Incorporated herein by reference to the
appendices thereto, and related Notice of Preliminary Proxy Statement, as amended,
Special Meeting of Stockholder, as amended filed concurrently with this Statement
- ----------------------------------------------------------------------------------------------------------------------
(b) Letter dated April 27, 2000 from LaSalle Filed herewith
Bank N.A. relating to loan commitment.
- ----------------------------------------------------------------------------------------------------------------------
(c)(1) Fairness Opinion of U.S. Bancorp Piper Incorporated herein by reference to
Jaffray dated January 27, 2000 Appendix C to the Proxy Statement
filed as Exhibit (a) to this Statement
- ----------------------------------------------------------------------------------------------------------------------
(c)(2) Fairness Opinion Presentation to the Special Filed herewith
Committee of the Board of Directors of
Sunrise prepared and presented by U.S.
Bancorp Piper Jaffray dated January 27, 2000
- ----------------------------------------------------------------------------------------------------------------------
(d)(1) Agreement and Plan of Merger, dated January Incorporated herein by reference to
31, 2000, between Sunrise and King Exhibit 2.1 to Sunrise's Current
Management Report on Form 8-K filed with the SEC
on February 3, 2000
- ----------------------------------------------------------------------------------------------------------------------
(d)(2) Agreement to Facilitate Merger, dated Incorporated herein by reference to
January 31, 2000, by and among King Exhibit 2.2 to Sunrise's Current
Management, Peter J. King, Stephen D. Report on Form 8-K filed with the SEC
Higgins, as trustee under each of the on February 3, 2000
William B. King Stock Trust UA Dated November
21, 1989 FBO William B. King and the Russell
S. King Stock Trust UA Dated November 11,
1989 FBO Russell S. King, and Stephen D.
Higgins, as sole trustee under each of the
Separate Trust FBO William B. King UA Dated
April 28, 1995, the Separate Trust FBO
Russell S. King UA Dated April 28, 1995, the
GST Trust FBO William B. King UA Dated April
28, 1995 and the GST Trust FBO Russell S.
King UA Dated April 28, 1995
- ----------------------------------------------------------------------------------------------------------------------
(d)(3) Voting Trust Agreement dated May 27, 1998 Incorporated herein by reference to
among Peter J. King, The King Management Exhibit 1 contained in Amendment No. 5 to
Corporation, the William B. King Stock Schedule 13D dated May 28, 1998 filed
Trust, the Russell S. King Stock Trust and by Peter J. King (File No. 5-42174)
the Peter J. King 1996 Grantor Retained
Annuity Trust
- ----------------------------------------------------------------------------------------------------------------------
(f) Statement of Appraisal Rights and Procedures Incorporated herein by reference to
Appendix D to the Proxy Statement
filed as Exhibit (a) to this Statement.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
11
<PAGE> 1
April 27, 2000
Mr. Jeff Jacobsen
CFO
Sunrise International Leasing Corp.
5500 Wayzata Blvd., Suite 725
Golden Valley, MN 55415-1262
Dear Mr. Jacobsen:
LaSalle Bank NA is pleased to provide a commitment for a maximum of $15.0
million in term loan facility to Newco (Sunrise International Leasing Corp., and
The King Management Corp.). The attached terms have been formally approved by
LaSalle Bank NA and will be the basis for a definitive loan agreement and
related documentation to document the transaction. We look forward to working
with you on this transaction and are very interested in building a long-term
relationship with you and the newly formed entity.
We hope this commitment meets with your approval. Please sign the attached term
sheet and return it to me to acknowledge your acceptance. Unless we receive your
signed copy of the attached term sheet, in the form attached hereto, along with
a wire transfer or certified check in the amount of $100,000, on or before 5:00
pm (Chicago Time) on May 1, 2000, we shall assume you have no further interest
in pursuing this matter, and this commitment and the attached term sheet shall
expire and be of no force or effect. Upon receipt of your signed copy, along
with the non-refundable commitment fee, we will immediately instruct our counsel
to begin drafting the definitive agreement and related documents.
Sincerely,
/s/ Alexia Sarfas
Alexia Sarfas
Commercial Loan Officer
<PAGE> 2
SUNRISE INTERNATIONAL LEASING CORPORATION
TERM SHEET
APRIL 27, 2000
BORROWER: NewCo ("Company" or "Borrower")
CO-BORROWERS: Sunrise International Leasing Corporation
King Management Company
LENDER: LaSalle Bank N.A. ("LaSalle")
AMOUNT & TYPE: $15,000,000 secured term note
TERM: 36 months from closing date
INTEREST RATE: Prime, floating. Interest on the outstanding principal
shall be payable monthly, in arrears, on the first day of
each month
FEES: $100,000 non-refundable commitment fee
REPAYMENT: Monthly payments of principal equal to the greater of: (i)
100% of monthly lease payments received pursuant to all
leases on equipment and all proceeds of sale of equipment at
the end of the lease term, where applicable, or (ii)
$416,666.67. There will be no prepayment penalty.
COLLATERAL: Collateral pledge of all equipment acquired by Borrower in
the normal course of its business for lease to its customers
and all related leases, securing this $15 million term note
(which at closing will total $17,647,059).
GUARANTEE: None
BORROWING BASE: 85% advance against net book value of the Eligible
Collateral. Leases included at closing will have received at
least 3 consecutive scheduled payments. Leases replacing
others that have gone 60 days past due will have received at
least 1 payment.
ELIGIBLE
COLLATERAL: Eligible leases are all leases designated by LaSalle in its
sole discretion other than those which:
1. Are more than 60 days past due on a contractual basis
2. Underlying obligor has filed for bankruptcy protection
3. Have been prepaid
4. Concentration limit has exceeded 7% for lessee
5. Limit to Sun Microsystems exposure to 50% of leases
1
<PAGE> 3
REPORTING
REQUIREMENTS: Customary reports consistent with similar types of
Facilities, including but not limited to Monthly Borrowing
Base, and other monthly portfolio reports as agreed upon and
between the Company and LaSalle. Customary financial
disclosure including but not limited to:
a. Receipt of CPA audited financial within 120 days of
fiscal year end (starting 12/31/00)
b. Unaudited monthly statements within 30 days following
month end
Monthly portfolio reports (provided within 30 days following
month end) shall include but not be limited to:
o monthly agings (current, 30+ days, 60+ days, 90+ days,
120+ days past due), showing total portfolio and
LaSalle's collateral pool
o cash collections and expected receipts for the LaSalle
collateral pool and total portfolio
o static pool analysis showing total portfolio and
LaSalle's collateral pool (provided twice a year)
o monthly report of repossessed equipment and recoveries
(tracking to begin in April 1, 2000)
COVENANTS: Customary covenants consistent with similar types of
Facilities, including but not limited to:
1. Minimum TNW (including sub debt but not reserves) +
$35,000,000 + 75% of positive after tax net income
Provided that Company agrees to reserve 100% for all
impaired assets (impaired assets include leases over
120 days past due and bankrupt obligors, and exclude
Cisco leases subject to recourse pools)
2. Maximum ratio of senior recourse debt to TNW of 5:1
3. Minimum ratio of net income plus interest,
depreciation, amortization and taxes to interest
expense of 4.5:1
4. Maximum concentration of lessees among collateral of 7%
of the outstanding balance of the Term Note
5. Minimum equipment reserve as a percentage of net book
value of non-defaulted portfolio of 1.5%, measured
monthly
MISCELLANEOUS: Field audits will be performed periodically at the Bank's
discretion and at the expense of the Borrower. Per Field
Audit Cap: $5,300 (although LaSalle usually conducts a field
audit once a year, LaSalle reserves the right to increase
the frequency if LaSalle sees a decline in asset
performance)
2
<PAGE> 4
Borrower shall pay all expenses incident hereto and the
credit facility contemplated hereby, including without
limitation the fees and expenses of any counsel engaged by
LaSalle, recording fees, appraisal expenses, audit fees, out
of pocket expenses incurred by LaSalle in performing due
diligence, negotiating and closing this term sheet from the
date of this proposal until the closing, if any, document
and search fees and all shall be payable regardless of
whether this facility is closed or funds advanced to the
Borrower.
Legal Cap: $15,000 (assuming customary negotiations)
This term sheet is subject to the negotiation and execution of a definitive loan
and security agreement and related documentation, containing certain standard
covenants, conditions, representations, warranties and legal opinions.
Acknowledged and Accepted:
/s/ Jeffrey G. Jacobsen, EVP and CFO
- ------------------------------------
Date: 4/27/00
3
