NINTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.2
NINTH AMENDMENT TO CREDIT AGREEMENT
THIS NINTH AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is dated to be effective as of the 1st
day of October, 2008 (“Effective Date”) by and between BANK OF AMERICA, N.A., a national banking
association, in its capacity as administrative agent (the “Administrative Agent”) for the “Lenders”
that are parties to the “Credit Agreement” (as defined below; terms defined in the Credit Agreement
shall have the same meanings in this Agreement) and in its capacity
as Swingline Lender and L/C
Issuer; each of the undersigned Lenders; SUNRISE SENIOR LIVING, INC., a Delaware corporation (the
“Borrower”); and each of the undersigned Guarantors. Hereafter, the Borrower and the Guarantors are
collectively referred to as the “Obligors”; and the Administrative Agent, the Lenders, the
Swingline Lender and the L/C Issuer are collectively referred to as the “Credit Parties.”
RECITALS
The Obligors are parties with the Credit Parties to a Credit Agreement dated December 2, 2005 as
amended by the First Amendment To Credit Agreement dated March 6, 2006, the Second Amendment To
Credit Agreement dated January 31, 2007, the Third Amendment To Credit Agreement dated June 27,
2001, the Fourth Amendment To Credit Agreement dated
September 17, 2007, the Fifth Amendment To
Credit Agreement dated January 31, 2008, the Sixth Amendment To Credit Agreement dated February 19,
2008, the Seventh Amendment To Credit Agreement dated March 13, 2008, and the Eighth Amendment To
Credit Agreement dated July 23, 2008 (collectively, as amended by this Agreement, and as further
amended, modified, substituted, extended and renewed from time to time, the “Credit Agreement”).
The Obligors have requested the Credit Parties agree to: (a) waive the non-compliance of the
Borrower with the financial covenant set forth in Section 7.14.(a) (Consolidated Net Worth) of the
Credit Agreement for the fiscal quarter ending September 30, 2008; and (b) make the other changes
to the terms of the Credit Agreement as are more particularly set forth herein.
The undersigned Credit Parties and the Obligors have entered into this Agreement to provide for
the requested waiver and changes.
the requested waiver and changes.
NOW,
THEREFORE, in consideration of the premises, the mutual agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
Section 1. Acknowledgment Of Obligations; Reaffirmation Of Obligations. The Obligors
acknowledge that: (a) each of the Loan Documents is the valid and binding obligation of each of the
Obligors that is a signatory thereto; (b) the Loan Documents are enforceable in accordance with all
stated terms; and (c) the Obligors have no defenses, claims of offset, or counterclaims against the
enforcement of the Loan Documents in accordance with all stated terms. Each Obligor hereby
reaffirms and ratifies all of its respective duties and obligations under the Loan Documents to
which it is a party.
Section 2. Waiver. Subject to the compliance by the Obligors with their covenants and
agreements set forth in this Agreement, the undersigned Credit Parties hereby waive the
noncompliance of the Borrower with the financial covenant set forth in Section 7.14.(a)
(Consolidated Net Worth) of the Credit Agreement for the fiscal quarter ending September 30, 2008.
Section 3. Amendment And Modification Of Credit Agreement. The Credit Agreement is hereby
amended and modified as of the Effective Date as follows:
Section 3.1. Amendment of Definition of “Applicable Rate”. The existing definition of
“Applicable Rate” is hereby deleted in its entirety and replaced with the following definition:
“Applicable Rate” means three hundred seventy-five (375) basis points for Eurodollar Rate Loans and
two hundred twenty-five (225) basis points for Base Rate Loans.”
Section 3.2.
Amendment to Section 2.8.(a) of Credit Agreement. The following sentence shall
be added to the end of Section 2.8.(a):
“Notwithstanding anything to the contrary in this Agreement, the minimum rate
upon which interest may accrue upon any of the Loans at any time shall not be
less than five percent (5%) per annum.”
Section 3.3.
Amendment of Section 3.3 of Credit Agreement. The following subsection (d) shall be added to the first sentence of Section 3.3 of the Credit Agreement:
”; ... or (d) the Base Rate is less than the BBA LIBOR.”
Section 4. Waiver And Amendment Fee. The Borrower shall pay upon its execution and delivery
of this Agreement to the Administrative Agent for the accounts of each Lender that executes this
Agreement, in accordance with its respective Applicable Percentage, a waiver and amendment fee in
the aggregate amount of Two Hundred Thousand Dollars ($200,000.00).
Section 5. Obligors’ Representations And Warranties. As an inducement to the Credit Parties
to enter into this Agreement and to agree to the requested waiver and to the modifications provided
for herein, each of the Obligors makes the following representations and warranties to the Credit
Parties and acknowledges the justifiable reliance of the Credit Parties thereon:
Section 5.1. Authority And Good Standing. Each Obligor: (a) has the power to enter into
this Agreement and any related documents and to perform all of its obligations hereunder and
thereunder; (b) has duly authorized the entry into and performance of this Agreement and all
related documents; and (c) is in good standing in the state of its organization and is qualified to
do business and is in good standing in all other states in which it transacts business.
Section 5.2. No Violations. The execution, delivery, and performance of this Agreement by
the Obligors will not immediately, or with the passage of time, the giving of notice, or both: (a)
violate any laws or result in a default under any contract, agreement, or instrument to which any
Obligor is a party or by which any Obligor or any properties of any Obligor are bound; or (b)
result in the creation or imposition of any security interest in, or lien or encumbrance upon, any
of the assets of the Obligors.
Section 5.3. Accuracy Of Information. All information and data submitted by or on behalf of
the Obligors in connection with this Agreement and the transactions contemplated herein, is true,
accurate and complete in all material respects as of the date made and contains no knowingly false,
incomplete or misleading statements.
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Section 5.4. Pending Proceedings. There are no actions, suits or proceedings pending
against any of the Obligors, the adverse determination of which would be likely to have a Material
Adverse Effect other than the proceedings itemized on Schedule 5.4 attached hereto.
Section 5.5. Judgments. No judgments have been entered against any of the Obligors which
when aggregated with all judgments against all Obligors exceed the
Threshold Amount.
Section 5.6. Borrower’s Representations And Warranties. All of the Borrower’s
representations and warranties set forth in the Credit Agreement and in the other Loan Documents
continue to be true, accurate, and complete in all material respects as of the Effective Date, with
the sole exception of the representation and warranty regarding the form of financial statements
described in Section 6.5 of the Credit Agreement.
Section 5.7. Defaults And Events Of Default. No Defaults or Events of Default have occurred
and are continuing as of the Effective Date, other than the noncompliance of the Borrower for the
fiscal quarter ending September 30, 2008 with the financial
covenant set forth in Section 7.14.(a)
of the Credit Agreement.
Section 6. Consultant. The Obligors consent to the engagement by the Administrative Agent
for the sole benefit of the Credit Parties of a consulting firm (“Consultant”) to review the
financial and operating conditions and procedures of the Obligors and to advise the Credit Parties
with respect thereto. The Obligors agree to cooperate with the Consultant and to provide the
Consultant with such information and access to the Obligors and to their respective books and
records and facilities as may be reasonably requested from time to time by the Consultant in order
to enable the Consultant to deliver its analysis to the Credit Parties not later than December 15,
2008. The Obligors shall reimburse the Administrative Agent for all fees and expenses of the
Consultant upon the Administrative Agent’s demand for reimbursement from the Obligors.
Section 7. Restructuring Of Credit Agreement And Obligations. All parties to this Agreement
acknowledge that it is the intention of the parties to revise and restructure the Credit Agreement
and the terms of the Obligations and Loan Documents prior to January 31, 2009, on terms and
conditions that are acceptable to the Credit Parties which shall include inter alia the granting by
the Obligors to the Credit Parties of such tangible collateral securing the repayment and
performance of the Obligations as will be acceptable to the Credit Parties in order to
collateralize the Obligations. The failure of the parties to mutually agree upon the terms and
conditions of such restructuring and revision of the Obligations and Loan Documents by January 31,
2009 shall constitute an Event of Default.
Section 8. No Other Modifications Of Loan Documents. The Obligors acknowledge that except
as specifically stated in this Agreement, the Loan Documents shall not be deemed to have been
amended, modified or changed in any respect, and shall continue to be enforceable against the
parties thereto in accordance with all stated terms.
Section 9. Further Assurances. Each Obligor agrees to execute and deliver to the
Administrative Agent such other and further documents as may, from time to time, be reasonably
requested by the Administrative Agent in order to execute or enforce the terms and conditions of
this Agreement or any of the Loan Documents.
Section 10. No Novation; No Refinance. It is the intent of each of the parties that nothing
contained in this Agreement shall be deemed to effect or accomplish or otherwise constitute a
novation of any of the agreements between the parties or of any of the obligations owed by any of
the Obligors to the
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Credit Parties or to be a refinance of any of the Obligations. Except as expressly provided for in
this Agreement, nothing contained herein shall be deemed to extinguish, terminate or impair any of
the duties or obligations owed by any of the Obligors to the Credit Parties.
Section 11. Waiver. No failure or delay by the Credit Parties in the exercise or
enforcement of any of their rights under any Loan Document shall be a waiver of such right or
remedy nor shall a single or partial exercise or enforcement thereof preclude any other or further
exercise or enforcement thereof or the exercise or enforcement of any other right or remedy. The
Credit Parties may at any time or from time to time waive all or any rights under this Agreement or
any of the Loan Documents, but any such waiver must be specific and in writing and no such waiver,
including without limitation the waiver set forth above in Section 2 of this Agreement, shall
constitute, unless specifically so expressed by the Administrative Agent on behalf of the Credit
Parties in writing, a future waiver of performance or exact performance by the Obligors. No notice
to or demand upon any Obligor in any instance shall entitle any Obligor to any other or further
notice or demand in the same, similar or other circumstance.
Section 12. Obligations Unconditional. The obligations of the Obligors set forth in this
Agreement and as required by the terms of the Loan Documents are absolute and unconditional, and
are independent of any defense or rights of set-off, recoupment or counterclaim which any of the
Obligors might have or ever had against any of the Credit Parties. Each of the Obligors agrees that
all payments required hereunder and/or by the Loan Documents shall be made free of any deductions
and without abatement, diminution or set-off.
Section 13. Reimbursement Of Expenses Of Administrative Agent. The Obligors agree to
reimburse to the Administrative Agent for all expenses incurred by the Administrative Agent in
connection with the negotiation and preparation of this Agreement and all other expenses incurred
by the Administrative Agent in connection with the consummation of the transactions and matters
described herein, including without limitation all attorneys’ fees incurred by the Administrative
Agent.
Section 14. Enforceability. This Agreement shall inure to the benefit of and be enforceable
against each of the parties and their respective successors and assigns.
Section 15.
Choice Of Law; Consent To Jurisdiction; Agreement As To Venue. This Agreement shall be
construed, performed and enforced and its validity and enforceability determined in accordance with
the Laws of the Commonwealth of Virginia (excluding, however, conflict of laws principles). Each of
the parties consents to the non-exclusive jurisdiction of the courts of the Commonwealth of
Virginia sitting in Fairfax County and of the United States District Court for the Eastern District
of Virginia, if a basis for federal jurisdiction exists. Each of the parties waives any right to
object to the maintenance of a suit in either of such courts on the basis of improper venue or
inconvenience of forum.
Section 16. RELEASE. IN ORDER TO INDUCE THE CREDIT PARTIES TO ENTER INTO THIS AGREEMENT,
EACH OF THE OBLIGORS FOREVER RELEASES AND DISCHARGES EACH OF THE CREDIT PARTIES AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS (COLLECTIVELY, THE “RELEASED
PARTIES”) FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, SUITS AND DAMAGES (INCLUDING CLAIMS FOR
ATTORNEYS’ FEES AND COSTS) WHICH ANY OF THE OBLIGORS, JOINTLY OR SEVERALLY, EVER HAD OR MAY NOW
HAVE AGAINST ANY OF THE RELEASED PARTIES FOR ANY CLAIMS ARISING OUT OF OR RELATED IN ANY WAY TO
THE OBLIGATIONS, THE LOAN DOCUMENTS, THIS AGREEMENT OR THE ADMINISTRATION THEREOF, WHETHER KNOWN OR
UNKNOWN, INCLUDING
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BUT NOT LIMITED TO ANY AND ALL CLAIMS BASED UPON OR RELYING ON ANY ALLEGATIONS OR ASSERTIONS OF
DURESS, ILLEGALITY, UNCONSCIONABILITY, BAD FAITH, BREACH OF CONTRACT, REGULATORY VIOLATIONS,
NEGLIGENCE, MISCONDUCT, OR ANY OTHER TORT, CONTRACT OR REGULATORY CLAIM OF ANY KIND OR NATURE.
THIS RELEASE IS INTENDED TO BE FINAL AND IRREVOCABLE AND IS NOT SUBJECT TO THE SATISFACTION OF ANY
CONDITIONS OF ANY KIND.
Section 17. Waiver Of Jury Trial. Each of the parties agrees that any suit, action, or
proceeding, whether claim or counterclaim, brought or instituted by it or by any of its successors
or assigns, on or with respect to this Agreement, the Obligations (or the administration thereof),
or any of the other Loan Documents, or which in any way, directly or indirectly relates thereto,
shall be tried by a court and not by a jury. EACH OF THE PARTIES TO THIS AGREEMENT EXPRESSLY
WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR PROCEEDING.
Section 18. Counterparts And Delivery. This Agreement may be executed and delivered in
counterparts, and shall be fully enforceable against each signatory, even if all designated
signatories do not actually execute this Agreement. This Agreement, and the signatures to this
Agreement, may be delivered by electronic transmission.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be duly executed and
delivered under seal by their duly authorized representatives to be effective as of the Effective
Date.
WITNESS/ATTEST: | BORROWER: | |||||||||
SUNRISE SENIOR LIVING, INC. | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 | |||||||||
GUARANTORS: | ||||||||||
SUNRISE SENIOR LIVING MANAGEMENT, INC. | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 | |||||||||
SUNRISE SENIOR LIVING INVESTMENTS, INC. | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 | |||||||||
SUNRISE DEVELOPMENT, INC. | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 |
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WITNESS/ATTEST: | GUARANTORS (cont.): | |||||||||
SUNRISE SENIOR LIVING SERVICES, INC. | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 |
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WITNESS/ATTEST: | ADMINISTRATIVE AGENT: | |||||||||
BANK OF AMERICA, N.A., | ||||||||||
As Administrative Agent | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 | |||||||||
LENDER: | ||||||||||
BANK OF AMERICA, N.A., as a Lender, | ||||||||||
L/C Issuer and Swing Line Lender in its own right | ||||||||||
and as successor by merger to LaSalle Bank | ||||||||||
National Association | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 |
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WITNESS/ATTEST: | LENDER: | |||||||||
WACHOVIA BANK, NATIONAL ASSOCIATION, | ||||||||||
as a Lender, | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 |
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WITNESS/ATTEST: | LENDER: | |||||||||
HSBC BANK USA, N.A.., as a Lender, | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 |
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WITNESS/ATTEST: | LENDER: | |||||||||
MANUFACTURERS AND TRADERS TRUST | ||||||||||
COMPANY, as a Lender in its own right and | ||||||||||
as successor by merger to First Horizon Bank, | ||||||||||
formerly a division of First Tennessee Bank, N.A., | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 |
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WITNESS/ATTEST: | LENDER: | |||||||||
CHEVY CHASE BANK, F.S.B., as a Lender, | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 |
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WITNESS/ATTEST: | LENDER: | |||||||||
PNC BANK NATIONAL ASSOCIATION., | ||||||||||
as a Lender, in its own right and as successor | ||||||||||
by merger to Farmers & Merchants Bank | ||||||||||
By: | (SEAL) | |||||||||
Name: | ||||||||||
Title: | ||||||||||
Date: | November , 2008 |
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