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.
     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.

2

--------------------------------------------------------------------------------

 

          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

3

--------------------------------------------------------------------------------

 

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

4

--------------------------------------------------------------------------------

 

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]

5

--------------------------------------------------------------------------------

 

     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    

6

--------------------------------------------------------------------------------

 

                      WITNESS/ATTEST:       GUARANTORS (cont.):    
 
                   
 
                            SUNRISE SENIOR LIVING SERVICES, INC.    
 
                   
 
                   
 
      By:           (SEAL)                  
 
          Name:        
 
                   
 
          Title:        
 
                   
 
                   
 
          Date:   November      , 2008    

7

--------------------------------------------------------------------------------

 

                      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    

8

--------------------------------------------------------------------------------

 

                      WITNESS/ATTEST:       LENDER:    
 
                            WACHOVIA BANK, NATIONAL ASSOCIATION,             as
a Lender,    
 
                   
 
      By:           (SEAL)                  
 
          Name:        
 
                   
 
          Title:        
 
                   
 
                   
 
          Date:   November      , 2008    

9

--------------------------------------------------------------------------------

 

                      WITNESS/ATTEST:       LENDER:    
 
                            HSBC BANK USA, N.A.., as a Lender,    
 
                   
 
                   
 
      By:           (SEAL)                  
 
          Name:        
 
                   
 
          Title:        
 
                   
 
                   
 
          Date:   November      , 2008    

10

--------------------------------------------------------------------------------

 

                      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    

11

--------------------------------------------------------------------------------

 

                      WITNESS/ATTEST:       LENDER:    
 
                            CHEVY CHASE BANK, F.S.B., as a Lender,    
 
                   
 
                   
 
      By:           (SEAL)                  
 
          Name:        
 
                   
 
          Title:        
 
                   
 
                   
 
          Date:   November      , 2008    

12

--------------------------------------------------------------------------------

 

                      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    

13