**Exhibit 10.42****FIRST AMENDMENT TO CREDIT AGREEMENT**     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is made as of the 6th day ofMarch, 2006 between SUNRISE SENIOR LIVING, INC. a Delaware corporation (the “Company”), and BANK OFAMERICA, N.A., as Administrative Agent, Swing Line Lender and Letter of Credit Issuer (the“Administrative Agent”) for itself and certain additional lenders who are or shall be from time totime participating as lenders pursuant to the Credit Agreement as hereinafter defined (collectivelywith the Administrative Agent, the “Lenders”).**RECITALS**     A. The Lenders have made a Credit Facility available to the Company in the maximum principalsum at any one time outstanding of $250,000,000.     B. The Credit Facility is governed by a Credit Agreement dated December 2, 2005 (as amended,modified, substituted, extended and renewed from time to time the “Credit Agreement”) by andbetween the Company and the Lenders.     C. The Credit Facility is guaranteed by the Guarantors pursuant to the terms of the CreditAgreement.     D. The Company has requested and the Lenders have agreed to modify certain provisions of theCredit Agreement, and to add a wholly owned subsidiary of the Company, Karrington OperatingCompany, Inc., an Ohio corporation (“Karrington”) as a Designated Borrower.     E. As a condition precedent to the agreements referenced above, the Administrative Agent hasrequired that this Agreement be executed and delivered to the Administrative Agent on behalf of theLenders.     NOW, THEREFORE, in consideration of the premises, the mutual agreements herein contained, andother good and valuable consideration, the receipt and sufficiency of which are herebyacknowledged, the Company and the Administrative Agent hereby agree as follows:     1. The above Recitals are a part of this Agreement. Unless otherwise expressly defined inthis Agreement, terms defined in the Credit Agreement shall have the same meaning under thisAgreement.     2. The Credit Agreement is hereby amended as follows:     (a) The following defined terms are hereby added to Section 1.1:     “Bond Letter of Credit” means the Letter of Credit in the form attachedhereto as Exhibit J hereto.
 

 
     “Bond Letter of Credit Expiration Date” means November 5, 2009.     “Bonds” means the Allegheny County Industrial Development Authority’sResidential Rental Development Revenue Bonds, 1996 Series A (Karrington of SouthHills Assisted Living Facility Project).     “Indenture” means the Trust Indenture dated as of May 1, 1996 from theAllegheny County Industrial Development Authority to PNC Bank, Ohio, NationalAssociation, as predecessor to J.P. Morgan Trust Company, National Association, asTrustee in connection with the Bonds.          (b) The following defined term in Section 1.1 is hereby amended and restated as follows:     “Letter of Credit” means any standby letter of credit issued hereunderand the Bond Letter of Credit and shall include the Existing Letters of Credit.Letters of Credit may be issued in Dollars or in an Alternative Currency.          (c) Section 2.3(a)(i) is hereby amended and restated as follows:               2.3(a) The Letter of Credit Commitment.               (i) Subject to the terms and conditions set forth herein, (A) the L/C Issueragrees, in reliance upon the agreements of the Lenders set forth in this Section2.3, (1) from time to time on any Business Day during the period from the ClosingDate until the Letter of Credit Expiration Date, to issue Letters of Creditdenominated in Dollars or in one or more Alternative Currencies in any amountgreater than or equal to $10,000 for the account of the Company, or any of theBorrowers and to amend or extend Letters of Credit previously issued by it, inaccordance with subsection (b) below, and (2) to honor drawings under the Letters ofCredit; and (B) the Lenders severally agree to participate in Letters of Creditissued for the account of the Company or any of the Borrowers and any drawingsthereunder; provided that after giving effect to any L/C Credit Extension withrespect to any Letter of Credit, (x) the Total Outstandings shall not exceed theAggregate Commitments, (y) the aggregate Outstanding Amount of the Committed Loansof any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount ofall L/C Obligations, plus such Lender’s Applicable Percentage of the OutstandingAmount of all Swing Line Loans shall not exceed such Lender’s Commitment, and (z)the Outstanding Amount of the L/C Obligations shall not exceed the Letter of CreditSublimit; and provided further that the Outstanding Amount of the L/C Obligations inan Alternative Currency plus the outstanding Alternative Currency Loans shall notexceed the Alternative Currency Sublimit. Each request by the Company for theissuance or amendment of a Letter of Credit shall be deemed to be a representationby the Company that the L/C Credit Extension so requested complies with theconditions set forth in the provisos to the preceding sentence. Within theforegoing limits, and subject to the terms and conditions hereof, the ability of theCompany or any of the
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Borrowers to obtain Letters of Credit shall be fully revolving, and accordinglythe Company may, during the foregoing period, obtain Letters of Credit to replaceLetters of Credit that have expired or that have been drawn upon and reimbursed.The Lenders hereby agree to issue the Bond Letter of Credit in connection with theBonds and with an initial expiration date of the Bond Letter of Credit ExpirationDate. All Existing Letters of Credit shall be deemed to have been issued pursuanthereto, and from and after the Closing Date shall be subject to and governed by theterms and conditions hereof.          (d) The following sub-section (v) is hereby added to Section 2.3(b):          2.3(b)(v) The Lenders acknowledge that the Bond Letter of Credit permits theautomatic reinstatement of all or a portion of the stated amount thereof after anydrawing thereunder pursuant to its terms. The Company shall not be required to makea specific request to the L/C Issuer to permit such reinstatement. The Lendersshall be deemed to have authorized (but may not require) the L/C Issuer to reinstateall or a portion of the stated amount thereof in accordance with the provisions ofthe Bond Letter of Credit.          (e) Exhibit F is hereby replaced in its entirety with the form of Exhibit Fattached hereto.          (f) Sections 2.14(a), 2.14(d) and 2.14(e) are hereby amended and restated as follows:          2.14(a) The Company may at any time, upon not less than fifteen (15) BusinessDays’ notice from the Company to the Administrative Agent (or such shorter period asmay be agreed by the Administrative Agent in its sole discretion), designateanySubsidiary of the Company (an “Applicant Borrower”) as aDesignated Borrower to receive Loans in an Alternative Currency or to have Lettersof Credit issued hereunder by delivering to the Administrative Agent (which shallpromptly deliver counterparts thereof to each Lender) a duly executed notice andagreement in substantially the form of Exhibit G (a “Designated BorrowerRequest and Assumption Agreement”). The parties hereto acknowledge and agreethat prior to any Applicant Borrower becoming entitled to utilize the creditfacilities provided for herein the Administrative Agent and the Lenders shall havereceived such supporting resolutions, incumbency certificates, opinions of counseland other documents or information, in form, content and scope reasonablysatisfactory to the Administrative Agent, as may be required by the AdministrativeAgent or the Required Lenders in their sole discretion, and Notes signed by such newBorrowers to the extent any Lenders so require. If the Administrative Agent and theRequired Lenders agree that an Applicant Borrower shall be entitled to receive Loansin an Alternative Currency or to have Letters of Credit issued hereunder, thenpromptly following receipt of all such requested resolutions, incumbencycertificates, opinions of counsel and other documents or information, theAdministrative Agent shall send a notice in substantially the form of ExhibitH (a “Designated Borrower Notice”) to the Company and the Lenders
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specifying the effective date upon which the Applicant Borrower shallconstitute a Designated Borrower for purposes hereof, whereupon each of the Lendersagrees to permit such Designated Borrower to receive Loans or to have Letters ofCredit issued hereunder, on the terms and conditions set forth herein, and each ofthe parties agrees that such Designated Borrower otherwise shall be a Borrower forall purposes of this Agreement; provided that no Committed Loan Notice orLetter of Credit Application may be submitted by or on behalf of such DesignatedBorrower until the date five (5) Business Days after such effective date. For anyDesignated Borrower established under the Laws of the United Kingdom or any otherForeign Obligor, if Administrative Agent so requires, the Company shall complete theAdministrative Agent’s customary forms before any borrowing by such DesignatedBorrower.          (d) The Company may from time to time, upon not less than fifteen (15) BusinessDays’ notice from the Company to the Administrative Agent (or such shorter period asmay be agreed by the Administrative Agent in its sole discretion), terminate aDesignated Borrower’s status as such, provided that there are no outstandingLoans payable by such Designated Borrower and no Letters of Credit outstanding forthe account of such Designated Borrower, or other amounts payable by such DesignatedBorrower on account of any Loans made to it or Letters of Credit issued for itsaccount, as of the effective date of such termination. The Administrative Agent willpromptly notify the Lenders of any such termination of a Designated Borrower’sstatus.          (e) Prior to any advance of a Loan or issuance of a Letter of Credit for aDesignated Borrower, the Company shall execute and deliver to the AdministrativeAgent a Company Guaranty guarantying all obligations of such Designated Borrower forthe benefit of the Lenders.          (g) The following new Section 9.4 is hereby added:          Section 9.4 Remedies Under the Indenture.          If an Event of Default occurs or is occurring the L/C Issuer shall have theright to exercise the rights and remedies of the Bank under the terms of theIndenture. In exercising the rights and remedies of the Bank under the Indenture,the L/C issuer shall follow the direction of the Administrative Agent.     3. As conditions precedent to the issuance of the Bond Letter of Credit, the Company shallhave complied with all applicable conditions of Section 2.14 for designation of Karrington as aDesignated Borrower including but not limited to execution and delivery of a Designated BorrowerRequest and Assumption Agreement, a Designated Borrower Notice and a Company Guaranty, and deliveryof organizational documents, resolutions, incumbency certificates, and opinions of counsel forKarrington and the Company. The Company and Karrington shall also have complied with allrequirements of the documents governing the Bonds for replacement of letter of credit numberSM416676C issued by First Union National Bank as predecessor to Wachovia Bank, National Associationfor the benefit of the Chase Manhattan Trust Company, National Association, Trustee for the accountof Karrington with the Bond Letter of Credit.
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     4. Except as specifically set forth herein, the terms, provisions and covenants of the CreditAgreement, including, but not limited to, all financial covenants and definitions related thereto,are hereby ratified and confirmed and remain in full force and effect. The parties acknowledgethat regardless of the provisions Section 2.3(iii)(E) of the Credit Agreement, the L/C Issuer hasagreed to issue the Bond Letter of Credit containing certain provisions for automatic reinstatementafter drawings thereunder.     5. This Agreement may be executed in any number of duplicate originals or counterparts, eachof such duplicate originals or counterparts shall be deemed to be an original and all takentogether shall constitute but one and the same instrument.     6. By their signatures below, the Guarantors consent to the transactions contemplated by andthe agreements made by the Company under this Agreement and ratify, confirm and reissue theirguaranty as set forth in the Credit Agreement.[SIGNATURES APPEAR ON FOLLOWING PAGES]
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     IN WITNESS WHEREOF*,*the parties hereto have caused this Agreement to be duly executed anddelivered under seal by their duly authorized representatives as of the date and year first writtenabove.      **COMPANY:**