Document:

exv10w2

Exhibit 10.2

Loan No. 105093

LOAN AGREEMENT

THIS LOAN AGREEMENT (“Agreement”) is executed as of September 28, 2007, by and between SUNRISE
PASADENA CA SENIOR LIVING, LLC, a California Limited Liability Company, and SUNRISE PLEASANTON
CA SENIOR LIVING, LP, a Delaware Limited Partnership, jointly and severally, (both referred to
as “Borrower”), and WELLS FARGO BANK, NATIONAL ASSOCIATION (“Lender”).

RECITALS

	A.	 	Borrower owns or will own certain real property described in Exhibit A hereto
(individually and collectively, “Property”).
	 
	B.	 	Borrower has requested from Lender a loan for the purpose of financing
the Property.
	 
	NOW, THEREFORE, Borrower and Lender agree as follows:

ARTICLE 1. LOAN

	1.1	 	LOAN. By and subject to the terms of this Agreement, Lender agrees to lend to
Borrower and Borrower agrees to borrow from Lender the principal sum of TWENTY-ONE MILLION NINE
HUNDRED SIX THOUSAND NINE HUNDRED FIFTY AND NO/100 DOLLARS ($21,906,950.00) (“Loan”), said sum to
be evidenced by a Promissory Note Secured by Deed of Trust of even date herewith (“Note”). The Note
shall be secured, in part, by a Deed of Trust, Security Agreement, Assignment of Leases and Rents
and Fixture Financing Statement of even date herewith, executed by Borrower for the benefit of
Lender, as hereafter amended, supplemented, replaced or modified (“Deed of Trust”), encumbering
certain real property and improvements as legally defined therein.
The obligations of the
Borrower under the Loan will be guaranteed
in whole or in part by SUNRISE SENIOR LIVING, INC., a Delaware Corporation,
(“Guarantor”) pursuant to a guaranty agreement of even date herewith (“Guaranty”).
Amounts disbursed to or on behalf of Borrower pursuant to the Note shall be used to
finance the Property and for such other purposes and uses as may be permitted under this
Agreement and the other Loan Documents, as described below.
	 
	1.2	 	FEES. Borrower shall pay to Lender, at Loan closing, a
non-refundable loan fee in the amount of TWO HUNDRED NINETEEN THOUSAND SIXTY-NINE AND
50/100 DOLLARS ($219,069.50).
	 
	1.3	 	LOAN DOCUMENTS; EFFECTIVE DATE. Borrower shall deliver to Lender concurrently with
this
Agreement the Note, the Deed of Trust and any other documents required by Lender, as
hereafter amended, supplemented, replaced or modified, each properly executed and in
recordable form, as applicable, described in Exhibit B (“Loan Documents”) together with
those documents described in Exhibit B as other related documents. The effective
date (“Effective Date”) of the Loan Documents shall be the date of this Agreement as set
forth on page 1 above.
	 
	1.4	 	MATURITY DATE. The maturity date of the Loan shall be October 1, 2009 (“Maturity
Date”).
	 
	1.5	 	FULL REPAYMENT AND SATISFACTION. In addition to the partial release option set
forth in this Section 1.5, Borrower may prepay the Loan in whole or in part at any time and
from time to time upon five (5) days written notice to Lender, subject to any breakage fee
incurred by Lender. Upon receipt of all sums owing and outstanding under the Loan
Documents, Lender shall issue a full reconveyance of the Property and

 

Loan No. 105093

	 	 	improvements from the lien of the Deed of Trust; provided, however, that each of the
following conditions shall be satisfied at the time of, and with respect to, such
reconveyance: (a) Lender shall have received all escrow, closing and recording costs, the
costs of preparing and delivering such satisfaction and any sums then due and payable under
the Loan Documents; (b) Lender shall have received a written release satisfactory to Lender
of any set aside letter, letter of credit or other form of undertaking which Lender has
issued to any surety, governmental agency or any other party in connection with the Loan
and/or the Property; and (c) Lender’s obligation to make further disbursements under the
Loan shall terminate as to any portion of the Loan undisbursed as of the date of issuance
of such reconveyance, and any commitment of Lender to lend any undisbursed portion of the
Loan shall be cancelled.
	 
	 	 	Notwithstanding anything to the contrary in this Loan Agreement, the parties anticipate
that either Property I or Property II, as defined in Exhibit A hereto, covered by the
Deed of Trust may be released prior to the Maturity Date of the Loan, as long as the
conditions in this paragraph are satisfied. So long as there exist no Defaults (as
defined in the Loan Documents) or any event, omission or failure of condition, which
would constitute a Default after Notice or lapse of time, or both, Lender shall issue a
partial satisfaction of Deed of Trust covering the specific Property upon the following
conditions: (a) receipt of $18,656,950.00, for Property I or receipt of $3,250,000.00
for Property II and remaining loan balance is not more than 65% of the remaining
collateral value, as determined solely in the discretion of the Lender; and (b) Lender
shall have received a written release satisfactory to Lender of any set aside letter,
letter of credit or other form of undertaking which Lender has issued to any surety,
governmental agency or any other party in connection with the Loan and/or the Property
and improvements.
	 
	1.6	 	OPTION TO EXTEND. Borrower shall have no option to extend the term of the Loan.

ARTICLE 2. DISBURSEMENT

	2.1	 	CONDITIONS PRECEDENT. Lender’s obligation to make the disbursement of the Loan shall
be subject to satisfaction of each of the following conditions precedent:

	 	a.	 	Lender shall have received fully executed originals of all Loan Documents, the
Guaranty and any other documents, instruments, policies, and other materials requested
by Lender under the terms of this Agreement or any of the other Loan Documents.
	 
	 	b.	 	There shall exist no Default as defined in this Agreement or any of the other
Loan Documents or any event, omission or failure of condition which would constitute a
Default after notice or lapse of time, or both.

	2.2	 	FUNDS TRANSFER DISBURSEMENTS.

	 	a.	 	Borrower hereby authorizes Lender to disburse the proceeds of the Loan made by Lender or
its
affiliate pursuant to the Loan Documents as requested by an authorized representative
of the Borrower to any of the accounts designated in Exhibit D. Borrower agrees to be
bound by any transfer request: (i) authorized or transmitted by Borrower; or, (ii)
made in Borrower’s name and accepted by Lender in good faith and in compliance with
these transfer instructions, even if not properly authorized by Borrower. Borrower
further agrees and acknowledges that Lender may rely solely on any bank routing
number or identifying bank account number or name provided by Borrower to effect a
wire or funds transfer even if the information provided by Borrower identifies a
different bank or account holder than named by the Borrower. Lender is not obligated
or required in any way to take any actions to detect errors in information provided
by Borrower. If Lender takes any actions in an attempt to detect errors in the
transmission or content of transfer or requests or takes any actions in an attempt to
detect unauthorized funds transfer requests, Borrower agrees that no matter how many
times Lender takes these actions Lender will not in any situation be liable for
failing to take or correctly perform these actions in the future and such actions
shall not become any part of the transfer disbursement procedures authorized under
this provision, the Loan Documents, or any agreement

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Loan No. 105093

	 	 	 	between Lender and Borrower. Borrower agrees to notify Lender of any errors in the
transfer of any funds or of any unauthorized or improperly authorized transfer
requests within 14 days after Lender’s confirmation to Borrower of such transfer.
	 
	 	b.	 	Lender will, in its sole discretion, determine the funds transfer system and the means
by which each transfer will be made. Lender may delay or refuse to accept a funds transfer
request if the transfer would: (i) violate the terms of this authorization; (ii)
require use of a bank unacceptable to Lender or prohibited by government authority;
(iii) cause Lender to violate any Federal Reserve or other regulatory risk control
program or guideline; or (iv) otherwise cause Lender to violate any applicable law
or regulation.
	 
	 	c.	 	Lender shall not be liable to Borrower or any other parties for (i) errors, acts or
failures to act of others, including other entities, banks, communications carriers or clearinghouses,
through which Borrower’s transfers may be made or information received or
transmitted, and no such entity shall be deemed an agent of the Lender, (ii) any
loss, liability or delay caused by fires, earthquakes, wars, civil disturbances,
power surges or failures, acts of government, labor disputes, failures in
communications networks, legal constraints or other events beyond Lender’s control,
or (iii) any special, consequential, indirect or punitive damages, whether or not
(A) any claim for these damages is based on tort or contract or (B) Lender or
Borrower knew or should have known the likelihood of these damages in any situation.
Lender makes no representations or warranties other than those expressly made in
this Agreement.

ARTICLE 3. INSURANCE

Borrower shall, while any obligation of Borrower or any Guarantor under any Loan Document remains
outstanding, maintain at Borrower’s sole expense, with licensed insurers approved by Lender, the
following policies of insurance in form and substance satisfactory to Lender. Capitalized terms
used in this Article shall have the same meaning as such terms are commonly and presently defined
in the insurance industry:

	3.1	 	TITLE INSURANCE. An extended coverage ALTA Lender’s Policy of Title Insurance (“Title
Policy”), together with any endorsements which Lender may require, insuring Lender, in the
principal amount of the Loan, of the validity and the priority of the lien of the Deed of
Trust upon the Property and the improvements, subject only to matters approved by Lender in
writing. During the term of the Loan, Borrower shall deliver to Lender, within ten (10) days
of Lender’s written request, such other endorsements to the Title Policy as Lender may
reasonably require with respect to the Property.
	 
	3.2	 	FLOOD HAZARD INSURANCE. If applicable, a policy of flood insurance, as required by
applicable governmental regulations, or as deemed necessary by Lender, in an amount required
by Lender, but in no event less than the amount sufficient to meet the requirements of
applicable law and governmental regulation.
	 
	3.3	 	LIABILITY INSURANCE. A policy of Commercial General Liability insurance on a claims
made basis, with coverages and limits as required by Lender, insuring against liability for
injury and/or death to any person and/or damage to any property occurring on the Property
and/or in the improvements. Lender may require that Borrower be named as an additional
insured on any such policy.
	 
	3.4	 	OTHER COVERAGE. Borrower shall provide to Lender evidence of such other reasonable
insurance in such reasonable amounts as Lender may from time to time request against such
other insurable hazards which at the time are commonly insured against for property similar to
the Property located in or around the region in which the Property is located. Such coverage
requirements may include, but are not limited to, coverage for earthquake, acts of terrorism,
mold, business income, delayed business income, rental loss, sink hole, soft costs, tenant
improvement or environmental.
	 
	3.5	 	GENERAL. Borrower shall ensure that the Property is fully insured at all times;
Borrower shall provide to Lender insurance certificates or other evidence of coverage in form
acceptable to Lender, with coverage

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	 	 	amounts, deductibles, limits and retentions as required by Lender, within a reasonable time.
All insurance policies shall provide that insurance provider will endeavor to provide at
least ten (10) days prior written notice to Lender of any cancellation for nonpayment of
premiums, or material modification and not less than 30 days prior written notice to Lender
prior to any other cancellation or any modification (including a reduction in coverage).
Lender shall be named under a Lender’s Loss Payable Endorsement (form #438BFU or equivalent)
on all insurance policies which Borrower actually maintains with respect to the Property and
improvements. All insurance policies shall be issued and maintained by insurers approved to
do business in the state in which the Property is located and must have an A.M. Best Company
financial rating of A-VII or better, and policyholder surplus acceptable to Lender.

ARTICLE 4. REPRESENTATIONS AND WARRANTIES

As a material inducement to Lender’s entry into this Agreement, Borrower represents and warrants to
Lender as of the Effective Date and continuing thereafter that:

	4.1	 	AUTHORITY/ENFORCEABILITY. Borrower is in compliance with all laws and regulations
applicable to its organization, existence and transaction of business and has all necessary
rights and powers to own and operate the Property as contemplated by the Loan Documents.
	 
	4.2	 	BINDING OBLIGATIONS. Borrower is authorized to execute, deliver and perform its
obligations under the Loan Documents, and such obligations are the valid and binding
obligations of Borrower.
	 
	4.3	 	COMPLIANCE WITH LAWS. Borrower has, and at all times shall have, all permits,
licenses, exemptions, and approvals necessary to occupy and market the Property, and shall
maintain compliance with all governmental requirements applicable to the Property, and all
other applicable statutes, laws, regulations and ordinances necessary for the transaction of
its business. The Property is a legal parcel lawfully created in full compliance with all
subdivision laws and ordinances.
	 
	4.4	 	LITIGATION. Except as disclosed to Lender in writing, there are no claims, actions,
suits, or proceedings pending, or to Borrower’s knowledge threatened, against Borrower or any
Guarantors or affecting the Property.
	 
	4.5	 	FINANCIAL CONDITION. Except as set forth in Section 7.3(a)(iv) with respect to
Guarantor and to the extent Section 7.3(a)(iv) effects Sunrise Senior Living Investments,
Inc., Guarantor’s wholly owned subsidiary, all financial statements and information heretofore and hereafter delivered to Lender by
Borrower, including, without limitation, information relating to the financial
condition of Borrower, the Property, the partners, joint venturers or members of Borrower,
and/or any Guarantors, fairly and accurately represent the financial condition of the subject
thereof and have been prepared (except as noted therein) in accordance with generally
accepted accounting principles consistently applied. Borrower acknowledges and agrees that
Lender may request and obtain additional information from third parties regarding any of the
above, including, without limitation, credit reports.
	 
	4.6	 	ACCURACY. All reports, documents, instruments, information and forms of evidence
delivered to Lender concerning the Loan or security for the Loan or required by the Loan
Documents are accurate, correct and sufficiently complete to give Lender true and accurate
knowledge of their subject matter, and do not contain any misrepresentation or omission.
	 
	4.7	 	UTILITIES. All utility services, including, without limitation, gas, water,
sewage, electrical and telephone, necessary for the occupancy of the Property are
available at the Property.
	 
	4.8	 	BUSINESS LOAN. The Loan is a business loan transaction in the stated amount
solely for the purpose of carrying on the business of Borrower and none of the proceeds of
the Loan will be used for the personal, family or agricultural purposes of Borrower.

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Loan No. 105093

	4.9	 	COMMENCEMENT OF CONSTRUCTION. Prior to the date of this Agreement, no
construction work or activity has been conducted at the Property or with respect to the
improvements and no contractor, subcontractor or materialman has performed any construction
work or other services or delivered any materials to or for the benefit of Borrower, the
Property or the improvements.

ARTICLE 5. HAZARDOUS MATERIALS

	 	5.1	 	SPECIAL REPRESENTATIONS AND WARRANTIES. Without in any way limiting the other
representations and warranties set forth in this Agreement, and after reasonable
investigation and inquiry, Borrower hereby specially represents and warrants to the best of
Borrower’s knowledge as of the date of this Agreement as follows:

	 	a.	 	Hazardous Materials. Except as previously disclosed to Lender in that
certain Final Environmental Impact Report I, Environmental Site Assessment report dated
December, 2006, for Property I and in that certain Phase I Environmental Site
Assessment report dated July 24, 2007, for Property II (both reports referred to as the
“Report”; Property I and Property II are specifically defined in Exhibit A hereto), the
Property is not and has not been a site for the use, generation, manufacture, storage,
treatment, release, threatened release, discharge, disposal, transportation or presence
of any oil, flammable explosives, asbestos, urea formaldehyde insulation, radioactive
materials, hazardous wastes, toxic or contaminated substances or similar materials,
including, without limitation, any substances which are “hazardous substances,”
“hazardous wastes,” “hazardous materials,” “toxic substances,” “wastes,” “regulated
substances,” “industrial solid wastes,” or “pollutants or contaminants” under the
Hazardous Materials Laws, as described below, and/or any other applicable environmental
laws, ordinances and regulations (collectively, the
“Hazardous Materials”). “Hazardous
Materials” shall not include commercially reasonable amounts of such materials used in
the ordinary course of operation of the Property which are used and stored in
accordance with all applicable environmental laws, ordinances and regulations.
	 
	 	b.	 	Hazardous Materials Laws. The Property is in compliance with all laws,
ordinances and regulations relating to Hazardous Materials (“Hazardous Materials Laws”),
including, without limitation: any and all applicable federal, state or local directive,
statute, law, rule, regulation, ordinance or rule of common law in effect and any
judicial or administrative decisions, including any judicial or administrative order,
consent decree or judgment, relating to the control of any pollutant or hazardous
material, the protection of the environment or the effect of the environment on human
health, including the Comprehensive Environment Response, Compensation and Liability Act
of 1980, as amended, 42 U.S.C. Section 9601 et seq.; the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. Section 6901 et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. Section 1252 et seq.; the Toxic Substances Control
Act, as amended, 15 U.S.C. Section 2601 et seq.; the Clean Air Act, as amended, 42
U.S.C. Section 7401 et seq.; the Safe Drinking Water Act, as amended, 42 U.S.C. Section
300f et seq.; the Hazardous Materials Transportation Act, as amended 49 U.S.C. Section
1801 et seq.; the Atomic Energy Act, as amended, 42 U.S.C. Section 2011 et seq.; the
Federal Insecticide, Fungicide and Rodenticide Act, as amended, 7 U.S.C. Section 136 et
seq.; the Occupational Safety and Health Act, as amended, 20 U.S.C. Section 651 et seq.;
the Emergency Planning and Community Right to Know Act, as amended, 42 U.S.C. Section
11001 et seq.; Chapter 6 of the California Health and Safety Code; California Health and
Safety Code Sections 25100 et seq. and Sections 25280 et seq.; the Safe Drinking Water
and Toxic Enforcement Act of 1986, as amended (Proposition 65); and Title 22 of the
California Code of Regulations (Division 4, Chapter 30); each as now and hereafter
amended, and the regulations thereunder, and any other local, state and/or federal laws
or regulations that govern (i) the existence, cleanup and/or remedy of contamination on
Property; (ii) the protection of the environment from released, spilled, deposited or
otherwise emplaced contamination; (iii) the control of hazardous wastes; or (iv) the
use, generation, transport, treatment, removal or recovery of Hazardous Materials,
including any and all building materials.

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     Loan No. 105093

	 	c.	 	Hazardous Materials Claims. There are no claims or actions (“Hazardous Materials
Claims”) known
to, pending or threatened against Borrower or the Property by any governmental
entity or agency or by any other person or entity relating to Hazardous Materials
or pursuant to the Hazardous Materials Laws.
	 
	 	d.	 	Border Zone Property. There has been no occurrence or condition on any real property
adjoining or
in the vicinity of the Property that could cause the Property or any part thereof to
become contaminated through the migration of Hazardous Materials onto, above or
under the Property, and the Property has not been designated as Border Zone Property
under the laws where such Property is located or any regulation adopted in
accordance therewith.

	5.2	 	HAZARDOUS MATERIALS COVENANTS. Borrower agrees as follows: 

	 	a.	 	No Hazardous Activities. Borrower shall not cause or permit the
Property to be used as a site for the use, generation, manufacture, storage,
treatment, release, discharge, disposal, transportation or presence of any Hazardous
Materials.
	 
	 	b.	 	Compliance. Borrower shall comply and cause the Property to comply with all
Hazardous Materials Laws.
	 
	 	c.	 	Notices. Borrower shall immediately notify Lender in writing of: (i) the
discovery of any Hazardous
Materials on, under or about the Property; (ii) any knowledge by Borrower that the
Property do not comply with any Hazardous Materials Laws; (iii) any Hazardous
Materials Claims; and (iv) the discovery of any occurrence or condition on any real
property adjoining or in the vicinity of the Property that could cause the Property
or any part thereof to become contaminated with Hazardous Materials.
	 
	 	d.	 	Removal and/or Remedial Action. In response to the presence of any Hazardous Materials
on, under
or about the Property, Borrower shall immediately take, at Borrower’s sole
expense, all actions required by any Hazardous Materials Laws or any regulatory
agency, governing body, judgment, consent decree, settlement or compromise with
respect to any Hazardous Materials Claims.

	5.3	 	INSPECTION BY LENDER. Upon reasonable prior notice to Borrower, Lender, its employees
and agents, may from time to time (whether before or after the commencement of a nonjudicial
or judicial foreclosure proceeding) enter and inspect the Property for the purpose of
determining the existence, location, nature and magnitude of any past or present release or
threatened release of any Hazardous Materials into, onto, beneath or from the Property.
	 
	5.4	 	HAZARDOUS MATERIALS INDEMNITY. Borrower hereby agrees to defend, indemnify and hold
harmless Lender, its directors, officers, employees, agents, successors and assigns from and
against any and all losses, damages, liabilities, claims, actions, judgments, court costs and
legal or other expenses (including, without limitation, attorneys’ fees and expenses) which
Lender may incur as a direct or indirect consequence of the use, generation, release,
manufacture, storage, disposal, threatened disposal, transportation or presence of Hazardous
Materials in, on, under or about the Property. Borrower shall immediately pay to Lender upon
demand any amounts owing under this indemnity, together with interest from the date the
indebtedness arises until paid at the rate of interest applicable to the principal balance of
the note. Borrower’s duty and obligations to defend, indemnify and hold harmless Lender shall
survive the cancellation of the Note and the release, reconveyance or partial reconveyance of
the Deed of Trust.
	 
	 	 	The foregoing indemnity and agreement to defend and hold harmless shall not apply to the
extent any losses, damages, liabilities, claims, actions, judgments, court costs and legal
or other expenses arise out of or result from Hazardous Materials that first come into
existence on the Property or improvements after the earlier of (a) the full repayment of the
Loan and indefeasible satisfaction of all of Borrower’s obligations under the Loan Documents
or (b) any foreclosure under the Deed of Trust or transfer of the Property by deed-in-lieu
thereof;

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Loan No. 105093

	 	 	provided, however, that the foregoing limitation shall cease to apply if any amount
repaid or required to be repaid by Borrower under any of the Loan Documents or any of
Borrower’s other obligations thereunder is at any time voided or otherwise rendered
unenforceable pursuant to any state or federal bankruptcy, insolvency, fraudulent transfer,
fraudulent conveyance or preference law, act, statute or regulation.
	 
	5.5	 	LEGAL EFFECT OF SECTION. Borrower and Lender agree that: (a) this Article 5 is
intended as Lender’s written request for information (and Borrower’s response) concerning the
environmental condition of the real property security as required by California Code of Civil
Procedure §726.5; and (b) each provision in this Article (together with any indemnity
applicable to a breach of any such provision) with respect to the environmental condition of
the real property security is intended by Lender and Borrower to be an “environmental
provision” for purposes of California Code of Civil Procedure §736, and as such it is
expressly understood that Borrower’s duty to indemnify Lender hereunder shall survive: (i)
any judicial or non-judicial foreclosure under the Deed of Trust, or transfer of the Property
in lieu thereof; (ii) the release and reconveyance or cancellation of the Deed of Trust; and
(iii) the satisfaction of all of Borrower’s obligations under the Loan Documents.
	 
	5.6	 	ENVIRONMENTAL IMPAIRMENT. If any portion  of the Property is determined to be
“environmentally impaired” (as “environmentally impaired” is defined in California Code of
Civil Procedure Section 726.5(e)(3)) or to be an “affected parcel” (as “affected parcel” is
defined in California Code of Civil Procedure Section 726.5(e)(1)), then, without otherwise
limiting or in any way affecting the Lender’s or the Trustee’s rights and remedies under this
Deed of Trust, the Lender may elect to exercise its right under California Code of Civil
Procedure Section 726.5(a) to (1) waive its lien on such environmentally impaired or affected
parcel or portion of the Property and (2) exercise (i) the rights and remedies of an unsecured
creditor, including reduction of its claim against the Borrower to judgment, and (ii) any
other rights and remedies permitted by law. For purposes of determining the Lender’s right to
proceed as an unsecured creditor under California Code of Civil Procedure Section 726.5(a),
the Borrower shall be deemed to have willfully permitted or acquiesced in a release or
threatened release of hazardous materials, within the meaning of California Code of Civil
Procedure Section 726.5(d)(1), if the release or threatened release of hazardous materials was
knowingly or negligently caused or contributed to by any lessee, occupant or user of any
portion of the Property and the Borrower knew or should have known of the activity by such
lessee, occupant or user which caused or contributed to the release or threatened release. All
costs and expenses, including, without limitation, attorneys’ fees, incurred by the Lender in
connection with any action commenced under this Section, including any action required by
California Code of Civil Procedure Section 726.5(b) to determine the degree to which the
Property is environmentally impaired, plus interest thereon at the default rate of interest
set forth in the Note until paid, shall be added to the obligations secured by this Deed of
Trust and shall be due and payable to the Lender upon its demand made at any time following
the conclusion of such action.

ARTICLE 6. COVENANTS OF BORROWER

	6.1	 	EXPENSES. Borrower shall immediately pay to Lender upon demand: (a) all
costs and expenses incurred by Lender in connection with the administration of this Agreement,
the other Loan Documents and any other documents required by Lender during the term of the
Loan; and (b) the enforcement or satisfaction by Lender of any of Borrower’s or Guarantor’s
obligations under this Agreement, the other Loan Documents and the Guaranty. For all purposes
of this Agreement, Lender’s costs and expenses shall include, without limitation, all
appraisal fees, cost engineering and inspection fees, legal fees and expenses, accounting
fees, environmental consultant fees, auditor fees, and the cost to Lender of any title
insurance premiums, title surveys, recording fees, Deed of Trust registration taxes,
reconveyance and notary fees. If any of the services described above are provided by an
employee of Lender, Lender’s costs and expenses for such services shall be calculated in
accordance with Lender’s standard charge for such services.
	 
	 	 	Lender hereby confirms and agrees that not withstanding anything else to the contrary in
this Agreement or any of the Loan Documents, Borrower shall not be liable for any cost or
expense related to transactions engaged in by Lender pursuant to Section 9.5 of this
Agreement, unless those costs and expenses are caused by Borrower’s failure or refusal to
cooperate.

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Loan No. 105093

	6.2	 	LEASING. To the extent any such space exists and is leased, Borrower shall use its
best efforts to maintain all leasable space in the Property leased at no less than fair market
rental rates.
	 
	6.3	 	FURTHER ASSURANCES. Upon Lender’s request and at Borrower’s sole cost and expense,
Borrower shall execute, acknowledge and deliver any other instruments and perform any other
acts necessary, desirable or proper, as determined by Lender, to carry out the purposes of
this Agreement and the other Loan Documents or to perfect and preserve any liens created by
the Loan Documents.
	 
	6.4	 	ASSIGNMENT. Without the prior written consent of Lender, Borrower shall not assign
Borrower’s interest under any of the Loan Documents, or in any monies due or to become due
thereunder, and any assignment without such consent shall be void, provided, however, that
this restriction will not be applicable to a change in control of Guarantor provided the
conditions set forth in Section 7.3 (b)(i) are satisfied. In this regard, Borrower
acknowledges that Lender would not make this Loan except in reliance on Borrower’s expertise,
reputation, prior experience in developing and constructing commercial real property, Lender’s
knowledge of Borrower, and Lender’s understanding that this Agreement is more in the nature of
an agreement involving personal services than a standard loan where Lender would rely on
security which already exists.
	 
	6.5	 	INDEMNITY. BORROWER HEREBY AGREES TO DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER, ITS
DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS FROM AND AGAINST ANY AND ALL
LOSSES, DAMAGES, LIABILITIES, CLAIMS, ACTIONS, JUDGMENTS, COURT COSTS AND LEGAL OR OTHER
EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS’ FEES AND EXPENSES) WHICH LENDER MAY INCUR
AS A DIRECT OR INDIRECT CONSEQUENCE OF: (A) THE PURPOSE TO WHICH BORROWER APPLIES THE LOAN
PROCEEDS; (B) THE FAILURE OF BORROWER TO PERFORM ANY OBLIGATIONS AS AND WHEN REQUIRED BY THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;(C) ANY FAILURE AT ANY TIME OF ANY OF BORROWER’S
REPRESENTATIONS OR WARRANTIES TO BE TRUE AND CORRECT; OR (D) ANY ACT OR OMISSION BY BORROWER,
CONSTITUENT PARTNER OR MEMBER OF BORROWER, ANY CONTRACTOR, SUBCONTRACTOR OR MATERIAL SUPPLIER,
ENGINEER, ARCHITECT OR OTHER PERSON OR ENTITY WITH RESPECT TO ANY OF THE
PROPERTY. BORROWER SHALL IMMEDIATELY PAY TO LENDER UPON DEMAND ANY AMOUNTS OWING UNDER
THIS INDEMNITY, TOGETHER WITH INTEREST FROM THE DATE THE INDEBTEDNESS ARISES UNTIL PAID
AT THE RATE OF INTEREST APPLICABLE TO THE PRINCIPAL BALANCE OF THE NOTE. BORROWER’S DUTY
AND OBLIGATIONS TO DEFEND, INDEMNIFY AND HOLD HARMLESS LENDER SHALL SURVIVE CANCELLATION
OF THE NOTE AND THE RELEASE OR RECONVEYANCE OF THE DEED OF TRUST.

ARTICLE 7. REPORTING COVENANTS

	7.1	 	FINANCIAL INFORMATION. Except for such financial reports referenced in Section
7.3(a)(iv), Borrower
shall deliver to Lender as soon as available, but in no event later than 120 days after
Borrower’s fiscal year end, Borrower’s current financial statement (including without
limitation, an income and expense statement and balance sheet) and Borrower’s current tax
return signed by Borrower together with any other financial information including, without
limitation, to the extent Borrower generates such reports in the ordinary course of
business, quarterly financial statements, annual financial statements, cash flow
projections, and quarterly operating statements requested by Lender. Borrower shall also
deliver to Lender, as soon as available, but in no event later than 120 days after
Guarantor(s) fiscal year end, Guarantor(s) current financial statement (including, without
limitation, a balance sheet).
	 
	 	 	Within 30 days of Lender’s request, Borrower shall also deliver to Lender such quarterly and
other financial information regarding any persons or entities in any way obligated on the
Loan as Lender may specify, to the extent Borrower generates such reports in the ordinary
course of business. If audited financial information is prepared, Borrower shall deliver to
Lender copies of that information within 15 days of its final preparation. Except as
otherwise agreed to by Lender, all such financial information shall be prepared in
accordance with generally accepted accounting principles consistently applied.

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Loan No. 105093

	7.2	 	LEASING REPORTS AND OPERATING STATEMENTS. To the extent any exist, Borrower shall
deliver to Lender quarterly rent rolls, leasing schedules and reports, operating statements
and/or such other leasing information as Lender shall request with respect to the Property,
each in form and substance satisfactory to Lender.
	 
	7.3	 	FINANCIAL CONDITION. Guarantor shall maintain its financial condition during the term
of this Agreement according to the following schedules, using generally accepted accounting
principles, consistently applied:

	 	(a)	 	FINANCIAL COVENANTS of Guarantor: Each of the following financial
covenants, or such other financial covenants as maybe hereafter required by that
certain Credit Agreement between Guarantor and Bank of America (“B of A”) dated
December 2, 2005 (Guarantor must provide Lender with notice of the change in financial
covenants before such change will alter the terms of this provision and (i) Lender must
consent to any deletion of any covenants or (ii) Guarantor must continue to satisfy any
deleted covenants), will be measured annually at the conclusion of the Guarantor’s
fiscal years, provided, however, that so long as B of A has waived or extended this
date of compliance, Guarantor will not be required to deliver any financial statements
until such statements have been made publicly available by the Securities and Exchange
Commission (“SEC”):

	 	(i)	 	CONSOLIDATED NET WORTH. The Guarantor will at all times
maintain, a Consolidated Net Worth of not less than the sum of $450,000,000
(Consolidated Net Worth is defined as eighty percent (80%) of Consolidated GAAP
shareholder equity as of the date hereof) plus seventy-five percent (75%) of the
net proceeds to the Guarantor of any equity capital transaction received during
any subsequent quarter (except for all exercises of employee stock options,
issuance or sale of restricted stock and operation of the employee stock
purchase program), less $110,000,000 associated with stock repurchases.
	 
	 	(ii)	 	LEVERAGE RATIO. The Guarantor will maintain a ratio of Total
Funded Indebtedness to Consolidated EBITDA so that it is not more than 4.25
to 1.0.
	 
	 	(iii)	 	FIXED CHARGE COVERAGE RATIO. The Guarantor will maintain a
ratio of Consolidated EBITDAR to Consolidated Fixed Charges of not less than
1.75 to 1.0.
	 
	 	(iv)	 	Lender acknowledges that Guarantor is in the process of restating certain Financial
Statements for periods of time prior to December 31, 2005. As part of the restatement
process, Guarantor has
not filed any Financial Statements subsequent to December 31, 2005. On September
18, 2007, B of A amended the covenants under the line of credit so that Guarantor
is not required to provide any quarterly Financial Statements until January 31,
2008. Guarantor will certify covenants compliance when audited statements are
provided.

	 	(b)	 	Additionally, the following covenants are included:

	 	(i)	 	A change in control of Guarantor does not require Lender’s consent if the
following terms
are met:

	 	(a)	 	The ownership of the Borrower does not change.
	 
	 	(b)	 	Guarantor, Sunrise Senior Living
Investments, Inc., Sunrise Senior Living Management, Inc. and
Sunrise Development, Inc. all continue to exist.
	 
	 	(c)	 	Guarantor does not change its business away from
managing and developing senior living facilities.
	 
	 	(d)	 	Guarantor has a management team with senior housing
experience and a reputation favorably comparable to Guarantor’s current
management team.

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Loan No. 105093

	 	(e)	 	The acquirer of Guarantor meets all
regulatory requirements required by federal law and provides Lender will
all information necessary to fully comply with the US Patriot Act.

	 	(c)	 	DEFINITIONS. Capitalized terms in this paragraph are defined as;

     (i) “CAPITALIZED CASH INTEREST EXPENSE” means capitalized interest on construction
or development loans, to the extent not funded from an interest reserve as part of third
party construction financing.

     (ii) “COMPANY ” means Guarantor.

     (iii) “CONSOLIDATED EBITDA” means the sum of: (a)(i) net income; (ii)
Consolidated Interest Expense; (iii) income taxes; (iv) depreciation and amortization; (v)
the non-cash component of any unusual or non-recurring item of loss or expense which was
deducted in determining net income (in accordance with GAAP), and (vi) income (or loss) in
respect of minority interest (assuming it was deducted in the calculation of net income);
minus (b) “other income-operating properties” as shown on the Company’s financial statements
in accordance with GAAP as of the date hereof (or as such category may be categorized in
future financial statements) in each case for the Borrower and is Subsidiaries on a
consolidated basis. For purposes of calculating the Leverage Ratio only, Consolidated EBITDA
will be adjusted to reflect actual transition costs (post-closing) or pre-closing on a pro
forma basis to reflect (i) material acquisitions and dispositions of property and (ii)
material acquisitions and dispositions of management contracts, provided that documentation
of such acquisitions and dispositions satisfactory to Wells Fargo Bank, N.A. in its sole
discretion is delivered to Wells Fargo Bank, N.A., Transition costs shall be subject to the
approval of Wells Fargo Bank, N.A.

     (iv) “CONSOLIDATED EBITDAR” means the sum of: (a) Consolidated EBITDA plus (b)
rent paid or payable under all operating leases as determined in accordance with GAAP.

     (v) “CONSOLIDATED FIXED CHARGES” means the sum of: (a) Consolidated Interest
Expense, (b) Capitalized Cash Interest Expense (c) scheduled payments of principal on Total
Funded Indebtedness (excluding balloon payments), (d) rent payable under all operating
leases (other than capital leases) as determined in accordance with GAAP, and (e) dividends
payable on stock.

     (vi) “CONSOLIDATED INTEREST EXPENSE” means total interest expense (whether paid
or accrued), including the amortization of debt discounts and premiums as well as the
interest component under capital leases, on a consolidated basis in accordance with GAAP.

     (vii) “CONSOLIDATED NET WORTH” means Shareholders’ Equity of the Borrower and
its Subsidiaries on a consolidated basis in accordance with GAAP.

     (viii) “CONTINUING CARE RETIREMENT COMMUNITY” means a Senior Living Facility
which provides or arranges housing and health-related services that are effective for the
life of the resident or for an extended, specified period in excess of one year, including
mutually terminable contracts, in consideration for the payment of an entrance fee, which
services are provided on a comprehensive continuum of care basis which includes a skilled
nursing facility.

     (ix) “CONVERTIBLE DEBT” means the $125,000,000 convertible subordinated notes
of the Borrower which was due February 1, 2009, and paid off in advance of this Loan.

     (x) “DEVELOPMENT JOINT VENTURE INVESTMENTS” means (a) Investments which are (i)
less than fifty percent (50%) owned and unconsolidated by any of the Loan Parties and (ii)
have a ratio of EBITDAR to Fixed Obligations of less then 1.20 to 1.0 for any fiscal quarter
plus (b) any amounts funded by any of the Loan Parties under operating deficit guaranties or
construction completion guaranties.

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Loan
No. 105093

     (xi) “GAAP” means generally accepted accounting principles in the United States set
forth in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and pronouncements of the
Financial Accounting Standards Board or such other principles as may be approved by a
significant segment of the accounting profession in the United States, that are applicable
to the circumstances as of the date of determination, consistently applied.

     (xii) “GOVERNMENTAL AUTHORITY” means the government of the Untied States or
any other nation, or of any political subdivision thereof, whether state or local, and any
agency, authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers
or functions of or pertaining to government (including any supranational bodies such as
the European Union or the European Central Bank).

     (xiii) “LIFECARE BOND” means a surety bond, irrevocable letter of credit or
other financial assurance required by a Governmental Authority as evidence of the
financial responsibility of the owner or operator of a Continuing Care Retirement
Community.

     (xiv) “PERSON” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority or other
entity.

     (xv) “SHAREHOLDERS’ EQUITY” means, as of any date of determination,
consolidated shareholders’ equity of the Company and its Subsidiaries as of that date
determined in accordance with GAAP.

     (xvi) “SUBSIDIARY” of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of directors or
other governing body (other than securities or interest having such power only by reason of
the happening of a contingency) are at the time beneficially owned, or the management of
which is otherwise controlled, directly or indirectly through one or more intermediaries,
or both, by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the
Company.

     (xvii) “TOTAL FUNDED INDEBTEDNESS” means all indebtedness and guarantees
including recourse and non-recourse mortgage debt, capitalized leases, letters of credit,
unsecured debt, guarantees (including all debt guarantees, but excluding all development
completion guarantees and operating deficit guarantees which will be captured in the
limitation on Development Joint Venture), purchase obligations treated as liabilities per
GAAP, subordinated debt, unfunded obligations (including total Lifecare Bond obligations at
GAAP book value, subject to certain exclusions as discussed below), all as defined in
accordance with GAAP. Total Funded Indebtedness shall not include security deposits,
accounts payable, accrued liabilities, any prepaid rent and any outstanding balance under
the Convertible Debt only to the extent that the Company’s common stock market price
remains at least $2.50 per share above the Convertible Debt conversion price. Furthermore,
certain Lifecare Bond obligations may be excluded from Total Funded Indebtedness to the
extent the Guarantor is not obligated to refund these obligations prior to receiving
proceeds of new Lifecare Bonds. Total Funded Indebtedness will be reduced by unrestricted
cash balances, cash equivalents and short-term marketable securities in excess of
$50,000,000.

ARTICLE 8. DEFAULTS AND REMEDIES

	8.1	 	DEFAULT. The occurrence of any one or more of the following shall
constitute an event of default (“Default”) under this Agreement and the other Loan
Documents:

	 	a.	 	Monetary. Borrower’s failure to pay when due any sums payable under the Note or
any of the other
Loan Documents or Borrower’s failure to deposit any Borrower’s Funds as and when
required under this Agreement within ten (10) business days of when the sums are due;
or

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Loan No. 105093

	 	b.	 	Performance of Obligations. Borrower’s failure to perform any
obligation, covenant or condition under the Note or any of the other Loan Documents;
provided, however, that if a cure period is provided for the remedy of such failure,
Borrower’s failure to perform will not constitute a Default until such date as the
specified cure period expires, or if no cure period is provided, Borrower shall have
thirty (30) days upon written notice from Lender within which to cure the Default;
provided, however, if Default cannot be cured through Borrower’s diligent attempts to
cure within the thirty (30) days, that period shall be extended until such time as the
Default can be cured, but in no event longer than ninety (90) days; or
	 
	 	c.	 	Lien; Attachment; Condemnation. (i) The recording or service upon Lender of any
claim of lien against the Property and the continuance of such claim of lien for 20
days after such recording or service for ten (10) calendar days after Lender’s demand,
whichever occurs first, without discharge, satisfaction or provision for payment being
made by Borrower in a manner satisfactory to Lender; or (ii) the condemnation, seizure
or appropriation of or occurrence of an uninsured casualty with respect to, any
material portion of the Property; or (iii) the sequestration or attachment, or any levy
or execution upon, any of the Property or any other collateral provided by Borrower or
any other party under any of the Loan Documents is not released, expunged or dismissed
within 20 days; or
	 
	 	d.	 	Representations and Warranties. (i) The failure of any representation
or warranty of Borrower in any of the Loan Documents or by any Guarantor in the
Guaranty and the continuation of such failure for more than 10 days after written
notice to Borrower from Lender requesting that Borrower cure such failure; or (ii) any
material adverse change in the financial condition of Borrower from the financial
condition represented to Lender or a violation of any of the covenants previously set
forth in Section 7.3 by Guarantor or any indemnitor as of the later of: (A) the
Effective Date; or (B) the date upon which the financial condition of such party was
first represented to Lender; or
	 
	 	e.	 	Bankruptcy; Insolvency; Dissolution. (i) The filing of by Borrower, any
Guarantor or any partner or member of Borrower of a petition for relief under the
Bankruptcy Reform Act of 1978 (11 USC Section 101-1330) as now or hereafter amended or
recodified (“Bankruptcy Code”), or under any other present or future state or federal
law regarding bankruptcy, reorganization or other debtor relief law; (ii) the filing
against Borrower, Guarantor or any partner or member of Borrower of an involuntary
proceeding under the Bankruptcy Code or other debtor relief law and the failure of
Borrower to effect a full dismissal of such proceeding within 30 days after the date of
filing such proceeding; (iii) a general assignment by Borrower, Guarantor or any
partner or member of Borrower for the benefit of creditors; or (iv) Borrower, Guarantor
or any partner or member of Borrower applying for, or the appointment of, a receiver,
trustee, custodian or liquidator of Borrower or any of its property; or
	 
	 	f.	 	Transfer of Assets. The sale, assignment, pledge, hypothecation, mortgage
or transfer of all or a substantial portion of the assets of Borrower.
	 
	 	g.	 	Transfer of Assets. Except as specifically allowed for in paragraph 7.3 above,
the sale, assignment, pledge, hypothecation, mortgage or transfer of all or a
substantial portion of assets of Guarantor other than in the ordinary course of
business of said entity; or
	 
	 	h.	 	Other Obligations. Borrower shall default in any obligation to Lender, whether direct or
indirect,
absolute or contingent.

	8.2	 	ACCELERATION UPON DEFAULT; REMEDIES. Upon the occurrence of any Default
specified herein, Lender may, at its sole option, declare all sums owing to Lender under the
Note, this Agreement and the other Loan Documents immediately due and payable. Upon such
acceleration, Lender may, in addition to all other remedies permitted under the Note and this
Agreement and the other Loan Documents and at law or equity, apply Borrower’s Funds, if any,
to the sums owing under the Loan Documents and any and all obligations of Lender to fund
further disbursements under the Loan shall terminate.

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Loan No. 105093

	8.3	 	DISBURSEMENTS TO THIRD PARTIES. Upon the occurrence of a Default occasioned
by Borrower’s failure to pay money to a third party as required by this Agreement, Lender may
but shall not be obligated to make such payment from the Loan proceeds or other funds of
Lender. If such payment is made from proceeds of the Loan, Borrower shall immediately deposit
with Lender, upon written demand, an amount equal to such payment. If such payment is made
from funds of Lender, Borrower shall immediately repay such funds upon written demand of
Lender. In either case, the Default with respect to which any such payment has been made by
Lender shall not be deemed cured until such deposit or repayment (as the case may be) has
been made by Borrower to Lender.
	 
	8.4	 	SET OFF. Upon the occurrence of a Default, Lender may set off any and
all amounts due by Borrower against any indebtedness or obligation of Lender to Borrower.
	 
	8.5	 	RIGHTS CUMULATIVE; NO WAIVER. All Lender’s rights and remedies provided in
this Agreement, the other Loan Documents and the Guaranty, together with those granted by law
or at equity, are cumulative and may be exercised by Lender at any time. Lender’s exercise of
any right or remedy shall not constitute a cure of any Default unless all sums then due and
payable to Lender under the Loan Documents are repaid and Borrower has cured all other
Defaults. No waiver shall be implied from any failure of Lender to take, or any delay by
Lender in taking, action concerning any Default or failure of condition under the Loan
Documents, or from any previous waiver of any similar or unrelated Default or failure of
condition. Any waiver or approval under any of the Loan Documents must be in writing and
shall be limited to its specific terms. Any funds expended by Lender in the exercise of its
rights or remedies under this Agreement and the other Loan Documents shall be payable to
Lender upon demand, together with interest at the rate applicable to the principal balance of
the Note from the date the funds were expended.

ARTICLE 9. MISCELLANEOUS PROVISIONS

	9.1	 	NOTICES. All notices, demands, or other communications under this Agreement and the
other Loan Documents shall be in writing and shall be delivered in accordance with the notice
provisions contained in the Deed of Trust.
	 
	9.2	 	RELATIONSHIP OF PARTIES. The relationship of Borrower and Lender under the Loan
Documents is, and shall at all times remain, solely that of borrower and lender, and Lender
neither undertakes nor assumes any responsibility or duty to Borrower or to any third party
with respect to the Property, except as expressly provided in this Agreement and the other
Loan Documents.
	 
	9.3	 	ATTORNEYS’ FEES AND EXPENSES; ENFORCEMENT. If any attorney is engaged by Lender to
enforce or defend any provision of this Agreement, any of the other Loan Documents or as a
consequence of any Default under the Loan Documents, with or without the filing of any legal
action or proceeding, and including, without limitation, any fees and expenses incurred in any
bankruptcy proceeding of Borrower or in connection with any appeal of a lower court decision,
then Borrower shall immediately pay to Lender, upon demand, the amount of all attorneys’ fees
and expenses and all costs incurred by Lender in connection therewith.
	 
	9.4	 	IMMEDIATELY AVAILABLE FUNDS. All amounts payable by Borrower to Lender shall be (a)
payable only in United States currency in immediately available funds, and (b) received by
Lender at the Disbursement and Operations Center in El Segundo, California, or at such other
places as may be designated in writing by Lender, no later than 11 AM Pacific Standard Time or
Pacific Daylight Time, as applicable. Any amounts received after such time shall be credited
the next business day.
	 
	9.5	 	LOAN SALES AND PARTICIPATIONS; DISCLOSURE OF INFORMATION. Borrower agrees that Lender
may elect, at any time, to sell, assign or grant participations in all or any portion of its
rights and obligations under the Loan Documents, and that any such sale, assignment or
participation may be to one or more financial institutions, private investors, and/or other
entities, at Lender’s sole discretion. Borrower further agrees that Lender may disseminate to
any such actual or potential purchaser(s), assignee(s) or participant(s)

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Loan No. 105093

	 	 	all documents and information (including, without limitation, all financial information)
which has been or is hereafter provided to or known to Lender with respect to: (a) the
Property and its operation; (b) any party connected with the Loan (including, without
limitation, the Borrower, any partner of Borrower, any constituent partner or member of
Borrower, any Guarantor, any indemnitor and any non-borrower mortgagor); and/or (c) any
lending relationship other than the Loan which Lender may have with any party connected
with the Loan. The indemnity obligations of Borrower under the Loan Documents shall also
apply with respect to any purchaser, assignee or participant.
	 
	9.6	 	LENDER’S AGENTS. Lender may designate an agent or independent contractor to
exercise any of Lender’s rights under this Agreement and any of the other Loan Documents.
Any reference to Lender in any of the Loan Documents shall include Lender’s agents, employees
or independent contractors. Borrower shall pay the costs of such agent or independent
contractor either directly to such person or to Lender in reimbursement of such costs, as
applicable.
	 
	9.7	 	WAIVER OF RIGHT TO TRIAL BY JURY. TO THE MAXIMUM EXTENT ALLOWABLE UNDER CALIFORNIA
LAW, EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (a) ARISING UNDER THE LOAN DOCUMENTS, INCLUDING, WITHOUT
LIMITATION, ANY PRESENT OR FUTURE
MODIFICATION THEREOF OR (b) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE
DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE LOAN DOCUMENTS (AS NOW OR
HEREAFTER MODIFIED) OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION IS NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE
WAIVER OF ANY RIGHT THEY MIGHT OTHERWISE HAVE TO TRIAL BY JURY.
	 
	9.8	 	SEVERABILITY. If any provision or obligation under this Agreement and the other Loan
Documents shall be determined by a court of competent jurisdiction to be invalid, illegal or
unenforceable, that provision shall be deemed severed from the Loan Documents and the
validity, legality and enforceability of the remaining provisions or obligations shall remain
in full force as though the invalid, illegal, or unenforceable provision
had never been a part of the Loan Documents, provided, however, that if the rate of
interest or any other amount payable under the Note or this Agreement or any
other Loan Document, or the right of collectibility therefor, are declared to be or become
invalid, illegal or unenforceable, Lender’s obligations to make advances under the Loan
Documents shall not be enforceable by Borrower.
	 
	9.9	 	HEIRS, SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided under the terms
and conditions of this Agreement, the terms of the Loan Documents shall bind and inure to the
benefit of the heirs, successors and assigns of the parties.
	 
	9.10	 	ATTORNEY IN FACT. Borrower hereby irrevocably appoints and authorizes Lender, as
Borrower’s attorney in fact, which agency is coupled with an interest, to execute and/or
record in Lender’s or Borrower’s name any notices, instruments or documents that Lender deems
appropriate to protect Lender’s interest under any of the Loan Documents.
	 
	9.11	 	TAX SERVICE. If the Maturity Date and any
extension thereof is 18 months or longer
from the date hereof, Lender is authorized to obtain a tax service contract with a third party
vendor which shall provide tax information on the Property satisfactory to Lender, and
Borrower will pay up to $1,000.00 per year of the costs due under such contract.
	 
	9.12	 	TIME. Time is of the essence of each and every term of this Agreement.

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Loan No. 105093

	9.13	 	GOVERNING LAW. This Agreement shall be governed by, and construed and enforced in
accordance with the laws of the state where the Property is located, except to the extent
preempted by federal laws. Borrower and all persons and entities in any manner obligated to
Lender under the Loan Documents consent to the jurisdiction of any federal or state court
within the state where the Property is located having proper venue and also consent to
service of process by any means authorized by the law of such state or federal law.
	 
	9.14	 	INTEGRATION: INTERPRETATION. The Loan Documents contain or expressly incorporate by
reference the entire agreement of the parties with respect to the matters contemplated
therein and supersede all prior negotiations or agreements, written or oral. The Loan
Documents shall not be modified except by written instrument executed by all parties. Any
reference to the Loan Documents includes any amendments, renewals or extensions now or
hereafter approved by Lender in writing.
	 
	9.15	 	JOINT AND SEVERAL LIABILITY. The liability of all persons and entities obligated in
any manner under this Agreement and any of the Loan Documents shall be joint and several.
	 
	9.16	 	FORM OF DOCUMENTS. The form and substance of all documents, instruments, and forms of
evidence to be delivered to Lender under the terms of this Agreement and any of the other Loan
Documents shall be subject to Lender’s approval and shall not be modified, superseded or
terminated in any respect without Lender’s prior written approval.
	 
	9.17	 	NO THIRD PARTIES BENEFITED. No person other than Lender and Borrower and their
permitted successors and assigns shall have any right of action under any of the Loan
Documents.
	 
	9.18	 	ACTIONS. Borrower agrees that Lender, in exercising the rights, duties or liabilities
of Lender or Borrower under the Loan Documents, may commence, appear in or defend any action
or proceeding purporting to affect the Property or the Loan Documents and Borrower shall
immediately reimburse Lender upon demand for all such expenses so incurred or paid by Lender,
including, without limitation, attorneys’ fees and expenses and court costs.
	 
	9.19	 	LENDER’S CONSENT. Wherever in this Agreement there is a requirement for Lender’s
consent and/or a document to be provided or an action taken “to the satisfaction of Lender”,
it is understood by such phrase that, except as expressly modified herein, Lender shall
exercise its consent, right or judgment in a reasonable manner given the specific facts and
circumstance applicable at the time.
	 
	9.20	 	HEADINGS. All articles, sections or other headings appearing in this Agreement and
any of the other Loan Documents are for convenience of reference only and shall be disregarded
in construing this Agreement and any of the other Loan Documents.
	 
	9.21	 	COUNTERPARTS. To facilitate execution, this document may be executed in as many
counterparts as may be convenient or required. It shall not be necessary that the signature
of, or on behalf of, each party, or that the signature of all persons required to bind any
party, appear on each counterpart. All counterparts shall collectively constitute a single
document. It shall not be necessary in making proof of this document to produce or account for
more than a single counterpart containing the respective signatures of, or on behalf of, each
of the parties hereto. Any signature page to any counterpart may be detached from such
counterpart without impairing the legal effect of the signatures thereon and thereafter
attached to another counterpart identical thereto except having attached to it additional
signature pages.
	 
	9.22	 	EXHIBITS INCORPORATED. Exhibits A, B, and C attached hereto, are hereby
incorporated into this Agreement.

IN WITNESS WHEREOF, Borrower and Lender have executed this Agreement as of the date appearing
on the first page of this Agreement.

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Loan No. 105093

	 	 	 	 	 
	 	“LENDER”

WELLS FARGO BANK, NATIONAL ASSOCIATION

 	 
	 	By:  	/s/ Jennifer Tyler
 	 
	 	 	Jennifer Tyler 	 
	 	 	Its: Vice President 	 
	 
	 	Lender’s Address:

WELLS FARGO BANK, NATIONAL ASSOCIATION

580 State Street, 2nd
Floor

 Salem, OR 97301 

Attn: Jennifer Tyler

“BORROWER”

SUNRISE PASADENA CA SENIOR LIVING, LLC, a

California Limited Liability Company

 	 
	 	     By:  	SUNRISE
SENIOR LIVING INVESTMENTS,
 	 
	 	 	INC., a Virginia Corporation, Member 	 
	 
	 	     By:  	/s/ Carl Adams
 	 
	 	 	Name: Carl Adams	 
	 	 	Its: Vice President	 
	 
	 	SUNRISE PLEASANTON CA SENIOR LIVING, LP, a

Delaware Limited Partnership

 	 
	 	     By:  	SUNRISE PLEASANTON GP, LLC, a Delaware
 	 
	 	 	Limited Liability Company, its General Partner 	 
	 	 	 
	 	          	By:  SUNRISE SENIOR LIVING INVESTMENTS,
 	 
	 	 	        INC., a Virginia Corporation, its Sole Member 	 
	 	 	 
	 	          	By:  /s/ Carl Adams
 	 
	 	 	        Name: Carl Adams	 
	 	 	        Its: Vice President 	 
	 
	 	 Borrower’s Address:

7902 Westpark Drive

McLean, VA 22102

Attn: James S. Pope

 	 
	 	 	 
	 	 	 
	 	 	 
	 

-16-

 

Loan No. 105093

EXHIBIT A

DESCRIPTION
OF PROPERTY

Exhibit A to LOAN AGREEMENT between SUNRISE PASADENA CA SENIOR LIVING, LLC, a California
Limited Liability Company, and SUNRISE PLEASANTON CA SENIOR LIVING, LP, a Delaware Limited
Partnership, jointly and severally, both referred to as “Borrower”, and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as “Lender”, dated as of September 28, 2007.

PROPERTY I:

All the certain real property located in the County of Los Angeles, State of California,
described as follows: 

PARCEL 1:

LOTS 4 AND 5 OF HULETT C. MERRITT TERRACE, IN THE CITY OF PASADENA, COUNTY OF LOS ANGELES, STATE OF
CALIFORNIA, AS PER MAP RECORDED IN BOOK 6 PAGE 141 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF
SAID LOS ANGELES COUNTY.

TOGETHER WITH THAT PORTION OF TERRACE DRIVE, 50 FEET IN WIDTH, VACATED BY RESOLUTION NO. 402, A
COPY OF WHICH RECORDED SEPTEMBER 23, 1969 AS INSTRUMENT NO. 2152 IN BOOK D4505 PAGE 223 OF OFFICIAL
RECORDS, IN SAID OFFICE OF THE COUNTY RECORDER, TITLE TO WHICH WOULD PASS WITH A LEGAL CONVEYANCE
OF THE ABOVE MENTIONED LOTS AND TOGETHER WITH THAT PORTION OF OLCOTT PLACE, 40 FEET IN WIDTH,
VACATED BY RESOLUTION NO. 8701, A COPY OF WHICH RECORDED OCTOBER 31, 1966 IN BOOK D3469 PAGE 638 OF
OFFICIAL RECORDS, IN SAID OFFICE OF THE COUNTY RECORDER, TITLE TO WHICH WOULD PASS WITH A LEGAL
CONVEYANCE OF THE ABOVE MENTIONED LOTS.

PARCEL 2:

LOT 3 OF KERNAGHAN AND ARNOLD’S SUBDIVISION OF THE NORTH 7 ACRES OF LOT 2 IN DIVISION C AND THE
SOUTH 1.82 ACRES OF LOT 3 OF BERRY AND ELLIOTT’S SUBDIVISION OF DIVISION “C” OF THE LANDS OF THE
SAN GABRIEL GROVE ASSOCIATION, IN THE CITY OF PASADENA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA,
AS SHOWN ON MAP RECORDED IN BOOK 16 PAGE 92 OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY
RECORDER OF SAID COUNTY.

TOGETHER WITH THAT PORTION OF TERRACE DRIVE, 50 FEET IN WIDTH VACATED BY RESOLUTION NO. 402, A COPY
OF WHICH RECORDED SEPTEMBER 23, 1969 AS INSTRUMENT NO. 2152 IN BOOK D4505 PAGE 223 OF OFFICIAL
RECORDS, IN SAID OFFICE OF THE COUNTY RECORDER, TITLE TO WHICH WOULD PASS WITH A LEGAL CONVEYANCE
OF THE ABOVE MENTIONED LOTS AND TOGETHER WITH THAT PORTION OF OLCOTT PLACE, 40 FEET IN WIDTH,
VACATED BY RESOLUTION NO. 8701, A COPY OF WHICH RECORDED OCTOBER
31, 1966 IN BOOK D3469 PAGE 638 OF
OFFICIAL RECORDS, IN SAID OFFICE OF THE COUNTY RECORDER, TITLE TO WHICH WOULD PASS WITH A LEGAL
CONVEYANCE OF THE ABOVE MENTIONED LOTS.

EXCEPT THEREFROM, ANY PORTION OF SAID LAND DESCRIBED IN THE DEED TO THE CITY OF PASADENA
RECORDED OCTOBER 31, 1966 AS INSTRUMENT NO. 2225 OF OFFICIAL RECORDS.

EXHIBIT A

-1-

 

Loan No. 105093

PARCEL 3:

LOT 13 (A PORTION OF WHICH WAS FORMERLY WITHIN TERRACE DRIVE, 50 FEET IN WIDTH, VACATED BY
RESOLUTION NO. 402, A COPY OF WHICH RECORDED SEPTEMBER 23, 1969 AS INSTRUMENT NO. 2152, IN BOOK
D-4505 PAGE 223 OF OFFICIAL RECORDS, IN SAID OFFICE OF THE COUNTY RECORDER, AND LOTS 14, 15, 16,17
AND 18 OF DR. CONGAR’S HOME TRACT, AS PER MAP RECORDED IN BOOK 14 PAGE 52 OF MISCELLANEOUS
RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXCEPT THOSE PORTIONS OF SAID LOTS LYING NORTHERLY OF THE SOUTHERLY BOUNDARY OF THE LAND DESCRIBED
IN PARCEL 12 OF THE DEED RECORDED OCTOBER 31, 1966 AS INSTRUMENT NO. 2225, OF OFFICIAL RECORDS.

PARCEL 4:

LOTS 15, 16, 17, 18, 19 AND 20 OF KERNAGHAN AND ARNOLD’S SUBDIVISION OF THE NORTH 7 ACRES OF LOT 2
IN DIVISION “C” AND THE SOUTH 11.82 ACRES OF LOT 3 OF BERRY AND ELLIOTT’S SUBDIVISION OF DIVISION
“C” OF THE LANDS OF THE SAN GABRIEL ORANGE GROVE ASSOCIATION, IN THE CITY OF PASADENA, COUNTY OF
LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 16 PAGE 92 OF MISCELLANEOUS RECORDS,
IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, TOGETHER WITH THAT PORTION OF CAMDEN STREET,
50 FEET IN WIDTH, VACATED BY RESOLUTION NO. 8627, A COPY OF WHICH RECORDED MAY 14, 1965 AS
INSTRUMENT NO. 4702, IN BOOK D-2905 PAGE 560, OF OFFICIAL RECORDS, AND THAT PORTION OF TERRACE
DRIVE, 50 FEET IN WIDTH, VACATED BY RESOLUTION NO. 402, A COPY OF WHICH RECORDED SEPTEMBER 23, 1969
AS INSTRUMENT NO. 2152, IN BOOK D-4505 PAGE 223 OF OFFICIAL RECORDS, IN SAID OFFICE OF THE COUNTY
RECORDER, TITLE TO WHICH WOULD PASS WITH A LEGAL CONVEYANCE OF THE ABOVE MENTIONED LOTS.

PARCEL 5:

THE NORTH HALF OF LOT 75 AND LOTS 76, 77, 78, 79 AND 80 OF THE DR. CONGAR TRACT, IN THE CITY OF
PASADENA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 7 PAGE 74 OF
MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY,TOGETHER WITH THAT
PORTION OF CAMDEN STREET, 50 FEET IN WIDTH (FORMERLY THE SOUTH HALF OF LOT 75 AND THE NORTH HALF OF
LOT 74), VACATED BY RESOLUTION NO. 8627, A COPY OF WHICH RECORDED MAY 14, 1965 AS INSTRUMENT NO.
4702, IN BOOK D-2905 PAGE 560, OFFICIAL RECORDS, IN SAID OFFICE OF THE COUNTY RECORDER, TITLE TO
WHICH WOULD PASS WITH A LEGAL CONVEYANCE OF LOT 75.

EXCEPT FROM SAID LANDS THOSE PORTIONS WITHIN AS DESCRIBED IN A FINAL DECREE OF CONDEMNATION
RECORDED IN BOOK 6143 PAGE 305 OF OFFICIAL RECORDS, AND ALSO WITHIN AS DESCRIBED IN A DEED RECORDED
OCTOBER 31, 1966 AS INSTRUMENT NO. 2225 OF OFFICIAL RECORDS.

ALSO EXCEPT THE EASTERLY 10 FEET OF SAID LOTS.

Assessor’s Tax Account Number for Property I: 5713-012-015 (Portion), 5713-016-016 and 573-016-017

Property I Address: SW Corner Green Street and St. Johns Avenue, Pasadena, California

PROPERTY II:

All the certain property located in the County of Alameda, State of California, described as
follows:

EXHIBIT A

-2-

 

Loan No. 105093

PARCEL B, PARCEL MAP 696, FILED MAY 4, 1971, BOOK 69 OF MAPS, PAGE 45, ALAMEDA COUNTY RECORDS.

EXCEPTING THEREFROM THAT PORTION DESCRIBED IN THE DEED TO THE CITY OF PLEASANTON, A MUNICIPAL
CORPORTION, RECORDED MAY 25, 1978, REEL 5410, IMAGE 20 SERIES NO. 78-98522, OFFICIAL RECORDS.

Assessor’s Tax Account Number for Property II: 941-1201-015-02

Property II Address: 5700 Pleasant Hills Road, Pleasanton,
California

EXHIBIT A

-3-

 

Loan
No. 105093

EXHIBIT B

DOCUMENTS

Exhibit B to LOAN AGREEMENT between SUNRISE PASADENA CA SENIOR LIVING, LLC, a California
Limited Liability Company, and SUNRISE PLEASANTON CA SENIOR LIVING, LP, a Delaware Limited
Partnership, jointly and severally, both referred to as “Borrower”, and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as “Lender”, dated as of September 28, 2007 (“Agreement”).

	1.	 	LOAN DOCUMENTS. The documents listed below, numbered 1.1 through 1.8, inclusive, below
of even
date herewith (unless otherwise specified), and amendments, modifications and supplements
thereto which have received the prior written consent of Lender, together with any
documents executed in the future that are approved by Lender and that recite that they are
“Loan Documents” for purposes of this Agreement are collectively referred to herein as the
Loan Documents.

	 	1.1	 	This Agreement.
	 
	 	1.2	 	Note.
	 
	 	1.3	 	Deed of Trust.
	 
	 	1.4	 	Two Uniform Commercial Code National Financing Statement Form UCC 1, dated
September ____, 2007.
	 
	 	1.5	 	Limited Liability Company Borrowing Certificate executed by SUNRISE
PASADENA CA SENIOR LIVING, LLC, a California Limited Liability Company.
	 
	 	1.6	 	Limited Partnership Borrower Certificate executed by SUNRISE PLEASANTON CA
SENIOR LIVING, LP, a Delaware Limited Partnership.
	 
	 	1.7	 	Corporate Resolution Authorizing Execution of Guaranty executed by SUNRISE
SENIOR LIVING, INC., a Delaware Corporation.
	 
	 	1.8	 	Agreement for Disbursement prior to recording.

	2.	 	OTHER RELATED DOCUMENTS (WHICH ARE NOT LOAN DOCUMENTS)

	 	2.1	 	Guaranty executed by SUNRISE SENIOR LIVING, INC., a Delaware Corporation as
Guarantor in favor of Lender.
	 
	 	2.2	 	Unsecured Hazardous Materials Indemnity Agreement dated September                    , 2007 executed by
and between SUNRISE SENIOR LIVING, INC. as Indemnitor and Lender.
	 
	 	2.3	 	Opinion of Borrower’s Legal Counsel dated                     , executed by                     on behalf
of                                         .

-1-

 

Loan No. 105093

EXHIBIT C

TRANSFER AUTHORIZER DESIGNATION

(For Disbursement of Loan Proceeds by Funds Transfer)

§ NEW o REPLACE PREVIOUS DESIGNATION o ADD o CHANGE o DELETE LINE NUMBER __

The following representatives of SUNRISE PASADENA CA SENIOR LIVING, LLC, a California Limited
Liability Company, and SUNRISE PLEASANTON CA SENIOR LIVING, LP, a Delaware Limited Partnership,
jointly and severally, (both referred to as “Borrower”) are authorized to request the
disbursement of Loan Proceeds and initiate funds transfers for Loan Number 105093 dated
September 28, 2007 between Wells Fargo Bank, National Association (“Bank”) and Borrower.
Bank is authorized to rely on this Transfer Authorizer Designation until it has received a new
Transfer Authorizer Designation signed by Borrower, even in the event that any or all of the
foregoing information may have changed.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Maximum Wire
	 	 	Name	 	Title	 	Amount1
	1.
	 	James S. Pope	 	Vice President	 	$	21,906,950.00	 
	2.
	 	Carl G. Adams	 	Vice President	 	$	21,906,950.00	 
	3.
	 	 	 	 	 	 	 	 	 	 	 	 
	4.
	 	 	 	 	 	 	 	 	 	 	 	 
	5.
	 	 	 	 	 	 	 	 	 	 	 	 

Beneficiary Bank and Account Holder Information

	 	 	 	 	 
	1.
	 	 	 	 
	 
	Transfer Funds to (Receiving Party Account Name):
	 	 	 	 
	SUNRISE PASADENA CA SENIOR LIVING, LLC, a California Limited Liability Company, and/or SUNRISE PLEASANTON CA SENIOR LIVING, LP, a California Limited Partnership

	 
	Receiving Party Account Number:

	 	 	 	 
	 
	Receiving Bank Name, City and State:

	 	Receiving Bank Routing (ABA) Number

	Bank of America, Richmond, VA

	 	026009593
	 
	Maximum Transfer Amount:
	 	 	 	 
	$521,906,950.00
	 	 	 	 
	 
	Further Credit Information/Instructions:
	 	 	 	 
	 
	2.
	 	 	 	 
	 
	Transfer Funds to (Receiving Party Account Name):
	 	 	 	 
	 
	Receiving Party Account Number:
	 	 	 	 
	 
	Receiving Bank Name, City and State:

	 	Receiving Bank Routing (ABA) Number

 

			
	1	 	Maximum Wire Amount may not exceed the Loan Amount.

-1-

 

Loan No. 105093

	 	 	 	 	 
	Maximum Transfer Amount:
	 	 	 	 
	 
	 	 	 	 
	Further Credit Information/Instructions:
	 	 	 	 
	 
	 	 	 	 
	3.
	 	 	 	 
	 
	 	 	 	 
	Transfer Funds to (Receiving Party Account Name):
	 	 	 	 
	 
	 	 	 	 
	Receiving Party Account Number:
	 	 	 	 
	 
	 	 	 	 
	Receiving Bank Name, City and State:
	 	Receiving Bank Routing (ABA) Number
	 
	 	 	 	 
	Maximum Transfer Amount:
	 	 	 	 
	 
	 	 	 	 
	Further Credit Information/Instructions:
	 	 	 	 
	 
	 	 	 	 
	Date:
	 	 	 	 
	 
	 	 	 	 
	“BORROWER’
	 	 	 	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	SUNRISE PASADENA CA SENIOR LIVING, LLC,	 	 	 	SUNRISE PLEASANTON CA SENIOR LIVING, LP,
	a California Limited Liability Company	 	 	 	a Delaware Limited Partnership
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	SUNRISE SENIOR LIVING	 	 	 	 	 	By:	 	SUNRISE PLEASANTON GP, LLC, a Delaware
	 	 	 	 	INVESTMENTS, INC., a Virginia	 	 	 	 	 	 	 	Limited Liability Company, its General Partner
	 

	 	 	 	Corporation, Member	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 	 	By:
	 	SUNRISE SENIOR LIVING INVESTMENTS,
	 

	 	 	 	 	 	 	 	 	 	 	 	 	 	INC., a Virginia Corporation, its Sole Member
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Carl Adams
	 	 	 	 	 	 	 	By:
	 	/s/ Carl Adams
	 

	 	 	 	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Name: 

Carl Adams
	 	 	 	 	 	 	 	Name:
	 	Carl Adams
	 

	 	Its:
	 	Vice President
	 	 	 	 	 	 	 	Its:
	 	Vice President

-2-

 

Loan No. 105093

DRAW AUTHORIZATION

Any one of the following individuals is authorized to sign each draw authorization on behalf of the Borrower
under Loan No. 105093.

	 	 	 	 
	Printed Name
	 	Signature

	 
	 	 
	James S. Pope, Vice President
	 	 
	 

	 	 
	 
	 	 
	Carl G. Adams, Vice President

	 	/s/ Carl G. Adams

-3-exv10w3

Exhibit 10.3

[WFB Letterhead]

October 1, 2009

Sunrise Pleasanton CA Senior Living, LP

c/o Sunrise Senior Living Investments, Inc.

7902 Westpark Drive

McLean, VA 22102

Sunrise Pasadena CA Senior Living, LLC

c/o Sunrise Senior Living Investments, Inc.

7902 Westpark Drive

McLean, VA 22102

Sunrise Senior Living Investments, Inc.

7902 Westpark Drive

McLean, VA 22102

Attn: General Counsel

			
	RE:	 	SUNRISE PASADENA CA SENIOR LIVING, LLC, a California limited liability
company, SUNRISE PLEASANTON CA SENIOR LIVING, LP, a Delaware limited
partnership (both referred to collectively as “Borrower”), and SUNRISE
SENIOR LIVING, INC., a Delaware corporation (“Guarantor”)

Wells Fargo Bank Loan #105093

Dear Ladies and Gentlemen:

          This Letter Agreement (“Letter Agreement”) is made by and among Borrower, Guarantor and Wells
Fargo Bank, National Association (“Lender”).

          Reference is hereby made to that certain Loan Agreement dated September 28, 2007 by and
between Borrower and Lender (as amended, the “Loan Agreement”) and all other documents and
instruments executed by Borrowers in connection with the Loan as described in the Loan Agreement.
Capitalized terms used but not defined herein have the meanings given to such terms in the Loan
Agreement. Guarantor has guaranteed certain obligations of Borrower in connection with the Loan.
All documents, instruments executed in connection with the Loan (including the Loan Agreement),
together with all modifications and amendments thereto and any document required hereunder, are
collectively referred to herein as the “Loan Documents”.

          As you know, the Loan is scheduled to mature on October 1, 2009. Upon the satisfaction of,
and in consideration of, the following terms and conditions, Lender has agreed to (i) extend the
Maturity Date to November 16, 2009 (the “Extended Maturity Date”) and (ii) forbear from enforcing
its rights or remedies with respect to the Financial Covenant Defaults (defined below) until the
earlier to occur of (a) the Extended Maturity Date or (b) other than the Financial

1

 

Covenant Defaults, a Default or any event or condition which, with the giving of notice or the
passage of time, constitutes a Default:

	 	a)	 	No Defaults. Except with respect to breaches of covenants contained in
Sections 7.3(a)(i)-(iii) of the Loan Agreement (the “Financial Covenant Defaults”), the
undersigned hereby represents and warrants, that as of the date of this Letter Agreement,
no Default shall have occurred and be continuing and no event or condition which, with the
giving of notice or the passage of time or both, would constitute a Default shall have
occurred and be continuing.

	 	b)	 	Waiver of Claims. Each of Borrower and Guarantor knowingly (and after having
had an opportunity to consult its own legal counsel), consciously, intentionally and fully
waives and releases any and all claims, defenses, counterclaims or other charges, offsets
or rights of action, known or unknown, contingent or direct, patent or latent, and arising
on or before the date hereof, against Lender in any way, directly or indirectly, connected
to or arising out of the transactions and activities that are covered by or associated with
the Loan Documents. Further, each of Borrower and Guarantor, by acceptance of this Letter
Agreement and its terms, acknowledges and agrees that, as of the date hereof, each of
Borrower and Guarantor has no basis for any claim for loss, damages, injury or wrongdoing
of any kind (negligent, intentional or otherwise) against Lender in connection with the
transactions, activities or matters that have any connection with or to the Loan Documents
and the transactions, activities, acts and subject matter thereof. Each of Borrower and
Guarantor agrees not to assert any such claim arising on or before the date hereof, whether
by way of defense, counterclaim, offset, independent claim or otherwise. The waivers and
estoppel assertions set forth herein are intended to be comprehensive in their breadth and
application and apply to acts, actions, omissions, statements, representations,
commitments, covenants, promises, agreements and any and all other sources of liability or
claim of any kind arising on or before the date hereof. Without limiting the generality of
the foregoing, each of Borrower and Guarantor specifically waives the benefits of
California Civil Code Section 1542 (or any similar provisions) which provides as follows:
	 
	 	 	 	A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER
MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.

	 	c)	 	Title Costs. Borrower shall, within seven (7) days of written demand therefor
by Lender, reimburse Lender for charges related to an additional endorsement for each of
Lender’s policies of title insurance obtained in connection with the Loan.

          Except as expressly provided herein, nothing in this Letter Agreement shall alter or affect
any provision, condition or covenant contained in the Loan Documents. From and after the date
hereof, this Letter Agreement shall be deemed a “Loan Document” as such term is defined in the Loan
Agreement.

2

 

          Nothing in this Letter Agreement imposes a commitment or obligation of any kind on the part of
the Lender to negotiate, enter into or otherwise provide any further forbearance, loan extension or
loan modification of any kind. Unless and except as expressly stated herein, this Letter Agreement
is not intended to limit or waive, nor shall it be deemed in any way to limit or waive, any of
Lender’s right or remedies under the Loan Documents or otherwise. In the event that a Default
other than the Financial Covenant Defaults occurs at any time prior to the Extended Maturity Date,
Lender may immediately exercise its rights and remedies in any manner it chooses in its sole and
absolute discretion. The Loan Documents shall remain in full force and effect as modified by this
Letter Agreement.

          Please confirm your agreement to the foregoing by executing a counterpart of the Letter
Agreement below and returning such counterpart to Lender. Upon satisfaction of the terms and
conditions listed above, all references in the Loan Documents to the Maturity Date shall mean
November 16, 2009.

Please feel free to contact me with any questions.

Sincerely,

“LENDER”

WELLS FARGO BANK, NATIONAL ASSOCIATION

	 	 	 	 	 
	By: 

Name:

	 	/s/ Martia Kontak
 

Martia Kontak
	 	 
	Its:

	 	Senior Vice President	 	 

BORROWER AND GUARANTOR EACH HEREBY ACKNOWLEDGE AND AGREE TO THE FOREGOING.

“BORROWER”

	 	 	 	 	 	 	 	 	 
	SUNRISE PASADENA CA SENIOR LIVING, LLC,	 	 
	a California limited liability company	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Sunrise Senior Living Investments, Inc.,	 	 
	 	 	 	 	a Virginia corporation, Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:

Name:
	 	/s/ Edward Burnett
 

Edward Burnett
	 	 
	 

	 	 	 	Its:
	 	Vice President	 	 

[SIGNATURE PAGE CONTINUES]

3

 

	 	 	 	 	 	 	 	 	 
	SUNRISE PLEASANTON CA SENIOR LIVING, LP,	 	 
	a Delaware limited partnership	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Sunrise Pleasanton GP, LLC, a Delaware	 	 
	 	 	 	 	limited liability company, its General Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	Sunrise Senior Living Investments, Inc.,	 	 
	 

	 	 	 	 	 	a Virginia corporation, its Sole Member	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:

Name:
	 	/s/ Edward Burnett
 

Edward Burnett
	 	 
	 

	 	 	 	Its:
	 	Vice President	 	 

“GUARANTOR”

SUNRISE SENIOR LIVING, INC., a Delaware corporation

	 	 	 	 	 
	By: 

Name:

	 	/s/ Julie A. Pangelinan
 

Julie A. Pangelinan
	 	 
	Its:

	 	Chief Financial Officer	 	 

4

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