Document:

exv10w16

Exhibit 10.16

FIRST AMENDMENT TO GUARANTY OF PAYMENT

(Loan B)

     THIS FIRST AMENDMENT TO GUARANTY OF PAYMENT (Loan B) (this
“Agreement”) is made as of September 2008, by and between SUNRISE SENIOR
LIVING, INC., a corporation organized under the laws of the State of Delaware
(“Guarantor”) and CHEVY CHASE BANK, F.S.B., a federal savings bank, its successors and
assigns (“Lender”).

RECITALS

     A. Sunrise Connecticut Avenue Assisted Living, L.L.C., a limited liability company
organized under the laws of the Commonwealth of Virginia (“Borrower”), obtained a loan
from Lender in the principal amount of Ten Million and No/Dollars ($10,000,000.00) (the
“Loan B”), which is one of two simultaneous loans made by Lender to Borrower.

     B. Loan B was made pursuant to the provisions of a certain Loan and Security
Agreement (Loan B) dated August 28, 2007, by and between Borrower and Lender, as amended
by that certain First Amendment to Loan Agreement (Loan B) dated April 15, 2008 (as
amended, modified, restated, substituted, extended and renewed at any time and from time
to time, collectively, the “Loan Agreement”).

     C. Loan B is evidenced by, and repaid with interest in accordance with the
provisions of a certain Deed of Trust Note B dated August 28, 2007, from Borrower
payable to Lender in the original principal amount of Ten Million and No/Dollars
($10,000,000.00) (as amended, modified, restated, substituted, extended and renewed at
anytime and from time to time, the “Note”).

     D. Guarantor executed a Guaranty of Payment (Loan B) dated August 28, 2007 (the
“Guaranty”) pursuant to which Guarantor guaranteed Borrower’s obligations under the Loan
Agreement and the Note.

     E. Borrower and Guarantor have requested and Lender has agreed to (i) waive any
defaults which have occurred under those certain financial covenants described in
Section 9(c) of the Guaranty for the fiscal year ending December 31, 2007 and the fiscal
quarters ending March 31, 2008 and June 30, 2008 and any defaults which may occur during
the fiscal quarter ending September 30, 2008; and (ii) make such other changes to the
Guaranty as are more particularly set forth herein.

AGREEMENTS

     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, receipt of which is hereby acknowledged, Guarantor and Lender agree as
follows:

 

 

     1. Guarantor and Lender agree that the Recitals above are a part of this Agreement. Unless
otherwise expressly defined in this Agreement, terms defined in the Loan Agreement shall have the
same meaning under this Agreement.

     2. The Guaranty is hereby amended as follows:

          (a) The following defined terms are hereby added to the end of Section 9(c) (Covenants):

     “Cash Equivalents” means any investment security issued by the United
States Government and backed by the full faith and credit of the United
States Government.

     “Required Liquidity” has the meaning set forth in Section 9(c)(iv).

          (b) A new subsection (iv) is hereby added to Section 9(c) (Covenants) as
follows:

     (d) Required Liquidity. Guarantor will maintain at all times,
tested as of the end of each calendar month until Guarantor has complied
with the Updated Reporting Requirements (as defined in the Sunrise Senior
Financing Agreement) and Guarantor is not otherwise in default under the
Sunrise Senior Financing Agreement, liquidity of not less than $50,000,000
composed of availability under the Sunrise Senior Financing Agreement plus
up to not more than $50,000,000 in unrestricted cash and unrestricted Cash
Equivalents (the “Required Liquidity”). Guarantor shall provide a
certificate of compliance with the Required Liquidity on or before fifteen
(15) days after the end of each such calendar month. The face amounts of
letters of credit outstanding under the Sunrise Senior Financing Agreement
and the outstanding amounts of the loans made under the Sunrise Senior
Financing Agreement will be deducted from the maximum availability under the
Sunrise Senior Financing Agreement for purposes of determining compliance
with “Required Liquidity.” During such time as Guarantor is required to
comply with the Required Liquidity covenant, Guarantor must also provide
evidence of compliance with the Required Liquidity covenant
contemporaneously when provided to the Sunrise Bank Group pursuant to the
Sunrise Senior Financing Agreement.

     3. Guarantor hereby acknowledges and agrees that, pursuant to the terms of Section 9(c) of the
Guaranty, Guarantor is required to comply with certain financial covenants more particularly
described therein (the “Financial Covenants”). Guarantor and Lender hereby agree to waive
compliance with the Financial Covenants for the fiscal year ending December 31, 2007 and the fiscal
quarters ending March 31, 2008 and June 30, 2008. Additionally, Guarantor hereby acknowledges and
agrees that Guarantor is not expected to be in compliance with the leverage ratio and the fixed
charge coverage ratio for the fiscal quarter ending September 30, 2008. Guarantor and Lender
hereby agree to waive compliance with subsections 9(c)(ii)

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(Leverage Ratio) and 9(c)(iii) (Fixed Charge Coverage Ratio) for the fiscal quarter ending
September 30, 2008.

     4. Guarantor hereby issues, ratifies and confirms the representations, warranties and
covenants contained in the Guaranty, as amended hereby. Guarantor agrees that this Agreement is not
intended to and shall not cause a novation with respect to any or all of the obligations of
Guarantor under the Guaranty. Except as expressly modified herein, the terms, provisions and
covenants of the Guaranty are in all other respects hereby ratified and confirmed and remain in
full force and effect.

     5. Guarantor shall pay to Lender at the time this Agreement is executed and delivered (i) a
waiver fee in the amount of $1,000.00, and (ii) all fees, costs, charges, taxes and other expenses
incurred by Lender and its counsel in connection with this Agreement.

     6. This Agreement may be executed in any number of duplicate originals or counterparts, each
of such duplicate originals or counterparts shall be deemed to be an original and all taken
together shall constitute but one and the same instrument. Guarantor agrees that Lender may rely
on a telecopy of any signature of Guarantor. Lender agrees that Guarantor may rely on a telecopy
of this Agreement executed by Lender.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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     IN WITNESS WHEREOF, Guarantor and Lender have executed this Agreement under seal as of the
date and year first written above.

	 	 	 	 	 	 	 	 	 
	WITNESS OR ATTEST:	 	GUARANTOR:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	SUNRISE SENIOR LIVING INC.
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Sunrise Senior Living Inc.
	 
	 	 	 	 	 	 	 	 
	/s/  

	 	 	 	By:
	 	/s/ Richard J. Nadeau
 

Name: Richard J. Nadeau
	 	(SEAL) 
	 

	 	 	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	LENDER:
	 
	 	 	 	 	 	 	 	 
	WITNESS:	 	CHEVY CHASE BANK, F.S.B.

	 
	/s/

	 	By:
	 	/s/	 	 
	 	(SEAL)
	 	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:exv10w17

Exhibit 10.17

SECOND AMENDMENT TO LOAN AGREEMENT

(Loan A)

     THIS SECOND AMENDMENT TO LOAN AGREEMENT (this “Agreement”) is made as of August 28, 2009, by
and between SUNRISE CONNECTICUT AVENUE ASSISTED LIVING L.L.C., a limited liability company
organized and existing under the laws of the Commonwealth of Virginia (the “Borrower”) and CHEVY
CHASE BANK, a division of Capital One, N.A. (“Agent” or in its individual capacity, “Chevy Chase”),
as Agent for the lenders party hereto (individually a “Lender” and collectively, “Lenders”).

RECITALS

     A. Borrower obtained a loan from the Lenders in the maximum principal amount of Thirty Million
and No/Dollars ($30,000,000.00) (“Loan A”) which was advanced pursuant to the provisions of a
certain Loan Agreement dated August 28, 2007 by and between the Borrower and the Lenders, as
amended by that certain First Amendment to Loan Agreement dated April 15, 2008 (the same, as
amended by this Agreement and as amended, modified, restated, substituted, extended and renewed at
any time and from time to time, the “Loan Agreement”).

     B. Loan A is evidenced by, and repaid with interest in accordance with the provisions of (i) a
Deed of Trust Note A dated August 28, 2007 from the Borrower payable to Chevy Chase in the
principal amount of Twenty Million and No/Dollars ($20,000,000.00), as amended by that certain
First Amendment to Deed of Trust Note A dated of even date herewith (as amended, modified,
restated, substituted, extended and renewed at anytime and from time to time, the “Chevy Chase
Note”) and (ii) a Deed of Trust Note A dated August 28, 2007 from the Borrower payable to M.B.
Financial Bank, N.A., a national banking association in the principal amount of Ten Million and
No/Dollars ($10,000,000.00), as amended by that certain First Amendment to Deed of Trust Note A
dated of even date herewith (as amended, modified, restated, substituted, extended and renewed at
anytime and from time to time, the “MB Financial Note” and, collectively with Chevy Chase Note, the
“Notes”).

     C. Loan A is guaranteed by Sunrise Senior Living, Inc. a Delaware corporation (“Guarantor”),
pursuant to the terms of that certain Guaranty of Payment dated August 28, 2007, as amended by that
certain First Amendment to Guaranty of Payment dated September 8, 2008 (as amended, modified,
restated, substituted, extended and renewed at anytime and from time to time, the “Guaranty”).

     D. The Borrower has requested and the Agent has agreed to (i) waive the Event of Default
caused by the Borrower’s failure to comply with the occupancy requirement for the fiscal quarters
ending March 31, 2009 and June 30, 2009, (ii) revise the financial reporting requirements and (iii)
make such other changes as more particularly set forth herein.

 

 

AGREEMENTS

     NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, receipt of which is hereby acknowledged, Borrower and Lender agree as follows:

     1. Borrower and Agent agree that the Recitals above are a part of this Agreement. Unless
otherwise expressly defined in this Agreement, terms defined in the Loan Agreement shall have the
same meaning under this Agreement.

     2. The parties hereto acknowledge and agree (a) that the outstanding principal balance of Loan
A as of the date hereof is $29,637,000 (b) that interest on the unpaid principal balance of Loan A
has been paid through August 1, 2009 and (c) that the unpaid principal balance of Loan A, together
with accrued and unpaid interest thereon, is due and owing subject to the terms of repayment
hereinafter set forth, without defense or offset.

     3. Borrower hereby acknowledges and agrees that pursuant to the terms of Section 7.29 (Debt
Service Ratio) of the Loan Agreement, Borrower is required to maintain, tested as of the end of
each fiscal quarter during the term of the Loan, a Debt Service Ratio for the Facility of not less
than 1.20 to 1.0 (the “Debt Service Covenant”). Borrower and Agent hereby acknowledge and agree
that for the period commencing July 1, 2009 and ending December 2, 2009 the Debt Service Covenant
will not be measured.

     4. Borrower hereby acknowledges and agrees that pursuant to the terms of Section 7.30
(Occupancy Covenant) of the Loan Agreement, Borrower is required to maintain at all times, tested
as of the end of each fiscal quarter during the term of each Loan, a minimum average daily
occupancy of eighty-five percent (85%), measured on a unit basis (the “Occupancy Covenant”).
Pursuant to Section 9.3 of the Loan Agreement, the failure to comply with the Occupancy Covenant
constitutes an Event of Default under each Loan Agreement. Agent hereby agrees to waive the Event
of Default caused by the Borrower’s failure to comply with the Occupancy Covenant for the fiscal
quarters ending March 31, 2009 and June 30, 2009.

     5. Subsection (c) of 7.1 (Financial Statements) of the Loan Agreement is hereby amended and
restated in its entirety as follows:

     “(c) As soon as available but in no event later than the dates indicated,
consolidated financial statements of Guarantor for the fiscal quarter ending
September 30, 2009, no later than November 15, 2009, and for each fiscal quarter
thereafter, within forty-five (45) days thereafter; such statements shall include a
consolidated balance sheet and related consolidated statements of income and
operations, shareholder’s equity and cash flows for such fiscal quarter.”

     6. Section 7.1 (Financial Statements) of the Loan Agreement is hereby amended by adding the
following subsections (f) – (j) in their entirety as follows:

     “(f) As soon as available but in no event later than the 15th day of
each calendar month, commencing on September 15, 2009, certification by Guarantor

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of the amount of its Cash Balance (as defined in the Guaranty) as of the last
day of the immediately preceding month.

     (g) As soon as available but in no event later than the 15th day of
each calendar month, commencing on September 15, 2009, a detailed report as to the
occupancy levels within the facilities owned by Guarantor or its Affiliates as of
the last day of the immediately preceding month.

     (h) As soon as available but in no event later than the 15th day of
each calendar month, commencing on September 15, 2009, a thirteen (13) week cash
flow projection for Guarantor and its Affiliates dating from the fifteenth
(15th) of such calendar month.

     (i) Immediately after their preparation, written copies of any updates or
additional information related to that certain long-term cash flow projection and
analysis of expected liquidity previously delivered to Agent.

     (j) Concurrently with delivery to such lender of Guarantor, Borrower will make
reasonable efforts to provide any additional written information or written reports
provided by an authorized officer of Guarantor related to any cash flow projection
or analysis of expected liquidity of Guarantor provided to any other lender of
Guarantor.”

     7. Borrower hereby issues, ratifies and confirms the representations, warranties and covenants
contained in the Loan Agreement, as amended hereby. Borrower agrees that this Agreement is not
intended to and shall not cause a novation with respect to any or all of the obligations of
Borrower under the Loan Agreement. Except as expressly modified herein, the terms, provisions and
covenants of the Loan Agreement are in all other respects hereby ratified and confirmed and remain
in full force and effect.

     8. The Borrower shall pay at the time this Agreement is executed and delivered all fees,
commissions, costs, charges, taxes and other expenses incurred by the Agent and its counsel in
connection with this Agreement, including, but not limited to, a commitment fee in the aggregate
amount of Fifty Thousand and No/100 Dollars ($50,000.00) for Loan A and Loan B payable to the
Lenders on a pro rata basis and the reasonable fees and expenses of the Agent’s counsel and all
recording fees, taxes and charges.

     9. This Agreement may be executed in any number of duplicate originals or counterparts, each
of such duplicate originals or counterparts shall be deemed to be an original and all taken
together shall constitute but one and the same instrument. Borrower agrees that Agent may rely on
a telecopy of any signature of Borrower. Agent agrees that Borrower may rely on a telecopy of this
Agreement executed by Agent.

     10. Pursuant to Section 8.15 of the Loan Agreement, Borrower has been prohibited from making
cash distributions to its Sole Member. As a result, Borrower has cash on hand as a result of its
Net Operating Income being greater than Debt Service. Lender hereby consents to

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the withdrawal of a portion of Borrower’s cash on hand in order to pay the commitment fee
described in Section 8 of this Agreement. Borrower’s projection of Net Operating Income from the
date hereof through the maturity date of the Loan, as provided by Borrower to Lender, indicates
that Borrower will generate sufficient funds to pay Debt Service at the interest rate set forth in
the Note as amended through the date hereof. Lender consents to Borrower’s use of Borrower’s funds
to pay Debt Service.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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     IN WITNESS WHEREOF, Borrower and Agent have executed this Agreement under seal as of the date
and year first written above.

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	WITNESS OR ATTEST:	 	SUNRISE CONNECTICUT AVENUE ASSISTED LIVING, L.L.C.
	 
	 	 	 	 
	 

	 	By:
	 	Sunrise Senior Living Investments, Inc., its sole Member

	 	 	 	 	 
	 	 	 
	/s/
Uma Singh
	By:  	/s/
Julie Pangelinan (SEAL)
 	 
	 	 	Julie Pangelinan 	 
	 	 	Vice President 	 
	 

COMMONWEALTH OF VIRGINIA, COUNTY OF FAIRFAX, TO WIT:

     On August 29, 2009, before me, Helen A. Wilson, a Notary Public in and for the Commonwealth
shown above, appeared Julie Pangelinan personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose signature is subscribed to the within instrument, and
acknowledged to me that she executed the same in her authorized capacity as Vice President of
Sunrise Senior Living Investments, Inc., sole Member of Sunrise Connecticut Avenue Assisted Living,
L.L.C., and that by her signature on the instrument the entity upon behalf of which she acted,
executed the instrument.

     WITNESS my hand and official seal.

	 	 	 	 	 
	 	 	 
	 	/s/ Helen A. Wilson
 	 
	 	Notary Public 	 
	 	 	 
	 

My Commission Expires: 11/30/2010

My Notarial Registration Number is: 313047

 

 

	 	 	 	 	 	 	 
	 	 	AGENT:
	 
	 	 	 	 	 	 
	WITNESS:	 	CHEVY CHASE BANK F.S.B., as Agent and Lender
	 
	 	 	 	 	 	 
	/s/                                 	 	 	 	By:
	 	/s/
Claude R. Sanders (SEAL)
	 
	 	 	 	 	 	 
	 	 	 	 	 	 	Claude R. Sanders
	 	 	 	 	 	 	Senior Vice President

COMMONWEALTH/STATE OF MARYLAND, COUNTY/CITY OF MONTGOMERY, TO WIT:

     On
August 28th, 2009, before me, Pauline Ralph, a Notary Public in and for the Commonwealth shown
above, appeared Claude R. Sanders, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person whose signature is subscribed to the within instrument, and
acknowledged to me that he executed the same in his authorized capacity as Senior Vice President of
Chevy Chase Bank F.S.B., a division of Capital One, N.A., and that by his signature on the instrument the
entity upon behalf of which he acted, executed the instrument.

     WITNESS my hand and official seal.

	 	 	 	 	 
	 	 	 
	 	/s/ Pauline C.  Ralph
 	 
	 	Notary Public 	 
	 	 	 

My Commission Expires: 6/1/2010

My Notarial Registration Number is:                                         

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