Document:

exhibit101.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 10.1

GOVERNANCE AGREEMENT

           This GOVERNANCE AGREEMENT (this “Agreement”), dated as of January 16, 2009, is made by and among GMAC LLC, a Delaware limited liability company (the “Company”), FIM Holdings LLC, a Delaware limited liability company (“FIM”), GM Finance Co. Holdings LLC, a Delaware limited liability company (“GM”), the United States Department of the Treasury (the “Treasury”) and any person who after the date hereof executes a joinder to this Agreement substantially in the form attached hereto as Exhibit A.

           WHEREAS, each of FIM and GM owns Common Membership Interests in the Company pursuant to that certain Second Amended and Restated Limited Liability Company Operating Agreement of the Company, dated as of December 31, 2008 (the “LLC Agreement”);

           WHEREAS, it is anticipated that on or prior to the Board Effective Date (as defined below), GM, GM Preferred Finance Co. Holdings LLC (“GM Preferred”) or their applicable Affiliates will transfer Membership Interests held by them to two trusts, one with a trustee selected by the Treasury (the “UST Trust”), and the second with a trustee selected by GM or its Affiliates (the “GM Trust”);

           WHEREAS, each of FIM, GM, the Company and GM Preferred are party to that certain letter agreement (the “Letter Agreement”), dated as of December 29, 2008, in which the parties thereto set forth their mutual understanding with the Treasury with respect to the composition of the board of managers of the Company (the “Board”) relating to the Company’s participation in the Treasury’s Troubled Asset Relief Program established under the Emergency Economic Stabilization Act of 2008 and the Company’s application to become a bank holding company pursuant to the Bank Holding Company Act of 1956, as amended; and

           WHEREAS, the parties hereto desire to enter into this Agreement for the purpose of establishing the composition of the Board of the Company, effective as of March 24, 2009 or such earlier date as may be agreed to by all parties hereto (the “Board Effective Date”).

           NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the parties hereby agree as follows:

           1.           Defined Terms.   Capitalized terms used, but not defined, herein shall have the meanings set forth in the LLC Agreement.

           2.           The Board of Managers.   Each of FIM and GM and any party that executes a joinder to this Agreement (including the Trustee (as defined below)) pursuant to Section 3(e) shall vote or shall cause to be voted (including causing the trustee(s) of any trust formed by any party to hold Common Membership Interests of the Company to vote in accordance with this Agreement, which, in the case of GM with respect to so causing the trustee(s), shall be satisfied by the actions required to be taken by GM pursuant to the last sentence of Section 3(e)) all voting interests of the Company over which such party has direct or indirect voting control, and shall take all other necessary or desirable lawful actions within such party’s control (whether in such party’s capacity as a holder of Common Membership Interests, manager, member of a board committee or officer of the Company or otherwise, and including,

without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the Company shall take all necessary and desirable lawful actions within its control (including, without limitation, calling special board and Common Holder meetings), so that:

     (a)  Board Composition. As of and after the Board Effective Date:

          (i)  the authorized number of Managers constituting the Board shall be seven (which number may be increased from time to time (by increasing the number of independent directors only) by (i) for so long as the UST Trust is entitled to designate two Managers pursuant to Section 2(a)(ii)(B) below, a majority vote of the Managers designated pursuant to Sections 2(a)(ii)(A), (B) and (C) (which majority must include at least one designee of the Trustee), (ii) for so long as the UST Trust is entitled to designate only one Manager pursuant to Section 2(a)(ii)(B) below, a majority vote of the full Board (which majority must include at least one designee of the Trustee) and (iii) following such time as the UST Trust is no longer entitled to designate a Manager pursuant to Section 2(a)(ii)(B) below, a majority vote of the full Board);

          (ii)  the following persons shall be elected to the Board:

               (A)  one Manager designated (1) by FIM or (2) after either (x) the transfer by FIM of more than fifty percent (50%) of the Common Membership Interests held by FIM as of the date hereof to its members or (y) the liquidation of FIM, by Affiliates of Cerberus Capital Management, L.P., in all cases for so long as FIM or such Affiliates collectively hold at least 5% of the then outstanding Common Membership Interests of the Company;

               (B)   two Managers designated by the trustee(s) (the “Trustee”) of the UST Trust, for so long as the UST Trust holds, including as collateral for certain debt obligations of GM to the Treasury, at least 50% of the Common Membership Interests originally deposited into the UST Trust. Thereafter, the Trustee shall be entitled to designate one Manager for so long as the UST Trust holds at least 5% of the then outstanding Common Membership Interests of the Company;

               (C)  the Chief Executive Officer of the Company; and

               (D)  three (or such larger amount in accordance with Section 2(a)(i) above) Independent Managers, to be appointed by (i) for so long as the UST Trust is entitled to designate two Managers pursuant to Section 2(a)(ii)(B) above a majority vote of the Managers designated pursuant to Sections 2(a)(ii)(A), (B) and (C) (which majority must include at

 2

least one designee of the Trustee), (ii) for so long as the UST Trust is entitled to designate only one Manager pursuant to Section 2(a)(ii)(B) above, a majority vote of the full Board (which majority must include at least one designee of the Trustee), and (iii) following such time as the UST Trust is no longer entitled to designate a Manager pursuant to Section 2(a)(ii)(B) above, a majority vote of the full Board.

          (iii) any Manager who shall be designated for removal from the Board by the Person(s) authorized to designate such Manager for election pursuant to clauses (A), (B) or (D) of Section 2(a)(ii), shall be removed from the Board;

          (iv) any vacancy on the Board created by reason of the death, removal or resignation of a Manager shall be filled by an individual designated by the Person(s) authorized to designate such Manager for election pursuant to clauses (A), (B) or (D) of Section 2(a)(ii); provided that in the event a holder or holders of Common Membership Interests loses the right to designate any Manager pursuant to either clause (A) or (B) of Section 2(a)(ii), such vacancy shall be filled in the same manner as provided with respect to the designation of an independent director pursuant to Section 2(a)(ii)(D) above (except that approval by a designee of the Trustee shall not be required if the vacancy to be filled is that of the last remaining designee of the Trustee); provided further that in the event that any time there are five or more vacancies on the Board, all such vacancies shall be filled by a majority vote of the Common Holders; and

          (v) in the event that the Chief Executive Officer of the Company, elected to the Board pursuant to Section 2(a)(ii)(C), for any reason ceases to be the Chief Executive Officer of the Company, the parties shall use their commercially reasonable efforts to cause such individual to resign or, in lieu of such resignation, to remove such individual from the Board. The new Chief Executive Officer or interim Chief Executive Officer will become a Manager on the Board upon assuming the responsibilities as Chief Executive Officer or interim Chief Executive Officer, without further action by the Board or the parties hereto.

     (b)  Chairman. By affirmative vote of a majority of the total number of Managers, the Board shall elect from among the Independent Managers elected pursuant to Section 2(a)(ii)(D) a Chairman of the Board. The Chairman shall serve in such capacity until removed by a majority of the total number of Managers.

     (c)  Board Observers. Subject to applicable law and stock exchange regulations, (1) for so long as FIM or any of its Affiliates shall directly or indirectly hold any Common Membership Interests, FIM and its Affiliates shall be entitled to appoint one non-voting observer to the Board and (2) for so long as GM or any of its Affiliates shall directly or indirectly hold any Common Membership Interests, GM and its Affiliates shall be entitled to appoint one non-voting observer to the Board. Subject to applicable law and stock exchange regulations, (i) each such non-voting observer shall have the right to attend all meetings of the Board and all committees thereof and (ii) each such non-voting observer shall receive notice of

3

all meetings of the Board and all committees thereof and all written materials and other information (including minutes of meetings) given to Managers in connection with such meetings at the same time such materials and information are given to Managers; provided that prior to permitting any such non-voting observer access to any such meetings or any such materials or other information, such non-voting observer shall be required to execute a customary confidentiality agreement with respect to the use and treatment of confidential information. Notwithstanding the foregoing, the Company shall be permitted to exclude any such non-voting observer from meetings and from receiving certain information if, based on the advice of counsel, such exclusion is necessary to preserve the attorney-client privilege of the Company, provided that to the extent practicable the Company shall provide such non-voting observer advance written notice of any such exclusion.

     (d)  The parties hereby agree to amend, effective as of the Board Effective Date, any provision of the LLC Agreement to the extent inconsistent with any provision of this Section 2.

     (e)  Notwithstanding anything to the contrary herein, the composition of the Board of Managers is subject to the rights of the holders of the Company’s Fixed Rate Cumulative Perpetual Preferred Membership Interests, Series D-1 and Fixed Rate Cumulative Perpetual Preferred Membership Interests, Series D-2.

3. Miscellaneous.

     (a)  Amendment and Waiver. The provisions of this Agreement may not be amended, modified, supplemented or terminated, and waivers or consents to departures from the provisions hereof may not be given, without the written consent of the Company and each of the parties hereto.

     (b)  Termination. This Agreement will automatically terminate and be of no further force or effect immediately upon the earlier to occur of (and to the extent any of the provisions of this Agreement are or have been reflected in the LLC Agreement or any amendments thereto, such provisions will similarly terminate and be of no further force or effect):

          (i)  upon completion of an initial Public Offering or, if earlier, the listing of the Common Membership Interests on the New York Stock Exchange, Nasdaq or any other national securities exchange; and

          (ii) with respect to any party hereto, including any Person who becomes a party by executing a joinder to this Agreement, when such party and its Affiliates collectively cease to own any Common Membership Interests.

     (c)  Survival; Conversion of the Company. This Agreement will survive and continue in full force in accordance with its terms in the event of a termination of the LLC Agreement or dissolution of the Company in connection with a Company Conversion, provided that in the event of any such Company Conversion, all references herein to (i) “Common Membership Interests” shall be deemed to refer to “common stock”, (ii) “Board of Managers” shall be deemed to refer to “Board of Directors”, (iii) “Manager” shall be deemed to refer to

4

“Director”, and (iv) any other words applicable to limited liability companies shall be deemed to refer to their comparable words applicable to corporations.

     (d)  Entire Agreement. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. This Agreement embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way, including the Letter Agreement.

     (e)  Successors and Assigns; Applicability to Trusts. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns (including, for the avoidance of doubt, any successor to the Company as a result of a Company Conversion), provided that (1) no party hereto shall be permitted to assign any of its rights under this Agreement and (2) no party hereto shall be permitted to Transfer any of its of Common Membership Interests unless, with respect to this clause (2) only, (a) such Transfer is permitted by the LLC Agreement and (b) except with respect to Transfers of Common Membership Interests in a widely dispersed public offering following the earlier to occur of (A) a Company Conversion and (B) December 29, 2009, prior to such Transfer, such transferee agrees to be fully bound by the terms of this Agreement by executing a joinder to this Agreement substantially in the form attached hereto as Exhibit A. Upon establishment of the UST Trust, the Treasury hereby agrees to cause such trust to execute a joinder to this Agreement. Upon establishment of the GM Trust, GM hereby agrees to cause such trust to execute a joinder to this Agreement.

     (f)  Counterparts. This Agreement may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement.

     (g)  Remedies; Specific Performance. The parties hereto acknowledge that money damages would not be an adequate remedy at law if any party fails to perform in any material respect any of its obligations hereunder, and accordingly agree that each party, in addition to any other remedy to which it may be entitled at law or in equity, shall be entitled to seek to compel specific performance of the obligations of any other party under this Agreement, without the posting of any bond, in accordance with the terms and conditions of this Agreement in any court of the United States or any State thereof having jurisdiction, and if any action should be brought in equity to enforce any of the provisions of this Agreement, none of the parties hereto shall raise the defense that there is an adequate remedy at law. Except as otherwise provided by law, a delay or omission by a party hereto in exercising any right or remedy accruing upon any such breach shall not impair the right or remedy or constitute a waiver of or acquiescence in any such breach. No remedy shall be exclusive of any other remedy. All available remedies shall be cumulative.

5

     (h)  Notices. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement will be in writing and shall be given when delivered personally, sent via a nationally recognized overnight courier or sent via facsimile or e-mail (with hard copy sent to the recipient by reputable overnight courier service, with proper postage prepaid) to the recipient. Such notices, demands and other communications will be sent to the address indicated below:

If to the Company, to:

          GMAC LLC

           200 Renaissance Center 

          Detroit, MI 48265

          Attention:            GMAC Corporate Secretary 

           Facsimile:           (313)656-6308

          with a copy to:

           GMAC LLC

           200 Renaissance Center 

           Detroit, MI 48265

           Attention:           GMAC General Counsel 

           Facsimile:           (313)656-6124

           and

           Wachtell, Lipton, Rosen & Katz 

           51 West 52nd Street 

           New York, NY 10019 

           Attention:           David E. Shapiro 

           Facsimile:           (212)403-2000

If to GM, to:

           General Motors Corporation 

           300 Renaissance Center 

           Detroit, Michigan 48265 

           Attention:           Jeffrey Braun 

           Facsimile:           (248)267-2555

           with a copy to:

           Cravath, Swaine & Moore LLP 

           Worldwide Plaza 

           825 Eighth Avenue 

           New York, NY 10019

           Attention:      B. Robbins Kiessling, Philip A. Gelston 

           Facsimile:      (212) 474-3700

6

If to FIM, to:

           c/o Cerberus Capital Management, L.P 

           299 Park Avenue 

           New York, NY 10171

           Attention:            Lenard Tessler, Seth Plattus, Mark Neporent 

           Facsimile:            (212) 750-5212

           with a copy to:

           Schulte Roth & Zabel 

           919 Third Avenue 

           New York NY 10022

           Attention:            Alan Waldenberg, David Rosewater 

           Facsimile:            (212) 593-5955

If to the Treasury, to:

           United States Department of the Treasury 

           1500 Pennsylvania Avenue, NW, Room 2312 

           Washington, D.C. 20220

           Attention:            Assistant General Counsel (Banking and Finance) 

           Facsimile:            (202) 622-1974

or such other address or to the attention of such other Person as the recipient party shall have specified by prior written notice to the sending party.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SUCH STATE.

     (j) Descriptive Headings. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

     (k) Waiver of Jury Trial. Each of the parties hereto waives any right it may have to trial by jury in respect of any litigation based on, arising out of, under or in connection with the Agreement or any course of conduct, course of dealing, verbal or written statement or action of any party hereto.

     (l) Jurisdiction; Venue; Service of Process. Each party hereto hereby irrevocably and unconditionally (a) agrees that any suit, action or proceeding, at law or equity, arising out of or relating to this Agreement shall only be brought in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware lacks jurisdiction, then in the applicable Delaware state court), or if under applicable Law exclusive jurisdiction of such

7

suit, action or proceeding is vested in the federal courts, then the United States District Court for the District of Delaware, (b) expressly submits to the personal jurisdiction and venue of such courts for the purposes thereof and (c) waives and agrees not to raise (by way of motion, as a defense or otherwise) any and all jurisdictional, venue and convenience objections or defenses that such party may have in such suit, action or proceeding. Each party hereto hereby irrevocably and unconditionally consents to the service of process of any of the aforementioned courts. Nothing herein contained shall be deemed to affect the right of any party hereto to serve process in any manner permitted by Law or commence legal proceedings or otherwise proceed against any other party hereto in any other jurisdiction to enforce judgments obtained in any suit, action or proceeding brought pursuant to this Section 3(l).

     (m) Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship of any of the provisions of this Agreement.

     (n) Further Assurances. Each party hereto shall do and perform or cause to be done and performed all such further acts and things and shall execute and deliver all such other agreements, certificates, instruments and documents as any other party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

     (o) No Control over UST Trust or GM Trust. Each party hereto acknowledges that GM and its Affiliates will have no control over the UST Trust or the GM Trust or the actions taken by the trustees thereof with respect to the subject matter of this Agreement, and will not be able to direct or otherwise influence any such trustee with respect to the subject matter of this Agreement. For all purposes of this Agreement, (i) GM and its Affiliates shall be deemed to not own or control, directly or indirectly, any Membership Interests held by the UST Trust or the GM Trust, and (ii) both the UST Trust and the GM Trust shall be deemed to be not “Affiliates” of GM and GM’s Affiliates.

* * * * *

8

     IN WITNESS WHEREOF, the parties hereto have executed this Governance Agreement as of the date first above written.

	GMAC LLC  
	  
	By: /s/ David C. Walker                  
	     Name: David C. Walker 
	      Title: Group Vice President and Treasurer 
	  
	FIM HOLDINGS LLC  
	By: Cerberus FIM Investors, LLC, its Managing Member  
	  
	By: /s/ Seth P. Plattus                      
	      Name: Seth P. Plattus 
	      Title: Authorized Signatory
	  
	UNITED STATES DEPARTMENT OF THE TREASURY  
	  
	By: /s/ Neel Kashkari                      
	      Name: Neel Kashkari 
	      Title: Interim Assistant Secretary For Financial Stability 

	GM FINANCE CO. HOLDINGS LLC  
	  
	  
	By: /s/ Walter G. Borst                      
	      Name: Walter G. Borst 
	      Title: Chief Executive Officer 

EXHIBIT A

FORM OF JOINDER

     This JOINDER (the “Joinder”) to the Governance Agreement (the “Agreement”), dated as of ______________ , made by and among GMAC LLC (the “Company”), FIM Holdings LLC, a Delaware limited liability company (“FIM”), GM Finance Co. Holdings LLC, a Delaware limited liability company (“GM”) and United States Department of the Treasury (the “Treasury”), is made and entered into as of _____________ by and between the Company and  ______________ (“Holder”). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Agreement.

     WHEREAS, Holder has acquired certain Common Membership Interests of the Company (“Holder Interests”), and the Agreement and the Company requires Holder, as a holder of such interests, to become a party to the Agreement, and Holder agrees to do so in accordance with the terms hereof.

     NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Joinder hereby agree as follows:

     1. Agreement to be Bound. Holder hereby agrees that upon execution of this Joinder, it shall become a party to the Agreement and shall be fully bound by, and subject to, all of the covenants, terms and conditions of the Agreement as though an original party thereto and shall be deemed a party to the Agreement for all purposes thereof.

     2. Successors and Assigns. Except as otherwise provided herein, this Joinder shall bind and inure to the benefit of and be enforceable by the Company and its successors and assigns and Holder and, except with respect to transferees in a transfer of Holder Interests in a widely dispersed public offering following the earlier to occur of (1) a Company Conversion and (2) December 29, 2009, any subsequent holders of Holder Interests and the respective successors and assigns of each of them, so long as they hold any Holder Interests.

     3. Counterparts. This Joinder may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement.

     4. Notices. For purposes of Section 3(h) of the Agreement, all notices, demands or other communications to the Holder shall be directed to:

                    [Name] 

                    [Address] 

                    [Facsimile Number]

     5. Governing Law. THE AGREEMENT INCLUDING THIS JOINDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SUCH STATE.

EXHIBIT A

     6. Descriptive Headings. The descriptive headings of this Joinder are inserted for convenience only and do not constitute a part of this Joinder.

     7. Jurisdiction. Each party hereto hereby irrevocably and unconditionally (a) agrees that any suit, action or proceeding, at law or equity, arising out of or relating to this Joinder shall only be brought in the Court of Chancery of the State of Delaware (or, if the Court of Chancery of the State of Delaware lacks jurisdiction, then in the applicable Delaware state court), or if under applicable Law exclusive jurisdiction of such suit, action or proceeding is vested in the federal courts, then the United States District Court for the District of Delaware, (b) expressly submits to the personal jurisdiction and venue of such courts for the purposes thereof and (c) waives and agrees not to raise (by way of motion, as a defense or otherwise) any and all jurisdictional, venue and convenience objections or defenses that such party may have in such suit, action or proceeding. Each party hereto hereby irrevocably and unconditionally consents to the service of process of any of the aforementioned courts. Nothing herein contained shall be deemed to affect the right of any party hereto to serve process in any manner permitted by Law or commence legal proceedings or otherwise proceed against any other party hereto in any other jurisdiction to enforce judgments obtained in any suit, action or proceeding brought pursuant to this Section 7.

* * * * *

     IN WITNESS WHEREOF, the parties hereto have executed this Joinder as of the date first above written.

GMAC LLC

                          By:                                         

 Name: 

Title:

[HOLDER]

                           By:exhibit10point1.htm -- Converted by SEC Publisher, created by BCL Technologies Inc., for SEC Filing

Exhibit 10.1

TENTH AMENDMENT TO CREDIT AGREEMENT

     THIS TENTH AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is dated to be effective as of the 30th day of December, 2008 (“Effective Date”) by and between BANK OF AMERICA, N.A., a national banking association, in its capacity as administrative agent (the “Administrative Agent”) for the “Lenders” that are parties to the “Credit Agreement” (as defined below; terms defined in the Credit Agreement shall have the same meanings in this Agreement) and in its capacity as Swingline Lender and L/C Issuer; each of the undersigned Lenders; SUNRISE SENIOR LIVING, INC., a Delaware corporation (the “Company”); certain Subsidiaries of the Company party to the Credit Agreement pursuant to Section 2.14 of the Credit Agreement (together with the Company, collectively the “Borrowers” and each a “Borrower”) and each of the undersigned Guarantors. Hereafter, the Borrowers and the Guarantors are collectively referred to as the “Obligors”; and the Administrative Agent, the Lenders, the Swingline Lender and the L/C Issuer are collectively referred to as the “Credit Parties”, and the Obligors and the Credit Parties are collectively referred to as the “Parties”.

RECITALS

     The Obligors are parties with the Credit Parties to a Credit Agreement dated December 2, 2005 as amended by the First Amendment To Credit Agreement dated March 6, 2006, the Second Amendment To Credit Agreement dated January 31, 2007, the Third Amendment To Credit Agreement dated June 27, 2001, the Fourth Amendment To Credit Agreement dated September 17, 2007, the Fifth Amendment To Credit Agreement dated January 31, 2008, the Sixth Amendment To Credit Agreement dated February 19, 2008, the Seventh Amendment To Credit Agreement dated March 13, 2008, the Eight Amendment To Credit Agreement dated July 23, 2008 and the Ninth Amendment (the “Ninth Amendment”) dated to be effective as of October 1, 2008 (collectively, as amended by this Agreement, and as further amended, modified, substituted, extended and renewed from time to time, the “Credit Agreement”).

     The Obligors have requested the Credit Parties to modify certain of the provisions of the Credit Agreement.

     The undersigned Parties have entered into this Agreement to provide for the requested modifications in accordance with the terms and conditions set forth herein.

     NOW, THEREFORE, in consideration of the premises, the mutual agreements herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

     Section 1.     Acknowledgment Of Obligations; Reaffirmation Of Obligations.  The Obligors acknowledge that: (a) each of the Loan Documents is the valid and binding obligation of each of the Obligors that is a party thereto; (b) the Loan Documents are enforceable in accordance with all stated terms; and (c) the Obligors have no defenses, claims of offset, or counterclaims against the enforcement of the Loan Documents in accordance with all stated terms. Each Obligor hereby reaffirms and ratifies all of its respective duties and obligations under the Loan Documents to which it is a party.

     Section 2.     Advances of Loan Proceeds And Issuances of Letters of Credit.  The Parties agree that notwithstanding anything to the contrary in the Loan Documents, the Lenders shall have no obligation prior to April 1, 2009 to advance any additional proceeds of the Loans to the Borrowers or to issue any new Letters of Credit for the accounts of any of the Obligors or their Subsidiaries. Thereafter, the obligations of the Lenders under the Credit Agreement to make any advances of proceeds of the

Loans or to issue any new Letters of Credit shall be subject to and conditioned upon the satisfaction in full of each of the following conditions precedent in addition to the satisfaction of all other conditions therefor required by the terms of the Credit Agreement: (a) each request by the Borrowers for any advances of proceeds of the Loans or for the issuance of any new Letters of Credit shall be accompanied by the Company’s written certification to the Credit Parties which shall (i) demonstrate to the satisfaction of the Lenders that no continuing Defaults or Events of Default exist as of the date of request, and (ii) contain computations that demonstrate to the satisfaction of the Lenders the compliance of the Obligors with the covenants contained in Section 7.14 of the Credit Agreement, with such compliance to be measured and tested through and as of the date of each of such requests (as opposed to quarterly); and (b) the Obligors shall provide additional collateral to secure and support each of such requested advances of proceeds of the Loan or issuances of Letters of Credit that is acceptable in all respects to the Lenders in the sole and absolute discretion of the Lenders. The Obligors acknowledge that the Lenders shall have no obligation to disburse any proceeds of the Loans or to issue any new Letters of Credit during the pendency of any continuing Defaults or Events of Default.

     Section 3.     Compliance with Section 7.14.   The Credit Parties agree that notwithstanding anything to the contrary in the Credit Agreement, for the period commencing and including the Effective Date and ending on March 30, 2009, the Borrower shall not be required to comply with the covenants contained in Section 7.14 of the Credit Agreement. Commencing on March 31, 2009, the Borrower shall comply with each of the covenants contained in Section 7.14, and such compliance shall be measured and tested for compliance on March 31, 2009 for the period ending on March 31, 2009.

     Section 4.     Amendment And Modification Of Credit Agreement.   The Credit Agreement is hereby amended and modified as of the Effective Date as follows:

                     Section 4.1.     Amendment of Definition of “Applicable Rate”.   The existing definition of “Applicable Rate” is hereby deleted in its entirety and replaced with the following definition:

     “Applicable Rate” means four hundred seventy-five (475) basis points for Eurodollar Rate Loans and three hundred twenty-five (325) basis points for Base Rate Loans.”

                     Section 4.2.     Amendment of Definition of “Base Rate”.   The existing definition of “Base Rate” is hereby deleted in its entirety and replaced with the following definition:

     “Base Rate” means for any day a fluctuating rate per annum equal to the greatest of: (a) the Federal Funds Rate plus 1⁄2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” or (c) the one-month Eurocurrency Rate plus 11⁄2 %. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America’s costs and desired return, general economic conditions and other facts, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such rate announced by Bank of America shall take effect at the opening of business on the day specific in the public announcement of such change.”

                     Section 4.3.     Additional Defined Terms.   The following definitions of “Disposition” or “Dispose” are hereby added to the Credit Agreement:

     “Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person.” 

2

                     Section 4.4.     Deletion of Section 3.3(d) of Credit Agreement.   Subsection (d) of Section 3.3 of the Credit Agreement is hereby deleted.

                     Section 4.5.     Liens.   For the period commencing on the Effective Date and ending on April 1, 2009, the following subsection (h) shall be added to Section 8.1 (Liens) of the Credit Agreement:

     “(h) Notwithstanding subsections (a) through (e) above and notwithstanding any other provision of this Credit Agreement to the contrary, there shall be: (A) no additional pledges of assets of the Company and its Subsidiaries and no additional consensual Liens against any assets of the Company and its Subsidiaries prior to April 1, 2009, other than any consensual Liens securing the contemplated financings (“Contemplated Financings”) of the properties scheduled on Exhibit 8.1. (f) which consensual Liens may only be Liens against the specific project assets being financed by the Contemplated Financing; and (B) no assignments of management agreements.”

                     Section 4.6.     Indebtedness.   For the period commencing on the Effective Date and ending on April 1, 2009, the following subsection (c) shall be added to Section 8.3 (Indebtedness) of the Credit Agreement:

     “(c) Notwithstanding subsections (a) and (b) above and notwithstanding any other provision of this Credit Agreement to the contrary, the Company and its Subsidiaries shall not incur any additional Indebtedness for borrowed monies except: (A) Indebtedness existing as of December 30, 2008 may have its maturities extended or such existing Indebtedness may be refinanced if any such refinancing does not materially increase the principal amount of such existing Indebtedness; (B) unsecured Indebtedness for borrowed monies that is (i) subordinated in right of payment to the repayment of the Obligations in accordance with written agreements acceptable to the Administrative Agent, and (ii) does not exceed Five Million Dollars ($5,000,000.00) in aggregate amount; and (C) the Contemplated Financings, as scheduled on Exhibit 8.1(f) . Neither the Company nor any of its Subsidiaries shall enter into any guarantys after the Effective Date other than guarantys provided solely in connection with the financing of the Burlingame transaction (as scheduled as a Contemplated Financing on Exhibit 8.1(f)) .

                     Section 4.7.     Dispositions.   For the period commencing on the Effective Date and ending on April 1, 2009, the following subsection (i) shall be added to Section 8.5 (Dispositions) of the Credit Agreement:

     “(i) Notwithstanding subsections (a) through (h) above and notwithstanding any other provision of this Credit Agreement to the contrary, there shall be no Dispositions of real estate, improvements or material assets other than the contemplated sales transactions (“Contemplated Sales Transactions”) of the properties scheduled on Exhibit 8.5. (i), provided that: (A) each Contemplated Sales Transaction shall be for fair market value, (B) each Contemplated Sales Transaction shall be on “arms-length” terms with independent third parties which are not affiliated with the Borrower or any of its Subsidiaries, (C) the aggregate net sales proceeds for the Contemplated Sales Transactions shall not exceed Twenty Million Dollars ($20,000,000.00) (which amount shall include the net sales proceeds that have been received or which may be received by the Obligors from the sales of item 1 and item 5 under the heading “Operating 

3

Communities” and item 11 under the heading “Land/Shut Down Communities” of Exhibit 8.5(i) in the approximate aggregate amount of Eight Million Dollars ($8,000,000.00)), and (D) no Contemplated Sales Transaction shall cause a violation of any of the provisions in this Section 8.5 other than Section 8.5(g)(ii) .”

                     Section 4.9.     Cross-Defaults. The following shall be added to the end of Section 9.1. (e) (Cross-Default) of the Credit Agreement:

“ . . . for the period commencing on December 30, 2008 and ending on March 30, 2009, and notwithstanding anything herein to the contrary, to the extent that either (A) any events of default occur under any of the facilities scheduled on Exhibit 9.1. (e) as a result of a cross-default provision or other provision that relates back solely to this Agreement or as a result of non-compliance with a financial covenant or (B) any events of default occur under a credit facility primarily secured by property or improvements not located in North America, any such event of default will not trigger the cross-default provisions of this Section 9.1. (e) unless the applicable creditor commences exercising its default remedies, at which time the provisions of Section 9.1(e) shall control and apply and the Credit Parties shall have all rights and remedies as a result thereof provided by the terms of this Agreement.”

     Section 5.     Amendment And Modification Of Ninth Amendment.   Section 7 of the Ninth Amendment is hereby deleted in its entirety.

     Section 6.     Principal Repayments.   The Company shall make the following principal repayments upon the Loans: (a) Four Hundred Thousand Dollars ($400,000.00) in aggregate amount shall be paid by the Company to the Administrative Agent for the ratable benefit of the Lenders upon the execution and delivery of this Agreement by the Administrative Agent and the Required Lenders; and (b) One Million One Hundred Thousand Dollars ($1,100,000.00) shall be paid by the Company to the Administrative Agent for the ratable benefit of the Lenders on or before January 23, 2009. The failure of the Company to pay such One Million One Hundred Thousand Dollars ($1,100,000.00) principal payment on or before January 23, 2009 shall constitute an immediate Event of Default under the Credit Agreement without any further notice or demand from the Credit Parties.

     Section 7.     Modification Fee.   Upon the execution and delivery of this Agreement by the Company, the Administrative Agent and the Required Lenders, the Company shall pay for the accounts of the Lenders that execute this Agreement, a modification fee in the aggregate amount of Four Hundred Thousand Dollars ($400,000.00) which shall be pro rated between such Lenders in accordance with their respective Applicable Percentages.

     Section 8.     Obligors’ Representations And Warranties.   As an inducement to the Credit Parties to enter into this Agreement and to agree to the requested waiver and to the modifications provided for herein, each of the Obligors makes the following representations and warranties to the Credit Parties and acknowledges the justifiable reliance of the Credit Parties thereon:

     Section 8.1.     Authority And Good Standing.   Each Obligor: (a) has the power to enter into this Agreement and any related documents and to perform all of its obligations hereunder and thereunder; (b) has duly authorized the entry into and performance of this Agreement and all related documents; and (c) is in good standing in the state of its organization and is qualified to do business and is in good standing in all other states in which it transacts business.

4

     Section 8.2.     No Violations.   The execution, delivery, and performance of this Agreement by the Obligors will not immediately, or with the passage of time, the giving of notice, or both: (a) violate any laws or result in a default under any contract, agreement, or instrument to which any Obligor is a party or by which any Obligor or any properties of any Obligor are bound; or (b) result in the creation or imposition of any security interest in, or lien or encumbrance upon, any of the assets of the Obligors.

     Section 8.3.     Accuracy Of Information.   All information and data submitted by or on behalf of the Obligors in connection with this Agreement and the transactions contemplated herein, is true, accurate and complete in all material respects as of the date made and contains no knowingly false, incomplete or misleading statements.

     Section 8.4.     Pending Proceedings.   There are no actions, suits or proceedings pending against any of the Obligors, the adverse determination of which would be likely to have a Material Adverse Effect other than the proceedings itemized on Schedule 8.4 attached hereto.

     Section 8.5.     Judgments.   No judgments have been entered against any of the Obligors which when aggregated with all judgments against all Obligors exceed the Threshold Amount.

     Section 8.6.     Events of Default.   The Obligors have no actual knowledge of any continuing events of default (other than of financial covenant defaults) under any credit facilities which as of the Effective Date would result in a cross-default under Section 9.1(e) of the Credit Agreement other than matters disclosed by the Obligors in writing to the Lenders.

     Section 9.     No Other Modifications Of Loan Documents.   The Obligors acknowledge that except as specifically stated in this Agreement, the Loan Documents shall not be deemed to have been amended, modified or changed in any respect, and shall continue to be enforceable against the parties thereto in accordance with all stated terms.

     Section 10.     Further Assurances.   Each Obligor agrees to execute and deliver to the Administrative Agent such other and further documents as may, from time to time, be reasonably requested by the Administrative Agent in order to execute or enforce the terms and conditions of this Agreement or any of the Loan Documents. Without limitation to the foregoing, each of the Obligors shall take such actions as are necessary to compel each of the “Loan Parties” to the Security Agreement dated March 13, 2008 (“Security Agreement”) to provide such information, execute such documents, and to provide the Administrative Agent for itself and the Lenders with perfected and continuing security interests and pledges into the “Collateral” (as defined in the Security Agreement). The Obligors shall promptly provide the Administrative Agent with such information concerning the Collateral as may be requested by the Administrative Agent from time to time.

     Section 11.     No Novation; No Refinance.   It is the intent of each of the parties that nothing contained in this Agreement shall be deemed to effect or accomplish or otherwise constitute a novation of any of the agreements between the parties or of any of the obligations owed by any of the Obligors to the Credit Parties or to be a refinance of any of the Obligations. Except as expressly provided for in this Agreement, nothing contained herein shall be deemed to extinguish, terminate or impair any of the duties or obligations owed by any of the Obligors to the Credit Parties. Each of the Obligors reaffirms and ratifies all Liens previously granted by it to the Credit Parties in accordance with the Loan Documents.

     Section 12.     Waiver.   No failure or delay by the Credit Parties in the exercise or enforcement of any of their rights under any Loan Document shall be a waiver of such right or remedy nor shall a 

5

single or partial exercise or enforcement thereof preclude any other or further exercise or enforcement thereof or the exercise or enforcement of any other right or remedy. The Credit Parties may at any time or from time to time waive all or any rights under this Agreement or any of the Loan Documents, but any such waiver must be specific and in writing and no such waiver, shall constitute, unless specifically so expressed by the Administrative Agent on behalf of the Credit Parties in writing, a future waiver of performance or exact performance by the Obligors. No notice to or demand upon any Obligor in any instance shall entitle any Obligor to any other or further notice or demand in the same, similar or other circumstance.

     Section 13.     Obligations Unconditional.   The obligations of the Obligors set forth in this Agreement and as required by the terms of the Loan Documents are absolute and unconditional, and are independent of any defense or rights of set-off, recoupment or counterclaim which any of the Obligors might have or ever had against any of the Credit Parties. Each of the Obligors agrees that all payments required hereunder and/or by the Loan Documents shall be made free of any deductions and without abatement, diminution or set-off.

     Section 14.     Reimbursement Of Expenses Of Administrative Agent.   The Obligors agree to reimburse to the Administrative Agent promptly upon receipt of an invoice therefor, all reasonable expenses incurred by the Administrative Agent in connection with the negotiation and preparation of this Agreement and all other expenses incurred by the Administrative Agent as of that date in connection with the consummation of the transactions and matters described herein and as otherwise incurred by the Administrative Agent in the administration of the Loans, including without limitation all reasonable attorneys’ fees and reasonable consultant’s fees incurred by the Administrative Agent. Thereafter, the Obligors shall promptly reimburse the Administrative Agent upon the request of the Administrative Agent for all reasonable expenses incurred by the Administrative Agent in connection with the administration of the Loans and the Loan Documents.

     Section 15.     Enforceability.   This Agreement shall inure to the benefit of and be enforceable against each of the parties and their respective successors and assigns.

       Section 16.     Time.   Time is of the essence of this Agreement.

     Section 17.     Choice Of Law; Consent To Jurisdiction; Agreement As To Venue.   This Agreement shall be construed, performed and enforced and its validity and enforceability determined in accordance with the Laws of the Commonwealth of Virginia (excluding, however, conflict of laws principles). Each of the Parties consents to the non-exclusive jurisdiction of the courts of the Commonwealth of Virginia sitting in Fairfax County and of the United States District Court for the Eastern District of Virginia, if a basis for federal jurisdiction exists. Each of the Parties waives any right to object to the maintenance of a suit in either of such courts on the basis of improper venue or inconvenience of forum.

     Section 18.      RELEASE.   IN ORDER TO INDUCE THE CREDIT PARTIES TO ENTER INTO THIS AGREEMENT, EACH OF THE OBLIGORS FOREVER RELEASES AND DISCHARGES EACH OF THE CREDIT PARTIES AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS (COLLECTIVELY, THE “RELEASED PARTIES”) FROM ANY AND ALL CLAIMS, CAUSES OF ACTION, SUITS AND DAMAGES (INCLUDING CLAIMS FOR ATTORNEYS’ FEES AND COSTS) WHICH ANY OF THE OBLIGORS, JOINTLY OR SEVERALLY, EVER HAD OR MAY NOW HAVE AGAINST ANY OF THE RELEASED PARTIES FOR ANY CLAIMS ARISING OUT OF OR RELATED IN ANY WAY TO THE OBLIGATIONS, THE LOAN DOCUMENTS, THIS AGREEMENT OR

6

THE ADMINISTRATION THEREOF, WHETHER KNOWN OR UNKNOWN, INCLUDING BUT NOT LIMITED TO ANY AND ALL CLAIMS BASED UPON OR RELYING ON ANY ALLEGATIONS OR ASSERTIONS OF DURESS, ILLEGALITY, UNCONSCIONABILITY, BAD FAITH, BREACH OF CONTRACT, REGULATORY VIOLATIONS, NEGLIGENCE, MISCONDUCT, OR ANY OTHER TORT, CONTRACT OR REGULATORY CLAIM OF ANY KIND OR NATURE. THIS RELEASE IS INTENDED TO BE FINAL AND IRREVOCABLE AND IS NOT SUBJECT TO THE SATISFACTION OF ANY CONDITIONS OF ANY KIND.

     Section 19.     Waiver Of Jury Trial.   Each of the Parties agrees that any suit, action, or proceeding, whether claim or counterclaim, brought or instituted by it or by any of its successors or assigns, on or with respect to this Agreement, the Obligations (or the administration thereof), or any of the other Loan Documents, or which in any way, directly or indirectly relates thereto, shall be tried by a court and not by a jury. EACH OF THE PARTIES TO THIS AGREEMENT EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION, OR PROCEEDING.

     Section 20.     Counterparts And Delivery.   This Agreement may be executed and delivered in counterparts, and shall be fully enforceable against each signatory that executes this Agreement, even if all indicated signatories do not actually execute this Agreement. This Agreement, and the signatures to this Agreement, may be delivered by electronic transmission.

[SIGNATURES APPEAR ON FOLLOWING PAGES]

7

Signature page to Tenth Amendment To Credit Agreement 

dated to be effective as of the 30th day of December, 2008

     IN WITNESS WHEREOF, the undersigned parties have caused this Agreement to be duly executed and delivered under seal by their duly authorized representatives to be effective as of the Effective Date.

	WITNESS/ATTEST:  	  	BORROWER:  	  	  
	  	  	SUNRISE SENIOR LIVING, INC., for itself and for  
	  	  	the Designated Borrowers  	  	  
	/s/ David Haddock 	  	By: /s/ John F. Gaul (SEAL)  
	  	  	      Name: John F. Gaul 	  	  
	  	  	      Title: Vice President	  	  
	  
	  	  	GUARANTORS:  	  	  
	  	  	SUNRISE SENIOR LIVING MANAGEMENT, INC.  
	/s/ David Haddock 	  	By: /s/ John F. Gaul  (SEAL)  
	  	  	      Name: John F. Gaul  	  	  
	  	  	      Title: Vice President  	  	  
					
	  	  	SUNRISE SENIOR LIVING INVESTMENTS, INC.  
	/s/ David Haddock   	  	By: /s/ John F. Gaul  (SEAL)  
	  	  	      Name: John F. Gaul  	  	  
	  	  	      Title: Vice President 	  	  
					
	  	  	SUNRISE DEVELOPMENT, INC.  	  	  
	/s/ David Haddock	  	By: /s/ John F. Gaul  (SEAL)  
	  	  	      Name: John F. Gaul   	  	  
	  	  	      Title: Vice President  	  	  
					
	  	  	SUNRISE SENIOR LIVING SERVICES, INC.  
	/s/ David Haddock  	  	By: /s/ John F. Gaul  (SEAL)  
	  	  	      Name: John F. Gaul  	  	  
	  	  	      Title: Vice President 	  	  
	
 

8

 

Signature page to Tenth Amendment To Credit Agreement 

dated to be effective as of the 30th day of December, 2008

	WITNESS/ATTEST:  	  	ADMINISTRATIVE AGENT:  	  	  
	  
	  	  	BANK OF AMERICA, N.A.,  	  	  
	  	  	As Administrative Agent  	  	  
	  
	  
	          [illegible]           	  	By: /s/ Roberto Salazar (SEAL)  
		  	      Name: Roberto Salazar	  	  
	  	  	     Title: Assistant Vice President 	  	  
	  
	  
	  	  	LENDER:  	  	  
	  
	  	  	BANK OF AMERICA, N.A , as a Lender,  	  	  
	  	  	L/C Issuer and Swing Line Lender in its own right  
	  	  	and as successor by merger to LaSalle Bank  	  	  
	  	  	National Association  	  	  
	  
	  
	______________	  	By: /s/ Daniel Langelier (SEAL)  
	  	  	      Name: Daniel Langelier 	  	  
	  	  	      Title: Senior Vice President	  	  
	
 

9

 

Signature page to Tenth Amendment To Credit Agreement 

dated to be effective as of the 30th day of December, 2008

	WITNESS/ATTEST:  	  	LENDER:  	  	  
	  
	  	  	PNC BANK NATIONAL ASSOCIATION.,  	  	  
	  	  	as a Lender, in its own right and as successor  	  	  
	  	  	by merger to Farmers & Merchants Bank  	  	  
	  
	  
	          [illegible]            	  	By: /s/ Wendy Andrus (SEAL)  
	  	  	     Name: Wendy Andrus	  	  
	  	  	     Title: Vice President	  	  
	  
	  
	  
	  
	10 

Signature page to Tenth Amendment To Credit Agreement 

dated to be effective as of the 30th day of December, 2008

	WITNESS/ATTEST:  	  	LENDER:  	  	  
	  
	  	  	WACHOVIA BANK, NATIONAL ASSOCIATION,  
	  	  	as a Lender,  	  	  
	  
	  
	          [illegible]             	  	By: /s/ S. Kent Thompson (SEAL)  
	  	  	     Name: S. Kent Thompson  	  	  
	  	  	     Title: Senior Vice President 	  	  
	  
	  
	  
	  
	11 

Signature page to Tenth Amendment To Credit Agreement 

dated to be effective as of the 30th day of December, 2008

	WITNESS/ATTEST:  	  	LENDER:  	  	  
	  
	  	  	MANUFACTURERS AND TRADERS TRUST  
	  	  	COMPANY, as a Lender in its own right and  	  	  
	  	  	as successor by merger to First Horizon Bank,  	  	  
	  	  	formerly a division of First Tennessee Bank, N.A.,  
	  
	  
	/s/ M. Comiskey 	  	By: /s/ Thomas H. Comiskey (SEAL)  
	  	  	     Name: Thomas H. Comiskey 	  	  
	  	  	     Title: Vice President 	  	  
	  
	  
	  
	  
	12 

Signature page to Tenth Amendment To Credit Agreement 

dated to be effective as of the 30th day of December, 2008

	WITNESS/ATTEST:  	  	LENDER:  	  	  
	  	  	CHEVY CHASE BANK, F.S.B., as a Lender,  	  	  
	  
	
	/s/ Kay Finlaw Creel 	  	By: /s/ Richard L. Amador (SEAL)  
	  	  	     Name: Richard L. Amador  	  	  
	  	  	     Title: Group Vice President 	  	  
	  
	  
	  
	  
	13

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00152-of-00352.parquet"}]]