Document:

exv10w10

Exhibit 10.10

GUARANTY OF PAYMENT 

(Loan B)

          THIS GUARANTY OF PAYMENT (this “Agreement”) is made as of August 28, 2007, by SUNRISE SENIOR
LIVING, INC., a corporation organized under the laws of the State of Delaware (“Guarantor”) in
favor of CHEVY CHASE BANK, F.S.B., a federal savings bank, its successors and assigns, “Lender”).

          IN ORDER to induce Lender to make a loan in the principal amount of $10,000,000 (the “Loan”)
to Sunrise Connecticut Avenue Assisted Living, L.L.C., a limited liability company organized under
the laws of the Commonwealth of Virginia (“Borrower”) and in connection therewith to accept a Deed
of Trust Note (as amended, extended, restated, supplemented or otherwise modified from time to
time, the “Note”) and a Deed of Trust, Assignment, Security Agreement and Fixture Filing (Loan B)
(as amended, extended, restated, supplemented or otherwise modified from time to time, the “Deed
of Trust”), of even date herewith, made by Borrower in the principal sum of $10,000,000, which
Loan is to be advanced pursuant to the terms of a Loan and Security Agreement (Loan B) of even
date herewith by and between Borrower and Lender (as amended, extended, restated, supplemented or
otherwise modified from time to time, the “Loan Agreement”), Guarantor hereby covenants and agrees
with Lender as follows:

          1. Guaranty.

          Guarantor hereby unconditionally and irrevocably guarantees to Lender: (a) the due and
punctual payment in full (and not merely the collectibility) of the principal of the Note and the
interest thereon, in each case when due and payable, whether on any installment payment date or at
the stated or accelerated maturity, all according to the terms of the Note and the Deed of Trust;
and (b) the due and punctual payment in full (and not merely the collectibility) of all other sums
and charges which may at any time be due and payable in accordance with, or secured by, the Note,
the Deed of Trust or any other document evidencing or securing the Loan (together with the Note
and the Deed of Trust, the “Financing Documents”); and (c) the due and punctual performance of all
of the other terms, covenants and conditions contained in the Note and the other Financing
Documents, on the part of Borrower or any subsequent owner of the property more particularly
described in the Deed of Trust (the “Property”) to be performed.

          2. Guaranty Unconditional.

          Guarantor expressly agrees that Lender may, in its sole and absolute discretion, without
notice to or further assent of Guarantor, except as specifically set forth herein, and without in
any way releasing, affecting or impairing the obligations and liabilities of Guarantor hereunder:
(a) waive compliance with, or any defaults under, or grant any other indulgences with respect to,
the Financing Documents; (b) with Guarantor’s prior written consent, modify, amend, change or
terminate any provisions of the Financing Documents; (c) with Guarantor’s prior written consent,
grant extensions or renewals of or with respect to the Note or the other Financing Documents; (d)
with Guarantor’s prior written consent, effect any release, subordination, compromise or
settlement in connection with the Note and the other Financing Documents; (e) with Guarantor’s
prior written consent, agree to the substitution, exchange, release or other

 

 

disposition of all or any part of the Property, or any other collateral for the Loan; (f) make
advances for the purpose of performing any term or covenant contained in any of the Financing
Documents with respect to which Borrower or the then owner of the Property shall be in default; (g)
with Guarantor’s prior written consent, assign or otherwise transfer the Financing Documents or
this Agreement or any interest therein or herein; and (h) deal in all respects with Borrower or the
then owner of the Property as if this Agreement were not in effect. The obligations of Guarantor
under this Agreement shall be unconditional, irrespective of the genuineness, validity, regularity
or enforceability of the Note or the Deed of Trust, or any security given therefor or in connection
therewith, or any other circumstances which might otherwise constitute a legal or equitable
discharge of a surety or guarantor.

          3. Guaranty Primary.

          The obligations and liability of Guarantor under this Agreement shall be primary, direct and
immediate; shall not be conditional or contingent upon pursuit by Lender of any remedies it may
have against Borrower with respect to the Financing Documents, whether pursuant to the terms
thereof or by law; and shall not be subject to any counterclaim, recoupment, set-off, reduction or
defense based upon any claim that Guarantor may have against Borrower or Lender. Without limiting
the generality of the foregoing, Lender shall not be required to make any demand on Borrower
and/or the then owner of the Property, or to sell at foreclosure or otherwise pursue or exhaust
its remedies against the Property or any part thereof and/or against Borrower or the then owner of
the Property, before, simultaneously with or after enforcing its rights and remedies hereunder
against Guarantor. Any one or more successive and/or concurrent actions may be brought hereon
against Guarantor either in the same action, if any, brought against Borrower and/or the then
owner of the Property or in separate actions, as often as Lender may deem advisable.

          4. Waivers by Guarantor.

          Guarantor hereby unconditionally and irrevocably waives: (a) presentment and demand for
payment of the principal of or interest on the Note and protest of non-payment; (b) notice of
acceptance of this Agreement and of presentment, demand and protest; (c) except as set forth
below, notice of any default under this Agreement or any of the Financing Documents and notice of
all indulgences; (d) except as set forth below, demand for observance, performance, or enforcement
of any terms or provisions of this Agreement or any of the Financing Documents; (e) any right or
claim of right to cause a marshalling of the assets of Borrower; and (f) all other notices and
demands otherwise required by law which Guarantor may lawfully waive.

          5. Reimbursement for Expenses.

          If Lender shall commence any action or proceeding for the enforcement of this Agreement,
Guarantor shall reimburse Lender promptly upon demand, for all expenses incurred in connection
therewith, including, without limitation, reasonable attorneys’ fees.

          6. Acceleration.

          Anything in this Agreement or in any of the Financing Documents to the contrary
notwithstanding, Lender, at its option, may, as to Guarantor, accelerate the indebtedness
evidenced and secured by the Financing Documents in the event of: (a) the making by Guarantor

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of an assignment for the benefit of creditors; (b) the appointment of a custodian for Guarantor, or
for any property of Guarantor; (c) the commencement of any proceeding by Guarantor under any
bankruptcy, reorganization, arrangement, insolvency, readjustment, receivership or like law or
statute; or (d) the commencement of any proceeding against Guarantor under any bankruptcy,
reorganization, arrangement, insolvency, readjustment, receivership or like law or statute which is
not discharged or dismissed within ninety (90) days after institution thereof; or (e) a Change of
Control (as defined in the current Sunrise Senior Financing Agreement of Guarantor); or (f) the
termination, dissolution or, liquidation of Guarantor, without the prior written consent of Lender.

          7. Subordination; Subrogation.

          If Guarantor shall advance any sums to Borrower or if Borrower shall hereafter become indebted
to Guarantor, such sums and indebtedness shall be subordinate in all respects to the amounts then
or thereafter due and owing to Lender under the Financing Documents. Nothing herein contained shall
be construed to give Guarantor any right of subrogation in and to the Note or the Deed of Trust or
all or any part of Lender’ interest therein, until all amounts owing to Lender shall have been paid
in full. Notwithstanding any provision of this Paragraph to the contrary, if Guarantor is or
becomes an “insider” (as defined from time to time in Section 101 of the Federal Bankruptcy Code)
with respect to Borrower, then Guarantor irrevocably and absolutely waives any and all rights of
subrogation, contribution, indemnification, reimbursement or any similar rights against Borrower
with respect to this Agreement, whether such rights arise under an express or implied contract or
by operation of law. It is the intention of the parties hereto that Guarantor shall not be deemed
to be a “creditor” (as defined in Section 101 of the Federal Bankruptcy Code) of Borrower by reason
of the existence of this Agreement in the event that Borrower becomes a debtor in any proceeding
under the Federal Bankruptcy Code.

          8. Representations and Warranties.

          Guarantor represents and warrants to Lender as follows:

               (a) Good Standing. Guarantor (a) is a corporation duly organized, existing
and in good standing under the laws of the jurisdiction of its organization, (b) has the power
to
own its property and to carry on its business as now being conducted, and (c) is duly
qualified to
do business and is in good standing in each jurisdiction in which the character of the
properties
owned by it therein or in which the transaction of its business makes such qualification
necessary.

               (b) Power and Authority. Guarantor has full corporate power and authority to
execute and deliver this Agreement and the other Financing Documents to which it is a party
and
to incur and perform the Obligations (as defined in the Deed of Trust) whether under this
Agreement, the other Financing Documents or otherwise, all of which have been duly authorized
by all proper and necessary corporate action. No consent or approval of shareholders or any
creditors of Guarantor, and no consent, approval, filing or registration with or notice to any
Governmental Authority on the part of Guarantor, is required as a condition to the execution,
delivery, validity or enforceability of this Agreement or the other Financing Documents or the
performance by Guarantor of the Obligations.

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               (c) Binding Agreements. This Agreement and the other Financing
Documents executed and delivered by Guarantor have been properly executed and delivered and
constitute the valid and legally binding obligations of Guarantor and are fully enforceable
against
Guarantor in accordance with their respective terms.

               (d) No Conflicts. Neither the execution, delivery and performance of the
terms of this Agreement or of any of the other Financing Documents executed and delivered by
Guarantor nor the consummation of the transactions contemplated by this Agreement will
conflict with, violate or be prevented by (i) the charter or bylaws of Guarantor, (ii) any
existing
mortgage, indenture, contract or agreement binding on Guarantor or affecting its property, or
(iii)
any Laws.

               (e) Compliance with Laws. Guarantor is not in violation of any applicable
Laws (including, without limitation, any Laws relating to employment
practices, to
environmental, occupational and health standards and controls) or order, writ, injunction,
decree
or demand of any court, arbitrator or any Governmental Authority affecting Guarantor or its
properties, the violation of which, considered in the aggregate, are reasonably likely to
materially
adversely affect the business, operations or properties of Guarantor.

               (f) Litigation. Except shown on the Form 8K provided to Lender, there are
no proceedings, actions or investigations pending or, so far as Guarantor knows, threatened
before or by any court, arbitrator or any Governmental Authority which, in any one case or in
the
aggregate, if determined adversely to the interests of Guarantor, would have a material
adverse
effect on the business, properties, condition (financial or otherwise) or operations, present
or
prospective, of Guarantor.

               (g) Financial Condition. On the date delivered, the draft financial statements of
Guarantor dated June 30, 2006 were complete and correct and fairly presented the financial
position of Guarantor and the results of its operations and transactions in its surplus
accounts as
of the date and for the period referred to and were prepared in accordance with GAAP applied
on
a consistent basis throughout the period involved. Subsequently the Guarantor provided
additional information including cash and debt levels as of June 30, 2007 and there has been
no
material adverse change in the cash or debt levels of Guarantor since such reports. The
representations and warranties contained in this Section shall also cover financial statements
furnished from time to time to Lender pursuant to the Loan Agreement. Notwithstanding the
foregoing, except as provided in Section 7.1 of the Loan Agreement, Guarantor will not be
required to deliver financial statements or operating statement until ten (10) days after such
statements have been made publicly available by the Securities and Exchange Commission.

               (h) Full Disclosure. The financial statements referred to in Section 8(g), and the
statements, reports or certificates furnished by Guarantor in connection with this Agreement (i)
do not contain any untrue statement of a material fact and (ii) when taken in their entirety, do
not omit any material fact necessary to make the statements contained therein not misleading.
There is no fact known to Guarantor which Guarantor has not disclosed to Lender in writing prior
to the date of this Agreement which materially and adversely affects or in the future could, in
the reasonable opinion of Guarantor materially adversely affect the condition, financial or
otherwise, results of operations, business, or assets of Guarantor.

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               (i) Financial Interest. Financial Interest. Guarantor will derive a benefit from the credit
facilities extended to and the Obligations incurred by Borrower, and hereby waives any claim that
Lender violated the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) in connection with the
Loan, any of the Financing Documents or any of the other Obligations or security for any obligation
which is the subject thereto.

          9. Covenants.

               (a) Guarantor covenants and agrees that until the Obligations are repaid in full
Guarantor shall at all times directly or indirectly own one hundred percent (100%) or more of
the
membership interests of Borrower.

               (b) Guarantor covenants and agrees that until the Obligations are repaid in full
Guarantor or an entity controlled by Guarantor shall operate and manage the Property.

               (c) Guarantor hereby covenants and agrees that it will comply with (i) the
following financial covenants contained in the Sunrise Senior Financing Agreement (as defined
in the Loan Agreement) provided that Lender hereby agrees that it will consent to any waiver
or
modification of such covenants to which the Sunrise Bank Group (as defined in the Loan
Agreement) consents so long as Lender is a member of the Sunrise Bank Group and Guarantor,
Borrower and Lender shall negotiate replacement covenants acceptable to Lender if Lender
ceases to be a member of the Sunrise Bank Group:

          (i) Consolidated Net Worth. Guarantor will at all times maintain,
tested as of the end of each of the Borrower’s fiscal quarters beginning with the
quarter ending December 31, 2007, a Consolidated Net Worth of not less than the sum
of $450,000,000 (which is eighty percent (80%) of consolidated GAAP Shareholder
Equity as of the date hereof) plus seventy-five percent (75%) of the net proceeds to
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. Guarantor will maintain, tested as of the end of
each of Guarantor’s fiscal quarters beginning with the quarter ending December 31,
2007, 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. Guarantor will maintain, tested as
of the end of each of the Guarantor’s fiscal quarters beginning with the quarter
ending December 31, 2007, a ratio of Consolidated EBITDAR to Consolidated Fixed
Charges of not less than 1.75 to 1.0.

The following definitions shall apply to this Section 9(c):

     “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.

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     “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 Guarantor’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 Guarantor and its
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 the Lender in its sole
discretion is delivered to the Lender. Transition costs shall be subject to the approval of the
Lender.

     “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.

     “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.

     “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.

     “Consolidated Net Worth” means Shareholders’ Equity of Guarantor and its Subsidiaries
on a consolidated basis in accordance with GAAP.

     “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.

     “Development Joint Venture” means an entity which owns a Development Joint
Venture Investment.

     “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 (as defined by GAAP) to Fixed Obligations (as defined by GAAP) of less than 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.

     “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.

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     “Investment” means, as to any Person, any direct or indirect acquisition or investment by such
Person, whether by means of (a) the purchase or other acquisition of capital stock or other
securities of another Person, (b) a loan, advance or capital contribution to, Guarantee or
assumption of debt of, or purchase or other acquisition of any other debt or equity participation
or interest in, another Person, including any partnership or joint venture interest in such other
Person, or (c) the purchase or other acquisition (in one transaction or a series of transactions)
of assets of another Person that constitute a business unit. For purposes of covenant compliance,
the carrying value of such Investment determined in accordance with GAAP.

     “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.

     “Loan Parties” means, collectively, Guarantor, each Subsidiary Guarantor (as defined in the
Sunrise Financing Agreement), and each Designated Borrower.

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

     “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.

     “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 Ventures),
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 Borrower 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.

          10. Financial Statements.

          Guarantor shall provide to Lender, the financial statements of Guarantor more fully described
in Section 7.1 of the Loan Agreement.

          Guarantor also agrees to provide Lender with such other financial information at such other
times as may be reasonably requested by Lender.

          11. Governing Law.

          The provisions of this Agreement shall be construed, interpreted and enforced in accordance
with the laws of the Commonwealth of Virginia as the same may be in effect from time to time.

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          12. Consent to Jurisdiction.

          Guarantor irrevocably submits to the jurisdiction of any state or federal court sitting in the
Commonwealth of Virginia over any suit, action, or proceeding arising out of or relating to this
Agreement. Guarantor irrevocably waives, to the fullest extent permitted by law, any objection that
it may now or hereafter have to the laying of the venue of any such suit, action, or proceeding
brought in any such court and any claim that any such suit, action, or proceeding brought in any
such court has been brought in an inconvenient forum. Final judgment in any such suit, action, or
proceeding brought in any such court shall be conclusive and binding upon Guarantor and may be
enforced in any court to whose jurisdiction Guarantor is subject, by a suit upon such judgment
provided that service of process is effected upon Guarantor in a manner specified in this Agreement
or as otherwise permitted by applicable law.

          13. Service of Process.

          Guarantor hereby irrevocably designates and appoints CT Corporation, 4701 Cox Road, Suite
301, Glen Allen, Virginia 23060, as its authorized agent to accept and acknowledge on its behalf
service of any and all process that may be served in any suit, action, or proceeding instituted in
connection with this Agreement in any state or federal court sitting in the Commonwealth of
Virginia. If such agent shall cease so to act, Guarantor shall irrevocably designate and appoint
without delay another such agent in the Commonwealth of Virginia satisfactory to Lender and shall
promptly deliver to Lender evidence in writing of such agent’s acceptance of such appointment and
its agreement that such appointment shall be irrevocable.

          Guarantor hereby consents to process being served in any suit, action, or proceeding
instituted in connection with this Agreement by (a) the mailing of a copy thereof by certified
mail, postage prepaid, return receipt requested, to it at its address designated herein and (b)
serving a copy thereof upon Lender, hereinabove designated and appointed by Guarantor as
Guarantor’s agent for service of process. Guarantor irrevocably agrees that such service shall be
deemed in every respect to be effective service of process in any such suit, action, or
proceeding. Nothing in this Agreement shall affect the right of Lender to serve process in any
manner otherwise permitted by law and nothing in this Agreement will limit the right of Lender
otherwise to bring proceedings against Guarantor, in the courts of any other appropriate
jurisdiction or jurisdictions.

          14. Waiver of Jury Trial.

          Guarantor and Lender hereby, jointly and severally, waive trial by jury in any action or
proceeding to which Guarantor and Lender may be parties, arising out of or in any way pertaining
to (a) this Agreement, (b) the Loan or (c) the other Financing Documents. It is agreed and
understood that this waiver constitutes a waiver of trial by jury of all claims against all
parties to such actions or proceedings, including claims against parties who are not parties to
this Agreement. This waiver is knowingly, willingly and voluntarily made by Guarantor, and
Guarantor hereby represents and warrants that no representations of fact or opinion have been made
by any individual to induce this waiver of trial by jury or to in any way modify or nullify its
effect. Guarantor further represents and warrants that it has been represented in the signing of
this Agreement and in the

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making of this waiver by independent legal counsel, selected of its own free will, and that it has
had the opportunity to discuss this waiver with counsel.

          15. Voidable Preference; Fraudulent Conveyance.

          If at any time any payment, or portion thereof, made by, or for the account of, Guarantor on
account of any of the obligations and liabilities hereunder is set aside by any court or trustee
having jurisdiction as a voidable preference or fraudulent conveyance or must otherwise be restored
or returned by Lender under any insolvency, bankruptcy or other federal and/or state laws or as a
result of any dissolution, liquidation or reorganization of Borrower or upon, or as a result of,
the appointment of any receiver, intervenor or conservator of, or trustee or similar officer for,
Borrower or any substantial part of its properties or assets, Guarantor hereby agrees that this
Agreement shall continue and remain in full force and effect or be reinstated, as the case may be,
all as though such payment(s) had not been made.

          16. Notices.

          Notice, demand, request or other communication which either party may desire to give to the
other with respect to this Agreement, shall be deemed to have been properly given if in writing
and delivered by hand, sent by overnight courier or mailed by certified mail, postage prepaid,
addressed as follows:

	 	 	 	 	 
	 

	 	Lender:
	 	Chevy Chase Bank, F.S.B.
	 

	 	 	 	7926 Jones Branch Drive
	 

	 	 	 	McLean, VA 22102
	 

	 	 	 	Attention:   Richard L. Amador
	 

	 	 	 	                   Group Vice President
	 
	 	 	 	 
	 

	 	If to Guarantor, at:
	 	Sunrise Senior Living, Inc.
	 

	 	 	 	c/o Sunrise Senior Living Investments, Inc.
	 

	 	 	 	7902 Westpark Drive
	 

	 	 	 	McLean, Virginia 22102
	 

	 	 	 	Attention:    James S. Pope
	 
	 	 	 	 
	 

	 	and:
	 	Sunrise Senior Living, Inc.
	 

	 	 	 	7902 Westpark Drive
	 

	 	 	 	McLean, Virginia 22102
	 

	 	 	 	Attn: General Counsel
	 
	 	 	 	 
	 

	 	With a Courtesy Copy to:
	 	Wayne G. Tatusko, Esquire
	 

	 	 	 	Wayne G. Tatusko, PC
	 

	 	 	 	3016 Williams Drive
	 

	 	 	 	Suite 200
	 

	 	 	 	Fairfax, VA 22031

          Any of the parties hereto may designate a change of address by notice in writing to the other
parties. Whenever in this Agreement the giving of notice by mail or otherwise is required,

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the giving of such notice may be waived in writing by the person or persons entitled to receive
such notice.

          17. Remedies Cumulative.

          All rights and remedies afforded to Lender by reason of this Agreement, the Financing
Documents, or by law are separate and cumulative and the exercise of one shall not in any way limit
or prejudice the exercise of any other such rights or remedies. Every right, power and remedy given
by this Agreement to Lender shall be concurrent and may be pursued separately, successively or
together against Guarantor; and each such right, power and remedy may be exercised from time to
time as often as Lender may deem expedient. No delay or omission by Lender in exercising any such
right or remedy shall operate as a waiver thereof. No waiver of any rights and remedies hereunder,
and no modification or amendment hereof, shall be deemed made by Lender unless in writing and duly
signed by Lender. Any such written waiver shall apply only to the particular instance specified
therein and shall not impair the further exercise of such right or remedy or of any other right or
remedy of Lender and no single or partial exercise of any right or remedy hereunder shall preclude
any other or further exercise thereof or any other right or remedy.

          18. Severability.

          If any provision (or any part of any provision) contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality
or unenforceability shall not affect any other provision (or remaining part of the affected
provision) of this Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision (or part thereof) had never been contained herein but only to the extent
it is invalid, illegal or unenforceable.

          19. Successors and Assigns.

          This Agreement shall inure to the benefit of, and be enforceable by, Lender and its
successors and assigns as holder of the Note, and shall be binding upon, and enforceable against,
Guarantor and its successors and assigns.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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          WITNESS the signature and seal of Guarantor as of the day and year first above written.

	 	 	 	 	 	 	 	 	 	 	 
	WITNESS OR ATTEST:	 	 	 	SUNRISE SENIOR LIVING, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	/s/ Kelly L. Hayden
 

	 	 	 	By:
	 	/s/ Carl Adams
 

Name: Carl Adams
	 	(SEAL)	 	 
	 

	 	 	 	 	 	Title: Treasurer	 	 	 	 

COMMONWEALTH OF VIRGINIA, COUNTY OF FAIRFAX, TO WIT:

          I HEREBY CERTIFY, that on this 28th day of August, 2007, before me, the undersigned
Notary Public of said Commonwealth, personally appeared Carl Adams, who
acknowledged himself to be the Treasurer of Sunrise Senior Living, Inc., a
corporation, known to me (or satisfactorily proven) to be the person whose name is subscribed to
the within instrument, and acknowledged that he executed the same for the purposes therein
contained as the duly authorized Treasurer of said corporation by signing the
name
of the corporation by himself as Treasurer.

          WITNESS my hand and Notarial Seal.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	/s/ Marguerite W. Capen	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Notary Public

	 	 
	

	 	 	 	 	 		 	 

11exv10w11

Exhibit 10.11

DEED OF TRUST NOTE B

			
	$10,000,000
	 	McLean, Virginia
	 
	 	August 28, 2007

     FOR
VALUE RECEIVED, SUNRISE CONNECTICUT AVENUE ASSISTED LIVING, L.L.C.,
 a limited liability company organized under the laws of the Commonwealth of Virginia (the “Borrower”), promises to pay
to the order of CHEVY CHASE BANK, F.S.B., a federally chartered savings bank  its successors
and assigns (the “Lender”), the principal sum of TEN MILLION DOLLARS ($10,000,000) (the “Principal
Sum”), together with interest thereon at the rate hereinafter provided, in accordance with the
Loan Agreement (as hereinafter defined) and the following:

     1. Interest.

     Commencing
as of the date hereof and continuing until repayment in full of all sums due
hereunder, the unpaid Principal Sum shall bear interest at the fluctuating rate based on an
independent index which is the average of interbank offered rates for one-month dollar deposits in
the London Market as reported in The Wall Street Journal (the “Index”) plus 225 basis points
per annum (the “LIBOR Rate”) which rate shall be adjusted for any reserve requirements imposed
upon the Lender from time to time. The LIBOR Rate does not necessarily represent the lowest rate
of interest charged by the Lender to borrowers. If the Index becomes unavailable during the
term of this Note, the Lender may designate a substitute index after giving notice to the
Borrower. The LIBOR Rate will be adjusted on the first day of each month, based on the value of
the Index as published in The Wall Street Journal as  of the first business day of each month.
All interest payable under the terms of this Note shall be calculated on the basis of a 365-day
year. The LIBOR Rate shall be in effect for a period of the number of days indicated (each a
“LIBOR Period”), in any case extended to the next succeeding Business Day (as defined in the Loan
and Security Agreement of even date herewith) when necessary, beginning on the date hereof or the
expiration date of the then-current LIBOR Period.

     2 . Payments and Maturity.

     The unpaid Principal Sum, together with interest thereon at the rate provided above, shall be
payable as follows:

          (a) Interest only commencing on October 1, 2007 and continuing on the same day of each
and every month thereafter, to and including August 1, 2009;

          (b)
Unless sooner paid, the unpaid Principal Sum, together with interest accrued
and unpaid thereon, shall be due and payable in full on August 28, 2009.

     3. Default Interest.

     Upon the occurrence of an Event of Default (as hereinafter defined) the unpaid Principal Sum
shall bear interest thereafter until such Event of Default is cured at the Post Default Rate (as
defined in the Loan Agreement).

 

 

     4. Late Charges.

     In the event that any payment due under the terms of this Note is not received by the Lender
within fifteen (15) days of the date such payment is due (inclusive of the date when due), the
Borrower shall pay to the Lender on demand a late charge equal to five percent (5%) of such
payment.

     5. Application and Place of Payments.

     All payments made on account of this Note, including prepayments, shall be applied first to
the payment of any prepayment fee due hereunder, second to any late charge then due hereunder,
third to the payment of accrued and unpaid interest then due hereunder, and the remainder, if any,
shall be applied to the unpaid Principal Sum, with application first made to all principal
installments then due hereunder, next to the outstanding principal balance due at maturity and
thereafter to the unpaid principal installments in the inverse order of maturity. All payments
on account of this Note shall be paid in lawful money of the United States of America in
immediately available funds during regular business hours of the Lender at its principal office in
Chevy Chase, Maryland or at such other times and places as the Lender may at any time and from
time to time designate in writing to the Borrower.

     6. Prepayment.

          (a) The Borrower may prepay the Principal Sum in whole or in part, at any time or from
time to time, upon ten (10) days prior written notice to the Lender, without premium or penalty.

          (b) Payment of the indebtedness evidenced by this Note in whole or in part subsequent
to the occurrence of an Event of Default shall be deemed to be a prepayment of the Principal Sum
subject to any prepayment fee due hereunder.

     7. Other Financing Documents.

     The term “Financing Documents” as used in this Note shall mean collectively this Note, the
Deed of Trust (as hereinafter defined) and any other instrument, agreement, or document previously, simultaneously, or hereafter executed and delivered by the Borrower and/or any other person,
singularly or jointly with any other person, evidencing, securing, guaranteeing, or in
connection with this Note or the Principal Sum evidenced hereby.

     8. Security.

     This
Note is secured by, among other things, a Deed of Trust, Assignment, Security Agreement and
Fixture Filing (Loan B) of even date herewith from the Borrower to Alexandra Johns and
Ellen-Elizabeth Lee, trustees (the “Deed of Trust”), covering the Borrower’s fee simple interest
in certain real property located in the District of Columbia, described in Exhibit A attached
hereto and made a part hereof and all other property, real and personal, more particularly
described in the Deed of Trust (the “Property”).

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     9. Events of Default.

     The occurrence of any one or more of the following events shall constitute an event of
default (individually, an “Event of Default” and collectively, the “Events of Default”)
under the terms of this Note:

          (a) The failure of the Borrower to pay to the Lender when due any and all amounts
payable by the Borrower to the Lender under the terms of this Note; or

          (b) The occurrence of a default or an event of default under the terms and conditions
of any of the other Financing Documents, which default or event of default remains uncured
beyond any applicable grace and/or cure period provided therefor.

     10. Remedies.

     Upon the occurrence of an Event of Default, at
 the option of the Lender, all amounts payable
by the Borrower to the Lender under the terms of this Note shall immediately become due and payable
 by the Borrower to the Lender without notice to the Borrower or any other person, and the
Lender shall have all of the rights, powers, and remedies available under the terms of this Note,
any of the other Financing Documents and all applicable laws. The Borrower and all endorsers,
guarantors, and other parties who may now or in the future be primarily or secondarily liable for
the payment of the indebtedness evidenced by this Note hereby severally waive presentment,
protest and demand, notice of protest, notice of demand and of dishonor and non-payment of this
Note and expressly agree that this Note or any payment hereunder may be extended from time to
time without in any way affecting the liability of the Borrower, guarantors and endorsers.

     11. Consent to Jurisdiction.

     The
Borrower irrevocably submits the  to jurisdiction of any state or federal court sitting in the
Commonwealth of Virginia over any suit, action, or proceeding arising out of or relating to this
Note. The Borrower irrevocably waives, to the fullest extent permitted by law, any objection
that the Borrower may now or hereafter have to the laying the venue of any such suit, action, or
proceeding brought in any such court and any claim that any such suit, action, or proceeding
brought in any such court has been brought in an inconvenient forum. Final judgment in any
such suit, action, or proceeding brought in any such court shall be conclusive and binding upon the
Borrower and may be enforced in any court in which the Borrower is subject to jurisdiction by a
suit upon such judgment provided that service of process is effected upon the Borrower as provided
in this Note or as otherwise permitted by applicable law.

     12. Service of Process.

          (a) The Borrower hereby irrevocably designates and appoints CT
Corporation, 4701 Cox Road, Suite 301, Glen Allen, Virginia 23060, as the Borrower’s authorized agent to accept and acknowledge on the Borrower’s behalf service of any and all process
that may be served in any suit, action, or proceeding instituted in connection with this Note in any
state or federal court sitting in the Commonwealth of Virginia. If such agent shall cease so
to act, the Borrower shall irrevocably designate and appoint without delay another such

3

 

agent in the Commonwealth of Virginia satisfactory to the Lender and shall promptly deliver to the
Lender evidence in writing of such agent’s acceptance of such appointment and its agreement that
such appointment shall be irrevocable.

          (b) The Borrower hereby consents to process being served in any suit, action, or
proceeding instituted in connection with this Note by (i) the mailing of a copy thereof by
certified mail, postage prepaid, return receipt requested, to the Borrower and (ii) serving a copy
thereof upon the agent, if any, hereinabove designated and appointed by the Borrower as the
Borrower’s agent for service of process. The Borrower irrevocably agrees that such service shall
be deemed to be service of process upon the Borrower in any such suit, action, or proceeding.
Nothing in this Note shall affect the right of the Lender to serve process in any manner otherwise
permitted by law and nothing in this Note will limit the right of the Lender otherwise to bring
proceedings against the Borrower in the courts of any jurisdiction or jurisdictions.

     13. Expenses.

     The Borrower promises to pay to the Lender on demand by the Lender all costs and expenses
incurred by the Lender in connection with the collection and enforcement of this Note, including,
without limitation, all reasonable attorneys’ fees and expenses and all court costs.

     14. Notices.

     Any notice, request, or demand to or upon the Borrower or the Lender shall be deemed to have
been properly given or made when delivered in  accordance with Section 9.3 of the Deed of Trust.

     15. Miscellaneous.

     Each right, power, and remedy of the Lender as provided for in this Note or any of the other
Financing Documents, or now or hereafter existing under any applicable law or otherwise shall be
cumulative and concurrent and shall be in addition to every other right, power, or remedy provided
for in this Note or any of the other Financing Documents or now or hereafter existing under any
applicable law, and the exercise or beginning of the exercise by the Lender of any one or more of
such rights, powers, or remedies shall not preclude the simultaneous or later exercise by the
Lender of any or all such other rights, powers, or remedies. No failure or delay by the Lender
to insist upon the strict performance of any term, condition, covenant, or agreement of this Note
or any of the other Financing Documents, or to exercise any right, power, or remedy consequent
upon a breach thereof, shall constitute a waiver of any such term, condition, covenant, or
agreement or of any such breach, or preclude the Lender from exercising any such right, power,
or remedy at a later time or times. By accepting payment after the due date of any amount
payable under the terms of this Note, the Lender shall not be deemed to waive the right either to
require prompt payment when due of all other amounts payable under the terms of this Note or to
declare an Event of Default for the failure to effect such prompt payment of any such other amount.
No course of dealing or conduct shall be effective to amend, modify, waive, release, or change
any provisions of this Note.

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     16. Partial Invalidity.

     In the event any provision of this Note (or any part of any provision) is held by a court of
competent jurisdiction to be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision (or remaining part of the
affected provision) of this Note; but this Note shall be construed as if such invalid, illegal, or
unenforceable provision (or part thereof) had not been contained in this Note, but only to the extent it is invalid, illegal, or unenforceable.

     17. Captions.

     The captions herein set forth are for convenience only and shall not be deemed to define,
limit, or describe the scope or intent of this Note.

     18. Governing Law.

     The provisions of this Note shall be construed, interpreted and enforced in accordance
with the laws of the Commonwealth of Virginia as the same may be in effect from time to time.

     19. Waiver of Trial by Jury.

     The Borrower and the Lender hereby waive trial by jury in any action or proceeding to which
the Borrower and the Lender may be parties, arising out of or in any way pertaining to (a) this Note,
(b) the other Financing Documents or (c) the Property. It is agreed and understood that this
waiver constitutes a waiver of trial by jury of all claims against all parties to such actions or
proceedings, including claims against parties who are not parties to this Note. This waiver is
knowingly, willingly and voluntarily made by the Borrower, and the Borrower hereby represents that
no representations of fact or opinion have been made by any individual to induce this waiver of
trial by jury or to in any way modify or nullify its effect. The Borrower further represents
that it has been represented in the signing of this Note and in the making of this waiver by
independent legal counsel, selected of its own free will, and that it has had the opportunity to
discuss this waiver with counsel.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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     IN WITNESS WHEREOF, the Borrower has caused this Note to be executed under seal by its duly
authorized member as of the date first written above.

	 	 	 
	WITNESS OR ATTEST

	 	SUNRISE CONNECTICUT AVENUE ASSISTED LIVING, L.L.C.
	 
	 

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

	 	 	 	 	 	 	 
	/s/
Kelly L. Hayden
	 	By :
	 	/s/ James Pope

	 	(SEAL)
	 

	 	 	 	Name: James Pope
	 

	 	 	 	Title: Vice President

     THIS IS TO CERTIFY that this is the Deed of Trust Note B described in the Deed of Trust,
Assignment, Security Agreement and Fixture Filing (Loan B) from the Borrower to Alexandra Johns
and Ellen-Elizabeth Lee trustees, securing the Lender and bearing even date herewith, said Deed of
Trust Note B and Deed of Trust, Assignment, Security Agreement and Fixture Filing (Loan B) having
been executed in my presence.

	 	 	 	 	 
	 

	 	/s/ 
Notary Public

	 	 

My Commission expires:

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EXHIBIT A

PROPERTY DESCRIPTION

Lot 162 in Square 1989 in a subdivision made by Sunrise Connecticut Avenue Assisted Living,
LLC, and others, as per plat recorded in Liber No. 194 at folio 37 among the Records of
the Office of the Surveyor of the District of Columbia.

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