TWELFTH AMENDMENT
TO CREDIT AGREEMENT
THIS TWELFTH AMENDMENT TO CREDIT AGREEMENT (this
“Amendment”) is dated to be effective as of
the 28th day of April, 2009 (“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
Amendment) 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”.
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, 2007, 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 Eighth Amendment To Credit
Agreement dated July 23, 2008, the Ninth Amendment To Credit
Agreement dated to be effective as of October 1, 2008 (the
“Ninth Amendment”), the Tenth Amendment To Credit
Agreement dated to be effective as of December 30, 2008, and the
Eleventh Amendment To Credit Agreement dated to be effective as of
March 20, 2009 (the “Eleventh Amendment”)
(collectively, as amended by this Amendment, and as further
amended, modified, substituted, extended and renewed from time to
time, the “Credit Agreement”).
The
Obligors executed and delivered a Security Agreement dated March
13, 2008 (“Security Agreement”) for the benefit of the
Credit Parties pursuant to which the Obligors granted to the Credit
Parties as security for the “Obligations”, as such term
is defined in the Security Agreement, a continuing security
interest in the “Collateral”, as such term is defined
in the Security Agreement.
The
Obligors have requested the Credit Parties to amend and modify
certain of the provisions of the Credit Agreement. The undersigned
Parties have entered into this Amendment to provide for the
requested modifications in accordance with the terms and conditions
set forth in this Amendment. The undersigned Lenders collectively
hold more than fifty percent (50%) of the Aggregate Commitments and
accordingly collectively constitute the Required Lenders.
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
And 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;
(d) the Obligors have no defenses, claims of offset, or
counterclaims against the enforcement of the Loan Documents in
accordance with all stated terms; and (d) the Total Outstandings as
of the Effective Date are Ninety-Seven Million One Hundred
Sixty-Two Thousand Seven Hundred Ninety Four Dollars and Sixty One
Cents ($97,162,794.61). Each Obligor hereby reaffirms and ratifies
all of its respective duties and obligations under the Credit
Agreement and the other Loan Documents to which it is a party, as
amended and modified by the terms of this Amendment.
Section 2. No Further
Advances of Loan Proceeds And No Further Issuances of Letters of
Credit . The Parties agree that notwithstanding any provisions
to the contrary in the Credit Agreement or in any other Loan
Documents, the Lenders and the L/C Issuer shall have no obligation
during the remaining term of the Credit Agreement to advance any
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. The Credit Parties agree to renew the existing
Letters of Credit which are scheduled on Exhibit A attached to this
Amendment in accordance with the stated annual renewal provisions
thereof, provided that: (a) the expiry dates of any of such Letters
of Credit as renewed will not be extended for more than one year
beyond any existing expiry dates; (b) the face amounts of such
Letters of Credit are not increased; (c) to the extent that the
expiry dates of any of such Letters of Credit as extended are
beyond the Letter of Credit Expiration Date, the Borrower shall, on
or before the Letter of Credit Expiry Date, Cash Collateralize such
Letters of Credit and all L/C Obligations arising therefrom; and
(d) there are no continuing Events of Default as of the date of any
renewal. The Loans shall be paid and satisfied in full on or before
the Maturity Date.
Section 3. Reductions Of
Commitments . The maximum permitted amount of Aggregate
Commitments and the maximum permitted aggregate Outstanding Amount
and the maximum permitted amount of Total Outstandings shall be
permanently reduced from time to time by all amounts paid to the
Agent for the accounts of the Lenders from the cash proceeds of:
(a) the Approved Dispositions; (b) the “Federal
Refunds,” as such term is defined in the Eleventh Amendment;
and (c) the Excess Cash Payment. The respective Commitments of the
Lenders shall be permanently reduced on each date of the receipt of
cash proceeds of Approved Dispositions, the Federal Refunds, and
the Excess Cash Payment on a pro rata basis to reflect
proportionately among the Lenders the application of such cash
payments to the Loans. The Lenders shall have no obligation to
reinstate their Commitments after any such reductions or to
readvance to the Borrower as proceeds of the Loans any sums which
have been repaid upon the Loans.
Section 4. Amendment And
Modification Of Credit Agreement . The Credit Agreement is
hereby amended and modified as of the Effective Date as
follows:
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Section 4.1 Amendment Of
Definition Of “Applicable Rate .” The existing
definition of “Applicable Rate” is amended and restated
in its entirety as the following definition:
“Applicable
Rate” means five hundred twenty-five (525) basis points
per annum for Eurodollar Rate Loans and three hundred seventy-five
(375) basis points per annum for Base Rate Loans.
Section 4.2 Addition Of
Definition Of “Approved Disposition .” The
following definition is added to the Credit Agreement:
“Approved
Disposition” has the meaning specified in Section 8.5 of
this Agreement.
Section 4.3 Addition Of
Definition Of “Cash Balance .” The following
definition is added to the Credit Agreement:
“Cash
Balance” means the aggregate amount of unrestricted cash
of the Company and of Sunrise Senior Living Management, Inc. on
deposit with the Administrative Agent.
Section 4.4 Addition Of
Definition Of “Contemplated Financings .” The
following definition is added to the Credit Agreement:
“Contemplated
Financings” has the meaning specified in Section 8.1 of
this Agreement.
Section 4.5 Addition Of
Definition Of “Contemplated Sales Transactions .”
The following definition is added to the Credit Agreement:
“Contemplated
Sales Transactions” has the meaning specified in Section
8.5 of this Agreement.
Section 4.6 Addition Of
Definition Of “Excess Cash Payment .” The following
definition is added to the Credit Agreement:
“Excess
Cash Payment” has the meaning specified in Section 7.15
of this Agreement.
Section 4.7 Amendment Of Definition
Of “Maturity Date .” The existing definition of
“Maturity Date” is amended and restated in its entirety
as the following definition:
“Maturity
Date” means December 2, 2009.
Section 4.8 Amendment Of Letter
Of Credit Fees . Section 2.3. (i) (Letter of Credit
Fees) is amended and restated in its entirety as follows:
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(i) Letter of Credit Fees
. The Borrower shall pay to the
Administrative Agent for the account of each Lender, in accordance
with its Applicable Percentage, a Letter of Credit Fee for each
standby Letter of Credit equal to 425 basis points per annum
times the daily maximum amount available to be drawn under
such Letter of Credit (whether or not such maximum amount is then
in effect under such Letter of Credit) (collectively, “
Letter of Credit Fees ”). Such Letter of Credit Fees
shall be computed on a quarterly basis in arrears. Such Letter of
Credit Fees shall be due and payable on the first Business Day
after the end of each March, June, September and December prorated
for the number of days in such preceding quarter such Letter of
Credit was outstanding, commencing with the first such date to
occur after the issuance of such Letter of Credit and on the Letter
of Credit Expiration Date and thereafter on demand.
Section 4.9 Minimum Rate Of
Interest . The sentence previously added to the end of Section
2.8.(a) (Interest) of the Credit Agreement by the Ninth
Amendment is amended and restated in its entirety as follows:
Notwithstanding anything to the
contrary in this Agreement, the minimum rate upon which interest
may accrue upon any of the Loans at any time shall not be less than
five and three-quarters percent (5.75%) .
Section 4.10 Deletion Of Section
2.15 . Section 2.15 (Extension of Maturity Date) is
deleted from the Credit Agreement and replaced with
“INTENTIONALLY OMITTED.”
Section 4.11 Deletion Of Section
2.16 . Section 2.16 (Increase in Commitment) is deleted
from the Credit Agreement and replaced with “INTENTIONALLY
OMITTED.”
Section 4.12 Additional Reporting
Requirements . Section 7.2 (Certificates; Other
Information) of the Credit Agreement is amended by adding the
following subsections:
(f) by the 15 th day of each
calendar month, commencing on May 15, 2009, certification by the
Company of the amount of its Cash Balance as of the last day of the
immediately preceding month;
(g) by the 15 th day of each
calendar month, commencing on May 15, 2009, a detailed report as to
the occupancy levels within the facilities owned or operated by the
Company or its Subsidiaries as of the last day of the immediately
preceding month;
(h) by the 15 th day of each
calendar month, commencing on May 15, 2009, a thirteen (13) week
cash flow projection for the Company and its Subsidiaries; and
(i) on or before June 1, 2009, cash flow
projections and an analysis of projected liquidity for the Company
and its Subsidiaries through the Maturity Date (together with
sufficient detail to support and explain the assumptions upon which
such projections and analysis are based) demonstrating the ability
of the Company and its Subsidiaries to achieve and maintain cash
flow and liquidity during the term of this
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Agreement
sufficient to enable the Company and its Subsidiaries to comply
with the Credit Agreement and to continue to operate their
respective assets and operations in the ordinary course of their
businesses.
Section 4.13 Amendment Of Financial
Covenants . Section 7.14 (Financial Covenants) of the
Credit Agreement is amended by deleting Sections 7.14.(a)
(Consolidated Net
Worth), 7.14.(b) (Leverage Ratio), 7.14.(c)
(Fixed Charge Coverage Ratio), and 7.14.(d) (Required
Liquidity) from the Credit Agreement and by adding to the
Credit Agreement the following paragraph:
(a)
Cash Balance . The Company and Sunrise Senior Living
Management, Inc. shall maintain, tested as of the last day of each
month, a Cash Balance of not less than Five Million Dollars
($5,000,000.00). The Company and its Subsidiaries shall maintain
substantially all of their unrestricted domestic cash in accounts
with the Administrative Agent.
Section 4.14 Addition Of Section 7.15 .
The Following Section 7.15 is added to the Credit Agreement:
7.15.
Excess Cash Payment . The Company shall pay to the
Administrative Agent for the ratable benefit of the Lenders on
October 31, 2009 a cash payment (“Excess Cash Payment”)
in an amount equal to the greater of: (a) all unrestricted cash of
the Company and its Subsidiaries as of the preceding Business Day
that is in excess of the aggregate amount of Thirty-Five Million
Dollars ($35,000,000.00); or (b) Two Million Dollars
($2,000,000.00) which amount shall be paid in two (2) even
installments of One Million Dollars ($1,000,000.00) each on October
31, 2009 and November 30, 2009.
Section 4.15 Amendment Of Section 8.1
(Liens) Section 8.1 (Liens) of th
