FIFTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.46
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Agreement”) is made as of January 31, 2008
between SUNRISE SENIOR LIVING, INC. a Delaware corporation (the “Company”), and BANK OF AMERICA,
N.A., as Administrative Agent, Swing Line Lender and Letter of Credit Issuer (the “Administrative
Agent”) for itself and certain additional lenders who are or shall be from time to time
participating as lenders pursuant to the Credit Agreement as hereinafter defined (collectively with
the Administrative Agent, the “Lenders”).
RECITALS
A. The Lenders have made a Credit Facility available to the Company in the maximum principal
sum at any one time outstanding of $250,000,000.
B. The Credit Facility is governed by a Credit Agreement dated December 2, 2005 as amended by
that certain First Amendment to Credit Agreement dated March 6, 2006, that certain Second Amendment
to Credit Agreement dated January 31, 2007, that certain Third Amendment to Credit Agreement dated
June 27, 2007 and that certain Fourth Amendment to Credit Agreement dated September 17, 2007 (as
amended by this Agreement, and as further amended, modified, substituted, extended and renewed from
time to time the “Credit Agreement”) by and between the Company and the Lenders.
C. The Credit Facility is guaranteed by the Guarantors pursuant to the terms of the Credit
Agreement.
D. The Company and the Lenders have agreed to (i) modify the delivery deadlines for certain
financial statements; (ii) waive delivery of certain other financial statements and (iii) and make
such other changes to the Credit Agreement as are more particularly set forth herein.
E. The Company has requested and the Lenders have agreed to reduce the maximum principal sum
outstanding to the extent and for the period more particularly set forth herein.
F. As a condition precedent to the agreements referenced above, the Administrative Agent has
required that this Agreement be executed and delivered to the Administrative Agent on behalf of the
Lenders.
AGREEMENTS
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 Company, the Lenders and the Administrative Agent hereby agree as follows:
1. The above Recitals are a part of this Agreement. Unless otherwise expressly defined in
this Agreement, terms defined in the Credit Agreement shall have the same meaning under this
Agreement.
2. The Company represents and warrants to the Lender as follows:
(a) The Company has the power and authority to execute and deliver this Agreement and perform
its obligations hereunder;
(b) The Credit Agreement, as amended by this Agreement, and each of the other Loan Documents
remains in full force and effect, and each constitutes the valid and legally binding obligation of
Borrower, enforceable in accordance with its terms;
(c) All of the Company’s representations and warranties contained in the Credit Agreement and
the other Loan Documents are true and correct on and as of the date of the Company’s execution of
this Agreement with the exception of representations and warranties regarding financial statements
described in Section 6.5 of the Credit Agreement; and
(d) No Event of Default and no event which, with notice, lapse of time or both would
constitute an Event of Default, has occurred and is continuing under the Credit Agreement or the
other Loan Documents which has not been waived in writing by the Lender.
3. The Company hereby acknowledges and agrees that pursuant to the terms of Sections 7.1 and
7.2 of the Credit Agreement the Company is required to deliver to the Administrative Agent certain
quarterly and annual financial statements and certain Compliance Certificates within the time
period specified therein. The Company, the Administrative Agent and the Lenders hereby agree to
waive receipt of (a) all quarterly financial statements which were to have been submitted to the
SEC for fiscal year 2006, and for the quarters ending March 31, 2007, June 30, 2007 and September
30, 2007 and the Compliance Certificates to be delivered to the Administrative Agent in connection
with such quarterly statements; and (b) the internally prepared draft financial statement for the
fiscal quarter ending September 30, 2007 and related preliminary financial covenant Compliance
Certificate for the fiscal quarter ending September 30, 2007.
4. The Company, the Administrative Agent and the Lenders hereby agree to modify the delivery
dates to the Administrative Agent of: (a) the annual financial statement for the Company for the
fiscal year ending December 31, 2006, as such financial statement was submitted to the SEC, and (b)
the Compliance Certificates to be submitted to the Administrative Agent with each such financial
statement required pursuant to Section 7.2 of the Credit Agreement (collectively, the “Outstanding
2006 Financial Reports”). As amended by this Agreement, the Outstanding 2006 Financial Reports
will be due no later than March 17, 2008.
5. The Company, the Administrative Agent and the Lenders hereby agree to modify the delivery
dates to the Administrative Agent of: (a) the annual financial statement for the Company for the
fiscal year ending December 31, 2007, as such financial statement was submitted to the SEC, and (b)
the Compliance Certificates to be submitted to the Administrative Agent with each such financial
statement required pursuant to Section 7.2 of the Credit
Agreement (collectively, the “Outstanding 2007 Financial Reports”). As amended by this
Agreement, the Outstanding 2007 Financial Reports will be due no later than June 30, 2008.
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6. The Company, the Administrative Agent and the Lenders hereby agree to modify the delivery
dates to the Administrative Agent of: (a) the annual financial statement for the Company for the
fiscal quarter ending March 31, 2008, as such financial statement was submitted to the SEC, and (b)
the Compliance Certificates to be submitted to the Administrative Agent with each such financial
statement required pursuant to Section 7.2 of the Credit Agreement (collectively, the “2008 First
Quarter Financial Reports”). As amended by this Agreement, the 2008 First Quarter Financial
Reports will be due no later than July 20, 2008.
7. The Company, the Administrative Agent and the Lenders hereby agree that on or before March
17, 2008, the Company shall provide to the Administrative Agent, in form and detail satisfactory to
Administrative Agent: (i) an internally prepared draft financial statement (balance sheet and
income statement only) for the fiscal year ending December 31, 2007 and (ii) a preliminary
financial covenant Compliance Certificate for the fiscal year ending December 31, 2007.
8. The Company, the Administrative Agent and the Lenders hereby agree that on or before May
31, 2008, the Company shall provide to the Administrative Agent, in form and detail satisfactory to
the Administrative Agent: (i) an internally prepared draft financial statement (balance sheet and
income statement only) for the fiscal quarter ending March 31, 2008 and (ii) a preliminary covenant
Compliance Certificate for the fiscal quarter ending March 31, 2008.
9. The Company, covenants and agrees to provide to the Administrative Agent on March 10, 2008
a formal report on the status of completion and filing by March 17, 2008 of the Outstanding 2006
Financial Reports.
10. The Company, the Administrative Agent and the Lenders hereby agree that through the
Maturity Date, the Company shall deliver, within forty-five (45) days after the end of each month,
internally prepared operating data that reflects revenue, expense, margin, average daily rate and
occupancy for only such Senior Living Facilities, on an aggregate basis, in which the Company or
its affiliates have an ownership interest and which operated in both the current month and the
corresponding month of the previous fiscal year in comparative form for both periods fairly
presenting the financial condition of such Senior Living Facility. The Administrative Agent and
the Lenders hereby waive the untimely receipt of such monthly reports for the month of October
2007.
11. The Company has requested and the Administrative Agent and the Lenders have agreed that
effective as of 12 Noon, Eastern Time on February 20, 2008, the Outstanding Amount shall not exceed
$160,000,000 in the aggregate until such time as the Administrative Agent acknowledges in writing
receipt of the Outstanding 2006 Financial Statements and the Outstanding 2007 Financial Statements,
at which time the maximum Outstanding Amount shall again be $250,000,000. The foregoing
notwithstanding, the Company shall at all times owe and shall pay when due the Unused Fee
calculated by the Administrative Agent as if the maximum Outstanding Amount were $250,000,000.
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12. The Company, the Administrative Agent and the Lenders agree that effective as of February
1, 2008, until the end of the Interest Period in which the Administrative Agent acknowledges in
writing receipt of the Outstanding 2006 Financial Statements and the Outstanding 2007 Financial
Statements and notwithstanding anything in the Credit Agreement to the contrary, the Applicable
Rate shall be as follows: (a) the Eurodollar Rate Loans Margin shall be 275 basis points and (b)
the Base Rate Loans Margin shall be 125 basis points.
13. In consideration of the waivers set forth herein the Company agrees that anything to the
contrary set forth in Section 9.1(c) (Other Defaults) of Credit Agreement notwithstanding, all of
the dates set forth in this Agreement for delivery of financial reports of any kind shall be
absolute. Failure to deliver any such reports as herein provided shall constitute an Event of
Default and the Company shall not be entitled to notice for failure to deliver such reports or any
automatic cure period unless expressly agreed to in writing by the Administrative Agent and the
Required Lenders.
14. The Company, the Administrative Agent and the Lenders hereby agree that the Company shall
pay to the Administrative Agent for the account of each Lender that executes this Agreement, in
accordance with its Applicable Percentage, a fee equal to twenty-five (25) basis points.
15. Except as specifically set forth herein, the terms, provisions and covenants of the Credit
Agreement, including, but not limited to, all financial covenants and definitions related thereto,
are hereby ratified and confirmed and remain in full force and effect.
16. This Agreement may be executed in any number of duplicate originals or counterparts, each
of such duplicate originals or counterparts shall be deemed to be an original and all taken
together shall constitute but one and the same instrument.
17. By their signatures below, the Guarantors consent to the transactions contemplated by and
the agreements made by the Company under this Agreement and ratify, confirm and reissue their
guaranty as set forth in the Credit Agreement.
[SIGNATURES APPEAR ON FOLLOWING PAGES]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered under seal by their duly authorized representatives as of the date and year first written
above.
| COMPANY: SUNRISE SENIOR LIVING, INC. |
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| By: | /s/ Xxxxxxx X. Xxxxxx | (Seal) | ||
| Name: | Xxxxxxx X. Xxxxxx | |||
| Title: | Chief Financial Officer | |||
| GUARANTORS: SUNRISE SENIOR LIVING MANAGEMENT, INC. |
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| By: | /s/ Xxxxxx Xxxxxxxx | (Seal) | ||
| Name: | Xxxxxx Xxxxxxxx | |||
| Title: | President | |||
| SUNRISE SENIOR LIVING INVESTMENTS, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | (Seal) | ||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Vice President | |||
| SUNRISE DEVELOPMENT, INC. |
||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | (Seal) | ||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | President | |||
| SUNRISE SENIOR LIVING SERVICES, INC. |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | (Seal) | ||
| Name: | Xxxxxx Xxxxxxxx | |||
| Title: | President | |||
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| BANK OF AMERICA, N.A., as Administrative Agent |
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| By: | /s/ Xxxxxxxx Xxxxxxx | (Seal) | ||
| Name: | Xxxxxxxx Xxxxxxx | |||
| Title: | Vice President | |||
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| 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 |
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| By: | /s/ Xxxxxxx X. Xxxxxxx | (Seal) | ||
| Xxxxxxx X. Xxxxxxx | ||||
| Senior Vice President | ||||
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| WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender |
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| By: | /s/ Xxxxx X. Xxxxxxxx III | |||
| Xxxxx X. Xxxxxxxx III | ||||
| Senior Vice President | ||||
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| HSBC BANK USA, N.A., as a Lender |
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| By: | /s/ Xxxx X. Xxxxxxxxxxx | |||
| Xxxx X. Xxxxxxxxxxx | ||||
| Vice President | ||||
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| 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. |
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| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxx | ||||
| Banking Officer | ||||
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| CHEVY CHASE BANK, F.S.B., as a Lender |
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| By: | /s/ Xxxxx-Xxxxxxxxx X. Xxx | |||
| Xxxxx-Xxxxxxxxx X. Xxx | ||||
| Assistant Vice President | ||||
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| PNC BANK, NATIONAL ASSOCIATION, as a Lender, in its
own right and as successor by merger to Farmers &
Mechanics Bank |
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| By: | /s/ Xxxxxxx X. Xxxxxxxx | |||
| Xxxxxxx X. Xxxxxxxx | ||||
| Vice President | ||||
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