Exhibit
10.39


 


ADDENDUM
TO CREDIT LINE ACCOUNT APPLICATION AND AGREEMENT


 


This Addendum (this “Addendum”)
is attached to, incorporated by reference into and is fully a part of the
Credit Line Account Application and Agreement between UBS Bank USA (the “Bank”)
and Five Star Quality Care, Inc. (the “Borrower”) dated as of the date
hereof (as amended or otherwise modified from time to time, collectively the “Agreement”).
This Addendum and the Agreement shall not become effective and binding upon the
Bank until this Addendum has been executed by the Borrower and accepted by the
Bank at its home office. Any conflict between the terms of the Agreement and
this Addendum shall be resolved in accordance with the terms of this Addendum.
Defined terms used herein to have the respective meanings set forth in the
Agreement unless otherwise defined in this Addendum.


 


A.           The Bank and the Borrower each
acknowledge and agree that:


 


1.              “Notwithstanding anything to the contrary in the Agreement, the
liability of Borrower with respect to the payment and performance of all of
Borrower’s obligations under the Agreement, including the Credit Line
Obligations, shall be “non- recourse” to Borrower and Guarantor, and
accordingly, the Bank’s source of satisfaction for the payment and performance
of all such obligations shall be limited to (a) Borrower’s UBS Financial
Services Inc. securities account No. (“Collateral Account”) and the assets
and property held therein, (b) the Bank’s receipt of proceeds and profits
from the Collateral Account and/or the assets and property held therein, and
the Bank shall not seek to procure payment out of any other assets of Borrower,
and (c) any other security or collateral now or hereafter held by the Bank
under the Agreement, and the Bank shall not seek to procure payment out of any
other assets of the Borrower. Notwithstanding the foregoing, it is expressly
understood and agreed that the aforesaid limitation on liability shall in no
way affect or apply to Borrower’s continued liability for: (1) fraud or
misrepresentation made by Borrower under or in connection with the Agreement; (2) failure
to prevent the creation of any liens or encumbrances on the Collateral Account
and/or any asset and property therein, or on any other collateral under this
Agreement; or (3) any and all court costs and actual attorney fees
actually incurred by the Bank in connection with the enforcement of its rights
under the Agreement.


 


Nothing herein shall
prohibit the Bank from exercising any and all rights and remedies available to
the Bank under the Agreement, including without limitation the right to enter a
judgment against Borrower to the extent necessary to exercise its rights and
remedies with respect to the Collateral Account, the assets and property held
therein or any other collateral under this Agreement, or when Borrower remains
liable as stated above.”


 


B.             This Addendum may be signed in multiple
original counterparts, each of which shall be deemed an original and all of
which together shall constitute one and the same instrument.


 


[Signature page{s} follows]


 

















 


IN WITNESS WHEREOF, each of the parties has signed
this Addendum pursuant to due and proper authority as of the date set for
below.


 


	
   

  	
  Borrower
  Name:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul V. Hoagland

  
	
   

  	
  Name:

  	
  Paul V. Hoagland

  
	
   

  	
  Title:

  	
  Treasurer and CFO

  
	
   

  	
   

  	
   

  
	
   

  	
  UBS
  BANK USA

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jared Cook

  
	
   

  	
  Name:

  	
  Jared Cook

  
	
   

  	
  Title:

  	
  VP UBS Bank USA

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jeff Abbott

  
	
   

  	
  Name:

  	
  Jeff Abbott

  
	
   

  	
  Title:

  	
  AVP UBS Bank USA

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  1/5/2010