Exhibit 10.9


 





AMENDMENT NO. 4


TO THE

TRANSITION TO INTERNAL MANAGEMENT AGREEMENT


 


This AMENDMENT NO. 4 to the TRANSITION
TO INTERNAL MANAGEMENT AGREEMENT is made and entered into on this 9th day of February, 2017 (this “Amendment”)
by and among, Sentio Healthcare Properties, Inc., a corporation organized under the laws of the State of Maryland (the “Company”),
Sentio Healthcare Properties OP, L.P., a Delaware limited partnership (the “Partnership,” and together
with the Company, the “Company Parties”), Sentinel RE Investment Holdings LP, a Delaware limited partnership
(the “Investor”), and Sentio Investments, LLC, a Florida limited liability company (the “Advisor”).


 


R
E C I T A L S


 


WHERAS, the Company and the Advisor
are parties to an advisory agreement pursuant to which the day-to-day business and affairs of the Company are managed by the Advisor
(as amended from time to time, the “Advisory Agreement”);


 


WHEREAS, on February 10, 2013, the
Company Parties, the Investor, and the Advisor, entered into the Transition to Internal Management Agreement, as amended by Amendment
no. 1 and Amendment no. 2, each dated April 8, 2014, and Amendment no. 3 dated February 24, 2015 (the “TIMA”);


 


WHEREAS, pursuant to Section 5(e)(i)
of the TIMA, the Company Parties, the Investor and the Advisor desire to continue to delay the Internalization Date (as defined
in the TIMA) as set forth below;


 


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


 


1.                 
Amendment to Section 1. The Company Parties, the Investor and the Advisor hereby agree that Section 1 of the
TIMA shall be amended and restated in its entirety as follows:


 


Renewal of Advisory Agreement. Subject to
compliance with the requirements of Section 8.2 of the Charter and Section 14 of the Advisory Agreement, the Company and the Advisor
will renew the Advisory Agreement upon the expiration of its current term for successive one-year terms provided that the Advisory
Agreement or any renewal agreement thereto provides for its termination upon the Internalization Date.


 


2.                 
Amendment to Section 4. The Company Parties, the Investor and the Advisor hereby agree that Section 4 of the
TIMA shall be amended to add Section 4(c) as follows:


 


Cap on Fee Amounts Payable to the Advisor. 


 


c.   Notwithstanding any provision
to the contrary in the Advisory Agreement, during the period from February 11, 2017 through February 10, 2018 (the “Fifth
Term”) and the period from February 11, 2018 through February 10, 2019 (the “Sixth Term”), the aggregate amount
of fees payable to the Advisor pursuant to Sections 8(a), 8(b), 8(c), 8(d) and 8(e) of the Advisory Agreement will be limited in
the aggregate as follows:


 






     


     


    

 


i.            During
the Fifth Term, a maximum of $3,200,000 plus the Second Extension Excess Fee Amount (the “Fifth Term Maximum Amount”).
The “Second Extension Excess Fee Amount” is $3,600,000.


 


ii.           During
the Sixth Term, a maximum of $3,200,000 plus any remaining portion of the Second Extension Excess Fee Amount not already paid to
the Advisor pursuant to Section 4(c)(i) hereof (the “Sixth Term Maximum Amount”).


 


iii.          For avoidance of doubt, during
the Fifth Term and the Sixth Term, the maximum amount of fees paid to the Advisor pursuant to Sections 8(a), 8(b), 8(c), 8(d) and
8(e) of the Advisory Agreement, for the period from February 11, 2017 through February 10, 2019, will be $10,000,000 (such amount
the “Second Maximum Extension Fee Amount”).





 


3.                 
Amendment to Section 5. The Company Parties, the Investor and the Advisor hereby agree that Section 5 of the
TIMA shall be amended and restated in its entirety as follows:


 


Internalization.


 


a.            The
current intent of the Company Parties, the Advisor and the Investor is to cause the Company to finalize the transition to an internal
management structure upon the completion of the Sixth Term.


 


b.            Subject
to Section 5(e) hereof, effective upon the first day after the end of the Sixth Term (the “Internalization Date”),
the Company will effect the acquisition of all of the Advisor’s assets that are reasonably necessary for the management and
operation of the Company’s business (such acquisition, an “Internalization”), including, but not limited
to, the assignment or other transfer to the Company of all of the Advisor’s rights, title and interest in any contracts with
third parties that are reasonably necessary for the operation of the Company’s business (the “Contracts”).


 


c.            Notwithstanding
the Fifth Term Maximum Amount or the Sixth Term Maximum Amount, upon an Internalization or a Liquidation Event (as defined in the
Investor Rights Agreement) prior to the Internalization Date, in addition to any subordinated performance fee amounts earned by
the Advisor in accordance with Section 3 hereof, the Advisor shall receive a fee (the “Event Fee”) in an amount
equal to the lesser of (x) $3,000,000 and (y) the remaining portion of the Second Maximum Extension Fee Amount not previously paid
to the Advisor during the Fifth Term or Sixth Term as of the date of the Internalization or Liquidation Event.


 


d.           Notwithstanding
Section 5(c) hereof, no Event Fee shall be paid to the Advisor if (i) at the time of a Liquidation Event or (ii) within twelve
months of a Liquidation Event, the Advisor or any of its members, managers or principals or affiliates of any of the foregoing
(x) continues to provide services (including in a management or advisory role, but excluding any transition services for which
the Advisor is not paid or that is otherwise approved by the board of directors of the Company and the Investor in writing) with
respect to the Company, the acquiror of the Company or all or substantially all of its assets, or any surviving entity resulting
from such Liquidation Event or any affiliates of the foregoing, (y) acquires or holds any equity interests or equity securities
in the Company, such acquiror, such surviving entity or such affiliates, or (z) receives any fees, payments or other compensation
(other than the compensation contemplated by this Agreement and the Advisory Agreement and earned prior to or upon such Liquidation
Event) from the Company, such acquiror, such surviving entity or such affiliates. In the case of Section 5(d)(ii), the Advisor
shall refund such Event Fee to the Company’s equity holders prior to such Liquidation Event.


 






     


     


    

 


e.           Notwithstanding
Section 5(a) hereof, the Internalization Date may be delayed as follows:


 


i.           If
the Company Parties, the Investor and the Advisor agree in writing in advance of such date to delay the Internalization Date, in
which case the Internalization Date will be the date agreed upon by the Company Parties, the Investor and the Advisor; or


 


ii.         If
the Company has not completed the employee transition in accordance with the provisions of Section 6 hereof, or has not secured
the consents to assignment of the Contracts in accordance with the provisions of Section 7 hereof, in which case the Internalization
Date will be the first date upon which all such conditions have been satisfied.


 


4.                 
Ratification; Effect on Advisory Agreement.


 


a.                  
Ratification. The TIMA and the Advisory Agreement, as amended hereby, shall remain in full force and effect and is
hereby ratified and confirmed in all respects.


 


b.                 
Effect on the Advisory Agreement. On and after the date hereof, each reference in the TIMA to “this Agreement,”
“herein,” “hereof,” “hereunder,” or words of similar import shall mean and be a reference to
the TIMA as amended hereby.


 


c.                  
Counterparts; Facsimile. This Amendment may be executed in one or more counterparts, each of which shall be deemed
an original and all of which, taken together, shall constitute



one and the same instrument. Original signatures hereto may be delivered by facsimile which shall be deemed originals.


 


 


Signature page follows.


 




     


     


    

 


IN WITNESS WHEREOF, the parties have executed
and delivered this Amendment as of the date first written above.


 





	 	THE COMPANY
	 	 	 
	 	Sentio Healthcare Properties, Inc.
	 	 	 
	 	By: 	/s/ JOHN MARK RAMSEY
	 	Name: John Mark Ramsey
	 	Title: President and Chief Executive Officer
	 	 	 
	 	 	 
	 	THE PARTNERSHIP
	 	 	 
	 	Sentio Healthcare Properties OP, L.P.
	 	 	 
	 	By: Sentio Healthcare Properties, Inc.,
	 	its general partner
	 	 	 
	 	By:	/s/ JOHN MARK RAMSEY
	 	Name: John Mark Ramsey
	 	Title: President and Chief Executive Officer
	 	 	 
	 	 	 
	 	THE INVESTOR
	 	 	 
	 	Sentinel RE Investment Holdings LP
	 	 	 
	 	By:	/s/ Billy
                                         Butcher

	 	Name: Billy Butcher
	 	Title: Vice President
	 	 	 
	 	 	 
	 	THE ADVISOR
	 	 	 
	 	Sentio Investments, LLC
	 	 	 
	 	By:	/s/ JOHN MARK RAMSEY
	 	Name: John Mark Ramsey
	 	Title: Chief Executive Officer