SECOND AMENDMENT AGREEMENT


 


This Second Amendment Agreement, dated April
8, 2014 (this "Agreement"), is made by and among Sentinel RE Investment
Holdings LP, a Delaware limited partnership (the “Investor”), Sentio Healthcare Properties, Inc.,
a corporation organized under the laws of the State of Maryland (the “Company”), and Sentio Healthcare Properties
OP, L.P., a Delaware limited partnership (the “Partnership,” and together with the Company, the “Sentio
Parties”). The Investor and the Sentio Parties are collectively referred to herein as the “Parties,”
and each a “Party.” Capitalized terms used but not defined herein will have the meanings ascribed to such terms
in the Purchase Agreement (defined below).


 


WHEREAS, the Parties have entered into a
Securities Purchase Agreement, dated as of February 10, 2013, as amended by that certain Waiver Agreement dated August 28, 2013
(as amended), that certain Waiver Agreement dated November 12, 2013 (as amended), and that certain Amendment Agreement dated as
of February 10, 2014 (collectively, the “Purchase Agreement”);


 


WHEREAS, on March 14, 2014, the Company’s
board of directors authorized the Company to conduct a tender offer pursuant to which the Company will seek to repurchase up to
$35,000,000 of Common Stock (the “Company Tender Offer”);


 


WHEREAS, the Sentio Parties have requested
that the Investor amend certain provisions of the Purchase Agreement to allow the Company to conduct the Company Tender Offer and
to provide for the funding of a portion of the Company Tender Offer by the Investor;


 


NOW, THEREFORE, in consideration of the
premises set forth above and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties agree as follows:


 


1.Agreements; Waivers.


 


(a)Pursuant to Section 9.3 of the Purchase
Agreement, the Parties hereby agree that Section 2.1 of the Purchase Agreement shall be amended and restated in its entirety as
follows:


 


Section 2.1.Put Exercise
Notices.


 


(a)Commencing on the thirtieth
day following the Effective Date, the Sentio Parties may, from time to time in their sole discretion, provide to the Investor a
Put Exercise Notice, substantially in the form attached hereto as Exhibit E for a Put Exercise in connection with a proposed
investment opportunity (an “Ordinary Put Exercise Notice”), and, solely during the period commencing on April
8, 2014 and ending on June 30, 2014, the Sentio Parties may provide to the Investor one Put Exercise Notice substantially in the
form attached hereto as Exhibit E-2 for a Put Exercise in connection with the Company Tender Offer (a “Tender Offer
Put Exercise Notice” and collectively with any Ordinary Put Exercise Notices, a “Put Exercise Notice”).
Each Put Exercise Notice must:


 






    	 



    	 



    

 


 


(i)be delivered to the Investor
not later than 9:30 a.m. (Eastern Standard time) at least fifteen (15) Business Days prior to the Closing Date specified in the
Put Exercise Notice (in the case of an Ordinary Put Exercise Notice), and, at least thirty (30) Business Days prior to the Closing
Date specified in the Put Exercise Notice (in the case of the Tender Offer Put Exercise Notice);


 


(ii)identify the proposed
investment opportunity and specify the criteria supporting the Sentio Parties’ conclusion that such investment opportunity
is a Qualifying Acquisition (in the case of an Ordinary Put Exercise Notice), or identify the proposed use for the Put Exercise
Amount as the repurchase by the Company of shares of Common Stock pursuant to the Company Tender Offer and specify the material
terms of such Company Tender Offer (in the case of the Tender Offer Put Exercise Notice);


 


(iii) specify the Put Exercise
Amount or, in the case of the Tender Offer Put Exercise Notice, the maximum Put Exercise Amount; and


 


(iv) designate the Closing
Date.


 


The date on which the Sentio
Parties deliver any Put Exercise Notice in accordance with this Section 2.1 hereinafter will be referred to as a “Put
Exercise Date.”


 


(b)In the case of an Ordinary
Put Exercise Notice, no later than five (5) Business Days from the Put Exercise Date, the Investor will notify the Sentio Parties
of whether (i) the proposed investment opportunity is an Approved Acquisition; (ii) the Investor is exercising a Strike with respect
to such proposed investment opportunity; or (iii) the Investor disputes the Sentio Parties’ conclusion that the proposed
investment opportunity is a Qualifying Acquisition. In the case of the Tender Offer Put Exercise Notice, no later than five (5)
Business Days from the Put Exercise Date, the Investor will notify the Sentio Parties of whether the Investor approves of the use
of the Put Exercise Amount for the funding of such Company Tender Offer.


 


(c)At any time prior to the
Closing Date set forth in a Put Exercise Notice, but no later than three (3) Business Days prior to the Closing Date set forth
in such Put Exercise Notice, the Sentio Parties may (i) notify the Investor that the Sentio Parties are terminating the Put Exercise
Notice, in which case such Put Exercise Notice will expire without further effect, or (ii) amend such Put Exercise Notice (an “Amended
Put Exercise Notice”) and deliver such Amended Put Exercise Notice to Investor. If the Amended Put Exercise Notice relates
to an Ordinary Put Exercise Notice, no later than three (3) Business Days after Investor’s receipt of the Amended Put Exercise
Notice, the Investor will notify the Sentio Parties of whether (x) the proposed investment opportunity is an Approved Acquisition;
(y) the Investor is exercising a Strike with respect to such proposed investment opportunity; or (z) the Investor disputes the
Sentio Parties’ conclusion that the proposed investment opportunity is a Qualifying Acquisition. If the Amended Put Exercise
Notice relates to the Tender Offer Put Exercise Notice, no later than three (3) Business Days after Investor’s receipt of
the Amended Put Exercise Notice, the Investor will notify the Sentio Parties of whether the Investor approves of the use of the
Put Exercise Amount for the funding of such Company Tender Offer; provided however, that if the Amended Put Exercise Notice relates
to the Tender Offer Put Exercise Notice and such Amended Put Exercise Notice only (i) amends the Closing Date, and/or (ii) specifies
the actual Put Exercise Amount, then no further Investor approval will be required.


 


 



    	 



    	 



    




 


(d)If the proposed investment
opportunity described in an Ordinary Put Exercise Notice (or Amended Put Exercise Notice, as applicable) is an Approved Acquisition,
then upon the terms and subject to the conditions of this Agreement, the Investor is obligated to accept such Put Exercise Notice
(or Amended Put Exercise Notice, as applicable) prepared and delivered in accordance with the provisions of this Agreement, and
to purchase from the Sentio Parties the Securities issuable pursuant to and as set forth in such Ordinary Put Exercise Notice (or
Amended Put Exercise Notice, as applicable). If the Tender Offer Put Exercise Notice (or Amended Put Exercise Notice, as applicable)
is approved by the Investor, the Investor is obligated to accept such Put Exercise Notice (or Amended Put Exercise Notice, as applicable)
prepared and delivered in accordance with the provisions of this Agreement, and to purchase from the Sentio Parties the Securities
issuable pursuant to and as set forth in such Put Exercise Notice (or Amended Put Exercise Notice, as applicable).


 


(e)If the Investor exercises
a Strike with respect to a proposed investment opportunity described in an Ordinary Put Exercise Notice (or Amended Put Exercise
Notice, as applicable) then the Investor is not obligated to accept such Ordinary Put Exercise Notice (or Amended Put Exercise
Notice, as applicable) and, subject to the provisions of Section 7.1(e), such Ordinary Put Exercise Notice (or Amended Put
Exercise Notice, as applicable) will expire without further effect.


 


(f)If the Investor disputes
the Sentio Parties’ conclusion that the proposed investment opportunity described in an Ordinary Put Exercise Notice (or
Amended Put Exercise Notice, as applicable) is a Qualifying Acquisition, or if the Investor declines to approve the Tender Offer
Put Exercise Notice (or Amended Put Exercise Notice, as applicable), then the Sentio Parties will negotiate with the Investor in
good faith to determine the changes necessary to make the proposed investment opportunity a Qualifying Acquisition, or to secure
Investor approval of the Tender Offer Put Exercise Notice, as applicable, and thereafter the Sentio Parties will resubmit a Put
Exercise Notice as described in Section 2.1(a) hereof.


 


(g)Upon the earlier of the
Closing Date of the Company Tender Offer or June 30, 2014 (the “Extension Date”), if the aggregate Exercised
Put Amount during the period from the Effective Date to the Extension Date (including, solely for the purpose of this section,
any Exercised Put Amounts related to the SLR Boston Acquisition Proposal and/or the Company Tender Offer, but excluding any other
Exercised Put Amounts closed after the First Anniversary and on or before the Extension Date) is less than $35,000,000, the Partnership
will pay to the Investor a premium equal to 5% of the difference between (i) $35,000,000 and (ii) the aggregate Exercised Put Amount
during the period from the Effective Date to the Extension Date.


 






    	 



    	 



    




 


(h)On the Business Day that
is two (2) years from the Effective Date (the “Second Anniversary”), if the aggregate Exercised Put Amount during
the period from the Extension Date to the Second Anniversary (excluding, solely for the purpose of this section, any Exercised
Put Amounts related to the SLR Boston Acquisition Proposal and/or the Company Tender Offer, but including any other Exercised Put
Amounts closed after the First Anniversary and on or before the Extension Date) is less than $35,000,000, the Partnership will
pay to the Investor a premium equal to 5% of the difference between (i) $35,000,000 and (ii) the aggregate Exercised Put Amount
during the period from the Extension Date to the Second Anniversary. Notwithstanding the foregoing, no such premium will be paid
if the Investor exercised more than one Strike during the period from the Extension Date to the Second Anniversary.


 


(i)If the Extension Period
is exercised in accordance with Section 7.1(d), on the Business Day that is three (3) years from the Effective Date (the
“Third Anniversary”), if the aggregate Exercised Put Amount during the period from the Second Anniversary to
the Third Anniversary is less than $50,000,000, the Partnership will pay to the Investor a premium equal to 5% of the difference
between (i) the lesser of (A) $50,000,000 and (B) the Remaining Put Amount, and (ii) the aggregate Exercised Put Amount during
the period from the Second Anniversary to the Third Anniversary. Notwithstanding the foregoing, no such premium will be paid if
the Investor exercised more than one Strike during the period from the Second Anniversary to the Third Anniversary.


 


(j)Notwithstanding Section
1.1 hereof, if the Company completes the Company Tender Offer, the Preferred Unit Put Right will be increased by the amount
of the Exercised Put Amount actually funded by the Investor pursuant to the Tender Offer Put Exercise Notice, up to a maximum increase
in the Preferred Unit Put Right of $29,000,000.


 


(b)Pursuant to Section 9.5 of the Purchase
Agreement, the obligations of the Sentio Parties pursuant to the provisions of Section 2.1(j) of the Purchase Agreement as in effect
immediately prior to the effectiveness of this Agreement shall be waived by the Investor effective upon the Closing of the Put
Exercise related to the Tender Offer Put Exercise Notice.


 


(c)Pursuant to Section 9.3 of the Purchase
Agreement, the Parties hereby agree that Section 5.4 of the Purchase Agreement shall be amended and restated in its entirety as
follows:


 


Section
5.4Other Agreements and Other Financings. The Sentio Parties will not enter into, announce or recommend any
agreement, plan, arrangement or transaction the terms of which would restrict, materially delay or conflict with the ability
or right of the Sentio Parties or any of their Subsidiaries to perform its obligations under this Agreement or the Related
Documents, including, without limitation, the obligation of the Sentio Parties to deliver Securities to the Investor in
respect of Put Exercise Notices that may be delivered from time to time pursuant to this Agreement; provided that this Section
5.4 will not limit the ability of the Sentio Parties to enter into debt financing arrangements in respect of a
Qualifying Acquisition solely by virtue of such financing arrangements containing provisions requiring the Sentio Parties to
obtain the consent of the lenders under such financing arrangements to a change of control of the Sentio Parties as a result
of the Investor acquiring Securities hereunder representing, in the aggregate, fifty percent (50%) or more of the voting
securities of the Company (as defined in Rule 12b-2 promulgated under the Exchange Act).


 






    	 



    	 



    




 


(d)Pursuant to Section 9.3 of the Purchase
Agreement, the Parties hereby agree that Section 5.11 of the Purchase Agreement shall be amended and restated in its entirety as
follows:


 


Section 5.11.Use of
Proceeds. The gross proceeds from the sale of the Securities at each Closing will be used by the Company and/or the Partnership
to acquire the Approved Acquisition specified in the Put Exercise Notice related to such Closing, to fund the Company Tender Offer
specified in the Tender Offer Put Exercise Notice, or for such other purpose as the Investor may approve in writing. The Parties
acknowledge that the minimum denomination of $100,000 applicable to each Put Exercise Notice may result in de minimis amounts
of unallocated proceeds upon each Closing.


 


(e)Pursuant to Section 9.3 of the Purchase
Agreement, the Parties hereby agree that Section 6.3(e) of the Purchase Agreement shall be amended and restated in its entirety
as follows:


 


(e)No Material Changes to
Approved Acquisitions or Tender Offers. There shall have been no material changes to the terms of the Approved Acquisition
or the terms of the Company Tender Offer, as applicable, as described in the Put Exercise Notice (or Amended Put Exercise Notice,
as applicable) between the date approved by the Investor and the Closing Date.


 


(f)Pursuant to Section 9.3 of the Purchase
Agreement, the Parties hereby agree that the definitions of the following terms in Annex A to the Purchase Agreement shall
be amended as follows:


 


“First Anniversary”
will mean the Business day that is one (1) year from the Effective Date.


 


“Ordinary Put Exercise
Notice” will have the meaning assigned to such term in Section 2.1(a) hereof.


 


“Tender Offer Put Exercise
Notice” will have the meaning assigned to such term in Section 2.1(a) hereof.


 






    	 



    	 



    




 


(g)Pursuant to Section 9.3 of the Purchase
Agreement, the Parties hereby agree to include Exhibit E-2 to this Agreement as Exhibit E-2 to the Purchase Agreement.


 


(h)Pursuant to Section 9.3 of the Purchase
Agreement, the Parties hereby agree to include Exhibit I-2 to this Agreement as Exhibit I-2 to the Purchase Agreement.


 


2.Limited Effect; No Modifications.
This Agreement is effective as of the date first set forth above. The amendments set forth above shall be limited precisely as
written and relate solely to the provisions of the Purchase Agreement in the manner and to the extent described above, and nothing
in this Agreement shall be deemed to constitute a waiver of compliance by any of the Parties with respect to any other term, provision
or condition of the Purchase Agreement or any Related Document, or any other instrument or agreement referred to therein. Except
as expressly set forth herein, nothing contained in this Agreement will be deemed or construed to amend, supplement or modify the
Purchase Agreement or otherwise affect the rights and obligations of any party thereto, all of which remain in full force and effect.


 


3.Miscellaneous.


 


(a)This Agreement is governed by, and
construed in accordance with, the internal procedural and substantive laws of the State of New York, without giving effect to the
choice of law provisions of such state that would cause the application of the laws of any other jurisdiction.


 


(b)This Agreement shall inure to the
benefit of and be binding upon each of the Parties and each of their respective successors and assigns in each case permitted under
Section 9.7 of the Purchase Agreement.


 


(c)The headings in this Agreement are
for convenience only and will not constitute a part of this Agreement for any other purpose and will not be deemed to limit or
affect any of the provisions hereof or of the Purchase Agreement.


 


(d)This Agreement may be executed in
counterparts (including by facsimile or other electronic transmission), all of which will be considered one and the same agreement
and will become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties
(including by facsimile or other electronic transmission).


 


(e)This Agreement, together with the
Purchase Agreement and the Related Documents, represents the entire agreement of the parties with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties by either party relative to subject matter hereof
not expressly set forth herein or therein.


 


[Signature page follows]





 






    	 



    	 



    

 


IN WITNESS WHEREOF, the Parties
have executed this Agreement on the date first written above.


 





	 	Sentio Healthcare Properties, Inc.
	 	 
	 	 
	 	By:	/s/ John Mark Ramsey
	 	Name: John Mark Ramsey
	 	Title: President and Chief Executive Officer
	 	 	 	 
	 	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







 






    	 



    	 



    

 


 


	 	Sentinel RE Investment Holdings LP
	 	 
	 	By:	Sentinel RE Investment Holdings GP,
	      	 	as general partner
	 	 	 
	 	 	By:	/s/ Billy Butcher
	 	 	Name:	Billy Butcher
	 	 	Title:	Vice President









 


 









    	 



    	 



    

  


Exhibit E-2


 


PUT EXERCISE NOTICE


OF 


SENTIO HEALTHCARE PROPERTIES, INC.


AND 


SENTIO HEALTHCARE PROPERTIES OP, L.P.


 


Pursuant to Section 2.1 of the Securities
Purchase Agreement, dated as of February 10, 2013, as amended (the “Agreement”), by and among Sentio Healthcare
Properties, Inc. (the “Company”), Sentio Healthcare Properties OP, L.P. (the “Partnership”
and, together with the Company, the “Sentio Parties”) and Sentinel RE Investment Holdings LP (the “Investor”),
the undersigned, [name of officer], being the [title] of the Company, on behalf of the Company and the Partnership, for itself
and as the general partner of the Partnership, respectively, hereby deliver to the Investor this Put Exercise Notice. Capitalized
terms not otherwise defined herein shall have the meanings set forth in the Agreement.


 


The Sentio Parties are proposing to conduct
a Company Tender Offer, the terms of which are described in Appendix A to this Put Exercise Notice. The maximum Put Exercise
Amount is [_______] Series B Convertible Preferred Units for a total of $[________]. The Closing Date for this Put Exercise is
__________, 20__ [at least [30] Business Days after the delivery of this Notice]. The Investor is requested
to wire the requisite funds to the account of the Partnership (instructions attached as Appendix B), on or prior to the
Closing Date.


 


Dated the [__] day of [_____], 20__.


 


 


 


_______________________________


Name:


Title:


 


 









    	 



    	 



    




 


Appendix A


 


Tender Offer Terms


 





 


 


 


 


 


 


 






    	 



    	 



    

 


 


Appendix B


 


Wiring Instructions


 





 


 


 


 


 


 


 


 






    	 



    	 



    




Exhibit I-2


 


SENTIO HEALTHCARE PROPERTIES, INC. 


AND


SENTIO HEALTHCARE PROPERTIES OP, L.P.


 


COMPLIANCE CERTIFICATE


 


[DATE]


 


The undersigned, ___________,
being the duly elected and acting [President/Chief Executive Officer/Chief Financial Officer/Senior Vice President] of Sentio Healthcare
Properties, Inc., a Maryland corporation (the “Company”), acting on behalf of the Company for itself, and on
behalf of Sentio Healthcare Properties OP, L.P., a Delaware limited partnership (the “Partnership” and, together
with the Company, the “Sentio Parties”) as the general partner of the Partnership, pursuant to Section 6.3(d)
of the Securities Purchase Agreement dated as of February 10, 2013, as amended (the “Agreement”), by and among
the Company, the Partnership and Sentinel RE Investment Holdings LP, a Delaware limited partnership (the “Investor”),
hereby certifies that:


 


		(i)	The representations and warranties [(other than Section 4.13 of the Agreement)][insert if there
is litigation] of the Sentio Parties (A) contained in the Agreement and the Related Documents (other than Section 4.1, Section
4.2, Section 4.6, and Section 4.7 of the Agreement) (i) that are not qualified by “materiality” or “Material
Adverse Effect” have been true and correct in all material respects when made and are true and correct in all material respects
as of the Put Exercise Date and the date hereof with the same force and effect as if made on such dates, except to the extent such
representations and warranties are as of another date, in which case, such representations and warranties are true and correct
in all material respects as of such other date and (ii) that are qualified by “materiality” or “Material Adverse
Effect” have been true and correct when made and are true and correct as of the Put Exercise Date and date hereof with the
same force and effect as if made on such dates, except to the extent such representations and warranties are as of another date,
in which case, such representations and warranties are true and correct as of such other date, (B) contained in Section 4.6 of
the Agreement are true in all but de minimis respects as of the Put Exercise Date and the date hereof with the same force and effect
as if made on such dates, and (C) contained in Sections 4.1, 4.2 and 4.7 of the Agreement are true in all respects as of the Put
Exercise Date and the date hereof with the same force and effect as if made on such dates;



 


		(ii)	Each of the Sentio Parties has performed, satisfied and complied in all material respects with
all covenants, agreements and conditions required by the Agreement and the Related Documents to be performed, satisfied or complied
with by it at or prior to the Put Exercise Date and date hereof;



 






    	 



    	 



    




 


		(iii)	There have been no material changes to the terms of the Company Tender Offer, as described in the
Put Exercise Notice (or Amended Put Exercise Notice, as applicable) between the date approved by the Investor and the date hereof;



 


		(iv)	The Securities issuable pursuant to such Put Exercise Notice have been duly authorized by all necessary
action of the Sentio Parties, and the Sentio Parties have timely delivered all the Securities relating to all prior Put Exercise
Notices to the Investor; and



 


		(v)	No temporary restraining order, preliminary or permanent injunction or other judgment or order
issued by any Governmental Authority and no Law are in effect restraining, enjoining, making illegal or otherwise prohibiting the
consummation of the transactions contemplated by the Agreement and the Related Documents.



 


Capitalized terms used
but not defined herein shall have such meaning as are given to such terms in the Agreement.


 









    	 



    	 



    

 


 


 


In
Witness Whereof, the undersigned has executed this Compliance Certificate in [his/her] capacity as ____________ of the
Company, on behalf of the Company and the Partnership, for itself and as general partner of the Partnership, respectively, as of
________, 201_.


 


 





	 	By:	 
	 	Name:	 
	 	Title: