Document:

Exhibit 10.1

 

LETTER AGREEMENT

 

January 16, 2015

 

Sentinel RE Investment Holdings LP

c/o Kohlberg Kravis Roberts & Co. L.P.

9 West 57th Street, Suite 4200

New York, NY 10019

Attention: Billy Butcher and General Counsel

 

Re: Issuance of Series B Convertible Preferred
Units and Change of Control

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Purchase
Agreement, as amended by that Amendment Agreement, dated February 10, 2014, that Second Amendment Agreement, dated April 8, 2014,
and that Third Amendment Agreement, dated December 22, 2014 (the “Third Amendment”) (collectively, the “Purchase
Agreement”) 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”). Capitalized terms not otherwise defined herein shall have the respective
meanings assigned to such terms in the Purchase Agreement.

 

Whereas, if the Partnership were to issue all
Series B Convertible Preferred Units, as calculated pursuant to Section 2.2 of the Purchase Agreement, for the Exercised Put Amount
related to the Construction Loan Put Exercise, the Investor would beneficially own greater than 49% of the outstanding partnership
interest of the Partnership, triggering certain “change-of-control” provisions in the Sentio Parties’ loan documents,
which, without consents from the lenders thereto, would cause the Sentio Parties to be in default under such loan documents. Although
the Sentio Parties are currently pursuing such requisite lender consents, the Sentio Parties do not anticipate receiving all required
consents prior to the Closing of the Construction Loan Put Exercise and thus wish to divide the issuance of the Series B Convertible
Preferred Units for the Construction Loan Put Exercise into two issuances.

 

In consideration of the mutual agreements and
covenants contained herein, for the reasons discussed above and for other good and value consideration, the receipt and sufficiency
of which is hereby acknowledged, the Sentio Parties and the Investor hereby agree as follows:

 

    	 

    	 

    

 

1.          Issuance
of Series B Convertible Preferred Units. Notwithstanding anything to the contrary in the Purchase Agreement, upon the Closing
of the Construction Loan Put Exercise, the Partnership will issue to the Investor that number of Series B Convertible Preferred
Units that would cause the Investor’s ownership interest in the Partnership to be 48.9% (such number of Series B Convertible
Preferred Units hereafter referred to as the “First Issuance”). The balance of the Series B Convertible Preferred
Units issuable upon the Closing of the Construction Loan Put Exercise pursuant to the Third Amendment (which amount will equal
the difference between (i) the securities calculated pursuant to Section 2.2 of the Purchase Agreement for the Construction Loan
Put Exercise (the “Full Issuance”) and (ii) the First Issuance) will then be issued upon the earlier to occur
of the following: (a) receipt of all lender consents listed on Schedule A attached hereto, (b) four months following the
Closing of the Construction Loan Put Exercise, subject to one or more extensions beyond such four-month period exercisable by the
Investor in its discretion upon ten days’ notice to the Sentio Parties, (c) upon a Liquidation Event (as defined in the Investor
Rights Agreement), (d) at the Investor’s election, a sale of a material amount of the assets of the Company or the Partnership,
(e) at the Investor’s election, a sale or issuance of any equity in the Company or the Partnership other than (X) sales by
holders of the stock of the Company in the ordinary course or (Y) issuances pursuant to the Purchase Agreement and (f) at the Investor’s
election, the listing of securities of the Company or the Partnership on a nationally recognized stock exchange. For all other
purposes under the Purchase Agreement, as well as the Investor Rights Agreement and the Partnership Agreement (each as defined
in the Purchase Agreement), including the receipt by the Investor of distributions payable on the Series B Convertible Preferred
Units under Section 9.2(d)(iii)(F) of the Partnership Agreement (which shall be accrued until they are paid to the Investor at
the time of the Full Issuance), the Investor shall be treated as having been issued the Full Issuance as of the date of the Closing;
provided that the Investor shall have only the voting rights relating to the securities the Investor actually beneficially
owns; provided further that nothing herein shall be deemed to amend or modify Sections 9.2(d)(iii)(A) and 9.2(d)(iv)(D) of the
Partnership Agreement. Notwithstanding anything to the contrary in the Purchase Agreement, the Investor Rights Agreement, the Partnership
Agreement or this Letter Agreement, in no event shall the Investor be required, without its prior written consent, to invest in
the Company in excess of $15,500,000 in the aggregate from the date of the First Issuance unless the Investor has received the
Full Issuance. The Sentio Parties and the Investor agree that upon receipt of copies of the loan documents evidencing the loan
encumbering the property known as Buffalo Crossing (the “Buffalo Crossing Loan”), Schedule A attached
hereto shall be amended to reflect whether lender consent is required with respect to the Buffalo Crossing Loan.

 

2.          Ratification.
The Purchase Agreement and this Letter Agreement shall remain in full force and effect and are hereby ratified and confirmed in
all respects.

 

3.          Governing
Law. This Letter Agreement will be 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.

 

4.          Counterparts.
This Letter 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).

 

[SIGNATURE PAGE FOLLOWS]

 

    	2

    	 

    

 

If the foregoing meets with your approval, please
indicate your acceptance of this Letter Agreement by countersigning a copy of this agreement in the space indicated below.

 

	 	Very truly yours,
	 	 
	 	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

 

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

 

    	 

    	 

    

 

SCHEDULE A

 

Lender Consents

 

Lender Consent Required:

 

		1.	Rome

		2.	Global/Dallas

		3.	Hedgecoxe

		4.	Caruth Haven

		5.	Oaks Bradenton

		6.	Greentree

		7.	Forestview

		8.	Floral Vale

		9.	Chattanooga

		10.	Amber Glen

		11.	Mill Creek

		12.	Hudson Creek

		13.	Sugar Creek

		14.	Buffalo Crossing

 

Lender Consent Not Required:

 

		1.	Oakleaf Portfolio

		2.	Bryan MOB

		3.	Blue Springs/Parkway

 

Conditional: Lender consent is not required provided
that the applicable condition set forth below is satisfied at the time of the Full Issuance. If the applicable condition is not
satisfied at the time of the Full Issuance, lender consent is required.

 

	Loan	 	Condition
	Standish Village 	 	Compliance with the provisions of Section 7 of Exhibit B to that certain Senior Housing Loan and Security Agreement dated December 6, 2013
	St. Andrews Village	 	Compliance with the provisions of Section 7 of Exhibit B to that certain Multifamily Loan and Security Agreement – Seniors Housing dated August 19, 2014
	Woodbury Mews	 	The satisfaction of the carve outs to a change of control scenario set forth in the definition of “Change of Control”, including, but not limited to, the “Take Out/Management Criteria”. 
	MVI, Live Oak, Wildewood, Gables-Hudson	 	The Partnership or another entity satisfactory to the administrative agent of the loan provides a carve out guaranty to such agent in favor of the lenders under the loan along with notice of such transfer prior to the Full Issuance on substantially the same form as the guaranty executed by the Company in connection with the origination of the  loan. 
	Sumter Place	 	The Partnership or another entity satisfactory to the administrative agent of the loan provides a carve out guaranty to such agent in favor of the lenders under the loan along with notice of such transfer prior to the Full Issuance on substantially the same form as the guaranty executed by the Company in connection with the origination of the loan. 
	Allentown	 	Borrower provides the applicable lender with notice of such transfer within ten (10) business days thereof.
	Court at Hilliard, Compass 1 and Compass 2 	 	Receipt of approval from HUD for each Form 2530 filed with HUD respect to (i) Investor’s potential ownership of over 50% of the shares of the Company and (ii) each member of the Board appointed by Investor.Exhibit 10.2

 

MARCH LETTER AGREEMENT

 

March 26, 2015

 

Sentinel RE Investment Holdings LP

c/o Kohlberg Kravis Roberts & Co. L.P.

9 West 57th Street, Suite 4200

New York, NY 10019

Attention: Billy Butcher and General Counsel

		Re:	March Put Exercise

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Purchase
Agreement, as amended by that Amendment Agreement, dated February 10, 2014, that Second Amendment Agreement, dated April 8, 2014,
that Third Amendment Agreement, dated December 22, 2014, and that January Letter Agreement (as defined below) (collectively, the
“Purchase Agreement”) 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”). Capitalized terms not otherwise defined herein shall have the respective
meanings assigned to such terms in the Purchase Agreement.

 

Whereas, on January 16, 2015, the Parties entered
into a letter agreement (the “January Letter Agreement”) and closed a Construction Loan Put Exercise (the “Georgetown
Put Exercise”) whereby the Investor agreed to commit to purchase newly issued Series B Convertible Preferred Units for
an aggregate amount of $41,912,000, funded pursuant to a draw schedule. Pursuant to the January Letter Agreement, the Investor
was issued 155,000 newly issued Series B Convertible Preferred Units, which is the amount of Series B Convertible Preferred Units
that would cause the Investor’s ownership interest in the Partnership to be 48.9%.

 

Whereas, if the Partnership were to issue any
additional Series B Convertible Preferred Units, the Investor would beneficially own greater than 48.9% of the outstanding partnership
interest of the Partnership, triggering certain “change-of-control” provisions in the Sentio Parties’ loan documents,
which, without consents from the lenders thereto, would cause the Sentio Parties to be in default under such loan documents. Although
the Sentio Parties are currently pursuing such requisite lender consents, the Sentio Parties do not anticipate receiving all required
consents prior to the Closing of a Put Exercise Notice originally delivered to the Investor on February 24, 2015, amended and restated
on March 18, 2015 and further amended and restated on March 25, 2015 for the acquisitions of Armbrook Village and Gables of Kentridge
(the “March Put Exercise”).

 

    	 

    	 

    

 

Whereas, pursuant to the March Put Exercise,
the Sentio Parties have requested that the Investor purchase 220,580 Series B Convertible Preferred Units for an aggregate amount
of $22,058,000.

 

Whereas, of the 155,000 Series B Convertible
Preferred Units issued to the Investor in connection with the Georgetown Put Exercise, as of March 2, 2015, the Investor has funded
only $1,902,000 for 19,020 Series B Convertible Preferred B Units. The Parties have agreed that the 135,980 unfunded Series B Convertible
Preferred Units issued in connection with the Georgetown Put Exercise shall be deemed instead to have been issued in connection
with the March Put Exercise, and that the Investor shall pay $13,598,000 for such unfunded units on the initial Closing of the
March Put Exercise, which amount shall be deemed to have been funded in connection with the March Put Exercise. In addition, because
the March Put Exercise is for an amount in excess of the $13,598,000, the Sentio Parties wish to provide further that the Series
B Convertible Preferred Units to be issued in connection with the March Put Exercise will be issued in two closings: an initial
closing representing the 135,980 Series B Convertible Preferred Units described above, and a subsequent closing for the balance
of the Series B Convertible Preferred Units issuable under the March Put Exercise.

 

In consideration of the mutual agreements and
covenants contained herein, for the reasons discussed above and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Sentio Parties and the Investor hereby agree as follows:

 

1.           Amendment to January Letter Agreement.
The January Letter Agreement is hereby amended as follows: the number of Series B Convertible Preferred Units referred to as the
“First Issuance” in the January Letter Agreement shall be 19,020 Series B Convertible Preferred Units.

 

2.           Issuance of Series B Convertible Preferred
Units for March Put Exercise. Notwithstanding anything to the contrary in the Purchase Agreement, the Series B Convertible
Preferred Units for the March Put Exercise shall be divided into two issuances. Upon the initial Closing of the March Put Exercise,
the Investor shall wire $13,598,000 to the account of the Partnership, and 135,980 of the Series B Convertible Preferred Units
issued in connection with the Georgetown Put Exercise shall be deemed instead to have been issued in connection with the March
Put Exercise (such number of Series B Convertible Preferred Units hereafter referred to as the “March First Issuance”)
and shall be subject to the same terms and conditions as if originally issued in connection with an Ordinary Put Exercise Notice.

 

    	2

    	 

    

 

The balance of the Series B Convertible Preferred
Units issuable upon the subsequent Closing of the March Put Exercise (which amount will equal the difference between (i) the securities
calculated pursuant to Section 2.2 of the Purchase Agreement for the March Put Exercise (the “March Full Issuance”)
and (ii) the March First Issuance) will then be issued, and the payment relating thereto will be wired to the account of the Partnership,
upon the earlier to occur of the following: (a) receipt of all lender consents listed on Schedule A attached hereto, (b)
four months following the Closing of the March Put Exercise, subject to one or more extensions beyond such four-month period exercisable
by the Investor in its discretion upon ten days’ notice to the Sentio Parties, (c) upon a Liquidation Event (as defined in
the Investor Rights Agreement), (d) at the Investor’s election, a sale of a material amount of the assets of the Company
or the Partnership, (e) at the Investor’s election, a sale or issuance of any equity in the Company or the Partnership other
than (X) sales by holders of the stock of the Company in the ordinary course or (Y) issuances pursuant to the Purchase Agreement
and (f) at the Investor’s election, the listing of securities of the Company or the Partnership on a nationally recognized
stock exchange. For all other purposes under the Purchase Agreement, as well as the Investor Rights Agreement and the Partnership
Agreement (each as defined in the Purchase Agreement), including the receipt by the Investor of distributions payable on the Series
B Convertible Preferred Units under Section 9.2(d)(iii)(F) of the Partnership Agreement (which shall be accrued until they are
paid to the Investor at the time of the March Full Issuance), the Investor shall be treated as having been issued the March Full
Issuance as of the date of the initial Closing; provided that the Investor shall have only the voting rights relating to
the securities the Investor actually beneficially owns (for the avoidance of doubt, the Investor shall beneficially own the March
Full Issuance upon the subsequent Closing of the March Put Exercise); provided further that nothing herein shall be deemed
to amend or modify Sections 9.2(d)(iii)(A) and 9.2(d)(iv)(D) of the Partnership Agreement. Notwithstanding anything to the contrary
in the Purchase Agreement, the Investor Rights Agreement, the Partnership Agreement or this March Letter Agreement, in no event
shall the Investor be required, without its prior written consent, to invest any additional amounts in the Company unless the Investor
has received the March Full Issuance and the Full Issuance (as defined in the January Letter Agreement).

 

3.           Ratification. Except as expressly
amended hereby, the Purchase Agreement (including, for the avoidance of doubt, the January Letter Agreement) shall remain in full
force and effect and is hereby ratified and confirmed in all respects.

 

4.           Governing Law. This March Letter
Agreement will be 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.

 

5.           Counterparts. This March Letter 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).

 

    	3

    	 

    

 

If the foregoing meets with your approval, please
indicate your acceptance of this March Letter Agreement by countersigning a copy of this agreement in the space indicated below.

 

	 	Very truly yours,
	 	 
	 	Sentio Healthcare Properties, Inc.
	 	 
	 	By:	/s/ Sharon Kaiser
	 	Name: Sharon Kaiser
	 	Title: Chief Financial Officer
	 	 
	 	Sentio Healthcare Properties OP, L.P.

 

	 	By:  	Sentio Healthcare Properties, Inc., its  
	 	 	general partner

 

	 	By:  	/s/ Sharon Kaiser
	 	 	Name: Sharon Kaiser
	 	 	Title: Chief Financial Officer

 

	Agreed to and accepted:
	Sentinel RE Investment Holdings LP
	 
	By: Sentinel RE Investment Holdings GP, as general partner

 

	By:  	/s/ Billy Butcher	 
	Name:  Billy Butcher	 
	Title:  Vice President	 

 

    	 

    	 

    

 

SCHEDULE A

 

Lender Consents

 

Lender Consent Required:

 

		1.	Rome

		2.	Global/Dallas

		3.	Hedgecoxe

		4.	Caruth Haven

		5.	Oaks Bradenton

		6.	Greentree

		7.	Forestview

		8.	Floral Vale

		9.	Chattanooga

		10.	Amber Glen

		11.	Mill Creek

		12.	Hudson Creek

		13.	Sugar Creek

		14.	Buffalo Crossing

 

Lender Consent Not Required:

 

		1.	Oakleaf Portfolio

		2.	Bryan MOB

		3.	Blue Springs/Parkway

 

Conditional: Lender consent is not required provided
that the applicable condition set forth below is satisfied at the time of the Full Issuance. If the applicable condition is not
satisfied at the time of the Full Issuance, lender consent is required.

 

	Loan	 	Condition
	Standish Village 	 	Compliance with the provisions of Section 7 of Exhibit B to that certain Senior Housing Loan and Security Agreement dated December 6, 2013
	St. Andrews Village	 	Compliance with the provisions of Section 7 of Exhibit B to that certain Multifamily Loan and Security Agreement – Seniors Housing dated August 19, 2014
	Woodbury Mews	 	The satisfaction of the carve outs to a change of control scenario set forth in the definition of “Change of Control”, including, but not limited to, the “Take Out/Management Criteria”. 
	MVI, Live Oak, Wildewood, Gables-Hudson	 	The Partnership or another entity satisfactory to the administrative agent of the loan provides a carve out guaranty to such agent in favor of the lenders under the loan along with notice of such transfer prior to the Full Issuance on substantially the same form as the guaranty executed by the Company in connection with the origination of the  loan. 

 

    	 

    	 

    

 

	Sumter Place	 	The Partnership or another entity satisfactory to the administrative agent of the loan provides a carve out guaranty to such agent in favor of the lenders under the loan along with notice of such transfer prior to the Full Issuance on substantially the same form as the guaranty executed by the Company in connection with the origination of the loan. 
	Allentown	 	Borrower provides the applicable lender with notice of such transfer within ten (10) business days thereof.
	Court at Hilliard, Compass 1 and Compass 2 	 	Receipt of approval from HUD for each Form 2530 filed with HUD respect to (i) Investor’s potential ownership of over 50% of the shares of the Company and (ii) each member of the Board appointed by Investor.

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