Document:

EX-10.2

 Exhibit 10.2 

LIFE STORAGE, INC. 
 6467 Main
Street 
 Buffalo, New York 14221 

December 18, 2018 
  

 
  

 
  

 
 RE: Performance-Based Award Notice 

Dear [Name]: 
 The Compensation Committee (the
“Committee”) of the Board of Directors (the “Board”) of Life Storage, Inc. (the “Company”) has selected you to receive a grant of a Performance-Based Award under the Company’s 2015 Award and Option Plan (the
“Plan”) which will be a payable in shares of Common Stock of the Company to the extent that the performance measures set forth in this Award Notice are achieved. 

This letter agreement constitutes your Award Notice with respect to such Performance-Based Award. The Plan text governs the operation of the
Plan as well as the terms and conditions of your Performance-Based Award granted under the Plan and is incorporated herein by reference. A copy of the Plan text is enclosed. Any term not defined in this Award Notice shall have the same meaning as
ascribed to it in the Plan. 
 As set forth below, you are eligible to be awarded shares based upon the Company’s total shareholder
return over the three year period ending December 18, 2021 relative to a peer group selected by the Committee. You will not be awarded any shares if threshold performance is not achieved. Provided threshold performance is achieved, you will be
eligible to be awarded an applicable percentage of the target number of shares between 25% and 200% as set forth below, e.g. 25% of the target number of shares if threshold performance is achieved, 100% if target performance is achieved and 200% if
maximum performance is achieved. 
 PERFORMANCE-BASED AWARD 

You are hereby awarded, effective December 18, 2018, a Performance-Based Award to be payable in shares of Common Stock of the Company
contingent upon the achievement of certain performance measures as set forth herein (the “Performance Shares”). The target number of Performance Shares is
                 (the “Target Number”). 

 PAYMENT OF PERFORMANCE-BASED AWARD 

For purposes of this Award Notice, the following definitions shall apply: 
  

	 	•	 	 “Applicable Percentage” shall refer to the percentages listed in the chart below.

  

	 	•	 	 “Maximum Performance” shall refer to the achievement by the Company of a Performance Percentile Rank of
100 for the Performance Period. 

  

	 	•	 	 “Performance Period” means the period commencing on December 19, 2018 and ending December 18,
2021. 

  

	 	•	 	 “Performance Percentile Rank” means the Company’s position in a percentile ranking in the Peer
Group based upon respective Total Shareholder Return for the Performance Period. In the event any member of the Peer Group does not exist through the entire Performance Period, such company shall be omitted in determining the Performance Percentile
Rank. 

  

	 	•	 	 “Peer Group” means the peer group of real estate investment trusts, as determined and selected by the
Committee, and listed in Schedule A hereto, and the Dow Jones Equity REIT Index. 

  

	 	•	 	 “Service Period” means the period commencing on the date of this letter agreement and ending
December 18, 2021. 

  

	 	•	 	 “Target Performance” shall refer to the achievement by the Company of a Performance Percentile Rank of
50 for the Performance Period. 

  

	 	•	 	 “Threshold Performance” shall refer to the achievement by the Company of a Performance Percentile Rank
of 25 for the Performance Period. 

  

	 	•	 	 “Total Shareholder Return” means total shareholder return and shall be determined for the Company and
other companies in the Peer Group, by dividing (a) the sum of common stock price appreciation and dividends of the respective company during the Performance Period by (b) the common stock price of such company at the beginning of the
Performance Period.  

 Except as otherwise set forth herein, the number of Performance Shares to be awarded will
be determined after the end of the Performance Period based upon the Company’s Performance Percentile Rank, as determined by the Committee within sixty (60) days after the end of the Performance Period, but no earlier than January 1,
2022 (the “Determination Date”). Upon such determination, the Company will award and issue to you Performance Shares with respect to the Applicable Percentage of the Target Number set forth in the chart below based on the Company’s
Performance Percentile Rank: 
  

			
	 Performance Percentile Rank
	  	Applicable Percentage of Target Number
		  	
	 100%
	  	200% (Maximum Performance)
	 93%
	  	188%
	 87%
	  	175%
	 81%
	  	162%
	 75%
	  	150%
	 68%
	  	138%
	 62%
	  	125%
	 56%
	  	112%
	 50%
	  	100%(Target Performance)
	 40%
	  	50%
	 30%
	  	25% (Threshold Performance)
	 less than 30%
	  	0%

 Any determination by the Committee with respect to the Performance Percentile Rank of the Company or award of Performance
Shares shall be final and binding. Payment upon any award shall be made as soon as practicable after the Determination Date, but in no event later than December 31, 2022. 

  
 - 2 - 

 TERMINATION OF EMPLOYMENT 

If your employment with the Company or a Subsidiary terminates on or before December 18, 2021 for any reason other than your death,
Disability, termination by the Company without cause or by you for Good Reason, or termination for a reason approved by the Committee, in its sole discretion, your rights to be issued and awarded Performance Shares shall be deemed forfeited and
canceled. 
 If your employment with the Company and its Subsidiaries terminates on or before December 18, 2021, by reason of your
death, Disability, termination by the Company without cause or by you for Good Reason, or termination for a reason approved by the Committee, in its sole discretion, you or your estate will be awarded on the Determination Date in a fraction
of the number of Performance Shares in which you would have been awarded if you had remained employed throughout the Performance Period. The numerator of that fraction will be the number of full calendar months elapsed in the Service Period through
the date of termination and the denominator will be the number of calendar months during the Service Period, i.e. 36. 
 If your employment
with the Company or a Subsidiary terminates on or after December 18, 2021 but prior to the Determination Date for any reason you or your estate will be awarded on the Determination Date the full amount of Performance Shares which you would have
otherwise been awarded if you had remained employed until the Determination Date. 
 For purposes of this Award Notice, the term
“Disability” means total disability entitling you to benefits under the Company’s long-term disability plan, as in effect from time to time, and the term “Good Reason” shall have such meaning as set forth in the Employment
Agreement between you and the Company as amended and restated from time to time. 

  
 - 3 - 

 CHANGE IN CONTROL AND CHANGE IN OWNERSHIP 

If there occurs a Change in Control or Change in Ownership and you would have been eligible for treatment afforded by Paragraph 21 of the Plan
but for the fact that you have received a Performance-Based Award rather than a Stock Option or Restricted Stock, Paragraph 21 of the Plan shall apply to you in the manner described in this section. 

You shall receive Performance Shares free of all restrictions as soon as practicable following the Acceleration Date but, in all events, on or
before the 15th day of the third month of the calendar year following the calendar year in which occurs the Acceleration Date. The number of Performance Shares you shall receive shall be determined in accordance with the provisions of this Award
Notice but shall be determined as if the Acceleration Date were the last day of the Performance Period. 
 RIGHTS AS A STOCKHOLDER 

You shall not be, nor have any of the rights or privileges of, a stockholder of the Company until the Performance Shares have been awarded
hereunder and a stock certificate is issued to you related thereto. Thus, you shall be not entitled to vote any shares subject to this award, or receive any cash dividends, until the Performance Shares have been awarded hereunder and a stock
certificate issued to you related thereto. 
 ADMINISTRATION OF THE PLAN; AUTHORITY OF THE COMMITTEE 

The Plan shall be administered by the Committee. The Committee has the authority, in its sole discretion, to interpret the Plan and all awards
thereunder, to establish, amend and rescind rules and regulations relating to the Plan, and to make any determination it believes necessary or advisable for the administration of the Plan. The scope of the Committee’s authority is more fully
described in the Plan. All decisions of the Committee in the administration of the Plan are conclusive and binding on you. 
 FORFEITURE 

If (1) in the opinion of the Committee, you, without the written consent of the Company, engage directly or indirectly in any manner or
capacity as principal, agent, partner, officer, director, employee, owner, promoter or otherwise, in any business or activity competitive with the business conducted by the Company or any Subsidiary, or (2) you perform any act or engage in any
activity which in the opinion of the Committee is inimical to the best interests of the Company, your Performance-Based Award and rights hereunder shall be deemed forfeited and canceled. 

  
 - 4 - 

 MISCELLANEOUS 

You have no right to assign, sell, transfer, pledge or encumber this Performance-Based Award and your rights hereunder, except by will, or by
the laws of descent and distribution. 
 Nothing in this letter agreement, or the Plan confers on you any right to continue in the
employment of the Company or a Subsidiary or restricts the right of the Company or a Subsidiary to terminate your employment. 
 By
acceptance of this grant, you agree that you will not make an election pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended. In the event you make such an election or attempt to make such an election your shares with
respect to this grant shall be deemed forfeited and canceled. 
 At the time you are taxable with respect to your Performance Shares, the
Company may deduct and withhold from amounts payable to you under the Plan or from any payment of any kind otherwise due to you, an amount sufficient to satisfy all Federal, state and/or local income and employment tax withholding requirements. In
accordance with Section 14(b) of the Plan, you may elect to have the withholding obligation satisfied by authorizing the Company to hold back shares of common stock to be issued that have a Fair Market Value as of the date withholding is
effected sufficient to satisfy the withholding amount due, or by transferring to the Company shares of common stock having a Fair Market Value as of the date withholding is effected sufficient to satisfy such withholding amount; provided, however,
that if you are subject to Section 16(b) of the Securities Exchange Act of 1934 you may do so only in compliance with the additional requirements set forth in Section 14(b)(i)-(v) of the Plan. 

This letter agreement shall be binding on and inure to the benefit of the Company (and its successors and assigns) and you (and your estate).

 This letter agreement shall be governed, construed and enforced in accordance with the Plan and with the laws of the State of New York.

 [Acceptance to Follow] 

  
 - 5 - 

 ACCEPTANCE 

If the foregoing is acceptable to you, kindly acknowledge your acceptance and agreement by signing the enclosed copy of this letter and
returning it to                      of the Company. 
  

									
	Very truly yours,	 		 		 	
				
	LIFE STORAGE, INC.	 		 		 	

									
					
	By	 	  
	 		 	By	 	  

									
				
	AGREED TO AND ACCEPTED this          day of December, 2018	 		 		 	
				
	  
	 		 		 	

  
 - 6 - 

 SCHEDULE A 

Peer Group 
 EastGroup Properties Inc.

 Lexington Realty Trust 
 PS Business Parks, Inc. 

CubeSmart 
 Extra Space Storage, Inc. 

Cousins Properties, Incorporated 
 National Retail Properties,
Inc. 
 Washington Real Estate Investment Trust 
 Highwoods
Properties Inc. 
 Public Storage 
 Pennsylvania Real Estate
Investment Trust 
 Mid-America Apartment Communities, Inc. 

Acadia Realty Trust 
 First Industrial Realty Trust, Inc 

 

	*	 Peer Group also includes the Dow Jones Equity REIT Index. 

  
 - 7 -Exhibit 10.1

 

FIRST LETTER AMENDMENT

 

Dated as of December 18, 2018

 

Citibank, N.A., 
 as Administrative Agent 
 1615 Brett Road OPS III
 New Castle, Delaware 19720
 Attention:  Bank Loan Syndications Department

 

Re:                             Five Star Senior Living Credit Facility

 

Ladies and Gentlemen:

 

Reference is made to the Amended and Restated Credit Agreement dated as of February 24, 2017 (as modified to date, the “Credit Agreement”) by and among Five Star Senior Living Inc. (f/k/a Five Star Quality Care, Inc.) (the “Borrower” or “us”), the subsidiaries of the Borrower listed therein as guarantors, Citibank, N.A., in its capacity as administrative agent (the “Administrative Agent” or “you”) and collateral agent, the financial institutions identified therein as lender parties (the “Lender Parties”) and RBC Capital Markets, as syndication agent, with Citigroup Global Markets Inc. and RBC Capital Markets as joint lead arrangers and joint book running managers.  Capitalized terms not otherwise defined herein shall have their respective meanings set forth in the Credit Agreement.

 

It is hereby agreed by you and us as follows:

 

1.                                      Amendments to Credit Agreement.  The Credit Agreement is hereby amended as follows:

 

(a) The cover page of the Credit Agreement is amended by deleting the dollar amount “$100,000,000” and replacing it with “$54,000,000”.

 

(b) Amended Definitions.  The following definitions in Section 1.01 of the Credit Agreement are amended and restated to read in their entirety as follows:

 

“‘Letter of Credit Facility’ means, at any time, an amount equal to the aggregate amount of the Issuing Banks’ Letter of Credit Commitments at such time as set forth on Schedule I hereto, as such amount may be reduced at or prior to such time pursuant to Section 2.05.”

 

“‘Termination Date’ means the earlier of (a) June 28, 2019, and (b) the date of termination in whole of the Revolving Credit Commitments, the Swing Line Commitment and the Letter of Credit Commitments pursuant to Section 2.05 or 6.01.”

 

(c)  Deleted Definitions.  The following definitions in Section 1.01 of the Credit Agreement are deleted in their entirety:  “Accession Agreement”, “Acceding Lender”, “Commitment Increase”, “Commitment Date”, “Extension Fee”, “First Extension Date”, “Increase Date”, “Increasing Lender”, “Proposed Increased Commitment”, “Purchasing Lender”, “Second Extension Date” and “Selling Lender”.

 

 

(d)  Clause (c) of definition “Flood Compliance Event” in Section 1.01 of the Credit Agreement is amended by deleting the words “any Commitment Increase pursuant to Section 2.19” and replacing it with “[intentionally omitted]”.

 

(e) Section 2.01(c) of the Credit Agreement is amended and restated in its entirety to read as follows:

 

(c)                                  Swing Line Advances. The Borrower may request the Swing Line Bank to make, and the Swing Line Bank agrees to make, on the terms and conditions hereinafter set forth, Swing Line Advances to the Borrower from time to time on any Business Day during the period from the date hereof until the Termination Date (i) in an aggregate amount not to exceed at any time outstanding the aggregate Swing Line Commitment set forth on Schedule I hereto (and if no Swing Line Commitment is set forth on such schedule, then $0.00) (the “Swing Line Facility”) and (ii) in an amount for each such Swing Line Borrowing not to exceed the aggregate of the Unused Revolving Credit Commitments of the Lenders at such time. No Swing Line Advance shall be used for the purpose of funding the payment of principal of any other Swing Line Advance. Each Swing Line Borrowing shall be in an amount of $250,000 or an integral multiple of $250,000 in excess thereof and shall be made as a Base Rate Advance. Within the limits of the Swing Line Facility and within the limits referred to in clause (ii) above, the Borrower may borrow under this Section 2.01(c), repay pursuant to Section 2.04(b) or prepay pursuant to Section 2.06(a) and reborrow under this Section 2.01(c).

 

(f) Section 2.08(d) of the Credit Agreement is amended and restated in its entirety to read as follows: “[Intentionally Omitted.]”.

 

(g)  Section 2.11(a) of the Credit Agreement is amended to delete the third sentence of such Section.

 

(h)  Section 2.16 of the Credit Agreement is amended and restated in its entirety to read as follows: “[Intentionally Omitted.]”

 

(i)  Section 2.19 of the Credit Agreement is amended and restated in its entirety to read as follows: “[Intentionally Omitted.]”

 

(j)  Section 3.02(a) of the Credit Agreement is amended and restated in its entirety to read as follows:

 

SECTION 3.02              Conditions Precedent to Each Borrowing, Issuance and Renewal.  (a) The obligation of each Lender to make an Advance (other than a Letter of Credit Advance made by an Issuing Bank or a Lender pursuant to Section 2.03(c) and a Swing Line Advance made by a Lender pursuant to Section 2.02(b)) on the occasion of each Borrowing (including the initial Borrowing) and the obligation of each Issuing Bank to issue a Letter of Credit (including the initial issuance) or renew a Letter of Credit and the right of the Borrower to request a Swing Line Borrowing shall be subject to the satisfaction of the conditions set forth in Section 3.01 (to the extent not previously satisfied pursuant to that Section) and such further conditions precedent that on the date of such Borrowing, issuance or renewal (a) the following statements shall be true and

 

2

 

the Administrative Agent shall have received for the account of such Lender, the Swing Line Bank or such Issuing Bank (w) a Notice of Borrowing or Notice of Issuance, as applicable, and a Borrowing Base Certificate, in each case dated the date of such Borrowing, issuance or renewal and, in the case of the Borrowing Base Certificate, demonstrating that the Facility Available Amount (calculated on a pro forma basis immediately after giving effect to such Borrowing, issuance or renewal) will be greater than or equal to the Facility Exposure, (x) all Collateral Deliverables and all items described in the definition of “BBA Proposal Package” herein (to the extent not previously delivered with respect to each Borrowing Base Asset pursuant to Section 3.01, Section 5.01(k) or this Section 3.02), (y) in the case of an addition of any Person as an Additional Guarantor, all Guarantor Deliverables (to the extent not previously delivered pursuant to Section 3.01, Section 5.01(k) or this Section 3.02), and (z) a certificate signed by a Responsible Officer of the Borrower, dated the date of such Borrowing, issuance, renewal or extension, stating that:

 

(i)                                     the representations and warranties contained in each Loan Document are true and correct on and as of such date (except that those that expressly relate to a prior date shall be true as though made on and as of such prior date), before and immediately after giving effect to (A) such Borrowing, issuance or renewal and (B) the application of the proceeds therefrom; provided, however, that solely with respect to a single Borrowing to be requested in December 2018, Borrower shall not be required to make the representation in the last sentence of Section 4.01(g);

 

(ii)                                  no Default or Event of Default has occurred and is continuing, or would result from (A) such Borrowing, issuance or renewal or (B)  from the application of the proceeds therefrom; and

 

(iii)                               for each Revolving Credit Advance, or Swing Line Advance made by the Swing Line Bank or issuance or renewal of any Letter of Credit, (A)  the Facility Available Amount equals or exceeds the Facility Exposure that will be outstanding immediately after giving effect to such Advance, issuance or renewal, respectively, and (B) before and immediately after giving effect to such Advance, issuance or renewal, the Borrower shall be in compliance with the covenants contained in Section 5.04, together with supporting information in form satisfactory to the Administrative Agent showing the computations used in determining compliance with such covenants; and

 

(b) the Administrative Agent shall have received such other approvals, opinions or documents as any Lender Party through the Administrative Agent may reasonably request.

 

(k) Section 5.02(g) is amended and restated in its entirety to read as follows:

 

(g)                                  Restricted Payments.  In the case of the Borrower, without the prior consent of the Required Lenders, declare or pay any dividends, purchase, redeem, retire, defease, or otherwise acquire for value any of its Equity Interests now or hereafter outstanding, return any capital to its stockholders, partners or members (or the equivalent Persons thereof) as such, make any distribution of

 

3

 

assets, Equity Interests, obligations or securities to its stockholders, partners or members (or the equivalent Persons thereof) as such.

 

(l) Section 5.04 is amended and restated in its entirety to read as follows:

 

SECTION 5.04 Financial Covenants.  So long as any Advance or any other Obligation of any Loan Party under any Loan Document shall remain unpaid, any Letter of Credit shall be outstanding or any Lender Party shall have, at any time after the Initial Extension of Credit, any Commitment hereunder, the Borrower will:

 

(a)                                 Borrower Financial Covenants.

 

(i)                                     [Intentionally Omitted]

 

(ii)                                  [Intentionally Omitted]

 

(iii)                               [Intentionally Omitted]

 

(b)                                 Borrowing Base Financial Covenants.

 

(i)                                     Maximum Facility Exposure.  Not permit at any time the Facility Exposure at such time to exceed the Facility Available Amount at such time.

 

(ii)                                  Minimum Borrowing Base Debt Service Coverage Ratio.  Maintain at all times a Borrowing Base Debt Service Coverage Ratio of not less than 1.50:1.00.

 

To the extent any calculations described in Section 5.04(b) are required to be made on any date of determination other than the last day of a fiscal quarter of the Borrower, such calculations shall be made on a pro forma basis to account for any acquisitions or dispositions of Assets, and the incurrence or repayment of any Debt for Borrowed Money relating to such Assets, that have occurred since the last day of the fiscal quarter of the Borrower most recently ended.  To the extent any calculations described in Section 5.04(b) are required to be made on a Test Date relating to an Advance, a merger permitted under Section 5.02(d), a Transfer permitted under Section 5.02(e)(iii) or new Material Debt, such calculations shall be made both before and on a pro forma basis after giving effect to such Advance, merger, Transfer or such other event, as applicable.  All calculations under this Section 5.04 shall be made on a pro forma basis to account for any applicable monthly or 30-day financial statements or reports required to be delivered pursuant to Section 5.03 since the date of the most recently delivered quarterly statements or reports.  All such calculations shall be reasonably acceptable to the Administrative Agent.

 

(m) Schedule I to the Credit Agreement is deleted in its entirety and replaced with a new Schedule I in the form of Schedule I attached hereto.

 

(n) Exhibit H to the Credit Agreement is deleted in its entirety and replaced with a new Exhibit H in the form of Exhibit H attached hereto.

 

4

 

2.                                      Amendment to March Waiver.  Paragraph (a) of the fifth paragraph of the Limited Waiver dated as of March 31, 2018 (the “March Waiver”) by and among the Borrower, the Administrative Agent and the Lender Parties party thereto, is amended and restated in its entirety to read as follows: “[Intentionally Omitted.]”

 

3.                                      Representations and Warranties.  Each of the Borrower and the Guarantors hereby represents and warrants that the representations and warranties of such Person contained in each of the Loan Documents (as amended or supplemented to date, including pursuant to this First Letter Amendment (this “Amendment”)) are true and correct in all material respects (except that any representation or warranty that is qualified by materiality is true and correct in all respects) as such representations and warranties may have changed based upon events or activities not prohibited by the Credit Agreement on and as of the date first above written, before and immediately after giving effect to this Amendment, as though made on and as of such date; provided, however, that each of the Borrower and the Guarantors does not make the representation in the last sentence of Section 4.01(g) of the Credit Agreement.  Each of the Borrower and the Guarantors further represents and warrants that the factual matters described herein are true and correct as of the date hereof.  The Borrower, by its execution of a counterpart of this Amendment, represents and warrants that no Default or Event of Default exists under the Loan Documents, as amended or supplemented to date.

 

4.                                      Effectiveness of Amendment.  This Amendment shall become effective as of the date first above written (the “Effective Date”) when, and only when, the Administrative Agent shall have received (a) counterparts of this Amendment executed by the Borrower and the Guarantors, the Administrative Agent, the Issuing Bank and the Required Lenders (or, as to any of the Lender Parties, advice satisfactory to the Administrative Agent that such Lender Party has executed this Amendment), (b) counterparts of the Consent attached hereto executed by each Guarantor, and (c) an amended and restated Note executed by the Borrower, payable to each Lender, in a principal amount equal to such Lender’s Revolving Credit Commitment as of the Effective Date.

 

5.                                      Costs and Expenses.  The Borrower agrees to pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution, delivery, administration, modification and amendment of this Amendment (including, without limitation, the cost incurred by the Administrative Agent to obtain updated Appraisals of all Borrowing Base Assets) and any instruments and documents to be delivered hereunder (including, without limitation, the reasonable fees and expenses of counsel for the Administrative Agent) in accordance with the terms of Section 9.04 of the Credit Agreement.

 

6.                                      Certain Definitions.  Following the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to “the Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended by this Amendment.

 

7.                                      Ratification.  The Credit Agreement (as amended by this Amendment) and each of the other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.  The execution, delivery and effectiveness of this Amendment shall not, except to the extent expressly provided herein, operate as a waiver of any right, power or remedy of any Lender Party or the Administrative Agent under the Credit Agreement or any of the other Loan Documents, nor constitute a waiver of any provision of the Credit Agreement or any of the other Loan Documents.

 

8.                                      Execution Instructions.  If you agree to the terms and provisions hereof, please evidence such agreement by executing and returning a counterpart of this Amendment to Malcolm K. Montgomery

 

5

 

of Shearman & Sterling LLP by facsimile (646.848.7587), with four duplicate originals by overnight courier.

 

9.                                      Miscellaneous.  This Amendment shall constitute a Loan Document.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK).

 

10.                               Counterparts.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Amendment by telecopier or as an electronic mail attachment in .pdf, .jpeg, .tiff, or similar electronic format shall be effective as delivery of a manually executed counterpart of this Amendment.

 

[Balance of page intentionally left blank]

 

6

 

This Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
FIVE STAR SENIOR LIVING INC.,
    
	
 
    	
a Maryland corporation
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By
    	
/s/ Richard A. Doyle
    
	
 
    	
 
    	
Name:
    	
 Richard A. Doyle
    
	
 
    	
 
    	
Title:
    	
Treasurer and Chief Financial   Officer
    
	
 
    	
 
    	
 
    

(Signatures continued on next page)

 

Signature Page to First Letter Amendment (Five Star)

 

 

	
Agreed as of the date   first above written:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
CITIBANK, N.A.,
    	
 
    	
 
    
	
as Administrative   Agent, as Issuing Bank and as a Lender
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
/s/ Christopher J.   Albano
    	
 
    	
 
    
	
 
    	
Name:
    	
Christopher J. Albano
    	
 
    	
 
    
	
 
    	
Title:
    	
Authorized Signatory
    	
 
    	
 
    

 

Signature Page to First Letter Amendment (Five Star)

 

 

	
ROYAL BANK OF CANADA,
    	
 
    	
 
    
	
as a Lender
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
/s/ Sheena Lee
    	
 
    	
 
    
	
 
    	
Name:
    	
Sheena Lee
    	
 
    	
 
    
	
 
    	
Title:
    	
Authorized Signatory
    	
 
    	
 
    

 

Signature Page to First Letter Amendment (Five Star)

 

 

	
PNC BANK, NATIONAL ASSOCIATION,
    	
 
    	
 
    
	
as a Lender
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By
    	
/s/ Margarita Muzzall
    	
 
    	
 
    
	
 
    	
Name:
    	
Margarita Muzzall
    	
 
    	
 
    
	
 
    	
Title:
    	
Senior Vice President
    	
 
    	
 
    

 

Signature Page to First Letter Amendment (Five Star)

 

 

	
COMPASS BANK,
    	
 
    
	
as a   Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By
    	
/s/ Brian Tuerff
    	
 
    
	
 
    	
Name:
    	
Brian Tuerff
    	
 
    
	
 
    	
Title:
    	
Senior Vice President
    	
 
    

 

Signature Page to First Letter Amendment (Five Star)

 

 

	
UBS AG, STAMFORD BRANCH,
    	
 
    
	
as a   Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By
    	
/s/ Kenneth Chin
    	
 
    	
 
    
	
 
    	
Name:
    	
Kenneth Chin
    	
 
    
	
 
    	
Title:
    	
Director
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By
    	
/s/ Craig Pearson
    	
 
    	
 
    
	
 
    	
Name:
    	
Craig Pearson
    	
 
    
	
 
    	
Title:
    	
Associate Director
    	
 
    
					

 

Signature Page to First Letter Amendment (Five Star)

 

 

	
WELLS FARGO BANK, N.A.,
    	
 
    
	
as a   Lender
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By
    	
/s/ D. Bryan Gregory
    	
 
    
	
 
    	
Name:
    	
D. Bryan Gregory
    	
 
    
	
 
    	
Title:
    	
Managing Director
    	
 
    

 

Signature Page to First Letter Amendment (Five Star)

 

 

CONSENT

 

	
 
    	
Dated as of   December 18, 2018
    

 

Each of the undersigned, as Guarantor under the Guaranty set forth in Article VII of the Credit Agreement dated as of February 24, 2017, as amended and modified to date, in favor of the Administrative Agent, for its benefit and the benefit of the Lender Parties party to the Credit Agreement referred to in the foregoing Amendment, hereby consents to such Amendment and hereby confirms and agrees that notwithstanding the effectiveness of such Amendment, the Guaranty is, and shall continue to be, in full force and effect and is hereby ratified and confirmed in all respects.

 

	
 
    	
FSQ THE PALMS AT FORT MYERS BUSINESS TRUST,
    
	
 
    	
a Maryland business trust
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Richard A. Doyle
    
	
 
    	
Name:   Richard A. Doyle
    
	
 
    	
Title:   Treasurer and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
FVE MW LLC,
    
	
 
    	
a Maryland limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Richard A. Doyle
    
	
 
    	
Name:   Richard A. Doyle
    
	
 
    	
Title:   Treasurer and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
FSQ VILLA AT RIVERWOOD BUSINESS TRUST,
    
	
 
    	
a Maryland business trust
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Richard A. Doyle
    
	
 
    	
Name:   Richard A. Doyle
    
	
 
    	
Title:   Treasurer and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
MORNINGSIDE OF CONCORD, LLC,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Richard A. Doyle
    
	
 
    	
Name:   Richard A. Doyle
    
	
 
    	
Title:   Treasurer and Chief Financial Officer
    

 

(Signatures continued on next page)

 

Signature Page to Guarantor Consent (Five Star)

 

 

	
 
    	
MORNINGSIDE OF SPRINGFIELD, LLC,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Richard A. Doyle
    
	
 
    	
Name:   Richard A. Doyle
    
	
 
    	
Title:   Treasurer and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
FIVE STAR COVINGTON LLC,
    
	
 
    	
a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Richard A. Doyle
    
	
 
    	
Name:   Richard A. Doyle
    
	
 
    	
Title:   Treasurer and Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
FVE EC LLC,
    
	
 
    	
a Maryland limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By
    	
/s/   Richard A. Doyle
    
	
 
    	
Name:   Richard A. Doyle
    
	
 
    	
Title:   Treasurer and Chief Financial Officer
    

 

Signature Page to Guarantor Consent (Five Star)

 

 

Schedule I

 

[See attached.]

 

Schedule I

 

SCHEDULE I

 

COMMITMENTS AND APPLICABLE LENDING OFFICES

 

	
Name of Initial
   Lender/
   Initial Issuing
    	
 
    	
Commitments
    	
 
    	
 
    	
 
    	
 
    
	
Bank
    	
 
    	
Revolving Credit
    	
 
    	
Letter of Credit
    	
 
    	
Swing Line
    	
 
    	
Domestic Lending Office
    	
 
    	
Eurodollar Lending Office
    
	
Citibank, N.A.
    	
 
    	
$
    	
9,450,000
    	
 
    	
$
    	
2,516,000
    	
 
    	
—
    	
 
    	
1615 Brett Road OPS III
   New Castle, DE 19720
   Attn:  Citi Loan Operations
   Tel:  302-894-6052
   Fax: 212-994-0847
   email: GLOriginationOps@citi.com
    	
 
    	
1615 Brett Road OPS III
   New Castle, DE 19720
   Attn:  Citi Loan Operations
   Tel:  302-894-6052
   Fax: 212-994-0847
   email: GLOriginationOps@citi.com
    
	
Royal Bank of   Canada
    	
 
    	
$
    	
9,450,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
Royal Bank of Canada
   Global Loan Administration
   New York Branch
   200 Vesey Street
   New York, NY 10281-8098
   Attn: Ashish Jawa
   Tel: 1-877-332-7455
   Fax: 1-212-428-2372
   email: RBCNewYorkGLA1@rbc.com
    	
 
    	
Royal Bank of Canada
   Global Loan Administration
   New York Branch
   200 Vesey Street
   New York, NY 10281-8098
   Attn: Ashish Jawa
   Tel: 1-877-332-7455
   Fax: 1-212-428-2372
   email: RBCNewYorkGLA1@rbc.com
    
	
PNC Bank,   National Association
    	
 
    	
$
    	
8,100,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
10851 Mastin Street
   Suite 300
   Overland Park, KS 66210
   Attn: Kim Wetzel
   Tel: 913-253-9280
   Fax: 888-578-2605
   email: kimberly.wetzel@pnc.com
    	
 
    	
10851 Mastin Street
   Suite 300
   Overland Park, KS 66210
   Attn: Kim Wetzel
   Tel: 913-253-9280
   Fax: 888-578-2605
   email: kimberly.wetzel@pnc.com
    
	
Compass Bank
    	
 
    	
$
    	
8,100,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
8333 Douglas Ave, 2nd Floor
   Dallas, TX 75225
   Attn: Ben David
   Tel: 972-735-3583
   email: Kristi.tadlock@bbva.com
    	
 
    	
8333 Douglas Ave, 2nd Floor
   Dallas, TX 75225
   Attn: Ben David
   Tel: 972-735-3583
   email: Kristi.tadlock@bbva.com
    
													

 

Schedule I -1

 

	
Name of Initial
   Lender/
   Initial Issuing
    	
 
    	
Commitments
    	
 
    	
 
    	
 
    	
 
    
	
Bank
    	
 
    	
Revolving Credit
    	
 
    	
Letter of Credit
    	
 
    	
Swing Line
    	
 
    	
Domestic Lending Office
    	
 
    	
Eurodollar Lending Office
    
	
Citizens Bank,   N.A.
    	
 
    	
$
    	
5,400,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
130 N. 18th Street
   Suite 1310
   Philadelphia, PA 19103
   Attn: Donato Affatato
   Tel: 267-671-1827
   email: donato.affatato@citizensbank.com
    	
 
    	
130 N. 18th Street
   Suite 1310
   Philadelphia, PA 19103
   Attn: Donato Affatato
   Tel: 267-671-1827
   email: donato.affatato@citizensbank.com
    
	
UBS AG, Stamford   Branch
    	
 
    	
$
    	
5,400,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
677 Washington Blvd
   Stamford, CT 06901
   Attn: Loan Administration Team
   Fax: 203-719-3888
   email: UBSAgency@ubs.com
    	
 
    	
677 Washington Blvd
   Stamford, CT 06901
   Attn: Loan Administration Team
   Fax: 203-719-3888
   email: UBSAgency@ubs.com
    
	
Wells Fargo   Bank, National Association
    	
 
    	
$
    	
8,100,000
    	
 
    	
—
    	
 
    	
—
    	
 
    	
100 North Main Street, 10th Floor
   Winston-Salem, NC 27101
   Attn: Angela R. Brown
   Tel: 336-842-7405
   email: angela.r.brown@wellsfargo.com
    	
 
    	
100 North Main Street, 10th Floor
   Winston-Salem, NC 27101
   Attn: Angela R. Brown
   Tel: 336-842-7405
   email: angela.r.brown@wellsfargo.com
    
	
Totals
    	
 
    	
$
    	
54,000,000
    	
 
    	
$
    	
2,516,000
    	
 
    	
$
    	
0.00
    	
 
    	
 
    	
 
    	
 
    
														

 

Schedule I -2

 

Exhibit H

 

[See attached.]

 

Exhibit H

 

EXHIBIT H to the
 CREDIT AGREEMENT

 

FORM OF BORROWING
 BASE CERTIFICATE

 

BORROWING BASE CERTIFICATE

 

Five Star Senior Living Inc.
 Borrowing Base Certificate
 Period ending   /  /

 

Citibank, N.A.

as Administrative Agent

under the Credit Agreement

referred to below

1615 Brett Road OPS III
 New Castle, DE 19720
 Attention:  Bank Loan Syndications Department

 

Pursuant to provisions of that certain Amended and Restated Credit Agreement, dated as of February 24, 2017, among Five Star Senior Living Inc. (f/k/a Five Star Quality Care, Inc.), a Maryland corporation, as borrower (“Borrower”), the Guarantors party thereto, Citibank, N.A., as Administrative Agent and Collateral Agent for the Secured Parties, the Secured Parties identified therein, and the Arrangers party thereto (as amended, amended and restated, supplemented or otherwise modified from time to time, the “Credit Agreement”; capitalized terms not otherwise defined herein shall have their respective meanings set forth in the Credit Agreement), the undersigned, a Responsible Officer of the Borrower, hereby certifies and represents and warrants on behalf of the Borrower as follows:

 

1.                                      The information contained in Schedule I of this certificate and the attached information supporting the calculation of the Facility Available Amount, Total Borrowing Base Value, and Borrowing Base Debt Service Coverage Ratio is true, complete and correct as of the close of business on             , 20   (the “Calculation Date”) and has been prepared in accordance with the provisions of the Credit Agreement.

 

2                                         The Facility Exposure of $                  does not exceed the Facility Available Amount of $                     as required by Section 5.04(b)(i) of the Credit Agreement.

 

3.                                      This certificate is furnished to the Administrative Agent pursuant to Section [3.02][5.01(k)][5.02(d)][5.02(e)(iii)(D)][5.03(d)] of the Credit Agreement.

 

4.                                      The Borrowing Base Assets comply with all Borrowing Base Conditions and the other conditions, terms, warranties, representations and covenants set forth in the Credit Agreement other than those previously waived in writing by the Administrative Agent and the Required Lenders.

 

In each case, with supporting information showing the computations used in determining compliance with such covenants set forth on Schedule I attached hereto.

 

Exh. H -1

 

	
 
    	
FIVE STAR SENIOR LIVING INC.,
    
	
 
    	
a Maryland corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

Exh. H -2

 

Schedule I — Financial Covenant Computations

 

(See Attached Pages)

 

Exh. H -3

 

	
Five Star   Quality Care, Inc.
    	
 
    	
 
    
	
Borrowing Base Covenant Calculation
    	
 
    	
 
    
	
As of   [          ]
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Facility Available Amount (the lesser of 1, 2, 3 and   4)
    	
 
    	
[                    ]
    
	
Facility Exposure (must not exceed #1 above)
    	
 
    	
[                    ]
    
	
 
    	
 
    	
 
    
	
Facility Available Amount (the lesser of 1, 2, 3 and   4)
    	
 
    	
[                    ]
    
	
 
    	
 
    	
 
    
	
1 $54,000,000
    	
 
    	
[                    ]
    
	
2 Total Borrowing Base Value
    	
 
    	
[                    ]
    
	
3 Amount that would result in a BB DSCR = 1.5x
    	
 
    	
[                    ]
    
	
4 Aggregate amount of title insurance
    	
 
    	
$
    	
[100,000,000]
    
	
 
    	
 
    	
 
    
	
Total Borrowing Base Value
    	
 
    	
[                    ]
    
	
 
    	
 
    	
 
    
	
Is the aggregate Asset Value of all Borrowing Base   Assets more than $100,000,000?
    	
 
    	
[                    ]
    
	
Is the number of Borrowing Base Assets not less than   5?
    	
 
    	
[                    ]
    
	
Total Borrowing Base Value adjusted subject to   adjusted NOI concentration limit and minimum of 75% private pay operating   revenue
    	
 
    	
[                    ]
    
	
 
    	
 
    	
 
    
	
Amount that would result in a BB DSCR = 1.5x
    	
 
    	
[                    ]
    
	
 
    	
 
    	
 
    
	
Aggregate Adjusted NOI for all Borrowing Base Assets
    	
 
    	
[                    ]
    
	
Facility Exposure
    	
 
    	
[                    ]
    
	
1 Month Eurodollar Rate
    	
 
    	
[                    ]
    
	
10 Year Treasuries Rate
    	
 
    	
[                    ]
    
	
7.50% per annum
    	
 
    	
[                    ]
    
	
Margin Used
    	
 
    	
[                    ]
    
	
Coupon Rate Used
    	
 
    	
[                    ]
    
	
Debt Service
    	
 
    	
[                    ]
    
	
DSCR
    	
 
    	
[                    ]
    

 

Exh. H -4

 

Five Star Quality Care, Inc.
 Borrowing Base Property Inputs 
 For the Twelve Months Ended [          ]

 

	
Facility
    	
 
    	
Asset Value
    	
 
    	
Included in
   Total
   Borrowing
   Base Value?
    	
 
    	
Borrowing
   Base Value
    	
 
    	
Adjusted NOI
    	
 
    	
% ANOI
   of Total
    	
 
    	
Borrowing Base
   Value adjustment for
   25% ceiling (1)
    	
 
    	
Borrowing Base Value
   adjusted for 25%
   ceiling (1)
    	
 
    	
Adjusted
   Operating
   Revenue
    	
 
    	
Adjusted
   Operating
   Revenue from
   Private Pay (1)
    	
 
    	
Adjusted NOI
   (1)
    	
 
    	
% private
   pay
    	
 
    	
Borrowing
   Base Value
   adjusted for
   75% floor (2)
    	
 
    
	
1
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
6
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
7
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
8
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
9
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
10
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

(1) Total Borrowing Base Value with max 25% NOI restriction
 (2) Total Borrowing Base Value with min 75% private pay condition

 

Exh. H -5

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00290-of-00352.parquet"}]]