Document:

EXHIBIT
10.1

 

CONFIRMATION OF AND JOINDER TO GUARANTEES AND 

CONFIRMATION AND AMENDMENT OF AND JOINDER TO 

OTHER INCIDENTAL DOCUMENTS

 

THIS CONFIRMATION OF AND JOINDER TO GUARANTEES AND CONFIRMATION AND
AMENDMENT OF AND JOINDER TO OTHER INCIDENTAL DOCUMENTS (this “Confirmation”)
is made as of August 1, 2008 by FIVE STAR QUALITY CARE,
INC., a Maryland
corporation  (the “Guarantor”), FIVE STAR QUALITY CARE TRUST, a Maryland
business trust (the “Tenant”), FSQ,
INC., a Delaware corporation (the “Tenant Pledgor”), each of
the parties identified on the signature page hereof as a subtenant pledgor
(collectively, the “Subtenant Pledgors”), and each of the parties
identified on the signature page hereof as a subtenant (collectively, the “Subtenants”)
for the benefit of each of the parties identified on the signature page hereof
as a landlord (collectively, the “Landlord”).

 

W
I  T  N  E  S  S  E  T  H
:

 

WHEREAS, pursuant to the terms of that certain Amended and
Restated Master Lease Agreement (Lease No. 3), dated as of June 30,
2008 (as the same may be amended, restated or otherwise modified from time to
time, “Amended Lease No. 3”), the Landlord leases to the Tenant,
and the Tenant leases from the Landlord, certain property, all as more
particularly described in Amended Lease No. 3; and

 

WHEREAS, the payment
and performance of all of the obligations of the Tenant with respect to Amended
Lease No. 3 are guaranteed by that certain Amended and Restated Guaranty
Agreement (Lease No. 3), dated as of June 30, 2008, made by the Guarantor
for the benefit of the Landlord (as the same may be amended, restated or
otherwise modified from time to time, the “Tenant Guarantee”) and that
certain Amended and Restated Subtenant Guaranty Agreement (Lease No. 3),
dated as of June 30, 2008, made by certain of the Subtenants for the
benefit of the Landlord (as the same my be amended, restated or otherwise
modified from time to time, the “Subtenant Guarantee”; and, together
with the Tenant Guarantee, collectively, the “Guarantees”); and

 

WHEREAS, the payment
and performance of all of the obligations of the Tenant with respect to Amended
Lease No. 3 are further secured by the other Incidental Documents (this
and other capitalized terms used but not otherwise defined herein 

 

 

shall have the meanings ascribed
to them in Amended Lease No. 3); and

 

WHEREAS, pursuant to a First Amendment to Amended and
Restated Master Lease Agreement (Lease No. 3), dated as of the date hereof
(the “First Amendment”), Amended Lease No. 3 is being amended to
add certain properties thereto, all as more particularly described in the First
Amendment; and

 

WHEREAS, the Tenant
intends to enter into a sublease agreement (as the same may be amended,
restated or otherwise modified from time to time, the “AL Sublease”)
with FSQC-AL, LLC, a Maryland limited liability company and an affiliate of
Tenant (the “AL Subtenant”), to sublease the properties being added to
Amended Lease No. 3 pursuant to the First Amendment; and

 

WHEREAS, in connection with, and
as a condition precedent to, the execution of the First Amendment by the
Landlord, the Landlord has required that the parties hereto confirm that the
Guarantees and the other Incidental Documents remain in full force and effect
and apply to Amended Lease No. 3 as amended by the First Amendment, that
the company interests in the AL Subtenant be pledged to the Landlord as
additional security for the payment and perform of the obligations of Tenant
under Amended Lease No. 3 and that the AL Subtenant join into those
Incidental Documents as may be applicable to it; and

 

WHEREAS, in connection with the
execution of the First Amendment and the AL Sublease, and in order to
accomplish the foregoing, the parties hereto wish to amend certain of the
Incidental Documents, including (i) the Amended and Restated Subtenant
Security Agreement (Lease No. 3), dated as of June 30, 2008, by and
among certain of affiliates of the Subtenants and the Landlords (as the same
may be amended, restated or otherwise modified or confirmed from time to time,
the “Subtenant Security Agreement”); (ii) the Amended and Restated Security Agreement (Lease No. 3),
dated as of June 30, 2008, by and among the Tenant and the Landlords (as
the same may be amended, restated or otherwise modified or confirmed
from time to time, the “Tenant Security Agreement”); and (iii) the Amended and Restated
Pledge of Stock and Membership Interests Agreement, dated as of June 30,
2008, made by the Subtenant Pledgors for the benefit of the Landlords (as the
same may be amended, restated or otherwise modified or confirmed from
time to time, the “Subtenant Pledge Agreement”), all subject to and upon the terms
and conditions herein set forth;

 

2

 

NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the mutual receipt and legal sufficiency of
which are hereby acknowledged, the parties hereto hereby agree, effective as of
the date hereof, as follows:

 

1.             Joinder by AL Subtenant.  The AL Subtenant hereby joins in the
Subtenant Guaranty and the Subtenant Security Agreement as if it had originally
executed and delivered the Subtenant Guaranty and the Subtenant Security
Agreement as a “Subtenant” thereunder.

 

2.             Amendment of Subtenant
Security Agreement.  The
Subtenant Security Agreement is hereby amended by (i) replacing Exhibit A
attached thereto with Exhibit A attached hereto; (ii) replacing
Schedule 1 attached thereto with Schedule 1 attached hereto; and (iii) replacing
Schedule 2 attached thereto with Schedule 2 attached hereto.

 

3.             Amendment
of Tenant Security Agreement.  The
Tenant Security Agreement is hereby amended by replacing Schedule 2 attached
thereto with Schedule 3 attached hereto.

 

4.             Amendment
of Subtenant Pledge Agreement.  The
Subtenant Pledge Agreement is hereby amended by (i) replacing Exhibit A
attached thereto with Exhibit A attached hereto; and (ii) replacing
Exhibit B attached thereto with Exhibit B attached hereto.

 

5.             Confirmation of Guarantees and
Other Incidental Documents.  Each of
the parties to the Guarantees and the other Incidental Documents hereby
confirms that all references in the Guarantees and the other Incidental
Documents to the “Amended Lease No. 3” shall refer to
Amended Lease No. 3 as amended by the First Amendment, and the Guarantees
and the other Incidental Documents, as amended and confirmed hereby, are hereby
ratified and confirmed in all respects.

 

6.             No
Impairment, Etc.  The obligations,
covenants, agreements and duties of the guarantors under the Guarantees shall
not be impaired in any manner by the execution and delivery of the First
Amendment, and in no event shall any ratification or confirmation of such
Guarantees or such other Incidental Documents, or the obligations, covenants,
agreements and the duties of the guarantors thereunder or of the parties under
the other Incidental Documents, including, without limitation, this
Confirmation, be required in connection with any such amendment, change or
modification.

 

3

 

[Signatures on following
pages.]

 

4

 

IN
WITNESS WHEREOF,
the parties hereto have caused this Confirmation to be duly executed, as a
sealed instrument, as of the date first set forth above.

 

	
   

  	
  GUARANTOR:

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE, INC.,

  
	
   

  	
  a
  Maryland corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Travis K. Smith

  
	
   

  	
   

  	
  Travis
  K. Smith

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  FIVE
  STAR QUALITY CARE TRUST,

  
	
   

  	
  a
  Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Travis K. Smith

  
	
   

  	
   

  	
  Travis
  K. Smith

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT PLEDGOR:

  
	
   

  	
   

  
	
   

  	
  FSQ, INC.,

  
	
   

  	
  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Travis K. Smith

  
	
   

  	
   

  	
  Travis
  K. Smith

  
	
   

  	
   

  	
  Vice
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SUBTENANT
  PLEDGORS:

  
	
   

  	
   

  
	
   

  	
  FIVE STAR QUALITY CARE-CA II, INC.,

  
	
   

  	
  FIVE STAR QUALITY CARE-SOMERFORD, 

  
	
   

  	
  LLC, SOMERFORD PLACE LLC and 

  
	
   

  	
  HAMILTON PLACE, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Travis K. Smith

  
	
   

  	
   

  	
  Travis
  K. Smith

  
	
   

  	
   

  	
  Vice
  President of each of the

  
	
   

  	
   

  	
  foregoing
  entities

  

 

5

 

	
   

  	
  SUBTENANTS:

  
	
   

  	
   

  
	
   

  	
  FSQC-AL, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-CA II, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-COLORADO, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-GA, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-IA, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-KS, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-MO, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-NE, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-WI, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-WY, LLC,

  
	
   

  	
  FIVE STAR QUALITY CARE-NE, INC.,

  
	
   

  	
  ANNAPOLIS HERITAGE PARTNERS, LLC,

  
	
   

  	
  COLUMBIA HERITAGE PARTNERS, LLC,

  
	
   

  	
  ENCINITAS HERITAGE PARTNERS, LLC,

  
	
   

  	
  FREDERICK HERITAGE PARTNERS, LLC,

  
	
   

  	
  HAGERSTOWN HERITAGE PARTNERS, LLC,

  
	
   

  	
  NEWARK HERITAGE PARTNERS I, LLC,

  
	
   

  	
  NEWARK HERITAGE PARTNERS II, LLC,

  
	
   

  	
  REDLANDS HERITAGE PARTNERS, LLC, and

  
	
   

  	
  STOCKTON HERITAGE PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Travis K. Smith

  
	
   

  	
   

  	
  Travis
  K. Smith

  
	
   

  	
   

  	
  Vice
  President of each of the 

  
	
   

  	
   

  	
  foregoing
  entities

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  FRESNO HERITAGE PARTNERS,

  
	
   

  	
  A CALIFORNIA LIMITED PARTNERSHIP and

  
	
   

  	
  ROSEVILLE HERITAGE PARTNERS, A

  
	
   

  	
  CALIFORNIA LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Somerford
  Place LLC,

  
	
   

  	
   

  	
  General
  Partner of each of 

  
	
   

  	
   

  	
  the
  foregoing entities

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/
  Travis K. Smith

  
	
   

  	
   

  	
   

  	
  Travis
  K. Smith

  
	
   

  	
   

  	
   

  	
  Vice
  President of each of

  
	
   

  	
   

  	
   

  	
  the
  foregoing entities

  
					

 

6

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  SPTIHS
  PROPERTIES TRUST,

  
	
   

  	
  SPTMNR PROPERTIES TRUST, and

  
	
   

  	
  SNH SOMERFORD PROPERTIES TRUST

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Richard A. Doyle

  
	
   

  	
   

  	
  Richard
  A. Doyle

  
	
   

  	
   

  	
  Treasurer
  and Chief Financial

  
	
   

  	
   

  	
  Officer
  and Secretary of each

  
	
   

  	
   

  	
  Of
  the foregoing entities

  

 

7

 

The following exhibits have
been omitted and will be supplementally furnished to the Securities and
Exchange Commission upon request:

 

Exhibit
A (Subleases), Exhibit B (Pledged Interests) and Schedule 1 (Facilities),
Schedule 2 (Facilities) and Schedule 3 (Facilities)EXHIBIT
10.2

 

SECOND
AMENDMENT TO

AMENDED AND RESTATED MASTER LEASE AGREEMENT

(LEASE NO. 3)

 

THIS
SECOND AMENDMENT TO AMENDED AND RESTATED MASTER LEASE AGREEMENT (LEASE NO. 3) (this “Amendment”) is made and
entered into as of September 1, 2008 by and among each of the parties
identified on the signature page hereof as a landlord, as landlord
(collectively, “Landlord”), and FIVE STAR QUALITY CARE
TRUST, a Maryland business trust, as tenant (“Tenant”).

 

W
I  T  N  E  S  S  E  T  H:

 

WHEREAS, Landlord and Tenant are parties to that
certain Amended and Restated Master Lease Agreement (Lease No. 3), dated
as of June 30, 2008, as amended by that certain First Amendment to Amended
and Restated Master Lease Agreement (Lease No. 3), dated as of August 1,
2008 (as so amended, “Lease No. 3”); and

 

WHEREAS, on or about the date hereof, various affiliates of Landlord
(collectively, the “RMI Landlords”) have acquired eight senior living
facilities located in State of Indiana (collectively, the “RMI Facilities”);
and

 

WHEREAS,
Landlord and Tenant would prefer to add the RMI Properties to Lease No. 3
on the date hereof but it is not feasible to do so because of certain financing
restrictions which currently encumber the RMI Facilities; and

 

WHEREAS,
instead of adding the RMI Properties to Lease No. 3 as of the date hereof,
the RMI Landlords are leasing the RMI Facilities to Five Star Quality Care-RMI,
LLC (the “RMI Tenant”) pursuant to a separate Master Lease Agreement,
dated as of the date hereof, among the RMI Landlords and the RMI Tenant; and

 

WHEREAS,
Landlord and Tenant have agreed to amend Lease No. 3 in certain respects
in order to cause the RMI Facilities to be added to Lease No. 3 as soon as
the applicable financing restrictions are released; and

 

WHEREAS,
the RMI Landlords and the RMI Tenant have agreed to join in this Amendment for
the limited purposes of evidencing their consent to this Amendment and their
agreement to add the RMI Facilities to Lease No. 3 as soon as the
applicable financing restrictions are released;

 

 

NOW,
THEREFORE, in
consideration of the mutual covenants herein contained and other good and
valuable consideration, the mutual receipt and legal sufficiency of which are
hereby acknowledged, Landlord and Tenant hereby agree that, effective as of the
date hereof, Lease No. 3 is hereby amended as follows:

 

1.                                       Definition of RMI Lease. 
The following new definition for the term “RMI Lease” is hereby added to
Lease No. 3 as a new Section 1.95 immediately following Section 1.94
thereof:

 

“RMI Lease”  shall mean that certain Master Lease
Agreement, dated as of September 1, 2008, by and among SNH RMI Fox Ridge
Manor Properties LLC, SNH RMI Jefferson Manor Properties LLC, SNH RMI McKay
Manor Properties LLC, SNH RMI Northwood Manor Properties LLC, SNH RMI Oak Woods
Manor Properties LLC, SNH RMI Park Square Manor Properties LLC, SNH RMI Smith
Farms Manor Properties LLC, SNH RMI Sycamore Manor Properties LLC, and Five
Star Quality Care-RMI, LLC.

 

2.                                       Definition of RMI Property. 
The following new definition for the term “RMI Property” is hereby added
to Lease No. 3 immediately following new Section 1.95 thereof:

 

“RMI Property”  shall mean a “Property,” as defined therein,
under the RMI Lease.

 

3.                                       Default under RMI Lease. 
The following new Section 12.1(l) is hereby added to Lease No. 3
immediately following Section 12.1(k) thereof:

 

should there occur
an “Event of Default,” as defined therein, under the RMI Lease.

 

4.                                       Addition of RMI Properties. 
The following new Section 23.18 is hereby added to Lease No. 3
immediately following Section 23.17 thereof:

 

RMI
Properties.  Landlord and Tenant expressly acknowledge and
agree that, effective automatically upon the release of any RMI Property from
the financing which is secured by such RMI Property, such RMI Property shall be
added to and demised under this Agreement in accordance with the terms and
conditions hereof, the Minimum Rent payable hereunder shall be increased by an
amount equal to the Minimum Rent payable under the RMI Lease with respect to
such RMI 

 

2

 

Property (as
reasonably determined by Landlord and Tenant), and the Additional Rent payable
hereunder shall be increased by the Additional Rent payable under the RMI Lease
with respect to such RMI Property.  The
addition of such RMI Property in accordance with the terms hereof shall be
automatic without any requirement that Landlord or Tenant take any action or
execute any document, instrument, amendment or confirmation with respect
thereto.  Notwithstanding the foregoing,
Landlord and Tenant shall execute and deliver such documents, instruments,
agreements and confirmations as the other party shall reasonably request with
respect to the foregoing.

 

6.                                       Ratification. 
As amended hereby, Lease No. 3 is hereby ratified and confirmed.

 

[Signature
Page Follows.]

 

3

 

IN WITNESS WHEREOF, the parties have executed this Amendment as a sealed instrument as of
the date above first written.

 

	
   

  	
  LANDLORD:

  
	
   

  	
   

  
	
   

  	
  SNH SOMERFORD PROPERTIES TRUST,

  SPTIHS PROPERTIES TRUST, and 

  SPTMNR PROPERTIES TRUST, each a

  Maryland real estate investment

  trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ David J.
  Hegarty

  
	
   

  	
   

  	
  David J. Hegarty

  
	
   

  	
   

  	
  President and Chief Operating

  Officer of each of the

  foregoing entities

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  
	
   

  	
  FIVE STAR QUALITY CARE TRUST, a
  

  Maryland business trust

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Francis R.
  Murphy III

  
	
   

  	
   

  	
  Francis R.
  Murphy III

  
	
   

  	
   

  	
  Treasurer and Chief Financial

  Officer

  

 

4

 

THE RMI LANDLORDS AND THE
RMI TENANT HEREBY JOIN IN THE EXECUTION OF THIS AMENDMENT FOR THE LIMITED
PURPOSES OF CONSENTING TO THE TERMS AND CONDITIONS HEREOF ONCE THE APPLICABLE
FINANCING RESTRICTIONS ARE RELEASED WITH RESPECT TO EACH RMI PROPERTY.

 

RMI
OWNERS:

 

SNH RMI FOX RIDGE MANOR
PROPERTIES LLC,

SNH RMI JEFFERSON MANOR
PROPERTIES LLC,

SNH RMI MCKAY MANOR PROPERTIES
LLC,

SNH RMI NORTHWOOD MANOR
PROPERTIES LLC,

SNH RMI OAK WOODS MANOR
PROPERTIES LLC,

SNH RMI PARK SQUARE MANOR
PROPERTIES LLC,

SNH RMI
SMITH FARMS MANOR PROPERTIES LLC, and

SNH RMI SYCAMORE MANOR PROPERTIES
LLC,

each a Maryland limited
liability company

 

	
  By:

  	
  /s/ David J. Hegarty

  	
   

  
	
   

  	
  David J. Hegarty

  	
   

  
	
   

  	
  President and Chief Operating Officer

  	
   

  
	
   

  	
  of each of the foregoing entities

  	
   

  

 

RMI
OPERATOR:

 

FIVE STAR QUALITY CARE–RMI, LLC,

a Maryland limited
liability company

 

 

	
  By:

  	
  /s/ Francis R. Murphy III

  	
   

  
	
   

  	
  Francis R. Murphy III

  	
   

  
	
   

  	
  Treasurer and Chief Financial Officer

  	
   

  

 

5

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