Document:

Exhibit 10.4 

 

SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED LEASE AGREEMENT

THIS SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED LEASE AGREEMENT (this “Amendment”) is made and entered into as of October 1, 2006 by and among each of the parties identified on the signature page hereof as 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, pursuant to the terms of that certain Second Amended and Restated Lease Agreement, dated as of November 19, 2004, as amended by that certain First Amendment of Lease, dated as of May 17, 2005, that certain Second Amendment to Second Amended and Restated Lease Agreement, dated as of June 3, 2005, that certain Third Amendment to Second Amended and Restated Lease Agreement, dated as of October 31, 2005, that certain Third Amendment to Second Amended and Restated Lease Agreement, dated as of December 30, 2005, that certain Letter Agreement, dated as of March 13, 2006, and that certain Fifth Amendment to Second Amended and Restated Lease Agreement, dated as of September 1, 2006 (as so amended, the “Consolidated Lease”), Landlord leases to Tenant, and Tenant leases from Landlord, the Leased Property (this
and other capitalized terms used but not otherwise defined herein having the meanings given such terms in the Consolidated Lease), all as more particularly described in the Consolidated Lease; and

WHEREAS, on or about the date hereof, Senior Housing Properties Trust has acquired all of the stock and other equity interests in RSA Healthcare, Inc. (“RSA”), whose wholly-owned subsidiary, Savannah Square, Inc. (the “Savannah Square Owner”), owns the fee simple interest in a senior living facility known as Savannah Square and located in Savannah, Georgia (the “Savannah Square Property”); and

WHEREAS, Landlord and Tenant would prefer to add the Savannah Square Property to the Consolidated Lease on the date hereof but it is not feasible to do so because of certain financing restrictions which currently encumber the Savannah Square Property; and

WHEREAS, instead of adding the Savannah Square Property to the Consolidated Lease as of the date hereof, the Savannah Square Owner is leasing the Savannah Square Property to Five Star Quality Care-Savannah, LLC (the “Savannah Square Operator”) pursuant to a separate Lease Agreement, dated as of the date 

 

 

 

 

hereof, between the Savannah Square Owner and the Savannah Square Operator; and

WHEREAS, Landlord and Tenant have agreed to amend the Consolidated Lease in certain respects in order to (among other reasons) add the Savannah Square Property to the Consolidated Lease as soon as the applicable financing restrictions are removed; and

WHEREAS, the Savannah Square Owner has agreed to join in this Amendment for purposes of evidencing its consent to this Amendment and its agreement to become a Landlord under the Consolidated Lease and to lease the Savannah Square Property to Tenant as soon as it becomes feasible to do so; and

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 as follows:

1.     Definition of Savannah Square Lease.  Effective as of the date hereof, the following new definition for the term “Savannah Square Lease” is hereby added to the Consolidated Lease as a new Section 1.101:

“Savannah Square Lease”  shall mean that certain Lease Agreement, dated as of September 30, 2006, between Savannah Square, Inc., as landlord, and Five Star Quality Care-Savannah, LLC, as tenant.

2.     Definition of Savannah Square Leased Property.  Effective as of the date hereof, the following new definition for the term “Savannah Square Leased Property” is hereby added to the Consolidated Lease as a new Section 1.102:

“Savannah Square Leased Property”  shall mean the “Leased Property”, as defined therein, under the Savannah Square Lease.

3.     Default under Savannah Square Lease.  Effective as of the date hereof, Section 12.1(m) of the Consolidated Lease is hereby amended by deleting the existing Section 12.1(m) in its entirety and replacing it with the following:

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

 

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4.     Financial Statements.  Effective as of the date hereof, Section 17.2(f) of the Consolidated Lease is hereby amended by deleting the existing Section 17.2(f) in its entirety and replacing it with the following:

promptly, upon Notice from Landlord, such other information concerning the business, financial condition and affairs of Tenant, any Guarantor, and/or any Affiliated Party of Tenant which is a party to an LTA GMAC Lease or the Savannah Square Lease as Landlord reasonably may request from time to time.

5.     Savannah Square Property.  Effective as of the date hereof, the following new Section 21.12 is hereby added to the Consolidated Lease immediately following Section 21.11:

Savannah Square Property.  Landlord and Tenant expressly acknowledge and agree that, effective automatically upon the release of the Savannah Square Leased Property from the financing which is secured by the Savannah Square Leased Property, the Savannah Square Leased 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 Savannah Square Lease, and the Additional Rent payable hereunder shall be increased by an amount equal to the Additional Rent payable under the Savannah Square Lease.  The addition of the Savannah Square 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, the Consolidated Lease is hereby ratified and confirmed.

[Signature Page Follows.]

 

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IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be duly executed, as a sealed instrument, as of the date first set forth above.

LANDLORD:

ELLICOTT CITY LAND I LLC, ELLICOTT CITY LAND II LLC, HRES2 PROPERTIES TRUST, SNH CHS PROPERTIES TRUST, SPTIHS PROPERTIES TRUST, SPT-MICHIGAN TRUST, SPTMNR PROPERTIES TRUST, SNH/LTA PROPERTIES TRUST and SNH/LTA PROPERTIES GA LLC

By:/s/ John R. Hoadley                

John R. Hoadley

Treasurer of each of the foregoing entities

TENANT:

FIVE STAR QUALITY CARE TRUST

By:/s/ Bruce J. Mackey Jr.        

Bruce J. Mackey Jr.

Treasurer, Chief Financial Officer and Assistant Secretary

 

 

THE SAVANNAH SQUARE OWNER HEREBY JOINS IN THE EXECUTION OF THIS AMENDMENT FOR THE LIMITED PURPOSES OF CONSENTING TO THE TERMS AND CONDITIONS HEREOF ONCE THE FINANCING RESTRICTIONS ARE NO LONGER APPLICABLE TO THE SAVANNAH SQUARE PROPERTY.

 

SAVANNAH SQUARE OWNER:

 

SAVANNAH SQUARE, INC.,

a Georgia corporation

 

/s/ John R. Hoadley            

John R. Hoadley

Treasurer

 

 

- 4 -Exhibit 10.5

 

CONFIRMATION OF GUARANTEES AND CONFIRMATION  

AND AMENDMENT OF OTHER INCIDENTAL DOCUMENTS

THIS CONFIRMATION OF GUARANTEES AND CONFIRMATION AND AMENDMENT OF OTHER INCIDENTAL DOCUMENTS (this “Confirmation”) is made as of September 1, 2006 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 “Landlords”).

W I T N E S S E T H :

WHEREAS, pursuant to the terms of that certain Second Amended and Restated Lease Agreement, dated as of November 19, 2004, as amended by that certain First Amendment of Lease dated as of May 17, 2005, that certain Second Amendment to Second Amended and Restated Lease dated as of June 3, 2005, that certain Third Amendment to Second Amended and Restated Lease Agreement dated as of October 31, 2005, that certain other Third Amendment to Amended and Restated Lease Agreement dated as of December 30, 2005 and that certain Letter Agreement dated as of March 13, 2006 (as so amended, the “Consolidated Lease”), the Landlords lease to the Tenant, and the Tenant leases from the Landlords, certain property, all as more particularly described in the Consolidated Lease; and

WHEREAS, the payment and performance obligations of the Tenant with respect to the Consolidated Lease are guaranteed by those certain Guaranty Agreements described on Exhibit A attached hereto (collectively, the “Guarantees”); and

WHEREAS, the payment and performance obligations of the Tenant with respect to the Consolidated Lease 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 the Consolidated Lease); and

WHEREAS, pursuant to a Fifth Amendment to Second Amended and Restated Lease Agreement, dated as of the date hereof (the “Fifth Amendment”), the Consolidated Lease is being amended to 

 

 

 

 

add certain properties, as more particularly described in the Fifth Amendment;

WHEREAS, the Tenant intends to sublease the properties being added to the Consolidated Lease pursuant to the Fifth Amendment to certain affiliates of the Tenant (collectively, the “Subleases”);

WHEREAS, in connection with, and as a condition precedent to, the execution of the Fifth Amendment by the Landlords, the Landlords have required that the parties hereto confirm that the Guarantees and the other Incidental Documents remain in full force and effect and apply to the Consolidated Lease as amended by the Fifth Amendment; and

WHEREAS, in connection with the execution of the Fifth Amendment and the Subleases, the parties hereto wish to amend certain of the Incidental Documents, including (i) the Security Agreement, dated as of December 31, 2001, by and among certain of the Subtenants and certain of the Landlords, as amended and confirmed from time to time (the “Subtenant Security Agreement”); (ii) the Security Agreement, dated as of December 31, 2001, by and among the Tenant and certain of the Landlords, as amended and confirmed from time to time (the “Tenant Security Agreement”); and (iii) the Second Amended and Restated Pledge of Stock and Membership Interests Agreement, dated as of May 6, 2005, made by the Subtenant Pledgors for the benefit of the Landlords, as
amended and confirmed from time to time (the “Subtenant Pledge Agreement”), all subject to and upon the terms and conditions herein set forth;

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 as follows:

1.     Joinder by Subtenants.  Each of the Subtenants that is not otherwise a party to the Subtenant Security Agreement or that certain Security Agreement dated as of October 25, 2002, by and among certain of the Subtenants and certain of the Landlords, as amended and confirmed from time to time, hereby joins in the Subtenant Security Agreement as if it had originally executed and delivered the Subtenant Security Agreement as a “Subtenant” thereunder.  Each of the Subtenants that is not otherwise a party to the Subtenant Guaranty (as defined in Exhibit A hereof) hereby joins in the Subtenant Guaranty as if it had originally executed and delivered the Subtenant Guaranty 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 Schedule 1 attached hereto; (ii) replacing Schedule 1 attached thereto with Schedule 2 attached hereto; and (iii) replacing Schedule 2 attached thereto with Schedule 3 attached hereto.

3.     Amendment of Tenant Security Agreement.  The Tenant Security Agreement is hereby amended by replacing Schedule 2 attached thereto with Schedule 4 attached hereto.

4.     Amendment of Subtenant Pledge Agreement.  The Subtenant Pledge Agreement is hereby amended by (i) replacing Exhibit A attached thereto with Schedule 5 attached hereto; and (ii) replacing Exhibit B attached thereto with Schedule 6 attached hereto.

5.     Confirmation of Guarantees.  Each of the parties to the Guarantees hereby confirms that all references in the Guarantees to the “Master Lease” or the “Lease” shall refer to the Consolidated Lease as amended by the Fifth Amendment and the Guarantees are hereby ratified and confirmed in all respects.

6.     Confirmation of Other Incidental Documents.  Each of the parties to the Incidental Documents (other than the Guarantees) hereby confirms that all references in such Incidental Documents to the “Master Lease”, the “Lease” or the “Second Amended Lease” shall refer to the Consolidated Lease as amended by the Fifth Amendment and that such Incidental Documents, as amended by this Confirmation, are hereby ratified and confirmed in all respects.

7.     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 Fifth Amendment, the Guarantees, the other Incidental Documents, or any amendments, changes or modifications thereof, 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.

 

[Signatures on following page.]

 

 

 

 

 

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.

	
             
 	
            By:
 	
            /s/ Bruce J. Mackey Jr.    
 

Bruce J. Mackey Jr.

Treasurer, Chief Financial Officer and Assistant Secretary

 

TENANT:

 

FIVE STAR QUALITY CARE TRUST

	
             
 	
            By:
 	
            /s/ Bruce J. Mackey Jr.    
 

Bruce J. Mackey Jr.

Treasurer, Chief Financial Officer and Assistant Secretary

 

TENANT PLEDGOR:

 

FSQ, INC.

	
             
 	
            By:
 	
            /s/ Bruce J. Mackey Jr.    
 

Bruce J. Mackey Jr.

Treasurer, Chief Financial Officer and Assistant Secretary

 

 

 

 

 

 

SUBTENANT PLEDGORS:

 

FSQ, INC., FIVE STAR QUALITY CARE TRUST, FVEST. JOE, INC., FIVE STAR QUALITY CARE-CA, INC., FIVE STAR QUALITY CARE-CA II, INC., FIVE STAR QUALITY CARE-CO, INC., THE HEARTLANDS RETIREMENT COMMUNITY-ELLICOTT CITY I, INC., FIVE STAR QUALITY CARE-GA, INC., FIVE STAR QUALITY CARE-IA, INC., FIVE STAR QUALITY CARE-NE, INC., FIVE STAR QUALITY CARE-WI, INC. and LIFETRUST AMERICA, INC.

	
             
 	
            By:
 	
            /s/ Bruce J. Mackey Jr.    
 

Bruce J. Mackey Jr.

Treasurer, Chief Financial Officer and Assistant Secretary of each of the foregoing entities

 

LIFETRUST PROPERTIES, L.L.C.

 

	
             
 	
            By:
 	
            LifeTrust America Inc.,
Its Sole Member
 

 

	
             
 	
            By:
 	
            /s/ Bruce J. Mackey Jr.    
 
				

Bruce J. Mackey Jr.

Treasurer, Chief Financial Officer and Assistant Secretary

 

 

 

 

 

SUBTENANTS:

 

FIVE STAR QUALITY CARE-AZ, LLC,
FIVE STAR QUALITY CARE-CA, LLC, FIVE STAR QUALITY CARE-CA II, LLC, FIVE STAR QUALITY CARE-COLORADO, LLC, FIVE STAR QUALITY CARE-CT, LLC,
FIVE STAR QUALITY CARE-FL, LLC, FIVE STAR QUALITY CARE-GA, LLC, FIVE STAR QUALITY CARE-GHV, LLC, FIVE STAR QUALITY CARE-IA, LLC,
FIVE STAR QUALITY CARE-IL, LLC, FIVE STAR QUALITY CARE-KS, LLC, FIVE STAR QUALITY CARE-MD, LLC, FIVE STAR QUALITY CARE-MO, LLC,
FIVE STAR QUALITY CARE-NE, LLC, FIVE STAR QUALITY CARE-NC, LLC, FIVE STAR QUALITY CARE-WI, LLC, FIVE STAR QUALITY CARE-WY, LLC,
FIVE STAR QUALITY CARE-VA, LLC, FIVE STAR QUALITY CARE-CA, INC., FIVE STAR QUALITY CARE-IA, INC., FIVE STAR QUALITY CARE-NE, INC.,
MORNINGSIDE OF GALLATIN, LLC, THE HEARTLANDS RETIREMENT COMMUNITY - ELLICOTT CITY I, INC. and MORNINGSIDE OF BELMONT, LLC

	
             
 	
            By:
 	
            /s/ Bruce J. Mackey Jr.    
 

Bruce J. Mackey Jr.

Treasurer, Chief Financial Officer and Assistant Secretary of each of the foregoing entities

 

 

 

 

 

	 	
            MORNINGSIDE OF ANDERSON, L.P.,
               MORNINGSIDE OF ATHENS, LIMITED PARTNERSHIP, MORNINGSIDE OF COLUMBUS, L.P., MORNINGSIDE OF DALTON, LIMITED PARTNERSHIP, MORNINGSIDE OF
               EVANS, LIMITED PARTNERSHIP, MORNINGSIDE OF GREENWOOD, L.P. and MORNINGSIDE OF KENTUCKY, LIMITED PARTNERSHIP

	 
		
            By:
 	
            LifeTrust America, Inc.,
General Partner of each of the foregoing entities

	 
			
            By:
 	
            /s/ Bruce J. Mackey Jr.      
Treasurer, Chief Financial Officer and Assistant Secretary 

	
 
	
             
 	
            MORNINGSIDE OF BELLGRADE,
               RICHMOND, LLC, MORNINGSIDE OF CHARLOTTESVILLE, LLC, MORNINGSIDE OF NEWPORT NEWS, LLC and MORNINGSIDE OF SKIPWITH – RICHMOND, LLC

	 
		
            By:
 	
            LifeTrust America, Inc.,
Member of each of the foregoing entities

	 
			
            By:
 	
            /s/ Bruce J. Mackey Jr.      
Treasurer, Chief Financial Officer and Assistant Secretary 

 

 

 

 

 

LANDLORD:

 

HRES2 PROPERTIES TRUST,

SPTIHS PROPERTIES TRUST,

SPT-MICHIGAN TRUST,

SPTMNR PROPERTIES TRUST,

SNH CHS PROPERTIES TRUST,

ELLICOTT CITY LAND I, LLC, 

ELLICOTT CITY LAND II, LLC, 

SNH/LTA PROPERTIES TRUST and

SNH/LTA PROPERTIES GA LLC

	
             
 	
            By:
 	
            /s/ John R. Hoadley            
 
	
             
 	
            John R. Hoadley
 	
             

Treasurer of each of the foregoing entities

 

 

 

 

EXHIBIT A

 

GUARANTEES

 

	
            1.
 	
            Guaranty Agreement, dated as of December 31, 2001, made by Guarantor in favor of HRES2 Properties Trust, SPTIHS Properties Trust, SPT-Michigan Trust and SPTMNR Properties Trust.
 

 

	
            2.
 	
            Guaranty Agreement, dated as of October 25, 2002, made by Guarantor in favor of SNH CHS Properties Trust.
 

 

	
            3.
 	
            Guaranty Agreement, dated as of October 25, 2002, made by certain of the Subtenants in favor of SNH CHS Properties Trust (the “Subtenant Guaranty”).
 

 

The Guarantees were confirmed pursuant to (i) that certain Confirmation of Guarantees and Security Documents, dated as of March 1, 2004, made by certain of the parties hereto; (ii) that certain Confirmation of Guarantees and Other Incidental Documents, dated as of June 23, 2004, made by certain of the parties hereto; (iii) that certain Confirmation of Guarantees and Other Incidental Documents, dated as of November 19, 2004, made by certain of the parties hereto; (iv) that certain Confirmation of Guarantees and Confirmation and Amendment of Other Incidental Documents, dated as of June 3, 2005, made by certain of the parties hereto; and (v) that certain Confirmation of Guarantees and Confirmation and Amendment of Other Incidental Documents, dated as of October 31, 2005, made by certain of the parties hereto.

 

 

 

 

 

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

 

SCHEDULE 1 – EXHIBIT A - Subleases

SCHEDULE 2 – SCHEDULE 1 

SCHEDULE 3 – SCHEDULE 2 - The Facilities

SCHEDULE 4 – SCHEDULE 2 - The Facilities

SCHEDULE 5 – EXHIBIT A - Subleases

SCHEDULE 6 – EXHIBIT B - Pledged Interests

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