Document:

Exhibit 10.2

 

EXECUTION VERSION

 

AMENDMENT AND CONSENT UNDER CREDIT AND SECURITY AGREEMENT

 

THIS AMENDMENT AND CONSENT (this “Consent”) dated as of April 13, 2012, by and among FIVE STAR QUALITY CARE, INC., a Maryland corporation (the “Borrower”), the Subsidiaries of the Borrower party hereto as “Guarantors” (the “Guarantors”), each of the Lenders party hereto (the “Lenders”), and JEFFERIES FINANCE LLC, as Administrative Agent and Collateral Agent (together with its successors and assigns, the “Agent”).

 

WHEREAS, the Borrower, the Guarantors, the Lenders, the Agent and certain other parties have entered into that certain Credit and Security Agreement dated as of March 18, 2010 (the “Credit Agreement”);

 

WHEREAS, the Borrower is entering into that certain Credit Agreement, dated as of April 13, 2012 (the “Citibank Credit Agreement”), among the Borrower, the guarantors named therein, Citibank, N.A., RBC Capital Markets, Citigroup Global Markets, the lenders named therein and the other parties named therein, with the obligations thereunder being secured by certain mortgages with respect to the properties listed on Exhibit A hereto (collectively, the “Citibank Properties”); and

 

WHEREAS, the Lenders and the Agent have agreed to consent to certain terms and conditions of the Citibank Credit Agreement, the Security Agreement (as defined in the Citibank Credit Agreement) and the related ancillary transaction documents (the “Citibank Loan Documents”) as hereinafter provided;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

Section 1.  Consent to Citibank Facility.  The Agent and the Lenders hereby consent to the Citibank Loan Documents and waive any applicable provisions of the Credit Agreement that would limit or restrict the Borrower or the Subsidiaries party thereto from entering into the Citibank Loan Documents or incurring obligations in respect thereof, including granting Liens on the Citibank Properties or any portion thereof.  For the avoidance of doubt, the parties hereto hereby agree that to the extent the waiver provided herein relates to any provisions of the Credit Agreement or other Loan Documents applicable to the Collateral, such waiver is limited to such provisions as they relate to the Released Collateral (as defined below) only.

 

Section 2.  Release of Certain Guarantors and Collateral; Excluded Subsidiaries.

 

(a)                                  The Agent and the Lenders hereby:

 

(i)                                     release each of the Guarantors listed on Exhibit B hereto (each, a “Released Guarantor”) from its obligations as a “Guarantor” under the Credit Agreement, and release the Lien of the Security Documents on the assets of each such Released Guarantor;

 

(ii)                                  release the following assets of each Guarantor listed on Exhibit C hereto (each, a “Transferor Guarantor”), and permit the transfer of such assets without

 

 

representation, warranty or recourse of any kind to certain non-Guarantor Subsidiaries (each, a “New Operator”):

 

(A)                              all Accounts of such Transferor Guarantor that are generated by, and only by, the operation of the Citibank Property by such Transferor Guarantor;

 

(B)                                all Chattel Paper of such Transferor Guarantor but only to the extent generated by, and only by, the operation of a Citibank Property by such Transferor Guarantor;

 

(C)                                all Supporting Obligations relating to any of the foregoing;

 

(D)                               all books and records pertaining to any of the foregoing (including without limitation, customer lists, credit files, computer programs, printouts and other computer materials and records);

 

(E)                                 all Leases entered into by such Transferor Guarantor with respect to, and only to, a Citibank Property; and

 

(F)                                 all accessions to, substitutions for, and all replacements, products and proceeds of the foregoing (including without limitation, proceeds of insurance policies insuring any of the foregoing);

 

provided, however, that the Lenders and the Agent do not release any other Collateral of any Transferor Guarantor from the Lien of the Security Documents, and each Transferor Guarantor reaffirms its grant of its Lien to the Lenders and the Agent in such other Collateral.

 

(b)                                 The parties hereto agree that each Released Guarantor and New Operator shall be deemed to be an Excluded Subsidiary; provided, however, that no Released Guarantor shall be deemed to be an Excluded Subsidiary pursuant to this paragraph (b) if it is a Provider with respect to a Property other than a Citibank Property.

 

(c)                                  The Agent hereby agrees to file (x) a termination statement with respect to each existing UCC-1 financing statement showing such Released Guarantor as debtor and the Agent as secured party and (y) an amendment to each existing UCC-1 financing statement, which amendment shall be in form and substance satisfactory to the Agent, describing the assets covered by security interests granted by such Transferor Guarantor to the Lender to reflect the release of the Collateral described above.

 

(d)                                 The parties hereto agree that Section 1.01 of the Credit Agreement is hereby amended by inserting the following definitions to such Section in their correct alphabetical order:

 

“Citibank Credit Agreement” shall mean that certain Credit Agreement, dated as of April 13, 2012 (as amended, restated or otherwise modified from time to time), among Five Star Quality Care, Inc, as borrower, the guarantors named therein, Citibank, N.A., RBC Capital Markets, Citigroup Global Markets, the lenders named therein and the other parties named therein.

 

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“Citibank Loan Documents” shall mean the Citibank Credit Agreement and the Citibank Transaction Documents.

 

“Citibank Property” shall mean each parcel of real property that serves as collateral security for the secured parties under the Citibank Loan Documents and is listed on Schedule A to the Consent.

 

“Citibank Transaction Documents” shall mean the term “Loan Documents” as such term defined in the Citibank Loan and Security Agreement, as such term may be amended, restated or otherwise modified from time to time.

 

“Consent” shall mean that certain Amendment and Consent, dated as of April 13, 2012, among the Borrower, the Subsidiaries party thereto, the Administrative Agent, the Lenders party thereto and the Collateral Agent.

 

“Released Accounts” shall mean solely the Accounts released from the Lien of this Agreement pursuant to the Consent.”

 

(e)                                  The parties hereto agree that the term “Eligible Accounts” in Section 1.01 of the Credit Agreement is hereby amended by deleting “or” in clause (t) thereof, deleting the period at the end of clause (u) thereof, inserting “; or” in lieu thereof and inserting the following clause (v):

 

“(v) Accounts of Providers that are generated by, and only by, the operation of a Citibank Property.”

 

(f)                                    The parties hereto agree that Section 5.01(d) of the Credit Agreement is hereby amended by deleting “and” in clause (xvi) thereof, amending clause (xvii) thereof to be the new clause (xviii) thereof and inserting a new clause (xvii) in lieu thereof:

 

“ (xvii)             Citibank Loan and Security Agreement.  A copy of each amendment, restatement, consent or waiver to the Citibank Loan Documents and any other material notices distributed to or delivered by the Borrower (or any of its Affiliates) in connection therewith; and”

 

(g)                                 The parties hereto agree that Article V is hereby amended by inserting a new Section 5.20 at the end of such Article:

 

“Section 5.20   Released Accounts.  Borrower shall cause each relevant Provider to establish one or more deposit accounts not subject to an Account Control Agreement for the deposit of all Proceeds of the Released Accounts (i) that are not Government Receivables within thirty (30) days from the date of the Consent and (ii) that are Government Receivables within ninety (90) days from the date of the Consent (or such later date as determined by the Agent in its sole discretion).  Borrower shall cause each relevant Provider to take all actions that may be necessary to cause any Proceeds of the Released Accounts to be deposited to the applicable deposit accounts established pursuant to the preceding sentence.  The Loan Parties hereby agree that this Section 5.20 relates solely to the establishment of deposit accounts for the purpose of depositing Proceeds relating to the Released Accounts and does not grant the Loan Parties any right or authority to establish or maintain any other deposit accounts for the purpose of

 

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depositing Proceeds relating to any other Accounts other than in accordance with the other provisions of this Agreement.

 

(h)                                 The parties hereto agree that Section 9.01 of the Credit Agreement is hereby amended by inserting the following at the end of such Section:

 

“(q)                           Certain Amendments to the Citibank Loan Documents.  Any amendment, restatement or other modification with respect to the Citibank Loan Documents shall become effective that could reasonably be expected to be materially adverse to the Lenders.

 

(r)                                    Citibank Legal Maturity Date.  The stated legal final maturity date with respect to the loans provided under the Citibank Credit Agreement is on or before June 18, 2013.”

 

(i)                                     The parties hereto agree that, following the release of the Lien under the Citibank Loan Documents on any of the Collateral released under Section 2(a)(i) and (ii) of this Consent (the “Released Collateral”), the owner of such collateral shall promptly assign, pledge and grant to the Collateral Agent, for the benefit of the Secured Parties, a first priority perfected security interest in all of such party’s right, title and interest, to and under such Released Collateral.  Such party shall authorize and, as required, execute and deliver to the Collateral Agent, concurrently with the pledge of such Released Collateral, and at any time thereafter, all financing statements or other documents (including any legal opinions reasonably requested by the Collateral Agent or the Agent) (and pay the cost of filing or recording the same in all public offices deemed necessary by the Collateral Agent), as the Collateral Agent may request, in a form satisfactory to the Collateral Agent, to perfect and maintain perfection of the Lien in such Released Collateral granted by such party to the Collateral Agent, and otherwise to protect and preserve such Released Collateral.  Further, if at any time a Released Guarantor is released from all of its obligations under the Citibank Loan Documents, the obligations of such Released Guarantor under the Security Documents shall be automatically reinstated and such Released Guarantor shall execute all documentation reasonably requested by the Collateral Agent or the Agent to evidence such reinstatement.

 

Section 3.  Conditions to Effectiveness.  The effectiveness of this Consent is subject to the satisfaction of the following conditions, in each case, to the satisfaction of the Agent:

 

(a)                                  The Agent shall have received this Consent duly executed by each party hereto;

 

(b)                                 The Agent shall have received duly executed copies of the Citibank Loan Documents dated as of the date of this Consent or such other date reasonably acceptable to the Agent and in form and substance reasonably satisfactory to the Agent; and

 

(c)                                  The Borrower shall have paid to the Agent all costs and expenses (including reasonable attorneys’ fees) required to be paid in connection with this Consent.

 

Section 4.  Miscellaneous.

 

(a)                                  Representations by each Loan Party.  Each Loan Party hereby repeats and reaffirms all representations and warranties made by such Loan Party to the Lender in the Credit Agreement and the other Loan Documents to which it is a party with the same effect as though

 

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made on and as of the date of this Consent and after giving effect to this Consent, except to the extent such representations and warranties expressly relate to an earlier date (in which case such representations and warranties shall be true and correct in all material respects on and as of such earlier date).  Each Loan Party hereby represents and warrants that this Consent has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation enforceable in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency or other similar laws affecting creditors’ rights generally and (ii) general principles of equity.

 

(b)                                 Reaffirmation of Guaranty by Guarantors.  Each Guarantor (other than a Released Guarantor) hereby reaffirms its continuing obligations to the Lenders and the Agent under Article VII of the Credit Agreement and agrees that the transactions contemplated by this Consent shall not in any way affect the validity and enforceability of its obligations under Article VII of the Credit Agreement, or reduce, impair or discharge the obligations of such Guarantor thereunder.

 

(c)                                  Certain References.  Each reference to the Credit Agreement in any of the Loan Documents shall be deemed to be a reference to the Credit Agreement, as amended by this Consent.

 

(d)                                 Expenses.  The Borrower shall reimburse the Agent upon demand for all costs and expenses (including reasonable attorneys’ fees) incurred by the Agent in connection with the preparation, negotiation and execution of this Consent and the other agreements and documents executed and delivered in connection herewith.

 

(e)                                  Benefits.  This Consent shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

 

(f)                                    GOVERNING LAW.  THIS CONSENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE.

 

(g)                                 Effect.  Except as expressly herein modified or waived, the terms and conditions of the Credit Agreement and the other Loan Documents remain in full force and effect.  Except as expressly stated herein, nothing contained herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Credit Agreement or any of the other Loan Documents and shall not be deemed to prejudice any right or rights which the Lenders or the Agent may now have or may have in the future under or in connection with any Loan Documents or any of the instruments or agreements referred to therein, as the same may be amended from time to time.  Except as expressly stated herein, the Lenders and the Agent reserve all rights, privileges and remedies under the Loan Documents.  The consents contained herein shall be deemed to have prospective application only, unless otherwise specifically stated herein.

 

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(h)                                 Counterparts.  This Consent may be executed in any number of counterparts, each of which shall be deemed to be an original and shall be binding upon all parties, their successors and assigns.

 

(i)                                     Definitions.  All capitalized terms not otherwise defined herein are used herein with the respective definitions given them in the Credit Agreement.

 

[Signatures on Next Page]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Consent to be executed as of the date first above written.

 

	
 
    	
FIVE   STAR QUALITY CARE, INC., as Borrower
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul Hoagland
    
	
 
    	
 
    	
Name:
    	
Paul Hoagland
    
	
 
    	
 
    	
Title:
    	
Treasurer and   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JEFFERIES   FINANCE LLC,
    
	
 
    	
as Administrative   Agent, Collateral Agent and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Brian Buoye
    
	
 
    	
 
    	
Name:
    	
Brian Buoye
    
	
 
    	
 
    	
Title:
    	
Senior Vice President
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
JEFFERIES   GROUP INC.,
    
	
 
    	
as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Peregrine   Broadbent
    
	
 
    	
 
    	
Name:
    	
Peregrine   Broadbent
    
	
 
    	
 
    	
Title:
    	
Chief Financial Officer
    

 

 

	
 
    	
GUARANTORS:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ALLIANCE   PHARMACY SERVICES, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-CA, INC.
    
	
 
    	
FIVE   STAR QUALITY CARE-IA, INC.
    
	
 
    	
FIVE   STAR QUALITY CARE-NE, INC.
    
	
 
    	
FIVE   STAR QUALITY CARE-AZ, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-CA, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-COLORADO, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-CT, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-GA, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-IA, 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-FL, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-KS, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-MD, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-VA, LLC
    
	
 
    	
FS   LAFAYETTE TENANT TRUST
    
	
 
    	
FS   LEISURE PARK TENANT TRUST
    
	
 
    	
FS   LEXINGTON TENANT TRUST
    
	
 
    	
FS   TENANT POOL I TRUST
    
	
 
    	
FS   TENANT POOL II TRUST
    
	
 
    	
FS   TENANT POOL III TRUST
    
	
 
    	
FS   TENANT POOL IV TRUST
    
	
 
    	
MORNINGSIDE   OF BELMONT, LLC
    
	
 
    	
MORNINGSIDE   OF GALLATIN, LLC
    
	
 
    	
MORNINGSIDE   OF SPRINGFIELD, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE-CA II, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE TRUST
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul V. Hoagland
    
	
 
    	
 
    	
Name:
    	
Paul V. Hoagland
    
	
 
    	
 
    	
Title:
    	
Treasurer and   Chief Financial Officer
    

 

 

	
 
    	
MORNINGSIDE   OF ALABAMA, L.P.
    
	
 
    	
MORNINGSIDE   OF ANDERSON, L.P.
    
	
 
    	
MORNINGSIDE   OF ATHENS, LIMITED PARTNERSHIP
    
	
 
    	
MORNINGSIDE   OF COLUMBUS, L.P.
    
	
 
    	
MORNINGSIDE   OF DALTON, LIMITED PARTNERSHIP
    
	
 
    	
MORNINGSIDE   OF DECATUR, L.P.
    
	
 
    	
MORNINGSIDE   OF EVANS, LIMITED PARTNERSHIP
    
	
 
    	
MORNINGSIDE   OF GREENWOOD, L.P.
    
	
 
    	
MORNINGSIDE   OF KENTUCKY, LIMITED PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
By:
    	
LIFETRUST   AMERICA, INC., its General Partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul Hoagland
    
	
 
    	
 
    	
Name:
    	
Paul Hoagland
    
	
 
    	
 
    	
Title:
    	
Treasurer and   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
ANNAPOLIS HERITAGE PARTNERS, LLC
    
	
 
    	
COLUMBIA HERITAGE PARTNERS, LLC
    
	
 
    	
ENCINITAS HERITAGE PARTNERS, LLC
    
	
 
    	
FREDERICK HERITAGE PARTNERS, LLC
    
	
 
    	
FSQ PHARMACY HOLDINGS, LLC
    
	
 
    	
HAGERSTOWN HERITAGE PARTNERS, LLC
    
	
 
    	
MORNINGSIDE   OF CONCORD, LLC
    
	
 
    	
MORNINGSIDE   OF GASTONIA, LLC
    
	
 
    	
MORNINGSIDE   OF GREENSBORO, LLC
    
	
 
    	
MORNINGSIDE   OF RALEIGH, LLC
    
	
 
    	
MORNINGSIDE OF PARIS, LLC
    
	
 
    	
MORNINGSIDE   OF WILLIAMSBURG, LLC,
    
	
 
    	
NEWARK HERITAGE PARTNERS I, LLC
    
	
 
    	
NEWARK HERITAGE PARTNERS II, LLC
    
	
 
    	
REDLANDS HERITAGE PARTNERS, LLC
    
	
 
    	
STOCKTON HERITAGE PARTNERS, LLC,
    
	
 
    	
each a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul V.   Hoagland
    
	
 
    	
 
    	
Name:
    	
Paul V. Hoagland
    
	
 
    	
 
    	
Title:
    	
Treasurer and   Chief Financial Officer
    

 

 

	
 
    	
FIVE   STAR QUALITY CARE - GHV, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - IL, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - IN, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - MN, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - MS, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE — NORTH CAROLINA, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - NJ, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - NS OPERATOR, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - NS OWNER, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - NS TENANT, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - OBX OPERATOR, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - OBX OWNER, LLC
    
	
 
    	
FIVE   STAR QUALITY CARE - TX, LLC
    
	
 
    	
FS   COMMONWEALTH LLC
    
	
 
    	
FS   PATRIOT LLC
    
	
 
    	
FSQC-AL,   LLC,
    
	
 
    	
each a Maryland limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul V.   Hoagland
    
	
 
    	
 
    	
Name:
    	
Paul V. Hoagland
    
	
 
    	
 
    	
Title:
    	
Treasurer and   Chief Financial Officer
    

 

 

	
 
    	
MORNINGSIDE   OF FAYETTE, L.P.,
    
	
 
    	
a Delaware limited partnership
    
	
 
    	
 
    
	
 
    	
By:
    	
LIFETRUST   AMERICA, INC., its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul V. Hoagland
    
	
 
    	
 
    	
Name:
    	
Paul V. Hoagland
    
	
 
    	
 
    	
Title:
    	
Treasurer and   Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
FRESNO HERITAGE PARTNERS, A CALIFORNIA LIMITED   PARTNERSHIP
    
	
 
    	
ROSEVILLE HERITAGE PARTNERS, A CALIFORNIA LIMITED   PARTNERSHIP
    
	
 
    	
 
    
	
 
    	
By:
    	
SOMERFORD PLACE   LLC, its general partner
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Paul V. Hoagland
    
	
 
    	
 
    	
Name:
    	
Paul V. Hoagland
    
	
 
    	
 
    	
Title:
    	
Treasurer and   Chief Financial Officer
    

 

 

EXHIBIT A

 

CITIBANK PROPERTIES

 

The facility known as the Palms at Fort Myers and located at 2674 Winkler Avenue, Fort Myers, FL, 33901

The facility known as Clearwater Commons and located at 4519 E. 82nd Street, Indianapolis, IN, 46250

The facility known as Rosewalk Commons and Garden Homes and located at 250 Shenandoah Drive, Lafayette, IN, 47905

The facility known as Riverwalk Commons and Garden Homes and located at 7235 Riverwalk Way North, Noblesville, IN, 46062

The facility known as Villa at Riverwood and located at One Pratt Place, Florissant, MO, 63031

The facility known as Morningside of Concord and located at 500 Penny Lane, N.E., Concord, NC, 28025

The facility known as Morningside of Gastonia and located at 2755 Union Road, Gastonia, NC, 28054

The facility known as Morningside at Irving Park and located at 3200 North Elm Street, Greensboro, NC, 27408

The facility known as Fox Hollow and located at 190 Fox Hollow Road, Pinehurst, NC, 28374

The facility known as Morningside of Raleigh and located at 801 Dixie Trail, Raleigh, NC, 27607

The facility known as New Seasons at Washington Township and located at 600 Medical Center Drive, Sewell, NJ, 08012

The facility known as New Seasons at Voorhees and located at 501 Laurel Oak Road, Voorhees, NJ, 08043

The facility known as Morningside of Paris and located at 350 Volunteer Drive, Paris, TN, 38242

The facility known as Morningside of Williamsburg and located at 440 McLaws Circle, Williamsburg, VA, 23185

The facility known as Huntington Place and located at 3801 North Wright Road, Janesville, WI, 53546

 

 

EXHIBIT B

 

RELEASED GUARANTORS

 

MORNINGSIDE OF CONCORD, LLC

MORNINGSIDE OF GASTONIA, LLC

MORNINGSIDE OF GREENSBORO, LLC

MORNINGSIDE OF PARIS, LLC

MORNINGSIDE OF RALEIGH, LLC

MORNINGSIDE OF WILLIAMSBURG, LLC

 

 

EXHIBIT C

 

TRANSFEROR GUARANTORS

 

FIVE STAR QUALITY CARE - FL, LLC

FIVE STAR QUALITY CARE - MO, LLC

FIVE STAR QUALITY CARE - NS OWNER, LLC

FIVE STAR QUALITY CARE - NS OPERATOR, LLC

FIVE STAR QUALITY CARE - OBX OPERATOR, LLC

FIVE STAR QUALITY CARE - OBX OWNER, LLCExhibit 10.1

 

 

March 5, 2012

 

William D. Baird

39 Washington Ave.

Bernardsville, NJ  07924

 

Dear Chip,

 

On behalf of Amicus Therapeutics, Inc. (the “Company”), I am pleased to confirm our offer to you for the position of Chief Financial Officer.  Your start date will be mutually agreed upon but no later than April 16, 2012.

 

Prior to the commencement of your employment, you will be required to execute the Company’s Confidentiality, Disclosure and Non-Competition Agreement.  A copy of this agreement is attached. In addition, as a condition of employment, Amicus requires a pre-employment drug screening.

 

In consideration for all your services to be rendered to the Company, your annual base salary will be $325,000, to be paid bi-weekly in accordance with the Company’s payroll practices. Once you agree to join Amicus, payable with your first paycheck, you will receive a sign on bonus of $40,000 minus customary deductions. Should you resign within twelve (12) months of your start date, you will be required to reimburse the Company the full amount of the sign on bonus.

 

As in accordance with the Company’s Management Bonus Program, upon the achievement of specific Company goals and Individual Goals, you will be eligible to receive a year end bonus target of (40%) of your base salary, minus customary deductions.  For 2012 your bonus will be calculated based upon your annualized base salary.

 

Upon approval by the Company’s Compensation Committee, you will receive an incentive stock option to purchase 175,000 shares of the Company’s common stock (the “Common Stock”) pursuant to a stock option agreement in form and substance acceptable to the Company The options will become exercisable over a four-year period as follows: 25% on the first anniversary of the date of grant, and the remaining 75% in equal monthly increments thereafter. The exercise price of the options will be the fair market value of the Company’s common stock on the date of grant.  Additionally, exercise of the options will be governed in accordance with the provisions of the Company’s stock option plan.

 

You will be eligible to participate in the Company’s health benefits program and are eligible to participate in the Company’s 401(k) as well as any other employee benefit plan(s) that are generally made available by the Company to its employees from time to time when and as the Company may make them available.

 

1 Cedar Brook Drive   Cranbury, NJ 08512     T: 609-662-2000   F: 609-662-2001     www.amicusrx.com

 

 

You will be eligible for fifteen (15) days paid vacation.  In addition, you will be eligible for paid Company holidays as outlined in our Holiday Policy, including the week the Company annually closes between Christmas and New Years along with two (2) floating holidays.   Vacation accrues on a monthly basis.  Because the Company expects to regularly review its benefit programs to keep them up to date and competitive, these programs are subject to periodic adjustments so that certain features may be added, modified or deleted over time.

 

It is important that you understand that the Company does not guarantee employment for any specific period of time.  You will be employed on an “at-will” basis.  This means that both the Company and you will have the right to terminate your employment at any time, for any reason, with or without prior notice or cause.  Neither you nor the Company will have any express or implied contract limiting your right to resign, or the Company’s right to terminate your employment, at any time, for any reason, with or without prior notice or cause.

 

In the event that your employment is terminated by the Company, except for “Cause” as defined below, you will be eligible to receive the following:

 

1. six (6) months salary continuation;

 

2. an additional six (6) months of option vesting;

 

3. in the event that your termination occurs after June 30th of  the calendar year, you will be entitled to a  payment of a bonus  equal to the bonus earned in the preceding year pro-rated for  the number of months actually worked in the year of termination; and

 

4. you will be entitled to a continuation of your health benefit coverage  under COBRA, premiums to be paid by the Company, for a period of  twelve (12) months, which shall commence on the date of termination and run concurrently with the period of salary continuation.

 

For purposes of this Agreement, “Cause” means termination for any of the following reasons: (1) willful or deliberate misconduct by you that materially damages the Company; (2) misappropriation of Company assets; (3) conviction of, or a plea of guilty or “no contest” to, a felony; or (4) any willful disobedience of the lawful and unambiguous instructions of the CEO of the Company; provided that the CEO has given you written notice of such disobedience or neglect and you have failed to cure such disobedience or neglect within a period reasonable under the circumstances.

 

If there is a Change in Control Event and you resign for Good Reason or are terminated without Cause within twelve (12) months of such Change in Control Event, then (i) you will be entitled to receive twelve (12) months of salary continuation, plus, in the event that the resignation for Good Reason or termination without Cause following a change in control event occurs after June 30th of the calendar year, you will be entitled to

 

 

a  payment of a bonus equal to the bonus earned in the preceding year pro-rated for the number of months actually worked in the year of your resignation or termination.  In addition, you will be entitled to continuation of your health benefit coverage under COBRA, premiums to be paid by the Company, for a period of twelve (12) months, which shall commence on the date of resignation or termination and run concurrently with the period of salary continuation, and (ii) all unvested stock options will have their remaining vesting schedule accelerated so that all stock options are fully vested.

 

“Change in Control Event” means any of the following: (i) any person or entity (except for a current stockholder) becomes the beneficial owner of greater than 50% of the then outstanding voting power of the Company; (ii) a merger or consolidation with another entity where the voting securities of the Company outstanding immediately before the transaction constitute less than a majority of the voting power of the voting securities of the Company or the surviving entity outstanding immediately after the transaction, or (iii) the sale or disposition of all or substantially all of the Company’s assets.  “Good Reason” means  (i) a material diminution in your authorities, duties, or responsibilities, or (ii) a material change in the geographic location at which you must perform services; provided, however, that you must provide the Company with notice of the existence of the Good Reason condition within ninety (90) days of its initial existence after which the Company will have a period of thirty (30) day within which it may remedy the condition and not be required to pay the severance payment; and provided, further, that any Good Reason termination must occur within two (2) years of the initial existence of the Good Reason condition.

 

Your right to receive severance payments pursuant to this letter agreement shall be subject to the condition that you execute a full release and waiver of all claims against the Company and related parties, in a form acceptable to the Company; provided that such payments and benefits will be paid, if ever, only on the date specified as the deadline for signing and delivering the release, (the “Release Deadline”), even if your release becomes irrevocable (i.e., you sign and deliver the release to the Company) before that date.  In the event the Release Deadline is more than thirty (30) days and you sign and deliver the release before the Release Deadline, the Company may elect to make such severance payments no earlier than thirty (30) days prior to the Release Deadline.

 

It is the intention of the parties that compensation paid or delivered to you by the Company either is paid in compliance with, or is exempt from, Section 409A of the Internal Revenue Code of 1986, as amended and the rules and regulations promulgated thereunder (collectively, “Section 409A”). However, the Company does not warrant to you that all compensation paid or delivered to you for your services will be exempt from, or paid in compliance with, Section 409A.  Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit under this Agreement received or to be received by you (the “Payment”) is determined to be subject (in whole or part) to the penalties imposed by Section 409A of the Code (the “Additional Taxes”), then you shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by you of the Additional Taxes, you retain an amount equal to the Payment net of any applicable taxes and withholdings other than Additional Taxes.  All

 

 

determinations required to be made under this provision , including whether and when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by the Company’s accountants or such other certified public accounting firm designated by you and reasonably acceptable to the Company.  Any certified public accounting firm chosen by you shall provide detailed supporting calculations both to the Company and you.  Any Gross-Up Payment due under this paragraph shall be paid to you no later than December 31 of the calendar year following the calendar year in which you remit the Additional Taxes to the applicable authorities.

 

For the purposes of determining when amounts otherwise payable on account of your termination of employment will be paid, which amounts become due because of your termination of employment, “termination of employment” or words of similar import shall be construed as the date that you first incur a “separation from service” for purposes of Section 409A on or following termination of employment.  Furthermore, if you are a “specified employee” of a public company as determined pursuant to Section 409A as of your termination of employment, any amounts payable on account of your termination of employment which constitute deferred compensation within the meaning of Section 409A and which are otherwise payable during the first six months following your termination (or prior to your death after termination) shall be paid to you in a cash lump-sum on the earlier of (1) the date of your death and (2) the first business day of the seventh calendar month immediately following the month in which your termination occurs.

 

In applying Section 409A to amounts paid pursuant to this letter, any right to a series of installment payments shall be treated as a right to a series of separate payments.

 

In accordance with the Immigration and Naturalization Control Act, all new employees must provide documentation that they have the legal right to work in the United States.  A copy of Form I-9 and a list of the acceptable documents confirming your right to work in the United States are also attached for your convenience.

 

To indicate your acceptance of our offer, please sign one copy of this letter in the space indicated below and return it to Nicole Schaeffer, SVP Administration and HR by March 12, 2012.  Acceptance of this offer constitutes your agreement with all of the above terms and conditions of employment with Amicus Therapeutics, Inc., and constitutes agreement to conform to Amicus Therapeutics, Inc. rules and procedures.  By signing below, you agree that no other promises, express or implied, have been made to you either verbally or in writing and that no further modifications to these terms and conditions will be effective except by a written agreement signed by the Chief Executive Officer of the Company and you.

 

 

The formality of this letter notwithstanding, I extend my personal best wishes and sincere pleasure that you are joining our team.  I look forward to working with you.

 

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
/s/ John F.   Crowley
    	
 
    
	
 
    	
 
    
	
John F. Crowley
    	
 
    
	
Chairman and CEO
    	
 
    

 

I accept the offer of employment under the terms and conditions stated above.  No other promises, express or implied, have been made to me either verbally or in writing.

 

	
By:
    	
/s/   William D. Baird
    	
 
    
	
 
    	
William   D. Baird

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