UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 14)
Forum Retirement Partners, L.P.
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(Name of Issuer)
Partnership Preferred Depositary Units
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(Title of Class of Securities)
349 851 105
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(CUSIP Number)
David L. Buckley
10400 Fernwood Road
Bethesda, MD 20817
(301) 380-9000
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(Name, Address and Telephone Number of Persons Authorized to
Receive Notices and Communications)
October 5, 1998
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other parties
to whom copies are to be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
any subsequent amendment containing information which would alter disclosures
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
"filed" for the purpose of Section 18 of the Securities Exchange Act of 1934
("Act") or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the Notes).
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Page 1 of 8 Pages
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CUSIP No. 349 851 105 Page 2 of 8 Pages
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1) Name of Reporting Person
I.R.S. Identification No. of Above Person (entities only)
Forum Group, Inc.
EIN: 61-0703072
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2) Check the Appropriate Box if a Member of a Group:
(a) [ ]
(b) [ ]
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3) SEC Use only
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4) Source of Funds: WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e): [ ].
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6) Citizenship or Place of Organization: Indiana
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Number of Units Beneficially owned by Each Reporting Person with:
7) Sole voting Power: 14,214,310 /1
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8) Shared Voting Power - 0 -
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9) Sole Dispositive Power: 14,214,310
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10) Shared Dispositive Power: - 0 -
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11) Aggregate Amount Beneficially
owned by Each Reporting Person: 14,214,310
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
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13) Percent of Class Represented by Amount in Row (11): 92.99%
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14) Type of Reporting Person: CO
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1/ Includes Units held by Forum A/H, Inc. and Forum Retirement, Inc.
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CUSIP No. 349 851 105 Page 3 of 8 Pages
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1) Name of Reporting Person
I.R.S. Identification No. of Above Person (entities only)
Forum A/H, Inc.
EIN: 35-1900163
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2) Check the Appropriate Box if a Member of a Group:
(a) [ ]
(b) [ ]
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3) SEC Use only
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4) Source of Funds: AF WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e): [ ].
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6) Citizenship or Place of Organization: Delaware
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Number of Units Beneficially Owned by Each Reporting Person with:
7) Sole Voting Power: 4,505,811
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8) Shared Voting Power: - 0 -
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9) Sole Dispositive Power: 4,505,811
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10) Shared Dispositive Power: - 0 -
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11) Aggregate Amount Beneficially
owned by Each Reporting Person: 4,505,811
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
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13) Percent of Class Represented by Amount in Row (11): 29.48%
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14) Type of Reporting Person: CO
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CUSIP No. 349 851 105 Page 4 of 8 Pages
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1) Name of Reporting Person
I.R.S. Identification No. of Above Person (entities only)
Forum Retirement, Inc.
EIN: 35-1658784
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2) Check the Appropriate Box if a Member of a Group:
(a) [ ]
(b) [ ]
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3) SEC Use only
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4) Source of Funds: AF WC
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e): [ ].
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6) Citizenship or Place of Organization: Delaware
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Number of Units Beneficially Owned by Each Reporting Person with:
7) Sole Voting Power: 2,141,795
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8) Shared Voting Power: - 0 -
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9) Sole Dispositive Power: 2,141,795
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10) Shared Dispositive Power: - 0 -
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11) Aggregate Amount Beneficially
owned by Each Reporting Person: 2,141,795
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
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13) Percent of Class Represented by Amount in Row (11): 14.01%
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14) Type of Reporting Person: CO
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CUSIP No. 349 851 105 Page 5 of 8 Pages
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Amendment No. 14 to Schedule 13D
This amendment No. 14 amends and supplements the Statement on Schedule
13D originally filed by Forum Group, Inc. ("FGI") (as heretofore amended and
supplemented, the "Schedule 13D"). Capitalized terms used herein without
definition have the meanings set forth in the Schedule 13D. This Amendment No.
14 to Schedule 13D should be read in conjunction with, and is qualified in its
entirety by reference to, the Schedule 13D, as amended.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Schedule 13D is revised and amended as set forth
below:
As of July 28, 1998, Forum Retirement, Inc. ("FRI"), a wholly-owned
subsidiary of FGI and the general partner of Forum Retirement Partners, L.P.
("FRP"), acquired an additional 25,938 Units for an aggregate price of
approximately $116,721 in connection with the previously reported settlement of
litigation ("Settlement") initiated by The Russell F. Knapp Revocable Trust. The
funds necessary for FRI to consummate this purchase were obtained from the
existing working capital of Host Marriott Corporation ("Host Marriott").
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is revised and amended as set forth
below:
On October 5, 1998, the Advisory Committee of the Board of Directors of
FRI, in consultation with the Advisory Committee's independent financial advisor
and independent legal counsel, (i) determined that the terms of the merger
agreement attached hereto as Exhibit A (the "Merger Agreement") by and among
FRI, FRP, FGI and Forum Merger Limited Partnership ("Forum MLP") are fair to the
holders of Units (other than affiliates of Host Marriott) and (ii) recommended
that the Board of Directors of FRI approve the Merger Agreement. Under the terms
of the Merger Agreement, Forum MLP will be merged with and into FRP (the
"Merger") and the holders of Units (other than affiliates of Host Marriott) will
receive $5.75 in cash per Unit at the time of closing.
On October 5, 1998, the Board of Directors of FRI approved the Merger
Agreement. Consummation of the Merger is subject to certain conditions set forth
in the Merger Agreement, including that (i) the Merger shall have been approved
by a majority in interest of the limited partners of FRP, (ii) all consents and
approvals prescribed by law which are necessary to the consummation of the
transactions contemplated by the Merger Agreement shall have been obtained,
(iii) all applicable waiting periods under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, shall have expired or otherwise been
terminated and (iv) no injunction or order preventing consummation of the merger
shall be in effect.
Under the terms of the Merger Agreement, FGI agreed to cause all
limited partnership interests owned by FGI and its affiliates to consent to the
Merger.
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CUSIP No. 349 851 105 Page 6 of 8 Pages
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The Merger Agreement also provides that holders of Units (other than
Host Marriott and its affiliates) shall have appraisal rights to the same extent
as would be available to a shareholder in such circumstances if FRP were a
corporation organized under the laws of the State of Delaware.
The description of the Merger Agreement herein does not purport to be
complete and is qualified in its entirety by reference to the Agreement, which
is attached as Exhibit A to this Amendment No. 14.
If and when the merger of Forum MLP and FRP is consummated, the Units
will cease to be authorized for trading on the American Stock Exchange and will
become eligible for termination of registration under Section 12(g)(4) of the
Securities Exchange Act of 1934, as amended ("Exchange Act").
Except as set forth herein or in connection with the Merger (if
consummated), the Reporting Persons have no present plans or proposals that
relate to or would result in: (i) the acquisition of additional Units or the
disposition of Units; (ii) an extraordinary FRP transaction, such as a merger,
reorganization or liquidation of FRP; (iii) a sale or transfer of a material
amount of assets of the FRP; (iv) any change in the present board of directors
or management of FRI, including any plans or proposals to change the number or
term of directors or to fill any existing vacancies on the board; (v) any
material change in FRP's business or structure; (vii) any changes in FRP's
governing instruments or other actions which may impede the acquisition of
control of the Partnership by any person; (viii) causing a class of securities
of FRP to be delisted from a national securities exchange or cease to be
authorized to be quoted in an inter-dealer quotation system of a registered
national securities association; (ix) causing a class of equity securities of
FRP to become eligible fore termination of registration pursuant to Section
12(g)(4) of the Exchange Act; or (ix) any action similar to any of those
enumerated above.
Item 5. Interest in Securities of the Issuer.
Item 5 of the Schedule 13D is revised and amended and is
restated as set forth below:
(a)-(b) The aggregate number and percentage of outstanding
Units beneficially owned are set forth below. Except as otherwise indicated,
each entity has the sole power to vote and to dispose of the Units listed
opposite its name.
Number of Units Percent of Outstanding
Name of Beneficial Owner Beneficially Owned Units Owned
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Forum Group, Inc. 14,214,310* 92.99%
Forum A/H, Inc. 4,505,811 29.48%
Forum Retirement, Inc. 2,141,795 14.01%
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* Includes 4,505,811 Units and 2,141,795 Units held by Forum A/H, Inc. and FRI,
respectively.
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CUSIP No. 349 851 105 Page 7 of 8 Pages
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(c) As reported in Item 3 above, FGI, through FRI, purchased
25,938 Units as of July 28,1998 at a purchase price of $4.50 per Unit in
connection with the Settlement. In connection with the Settlement, Host Marriott
also agreed to pay as much as $1.25 per Unit to holders of Units who accepted
the Settlement, under certain circumstances, in the event that Host Marriott
within three years following the date of the Settlement initiates a tender offer
for Units. The District Court for the Southern District of Indiana entered an
order approving the Settlement on February 5, 1998.
(d) Not Applicable.
(e) Not Applicable.
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CUSIP No. 349 851 105 Page 8 of 8 Pages
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Signatures
After reasonable inquiry and to the best of the knowledge and
belief of each of the undersigned, each of the undersigned certificates that the
information set forth in this statement is true, complete and correct.
Dated. October 7, 1998
Forum Group, Inc. Forum A/H, Inc.
By: /s/ Christopher G Townsend By: /s/ Christopher G Townsend
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Christopher G. Townsend, Secretary Christopher G. Townsend, Secretary
Forum Retirement, Inc.
By: /s/ Christopher G Townsend
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Christopher G. Townsend, Secretary
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EXHIBIT A
This AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of
October 5, 1998, by and among FORUM RETIREMENT PARTNERS, L.P., a Delaware
limited partnership (the "Partnership"), FORUM RETIREMENT, INC., a Delaware
corporation (the "General Partner"), FORUM GROUP, INC., a Delaware corporation
(the "Parent"), and FORUM MERGER LIMITED PARTNERSHIP, a Delaware limited
partnership and an indirect subsidiary of the Parent ("Forum MLP").
RECITALS
WHEREAS, the Partnership has heretofore issued limited partnership
units (the "Units"), each representing limited partner interests in the
Partnership;
WHEREAS, the Units have been deposited with a depository (the
"Depositary") designated by the General Partner, and the Units are represented
by depositary receipts ("Depositary Receipts")
WHEREAS, the General Partner is the sole general partner of the
Partnership;
WHEREAS, each of the Parent and Forum MLP is an affiliate (as used
herein, such term shall have the meaning set forth in the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder (the "Exchange
Act")) of the General Partner;
WHEREAS, the Parent wishes to merge Forum MLP with and into the
Partnership (the "Merger") pursuant and subject to the terms and conditions of
this Agreement, whereby each issued and outstanding Unit not owned directly or
indirectly by Forum MLP, the Parent or their affiliates will be converted into
the right to receive $5.75 per Unit in cash (the "Merger Consideration");
WHEREAS, the Board of Directors of the General Partner has established
an advisory committee consisting of persons not otherwise affiliated with the
Parent or its affiliates (the "Advisory Committee"), and has charged the
Advisory Committee to negotiate and determine the fairness of this Agreement and
the Merger to the holders of Depositary Receipts other than Parent and its
affiliates;
WHEREAS, the Advisory Committee has considered the fairness of this
Agreement and the Merger to the Limited Partners (as defined in the Amended and
Restated Agreement of Limited Partnership of the Partnership dated as of
December 29, 1986 (the "Partnership Agreement")) other than the Parent and its
affiliates (the "Unaffiliated Limited Partners"), and has, subject to the terms
and conditions of this Agreement, (i) determined that the Merger is fair to,
advisable and in the best interests of the Unaffiliated Limited Partners, (ii)
recommended that the General Partner approve this Agreement and (iii)
recommended that the Merger be approved by the Limited Partners;
<PAGE>
WHEREAS, the General Partner, on its own behalf and on behalf of the
Partnership, and the Parent, on its own behalf and on behalf of Forum MLP, have
duly approved this Agreement and the Merger, and the General Partner has
determined, upon the recommendation of the Advisory Committee, that the Merger
is fair to and in the best interests of the Unaffiliated Limited Partners and,
subject to the terms and conditions of this Agreement, has recommended that the
Merger be approved by the Limited Partners; and
WHEREAS, the Parent and affiliates of the Parent holding, in the
aggregate, approximately 92.9% of the outstanding Units have agreed to consent
to approval of this Agreement and the Merger upon submission of this Agreement
and the Merger to the Limited Partners for approval (the "Merger Consent")
pursuant to Section 17-211 of the Delaware Revised Uniform Limited Partnership
Act (the "Delaware Partnership Act") and Articles XV and XVI of the Amended and
Restated Agreement of Limited Partnership of the Partnership.
NOW THEREFORE, in consideration of the mutual benefits to be derived
from this Agreement and of the representations, warranties, agreements and
conditions contained in this Agreement, the parties agree as follows:
ARTICLE I - The Merger
1.1 The Merger. In accordance with and subject to (a) the provisions of
this Agreement, (b) the Certificate of Merger (as hereinafter defined), and (c)
the Delaware Partnership Act, at the Effective Time (as hereinafter defined),
Forum MLP shall be merged with and into the Partnership in the Merger. As a
result of the Merger, the separate existence of Forum MLP shall cease, and the
Partnership shall continue as the surviving partnership. The Partnership is
hereinafter sometimes referred to as the "Surviving Partnership."
1.2 Effective Time of the Merger. Subject to the provisions of this
Agreement, an appropriate form of certificate of merger (the "Certificate of
Merger") shall be duly executed and filed by the Partnership and Forum MLP on
the Closing Date (as hereinafter defined) in the manner provided in Section
17-211 of the Delaware Partnership Act. The Merger shall become effective at
such time on the Closing Date as the Certificate of Merger is filed with the
Secretary of State of the State of Delaware (or such later time as may be
specified in the Certificate of Merger) (the "Effective Time").
1.3 Closing. Unless this Agreement shall have been terminated and the
transactions contemplated by this Agreement shall have been abandoned pursuant
to the provisions of Article VI, and subject to the provisions of Article V, the
closing of the Merger (the "Closing") will take place at 10:00 a.m., Washington,
D.C. time, on the first Business Day (as hereinafter defined) occurring after
the Merger Consent (which shall consist of a solicitation of consents of the
Limited Partners during the twenty (20) calendar day period from and after the
mailing of the Consent Solicitation Statement (as defined below)) or, if later,
the date which is the first Business Day after all of the conditions set forth
in Article V hereof shall have been satisfied or waived, or such other date and
time
<PAGE>
which is agreed to in writing by the parties (the "Closing Date"). The Closing
shall take place at the offices of Arnold & Porter, 555 12th Street, N.W.,
Washington, D.C., unless another place is agreed to by the parties. For purposes
of this Agreement, "Business Day" shall mean any day except Saturday, Sunday or
any day on which banks are generally not open for business in Washington, D.C.
1.4 Effects of the Merger; General Partner. The Merger shall, from and
after the Effective Time, have the effects provided for in the Delaware
Partnership Act. The General Partner shall be the general partner of the
Surviving Partnership until its resignation or removal or until its successor is
duly qualified.
1.5 Governing Documents. Following the Effective Time, the Partnership
Agreement of the Partnership shall be the partnership agreement of the Surviving
Partnership, until amended in accordance with the provisions thereof and
applicable law.
1.6 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Forum MLP, the Partnership, the
Surviving Partnership or any holder of any of the following securities:
(a) Subject to Section 1.8, each Unit which is issued and outstanding
immediately prior to the Effective Time and is owned by persons other than the
Parent and its affiliates (the "Unaffiliated Unitholders") shall be canceled,
extinguished and retired, and be converted into and become a right to receive
the Merger Consideration;
(b) Each Unit which is issued and outstanding immediately prior to the
Effective Time and is not owned by an Unaffiliated Unitholder shall be and
remain a unit of limited partnership interest in the Surviving Partnership;
(c) Each partnership interest, general or limited, of Forum MLP issued
and outstanding immediately prior to the Effective Time shall be canceled,
extinguished and retired, and no payment shall be made thereon; and
(d) The General Partner's general partnership interest in the
Partnership shall be and remain a general partnership interest in the Surviving
Partnership.
1.7 Payment.
(a) From and after the Effective Time, a bank or trust company
designated by the Parent at or prior to the Effective Time and reasonably
satisfactory to the Advisory Committee (the "Payment Agent") shall act as
payment agent in effecting the payment of the Merger Consideration for Units or
Depositary Receipts pursuant to Section 1.6(a) hereof. At or before the
Effective Time, the Parent or Forum MLP shall deposit with the Payment Agent the
aggregate Merger Consideration in trust for the benefit of the Unaffiliated
Unitholders. Promptly after the Effective Time, the Payment Agent shall mail to
each record holder of Depositary Receipts a form of letter of transmittal (which
shall specify that delivery shall be effected, and risk of loss and title to
such Depositary Receipt shall pass, only upon delivery of such Depositary
Receipts to the Payment Agent) and instructions for use in surrendering such
Depositary Receipts and receiving the Merger Consideration for each Unit
previously represented thereby. Upon the surrender of each such Depositary
Receipt and the payment by the Payment Agent of the Merger Consideration in
exchange therefor, such Depositary Receipt shall be canceled. Until so
surrendered and exchanged, each such Depositary Receipt held by any Unaffiliated
Unitholders shall represent solely the right to receive the Merger
<PAGE>
Consideration, multiplied by the number of Units represented by such Depositary
Receipt, and subject to the rights described in Section 1.8, the holder thereof
shall have no rights whatsoever in the Partnership or the Surviving Partnership.
Upon the surrender of such outstanding Depositary Receipt, the holder shall
receive such Merger Consideration, without any interest thereon. If any cash is
to be paid to a name other than the name in which the Depositary Receipt
surrendered in exchange therefor is registered, it shall be a condition to such
payment that the person requesting such payment shall pay to the Payment Agent
any transfer or other taxes required by reason of the payment of such cash to a
name other than that of the registered holder of the Depositary Receipt
surrendered, or such person shall establish to the satisfaction of the Payment
Agent that such tax has been paid or is not applicable. Notwithstanding the
foregoing, neither the Payment Agent nor any party hereto shall be liable to a
holder of Depositary Receipts for any Merger Consideration or other payments
made to a public official pursuant to applicable abandoned property laws. The
Surviving Partnership and the Payment Agent shall be entitled to deduct and
withhold from the Merger Consideration otherwise payable to a holder of Units
pursuant to the Merger any taxes or other amounts as are required by applicable
law, including without limitation Sections 3406 and 1445 of the Internal Revenue
Code of 1986. To the extent that amounts are so withheld by the Surviving
Partnership or the Payment Agent, they shall be treated for all purposes of this
Agreement as having been paid to the holder of the Units in respect of which
such deduction and withholding was made.
(b) Six (6) months after the Closing Date, the Surviving Partnership
shall be entitled to the return of all amounts then held by the Payment Agent
pursuant to Section 1.7(a) (including earnings thereon), and the Payment Agent's
duties shall terminate. Thereafter, any holder of a Depositary Receipt shall
look only to the Surviving Partnership (subject to applicable abandoned
property, escheat and similar laws) as a general creditor to receive in exchange
therefor the Merger Consideration, without any interest thereon.
(c) At and after the Effective Time, there shall be no transfers on the
books of the Surviving Partnership of any Unit other than Units that remain
outstanding pursuant to Section 1.6(b) hereof. As of the Effective Time, each
Unaffiliated Unitholder shall be deemed to have withdrawn as a limited partner
and shall have no further interest in the Partnership or the Surviving
Partnership or any allocations or distributions of income, property or
otherwise, other than the right to receive the Merger Consideration as provided
in this Article I.
1.8 Appraisal Rights. In accordance with Section 17-212 the Delaware
Partnership Act the Unaffiliated Unitholders shall have, in respect of the Units
held by such Unaffiliated Unitholders, the appraisal rights to the same extent
as would be available to a shareholder in such circumstances if the Partnership
were a corporation organized under the laws of the State of Delaware.
<PAGE>
ARTICLE II - Approval of the Merger
2.1 Actions of the Partnership and the General Partner. (a) The General
Partner hereby consents to the Merger, agrees in all respects with the terms of
this Agreement and, subject to the terms and conditions of this Agreement, the
consummation of the transactions contemplated hereby. In connection therewith,
by executing this Agreement, the General Partner, as the sole general partner of
the Partnership, consents to and approves in all respects this Agreement and the
transactions contemplated hereby (including, without limitation, the Merger) on
behalf of the Partnership. The General Partner hereby represents that, at a
meeting of its Board of Directors duly called and held on October 5, 1998, (i)
based upon (x) the opinion of Robert A. Innamorati & Co., financial advisor to
the Advisory Committee (the "Financial Advisor") that, as of the date of this
Agreement, the Merger Consideration to be received by the Unaffiliated
Unitholders pursuant to the Merger is fair, from a financial point of view, to
the Unaffiliated Limited Partners and (y) the recommendation of the Advisory
Committee, such Board approved this Agreement and the Merger and has determined
that the Merger, considered as a whole, is fair to and in the best interests of
the Unitholders and (ii) such Board recommended that the Unitholders of the
Partnership approve and adopt this Agreement and the Merger.
2.2 Solicitation of Consents of Limited Partners of the Partnership.
Promptly after the date of this Agreement, the Partnership shall take all action
necessary, in accordance with the Delaware Partnership Act and the Partnership
Agreement, to solicit the consents of the Limited Partners to this Agreement and
the Merger during the twenty (20) calendar day period following the mailing of
the Consent Solicitation Statement (hereinafter defined). The parties agree that
the Partnership shall take all commercially reasonable actions necessary to
admit as Limited Partners of the Partnership all Assignees (as defined in the
Partnership Agreement), as of the record date established by the General
Partner. The Parent shall cause, and shall cause each of the affiliates of the
Parent holding outstanding Units to cause, all of the Units owned by them to
approve and consent to this Agreement and the Merger.
2.3 Consent Solicitation Statement. Promptly following the execution of
this Agreement, the Partnership shall prepare (and Parent and Forum MLP shall
cooperate in preparing) and as soon as reasonably practicable thereafter shall
file with the Securities and Exchange Commission ("SEC") a consent solicitation
statement with respect to the Merger. Subject to compliance with the rules and
regulations of the SEC, the Partnership shall thereafter file with the SEC and
mail to Unitholders a definitive consent solicitation statement with respect to
the Merger. The term "Consent Solicitation Statement" shall mean such consent
solicitation statement at the time it initially is mailed to the Unitholders and
all amendments or supplements thereto, if any, similarly filed and mailed. Forum
MLP and the Partnership each agree to correct any information provided by it for
use in the Consent Solicitation Statement which shall have become false or
misleading in any material respect.
<PAGE>
ARTICLE III
Representations and Warranties
3.1 Representations and Warranties of the Parent and Forum MLP. The
Parent and Forum MLP each, jointly and severally, represents and warrants to the
Partnership as follows:
(a) Organization and Qualification. The Parent is a corporation validly
existing and in good standing under the laws of Delaware. Forum MLP is a limited
partnership duly formed, validly existing and in good standing under the laws of
Delaware.
(b) Authority Relative to this Agreement. The Parent has the requisite
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder. Forum MLP (through its general partner) has the requisite
partnership power and authority to enter into this Agreement and to perform its
obligations hereunder. The execution, delivery and performance of this Agreement
by the Parent and Forum MLP and the consummation by the Parent and Forum MLP of
the transactions contemplated hereby have been duly authorized by the Parent and
Forum MLP and no other corporate or partnership action on the part of the Parent
or Forum MLP is necessary to authorize the execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby.
This Agreement has been duly executed and delivered by the Parent and Forum MLP
and constitutes a valid and binding obligation of each such company, enforceable
against each such company in accordance with its terms, except to the extent
that its enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally or by general equitable principles.
(c) Financing. The Parent has sufficient available funds to consummate
the Merger, and shall make such funds available for such purposes.
(d) Certain Information. To the knowledge of Parent, without
independent inquiry, the written information (other than the Projections (as
defined below)) concerning the Partnership supplied to the Advisory Committee by
the Parent or any of its affiliates was, taken as a whole, accurate in all
material respects at the time such written information was provided. To the
knowledge of Parent, without independent inquiry, the financial projections of
the results of operations and cash flows relating to the Partnership's
properties furnished by the General Partner to the Advisory Committee (the
"projections") prepared by Marriott Senior Living Services, Inc., manager of the
Partnership's assets (the "Manager"), were based upon the reasonable, good faith
assumptions of the General Partner at the time such assumptions were made. For
purposes of this Section 3.1(d), the knowledge of the Manager shall not be
imputed to Parent.
3.2 Representations and Warranties of the Partnership. The Partnership
represents and warrants to each of the Parent and Forum MLP as follows:
<PAGE>
(a) Organization and Qualification. The Partnership is a limited
partnership duly formed, validly existing and in good standing under the laws of
the State of Delaware.
(b) Authority Relative to Agreement. The General Partner, pursuant to
the Partnership Agreement and the Delaware Partnership Act, has the requisite
power and authority to cause the Partnership to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereunder. No other corporate or partnership proceedings on the
part of the General Partner or the Partnership are necessary to authorize this
Agreement and the transactions contemplated hereby, other than the affirmative
vote of the Limited Partners representing a Majority Interest (as defined in the
Partnership Agreement). This Agreement has been duly executed and delivered by
the Partnership and constitutes a valid and binding obligation of the
Partnership, enforceable against the Partnership in accordance with its terms,
except to the extent that its enforceability may be limited by applicable
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditors rights generally or by general equitable principles.
(c) General Partner Recommendation. The Board of Directors of the
General Partner, upon the recommendation of the Advisory Committee, has duly
approved and adopted this Agreement and the Merger on the terms and conditions
set forth herein, and has recommended and will recommend that the Unaffiliated
Limited Partners approve and adopt this Agreement and the Merger; provided,
however, that such recommendation may be withdrawn or modified if, and only to
the extent that, the Advisory Committee, after consultation with and based upon
the advice of outside legal counsel, determines in good faith that such action
is required for the Board of Directors of the General Partner to comply with its
fiduciary duties to Unaffiliated Limited Partners under Delaware law as in
effect at the time of such action.
(d) Fees. Except for the fees payable to Robert A. Innamorati & Co.,
neither the General Partner nor the Partnership has paid or become obligated to
pay any fee or commission to any broker, finder or intermediary in connection
with the transactions contemplated hereby.
ARTICLE IV - Covenants
4.1 Legal Conditions to Merger. The General Partner (on behalf of
itself and the Partnership), Forum MLP and the Parent shall take all reasonable
actions necessary to comply promptly with all legal requirements with respect to
the Merger and shall use commercially reasonable efforts to cooperate promptly
with and furnish information to the other parties in connection
<PAGE>
with any such requirements. The General Partner (on behalf of itself and the
Partnership), Forum MLP and the Parent shall use commercially reasonable efforts
(i) to obtain (and will take all reasonable actions necessary to promptly
cooperate with the other parties in obtaining) any consent, authorization, order
or approval of, or any exemption by, any administrative agency or commission or
other governmental authority or instrumentality (a "Governmental Entity"), or
other third party, required to be obtained or made (or cooperate in the
obtaining of any thereof required to be obtained) in connection with the Merger
or the taking of any action contemplated by this Agreement; (ii) to lift,
rescind or mitigate the effect of any injunction or restraining order or other
order adversely affecting the consummation of the transactions contemplated
hereby; (iii) to fulfill all conditions pursuant to this Agreement; (iv) to
prevent, with respect to a threatened or pending temporary, preliminary or
permanent injunction or other order, decree or ruling, the entry thereof and (v)
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective as promptly as practicable the transactions
contemplated by this Agreement.
4.2 Expenses. Whether or not the Merger is consummated, Parent and/or
its affiliates (other than the General Partner and the Partnership) shall bear
all costs and expenses of each party hereto incurred in connection with the
transactions contemplated by this Agreement.
4.3 Advisory Committee. (a) During the term of this Agreement and until
the Effective Time, Parent and the General Partner of the Partnership shall take
all actions necessary such that the Advisory Committee of the Board of Directors
shall continue in existence without diminution of any of its powers or duties
and its members shall consist solely of the directors of the General Partner who
currently serve on such committee, or any successors selected by such directors.
(b) Any amendment or termination of this Agreement by the Partnership,
any waiver of any of the Partnership's or the General Partner's rights
hereunder, any extension of the time for performance of the Parent or Forum
MLP's obligations or other acts hereunder, or any actions to be taken by the
Board of Directors of the General Partner in connection with this Agreement,
shall require the concurrence of the members of the Advisory Committee;
provided, however, that if no members of the Advisory Committee shall then be in
office, this Section 4.3(b) shall be inapplicable.
4.4 Indemnification. (a) The General Partner, Parent and Forum MLP
agree that all rights to exculpation and indemnification for acts or omissions
occurring prior to the Effective Time now existing in favor of the current or
former directors or officers (the "Indemnified Parties") of the General Partner
as provided in its charter or by-laws, the Partnership Agreement or in any other
document or agreement shall survive the Merger and shall continue in full force
and effect in accordance with their terms.
(b) The Surviving Partnership shall not amend Section 6.9 or 6.10 of
the Partnership Agreement as in effect on the date hereof in any manner that
would adversely affect the rights thereunder of individuals who at or prior to
the Effective Time were directors or officers of the General Partner.
(c) For three years from and after the Effective Time, Parent shall use
commercially reasonable efforts to maintain directors' and officers' liability
insurance covering the Indemnified Parties who are currently covered by Parent's
directors' and officers' liability insurance policy on terms no less favorable
(in terms of coverage and amounts) to such persons than those of the policy in
effect prior to the Effective Time.
<PAGE>
ARTICLE V - Conditions Precedent
5.1 Certain Conditions on the Obligation of Forum MLP to Consummate the
Merger.
The respective obligations of each party to effect the Merger shall be
subject to satisfaction of the following conditions at or prior to the Effective
Time:
(a) this Agreement and the Merger shall have been approved and adopted
by a Majority Interest (as defined in the Partnership Agreement) in the manner
required by the Delaware Partnership Act and the Partnership Agreement;
(b) All consents and approvals prescribed by law which are necessary to
the consummation of the transactions contemplated hereby shall have been
obtained, and all statutory waiting periods in respect thereof shall have
expired.
(c) All applicable waiting periods (and any extensions thereof) under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall have
expired or otherwise been terminated.
(d) No preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a Governmental Entity
nor any statute, rule, regulation or executive order promulgated or enacted by
any Governmental Entity shall be in effect, which would make the acquisition or
holding by the Parent, its subsidiaries or affiliates of the Units of the
Surviving Partnership illegal or otherwise prevent the consummation of the
Merger or make the consummation of the Merger illegal.
ARTICLE VI - Termination
6.1 Termination. This Agreement may be terminated, and the Merger
contemplated herein may be abandoned, at any time prior to the Effective Time,
whether prior to or after approval of the Merger by the Unitholders:
(a) by the Parent or the Partnership, if either party concludes in good
faith that any of the conditions specified in Article V cannot be satisfied in a
timely manner; or
(b) by the Parent and the Partnership, by their mutual agreement,
provided such termination is authorized by the members of the Advisory
Committee; or
(c) by either the Partnership (with the consent of the members of the
Advisory Committee) or the Parent (without the consent of the members of the
Advisory Committee):
(i) if the Effective Time has not occurred prior to March
31, 1998; provided that the party seeking to
terminate this Agreement pursuant to this clause
6.1(c)(i) shall not have breached in any
<PAGE>
material respect its obligations under this Agreement
in any manner that shall have proximately contributed
to the failure to consummate the Merger on or before
such date; or
(ii) if any court of competent jurisdiction or other
Governmental Entity shall have issued an order,
decree or ruling, or taken any other action
permanently restraining, enjoining or otherwise
prohibiting the Merger and such order, decree, ruling
or other action shall have become final and
non-appealable.
6.2 Effect of Termination. In the event of the termination of this
Agreement as provided in Section 6.1 hereof, this Agreement shall forthwith
become void, except (i) as set forth in this Section 6.2 and in Sections 4.2 and
4.4 and (ii) nothing herein shall relieve any party from liability for any
breach of this Agreement, and there shall be no liability on the part of the
Parent, Forum MLP, the General Partner or the Partnership, or any of their
respective directors or officers.
ARTICLE VII - General Provisions
7.1 Amendment. This Agreement may not be amended except by (i) an
instrument in writing signed on behalf of each of the parties hereto and (ii)
prior approval of such amendment by the members of the Advisory Committee
provided, however, that after approval of the Merger by the Limited Partners, no
amendment may be made which would: (a) alter or change the Merger Consideration;
or (b) alter or change any other terms and conditions of this Agreement if any
of the alterations or changes, alone or in the aggregate, would materially
adversely affect the Limited Partners in each case without the further approval
of a Majority Interest (as defined in the Partnership Agreement).
7.2 Nonsurvival of Representations, Warranties and Agreements. The
respective representations and warranties of the Parent, Forum MLP and the
Partnership contained herein shall expire with, and be terminated and
extinguished upon, consummation of the Merger, and thereafter none of the
Partnership, the Parent or Forum MLP or any officer, director or principal
thereof shall be under any liability whatsoever with respect to any such
representation or warranty. This Section 7.2 shall have no effect upon any other
obligation of the parties hereto, whether to be performed before or after the
consummation of the Merger.
7.3 Entire Agreement; Counterparts. This Agreement contains the entire
agreement among the Partnership, the Parent and Forum MLP with respect to the
subject matter hereof and supersedes all prior arrangements and understandings,
both written and oral, among such parties with respect thereto. This Agreement
may be executed in one or more counterparts, all of which shall be considered
one and the same agreement and shall become effective when one or more
counterparts have been signed by each of the parties and delivered to the other
parties, it being understood that all parties need not sign the same
counterpart.
<PAGE>
7.4 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to be sufficient if contained in a written
instrument and shall be deemed to have been duly given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid, to the
parties at the following addresses (or at such other addresses as shall be
specified by a party by like notice):
Forum Group, Inc.
10400 Fernwood Road
Bethesda, MD 20817-1109
Attention: David L. Buckley
with a copy to:
Arnold & Porter
555 12th Street, N.W.
Washington, D.C. 20004
Attention: Andrew Pace
and:
Mr. John Sexton
Chairman, Advisory Committee of
Forum Retirement, Inc.
c/o Evan-Mckinsey & Company
Sterling Plaza
5949 Sherry Lane, Suite 1880
Dallas, TX 75225
All such notices and other communications shall be deemed to have been received
(a) in the case of personal delivery, on the date of such delivery if received
prior to 5:00 p.m. Washington, D.C. time on such date, (b) in the case of a
telecopy, when the party receiving such telecopy shall have confirmed receipt of
the communication, (c) in the case of delivery by nationally recognized
overnight courier, on the Business Day following dispatch and (d) in the case of
mailing, on the third Business Day following such mailing.
7.5 Public Announcements. The General Partner, on behalf of itself and
the Partnership, and the Parent and Forum MLP shall consult with each other
before issuing any press release or otherwise making any public statements with
respect to this Agreement or the Merger and shall not issue any such press
release or make such public statement prior to such consultation except as may
be required by law or the rules of the American Stock Exchange.
7.6 Severability. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement in any other jurisdiction. If any
<PAGE>
provision of this Agreement is so broad as to be unenforceable, such provision
shall be interpreted to be only so broad as is enforceable.
7.7 Interpretation. When a reference is made in this Agreement to
subsidiaries of Forum MLP, the Parent, the General Partner or the Partnership,
the word "subsidiaries" means any corporation more than 50% of whose outstanding
voting securities, or any partnership, joint venture or other entity more than
50% of whose total equity interest, is directly or indirectly owned by the
Parent, Forum MLP, the General Partner or the Partnership, as the case may be.
For purposes of this Agreement, the Partnership shall not be deemed to be an
affiliate or subsidiary of the Parent or Forum MLP.
7.8 Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
7.9 Benefits; Assignment. Except for Section 4.4 hereof, this Agreement
is not intended to confer upon any person other than the parties any rights or
remedies hereunder. This Agreement shall not be assigned (other than by
operation of law); provided, however, that notwithstanding the foregoing, the
parties hereto acknowledge that Forum MLP shall have the unrestricted right to
assign all of its respective rights and obligations hereunder to a wholly-owned
affiliate of the Parent or Forum MLP; provided, further, that notwithstanding
such assignment, Forum MLP shall not be released from its obligations hereunder.
This Agreement shall be binding upon, inure to the benefit of and be enforceable
by the parties and their respective successors and assigns.
7.10 Limitation of Liability. In no event shall any partner (other than
the General Partner) or representative of the Partnership or any direct or
indirect stockholder, officer, director, partner or representative of the
General Partner or any other such person, be personally liable for any
obligation of the Partnership or the General Partner under this Agreement. In no
event shall recourse with respect to the obligations under this Agreement of the
Partnership or the General Partner be had to the assets or business of any
person other than the Partnership or the General Partner, respectively.
7.11 Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without reference to the
conflicts of laws provisions thereof.
IN WITNESS WHEREOF, the Partnership, the General Partner, the Parent
and Forum MLP have caused this Agreement to be executed as of the date first
written above by their respective officers thereunder duly authorized.
FORUM RETIREMENT PARTNERS, L.P.
By: Forum Retirement, Inc., its General Partner
By: /s/ Christopher G Townsend
-------------------------------------------
Name: Christopher G Townsend
Title: Secretary
<PAGE>
FORUM RETIREMENT, INC.
By: Forum Retirement, Inc., its General Partner
By: /s/ Christopher G Townsend
-------------------------------------------
Name: Christopher G Townsend
Title: Secretary
FORUM GROUP, INC.
By: /s/ David L. Buckley
-------------------------------------------
Name: David L. Buckley
Title: Vice-President
FORUM MERGER LIMITED PARTNERSHIP
By: Forum A/H, Inc., its General Partner
By: /s/ David L. Buckley
-------------------------------------------
Name: David L. Buckley
Title: Vice-President
