EXHIBIT 10.5
EXECUTION COPY
ASSUMPTION AND REIMBURSEMENT AGREEMENT (CNL)
This ASSUMPTION AND REIMBURSEMENT AGREEMENT (this "Agreement") is made
effective as of March 28, 2003, by and among MARRIOTT INTERNATIONAL, INC., a
Delaware corporation ("Marriott Parent"), MARRIOTT CONTINUING CARE, LLC, a
Delaware limited liability company ("MCC" and, together with Marriott Parent,
"Assignors"), CNL RETIREMENT PROPERTIES, INC., a Delaware corporation ("CNL
Parent"), CNL Retirement MA3 Pennsylvania, LP, a Delaware limited partnership
("PA Assignee"), and CNL Retirement MA3 Virginia, LP, a Delaware limited
partnership ("VA Assignee" and, together with PA Assignee, "Operating
Assignees;" Operating Assignees and CNL Parent, collectively, "Assignees").
RECITALS
A. On the date hereof, pursuant to a Purchase and Sale Agreement
dated as of December 20, 2002 by and among MCC (as Seller), CNL Retirement MA3,
LP, a Delaware limited partnership, or assigns (as Purchaser), Marriott Parent
and CNL Parent (as amended or modified from time to time, the "Real Estate
Purchase Agreement"), the VA Assignee is purchasing from MCC the senior living
facility located in Ft. Belvoir, Virginia more specifically described in EXHIBIT
A-1 attached hereto (the "Fairfax") and PA Assignee is purchasing the senior
living facility located in Haverford, Pennsylvania more specifically described
in EXHIBIT A-2 attached hereto (the "Quadrangle," and collectively with the
Fairfax, the "Facilities"); and, pursuant to a Stock Purchase Agreement dated as
of December 30, 2002 by and among Marriott Parent, Sunrise Assisted Living, Inc.
("Sunrise") and certain affiliates of Marriott Parent (as amended or modified
from time to time, the "Stock Purchase Agreement"), Sunrise is acquiring all of
the issued and outstanding stock of Marriott Senior Living Services, Inc., a
Delaware corporation to be renamed Sunrise Senior Living Services, Inc. (the
"Company") and, indirectly through the Company, all of the issued and
outstanding stock of MCC (capitalized terms used and not defined herein shall
have the meanings given them in the Real Estate Purchase Agreement);
B. Each of MCC, Company (as predecessor to MCC) and Marriott
Retirement Communities - Haverford, Inc. (as predecessor to Company and MCC)
have from time to time issued to residents of the Quadrangle and to certain
other Persons in connection with continuing care arrangements at the Quadrangle
obligations known as "Lifecare Bonds" as more specifically described on Schedule
1 hereto (the "Outstanding Quadrangle Bonds");
C. Each of MCC, Company (as predecessor to MCC) and Marriott
Retirement Communities - Fairfax, Inc., as predecessor to Company and MCC, have
from time to time issued to residents of the Fairfax and to certain other
Persons in connection with continuing care arrangements at the Fairfax
obligations known as "Lifecare Bonds" as more specifically
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described on Schedule 2 hereto (the "Outstanding Fairfax Bonds" and, together
with the Outstanding Quadrangle Bonds, the "Outstanding Bonds");
D. Pursuant to the Lifecare Agreements of Undertaking set forth on
Schedule 3 hereto (the "Lifecare Undertakings"), Marriott Parent has agreed to
provide all financial and other support that may be required to comply with
obligations under "Lifecare Bonds" issued in respect of the Facilities
("Lifecare Bonds") and continuing care agreements entered into in respect of the
Facilities ("Continuing Care Agreements");
E. Pursuant to the Host Marriott Indemnity Agreement, dated as of
October 8, 1993, among Marriott International, Inc., Marriott Senior Living
Services, Inc., Marriott Corporation, HMC Retirement Properties, Inc. and HMH
Properties, Inc. (the "Host Marriott Indemnity Agreement," and, together with
the Lifecare Undertakings, the "Parent Lifecare Agreements"), Marriott Parent
has agreed to indemnify and hold harmless Host Marriott Corporation from and
against liabilities in respect of Continuing Care Agreements and Lifecare Bonds;
F. Pursuant to the Real Estate Purchase Agreement, PA Operating
Assignee and VA Operating Assignee respectively have agreed to assume and
perform all of the obligations of MCC in respect of the Outstanding Quadrangle
Bonds and the Outstanding Fairfax Bonds respectively; and CNL Parent has agreed
to assume all of the financial obligations of Marriott Parent under the Parent
Lifecare Agreements and to indemnify and reimburse Marriott Parent as provided
herein;
G. Pursuant to the Real Estate Purchase Agreement, contemporaneous
with the execution and delivery hereof, VA Operating Assignee is entering into a
Deed of Trust, Assignment of Rents and Security Agreement dated as of the date
hereof granting to Marriott Parent a lien on and security interest in the
Fairfax as security for the obligations of Assignees to Marriott Parent
hereunder (the "VA Deed of Trust") and PA Operating Assignee is entering into a
Mortgage, Assignment of Rents and Security Agreement dated as of the date hereof
granting to Marriott Parent a lien on and security interest in the Quadrangle as
security for the obligations of Assignees to Marriott Parent hereunder (the "PA
Mortgage" and with the VA Deed of Trust, collectively, the "Mortgages");
H. On the date hereof, MCC and Operating Assignees are entering
into certain lease agreements in respect of the Facilities (collectively, the
"Operating Agreements"), and, pursuant thereto, from and after the Closing,
Lifecare Bonds will be issued by MCC or another Affiliate of Sunrise, Continuing
Care Agreements will be entered into by MCC or another Affiliate of Sunrise, and
CNL Parent will provide financial support in respect thereof; and
I. Assignors and Assignees desire to confirm the foregoing
assumptions and agreements, and to provide certain related assurances; and MCC
and Operating Assignees desire to consent to the assumption by CNL Parent of
Marriott Parent's financial obligations with respect to the Parent Lifecare
Undertakings, all on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the agreements and
covenants herein contained and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. ASSIGNMENT.
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(a) MCC hereby assigns to VA Operating Assignee all of the
obligations, liabilities, duties and covenants to be performed by MCC or any
Affiliate of MCC after the date hereof under or in respect of each of the
Outstanding Fairfax Bonds (the "Assumed Fairfax Obligations").
(b) MCC hereby assigns to PA Operating Assignee all of the
obligations, liabilities, duties and covenants to be performed by MCC or any
Affiliate of MCC after the date hereof under or in respect of each of the
Outstanding Quadrangle Bonds (the "Assumed Quadrangle Obligations" and, together
with the Assumed Fairfax Obligations, the "Assumed Operating Obligations").
(c) Marriott Parent hereby assigns to CNL Parent and the
Operating Assignees, as joint and several obligors, all of the financial
obligations, liabilities, duties and covenants to be performed by Marriott
Parent or any Affiliate of Marriott Parent after the date hereof under each of
the Lifecare Undertakings and, to the extent related to Lifecare Bonds or
Continuing Care Agreements, the Host Marriott Indemnity Agreement (collectively,
the "Assumed Parent Obligations" and, together with the Assumed Operating
Obligations, the "Assumed Obligations"). For the avoidance of doubt, (i) the
parties acknowledge that, pursuant to the Operating Agreements, the management
and operation of the Facilities from and after the Closing, including the
provision of living accommodations, facilities, services and programs provided
for in the Continuing Care Agreements, will be the exclusive responsibility of
MCC and/or its Affiliates, and (ii) without limiting the obligation of Assignees
to (x) provide financial support in respect of Lifecare Bonds and Continuing
Care Agreements, (y) reimburse and indemnify Marriott Parent in accordance with
the terms hereof, and (z) provide for operation of the Facilities by entities
not affiliated with CNL Parent pursuant to the Operating Agreements or successor
leases, management agreements, operating agreements or contracts, the parties
agree that nothing in this Agreement shall obligate CNL Parent or its Affiliates
to provide directly the living accommodations, facilities, services and programs
provided for in the Continuing Care Agreements.
2. ASSUMPTION. Each Assignee hereby (i) accepts the foregoing
assignment to such Assignee, (ii) irrevocably assumes each of the Assumed
Obligations assigned to such Assignee, (iii) unconditionally agrees to pay or
otherwise discharge the Assumed Obligations assigned to such Assignee when and
as the same may be due, and (iv) consents to each other assignment and
assumption hereunder.
3. REIMBURSEMENT AND INDEMNIFICATION.
(a) Reimbursement.
(i) Each Operating Assignee unconditionally promises
and agrees that, if at any time MCC or any of its Affiliates (i) pay any amounts
under or in respect of any Assumed Operating Obligation assumed by such
Operating Assignee or otherwise incurs any expenses in connection with any such
Assumed Operating Obligation (including without limitation payment of any fees,
costs or expenses of a Lifecare Bond holder) or (ii) pay any amounts in respect
of Lifecare Bonds pursuant to Section 3.4 of either Operating Agreement
(collectively, the "Operating Assignee Reimbursement Obligations"), such
Operating Assignee
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shall pay to MCC an amount equal to all amounts so paid and all other costs or
expenses so incurred no later than fifteen (15) Business Days after receipt from
MCC of Quarterly Reports setting forth the Operating Assignee Reimbursement
Obligations in accordance with the Operating Agreements. Any Operating Assignee
Reimbursement Obligations not paid when due hereunder shall bear interest from
the date of payment by MCC or its Affiliate until paid in full at a floating
rate equal to the Prime Rate (defined below) plus two percent (2%), but not to
exceed a rate of eight percent (8%). All payments of Operating Assignee
Reimbursement Obligations, together with any interest thereon, shall be made
without setoff, counterclaim or other defense, and shall be made in lawful money
of the United States of America, in same day funds, at such place as MCC shall
direct. All such payments shall be credited first to interest due, if any, and
then to the principal of the Operating Assignee Reimbursement Obligations.
(ii) CNL Parent and each Operating Assignee jointly
and severally unconditionally promise and agree that, if at any time Marriott
Parent or any of its Affiliates pay any amounts under or in respect of any
Assumed Obligation or otherwise in respect of any Lifecare Bonds (whether issued
prior to or on or after the date hereof) or Continuing Care Agreements (whether
entered into prior to or on or after the date hereof) (including without
limitation any payment directly to a Current Lifecare Beneficiary) or otherwise
incur any expenses in connection with any such Assumed Parent Obligation,
Lifecare Bond or Continuing Care Agreement (including without limitation payment
of any fees, costs or expenses of a Current Lifecare Beneficiary) (collectively,
the "Parent Reimbursement Obligations"), Assignees shall pay to Marriott Parent
an amount equal to all amounts so paid and all other costs or expenses so
incurred no later than two (2) Business Days after receipt from Marriott Parent
of notice thereof accompanied by written evidence of such payment or incurrence
by Marriott Parent or its Affiliates. Any Parent Reimbursement Obligations not
paid when due hereunder shall bear interest from the date of payment by Marriott
Parent or its Affiliate until paid in full at a floating rate equal to the Prime
Rate plus two percent (2%). All payments of Parent Reimbursement Obligations,
together with any interest thereon, shall be made without setoff, counterclaim
or other defense, and shall be made in lawful money of the United States of
America, in same day funds, at such place as Marriott Parent shall direct. All
such payments shall be credited first to interest due, if any, and then to the
principal of the Parent Reimbursement Obligations.
(iii) "PRIME RATE" means the rate that Citibank, N.A. (or any
successor entity) publishes from time to time as its prime lending rate, as in
effect from time to time.
(b) Performance by Assignees.
(i) Without limiting the foregoing, if at any time
Marriott Parent or any of its respective Affiliates become obligated to pay any
amounts under, or any fees, costs or expenses relating to, or otherwise to
perform any obligations under, any Assumed Parent Obligation, Lifecare Bond or
Continuing Care Agreement, then, promptly upon notice thereof from Marriott
Parent, CNL Parent shall, or shall cause one or both Operating Assignees to,
make any payments required to be made and perform any other obligation required
to be performed by Marriott Parent or any of its respective Affiliates.
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(ii) Without limiting the foregoing, if at any time
MCC or any of its respective Affiliates become obligated to pay any amounts
under, or any fees, costs or expenses relating to, or otherwise to perform any
obligations under, any Lifecare Bond, then, promptly upon notice thereof from
MCC, the applicable Operating Assignee shall make any payments required to be
made and perform any other obligation otherwise required to be performed by MCC
or any of its respective Affiliates.
(c) Indemnification.
(i) Assignees, jointly and severally, shall
indemnify, defend and hold harmless Marriott Parent and its directors, officers,
employees, Affiliates, agents and assigns from and against Indemnifiable Losses
(as defined below) relating to, resulting from or arising out of the Assumed
Parent Obligations, any Lifecare Bond (whether issued prior to or on or after
the date hereof) or Continuing Care Agreement (whether entered into prior to or
on or after the date hereof), any failure of any Assignee to perform, pay,
discharge or otherwise comply with the Assumed Obligations or any other breach
or non-performance of the obligations of any Assignee hereunder.
(ii) "Indemnifiable Loss" means any cost, damage,
disbursement, expense, liability, monetary obligation, loss, deficiency, penalty
or settlement of any kind or nature, including reasonable legal, accounting and
other professional fees and expenses and amounts paid in settlement or incurred
in connection with the investigation or defense of any third party claim, that
are actually imposed on or otherwise actually incurred or suffered from time to
time by the specified Person.
4. OBLIGATIONS ABSOLUTE. The obligations of each Assignee to
Marriott Parent under this Agreement shall be absolute and unconditional, under
any and all circumstances, and shall not be diminished, discharged or affected
by any circumstance, act or omission whatsoever, including without limitation
any of the following, whether known or unknown to either of the Assignors:
(a) the invalidity or unenforceability of, or any defect in,
this Agreement, any Lifecare Undertaking, Lifecare Bond or Continuing Care
Agreement, the Host Marriott Indemnity Agreement or any other agreement or
instrument;
(b) any amendment to or waiver of any Lifecare Bond or any
Continuing Care Agreement after the date hereof;
(c) any action taken or omitted by any Assignee, the
Company, MCC or any Current Lifecare Beneficiary;
(d) any lack of authority or alleged lack of authority of
any Person specified in clause (c) above or any Person purporting to act on
behalf of any such Person;
(e) the existence of any claim, set-off, defense or other
right which any Assignee, any of its Affiliates, either Assignor, or any
beneficiary of or party to a Lifecare Bond or Continuing Care Agreement, on the
one hand, may have at any time against either Assignor, any beneficiary of or
party to a Lifecare Bond or Continuing Care Agreement or any other
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Person, on the other hand, whether in connection with this Agreement, any of the
Assumed Obligations, the Lifecare Bonds or the Continuing Care Agreements or the
transactions referred to herein or therein or in connection with any unrelated
transaction;
(f) any certificate, draft, demand or other document
presented in connection with any Assumed Obligation, Lifecare Undertaking,
Lifecare Bond or Continuing Care Agreement proving to be forged, fraudulent,
invalid, insufficient, unauthorized or uncollectable in any respect, or any
statement therein (including any statement with respect to amount) proving (or
being alleged) to be untrue or inaccurate in any respect whatsoever;
(g) any irregularity in this Agreement, or any irregularity
(including fraud) in any Lifecare Undertaking or Lifecare Bond or Continuing
Care Agreement or by any beneficiary of or party to a Lifecare Bond or
Continuing Care Agreement;
(h) any breach of contract involving any Person specified in
clause (c) above or any other Person;
(i) any consequence of compliance with any applicable
constitutional provision, statute, law, rule, regulation, ordinance or
interpretation of any governmental entity or any award, decision, verdict,
subpoena, decree, injunction, judgment, order, ruling, assessment or writ
issued, made or rendered by an arbitrator or governmental entity (collectively
"Laws");
(j) any act or omission by Marriott Parent or by any
beneficiary of or party to a Lifecare Bond or Continuing Care Agreement, done or
omitted pursuant to an order of any court; or
(k) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any Assignee, except for circumstances resulting directly from the
gross negligence or willful misconduct of Marriott Parent or, only to the extent
occurring prior to the date hereof, MCC.
Each Assignee acknowledges and agrees that it will derive substantial
direct and indirect benefits by reason of Marriott Parent continuing to be a
party to the Lifecare Undertakings, and that all obligations of Assignees to
Marriott Parent hereunder shall be joint and several irrespective of whether any
applicable Assumed Obligation relates to the Fairfax or the Quadrangle. Neither
the joint and several liability of, nor the liens granted to Marriott Parent
under the Mortgages by, any Assignee shall be impaired or released by (i) the
failure of either Assignor to assert any claim or demand or to exercise or
enforce any right, power or remedy against any Assignee or any of its
Affiliates, any other Person or otherwise; (ii) any extension or renewal for any
period (whether or not longer than the original period) of any Lifecare Bonds or
Continuing Care Agreements or the release or compromise of any obligation of any
Person with respect thereto; (iii) the surrender, release or exchange of all or
any part of any property securing payment, performance and/or observance of any
of the Parent Reimbursement Obligations or the compromise or extension or
renewal for any period (whether or not longer than the original period) of any
obligations of any Person with respect to any such property; or (iv) any other
act,
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matter or thing that would or might, in the absence of this provision, operate
to release, discharge or otherwise prejudicially affect the obligations of each
Assignee.
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5. ADDITIONAL AGREEMENTS IN RESPECT OF LIFECARE UNDERTAKINGS.
(a) Solely with respect to Persons who, as of the date
hereof, (i) hold a Lifecare Bond issued in respect of a Facility, as set forth
on Schedules 1 and 2 hereto, or (ii) are resident at a Facility and party to a
Continuing Care Agreement (collectively, "Current Lifecare Beneficiaries"), and
without limiting the obligations of Assignees and MCC hereunder and under the
Operating Agreements, Marriott Parent shall remain secondarily liable to MCC for
financial obligations arising under the Lifecare Undertakings; provided that
Assignees, jointly and severally, shall be primarily liable with respect to such
Current Lifecare Beneficiaries, and MCC (and, if applicable, Operating
Assignees) shall at all times proceed first against CNL Parent (or an Operating
Assignee) for the performance of all obligations under the Lifecare Undertakings
or otherwise in respect of the Lifecare Bonds and Continuing Care Agreements,
and shall pursue and exhaust all remedies available against Assignees prior to
seeking any payment or performance by Marriott Parent under any Lifecare
Undertaking or otherwise in respect of the Lifecare Bonds and Continuing Care
Agreements in favor of Current Lifecare Beneficiaries.
(b) Except as set forth in Section 5(a) in respect of
Current Lifecare Beneficiaries, MCC and the Assignees hereby irrevocably and
completely discharge and release Marriott Parent and its Affiliates from any
liability under any Lifecare Undertaking or otherwise in respect of Lifecare
Bonds and Continuing Care Agreements.
(c) Assignees and MCC hereby waive any applicable principles
or provisions of Law, statutory or otherwise, or contract which are or might be
in conflict with the terms of this Section 5.
(d) Without limiting the obligations of Assignees hereunder,
(i) nothing herein purports or is intended to release MCC from its obligations
under any Continuing Care Agreement, and (ii) solely as between MCC and any
Person that holds a Lifecare Bond, nothing herein purports to or is intended to
release MCC from its obligations to such Person under the applicable Lifecare
Bond.
6. COVENANTS AND ACKNOWLEDGEMENTS OF ASSIGNEES AND MCC.
(a) Neither MCC nor any Assignee shall, or shall cause or
permit any of its Subsidiaries or MCC to (i) directly or indirectly assign or
otherwise transfer (other than to an Affiliate of CNL Parent) any of its direct
or indirect obligations to a Current Lifecare Beneficiary (or, in the case of an
Operating Assignee, its obligations to MCC) under or in respect of any Lifecare
Bond or Continuing Care Agreement (each such obligation, an "Underlying Lifecare
Obligation"), (ii) cause or permit the term of any Underlying Lifecare
Obligation to be extended beyond the term in effect on the Closing Date, or
(iii) enter into or agree to any amendment or modification to the terms of any
Underlying Lifecare Obligation, unless, in any such case, prior to the
effectiveness thereof, Marriott Parent and its Affiliates shall be
unconditionally released, in a manner reasonably satisfactory to Marriott Parent
(which shall, without limitation, require an acknowledgement from the applicable
Current Lifecare Beneficiary) from all obligations to such Current Lifecare
Beneficiary; provided that MCC or CNL Parent may assign or otherwise transfer
(directly or indirectly) any Underlying Lifecare Obligation so long as (x) prior
to such assignment or transfer, MCC or CNL Parent shall notify Marriott Parent
thereof specifying the
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Underlying Lifecare Obligations transferred and the name of the transferee and
certifying that the other conditions set forth below have been satisfied (if
applicable), (y) the transferee shall be at least as creditworthy as CNL Parent
or MCC, as applicable and (z) the transferee shall have delivered a letter
agreement to Marriott Parent pursuant to which it agrees to be bound by the
restrictions set forth in this Section 6(a) for the benefit of Marriott Parent;
and provided further that no such transfer shall alter or effect the obligations
of Assignees hereunder. MCC and each Assignee shall promptly notify Marriott
Parent of any default or alleged default in payment of any amount due to a
Current Lifecare Beneficiary under any Lifecare Bond, which default or alleged
default could reasonably be expected to lead to a demand for payment by Marriott
Parent under Section 5(a).
(b) MCC shall (or shall cause its Affiliate to) give prompt
notice to Marriott Parent and CNL Parent of any demand for payment of an
Outstanding Bond, and any other demand in respect of a Continuing Care Agreement
or Lifecare Bond if, in any such case, such demand could reasonably be expected
to give rise to an obligation under any Parent Lifecare Agreement.
(c) Assignees acknowledge and agree that CNL Parent and its
Subsidiaries are not obtaining any rights or licenses with respect to any name,
xxxx, logo, trade dress or design owned by Marriott Parent or its Affiliates,
including the word xxxx "Marriott" (the "Marriott Word Xxxx"), the name and xxxx
"Marriott International, Inc.", the "M" logo (a copy of which is attached hereto
as Schedule (4)) or any composite or other name or xxxx containing "Marriott",
or any name, xxxx, logo or design that is similar to any of the foregoing in
appearance, sound or commercial impression (the "Marriott Parent Marks").
Assignees shall, and shall cause their respective Subsidiaries and any manager
of either Facility, to cease any and all use of the Marriott Parent Marks as
soon as practicable after the Closing Date, but not later than 60 days after the
Closing Date; provided, however, that with respect to stationery, contracts,
purchase orders, agreements and other business forms and writings (including
without limitation, Lifecare Bonds and Continuing Care Agreements) which could
result after the Closing Date in a legal commitment of Marriott Parent or any of
its Subsidiaries, Assignees shall, and shall cause their respective Subsidiaries
and any manager of either Facility, to cease within 10 Business Days after the
Closing Date any use of the Parent Marks; provided further that, from and after
the Closing Date, MCC shall comply with the provisions of Section 5.7 (f) of the
Stock Purchase Agreement. Within 10 Business Days after the Closing Date,
Assignees shall notify, or cause the manager of the Facilities to notify, in
writing, all residents at the Facilities that the Facilities have been acquired
from Sellers by Buyer, and that CNL Parent will, from and after the Closing
Date, ensure that the Facilities have all financial and other support that may
be required to ensure compliance with all obligations under the Lifecare Bonds
and Continuing Care Agreements.
7. COVENANT OF ASSIGNOR. Marriott Parent shall give written notice
to CNL Parent promptly upon receipt of any demand on Marriott Parent for payment
or performance of any Assumed Parent Obligation; provided that no failure to
give any such notice shall alter or affect the obligations of Assignees
hereunder.
8. EVENTS OF DEFAULT. If any of the following conditions or events
(each, an "Event of Default") shall occur:
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(a) Any Assignee shall fail to pay Marriott Parent any
amount due under Section 3(a)(ii) hereof, and such failure continues for 10
Business Days; or
(b) Any Assignee shall fail to pay MCC any amount due under
Section 3(a)(i) hereof, and such failure continues for 10 Business Days; or
(c) Any demand shall be made to Marriott Parent for payment
or other performance under or in respect of any Assumed Obligation, any Lifecare
Bond or Continuing Care Agreements and shall not either be (i) rescinded within
15 Business Days thereof or (ii) paid or performed in full by Assignees within
15 Business Days of notice thereof by Marriott Parent to Assignees; or
(d) Any Assignee or MCC shall fail to perform or comply with
its obligations under Section 6 hereof and such failure shall continue for 15
Business Days; or any Underlying Lifecare Obligation shall otherwise be
transferred (directly or indirectly) to any Person other than CNL Parent or an
Affiliate thereof, unless the conditions set forth in Section 6(a) have been
satisfied in connection with such transfer); or
(e) Any Assignee or MCC shall fail to perform or comply with
any of its obligations under this Agreement which failure is not already
addressed in Section 8(a) though (d) hereof and such failure shall continue for
10 Business Days; or
(f) Any "Event of Default" as defined in either Mortgage
shall occur and be continuing; or
(g) Any Insolvency Event (as defined below) shall occur;
then, in addition to any other remedy available to Marriott
Parent at law or in equity, in the case of any event described in clause (g),
the maximum amount that may at any time become due under or in respect of the
Assumed Parent Obligations (the "Maximum Amount") shall automatically become
immediately due and payable, without presentment, demand, protest or other
requirements of any kind, all of which are hereby waived; and, if any other
Event of Default shall have occurred and be continuing, Marriott Parent may, by
written notice to CNL Parent declare all or any portion of the Maximum Amount
due and payable, and the same shall become immediately payable without
presentment, demand, protest or other requirements of any kind, all of which are
hereby waived. If any Event of Default shall have occurred and be continuing, in
addition to and not in limitation of any other rights available to Marriott
Parent at law or in equity, Marriott Parent may exercise all rights and remedies
provided for in either.
"INSOLVENCY EVENT" shall mean:
(i) A court having jurisdiction in the premises
shall enter a decree or order for relief in respect of CNL Parent or either
Operating Assignee in an involuntary case under any applicable bankruptcy,
insolvency or similar law now or hereafter in effect, which decree or order is
not stayed; or
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(ii) An involuntary case shall be commenced against
CNL Parent or either Operating Assignee under any applicable bankruptcy,
insolvency or similar law now or thereafter in effect; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over CNL Parent or either Operating Assignee or over all or a substantial
part of its respective property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of CNL Parent or any of the Operating Assignees for all or a
substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of CNL Parent or any of the Operating Assignees and any such event
described in this clause (ii) shall continue for 60 days unless dismissed,
bonded or discharged; or
(iii) CNL Parent or either Operating Assignee shall
have an order for relief entered with respect to it or commence a voluntary case
under any applicable bankruptcy, insolvency or similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; or CNL Parent or either Operating Assignee shall make any assignment
for the benefit of creditors; or
(iv) CNL Parent or either Operating Assignee shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the Board of Directors of CNL Parent (or
any committee thereof) shall adopt any resolution or otherwise authorize any
action to approve any of the actions referred to in clause (iii) above or this
clause (iv).
For the avoidance of doubt, nothing in this Section 8, including any
provision for notice and cure, and no exercise or waiver by Marriott Parent of
any right or remedy under this Section 8, shall alter or affect (i) the
obligation of Assignees to pay any amount due under and in accordance with
Section 3 hereof or (ii) any other right or remedy of Marriott Parent and its
Affiliates hereunder, under the Mortgages or under the Real Estate Purchase
Agreement.
9. FURTHER ASSURANCES. Each party hereto shall promptly execute,
acknowledge and deliver, and shall cause its Affiliates to execute, acknowledge
and deliver, to the other parties hereto any assurances, documents, instruments
or conveyances reasonably requested by any party hereto, or necessary for the
parties hereto to effectuate the transactions contemplated hereby.
10. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.
(a) This Agreement shall be interpreted, construed, applied
and enforced in accordance with the laws of the State of Delaware.
(b) To the maximum extent permitted by applicable law, any
action to enforce, arising out of, or relating in any way to, any of the
provisions of this Agreement shall be brought and prosecuted in such court or
courts located in the State of Delaware as is provided by law; and the parties
consent to the jurisdiction of said court or courts located in the State of
11
Delaware and to service of process by registered mail, return receipt requested,
or by any other manner provided by law.
(c) EACH PARTY HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF
ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY
TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO
THIS AGREEMENT, THE MORTGAGES OR ANY OTHER DOCUMENT RELATED TO THIS AGREEMENT,
OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS
WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY EACH
PARTY, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS
TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. ANY PARTY IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH PARTY HERETO.
11. TIME OF THE ESSENCE. Time is of the essence in the performance
of all obligations of each Assignee and MCC hereunder.
12. REPRESENTATIONS AND WARRANTIES.
(a) The execution, delivery and performance of this
Agreement by each Assignee have been duly and validly authorized by the Board of
Directors or governing body of each such Assignee and by all other necessary
corporate or partnership action on the part of such Assignee. This Agreement
constitutes a legally valid and binding obligation of each Assignee, enforceable
against such Assignee in accordance with its terms except as may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws and
equitable principles relating to or limiting creditors' rights generally. The
execution, delivery and performance of this Agreement by each Assignee will not
(i) violate or constitute a breach or default (whether upon lapse of time and/or
the occurrence of any act or event or otherwise) under the charter documents,
by-laws, partnership agreements (as applicable) of each Assignee; (ii) result in
the imposition of any Lien against any material assets or properties of each
Assignee; or (iii) violate any Law, except for any such violations, breaches,
defaults and impositions as would not reasonable be expected to have a material
adverse effect on the business operations, assets or financial condition of each
Assignee or performance by each Assignee of its obligations hereunder. The
execution, delivery and performance of this Agreement by each Assignee does not
require that any approval, authorization, consent, qualification or
registration, or any extension, modification, amendment or waiver of any of the
foregoing ("Approvals"), to be obtained from, or any notice, statement or other
communication ("Filings") to be filed with or delivered to, any governmental
entity or other Person, except for any such Approvals or Filings as to which the
failure to receive or make would not in the aggregate have a materials adverse
effect on the ability of any Assignee to perform its obligations hereunder.
(b) The execution, delivery and performance of this
Agreement by each Assignor has been duly and validly authorized by the Board of
such Assignor and by all other necessary corporate action on the part of such
Assignor. This Agreement constitutes a legally valid and binding obligation of
each Assignor, enforceable against such Assignor in accordance with its terms
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
12
and other similar laws and equitable principles relating to or limiting
creditors' rights generally. The execution, delivery and performance of this
Agreement by each Assignor will not (i) violate or constitute a breach or
default (whether upon lapse of time and/or the occurrence of any act or event or
otherwise) under the charter documents or by-laws of such Assignor ; (ii) result
in the imposition of any Lien against any material assets or properties of such
Assignor; or (iii) violate any Law, except for any such violations, breaches,
defaults and impositions as would not reasonable be expected to have a material
adverse effect on the business operations, assets or financial condition of such
Assignor or performance by such Assignor of its obligations hereunder. The
execution, delivery and performance of this Agreement by each Assignor does not
require any Approvals to be obtained from, or any Filings to be filed with or
delivered to, any governmental entity or other Person, except for any such
Approvals or Filings as to which the failure to receive or make would not in the
aggregate have a material adverse effect on the ability of such Assignor or any
Assignee to perform its obligations hereunder.
13. MISCELLANEOUS.
(a) Amendments. This Agreement and any Schedule or Exhibit
attached hereto may be modified or amended only by agreement in writing of
Assignors and Assignees; provided that Sections 1(c), 3(a)(ii), 3(b)(i),
3(c)(ii), 7 and 8 of this Agreement may be amended or modified without the
consent of MCC.
(b) Third Party Beneficiaries. Nothing herein, express or
implied, is intended to confer upon or give any Person other than the parties
hereto any rights or remedies of any nature under or by reason of this
Agreement.
(c) Severability. If any provision of this Agreement shall
be held or deemed to be, or shall in fact be, invalid, inoperative or
unenforceable as applied to any particular case in any jurisdiction or
jurisdictions, or in all jurisdictions or in all cases, because of the conflict
of any provision with any constitution or statute or rule of public policy or
for any other reason, such circumstance shall not have the effect of rendering
the provision or provisions in question invalid, inoperative or unenforceable in
any other jurisdiction or in any other case or circumstance or of rendering any
other provision or provisions herein contained invalid, inoperative or
unenforceable to the extent that such other provisions are not themselves
actually in conflict with such constitution, statute or rule of public policy,
but this Agreement shall be reformed and construed in any such jurisdiction or
case as if such invalid, inoperative or unenforceable provision had never been
contained herein and such provision reformed so that it would be valid,
operative and enforceable to the maximum extent permitted in such jurisdiction
or in such case.
(d) Section and Other Headings. The headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
(e) Entire Agreement. This Agreement, the Mortgages and the
Real Estate Purchase Agreement constitute the entire agreement among the parties
with respect to the subject matter hereof.
13
(f) Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned or
delegated, in whole or in part, by operation of law or otherwise by any of the
parties without the prior written consent of the other parties. Subject to the
preceding sentence, this Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns.
(g) Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument.
(h) Waivers, Etc. Any waiver of any term or condition of
this Agreement, or of the breach of any covenant, representation or warranty
contained herein, in any one instance, shall not operate as or be deemed to be
or construed as a further or continuing waiver of any other breach of such term,
condition, covenant, representation or warranty or any other term, condition,
covenant, representation or warranty, nor shall any failure at any time or times
to enforce or require performance of any provision hereof operate as a waiver of
or affect in any manner such party's right at a later time to enforce or require
performance of such provision or any other provision hereof.
(i) Notices. Any and all notices, demands, consents,
approvals, offers, elections and other communications required or permitted
under this Agreement shall be deemed adequately given if in writing and the same
shall be delivered either in hand, or by mail or Federal Express or similar
expedited commercial carrier, addressed to the recipient of the notice, postpaid
and registered or certified with return receipt requested (if by mail), or with
all freight charges prepaid (if by Federal Express or similar carrier). All
notices required or permitted to be sent hereunder shall be deemed to have been
given for all purposes of this Agreement upon the date of acknowledged receipt,
upon the date of receipt or refusal, except that whenever under this Agreement a
notice is either received on a day which is not a Business Day or is required to
be delivered on or before a specific day which is not a Business Day, the day of
receipt or required delivery shall automatically be extended to the next
Business Day.
All such notices shall be addressed,
if to Marriott Parent, to:
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Chief Financial Officer
with a copy to:
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: General Counsel
14
and
Marriott International, Inc.
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attn: Treasurer
and
Arent Fox Xxxxxxx Xxxxxxx & Xxxx, PLLC
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxx, Esq.
If to MCC:
c/o Sunrise Assisted Living, Inc.
0000 Xxxxxxxx Xxxxx
XxXxxx, XX 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
With a copy to (which shall not constitute notice):
Xxxxx & Xxxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxxxxx
Telecopier No.: (000) 000-0000
if to any of the Assignees:
c/o CNL Retirement Corp.
CNL Center at City Commons
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Chief Operating Officer
with a copy to:
Lowndes, Drosdick, Doster, Xxxxxx & Xxxx, P.A.
000 Xxxxx Xxxx Xxxxx
Post Office Box 2809
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
15
By notice given as herein provided, the parties hereto and their
respective successors and assigns shall have the right from time to time and at
any time during the term of this Agreement to change their respective addresses
effective upon receipt by the other parties of such notice and each shall have
the right to specify as its address any other address within the United States
of America.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
16
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first set forth above.
MARRIOTT PARENT:
MARRIOTT INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxxx
Authorized Signatory
MCC:
MARRIOTT CONTINUING CARE, LLC,
a Delaware limited liability company
By: Marriott Senior Living Services, Inc.,
A Delaware corporation, sole Member
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------
Xxxxxxx X. Xxxxxxx
Authorized Signatory
[SIGNATURES FOR ASSUMPTION AND REIMBURSEMENT AGREEMENT CONTINUE
ON THE FOLLOWING PAGES]
S-1
CNL PARENT:
CNL RETIREMENT PROPERTIES, INC.,
A Delaware corporation
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Xxxxxxx X. Xxxx
Title: Senior Vice President
-------------------------
OPERATING ASSIGNEES:
CNL RETIREMENT MA3 VIRGINIA, LP, a Delaware
limited partnership
By: CNL Retirement MA3 GP Holding, LLC,
a Delaware limited liability company,
Its sole general partner
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Xxxxxxx X. Xxxx
Senior Vice President
CNL RETIREMENT MA3 PENNSYLVANIA, LP, a Delaware
limited partnership
By: CNL Retirement MA3 GP Holding, LLC,
a Delaware limited liability company,
Its sole general partner
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Xxxxxxx X. Xxxx
Senior Vice President
X-0
XXXXXXXX XX XXXXXXXX
ss:
-----------------------
-----------------------
I, the undersigned, a Notary Public in and for the jurisdiction
aforesaid, do hereby certify that Xxxxxxx X. Xxxxxxx, whose name as Authorized
Signatory of Marriott International, Inc., a Delaware corporation, is signed to
the foregoing and annexed instrument, did personally appear before me this day
and acknowledged the same to be the act and deed of Marriott International, Inc.
GIVEN under my hand and seal this 19th day of March, 2003.
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------
NOTARY PUBLIC
[Notarial Seal]
My Commission Expires: November 14, 0000
----------------------------
XXXXXXXX XX XXXXXXXX
ss:
-----------------------
-----------------------
I, the undersigned, a Notary Public in and for the jurisdiction
aforesaid, do hereby certify that Xxxxxxx X. Xxxxxxx, whose name as Authorized
Signatory of Marriott Senior Living Services, Inc., a Delaware corporation and
sole member of Marriott Continuing Care, LLC, a Delaware limited liability
company, is signed to the foregoing and annexed instrument, did personally
appear before me this day and acknowledged the same to be the act and deed of
Marriott Senior Living Services, Inc.
GIVEN under my hand and seal this 19th day of March, 2003.
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------
NOTARY PUBLIC
[Notarial Seal]
My Commission Expires: November 14, 0000
X-0
XXXXXXXX XX XXXXXXXX
ss:
-----------------------
-----------------------
I, the undersigned, a Notary Public in and for the jurisdiction
aforesaid, do hereby certify that Xxxxxxx X. Xxxx, whose name as Senior Vice
President of CNL Retirement Properties, Inc., a Delaware corporation, is signed
to the foregoing and annexed instrument, did personally appear before me this
day and acknowledged the same to be the act and deed of CNL Retirement
Properties, Inc.
GIVEN under my hand and seal this 19th day of March, 2003.
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------
NOTARY PUBLIC
[Notarial Seal]
My Commission Expires: November 14, 0000
XXXXXXXX XX XXXXXXXX
ss:
-----------------------
-----------------------
I, the undersigned, a Notary Public in and for the jurisdiction
aforesaid, do hereby certify that Xxxxxxx X. Xxxx, whose name as Senior Vice
President of CNL Retirement MA3 GP Holding, LLC, the sole general partner of CNL
Retirement MA3 Virginia, LP, a Delaware limited partnership and the sole general
partner of CNL Retirement MA3 Pennsylvania, LP, a Delaware limited partnership,
is signed to the foregoing and annexed instrument, did personally appear before
me this day and acknowledged the same to be the act and deed of CNL Retirement
MA3 Virginia, LP and CNL Retirement MA3 Pennsylvania, LP.
GIVEN under my hand and seal this 19th day of March, 2003.
/s/ Xxxxxxx X. Xxxxxx
------------------------------------------
NOTARY PUBLIC
[Notarial Seal]
My Commission Expires: November 14, 2004
S-4
