Exhibit 2.12
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CONVEYANCE AGREEMENT
BY AND AMONG
BROOKDALE SENIOR LIVING INC.,
BROOKDALE LIVING COMMUNITIES, INC.
BSL BROOKDALE MERGER INC.,
BSL CCRC MERGER INC.,
BSL FEBC MERGER INC.,
EMERITUS CORPORATION,
FEBC-ALT INVESTORS LLC,
FIT-ALT INVESTOR LLC,
FORTRESS CCRC ACQUISITION LLC,
FORTRESS INVESTMENT TRUST II,
FORTRESS REGISTERED INVESTMENT TRUST,
FORTRESS BROOKDALE ACQUISITION LLC,
HEALTH PARTNERS
and
NW SELECT LLC
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Dated as of September 30, 2005
ARTICLE I DEFINITIONS...................................................... 3
Section 1.1 Defined Terms............................................... 3
ARTICLE II MERGERS......................................................... 8
Section 2.1 Brookdale Merger............................................ 8
Section 2.2 FEBC-ALT Merger............................................. 9
Section 2.3 Fortress CCRC Merger........................................ 9
Section 2.4 Agreement to Exchange Membership Interests.................. 10
Section 2.5 Closing..................................................... 10
Section 2.6 Closing Deliveries.......................................... 11
Section 2.7 Withholding Taxes........................................... 11
ARTICLE III................................................................ 11
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS WITH RESPECT TO THE BSL
ENTITIES................................................................... 11
Section 3.1 Organization; Authorization................................. 12
Section 3.2 No Conflicts................................................ 12
Section 3.3 Governmental Approvals...................................... 12
Section 3.4 Subsidiaries................................................ 12
Section 3.5 Litigation.................................................. 13
Section 3.6 Compliance With Laws........................................ 13
Section 3.7 Financial Statements; Liabilities........................... 13
Section 3.8 Absence of Certain Changes.................................. 14
Section 3.9 Affiliate Agreements........................................ 15
Section 3.10 Other Agreements........................................... 15
Section 3.11 No Brokers................................................. 15
Section 3.12 Taxes...................................................... 15
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY................... 16
Section 4.1 Organization; Authorization................................. 16
Section 4.2 Enforceability.............................................. 17
Section 4.3 No Conflicts................................................ 17
Section 4.4 Governmental Approvals...................................... 17
Section 4.5 Litigation.................................................. 18
Section 4.6 Capitalization.............................................. 18
Section 4.7 Financial Statements........................................ 18
Section 4.8 Title....................................................... 18
Section 4.9 Liabilities................................................. 19
Section 4.10 Affiliate Agreements....................................... 19
Section 4.11 Other Agreements........................................... 19
Section 4.12 No Brokers................................................. 19
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INVESTORS.................. 19
Section 5.1 Organization, Authorization................................. 19
Section 5.2 Enforceability.............................................. 19
Section 5.3 No Conflicts................................................ 20
Section 5.4 Investment.................................................. 20
Section 5.5 Conveyance Transactions..................................... 20
Section 5.6 Governmental Approvals...................................... 21
Section 5.7 Litigation.................................................. 21
Section 5.8 Brokers..................................................... 21
Section 5.9 Information Supplied........................................ 21
ARTICLE VI ADDITIONAL AGREEMENTS........................................... 22
Section 6.1 LLC Agreement Amendment..................................... 22
Section 6.2 Management Incentive Plans.................................. 22
Section 6.3 Filings..................................................... 22
Section 6.4 Stockholders Agreement...................................... 22
Section 6.5 Consent..................................................... 22
Section 6.6 Expenses.................................................... 22
Section 6.7 Further Action; Cooperation................................. 23
ARTICLE VII INDEMNIFICATION................................................ 23
Section 7.1 Survival of Representations and Warranties.................. 23
Section 7.2 Indemnification............................................. 23
Section 7.3 Sole Remedy................................................. 25
ARTICLE VIII MISCELLANEOUS................................................. 26
Section 8.1 Headings.................................................... 26
Section 8.2 Entire Agreement............................................ 26
Section 8.3 Notices..................................................... 26
Section 8.4 Applicable Law.............................................. 28
Section 8.5 Severability................................................ 28
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Section 8.6 Successors and Assigns; Third-Party Beneficiaries........... 28
Section 8.7 Amendments.................................................. 29
Section 8.8 Waiver...................................................... 29
Section 8.9 Counterparts................................................ 29
Section 8.10 Submission to Jurisdiction................................. 29
Section 8.11 Injunctive Relief.......................................... 29
Exhibit A Emeritus/NW Select Stockholders Agreement
Exhibit B Governance Agreement
Exhibit C Stockholders Agreement
Exhibit D Emeritus/NW Select Registration Rights Agreement
Exhibit E-1 Financial Statements of Brookdale
Exhibit E-2 Financial Statements of FEBC-ALT
Exhibit E-3 Financial Statements of Fortress CCRC
Exhibit F Financial Statements of Company
Exhibit G Amended LLC Agreement
Schedule 2.6(b)(ii) Allocation of FEBC-ALT Shares
Schedule 7.2(d) Indemnification Limit for Company Indemnified Persons
Schedule 7.2(e)(i) Pro Rata Indemnification Percentages
Schedule 7.2(f) Indemnification Limit for Investor Indemnified Persons
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THIS CONVEYANCE AGREEMENT (this "Agreement") is made as of September
30, 2005, by and among Brookdale Senior Living Inc., a Delaware corporation (the
"Company"), Brookdale Living Communities, Inc., a Delaware corporation
("Brookdale"), BSL Brookdale Merger Inc., a Delaware corporation ("Brookdale
Merger Sub"), BSL CCRC Merger Inc., a Delaware corporation ("CCRC Merger Sub"),
BSL FEBC Merger Inc., a Delaware corporation ("FEBC Merger Sub"), Emeritus
Corporation, a Washington corporation ("Emeritus"), FEBC-ALT Investors LLC, a
Delaware limited liability company ("FEBC-ALT"), FIT-ALT Investor LLC, a
Delaware limited liability company ("FIT-ALT"), Fortress Brookdale Acquisition
LLC, a Delaware limited liability company ("FBA"), Fortress CCRC Acquisition
LLC, a Delaware limited liability company ("Fortress CCRC"), Fortress Investment
Trust II, a Delaware business trust, ("FIT II"), Fortress Registered Investment
Trust, a Delaware business trust ("FRIT"), Health Partners, a Bermuda exempted
partnership ("HP") and NW Select LLC, a Washington limited liability company
("NW Select"). Each of Emeritus, FIT-ALT, FBA, FIT II, FRIT, HP and NW Select
are referred to herein as an "Investor" and collectively, the "Investors").
Certain capitalized terms used in this Agreement are defined in Article I.
Unless otherwise indicated, references to articles and sections shall be to
articles and sections of this Agreement.
WHEREAS, FRIT and HP are parties to the Amended and Restated Limited
Liability Company Agreement of Fortress Brookdale Acquisition LLC, dated as of
July 26, 2000 and amended as of September 15, 2000 (the "LLC Agreement");
WHEREAS, FBA owns all of the issued and outstanding shares (the
"Brookdale Shares") of common stock, par value $0.01 per share (the "Brookdale
Common Stock"), of Brookdale, other than shares of Brookdale Common Stock issued
pursuant to the Employee Stock Plan (as defined below);
WHEREAS, FIT II has sold to FEBC-ALT all of the issued and outstanding
membership interests of FIT REN LLC in exchange for FEBC Membership Interests
(as defined below) representing a 39.49% Percentage Interest (as such term is
defined in the FEBC LLC Agreement);
WHEREAS, Emeritus, FIT-ALT, FIT II and NW Select own all of the
outstanding membership interests of FEBC-ALT, other than the membership
interests issued pursuant to the Alterra Stock Plan (as defined below);
WHEREAS, FIT II owns all of the outstanding membership interests of
Fortress CCRC;
WHEREAS, pursuant to the terms and conditions set forth herein, the
parties hereto deem it desirable that Brookdale be sold or conveyed to the
Company, which conveyance shall be effectuated by having Brookdale Merger Sub, a
wholly-owned subsidiary of the Company, merge with and into Brookdale, with
Brookdale as the surviving corporation;
WHEREAS, pursuant to the terms and conditions set forth herein, the
parties hereto deem it desirable that FEBC-ALT be sold or conveyed to the
Company, which conveyance shall be effectuated by having FEBC Merger Sub, a
wholly-owned subsidiary of the Company, merge with and into FEBC-ALT, with
FEBC-ALT as the surviving limited liability company;
WHEREAS, pursuant to the terms and conditions set forth herein, the
parties hereto deem it desirable that Fortress CCRC be sold or conveyed to the
Company, which conveyance shall be effectuated by having CCRC Merger Sub, a
wholly-owned subsidiary of the Company, merge with and into Fortress CCRC, with
Fortress CCRC as the surviving limited liability company;
WHEREAS, at the Closing (as defined below), HP shall receive shares of
Common Stock from FBA in exchange for its Membership Interests (as defined
below) in FBA and its rights and interests in FBA shall terminate;
WHEREAS, at the Closing, Xxxx X. Xxxxxxx shall receive shares of
Common Stock from FBA in exchange for his Membership Interests in FBA and his
rights and interests in FBA shall terminate;
WHEREAS, the Company, FIT-ALT, Emeritus and NW Select are parties to
the Stockholders and Voting Agreement that is attached as Exhibit A hereto (the
"Emeritus/NW Select Stockholder Agreement");
WHEREAS, the Conveyance Transactions (as defined below) are intended
to qualify as tax-free reorganizations or transfers under the Internal Revenue
Code of 1986, as amended;
WHEREAS, it is contemplated that, subsequent to the Closing, the
Company will conduct an Initial Public Offering (as defined below);
WHEREAS, certain stockholders of the Company desire to set forth their
agreement with respect to the governance of the Company prior to the Initial
Public Offering in a governance agreement, the form of which is attached as
Exhibit B hereto (the "Governance Agreement");
WHEREAS, certain stockholders of the Company desire to set forth their
agreement with respect to registration rights for Common Stock and the
governance of the Company after the consummation of the Initial Public Offering
in a stockholders agreement, the form of which is attached as Exhibit C hereto
(the "Stockholders Agreement"); and
WHEREAS, simultaneously with the consummation of the Initial Public
Offering, the Company, Emeritus and NW Select may enter into a Registration
Rights Agreement, substantially in the form attached as Exhibit D hereto (the "
Emeritus/NW Select Registration Rights Agreement").
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NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements set forth herein and for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Defined Terms. For purposes of this Agreement, the
following terms shall have the following meanings:
"Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated
under the Securities Exchange Act of 1934, as amended; provided, however, that
no Person shall be deemed an Affiliate of any other Person solely by reason of
any investment in the Company or any BSL Entity.
"Agreement" shall have the meaning set forth in the introductory
paragraph.
"Alterra Stock Plan" shall have the meaning set forth in Section
6.2(b).
"Amended LLC Agreement" shall have the meaning set forth in Section
6.1.
"Book Value" shall mean with respect to each BSL Entity, an amount
equal to such BSL Entity's total assets less (i) liabilities and (ii) intangible
assets, as measured on a consolidated basis and determined in accordance with
GAAP.
"Brookdale" shall have the meaning set forth in the introductory
paragraph.
"Brookdale Certificate of Merger" shall have the meaning set forth in
Section 2.1(a).
"Brookdale Common Stock" shall have the meaning set forth in the
recitals.
"Brookdale Effective Time" shall have the meaning set forth in Section
2.1(b).
"Brookdale Financial Statements" shall have the meaning assigned to it
in Section 3.7(a).
"Brookdale Merger" shall have the meaning set forth in Section 2.1(a).
"Brookdale Shares" shall have the meaning set forth in the recitals.
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"BSL Entities" shall mean collectively Brookdale, FEBC-ALT and
Fortress CCRC and "BSL Entity" shall mean any of them.
"CCRC Certificate of Merger" shall have the meaning set forth in
Section 2.3(b).
"CCRC Effective Time" shall have the meaning set forth in Section
2.3(b).
"CCRC Merger" shall have the meaning set forth in Section 2.3(a).
"Certificates of Merger" shall mean collectively the Brookdale
Certificate of Merger, the CCRC Certificate of Merger and the FEBC Certificate
of Merger.
"Closing" shall have the meaning set forth in Section 2.5.
"Closing Date" shall have the meaning set forth in Section 2.5.
"Common Stock" shall mean the Company's common stock, par value $0.01
per share
"Company" shall have the meaning set forth in the introductory
paragraph.
"Company Indemnified Person" shall have the meaning set forth in
Section 7.2(a).
"Conveyance Transaction" shall mean any of the Brookdale Merger, the
CCRC Merger or the FEBC Merger.
"Damages" shall mean each and all of the following items: losses,
claims, liabilities, obligations, payments, damages, charges, judgments, fines,
penalties, amounts paid in settlement, costs and expenses (including, without
limitation, interest which may be imposed in connection therewith, costs and
expenses of investigation, actions, suits, proceedings, demands, assessments and
fees, expenses and disbursements of counsel, consultants and other experts) or
any diminution in value of the BSL Entities, whether or not involving a third
party claim, but shall not include any punitive, incidental, special, indirect
or consequential damages or any diminution in value of the Common Stock (solely
to the extent already included in the calculation of Damages).
"Disclosure Letter" shall mean the disclosure letter dated as of the
date of this Agreement.
"DGCL" shall mean the Delaware General Corporation Law.
"DLLCA" shall mean the Delaware Limited Liability Company Act.
"Emeritus" shall have the meaning set forth in the introductory
paragraph.
"Emeritus/NW Select Stockholders Agreement" shall have the meaning set
forth in the recitals.
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"Emeritus/NW Select Transaction Agreements" shall mean collectively
(i) the Emeritus/NW Select Stockholders Agreement, (ii) the Emeritus/NW Select
Registration Rights Agreement, (iii) the Membership Interest Purchase Agreement,
dated June 29, 2005, by and among the Company, Emeritus, FIT-ALT and NW Select
LLC, and (iv) the Amended and Restated Limited Liability Company Agreement of
FEBC-ALT, dated June 29, 2005.
"Employee Stock Plan" shall have the meaning set forth in Section
6.2(a).
"FBA" shall have the meaning set forth in the introductory paragraph.
"FBA Shares" shall have the meaning set forth in Section 2.1(c)
"FEBC-ALT" shall have the meaning set forth in the introductory
paragraph.
"FEBC-ALT Financial Statements" shall have the meaning assigned to it
in Section 3.7(b).
"FEBC-ALT Shares" shall have the meaning set forth in Section 2.2(c).
"FEBC Certificate of Merger" shall have the meaning set forth in
Section 2.2(b).
"FEBC Effective Time" shall have the meaning set forth in Section
2.2(b).
"FEBC LLC Agreement" shall mean the Limited Liability Company
Agreement of FEBC-ALT Investors LLC, dated as of June 29, 2005 and as may be
amended from time to time.
"FEBC Membership Interests" shall have the meaning assigned to the
term "Membership Interests" in the FEBC LLC Agreement.
"FEBC Merger" shall have the meaning set forth in Section 2.2(a).
"Financial Statements" shall have the meaning set forth in Section
3.7(c).
"FIT II" shall have the meaning set forth in the introductory
paragraph.
"FIT-ALT" shall have the meaning set forth in the introductory
paragraph.
"FRIT" shall have the meaning set forth in the introductory paragraph.
"FIT II Shares" shall have the meaning set forth in Section 2.3(c).
"Fortress CCRC" shall have the meaning set forth in the introductory
paragraph.
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"Fortress CCRC Financial Statements" shall have the meaning assigned
to it in Section 3.7(c).
"Governance Agreement" shall have the meaning set forth in the
recitals.
"Governmental Consent" shall have the meaning set forth in Section
3.3.
"Governmental Entity" shall have the meaning set forth in Section 3.3.
"HP" shall have the meaning set forth in the introductory paragraph.
"HP Shares" shall have the meaning set forth in Section 2.4.
"Initial Public Offering" shall mean the initial public offering of
Common Stock by the Company pursuant to an effective registration statement
under the Securities Act.
"Investor" and "Investors" each shall have the meaning set forth in
the introductory paragraph.
"Investor Indemnified Person" shall have the meaning set forth in
Section 7.2(b).
"Laws" shall mean all foreign, federal, state, and local laws,
statutes, ordinances, rules, regulations, orders, injunctions, judgments,
decrees and bodies of law.
"Liens" shall mean any liens, claims, rights, security interests or
charges, other than (i) restrictions imposed by the U.S. securities laws and
(ii) any rights pursuant to the Governance Agreement, the Stockholders Agreement
or the Emeritus/NW Select Stockholders Agreement.
"LLC Agreement" shall have the meaning set forth in the recitals.
"Material Adverse Effect" shall mean, with respect to any Person, any
event that, individually or in the aggregate with any other event, has had or
would reasonably be expected to have a material adverse effect on (i) the
financial condition, results of operations, assets, properties or business of
such Person and its subsidiaries, taken as a whole, or (ii) the ability of such
Person to consummate the transactions contemplated by this Agreement, in each
case other than (i) as a result of changes in general economic or industry
conditions or changes in applicable laws, rules or regulations (unless such
Person has been materially and disproportionately affected) or (ii) changes
arising out of the announcement of the transactions contemplated by this
Agreement or the Initial Public Offering or the performance of the obligations
contained herein.
"Member" shall have the meaning assigned to such term in the LLC
Agreement.
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"Membership Interests" shall have the meaning assigned to it in the
LLC Agreement.
"Merger Sub" shall mean any of Brookdale Merger Sub, CCRC Merger Sub
and FEBC Merger Sub, and "Merger Subs" shall mean all such entities.
"NW Select" shall have the meaning set forth in the introductory
paragraph.
"OC Members" shall have the meaning assigned to it in the LLC
Agreement.
"Operating Committee" shall have the meaning assigned to it in the LLC
Agreement.
"Percentage Interest" shall have the meaning assigned to it in the
FEBC LLC Agreement.
"Person" shall mean any individual, firm, corporation, partnership,
limited liability company or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"Secretary of State" shall have the meaning set forth in Section
2.1(b).
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Stockholders Agreement" shall have the meaning set forth in the
recitals.
"Subsidiary" shall mean, with respect to any Person, any other Person
of which (i) a majority of the outstanding share capital, voting securities or
other equity interests are owned, directly or indirectly, by such first Person
or (ii) such first Person is entitled, directly or indirectly, to appoint a
majority of the board of directors, board of managers or comparable body of such
other Person.
"Taxing Authority" means any Governmental Entity responsible for the
administration of any Tax.
"Taxes" means (i) all federal, state, local or foreign taxes, charges,
fees, imposts, levies or other assessments, including, without limitation, all
net income, gross receipts, capital, sales, use, ad valorem, value added,
transfer, franchise, profits, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, property and estimated taxes, customs duties, fees, assessments and
charges of any kind whatsoever, (ii) all interest, penalties, fines, additions
to tax or additional amounts imposed by any taxing authority in connection with
any item described in clause (i), and (iii) any liability in respect of any
items described in clauses (i) and/or (ii) payable by reason of contract,
assumption, transferee liability, operation of Law, Treasury Regulation section
1.1502-6(a) (or any
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predecessor or successor thereof of any analogous or similar provision under
Law) or otherwise.
ARTICLE II
MERGERS
Section 2.1 Brookdale Merger.
(a) On the terms set forth in this Agreement, at the Closing and
in accordance with the DGCL, Brookdale Merger Sub shall be merged with and into
Brookdale, the separate corporate existence of Brookdale Merger Sub shall cease
and Brookdale shall continue as the surviving corporation and shall succeed to
and assume all the rights and obligations of Brookdale Merger Sub in accordance
with the DGCL (the "Brookdale Merger").
(b) As soon as practicable on the Closing Date, Brookdale and
Brookdale Merger Sub shall cause the Brookdale Merger to be consummated by
filing a certificate of merger in such form as required by, and executed in
accordance with, the relevant provisions of the DGCL (the "Brookdale Certificate
of Merger") with the Secretary of State of the State of Delaware (the "Secretary
of State") and shall make all other filings or recordings required under the
DGCL. The Brookdale Merger shall become effective at such time as the Brookdale
Certificate of Merger is duly filed with the Secretary of State. The time at
which the Brookdale Merger becomes effective is referred to herein as the
"Brookdale Effective Time." At the Effective Time, (i) the Brookdale Merger
shall have the effects set forth in this Agreement and in the applicable
provisions of the DGCL, (ii) the certificate of incorporation of Brookdale, as
in effect immediately prior to the Effective Time, shall be the certificate of
incorporation of the surviving corporation without change or amendment and (iii)
the by-laws of Brookdale, as in effect immediately prior to the Effective Time,
shall be the by-laws of the surviving corporation until amended in accordance
with the terms of such by-laws and applicable law.
(c) At the Brookdale Effective Time, by virtue of the Brookdale
Merger and without any action on the part of Brookdale, Brookdale Merger Sub or
the Company, all shares of Brookdale Common Stock issued and outstanding
immediately prior to the Brookdale Effective Time (including, without
limitation, pursuant to the Employee Stock Plan) shall be automatically
converted into an aggregate of 20,000,000 fully paid and nonassessable shares of
Common Stock (equivalent to 34.5% of the fully-diluted equity ownership of the
Company as of the date of the Closing, after giving effect to the total number
of shares of Common Stock that may be issued pursuant to the Employee Stock Plan
or the Alterra Stock Plan) (the "FBA Shares") and each issued and outstanding
share of common stock, par value $0.01 per share, of Brookdale Merger Sub shall
be automatically converted into one share of Brookdale Common Stock.
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Section 2.2 FEBC-ALT Merger.
(a) On the terms set forth in this Agreement, at the Closing and
in accordance with the DLLCA and the DGCL, FEBC Merger Sub shall be merged with
and into FEBC-ALT, the separate corporate existence of FEBC Merger Sub shall
cease and FEBC-ALT shall continue as the surviving limited liability company and
shall succeed to and assume all the rights and obligations of FEBC Merger Sub in
accordance with the DLLCA and the DGCL (the "FEBC Merger").
(b) As soon as practicable on the Closing Date, FEBC-ALT and FEBC
Merger Sub shall cause the FEBC Merger to be consummated by filing a certificate
of merger in such form as required by, and executed in accordance with, the
relevant provisions of the DLLCA and the DGCL (the "FEBC Certificate of Merger")
with the Secretary of State and shall make all other filings or recordings
required under the DLLCA and the DGCL. The FEBC Merger shall become effective at
such time as the FEBC Certificate of Merger is duly filed with the Secretary of
State. The time at which the FEBC Merger becomes effective is referred to herein
as the "FEBC Effective Time." At the Effective Time, (i) the FEBC Merger shall
have the effects set forth in this Agreement and in the applicable provisions of
the DLLCA and the DGCL, (ii) the certificate of formation of FEBC-ALT, as in
effect immediately prior to the Effective Time, shall be the certificate of
formation of the surviving limited liability company without change or amendment
and (iii) the FEBC LLC Agreement, as in effect immediately prior to the
Effective Time, shall be the limited liability company agreement of the
surviving limited liability company until amended in accordance with the terms
of such limited liability company agreement and applicable law.
(c) At the FEBC Effective Time, by virtue of the FEBC Merger and
without any action on the part of FEBC-ALT, FEBC Merger Sub or the Company, the
FEBC Membership Interests issued and outstanding immediately prior to the FEBC
Effective Time (including, without limitation, pursuant to the Alterra Stock
Plan) shall be automatically converted into an aggregate of 29,750,000 fully
paid and nonassessable shares of Common Stock (equivalent to 51.3% of the
fully-diluted equity ownership of the Company as of the date of the Closing,
after giving effect to the total number of shares of Common Stock that may be
issued pursuant to the Employee Stock Plan or the Alterra Stock Plan) (the
"FEBC-ALT Shares") and all issued and outstanding shares of common stock, par
value $0.01 per share, of FEBC Merger Sub shall be automatically converted into
100% of the Class A membership interests in FEBC-ALT.
Section 2.3 Fortress CCRC Merger.
(a) On the terms set forth in this Agreement, at the Closing and
in accordance with the DLLCA and the DGCL, CCRC Merger Sub shall be merged with
and into Fortress CCRC, the separate corporate existence of CCRC Merger Sub
shall cease and Fortress CCRC shall continue as the surviving limited liability
company and shall succeed to and assume all the rights and obligations of CCRC
Merger Sub in accordance with the DLLCA and the DGCL (the "CCRC Merger").
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(b) As soon as practicable on the Closing Date, Fortress CCRC and
CCRC Merger Sub shall cause the CCRC Merger to be consummated by filing a
certificate of merger in such form as required by, and executed in accordance
with, the relevant provisions of the DLLCA and the DGCL (the "CCRC Certificate
of Merger") with the Secretary of State and shall make all other filings or
recordings required under the DLLCA and the DGCL. The CCRC Merger shall become
effective at such time as the CCRC Certificate of Merger is duly filed with the
Secretary of State. The time at which the CCRC Merger becomes effective is
referred to herein as the "CCRC Effective Time." At the Effective Time, (i) the
CCRC Merger shall have the effects set forth in this Agreement and in the
applicable provisions of the DLLCA and the DGCL, (ii) the certificate of
formation of Fortress CCRC, as in effect immediately prior to the Effective
Time, shall be the certificate of formation of the surviving limited liability
company without change or amendment and (iii) the limited liability company
agreement of Fortress CCRC, as in effect immediately prior to the Effective
Time, shall be the limited liability company agreement of the surviving limited
liability company until amended in accordance with the terms of such limited
liability company agreement and applicable law.
(c) At the CCRC Effective Time, by virtue of the CCRC Merger and
without any action on the part of Fortress CCRC, CCRC Merger Sub or the Company,
all of the limited liability company interests of Fortress CCRC issued and
outstanding immediately prior to the CCRC Effective Time shall be automatically
converted into an aggregate of 8,250,000 fully paid and nonassessable shares of
Common Stock (equivalent to 14.2% of the fully-diluted equity ownership of the
Company as of the date of the Closing, after giving effect to the total number
of shares of Common Stock that may be issued pursuant to the Employee Stock Plan
or the Alterra Stock Plan) (the "FIT II Shares") and all issued and outstanding
shares of common stock, par value $0.01 per share, of CCRC Merger Sub shall be
converted into 100% of the membership interests in Fortress CCRC.
Section 2.4 Agreement to Exchange Membership Interests. Immediately
after the consummation of the Brookdale Merger pursuant to Section 2.1, at the
Closing, FBA will convey, assign, transfer and deliver to HP, free and clear of
all Liens, and HP will acquire and accept from FBA, an aggregate of 7,844,625
shares of Common Stock (equivalent to 13.53% of the fully-diluted equity
ownership of the Company as of the date of the Closing, after giving effect to
the total number of shares of Common Stock that may be issued pursuant to the
Employee Stock Plan or the Alterra Stock Plan) (the "HP Shares"), including
FBA's right, title and interest therein and thereto, free and clear of all
Liens, in exchange for the conveyance, assignment, transfer and delivery to FBA,
free and clear of all Liens, of all of HP's Membership Interests in FBA,
including all of HP's right, title and interest therein.
Section 2.5 Closing. The conveyance and exchange contemplated by this
Agreement will take place at a closing (the "Closing") at 10:00 a.m., New York
time, on the date hereof, at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx
LLP, 0 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the date on which the Closing
shall occur is hereinafter referred to as the "Closing Date").
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Section 2.6 Closing Deliveries. At the Closing, upon the terms and
conditions set forth in this Agreement:
(a) Each of the Company, FIT II, FBA and HP shall deliver to each
other party a copy of the Governance Agreement, duly executed by it;
(b) The Company shall deliver, or cause to be delivered:
(i) the FBA Shares to FBA;
(ii) the FEBC-ALT Shares (in the respective share amounts as
set forth in Schedule 2.6(b)(ii) hereto) to each of Emeritus, FIT II, FIT-ALT,
NW Select; and
(iii) the FIT II Shares to FIT II.
(c) HP shall deliver, or cause to be delivered to FBA:
(i) a copy of the Amended LLC Agreement (as defined below)
duly executed by HP; and
(ii) the resignations of Xxxx X. Xxxxxxx and Xxxxxx X. Xxxxx
from the Operating Committee and the board of directors of Brookdale and each of
its Subsidiaries, effective as of the Closing.
(d) FBA shall deliver, or cause to be delivered to HP, a stock
certificate representing the HP Shares, duly endorsed for transfer to HP or
accompanied by duly executed stock powers endorsed in blank.
Section 2.7 Withholding Taxes. Notwithstanding anything to the
contrary contained herein, consideration otherwise payable pursuant to this
Article II shall be reduced by applicable withholding Taxes, if any, to the
extent required by Law.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS WITH RESPECT
TO THE BSL ENTITIES
Each of FBA (solely with respect to Brookdale and its Subsidiaries, when
applicable), HP (solely with respect to Brookdale and its Subsidiaries, when
applicable), FRIT (solely with respect to Brookdale and its Subsidiaries, when
applicable), FIT II (solely with respect to Fortress CCRC Acquisition LLC and
its Subsidiaries, when applicable) and FIT-ALT (solely with respect to FEBC-ALT
and its Subsidiaries, when applicable) represents and warrants ((i) with respect
to Section 3.7(a), FBA, FRIT and HP only, (ii) with respect to Section 3.7(b),
FIT-ALT and (iii) with respect to Section 3.7(c), FIT II only), severally but
not jointly, to each other as of the Closing Date that:
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Section 3.1 Organization; Authorization. Such BSL Entity is a
corporation or limited liability company, as the case may be, duly organized,
validly existing and in good standing under the laws of the state of its
incorporation or organization and has the requisite power and authority to carry
on its business as it is now being conducted.
Section 3.2 No Conflicts. The execution, delivery and performance of
this Agreement, the Governance Agreement and the Stockholders Agreement to which
such BSL Entity is a party and the consummation of the transactions contemplated
hereby and thereby will not (a) result in a violation of, be in conflict with or
constitute a default (with or without notice or lapse of time or both) under (i)
any law applicable to such BSL Entity or any of their Subsidiaries or any of
their respective assets, (ii) any provision of the organizational documents of
such BSL Entity or any of their Subsidiaries, (iii) any order or judgment of any
court or other agency of government applicable to such BSL Entity or any of
their Subsidiaries or any of their assets or (iv) any contractual restriction
binding on or affecting such BSL Entity or any of their Subsidiaries or any of
their assets or (b) result in the creation or imposition of any Liens upon any
assets of such BSL Entity or any assets of any of its Subsidiaries, except in
the case of clauses (a) and (b) for violations, conflicts, defaults or Liens
which have not had and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect as to such BSL Entity.
Section 3.3 Governmental Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing (any, a "Governmental
Consent") with, any court, administrative agency or commission or other
governmental authority or instrumentality (any, a "Governmental Entity"),
including under federal or state law or otherwise, is required to be obtained or
made by or with respect to such BSL Entity or any of its Subsidiaries in
connection with the consummation of the transactions contemplated under this
Agreement, the Governance Agreement or the Stockholders Agreement, except (a)
those Governmental Consents that have already been obtained and (b) those
Governmental Consents the failure which to obtain have not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect as to such BSL Entity.
Section 3.4 Subsidiaries. Each material Subsidiary of such BSL Entity
is a corporation, limited partnership or limited liability company, as the case
may be, duly organized, validly existing and in good standing under the laws of
the state of its incorporation or organization and has the requisite power and
authority to carry on its business as it is now being conducted, except where
the failure to be in good standing or to have such power and authority has not
had and would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect as to such BSL Entity. The outstanding
shares of capital stock, partnership interest or equity interests of each
material Subsidiary of such BSL Entity are validly issued, fully paid and
non-assessable and were not issued in violation of any preemptive or similar
rights. There is no existing option, warrant, call, right or contract to which
any Subsidiary of such BSL Entity is a party requiring, and there are no
convertible securities of any Subsidiary of such BSL Entity outstanding which
upon conversion would require, the issuance of any shares of
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capital stock or other equity interests of any Subsidiary of such BSL Entity or
other securities convertible into shares of capital stock or other equity
interests of any Subsidiary of such BSL Entity.
Section 3.5 Litigation. Except as set forth on Schedule 3.5 of the
Disclosure Letter, there is no lawsuit, claim, proceeding or investigation
pending or, to the knowledge of the applicable Investor, threatened by or
against such BSL Entity or any of its Subsidiaries or any of their properties,
assets, operations or businesses, which, individually or in the aggregate, has
had or would reasonably be expected to have a Material Adverse Effect as to such
BSL Entity.
Section 3.6 Compliance With Laws. Such BSL Entity and its Subsidiaries
have conducted and continue to conduct their business in accordance with, and
have otherwise complied and are in compliance with, all applicable Laws, in all
respects, and are not in violation, in any respect, of any such Law, except for
any noncompliance or violations which have not had and would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect as
to such BSL Entity.
Section 3.7 Financial Statements; Liabilities.
(a) The audited consolidated balance sheet as of December 31,
2004 and the unaudited consolidated balance sheets as of June 30, 2005 and the
related audited and unaudited consolidated statements of income and of cash
flows for the periods then ended (including the notes thereto) attached as
Exhibit E-1 hereto (collectively, the "Brookdale Financial Statements") have
been prepared in accordance with GAAP applied on a consistent basis throughout
the periods covered thereby without modification of the accounting principles
used in the preparation thereof and present fairly in all material respects the
consolidated financial condition of Brookdale and its Subsidiaries as of such
respective dates and the results of operations and cash flows of Brookdale and
its Subsidiaries for such periods. Brookdale, together with its Subsidiaries,
does not have any material liabilities or indebtedness (whether or not required
under GAAP to be reflected on a balance sheet or the notes thereto) or
obligations of any kind other than those (i) specifically reflected on and fully
reserved against in the Brookdale Financial Statements, or (ii) incurred in the
ordinary course of business consistent with past practice since June 30, 2005.
(b) The audited consolidated balance sheets as of December 31,
2004 and the unaudited consolidated balance sheets as of June 30, 2005 and the
related audited and unaudited consolidated statements of income and of cash
flows for the periods then ended (including the notes thereto) attached as
Exhibit E-2 hereto (collectively, the "FEBC-ALT Financial Statements") have been
prepared in accordance with GAAP applied on a consistent basis throughout the
periods covered thereby without modification of the accounting principles used
in the preparation thereof and present fairly in all material respects the
consolidated financial condition of FEBC-ALT and its Subsidiaries as of such
respective dates and the results of operations and cash flows of FEBC-ALT and
its Subsidiaries s for such periods. FEBC-ALT, together with its
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Subsidiaries, does not have any material liabilities or indebtedness (whether or
not required under GAAP to be reflected on a balance sheet or the notes thereto)
or obligations of any kind other than those (i) specifically reflected on and
fully reserved against in the FEBC-ALT Financial Statements, or (ii) incurred in
the ordinary course of business consistent with past practice since June 30,
2005.
(c) The unaudited balance sheet as of June 30, 2005 and the
unaudited statement of operating revenue and expenses for the period from April
6, 2005 through June 30, 2005 attached as Exhibit E-3 hereto (collectively, the
"Fortress CCRC Financial Statements" and together with the Brookdale Financial
Statements and the FEBC-ALT Financial Statements, the "Financial Statements")
have been prepared in accordance with GAAP applied on a consistent basis
throughout the periods covered thereby without modification of the accounting
principles used in the preparation thereof and present fairly in all material
respects the consolidated financial condition of Fortress CCRC and its
Subsidiaries as of such respective dates and the results of operations and cash
flows of Fortress CCRC and its Subsidiaries for such periods. Fortress CCRC,
together with its Subsidiaries, does not have any material liabilities or
indebtedness (whether or not required under GAAP to be reflected on a balance
sheet or the notes thereto) or obligations of any kind other than those (i)
specifically reflected on and fully reserved against in the Fortress CCRC
Financial Statements, or (ii) incurred in the ordinary course of business
consistent with past practice since June 30, 2005.
Section 3.8 Absence of Certain Changes. Except as set forth on
Schedule 3.8 of the Disclosure Letter, since June 30, 2005 or as contemplated by
this Agreement, the Governance Agreement, the Stockholders Agreement or the
Emeritus/NW Select Transaction Agreements, (i) such BSL Entity and its
Subsidiaries have conducted their respective businesses only in the ordinary
course of business consistent with past practice and (ii) there has not been any
change, event or development or series of changes, events or developments which,
individually or in the aggregate, has had or could reasonably be expected to
have a Material Adverse Effect with respect to such BSL Entity. Without limiting
the generality of the foregoing, except as set forth on Schedule 3.8 of the
Disclosure Letter, since June 30, 2005:
(a) there has not been any damage, destruction or loss, whether
or not covered by insurance, with respect to the property and assets of such BSL
Entity or any of its Subsidiaries having a replacement cost in the aggregate
that represents more than 15% of such BSL Entity's Book Value;
(b) there has not been any declaration, setting aside or payment
of any dividend or other distribution in respect of any shares of capital stock
of BSL Entity or any of its Subsidiaries or any repurchase, redemption or other
acquisition by such BSL Entity or any of its Subsidiaries of any outstanding
shares of capital stock or other securities of, or other ownership interest in,
such BSL Entity or any of its Subsidiaries;
14
(c) neither such BSL Entity nor any of its Subsidiaries have
entered into any material agreement or arrangement with any Affiliate of such
BSL Entity or any of its Subsidiaries;
(d) except as contemplated by this Agreement, neither such BSL
Entity nor any of its Subsidiaries have acquired any Person or business, by
merger or consolidation, purchase of assets or equity interests, or by any other
manner, in a single transaction or a series of related transactions or invest
in, make a loan, advance or capital contribution to, or otherwise acquire the
securities or assets of any other Person that, in the aggregate, represents in
excess of 15% of such BSL Entity's Book Value;
(e) neither such BSL Entity nor any of its Subsidiaries have
sold, assigned, licensed, transferred, conveyed, leased or otherwise disposed of
any of its material properties or assets in an individual transaction that, in
the aggregate, represents in excess of 15% of such BSL Entity's Book Value;
(f) neither such BSL Entity nor any of its Subsidiaries have
issued, created, incurred, assumed or guaranteed any indebtedness, other than
working capital lines (in an amount not in excess of $1,000,000 in the
aggregate) incurred in the ordinary course of business; and
(g) neither such BSL Entity nor any of its Subsidiaries have
agreed, committed, arranged or entered into any understanding to do anything set
forth in this Section 3.8.
Section 3.9 Affiliate Agreements. Except as set forth on Schedule 3.9
of the Disclosure Letter, to such Investor's knowledge, such BSL Entity and its
Affiliates, on the one hand, and any of the other BSL Entities, their respective
Affiliates or the Company, on the other hand, are not party to any material
agreement or arrangement.
Section 3.10 Other Agreements. To such Investor's knowledge, no
material agreements, arrangements or understandings have been entered into with
respect to the subject matter of this Agreement, including, without limitation,
with respect to the payment of fees or reimbursement of expenses, other than the
agreements that are set forth on Schedule 3.10 of the Disclosure Letter.
Section 3.11 No Brokers. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement based on any agreement,
arrangement or understanding with such BSL Entity or any of its Affiliates.
Section 3.12 Taxes. Except as set forth on Schedule 3.12 of the
Disclosure Letter, each BSL Entity and Subsidiary thereof has timely filed all
material federal, state and foreign tax returns and reports required to be filed
by it or requests for extensions to file such returns or reports have been
timely filed, granted and have not expired. All material Taxes required to be
paid by it have either been paid or are reflected in accordance with GAAP as a
reserve for Taxes on the applicable Financial
15
Statements and such Financial Statements reflect an adequate reserve for all
Taxes payable by each such BSL Entity or Subsidiary for all taxable periods and
portions thereof through the date of such Financial Statements. All such returns
and reports are correct and complete in all material respects. All material
Taxes required to be withheld by each BSL Entity or Subsidiary thereof have been
withheld and have been (or will be) duly and timely paid to the proper Taxing
Authority. No material deficiencies for any Taxes have been proposed, asserted
or assessed against any BSL Entity or Subsidiary thereof that are still pending.
Except as set forth on Schedule 3.12 of the Disclosure Letter, no income Tax
Return of a BSL Entity or Subsidiary thereof is under current examination by the
Internal Revenue Service or by any state or foreign tax authority. All
assessments for Taxes due with respect to any concluded litigation have been
fully paid or have been adequately reserved on the Financial Statements in
accordance with GAAP. Except as set forth on Schedule 3.12 of the Disclosure
Letter, no BSL Entity or Subsidiary thereof is liable for the Taxes of any other
person as a result of any indemnification provision or other contractual
obligation. There are no liens as a result of any unpaid Taxes upon any of the
assets of any BSL Entity or Subsidiary thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to each of the Investors as of the
Closing Date as follows:
Section 4.1 Organization; Authorization.
(a) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the state of Delaware and has the
requisite power and authority to carry on its business as it is now being
conducted. The Company has made available to each of the Investors true, correct
and complete copies of its certificate of incorporation and by-laws, in each
case amended as of the date hereof. The execution, delivery and performance by
it of this Agreement, the Governance Agreement, the Stockholders Agreement, the
Emeritus/NW Select Stockholders Agreement and the Emeritus/NW Select
Registration Rights Agreement and the consummation by the Company of the
transactions contemplated thereby and thereby, have been duly authorized by all
necessary action on its part.
(b) Each of the Merger Subs is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware
and has the requisite power and authority to carry on its business as it is now
being conducted. The Company has made available to each of the Investors true,
correct and complete copies of the certificate of incorporation and by-laws of
each of the Merger Subs, in each case amended as of the date hereof. The
execution, delivery and performance by it of this Agreement and the consummation
by each of the Merger Subs of the transactions contemplated thereby and thereby,
have been duly authorized by all necessary action on its part.
16
Section 4.2 Enforceability.
(a) This Agreement constitutes, and the Governance Agreement, the
Stockholders Agreement, the Emeritus/NW Select Stockholders Agreement and the
Emeritus/NW Select Registration Rights Agreement, when executed and delivered by
the Company will constitute, assuming the due authorization, execution and
delivery hereof and thereof by all other parties hereto and thereto, a legal,
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to any limitations imposed by bankruptcy,
insolvency, or other laws of general application relating to enforcement of
creditors' rights or general equity principles.
(b) This Agreement constitutes, assuming the due authorization,
execution and delivery hereof and thereof by all other parties hereto and
thereto, a legal, valid and binding obligation of each of the Merger Subs,
enforceable against the Merger Subs in accordance with its terms, subject to any
limitations imposed by bankruptcy, insolvency, or other laws of general
application relating to enforcement of creditors' rights or general equity
principles.
Section 4.3 No Conflicts. The execution, delivery and performance of
this Agreement, the Governance Agreement, the Stockholders Agreement, the
Emeritus/NW Select Stockholders Agreement and the Emeritus/NW Select
Registration Rights Agreement by the Company and the Merger Subs and the
consummation by the Company and the Merger Subs of the transactions contemplated
hereby or thereby will not (a) result in a violation of, be in conflict with or
constitute a default (with or without notice or lapse of time or both) under (i)
any law applicable to the Company, the Merger Subs or any of their respective
assets, (ii) any provision of their respective organizational documents, (iii)
any order or judgment of any court or other agency of government applicable to
the Company, the Merger Subs or any of their respective assets or (iv) any
contractual restriction binding on or affecting the Company, the Merger Subs or
any of their respective assets or (b) result in the creation or imposition of
any Liens upon any of the Company's or the Merger Subs' respective assets,
except in the case of clauses (a) and (b) for violations, conflicts, defaults or
Liens which have not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 4.4 Governmental Approvals. No Governmental Consent with any
Governmental Entity is required to be obtained or made by or with respect to the
Company or any Merger Sub in connection with its execution and delivery of this
Agreement, the Governance Agreement, the Stockholders Agreement, the Emeritus/NW
Select Stockholders Agreement and the Emeritus/NW Select Registration Rights
Agreement or the consummation of the transactions contemplated hereby or thereby
by the Company and the Merger Subs, except (a) the filing of a registration
statement and the approval of the Securities and Exchange Commission in
connection with the Initial Public Offering, (b) the filing of the Articles of
Merger with the Secretary of State, (c) those Governmental Consents that have
already been obtained and (d) those Governmental Consents the failure which to
obtain have not had and would not
17
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.
Section 4.5 Litigation. Except as set forth on Schedule 4.5 of the
Disclosure Letter, there is no lawsuit, claim, proceeding or investigation
pending or threatened by or against the Company or any of its Subsidiaries or
any of their properties, assets, operations or businesses, which relates to the
transactions contemplated by this Agreement, which, individually or in the
aggregate, has had or would reasonably be expected to have a Material Adverse
Effect.
Section 4.6 Capitalization. After giving effect to the transactions
contemplated by this Agreement (other than the Initial Public Offering),
including without limitation, issuances or conversions contemplated pursuant to
the Employee Stock Plan or the Alterra Stock Plan, (i) the authorized capital
stock of the Company, (ii) the number of issued and outstanding capital stock of
the Company by record holder and (iii) the total number of shares of Common
Stock that may be issued as a result of the issuance and/or exercise of stock
options, restricted stock, restricted stock units, stock appreciation rights,
phantom stock awards or similar incentive compensation awards, will be as set
forth on Schedule 4.6 of the Disclosure Letter. Except for issuances or
conversions contemplated pursuant to the Employee Stock Plan and the Alterra
Stock Plan, there is no existing option, warrant, call, right or contract to
which any Person is a party requiring, and there are no securities of the
Company outstanding which upon conversion or exchange would require, the
issuance, sale or transfer of any additional shares of capital stock or other
equity securities of the Company or other securities convertible into,
exchangeable for or evidencing the right to subscribe for or purchase shares of
capital stock or other equity securities of the Company. There are no
obligations, contingent or otherwise, of the Company to repurchase, redeem or
otherwise acquire any shares of Common Stock. There are no outstanding stock
appreciation, phantom stock, profit participation or similar rights with respect
to the Company. Except as set forth in Governance Agreement, the Stockholders
Agreement and the Emeritus/NW Select Stockholder Agreement, there are no voting
trusts, irrevocable proxies or other agreements, arrangements or understandings
to which the Company is a party or is bound with respect to the voting or
consent of any shares of Common Stock.
Section 4.7 Financial Statements. The unaudited pro forma condensed
financial statements of the Company (including the notes thereto) sets forth the
historical financial information as of and for the three and six months ended
June 30, 2005 and for the year ended December 31, 2004, attached as Exhibit F
hereto, have been prepared in accordance with GAAP applied on a consistent basis
throughout the period covered thereby without modification of the accounting
principles used in the preparation thereof and present fairly in all material
respects the combined financial condition of the Company as of such date and the
results of operations and cash flows of such entities for such period.
Section 4.8 Title. The FIT II Shares, the FEBC-ALT Shares and the FBA
Shares have been duly authorized by the Company and, when issued, exchanged and
delivered in accordance with this Agreement, will be validly issued, fully paid
and
18
nonassessable and shall convey to the applicable Investor good and valid title
to the FIT II Shares, the FEBC-ALT Shares or FBA Shares, as the case may be,
free and clear of any and all Liens.
Section 4.9 Liabilities. The Company was formed as a Delaware
corporation on June 29, 2005 and, except as set forth on Schedule 4.9 of the
Disclosure Letter, has no material liabilities or obligations or any
Subsidiaries other than the Merger Subs.
Section 4.10 Affiliate Agreements. Except as set forth on Schedule
4.10 of the Disclosure Letter and other than with respect to this Agreement, the
Governance Agreement, the Stockholders Agreement and the Emeritus/NW Select
Transaction Agreements, the Company and its Affiliates, on the one hand, and any
of the BSL Entities or their respective Affiliates, on the other hand, are not
party to any material agreement or arrangement.
Section 4.11 Other Agreements. To the Company's knowledge, no material
agreements, arrangements or understandings have been entered into with respect
to the subject matter of this Agreement, the Governance Agreement, the
Stockholders Agreement or the Emeritus/NW Select Transaction Agreements,
including, without limitation, with respect to the payment of fees or
reimbursement of expenses, other than the agreements that are set forth on
Schedule 4.11 of the Disclosure Letter.
Section 4.12 No Brokers. No agent, broker, investment banker,
financial advisor or other firm or Person is or will be entitled to any broker's
or finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement based on any agreement,
arrangement or understanding with the Company or any of its Affiliates.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
Each of the Investors ((i) with respect to Section 5.5(a), FBA, FRIT
and HP only, (ii) with respect to Section 5.5(b), FIT-ALT only, (iii) with
respect to Section 5.5(c), FIT II only, and (iv) with respect to Section 5.5(d),
HP only) represent and warrant, severally but not jointly, to the Company and,
solely with respect to Section 5.5(d), to FBA as well, as follows:
Section 5.1 Organization, Authorization. Such Investor is duly
organized or formed (as applicable), validly existing and in good standing under
the laws of its jurisdiction of organization or formation. The execution,
delivery and performance by such Investor of this Agreement and the consummation
by such Investor of the transactions contemplated hereby have been duly
authorized by all necessary corporate and other action on its part.
Section 5.2 Enforceability. This Agreement has been duly executed and
delivered by such Investor. This Agreement constitutes a legal, valid and
binding
19
obligation of such Investor, enforceable against such Investor in accordance
with its terms, subject to any limitations imposed by bankruptcy, insolvency, or
other laws of general application relating to enforcement of creditors' rights
or general equity principles.
Section 5.3 No Conflicts. The execution, delivery and performance of
this Agreement by such Investor and the consummation by such Investor of the
transactions contemplated hereby will not (a) result in a violation of, be in
conflict with or constitute a default (with or without notice or lapse of time
or both) under (i) any law applicable to such Investor or any of its assets,
(ii) any provision of its organizational documents, (iii) any order or judgment
of any court or other agency of government applicable to such Investor or any of
its assets or (iv) any contractual restriction binding on or affecting such
Investor or any of its assets or (b) result in the creation or imposition of any
Liens upon any of such Investor's assets.
Section 5.4 Investment.
(a) Such Investor is acquiring the shares of Common Stock for
investment for its own account, and not with a view to any distribution thereof
in violation of the securities laws. Such Investor understands that such shares
of Common Stock have not been registered under the Securities Act by reason of
specific exemptions therefrom which depend upon, among other things, the bona
fide nature of the investment intent and the accuracy of such Investor's
representations as expressed herein.
(b) Such Investor's financial condition and investments are such
that it is in a position to bear the economic risks of the investment and
withstand the complete loss of the investment. Such Investor has extensive
knowledge and experience in financial and business matters and has the
capability to evaluate the merits and risks of an investment in the shares of
Common Stock.
(c) Such Investor qualifies as an "accredited investor" as such
term is defined in Section 2(15) of the Securities Act and Regulation D
promulgated thereunder.
Section 5.5 Conveyance Transactions.
(a) The Brookdale Merger shall convey to the Company good and
valid title to the Brookdale Shares, free and clear of any and all Liens. As a
result of such merger, the Company shall acquire all of the outstanding equity
interests (including, without limitation, any security convertible into, or
exerciseable or exchangeable for, equity securities) of Brookdale.
(b) The FEBC Merger shall convey to the Company good and valid
title to the membership interests of FEBC-ALT, free and clear of any and all
Liens. As a result of such merger, the Company shall acquire all of the
outstanding equity interests (including, without limitation, any security
convertible into, or exerciseable or exchangeable for, equity securities) of
FEBC-ALT.
20
(c) The CCRC Merger shall convey to the Company good and valid
title to the membership interests of Fortress CCRC Acquisition LLC, free and
clear of any and all Liens. As a result of such merger, the Company shall
acquire all of the outstanding equity interests (including, without limitation,
any security convertible into, or exerciseable or exchangeable for, equity
securities) of Fortress CCRC Acquisition LLC.
(d) HP directly owns all of its Membership Interests in FBA, free
and clear of all Liens. The exchange of HP's Membership Interests in FBA for
Common Stock pursuant to Section 2.4 shall convey to FBA good and valid title to
such Membership Interests, free and clear of any and all Liens.
Section 5.6 Governmental Approvals. No Governmental Consent with any
Governmental Entity, including under federal or state law or otherwise, is
required to be obtained or made by or with respect to such Investor in
connection with its execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby by such Investor, other than the filings
contemplated by Section 6.3.
Section 5.7 Litigation. There is no lawsuit, claim, proceeding or
investigation pending or, to its knowledge, threatened by or against such
Investor or any of its properties, assets, operations, businesses or prospects,
which relates to the transactions contemplated by (i) this Agreement or (ii) the
Governance Agreement or the Stockholders Agreement, to the extent such Investor
is a party to either such agreement. No lawsuit, claim, proceeding or
investigation pending or threatened, which seeks to delay or prevent the
consummation of, or which could reasonably be expected to materially adversely
affect, the ability of such Investor to consummate the transactions contemplated
by this Agreement, the Governance Agreement or the Stockholders Agreement.
Section 5.8 Brokers. No agent, broker, investment banker, financial
advisor or other firm or Person is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by this Agreement based on any agreement,
arrangement or understanding with such Investor or any of its Affiliates.
Section 5.9 Information Supplied. Except as set forth specifically
herein, the Company has not provided, and will not be providing, such Investor
with any material or information regarding the transactions contemplated by this
Agreement and such Investor acknowledges that it has had the opportunity to ask
questions and receive answers from the Company or any persons acting on behalf
of the Company, has been furnished with all other materials that it considers
relevant to its investment in the Company and has been given the opportunity
fully to perform its own due diligence. Such Investor is experienced,
sophisticated and knowledgeable in the trading of public and private companies
and the operation of senior living facilities and understands the disadvantage
to which it is subject on account of the disparity of information regarding the
Company and any Conveyance Transaction.
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ARTICLE VI
ADDITIONAL AGREEMENTS
Section 6.1 LLC Agreement Amendment. Prior to the execution hereof,
each of HP and FRIT shall have executed and delivered the amendment to the LLC
Agreement in the form attached as Exhibit G hereto (the "Amended LLC
Agreement").
Section 6.2 Management Incentive Plans. Simultaneously with, and
subsequent to, the Closing, each party hereto shall take all actions necessary
to approve the conversion of (i) each share of Brookdale Common Stock issued
pursuant to the Brookdale Living Communities Inc. Employee Restricted Stock Plan
(the "Employee Stock Plan") into shares of Common Stock in accordance with the
terms of the Employee Stock Plan (solely to the extent that such shares of
Common Stock are reflected on Schedule 4.6 of the Disclosure Letter) and (ii)
each security issued to members of the management of Alterra Healthcare
Corporation pursuant to a management incentive plan into shares of Common Stock
in accordance with the terms of such plan, such number of shares of Common Stock
not to exceed in the aggregate 1.5% of the Common Stock issued and outstanding
as of the Closing Date (after giving effect to the consummation of the
transactions contemplated by this Agreement) (solely to the extent that such
shares of Common Stock are reflected on Schedule 4.6 of the Disclosure Letter).
Section 6.3 Filings. Each of the parties hereto shall cooperate in
making any governmental and regulatory filings and any notices and approvals
required to be made or obtained.
Section 6.4 Stockholders Agreement. Simultaneously with the
consummation of the Initial Public Offering, each of the Company, FIT II, FBA
and HP shall deliver to each other a copy of the Stockholders Agreement duly
executed by it.
Section 6.5 Consent. HP and FRIT, each in its capacity as a Member of
FBA and a stockholder of the Company and their respective OC Members and
designees to the board of directors of Brookdale, its Subsidiaries and the
Company hereby consent to the transactions contemplated by this Agreement, the
Governance Agreement, the Stockholders Agreement, the Emeritus/NW Select
Stockholders Agreement and the Emeritus/NW Select Registration Rights Agreement,
including, without limitation, the Initial Public Offering (solely with respect
to this Section 6.5, as such term is defined in the Governance Agreement).
Section 6.6 Expenses. The Company shall be responsible for the payment
of all reasonable fees and expenses incurred by the parties hereto in connection
with the transactions contemplated by this Agreement, the Governance Agreement,
the Stockholders Agreement and the Emeritus/NW Select Transaction Agreements,
including, without limitation, attorneys' fees and expenses, including for any
filing fees required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended;
22
provided, however, that each of the Investors shall be responsible for any Taxes
payable by it in connection with the transactions contemplated by this
Agreement.
Section 6.7 Further Action; Cooperation. Each of the parties hereto
agrees to use its reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, and to assist and cooperate with the other
parties in doing, all things necessary, proper or advisable to give effect to
the transactions contemplated by this Agreement, including, without limitation,
the Conveyance Transactions and the Initial Public Offering.
ARTICLE VII
INDEMNIFICATION
Section 7.1 Survival of Representations and Warranties. The
representations and warranties of the parties hereto contained in this Agreement
shall expire upon the earlier of (i) the consummation of the Initial Public
Offering or (ii) the date that is thirty days after the delivery to each of the
parties hereto of audited consolidated financial statements of the Company for
the fiscal year ended December 31, 2005; provided, that the representations and
warranties set forth in Sections 3.1, 4.1, 4.2, 5.1 and 5.2 shall survive until
60 days after the expiration of the applicable statute of limitations (including
any extensions thereof); provided, further, that the representations and
warranties set forth in Sections 3.11, 4.6, 4.8, 4.10 and 5.8 shall survive
until the consummation of the Initial Public Offering. After the expiration of
such applicable period, any claim by a party hereto based upon any such
representation or warranty shall be of no further force and effect, except to
the extent a party has asserted a claim for breach of any such representation or
warranty prior to the expiration of such period, in which event any
representation or warranty to which such claim relates shall survive with
respect to such claim until such claim is resolved. The covenants and agreements
of the parties hereto contained in this Agreement shall survive the Closing
until performed in accordance with their terms.
Section 7.2 Indemnification.
(a) The Company shall indemnify, defend and hold harmless each
Investor, its Affiliates and their respective officers, directors, partners,
members, employees, agents, representatives, successors and assigns (each a
"Company Indemnified Person"), from and against all Damages incurred or suffered
by a Company Indemnified Person arising from, relating to or as a result of (i)
the breach of any of the representations or warranties made by the Company in
this Agreement or (ii) the breach of any covenant, obligation or agreement made
by the Company in this Agreement. For purposes of this Article VII, the Company
Indemnified Persons with respect to FBA shall not be deemed to include HP, any
of the members of the Operating Committee appointed by HP pursuant to the LLC
Agreement, or any of their respective Affiliates..
(b) Each Investor shall, solely on behalf of itself, separately
and not jointly, indemnify, defend and hold harmless each other Investor, the
Company, their
23
respective Affiliates, and their respective officers, directors, partners,
members, employees, agents, representatives, successors and assigns (each an
"Investor Indemnified Person") from and against all Damages incurred or suffered
by an Investor Indemnified Person arising from, relating to, or as a result of
(i) the breach of any of the representations or warranties made by such Investor
in this Agreement (or in the case of Emeritus or NW Select, for the breach of
any of the representations or warranties made by FIT-ALT under Article III) or
(ii) the breach of any covenant, obligation or agreement made by such Investor
in this Agreement.
(c) For purposes of determining the breach of representations,
warranties, covenants, obligations or other agreements in connection with a
claim for indemnification pursuant to this Section 7.2, and calculating Damages
hereunder, any materiality or Material Adverse Effect qualifications (other than
in the first sentence of Section 3.8) in the representations, warranties,
covenants, obligations and agreements shall be disregarded.
(d) No claim may be made against the Company for indemnification
with respect to breaches of representations and warranties (other than the
representations and warranties set forth in Sections 4.1, 4.2, 4.6, 4.8 and
4.13) pursuant to Section 7.2(a)(i) above with respect to any Damages unless (i)
such individual Damage is in excess of $125,000 and (ii) the aggregate amount of
Damages incurred by the Company Indemnified Persons thereunder exceeds
$5,000,000, and the Company shall then only be liable for the amount of such
Damages which exceed $5,000,000. The maximum amount recoverable with respect to
breaches of representations and warranties (other than the representations and
warranties set forth in Sections 4.1, 4.2, 4.6, 4.8 and 4.13) under Section
7.2(a)(i) by each of the Investors and its related Company Indemnified Persons
is set forth on Schedule 7.2(d) hereto.
(e) (i) No claim may be made against an Investor for
indemnification with respect to breaches of representations and warranties made
by such Investor (or in the case of Emeritus and NW Select, those
representations and warranties made by FIT-ALT) in Article III relating to a BSL
Entity (other than the representations and warranties set forth in Sections 3.1,
3.4, 3.11) pursuant to Section 7.2(b)(i) above with respect to any Damages
unless (A) such individual Damage exceeds $125,000 and (B) the aggregate amount
of Damages incurred by the Investor Indemnified Persons as a result of breaches
of representations and warranties with respect to such BSL Entity exceed
$5,000,000, and then the Investors making such representations and warranties
with respect to such BSL Entity (or with respect to FEBC-ALT: Emeritus, FIT-ALT
and NW Select) shall then (1) only be liable for the amount of such Damages
which exceed $5,000,000 and (2) with respect to each such Investor, only be
liable for such Investor's pro rata share of the amount of any such Damages in
excess of $5,000,000, such pro rata share being set forth on Schedule 7.2(e)(i)
hereto. Notwithstanding anything to the contrary in this Agreement or the
schedules hereto, no Investor shall have any indemnification obligations under
Section 7.2(b)(i) for breaches of representations and warranties set forth in
Article III with respect to any BSL Entity for which it has not explicitly made
representations and warranties in Article III.
24
(ii) No claim may be made against an Investor for
indemnification with respect to breaches of representations and warranties made
by such Investor in Article V (other than the representations and warranties set
forth in Sections 5.1, 5.2, and 5.8, to which this Section 7.2(e)(ii) shall not
apply) pursuant to Section 7.2(b)(i) above with respect to any Damages unless
(i) such individual Damage exceeds $125,000 and (ii) the aggregate amount of
Damages incurred by the Company (or with respect to Section 5.5(d), FBA)
thereunder exceeds $5,000,000, and such Investor shall then only be liable for
the amount of such Damages which exceed $5,000,000.
(f) The maximum amount recoverable with respect to breaches of
representations and warranties (other than the representations and warranties
set forth in Sections 3.1, 3.4, 3.11, 5.1, 5.2 and 5.8) under Section 7.2(b)(i)
from each Investor by all Investor Indemnified Persons, in the aggregate, is set
forth on Schedule 7.2(f) hereto.
(g) In no case shall any payment be made in the case of an
indemnification claim under Sections 7.2(a)(i), 7.2(a)(ii), 7.2(b)(i) or
7.2(b)(ii) until a Damage occurs. The Company shall not have any liability to
any Company Indemnified Person under Section 7.2(a)(i) for any breach of a
representation or warranty to the extent that a claim for indemnification is
based upon facts of which such Company Indemnified Person had knowledge on or
prior to the Closing Date, unless such claim also relies upon a materially
adverse occurrence or development that occurs after the Closing Date. No
Investor shall have any liability to any Investor Indemnified Person under
Section 7.2(b)(i) for any breach of a representation or warranty to the extent
that a claim for indemnification is based upon facts of which such Investor
Indemnified Person had knowledge on or prior to the Closing Date, unless such
claim also relies upon a materially adverse occurrence or development that
occurs after the Closing Date. For purposes of this Section 7.2(g), a Person
shall be deemed to have knowledge only to the extent of his or her actual
knowledge of such fact and only to the extent of his or her awareness that such
fact constitutes a breach of such representation or warranty.
(h) Notwithstanding anything to the contrary in this Article VII,
in no event shall any Person have the right to seek indemnification pursuant to
both Sections 7.2(a) and 7.2(b) with respect to any claim for Damages (or series
of related claims) arising from the same underlying facts, events or
circumstances.
Section 7.3 Sole Remedy. Except in the case of fraud, the rights to
indemnification provided for in this Article VII for a breach of representations
or warranties by the Investors (in the case of indemnification pursuant to
Section 7.2(b)(i)) or the Company (in the case of indemnification pursuant to
Section 7.2(a)(i)) shall constitute the sole post-closing remedy of the Company
and the Investors, respectively, for such breach, and the Company and the
Investors shall have no other liability or damages to the other party resulting
from any such breach.
25
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Headings. The headings in this Agreement are for
convenience of reference only and shall not control or effect the meaning or
construction of any provisions hereof.
Section 8.2 Entire Agreement. This Agreement, the Governance
Agreement, the Stockholders Agreement and the Emeritus/NW Select Transaction
Agreements constitute the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein, and there are no
restrictions, promises, representations, warranties, covenants, conditions or
undertakings with respect to the subject matter hereof, other than those
expressly set forth or referred to herein. This Agreement, the Governance
Agreement, the Stockholders Agreement and the Emeritus/NW Select Transaction
Agreements supersedes all prior agreements and understandings between the
parties hereto with respect to the subject matter hereof.
Section 8.3 Notices. All notices, requests, consents and other
communications hereunder to any party shall be deemed to be sufficient if
contained in a written instrument delivered in person or sent by telecopy,
nationally recognized overnight courier or first class registered or certified
mail, return receipt requested, postage prepaid, addressed to such party at the
address set forth below or such other address as may hereafter be designated on
the signature pages of this Agreement or in writing by such party to the other
parties:
(a) If to the Company to:
Brookdale Senior Living Inc.
000 X. Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
with a copy (which shall not constitute notice) to:
Fortress Investment Group, LLC
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
26
Attn: Xxxxxx X. Coco, Esq.
(b) If to Emeritus:
Emeritus Corporation
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxxxx
with a copy (which shall not constitute notice) to:
Xxxxxxx Coie
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxxx, Esq.
(c) If to Brookdale, FBA, FEBC-ALT, FIT II, FIT-ALT, Fortress CCRC,
FRIT or any Merger Sub to:
c/o Fortress Investment Group, LLC
0000 Xxxxxx xx xxx Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attn: Xxxxxx X. Xxxxxxx
with a copy (which shall not constitute notice) to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
0 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Fax: (000) 000-0000
Attn: Xxxxxx X. Coco, Esq.
(d) If to HP:
c/o Capital Z Management
00 Xxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxx X. Xxxxxxx and Xxxxxx X. Xxxxx
27
with a copy (which shall not constitute notice) to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxx, Esq.
(e) If to NW Select:
NW Select LLC
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxxx X Xxxx
All such notices, requests, consents and other communications shall be deemed to
have been given or made if and when received (including by overnight courier) by
the parties at the above addresses or sent by electronic transmission, with
confirmation received, to the telecopy numbers specified above (or at such other
address or telecopy number for a party as shall be specified by like notice).
Any notice delivered by any party hereto to any other party hereto shall also be
delivered to each other party hereto simultaneously with delivery to the first
party receiving such notice.
Section 8.4 Applicable Law. The substantive laws of the State of
Delaware shall govern the interpretation, validity and performance of the terms
of this Agreement, without regard to conflicts of law doctrines. THE PARTIES
HERETO WAIVE THEIR RIGHT TO A JURY TRIAL WITH RESPECT TO DISPUTES HEREUNDER.
Section 8.5 Severability. The invalidity, illegality or
unenforceability of one or more of the provisions of this Agreement in any
jurisdiction shall not affect the validity, legality or enforceability of the
remainder of this Agreement, including any such provisions, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
Section 8.6 Successors and Assigns; Third-Party Beneficiaries.
(a) Except as otherwise provided herein, all the terms and
provisions of this Agreement shall be binding upon, shall inure to the benefit
of and shall be enforceable by the respective successors and permitted assigns
of the parties hereto. Other than as set forth herein, no assignment of this
Agreement may be made by any party at any time, whether or not by operation of
law, without each of the other parties' prior written consent.
(b) Except as provided in Article VII with respect to Company
Indemnified Parties and Investor Indemnified Parties, this Agreement is for the
sole
28
benefit of the parties to this Agreement and their successors and permitted
assigns and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any legal or equitable right, benefit or
remedy of any nature whatsoever under or by reason of this Agreement.
Section 8.7 Amendments. This Agreement may not be amended, modified or
supplemented unless such amendment, modification or supplement is in writing and
signed by each of the parties hereto.
Section 8.8 Waiver. The failure of a party hereto at any time or times
to require performance of any provision hereof shall in no manner affect its
right at a later time to enforce the same. No waiver by a party of any condition
or of any breach of any term, covenant, representation or warranty contained in
this Agreement shall be effective unless in a writing signed by the party
against whom the waiver is to be effective, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
Section 8.9 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same Agreement.
Section 8.10 Submission to Jurisdiction. ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT AND ANY ACTION FOR ENFORCEMENT OF ANY
JUDGMENT IN RESPECT THEREOF MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND THE
APPELLATE COURTS THEREOF. EACH PARTY HERETO IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO SUCH PARTY AT THE ADDRESS FOR NOTICES SET FORTH HEREIN. EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS OR
PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT BROUGHT IN THE
COURTS REFERRED TO ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO
PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN
ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
Section 8.11 Injunctive Relief. Each party hereto acknowledges and
agrees that a violation of any of the terms of this Agreement will cause the
other parties
29
irreparable injury for which an adequate remedy at law is not available.
Therefore, the parties agree that each party shall be entitled to, an
injunction, restraining order, specific performance or other equitable relief
from any court of competent jurisdiction, restraining any party from committing
any violations of the provisions of this Agreement.
[Remainder of page left blank intentionally]
30
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly as of the
date first above written.
BROOKDALE SENIOR LIVING INC.
By: /s/ R. Xxxxxxx Xxxxx
------------------------------------
Name: R. Xxxxxxx Xxxxx
----------------------------------
Title:
---------------------------------
BROOKDALE LIVING COMMUNITIES, INC.
By: /s/ R. Xxxxxxx Xxxxx
------------------------------------
Name: R. Xxxxxxx Xxxxx
----------------------------------
Title:
---------------------------------
BSL BROOKDALE MERGER INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title:
---------------------------------
BSL CCRC MERGER INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title:
---------------------------------
BSL FEBC MERGER INC.
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title:
---------------------------------
EMERITUS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
----------------------------------
Title: Vice President of Finance
---------------------------------
FEBC-ALT INVESTORS LLC
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------------
Title: VP
---------------------------------
FIT-ALT INVESTOR LLC
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------------
Title: VP
---------------------------------
FORTRESS BROOKDALE ACQUISITION LLC
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
FORTRESS CCRC ACQUISITION LLC
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
----------------------------------
Title: VP
---------------------------------
FORTRESS INVESTMENT TRUST II LLC
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------
Title: Chief Operating Officer
-----------------------------------
FORTRESS REGISTERED INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------
Title: Chief Operating Officer & Secretary
-----------------------------------
HEALTH PARTNERS
By: Capital Z Financial Services
Fund II, L.P.,
its General Partner
By: Capital Z Partners, L.P., its
General Partner
By: Capital Z Partners, Ltd, its General
Partner
By: /s/ Xxxxxx Burnardon
--------------------------------------
Name: Xxxxxx Burnardon
------------------------------------
Title: CFO
------------------------------------
NW SELECT LLC
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
Schedule 2.6(b)(ii)
Allocation of FEBC-ALT Shares
Entity Number of Shares of Common Stock
------ --------------------------------
Emeritus 2,086,000
FIT II 11,750,000
FIT-ALT 13,228,000
NW Select 2,086,000
Schedule 7.2(d)
Maximum Amount Recoverable by Investors
for Breaches of
Representations and Warranties
FIT II and FIT-ALT (collectively) $332,280,000
FBA and FRIT (collectively) $ 91,027,000
HP $ 78,446,250
Emeritus $ 20,860,000
NW Select $ 20,860,000
Schedule 7.2(e)(i)
Pro Rata Indemnification Percentages
INVESTOR PRO RATA INDEMNIFICATION PERCENTAGE
-------- -----------------------------------
Emeritus 12%
FBA and FRIT (collectively) 60%
FIT II 100%
FIT-ALT 76%
HP 40%
NW Select 12%
Schedule 7.2(f)
Maximum Amount Recoverable from Investors
for Breaches of
Representations and Warranties
FIT II and FIT-ALT (collectively) $332,280,000
FBA and FRIT (collectively) $ 91,027,000
HP $ 78,446,250
Emeritus $ 20,860,000
NW Select $ 20,860,000
