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STOCKHOLDERS AND VOTING AGREEMENT

Voting Agreement

STOCKHOLDERS AND VOTING AGREEMENT | Document Parties: EMERITUS CORP\WA\ | BROOKDALE SENIOR LIVING INC. | FIT-ALT INVESTOR LLC | NW SELECT LLC You are currently viewing:
This Voting Agreement involves

EMERITUS CORP\WA\ | BROOKDALE SENIOR LIVING INC. | FIT-ALT INVESTOR LLC | NW SELECT LLC

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Title: STOCKHOLDERS AND VOTING AGREEMENT
Governing Law: Delaware     Date: 7/1/2005
Industry: Healthcare Facilities     Law Firm: Fortress Investment Group, LLC; Skadden, Arps, Slate, Meagher & Flom LLP     Sector: Healthcare

STOCKHOLDERS AND VOTING AGREEMENT, Parties: emeritus corp\wa\ , brookdale senior living inc. , fit-alt investor llc , nw select llc
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STOCKHOLDERS AND VOTING AGREEMENT

 

BY AND AMONG

 

BROOKDALE SENIOR LIVING INC.,

 

FIT-ALT INVESTOR LLC

 

EMERITUS CORPORATION

 

and

 

NW SELECT LLC

 

 

 

 

 

 

 

______________

 

 

 

Dated as of June 29, 2005

 


 

 

 

ARTICLE I

 

 

DEFINITIONS

 

Section 1.1

Defined Terms

1

 

ARTICLE II

 

 

TRANSFER

 

Section 2.1

Restrictions on Transfer.

4

Section 2.2

Binding Effect on Transferees

5

Section 2.3

Additional Purchases

5

Section 2.4

Legend

5

 

ARTICLE III

 

 

VOTING

 

Section 3.1

Voting of Company Securities

6

Section 3.2

Irrevocable Proxy

7

 

ARTICLE IV

 

 

TAG-ALONG AND DRAG-ALONG RIGHTS

 

Section 4.1

Tag-Along Rights.

7

Section 4.2

Drag-Along Rights.

9

 

ARTICLE V

 

 

REPRESENTATIONS OF EACH STOCKHOLDER

 

Section 5.1

Due Organization, Authorization

10

Section 5.2

Enforceability, Etc

11

Section 5.3

No Conflicts

11

Section 5.4

Governmental Approvals

11

Section 5.5

Litigation

11

Section 5.6

Title to the Shares

11

 

ARTICLE VI

 

 

MISCELLANEOUS

 

Section 6.1

Effective Time of Agreement

12

Section 6.2

Further Actions; Additional Agreements

12

Section 6.3

Headings

12

Section 6.4

Entire Agreement

13

Section 6.5

Further Actions; Cooperation

13

Section 6.6

Notices

13

Section 6.7

Applicable Law; Venue

15

Section 6.8

Severability

15

Section 6.9

Successors and Assigns

16

Section 6.10

Amendments

16

Section 6.11

Waiver

16

Section 6.12

Counterparts

16

Section 6.13

Injunctive Relief

16

Section 6.14

Recapitalizations, Exchanges, Etc. Affecting the Shares of Common Stock; New Issuances

17

Section 6.15

Termination

17

 


 

 

 

 

 

______________

 

THIS STOCKHOLDERS AND VOTING AGREEMENT (this " Agreement ") is made as of June 29, 2005 and effective as of the date set forth in Section 6.1 hereof, by and among Brookdale Senior Living Inc., a Delaware corporation (the " Company "), FIT-ALT Investor LLC, a Delaware limited liability company (" FIT-ALT "), Emeritus Corporation, a Washington corporation (" Emeritus "), and NW Select LLC, a Washington limited liability company (" NW Select "). Emeritus and NW Select are referred to herein individually as an " Initial Stockholder " and collectively referred to herein as the " Initial Stockholders ." 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, each Initial Stockholder and FIT-ALT are parties to the Amended and Restated Limited Liability Company Agreement of FEBC-ALT Investors LLC (" FEBC-ALT "), dated the date hereof;

 

WHEREAS, it is contemplated that subsequent to the date of this Agreement, each of the Initial Stockholders will receive shares of Common Stock (as hereinafter defined) in exchange for their respective membership interests in FEBC-ALT;

 

WHEREAS, prior to the Expiration Date (as hereinafter defined) the Company desires to regulate the sale, assignment, transfer, encumbrance or other disposition of Company Securities (as hereinafter defined) and to provide for certain rights and obligations in respect thereto as hereinafter provided; and

 

WHEREAS, the Stockholders (as hereinafter defined) deem it in their best interests to provide for certain arrangements with respect to the voting of certain securities of the Company.

 

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 terms defined other than in this Article I shall have the meanings indicated and the following terms shall have the following meanings:

 

 

1


 

 

 

(a)    " Affiliate " shall have the meaning set forth in Rule 12b-2 promulgated under the Exchange Act; provided that no Stockholder shall be deemed an Affiliate of any other Stockholder solely by reason of any investment in the Company.

 

(b)    " Approved Sale " shall have the meaning set forth in Section 4.2(a) .

 

(c)    A Person shall be deemed to " Beneficially Own " securities if such Person is deemed to be a "beneficial owner" within the meaning of Rules 13d-3 and 13d-5 under the Exchange Act as in effect on the date of this Agreement.

 

(d)    " Common Stock " shall mean the Company's common stock, par value $0.01 per share and any and all securities of any kind whatsoever of the Company which may be issued and outstanding on or after the date hereof in respect of, in exchange for, or upon conversion of shares of Common Stock pursuant to a merger, consolidation, stock split, stock dividend, recapitalization of the Company or otherwise.

 

(e)    " Company Securities " shall mean (i) any Common Stock and (ii) any other securities of the Company entitled to vote generally in the election of directors of the Company.

 

(f)    " Exchange Act " shall mean the Securities Exchange Act of 1934, as amended.

 

(g)    " Expiration Date " shall mean the date of the consummation of the Initial Public Offering.

 

(h)    " Fortress Entity " shall collectively mean FIT-ALT or any Affiliate to which it has Transferred all of its Company Securities.

 

(i)    " Initial Public Offering " shall mean the initial public offering by the Company of Common Stock pursuant to an effective registration statement under the Securities Act.

 

(j)    " Liens " shall have the meaning set forth in Section 4.1(a) .

 

(k)    " Membership Interest Purchase Agreement " shall mean the Membership Interest Purchase Agreement, dated as of June 29, 2005, by and among the Initial Stockholders and FIT-ALT Investor LLC.

 

(l)    " Other Stockholders " shall have the meaning set forth in Section 4.1(a) .

 

(m)    " Participating Stockholder " shall have the meaning set forth in Section 4.1(b) .

 

 

2


 

 

 

(n)    " Permitted Transferee " shall mean, with respect to each Stockholder, (i) any other Stockholder, (ii) such Stockholder's Affiliates and (iii) in the case of any Stockholder, (A) any general or limited partner or member of such Stockholder, (B) any corporation, partnership, limited liability company or other entity that is an Affiliate of such Stockholder or any general or limited partner of such Stockholder (collectively, " Stockholder Affiliates "), (C) any investment funds managed directly or indirectly by such Stockholder or any Stockholder Affiliates (a " Stockholder Fund "), (D) any general or limited partner of any Stockholder Fund, (E) any managing director, general partner, director, limited partner, officer or employee of any Stockholder Affiliate, or any spouse, lineal descendant, sibling, parent, heir, executor, administrator, testamentary trustee, legatee or beneficiary of any of the foregoing persons described in this clause (E) (collectively, " Stockholder Associates ") or (F) any trust, the beneficiaries of which, or any corporation, limited liability company or partnership, the stockholders, members or general or limited partners of which consist solely of any one or more of such Stockholder, any general or limited partner of such Stockholder, any Stockholder Affiliates, any Stockholder Fund, any Stockholder Associates, their spouses or their lineal descendants.

 

(o)    " 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.

 

(p)    " Proxy " shall have the meaning set forth in Section 3.2 .

 

(q)    " Reorganization Transaction " shall have the meaning assigned to it in the Amended and Restated Limited Liability Company Agreement of FEBC-ALT Investors LLC dated as of June 29, 2005.

 

(r)    " Securities Act " shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

(s)    " Stockholders " shall mean (i) the Initial Stockholders and (ii) each Permitted Transferee (as defined above) who becomes a party to or bound by the provisions of this Agreement in accordance with the terms hereof or Permitted Transferee thereof who is entitled to enforce the provisions of this Agreement in accordance with the terms hereof.

 

(t)    " Tag-Along Notice " shall have the meaning set forth in Section 4.1(b) .

 

(u)    " Tag-Along Notice Period " shall have the meaning set forth in Section 4.1(b) .

 

(v)    " Third Party " shall mean any Person other than the Fortress Entity and its Affiliates.

 

 

3


 

 

 

(w)    " Third Party Offer " shall have the meaning set forth in Section 4.1(a) .

 

(x)    " Third Party Notice " shall have the meaning set forth in Section 4.1(a) .

 

(y)    " Transfer " shall mean, with respect to any Company Securities, (i) when used as a verb, to sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise transfer such Company Securities or any participation or interest therein, whether directly or indirectly, or agree or commit to do any of the foregoing and (ii) when used as a noun, a direct or indirect sale, assignment, disposition, exchange, pledge, encumbrance, hypothecation, or other transfer of such Company Securities or any participation or interest therein or any agreement or commitment to do any of the foregoing.

 

ARTICLE II   

 

 

 

 TRANSFER

 

 

 

Section 2.1    Restrictions on Transfer

 

(a)    Except as set forth in Section 4.1 of the Membership Interest Purchase Agreement and in Article IV hereof, prior to the earlier of (i) the Expiration Date and (ii) the date that is the six-month anniversary of the date hereof, each Stockholder agrees that it shall not Transfer any Company Securities. If the Expiration Date shall not have occurred prior to the date that is the six-month anniversary of the date hereof, each Stockholder agrees that, until the Expiration Date, it shall not Transfer any Company Securities except for any Transfer from any Stockholder to one or more of its respective Permitted Transferees. The exception in the forgoing sentence is subject to the condition that any Permitted Transferee execute the agreement referred to in Section 2.2 . The provisions of this Agreement shall be applied to the Company Securities acquired by any Permitted Transferee of a Stockholder in the same manner and to the same extent as such provisions were applicable to such Company Securities in the hands of such Stockholder. Any reference in this Agreement to the Stockholders shall be deemed to include each Stockholder and its respective Permitted Transferees.

 

(b)    Prior to the Expiration Date, each Stockholder agrees that it will not, directly or indirectly, Transfer any Company Securities unless such Transfer is made (i) pursuant to an effective registration statement under the Securities Act and is qualified under applicable state securities or blue sky laws or (ii) without registration under the Securities Act and qualification under applicable state securities or blue sky laws, as a result of the availability of an exemption from registration and qualification under such laws, and such Stockholder shall have furnished to the other Stockholders, with a copy to the Company, a certificate to that effect.

 

 

4


 

 

 

(c)    Any purported Transfer of any Company Securities or any economic benefit or interest therein in violation of this Agreement shall be null and void ab initio , and shall not create any obligation or liability of the issuer of such Company Securities to the purported transferee, and any Person purportedly acquiring any Company Securities or any economic benefit or interest therein transferred in violation of this Agreement shall not be entitled to be recognized as a holder of such Company Securities and shall have no rights under this Agreement. In the case of an attempted Transfer of any Company Securities or any economic benefit or interest therein in violation of this Agreement, the parties engaging or attempting to engage in such Transfer shall indemnify and hold harmless the issuer of such Company Securities and the other Investors from all cost, liability and damage that any of such indemnified persons may incur (including incremental tax liability and attorneys' fees and expenses) as a result of such attempted Transfer or Transfer and the enforcement of this indemnity.

 

Section 2.2    Binding Effect on Transferees

 

. Prior to the Transfer by a Stockholder of Company Securities to a Permitted Transferee, the transferring Stockholder shall cause the transferee to execute an agreement on the same terms and conditions set forth herein, providing that such transferee shall be bound by and shall fully comply with the terms of this Agreement (including the provisions of Section 3.2 with respect to the execution of a Proxy and the provisions of Articles IV and V with respect to the Company Securities being transferred to such transferee) and shall become a Stockholder hereunder.

 

Section 2.3    Additional Purchases

 

. Any Company Securities owned by a Stockholder on or after the date of this Agreement shall be subject to the terms and conditions of this Agreement.

 

Section 2.4    Legend

 

. Each certificate representing Company Securities issued to a Stockholder shall be stamped or otherwise imprinted with a legend in substantially the following form:

 

"The shares represented by this certificate are subject to the transfer restrictions and other provisions (including provisions with respect to the voting of the shares represented by this certificate) contained in the Stockholders and Voting Agreement dated as of June 29, 2005 among the stockholders of the Corporation named therein."

 

 

5


 

 

 

ARTICLE III   

 

 

 

VOTING

 

 

 

Section 3.1    Voting of Company Securities

 

.

 

(a)    Each Stockholder hereby agrees that, from and after the date hereof and until the Expiration Date, at every meeting of the stockholders of the Company, however called (with or without support or the recommendation of the Board of Directors of the Company) and at every adjournment thereof, and in every action by consent of the stockholders of the Company, each Stockholder shall, provided that such Stockholder has not received notice from the Fortress Entity (which notice may be delivered at any such meeting) stating the Fortress Entity's intention to exercise the Proxy (as defined below) at such meeting, appear at any such meeting or otherwise cause the Company Securities Beneficially Owned by it to be counted as present for purposes of establishing a quorum, and shall vote or consent (or cause to be voted or consented) such Company Securities: (i) in favor of the approval and adoption of any transactions contemplated in connection with the Reorganization Transaction in such manner as may be necessary to consummate the Reorganization transaction; and (ii) otherwise as directed in writing by the Fortress Entity.

 

(b)    If a Stockholder fails for any reason to vote the Company Securities Beneficially Owned by it as required by Section 3.1(a) , the holder of the Proxy shall have the right to vote such Company Securities at any meeting of the Company's shareholders and in any action by written consent of the Company's shareholders in accordance with Section 3.1(a) and the Proxy. The vote of a holder of the Proxy shall control in any conflict between a vote of the Company Securities by a holder of the Proxy and a vote of the Company Securities by a Stockholder.

 

(c)    Each Stockholder hereby agrees that it shall not, prior to the Expiration Date, enter into any agreement or understanding with any person or entity with respect to the Company Securities owned by it, the effect of which would be inconsistent with or violative of any provision contained in this Article III .

 

Section 3.2    Irrevocable Proxy

 

. Concurrently with the execution of this Agreement, each Stockholder has executed and delivered a proxy in the form attached as Exhibit A hereto (the " Proxy "), which Stockholder agrees shall be irrevocable to the fullest extent permissible by applicable law, with respect to any Company Securities Beneficially Owned by it.

 

 

6


 

 

 

ARTICLE IV   

 

 

 

TAG-ALONG AND DRAG-ALONG RIGHTS

 

 

Section 4.1    Tag-Along Rights

 

(a)    If a Fortress Entity intends to Transfer all of the Company Securities then owned by or in the name of such Fortress Entity to a Third Party (each, a " Third Party Offer "), the Fortress Entity shall promptly, acting in good faith (i) cause the Third Party Offer to be reduced to writing, which shall identify the Third Party, the Company Securities proposed to be transferred to the Third Party by the Fortress Entity, the price to be paid in cash by the Third Party and all other material terms and conditions of the Third Party Offer and (ii) provide written notice (the " Third Party Notice ") of such Third Party Offer to each of the Stockholders (the Stockholders receiving a Third Party Notice pursuant to this sentence being collectively referred to herein as the " Other Stockholders "), which Third Party Notice shall (x) contain an offer by such Third Party to purchase or otherwise acquire from each Other Stockholder such Other Stockholder's Company Securities (to the extent such Third Party Offer shall be allocable to such Other Stockholder pursuant to Section 4.1(c) hereof) on the same terms and conditions as the Third Party Offer (except that the only representation and warranty that such Other Stockholder shall be required to make in connection with any such Transfer is a warranty with respect to his or its own ownership of the Company Securities to be sold by him or it and his or its ability to convey title thereto free and clear of any and all liens, mortgages, pledges, security interests or other restrictions or encumbrances (collectively, "Liens ")) and (y) be accompanied by a true and correct copy of the Third Party Offer.

 

(b)    Each Other Stockholder desiring to accept the offer (each, a " Participating Stockholder ") set forth in the Third Party Notice shall, within ten (10) Business Days after the date the Third Party Notice is received by such Other Stockholder (as such period may be extended pursuant to Section 4.1(d) hereof, (each, a " Tag-Along Notice Period "), deliver a written notice to the Transferring Stockholder (each, a " Tag-Along Notice "), which notice shall (i) specify the amount of Company Securities which such Participating Stockholder wishes to Transfer pursu-ant to the Third Party Offer and (ii) constitute a firm acceptance by such Other Stockholder of the Third Party Offer, except as otherwise provided in Sections 4.1(c) and (d) hereof.

 

(c)    If one or more Other Stockholders give the Fortress Entity a timely Tag-Along Notice, then the Fortress Entity shall use all reasonable efforts to cause the Third Party to agree to acquire all Company Securities identified in all Tag-Along Notices that are timely given to the Fortress Entity, upon the same terms and conditions as are applicable to the Fortress Entity*s Company Securities. If such Third Party is unwilling or unable to acquire all of such additional Company Securities upon such terms, then the Fortress Entity may elect to either cancel such proposed Transfer or allocate the maximum Company Securities that such Third Party is willing to purchase

 

 

7


 

among the Fortress Entity and the Participating Stockholders


 
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