-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WPcjeAxGlvg8oHvXXVcnOuCFruWlXkoNVpg+OkItG5sUEQj1dV+oiNGHHJefEliY z8VpnfDWqZA7NXl80y7qhw== 0001341004-06-002069.txt : 20060801 0001341004-06-002069.hdr.sgml : 20060801 20060801152212 ACCESSION NUMBER: 0001341004-06-002069 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20060801 DATE AS OF CHANGE: 20060801 GROUP MEMBERS: FIG ADVISORS LLC GROUP MEMBERS: FIT HOLDINGS LLC GROUP MEMBERS: FIT-ALT INVESTOR LLC GROUP MEMBERS: FORTRESS FUND MM II LLC GROUP MEMBERS: FORTRESS FUND MM LLC GROUP MEMBERS: FORTRESS INVESTMENT FUND II LLC GROUP MEMBERS: FORTRESS INVESTMENT FUND LLC GROUP MEMBERS: FORTRESS INVESTMENT GROUP LLC GROUP MEMBERS: FORTRESS INVESTMENT HOLDINGS LLC GROUP MEMBERS: FORTRESS INVESTMENT TRUST II GROUP MEMBERS: FORTRESS REGISTERED INVESTMENT TRUST GROUP MEMBERS: FRIT HOLDINGS LLC GROUP MEMBERS: RIC COINVESTMENT FUND LP SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: Brookdale Senior Living Inc. CENTRAL INDEX KEY: 0001332349 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-NURSING & PERSONAL CARE FACILITIES [8050] IRS NUMBER: 203068069 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: 1934 Act SEC FILE NUMBER: 005-81398 FILM NUMBER: 06994289 BUSINESS ADDRESS: STREET 1: 330 NORTH WABASH STREET 2: SUITE 1400 CITY: CHICAGO STATE: IL ZIP: 60611 BUSINESS PHONE: (312) 977-3700 MAIL ADDRESS: STREET 1: 330 NORTH WABASH STREET 2: SUITE 1400 CITY: CHICAGO STATE: IL ZIP: 60611 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FORTRESS INVESTMENT GROUP LLC CENTRAL INDEX KEY: 0001245521 IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICA STREET 2: 46 FLOOR CITY: NEW YORK STATE: NY ZIP: 10105 BUSINESS PHONE: 212-798-6100 MAIL ADDRESS: STREET 1: 1345 AVENUE OF THE AMERICA STREET 2: 46 FLOOR CITY: NEW YORK STATE: NY ZIP: 10105 SC 13D 1 ny562023.txt SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 Brookdale Senior Living Inc. - ------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $0.01 per share - ------------------------------------------------------------------------------- (Title of Class of Securities) 37944Q 10 3 - ------------------------------------------------------------------------------- (CUSIP Number) Randal A. Nardone Chief Operating Officer c/o Fortress Investment Group LLC 1345 Avenue of the Americas New York, New York 10105 (212) 798-6100 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) COPY TO: Joseph A. Coco, Esq. Skadden, Arps, Slate, Meagher & Flom LLP Four Times Square New York, New York 10036 (212) 735-3000 July 25, 2006 - ------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), Rule 13d-1(f) or Rule 13d-1(g), check the following box. [ ] *The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 2 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FRIT Holdings LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) AF - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ---------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -7,400,000- ---------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ---------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -7,400,000- ---------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -7,400,000- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 7.2% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 3 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Fortress Registered Investment Trust - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) AF - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - -------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -9,102,708-* ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -9,102,708-* ----------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -9,102,708- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) IV - ------------------------------------------------------------------------------- * 7,400,000 shares solely in its capacity as the holder of all issued and outstanding shares of beneficial interest of FRIT Holdings LLC SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 4 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Fortress Investment Fund LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -9,102,708-* ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -9,102,708-* ----------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -9,102,708- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ------------------------------------------------------------------------------- * Solely in its capacity as the holder of all issued and outstanding shares of beneficial interest of Fortress Registered Investment Trust. SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 5 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Fortress Fund MM LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -9,102,708-* ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -9,102,708-* ----------------------------------------------------- PERSON WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -9,102,708- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 8.9% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ------------------------------------------------------------------------------- * Solely in its capacity as the managing member of Fortress Investment Fund LLC. SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 6 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FIT-ALT Investor LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) AF - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -13,228,000- ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -13,228,000- ----------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -13,228,000- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.9% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 7 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FIT Holdings LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) AF - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -33,228,000-* ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -33,228,000-* ----------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -33,228,000- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 32.3% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ------------------------------------------------------------------------------- * 13,228,000 shares solely in its capacity as the holder of all issued and outstanding shares of beneficial interest of FIT-ALT Investor LLC. SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 8 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Fortress Investment Trust II - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -33,228,000-* ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -33,228,000-* ----------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -33,228,000- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 32.3% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) IV - ------------------------------------------------------------------------------- * Solely in its capacity as the holder of all issued and outstanding shares of beneficial ownership of FIT Holdings LLC. SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 9 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Fortress Investment Fund II LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -33,228,000-* ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -33,228,000-* ----------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -33,228,000- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 32.3% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ------------------------------------------------------------------------------- * Solely in its capacity as the holder of a majority of the issued and outstanding shares of beneficial interest of Fortress Investment Trust II. SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 10 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Fortress Fund MM II LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -33,228,000-* ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -33,228,000-* ----------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -33,228,000- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 32.3% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ------------------------------------------------------------------------------- * Solely in its capacity as the managing member of Fortress Investment Fund II LLC. SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 11 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON RIC Coinvestment Fund LP - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) WC - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -17,600,867- ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -17,600,867- ----------------------------------------------------- PERSON WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -17,600,867- - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.1% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) IV - ------------------------------------------------------------------------------- SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 12 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON FIG Advisors LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -18,427,159-* ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -18,427,159-* ----------------------------------------------------- PERSON WITH - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -18,427,159- - -------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 17.9% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) IA - ------------------------------------------------------------------------------- * 17,600,867 shares solely in its capacity as the investment advisor of RIC Coinvestment Fund LP and 826,292 shares solely in its capacity as the investment advisor of Fortress Brookdale Investment Fund LLC. SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 13 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Fortress Investment Group LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ----------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -61,007,867-* ----------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ----------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -61,007,867-* ----------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -61,007,867- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 59.3% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ------------------------------------------------------------------------------- * 18,427,159 shares solely in its capacity as the holder of all of the issued and outstanding shares of beneficial interest of FIG Advisors LLC; 9,102,708 shares solely in its capacity as the managing member of Fortress Fund MM LLC; 33,228,000 shares solely in its capacity as the managing member of Fortress Fund MM II LLC; 125,000 shares solely in its capacity as the managing member of Drawbridge Special Opportunities Advisors LLC; and 125,000 shares solely in its capacity as the managing member of Drawbridge Global Macro Advisors LLC. SCHEDULE 13D - ------------------------------------------------------------------------------- CUSIP No. 37944Q 10 3 Page 14 of 19 Pages - ------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Fortress Investment Holdings LLC - ------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions) (a) | | (b) | x | - ------------------------------------------------------------------------------- 3 SEC USE ONLY - ------------------------------------------------------------------------------- 4 SOURCE OF FUNDS (See Instructions) Not applicable - ------------------------------------------------------------------------------- 5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e) - ------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF -0- SHARES ---------------------------------------------------- 8 SHARED VOTING POWER BENEFICIALLY -61,007,867-* ---------------------------------------------------- OWNED BY 9 SOLE DISPOSITIVE POWER -0- EACH ---------------------------------------------------- 10 SHARED DISPOSITIVE POWER REPORTING -61,007,867-* ----------------------------------------------------- PERSON WITH - ------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON -61,007,867- - ------------------------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (See Instructions) - ------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 59.3% (based on 102,834,548 shares of common stock outstanding as of July 25, 2006) - ------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON (See Instructions) OO - ------------------------------------------------------------------------------- * Solely in its capacity as the sole member of Fortress Investment Group LLC. The item numbers and responses thereto below are in accordance with the requirements of Schedule 13D. Item 1. Security and Issuer This statement on Schedule 13D (this "Statement") relates to shares of common stock, par value $0.01 per share ("Common Stock"), of Brookdale Senior Living Inc., a Delaware corporation (the "Issuer"). The principal executive officers of the Issuer are located at 330 North Wabash Avenue, Suite 1400, Chicago, Illinois 60611. Item 2. Identity and Background (a), (b), (c) and (f). This Statement is being filed jointly by FRIT Holdings LLC ("FRITH"), Fortress Registered Investment Trust ("FRIT"), Fortress Investment Fund LLC ("FIF"), Fortress Fund MM LLC ("Fund MM"), FIT-ALT Investor LLC ("FIT-ALT"), FIT Holdings LLC ("FITH"), Fortress Investment Trust II ("FIT II"), Fortress Investment Fund II LLC ("FIF II"), Fortress Fund MM II LLC ("Fund MM II"), RIC Coinvestment Fund LP ("RIC"), FIG Advisors LLC ("FIGA"), Fortress Investment Group LLC ("FIG") and Fortress Investment Holdings LLC ("FIH"), pursuant to a joint filing agreement attached hereto as Exhibit 1.1. FRIT, FIF, Fund MM, FIT-ALT, FIT II, FIF II and Fund MM II, together with FIG and FIH, are collectively referred to herein as the "Existing Reporting Persons." RIC, together with FIGA, FIG and FIH, are collectively referred to herein as the "RIC Reporting Persons." FRITH, FITH and Fortress Brookdale Investment Fund LLC ("FBIF"), together with FRIT, FIF, Fund MM, FIT II, FIF II Fund MM II, FIGA, FIG and FIH are collectively referred to herein as the "June Transfer Reporting Persons". The Existing Reporting Persons, the RIC Reporting Persons and the June Transfer Reporting Persons are collectively referred to herein as the "Reporting Persons." The business address of each of the Reporting Persons is 1345 Avenue of the Americas, 46th Floor, New York, New York 10105. The principal business of each Reporting Person is real estate-related investments. Set forth in Annex A attached hereto is a listing of the director and executive officers of FIG, the directors and executive officers of FIF II and Fund MM II, the directors of RIC, the managers and members of FRITH, FIF, FITH, Fund MM, FIT-ALT, FIGA, and FIH, and the trustees and executive officers of FRIT and FIT II (collectively, the "Covered Persons"), and the business address and present principal occupation or employment of each of the Covered Persons, and is incorporated herein by reference. Each of the Covered Persons is a United States citizen. (d) and (e). None of the Reporting Persons, or, to the best of their knowledge, the Covered Persons has, during the past five years, (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which any of them is or was subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding a violation in respect to such laws. Item 3. Source and Amount of Funds or Other Consideration The total amount of funds required to purchase the shares of Common Stock beneficially owned by the RIC Reporting Persons, as described in Item 5 below, was approximately $650.0 million. RIC obtained the funds to purchase the shares of Common Stock reported in Item 5 below from its working capital. Prior to the Issuer's formation in June 2005, the Existing Reporting Persons were majority owners of each of the Issuer's predecessor entities. Prior to the consummation of the Issuer's initial public offering on November 22, 2005, the Existing Reporting Persons and Fortress Brookdale Acquisition LLC ("FBA") acquired the beneficial ownership of 43,407,000 shares of the Issuer's Common Stock in exchange for their ownership interests in the Issuer's predecessor entities pursuant to a series of transactions that occurred on September 30, 2005. Item 4. Purpose of Transaction The RIC Reporting Persons acquired the shares of Common Stock reported in Item 5 below in connection with the closing of (i) the ARC Merger (as defined below) and (ii) the Investment Agreement (as defined below). The Existing Reporting Persons acquired the shares of Common Stock reported in Item 5 below prior to the initial public offering of the Issuer's Common Stock. Following the June Transfers (as defined below), the June Transfer Reporting Persons acquired the beneficial ownership of certain of the shares of Common Stock previously held by the Existing Reporting Persons. The Reporting Persons acquired all of the shares of Common Stock reported in Item 5 below for investment purposes and for purposes of influencing the business and affairs of the Issuer. The Reporting Persons intend to continuously review their investment in the Issuer, and may in the future determine to (i) dispose of all or a portion of the securities of the Issuer owned by them from time to time in public or private transactions, (ii) acquire additional securities of the Issuer, through open market purchases, private agreements or otherwise, (iii) take any other available course of action, which could involve one or more of the types of transactions or have one or more of the results described in the following paragraph of this Item 4 or (iv) otherwise change their investment intent. Notwithstanding anything contained herein to the contrary, the Reporting Persons specifically reserve the right to change their intentions at any time with respect to any or all of such matters, as they deem appropriate. In reaching any decision as to their course of action (as well as to the specific elements thereof), the Reporting Persons currently expect that they would take into consideration a variety of factors, including, but not limited to the Issuer's financial condition, business, operations and prospects, other developments concerning the Issuer and the senior living business generally, other business opportunities available to the Reporting Persons, other developments with respect to the business of the Reporting Persons, general economic conditions and money and stock market conditions, including the market price of the securities of the Issuer, and other relevant factors. Other than as described herein, none of the Reporting Persons has any present plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the Issuer or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer or any of its subsidiaries; (d) any change in the Board of Directors or management of the Issuer, including any plans or proposals to change the number or terms of directors or to fill any existing vacancies on the Board of Directors of the Issuer; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer's business or corporate structure; (g) changes in the Issuer's articles of incorporation, by-laws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) a class of securities of the Issuer being delisted from a national securities exchange or ceasing to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended; or (j) any action similar to those enumerated above. Shares Held By RIC Reporting Persons ------------------------------------ On May 12, 2006, the Issuer entered into an agreement and plan of merger (the "ARC Merger Agreement") with Beta Merger Sub Corporation, a Delaware corporation and a wholly-owned subsidiary of the Issuer ("Merger Sub"), and American Retirement Corporation, a Tennessee corporation ("ARC"), pursuant to which Merger Sub was merged with and into ARC (the "ARC Merger") with ARC continuing as the surviving corporation and as a wholly-owned subsidiary of the Issuer. Pursuant to the ARC Merger Agreement, the Issuer agreed to purchase all issued and outstanding shares of ARC common stock for $33.00 per share in cash, and all shares issuable upon the exercise of outstanding stock options for the excess, if any, of $33.00 over the applicable exercise price, for aggregate consideration of approximately $1.2 billion in cash, subject to the terms and conditions contained in the ARC Merger Agreement. Also on May 12, 2006, in connection with the execution of the ARC Merger Agreement, the Issuer entered into an Investment Agreement (the "Investment Agreement") with RIC, pursuant to which RIC committed to purchase from the Issuer, at the closing of the ARC Merger (the "ARC Closing"), up to $1.3 billion in the aggregate of the Issuer's Common Stock at a price per share of $36.93. Prior to the ARC Closing, in connection with a public offering of the Issuer's equity securities and pursuant to the terms of the Investment Agreement, the $1.3 billion aggregate commitment from RIC was reduced to $650.0 million. The purchase of the shares by RIC closed simultaneously with the ARC Closing. This issuance of these securities was made pursuant to an exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. On May 25, 2006, in connection with the ARC Merger, the Issuer's board of directors unanimously approved an amendment to its amended and restated certificate of incorporation to increase the authorized number of directors from not more than seven members to not more than eight members, in the event that the Issuer decides to offer a current member of the board of directors of ARC or some other qualified individual the opportunity to join its board of directors after the consummation of the ARC Merger. As of the date of this Statement, the Issuer has no arrangement with any individual to join its board of directors. The Investment Agreement is filed hereto as Exhibit 1.2 and is incorporated herein by reference, and any description thereof is qualified in its entirety by reference thereto. Shares Held By Existing Reporting Persons and June Transfer Reporting Persons ----------------------------------------------------------------------------- In September 2005, the Issuer entered into a conveyance agreement with certain equity holders of its predecessor entities, including certain of the Existing Reporting Persons, pursuant to which the equity holders of these entities received an aggregate of 58,000,000 shares of Common Stock in exchange for all of their equity interests in these entities and became direct owners of 100% of the Issuer's Common Stock prior to its initial public offering. Pursuant to the conveyance agreement, the Existing Reporting Persons acquired the beneficial ownership of 43,407,000 shares of Common Stock, of which (i) 9,929,000 shares were held directly by FBA, (ii) 13,228,000 were held directly by FIT-ALT, and (iii) 20,000,000 were held directly by FIT II. On June 28, 2006, the following distributions and contributions of Common Stock were made (together, the "June Transfers"): (i) FBA distributed all of the shares of the Issuer's Common Stock beneficially owned by it to its two members, FRIT, which received 9,102,708 shares, and FBIF, which received 826,292 shares; (ii) FRIT contributed 7,400,000 of the shares of Common Stock received from FBA to FITH; and (iii) FIT II contributed the 20,000,000 shares of Common Stock beneficially owned by it to FRITH. Following the June Transfers, the June Transfer Reporting Persons beneficially owned 29,929,000 shares of Common Stock. In connection with the closing of the initial public offering of the Issuer, FIT-ALT, FBA, and FIT II entered into a Stockholders Agreement with Health Partners, a Bermuda exempted partnership ("HP" and, together with FIT-ALT, FBA, and FIT II, the "Stockholders"), dated as of November 28, 2005. Upon the consummation of the June Transfers, the Issuer and each of FRIT, FBIF, FRITH and FITH agreed that each of FRIT, FBIF, FRITH and FITH will be considered a "Stockholder" and a "Fortress Stockholder" (as defined below) for purposes of the Stockholders Agreement and will be bound by all of the restrictions and obligations of the Stockholders Agreement. Upon consummation of the ARC Merger, the Issuer, the Stockholders and RIC agreed that RIC will be considered a "Stockholder" and a "Fortress Stockholder" for purposes of the Stockholders Agreement and will be bound by all of the restrictions and obligations of the Stockholders Agreement. Pursuant to the Stockholders Agreement, the Issuer granted to the Stockholders, for so long as such Stockholders collectively and beneficially own an amount of the Issuer's Common Stock at least equal to 5% or more of the shares issued and outstanding immediately after the consummation of its initial public offering (a "Registrable Amount"), "demand" registration rights that allow them at any time to request that the Issuer register under the Securities Act of 1933, as amended, an amount equal to or greater than 5% of the Common Stock outstanding on the date such demand is made. Each of the Stockholders is entitled to an aggregate of two demand registrations. The Issuer is not required to maintain the effectiveness of the registration statement for more than 60 days. The Issuer is also not required to effect any demand registration within six months of a "firm commitment" underwritten offering to which the requestor held "piggyback" rights and which included at least 50% of the securities requested by the requestor to be included. The Issuer is not obligated to grant a request for a demand registration within four months of any other demand registration, and may refuse a request for demand registration if in its reasonable judgment, it is not feasible for the Issuer to proceed with the registration because of the unavailability of audited financial statements. The Issuer granted the Stockholders "piggyback" registration rights that allow them to include the shares of Common Stock that they own in any public offering of equity securities initiated by the Issuer (other than those public offerings pursuant to registration statements on Forms S-4 or S-8) or by any of the Issuer's other stockholders that have registration rights. The "piggyback" registration rights of these stockholders are subject to proportional cutbacks based on the manner of the offering and the identity of the party initiating such offering. The Issuer granted the Stockholders, for so long as each beneficially owns a Registrable Amount, the right to request a shelf registration on Form S-3 providing for an offering of the shares of Common Stock owned by such Stockholders to be made on a continuous basis, subject to a time limit on the Issuer's efforts to keep the shelf registration statement continuously effective and the Issuer's right to suspend the use of the shelf registration prospectus for a reasonable period of time (not exceeding 60 days in succession or 90 days in the aggregate in any 12 month period) if the Issuer determines that certain disclosures required by the shelf registration statement would be detrimental to it or its stockholders. In addition, each Stockholder that has not made a request for a shelf registration may elect to participate in such shelf registration within ten days after notice of the registration is received. The Issuer agreed to indemnify each of the Stockholders against any losses or damages resulting from any untrue statement or omission of material fact in any registration statement or prospectus pursuant to which they sell shares of the Issuer's Common Stock, unless such liability arose from such stockholder's misstatement or omission, and each such stockholder has agreed to indemnify the Issuer against all losses caused by its misstatements or omissions. The Issuer will pay all expenses incident to its performance under the Stockholders Agreement, and the Stockholders will pay their respective portions of all underwriting discounts, commissions and transfer taxes relating to the sale of their shares under the Stockholders Agreement. The Stockholders Agreement is filed hereto as Exhibit 1.3 and is incorporated herein by reference, and any description thereof is qualified in its entirety by reference thereto. Except as set forth above, each Reporting Person has no present plans or intentions which would result in or relate to any of the transactions described in subparagraphs (a) through (j) of Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer (a) and (b). For the reasons set forth below, each of FRIT, FIF, Fund MM, FIG and FIH may be deemed to beneficially own the 7,400,000 shares held directly by FRITH and each of FIF, Fund MM, FIG and FIH may be deemed to beneficially own the 1,702,708 shares held directly by FRIT. Each of FIF, Fund MM, FIG and FIH does not directly own any securities of the Issuer. However, (i) FRIT has the ability to direct the management of FRITH's business and affairs as the holder of all of the issued and outstanding shares of beneficial interest of FRITH; (ii) FIF has the ability to direct the management of FRIT's business and affairs as the holder of all issued and outstanding shares of beneficial interest of FRIT; (iii) Fund MM has the ability to direct the management of FIF's business and affairs as the managing member of FIF; (iv) FIG has the ability to direct the management of Fund MM's business and affairs as the managing member of Fund MM; and (v) FIH has the ability to direct the management of FIG's business and affairs as the sole member of FIG. For the reasons set forth below, each of FITH, FIT II, FIF II, Fund MM II, FIG and FIH may be deemed to beneficially own the 13,228,000 shares held directly by FIT-ALT and each of FIT II, FIF II, Fund MM II, FIG and FIH may be deemed to beneficially own the 20,000,000 shares held directly by FITH. Each of FIF II, Fund MM II, FIG and FIH does not directly own any securities of the Issuer. However, (i) FITH has the ability to direct the management of FIT-ALT's business and affairs as the holder of all issued and outstanding shares of FITH; (ii) FIT II has the ability to direct the management of FITH's business and affairs as the holder of all issued and outstanding shares of beneficial interest of FITH; (iii) FIF II has the ability to direct the management of FIT II's business and affairs as the holder of a majority of the issued and outstanding shares of beneficial interest of FIT II; (iv) Fund MM II has the ability to direct the management of FIF II's business and affairs as the managing member of FIF II; (v) FIG has the ability to direct the management of Fund MM II's business and affairs as the managing member of Fund MM II; and (vi) FIH has the ability to direct the management of FIG's business and affairs as the sole member of FIG. For the reasons set forth below, each of FIGA, FIG, and FIH may be deemed to beneficially own the 17,600,867 shares held directly by RIC (the "Reported Shares"). Each of FIGA, FIG, and FIH does not directly own any securities of the Issuer. However, (i) FIGA has the ability to direct the management of RIC's business and affairs as the investment advisor of RIC; (ii) FIG has the ability to direct the management of FIGA's business and affairs as the holder of all issued and outstanding shares of beneficial interest of FIGA; and (iii) FIH has the ability to direct the management of FIG's business and affairs as the sole member of FIG. As a result of the acquisition of the Reported Shares, FIG and FIH, through their beneficial ownership of 61,007,867 shares, collectively control approximately 59.3% of the outstanding voting capital stock of the Issuer. Wesley R. Edens, one of the Covered Persons, directly owns 49,200 shares of the Issuer's Common Stock. The Reporting Persons have been advised that each of the Covered Persons disclaims beneficial ownership of the shares of the Issuer's Common Stock from time to time owned directly or otherwise beneficially by such Reporting Persons. (c) See Item 4 above. (d) and (e) Not applicable. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. See Item 4 above. Except as set forth in the Stockholders Agreement, the Credit Agreements (as defined below) or as set forth herein, neither any of the Reporting Persons nor, to the best of such Reporting Persons' knowledge, any of the Covered Persons, has any contracts, arrangements, understandings or relationships (legal or otherwise), with any person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. Stockholders Agreement ---------------------- Pursuant to the Stockholders Agreement, each of FRITH, FITH, FRIT, FBIF, FIT-ALT and their respective affiliates and permitted transferees (collectively, the "Fortress Stockholders") and HP and its affiliates and permitted transferees (collectively, the "HP Stockholders") agreed to vote or cause to be voted all of the Common Stock beneficially owned by each and to take all other reasonably necessary action so as to elect to the Issuer's board of directors the following: o so long as the Fortress Stockholders beneficially own (i) more than 50% of the voting power of the Issuer, four directors designated by FIGA, or such other party designated by Fortress; (ii) between 25% and 50% of the voting power of the Issuer, three directors designated by FIGA; (iii) between 10% and 25% of the voting power of the Issuer, two directors designated by FIGA; and (iv) between 5% and 10% of the voting power of the Issuer, one director designated by FIGA; and o so long as the HP Stockholders beneficially own more than 5% of the voting power of the Company, one director designated by HP. Upon consummation of the ARC Merger, the Issuer increased the number of directors that the Fortress Stockholders are entitled to designate under the Stockholders Agreement from four (of seven) to five (of eight), provided that the Fortress Stockholders continue to beneficially own more than 50% of the voting power of the Company. The Reporting Persons disclaim membership of a "group" with HP and disclaim beneficial ownership of the shares of Common Stock beneficially owned by HP. As of July 25, 2006, HP beneficially owned 3,444,626 shares of Common Stock, or approximately 3.4% of the outstanding capital stock of the Issuer. Credit Agreements ----------------- On June 28, 2006, FRITH and FITH (the "Borrowers") entered into separate credit agreements (the "Credit Agreements") with Deutsche Bank AG, London Branch ("Deutsche Bank"), as Administrative Agent and sole lender. Pursuant to the Credit Agreements, the Borrowers received an aggregate commitment of approximately $1.43 billion from Deutsche Bank, and this amount has been secured by, among other things, a pledge by the Borrowers and FIT-ALT of a total of 40,628,000 shares of Common Stock. The 40,628,000 shares of Common Stock represent approximately 39.5% of the Issuer's issued and outstanding Common Stock as of the date of this Statement. The Credit Agreements contain customary default provisions and also require prepayment or cash collateralization of a portion of the borrowings by the Borrowers in the event the trading price of the Common Stock decreases below certain specified levels. In the event of a default under the Credit Agreements by the Borrowers, Deutsche Bank may foreclose upon any and all shares of Common Stock pledged to it. The Borrowers have agreed in the Credit Agreements that if a shelf registration statement is not effective and usable for resales of any portion of the pledged Common Stock by Deutsche Bank (in the event of foreclosure) as of June 9, 2007, the applicable Borrower will prepay a related portion of the borrowings. The Borrowers have also agreed in the Credit Agreements that if RIC or any of its affiliates sells any shares of Common Stock received by it pursuant to the Investment Agreement, the Borrowers will prepay or cash-collateralize a related portion of the borrowings. The Issuer is not a party to the Credit Agreements and has no obligations thereunder. Except as provided in the Stockholders Agreement, the Credit Agreements or as set forth herein, neither any of the Reporting Persons nor, to the best of such Reporting Persons' knowledge, any of the Covered Persons has any contracts, arrangements, understandings or relationships (legal or otherwise), with any person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies. Item 7. Material to be Filed as Exhibits Exhibit Description - ------- ----------- 1.1 Joint Filing Agreement, dated July 25, 2006, by and between FRIT Holdings LLC, Fortress Registered Investment Trust, Fortress Investment Fund LLC, Fortress Fund MM LLC, FIT-ALT Investor LLC, FIT Holdings LLC, Fortress Investment Trust II, Fortress Investment Fund II LLC, Fortress Fund MM II LLC, RIC Coinvestment Fund LP, FIG Advisors LLC, Fortress Investment Group LLC and Fortress Investment Holdings LLC. 1.2 Investment Agreement, dated May 12, 2006, by and between Brookdale Senior Living Inc. and RIC Coinvestment Fund LP. 1.3 Stockholders Agreement, dated November 28, 2005, by and among Brookdale Senior Living Inc., FIT-ALT Investor LLC, Fortress Brookdale Acquisition LLC, Fortress Investment Trust II, and Health Partners. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FRIT HOLDINGS LLC By: Fortress Registered Investment Trust, a Delaware business trust, as Managing Member By: /s/ Randal A. Nardone ------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FORTRESS REGISTERED INVESTMENT TRUST By: /s/ Randal A. Nardone --------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FORTRESS INVESTMENT FUND LLC By: Fortress Fund MM LLC, a Delaware limited liability company, as Managing Member By: /s/ Randal A. Nardone --------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FORTRESS FUND MM LLC By: /s/ Randal A. Nardone --------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FIT-ALT INVESTOR LLC By: /s/ Randal A. Nardone --------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FIT HOLDINGS LLC By: Fortress Investment Trust II, as Managing Member By: /s/ Randal A. Nardone ---------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FORTRESS INVESTMENT TRUST II By: /s/ Randal A. Nardone ---------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FORTRESS INVESTMENT FUND II LLC By: Fortress Fund MM II LLC, as Managing Member By: /s/ Randal A. Nardone ---------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FORTRESS FUND MM II LLC By: /s/ Randal A. Nardone ---------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 RIC COINVESTMENT FUND LP By: RIC Coinvestment GP LLC, its general partner By: /s/ Randal A. Nardone ---------------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FIG ADVISORS LLC By: /s/ Randal A. Nardone ---------------------------------------------- Randal A. Nardone its Chief Operating Officer of Fortress Investment Group LLC, managing member of FIG Advisors LLC SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FORTRESS INVESTMENT GROUP LLC By: /s/ Randal A. Nardone ---------------------------------------------- Randal A. Nardone its Chief Operating Officer SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Dated: August 1, 2006 FORTRESS INVESTMENT HOLDINGS LLC By: /s/ Randal A. Nardone ---------------------------------------------- Randal A. Nardone its Manager ANNEX A DIRECTOR AND EXECUTIVE OFFICERS OF FORTRESS INVESTMENT GROUP LLC The name and principal occupation of the director and each of the executive officers of Fortress Investment Group LLC, the holder of all issued and outstanding shares of beneficial interest of FIG Advisors LLC, the managing member of Fortress Fund MM LLC, the managing member of Fortress Fund MM II LLC, the managing member of Drawbridge Special Opportunities Advisors LLC and the managing member of Drawbridge Global Macro Advisors LLC, are listed below. The principal business address of each of the directors and executive officers of Fortress Investment Group LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings - ------------------------------- ----------------------------------------------- Robert I. Kauffman Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Peter L. Briger Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Michael E. Novogratz Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Daniel Bass Chief Financial Officer of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- EXECUTIVE OFFICERS OF FORTRESS INVESTMENT FUND II LLC The name and principal occupation of each of the executive officers of Fortress Investment Fund II LLC, the holder of a majority of the issued and outstanding shares of beneficial interest of Fortress Investment Trust II, are listed below. The principal business address of each of the directors and executive officers of Fortress Investment Fund II LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings - ------------------------------- ----------------------------------------------- Robert I. Kauffman Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Jeffrey R. Rosenthal Chief Financial Officer of Fortress Investment Group's Private Equity Funds - ------------------------------- ----------------------------------------------- EXECUTIVE OFFICERS OF FORTRESS FUND MM II LLC The name and principal occupation of each of the executive officers of Fortress Fund MM II LLC, the managing member of Fortress Investment Fund II LLC, are listed below. The principal business address of each of the directors and executive officers of Fortress Fund MM II LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings - ------------------------------- ----------------------------------------------- Robert I. Kauffman Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Jeffrey R. Rosenthal Chief Financial Officer of Fortress Investment Group's Private Equity Funds - ------------------------------- ----------------------------------------------- DIRECTORS OF RIC COINVESTMENT FUND LP The name and principal occupation of each of the directors of RIC Coinvestment Fund LP are listed below.
- ---------------------- ---------------------------------------- ------------------------------- NAME PRINCIPAL OCCUPATION PRINCIPLE BUSINESS ADDRESS - ---------------------- ---------------------------------------- ------------------------------- Dennis Porterfield Self-employed 321 Race Track Road Ho-Ho-Kus, NJ 07423 - ---------------------- ---------------------------------------- ------------------------------- John Sites Partner, Daystar Partners Daystar Partners 411 Theodore Fremd Avenue Suite 100 Rye, NY 10580 - ---------------------- ---------------------------------------- ------------------------------- Wesley R. Edens Chairman and Member of Management Fortress Investment Group LLC Committee of Fortress Investment Group 1345 Avenue of the Americas, LLC and Fortress Investment Holdings 46th Floor LLC New York, NY 10105 - ---------------------- ---------------------------------------- -------------------------------
MANAGERS AND MEMBERS OF FORTRESS INVESTMENT FUND LLC The name and principal occupation of each of the managers and members of Fortress Investment Fund LLC, the holder of all of the issued and outstanding shares of beneficial interest of Fortress Registered Investment Trust, are listed below. The principal business address of each of the managers and members officers of Fortress Investment Fund LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Robert I. Kauffman Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Peter L. Briger Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Michael E. Novogratz Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Daniel Bass Chief Financial Officer of Fortress Investment Group - ------------------------------- ----------------------------------------------- EXECUTIVE OFFICERS OF FIT HOLDINGS LLC The name and principal occupation of each of the executive officers of FIT Holdings LLC, the managing member of FIT-ALT Investors LLC, are listed below. The principal business address of each of the managers and members officers of FIT Holdings LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Jeffrey R. Rosenthal Chief Financial Officer of Fortress Investment Group's Private Equity Funds - ------------------------------- ----------------------------------------------- EXECUTIVE OFFICERS OF FRIT HOLDINGS LLC The name and principal occupation of each of the executive officers of FRIT Holdings LLC are listed below. The principal business address of each of the managers and members officers of FRIT Holdings LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Jeffrey R. Rosenthal Chief Financial Officer of Fortress Investment Group's Private Equity Funds - ------------------------------- ----------------------------------------------- MANAGERS AND MEMBERS OF FORTRESS FUND MM LLC The name and principal occupation of each of the managers and members of Fortress Fund MM LLC, the managing member of Fortress Investment Fund LLC, are listed below. The principal business address of each of the managers and members officers of Fortress Fund MM LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Robert I. Kauffman Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Jeffrey R. Rosenthal Chief Financial Officer of Fortress Investment Group's Private Equity Funds - ------------------------------- ----------------------------------------------- EXECUTIVE OFFICERS OF FIT-ALT INVESTOR LLC The name and principal occupation of each of the executive officers of FIT-ALT Investor LLC are listed below. The principal business address of each of the managers and members officers of FIT-ALT Investor LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Jeffrey R. Rosenthal Chief Financial Officer of Fortress Investment Group's Private Equity Funds - ------------------------------- ----------------------------------------------- William Doniger Managing Director of Fortress Investment Group LLC - ------------------------------- ----------------------------------------------- MANAGERS AND MEMBERS OF FIG ADVISORS LLC The name and principal occupation of each of the managers and members of FIG Advisors LLC, the investment advisor of RIC Coinvestment Fund LP and Fortress Brookdale Investment Fund LLC, are listed below. The principal business address of each of the managers and members officers of FIG Advisors LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Robert I. Kauffman Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Jeffrey R. Rosenthal Chief Financial Officer of Fortress Investment Group's Private Equity Funds - ------------------------------- ----------------------------------------------- MANAGERS AND MEMBERS OF FORTRESS INVESTMENT HOLDINGS LLC The name and principal occupation of each of the members and managers of Fortress Investment Holdings LLC, the managing member of Fortress Investment Group LLC, are listed below. The principal business address of each of the members and managers of Fortress Investment Holdings LLC is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings - ------------------------------- ----------------------------------------------- Robert I. Kauffman Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Peter L. Briger Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Michael E. Novogratz Member of Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- TRUSTEES AND EXECUTIVE OFFICERS OF FORTRESS REGISTERED INVESTMENT TRUST The name and principal occupation of each of the trustees and executive officers of Fortress Registered Investment Trust are listed below. The principal business address of each of the executive officers of Fortress Registered Investment Trust is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. Trustees
- ---------------------------- ---------------------------------------- -------------------------------- NAME PRINCIPAL OCCUPATION PRINCIPLE BUSINESS ADDRESS - ---------------------------- ---------------------------------------- -------------------------------- Carmen Gigliotti Senior Portfolio Manager, DuPont DuPont Pension Fund Pension Fund Investment Investment One Righter Pkwy Suite 3200 Wilmington, DE 19803 - ---------------------------- ---------------------------------------- -------------------------------- John Deterding Owner, Deterding Associates Deterding Associates 107 North Waterview Richardson, TX 75080 - ---------------------------- ---------------------------------------- -------------------------------- Robert H. Gidel Managing Director, Liberty Partners, Liberty Partners, L.P. L.P. 3001 North Rocky Point Drive East - Suite 200 Tampa, Fl 33607 - ---------------------------- ---------------------------------------- -------------------------------- Marcia Haydel Portfolio Manager, General Motors General Motors Investment Investment Management Corporation Management Corporation 767 Fifth Avenue New York, NY 10153 - ---------------------------- ---------------------------------------- -------------------------------- Dennis Porterfield Self-employed 321 Race Track Road Ho-Ho-Kus, NJ 07423 - ---------------------------- ---------------------------------------- -------------------------------- Gary Holt Investment Officer, Washington State Washington State Investment Investment Board Board 2100 Evergreen Park Drive SW Olympia, WA 98504 - ---------------------------- ---------------------------------------- -------------------------------- John Sites Partner, Daystar Partners Daystar Partners 411 Theodore Fremd Avenue Suite 100 Rye, NY 10580 - ---------------------------- ---------------------------------------- -------------------------------- Mark Barnard Director - Private Investments, Howard Howard Hughes Medical Institute Hughes Medical Institute 4000 Jones Bridge Road Chevy Chase, MD 20815-6789 - ---------------------------- ---------------------------------------- -------------------------------- Wesley R. Edens Chairman and Member of Management Fortress Investment Group LLC Committee of Fortress Investment Group 1345 Avenue of the Americas, LLC and Fortress Investment Holdings 46th Floor LLC New York, NY 10105 - ---------------------------- ---------------------------------------- --------------------------------
Executive Officers - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of the Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Robert I. Kauffman Member of the Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of the Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Jeffrey R. Rosenthal Chief Financial Officer of Fortress Investment Group's Private Equity Funds - ------------------------------- ----------------------------------------------- Allison Thrush Managing Director of Fortress Investment Group LLC - ------------------------------- ----------------------------------------------- TRUSTEES AND EXECUTIVE OFFICERS OF FORTRESS INVESTMENT TRUST II The name and principal occupation of each of the trustees and executive officers of Fortress Investment Trust II are listed below. The principal business address of each of the executive officers of Fortress Investment Trust II is 1345 Avenue of the Americas, 46th Floor, New York, NY 10105. Trustees
- ---------------------- ---------------------------------------- ------------------------------ NAME PRINCIPAL OCCUPATION PRINCIPLE BUSINESS ADDRESS - ---------------------- ---------------------------------------- ------------------------------ Carmen Gigliotti Senior Portfolio Manager, DuPont DuPont Pension Fund Pension Fund Investment Investment One Righter Pkwy Suite 3200 Wilmington, DE 19803 - ---------------------- ---------------------------------------- ------------------------------ John Deterding Owner, Deterding Associates Deterding Associates 107 North Waterview Richardson, TX 75080 - ---------------------- ---------------------------------------- ------------------------------ Robert H. Gidel Managing Director, Liberty Partners, Liberty Partners, L.P. L.P. 3001 North Rocky Point Drive East - Suite 200 Tampa, Fl 33607 - ---------------------- ---------------------------------------- ------------------------------
Executive Officers - ------------------------------- ----------------------------------------------- NAME PRINCIPAL OCCUPATION - ------------------------------- ----------------------------------------------- Wesley R. Edens Chairman and Member of the Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Robert I. Kauffman Member of the Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Randal A. Nardone Member of the Management Committee of Fortress Investment Group LLC and Fortress Investment Holdings LLC - ------------------------------- ----------------------------------------------- Jeffrey R. Rosenthal Chief Financial Officer of Fortress Investment Group's Private Equity Funds - ------------------------------- ----------------------------------------------- Allison Thrush Managing Director of Fortress Investment Group LLC - ------------------------------- ----------------------------------------------- EX-1 2 nyc569057.txt EXHIBIT 1.1 - JOINT FILING AGREEMENT Exhibit 1.1 JOINT FILING AGREEMENT This JOINT FILING AGREEMENT, dated as of July 25, 2006, is made by and between FRIT Holdings LLC, a Delaware limited liability company ("FRITH"), Fortress Registered Investment Trust, a Delaware business trust ("FRIT"), Fortress Investment Fund LLC, a Delaware limited liability company ("FIF"), Fortress Fund MM LLC, a Delaware limited liability company ("Fund MM"), FIT-ALT Investor LLC, a Delaware limited liability company ("FIT-ALT"), FIT Holdings LLC, a Delaware limited liability company ("FITH"), Fortress Investment Trust II, a Delaware business trust ("FIT II"), Fortress Investment Fund II LLC, a Delaware limited liability company ("FIF II"), Fortress Fund MM II LLC, a Delaware limited liability company ("Fund MM II"), RIC Coinvestment Fund LP, a Delaware limited partnership ("RIC"), FIG Advisors LLC, a Delaware limited liability company, Fortress Investment Group LLC, a Delaware limited liability company ("FIG") and Fortress Investment Holdings LLC, a Delaware limited liability company ("FIH"). FRITH, FRIT, FIF, Fund MM, FIT-ALT, FITH, FIT II, FIF II, Fund MM II, RIC, FIGA, FIG and FIH are collectively referred to herein as the "Parties" and each individually as a "Party." Pursuant to Rule 13d-1(k)(1)(iii) promulgated under the Securities Exchange Act of 1934, as amended, the Parties hereby acknowledge and agree that Schedule 13D is filed on behalf of each such Party and that all subsequent amendments to the Statement on Schedule 13D shall be filed on behalf of each of the Parties without the necessity of filing additional joint acquisition statements. The Parties hereby acknowledge that each Party shall be responsible for timely filing of such amendments, and for the completeness and accuracy of the information concerning such Party contained therein, but shall not be responsible for the completeness and accuracy of the information concerning any other Party, except to the extent that such Party knows or has reason to believe that such information is inaccurate. [signature pages follow] IN WITNESS WHEREOF, the Parties hereto have executed this Joint Filing Agreement as of the day and year first above written. FRIT HOLDINGS LLC By: Fortress Registered Investment Trust, a Delaware business trust, as Managing Member By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary FORTRESS REGISTERED INVESTMENT TRUST By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary FORTRESS INVESTMENT FUND LLC By: Fortress Fund MM LLC, a Delaware limited liability company, as Managing Member By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary FORTRESS FUND MM LLC By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary FIT-ALT INVESTOR LLC By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary FIT HOLDINGS LLC By: Fortress Investment Trust II, as Managing Member By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary FORTRESS INVESTMENT TRUST II By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary FORTRESS INVESTMENT FUND II LLC By: Fortress Fund MM II LLC, as Managing Member By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary FORTRESS FUND MM II LLC By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary RIC COINVESTMENT FUND LP By: RIC Coinvestment GP LLC, its general partner By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer and Secretary FIG ADVISORS LLC By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer of Fortress Investment Group LLC, managing member of FIG Advisors LLC FORTRESS INVESTMENT GROUP LLC By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Chief Operating Officer FORTRESS INVESTMENT HOLDINGS LLC By: /s/ Randal A. Nardone -------------------------------------- Randal A. Nardone its Manager EX-1 3 bdex1-2.txt EXHIBIT 1.2 - INVESTMENT AGREEMENT Exhibit 1.2 EXECUTION COPY INVESTMENT AGREEMENT between BROOKDALE SENIOR LIVING INC. and RIC COINVESTMENT FUND LP Dated as of May 12, 2006 TABLE OF CONTENTS Page ---- ARTICLE I DEFINITIONS ARTICLE II PURCHASE AND SALE OF SHARES Section 2.1 Notice of Commitment Amount.......................................6 Section 2.2 Issuance and Sale.................................................6 Section 2.3 The Purchase Price................................................6 Section 2.4 Repurchase Option.................................................6 Section 2.5 Commitment Fee....................................................6 ARTICLE III THE CLOSING Section 3.1 The Closing.......................................................7 Section 3.2 Deliveries........................................................7 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY Section 4.1 Organization; Subsidiaries........................................8 Section 4.2 Due Authorization.................................................8 Section 4.3 Capitalization....................................................9 Section 4.4 SEC Reports......................................................10 Section 4.5 Financial Statements.............................................10 Section 4.6 Litigation.......................................................11 Section 4.7 Consents and Approvals...........................................11 Section 4.8 Compliance with Laws.............................................12 Section 4.9 Financial Advisory, Legal and Other Fees.........................12 Section 4.10 Board of Directors..............................................12 Section 4.11 Information Statement...........................................13 Section 4.12 Taxes ..........................................................13 i ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INVESTOR Section 5.1 Investment.......................................................13 Section 5.2 Rule 144.........................................................14 Section 5.3 Organization; Etc................................................14 Section 5.4 Authority........................................................14 Section 5.5 Non-Contravention................................................14 Section 5.6 Consents and Approvals...........................................15 Section 5.7 Brokers and Finders..............................................15 Section 5.8 Sufficient Funds.................................................15 Section 5.9 Information Supplied.............................................15 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INVESTOR Section 5.1 Investment.......................................................13 Section 5.2 Rule 144.........................................................14 Section 5.3 Organization; Etc................................................14 Section 5.4 Authority........................................................14 Section 5.5 Non-Contravention................................................14 Section 5.6 Consents and Approvals...........................................15 Section 5.7 Brokers and Finders..............................................15 Section 5.8 Sufficient Funds.................................................15 Section 5.9 Information Supplied.............................................15 ARTICLE VI COVENANTS Section 6.1 Conduct of the Business Pending the Closing......................16 Section 6.2 Information Statement............................................17 Section 6.3 Listing Obligation...............................................17 Section 6.4 Cooperation......................................................18 Section 6.5 Notification of Certain Matters..................................18 Section 6.6 Consent; Approvals...............................................18 Section 6.7 Further Assurances...............................................18 Section 6.8 Use of Proceeds..................................................18 Section 6.9 Waiver of Piggyback Registration Rights For Registration on Form S-1................................................19 Section 6.10 Venture Capital Operating Company Rights........................19 ARTICLE VII CONDITIONS PRECEDENT Section 7.1 Conditions to Obligations of the Investor and the Company........19 Section 7.2 Conditions to Obligations of the Investor........................19 Section 7.3 Conditions to Obligations of the Company.........................20 ARTICLE VIII TERMINATION Section 8.1 Termination......................................................21 ii ARTICLE IX INDEMNIFICATION Section 9.1 Survival of Representations and Warranties.......................22 Section 9.2 Indemnification..................................................22 Section 9.3 Procedure for Indemnification....................................24 Section 9.4 Sole Remedy......................................................25 ARTICLE X MISCELLANEOUS Section 10.1 Governing Law..................................................26 Section 10.2 Jurisdiction; Forum; Service of Process; Waiver of Jury Trial....................................................26 Section 10.3 Successors and Assigns.........................................26 Section 10.4 Fees and Expenses..............................................26 Section 10.5 Entire Agreement; Amendment....................................27 Section 10.6 Notices........................................................27 Section 10.7 Delays or Omissions............................................28 Section 10.8 Counterparts...................................................28 Section 10.9 Severability...................................................29 Section 10.10 Titles and Subtitles...........................................29 Section 10.11 No Public Announcement.........................................29 iii THIS INVESTMENT AGREEMENT is made and entered into as of May 12, 2006 (the "Agreement"), between Brookdale Senior Living Inc., a Delaware corporation (the "Company") and RIC Coinvestment Fund LP, a Delaware limited partnership (the "Investor"). Capitalized terms used in this Agreement but not otherwise defined herein shall have the meanings ascribed to such terms in Article I. References herein to sections shall be to sections of this Agreement, and references herein to this Agreement shall include each of the Exhibits and Schedules attached hereto. WHEREAS, the Company has entered into an Agreement and Plan of Merger, dated the date hereof, by and among the Company, Beta Merger Sub Corporation, a Delaware corporation and a direct wholly owned subsidiary of the Company ("Merger Sub"), and American Retirement Corporation, a Tennessee corporation ("ARC") (the "Merger Agreement"), whereby Merger Sub shall be merged with and into ARC (collectively, the "Transaction"); WHEREAS, in connection with the Transaction, the Investor desires to subscribe for and purchase, and the Company desires to sell to the Investor, upon the terms and subject to the conditions set forth herein, shares of the Company's common stock, par value $0.01 per share (the "Common Stock"); WHEREAS, at the Closing, the Investor and the Company desire to enter into an option agreement, the form of which is attached hereto as Exhibit A (the "Option Agreement"), pursuant to which the Company shall have the right and option (but not the obligation) to purchase a portion of the shares of the Company's Common Stock issued to the Investor pursuant to this Agreement; WHEREAS, the Company has obtained the Written Consent of Stockholders In Lieu of a Special Meeting attached hereto as Exhibit B for the issuance of the Shares (as defined below) (the "Stockholder Approval"); and WHEREAS, at the Closing, the Investor and the Company desire to enter into an agreement pursuant to which the Investor will be bound by the provisions of the Stockholders Agreement dated as of November 28, 2005, by and among the Company, FIT-ALT Investor LLC, Fortress Brookdale Acquisition LLC, Fortress Investment Trust II and Health Partners (the "Stockholders Agreement"), pursuant to which the Investor shall have certain rights regarding the registration under the Securities Act of the Common Stock purchased by the Investor pursuant to this Agreement. NOW, THEREFORE, in consideration of the mutual covenants, agreements, representations and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows: ARTICLE I DEFINITIONS ----------- As used herein, the following terms shall have the meanings set forth below: Affiliate shall have the meaning ascribed to such term in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Affiliates of the Investor shall be deemed to include limited partners, general partners and members (including the managing member) in, and other direct or indirect owners or managers of the Investor, together with entities owned, controlled or managed by any or all of such Persons. Claim has the meaning ascribed to it in Section 9.3(a). Closing has the meaning ascribed to it in Section 3.1. Closing Date means the date on which the Closing occurs. Code means the Internal Revenue Code of 1986, as amended. Commitment Amount means up to $1,300,000,000; provided, however, that such amount may be reduced by the Company on or before the Closing Date ("Offering Reduction"), but in no event shall the Commitment Amount be less than $650,000,000. Commitment Amount Notice has the meaning ascribed to it in Section 2.1. Consents has the meaning ascribed to it in Section 6.6. Common Stock has the meaning ascribed to it in the second whereas clause above. Company Add-On Offering Reduction means an Offering Reduction through the use by the Company of an amount equal to the net proceeds received by the Company pursuant to any public or private offering of equity securities of the Company that is consummated on or before the Closing Date. Encumbrance means, with respect to any Person, any mortgage, pledge, charge, claim, option, proxy, voting trust, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title 2 retention agreement or capital lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements). Exchange Act has the meaning ascribed to it in the definition of Affiliate. Facilities means the senior living facilities owned, leased or managed by the Company. GAAP has the meaning ascribed to it in Section 4.5. Governmental Entity means any supernational, national, foreign, federal, state or local judicial, legislative, executive, administrative or regulatory body or authority. HSR Act has the meaning ascribed to it in Section 4.7. Indemnified Person has the meaning ascribed to it in Section 9.2(b). Indemnifying Party has the meaning ascribed to it in Section 9.3(a). Indemnitee has the meaning ascribed to it in Section 9.3(a). Information Statement has the meaning ascribed to it in Section 6.2. Investor Indemnified Person has the meaning ascribed to it in Section 9.2(a). Investor Representative means Randal A. Nardone. Knowledge of a party hereto means the actual knowledge of any executive officer after due inquiry. Laws means all foreign, federal, state, and local laws, statutes, ordinances, rules, regulations, orders, judgments, decrees and bodies of law. Licenses has the meaning ascribed to it in Section 4.8. Lien means with respect to any asset or right, any mortgage, deed of trust, lien (statutory or other), pledge, hypothecation, assignment, claim, charge, security interest, conditional sale agreement, title, exception, or Encumbrance, option, right of first offer or refusal, easement, servitude, voting or transfer 3 restriction, or any other right of another to or adverse claim or any kind in respect of such asset or right. Litigation has the meaning ascribed to it in Section 4.5(a). Losses means each and all of the following items: claims, losses, liabilities, obligations, payments, damages (actual or punitive), 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). Material Adverse Effect means any event which has had, has or would reasonably be expected to have a material adverse effect on the financial condition, results of operations or business of the Company and its Subsidiaries, taken as a whole, other than (i) as a result of changes in general economic or industry conditions or changes in applicable Laws, rules or regulations or (ii) as a result of changes arising out of the announcement of the transactions contemplated by this Agreement. Merger Agreement has the meaning ascribed thereto in the second whereas clause above. NYSE has the meaning ascribed to it in Section 4.2. Offering Reduction has the meaning ascribed thereto in the definition of Commitment Amount. Option Agreement has the meaning ascribed to thereto in the third whereas clause above. Option Per Share Price means $38.07. Per Share Price means $36.93. Person means any individual, firm, corporation, limited liability company, partnership, company, trust or other entity, and shall include any successor (by merger or otherwise) of such entity. Preferred Stock has the meaning ascribed to it in Section 4.3(a). Proceeding has the meaning ascribed to it in Section 10.2. 4 Purchase Price means the Per Share Price multiplied by the aggregate number of Shares purchased by the Investor pursuant to this Agreement. Repurchase Amount means the difference between the Commitment Amount set forth in the Commitment Amount Notice and $650,000,000. Repurchase Option has the meaning ascribed to it in Section 2.4. Repurchase Shares means that number of shares of Common Stock equal to the quotient of the Repurchase Amount divided by the Option Per Share Price, such number to be rounded upwards to the nearest whole number. SEC means the United States Securities and Exchange Commission and any successor Governmental Entity. SEC Reports has the meaning ascribed to it in Section 4.4. Securities Act means the Securities Act of 1933, as amended, or any successor federal statute, and the rules and regulations of the SEC thereunder, all as the same shall be in effect at the time. Reference to a particular section of the Securities Act shall include reference to the comparable section, if any, of such successor federal statute. Selected Courts has the meaning ascribed to it in Section 10.2(a). Shares means that number of shares of Common Stock equal to the quotient of the Commitment Amount divided by the Per Share Price, such number to be rounded upwards to the nearest whole number. Stockholders Agreement has the meaning ascribed thereto in the fifth whereas clause above. Stockholder Approval has the meaning ascribed to it in the fourth whereas clause above. Subsidiary means as to any Person, each corporation, partnership or other entity of which shares of capital stock or other equity interests having ordinary voting power (other than capital stock or other equity interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership or other entity are at the time owned, directly or indirectly, or the management of which is otherwise controlled, directly or indirectly, or both, by such Person. 5 Transaction has the meaning ascribed to it in the second whereas clause above. Transaction Agreement means the Merger Agreement and any ancillary documents. ARTICLE II PURCHASE AND SALE OF SHARES --------------------------- Section 2.1 Notice of Commitment Amount. The Company shall deliver to the Investor a notice setting forth the Commitment Amount at least 10 business days prior to the Closing (the "Commitment Amount Notice"); provided, however, that, the Company shall be entitled until the Closing Date to amend the Commitment Amount Notice to reduce the Commitment Amount. Section 2.2 Issuance and Sale. Upon the terms and conditions set forth herein, at the Closing, the Company shall issue and sell, free and clear of any Liens, to the Investor and the Investor shall purchase from the Company the Shares. Notwithstanding anything to the foregoing set forth herein, the Investor shall have the right to assign its right to purchase Shares to one or more of its Affiliates but any such assignment shall not relieve such Investor of its obligations hereunder. Section 2.3 The Purchase Price.The Investor shall pay to the Company, by wire transfer of immediately available funds, the Purchase Price in consideration for the Shares purchased by the Investor pursuant to this Agreement. Section 2.4 Repurchase Option. Upon the terms and conditions set forth herein, at the Closing, the Investor and the Company shall enter into the Option Agreement, pursuant to which the Investor shall issue to the Company a one time right and option (but not the obligation) to purchase for cash (the "Repurchase Option") from the Investor the Repurchase Shares, at a price per share equal to the Option Per Share Price; provided, however, the Company shall not be entitled to a Repurchase Option and no Option Agreement shall be executed at the Closing, if a Company Add-On Offering Reduction occurs prior to the Closing. Such Repurchase Option shall be available for a period commencing on the Closing Date and concluding one day following the six month anniversary of the Closing Date. Section 2.5 Commitment Fee. In the event the Company receives a Termination Fee (as such term is defined in the Merger Agreement) pursuant to Section 8.02 of the Merger Agreement, the Company shall, as soon as reasonably practicable, pay to the Investor or its assignees, by wire transfer of immediately available funds, a commitment fee equal to 50% of the Termination Fee received by 6 the Company pursuant to the terms of the Merger Agreement. The Company in good faith will pursue its rights to receive the Termination Fee under the terms of the Merger Agreement. ARTICLE III THE CLOSING ----------- Section 3.1 The Closing. Subject to the satisfaction or waiver of the conditions contained in Article VII, the closing (the "Closing") of the purchase and sale of the Shares and the issuance of the Repurchase Option will take place at the office of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, New York at the same time as the closing of the Transaction. Section 3.2 Deliveries(a) . Subject to the satisfaction or waiver of each of the conditions hereof, at the Closing, the Company shall deliver to the Investor against payment of the Purchase Price: (i) one certificate representing the Shares registered in the name of the Investor; (ii) each of the certificates, instruments and agreements required to be delivered by the Company pursuant to Article VII; (iii) the executed Option Agreement; (iv) the executed agreement pursuant to which the Company shall be bound by the provisions of the Stockholders Agreement; and (v) such other documents as the Investor may reasonably request in connection with the Closing. (b) Subject to the satisfaction or waiver of each of the conditions hereof, at the Closing, the Investor shall deliver to the Company: (i) payment of the Purchase Price, by wire transfer of immediately available funds to an account or accounts designated by the Company prior to the Closing; (ii) the certificates, instruments and agreements required to be delivered by the Investor pursuant to Article VII; (iii) the executed Option Agreement; (iv) the executed agreement pursuant to which the Investor shall be a Stockholder (as defined in the Stockholders Agreement) and bound by the provisions of and entitled to the registration rights of, the Stockholders Agreement; and (v) such other documents as the Company may reasonably request in connection with the Closing. ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY --------------------------------------------- The Company hereby represents and warrants to the Investor that all of the statements contained in this Article IV are true and correct as of the date hereof and the Closing Date. 7 Section 4.1 Organization; Subsidiaries. (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 corporate power and corporate authority to carry on its business as it is now being conducted or presently proposed to be conducted. To the Company's Knowledge, the Company is duly qualified and licensed as a foreign corporation to do business and is in good standing (and has paid all relevant franchise or analogous taxes) in each jurisdiction where the character of its assets owned or held under lease or the nature of its business makes such qualification necessary, except where the failure to be so qualified or licensed, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect. (b) The Company owns, either directly or indirectly through one or more of its Subsidiaries, all of the capital stock or other equity interests of its Subsidiaries free and clear of all Liens, except those Liens pursuant to the credit and other loan agreements existing as of the date hereof. There are no outstanding subscription rights, options, warrants, convertible or exchangeable securities or other rights of any character whatsoever relating to issued or unissued capital stock or other equity interests of any Subsidiary, or any commitments of any character whatsoever relating to issued or unissued capital stock or other equity interests of any Subsidiary or pursuant to which any Subsidiary is or may become bound to issue or grant additional shares of its capital stock or other equity interests or related subscription rights, options, warrants, convertible or exchangeable securities or other rights, or to grant preemptive rights. (c) Each Subsidiary is a corporation, limited liability company, partnership, business association or other Person duly organized, validly existing and in good standing (in jurisdictions where such concept is recognized) under the Laws of the jurisdiction of its organization and has the requisite corporate power and authority to carry on its business as it is now being conducted. To the Company's Knowledge, each Subsidiary of the Company is duly qualified and licensed as a foreign corporation or other business entity to do business and is in good standing (and has paid all relevant franchise or analogous taxes) in each jurisdiction where the character of its assets owned or held under lease or the nature of its business makes such qualification necessary, except where the failure of one or more Subsidiaries to be so qualified or licensed, individually or in the aggregate, has not had and would not be reasonably expected to have a Material Adverse Effect. Section 4.2 Due Authorization. (a) The Company has all corporate right, power and authority to enter into this Agreement and the Merger Agreement and to consummate the 8 transactions contemplated hereby and thereby. The (a) execution and delivery by the Company of this Agreement, (b) issuance, sale and delivery of the Shares by the Company and (c) compliance by the Company with each of the provisions of this Agreement (i) are within the corporate power and authority of the Company and (ii) have been duly authorized by all requisite corporate action of the Company. This Agreement has been duly and validly executed and delivered by the Company, and (assuming this Agreement constitutes a valid and binding obligation of the Investor) this Agreement constitutes a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except as such enforcement is limited by bankruptcy, insolvency, reorganization, moratorium and other similar Laws affecting the enforcement of creditors' rights generally and limitations imposed by general principles of equity. (b) The Shares have been duly authorized by the Company and, when issued, sold and delivered in accordance with this Agreement, the Shares will be validly issued, fully paid and nonassessable, free and clear of all Liens, and the issuance thereof will not be subject to any preemptive rights, right of first refusal or similar right. At the Closing, no further approval or authority of the stockholders or the Board of Directors under the Delaware General Corporation Law (the "DGCL"), the rules of the New York Stock Exchange (the "NYSE") or the consent of any other party will be required for the issuance of the Shares, other than the approval of the NYSE of the listing of such shares of Common Stock on the NYSE. No preemptive rights or other rights to subscribe for or purchase securities exist with respect to the issuance and sale of the Shares. Section 4.3 Capitalization. (a) The authorized capital stock of the Company consists of (i) 200,000,000 shares of Common Stock and (ii) 50,000,000 shares of preferred stock, par value $.01 per share ("Preferred Stock"). As of the date hereof, there are 65,006,833 shares of Common Stock and no shares of Preferred Stock issued and outstanding. All of the issued and outstanding shares of Common Stock have been duly authorized and are validly issued, fully paid and nonassessable and not subject to preemptive or other similar rights of the stockholders of the Company. (b) Except as set forth in this Agreement or as described in the SEC Reports filed prior to the date hereof, there are no outstanding subscription rights, options, warrants, convertible or exchangeable securities or other rights of any character whatsoever to which the Company is a party relating to issued or unissued capital stock of the Company, or any commitments of any character whatsoever relating to issued or unissued capital stock of the Company or pursuant to which the Company or any of the Subsidiaries are or may become bound to issue or grant additional shares of their capital stock or related subscription rights, options, 9 warrants, convertible or exchangeable securities or other rights, or to grant preemptive rights. Except as set forth in the SEC Reports filed prior to the date hereof and except as contemplated by this Agreement, including Section 6.1, (a) the Company has not agreed to register any securities under the Securities Act or under any state securities law or granted registration rights to any Person and (b) there are no voting trusts, stockholders agreements, proxies or other commitments or understandings in effect to which the Company is a party with respect to the voting or transfer of any of the outstanding shares of Common Stock. Section 4.4 SEC Reports. The Company has filed all annual reports, quarterly reports, proxy statements and other reports required to be filed by it with the SEC under the Exchange Act since November 21, 2005 (together with the Company's final prospectus filed with the SEC pursuant to Rule 424 of the Securities Act on November 23, 2005, the "SEC Reports"). Each SEC Report was, on the date of its filing or as subsequently amended prior to the date hereof, in compliance in all material respects with the requirements of its respective report form and applicable Laws and did not, on the date of filing or as subsequently amended, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Section 4.5 Financial Statements. The consolidated financial statements of the Company (including any related schedules and/or notes) included in the SEC Reports, as subsequently amended prior to the date hereof, comply in all material respects with applicable accounting requirements and with the published rules and regulations of the SEC with respect thereto, and have been prepared in accordance with United States generally accepted accounting principles ("GAAP") consistently followed throughout the periods involved (except as may be indicated in the notes thereto) and fairly present in accordance with GAAP the consolidated financial condition, results of operations, cash flows and changes in stockholders' equity of the Company and the Subsidiaries as of the respective dates thereof and for the respective periods then ended (in each case subject, as to interim statements, to the absence of footnotes and as permitted by Form 10-Q and subject to changes resulting from year-end adjustments). Except as disclosed in the SEC Reports filed prior to the date hereof, neither the Company nor any Subsidiary has any liability or obligation (whether accrued, absolute, contingent, unliquidated or otherwise, whether known or unknown, whether due or to become due and regardless of when asserted), except for (i) liabilities and obligations reflected or disclosed in the audited consolidated balance sheet of the Company and its Subsidiaries as of December 31, 2005, or the unaudited consolidated balance sheet of the Company and its Subsidiaries as of March 31, 2006, or the footnotes thereto, (ii) liabilities and obligations incurred in the ordinary course of business since March 31, 2006, or (iii) 10 liabilities and obligations which, individually or in the aggregate, have not had and would not reasonably be expected to have or result in a Material Adverse Effect. Section 4.6 Litigation. (a) Except as disclosed in the SEC Reports filed prior to the date hereof, there is no claim, action, suit, investigation or proceeding of any kind or nature whatsoever ("Litigation") pending or, to the Knowledge of the Company, threatened against the Company or any of the Subsidiaries or involving any of their respective properties or assets by or before any court, arbitrator or other Governmental Entity that (x) in any manner challenges or seeks to prevent, enjoin, alter or delay the transactions contemplated by this Agreement or (y) if resolved adversely to the Company or a Subsidiary would have or would reasonably be expected to have a Material Adverse Effect. Except as disclosed in such SEC Reports, there is no judgment, decree, injunction, rule, or order of any court, governmental department, commission, agency, instrumentality or arbitrator outstanding against the Company or any of the Subsidiaries which has or would reasonably be expected to have a Material Adverse Effect. (b) To the Knowledge of the Company, neither the Company nor any of the Subsidiaries is in default under or in breach of any order, judgment or decree of any court, arbitrator or other Governmental Entity, and neither the Company nor any of the Subsidiaries is a party or subject to any order, judgment or decree of any court, arbitrator or other Governmental Entity, except where such default, breach, order, judgment or decree has not had or would not reasonably be expected to have a Material Adverse Effect. Section 4.7 Consents and Approvals. The execution, delivery or performance by the Company of this Agreement and the consummation of the transactions contemplated hereby, do not and will not (i) conflict with, or result in a breach or a violation of, any provision of the certificate of incorporation or by-laws or other organizational documents of the Company or any of its Subsidiaries, (ii) constitute, with or without notice or the passage of time or both, a breach, violation or default, create an Encumbrance, or give rise to any right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, under (A) any applicable Law or (B) any provision of any agreement or other instrument to which the Company or any of the Subsidiaries is a party or pursuant to which any of them or any of their assets or properties is subject, except where such breach, violation or default, creation of an Encumbrance, or right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration, individually or in the aggregate, has not had and would not reasonably be expected to have a Material Adverse Effect or (iii) except for (A) the approval of the NYSE of the listing of the Shares on the NYSE, (B) the filing 11 with the SEC of the Information Statement relating thereto, (C) any required filing under any foreign governmental and regulatory filings (including the premerger notification and report form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), notices and approvals required to be made or obtained as contemplated by Section 6.6, and (D) any filings, consents, approvals or authorizations of, notifications to, or exemptions or waivers by any Governmental Entity or any other Person which are not, individually or in the aggregate, material to the consummation of the transactions contemplated hereby, require any consent, approval or authorization of, notification to, filing with, or exemption or waiver by, any Governmental Entity or any other Person on the part of the Company or any of its Subsidiaries. Section 4.8 Compliance with Laws. Except as disclosed in the SEC Reports filed prior to the date hereof, the Company and the Subsidiaries are in compliance with all Laws in all respects, and neither the Company nor any Subsidiary has received any notice of any alleged violation of Law, except where a failure to comply or alleged violation of Law has not had or would not reasonably be expected to have a Material Adverse Effect. To the Knowledge of the Company, the Company holds all material licenses, franchise permits, consents, registrations, certificates, and other governmental or regulatory permits, authorizations or approvals required for the operation of the business as presently conducted and for the ownership, lease or operation of the Company's and its Subsidiaries' Facilities (collectively, "Licenses"). To the Knowledge of the Company, all of such Licenses are valid and in effect, the Company and the Subsidiaries have duly performed and are in compliance with all of their obligations under such Licenses and no investigation or review by any governmental or regulatory body or authority is pending or threatened, except where a failure with respect thereto has not had or would not reasonably be expected to have a Material Adverse Effect. Section 4.9 Financial Advisory, Legal and Other Fees.. No agent, broker, accounting firm, investment bank, other financial advisor, commercial bank, other financial institution, law firm, public relations firm or any other Person other than Bear, Stearns & Co., Inc. and Goldman, Sachs & Co. is or will be entitled to any fee, commission, expense or other amount from the Company or any of the Subsidiaries in connection with any of the transactions contemplated by this Agreement. Section 4.10 Board of Directors. The Board of Directors of the Company, after accepting the recommendation of a Special Committee of the Board of Directors, has determined that the issuance of the Shares, this Agreement and the transactions contemplated hereby, are advisable and in the best interests of the Company and its stockholders. 12 Section 4.11 Information Statement. The Information Statement will not, at the date it is first mailed to the Company's stockholders, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Information Statement will comply as to form in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations thereunder, except that no representation or warranty is made by the Company with respect to information or statements specifically supplied by or on behalf of any of the Investor for inclusion or incorporation by reference in the Information Statement. Section 4.12 Taxes. The Company and its subsidiaries have filed all necessary federal, state and foreign income and franchise tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine or penalty levied against any of them, except, in all cases, for any such amounts that the Company is contesting in good faith and except in any case in which the failure to so file or pay would not in the aggregate cause a Material Adverse Effect. The Company has made, to the extent required by GAAP, adequate charges, accruals and reserves in the applicable financial statements referred to in Section 4.5 in respect of all federal, state and foreign income and franchise taxes for all periods as to which the tax liability of the Company or any of its subsidiaries has not been finally determined. ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE INVESTOR ---------------------------------------------- The Investor hereby represents and warrants to the Company that all of the statements contained in this Article V are true and correct as of the date hereof and the Closing Date. Section 5.1 Investment. (a) The Investor is acquiring the Shares for investment for its own account, and not with a view to any resale or distribution thereof in violation of the Securities Act. (b) The Investor's financial condition and investments are such that it is in a position to hold the Shares for an indefinite period, bear the economic risks of the investment and withstand the complete loss of the investment. The Investor has extensive knowledge and experience in financial and business matters and has the capability to evaluate the merits and risks of such Shares. The Investor qualifies as (i) an "accredited investor" as such term is defined in Section 2(a)(15) of the 13 Securities Act and Regulation D promulgated thereunder or (ii) a "qualified institutional buyer" as defined in Rule 144A under the Securities Act. Section 5.2 Rule 144. The Investor acknowledges that the Shares must be held indefinitely unless subsequently registered under the Securities Act and any applicable state securities laws or unless exemptions from such registrations are available. The Investor is aware of and familiar with the provisions of Rule 144 promulgated under the Securities Act that permit limited resale of securities purchased in a private placement subject to the satisfaction of certain conditions. Section 5.3 Organization; Etc. The Investor is duly organized and validly existing and in good standing under the Laws of the jurisdiction of its organization. Section 5.4 Authority. (a) The Investor has all right, power and authority to execute and deliver this Agreement, to consummate the transactions contemplated hereby and thereby and to comply with the terms, conditions and provisions hereof and thereof. (b) The (i) execution, delivery and performance by the Investor of this Agreement, (ii) compliance by the Investor with each of the provisions of this Agreement and (iii) consummation of the transactions contemplated hereby and thereby (A) are within the power and authority of the Investor, (B) have been duly authorized and approved by the requisite actions of the Investor and (C) do not require any further authorization or consent of the Investor or, if applicable, its beneficial owners. This Agreement has been duly and validly executed and delivered by the Investor, and (assuming this Agreement constitutes a valid and binding obligation of the Company) this Agreement constitutes a legal, valid and binding agreement of the Investor, enforceable against the Investor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws from time to time affecting the enforcement of creditors' rights generally and limitations imposed by general principles of equity. Section 5.5 Non-Contravention. The execution, delivery and performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby, will not (a) conflict with or result in a breach of any of the terms and provisions of, or constitute a default (or an event which with notice or lapse of time, or both, would constitute a default) under, or result in the creation or imposition of any Lien, charge or Encumbrance upon any property or assets of the Investor pursuant to any agreement, instrument, franchise, license or permit to which the Investor is a party or by which any of its properties or assets may 14 be bound or (b) violate or conflict with any Law of any Governmental Entity applicable to the Investor or any of its properties or assets, other than such breaches, defaults or violations that are not reasonably expected to impair the ability of the Investor to consummate the transactions contemplated by this Agreement. The execution, delivery and performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby, do not and will not violate or conflict with any provision of the organizational documents of the Investor, as currently in effect. Section 5.6 Consents and Approvals. No consent, approval, authorization, order, registration, filing, qualification, license or permit of or with any Governmental Entity applicable to the Investor or of or with any third party is required for the execution, delivery and performance of this Agreement and to consummate the transactions contemplated hereby. Section 5.7 Brokers and Finders. No agent, broker, investment banker, financial advisor or other firm or person engaged by or on behalf of the Investor 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. Section 5.8 Sufficient Funds. The Investor has available, or has obtained commitments for, sufficient funds to acquire the Shares to be purchased pursuant to this Agreement. Section 5.9 Information Supplied. None of the information supplied or to be supplied by or on behalf of the Investor in writing specifically for inclusion or incorporation by reference in the Information Statement will, at the date it is first mailed to the Company's stockholders, contain, any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading. 15 ARTICLE VI COVENANTS --------- Section 6.1 Conduct of the Business Pending the Closing. The Company covenants and agrees that, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement or the Closing unless the Investor otherwise consents in writing (which consent shall not be unreasonably withheld, conditioned or delayed) the Company shall, and shall cause each of its Subsidiaries to, (i) conduct its business only in the ordinary course and consistent with past practice; (ii) use commercially reasonable best efforts to preserve and maintain its assets and properties and its relationships with its customers, suppliers, advertisers, distributors, agents, officers and employees and other persons with which it has significant business relationships; (iii) use its commercially reasonable best efforts to maintain all of the material assets it owns or uses in the ordinary course of business consistent with past practice; (iv) use its commercially reasonable best efforts to preserve the goodwill and ongoing operations of its business; (v) maintain its books and records in the usual, regular and ordinary manner, on a basis consistent with past practice; and (vi) comply in all material respects with applicable Laws. Notwithstanding the forgoing and except as expressly contemplated by this Agreement or the Transaction Agreements or as consented to by the Investor in writing (which consent shall not be unreasonably withheld, conditioned or delayed), during the period from the date of this Agreement through and including the Closing Date, the Company shall not, and shall not permit any of its Subsidiaries to: (a) (i) split, combine or reclassify any of its capital stock or issue or authorize the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, or (ii) purchase, redeem or otherwise acquire any capital stock in the Company or any of the Subsidiaries or any other securities thereof or any rights, warrants or options to acquire any such shares or other securities, except in the ordinary course of business pursuant to the Company's employee benefit plans; (b) take any action that is reasonably likely to result in (i) any of the representations and warranties set forth in Article IV becoming false or inaccurate in any material respect as of, or at any time prior to, the Closing Date or (ii) any of the conditions to the obligations of the Investor set forth in Section 7.2 not being satisfied; (c) amend the charter, bylaws or other comparable organizational documents of the Company in a manner likely to adversely affect the Investor; or 16 (d) agree to take any of the foregoing actions. Notwithstanding anything to the contrary contained in this Agreement, the Company shall not be prevented from, or obligated to obtain the consent of the Investor prior to, (i) issuing shares of its capital stock or entering into agreements with respect thereto, including with respect to registration rights, or (ii) engaging in any merger, acquisition or business combination transaction. Section 6.2 Information Statement. As promptly as practicable following the date of this Agreement, the Company shall prepare a form of information statement to be mailed to the stockholders of the Company relating to the Stockholder Approval (the "Information Statement") (provided that the Investor shall have the right to consent to any descriptions of or references to the Investor or any of their Affiliates, which consent shall not be unreasonably withheld, conditioned or delayed) and use its commercially reasonable best efforts (x) (1) to respond as promptly as practicable to any comments made by the SEC with respect to the Information Statement and (2) to promptly supply the Investor with copies of all correspondence between the Company or any of its representatives, on the one hand, and the SEC or its staff, on the other hand, with respect to the Information Statement, and (y) to cause the Information Statement to be mailed to its stockholders at the earliest practicable date following the clearance of the Information Statement by the SEC. Section 6.3 Listing Obligation. Prior to the Closing, the Company will take all reasonable steps necessary, and pay all reasonable fees required, to list the Shares on the NYSE, to the extent required by the NYSE. Following the initial listing of the Shares, the Company will use its commercially reasonable best efforts to maintain the listing of the Common Stock for so long as the Investor owns any Shares. 17 Section 6.4 Cooperation. The Investor, on the one hand, and the Company, on the other, agrees to use its commercially reasonable best efforts to cause, or not to impede, to the extent that such party has control or influence over such matters, satisfaction of the conditions, set forth in Sections 7.2 and 7.3, to the other party's obligation to consummate the transactions contemplated by this Agreement. Section 6.5 Notification of Certain Matters. From the date hereof through the Closing, the Investor, on the one hand, and the Company, on the other shall give prompt notice to such other party of the occurrence, or failure to occur, of any event the occurrence or failure of which caused any of the Company's or the Investor's representations or warranties contained in this Agreement to be untrue or inaccurate in any material respect; provided, however, that no such notification shall be deemed for any purpose under this Agreement to permit the Company or the Investor to alter or amend the representations and warranties contained herein. Section 6.6 Consent; Approvals. The Company shall use its commercially reasonable efforts to obtain, as promptly as practicable, all consents, waivers, exemptions, approvals, authorizations or orders (collectively, "Consents") (including, without limitation (i) all Consents required to avoid any breach, violation, default, encumbrance or right of termination, modification, cancellation, prepayment, suspension, limitation, revocation or acceleration of any material agreement or instrument to which the Company is a party or its properties or assets are bound, and (ii) all approvals of Governmental Entities, required in connection with the consummation of the transactions contemplated by this Agreement as promptly as practicable (including the premerger notification and report form under the HSR Act), except where the failure to obtain such Consents, individually or in the aggregate, has not had and would not be reasonably expected to have a Material Adverse Effect. Section 6.7 Further Assurances. From time to time after the date of this Agreement, the parties hereto shall execute, acknowledge and deliver to the other parties such other instruments, documents, and certificates and will take such other actions as the other parties may reasonably request in order to consummate the transactions contemplated by this Agreement. Section 6.8 Use of Proceeds. The Company shall apply the proceeds from the sale of the Shares to the payments required to be made by the Company pursuant to the Transaction Agreements and associated costs and expenses. 18 Section 6.9 Waiver of Piggyback Registration Rights For Registration on Form S-1. In the event the Company files a registration statement on Form S-1 prior to the six month anniversary of the execution of this Agreement, the Investor hereby covenants and agrees to irrevocably and unconditionally waive all piggyback registration rights and other rights provided pursuant to Section 5.2 of the Stockholders Agreement in connection with such registration statement including, without limitation, the right to receive any notices from the Company pursuant to Section 6.4 of the Stockholders Agreement. Nothing in this Section 6.9 shall be deemed to be a waiver of any of the Investor's other rights under the Stockholders Agreement, including the right of the Investor to demand registration pursuant to Section 5.1 or 5.3 of the Stockholders Agreement. Section 6.10 Venture Capital Operating Company Rights. In the event the Investor were to transfer some or all of its equity investment in the Company to an entity that intends to qualify as a "venture capital operating company," the Company hereby agrees to enter into a letter substantially in the form attached hereto as Exhibit C prior to, or simultaneously with, such transfer. ARTICLE VII CONDITIONS PRECEDENT -------------------- Section 7.1 Conditions to Obligations of the Investor and the Company. The respective obligations of the Investor and the Company to consummate the transactions contemplated hereby shall be subject to the satisfaction or waiver at or prior to the Closing of each of the following conditions: (a) Laws. No Laws shall be in effect which prohibit the consummation of the transactions contemplated hereby. (b) Consummation of Transaction. The Closing shall be consummated simultaneously with the closing of the Transaction. Section 7.2 Conditions to Obligations of the Investor. The obligation of the Investor to consummate the transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions: (a) Representations and Warranties. All of the representations and warranties of the Company set forth in this Agreement shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing 19 Date, as if made at and as of such time, except to the extent expressly made as of an earlier date, in which case as of such date. (b) Performance of Obligations. The Company shall have performed, satisfied and complied with, in all material respects, all covenants and agreements set forth in this Agreement required to be performed by it under this Agreement at or prior to the Closing. (c) Officer's Certificate. The Company shall have delivered to the Investor a certificate signed by its president, dated the Closing Date, in form and substance reasonably satisfactory to the Investor, to the effect that the conditions set forth in Sections 7.2(a) have been satisfied. (d) Receipts of Consents. The Company shall have obtained the Consents contemplated by Section 6.6, if any, and a copy of each such consent or evidence thereof reasonably satisfactory to the Investor shall have been provided to the Investor at or prior to the Closing, unless the failure to obtain such Consents, when taken together with other events, developments or circumstances, has had or would reasonably be expected to have a Material Adverse Effect. (e) Stockholders Agreement. On the Closing Date, the Investor shall have received the agreement pursuant to which the Investor shall be bound by the provisions of the Stockholders Agreement, executed by the Company, and such agreement shall be in full force and effect. Section 7.3 Conditions to Obligations of the Company. The obligation of the Company to consummate the transactions with the Investor contemplated hereby shall be subject to the satisfaction at or prior to the Closing of each of the following conditions: (a) Representations and Warranties. All of the representations and warranties of the Investor set forth in this Agreement shall be true and correct in all material respects, in each case as of the date of this Agreement and as of the Closing Date, as if made at and as of such time, except to the extent expressly made as of an earlier date, in which case as of such date. (b) Performance of Obligations. The Investor shall have performed, satisfied and complied with, in all material respects, all covenants and agreements set forth in this Agreement required to be performed by it under this Agreement at or prior to the Closing. (c) Investor Certificate. The Investor shall have delivered to the Company a certificate signed by an authorized signatory thereof, dated the 20 Closing Date, in form and substance reasonably satisfactory to the Company, to the effect that the conditions set forth in Sections 7.3(a) and 7.3(b) have been satisfied. (d) Stockholders Agreement. On the Closing Date, the Company shall have received the agreement pursuant to which the Investor shall be bound by the provisions of the Stockholders Agreement, executed by the Investor, and such agreement shall be in full force and effect. ARTICLE VIII TERMINATION ----------- Section 8.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Closing Date notwithstanding the fact that any requisite authorization and approval of the transactions contemplated hereby shall have been received and no party hereto shall have any liability to any other party hereto (provided that any such termination shall not (i) relieve any party from liability for a breach of any provision hereof prior to such termination or (ii) terminate the parties' respective obligations under Article IX or Section 10.04); provided, however, that in the event this Agreement is terminated in accordance with this Section 8.1, no Investor Indemnified Person may seek indemnification from the Company pursuant to Article IX hereof other than for the reasonable out-of-pocket fees, costs or expenses incurred by the Investor Indemnified Person in connection with the Transactions): (a) by the Investor or the Company if the Merger Agreement is terminated in accordance with its terms; (b) by the Investor or the Company if there shall be any Law that makes consummation of the purchase of the Shares hereunder illegal or otherwise prohibited or if any court of competent jurisdiction or governmental authority shall have issued an order, decree, ruling or taken any other action restraining, enjoining or otherwise prohibiting the purchase of the Shares hereunder and such order, decree, ruling or other action shall have become final and non-appealable; (c) by the Investor or the Company if the Closing shall not have occurred on or before the nine month anniversary of the date of the Merger Agreement. (d) by the Company if the Investor shall have breached in any respect any of its representations, warranties, covenants or other agreements contained in this Agreement that would give rise to the failure of a condition set forth in Article VII; or 21 (e) by the Investor if the Company shall have breached in any respect any of its representations, warranties, covenants or other agreements contained in this Agreement that would give rise to the failure of a condition set forth in Article VII. ARTICLE IX INDEMNIFICATION --------------- Section 9.1 Survival of Representations and Warranties. The representations and warranties of the parties hereto contained in this Agreement shall expire twelve months after the Closing Date, except that the representations and warranties set forth in Sections 4.1(a), 4.2, 4.3, 5.1, 5.2, 5.3 and 5.4 shall survive until 6 months after the expiration of the applicable statute of limitations (including any extensions thereof). After the expiration of such periods, 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 in accordance with this Article IX 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 as provided in this Article IX. The covenants and agreements of the parties hereto contained in this Agreement shall survive the Closing until performed in accordance with their terms. Section 9.2 Indemnification. (a) The Company shall indemnify, defend and hold harmless the Investor, its Affiliates, and their respective officers, directors, partners, members, employees, agents, representatives, successors and assigns (each an "Investor Indemnified Person") from and against all Losses 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 the Company in this Agreement or in any certificate furnished by the Company to the Investor pursuant to this Agreement (which breach shall be determined without regard to any materiality or Material Adverse Effect qualifications contained in the representation and warranty giving rise to such claim for indemnity), (ii) the breach of any covenant, obligation or agreement made by the Company in this Agreement or (iii) any actual or threatened Litigation against the Investor Indemnified Person by any Person (other than an Investor Indemnified Person) in connection with (A) the transactions contemplated hereby, (B) the negotiation, execution, delivery and performance of this Agreement or (C) any actions taken by any Investor Indemnified Person pursuant hereto or thereto or in connection with the transactions contemplated hereby (whether or not the transactions contemplated hereby are consummated); provided, however, that the 22 Company shall not have any obligation to indemnify a particular Investor Indemnified Person pursuant to this Section 9.2(a)(iii) to the extent such suit, action, claim or proceeding arises from a breach of this Agreement by the Investor or Investor Indemnified Person or a failure of any representation or warranty of the Investor set forth in Article V hereof to be true and correct and such breach or failure of a representation or warranty to be true and correct results in any condition contained in Sections 7.1 or 7.3 hereof being incapable of being satisfied prior to the Closing. (b) The Investor shall indemnify, defend and hold harmless the Company, its Affiliates, and their respective officers, directors, partners, members, employees, agents, representatives, successors and assigns (each an "Indemnified Person") from and against all Losses incurred or suffered by an Indemnified Person arising from, relating to, or as a result of (i) the breach of any of the representations or warranties made by the Investor in this Agreement or any certificate furnished by the Investor to the Company pursuant to this Agreement or (ii) the breach of any covenant, obligation or agreement made by the Investor in this Agreement. (c) No claim may be made against the Company for indemnification with respect to breaches of representations and warranties pursuant to Section 9.2(a)(i) above with respect to any Losses unless the aggregate amount of Losses incurred by the Investor Indemnified Persons thereunder exceeds $10,000,000, and the Company shall then only be liable for the amount of such Losses which exceed $10,000,000. The maximum amount recoverable under Section 9.2(a)(i) by the Investor and the Investor Indemnified Persons, in the aggregate, shall not exceed the Purchase Price. No claim may be made against the Investor for indemnification with respect to breaches of representations and warranties pursuant to Section 9.2(b)(i) above with respect to any Losses unless the aggregate amount of Losses incurred by the Indemnified Persons thereunder exceeds $10,000,000, and the Investor shall then only be liable for the amount of such Losses which exceed $10,000,000. With respect to the Investor, the maximum amount recoverable under Section 9.2(b)(i) by all Indemnified Persons from the Investor shall be equal to the Purchase Price. (d) In no case shall any payment be made in the case of an indemnification claim under Section 9.2(a)(i) or 9.2(a)(ii) until a Loss occurs. No Person shall have any liability to any Investor Indemnified Person under Section 9.2(a)(i) for any breach of a representation or warranty to the extent that a claim for indemnification is based upon facts of which the 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 9.2(d), (i) the Investor shall be deemed to have knowledge of a fact only if any of the Persons set forth in the definition of "Investor 23 Representative" has knowledge of the particular fact and (ii) such individual 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. Section 9.3 Procedure for Indemnification. (a) If an Investor Indemnified Person or an Indemnified Person (such Person being referred to as the "Indemnitee") shall receive notice or otherwise learn of the assertion by a Person who is not a party to this Agreement of any claim or of the commencement by any such Person of any action (a "Claim") with respect to which the other party (the "Indemnifying Party") may be obligated to provide indemnification, such Indemnitee shall give such Indemnifying Party written notice thereof promptly after becoming aware of such Claim; provided, that the failure of any Indemnitee to give notice as provided in this Section 9.3 shall not relieve the applicable Indemnifying Party of its obligations under this Article IX, except to the extent that such Indemnifying Party is materially prejudiced by such failure to give notice; provided, further, that the applicable Indemnifying Party shall have no obligations under Section 9.2(a)(i) or Section 9.2(b)(i), as applicable, unless such written notice is received by the Indemnifying Party within the survival periods set forth in Section 9.1. Such notice shall describe the Claim in reasonable detail, and shall indicate the amount (estimated if necessary) of the Loss that has been or may be sustained by or is claimed against such Indemnitee. (b) An Indemnifying Party may elect to compromise, settle or defend, at such Indemnifying Party's own expense and by such Indemnifying Party's own counsel, any Claim; provided, however, that the Indemnifying Party shall not compromise, settle or defend a Claim without the consent of the Indemnitee (which consent shall not be unreasonably withheld, conditioned or delayed). If an Indemnifying Party elects to compromise, settle or defend a Claim, it shall, within 30 days of the receipt of notice from an Indemnitee pursuant to Section 9.3(a) (or sooner, if the nature of such Claim so requires), notify the applicable Indemnitee of its intent to do so, and such Indemnitee shall cooperate in a commercially reasonable manner in the compromise or settlement of, or defense against, such Claim. After notice from an Indemnifying Party to an Indemnitee of its election to assume the defense of a Claim, the Indemnitee shall have the right to participate in the defense thereof, at its own expense, and such Indemnifying Party shall not be liable to such Indemnitee under this Article IX for any legal or other expenses subsequently incurred by such Indemnitee in connection with the defense thereof (except expenses approved in advance by the Indemnitee); provided, that such Indemnitee shall have the right to employ one separate counsel reasonably satisfactory to the Indemnifying Party to represent such Indemnitee if (i) in the reasonable judgment of the Indemnitee, there are legal defenses available to such Indemnitee that are different 24 from or additional to those available to the Indemnifying Party, (ii) the Indemnifying Party shall authorize in writing the Indemnitee to retain a single, separate counsel at the Indemnifying Party's expense or (iii) the defendants in any such Claim include both the Indemnifying Party and the Indemnitee and, in such Indemnitee's reasonable judgment, a conflict of interest between such Indemnitee and such Indemnifying Party exists in respect of such Claim, and only in the events listed in clauses (i) through (iii) of this paragraph (b) shall the reasonable fees and expenses of such separate counsel be paid by such Indemnifying Party. If an Indemnifying Party elects not to compromise, settle or defend against a Claim, or fails to notify an Indemnitee of its election as provided in this Section 9.3 within 30 days of notice from the Indemnitee pursuant to Section 9.3(a), such Indemnitee may compromise, settle or defend such Claim at the expense of such Indemnifying Party. (c) If an Indemnifying Party chooses to defend any claim, the applicable Indemnitee shall make available to such Indemnifying Party any personnel or any books, records or other documents within its control that are reasonably necessary or appropriate for such defense. (d) If the aggregate amount of any Loss shall, at any time subsequent to payment pursuant to this Agreement, be reduced by recovery, settlement or otherwise, the amount of such reduction, net of any expenses incurred in connection therewith or additional Losses incurred, shall promptly be repaid by the applicable Indemnitee to the applicable Indemnifying Party. (e) In the event of payment by an Indemnifying Party to any Indemnitee in connection with any Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right or claim relating to such Claim. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and, at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right or claim. Section 9.4 Sole Remedy. Except in the case of fraud, the rights to indemnification provided for in this Article IX for a breach of representations or warranties by the Investor (in the case of indemnification pursuant to Section 9.2(b)(i)) or the Company (in the case of indemnification pursuant to Section 9.2(a)(i)) shall constitute the sole post-closing remedy of the Company and the Investor respectively, for such breach, and the Company and the Investor shall have no other liability or damages to the other party resulting from any such breach. 25 ARTICLE X MISCELLANEOUS ------------- Section 10.1 Governing Law. This Agreement shall be governed by, and construed in accordance with, the internal and substantive Laws of the State of New York without giving effect to conflicts of law principles thereof. Section 10.2 Jurisdiction; Forum; Service of Process; Waiver of Jury Trial. With respect to any suit, action or proceeding ("Proceeding") arising out of or relating to this Agreement, the Company and the Investor hereby irrevocably: (a) submits to the exclusive jurisdiction of the courts of the United States of America located in the State of New York and the courts of the State of New York (the "Selected Courts"), for any Proceeding arising out of or relating to this Agreement and the transactions contemplated hereby (and agrees not to commence any Litigation relating hereto except in such Selected Courts) and waives any objection to venue being laid in the Selected Courts whether based on the grounds of forum non conveniens or otherwise; (b) consents to service of process in any Proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized international express carrier or delivery service, to the Company or the Investor at its address referred to in Section 10.6; provided, however, that nothing herein shall affect the right of any party hereto to serve process in any other manner permitted by Law; and (c) waives, to the fullest extent permitted by Law, any right it may have to a trial by jury in any Proceeding directly or indirectly arising out of, under or in connection with this Agreement. Section 10.3 Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors by operation of Law and permitted assigns of the parties hereto. Except as permitted under Section 2.2, no assignment of this Agreement may be made by any party at any time, whether or not by operation of Law, without the other parties' prior written consent. Only the parties to this Agreement or their permitted assigns shall have rights under this Agreement. Section 10.4 Fees and Expenses. Except as otherwise provided herein, all fees, costs or expenses shall be paid by the party incurring such fees, costs or expenses. All legal fees and expenses of Skadden, Arps, Slate, Meagher & Flom LLP will be paid by the Company. 26 Section 10.5 Entire Agreement; Amendment. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof and supercedes all prior agreements relating to the subject matter hereof. Except as expressly provided herein, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Company and by the Investor. No waiver of any of the provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision hereof (whether or not similar). No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof. Section 10.6 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 facsimile, 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 in writing by such party to the other parties: if to the Company to: Brookdale Senior Living Inc. 330 North Wabash Avenue, Suite 1400 Chicago, Illinois 60611 Facsimile: 312-977-3699 Attention: General Counsel with a copy to: Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036-6522 Facsimile: (212) 735-2000 Attention: Joseph A. Coco if to Investor to: 1345 Avenue of the Americas, 46th Floor New York, NY 10105 Facsimile: (212) 798-6120 Attention: Randal A. Nardone 27 with a copy to: 1345 Avenue of the Americas, 46th Floor New York, NY 10105 Facsimile: (212) 798-6060 Attention: Alan Chesick and a copy to: 1345 Avenue of the Americas, 46th Floor New York, NY 10105 Facsimile: (212) 798-6000 Attention: William B. Doniger All such notices, requests, consents and other communications shall be deemed to have been given or made if and when delivered personally or by overnight courier to the parties at the above addresses or sent by electronic transmission, with confirmation received, to the facsimile numbers specified above (or at such other address or facsimile 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 10.7 Delays or Omissions. Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to the Company or the Investor upon any breach or default of any party under this Agreement, shall impair any such right, power or remedy of the Company or the Investor nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of the Company or the Investor of any breach or default under this Agreement, or any waiver on the part of any such party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by Law or otherwise afforded to the Company or the Investor shall be cumulative and not alternative, except as set forth in Section 9.4. Section 10.8 Counterparts. This Agreement may be executed in any number of counterparts, each of which may be executed by only one of the parties 28 hereto, each of which shall be enforceable against the party actually executing such counterpart, and all of which together shall constitute one instrument. Section 10.9 Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provisions; provided that, no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party. Section 10.10 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. Section 10.11 No Public Announcement(a) . None of the Company or its Subsidiaries or the Investor or its Affiliates shall make any press release, public announcement or filing with any Governmental Entity concerning the transactions contemplated by this Agreement, except as and to the extent that any such party shall be obligated to make any such disclosure by this Agreement, by Law or the rules of any national securities exchange. Signature pages follow 29 IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be executed as of the date first above written. BROOKDALE SENIOR LIVING INC. By: /s/ Mark J. Schulte --------------------------------------- Name: Mark J. Schulte Title: Chief Executive Officer RIC COINVESTMENT FUND LP By: RIC Coinvestment GP LLC, its general partner By: /s/ Randal A. Nardone --------------------------------------- Name: Randal A. Nardone Title: COO and Secretary Brookdale Senior Living Inc. Investment Agreement Signature Page EX-1 4 bdex1-3.txt EXHIBIT 1.3 - STOCKHOLDERS AGREEMENT Exhibit 1.3 ______________ STOCKHOLDERS AGREEMENT BY AND AMONG BROOKDALE SENIOR LIVING INC., FIT-ALT INVESTOR LLC, FORTRESS BROOKDALE ACQUISITION LLC, FORTRESS INVESTMENT TRUST II and HEALTH PARTNERS ______________ Dated as of November 28, 2005 ARTICLE I DEFINITIONS..........................................................1 Section 1.1 Defined Terms......................................................1 ARTICLE II TRANSFER............................................................6 Section 2.1 Binding Effect on Transferees......................................6 Section 2.2 Additional Purchases...............................................7 Section 2.3 Charter Provisions.................................................7 Section 2.4 Legend.............................................................7 ARTICLE III BOARD OF DIRECTORS.................................................7 Section 3.1 Board .............................................................7 ARTICLE IV REPRESENTATIONS OF EACH STOCKHOLDER.................................9 Section 4.1 Due Organization, Authorization....................................9 Section 4.2 Enforceability, Etc................................................9 Section 4.3 No Conflicts.......................................................9 Section 4.4 Governmental Approvals.............................................9 Section 4.5 Litigation........................................................10 Section 4.6 Title to the Shares...............................................10 ARTICLE V REGISTRATION RIGHTS.................................................10 Section 5.1 Demand Registration...............................................10 Section 5.2 Piggyback Registrations...........................................12 Section 5.3 Shelf Registration................................................14 Section 5.4 Withdrawal Rights.................................................15 Section 5.5 Holdback Agreements...............................................16 Section 5.6 Registration Procedures...........................................16 Section 5.7 Registration Expenses.............................................20 Section 5.8 Indemnification...................................................21 ARTICLE VI MISCELLANEOUS......................................................24 Section 6.1 Headings..........................................................24 Section 6.2 Entire Agreement..................................................24 Section 6.3 Further Actions; Cooperation......................................24 Section 6.4 Notices...........................................................24 Section 6.5 Applicable Law....................................................26 Section 6.6 Severability......................................................26 2 Section 6.7 Successors and Assigns............................................26 Section 6.8 Amendments........................................................27 Section 6.9 Waiver............................................................27 Section 6.10 Counterparts.....................................................27 Section 6.11 Submission to Jurisdiction.......................................27 Section 6.12 Injunctive Relief................................................27 Section 6.13 Recapitalizations, Exchanges, Etc. Affecting the shares of Common Stock; New Issuances.......................................28 Section 6.14 Termination......................................................28 Section 6.15 Rule 144.........................................................28 3 STOCKHOLDERS AGREEMENT OF BROOKDALE SENIOR LIVING INC.. ______________ THIS STOCKHOLDERS AGREEMENT (this "Agreement") is made as of November 28, 2005, by and among Brookdale Senior Living Inc., a Delaware corporation (the "Company"), FIT-ALT Investor LLC, a Delaware limited liability company ("FIT-ALT"), Fortress Brookdale Acquisition LLC, a Delaware limited liability company ("FBA"), Fortress Investment Trust II, a Delaware business trust ("FIT"), and Health Partners, a Bermuda exempted partnership ("HP"). FBA, FIT, FIT-ALT and HP 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 is the holder of shares of Common Stock (as hereinafter defined); WHEREAS, the Initial Stockholders desire 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; WHEREAS, the Company has agreed to provide the registration rights set forth herein; and WHEREAS, the Stockholders (as hereinafter defined) deem it in their best interests and in the best interests of the Company to provide for certain arrangements with respect to the management of the Company and desire to enter into this Agreement in order to effectuate such purpose and to set forth certain of their respective rights and obligations in connection with their investment in 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 following terms shall have the following meanings: (a) "Additional Registration Rights Agreement" shall mean the Registration Rights Agreement, dated June 29, 2005, between the Company, Emeritus Corporation and NW Select LLC. (b) "Additional Sellers" shall mean those Persons which are entitled to demand and "piggyback" registration rights with respect to shares of Common Stock owned by them pursuant to the Additional Registration Rights Agreement. (c) "Additional Shares" shall mean the "Registrable Securities" (as such term is defined in the Additional Registration Rights Agreement) held by the Additional Sellers. (d) "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. (e) "Agreement" shall have the meaning assigned to it in the introductory paragraph. (f) 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. (g) "Board" shall have the meaning assigned to it in Section 3.1(a). (h) "Capital Stock" shall mean and include (i) any and all shares, interests, participations or other equivalents of or interests in (however designated) corporate stock of any Person, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company and (iv) all equity or ownership interests in any Person of any other type. (i) "Commission" shall mean the United States Securities and Exchange Commission or any successor agency. (j) "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. (k) "Company" shall have the meaning assigned to it in the introductory paragraph. 2 (l) "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. (m) "Demand" shall have the meaning assigned to it in Section 5.1(a). (n) "Demand Registration" shall have the meaning assigned to it in Section 5.1(a). (o) "Emeritus/NW Select Demand Registration" shall have the meaning assigned to "Demand Registration" in the Registration Rights Agreement, dated the date hereof, by and among the Company, Emeritus Corporation and NW Select LLC. (p) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. (q) "FBA" shall have the meaning assigned to it in the introductory paragraph. (r) "FIG Advisors" shall mean FIG Advisors LLC, a Delaware limited liability company, or any other Person designated as "FIG Advisors" by Fortress Investment Group LLC in a written notice to the Company. (s) "FIT" shall have the meaning assigned to it in the introductory paragraph. (t) "FIT-ALT" shall have the meaning assigned to it in the introductory paragraph. (u) "Form S-3" shall have the meaning assigned to it in Section 5.3(a). (v) "Fortress Stockholders" shall mean collectively FBA, FIT and FIT-ALT. (w) "HP" shall have the meaning assigned to it in the introductory paragraph. (x) "Initial Public Offering" shall mean the initial public offering of Common Stock pursuant to an effective registration statement under the Securities Act. (y) The terms "Initial Stockholder" and "Initial Stockholders" shall each have the meaning assigned to such term in the introductory paragraph. (z) "Inspectors" shall have the meaning assigned to it in Section 5.6(a)(viii). 3 (aa) "Liens" shall have the meaning assigned to it in Section 4.3. (bb) "Losses" shall have the meaning assigned to it in Section 5.8(a). (cc) "NYSE" means the New York Stock Exchange. (dd) "Other Demanding Sellers" shall have the meaning assigned to it in Section 5.2(b). (ee) "Other Proposed Sellers" shall have the meaning assigned to it in Section 5.2(b). (ff) "Partner Permitted Transferee" shall mean those Permitted Transferees of HP or any of its Permitted Transferees specified in clauses (iii)(A) and (D) of the definition of "Permitted Transferee" contained herein. (gg) "Piggyback Notice" shall have the meaning assigned to it in Section 5.2(a). (hh) "Piggyback Registrable Amount" shall mean an amount of Common Stock equal to 1% of the Common Stock issued and outstanding immediately after the consummation of the Initial Public Offering. (ii) "Piggyback Registration" shall have the meaning assigned to it in Section 5.2(a). (jj) "Piggyback Seller" shall have the meaning assigned to it in Section 5.2(a). (kk) "Piggyback Stockholder" shall mean (i) the Initial Stockholders and (ii) each Permitted Transferee 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, in the case of clauses (i) and (ii), to the extent that such Initial Stockholder (irrespective of whether or not such Initial Stockholder owns any Registrable Securities) or such Permitted Transferee, together with its respective Permitted Transferees (other than any other Initial Stockholders), holds at least a Piggyback Registrable Amount. (ll) "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 4 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. (mm) "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. (nn) "Public Offering" shall mean an offering of equity securities of the Company pursuant to an effective registration statement under the Securities Act, including an offering in which Stockholders are entitled to sell Common Stock pursuant to the terms of this Agreement. (oo) "Records" shall have the meaning assigned to it in Section 5.6(a)(viii). (pp) "Registrable Amount" shall mean an amount of Common Stock equal to 5% of the Common Stock issued and outstanding immediately after the consummation of the Initial Public Offering. (qq) "Registrable Securities" shall mean any Common Stock currently owned or hereafter acquired by any Stockholder. As to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (x) a registration statement registering such securities under the Securities Act has been declared effective and such securities have been sold or otherwise transferred by the holder thereof pursuant to such effective registration statement or (y) such securities are sold in accordance with Rule 144 (or any successor provision) promulgated under the Securities Act. (rr) "Requested Information" shall have the meaning assigned to it in Section 5.8(g). (ss) "Requesting Stockholder" shall have the meaning assigned to it in Section 5.1(a). (tt) "Securities Act" shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. (uu) "Selling Holders" shall have the meaning assigned to it in Section 5.6(a)(i). (vv) "Shelf Notice" shall have the meaning assigned to it in Section 5.3(a). 5 (ww) "Shelf Registration Statement" shall have the meaning assigned to it in Section 5.3(a). (xx) "Stockholders" shall mean (i) the Initial Stockholders and (ii) each Permitted Transferee 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, in the case of clauses (i) and (ii), to the extent that such Initial Stockholder (irrespective of whether or not such Initial Stockholder owns any Registrable Securities) or such Permitted Transferee, together with its respective Permitted Transferees (other than any other Initial Stockholders), hold at least a Registrable Amount. (yy) "Suspension Period" shall have the meaning assigned to it in Section 5.3(d). (zz) "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. (aaa) "Underwritten Offering" shall mean a sale of securities of the Company to an underwriter or underwriters for reoffering to the public. (bbb) "Voting Power of the Company" shall mean the total number of votes that may be cast in the election of directors of the Company if all Company Securities were present and voted at a meeting held for such purpose. ARTICLE II TRANSFER Section 2.1 Binding Effect on Transferees. Prior to any Transfer by a Stockholder of Company Securities to a Permitted Transferee (other than a Partner 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 Article IV with respect to the Company Securities being transferred to such transferee) and shall become a Stockholder hereunder; provided, however, that prior to any Transfer to a Partner Permitted Transferee, the transferring Stockholder shall cause such Partner Permitted Transferee to execute a joinder agreement whereby such Partner Permitted Transferee shall agree to be bound by the provisions of 6 Section 5.5 hereof. For the avoidance of doubt, no Partner Permitted Transferee shall be deemed to have any other rights hereunder, including any right to have shares of Company Securities registered pursuant to Article V hereof. Section 2.2 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 2.3 Charter Provisions. No amendment shall be made to the Company's Certificate of Incorporation as in effect as of the date of this Agreement in a manner that would (a) add restrictions to the transferability of the Company Securities by any Stockholder who was an original party to this Agreement and who (or whose Permitted Transferee) remains a "Stockholder" at the time of such an amendment, which restrictions are beyond those provided for in the Company's Certificate of Incorporation, this Agreement or the securities laws or (b) nullify any of the rights of any Stockholder who was an original party to this Agreement and who (or whose Permitted Transferee) remains a "Stockholder" at the time of such amendment, which rights are explicitly provided for in this Agreement, unless, in each such case, such amendment shall have been approved by such Stockholder. 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 provisions contained in the Stockholders Agreement dated as of ________, 2005 among certain of the stockholders of the Corporation named therein." ARTICLE III BOARD OF DIRECTORS Section 3.1 Board. (a) For so long as this Agreement is in effect, each of the Stockholders shall vote or cause to be voted all of the Company Securities held of record or beneficially owned by such Stockholder and take all other reasonably necessary action so as to elect to the board of directors of the Company (the "Board"), and to continue in office not more than seven (7) directors which shall include (x) those directors designated by FIG Advisors pursuant to Section 3.1(b) and (y) the director designated by HP pursuant to Section 3.1(c). The Stockholders shall cause the Company to take all necessary or desirable action within its control to give effect to the provisions of this Section 3.1. The Company shall use its reasonable efforts so that a sufficient number of "independent directors" (as such term is defined in the applicable NYSE listing standards from time to time) are members of the Board in order for the Company to comply with 7 the applicable listing standards of the NYSE without reliance on the "controlled company" exception contemplated thereby. (b) So long as the Fortress Stockholders and their Permitted Transferees have Beneficial Ownership of: (i) more than 50% of the Voting Power of the Company, FIG Advisors shall be entitled to designate four directors to the Board, (ii) less than 50% but more than 25% of the Voting Power of the Company, FIG Advisors shall be entitled to designate three directors to the Board, (iii) less than 25% but more than 10% of the Voting Power of the Company, FIG Advisors shall be entitled to designate two directors to the Board, and (iv) less than 10% but more than 5% of the Voting Power of the Company, FIG Advisors shall be entitled to designate one director to the Board. Each of the Stockholders shall vote or cause to be voted all of the Company Securities held of record or beneficially owned by such Stockholder and take all other reasonably necessary action so as to effect the purpose of this Section 3.1(b). (c) So long as HP and its Permitted Transferees (other than any Partner Permitted Transferee) have Beneficial Ownership of more than 5% of the Voting Power of the Company, HP shall be entitled to designate one director to the Board. Each of the Stockholders shall vote or cause to be voted all of the Company Securities held of record or beneficially owned by such Stockholder and take all other reasonably necessary action so as to effect the purpose of this Section 3.1(c). (d) If either FIG Advisors or HP notifies the other Stockholders of its desire to remove, with or without cause, any director previously designated by it, each Stockholder shall vote or cause to be voted all of the shares of Company Securities held or record or beneficially owned by such Stockholder and take all other necessary actions to cause the removal of any director designated by FIG Advisors or HP, as the case may be, pursuant to this Section 3.1(d). (e) In the event that any designee of either FIG Advisors or HP shall for any reason cease to serve as a member of the Board during his term of office, the resulting vacancy on the Board will be filled by an individual designated by FIG Advisors or HP, as the case may be, and each of the Stockholders shall vote or cause to be voted all of the Company Securities held of record or beneficially by such Stockholder and take all other reasonably necessary action so as to effect the purpose of this Section 3.1(e). (f) If at any time the number of directors entitled to be designated by either of FIG Advisors or HP pursuant to this Section 3.1 would decrease, within 10 days thereafter, FIG Advisors or HP, as applicable, shall cause a sufficient number of 8 directors designated by it to resign from the board so that the number of directors designated by it on the Board after such resignation(s) equals the number of directors FIG Advisors or HP, as applicable, would have been entitled to designate had an election of directors taken place at such time. Any vacancies created by a resignation required by this Section 3.1(f) shall be filled by a majority vote of the Board. ARTICLE IV REPRESENTATIONS OF EACH STOCKHOLDER Each Stockholder hereby represents and warrants to each other Stockholder as follows: Section 4.1 Due Organization, Authorization. Such Stockholder is either (a) duly organized, validly existing and in good standing under the laws of its jurisdiction of organization or (b) a natural person that is competent and has legal capacity to execute, deliver and perform its obligations under this Agreement. The execution, delivery and performance by such Stockholder of this Agreement, if not a natural person, and the consummation by such Stockholder of the transactions contemplated hereby, have been duly authorized by all necessary corporate and other action on its part. Section 4.2 Enforceability, Etc. This Agreement has been duly executed and delivered by such Stockholder. This Agreement constitutes a legal, valid and binding obligation of such Stockholder, enforceable against such Stockholder 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 by such Stockholder and the consummation by such Stockholder 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 Stockholder or any of its assets, (ii) any provision of its organizational documents, if such Stockholder is not a natural person, (iii) any order or judgment of any court or other agency of government applicable to such Stockholder or any of its assets or (iv) any contractual restriction binding on or affecting such Stockholder or any of its assets or (b) result in the creation or imposition of any lien, mortgage, pledge, claim, right, charge, security interest or other restriction or encumbrance (collectively, "Liens") upon any of such Stockholder's assets, including the shares of Common Stock. Section 4.4 Governmental Approvals. No consent, approval, order or authorization of, or registration, declaration or filing with, any court, administrative agency or commission or other governmental authority or instrumentality, including under federal or state law or otherwise, is required to be obtained or made by or with respect to such Stockholder in connection with its execution and delivery of this Agreement or the consummation of the transactions contemplated hereby by such Stockholder (other than those which are not material). 9 Section 4.5 Litigation. There is no lawsuit, claim, proceeding or investigation pending or threatened by or against such Stockholder or any of its properties, assets, operations, businesses or prospects, which relates to the transactions contemplated by this Agreement. Section 4.6 Title to the Shares. Such Stockholder owns the Company Securities owned by it free and clear of any Liens. ARTICLE V REGISTRATION RIGHTS Section 5.1 Demand Registration. (a) At any time after the six month anniversary of the date hereof, any Persons that on the date a Demand (as hereafter defined) is made constitute a Stockholder (a "Requesting Stockholder") shall be entitled to make a written request of the Company (a "Demand") for registration under the Securities Act of an amount of Registrable Securities that, when taken together with the amounts of Registrable Securities requested to be registered under the Securities Act by such Requesting Stockholder's Affiliates, equals or is greater than the Registrable Amount (based on the number of Registrable Securities outstanding on the date such Demand is made) (a "Demand Registration") and thereupon the Company will, subject to the terms of this Agreement, use its commercially reasonable efforts to effect the registration under the Securities Act of: (i) the Registrable Securities which the Company has been so requested to register by the Requesting Stockholders for disposition in accordance with the intended method of disposition stated in such Demand; (ii) all other Registrable Securities which the Company has been requested to register pursuant to Section 5.1(b); and (iii) all shares of Common Stock which the Company may elect to register in connection with any offering of Registrable Securities pursuant to this Section 5.1, but subject to Section 5.1(g); all to the extent necessary to permit the disposition (in accordance with the intended methods thereof) of the Registrable Securities and the additional Common Stock, if any, to be so registered. (b) A Demand shall specify: (i) the aggregate number of Registrable Securities requested to be registered in such Demand Registration, (ii) the intended method of disposition in connection with such Demand Registration, to the extent then known and (iii) the identity of the Requesting Stockholder (or Requesting Stockholders). Within five days after receipt of a Demand, the Company shall give written notice of such Demand to any other Persons that on the date a Demand is 10 delivered to the Company constitute a Stockholder. Subject to Section 5.1(g), the Company shall include in the Demand Registration covered by such Demand all Registrable Securities with respect to which the Company has received a written request for inclusion therein within ten days after the Company's notice required by this paragraph has been given. Such written request shall comply with the requirements of a Demand as set forth in this Section 5.1(b). (c) Each Stockholder shall be entitled to an aggregate of two Demand Registrations. (d) A Demand Registration shall not be deemed to have been effected and shall not count as a Demand (i) unless a registration statement with respect thereto has become effective and has remained effective for a period of at least 60 days (or such shorter period in which all Registrable Securities included in such Demand Registration have actually been sold thereunder), (ii) if, after it has become effective, such Demand Registration becomes subject to any stop order, injunction or other order or requirement of the Commission or other governmental agency or court for any reason or (iii) if the conditions to closing specified in the purchase agreement or underwriting agreement entered into in connection with such Demand Registration are not satisfied, other than by reason of some act or omission by such Requesting Stockholders. (e) Demand Registrations shall be on such appropriate registration form of the Commission as shall be selected by the Requesting Stockholders and shall be reasonably acceptable to the Company. (f) The Company shall not be obligated to (i) maintain the effectiveness of a registration statement under the Securities Act, filed pursuant to a Demand Registration, for a period longer than 60 days or (ii) effect any Demand Registration (A) within six months of a "firm commitment" Underwritten Offering in which all Piggyback Stockholders were given "piggyback" rights pursuant to Section 5.2 (subject to Section 5.1(g)) and at least 50% of the number of Registrable Securities requested by such Stockholders to be included in such Demand Registration were included, (B) within four months of any other Demand Registration or Emeritus/NW Select Demand Registration or (C) if, in the Company's reasonable judgment, it is not feasible for the Company to proceed with the Demand Registration because of the unavailability of audited financial statements. In addition, the Company shall be entitled to postpone (upon written notice to all Stockholders) for up to 120 days the filing or the effectiveness of a registration statement for any Demand Registration (but no more than twice in any period of 12 consecutive months) if the Board determines in good faith and in its reasonable judgment that the filing or effectiveness of the registration statement relating to such Demand Registration would cause the disclosure of material, non-public information that the Company has a bona fide business purpose for preserving as confidential. In the event of a postponement by the Company of the filing or effectiveness of a registration statement for a Demand Registration, the holders of a majority of Registrable Securities held by the Requesting Stockholder(s) shall have the right to withdraw such Demand in accordance with Section 5.4. 11 (g) The Company shall not include any securities other than Registrable Securities and Additional Shares in a Demand Registration, except with the written consent of Stockholders participating in such Demand Registration that hold a majority of the Registrable Securities included in such Demand Registration. If, in connection with a Demand Registration, any managing underwriter (or, if such Demand Registration is not an Underwritten Offering, a nationally recognized independent investment bank selected by FIG Advisors or any of the Permitted Transferees of either of the Fortress Stockholders (to the extent a Stockholder hereunder), reasonably acceptable to the Company, and whose fees and expenses shall be borne solely by the Company) advises the Company, in writing, that, in its opinion, the inclusion of all of the securities, including securities of the Company that are not Registrable Securities, sought to be registered in connection with such Demand Registration would adversely affect the marketability of the Registrable Securities sought to be sold pursuant thereto, then the Company shall include in such registration statement only such securities as the Company is advised by such underwriter can be sold without such adverse effect as follows and in the following order of priority: (i) first, up to the number of Registrable Securities requested to be included in such Demand Registration by the Stockholders, which, in the opinion of the underwriter can be sold without adversely affecting the marketability of the offering, pro rata among such Stockholders requesting such Demand Registration on the basis of the number of such securities requested to be included by such Stockholders and such Stockholders that are Piggyback Sellers; (ii) second, securities the Company proposes to sell; and (iii) third, all other securities of the Company duly requested to be included in such registration statement, pro rata on the basis of the amount of such other securities requested to be included or such other method determined by the Company. (h) Anytime that a Demand Registration involves an Underwritten Offering, the Company shall select the investment banker or investment bankers and managers that will serve as lead and co-managing underwriters with respect to the offering of such Registrable Securities. Section 5.2 Piggyback Registrations. (a) Subject to the terms and conditions hereof, whenever the Company proposes to register any of its equity securities under the Securities Act (other than a registration by the Company on a registration statement on Form S-4 or a registration statement on Form S-8 or any successor forms thereto) (a "Piggyback Registration"), whether for its own account or for the account of others, the Company shall give the Piggyback Stockholders prompt written notice thereof (but not less than ten business days prior to the filing by the Company with the Commission of any registration statement with respect thereto). Such notice (a "Piggyback Notice") shall specify, at a minimum, the number of equity securities proposed to be registered, the proposed date of filing of such registration statement with the Commission, the proposed means of distribution, the proposed managing underwriter or underwriters (if any and if known) and a good faith estimate by the Company of the proposed minimum offering price of such equity securities. Upon the written request of any Persons that on the date of the Piggyback Notice constitute a Piggyback Stockholder (a "Piggyback Seller") (which 12 written request shall specify the number of Registrable Securities then presently intended to be disposed of by such Piggyback Seller) given within ten days after such Piggyback Notice is received by such Piggyback Seller, the Company, subject to the terms and conditions of this Agreement, shall use its reasonable best efforts to cause all such Registrable Securities held by Piggyback Sellers with respect to which the Company has received such written requests for inclusion to be included in such Piggyback Registration on the same terms and conditions as the Company's equity securities being sold in such Piggyback Registration. (b) If, in connection with a Piggyback Registration, any managing underwriter (or, if such Piggyback Registration is not an Underwritten Offering, a nationally recognized independent investment bank selected by FIG Advisors or any of the Permitted Transferees of either of the Fortress Stockholders (to the extent a Stockholder hereunder), reasonably acceptable to the Company, and whose fees and expenses shall be borne solely by the Company) advises the Company in writing that, in its opinion, the inclusion of all the equity securities sought to be included in such Piggyback Registration by (i) the Company, (ii) others who have sought to have equity securities of the Company registered in such Piggyback Registration pursuant to rights to demand (other than pursuant to so-called "piggyback" or other incidental or participation registration rights) such registration (such Persons being "Other Demanding Sellers"), (iii) the Piggyback Sellers and (iv) any other proposed sellers of equity securities of the Company (such Persons being "Other Proposed Sellers"), as the case may be, would adversely affect the marketability of the equity securities sought to be sold pursuant thereto, then the Company shall include in the registration statement applicable to such Piggyback Registration only such equity securities as the Company is so advised by such underwriter can be sold without such an effect, as follows and in the following order of priority: (i) if the Piggyback Registration relates to an offering for the Company's own account, then (A) first, such number of equity securities to be sold by the Company as the Company, in its reasonable judgment and acting in good faith and in accordance with sound financial practice, shall have determined, (B) second, Registrable Securities of Piggyback Sellers, securities sought to be registered by Other Demanding Sellers and Additional Shares of Additional Sellers (if any), pro rata on the basis of the number of shares of Common Stock held by such Piggyback Sellers and Additional Sellers and (C) third, other equity securities held by any Other Proposed Sellers; or (ii) if the Piggyback Registration relates to an offering other than for the Company's own account, then (A) first, such number of equity securities sought to be registered by each Other Demanding Seller, the Piggyback Sellers and the Additional Sellers (if any), pro rata in proportion to the number of securities sought to be registered by all such Other Demanding Sellers, Piggyback Sellers and Additional Sellers and (B) second, other equity securities held by any Other Proposed Sellers or to be sold by the Company as determined by the Company. (c) In connection with any Underwritten Offering under this Section 5.2 for the Company's account, the Company shall not be required to include a 13 holder's Registrable Securities in the Underwritten Offering unless such holder accepts the terms of the underwriting as agreed upon between the Company and the underwriters selected by the Company; provided, that any such underwriting agreement includes only customary terms and conditions. (d) If, at any time after giving written notice of its intention to register any of its equity securities as set forth in this Section 5.2 and prior to the time the registration statement filed in connection with such Piggyback Registration is declared effective, the Company shall determine for any reason not to register such equity securities, the Company may, at its election, give written notice of such determination to each Piggyback Stockholder and thereupon shall be relieved of its obligation to register any Registrable Securities in connection with such particular withdrawn or abandoned Piggyback Registration (but not from its obligation to pay the Registration Expenses in connection therewith as provided herein); provided, that Stockholders may continue the registration as a Demand Registration pursuant to the terms of Section 5.1. Section 5.3 Shelf Registration. (a) Subject to Section 5.3(d), and further subject to the availability of a Registration Statement on Form S-3 ("Form S-3") to the Company, each of the Fortress Stockholders and HP or any of their respective Permitted Transferees (in each case to the extent a Stockholder hereunder) may by written notice delivered to the Company (the "Shelf Notice") require the Company to file as soon as practicable (but no later than 60 days after the date the Shelf Notice is delivered), and to use commercially reasonable efforts to cause to be declared effective by the Commission (within 90 days after such filing date), a Form S-3 providing for an offering to be made on a continuous basis pursuant to Rule 415 under the Securities Act relating to the offer and sale, from time to time, of the Registrable Securities owned by the Fortress Stockholders or HP (or any of their Permitted Transferees), as the case may be, and any other Persons that at the time of the Shelf Notice meet the definition of a Stockholder who elect to participate therein as provided in Section 5.3(b) in accordance with the plan and method of distribution set forth in the prospectus included in such Form S-3 (the "Shelf Registration Statement"). (b) Within five business days after receipt of a Shelf Notice pursuant to Section 5.3(a), the Company will deliver written notice thereof to each Stockholder. Each Stockholder may elect to participate in the Shelf Registration Statement by delivering to the Company a written request to so participate within ten days after the Shelf Notice is received by any such Stockholder. (c) Subject to Section 5.3(d), the Company will use commercially reasonable efforts to keep the Shelf Registration Statement continuously effective until the earlier of (i) one year after the Shelf Registration Statement has been declared effective; and (ii) the date on which all Registrable Securities covered by the Shelf Registration Statement have been sold thereunder in accordance with the plan and method of distribution disclosed in the prospectus included in the Shelf Registration Statement, or otherwise. 14 (d) Notwithstanding anything to the contrary contained in this Agreement, the Company shall be entitled, from time to time, by providing written notice to the Stockholders who elected to participate in the Shelf Registration Statement, to require such Stockholders to suspend the use of the prospectus for sales of Registrable Securities under the Shelf Registration Statement for a reasonable period of time not to exceed 60 days in succession or 90 days in the aggregate in any 12 month period (a "Suspension Period") if the Company shall determine that it is required to disclose in the Shelf Registration Statement a financing, acquisition, corporate reorganization or other similar corporate transaction or other material event or circumstance affecting the Company or its securities, and that the disclosure of such information at such time would be detrimental to the Company or its stockholders. Immediately upon receipt of such notice, the Stockholders covered by the Shelf Registration Statement shall suspend the use of the prospectus until the requisite changes to the prospectus have been made as required below. Any Suspension Period shall terminate at such time as the public disclosure of such information is made. After the expiration of any Suspension Period and without any further request from a Stockholder, the Company shall as promptly as reasonably practicable prepare a post-effective amendment or supplement to the Shelf Registration Statement or the prospectus, or any document incorporated therein by reference, or file any other required document so that, as thereafter delivered to purchasers of the Registrable Securities included therein, the prospectus will not include an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Section 5.4 Withdrawal Rights. Any Stockholder having notified or directed the Company to include any or all of its Registrable Securities in a registration statement under the Securities Act shall have the right to withdraw any such notice or direction with respect to any or all of the Registrable Securities designated by it for registration by giving written notice to such effect to the Company prior to the effective date of such registration statement. In the event of any such withdrawal, the Company shall not include such Registrable Securities in the applicable registration and such Registrable Securities shall continue to be Registrable Securities for all purposes of this Agreement. No such withdrawal shall affect the obligations of the Company with respect to the Registrable Securities not so withdrawn; provided, however, that in the case of a Demand Registration, if such withdrawal shall reduce the number of Registrable Securities sought to be included in such registration below the Registrable Amount, then the Company shall as promptly as practicable give each holder of Registrable Securities sought to be registered notice to such effect and, within ten days following the mailing of such notice, such holder of Registrable Securities still seeking registration shall, by written notice to the Company, elect to register additional Registrable Securities, when taken together with elections to register Registrable Securities by its Affiliates, to satisfy the Registrable Amount or elect that such registration statement not be filed or, if theretofore filed, be withdrawn. During such ten day period, the Company shall not file such registration statement if not theretofore filed or, if such registration statement has been theretofore filed, the Company shall not seek, and shall use commercially reasonable efforts to prevent, the effectiveness thereof. Any registration statement withdrawn or not filed (a) in accordance with an election by the Company, (b) in 15 accordance with an election by the Requesting Stockholders in the case of a Demand Registration or by the Fortress Stockholders, HP or their respective Permitted Transferees (in each case to the extent a Stockholder hereunder) with respect to a Shelf Registration Statement or (c) in accordance with an election by the Company subsequent to the effectiveness of the applicable Demand Registration statement because any post-effective amendment or supplement to the applicable Demand Registration statement contains information regarding the Company which the Company deems adverse to the Company, shall not be counted as a Demand. Section 5.5 Holdback Agreements. Each Stockholder agrees not to effect any public sale or distribution (including sales pursuant to Rule 144) of equity securities of the Company, or any securities convertible into or exchangeable or exercisable for such equity securities, during any time period reasonably requested by the Company (which shall not exceed 90 days) with respect to any Public Offering, Demand Registration or Piggyback Registration (in each case, except as part of such registration), or, in each case, a later date required by any underwriting agreement with respect thereto. Section 5.6 Registration Procedures. (a) If and whenever the Company is required to use commercially reasonable efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 5.1, 5.2 and 5.3 the Company shall as expeditiously as reasonably possible: (i) prepare and file with the Commission a registration statement to effect such registration and thereafter use commercially reasonable efforts to cause such registration statement to become and remain effective pursuant to the terms of this Agreement; provided, however, that the Company may discontinue any registration of its securities which are not Registrable Securities at any time prior to the effective date of the registration statement relating thereto; provided, further that before filing such registration statement or any amendments thereto, the Company will furnish to the counsel selected by the holders of Registrable Securities which are to be included in such registration ("Selling Holders") copies of all such documents proposed to be filed, which documents will be subject to the review of such counsel, and such review to be conducted with reasonable promptness; (ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement until the earlier of such time as all of such securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement or (i) in the case of a Demand Registration pursuant to Section 5.1, the expiration of 60 days after such registration statement becomes effective or (ii) in the case of a Piggyback Registration pursuant to Section 5.2, the expiration of 60 days after such 16 registration statement becomes effective or (iii) in the case of a Shelf Registration pursuant to Section 5.3, the expiration of one year after such registration statement becomes effective; (iii) furnish to each Selling Holder and each underwriter, if any, of the securities being sold by such Selling Holder such number of conformed copies of such registration statement and of each amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus contained in such registration statement (including each preliminary prospectus and any summary prospectus) and any other prospectus filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents as such Selling Holder and underwriter, if any, may reasonably request in order to facilitate the public sale or other disposition of the Registrable Securities owned by such seller; (iv) use commercially reasonable efforts to register or qualify such Registrable Securities covered by such registration statement under such other securities laws or blue sky laws of such jurisdictions as any Selling Holder and any underwriter of the securities being sold by such Selling Holder shall reasonably request, and take any other action which may be reasonably necessary or advisable to enable such Selling Holder and underwriter to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Selling Holder, except that the Company shall not for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction wherein it would not but for the requirements of this clause (iv) be obligated to be so qualified, to subject itself to taxation in any such jurisdiction or to file a general consent to service of process in any such jurisdiction; (v) use commercially reasonable efforts to cause such Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed and, if no such securities are so listed, use commercially reasonable efforts to cause such Registrable Securities to be listed on the New York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market; (vi) use commercially reasonable efforts to cause such Registrable Securities covered by such registration statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Selling Holder(s) thereof to consummate the disposition of such Registrable Securities; (vii) in connection with an Underwritten Offering, obtain for each Selling Holder and underwriter: (1) an opinion of counsel for the Company, covering the matters customarily covered in opinions requested in underwritten offerings and such other matters as may be reasonably requested by such Selling Holder and underwriters, and (2) a "comfort" letter (or, in the case of any such Person which does not satisfy the conditions for receipt of a 17 "comfort" letter specified in Statement on Auditing Standards No. 72, an "agreed upon procedures" letter) signed by the independent public accountants who have certified the Company's financial statements included in such registration statement; (viii) promptly make available for inspection by any seller, any underwriter participating in any disposition pursuant to any registration statement, and any attorney, accountant or other agent or representative retained by any such seller or underwriter (collectively, the "Inspectors"), all financial and other records, pertinent corporate documents and properties of the Company (collectively, the "Records"), as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the Company's officers, directors and employees to supply all information requested by any such Inspector in connection with such registration statement; provided, however, that, unless the disclosure of such Records is necessary to avoid or correct a misstatement or omission in the registration statement or the release of such Records is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, the Company shall not be required to provide any information under this subparagraph (viii) if (i) the Company believes, after consultation with counsel for the Company, that to do so would cause the Company to forfeit an attorney-client privilege that was applicable to such information or (ii) if either (A) the Company has requested and been granted from the SEC confidential treatment of such information contained in any filing with the SEC or documents provided supplementally or otherwise or (B) the Company reasonably determines in good faith that such Records are confidential and so notifies the Inspectors in writing unless prior to furnishing any such information with respect to (i) or (ii) such Holder of Registrable Securities requesting such information agrees, and causes each of its Inspectors, to enter into a confidentiality agreement on terms reasonably acceptable to the Company; and provided, further, that each Holder of Registrable Securities agrees that it will, upon learning that disclosure of such Records is sought in a court of competent jurisdiction, give notice to the Company and allow the Company, at its expense, to undertake appropriate action and to prevent disclosure of the Records deemed confidential; (ix) promptly notify in writing each Selling Holder and the underwriters, if any, of the following events: (1) the filing of the registration statement, the prospectus or any prospectus supplement related thereto or post-effective amendment to the registration statement, and, with respect to the registration statement or any post-effective amendment thereto, when the same has become effective; (2) any request by the Commission for amendments or supplements to the registration statement or the prospectus or for additional information; 18 (3) the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings by any Person for that purpose; and (4) the receipt by the Company of any notification with respect to the suspension of the qualification of any Registrable Securities for sale under the securities or blue sky laws of any jurisdiction or the initiation or threat of any proceeding for such purpose; (x) notify each Selling Holder, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and, at the request of any Selling Holder, promptly prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; (xi) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of such registration statement; (xii) otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, and make available to Selling Holders, as soon as reasonably practicable, an earnings statement covering the period of at least 12 months, but not more than 18 months, beginning with the first day of the Company's first full quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; (xiii) use its reasonable best efforts to assist Stockholders who made a request to the Company to provide for a third party "market maker" for the Common Stock; provided, however, that the Company shall not be required to serve as such "market maker"; (xiv) cooperate with the sellers and the managing underwriter to facilitate the timely preparation and delivery of certificates (which shall not bear any restrictive legends unless required under applicable law) representing securities sold under any registration statement, and enable such securities to be in such denominations and registered in such names as the managing underwriter or such sellers may request and keep available and make available to the Company's transfer agent prior to the effectiveness of such registration statement a supply of such certificates; and (xv) have appropriate officers of the Company prepare and make presentations at any "road shows" and before analysts and rating agencies, 19 as the case may be, take other actions to obtain ratings for any Registrable Securities (if they are eligible to be rated) and otherwise use its reasonable best efforts to cooperate as reasonably requested by the Selling Holders and the underwriters in the offering, marketing or selling of the Registrable Securities. The Company may require each Selling Holder and each underwriter, if any, to furnish the Company in writing such information regarding each Selling Holder or underwriter and the distribution of such Registrable Securities as the Company may from time to time reasonably request to complete or amend the information required by such registration statement. (b) Without limiting any of the foregoing, in the event that the offering of Registrable Securities is to be made by or through an underwriter, the Company shall enter into an underwriting agreement with a managing underwriter or underwriters containing representations, warranties, indemnities and agreements customarily included (but not inconsistent with the covenants and agreements of the Company contained herein) by an issuer of common stock in underwriting agreements with respect to offerings of common stock for the account of, or on behalf of, such issuers. In connection with any offering of Registrable Securities registered pursuant to this Agreement, the Company shall (i) furnish to the underwriter, if any (or, if no underwriter, the sellers of such Registrable Securities), unlegended certificates representing ownership of the Registrable Securities being sold, in such denominations as requested and (ii) instruct any transfer agent and registrar of the Registrable Securities to release any stop transfer order with respect thereto. (c) Each Selling Holder agrees that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 5.6(a)(ix), such Selling Holder shall forthwith discontinue such Selling Holder's disposition of Registrable Securities pursuant to the applicable registration statement and prospectus relating thereto until such Selling Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 5.6(a)(ix) and, if so directed by the Company, deliver to the Company, at the Company's expense, all copies, other than permanent file copies, then in such Selling Holder's possession of the prospectus current at the time of receipt of such notice relating to such Registrable Securities. In the event the Company shall give such notice, any applicable 60 day or one year period during which such registration statement must remain effective pursuant to this Agreement shall be extended by the number of days during the period from the date of giving of a notice regarding the happening of an event of the kind described in Section 5.6(a)(ix) to the date when all such Selling Holders shall receive such a supplemented or amended prospectus and such prospectus shall have been filed with the Commission. Section 5.7 Registration Expenses. All expenses incident to the Company's performance of, or compliance with, its obligations under this Agreement including, without limitation, all registration and filing fees, all fees and expenses of compliance with securities and "blue sky" laws, all fees and expenses associated with filings required to be made with the NASD (including, if applicable, the fees and expenses of any "qualified independent underwriter" as such term is defined in Schedule E 20 of the By-Laws of the NASD), all fees and expenses of compliance with securities and "blue sky" laws, all printing (including, without limitation, expenses of printing certificates for the Registrable Securities in a form eligible for deposit with the Depository Trust Company and of printing prospectuses if the printing of prospectuses is requested by a holder of Registrable Securities) and copying expenses, all messenger and delivery expenses, all fees and expenses of the Company's independent certified public accountants and counsel (including, without limitation, with respect to "comfort" letters and opinions) and fees and expenses of one firm of counsel to the Stockholders selling in such registration (which firm shall be selected by the Stockholders selling in such registration that hold a majority of the Registrable Securities included in such registration) (collectively, the "Registration Expenses") shall be borne by the Company, regardless of whether a registration is effected. The Company will pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties, the expense of any annual audit and the expense of any liability insurance) and the expenses and fees for listing the securities to be registered on each securities exchange and included in each established over-the-counter market on which similar securities issued by the Company are then listed or traded. Each Selling Holder shall pay its portion of all underwriting discounts and commissions and transfer taxes, if any, relating to the sale of such Selling Holder's Registrable Securities pursuant to any registration. Section 5.8 Indemnification. (a) The Company agrees to indemnify and hold harmless, to the fullest extent permitted by law, each Selling Holder, its officers, directors, employees, managers, partners and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) such Selling Holder or such other indemnified Person from and against all losses, claims, damages, liabilities and expenses (including reasonable expenses of investigation and reasonable attorneys' fees and expenses) (collectively, the "Losses") caused by, resulting from or relating to any untrue statement (or alleged untrue statement) of a material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission (or alleged omission) of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, except insofar as the same are caused by any information furnished in writing to the Company by such Selling Holder expressly for use therein or by such Selling Holder's failure to deliver a copy of a current prospectus or any amendments or supplements thereto (which does not contain any such material misstatements or omissions) after the Company has furnished such holder with a sufficient number of copies of the same. In connection with an Underwritten Offering and without limiting any of the Company's other obligations under this Agreement, the Company shall also indemnify such underwriters, their officers, directors, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) such underwriters or such other indemnified Person to the same extent as provided above with respect to the indemnification (and exceptions thereto) of the holders of Registrable Securities being sold. Reimbursements payable pursuant to the indemnification contemplated by this Section 5.8(a) will be made 21 by periodic payments during the course of any investigation or defense, as and when bills are received or expenses incurred. (b) In connection with any registration statement in which a holder of Registrable Securities is participating, each such Selling Holder will furnish to the Company in writing information regarding such Selling Holder's ownership of Registrable Securities and its intended method of distribution thereof and, to the extent permitted by law, shall, severally and not jointly, indemnify the Company, its directors, officers, employees and agents and each Person who controls (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) the Company or such other indemnified Person against all Losses caused by any untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, but only to the extent that such untrue statement or omission is caused by and contained in such information so furnished in writing by such Selling Holder expressly for use therein; provided, however, that each Selling Holder's obligation to indemnify the Company hereunder shall, to the extent more than one Selling Holder is subject to the same indemnification obligation, be apportioned between each Selling Holder based upon the net amount received by each Selling Holder from the sale of Registrable Securities, as compared to the total net amount received by all of the Selling Holders of Registrable Securities sold pursuant to such registration statement. Notwithstanding the foregoing, no Selling Holder shall be liable to the Company for amounts in excess of the lesser of (i) such apportionment and (ii) the amount received by such holder in the offering giving rise to such liability. (c) Any Person entitled to indemnification hereunder shall give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification; provided, however, the failure to give such notice shall not release the indemnifying party from its obligation, except to the extent that the indemnifying party has been materially prejudiced by such failure to provide such notice on a timely basis. (d) In any case in which any such action is brought against any indemnified party, and it notifies an indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not (so long as it shall continue to have the right to defend, contest, litigate and settle the matter in question in accordance with this paragraph) be liable to such indemnified party hereunder for any legal or other expense subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation, supervision and monitoring (unless (i) such indemnified party reasonably objects to such assumption on the grounds that there may be defenses available to it which are different from or in addition to the defenses available to such indemnifying party or (ii) the indemnifying party shall have failed 22 within a reasonable period of time to assume such defense and the indemnified party is or is reasonably likely to be prejudiced by such delay, in either event the indemnified party shall be promptly reimbursed by the indemnifying party for the expenses incurred in connection with retaining separate legal counsel). An indemnifying party shall not be liable for any settlement of an action or claim effected without its consent. The indemnifying party shall lose its right to defend, contest, litigate and settle a matter if it shall fail to diligently contest such matter (except to the extent settled in accordance with the next following sentence). No matter shall be settled by an indemnifying party without the consent of the indemnified party (which consent shall not be unreasonably withheld, it being understood that the indemnified party shall not be deemed to be unreasonable in withholding its consent if the proposed settlement imposes any obligation on the indemnified party other than the payment of money). (e) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified Person and will survive the transfer of the Registrable Securities and the termination of this Agreement. (f) If recovery is not available under the foregoing indemnification provisions for any reason or reasons other than as specified therein, any Person who would otherwise be entitled to indemnification by the terms thereof shall nevertheless be entitled to contribution with respect to any Losses with respect to which such Person would be entitled to such indemnification but for such reason or reasons. In determining the amount of contribution to which the respective Persons are entitled, there shall be considered the Persons' relative knowledge and access to information concerning the matter with respect to which the claim was asserted, the opportunity to correct and prevent any statement or omission, and other equitable considerations appropriate under the circumstances. It is hereby agreed that it would not necessarily be equitable if the amount of such contribution were determined by pro rata or per capita allocation. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not found guilty of such fraudulent misrepresentation. Notwithstanding the foregoing, no Selling Holder or transferee thereof shall be required to make a contribution in excess of the net amount received by such holder from its sale of Registrable Securities in connection with the offering that gave rise to the contribution obligation. (g) Not less than five business days before the expected filing date of each registration statement pursuant to this Agreement, the Company shall notify each Stockholder who has timely provided the requisite notice hereunder entitling the Stockholder to register Registrable Securities in such registration statement of the information, documents and instruments from such Stockholder that the Company or any underwriter reasonably requests in connection with such registration statement, including, but not limited to a questionnaire, custody agreement, power of attorney, lock-up letter and underwriting agreement (the "Requested Information"). If the Company has not received, on or before the second day before the expected filing date, the Requested Information from such Stockholder, the Company may file the Registration Statement without including Registrable Securities of such Stockholder. The failure to so include in 23 any registration statement the Registrable Securities of a Stockholder (with regard to that registration statement) shall not in and of itself result in any liability on the part of the Company to such Stockholder. ARTICLE VI MISCELLANEOUS Section 6.1 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 6.2 Entire Agreement. This Agreement 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 supersedes all prior agreements and understandings between the parties hereto with respect to the subject matter hereof. Section 6.3 Further Actions; Cooperation. Each of the Stockholders 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. Without limiting the generality of the foregoing, each of the Stockholders (i) acknowledges that the Stockholders will prepare and file with the Commission filings under the Exchange Act, including under Section 13(d) of the Exchange Act, relating to their beneficial ownership of the Common Stock and (ii) agrees to use its reasonable efforts to assist and cooperate with the other parties in promptly preparing, reviewing and executing any such filings under the Exchange Act, including any amendments thereto. Section 6.4 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 any of the Fortress Stockholders, to: c/o Fortress Investment Group LLC 1251 Avenue of the Americas, 16th Floor New York, NY 10020 Fax: (212) 798-6122 Attn: Randal A. Nardone 24 with a copy (which shall not constitute notice) to: Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036-6522 Fax: (212) 735-2000 Attn: Joseph A. Coco, Esq. (b) If to HP: c/o Capital Z Management 54 Thompson Street New York, New York 10012 Fax: (212) 965-2411 Attn: Mani A. Sadeghi and Joseph R. Tomei with a copy (which shall not constitute notice) to: Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Fax: (212) 310-8007 Attn: Douglas P. Warner, Esq. (c) If a Stockholder that is not an Initial Stockholder, then to the address set forth on such Stockholder's signature page hereto. A copy of each notice delivered pursuant to this Agreement shall be delivered to the Company in accordance with this Section 6.4 at the following address: Brookdale Senior Living Inc. 330 N. Wabash, Suite 1400 Chicago, IL 60611 Fax: (866) 326-9975 Attn: Deborah C. Paskin, Esq. with a copy (which shall not constitute notice) to: Fortress Investment Group LLC 1251 Avenue of the Americas, 16th Floor New York, NY 10020 Fax: (212) 798-6122 Attn: Randal A. Nardone and \ 25 Skadden, Arps, Slate, Meagher & Flom LLP 4 Times Square New York, NY 10036-6522 Fax: (212) 735-2000 Attn: Joseph A. Coco, Esq. 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 6.5 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 6.6 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 6.7 Successors and Assigns. 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. No Stockholder may assign any of its rights hereunder to any Person other than a Permitted Transferee that has complied in all respects with the requirements of this Agreement (including, without limitation, Section 2.1). Except as otherwise provided in Section 2.1, each Permitted Transferee of any Stockholder, shall be subject to all of the terms of this Agreement, and by taking and holding such shares such Person shall be entitled to receive the benefits of and be conclusively deemed to have agreed to be bound by and to comply with all of the terms and provisions of this Agreement; provided, however, no transfer of rights permitted hereunder shall be binding upon or obligate the Company unless and until (i) the Company shall have received written notice of such transfer, (ii) such transferee can establish beneficial ownership or ownership of record of Company Securities (whether individually or together with its Affiliates that are Stockholders or transferees of Stockholders and, if applicable, its other Permitted Transferees that are Stockholders or transferees of Stockholders) and (iii) with respect to the rights set forth in Article V hereof, such transferee can establish beneficial ownership or ownership of record of a Registrable Amount (whether individually or together with its Affiliates that are Stockholders or transferees of Stockholders and, if applicable, its other Permitted Transferees that are Stockholders or transferees of Stockholders). The Company may not assign any of its rights or obligations hereunder 26 without the prior written consent of each of the Stockholders. Notwithstanding the foregoing, no successor or assignee of the Company shall have any rights granted under this Agreement until such Person shall acknowledge its rights and obligations hereunder by a signed written statement of such Person's acceptance of such rights and obligations. Section 6.8 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 Stockholders and the Company. Section 6.9 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 6.10 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 6.11 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 6.12 Injunctive Relief. Each party hereto acknowledges and agrees that a violation of any of the terms of this Agreement will cause the other parties 27 irreparable injury for which an adequate remedy at law is not available. Therefore, the Stockholders 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. Section 6.13 Recapitalizations, Exchanges, Etc. Affecting the shares of Common Stock; New Issuances. The provisions of this Agreement shall apply, to the full extent set forth herein with respect to Company Securities and to any and all equity or debt securities of the Company or any successor or assign of the Company (whether by merger, consolidation, sale of assets, or otherwise) which may be issued in respect of, in exchange for, or in substitution of, such Company Securities and shall be appropriately adjusted for any stock dividends, splits, reverse splits, combinations, reclassifications, recapitalizations, reorganizations and the like occurring after the date hereof. Section 6.14 Termination. Upon the mutual consent of all of the parties hereto or, with respect to each Stockholder, at such earlier time as such Stockholder and its Affiliates and Permitted Transferees ceases to beneficially own a Registrable Amount, the terms of this Agreement shall terminate, and be of no further force and effect; provided, however, that the following shall survive the termination of this Agreement: (i) the provisions of Sections 5.2 (which shall terminate, and be of no further force and effect, with respect to each Piggyback Stockholder, at such time as such Piggyback Stockholder and its Affiliates and Permitted Transferees ceases to beneficially own a Piggyback Registrable Amount), 5.7, 5.8, 6.5, 6.11, this Section 6.14 and Section 6.15; (ii) the rights with respect to the breach of any provision hereof by the Company and (iii) any registration rights vested or obligations accrued as of the date of termination of this Agreement to the extent, in the case of registration rights so vested, if such Stockholder ceases to meet the definition of a Stockholder under this Agreement subsequent to the vesting of such registration rights as a result of action taken by the Company; provided, further, however that at any time each of HP and its Permitted Transferees may elect, by written notice to the Company, to withdraw from this Agreement and as a result of such withdrawal, such Stockholder shall no longer be entitled to the rights, nor be subject to the obligations, of this Agreement and the Common Stock held by such Stockholder shall conclusively be deemed thereafter not to be "Registrable Securities" under this Agreement. In connection with any withdrawal from the Agreement by HP, HP will cause its designee to the Company's Board to tender his or her resignation contemporaneously with HP's withdrawal. No withdrawal pursuant to this Section 6.14 shall release any Stockholder from its indemnification and contribution rights and obligations, if any, pursuant to Section 5.8 herein. Section 6.15 Rule 144. The Company covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder (or, if it is not required to file such reports, it will, upon the request of any holder of Registrable Securities, make publicly available other information so long as necessary to permit sales in compliance with Rule 144 under the Securities Act), and it will take such further reasonable action, to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions 28 provided by Rule 144 under the Securities Act, as such Rule 144 may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission. Upon the reasonable request of any holder of Registrable Securities, the Company will deliver to such holder a written statement as to whether it has complied with such information and filing requirements. [Remainder of page left blank intentionally] 29 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/ Mark J. Schulte --------------------------------- Name: Mark J. Schulte Title: Chief Executive Officer FIT-ALT INVESTOR LLC By: /s/ Randal A. Nardone --------------------------------- Name: Randal A. Nardone Title: COO & Secretary FORTRESS BROOKDALE ACQUISITION LLC By: /s/ Randal A. Nardone --------------------------------- Name: Randal A. Nardone Title: Secretary FORTRESS INVESTMENT TRUST II By: /s/ Randal A. Nardone --------------------------------- Name: Randal A. Nardone Title: VP, COO & 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/ Bradley E. Cooper ------------------------ Name: Bradley E. Cooper Title: -----END PRIVACY-ENHANCED MESSAGE-----