AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF FEBC-ALT INVESTORS LLC dated as of June 29, 2005
AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
FEBC-ALT
INVESTORS LLC
dated
as of June 29, 2005
TABLE
OF CONTENTS
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||
ARTICLE
I DEFINITIONS AND INTERPRETATION
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1
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Section
1.1.
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Definitions.
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1
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Section
1.2.
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Interpretation
|
8
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ARTICLE
II GENERAL PROVISIONS
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8
|
|
Section
2.1.
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Registered
Office
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8
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Section
2.2.
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Other
Offices
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8
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Section
2.3.
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Purpose;
Nature of Business Permitted; Powers
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8
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Section
2.4.
|
Limited
Liability of Members
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8
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Section
2.5.
|
Tax
Classification; No State Law Partnership.
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9
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Section
2.6.
|
Duration
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9
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Section
2.7.
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Qualification
in Other Jurisdictions
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9
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Section
2.8.
|
Certificates
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9
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ARTICLE
III FINANCING; ADDITIONAL MEMBERS
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9
|
|
Section
3.1.
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Capital
Contributions Generally
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9
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Section
3.2.
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Additional
Voluntary Capital Contributions.
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9
|
Section
3.3.
|
Admission
of New Members
|
10
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Section
3.4.
|
Renaissance
Acquisition
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10
|
Section
3.5.
|
Pre-emptive
Rights
|
10
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ARTICLE
IV MANAGEMENT OF THE COMPANY
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11
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|
Section
4.1.
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Composition
of the Board of Managers.
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11
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Section
4.2.
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Authority
of the Board
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11
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Section
4.3.
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Other
Ventures.
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12
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Section
4.4.
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Meetings
of the Board; Notice, Quorum and Voting Requirements.
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13
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Section
4.5.
|
Action
by Written Consent
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13
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Section
4.6.
|
Compensation
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14
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Section
4.7.
|
Standard
of Care; Fiduciary Duties
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14
|
Section
4.8.
|
Officers;
Designation; Term; Qualifications.
|
15
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Section
4.9.
|
Boards
of Subsidiaries
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15
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ARTICLE
V TRANSFERS OF MEMBERSHIP INTERESTS
|
16
|
|
Section
5.1.
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Restrictions
on Transfer.
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16
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Section
5.2.
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Non-Permitted
Transfers.
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18
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Section
5.3.
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Tag-Along
Rights.
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18
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Section
5.4.
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Drag-Along
Rights.
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20
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Section
5.5.
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Further
Actions and Additional Agreements.
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21
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ARTICLE
VI DISTRIBUTIONS AND EXPENSES
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22
|
|
Section
6.1.
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Distributions
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22
|
Section
6.2.
|
Amounts
Withheld
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22
|
Section
6.3.
|
Expenses
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22
|
Section
6.4.
|
Omega
Healthcare Guarantee
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22
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ARTICLE
VII DISSOLUTION AND TERMINATION OF THE COMPANY
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23
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|
Section
7.1.
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Dissolution
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23
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Section
7.2.
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Continuation
of Interest of Member’s Representative
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23
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Section
7.3.
|
Dissolution,
Winding Up and Liquidation
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23
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ARTICLE
VIII
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24
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REPRESENTATIONS
AND WARRANTIES
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24
|
|
Section
8.1.
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Representations
and Warranties of the Initial Members
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24
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Section
8.2.
|
Survival
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25
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ARTICLE
IX INDEMNIFICATION AND CONTRIBUTION
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25
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|
Section
9.1.
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Indemnity
by the Company.
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25
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Section
9.2.
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Exculpation
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25
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Section
9.3.
|
Indemnification
by the Members
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26
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Section
9.4.
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Expenses
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26
|
Section
9.5.
|
Beneficiaries.
|
26
|
Section
9.6.
|
Indemnification
Procedure for Third-Party Claims
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26
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Section
9.7.
|
Other
Claims
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27
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Section
9.8.
|
Limitation
on Damages
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27
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Section
9.9.
|
Survival
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27
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ARTICLE
X MISCELLANEOUS PROVISIONS
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28
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|
Section
10.1.
|
Entire
Agreement
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28
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Section
10.2.
|
Amendments
|
28
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Section
10.3.
|
Applicable
Law; Venue.
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28
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Section
10.4.
|
Enforcement
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29
|
Section
10.5.
|
Headings.
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29
|
Section
10.6.
|
Severability
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29
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Section
10.7.
|
Heirs,
Successors and Assigns
|
29
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Section
10.8.
|
Financial
Statements and Reports
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29
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Section
10.9.
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Counterparts
|
30
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Section
10.10.
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Filings.
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30
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Section
10.11.
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Additional
Documents
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30
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Section
10.12.
|
Notices.
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30
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Section
10.13.
|
Waiver
of Right to Partition and Xxxx of Accounting.
|
31
|
Section
10.14.
|
Confidentiality;
Press Releases.
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31
|
Section
10.15.
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Disclosures.
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32
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Section
10.16.
|
Specific
Enforcement
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32
|
Section
10.17.
|
Waivers.
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32
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Schedule
I - Schedule
of Capital Contributions, Percentage Interests of Members and
Balances
Exhibit
A
- Form
of
Draft Conveyance Agreement
AMENDED
AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT
OF
FEBC-ALT
INVESTORS LLC
a
Delaware Limited Liability Company
THIS
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”)
of
FEBC-ALT INVESTORS LLC, a Delaware limited liability company (the “Company”),
is
made as of June 29, 2005, by and among, FIT-ALT INVESTOR LLC, a Delaware
limited
liability company (“FIT-ALT
Investor”),
as
the Class A Member, and NW SELECT LLC, a Washington limited liability company
(“NW
Select”),
and
EMERITUS CORPORATION, a Washington corporation (“Emeritus”),
as
the Class B Members, and the Company.
RECITALS:
WHEREAS,
FIT-ALT Investor caused a Certificate of Formation of the Company to be filed
with the Secretary of State of the State of Delaware on August 1, 2003 to
organize the Company under and pursuant to the Act (as hereinafter
defined);
WHEREAS,
the Initial Members entered into that certain Limited Liability Company
Agreement of the Company dated as of October 14, 2003 and amended as of November
17, 2003 (the “Original
LLC Agreement”);
and
WHEREAS,
pursuant to the Membership Interest Purchase Agreement, dated as of the date
hereof, between Brookdale Senior Living, Inc. ("BSL"),
FIT-ALT Investor, Emeritus and NW Select (the "Membership
Interest Purchase Agreement"),
FIT-ALT Investor has purchased a portion of the Membership Interest of each
of
Emeritus and NW Select;
WHEREAS,
in connection with the Membership Purchase Agreement and in accordance with
the
terms of Section 13.2 of the Original LLC Agreement, the Company and the
Members
desire to amend the Original LLC Agreement as set forth herein.
NOW,
THEREFORE, in consideration of the mutual promises and agreements herein
made
and intending to be legally bound hereby, the parties hereto agree as follows:
DEFINITIONS
AND INTERPRETATION
Definitions.
Unless
the context otherwise requires, the terms defined in this Section
1.1
shall,
for the purposes of this Agreement, have the meanings specified
below:
“Act”
means
the Delaware Limited Liability Company Act (as it may be amended from time
to
time and any successor to such Act).
1
“Affiliate”
means,
when used with reference to a specified Person (or when not referring to
a
specified Person shall mean an Affiliate of a Member), any Person that, directly
or indirectly, through one or more intermediaries, Controls, is Controlled
by or
is under common Control with such specified Person (or Member).
“Affiliated
Individual”
means,
with respect to a specified Person, any individual who is an officer, director,
shareholder, employee, partner or member of such specified Person or a Family
Member of any of the foregoing.
“Affiliated
Initial Member Transferee”
means
an Affiliate of one or more of the Initial Members that is ultimately Controlled
by one or more of the Ultimate Controlling Person(s) Controlling such Member
as
of the date hereof.
“Agreement”
has the
meaning set forth in the Preamble.
“Alterra”
means
Alterra Healthcare Corporation, a Delaware corporation.
“Approved
Sale”
has the
meaning set forth in Section
5.4(a).
“Bankruptcy”
means,
with respect to any Person, a “Voluntary
Bankruptcy”
or an
“Involuntary
Bankruptcy”.
A
“Voluntary
Bankruptcy”
shall
mean, with respect to any Person, (i) an admission in writing by such Person
of
its inability to pay its debts generally or a general assignment by such
Person
for the benefit of creditors, (ii) the filing of any petition or answer by
such
Person seeking to adjudicate it a bankrupt or insolvent or seeking for itself
any liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of such Person or its debts under any law
relating to bankruptcy, insolvency, reorganization or relief of debtors,
or
seeking, consenting to or acquiescing in the entry of an order for relief
or the
appointment of a receiver, trustee, custodian or other similar official for
such
Person or for any substantial part of its property, or (iii) corporate action
taken by such Person to authorize any of the actions set forth above. An
“Involuntary
Bankruptcy”
shall
mean, with respect to any Person, without the consent or acquiescence of
such
Person, the entering of an order for relief or approving a petition for relief
or reorganization or any other petition seeking any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or other similar relief
under any present or future bankruptcy, insolvency or similar statute, law
or
regulation or the filing of any such petition against such Person which order
or
petition shall not be dismissed within ninety (90) Business Days or, without
the
consent or acquiescence of such Person, the entering of an order appointing
a
trustee, custodian, receiver or liquidator of such Person or of all or any
substantial part of the property of such Person, which order shall not be
dismissed within ninety (90) Business Days.
“Base
Closing Date Capital Contribution”
means,
with respect (i) to FIT-ALT Investor, $49,000,000, (ii) Emeritus, $7,000,000,
and (iii) NW Select, $7,000,000.
“Board”
has the
meaning set forth in Section
4.1.
“Business
Day”
means
any day other than a Saturday, Sunday or any other day on which banks in
the
City of New York are required or permitted by law to be closed.
2
“Capital
Contribution”
means,
with respect to any Member, the amount of money contributed to the Company
in
exchange for or in respect of a Membership Interest in the Company, including
the Base Closing Date Capital Contribution of such Member, as well as any
Covering Capital Contribution made by such Member.
“Certificate
of Formation”
means
the Certificate of Formation of the Company filed with the Secretary of State
of
the State of Delaware on August 1, 2003 to organize the Company under and
pursuant to the Act and all amendments thereto and restatements thereof filed
on
behalf of the Company with the office of the Secretary of State of the State
of
Delaware pursuant to the Act.
“Claims
and Expenses”
suffered or incurred by a Person means any and all claims, actions, suits,
proceedings, liabilities, obligations, losses, and damages, judgments, fines,
penalties, amounts paid in settlement, interest, costs and expenses (including
reasonable attorney’s and accountant’s fees, court costs and other out-of-pocket
expenses actually and reasonably incurred in investigating, preparing or
defending the foregoing) suffered or incurred by such Person.
“Class
A Investment Balance”
means,
as of a specified date: (i) the aggregate amount of all Capital Contributions
made by or on behalf of the Class A Member prior to such date less
(ii) the
aggregate amount of all distributions made to the Class Member pursuant to
clause (ii) of Section
6.1
prior to
such date.
“Class
A Member”
means
FIT-ALT Investor and its successors and permitted assigns.
“Class
A Preferred Return”
means a
preferred return on the Class A Investment Balance from time to time accruing,
commencing on the Closing Date, at the rate of fifteen percent (15%) per
annum,
compounded monthly.
“Class
A Preferred Return Balance”
means,
as of a specified date: (i) the aggregate amount of the Class A Preferred
Return
accrued as of such date less
(ii) the
aggregate amount of all distributions made to the Class Member pursuant to
clause (i) of Section
6.1
prior to
such date.
“Class
A Purchase Return Balance”
means
$6,000,000.
“Class
B Members”
means
Emeritus and NW Select, and their respective successors and permitted assigns;
provided,
however,
that in
no event shall FIT-ALT, its Affiliates or its successors or assigns be deemed
a
"Class B Member."
“Closing
Date”
means
the effective date of the Merger.
“Code”
means
the Internal Revenue Code of 1986.
“Company”
has the
meaning set forth in the Preamble.
3
“Company
Asset”
means
the capital stock of FEBC-ALT Holdings or any other property or asset acquired
by the Company.
“Company
Indemnified Person”
has the
meaning set forth in Section
9.1.
“Confidential
Information”
shall
mean any information disclosed to a Member or any Affiliate relating to the
business or operations of the Company or any of its Subsidiaries or the business
or operations of any Member or any Affiliate, including any business plans,
financial information, personnel information, secret processes, know-how,
customer lists, formulas, facility drawings or other technical data. To the
extent not disclosed pursuant to the Disclosure Statement distributed to
creditors in the Chapter 11 Proceeding, the terms of this Agreement and the
other Transaction Documents shall also be deemed to constitute Confidential
Information for the purposes hereof. Notwithstanding the foregoing, information
shall not be deemed to be “Confidential Information” to the extent that such
information was (i) previously known on a nonconfidential basis by such Member
or Affiliate, (ii) in the public domain through no fault of such Member or
Affiliate or (iii) later lawfully acquired by a Person from sources other
than
such Member or Affiliate.
“Control”
means,
with respect to any Person, the power of another Person, through ownership
of
equity, contract rights or otherwise, to direct the management and policies
of
such Person, and “Controlled” and “Controlling” have correlative
meanings.
“Covering
Contribution”
has the
meaning set forth in Section
3.2(b).
“Dilution
Adjustment”
has the
meaning set forth in Section
6.4.
“Emeritus”
has the
meaning set forth in the Preamble.
“Exchange
Act”
means
the Securities Exchange Act of 1934 (as it may be amended from time to time
and
any successor to such act) and the rules and regulations
thereunder.
“Family
Member”
means,
with respect to any specified natural person, (i) any parent, child, descendant,
or sibling of such natural person (including relationships resulting from
adoption), (ii) the spouse of such natural person or of any person described
in
clause (i), or (iii) any parent, child, descendant or sibling of such spouse
(including relationships resulting from adoption).
“FEBC-ALT
Holdings”
means
FEBC-ALT Holdings Inc., a Delaware corporation.
“FEBC-ALT
Investors Inc.”
has the
meaning set forth in the Recitals.
“Fiscal
Year”
shall
be the fiscal year of the Company as determined by the Board from time to
time.
“FIT-ALT
Investor”
has the
meaning set forth in the Preamble.
4
“Formation
Date”
means
October 14, 2003.
“’40
Act”
means
the Investment Company Act of 1940 (as it may be amended from time to time
and
any successor to such act), and the rules and regulations
thereunder.
“GAAP”
means
generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute
of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board or in such other statements by such
other
entity as may be approved by a significant segment of the accounting profession,
which are applicable to the circumstances as of the date of
determination.
“Guarantee
Payment”
has the
meaning set forth in Section
6.4.
“Guarantor”
has the
meaning set forth in Section
6.4.
“Indemnifiable
Losses”
has the
meaning set forth in Section
9.1.
“Indemnified
Party”
has the
meaning set forth in Section
9.6.
“Indemnifying
Party”
has the
meaning set forth in Section
9.6.
“Initial
Member”
means
each of FIT-ALT Investor, Emeritus and NW Select.
“Initial
Public Offering”
has the
meaning set forth in Section
4.2.
“IPO
Securities”
has the
meaning set forth in Section
4.2.
“Manager”
and
”Managers”
have
the meanings set forth in Section
4.1(a).
“Member”
means a
Class A Member or a Class B Member, as applicable, and “Members”
means
the Class A Member and Class B Members.
“Membership
Interest”
means,
with respect to any Member, the limited liability company interest (as defined
in the Act) of such Member in the Company, including each Member’s voting
rights, if any, and any other rights, benefits and obligations of such Member
under this Agreement and the Act.
“Membership
Interest Purchase Agreement”
has the
meaning set forth in the Recitals.
“Merger”
means
the merger pursuant to the Merger Agreement of FEBC-ALT Acquisition Inc.
with
and into Alterra, which resulted in Alterra becoming a wholly-owned subsidiary
of FEBC-ALT Holdings.
“Merger
Agreement”
means
the Agreement and Plan of Merger, dated as of July 18, 2003 (the “Merger
Agreement”),
between FEBC-ALT Investors Inc, FEBC-ALT Acquisition Inc. and Alterra.
5
“NW
Select”
has the
meaning set forth in the Preamble.
“Officers”
has the
meaning set forth in Section
4.8.
“Omega”
has the
meaning set forth in Section
6.4.
“Omega
Guarantee”
has the
meaning set forth in Section
6.4.
“Original
LLC Agreement”
has the
meaning set forth in the Recitals.
“Other
Members”
has the
meaning set forth in Section
5.3(a).
“Participating
Member”
has the
meaning set forth in Section
5.3(b).
“Percentage
Interest”
means,
with respect to any Member, the percentage set forth opposite its name on
Schedule
I,
as such
schedule may be amended to reflect changes in such percentage contemplated
by
Article
III,
resulting from Transfers made pursuant to and in accordance with this Agreement
or resulting from any Reorganization Transaction.
“Person”
means
any individual, corporation, association, partnership (general or limited),
joint venture, trust, joint-stock company, estate, limited liability company,
unincorporated organization or other legal entity or organization.
“Principal
Emeritus Shareholders”
means,
collectively, Xxxxxx X. Xxxx and each other shareholder who beneficially
owns
(as such term is understood for purposes of Rule 13d-3 of the Exchange Act)
as
of the date hereof twenty-five percent (25%) or more of the common stock
of
Emeritus.
“Renaissance
Acquisition”
means
the direct or indirect acquisition by the Company or a Subsidiary thereof,
whether by contribution, exchange, merger, sale or otherwise, of up to nine
senior living properties (the "Renaissance
Properties")
subject to the Purchase and Sale Agreement, dated as of March 16, 2005, by
and
between SHP Pacific Inn, LLC; SHP Xxxx Ranch, LLC; SHP Gables, LLC; SHP Oak
Tree
Villa, LLC; SHP Lexington, LLC; SHP Inn at the Park, LLC; SHP Xxxxxx Creek,
LLC;
SHP Mirage Inn, LLC; SHP Ocean House, LLC and FIT REN LLC, as amended by
that
certain First Amendment to Purchase and Sale Agreement, dated as of June
10,
2005..
“Renaissance
Cut-Off Date”
has the
meaning set forth in Section
6.4.
“Reorganization
Transaction”
has the
meaning set forth in Section
4.2.
“Representative”
has the
meaning set forth in Section
7.2.
“Securities
Act”
means
the Securities Act of 1933 (as it may be amended from time to time and any
successor to such act) and the rules and regulations thereunder.
6
“Stockholders
Agreement”
shall
mean the stockholders and voting agreement attached as Exhibit IV to the
Membership Interest Purchase Agreement by and among NW Select LLC, Emeritus
Corporation and FIT-ALT Investor LLC.
“Subsidiary”
of a
specified Person means any corporation, partnership, limited liability company,
joint venture or other legal entity of which the Person (either alone or
through
or together with any other Subsidiary), owns, directly or indirectly, 50%
or
more of the outstanding voting securities or equity interests of such legal
entity or is the general partner of such legal entity.
“Tag-Along
Notice”
has the
meaning set forth in Section
5.3(b).
“Tag-Along
Notice Period”
has the
meaning set forth in Section
5.3(b).
"Third
Party"
means
any Person other than any Affiliate of a Class A Member or BSL.
“Third
Party Claim”
has the
meaning set forth in Section
9.6.
“Third
Party Notice”
has the
meaning set forth in Section
5.3(a).
“Third
Party Offer”
has the
meaning set forth in Section
5.3(a).
“Transaction
Documents”
means
this Agreement, the Merger Agreement, the related Plan of Reorganization
of
Alterra and Disclosure Statement, the Membership Interest Purchase Agreement,
the Stockholders Agreement and the Registration Rights Agreement (as such
term
is defined in the Membership Interest Purchase Agreement) and all documents
and
agreements contemplated to be delivered hereunder and thereunder.
“Transfer”
has the
meaning set forth in Section
5.1(a).
“Transferring
Member”
has the
meaning set forth in Section
5.3(a).
“UCC”
shall
mean the Uniform Commercial Code as in effect from time to time in the State
of
New York.
“Ultimate
Controlling Person(s)”
means:
(i) with respect to NW Select -- Xxxxxx X. Xxxx, (ii) with respect to Emeritus
-- the Principal Emeritus Shareholders and (iii) with respect to any other
specified Member -- the Person(s) ultimately Controlling such Member as of
the
date such Member first becomes a Member of the Company (as specified by such
Member in a written notice to the Company and the other Members).
“Up-to-Date
Contributing Member”
has the
meaning set forth in Section
3.2(b).
“Voluntary
Call Notice”
has the
meaning set forth in Section
3.2(b).
“Voluntary
Capital Contributions”
has the
meaning set forth in Section
3.2(a).
7
“Voluntary
Non-Contributing Member”
has the
meaning set forth in Section 3.2(b).
Any
capitalized term not defined herein that is defined in the Act shall have
the
meaning ascribed to such term in the Act.
Interpretation.
Each
definition in this Agreement includes the singular and the plural, and reference
to the neuter gender includes the masculine and feminine where appropriate.
The
words “include”“includes” and “including” shall be deemed to be followed by the
words “without limitation” whether or not such words are set forth herein.
References to any statute or Treasury Regulations means such statute or
regulations as amended at the time and include any successor legislation
or
regulations. The headings to the Articles and Sections are for convenience
of
reference and shall not affect the meaning or interpretation of this Agreement.
Except as otherwise stated, reference to Articles, Sections, Exhibits and
Schedules mean the Articles, Sections, Exhibits and Schedules of this Agreement.
The Schedules are hereby incorporated by reference into and shall be deemed
a
part of this Agreement.
GENERAL
PROVISIONS
Registered
Office.
The
registered agent and office of the Company in the State of Delaware shall
be The
Corporation Trust Company, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
The
Board may change such registered agent and/or registered office from time
to
time as it deems appropriate.
Other
Offices.
The
Company may have one or more offices as may be established from time to
time.
Purpose;
Nature of Business Permitted; Powers.
The
Company has been organized for the business object and purpose of (i) holding,
directly or indirectly, equity interests of Alterra or any successor thereto
and
(ii) such other activities as limited liability companies may engage
in under
the
Act. The Company shall possess and may exercise all the powers and privileges
granted by the Act or by any other law or by this Agreement, together with
any
powers incidental thereto, insofar as such powers and privileges are necessary
or convenient
to the conduct, promotion or attainment of the foregoing business object
and
purpose of the Company.
Limited
Liability of Members.
No
Member or any of its Affiliates or Affiliated Individuals shall have any
liability for the debts, obligations or liabilities of the Company or of
any
another Member.
8
Tax
Classification; No State Law Partnership.
The
Company and the Initial Members have elected, pursuant of
Section 301.7701-3(c) of the Regulations, for the Company to be treated
as
a “C corporation” for federal income tax purposes and shall make corresponding
elections under applicable state income tax laws effective January 31,
2004.
No
provision of this Agreement shall be deemed or construed to constitute the
Company (including its Subsidiaries) as a partnership (including a limited
partnership) or joint venture, or any Member as a partner of or with any
other
Member, for any purposes other than federal and state tax purposes (subject
to
Section
2.5(a)).
Duration.
The
Company shall continue in existence until the Company shall be dissolved
and its
affairs wound up in accordance with the Act or this Agreement.
Qualification
in Other Jurisdictions.
The
Company shall qualify to transact business in such jurisdictions other than
the
State of Delaware as the Board from time to time shall deem necessary,
appropriate and in the best interests of the Company.
Certificates.
The
Managers and each Officer are authorized Persons within the meaning of the
Act
to execute, deliver and file any certificates (and any amendments
and/or restatements thereof) necessary for the Company to qualify to do business
in a jurisdiction within the United States in which the Company may wish
to
conduct business; provided that the laws of such jurisdiction recognize the
limited liability of the Members and the Company qualifies to do business
in
such jurisdiction as a foreign limited liability company.
FINANCING;
ADDITIONAL MEMBERS
Capital
Contributions Generally.
Capital
Contributions by the Members shall be made in U.S. dollars by wire transfer
of
federal funds to an account or accounts
of the Company specified by the Board or in such other form as may be specified
by the Board. No Member shall be entitled to any compensation by reason of
its
Capital Contribution. No Member shall be required to lend any funds to the
Company.
Additional
Voluntary Capital Contributions.
The
Board, by unanimous vote of the Managers, may from time to time request that
the
Members make Capital Contributions, whether in respect of the existing
Membership Interests or in connection with the issuance of additional equity
interests (“Voluntary
Capital Contributions”).
Such
Voluntary Capital Contributions shall be made by the Members pro
rata
in
accordance with their respective Percentage Interests (subject to Section
3.2(b),
in the
amounts and at the times the Board determines in good faith are reasonably
required for the Company to carry out any of its permitted purposes.
9
If
the
Board at any time requests that Voluntary Capital Contributions be made by
the
Members in accordance with Section
3.2(a),
the
Board shall give the Members at least ten (10) days’ prior notice thereof (a
“Voluntary
Call Notice”),
which
Voluntary Call Notice shall set forth in reasonable detail (i) the amount
of the
requested Voluntary Capital Contribution, (ii) the purpose thereof and (ii)
the
date on which such Voluntary Capital Contribution shall be made to the Company.
In the event that a Member (a “Voluntary
Non-Contributing Member”)
fails
to contribute its pro rata share of such Voluntary Capital Contribution,
any
other Member (an “Up-to-Date
Contributing Member”),
shall
have the right, but not the obligation, to contribute to the Company all
or any
portion of an amount equal to the Voluntary Capital Contribution (the
“Covering
Contribution”)
that
the Voluntary Non-Contributing Member failed to make; provided
that if
more than one Up-to-Date Contributing Member desires to make a Covering
Contribution, each such Up-to-Date Contributing Member shall, unless otherwise
agreed, make such contribution in proportion to its respective Percentage
Interest; and provided,
further,
that
(1) such Covering Contribution shall result in the Percentage Interest of
each
Up-to-Date Contributing Member being equal to the sum of (x) the Percentage
Interest of such Up-to-Date Contributing Member immediately prior to making
such
Covering Contribution and (y) the amount of such Covering Contribution expressed
as a percentage of the aggregate of all Capital Contributions theretofore
made
by all Members (after giving effect to such Covering Contribution), and (2)
the
Percentage Interest of the Voluntary Non-Contributing Member shall be reduced
accordingly. The Board shall not apply any Voluntary Capital Contribution
to any
purpose other than that stated in the Voluntary Call Notice with respect
to
which such Voluntary Capital Contribution was made.
Admission
of New Members.
Except
as otherwise provided under Article V,
new
Members may only be admitted to membership in the Company with the approval
of
the Class A Member. A new Member must agree in writing to be bound by the
terms
and provisions of the Certificate of Formation and this Agreement, as amended,
and must execute a counterpart of, or an agreement adopting, this Agreement
or
other related agreements as the existing Members may require and shall specify
the Ultimate Controlling Person of such new Member. Upon admission, the new
Member shall have all rights and duties of a Member of the Company.
Renaissance
Acquisition.
Notwithstanding anything to the contrary contained herein, in no event shall
any
Class B Member be entitled to make a Voluntary Capital Contribution in
connection with the Renaissance Acquisition, and upon the consummation of
the
Renaissance Acquisition, a new Member may be admitted and each Class B Member's
respective Percentage Interest shall be adjusted accordingly. In the event
that
prior to the Initial Public Offering, the Board (as defined below) determines
to
transfer from the Company or a Subsidiary thereof the Renaissance Properties
to
a Person other than the Company or a Subsidiary thereof, each Class B Member's
respective Percentage Interest shall be adjusted to equal such Class B Member's
Percentage Interest immediately prior to the Renaissance Acquisition, as
appropriately adjusted in accordance with the terms of this Agreement. Such
adjustment shall occur simultaneously upon the consummation of such transfer
of
the Renaissance Properties.
10
Pre-emptive
Rights.
Other
than any Membership Interests that may be issued in connection with the
Renaissance Acquisition, the Company will not issue or sell Membership Interests
or other debt or equity securities or securities convertible into or exercisable
for any of the foregoing unless each existing Member is offered “pre-emptive”
rights to
subscribe for and
purchase a share of such Membership Interests or securities equal to the
quotient of its Percentage Interest divided by all Percentage
Interests;
provided,
however,
that
nothing in this Section
3.5
shall be
deemed to grant "pre-emptive" rights to any Member with respect to the issuance
of any equity or debt securities of the Company or a Subsidiary thereof or
securities convertible or exercisable for any of the foregoing in connection
with the issuance of any such security to any current or future member of
the
management of Alterra pursuant to any existing or future stock option, incentive
stock plan, restricted stock plan or any other management incentive
plan.
MANAGEMENT
OF THE COMPANY
Composition
of the Board of Managers.
From
and
after the date hereof, the Board of Managers of the Company (the “Board”)
will
consist of three (3) managers (individually, a “Manager”
and,
collectively, the “Managers”),
each
of which will be appointed by FIT-ALT Investor (or a transferee of its Class
A
Membership Interest).
Any
Manager may be removed at any time, with or without cause, by the Class A
Member
and may not otherwise be removed by the Board or the Members. In the event
that
a vacancy shall exist or occur on the Board at any time by reason of a Manager’s
death, disability, retirement, resignation, removal or otherwise, the Class
A
Member shall have the right to designate a new Manager to fill such
vacancy.
Each
Manager shall hold office until his resignation or removal in accordance
with
the provisions hereof. Each Manager shall devote such time to the business
and
affairs of the Company as he deems necessary, in his sole discretion, for
the
performance of his duties, but in any event, shall not be required to devote
full time to the performance of such duties and may delegate his duties and
responsibilities as provided in this Agreement.
Except
as
the Board may otherwise unanimously agree, no committee of the Board shall
be
formed unless such committee consists of (and solely of) all of the
Managers.
Authority
of the Board.
Subject
to the provisions of this Agreement, the Board shall have complete and exclusive
discretion in the management and control of the business and affairs of the
Company, including the right to make and control all ordinary and extraordinary
decisions concerning the business and affairs of the Company (and including,
without limitation, the right to decide to sell or otherwise dispose of all
or
any part of the assets of the Company). The Board shall possess all power,
on
behalf of the Company, to do or authorize the Company to do, or to direct
the
executive officers of the Company, on behalf of
11
the
Company, to do, all things necessary or convenient to carry out the business
and
affairs of the Company. Notwithstanding anything to the contrary contained
herein, each of the Members acknowledge and agree the Board may take any
and all
actions that it deems necessary or proper in connection with the operation
of
the Company, including, without limitation:
(a) causing
the Company, Alterra, or any direct or indirect Subsidiary or Affiliate of
any
such Person to merge, consolidate or enter into any transaction with any
other
Person, including, without limitation, the contribution of all of a Member's
Membership Interests in exchange for securities of such Person;
(b) cause
the
contribution (i) by the Members of all of the Membership Interests in exchange
for securities issued by another Person or by the Company of any or all of
its
capital stock or the capital stock of Alterra, FEBC-ALT Holdings or any other
Company Asset or asset of its Subsidiaries, to any Person or (ii) by the
Company, Alterra or any of their respective Subsidiaries of any or all of
its
assets to any Person; including, without limitation, in either case, in
connection with an initial public offering of such other Person or Affiliates
thereof or of the Company or a Subsidiary thereof;
(c) purchase
or otherwise acquire any assets from a third Person (including capital stock),
whether for cash or for securities of the Company or a Subsidiary thereof
(any
of the transactions described in clauses (a), (b) and this clause (c), a
"Reorganization
Transaction");
The
Members acknowledge and agree that a Reorganization Transaction may be entered
into with one or more Affiliates of FIT-ALT Investor. In addition, in connection
with a Reorganization Transaction, interests received by FIT-ALT Investor
may
have voting or control rights different from interests received by the other
Members.
In
connection with any initial public offering of securities of the Company
or any
successor of the Company or any Person that is a party to or results from
a
Reorganization Transaction (the "Initial
Public Offering"),
all
Class B Members shall own, in the place of their Membership Interests,
securities of the same class as are offered in such initial public offering
(the
"IPO
Securities")
and
upon their issuance to the Class B Members, the IPO Securities shall be subject
to no greater restrictions on transfer required by underwriters to facilitate
the marketing of the IPO Securities as are the IPO Securities of the
Class A Members. Notwithstanding any other prior Reorganization
Transaction, the Class A Member shall undertake any additional
Reorganization Transactions prior to an initial public offering to effect
the
result of the immediately preceding sentence.
The
issuance of the IPO Securities to the Class B Members shall be subject to
the
execution and delivery by the Class B Members of the Stockholders
Agreement.
12
Other
Ventures.
It
is
expressly agreed that each Member, each Manager and any Affiliates thereof,
and
their respective officers, directors, managers, stockholders, members, partners
or employees, may engage in other business ventures of every nature and
description, whether or not in competition with the Company or any Subsidiary
thereof, independently or with others, and neither the Company nor the other
Members shall have any rights in and to any independent venture or activity
or
the income or profits derived therefrom; the pursuit of other ventures and
activities by any such Person is hereby consented to by each Member and shall
not be deemed wrongful or improper.
Nothing
in this Agreement shall be construed so as to prohibit any Member, Manager
or
any Affiliate thereof, or any of their respective officers, directors, managers,
stockholders, members, partners or employees, from owning, operating or
investing in any business of any nature and description, independently or
with
others, and no Member or Manager need disclose its intention to make any
such
investment to the other Members or Managers, nor advise the Company of the
opportunity presented by any such prospective investment.
Meetings
of the Board; Notice, Quorum and Voting Requirements.
The
Board shall meet at least quarterly (unless otherwise agreed by all the
Managers) and shall otherwise meet upon the call of any two (2) Managers.
Managers may participate in or hold a meeting by conference telephone or
similar
communications equipment by means of which all Managers participating in
the
meeting can hear each other, and participation in such meeting shall constitute
attendance and presence in person at such meeting, except where a Manager
participates in the meeting for the express purpose of objecting to the
transaction of any business on the ground that the meeting is not lawfully
called or convened.
Written
or telephonic notice stating the place, date and hour of any meeting of the
Board and the purpose or purposes for which the meeting is called, shall
be
given not less than one (1) day before the date and time of the meeting.
Notice
shall be sufficient if made personally, by mail, overnight courier service,
telecopy, telegram, telex, cablegram or telephone to each Manager. Except
as
provided in the last sentence of subsection (a) above, attendance by any
Manager
at any meeting of the Board shall constitute a waiver of notice of such meeting.
Minutes shall be kept of any meeting of the Board attended by less than all
of
the Managers (unless waived by the absent Manager(s)) and shall be circulated
to
the Managers within a reasonable time after the Board meeting.
A
majority of the Managers shall constitute a quorum for any meeting of the
Board.
The Board shall approve decisions or resolutions by the vote of a majority
of
the Managers.
Action
by Written Consent.
Any
action that may be taken at a meeting of the Board may be taken without a
meeting if a consent in writing, setting forth the action to be taken, shall
be
signed by the Class A Member, and such consent shall have the same
13
force
and
effect as a unanimous vote of the Managers at a meeting duly called and held.
No
notice shall be required in connection with the use of a written consent
pursuant to this Section 4.5.
Compensation.
The
Managers and any officer of the Company or any Subsidiary who is an Affiliated
Individual of Member shall serve without compensation (other than any
compensation provided by such Member). Without limiting their rights of
indemnification set forth in Article IX,
the
Managers and such officers shall not be entitled to reimbursement from the
Company or any Subsidiary for any expenses incurred by them in attending
any
meeting of the Board or any board or other governing body of any Subsidiary
or
otherwise performing their duties hereunder.
Standard
of Care; Fiduciary Duties.
Each
Member expressly acknowledges that the Company has been formed for the purposes
set forth in Section 2.3.
The
Board shall exercise all its powers and duties under this Agreement in
accordance with the terms of this Agreement. Notwithstanding anything in
this
Agreement to the contrary (other than Section
4.3),
the
Members agree that: (x) the Managers designated by them shall act with a
degree
of skill, diligence, prudence and care which, and in a manner which, other
prudent members of a board of directors of a Delaware corporation familiar
with
such matters would use in the conduct of an enterprise of like character
and
with like aims, and (y) the
Members and the Managers shall owe the same fiduciary duties to the Company
and
its Members as would apply to the shareholders and directors, respectively,
of a
Delaware corporation.
14
Officers;
Designation; Term; Qualifications.
The
Board
may, from time to time designate one or more Persons to be officers of the
Company (“Officers”),
such
Persons to serve in such offices until resignation or removal by the Board.
The
names of the Persons designated as the Officers of the Company as of the
date
hereof are set forth on Schedule
II hereof.
Any
Officer so designated shall have such authority and perform such duties as
the
Board delegates. The Board may assign titles to particular Officers, and
unless
the Board decides otherwise, the assignment of such title shall constitute
the
delegation to such Officer of the authority and duties that are normally
associated with that office, subject to any specific delegation of authority
and
duties made to such Officer by the Board pursuant to this Section 4.8.
Each
Officer shall hold office for the term for which such Officer is designated
and
until his or her successor shall be duly designated and shall qualify or
until
his or her death, resignation or removal (with or without cause) by the Board.
Any Person may hold any number of offices. No Officer need be a Manager,
a
Member, a Delaware resident or a United States citizen. Designation of any
Person as an Officer of the Company shall not of itself create any contract
rights in such Person.
Any
Officer of the Company may be removed as such, with or without cause, by
the
Board; provided,
however,
that
such removal shall be without prejudice to the contract rights (including
any
rights to indemnification and advancement of expenses under Article IX
of this
Agreement or under any contract between such Officer and the Company or any
Subsidiary thereof), if any, of the Person so removed. Any Officer of the
Company may resign as such at any time upon written notice to the Board.
Such
resignation shall take effect at the time specified therein, or if no time
is
specified therein, at the time of its receipt by the Board. The acceptance
of a
resignation shall not be necessary to make it effective unless expressly
so
provided in the resignation.
Any
vacancy occurring in any office of the Company may be filled by the
Board.
No
Officer of the Company shall be entitled to any interest in the Company by
reason of serving as an Officer.
Each
Officer of the Company is an agent of the Company for the purpose of the
business of the Company in accordance with this Agreement, and the act of
each
Officer for apparently carrying on the ordinary course of business of the
Company binds the Company, unless (i) the Officer so acting has in fact no
authority to act for the Company in the particular matter and (ii) the Person
with whom such Officer is dealing has knowledge of the fact that such Officer
has no such authority. An act of an Officer that is not apparently carrying
on
the ordinary course of business of the Company does not bind the Company
unless
authorized by the Board.
Boards
of Subsidiaries.
The
Company shall cause the board of directors or similar governing body of each
Subsidiary of the Company, and each committee of
15
such
board or governing body, to consist of the Managers then constituting the
Board
of the Company or comparable committee thereof.
TRANSFERS
OF MEMBERSHIP
INTERESTS
Restrictions
on Transfer.
Except
as
provided in Sections
5.3
and
5.4,
no
Class B Member shall (voluntarily or involuntarily), directly or indirectly,
transfer, assign, pledge or otherwise encumber or dispose of (each, a
“Transfer”)
(including a Transfer pursuant to a foreclosure sale of all or any part of
the
assets of a Member) its Membership Interest or any interest therein (including
any security received in exchange for, or in connection with, such Class
B
Member's Membership Interest), except, in each case subject to the next sentence
and to Sections 5.1(b)
and
(f)
below:
(i) a Transfer by any Member as permitted or required by Section 3.2(b)
(an
implicit Transfer based on another Member’s Covering Contribution in respect of
such first Member’s failure to pay a Voluntary Contribution) or (ii) a Transfer
with the written consent of the Class A Member. No Transfer of any Membership
Interest shall be effected until ten (10) Business Days after and excluding
the
day upon which written notice of such proposed Transfer has been given to
each
of the Members. If, as a result of any acquisition, directly or indirectly,
by a
Person or Group of Persons (as such term is understood for purposes of Rule
13d-3 of the Exchange Act) of any securities or other interests of any Person
or
Persons having a direct or indirect beneficial ownership (as such term is
understood for purposes of Rule 13d-3 of the Exchange Act) interest in a
Class B
Member holding Membership Interests (other than a Class B Member that is
a
public company), (x) such Class B Member ceases to be ultimately controlled
by
the Ultimate Controlling Person(s) of such Member prior to such acquisition,
(y)
at least eighty percent (80%) of the economic interests of such Class B Member
(excluding any such interests issued to the public) cease to be owned, directly
or indirectly, by such Ultimate Controlling Person(s) or (z) any Person(s)
other
than such Ultimate Controlling Person(s) that are not solely Controlled by
such
Ultimate Controlling Person(s) acquires concurrent or supervening Control
of
such Class B Member, such acquisition shall be deemed a Transfer of the
Membership Interests of such Class B Member for purposes of this Section 5.1(a)
and
shall have the effect set forth in Section
5.2
unless
such Transfer is otherwise permitted by the first sentence of this Section
5.1(a).
In the
case of a Class B Member holding Membership Interests that is a public company,
upon the acquisition by any Person or Group of Persons (as such term is
understood for purposes of Rule 13d-3 of the Exchange Act), other than one
or
more Ultimate Controlling Person(s) or Person(s) Controlled by such Ultimate
Controlling Person(s), of direct or indirect beneficial ownership (as such
term
is understood for purposes of Rule 13d-3 of the Exchange Act) of securities
representing a greater percentage of the voting power of the outstanding
equity
interests in such Class B Member than is represented by the equity interests
in
such Class B Member held by such Ultimate Controlling Person(s)
or
Person(s) Controlled by such Ultimate Controlling Person(s), such acquisition
shall be deemed a Transfer of the Membership Interests of such Member for
purposes of this Section 5.1(a)
and
shall have the effect set forth in Section
5.2
unless
such Transfer is otherwise permitted by the first sentence of this Section
5.1(a).
16
To
the
extent not already a Member of the Company, any transferee of a Membership
Interest pursuant to a Transfer permitted under Section 5.1(a)
shall
become a substitute Member upon: (i) the transferee agreeing in writing to
be
bound by all the terms and conditions of this Agreement as then in effect,
and
specifying in writing the identity of such transferee’s Ultimate Controlling
Person(s); (ii) compliance with applicable federal and state securities laws;
(iii) receipt of any regulatory approvals required under applicable law;
and
(iv) receipt by the Company and the Class A Member of an opinion of legal
counsel to such transferee, reasonably acceptable to the Class A Member,
as to
(x) the enforceability of this Agreement against such transferee and (y)
such
Transfer not resulting in any violation of or failure to comply with applicable
federal and state securities laws. Unless and until a transferee of a Membership
Interest is admitted as an additional or substitute Member, the transferee
shall
have no right to exercise any of the powers, rights and privileges of a Member
hereunder. Upon the completion of any Transfer of a Membership Interest in
accordance with the foregoing, except as otherwise indicated herein, the
transferee shall become a successor to the rights and obligations of the
transferor under this Agreement with respect to the Membership Interest
transferred and any references in this Agreement to such transferor shall
thereafter be deemed to refer to such transferee.
A
Member
who has transferred its Membership Interest shall cease to be a Member for
all
purposes of this Agreement upon completion of such Transfer in accordance
with
the applicable provisions of this Agreement and thereafter shall have no
powers,
rights and privileges as a Member hereunder.
The
Company, each Member, the Managers, the Officers of the Company and any other
Person or Persons having business with the Company need only deal with Members
who are admitted as Members or as additional or substitute Members of the
Company, and they shall not be required to deal with any other Person by
reason
of a Transfer by a Member of any of its Membership Interests, except as may
be
otherwise expressly provided in this Agreement. In the absence of a transferee
of a transferring Member’s Membership Interests being admitted as a Member as
provided herein, any payment to the transferring Member or holder, as the
case
may be, shall release the Company and the Board of all liability to any other
Person(s) who may be interested in such payment by reason of an assignment
by
such transferring Member or holder.
Nothing
in this Section
5.1
shall
prohibit or restrict the Transfer by the Class A Member of any or all of
its
Membership Interests (including any Membership Interests acquired from the
Class
B Members pursuant to the Membership Interest Purchase Agreement).
Sections 5.1(a)
and
(b),
and any
successor provisions of this Agreement applicable to Class B Members
with
respect to IPO Securities shall terminate upon the closing of the initial
public
offering contemplated by Section 4.2,
so that
Class B Members, with respect to their Membership Interests or the
IPO
Securities, shall, at the time of the consummation of the IPO, be under no
greater restrictions of transfer (other than those restrictions pursuant
to the
federal and state securities laws) than are applicable to the Class A
Members, with respect to their Membership Interests or securities that are
exchanged for the Membership Interests of the
17
Class
A
Members in a Reorganization Transaction. Notwithstanding the foregoing, the
Class B Members, with respect to their Membership Interests or IPO
Securities, shall be subject to restrictions under agreements required by
underwriters to facilitate the marketing of securities in an initial public
offering that are no more restrictive than those applicable to the Class A
Members, with respect to their Membership Interests or securities that are
exchanged for such Membership Interests in a Reorganization
Transaction.
Non-Permitted
Transfers.
Any
purported Transfer by a Class B Member of all or any portion of its Membership
Interest or any economic benefit or other interest therein not in compliance
with Section 5.1
shall be
null and void ab
initio,
regardless of any notice provided to the Company, and shall not create any
obligation or liability of the Company to the purported transferee, and any
Person purportedly acquiring all or any portion of any Membership Interest
or
any economic benefit or other interest therein transferred not in compliance
with Section 5.1
shall
not be entitled to admission to the Company as a substitute Member and shall
not
have any rights under this Agreement with respect to any Membership Interests
of
the Company or otherwise.
In
the
case of an attempted Transfer of all or any portion of any Membership Interests
or any economic benefit or other interest therein that is not in compliance
with
Section 5.1,
the
parties engaging or attempting to engage in such Transfer shall indemnify
and
hold harmless the Company, the Managers and the other Members from all cost,
liability and damage that any of such indemnified persons may incur (including
incremental tax liability and attorneys’ fees and expenses) as a result of such
Transfer or attempted Transfer and the enforcement of this
indemnity.
Tag-Along
Rights.
If
a
Class A Member (each a "Transferring
Member")
intends to Transfer any or all of the Membership Interests then owned by
or in
the name of such Transferring Member to a Third Party (each, a "Third
Party Offer"),
the
Transferring Member shall promptly, acting in good faith (i) cause the Third
Party Offer to be reduced to writing, which shall identify the Third Party,
the
Membership Interests proposed to be transferred to the Third Party by the
Transferring Member, the price to be paid in cash by the Third Party and
all
other material terms and conditions of the Third Party Offer and (ii) provide
written notice (the "Third
Party Notice")
of
such Third Party Offer to each of the Class B Members (the Class B Members
receiving a Third Party Notice pursuant to this sentence being collectively
referred to herein as the "Other
Members"),
which
Third Party Notice shall (x) contain an offer by such Third Party to purchase
or
otherwise acquire from each Other Member such Other Member's Membership
Interests (to
the
extent such Third Party Offer shall be allocable to such Other Member pursuant
to Section
5.3(c)
hereof)
on the same terms and conditions as the Third Party Offer (except that the
only
representation and warranty that such Other Member shall be required to make
in
connection with any such Transfer is a warranty with respect to his or its
own
ownership of the Membership Interests to be sold by him or it and his or
its
ability to convey title thereto free and clear of any and all liens, mortgages,
pledges, security interests or other restrictions or encumbrances) and (y)
be
accompanied by a true and correct copy of the Third Party Offer.
18
Each
Other
Member desiring to accept the offer (each, a "Participating
Member")
set
forth in the Third Party Notice shall, within ten (10) Business Days after
the
date the Third Party Notice is received by such Other Member (as such period
may
be extended pursuant to Section 5.3(d) hereof (each, a "Tag-Along
Notice Period"),
deliver a written notice to the Transferring Member (each, a "Tag-Along
Notice"),
which
notice shall (i) specify the amount of Membership Interests which such
Participating Member wishes to Transfer pursu-ant to the Third Party Offer
and
(ii) constitute a firm acceptance by such Other Member of the Third Party
Offer,
except as otherwise provided in Sections
5.3(c)
and
(d)
hereof.
If
one or
more Other Members give the Transferring Member a timely Tag-Along Notice,
then
the Transferring Member shall use all reasonable efforts to cause the Third
Party to agree to acquire all Membership Interests identified in all Tag-Along
Notices that are timely given to the Transferring Member, upon the same terms
and conditions as are applicable to the Transferring Member's Membership
Interests. If
such
Third Party is unwilling or unable to acquire all of such additional Membership
Interests upon such terms, then the Transferring Member may elect to either
cancel such proposed Transfer or allocate the maximum Membership Interests
that
such Third Party is willing to purchase among the Transferring Members and
the
Participating Members, with (i) each Participating Member permitted to sell
Membership Interests corresponding to the percentage of all Membership Interests
held by such Participating Member and (ii) the Transferring Member permitted
to
sell Membership Interests equal to the remaining Membership Interests that
such
Third Party is willing to purchase. Such allocation shall give effect to
the
applicable orders of priority set forth in Section
6.1.
In
the
event that the terms and conditions of any Third Party Offer shall be modified
in any way prior to the consummation of the respective Transfers of Membership
Interests contemplated by such Third Party Offer, the Transferring Member
shall
send a copy of the amended Third Party Offer to each of the Participating
or
Other Members. Any Other Member desiring to Transfer Membership Interests
pursuant to the amended Third Party Offer, or any Participating Member desiring
to amend or withdraw its Tag-Along Notice may do so by delivering notice
within
three (3) Business Days after receipt of such amended Third Party Offer to
the
Transferring Member. If such notice is not timely delivered, such Other Member
shall be deemed to have elected not to participate in the Third Party Offer,
or
such Participating Member, as the case may be, shall be deemed to have elected
to participate in such Third Party Offer under the same terms and conditions
that such Participating Member shall have originally elected to Transfer
its
Membership Interests.
Within
three (3) Business Days after the termination of the Tag-Along Notice Period
(including any extension thereof) with respect to any Third Party Offer,
the
Transferring Member, after review of the Tag-Along Notices received, and
notices
of withdrawal, if any, shall give written notice to each Participating Member
of
the time and place of the closing, which shall occur not fewer than two (2)
Business Days and not more than sixty (60) Business Days from the date such
notice is given. At the closing, each Participating Member shall, and hereby
covenants to, Transfer such Participating Member's Membership Interests to
be
sold to such Third Party free and clear of any and all liens, mortgages,
pledges, security interests or other restrictions or encumbrances against
payment of the purchase price for
19
such
Membership Interests. If such Third Party does not purchase such Membership
Interests from all Participating Members on the same terms and conditions
applicable to the transferring Member, then the entire proposed Transfer
by the
Transferring Member to such Third Party shall be invalid.
If
at the
termination of the Tag-Along Notice Period (and any extension thereof) any
Other
Member shall not have accepted the offer contained in the Third Party Notice,
such Other Member shall be deemed to have waived any and all of his or its
rights under this Section
5.3
to
Transfer his or its Company Securities to such Third Party on the terms
specified in the Third Party Offer.
Drag-Along
Rights.
If
the
Board approves a sale of the Company or substantially all of its assets to
a
Third Party (an "Approved
Sale"),
whether by way of merger, consolidation, sale of interests or assets, or
otherwise, all Members shall consent to and raise no objections against the
Approved Sale, and if the Approved Sale is structured as (i) a merger or
consolidation of the Company, or a sale of all or substantially all of the
Company's assets, each Member shall waive any dissenters rights, appraisal
rights or similar rights in connection with such merger, consolidation or
asset
sale, or (ii) a sale of the Membership Interests of the Company, the Members
shall agree to sell their Membership Interests on the terms and conditions
approved by the Board in accordance with the terms hereof. The Members shall
take all necessary and desirable actions approved by the Board in connection
with the consummation of the Approved Sale, including the execution of such
agreements and such instruments and other actions reasonably necessary (i)
to
provide the representations, warranties, indemnities, covenants, conditions,
escrow agreements and other provisions and agreements relating to such Approved
Sale, to the extent reasonably customary in similar transactions, and (ii)
to
effectuate the allocation and distribution of the aggregate consideration
upon
the Approved Sale.
The
obligations of the Members pursuant to this Section
5.4
are
subject to the following conditions:
(i) upon
consummation of the Approved Sale, each Member shall receive the same amount
of
consideration from the Approved Sale with respect to its Membership Interests
that such Member would have received if such aggregate consideration had
been
distributed by the Company pursuant to Section
6.1
(giving
effect to applicable orders of priority);
(ii) if
any
Members are given an option as to the form and amount of consideration to
be
received, all Members will be given the same option;
(iii) no
Member
shall be obligated to make any out-of-pocket expenditure prior to the
consummation of the Approved Sale (excluding modest expenditures for postage,
copies, etc.) and no Member shall be obligated to pay more than his or its
pro rata
share
(based upon the amount of consideration received) of reasonable expenses
incurred in connection with a consummated Approved Sale to the extent such
costs
are incurred for the benefit of all Members and are not otherwise paid by
the
Company or the acquiring party, provided that a
20
Member's
liability for such expenses shall be capped at the total purchase price received
by such Member for his or its Membership Interests; and
(iv) in
the
event that the Members are required to provide any representations or
indemnities in connection with the Approved Sale (other than representations
and
indemnities concerning each Member's valid ownership of his or its Membership
Interests, free and clear of any and all liens, mortgages, pledges, security
interests or other restrictions or encumbrances, each Member's authority,
power
and right to enter into and consummate such purchase or merger agreement
without
violating any other agreement and other representations and indemnities which
are individual to each Member), then no Member shall be liable for more than
his
or its pro rata
share
(based upon the Membership Interests held and not the amount of consideration
received) of any liability for misrepresentation or indemnity and such liability
shall not exceed the total purchase price received by such Member for his
or its
Membership Interests; provided,
however,
that
this Section
5.4(b)(iv)
shall
not limit a Member's liability with respect to any misrepresentation made
by
such Member as a result of such Member's bad faith, willful misconduct or
gross
negligence.
Further
Actions and Additional Agreements.
Each
Class B Member shall promptly execute and deliver, or shall cause to be executed
and delivered, such documents and other papers and shall take, or shall cause
to
be taken, such further actions as may be reasonably required to carry out
the
provisions of this Agreement and give effect to the transactions contemplated
by
this Agreement,
including the consummation
of any Reorganization Transaction.
Each
Class B Member shall promptly execute and deliver, or shall cause to be executed
and delivered, customary agreements (including, without limitation, (i) the
execution and delivery of any underwriting agreement, power of attorney,
custody
agreement, stock power or medallion guarantee, (ii) the delivery of an opinion
of counsel and officers' certificate to the underwriters with respect to
any
securities to be sold in an initial public offering by the Class B Members
and
(iii) the execution and delivery of an agreement restricting the transfer
of any
securities owned by the Sellers as may be required by underwriters to facilitate
the marketing of the securities in the initial public offering (so long as
such
restrictions on transfer are no greater than the restrictions contained in
a
similar agreement with the underwriters with respect to the IPO Securities
of
the Class A Member) and take such other actions as the Class A Member or
an
underwriter reasonably requests in connection with any (i) public offering
of
securities of the Company, Alterra, FEBC-ALT Holdings, any successor or
Affiliate thereof, or any transferee of the assets of the Company, Alterra
or
FEBC-ALT Holdings or an Affiliate of such transferee, or (ii) merger,
consolidation or other business combination involving the Company, Alterra,
FEBC-ALT Holdings or any successor or Affiliate thereof, including, without
limitation, if requested by the Class A Member, the prompt execution and
delivery of a conveyance agreement, in the draft form attached as Exhibit
A
hereto
and with such changes as may be made subsequent to the date hereof which
do not
disproportionately affect the Class B Members.
21
DISTRIBUTIONS
AND EXPENSES
Distributions.
The
Company may make distributions of cash or property to the Members at such
times
and in such amounts as the Board deems appropriate. Any distribution by the
Company shall be distributed to the Members as follows:
(i) First,
to
the Class A Member until the Class A Preferred Return Balance has been reduced
to zero;
(ii) Second,
to the Class A Member until the Class A Investment Balance has been reduced
to
zero;
(iii) Third,
to
the Class A Member until the Class A Purchase Return Balance has been reduced
to
zero;
(iv) Thereafter,
to each of the Members pro rata in accordance with their respective Percentage
Interests.
Amounts
Withheld.
All
amounts withheld or paid pursuant to the Code or any provisions of state,
local
or foreign tax law with respect to any payment, distribution, allocation
or
other consideration paid to the Members, including in connection with a
contribution of assets to the Company by a Member, shall be treated as amounts
paid or distributed, as the case may be, to the Members with respect to which
such amount was withheld or paid pursuant to this Section 6.2
for all
purposes under this Agreement. The Company is authorized to withhold or pay,
when required under applicable law, from payments, distributions, or other
consideration paid to Members, and with respect to allocations to the Members,
and to pay
over
to any federal, state, local or foreign government any amounts required to
be so
withheld
or paid pursuant to the Code or any provisions of any federal, state, local
or
foreign law,
and
shall allocate any such amounts to the Members with respect to which such
amounts were withheld or paid.
Expenses.
Except
as otherwise provided in this Agreement, the Company will be responsible
for all
third party expenses of the Company and each Member shall be
responsible for all costs and expenses incurred by such Member in the
performance of its obligations under this Agreement.
Omega
Healthcare Guarantee.
Each of
the Class B Members acknowledges that in connection with the proposed purchase
by Alterra (or a Subsidiary thereof) of the six properties currently subject
to
leases between Omega Healthcare Investors, Inc. (“Omega”)
and
Alterra (or a Subsidiary thereof), Fortress Investment Trust II (the
“Guarantor”),
an
Affiliate of FIT-ALT Investor, shall be required to execute a guarantee in
favor
of Omega as a condition to such purchase, (the “Omega
Guarantee”).
Each
Class B Member agrees that in the
22
event
the
Guarantor is required to pay any amounts under the Omega Guarantee, each
Class B
Member shall, upon written notice from the Class A Member, promptly pay to
the
Guarantor in immediately available funds (a "Guarantee
Payment")
an
amount equal to the product of (x) the total amount paid by the Guarantor
pursuant to the Omega Guarantee and (y) such Class B Member's Percentage
Interest of the Company, computed at the time of any such payment; provided,
however,
that
with respect to any Guarantee Payment made during the period commencing with
the
date of the consummation of the Renaissance Acquisition and ending with the
date
that is the nine month anniversary of the date of the consummation of the
Renaissance Acquisition (the "Renaissance
Cut-Off Date"),
the
amount of any Guarantee Payment for each Class B Member shall equal the product
of (x) the total amount paid by the Guarantor pursuant to the Omega Guarantee
and (y) such Class B Member's Percentage Interest of the Company, computed
at
the time of any such payment but adjusted (the "Dilution
Adjustment")
so as
to not give effect to any dilution of such Class B Member's Percentage Interest
of the Company as a result of the Renaissance Acquisition; provided,
further,
that
(i) in the event any Class B Member has made any Guarantee Payment prior
to the
Renaissance Cut-Off Date and (ii) on the Renaissance Cut-Off Date the
Renaissance Properties are held by the Company, a successor thereto or any
Subsidiary thereof, the Class B Member shall be entitled to a refund from
the
Guarantor of an amount equal to the difference between (A) the aggregate
amount
of Guarantee Payments actually made by such Class B Member prior to the
Renaissance Cut-Off Date and (B) the aggregate amount of Guarantee Payments
such
Class B Member would have been obligated to make prior to the Renaissance
Cut-Off Date pursuant to this Section
6.4
if not
for the Dilution Adjustment. Notwithstanding anything to the contrary herein,
in
no event shall the aggregate amounts paid by each Class B Member as a Guarantee
Payment exceed $2,550,000.
DISSOLUTION
AND TERMINATION OF THE COMPANY
Dissolution.
The
Company shall be dissolved and its affairs shall be wound up upon: (a) the
direction of Class A Member or (b) the entry of a decree of judicial dissolution
pursuant to Section 18-802 of the Act.
Continuation
of Interest of Member’s Representative.
Notwithstanding anything contained in Article V,
upon
the expulsion, receivership, dissolution or Bankruptcy of a Member, the personal
representative, trustee-in-bankruptcy, debtor-in-possession, receiver, other
representative, successor, heir or legatee (each a “Representative”)
of
such Member shall, subject to the provisions of Section 5.1(b),
immediately succeed to the Membership Interests of such Member in the Company.
Such Representative shall appoint an individual (which
may be such Representative) who will represent the Representative’s voting
interest, if any, in the Company.
Dissolution,
Winding Up and Liquidation.
Upon a
dissolution of the Company, the Company shall continue solely for purposes
of
winding up its affairs in an orderly manner, liquidating its assets, and
satisfying claims of its creditors. The liquidator of the Company shall take
full account of the Company’s liabilities and property and shall cause the
property
or the proceeds from the sale thereof, to the extent sufficient therefor,
to be
applied and distributed, to the maximum extent permitted by law, in the
following order:
23
(i) first,
to
the payment of the expenses of winding-up, liquidation and dissolution of
the
Company;
(ii) second,
to pay all creditors (including Members who are creditors) in satisfaction
of
all the Company’s debts and other liabilities, either by payment thereof or
making of reasonable provisions therefor;
(iii) third,
to
establish reserves, in amounts determined by the Board or the liquidator,
to
other liabilities of the Company; and
(iv) fourth,
to make distributions to the Members in accordance with Section 6.1.
REPRESENTATIONS
AND WARRANTIES
Representations
and Warranties of the Initial Members.
Each of
the Initial Members hereby severally and not jointly represents and warrants
to
the Company and to each of the other Initial Members, as of the date hereof
that:
If
such
Initial Member is a corporation or limited liability company, it is duly
incorporated or otherwise duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization,
and if
its is a partnership, it is validly constituted and not dissolved, and, in
each
case, has the power and lawful authority to own its assets and properties
and to
carry on its business as now conducted.
The
execution and delivery of this Agreement and the performance of its obligations
hereunder have been duly authorized by all necessary action on the part of
each
of such Initial Member, and this Agreement has been duly executed and delivered
by a duly authorized officer of such Initial Member and constitutes the valid,
legal and binding obligation of such Initial Member and is enforceable against
such Initial Member in accordance with its terms, except as (i) such
enforceability may be limited by bankruptcy, reorganization or moratorium
or
other similar laws affecting the enforcement of creditors’ rights generally and
(ii) the availability of equitable remedies may be limited by equitable
principles of general applicability.
The
execution, delivery and performance of this Agreement by such Initial Members
will not result in (i) any conflict with the certificate of incorporation
or
certificate of formation of such Initial Member, (ii) any material breach
or
violation of or default under any statute, law, rule, regulation, judgment,
decree, order or any material mortgage, deed of trust, indenture, agreement
or
any other instrument to which such Initial Member or any Subsidiary is a
party
or by which any of their respective material properties or assets is bound,
or
(iii) the creation or imposition of any lien, charge, pledge or encumbrance
thereon, except for such breaches, violations or defaults and such liens,
charges, pledges or encumbrances except, in each
24
case,
for
such breaches violations or defaults that would not, individually or in the
aggregate, materially impair the ability of such Initial Member to perform
its
obligations hereunder.
No
approval or consent of any governmental authority or of any other Person
is
required in connection with the execution and delivery by such Initial Member
of
this Agreement and the consummation and performance by such Initial Member
of
the transactions contemplated hereunder, except such as have been obtained
and
are in full force and effect.
Survival.
The
representations and warranties of the Initial Members contained in this
Agreement shall survive until the expiration of the applicable statute of
limitations.
INDEMNIFICATION
AND CONTRIBUTION
Indemnity
by the Company.
Subject
to the provisions of Section 9.6,
the
Company shall indemnify any Person who was or is a party or is threatened
to be
made a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative by reason of the
fact
that such Person is or was a Manager, Member, Officer, director, controlling
person, employee, legal representative or agent of the Company or any of
its
Subsidiaries, or is or was serving at the request of the Company or any of
its
Subsidiaries as manager, director, officer, partner, member, shareholder,
controlling person,
employee, legal representative or agent of another limited liability company,
partnership, corporation, joint venture, trust or other enterprise (a
“Company
Indemnified Person”),
from
and against any Claims and Expenses suffered or incurred by such Company
Indemnified Person while serving in such capacity or that otherwise in any
way
relate to or arise out of any action or inaction by such Company Indemnified
Person or the Company or any of its Subsidiaries, including, without limitation,
this Agreement (collectively, “Indemnifiable
Losses”),
if
such Company Indemnified Person acted in good faith and in a manner that
such
Company Indemnified Person reasonably believed to be in or not opposed to
the
best interests of the Company and its Subsidiaries and not in violation of
this
Agreement, and, with respect to a criminal action or proceeding, had no
reasonable cause to believe such Person’s conduct was unlawful; provided
that the
Company shall have no obligation to indemnify or defend hereunder to the
extent
such action, suit or proceeding arises from fraud, willful misconduct or
gross
negligence on the part of such Company Indemnified Person.
Subject
to the provisions of Section 9.6,
the
Company shall also indemnify each of the Members and their respective
Affiliates, and each officer, director, employee and legal representative
thereof, from and against any Claims and Expenses suffered or incurred by
any
such Person as a result of any breach by the Company of any covenant,
representation or warranty of the Company contained in this Agreement.
Notwithstanding
anything to the contrary set forth above, the provisions of this Section
9.1
shall
not apply in the case of any action, suit or proceeding initiated by a
Member.
25
Exculpation.
Except
as otherwise provided in Section
4.7,
no
Company Indemnified Person shall be liable to any Member or the Company or
any
of its Subsidiaries for any act or failure to act on behalf of the Company
or
any of its Subsidiaries unless such act or failure to act resulted from fraud,
willful misconduct or gross negligence of the Company Indemnified Person.
Each
Company Indemnified Person may consult with legal counsel and accountants
in
respect of the affairs of the Company and its Subsidiaries and shall be fully
protected and justified in any action or inaction which is taken in accordance
with the advice or opinion of such counsel or accountants.
Indemnification
by the Members.
Subject
to the provisions of Section 9.6,
each
Member shall indemnify each of the other Members and their respective
Affiliates, and each officer, director, employee and legal representative
thereof, from and against any Claims and Expenses suffered or incurred by
such
any such Person as a result of any breach by
such
first Member of any covenant, representation or warranty of such first Member
contained in this Agreement or the Original LLC Agreement.
Expenses.
Any
indemnification under Section 9.1
or
9.3,
as well
as the advance payment of expenses permitted under this Section 9.4
shall be
made by the Company or the applicable Member to the fullest extent permitted
under the Act. The expenses of any Company Indemnified Person incurred in
defending a civil or criminal action, suit or proceeding may be paid by the
Company as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf
of
such Company Indemnified Person (in form and substance, from an indemnitor,
reasonably satisfactory to all the Members), to repay the amount if it is
ultimately determined by a court of competent jurisdiction that such Company
Indemnified Person is not entitled to be indemnified by the Company. The
provisions of this Section 9.4
do not
affect and shall not be deemed exclusive of any other rights, including,
without, limitation, any rights to indemnification or advancement of expenses
to which any such Company Indemnified Person other than the Members may be
entitled under any contract, pursuant to approval of the Members, or otherwise
by law.
Beneficiaries.
The
indemnification and advancement of expenses authorized in or ordered by a
court
pursuant to this Article IX
continues for a Person who has ceased to be a Member, officer, employee or
agent
and inures to the benefit of the heirs, executors and administrators of such
Person.
Indemnification
Procedure for Third-Party Claims.
A party
against whom indemnification is sought under this Agreement (the “Indemnifying
Party”)
shall
have the right, but not the obligation, exercisable by written notice to
the
Person seeking such
indemnification hereunder (the “Indemnified
Party”)
within
thirty (30) days after receipt of written notice from the Indemnified Party
of
the commencement of or assertion of any claim, action, suit or proceeding
by a
third party in respect of which indemnity may be sought hereunder (a
“Third-Party
Claim”),
to
assume the defense and control the settlement of such Third-Party Claim (subject
to the limitations set forth below) if such Third Party Claim involves (and
continues to involve) solely money damages. The Indemnified Party shall have
the
right to
26
assume
the defense and control the settlement of any Third-Party Claim (x) not
described in the preceding sentence or (y) described in the preceding sentence
whose defense and control of settlement has not been assumed by the Indemnifying
Party. The Indemnifying Party or the Indemnified Party, as the case may be,
shall have the right to participate in (but not control), at its own expense,
the defense of any Third-Party Claim that the other has the right to defend,
as
provided
in this Agreement. The Indemnifying Party, if it has assumed the defense
of any
Third-Party Claim as provided in this Agreement, shall not consent to a
settlement of, or the entry of any judgment arising from, any such Third-Party
Claim without the Indemnified Party’s prior written consent (which consent shall
not be unreasonably withheld or delayed). The Indemnifying Party shall not,
without the Indemnified Party’s prior written consent, enter into any compromise
or settlement which (i) commits the Indemnified Party to take, or to forbear
to
take, any action or (ii) does not provide for a complete release by such
Third
Party of the Indemnified Party. The Indemnified Party shall have the sole
and
exclusive right to settle any Third-Party Claim, on such terms and conditions
as
it deems reasonably appropriate, to the extent such Third-Party Claim involves
equitable or other non-monetary relief against the Indemnified Party, and
shall
have the right to settle any Third-Party Claim involving money damages for
which
the Indemnifying Party has not assumed the defense pursuant to this Section 9.6
with the
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed.
Other
Claims.
In the
event an Indemnified Party shall claim a right to payment pursuant to this
Agreement for other than a Third-Party Claim, such Indemnified Party shall
send
written notice of such claim to the Indemnifying Party. Such notice shall
specify the basis for such claim. As promptly as possible after the Indemnified
Party has given such notice, the Indemnified Party and the Indemnifying Party
shall attempt to resolve such claim by mutual agreement before resorting
to
other legal means to resolve such claim.
Limitation
on Damages.
Notwithstanding anything contained in this Agreement to the contrary, no
party
shall be liable to any other party for any indirect, special, punitive,
exemplary or consequential loss or damage (including any loss of revenue
or
profit) arising out of this Agreement including in respect of any breach
by any
Member of this Agreement; provided,
that
the foregoing shall not be construed to preclude recovery by any Indemnified
Party in respect of Indemnifiable Losses directly incurred from Third Party
Claims.
Survival.
The
representations and warranties of the Members contained in Article X of the
Original LLC Agreement shall survive the Formation Date and the Closing Date
for
the purposes of this Article IX.
27
MISCELLANEOUS
PROVISIONS
Entire
Agreement.
This
Agreement, the Certificate of Formation and the other Transaction Documents
constitute the complete and exclusive statement of the agreement
among the Members with respect to the subject matter contained herein and
therein. This Agreement, the Certificate of Formation and the other Transaction
Documents replace and supersede all prior agreements by and among the Members
with respect to the subject matter contained herein and therein, including
the
term sheets dated October 1, 2003 entered into by FIT ALT Investor, NW Select
and Emeritus contemplating the formation of the Company and, except as provided
in Section
6.3,
the
expense sharing letter agreement dated July 22, 2003 between Emeritus and
Fortress Investment Group LLC; provided,
however,
that
the Old LLC Agreement shall be deemed to have been in effect through the
date of
this Agreement.
Amendments.
This
Agreement may be amended only by a written agreement executed by the Class
A
Member; provided,
however,
that
any amendment to Sections
2.4,
2.5,
10.2,
10.8
or
10.14
or
Articles III,
V,
VI
or
IX
in a
manner materially adverse to the Class B Members shall also require the written
consent of the Class B Members; provided,
however,
that in
no event shall the consent of the Class B Members be required in connection
with
any Reorganization Transaction, as long as any such Reorganization Transaction
does not impair the rights of the Class B Members as provided in the
penultimate sentence of Section 4.2
or in
Section 5.1(f).
Applicable
Law; Venue.
The
Certificate of Formation and this Agreement shall be governed exclusively
by
their respective terms and the laws of the State of Delaware, without regard
to
the conflicts of laws principles thereof.
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
Member 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 Member 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
Member
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.
28
EACH
PARTY HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
PROCEEDING (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR
RELATING TO THIS AGREEMENT OR ANY TRANSACTION OR AGREEMENT CONTEMPLATED HEREBY
OR
THE
ACTIONS OF ANY PARTY HERETO IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE
OR
ENFORCEMENT HEREOF.
Enforcement.
In the
event of an action, suit or proceeding initiated by any Member against another
Member or the Company involving the enforcement of its rights hereunder,
the
prevailing party (upon receipt of a final non-appealable judgment or order)
shall be
entitled to indemnification from the other party of reasonable
attorneys’ fees and expenses incurred in enforcing its rights in such action,
suit or proceeding.
Headings.
The
headings in this Agreement are inserted for convenience only and are in no
way
intended to describe, interpret, define, or limit the scope, extent or intent
of
this Agreement or any provisions contained herein.
Severability.
If any
provision of this Agreement or the application thereof to any Person or
circumstance shall be deemed invalid, illegal or unenforceable to any extent,
the remainder of this Agreement and the application thereof shall not be
affected and shall be enforceable to the fullest extent permitted by
law.
Heirs,
Successors and Assigns.
Each
and all of the covenants, terms, provisions and agreements contained in this
Agreement shall be binding upon and inure to the benefit of the Initial Members,
all new and substituted Members, and their respective permitted assigns,
heirs,
legal representatives and successors; provided, however, that no assignment
shall be made by any Member other than pursuant to, in accordance with and
as
permitted by Article V
of this
Agreement.
Financial
Statements and Reports.
The
Company will furnish each Member the information required below at the times
set
forth below:
(a) Annual
Financial Statements.
As soon
as available and in any event within ninety (90) days after the close of
each
Fiscal Year of the Company, the consolidated and consolidating balance sheets
of
the Company and its Subsidiaries, as at the end of such Fiscal Year and the
related consolidated and consolidating statements of earnings and cash flow
for
such Fiscal Year, in each case setting forth comparative figures for the
preceding Fiscal Year, and, in the case of such consolidated statements,
audited
by independent certified public accountants of recognized national standing
whose opinion shall not be qualified as to the scope of audit, (or, in the
case
of such consolidating statements, certified by the chief financial officer
of
the Company).
(b) Quarterly
Financial Statements.
As soon
as available and in any event within forty-five (45) days after the close
of
each fiscal quarter the consolidated and consolidating balance sheets of
the
Company and its Subsidiaries, as at the end of such fiscal quarter and the
related consolidated and consolidating statements of earnings and cash flow
for
29
such
fiscal quarter and for the elapsed portion of the Fiscal Year ended with
the
last day of such fiscal quarter, and in each case setting forth comparative
figures for the corresponding periods in the prior Fiscal Year and in the
budget
delivered in respect of the current Fiscal Year, all of which shall be certified
by the chief financial officer of the Company, subject to changes resulting
from
audit and normal year-end audit adjustments.
Counterparts.
This
Agreement may be executed in several counterparts with the same effect as
if the
parties executing the several counterparts had all executed one
counterpart.
Filings.
Following the execution and delivery of this Agreement, the Officers or their
designee, under the supervision and control of the Board, shall promptly
prepare
any documents required to be filed and recorded under the Act, and the Officers
or such designee shall promptly cause each such document to be filed and
recorded in accordance with the Act and, to the extent required by local
law, to
be filed and recorded or notice thereof to be published in the appropriate
place
in each jurisdiction in which the Company may hereafter establish a place
of
business. The Officers or such designee, under the supervision and control
of
the Board, shall also promptly cause to be filed, recorded and published
such
statements of fictitious business name and any other notices, certificates,
statements or other instruments required by any provision of any applicable
law
of the United States or any state or other jurisdiction which governs the
conduct of its business from time to time.
Additional
Documents.
Each
Member agrees to perform all further acts and to execute, acknowledge and
deliver any documents that may be reasonably necessary to carry out the
provisions of this Agreement.
Notices.
All
notices, requests and other communications to any party hereunder shall be
in
writing (including facsimile) and shall be effective and deemed delivered
or given, as the case may be, (a) if given by facsimile, when transmitted
and
the appropriate confirmation is received from the machine transmitting such
facsimile, and followed by hard copy via overnight mail or reputable overnight
courier for receipt the next Business Day, (b) if given by reputable overnight
courier, on the next Business Day or (c) by hand delivery, when
delivered:
If
to
FIT-ALT Investor, addressed as follows:
FIT-ALT
Investor LLC
c/o
Fortress Investment Group LLC
1251
Avenue of the Xxxxxxxx
00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxxx Xxxxxxx
Facsimile
number: (000) 000-0000
30
with
a
copy to:
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
0
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxx X. Coco
Facsimile
Number: (000) 000-0000
If
to
Emeritus, addressed as follows:
Emeritus
Corporation
0000
Xxxxxx Xxxxxx
Xxxxx
000
Xxxxxxx,
Xxxxxxxxxx 00000
Attention:
Xxxxxxx X. Xxxxxxxxxx
Facsimile
number: (000) 000-0000
with
a
copy to:
Xxxxxxx
Coie
0000
Xxxxx Xxxxxx
Xxxxxxx,
XX 00000
Attention:
Xxxxxxx X. Xxxxxxxxx
Facsimile
number: 000-000-0000
If
to NW
Select, addressed as follows:
NW
Select
LLC
000
Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx,
Xxxxxxxxxx 00000
Attention:
Xxxxxx X Xxxx
Facsimile
number: (000) 000-0000
If
to the
other Members, at the addresses or facsimile numbers set forth in a schedule
filed with the records of the Company or such other addresses or facsimile
numbers as such Members may hereafter specify to the Board, who shall so
notify
the other Members.
Any
Member may change its address(es) and/or facsimile number(s) for the purposes
of
this Section 10.12
by
written notice to the Company and each of the other Members given at least
three
(3) Business Days prior to the effective date of such change.
Failure
or delay in delivering copies of any notice or other communication to the
persons designated above to receive copies shall in no way adversely affect
the
effectiveness of such notice, demand, request, consent, approval, declaration
or
other communication.
31
Waiver
of Right to Partition and Xxxx of Accounting.
To the
fullest extent permitted by applicable law, each Member covenants that it
will
not, and hereby waives any right to, file a xxxx for partnership accounting.
Each Member irrevocably waives any right that it may have to maintain any
action
for dissolution of the Company (unless the Company is dissolved pursuant
to
Section 7.1)
or
partition with respect to any of the Company’s assets.
Confidentiality;
Press Releases.
Each
Class B Member shall keep confidential all Confidential Information obtained
pursuant to this Agreement, except that a Member
shall be entitled to disclose such Confidential Information to its lawyers,
accountants and other service providers as reasonably necessary in the
furtherance of such Member’s bona fide interests, as otherwise required by law
or judicial process and to comply with reporting requirements (including
the
rules of any applicable securities exchange or quotation or listing system),
and
to potential permitted transferees of its Membership Interest, provided
that
such potential transferees enter into customary confidentiality agreements,
with
the Company and the other Members expressly stated therein to be third party
beneficiaries thereof prior to the disclosure of Confidential Information.
Each
Class B Member agrees to not to issue any press release or make any public
statement with respect to the business and affairs of the Company, Alterra
and
their respective Subsidiaries and Affiliates without the prior written consent
of the Class A Member (which shall not be unreasonably withheld); provided,
however,
in the
event a Class B Member is required by applicable law or any listing agreement
with any national securities exchange or quotation or listing system to issue
a
press release or make a public statement prior to such consent, such Class
B
Member shall
only be required to consult with the Class A Member and the Company before
issuing such press release or making such public statement and will not issue
any such press release or make any such public statement prior to such
consultation.. Notwithstanding the foregoing, each Class B Member (and each
employee, representative or other agent of a Member) may disclose to any
and all
Persons, without limitation of any kind, the tax treatment and tax structure
of
the transactions contemplated by this Agreement and all materials of any
kind
(including opinions or other tax analyses) that are provided to such Member
relating to such tax treatment and tax structure.
DISCLOSURES.
THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES EXCHANGE
ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR THE SECURITIES LAWS OF ANY STATE
AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION
REQUIREMENTS OF THE 1933 ACT AND SUCH LAWS. SUCH SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR
RESOLD
EXCEPT AS PERMITTED UNDER THE 1933 ACT AND SUCH LAWS PURSUANT TO EXEMPTION
FROM
REGISTRATION THEREUNDER. THERE WILL NOT BE ANY PUBLIC MARKET FOR THE SECURITIES.
IN ADDITION, THE TERMS OF THIS AGREEMENT RESTRICT THE TRANSFERABILITY OF
THE
SECURITIES.
Specific
Enforcement.
Each of
the Members expressly agrees that the other Members will be irreparably damaged
if this Agreement is not specifically enforced.
32
Upon
a
breach or threatened breach of the terms, covenants and/or conditions of
this
Agreement by any Member, the other Members shall, in addition to all other
remedies, each be entitled to a temporary or permanent injunction, without
showing any actual damage or the posting of any bond, and/or a decree for
specific performance, in accordance with the provisions hereof.
Waivers.
No
failure by any party to insist upon the strict performance of any covenant,
duty, agreement or condition of this Agreement or to exercise any right or
remedy consequent upon a breach thereof shall constitute a waiver of any
such
breach or any other covenant, duty, agreement or conditions.
33
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
first above written.
Company:
|
FEBC-ALT
INVESTORS LLC,
a
Delaware limited liability company
|
By:
/s/
Xxxxxxx Xxxxxxx
Name:
Xxxxxxx
Xxxxxxx
Title:
|
Initial
Members:
|
FIT-ALT
INVESTOR LLC,
a
Delaware limited liability company
|
By:
/s/ Xxxxxxx Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
|
EMERITUS
CORPORATION, a Washington corporation:
|
By:
/s/
Xxxxxxx X. Xxxxxxxxxx
Name:
Xxxxxxx X.
Xxxxxxxxxx
Title:
Vice President of Finance
|
NW
SELECT LLC, a Washington
limited
liability company
|
By:
/s/ Xxxxxx X.
Xxxx
Name:
Xxxxxx X.
Xxxx
Title: Manager
|
34
Schedule
I
to
Schedule
of Capital Contributions, Percentage Interests of Members and
Balances
MEMBER’S
NAME
|
PERCENTAGE
INTEREST
|
Emeritus
|
12.5%
|
FIT-ALT
Investor
|
75%
|
NW
Select
|
12.5%
|
Schedule
II
to
Name Initial
Officers
Xxxxxx
Xxxxx CEO
Xxxxxx
Xxxxxxx COO
and
Secretary
Xxxxxxx
Xxxxxxxxx CFO
Xxxxxxx
Xxxxxxx Vice
President
Exhibit
A
to
Form
of
Draft Conveyance Agreement