CONTRIBUTION AGREEMENT
BETWEEN
FORTRESS REGISTERED INVESTMENT TRUST
HEALTH PARTNERS
AND
FORTRESS BROOKDALE ACQUISITION LLC
Dated: As of July 26, 2000
CONTRIBUTION AGREEMENT
Contribution Agreement (this "Agreement") made as of the
26th day of July, 2000, by and among FORTRESS REGISTERED INVESTMENT TRUST,
a Delaware business trust ("Fortress"), HEALTH PARTNERS, a Bermuda exempted
partnership ("Health Partners") and FORTRESS BROOKDALE ACQUISITION LLC, a
Delaware limited liability company (the "Company").
(All capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the LLC Agreement (as defined below)).
WHEREAS:
A. The parties hereto have entered into that certain Amended and
Restated Limited Liability Company Agreement of Fortress Brookdale
Acquisition LLC (the "LLC Agreement"), dated as of July 26, 2000;
B. Fortress had previously contributed 4,004,350 shares of common
stock of Brookdale Living Communities, Inc. ("Brookdale") to the Company in
return for Membership Interests in the Company;
C. Fortress desires to contribute to the Company cash in return for
additional Membership Interests in the Company pursuant to Article II of
the LLC Agreement;
D. Health Partners is the legal and beneficial owner of
$100,000,000 principal amount of 5 1/2% Convertible Subordinated Notes Due
2009 of Brookdale, purchased pursuant to that certain Note Purchase
Agreement, dated as of April 27, 1999, between Brookdale and Health
Partners (such convertible notes, collectively, together with all of Health
Partners' rights in connection with the ownership therewith, the
("Convertible Notes");
E. Health Partners desires to contribute to the Company its legal
and beneficial interest in the Convertible Notes in return for Membership
Interests in the Company pursuant to Article II of the LLC Agreement; and
F. It is contemplated that the Company will enter into an Agreement
and Plan of Merger with Brookdale pursuant to which each outstanding share
of common stock of Brookdale will be converted into the right to receive
$15.25 in cash (the "Merger") and in furtherance of the Merger the Company
will commence an offer to purchase for cash any and all of the outstanding
shares of common stock of Brookdale at $15.25 per share (the "Offer").
NOW THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
1. Contribution of Cash and Convertible Notes; Issuance of
Membership Interests. Upon receipt of an Initial Capital Demand Notice from
the Operating Committee in accordance with the provisions of Section 2.1(b)
of the LLC Agreement, (a) Fortress will contribute to the Company cash in
an amount necessary to pay all costs and expenses of the Offer and the
Merger, including but not limited to payments to stockholders of Brookdale,
attorneys' fees, printing costs, filing fees and related expenses;
provided, however, that such amount contributed by Fortress to the Company
shall not exceed $98,933,633, in exchange for Membership Interests which
when taken together with its existing Membership Interests and after giving
effect to the contribution of Health Partners will result in its Percentage
Interest being fifty nine and three tenths of one percent (59.3%); and (b)
Health Partners will contribute the Convertible Note in exchange for
Membership Interests which, after giving effect to the contributions of
Fortress described above will result in Health Partners's Percentage
Interest being forty and seven tenths of one percent (40.7%). Unless
affirmatively requested to do otherwise by the Operating Committee, Health
Partners shall contribute the Convertible Note to the Company on the date
immediately following the expiration or earlier termination date of the
Offer.
2. Assignment of Rights. Health Partners, in addition to
contributing the Convertible Notes, shall assign to the Company, concurrent
with the contribution of the Convertible Note as described in Section 1
above, to the fullest extent assignable, all right, title and interest of
Health Partners in and to the benefit of any and all representation and
warranties made to Health Partners (or its predecessor-in-interest with
respect to the Convertible Notes) in connection with the holding of the
Convertible Notes by Health Partners, together with all right, title and
interest of any assignor in any enforcement rights, indemnification rights
and any other rights contained in any agreement associated with any prior
conveyance of the Convertible Notes.
3. Miscellaneous.
3.1 This Agreement shall be interpreted and enforced according
to the laws of the State of New York without regard to the
principles of conflicts of law.
3.2 All headings and sections of this Agreement are inserted for
convenience only and do not form part of this Agreement or
limit, expand or otherwise alter the meaning of any
provisions hereof.
3.3 This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of
which shall constitute one and the same agreement. Facsimile
signatures shall be deemed effective execution of this
Agreement and may be relied upon as such by the other
parties hereto. In the event facsimile signatures are
delivered, originals of such signatures shall be delivered
to the other parties hereto within three (3) business days
after execution.
3.4 The provisions of this Agreement are intended to be for the
sole benefit of the parties hereto and their respective
successors and assigns, and none of the provisions of this
Agreement are intended to be, nor shall they be construed to
be, for the benefit of any third party.
3.5 This Agreement and the LLC Agreement, taken together,
represent the entire agreement between the parties hereto
covering everything agreed upon or understood in this
transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of
any kind as conditions or inducements to the execution
hereof or in effect between the parties hereto. No change or
addition shall be made to this Agreement except by a written
agreement executed by the parties hereto.
3.6 The persons executing this Agreement for and on behalf of
the parties hereto each represent that they have the
requisite authority to bind the entities on whose behalf
they are signing.
3.7 If any term, covenant or condition of this Agreement is held
to be invalid or unenforceable in any respect, such
invalidity or unenforceability shall not affect any other
provision hereof, and this Agreement shall be construed as
if such invalid or unenforceable provision had never been
contained herein.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first written above.
FORTRESS:
FORTRESS REGISTERED INVESTMENT TRUST,
a Delaware business trust
By: /s/ Wesley R. Edens
---------------------------------------------
Name: Wesley R. Edens
Title: Chief Executive Officer
HEALTH PARTNERS:
HEALTH PARTNERS, a Bermuda exempted
partnership
By: Capital Z Financial Services Fund II, L.P.,
its general partner
By: Capital Z Partners, L.P., its general partner
By: Capital Z Partners, Ltd., its general partner
By: /s/ Paul H. Warren
---------------------------------------------
Name: Paul H. Warren
Title: Senior Vice President
THE COMPANY:
FORTRESS BROOKDALE ACQUISITION LLC,
a Delaware limited liability company
By: Fortress Registered Investment Trust, its
managing member
By: /s/ Wesley R. Edens
-------------------------------------------
Name: Wesley R. Edens
Title: Chief Executive Officer
