Document:

Stockholders and Voting Agreement

    
      

    

    

     

    

    

    

     

    

    

    

     

    

    

    

    STOCKHOLDERS
      AND VOTING AGREEMENT

     

    BY
      AND
      AMONG

    

    BROOKDALE
      SENIOR LIVING INC.,

    

    FIT-ALT
      INVESTOR LLC

    

    EMERITUS
      CORPORATION

    

    and

    

    NW
      SELECT
      LLC

    

    

    

    

    

    

    

    ______________

    

    

    

    Dated
      as
      of June 29, 2005

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    
      	 	
              ARTICLE
                I

            	 
	 	
              DEFINITIONS

            	 
	
              Section
                1.1 

            	
              Defined
                Terms

            	
              1

            
	 	
              ARTICLE
                II

            	 
	 	
              TRANSFER

            	 
	
              Section
                2.1 

            	
              Restrictions
                on Transfer.

            	
              4

            
	
              Section
                2.2 

            	
              Binding
                Effect on Transferees

            	
              5

            
	
              Section
                2.3 

            	
              Additional
                Purchases

            	
              5

            
	
              Section
                2.4 

            	
              Legend

            	
              5

            
	 	
              ARTICLE
                III

            	 
	 	
              VOTING

            	 
	
              Section
                3.1 

            	
              Voting
                of Company Securities

            	
              6

            
	
              Section
                3.2 

            	
              Irrevocable
                Proxy

            	
              7

            
	 	
              ARTICLE
                IV

            	 
	 	
              TAG-ALONG
                AND DRAG-ALONG RIGHTS

            	 
	
              Section
                4.1 

            	
              Tag-Along
                Rights.

            	
              7

            
	
              Section
                4.2 

            	
              Drag-Along
                Rights.

            	
              9

            
	 	
              ARTICLE
                V

            	 
	 	
              REPRESENTATIONS
                OF EACH STOCKHOLDER

            	 
	
              Section
                5.1 

            	
              Due
                Organization, Authorization

            	
              10

            
	
              Section
                5.2 

            	
              Enforceability,
                Etc

            	
              11

            
	
              Section
                5.3 

            	
              No
                Conflicts

            	
              11

            
	
              Section
                5.4 

            	
              Governmental
                Approvals

            	
              11

            
	
              Section
                5.5 

            	
              Litigation

            	
              11

            
	
              Section
                5.6 

            	
              Title
                to the Shares

            	
              11

            
	 	
              ARTICLE
                VI

            	 
	 	
              MISCELLANEOUS

            	 
	
              Section
                6.1 

            	
              Effective
                Time of Agreement

            	
              12

            
	
              Section
                6.2 

            	
              Further
                Actions; Additional Agreements

            	
              12

            
	
              Section
                6.3 

            	
              Headings

            	
              12

            
	
              Section
                6.4 

            	
              Entire
                Agreement

            	
              13

            
	
              Section
                6.5 

            	
              Further
                Actions; Cooperation

            	
              13

            
	
              Section
                6.6 

            	
              Notices

            	
              13

            
	
              Section
                6.7 

            	
              Applicable
                Law; Venue

            	
              15

            
	
              Section
                6.8 

            	
              Severability

            	
              15

            
	
              Section
                6.9 

            	
              Successors
                and Assigns

            	
              16

            
	
              Section
                6.10

            	
              Amendments

            	
              16

            
	
              Section
                6.11

            	
              Waiver

            	
              16

            
	
              Section
                6.12

            	
              Counterparts

            	
              16

            
	
              Section
                6.13

            	
              Injunctive
                Relief

            	
              16

            
	
              Section
                6.14

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

            	
              17

            
	
              Section
                6.15

            	
              Termination

            	
              17

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

     

    

     

    ______________

     

    THIS
      STOCKHOLDERS AND VOTING AGREEMENT (this "Agreement")
      is
      made as of June 29, 2005 and effective as of the date set forth in Section
      6.1
      hereof,
      by and among Brookdale Senior Living Inc., a Delaware corporation (the
      "Company"),
      FIT-ALT Investor LLC, a Delaware limited liability company ("FIT-ALT"),
      Emeritus Corporation, a Washington corporation ("Emeritus"),
      and
      NW Select LLC, a Washington limited liability company ("NW
      Select").
      Emeritus and NW Select are referred to herein individually as an "Initial
      Stockholder"
      and
      collectively referred to herein as the "Initial
      Stockholders."
      Certain capitalized terms used in this Agreement are defined in Article
      I.
      Unless
      otherwise indicated, references to articles and sections shall be to articles
      and sections of this Agreement.

     

    WHEREAS,
      each Initial Stockholder and FIT-ALT are parties to the Amended and Restated
      Limited Liability Company Agreement of FEBC-ALT Investors LLC ("FEBC-ALT"),
      dated
      the date hereof;

     

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

     

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

     

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

     

    NOW,
      THEREFORE, in consideration of the foregoing and of the mutual covenants and
      agreements set forth herein and for good and valuable consideration, the receipt
      and sufficiency of which is hereby acknowledged, the parties hereto hereby
      agree
      as follows:

     

    ARTICLE
      I  

     

    

     

    DEFINITIONS

     

    

     

    Section
      1.1   Defined
      Terms

     

    .
      For
      purposes of this Agreement, the terms defined other than in this Article I
      shall
      have the meanings indicated and the following terms shall have the following
      meanings: 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

     

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

     

    (o)
        "Person"
      shall
      mean any individual, firm, corporation, partnership, limited liability company
      or other entity, and shall include any successor (by merger or otherwise) of
      such entity.

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

     

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

     

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

     

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

     

    ARTICLE
      II  

     

    

     

     TRANSFER

     

    

     

    Section
      2.1   Restrictions
      on Transfer. 

     

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

     

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

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

     

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

     

    Section
      2.2   Binding
      Effect on Transferees

     

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

     

    Section
      2.3   Additional
      Purchases

     

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

     

    Section
      2.4   Legend

     

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

     

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

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      III  

     

    

     

    VOTING

     

    

     

    Section
      3.1   Voting
      of Company Securities

     

    .

     

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

     

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

     

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

     

    Section
      3.2   Irrevocable
      Proxy

     

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

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    ARTICLE
      IV  

     

    

     

    TAG-ALONG
      AND DRAG-ALONG RIGHTS

     

    

    Section
      4.1   Tag-Along
      Rights. 

     

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

     

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

     

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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    among
      the
      Fortress Entity and the Participating Stockholders, with (i) each Participating
      Stockholder permitted to sell Company Securities corresponding to the respective
      percentage of all Company Securities held by such Participating Stockholder
      and
      (ii) the Fortress Entity permitted to sell Company Securities equal to the
      remaining Company Securities that such Third Party is willing to purchase.
      

     

    (d)
        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 Company
      Securities contemplated by such Third Party Offer, the Transferring Stockholder
      shall send a copy of the amended Third Party Offer to each of the Participating
      or Other Stockholders. Any Other Stockholder desiring to Transfer Company
      Securities pursuant to the amended Third Party Offer, or any Participating
      Stockholder 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 Stockholder. If such notice is not timely
      delivered, such Other Stockholder shall be deemed to have elected not to
      participate in the Third Party Offer, or such Participating Stockholder, 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 Stockholder
      shall have originally elected to Transfer its Company Securities.

     

    (e)
        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
      Fortress Entity, after review of the Tag-Along Notices received, and notices
      of
      withdrawal, if any, shall give written notice to each Participating Stockholder
      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 Stockholder shall, and
      hereby covenants to, Transfer such Participating Stockholder*s
      Company
      Securities to be sold to such Third Party free and clear of any and all Liens
      against payment of the purchase price for such Company Securities. If such
      Third
      Party does not purchase such Company Securities from all Participating
      Stockholders on the same terms and conditions applicable to the Fortress Entity,
      then the entire proposed Transfer by the Fortress Entity to such Third Party
      shall be invalid.

     

    (f)
        If
      at the
      termination of the Tag-Along Notice Period (and any extension thereof) any
      Other
      Stockholder shall not have accepted the offer contained in the Third Party
      Notice, such Other Stockholder shall be deemed to have waived any and all of
      his
      or its rights under this Section
      4.1
      to
      Transfer his or its Company Securities to such Third Party on the terms
      specified in the Third Party Offer.

     

    Section
      4.2   Drag-Along
      Rights. 

     

    (a)
        If
      (i)
      the board of directors of the Company (the "Board of Directors") approves a
      sale
      of the Company or substantially all of its assets to a Third Party, whether
      by
      way of merger, consolidation, sale of interests or assets, or otherwise or
      (ii)
      if the Fortress Entity shall agree to sell all of its Company Securities to
      a
      Third Party 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (either
      of clauses (i) or (ii), an "Approved
      Sale"),
      all
      Stockholders 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
      Stockholder shall waive any dissenters rights, appraisal rights or similar
      rights in connection with such merger, consolidation or asset sale, or (ii)
      a
      sale of Company Securities, the Stockholders shall agree to sell their Company
      Securities on the terms and conditions approved by the Board of Directors or
      on
      the terms and conditions agreed to by the Fortress Entity, as applicable, in
      accordance with the terms hereof. The Stockholders shall take all necessary
      and
      desirable actions approved by the Board of Directors or the Fortress Entity,
      as
      applicable, 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 as set forth
      below.

     

    (b)
        The
      obligations of the Stockholders pursuant to this Section
      4.2
      are
      subject to the following conditions:

     

    (i)
        upon
      consummation of the Approved Sale, each Stockholder shall receive from the
      Approved Sale the same amount of consideration with respect to each of its
      Company Securities that all other holders of such Company Security participating
      in such Approved Sale shall receive with respect to such Company
      Security;

     

    (ii)
        if
      any
      holder of a Company Security is given an option as to the form and amount of
      consideration to be received, all Stockholders will be given the same
      option;

     

    (iii)
        no
      Stockholder 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 Stockholder 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 Stockholders and are not otherwise paid
      by
      the Company or the acquiring party, provided that a Stockholder*s
      liability for such expenses shall be capped at the total purchase price received
      by such Stockholder for his or its Company Securities; and

     

    (iv)
        in
      the
      event that the Stockholders are required to provide any representations or
      indemnities in connection with the Approved Sale (other than representations
      and
      indemnities concerning each Stockholder*s
      valid
      ownership of his or its Company Securities, free and clear of any and all Liens,
      each Stockholder*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 Stockholder), then no Stockholder
      shall
      be 

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    liable
      for more than his or its pro rata
      share
      (based upon the Company Securities 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 Stockholder for
      his
      or its Company Securities; provided,
      however,
      that
      this Section
      4.2(b)(iv)
      shall
      not limit a Stockholder's liability with respect to any misrepresentation made
      by such Stockholder as a result of such Stockholder's bad faith, willful
      misconduct or gross negligence.

     

    ARTICLE
      V  

     

    

     

    REPRESENTATIONS
      OF EACH STOCKHOLDER

     

      Each
      Stockholder hereby represents and warrants to each other Stockholder as of
      the
      date hereof and as of the Effective Date (unless otherwise specified herein)
      as
      follows:

     

    Section
      5.1   Due
      Organization, Authorization

     

    .
      Such
      Stockholder is either (a) duly organized, validly existing and in good standing
      under the laws of its jurisdiction of organization or (b) a natural person
      that
      is competent and has legal capacity to execute, deliver and perform its
      obligations under this Agreement. The execution, delivery and performance by
      such Stockholder of this Agreement, if not a natural person, and the
      consummation by such Stockholder of the transactions contemplated hereby, have
      been duly authorized by all necessary corporate and other action on its
      part.

     

    Section
      5.2   Enforceability,
      Etc

     

    .
      This
      Agreement has been duly executed and delivered by such Stockholder. This
      Agreement constitutes a legal, valid and binding obligation of such Stockholder,
      enforceable against such Stockholder in accordance with its terms, subject
      to
      any limitations imposed by bankruptcy, insolvency, or other laws of general
      application relating to enforcement of creditors' rights or general equity
      principles.

     

    Section
      5.3   No
      Conflicts

     

    .
      The
      execution, delivery and performance of this Agreement by such Stockholder and
      the consummation by such Stockholder of the transactions contemplated hereby
      will not (a) result in a violation of, be in conflict with or constitute a
      default (with or without notice or lapse of time or both) under (i) any law
      applicable to such Stockholder or any of its assets, (ii) any provision of
      its
      organizational documents, if such Stockholder is not a natural person, (iii)
      any
      order or judgment of any court or other agency of government applicable to
      such
      Stockholder or any of its assets or (iv) any contractual restriction binding
      on
      or affecting such Stockholder or any of its assets or (b) result in the creation
      or imposition of any Lien upon any of such Stockholder's assets, including
      any
      Company Securities.

     

    Section
      5.4   Governmental
      Approvals

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

     

    .
      No
      consent, approval, order or authorization of, or registration, declaration
      or
      filing with, any court, administrative agency or commission or other
      governmental authority or instrumentality, including under federal or state
      law
      or otherwise, is required to be obtained or made by or with respect to such
      Stockholder in connection with its execution and delivery of this Agreement
      or
      the consummation of the transactions contemplated hereby by such Stockholder
      (other than those which are not material).

     

    Section
      5.5   Litigation

     

    .
      There
      is no lawsuit, claim, proceeding or investigation pending or threatened by
      or
      against such Stockholder or any of its properties, assets, operations,
      businesses or prospects, which relates to the transactions contemplated by
      this
      Agreement.

     

    Section
      5.6   Title
      to the Shares

     

    .
      As of
      the Effective Date, such Stockholder owns the Company Securities Beneficially
      Owned by it free and clear of any Liens. 

     

    ARTICLE
      VI  

     

    

     

    MISCELLANEOUS

     

    

     

    Section
      6.1   Effective
      Time of Agreement

     

    . 

     

    This
      Agreement, without any further action required by the parties hereto, shall
      become effective immediately upon the receipt by the Initial Stockholders of
      shares of Common Stock in exchange for each Initial Stockholders' membership
      interests in FEBC-ALT.

     

    Section
      6.2   Further
      Actions; Additional Agreements

     

    . 

     

    Each
      Stockholder 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 the Initial Public Offering. Not in limitation of the preceding sentence
      but
      subject to Section
      4.1(a)
      of the
      Membership Interest Purchase 

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    Agreement,
      each Stockholder shall promptly execute and deliver, or shall cause to be
      executed and delivered, customary agreements and take such other actions as
      the
      Company or the underwriters reasonably request in connection with the Initial
      Public Offering, 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 Company Securities to be
      sold in the Initial Public Offering by such Stockholder and (iii) the execution
      and delivery of an agreement restricting the Transfer of any Company Securities
      owned by a Stockholder 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 Company Securities
      of the Fortress Entity). 

     

    Section
      6.3   Headings

     

    .
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      control or effect the meaning or construction of any provisions
      hereof. 

     

    Section
      6.4   Entire
      Agreement

     

    .
      This
      Agreement, the Membership Interest Purchase Agreement and the Registration
      Rights Agreement (as such term is defined in the Membership Interest Purchase
      Agreement) constitute the entire agreement and understanding of the parties
      hereto in respect of the subject matter contained herein, and there are no
      restrictions, promises, representations, warranties, covenants, conditions
      or
      undertakings with respect to the subject matter hereof, other than those
      expressly set forth or referred to herein. This Agreement supersedes all prior
      agreements and understandings between the parties hereto with respect to the
      subject matter hereof. 

     

    Section
      6.5   Further
      Actions; Cooperation

     

    .
      Each of
      the Stockholders agrees to use its reasonable efforts to take, or cause to
      be
      taken, all actions and to do, or cause to be done, and to assist and cooperate
      with the other parties in doing, all things necessary, proper or advisable
      to
      give effect to the transactions contemplated by this Agreement. 

     

    Section
      6.6   Notices

     

    .
      All
      notices, requests, consents and other communications hereunder to any party
      shall be deemed to be sufficient if contained in a written instrument delivered
      in person or sent by telecopy, nationally recognized overnight courier or first
      class registered or certified mail, return receipt requested, postage prepaid,
      addressed to such party at the address set forth below or such other address
      as
      may hereafter be designated on the signature pages of this Agreement or in
      writing by such party to the other parties:

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

     

    
      	 	
              (a)

            	
              If
                to the Company:

            

    

     

    Brookdale
      Senior Living Inc.

    330
      N.
      Wabash, Suite 1400

    Chicago,
      IL 60611

    Fax:
      (866) 326-9975

    Attn:
      Deborah C. Paskin, Esq.

    

    with
      a
      copy (which shall not constitute notice) to:

    

    Fortress
      Investment Group, LLC

    1251
      Avenue of the Americas, 16th
      Floor

    New
      York,
      NY 10020

    Fax: (212)
      798-6122

    Attn: Randal
      A.
      Nardone

    

    and

    

    Skadden,
      Arps, Slate, Meagher & Flom LLP

    4
      Times
      Square

    New
      York,
      NY 10036-6522

    Fax:
      (212) 735-2000

    Attn:
      Joseph A. Coco, Esq.

    

    
      	 	
              (b)

            	
              If
                to Emeritus:

            

    

     

    Emeritus
      Corporation

    3131
      Eliott Avenue 

    Suite
      500

    Seattle,
      Washington 98121

    Fax:
      (206) 378-4205

    Attention:
      Raymond R. Brandstrom

    

    

    with
      a
      copy (which shall not constitute notice) to:

    

    Perkins
      Coie

    1201
      Third Avenue 

    Seattle,
      WA 98101 

    Fax:
      206-359-9771  

    Attn:
      Michael E. Stansbury 

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    (c) If
      to
      FIT-ALT:

    

    c/o
      Fortress Investment Group, LLC

    1251
      Avenue of the Americas, 16th
      Floor

    New
      York,
      NY 10020

    Fax: (212)
      798-6122

    Attn: Randal
      A.
      Nardone

    

    and

    

    Skadden,
      Arps, Slate, Meagher & Flom LLP

    4
      Times
      Square

    New
      York,
      NY 10036-6522

    Fax:
      (212) 735-2000

    Attn:
      Joseph A. Coco, Esq.

    

    
      	 	
              (d)

            	
              If
                to NW Select:

            

    

     

    NW
      Select
      LLC

    600
      University Street, Suite 2500

    Seattle,
      Washington 98101

    Attention:
      Daniel R Baty

    Facsimile
      number: (206) 728-9327

    

    All
      such
      notices, requests, consents and other communications shall be deemed to have
      been given or made if and when received (including by overnight courier) by
      the
      parties at the above addresses or sent by electronic transmission, with
      confirmation received, to the telecopy numbers specified above (or at such
      other
      address or telecopy number for a party as shall be specified by like notice).
      Any notice delivered by any party hereto to any other party hereto shall also
      be
      delivered to each other party hereto simultaneously with delivery to the first
      party receiving such notice.

    

    Section
      6.7   Applicable
      Law; Venue

     

    .
      The
      substantive laws of the State of Delaware shall govern the interpretation,
      validity and performance of the terms of this Agreement, without regard to
      conflicts of law doctrines. Any legal action or proceeding with respect to
      this
      Agreement and any action for enforcement of any judgment in respect thereof
      may
      be brought in the courts of the State of New York or of the United States of
      America for the Southern District of New York and, by execution and delivery
      of
      this Agreement, each party hereto hereby accepts for itself and in respect
      of
      its property, generally and unconditionally, the non-exclusive jurisdiction
      of
      the aforesaid courts and the appellate courts thereof. Each party hereto
      irrevocably consents to the service of process out of any of the aforementioned
      courts in any such action or proceeding by the mailing of copies thereof by
      registered or certified mail, postage prepaid, to such party at the address
      for
      notices set forth herein. Each party hereto hereby irrevocably waives any
      objection which it may 

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    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. 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.

     

    Section
      6.8   Severability

     

    .
      The
      invalidity, illegality or unenforceability of one or more of the provisions
      of
      this Agreement in any jurisdiction shall not affect the validity, legality
      or
      enforceability of the remainder of this Agreement, including any such
      provisions, in any other jurisdiction, it being intended that all rights and
      obligations of the parties hereunder shall be enforceable to the fullest extent
      permitted by law. 

     

    Section
      6.9   Successors
      and Assigns

     

    .
      Except
      as otherwise provided herein, all the terms and provi-sions of this Agreement
      shall be binding upon, shall inure to the benefit of and shall be enforceable
      by
      the respective successors and permitted assigns of the parties hereto. No
      Stock-holder may assign any of its rights hereunder to any Person other than
      a
      Permitted Transferee that has complied in all respects with the requirements
      of
      this Agreement (including, without limitation, Section
      2.2).
      Except
      as otherwise provided in Section
      2.2,
      each
      Permitted Transferee of any Stockholder, shall be subject to all of the terms
      of
      this Agreement, and by taking and holding such shares such Person shall be
      entitled to receive the benefits of and be conclusively deemed to have agreed
      to
      be bound by and to comply with all of the terms and provisions of this
      Agreement; provided,
      however,
      no
      transfer of rights permitted hereunder shall be binding upon or obligate the
      Company unless and until the Company shall have received notice and such
      transfer.  

     

    Section
      6.10   Amendments

     

    .
      This
      Agreement may not be amended, modified or supplemented unless such amendment,
      modification or supplement is in writing and signed by each of the Stockholders,
      FIT-ALT and the Company. 

     

    Section
      6.11   Waiver

     

    .
      The
      failure of a party hereto at any time or times to require performance of any
      provision hereof shall in no manner affect its right at a later time to enforce
      the same. No waiver by a party of any condition or of any breach of any term,
      covenant, representation or warranty contained in this Agreement shall be
      effective unless in a writing signed by the party against whom the waiver is
      to
      be effective, and no waiver in 

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    any
      one
      or more instances shall be deemed to be a further or continuing waiver of any
      such condition or breach in other instances or a waiver of any other condition
      or breach of any other term, covenant, representation or warranty. 

     

    Section
      6.12   Counterparts

     

    .
      This
      Agreement may be executed in two or more counterparts, each of which shall
      be
      deemed an original but all of which shall constitute one and the same
      Agreement. 

     

    Section
      6.13   Injunctive
      Relief

     

    .
      The
      parties hereto acknowledge and agree that it will be impossible to measure
      in
      money the damages that would be suffered if any party hereto violates any of
      the
      terms of this Agreement and that any such violation will cause an aggrieved
      party irreparable injury for which an adequate remedy at law is not available.
      Therefore, the parties hereto shall be entitled (in addition to any other remedy
      to which they may be entitled in law or in equity) to specific performance
      or an
      injunction, restraining order or other equitable relief from any court of
      competent jurisdiction, restraining any party hereto from committing any
      violations of the provisions of this Agreement, and none of the parties hereto
      shall raise the defense that there is an adequate remedy at law or request
      that
      any bond be posted in connection with seeking such equitable relief.

     

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

     

    .
      The
      provisions of this Agreement shall apply, to the full extent set forth herein
      with respect to Company Securities and to any and all equity or debt securities
      of the Company or any successor or assign of the Company (whether by merger,
      consolidation, sale of assets, or otherwise) which may be issued in respect
      of,
      in exchange for, or in substitution of, such Company Securities and shall be
      appropriately adjusted for any stock dividends, splits, reverse splits,
      combinations, reclassifications, recapitalizations, reorganizations and the
      like
      occurring after the date hereof.

     

    Section
      6.15   Termination

     

    .
      This
      Agreement shall terminate upon the earlier to occur of (i) the Expiration Date
      and (ii) the mutual consent of all of the parties hereto; provided,
      however,
      that
      the provisions of Section
      6.7
      and this
Section
      6.15
      shall
      survive the termination of this Agreement.

     

    [Remainder
      of page left blank intentionally]

     

    

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

        
        

      

    

    IN
      WITNESS WHEREOF, the parties have caused this Agreement to be executed and
      delivered by their respective officers thereunto duly as of the date first
      above
      written. 

    

    BROOKDALE
      SENIOR LIVING INC.

    

    

    By:_/s/
      Randal A. Nardone______

    Name:
      Randal A. Nardone

                                      Title:

    

    

    FIT-ALT
      INVESTOR LLC

    

    

    By:_/s/
      William Doniger__________

     
      Name: William Doniger

                                     
Title:

    

    

    EMERITUS
      CORPORATION

    

    

    By:_/s/
      Raymond R. Brandstrom  

    Name:
      Raymond R. Brandstrom

    Title:
      Vice President of Finance

    

    NW
      SELECT LLC

    

    By:_/s/
      Daniel R. Baty________

    Name:
      Daniel R. Baty

    Title:
      Manager

    

    
      
        
          

           

        

        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    

      Exhibit
        A

      IRREVOCABLE
        PROXY

      

      The
        undersigned stockholder ("Stockholder") of Brookdale Senior Living Inc.,
        a
        Delaware corporation (the "Company"), hereby irrevocably appoints Wesley
        Edens,
        Randal Nardone and William Doniger, and each of them, as the sole and exclusive
        attorneys and proxies of the undersigned, with full power of substitution
        and
        resubstitution, to vote and exercise all voting and related rights (to the
        full
        extent that the undersigned is entitled to do so) with respect to all Company
        Securities owned by Stockholder as of the date hereof and of which Stockholder
        acquires ownership after the date hereof (collectively, the "Shares") in
        accordance with the terms of this Proxy until the Expiration Date. Upon the
        undersigned's execution of this Proxy, any and all prior proxies given by
        the
        undersigned with respect to any Shares are hereby revoked and the undersigned
        agrees not to grant any subsequent proxies with respect to the Shares until
        after the Expiration Date.

      

      This
        Proxy is irrevocable (to the fullest extent permitted by applicable law),
        is
        coupled with an interest and made for the benefit of third parties and is
        granted pursuant to that certain Stockholders Agreement of even date herewith
        by
        and among the Company, Stockholder and Emeritus Corporation (the "Stockholders
        Agreement"), and is granted in consideration of FIT-ALT Investor LLC entering
        into that certain Membership Interest Purchase Agreement, dated June 29,
        2005.
        Terms not defined herein shall have the meaning assigned to them in the
        Stockholders Agreement. 

      

      The
        attorneys and proxies named above, and each of them, are hereby authorized
        and
        empowered by the undersigned, at any time prior to the Expiration Date, to
        act
        as the undersigned's attorney and proxy to vote the Shares, and to exercise
        all
        voting, consent and similar rights of the undersigned with respect to the
        Shares
        (including, without limitation, the power to execute and deliver written
        consents and be counted as present for purposes of establishing a quorum)
        at
        every meeting of the shareholders of the Company, however called, and at
        every
        adjournment thereof, and in every action by consent of the shareholders of
        the
        Company, as follows: (i) in favor of the approval and adoption of any
        transactions contemplated in connection with the Reorganization Transaction
        in
        such manner as may be necessary to consummate the Reorganization Transaction;
        and (ii) otherwise as directed in writing by the Fortress Entity.

      

      All
        authority herein conferred shall survive the death or incapacity of the
        undersigned to the extent permitted by law, and any obligation of the
        undersigned hereunder shall be binding upon the successors and assigns of
        the
        undersigned.

      

      This
        Proxy is irrevocable (to the fullest extent permitted by applicable law).
        This
        Proxy shall terminate, and be of no further force and effect, automatically
        upon
        the Expiration Date.

      

      Dated:
        June 29, 2005

      NW
        Select
        LLC

      Signature
        of Stockholder:/s/
        Daniel R. Baty  

      

      Print
        Name of Stockholder: Daniel
        R. Baty  

      Manager

      

      
        
          
            

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      IRREVOCABLE
        PROXY

      

      The
        undersigned stockholder ("Stockholder") of Brookdale Senior Living Inc.,
        a
        Delaware corporation (the "Company"), hereby irrevocably appoints Wesley
        Edens,
        Randal Nardone and William Doniger, and each of them, as the sole and exclusive
        attorneys and proxies of the undersigned, with full power of substitution
        and
        resubstitution, to vote and exercise all voting and related rights (to the
        full
        extent that the undersigned is entitled to do so) with respect to all Company
        Securities owned by Stockholder as of the date hereof and of which Stockholder
        acquires ownership after the date hereof (collectively, the "Shares") in
        accordance with the terms of this Proxy until the Expiration Date. Upon the
        undersigned's execution of this Proxy, any and all prior proxies given by
        the
        undersigned with respect to any Shares are hereby revoked and the undersigned
        agrees not to grant any subsequent proxies with respect to the Shares until
        after the Expiration Date.

      

      This
        Proxy is irrevocable (to the fullest extent permitted by applicable law),
        is
        coupled with an interest and made for the benefit of third parties and is
        granted pursuant to that certain Stockholders Agreement of even date herewith
        by
        and among the Company, Stockholder and NW Select LLC (the "Stockholders
        Agreement"), and is granted in consideration of FIT-ALT Investor LLC entering
        into that certain Membership Interest Purchase Agreement, dated June 29,
        2005.
        Terms not defined herein shall have the meaning assigned to them in the
        Stockholders Agreement. 

      

      The
        attorneys and proxies named above, and each of them, are hereby authorized
        and
        empowered by the undersigned, at any time prior to the Expiration Date, to
        act
        as the undersigned's attorney and proxy to vote the Shares, and to exercise
        all
        voting, consent and similar rights of the undersigned with respect to the
        Shares
        (including, without limitation, the power to execute and deliver written
        consents and be counted as present for purposes of establishing a quorum)
        at
        every meeting of the shareholders of the Company, however called, and at
        every
        adjournment thereof, and in every action by consent of the shareholders of
        the
        Company, as follows: (i) in favor of the approval and adoption of any
        transactions contemplated in connection with the Reorganization Transaction
        in
        such manner as may be necessary to consummate the Reorganization Transaction;
        and (ii) otherwise as directed in writing by the Fortress Entity.

      

      All
        authority herein conferred shall survive the death or incapacity of the
        undersigned to the extent permitted by law, and any obligation of the
        undersigned hereunder shall be binding upon the successors and assigns of
        the
        undersigned.

      

      This
        Proxy is irrevocable (to the fullest extent permitted by applicable law).
        This
        Proxy shall terminate, and be of no further force and effect, automatically
        upon
        the Expiration Date.

      

      Dated:
        June 29, 2005

      Emeritus
        Corporation 

      Signature
        of Stockholder: /s/Raymond
        R. Brandstrom

      

      Print
        Name of Stockholder: Raymond
        R. Brandstrom

      Vice
        President of FiananceDEAN HELLER                 STATE OF NEVADA             CHARLES E. MOORE
Secretary of State            [Graphic Omitted]       Securities Administrator

 RENEE L PARKER                                           SCOTT W. ANDERSON
  Chief Deputy                                             Deputy Secretary
Secretary of State                                    for Commercial Recordings

  PAMELA RUCKEL                                               ELLICK HSU
 Deputy Secretary                                          Deputy Secretary
for Southern Nevada               OFFICE OF THE              for Elections
                               SECRETARY OF STATE

                              Filing Acknowledgement
                                                                   June 28, 2005

JOB NUMBER                     CORPORATION NUMBER
C20050628-1444                  C5713-1999

FILING DESCRIPTION             DOCUMENT FILING
                               NUMBER                  DATE/TIME OF FILING
Designation                    20050254214-75          June 28, 2005 11:06:40 AM

CORPORATION NAME                               RESIDENT AGENT
PALOMAR ENTERPRISES, INC.                      VAL-U-CORP SERVICES, INC.

The  attached  document(s)  were  filed  with  the  Nevada  Secretary  of State,
Commercial  Recordings  Division.  The filing date and time have been affixed to
each  document,  indicating the date and time of filing. A filing number is also
affixed  and  can  be used to reference this document in the future. DEAN HELLER
Secretary  of  State  Respectfully,

                                                    Respectfully,

                                                    /s/ DEAN HELLER

                                                    DEAN HELLER
                                                    Secretary of State

                          Commercial Recording Division
                              202 N. Carson Street
                         Carson City, Nevada 89701-4069
                            Telephone (775)684-5708
                               Fax (775) 684-7138

<PAGE>
                   Dean Heller
[Graphic Omitted]  Secretary of State
                   204 North Carson Street, Suite 1        Entity #
                   Carson City, Nevada 89701-4399          C5713-199
                   (775)854-8705                           Document Number
                   Website: securityofstate.biz            20050254214-75

---------------------------------------------------        Date Filed:
            Certificate of Designation                     6/28/2005 11:06:40 AM
            (PURSUANT TO NRS 78, 1955)                     In the office of
                                                           /s/ Dean Heller
---------------------------------------------------
Important: Read Attached Instructions before completing form.
                                                           Dean Heller
                                                           Secretary of State
                                                           Above Space

                           Certificate of Designation
                           --------------------------
                         For Nevada Profit Corporations
                         ------------------------------
                            (Pursuant to NRS 78.1855)

1.   Name of corporation:

     PALOMR ENTERPRISES, INC.

2.   By resolution of the board of directors pursuant to a provision in the
     articles of incorporation, this certificate establishes the following
     regarding the voting powers, designations, preferences, limitations,
     restrictions and relative rights of the following class or series of stock:

     Class B Common Stock, par value $0.00001 per share, to consist of
     1,000,000,000 shares and to have the same rights, preferences and
     limitations as those of the existing class of the Common Stock, with the
     following two exceptions:

     1.   Different CUSIP Numbers, The Common Stock shall be designated with the
     Common Stock CUSIP number, Class B Common Stock shall be designated with
     the Class B Common Stock CUSIP number.

     2.   No Adjustment Upon subdivision or Combination of the Common Stock, If
     the Company at any time subdivides the Common Stock (by any stock split,
     stock dividend, recapitalization or otherwise) into a greater number of
     shares, or combines the Common Stock (by combination, reverse split or
     otherwise) into a smaller number of shares, neither the number of shares of
     the Class B Common Stock issued and outstanding, nor the number of shares
     held by each of the Class B Common stockholders immediately prior to such
     subdivision or combination will be proportionately adjusted.

3.   Effective date of filing (optional):

4.   Officer Signature:
                         ------------------------------------------------------

FILING FEE: $175.00

     IMPORTANT: Failure to include any of the above information and submit the
     proper fees may cause this filing to be rejected.

     SUBMIT IN DUPLICATE

This form must be  accompanied by appropriate fees. See attached.

<PAGE>

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