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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________________
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
____________________
BROOKDALE LIVING COMMUNITIES, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
112462 10 6
(CUSIP Number)
MICHAEL W. RESCHKE
77 WEST WACKER DRIVE
SUITE 3900
CHICAGO, IL 60601
(312) 917-1500
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
With a copy to:
WAYNE D. BOBERG, ESQ.
WINSTON & STRAWN
35 WEST WACKER DRIVE
CHICAGO, IL 60601
(312) 558-5600
JANUARY 16, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: [ ]
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SCHEDULE 13D
- -----------------------
CUSIP NO. 112462 10 6
- -----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael W. Reschke
- ------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
2 (a) [_]
(b) [_]
- ------------------------------------------------------------------------------
SEC USE ONLY
3
- ------------------------------------------------------------------------------
SOURCE OF FUNDS
4
Not Applicable
- ------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- ------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
United States of America
- ------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
4,044,350
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
4,044,350
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11 May be deemed to share beneficial ownership of the 1,355,390 shares of
Common Stock, par value $0.01 per share ("Common Stock"), directly owned
by The Prime Group, Inc., the 320,633 shares of Common Stock directly
owned by Prime Group Limited Partnership and the 2,368,327 shares of
Common Stock directly owned by Prime Group VI, L.P.
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13 May be deemed to share beneficial ownership of (i) the approximate 14.30%
equity interest in the Issuer directly owned by The Prime Group, Inc.,
(ii) the approximate 3.38% equity interest in the Issuer directly owned by
Prime Group Limited Partnership and (iii) the approximate 25.0% equity
interest in the Issuer directly owned by Prime Group VI, L.P.
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
IN
- ------------------------------------------------------------------------------
2
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SCHEDULE 13D
- ----------------------
CUSIP NO. 112462 10 6
- ----------------------
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
The Prime Group, Inc.
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [_]
- --------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------
SOURCE OF FUNDS
4
00
- --------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- --------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Illinois, United States of America
- --------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 1,355,390
SHARES -------------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 1,355,390
PERSON -------------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
1,355,390 shares of Common Stock, par value $0.01 per share
- --------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximate 14.30% equity interest in the Issuer
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- --------------------------------------------------------------------------------
3
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SCHEDULE 13D
- ----------------------
CUSIP NO. 112462 10 6
- ----------------------
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Prime Group VI, L.P.
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [_]
- --------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------
SOURCE OF FUNDS
4
00
- --------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- --------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Illinois, United States of America
- --------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 2,368,327
SHARES -------------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
0
OWNED BY
-------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 2,368,327
PERSON -------------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
2,368,327 shares of Common Stock, par value $0.01 per share
- --------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximate 25.0% equity interest in the Issuer
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
PN
- --------------------------------------------------------------------------------
4
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SCHEDULE 13D
- ----------------------
CUSIP NO. 112462 10 6
- ----------------------
- --------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PGLP, Inc.
- --------------------------------------------------------------------------------
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
2 (a) [_]
(b) [_]
- --------------------------------------------------------------------------------
SEC USE ONLY
3
- --------------------------------------------------------------------------------
SOURCE OF FUNDS
4
Not Applicable
- --------------------------------------------------------------------------------
CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
5
- --------------------------------------------------------------------------------
CITIZENSHIP OR PLACE OF ORGANIZATION
6
Illinois, United States of America
- --------------------------------------------------------------------------------
SOLE VOTING POWER
7
NUMBER OF 0
SHARES -------------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
2,368,327
OWNED BY
-------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -------------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
2,368,327
- --------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
May be deemed to share beneficial ownership of the 2,368,327 shares of
Common Stock, par value $0.01 per share, directly owned by Prime Group
VI, L.P.
- --------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- --------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
May be deemed to share beneficial ownership of the approximate 25.0%
equity interest in the Issuer directly owned by Prime Group VI, L.P.
- --------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- --------------------------------------------------------------------------------
5
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ITEM 1. SECURITY AND ISSUER.
This Amendment No. 2 to Schedule 13D relates to shares of Common
Stock, par value $0.01 per share ("Common Stock"), of Brookdale Living
Communities, Inc., a Delaware corporation (the "Company"). The principal
executive offices of the Company are located at 77 West Wacker Drive, Suite
4800, Chicago, Illinois 60601.
ITEM 2. IDENTITY AND BACKGROUND.
(a) and (f) This Amendment No. 2 to Schedule 13D is filed by each of
Michael W. Reschke, an individual and a citizen of the United States of America
("Reschke"), The Prime Group, Inc., an Illinois corporation ("PGI"), Prime Group
VI, L.P., an Illinois limited partnership ("PG-VI"), and PGLP, Inc., an Illinois
corporation ("PGLPI").
Reschke owns an approximate 50.75% equity interest in PGI and an
approximate 50.75% equity interest in PGLPI, which is the managing general
partner of, with a 1.0% interest in, PG-VI.
(b)(i) The business address of each of Reschke, PGI, PG-VI and PGLPI
is:
77 West Wacker Drive
Suite 3900
Chicago, Illinois 60601
(ii) Unless otherwise indicated in paragraph (c)(iii) of this Item
2, the business address of each person listed in paragraph (c)(iii) of this Item
2 is:
77 West Wacker Drive
Suite 3900
Chicago, Illinois 60601
(c)(i) Reschke is the Chairman, President and Chief Executive Officer
of PGI, the President and a member of the Board of Directors of PGLPI and the
Chairman of the Board of Trustees of Prime Group Realty Trust, a publicly traded
real estate investment trust ("PGRT"). The principal business of PGRT is the
acquisition, development, finance, construction, leasing, marketing, renovation
and property management of office and industrial properties. The business
address of PGRT is 77 West Wacker Drive, Suite 3900, Chicago, Illinois 60601.
Reschke is also the Chairman of the Board of Directors of each of Prime Retail,
Inc., a publicly traded real estate investment trust involved in factory outlet
centers, and the Company and a member of the Board of Directors of Ambassador
Apartments, Inc., a publicly traded real estate investment trust involved in
multi-family residential projects.
(ii) The principal business of each of PGI, PG-VI and PGLPI is the
ownership, development and management of, and investment in, directly or
indirectly, real estate.
(iii) The following table sets forth the name and the principal
occupation or employment of each director and executive officer (except Reschke
(see paragraph (c)(i) of this Item 2)) of PGI and PGLPI:
<TABLE>
<CAPTION>
Name Present Principal Occupation or Employment
- ---- ------------------------------------------
<S> <C>
Robert J. Rudnik (A)(B).... Executive Vice President/General Counsel and
Secretary of PGI; Vice President and Secretary of
PGLPI; Executive Vice President, General Counsel
and Secretary of PGRT; General Counsel and
Secretary of the Company
Gary J. Skoien............. Executive Vice President of PGI; Vice President of
PGLPI
Ray R. Grinvalds (A)....... Senior Vice President/Asset and Development
Management of PGI; Vice President and Treasurer of
PGLPI
Mark K. Cynkar............. Vice President/Chief Financial Officer of PGI
Bohdan P. Hirniak.......... Vice President/Land Development Division of PGI
</TABLE>
6
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Name Present Principal Occupation or Employment
- ---- ------------------------------------------
Warren H. John (A)(B).......... Vice President of PGI; Vice President and
Assistant Secretary of PGLPI
Robert E. Lemke................ Vice President/Single Family Housing of PGI
Glenn D. Reschke (A)........... Executive Vice President/Development of Prime
c/o The Prime Group, Inc. Retail, Inc.
100 East Pratt Street
Baltimore, MD 21202
Edward J. John (A)............. Orthodontist
1420 N. Arlington Heights Rd.
Arlington Heights, IL 60004
___________________
(A) Director of PGI
(B) Director of PGLPI
All of the executive officers and directors of PGI and PGLPI are
citizens of the United States of America.
(d) and (e) During the last five years, none of Reschke, PGI, PG-VI
or PGLPI or any of the directors or executive officers of PGI or PGLPI (i) has
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Pursuant to a Formation Agreement, dated as of May 7, 1997, by and
among the Company, PGI, PGLP, Brookdale Holdings, Inc. and Mark J. Schulte (the
"Formation Agreement"), and in connection with the consummation of the Company's
initial public offering of Common Stock on May 7, 1997, PGI and certain of its
affiliates contributed the assets and operations of PGI's senior and assisted
living division to the Company in exchange for the receipt by PGI and Prime
Group Limited Partnership, an Illinois limited partnership ("PGLP"), of
1,382,410 and 320,633 shares of Common Stock, respectively, and the assumption
by the Company of certain indebtedness of PGI's senior and assisted living
division in the aggregate amount of $65.0 million. The Formation Agreement is
identified as Exhibit I hereto and incorporated herein by reference.
In addition, in connection with the consummation of the Company's
initial public offering of Common Stock on May 7, 1997, PG-VI acquired 2,500,000
shares of Common Stock at a purchase price of $10.695 per share.
ITEM 4. PURPOSE OF TRANSACTION.
PGI and PGLP acquired the shares of Common Stock owned by such
entities in order to maintain a significant investment in the Company following
the consummation of the Company's initial public offering. PG-VI purchased the
shares of Common Stock owned by it for investment purposes and to facilitate the
formation of the Company.
On May 7, 1997, the Company granted to Reschke, as Chairman of the
Board of the Company, options to acquire 100,000 shares of Common Stock. The
options vest, subject to the satisfaction of certain conditions, at the rate of
25% per year over the four years commencing on the first anniversary of their
date of grant and will have a term of 10 years. The exercise price of the
options is the initial public offering price of $11.50 per share.
7
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Except as set forth in this Amendment No. 2 to Schedule 13D, none of
Reschke, PGI, PG-VI or PGLPI has any current plans or proposals which relate to
or would result in the types of transactions set forth in paragraphs (a) through
(j) of the instructions for this Item 4.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) PGI directly beneficially owns 1,355,390 of the 4,044,350 shares
of Common Stock to which this Amendment No. 2 to Schedule 13D relates, which
number of shares constitutes approximately 14.30% of the total outstanding
shares of the Company's Common Stock. PGLP beneficially owns 320,633 of the
4,044,350 shares of Common Stock to which this Amendment No. 2 to Schedule 13D
relates, which number of shares constitutes approximately 3.38% of the total
outstanding shares of the Company's Common Stock. PG-VI beneficially owns
2,368,327 of the 4,044,350 shares of Common Stock to which this Amendment No. 2
to Schedule 13D relates, which number of shares constitutes approximately 25.0%
of the total outstanding shares of the Company's Common Stock. By virtue of his
ability to control each of PGI, PGLP and PG-VI, Reschke may be deemed to share
beneficial ownership of the 1,355,390, 320,633 and 2,368,327 shares of Common
Stock directly owned by PGI, PGLP and PG-VI, respectively. By virtue of its
ability to control PG-VI, PGLPI may be deemed to share beneficial ownership of
the 2,368,327 shares of Common Stock directly owned by PG-VI.
(b) Each of PGI, PGLP and PG-VI has the sole power to direct the vote
of the 1,355,390, 320,633 and 2,368,327 shares of Common Stock directly owned by
PGI, PGLP and PG-VI, respectively. Reschke may be deemed to share the power to
direct the vote of the 1,355,390, 320,633 and 2,368,327 shares of Common Stock
directly owned by PGI, PGLP and PG-VI, respectively, because Reschke has the
ability to control each of PGI, PGLP and PG-VI. PGLPI may be deemed to share
the power to direct the vote of the 2,368,327 shares of Common Stock directly
owned by PG-VI because PGLPI is the managing general partner of PG-VI.
(c) On January 16, 1998, PGI, in Chicago, Illinois, transferred to
Robert J. Rudnik ("Rudnik") 27,020 shares of Common Stock at a value of
$17.82503 per share in partial redemption of Rudnik's interests in PGI. Pursuant
to the terms and conditions of an Agreement Regarding Assignments of BLCI Common
Stock, dated as of January 16, 1998, by and among PG-VI, PGLP, Prime Group II,
L.P., Reschke, Edward J. John, Glenn D. Reschke, Reschke 1, L.L.C., Warren H.
John, Rudnik and Ray R. Grinvalds (the "Agreement Regarding Assignments"), PG-
VI, in Chicago, Illinois, transferred to Rudnik and Warren H. John ("John")
98,264 and 33,409 shares of Common Stock, respectively, at a value of $17.82503
per share in partial redemption of Rudnik's and John's respective interests in
PGLP and Prime Group II, L.P. Other than as described above, none of Reschke,
PGI, PGLP or PG-VI, nor, to the best of their knowledge, any of the executive
officers or directors of PGI or PGLPI, has effected any transaction in
securities of the Company during the past 60 days.
(d) Other than Och-Ziff Capital Management, L.P., a Delaware limited
partnership ("Och-Ziff"), pursuant to the terms and conditions of a Pledge and
Security Agreement, dated as of December 5, 1997, by and between PG-VI and Och-
Ziff (the "Pledge and Security Agreement"), no person is known to have the right
to receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, securities held by Reschke, PGI, PGLP or PG-VI, except for
Reschke, PGI, PGLP, PG-VI or PGLPI.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO
SECURITIES OF THE ISSUER.
Pursuant to the terms and conditions of a Registration Rights
Agreement, dated as of May 7, 1997, by and among the Company, PGI, PGLP and PG-
VI, as amended by Amendment No. 1 to Registration Rights Agreement, dated as of
December 5, 1997, by and among the Company, PGI, PGLP and PG-VI ("Amendment No.
1 to Registration Rights Agreement") (collectively, the "Registration Rights
Agreement"), the Company granted demand and incidental registration rights to
PGI, PGLP and PG-VI for the registration of shares of Common Stock owned by PGI,
PGLP and PG-VI under the Securities Act of 1933, as amended. Under the
Registration Rights Agreement, three demand registrations are permitted during
the first five years following the Company's initial public offering of Common
Stock and one demand registration per year is permitted each year thereafter
until PGI, PGLP and PG-VI collectively own less than 10% of the outstanding
Common Stock. The Company will pay the fees and expenses of the demand
registrations and the incidental registrations, while PGI, PGLP and PG-VI will
pay all underwriting discounts and
8
<PAGE>
commissions. These registration rights are subject to certain conditions and
limitations, including the right of underwriters to limit the number of shares
owned by PGI, PGLP and PG-VI included in such registration.
Pursuant to the terms and conditions of a Stock Option and Deposit
Agreement, dated as of May 7, 1997, by and between PGI and Darryl W. Copeland,
Jr. (the "Copeland Stock Option Agreement"), Mr. Copeland received an option,
subject to a one year vesting period, to purchase 100,000 shares of Common Stock
from PGI at a purchase price of $0.01 per share. In the event the employment of
Mr. Copeland is terminated by the Company for any reason or in the event Mr.
Copeland voluntarily terminates his employment with the Company due to a "change
of control" of the Company and a material diminution of his duties and
responsibilities or compensation prior to the expiration of the vesting period,
the option immediately vests.
Pursuant to the terms and conditions of a Stock Purchase Agreement and
Agreement Concerning Option Shares, dated as of May 7, 1997, by and among PGI,
PG-VI and Darryl W. Copeland, Jr. (the "Stock Purchase Agreement"), PG-VI agreed
to sell to Mr. Copeland 25,000 shares of Common Stock (the "Purchased Shares")
for an aggregate purchase price of $272,722.50. The purchase and sale of the
Purchased Shares shall occur no later than May 8, 2000. In the event the
purchase and sale of the Purchased Shares does not occur on or before May 8,
2000, Mr. Copeland's right to purchase the Purchased Shares and PG-VI's
obligation to sell the Purchased Shares automatically terminate. Mr. Copeland
has no voting rights as a stockholder with respect to the Purchased Shares until
the closing of the purchase and sale of the Purchased Shares.
Pursuant to the terms and conditions of a Stock Option Agreement,
dated as of May 7, 1997, by and between PGI and Blackacre Bridge Capital L.L.C.,
a Delaware limited liability company ("Blackacre") (the"Blackacre Stock Option
Agreement"), PGI granted to Blackacre an option to purchase 12,500 shares of
Common Stock at a price per share equal to the lesser of $12.00 or the average
of all closing prices of the Common Stock from the date of the consummation of
the Company's initial public offering to that date which is six months after the
date of the consummation of the Company's initial public offering. The option
first became exerciseable on November 7, 1997, and the term of the option shall
continue in effect until May 7, 2000. Blackacre has no rights as a stockholder
with respect to such shares until the date of the sale of such shares upon the
exercise of such option.
Pursuant to the terms and conditions of a Note Purchase Agreement,
dated as of December 5, 1997, by and between PG-VI and Och-Ziff (the "Note
Purchase Agreement"), PG-VI issued an exchangeable note, dated December 5, 1997,
having a principal amount of $20.0 million and a five year term (the
"Exchangeable Note") to Och-Ziff. Pursuant to the terms and conditions of the
Exchangeable Note, Och-Ziff shall have the right, commencing on November 15,
1998 (the "Initial Exchange Date"), to exchange a portion of the outstanding
principal amount of the Exchangeable Note, plus accrued interest thereon, for
shares of Common Stock of the Company held by PG-VI ("Exchange Shares") at the
exchange rate specified therein (an "Exchange"). On and after the Initial
Exchange Date, Och-Ziff shall be entitled to exchange up to $5.0 million of the
outstanding principal amount of the Exchangeable Note, plus accrued interest
thereon, on each of January 15, 1999, March 15, 1999 and May 15, 1999. Subject
to certain exceptions, the number of Exchange Shares exchangeable by Och-Ziff
pursuant to an Exchange shall be equal to (x) the principal amount, plus accrued
interest thereon, of the Exchangeable Note specified for exchange in the notice
of exchange divided by (y) the Exchange Price in effect on the date of exchange.
The "Exchange Price" shall be the product of (A) 88% multiplied by (B) the
average of the closing bid prices for the Common Stock on the Nasdaq National
Market on the seven trading days immediately preceding the date of exchange. PG-
VI shall have the right, pursuant to the terms and conditions of the
Exchangeable Note, to effect an optional redemption of (i) the principal amount,
plus accrued interest thereon, of the Exchangeable Note sought to be exchanged
by Och-Ziff, at the applicable optional redemption price specified therein, if
on the date of delivery of a notice of exchange the Exchange Price for the
Common Stock is less than $17.60 per share, and (ii) the outstanding principal
amount, plus accrued interest thereon, of the Exchangeable Note, at the
applicable optional redemption price specified therein, if a period during which
Och-Ziff may not sell or otherwise transfer, pursuant to an effective "shelf"
registration statement under Rule 415 of the Securities Act of 1933, as amended,
covering the resale on a continuous basis of the Exchange Shares which Och-Ziff
becomes entitled to receive, any Exchange Shares continues for more than 90
days. Och-Ziff shall have the right, pursuant to the terms and conditions of the
Exchangeable Note, to effect a mandatory redemption by PG-VI of all or any
portion of the outstanding principal amount, plus accrued interest thereon, of
the Exchangeable Note, at the mandatory redemption price specified therein, if a
mandatory redemption event specified therein occurs.
9
<PAGE>
Pursuant to the terms and conditions of the Note Purchase Agreement,
PG-VI pledged 1,370,000 shares of its 2,368,327 shares of Common Stock of the
Company to Och-Ziff, pursuant to the terms and conditions of the Pledge and
Security Agreement, in order to secure the obligations of PG-VI under the
Exchangeable Note issued to Och-Ziff. In addition, each of PGI, PGLP, PGLPI,
Prime International, Inc. and Prime Group II, L.P. guaranteed the payment in
full of the obligations of PG-VI under the Exchangeable Note issued to Och-Ziff
pursuant to separate Guaranties, each dated as of December 5, 1997 (a form of
which is identified as Exhibit X hereto and incorporated herein by reference),
made in favor of Och-Ziff.
Pursuant to the terms and conditions of the Agreement Regarding
Assignments, PG-VI transferred to Rudnik and John 98,264 and 33,409 shares of
Common Stock, respectively, at a value of $17.82503 per share in partial
redemption of Rudnik's and John's respective interests in PGLP and Prime Group
II, L.P.
Each of the Registration Rights Agreement, Amendment No. 1 to
Registration Rights Agreement, the Copeland Stock Option Agreement, the Stock
Purchase Agreement, the Blackacre Stock Option Agreement, the Note Purchase
Agreement, the Exchangeable Note and the Pledge and Security Agreement are
identified as Exhibits II, III, IV, V, VI, VII, VIII and IX, respectively, and
incorporated herein by reference. The Agreement Regarding Assignments is
attached hereto as Exhibit XI and incorporated herein by reference.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit I Formation Agreement, dated as of May 7, 1997, by and
among the Company, PGI, PGLP, Brookdale Holdings, Inc.
and Mark J. Schulte, as filed with the Securities and
Exchange Commission on August 14, 1997 as Exhibit 10.1
to the Company's Form 10-Q (Commission File No. 0-22253)
and incorporated herein by reference
Exhibit II Registration Rights Agreement, dated as of May 7, 1997,
by and among the Company, PGI, PGLP and PG-VI, as filed
with the Securities and Exchange Commission on August
14, 1997 as Exhibit 10.3 to the Company's Form 10-Q
(Commission File No. 0-22253) and incorporated herein by
reference
Exhibit III Amendment No. 1 to Registration Rights Agreement, dated
as of December 5, 1997, by and among the Company, PGI,
PGLP and PG-VI*
Exhibit IV Stock Option and Deposit Agreement, dated as of May 7,
1997, by and between Darryl W. Copeland, Jr. and PGI, as
filed with the Securities and Exchange Commission on
August 14, 1997 as Exhibit 10.42 to the Company's Form
10-Q (Commission File No. 0-22253) and incorporated
herein by reference
Exhibit V Stock Purchase Agreement and Agreement Concerning Option
Shares, dated as of May 7, 1997, by and among Darryl W.
Copeland, Jr., PGI and PG-VI, as filed with the
Securities and Exchange Commission on August 14, 1997 as
Exhibit 10.43 to the Company's Form 10-Q (Commission
File No. 0-22253) and incorporated herein by reference
Exhibit VI Stock Option Agreement, dated as of May 7, 1997, by and
between PGI and Blackacre*
Exhibit VII Note Purchase Agreement, dated as of December 5, 1997,
by and between PG-VI and Och-Ziff*
Exhibit VIII Exchangeable Note, dated December 5, 1997, issued by
PG-VI to Och-Ziff*
Exhibit IX Pledge and Security Agreement, dated as of December 5,
1997, by and between PG-VI and Och-Ziff*
Exhibit X Form of Guaranty*
10
<PAGE>
Exhibit XI Agreement Regarding Assignments of BLCI Common Stock,
dated as of January 16, 1998, by and among PG-VI, PGLP,
Prime Group II, L.P., Reschke, Edward J. John, Glenn D.
Reschke, Reschke 1, L.L.C., John, Rudnik and Ray R.
Grinvalds
Exhibit XII Joint Acquisition Statement pursuant to Rule 13d-1(f)(1)
of the Securities Exchange Act of 1934, as amended, by
Reschke, PGI, PG-VI and PGLPI*
------------------
*Previously filed.
11
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of his or its knowledge and
belief, the undersigned certifies that the information set forth in this
Amendment No. 2 to Schedule 13D is true, complete and correct.
/s/ Michael W. Reschke
-------------------------
Michael W. Reschke
Dated: January 26, 1998
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of his or its knowledge and
belief, the undersigned certifies that the information set forth in this
Amendment No. 2 to Schedule 13D is true, complete and correct.
THE PRIME GROUP, INC.
By: /s/ Michael W. Reschke
-----------------------
Name: Michael W. Reschke
Title: President
Dated: January 26, 1998
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of his or its knowledge and
belief, the undersigned certifies that the information set forth in this
Amendment No. 2 to Schedule 13D is true, complete and correct.
PRIME GROUP VI, L.P.
By: PGLP, Inc.
Managing General Partner
By: /s/ Michael W. Reschke
-----------------------
Name: Michael W. Reschke
Title: President
Dated: January 26, 1998
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of his or its knowledge and
belief, the undersigned certifies that the information set forth in this
Amendment No. 2 to Schedule 13D is true, complete and correct.
PGLP, INC.
By: /s/ Michael W. Reschke
-----------------------
Name: Michael W. Reschke
Title: President
Dated: January 26, 1998
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
Exhibit I Formation Agreement, dated as of May 7, 1997, by and among
the Company, PGI, PGLP, Brookdale Holdings, Inc. and Mark J.
Schulte, as filed with the Securities and Exchange Commission
on August 14, 1997 as Exhibit 10.1 to the Company's Form 10-Q
(Commission File No. 0-22253) and incorporated herein by
reference
Exhibit II Registration Rights Agreement, dated as of May 7, 1997, by
and among the Company, PGI, PGLP and PG-VI, as filed with the
Securities and Exchange Commission on August 14, 1997 as
Exhibit 10.3 to the Company's Form 10-Q (Commission File No.
0-22253) and incorporated herein by reference
Exhibit III Amendment No. 1 to Registration Rights Agreement, dated as of
December 5, 1997, by and among the Company, PGI, PGLP and PG-
VI*
Exhibit IV Stock Option and Deposit Agreement, dated as of May 7, 1997,
by and between Darryl W. Copeland, Jr. and PGI, as filed with
the Securities and Exchange Commission on August 14, 1997 as
Exhibit 10.42 to the Company's Form 10-Q (Commission File No.
0-22253) and incorporated herein by reference
Exhibit V Stock Purchase Agreement and Agreement Concerning Option
Shares, dated as of May 7, 1997, by and among Darryl W.
Copeland, Jr., PGI and PG-VI, as filed with the Securities
and Exchange Commission on August 14, 1997 as Exhibit 10.43
to the Company's Form 10-Q (Commission File No. 0-22253) and
incorporated herein by reference
Exhibit VI Stock Option Agreement, dated as of May 7, 1997, by and
between PGI and Blackacre*
Exhibit VII Note Purchase Agreement, dated as of December 5, 1997, by and
between PG-VI and Och-Ziff*
Exhibit VIII Exchangeable Note, dated December 5, 1997, issued by PG-VI to
Och-Ziff*
Exhibit IX Pledge and Security Agreement, dated as of December 5, 1997,
by and between PG-VI and Och-Ziff*
Exhibit X Form of Guaranty*
Exhibit XI Agreement Regarding Assignments of BLCI Common Stock, dated
as of January 16, 1998, by and among PG-VI, PGLP, Prime Group
II, L.P., Reschke, Edward J. John, Glenn D. Reschke, Reschke
1, L.L.C., John, Rudnik and Ray R. Grinvalds
Exhibit XII Joint Acquisition Statement pursuant to Rule 13d-1(f)(1) of
the Securities Exchange Act of 1934, as amended, by Reschke,
PGI, PG-VI and PGLPI*
- ------------------
*Previously filed.
<PAGE>
Exhibit XI
AGREEMENT REGARDING ASSIGNMENTS
OF BLCI COMMON STOCK
THIS AGREEMENT REGARDING ASSIGNMENTS OF BLCI COMMON STOCK (this
"Agreement") is made and entered into as of the 16th day of January, 1998, by
and among Prime Group VI, L.P., an Illinois limited partnership ("PG6LP"), Prime
Group Limited Partnership, an Illinois limited partnership ("Prime L.P."), Prime
Group II, L.P., an Illinois limited partnership ("PG2LP"), Michael W. Reschke
("MWR"), Edward J. John ("EJJ"), Glenn D. Reschke ("GDR"), Reschke 1, L.L.C., a
Maryland limited liability company ("Reschke LLC"), Warren H. John ("WHJ"),
Robert J. Rudnik ("RJR") and Ray R. Grinvalds ("RRG").
W I T N E S S E T H:
WHEREAS, as of the date hereof, MWR, EJJ, GDR, Reschke LLC, WHJ, RJR and
RRG are the holders of all of the partnership interests in Prime L.P. and are
the holders of all of the limited partnership interests in PG2LP; and
WHEREAS, Prime L.P. is a limited partner in PG6LP; and
WHEREAS, (i) RJR, The Prime Group, Inc. ("PGI"), Prime International, Inc.
("PII"), PGLP, Inc. ("PGLP Inc."), Prime L.P. and PG2LP are parties to that
certain Redemption Agreement, dated as of December 1, 1997 (the "RJR Redemption
Agreement"), and (ii) WHJ, PGI, PII, PGLP Inc., Prime L.P. and PG2LP are parties
to that certain Redemption Agreement, dated as of December 1, 1997 (the "WHJ
Redemption Agreement"); and
WHEREAS, the RJR Redemption Agreement, in part, provides for the partial
redemption of RJR's interests in PGI, PGLP Inc., Prime L.P. and PG2LP, and the
WHJ Redemption Agreement, in part, provides for the Partial redemption of WHJ's
interests in PGI, PGLP Inc., Prime L.P. and PG2LP; and
WHEREAS, it has been determined that (i) in redemption of a portion of
RJR's interests in Prime L.P. pursuant to the RJR Redemption Agreement, Prime
L.P. shall transfer and assign to RJR 59,822 shares of common stock of Brookdale
Living Communities, Inc., a Delaware corporation ("BLCI"), (ii) in redemption of
a portion of RJR's interests in PG2LP pursuant to the RJR Redemption Agreement,
PG2LP shall transfer and assign to RJR 38,442 shares of common stock of BLCI,
(iii) in redemption of a portion of WHJ's interests in Prime L.P. pursuant to
the WHJ Redemption Agreement, Prime L.P. shall transfer and assign to WHJ 32,266
shares of common stock of BLCI, and (iv) in redemption of a portion of WHJ's
interests in PG2LP pursuant to the WHJ Redemption Agreement, PG2LP shall
transfer and assign to WHJ 1,143 shares of common stock of BLCI; and
WHEREAS, all of the shares of Common Stock in BLCI to be
<PAGE>
transferred and assigned to RJR and WHJ in partial redemption of their interests
in Prime L.P. and PG2LP as described above (such shares are referred to herein
as the "BLCI Redemption Shares") are currently held by PG6LP; and
WHEREAS, in order for Prime L.P. and PG2LP to hold the appropriate number
of BLCI Redemption Shares to be in a position to effect the partial redemption
of the interests in Prime L.P. and PG2LP held by RJR and WHJ as described above,
it has been determined that (i) the BLCI Redemption Shares must be transferred
and assigned by PG6LP to Prime L.P., (ii) certain of the BLCI Redemption Shares
must be transferred and assigned by Prime L.P. to the holders of partnership
interests in Prime L.P., (iii) the holders of partnership interests in Prime
L.P. must transfer and assign to PG2LP the BLCI Redemption Shares received by
them as described in clause (ii) above, (iv) Prime L.P. must transfer and assign
to RJR and WHJ the appropriate number of BLCI Redemption Shares in partial
redemption of the interests in Prime L.P. held by RJR and WHJ, and (v) PG2LP
must transfer and assign to RJR and WHJ the appropriate number of BLCI
Redemption Shares in partial redemption of the interests in PG2LP held by RJR
and WHJ; and
WHEREAS, the parties hereto have agreed to take all actions and steps to
cause, effect, accomplish and evidence the transactions described above, and, in
connection therewith, have agreed that the transfers and assignments of the BLCI
Redemption Shares described in clauses (i), (ii) and (iii) of the immediately
preceding paragraph will be effected and accomplished without the delivery of a
stock certificate or stock certificates representing the BLCI Redemption Shares
and that PG6LP is authorized and directed to transfer and assign the appropriate
number of BLCI Redemption Shares directly to RJR and WHJ in partial redemption
of their respective interests in Prime L.P. and PG2LP; and
WHEREAS, the parties hereto have agreed to enter into this Agreement to
cause, effect and accomplish the transfer and assignments of the BLCI Redemption
Shares described above and the other transactions described herein.
NOW THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. The parties hereto hereby agree that shares of common stock of BLCI,
par value $0.01 (the "BLCI Common Stock"), are hereby transferred and
assigned as follows in the following order:
(a) PG6LP hereby assigns to Prime L.P. 131,363 shares of BLCI Common
Stock.
2
<PAGE>
(b) Prime L.P. hereby assigns to MWR 17,080 shares of BLCI Common Stock.
(c) Prime L.P. hereby assigns to EJJ 8,864 shares of BLCI Common Stock.
(d) Prime L.P. hereby assigns to GDR 1,720 shares of BLCI Common Stock.
(e) Prime L.P. hereby assigns to Reschke LLC 2,530 shares of BLCI Common
Stock.
(f) Prime L.P. hereby assigns to WHJ 4,250 shares of BLCI Common Stock.
(g) Prime L.P. hereby assigns to RJR 4,250 shares of BLCI Common Stock.
(h) Prime L.P. hereby assigns to RRG 891 shares of BLCI Common Stock.
(i) MWR hereby assigns to PG2LP 17,080 shares of BLCI Common Stock.
(j) EJJ hereby assigns to PG2LP 8,864 shares of BLCI Common Stock.
(k) GDR hereby assigns to PG2LP 1,720 shares of BLCI Common Stock.
(l) Reschke LLC hereby assigns to PG2LP 2,530 shares of BLCI Common Stock.
(m) WHJ hereby assigns to PG2LP 4,250 shares of BLCI Common Stock.
(n) RJR hereby assigns to PG2LP 4,250 shares of BLCI Common Stock.
(o) RRG hereby assigns to PG2LP 891 shares of BLCI Common Stock.
(p) Prime L.P. hereby assigns to RJR 59,822 shares of BLCI Common Stock.
(q) Prime L.P. hereby assigns to WHJ 32,266 shares of BLCI Common Stock.
(r) PG2LP hereby assigns to RJR 38,422 shares of BLCI Common Stock.
3
<PAGE>
(s) PG2LP hereby assigns to WHJ 1,143 shares of BLCI Common Stock.
2. The parties hereto hereby agree that, although each of the above-
described assignments have occurred on the date hereof, the assignees of each
assignment have not and will not receive a certificate or certificates
representing the shares of BLCI Common Stock so assigned. To evidence and effect
the result of the assignments described herein, the parties hereto hereby direct
and authorize PG6LP to cause the delivery directly to RJR and WHJ of the
following certificates representing shares of BLCI Common Stock:
(a) A Stock Certificate issued in the name of Robert J. Rudnik
representing 59,822 shares of Common Stock of BLCI (i.e., the shares
of Common Stock of BLCI to be transferred and assigned by Prime L.P.
to RJR pursuant to the RJR Redemption Agreement);
(b) A Stock Certificate issued in the name of Warren H. John representing
32,266 shares of Common Stock of BLCI (i.e., the shares of Common
Stock of BLCI to be transferred and assigned by Prime L.P. to WHJ
pursuant to the WHJ Redemption Agreement);
(c) A Stock Certificate issued in the name of Robert J. Rudnik
representing 38,442 shares of Common Stock of BLCI (i.e., the shares
of Common Stock of BLCI to be transferred and assigned by PG2LP to RJR
pursuant to the RJR Redemption Agreement); and
(d) A Stock Certificate issued in the name of Warren H. John representing
1,143 shares of Common Stock of BLCI (i.e., the shares of Common Stock
of BLCI to be transferred and assigned by PG2LP to WHJ pursuant to the
WHJ Redemption Agreement).
[signature page follows]
4
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
day and year first above written.
PRIME GROUP VI, L.P.
By: PGLP, Inc.
Its: Managing General Partner
By: /s/ Robert J. Rudnik
_____________________________
Its: Vice President
_____________________________
PRIME GROUP LIMITED PARTNERSHIP
By: /s/ Michael W. Reschke
_____________________________
Michael W. Reschke
Managing General Partner
PRIME GROUP II, L.P.
By: PGLP, Inc.
Its: Managing General Partner
By: /s/ Robert J. Rudnik
_____________________________
Its: Vice President
_____________________________
/s/ Michael W. Reschke
______________________________
MICHAEL W. RESCHKE
/s/ Edward J. John
_____________________________
EDWARD J. JOHN
/s/ Glenn D. Reschke
_____________________________
GLENN D. RESCHKE
5
<PAGE>
RESCHKE 1, L.L.C.
By: /s/ Glenn D. Reschke
__________________________
Glenn D. Reschke
Managing Member
/s/ Warren H. John
_____________________________
WARREN H. JOHN
/s/ Robert J. Rudnik
_____________________________
ROBERT J. RUDNIK
/s/ Ray R. Grinvalds
_____________________________
RAY R. GRINVALDS
6
