<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 5)
__________________
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 4200
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
Suite 4200
Chicago, IL 60601
(312) 558-5600
April 20, 2000
(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 (S)(S)240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box [_].
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SCHEDULE 13D
- ----------------------
CUSIP NO. 112462 10 6
- ----------------------
- -------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 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 93,000
SHARES ------------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
3,929,350
OWNED BY
------------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 93,000
PERSON ------------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
3,929,350
- -------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
Individually beneficially owns vested options to purchase 93,000
shares of common stock, par value $0.01 per share ("Common Stock").
May be deemed to share beneficial ownership of (i) 31,784 shares of
Common Stock directly owned by The Prime Group, Inc., (ii) 3,576,933
shares of Common Stock directly owned by Prime Group VI, L.P. and
(iii) 320,633 shares of Common Stock directly owned by Prime Group II,
L.P. by virtue of his ability to control The Prime Group, Inc. and
PGLP, Inc., which is the managing general partner of Prime Group VI,
L.P. and Prime Group II, 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
Individually beneficially owns an approximate .9% equity interest in
the Issuer, assuming full exercise of options to purchase 93,000
shares of Common Stock. May be deemed to share beneficial ownership
of (i) the approximate .3% equity interest in the Issuer directly
owned by The Prime Group, Inc., (ii) the approximate 36.3% equity
interest in the Issuer directly owned by Prime Group VI, L.P. and
(iii) the approximate 3.3% equity interest in the Issuer directly
owned by Prime Group II, L.P. by virtue of his ability to control
The Prime Group, Inc. and PGLP, Inc., which is the managing general
partner of Prime Group VI, L.P. and Prime Group II, 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 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
3,576,933
SHARES -----------------------------------------------------------
SHARED VOTING POWER
BENEFICIALLY 8
OWNED BY 0
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING
3,576,933
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
0
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
3,576,933 shares of Common Stock
- ------------------------------------------------------------------------------
CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
12
[_]
- ------------------------------------------------------------------------------
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13
Approximate 36.3% equity interest in the Issuer
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
PN
- ------------------------------------------------------------------------------
3
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SCHEDULE 13D
- ----------------------
CUSIP NO. 112462 10 6
- ----------------------
- ------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 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
3,897,566
OWNED BY
-----------------------------------------------------------
EACH SOLE DISPOSITIVE POWER
9
REPORTING 0
PERSON -----------------------------------------------------------
SHARED DISPOSITIVE POWER
WITH 10
3,897,566
- ------------------------------------------------------------------------------
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11
May be deemed to share beneficial ownership of (i) 3,576,933 shares
of Common Stock directly owned by Prime Group VI, L.P. and (ii)
320,633 shares of Common Stock directly owned by Prime Group II, L.P.
by virtue of its position as managing general partner of Prime
Group VI, L.P. and Prime Group II, 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
36.3% equity interest in the Issuer directly owned by Prime Group
VI, L.P. and (ii) the approximate 3.3% equity interest in the Issuer
directly owned by Prime Group II, L.P. by virtue of its position as
managing general partner of Prime Group VI, L.P. and Prime Group II,
L.P.
- ------------------------------------------------------------------------------
TYPE OF REPORTING PERSON
14
CO
- ------------------------------------------------------------------------------
4
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Item 1. Security and Issuer.
Item 1 is amended and restated in its entirety as set forth below:
This Amendment No. 5 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 330 North Wabash Avenue, Suite
1400, Chicago, Illinois 60611.
Item 2. Identity and Background.
Items 2(a) and 2(f) are amended and restated in their entirety as set
forth below:
(a) and (f) This Amendment No. 5 to Schedule 13D is filed by each of
Michael W. Reschke, an individual and a citizen of the United States of America
("Reschke"), 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 PGLPI, which is
the managing general partner of PG-VI.
Item 2(c)(i) is amended and restated in its entirety as follows:
(c)(i) Reschke is the Chairman of the Board and a member of the Board
of Directors of the Company. Reschke is also the Chairman of the Board,
President and Chief Executive Officer and a member of the Board of Directors of
The Prime Group, Inc. ("PGI"), the President and a member of the Board of
Directors of PGLPI and the Chairman of the Board and a member of the Board of
Trustees of Prime Group Realty Trust, a publicly traded real estate investment
trust ("PGRT"). The principal business of PGI is the ownership, development and
management of, and investment in, directly or indirectly, real estate. The
business address of PGI is 77 West Wacker Drive, Suite 4200, Chicago, Illinois
60601. 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 a member of the
Board of Directors of each of Prime Retail, Inc., a publicly traded real estate
investment trust involved in the ownership, development and management of
factory outlet centers ("Prime Retail"), and Horizon Group Properties, Inc., a
publicly traded corporation involved in the ownership, development and
management of factory outlet centers ("Horizon"). The business address of Prime
Retail is 100 East Pratt Street, Nineteenth Floor, Baltimore, Maryland 21202.
The business address of Horizon is 77 West Wacker Drive, Suite 4200, Chicago,
Illinois 60601.
Items 2(b), (c)(ii), (c)(iii), (d) and 2(e) are not amended.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 is amended by adding the following:
On March 21, 2000, Mark J. Schulte, the President and Chief Executive
Officer of the Company, transferred 10,000 shares of Common Stock to PGI.
Item 4. Purpose of Transaction.
Item 4 is amended by (i) deleting the last paragraph thereof and (ii)
adding the following:
Except as set forth in Item 6 of this Amendment No. 5 to Schedule 13D,
none of Reschke, PG-VI or PGLPI, nor, to the best of their knowledge, any of the
executive officers or directors of PGLPI, has any current plans or proposals
that relate to or would result in the types of transactions set forth in
paragraphs (a) through (j) of the instructions for this Item 4.
5
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Item 5. Interest in Securities of the Issuer.
Items 5(a), (b) and (c) are amended and restated in their entirety as
set forth below:
(a) Reschke owns vested options to purchase 93,000 shares of Common
Stock, which number of shares, assuming full exercise of such vested options,
constitutes approximately .9% of the outstanding shares of the Company's Common
Stock. PGI beneficially owns 31,784 shares of Common Stock, which number of
shares constitutes approximately .3% of the outstanding shares of the Company's
Common Stock. PG-VI beneficially owns 3,576,933 shares of Common Stock, which
number of shares constitutes approximately 36.3% of the outstanding shares of
the Company's Common Stock. PG-II beneficially owns 320,633 shares of Common
Stock, which number of shares constitutes approximately 3.3% of the outstanding
shares of the Company's Common Stock.
By virtue of his ability to control PGI and PGLPI, which is the
managing general partner of PG-VI and PG-II, Reschke may be deemed to share
beneficial ownership of the 31,784, 3,576,933 and 320,633 shares of Common Stock
directly owned by PGI, PG-VI and PG-II, respectively. By virtue of its position
as managing general partner of PG-VI and PG-II, PGLPI may be deemed to share
beneficial ownership of the 3,576,933 and 320,633 shares of Common Stock
directly owned by PG-VI and PG-II, respectively.
(b) Assuming full exercise of Reschke's vested options, Reschke has
the sole power to direct the vote and disposition of 93,000 shares of Common
Stock directly owned by Reschke. Each of PGI, PG-VI and PG-II has the sole
power to direct the vote and disposition of the 31,784, 3,576,933 and 320,633
shares of Common Stock owned by PGI, PG-VI and PG-II, respectively.
By virtue of his ability to control PGI and PGLPI, which is the
managing general partner of PG-VI and PG-II, Reschke may be deemed to share the
power to direct the vote and disposition of the 31,784, 3,576,933 and 320,633
shares of Common Stock directly owned by PGI, PG-VI and PG-II, respectively. By
virtue of its position as managing general partner of PG-VI and PG-II, PGLPI may
be deemed to share the power to direct the vote and disposition of the 3,576,933
and 320,633 shares of Common Stock directly owned by PG-VI and PG-II,
respectively.
(c) On March 21, 2000, Mark J. Schulte transferred 10,000 shares of
Common Stock to PGI. Other than as described above, none of Reschke, PGI,
PGLPI, PG-VI or PG-II, nor, to the best of their knowledge, any of the executive
officers or directors of PGLPI, has effected any transaction in securities of
the Company during the past 60 days.
Items 5(d) and (e) are not amended.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Item 6 is amended by adding the following:
On April 20, 2000, Reschke, PGLPI, PGI, PG-II and PG-VI entered into a
Stock Purchase Agreement (the "Fortress Stock Purchase Agreement") with Fortress
Registered Investment Trust ("Fortress") and the Company whereby Reschke, PGLPI,
PGI, PG-II and PG-VI agreed to sell to Fortress (i) 3,916,850 shares of Common
Stock beneficially owned by PGI, PG-II and PG-VI (the "Prime Shares"), (ii)
12,500 shares of Common Stock subject to an option to purchase granted to
Blackacre by PGI (the "Blackacre Shares") under the Blackacre Stock Option
Agreement, (iii) 50,000 shares of Common Stock subject to vested options to
purchase granted to Reschke by the Company (the "Reschke Option Shares") and
(iv) if such options become vested, 25,000 shares of Common Stock subject to
non-vested options to purchase granted to Reschke by the Company (the "Non-
Vested Options") on or before the later of (x) May 18, 2000 or (y) the business
day after the date of expiration or termination of the applicable waiting period
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"Closing Date"). Under the Fortress Stock Purchase Agreement, the purchase
price is payable on the Closing Date in the amount of: (i) $57,752,750 (full
payment of the purchase price for the Prime Shares minus a $1,000,000 deposit to
be paid prior to or on April 24, 2000); (ii) $150,000 for the Blackacre Shares;
provided, however, that if Blackacre's option expires without having been
exercised on or prior to May 7, 2000, Fortress shall pay an additional $37,500
for such shares on the Closing
6
<PAGE>
Date; (iii) $750,000 for the Reschke Option Shares; and (iv) $375,000 for the
shares, if any, issued pursuant to the Non-Vested Options. A copy of the
Fortress Stock Purchase Agreement is attached hereto as Exhibit 99.18 and
incorporated herein by reference.
Item 7. Material to be Filed as Exhibits.
Item 7 is amended by adding the following:
Exhibit No. Description
----------- -----------
Exhibit 99.18 Stock Purchase Agreement, dated as of April 20, 2000,
by and among Fortress Registered Investment Trust,
Brookdale Living Communities, Inc., Michael W. Reschke,
The Prime Group, Inc., Prime Group II, L.P., Prime
Group VI, L.P. and PGLP, Inc.
7
<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. 5 to Schedule 13D is true, complete and correct.
/s/ Michael W. Reschke
-----------------------
Michael W. Reschke
Dated: April 21, 2000
8
<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. 5 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: April 21, 2000
9
<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. 5 to Schedule 13D is true, complete and correct.
PGLP, INC.
By: /s/ Michael W. Reschke
---------------------------
Name: Michael W. Reschke
Title: President
Dated: April 21, 2000
10
<PAGE>
EXHIBIT INDEX
The Exhibit Index is amended by adding the following:
Exhibit No. Description
- ----------- -----------
Exhibit 99.18 Stock Purchase Agreement, dated as of April 20, 2000, by and
among Fortress Registered Investment Trust, Brookdale Living
Communities, Inc., Michael W. Reschke, The Prime Group, Inc.,
Prime Group II, L.P., Prime Group VI, L.P. and PGLP, Inc.
11
<PAGE>
EXHIBIT 99.18
STOCK PURCHASE AGREEMENT
by and among
Fortress Registered Investment Trust
and
Brookdale Living Communities, Inc.
and
Michael W. Reschke
The Prime Group, Inc.
Prime Group II, L.P.
Prime Group VI, L.P.
and
PGLP, Inc.
dated as of
April 20, 2000
<PAGE>
STOCK PURCHASE AGREEMENT
------------------------
This Stock Purchase Agreement (this "Agreement") is made and entered
into as of this 20th day of April, 2000, by and among Fortress Registered
Investment Trust (the "Purchaser"), Brookdale Living Communities, Inc. (the
"Company"), Mr. Michael W. Reschke ("Reschke"), PGLP, Inc. ("PGLP"), The Prime
Group, Inc. and the other parties signatory hereto (The Prime Group, Inc., Prime
Group II, L.P. and Prime Group VI, L.P., individually a "Stockholder," and
collectively, "Stockholders"; together with Reschke and PGLP, collectively, the
"Seller").
W I T N E S S E T H:
WHEREAS, the Stockholders are the owners, beneficially and of record,
of 3,929,350 shares (the "Shares"), in aggregate, constituting (i) 3,916,850
shares, which are not subject to any outstanding rights or agreements granted or
entered into by or binding upon the Seller (the "Prime Shares") and (ii) 12,500
shares, which are subject to an option to purchase in favor of Blackacre Bridge
Capital, LLC on the terms summarized in Exhibit A ("Blackacre Shares"; such
option the "Blackacre Option"), of the common stock, par value $0.01 per share
(the "Common Stock"), of the Company, as more specifically set forth in Exhibit
A attached hereto; and
WHEREAS, the Seller desires to sell, assign and convey to the
Purchaser, the Shares, and the Purchaser desires to purchase, acquire and accept
such Shares from the Seller on and subject to the terms and conditions of this
Agreement.
NOW, THEREFORE, in consideration of the respective representations and
warranties hereinafter set forth and of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiently of which is hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
1. Sale and Purchase. On and subject to the terms and conditions
-----------------
contained herein, the Seller hereby agrees to sell, transfer, assign, convey and
deliver to the Purchaser, and the Purchaser hereby agrees to purchase, acquire
and accept from the Seller, (i) all of the Seller's right, title and interest
in and to the Shares, free and clear of any liens, pledges, security interests,
claims or encumbrance of any kind,
<PAGE>
and (ii) all rights of Seller under the Registration Rights Agreement dated as
of May 7, 1997, as amended (the "Registration Rights Agreement") by and among
the Company and the Seller, Reschke shall exercise options for 50,000 shares of
the Common Stock ("Reschke Option Shares"), which are vested and exercisable as
of the date hereof, and sell all such Reschke Option Shares to the Purchaser at
the Closing (as defined below) for Fifteen Dollars ($15) per share. If Reschke
is permitted to exercise options for 25,000 shares of the Common Stock, which
will vest on May 7, 2000 (the "Non-Vested Options"), Reschke shall exercise such
Non-Vested Options and sell all such shares to the Purchaser for Fifteen Dollars
($15) per share.
2. Purchase Price. The purchase price for the Prime Shares (the
--------------
"Purchase Price") shall be Fifteen Dollars ($15) per share (the "Purchase
Price"). The purchase price of the Blackacre Shares shall be Twelve Dollars
($12) per share, provided, however, that, if the Blackacre Option expires
without having been exercised on or prior to May 7, 2000 (the "Expiration
Date"), the Purchaser shall pay to the Seller $37,500 (the "Option Supplement")
as promptly as possible, but in any case no later than the 10th business day
after the Expiration Date. Within two business days from the date hereof, the
Purchaser shall deliver to the Seller via wire transfer of immediately available
funds to an account (or accounts) designated by the Seller the amount of
$1,000,000 as partial payment of the Purchase Price for the Prime Shares (the
"Deposit"); provided, however, that the Deposit shall be immediately returned or
otherwise refunded to an account (or accounts) designated by the Purchaser by
wire-transfer of immediately available funds, if this Agreement shall be
terminated for any reason other than the Purchaser's breach of material
agreements contained herein. On the date of the Closing, the Purchaser shall
deliver to the Seller via wire transfer of immediately available funds to an
account (or accounts) designated by the Seller the amount of (i) $57,752,750
(full payment of the Purchase Price for the Prime Shares minus the Deposit),
(ii) if the Blackacre Option shall not have been exercised, $150,000 as full
payment of the purchase price for the Blackacre Shares, subject to the
subsequent payment of the Option Supplement for such Blackacre Shares; (iii)
$750,000 for the Reschke Option Shares; plus (iv) $375,000 for the shares issued
pursuant to the Non-Vested Options, as the case may be.
3. Closing. On and subject to the terms and conditions set forth
-------
herein, the sale and transfer of the Shares by the Seller to the Purchaser (the
"Closing") shall take place at the offices of Skadden, Arps, Slate, Meagher &
Flom LLP, 333 West Wacker Drive, Chicago, Illinois at 10:00 a.m., on the later
of (i) the eleventh business day from the date hereof or (ii) the first business
day following the satisfaction and/or waiver of all conditions to effect the
Closing set forth in Section 6
2
<PAGE>
below, but in no event later than the later of (x) May 18, 2000 or (y) the
business day after the date of expiration or termination of the applicable
waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended (the "HSR Act") (the "Closing Date"), unless another date or place is
agreed in writing by each of the parties hereto. At the Closing, each
Stockholder shall deliver to the Purchaser (i) stock certificates representing
the number of Shares set opposite such Stockholder's name on Exhibit A attached
hereto, each such certificate to be duly and validly endorsed in favor of the
Purchaser or accompanied by a separate stock power duly and validly executed by
such Stockholder and otherwise sufficient to vest in the Purchaser good and
marketable title to such Shares; (ii) an assignment of all right, title and
interest of Seller under the Registration Rights Agreement; and (iii) all other
previously undelivered documents required to be delivered by the Seller to the
Purchaser at or prior to the Closing in connection with this Agreement.
4. Representations and Warranties of Seller and Company. The Seller
----------------------------------------------------
hereby, jointly and severally, and the Company, severally, as to Sections 4.1,
4.2 and 4.3 and only with respect to itself, represents and warrants to, and
agrees with, the other parties hereto as follows:
4.1 Organization and Good Standing. Each of PGLP and the
------------------------------
Stockholders and the Company is an entity duly organized, validly existing and
in good standing under the applicable laws of the State of Delaware, in the case
of the Company, and the State of Illinois, in the case of the others.
4.2 Authorization; Validity of Agreement. This Agreement has been
------------------------------------
duly authorized, executed and delivered by the Company and each Seller, and
constitutes a legal, valid and binding obligation against the Company and each
Seller in accordance with its terms.
4.3 No Conflict. None of the execution or delivery of this
-----------
Agreement, or the consummation of the transactions contemplated hereby, will
result in a breach, violation or default of, or give rise to an event which with
the giving of notice or after the passage of time, or both, would result in a
breach, violation or default of, or will require any consent, approval or notice
under, any of the terms or provisions of any constitutive documents of the
Company, PGLP, or any Stockholder, or of any note, bond, indenture, mortgage,
deed of trust, loan agreement or other material contract, agreement, instrument,
restriction or arrangement to which the Company or any Seller is a party or by
which the Company or such Seller or any of its assets may be bound or affected,
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any Seller,
3
<PAGE>
except for any necessary filing under the HSR Act and the Securities Exchange
Act of 1934 (the "Exchange Act").
4.4 Ownership of Shares. The Shares are owned by the Seller free and
-------------------
clear of all liens, pledges, security interests, claims or encumbrances of any
kind, except as specified in Exhibit A attached hereto. Each Stockholder owns
such number of shares of the Common Stock as specified in Exhibit A attached
hereto. The Shares have been duly authorized and validly issued and are fully
paid and non-assessable. There are no outstanding rights or agreements granted
or entered into by or binding upon the Seller with respect to any of the Shares
except the Stockholders Agreement (as defined below). Delivery of the Shares at
the Closing together with necessary stock powers will give the Purchaser good
title to the Shares, free of any liens, pledges, security interests, claims or
encumbrances of any kind whatsoever.
5. Representations and Warranties of Purchaser. The Purchaser hereby
-------------------------------------------
represents and warrants to, and agrees with, the Seller as follows:
5.1 Organization and Good Standing. The Purchaser is a business
------------------------------
trust duly formed, validly existing and in good standing under the laws of the
State of Delaware.
5.2 Authorization; Validity of Agreement. This Agreement has been
------------------------------------
duly authorized, executed and delivered by the Purchaser, and constitutes a
legal, valid and binding obligation against the Purchaser in accordance with its
terms.
5.3 No Conflict. None of the execution and delivery of this
-----------
Agreement, and the consummation of the transactions contemplated hereby, will
result in a breach, violation or default of, or give rise to an event which with
the giving of notice or after the passage of time, or both, would result in a
breach, violation or default of, or will require any consent, approval or notice
under, any of the terms or provisions of the Purchaser's Declaration of Trust or
By-laws, or of any note, bond, indenture, mortgage, deed of trust, loan
agreement or other material contract, agreement, instrument, restriction or
arrangement to which the Purchaser is a party or by which the Purchaser or any
of its assets may be bound or affected, or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Purchaser,
except for any necessary filing under the HSR Act and the Exchange Act.
5.4 Investment Representation. The Purchaser is acquiring the Shares
-------------------------
for investment for its own account, not as a nominee or agent, and not
4
<PAGE>
with a view to, or for resale in connection with, any distribution thereof in
violation of the Securities Act of 1933, as amended (the "Securities Act"). The
Purchaser understands and acknowledges that the sale by the Seller to the
Purchaser of the Prime Shares, the Blackacre Shares, the Reschke Option Shares,
and the shares issued pursuant to Non-Vested Options has not been, and will not
be, registered under the Securities Act or any other applicable securities law
and, unless so registered, may not be offered, sold or otherwise transferred
except in compliance with the registration requirements of the Securities Act or
any other applicable securities law, pursuant to or exemption therefrom or in a
transaction not subject thereto.
6. Conditions to Effect the Closing. The respective obligation of
--------------------------------
each party to effect the Closing shall be subject to the satisfaction at or
prior to the Closing Date of each of the following conditions (except that
Section 6.6 shall be a condition to closing by the Purchaser only):
6.1 Statutes; Court Orders. No statute, rule or regulation
----------------------
shall have been enacted or promulgated by any governmental authority which
prohibits the consummation of the Closing; and there shall be no order or
injunction of a court of competent jurisdiction in effect precluding
consummation of the Closing;
6.2 HSR Approval. The applicable waiting period under the HSR
------------
Act shall have expired or been terminated;
6.3 Representations and Warranties. The representations and
------------------------------
warranties of the other party or parties set forth in Sections 4 or 5,
respectively, shall be true in all material respects on the date of this
Agreement and as of the Closing.
6.4 Approval of the Board. The Board of the Directors of the
---------------------
Company (or the appropriate committee thereof) shall have approved (i) the
Purchaser (or any person controlling, controlled by or under common control with
Purchaser, including any person of which the Purchaser owns at least 50% of the
ownership interest) becoming an interested stockholder for purposes of Section
203 of the General Corporation Law of the State of Delaware, and (ii) the
Company's entrance into a standstill agreement (the "Standstill Agreement"),
substantially in the form attached hereto as Exhibit B.
6.5 Stockholders Agreement; Registration Rights Agreement. The
-----------------------------------------------------
Stockholders Agreement by and among the Company, the Stockholders and Health
Partners, dated May 14, 1999 (the "Stockholders Agreement"), shall have been
amended so that the Purchaser shall be deemed to be "Prime Holders" for
5
<PAGE>
purposes of the Stockholders Agreement, and otherwise the Stockholders Agreement
shall be in effect as if "Prime Holders" continued to be a party to the
Agreement; and the Purchaser agrees to be bound by the terms of the Stockholders
Agreement pursuant to Section 4.1 thereof. Notwithstanding the foregoing, it is
understood by the parties that nothing in the Stockholders Agreement shall
affect the obligations of the Purchaser pursuant to the Standstill Agreement.
The Company shall have consented to the assignment to the Purchaser of all
right, title and interest the Seller has under the Registration Rights
Agreement.
6.6 Board of Directors. Reschke shall have resigned, and two
------------------
designees of the Purchaser shall have been elected, as directors of the Company
to fill the vacancy resulting from Reschke's resignation and to fill the current
vacancy in the Board.
7. Acknowledgments and Agreements of the Parties.
---------------------------------------------
(1) The Seller hereby agrees that, except as set forth herein, it
will not convert, retire, sell, hypothecate or otherwise transfer any rights
relating to the Shares or the Blackacre Shares, including, but not limited to,
stock options, without the prior written consent of the Purchaser.
(2) The parties hereby agree to take promptly all actions
necessary to make the filings required of them or any of their affiliates under
the HSR Act. Concurrently with the filing of notifications under the HSR Act or
as soon thereafter as practicable, the Seller, the Purchaser and the Company
shall each request early termination of the HSR Act waiting period.
(3) The Seller shall use its best efforts to obtain the release
of any liens on, or any restriction on the sale of, the Prime Shares at or prior
to the Closing, including using the proceeds of the Sale to repay any
indebtedness secured by the applicable Prime Shares subject to such lien or
restriction.
8. Survival; Indemnification.
-------------------------
8.1 Survival; Remedy for Breach. The covenants, agreements,
---------------------------
representations, warranties and indemnities of the parties hereto contained
herein or in any certificate or other writing attached hereto, or required by
the terms hereof to be delivered by the Purchaser or the Seller, shall survive
the Closing.
8.2 Indemnification by Seller.
-------------------------
6
<PAGE>
(1) Each of Reschke, PGLP and the Stockholders hereby jointly and
severally indemnify the Purchaser, its shareholders, officers, directors and
affiliates (collectively, the "Indemnified Parties") against and agree to hold
each of them harmless from any and all damage, loss, liability, expense
(including, without limitation, reasonable out-of-pocket expenses of
investigation and attorneys' fees and expenses in connection with any action,
suit or proceeding brought against or involving any Indemnified Parties) and
costs (collectively, "Purchaser Indemnified Amounts") incurred or suffered by
any Indemnified Parties arising out of any misrepresentation or breach of
warranty, covenant or agreement made or to be performed by the Seller pursuant
to this Agreement.
(2) The agreements and indemnities of the Seller contained herein
shall be cumulative, except that an Indemnified Party shall not recover more
than once for the same Purchaser Indemnified Amount.
(3) The Indemnified Parties agree to give notice to the Seller
promptly after learning of the assertion of any claim, or the commencement of
any suit, action or proceeding, in respect of which indemnity may be sought
hereunder; provided, however, that the failure of any Indemnified Party to give
-------- -------
such notice shall not constitute a waiver of its rights hereunder in respect of
the claim, suit, action or proceeding with respect to which such notice was
required to have been given hereunder.
(4) The Seller shall not be liable under this Section 8.2 for any
settlement effected without its consent of any claim, litigation or proceeding
in respect of which indemnity may be sought hereunder. No investigation by the
Purchaser at or prior to the Closing shall relieve the Seller of any liability
hereunder.
(5) The amount required to be paid to an Indemnified Party by the
Seller for any Purchaser Indemnified Amounts hereunder shall be paid not later
than thirty (30) days after receipt by the Seller of written notice from an
Indemnified Party stating that such Purchaser Indemnified Amounts have been
incurred and the amount thereof and of the related indemnity payment.
8.3 Indemnification by the Purchaser.
--------------------------------
(1) The Purchaser hereby indemnifies the Seller, its shareholders,
officers, directors and affiliates (collectively, the "Seller Indemnified
Parties") against and agrees to hold each of them harmless from any and all
damages, loss, liability, expense (including, without limitation, reasonable
out-of-pocket
7
<PAGE>
expenses of investigation and reasonable attorneys' fees and expenses in
connection with any action, suit or proceeding brought against or involving the
Seller) and costs (collectively, "Seller Indemnified Amounts") incurred or
suffered by any of the Seller Indemnified Parties arising out of any
misrepresentation or breach of warranty, covenant or agreement made or to be
performed by the Purchaser pursuant to this Agreement.
(2) The agreements and indemnities of the Purchaser contained
herein shall be cumulative, except that any of the Seller Indemnified Parties
shall not recover more than once for the same Seller Indemnified Amount.
(3) The Seller Indemnified Parties agree to give notice to the
Purchaser promptly after learning of the assertion of any claim, or the
commencement of any suit, action or proceeding, in respect of which indemnity
may be sought hereunder, provided, however, that the failure of any of the
-------- -------
Seller Indemnified Parties to give such notice shall not constitute a waiver of
its rights hereunder in respect of the claim, suit, action or proceeding with
respect to which such notice was required to have been given hereunder.
(4) The Purchaser shall not be liable under this Section 8.3 for
any settlement effected without its consent of any claim, litigation or
proceeding in respect of which indemnity may be sought.
(5) The amount required to be paid to any of the Seller
Indemnified Parties by the Purchaser for any Seller Indemnified Amounts
hereunder shall be paid not later than thirty (30) days after receipt by the
Purchaser of written notice from such party, stating that such Seller
Indemnified Amounts have been incurred and the amount thereof and of the related
indemnity payment.
9. Notices. Any notices or other communications required or
-------
permitted hereunder shall be sufficiently given if sent by facsimile
transmission and confirmed by registered or certified mail, postage prepaid,
addressed as follows:
If to the Purchaser:
c/o Fortress Investment Group LLC
1301 Avenue of the Americas
42nd Floor
New York, New York 10019
Attention: Randal Nardone
Facsimile No.: (212)798-6133
Copy to:
8
<PAGE>
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
Attention: Edmund C. Duffy, Esq.
Facsimile No.: (212)735-2000
If to Reschke/PGLP/Stockholders:
c/o The Prime Group, Inc.
77 West Wacker Drive, Suite 4200
Chicago, Illinois 60601
Attention: Michael W. Reschke
Facsimile No.: (312) 917-1511
Copy to:
c/o The Prime Group, Inc.
77 West Wacker Drive, Suite 4200
Chicago, Illinois 60601
Attention: Robert J. Rudnik, Esq.
Facsimile No.: (312) 917-8442
and to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Attention: Wayne D. Boberg, Esq.
Facsimile No.: (312) 558-5700
If to the Company:
Brookdale Living Communities, Inc.
330 North Wabash, Suite 1400
Chicago, Illinois 60611
Attention: Mark J. Schulte
Facsimile No.: (312) 977-3699
Copy to:
9
<PAGE>
Brookdale Living Communities, Inc.
330 North Wabash, Suite 1400
Chicago, Illinois 60611
Attention: Robert J. Rudnik
Facsimile No.: (312) 977-3769
and to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Attention: Wayne D. Boberg, Esq.
Facsimile No.: (312) 558-5700
or to such other addresses as shall be furnished by like notice by such party.
Any such notice or communication given by mail shall be effective upon receipt
thereof.
10. Further Assurances. The Seller agrees that, at any time
------------------
after the date hereof, upon the request of the Purchaser, it will do, execute,
acknowledge and deliver, or will cause to be done, executed, acknowledged and
delivered, all such further acknowledgments, deeds, assignments, bills of sale,
transfers, conveyances, instruments, consents and assurances as may reasonably
be required for the better assuring and confirming to the Purchaser, its
successors and assigns, absolute ownership to the Shares to be sold to the
Purchaser hereunder.
11. Entire Agreement; Modification. This Agreement (i)
------------------------------
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof and (ii) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. This
Agreement may not be modified or amended except by an instrument in writing duly
signed by or on behalf of the parties hereto and dated on or subsequent to the
date hereof.
12. Termination. This Agreement may be terminated or abandoned
-----------
at any time prior to the Closing Date:
(i) by the mutual written consent of the Purchaser and the Seller; or
10
<PAGE>
(ii) by the non-breaching party, if the Seller or the Purchaser shall
have breached in any material respect any of its representations, warranties,
covenants or other agreements contained in this Agreement, which breach cannot
be or has not been cured within 15 days after the giving of written notice by
the non-breaching party, specifying such breach.
Notwithstanding the foregoing, the Agreement shall be terminated by either party
if the Closing shall not have taken place by the later of (i) May 18, 2000, or
(ii) one business day following expiration or termination of the applicable
waiting period under HSR, unless the parties agree otherwise.
13. Governing Law. This Agreement shall be governed by and construed
-------------
and enforced in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within the State.
14. Binding Effect; Assignment. This Agreement shall be binding upon
--------------------------
the parties hereto and shall not be assigned without the written consent of the
other parties, provided, however, that the Purchaser may assign this Agreement
to any persons directly or indirectly controlling, controlled by, or under
direct or indirect common control with, the Purchaser or any entity 50% or more
of the equity interest of which is owned by Purchaser, without the consent of
the other parties, only if such assignee agrees in writing to be bound to the
Standstill Agreement and this Agreement.
15. Counterparts. This Agreement may be executed simultaneously in
------------
any number of counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
16. Paragraph Headings. The paragraph headings in this Agreement are
------------------
for convenience of reference only and shall not be deemed to alter or affect any
provision hereof.
17. Transaction Expenses. Notwithstanding anything else to this
--------------------
Agreement to the contrary, the parties hereto shall each be responsible for the
payment of any and all of its or his own expenses, including, without
limitation, the fees and expenses of counsel, accountants and other advisers,
arising out of or relating directly or indirectly to the transactions
contemplated by this Agreement, whether or not such transactions are consummated
in whole or in part.
11
<PAGE>
18. Severability. If any provision of this Agreement is invalid,
------------
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.
19. Waiver. The waiver of one breach or default hereunder shall not
------
constitute the waiver of any other or subsequent breach or default.
20. No Agency. This Agreement shall not constitute any party the
---------
legal representative or agent of the other, nor shall any party have the right
or authority to assume, create, or incur any liability or any obligation of any
kind, express or implied, against or in the name of or on behalf of the other
party.
21. Adjustment upon Changes in Capitalization. In the case of any
-----------------------------------------
changes affecting the Company's capitalization, including, but not limited to,
stock dividends, cash dividends in excess of normal quarterly cash dividends
consistent with past practice, stock splits, recapitalization and the like, the
number of the Shares, the Purchase Price and any other items affected by such
change shall be appropriately adjusted.
[Signature page follows]
12
<PAGE>
IN WITNESS WHEREOF, the parties hereto duly executed this Agreement
the day and date first above written.
THE PURCHASER:
Fortress Registered Investment Trust
By:/s/ Randal Nardone
---------------------
Name: Randal Nardone
Title: Chief Operating Officer
THE COMPANY:
Brookdale Living Communities, Inc.
By:/s/ Mark J. Schulte
---------------------
Name: Mark J. Schulte
Title: President and Chief Executive Officer
THE PARTIES CONSTITUTING THE SELLER:
/s/ Michael W. Reschke
-----------------------
Michael W. Reschke
The Prime Group, Inc.
By:/s/ Michael W. Reschke
-------------------------
Name: Michael W. Reschke
Title: President
13
<PAGE>
Prime Group II, L.P.
By: PGLP, Inc., Managing General Partner
By:/s/ Michael W. Reschke
-----------------------
Name: Michael W. Reschke
Title: President
Prime Group VI, L.P.
By: PGLP, Inc., Managing General Partner
By:/s/ Michael W. Reschke
-----------------------
Name: Michael W. Reschke
Title: President
PGLP, Inc.
By:/s/ Michael W. Reschke
-----------------------
Name: Michael W. Reschke
Title: President
14
<PAGE>
EXHIBIT A
Name of Stockholder(1) Number of Shares Owned
- ---------------------- ----------------------
The Prime Group, Inc. 31,784(2)
Prime Group II, L.P. 320,633(3)
Prime Group VI, L.P. 3,576,933(4)
- ---------------------------------------------------------------
Total 3,929,350(5)
___________________________
(1) Michael W. Reschke has the ability to control The Prime Group, Inc. and
PGLP, Inc., which is the managing general partner of Prime Group II, L.P. and
Prime Group VI, L.P.
(2) 12,500 shares are subject to an option, by which Blackacre Bridge Capital
LLC may purchase such shares at a price of $12 per share.
(3) The Shares owned by Prime Group II, L.P. are pledged to Kemper Investors
Life Insurance Company, which pledge shall be released on or prior to the
Closing.
(4) The shares owned by Prime Group VI, L.P. are pledged to LaSalle Bank
National Association, which pledge shall be released on or prior to the closing.
Subject to a no sale agreement in favor of FBR Assets Investment Corporation,
which shall be waived at the closing.
(5) All of the shares are subject to the terms of the Stockholders Agreements,
dated as of May 14, 1999, among the Company, the Stockholders and Health
Partners.
15
<PAGE>
EXHIBIT B
STANDSTILL AGREEMENT
--------------------
THIS STANDSTILL AGREEMENT (this "Standstill Agreement") dated as of
April 20, 2000, is entered into by and between Brookdale Living Communities,
Inc., a Delaware corporation (including its successors, the "Company"), and
Fortress Registered Investment Trust, a Delaware business trust (the
"Purchaser").
WHEREAS, the Purchaser wishes to acquire all of the common stock,
$0.01 par value, of the Corporation (the "Common Stock") currently owned
(including shares subject to currently outstanding options) by The Prime Group,
Inc. certain of its affiliates and Mr. Michael W. Reschke (collectively, the
"Seller") as set forth in Exhibit A (the "Prime Shares") pursuant to the Stock
Purchase Agreement by and among the Company, the Seller, and the Purchaser (the
"Stock Purchase Agreement");
WHEREAS, the Board of Directors of the Company approved the Purchaser
becoming an interested stockholder for purposes of Section 203 of the General
Corporation Law of the State of Delaware so as to eliminate any restriction
under such Section 203 on a subsequent business combination involving the
Corporation and the Purchaser (the "Section 203 Approval");
WHEREAS, as a condition to the Section 203 Approval, the Board of
Directors of the Company has required the Purchaser to execute this Agreement on
and subject to the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the respective representations and
warranties hereinafter set forth and of the mutual covenants and agreements
contained herein and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, and intending to be legally bound,
the parties hereto agree as follows:
Section 1. Standstill. (a) For a period commencing upon the date of
----------
this Agreement and ending on May 14, 2002 (the "Expiration Day"), neither the
Purchaser, any persons controlling the Purchaser (the "Controlling Person"), nor
any of their affiliates shall (nor shall the Controlling Person permit the
Purchaser to), without the prior written consent of the Company (without
counting as a director for
<PAGE>
such purpose any director designated by the Purchaser or the Controlling
Person), directly or indirectly:
(i) purchase, offer to purchase, agree to acquire or otherwise acquire
Beneficial Ownership (as defined below) of additional Common Stock or any
equivalents to the Common Stock (the "Common Stock Equivalents"), except
pursuant to the Stock Purchase Agreement;
(ii) except as required by law, propose to enter into, or announce or
disclose any intention to propose to enter into, directly or indirectly, any
merger or business combination involving the Company of any of its subsidiaries
or to purchase, directly or indirectly, all or substantially all of the assets
of the Company and its subsidiaries, taken as a whole;
(iii) request the Company (or its directors, officers, employees or
agents), directly or indirectly, to take any action which would require the
Company to make a public announcement regarding the possibility of (A) a
business combination or merger involving the Company or any of its subsidiaries,
on the one hand, or Purchaser or any Controlling Person, or any affiliate, on
the other hand, or (B) the sale to the Purchaser or any Controlling Person, or
any affiliate thereof of all or substantially all of the assets of the Company
and its subsidiaries, taken as a whole;
(iv) make, or in any way participate in, directly or indirectly, any
"solicitation" of "proxies" (as such terms are defined or used in Regulation 14A
of the Securities Exchange Act of 1934, as amended (the "Exchange Act")), to
vote, or seek to advise or influence any person with respect to the voting of,
any Common Stock, or become a "participant" in any "election contest" (as such
terms are used or defined in Regulation 14A of the Exchange Act);
(v) form, join or in any way participate in a "group" (within the meaning
of Section 13(d)(3) of the Exchange Act) or otherwise act in concert with any
person for the purpose of circumventing the provisions of this Agreement;
(vi) nominate a slate of directors or seek to change the size of the Board
of Directors of the Company together or in connection with any other person or
group; or
(vii) challenge the legality of the foregoing restrictions; provided that
after July 5, 2000 the Purchaser or any of its affiliates may commence a cash
tender offer for not less than all shares of Common Stock not owned by it for a
price equal to the
2
<PAGE>
greater of $15 per share or the price paid to the Seller pursuant to the Stock
Purchase Agreement and may acquire all shares tendered pursuant thereto (it
being understood that the foregoing restrictions shall not prohibit or limit the
Purchaser from taking any appropriate action to disclose its intentions or
seeking the support of the Board of Directors of the Company with respect to
such tender offer), and, if the Purchaser shall thereafter Beneficially Own a
majority (not including for such purposes shares owned by or acquired from Cap Z
(as hereinafter defined)) of the Common Stock, the foregoing restrictions shall
no longer be applicable. Notwithstanding the foregoing, for the purposes of
calculating the number of shares of Common Stock and/or Common Stock Equivalents
Beneficially Owned by the Purchaser, the Controlling Person and their
affiliates, there shall be excluded from such calculation any shares owned by
any institution which is controlled by the Controlling Person as part of such
institution's investment portfolio (and not owned for the purpose of affecting
control of the Company). For purposes of this Agreement, "Beneficially Own" or
"Beneficial Ownership" means beneficial ownership determined in accordance with
Rule 13d-3 promulgated under the Exchange Act, and "Fully Diluted Common Stock"
means all outstanding shares of Common Stock and all shares of Common Stock
issuable upon the conversion or exchange of all then outstanding Common Stock
Equivalents.
(b) The provisions of this Section 1 shall terminate prior to the
Expiration Day, and the Purchaser, the Controlling Person or any of their
affiliates shall be free to acquire Common Stock and/or Common Stock Equivalents
without regard to the Standstill, at and following the earliest time that (A)
any person other than the Purchaser, the Controlling Person, Health Partners,
Capital Z Partners, Ltd. (the ultimate general partner of Health Partners,
hereinafter "Cap Z") or any of their affiliates (and other than a person acting
in concert with any of the foregoing) acquires Beneficial Ownership of Common
Stock and/or Common Stock Equivalents representing, together with any Common
Stock and/or Common Stock Equivalents already Beneficially Owned by such person
and its affiliates, at least 20% of the total Fully-Diluted Common Stock, (B)
any person other than the Purchaser, the Controlling Person or any of their
affiliates notifies in writing the Company or its Board of Directors or publicly
announces that it has acquired or has offered to acquire (including but not
limited to any offer to acquire by means of a tender offer) Beneficial Ownership
of Common Stock and/or Common Stock Equivalents representing, together with any
Common Stock and/or Common Stock Equivalents already Beneficially Owned (as
determined in accordance with Rule l3d-3 promulgated under the Exchange Act) by
such person and its affiliates, at least 20% of the total Fully-Diluted Common
Stock, (C) any person commences (or publicly announces its intention to
commence) a proxy contest pursuant to which such person
3
<PAGE>
seeks to defeat or otherwise challenge the election of the designees of the
Purchaser as directors of the Company, (D) the restrictions set forth in Article
2 "Health Partners Standstill" of the Stockholder Agreement, dated May 14, 1999,
shall be amended, modified, waived, or otherwise terminated without the prior
written consent of the Purchaser or (E) the Stock Purchase Agreement shall have
terminated without the Purchaser or any assignee thereof having acquired shares
of Common Stock pursuant thereto.
Section 2. Representations and Warranties of the Company. The
---------------------------------------------
Company hereby represents and warrants to, and agrees with, the Purchaser as
follows:
2.1 Organization and Good Standing. The Company is a
------------------------------
corporation duly formed, validly existing and in good standing under the laws of
the State of Delaware.
2.2 Authorization; Validity of Agreement. This Agreement has
------------------------------------
been duly authorized, executed and delivered by the Company, and constitutes a
legal, valid and binding obligations enforceable against the Company in
accordance with its terms.
2.3 No Conflict. None of the execution and delivery of this
-----------
Agreement, and the consummation of the transaction contemplated hereby, will
result in a breach, violation or default of, or give rise to an event which with
the giving of notice or after the passage of time, or both, would result in a
breach, violation or default of, or will require any consent, approval or notice
under, any of the terms or provisions of the Company's Certificate of
Incorporation or By-laws, or of any material note, bond, indenture, mortgage,
deed of trust, loan agreement or other material contract, agreement, instrument,
restriction, or arrangement to which the Company is a party or by which the
Company or any of its assets may be bound or affected, or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
the Company.
2.4 Approval of the Board. The Board of the Directors of the
---------------------
Company have approved the Purchaser (or any person controlling, controlled by or
under common control with Purchaser, including any person of which the Purchaser
owns, directly or indirectly, at least 50% of the ownership interest) becoming
an interested stockholder for purposes of Section 203 of the General Corporation
Law of the State of Delaware.
4
<PAGE>
Section 3. Representations and Warranties of the Purchaser. The
-----------------------------------------------
Purchaser hereby represents and warrants to, and agrees with, the Company as
follows:
3.1 Organization and Good Standing. The Purchaser is a
------------------------------
business trust duly formed, validly existing and in good standing under the laws
of the State of Delaware.
3.2 Authorization; Validity of Agreement. This Agreement has
------------------------------------
been duly authorized, executed and delivered by the Purchaser, and constitutes a
legal, valid and binding obligation against the Purchaser in accordance with its
terms.
3.3 No Conflict. None of the execution and delivery of this
-----------
Agreement, and the consummation of the transaction contemplated hereby, will
result in a breach, violation or default of, or give rise to an event which with
the giving of notice or after the passage of time, or both, would result in a
breach, violation or default of, or will require any consent, approval or notice
under, any of the terms or provisions of the Declaration of Trust and By-laws of
the Purchaser, or of any note, bond, indenture, mortgage, deed of trust, loan
agreement or other contract, agreement, instrument, restriction, or arrangement
to which the Purchaser is a party or by which the Purchaser or any of its assets
may be bound or affected, or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Purchaser.
Section 4. Entire Agreement; Modification. This Agreement (i)
------------------------------
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof and (ii) is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder. This
Agreement may not be modified or amended except by an instrument in writing duly
signed by or on behalf of the parties hereto and dated on or subsequent to the
date hereof.
Section 5. Governing Law. This Agreement shall be governed by and
-------------
construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within the State.
Section 6. Binding Effect. This Agreement shall be binding upon the
--------------
parties and inure to the benefits of the successors and assigns of the
respective parties hereto.
5
<PAGE>
Section 7. Counterparts. This Agreement may be executed
------------
simultaneously in any number of counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
Section 8. Paragraph Headings. The paragraph headings in this
------------------
Agreement are for convenience of reference only and shall not be deemed to alter
or affect any provision hereof.
Section 9. Transaction Expenses. Notwithstanding anything else in
--------------------
this Agreement to the contrary, the parties hereto shall each by responsible for
the payment of any and all of its or his own expenses, including, without
limitation, the fees and expenses of counsel, accountants and other advisers,
arising out of or relating directly or indirectly to the transactions
contemplated by this Agreement, whether or not such transactions are consummated
in whole or in part.
Section 10. Severability. If any provision of this Agreement is
------------
invalid, illegal, or unenforceable, the balance of this Agreement shall remain
in effect, and if any provision is inapplicable to any person or circumstance,
it shall nevertheless remain applicable to all other persons and circumstances.
Section 11. Waiver. The waiver of one breach or default hereunder
------
shall not constitute the waiver of any other or subsequent breach or default.
Section 12. No Agency. This Agreement shall not constitute any party
---------
the legal representative or agent of the other, nor shall any party have the
right or authority to assume, create, or incur any liability or any obligation
of any kind, express or implied, against or in the name of or on behalf of the
other party.
Section 13. Adjustment upon Changes in Capitalization. In the case
-----------------------------------------
of any changes affecting the Company's capitalization, including, but not
limited to, stock dividends, cash dividends in excess of normal quarterly cash
dividends consistent with past practice, stock splits, recapitalization and the
like, the number of shares and any other items affected by such change shall be
appropriately adjusted.
Section 14. Interpretation. The words "hereof", "herein" and
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"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole and not to any particular
provision of this Agreement, and article, section, paragraph, exhibit and
schedule references are to the articles, sections, paragraphs, exhibits and
schedules of this Agreement unless
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otherwise specified. Whenever the words "include", "includes" or "including" are
used in this Agreement they shall be deemed to be followed by the words "without
limitation". The words describing the singular number shall include the plural
and vice versa, and words denoting any gender shall include all genders and
words denoting natural persons shall include corporations and partnerships and
vice versa. As used in this Agreement, the term "affiliate(s)" shall have the
meaning set forth in Rule l2b-2 of the Exchange Act. As used in this Agreement,
the term "person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization or government or other agency or political
subdivision thereof. The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
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IN WITNESS WHEREOF, the Purchaser and the Company have caused this
Agreement to be signed by their respective officers thereunto duly authorized as
of the date first written above.
FORTRESS REGISTERED
INVESTMENT TRUST
By:__________________________
Name:
Title:
BROOKDALE LIVING
COMMUNITIES, INC.
By:__________________________
Name:
Title:
