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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. 1)
____________________
HORIZON GROUP PROPERTIES, INC.
(Name of Issuer)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
44041U 10 2
(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
JUNE 26, 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: / /
<PAGE>
SCHEDULE 13D
CUSIP No. 44041U 10 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael W. Reschke
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /x/
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES 7. SOLE VOTING POWER - 8,206
BENEFICIALLY OWNED BY
EACH PERSON WITH 8. SHARED VOTING POWER - 894,518
9. SOLE DISPOSITIVE POWER - 8,206
10. SHARED DISPOSITIVE POWER -894,518
2
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
Individually beneficially owns 8,206 shares of Common Stock, par value $0.01
per share, of the Issuer ("Common Stock"). May be deemed to share beneficial
ownership of: (i) 453,818 shares of Common Stock and 75,620 Common Units of
Horizon Group Properties, L.P., a Delaware limited partnership ("Common
Units"), which Common Units are exchangeable on a one for one basis for Common
Stock at any time (or, at the Issuer's election, cash of equivalent value),
directly owned by Prime Group Limited Partnership, an Illinois limited
partnership ("PGLP"); (ii) 277,850 Common Units directly owned by Prime
Financing Limited Partnership, an Illinois limited partnership ("PFLP");
(iii) 42,281 Common Units directly owned by Prime Group II, L.P., an Illinois
limited partnership ("PG-II"); (iv) 3,081 Common Units directly owned by Prime
Group III, L.P., an Illinois limited partnership ("PG-III"); (v) 6,818 Common
Units directly owned by Prime Group IV, L.P., an Illinois limited partnership
("PG-IV"); and (vi) 35,050 Common Units directly owned by Prime Group V, L.P.,
an Illinois limited partnership ("PG-V") by virtue of his position as managing
general partner of PGLP and his ability to control PFLP, PG-II, PG-III, PG-IV
and PG-V.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES / /,
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Individually beneficially owns 8,206 shares of Common Stock which constitute
approximately 0.3% of the outstanding shares of Common Stock. May be deemed
to share beneficial ownership of the approximately: (i) 453,818 shares of
Common Stock and 75,620 Common Units directly owned by PGLP, which, assuming
exchange of the Common Units, constitute approximately 18.6% of the
outstanding shares of Common Stock; (ii) 277,850 Common Units directly owned
by PFLP which, assuming exchange of the Common Units, constitute approximately
9.1% of the outstanding shares of Common Stock; (iii) 42,281 Common Units
directly owned by PG-II which, assuming exchange of the Common Units,
constitute approximately 1.5% of the outstanding shares of Common Stock; (iv)
3,081 Common Units directly owned by PG-III which, assuming exchange of the
Common Units, constitute approximately 0.1% of the outstanding shares of
Common Stock; (v) 6,818 Common Units directly owned by PG-IV which, assuming
exchange of the Common Units, constitute approximately 0.3% of the outstanding
shares of Common Stock; and (vi) 35,050 Common Units directly owned by PG-V
which, assuming exchange of the Common Units, constitute approximately 1.3% of
the outstanding shares of Common Stock, by virtue of his position as managing
general partner of PGLP and his ability to control PFLP, PG-II, PG-III, PG-IV
and PG-V.
14. TYPE OF REPORTING PERSON - IN
3
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SCHEDULE 13D
CUSIP No. 44041U 10 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
PGLP, Inc.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /x/
3. SEC USE ONLY
4. SOURCE OF FUNDS
Not Applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois, United States of America
NUMBER OF SHARES 7. SOLE VOTING POWER - 0
BENEFICIALLY OWNED BY
EACH PERSON WITH 8. SHARED VOTING POWER - 87,230
9. SOLE DISPOSITIVE POWER - 0
10. SHARED DISPOSITIVE POWER - 87,230
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
May be deemed to share beneficial ownership of: (i) 42,281 Common
Units of Horizon Group Properties, L.P., a Delaware limited
partnership ("Common Units"), which Common Units are exchangeable on
a one for one basis for Common Stock, par value $0.01 per share, of
the Issuer ("Common Stock") at any time (or, at the Issuer's
election, case of equivalent value), owned by Prime Group, II, L.P.,
an Illinois limited partnership ("PG-II"); (ii) 3,081 Common Units
owned by Prime Group III, L.P., an Illinois limited partnership
("PG-III"); (iii) 6,818 Common Units owned by Prime Group IV, L.P.,
an Illinois limited partnership ("PG-IV"); and (iv) 35,050 Common
Units owned by Prime Group V, L.P., an Illinois limited partnership
("PG-V") by virtue of its position as managing general partner of
each of PG-II, PG-III, PG-IV and PG-V.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
4
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
May be deemed to share beneficial ownership of: (i) 42,281 Common
Units owned by PG-II which, assuming exchange of the Common Units,
constitute approximately 1.5% of the outstanding shares of Common
Stock; (ii) 3,081 Common Units owned by PG-III which, assuming
exchange of the Common Units, constitute approximately 0.1% of the
outstanding shares of Common Stock; (iii) 6,818 Common Units owned
by PG-IV which, assuming exchange of the Common Units, constitute
approximately 0.3% of the outstanding shares of Common Stock; and
(iv) 35,050 Common Units owned by PG-V which, assuming exchange of
the Common Units, constitutes approximately 1.3% of the outstanding
shares of Common Stock by virtue of its position as managing general
partner of each of PG-II, PG-III, PG-IV and PG-V.
14. TYPE OF REPORTING PERSON - CO
5
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SCHEDULE 13D
CUSIP No. 44041U 10 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Prime Finance, Inc.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /x/
3. SEC USE ONLY
4. SOURCE OF FUNDS
Not Applicable
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois, United States of America
NUMBER OF SHARES 7. SOLE VOTING POWER - 0
BENEFICIALLY OWNED BY
EACH PERSON WITH 8. SHARED VOTING POWER - 277,850
9. SOLE DISPOSITIVE POWER - 0
10. SHARED DISPOSITIVE POWER - 277,850
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
May be deemed to share beneficial ownership of 277,850 Common Units
of Horizon Group Properties, L.P., a Delaware limited partnership
("Common Units"), which Common Units are exchangeable on a one for
one basis for Common Stock, par value $0.01 per share, of the
Issuer, at any time (or, at the Issuer's election, cash of
equivalent value), directly owned by Prime Financing Limited
Partnership by virtue of its position as managing general partner of
Prime Financing Limited Partnership.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
6
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
May be deemed to share beneficial ownership of the approximate 9.1%
equity interest in the Issuer directly owned by Prime Financing
Limited Partnership, assuming exchange of the Common Units, by
virtue of its position as managing general partner of Prime
Financing Limited Partnership.
14. TYPE OF REPORTING PERSON - CO
7
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SCHEDULE 13D
CUSIP No. 44041U 10 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Prime Group Limited Partnership
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /x/
3. SEC USE ONLY
4. SOURCE OF FUNDS
00 and PF
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois, United States of America
NUMBER OF SHARES 7. SOLE VOTING POWER - 529,438
BENEFICIALLY OWNED BY
EACH PERSON WITH 8. SHARED VOTING POWER - 0
9. SOLE DISPOSITIVE POWER - 529,438
10. SHARED DISPOSITIVE POWER - 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
453,818 shares of Common Stock of the Issuer, $0.01 par value per
share ("Common Stock") and 75,620 Common Units of Horizon Group
Properties, L.P., a Delaware limited partnership ("Common Units"),
which Common Units are exchangeable on a one for one basis for
Common Stock at any time or, at the Issuer's election, cash of
equivalent value.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 18.6% equity interest in the Issuer assuming exchange
of the Common Units.
14. TYPE OF REPORTING PERSON - PN
8
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SCHEDULE 13D
CUSIP No. 44041U 10 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Prime Financing Limited Partnership
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /x/
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois, United States of America
NUMBER OF SHARES 7. SOLE VOTING POWER - 277,850
BENEFICIALLY OWNED BY
EACH PERSON WITH 8. SHARED VOTING POWER - 0
9. SOLE DISPOSITIVE POWER - 277,850
10. SHARED DISPOSITIVE POWER - 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
277,850 Common Units of Horizon Group Properties, L.P., a Delaware
limited partnership ("Common Units"), which Common Units are
exchangeable on a one for one basis for Common Stock of the Issuer,
$0.01 par value per share ("Common Stock"), at any time or, at the
Issuer's election, cash of equivalent value.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 9.1% equity interest in the Issuer assuming exchange
of the Common Units.
14. TYPE OF REPORTING PERSON - PN
9
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SCHEDULE 13D
CUSIP No. 44041U 10 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Prime Group II, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /x/
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois, United States of America
NUMBER OF SHARES 7. SOLE VOTING POWER - 42,281
BENEFICIALLY OWNED BY
EACH PERSON WITH 8. SHARED VOTING POWER - 0
9. SOLE DISPOSITIVE POWER 42,281
10. SHARED DISPOSITIVE POWER - 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
42,281 Common Units of Horizon Group Properties, L.P., a Delaware
limited partnership ("Common Units"), which Common Units are
exchangeable on a one for one basis for Common Stock of the Issuer,
$0.01 par value per share, at any time or, at the Issuer's election,
cash of equivalent value.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 1.5% equity interest in the Issuer assuming exchange
of the Common Units.
14. TYPE OF REPORTING PERSON - PN
10
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SCHEDULE 13D
CUSIP No. 44041U 10 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Prime Group III, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /x/
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois, United States of America
NUMBER OF SHARES 7. SOLE VOTING POWER - 3,081
BENEFICIALLY OWNED BY
EACH PERSON WITH 8. SHARED VOTING POWER - 0
9. SOLE DISPOSITIVE POWER - 3,081
10. SHARED DISPOSITIVE POWER - 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,081 Common Units of Horizon Group Properties, L.P., a Delaware
limited partnership ("Common Units"), which Common Units are
exchangeable on a one for one basis for Common Stock of the Issuer,
$0.01 par value per share, at any time or, at the Issuer's election,
cash of equivalent value.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 0.1% equity interest in the Issuer assuming exchange
of the Common Units.
14. TYPE OF REPORTING PERSON - PN
11
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SCHEDULE 13D
CUSIP No. 44041U 10 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Prime Group IV, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /x/
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois, United States of America
NUMBER OF SHARES 7. SOLE VOTING POWER - 6,818
BENEFICIALLY OWNED BY
EACH PERSON WITH 8. SHARED VOTING POWER - 0
9. SOLE DISPOSITIVE POWER - 6,818
10. SHARED DISPOSITIVE POWER - 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,818 Common Units of Horizon Group Properties, L.P., a Delaware
limited partnership ("Common Units"), which Common Units are
exchangeable on a one for one basis for Common Stock of the Issuer,
$0.01 par value per share, at any time or, at the Issuer's election,
cash of equivalent value.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 0.3% equity interest in the Issuer assuming exchange
of the Common Units.
14. TYPE OF REPORTING PERSON - PN
12
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SCHEDULE 13D
CUSIP No. 44041U 10 2
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Prime Group V, L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) / /
(b) /x/
3. SEC USE ONLY
4. SOURCE OF FUNDS
00
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois, United States of America
NUMBER OF SHARES 7. SOLE VOTING POWER - 35,050
BENEFICIALLY OWNED BY
EACH PERSON WITH 8. SHARED VOTING POWER - 0
9. SOLE DISPOSITIVE POWER - 35,050
10. SHARED DISPOSITIVE POWER - 0
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
35,050 Common Units of Horizon Group Properties, L.P., a Delaware
limited partnership ("Common Units"), which Common Units are
exchangeable on a one for one basis for Common Stock of the Issuer,
$0.01 par value per share, at any time or, at the Issuer's election,
cash of equivalent value.
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES / /
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 1.3% equity interest in the Issuer assuming exchange
of the Common Units.
14. TYPE OF REPORTING PERSON - PN
13
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ITEM 1. SECURITY AND ISSUER.
This Amendment No. 1 to Schedule 13D relates to shares of Common
Stock, par value $0.01 per share ("Common Stock"), of Horizon Group
Properties, Inc., a Maryland corporation (the "Company"). The principal
executive offices of the Company are located at 5000 Hakes Drive, Norton
Shores, Michigan 49441.
ITEM 2. IDENTITY AND BACKGROUND.
(a) and (f). This Amendment No. 1 to Schedule 13D is filed by each
of Michael W. Reschke, an individual and a citizen of the United States of
America ("Reschke"); PGLP, Inc., an Illinois corporation ("PGLPI"); Prime
Finance, Inc., an Illinois corporation ("Prime Finance"); Prime Group
Limited Partnership, an Illinois limited partnership ("PGLP"); Prime
Financing Limited Partnership, an Illinois limited partnership ("PFLP");
Prime Group II, L.P., an Illinois limited partnership ("PG-II"); Prime Group
III, L.P., an Illinois limited partnership ("PG-III"); Prime Group IV, L.P.,
an Illinois limited partnership ("PG-IV") and Prime Group V, L.P., an
Illinois limited partnership ("PG-V").
Reschke (i) is the managing general partner of PGLP; (ii) owns an
approximate 50.75% equity interest in PGLPI, which is the managing general
partner of each of PG-II, PG-III, PG-IV, and PG-V; and (iii) owns an
approximate 50.75% equity interest in Prime International, Inc., which owns
all of the issued and outstanding stock of Prime Finance, which is the
managing general partner of PFLP.
(b) (i) The business address of each of Reschke, PGLPI, Prime
Finance, PGLP, PFLP, PG-II, PG-III, PG-IV, and PG-V 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 The Prime Group, Inc., an Illinois corporation ("PGI") , the
President and a member of the Board of Directors of PGLPI and Prime Finance
and the Chairman of the Board of Trustees of Prime Group Realty Trust, a
publicly traded real estate investment trust ("PGRT"). Reschke is also a
member of the Board of Directors of the Company and the Chairman of the Board
of Directors of each of Prime Retail, Inc., a publicly traded real estate
investment trust engaged in the ownership, development and management of
factory outlet centers, and Brookdale Living Communities, Inc., a publicly
traded Delaware corporation involved in the ownership, development and
operation of senior independent and assisted living facilities. The
principal business of PGI is the ownership, development and management of,
and investment in, directly or indirectly, real estate. The principal
business of PGRT is the acquisition, development, finance, construction,
leasing, marketing, renovation and property management of office and
industrial properties.
(ii) The principal business of each of PGLPI, Prime Finance,
PGLP, PFLP, PG-II, PG-III, PG-IV, and PG-V 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 PGLPI and Prime Finance:
<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 and Prime Finance; Executive Vice
President/ General Counsel and Secretary of
Brookdale Living Communities, Inc.
</TABLE>
14
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<TABLE>
<CAPTION>
Name Present Principal Occupation or Employment
---- ------------------------------------------
<S> <C>
Gary J. Skoien . . . . . . President, Chief Executive Officer and Chairman
of Board of the Company; Executive Vice
President of PGI; Vice President of PGLPI and
Prime Finance
Mark K. Cynkar . . . . . . Senior Vice President and Chief Financial
Officer of PGI; Vice President of PGLPI and
Prime Finance
Ray R. Grinvalds . . . . . Senior Vice President/Asset and Development
Management of PGI; Vice President and Treasurer
of PGLPI
Warren H. John (B) . . . . Vice President of PGI; Vice President and
Assistant Secretary of PGLPI
</TABLE>
-------------------
(A) Director of Prime Finance
(B) Director of PGLPI
All of the executive officers and directors of PGLPI and Prime
Finance are citizens of the United States of America.
(d) and (e) During the last five years, none of Reschke or any of
the executive officers of PGLPI or Prime Finance (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 an Amended and Restated Agreement and Plan of Merger,
dated as of February 1, 1998, by and among the Company, Prime Retail, Inc.,
Horizon Group, Inc., Sky Merger Corp., Horizon Group Properties, L.P., and
Horizon/Glen Outlet Centers Limited Partnership, among other things, the
initial distribution (the "Distribution") was effected of the Common Stock
and Common Units of Horizon Group Properties, L.P., a Delaware limited
partnership ("Common Units") which Common Units are exchangeable on a one for
one basis for Common Stock (or, at the Company's election, cash of equivalent
value). As a result of the Distribution, on June 15, 1998, Reschke and PGLP
received shares of Common Stock and PGLP, PFLP, PG-II, PG-III, PG-IV, and
PG-V received Common Units.
In addition, PGLP purchased the following number of shares of
Common Stock in the open market at the prices and on the dates indicated: (i)
70,000 shares at an average price of $6.00 per share on June 17, 1998; (ii)
42,000 shares at an average price of $6.63 per share on June 26, 1998; (iii)
20,000 shares at an average price of $6.63 on June 29, 1998; (iv) 17,500
shares at an average price of $6.75 on July 1, 1998; (v) 10,000 shares at an
average price of $6.75 per share on July 7, 1998; (vi) 10,000 shares at an
average price of $6.50 per share on July 9, 1998; (vii) 20,000 shares at an
average price of $6.13 on July 14, 1998; (viii) 10,000 shares at an average
price of $6.00 on July 14, 1998; (ix) 30,000 shares at an average price of
$6.18 on July 10, 1998; (x) 20,000 shares at an average price of $5.63 on
July 21, 1998; and (xi) 10,000 shares at an average price of $5.38 on July
27, 1998. PGLP purchased the foregoing shares in the open market and, except
for the 30,000 shares described in (ix) above, funded such purchases in part
through an extension of margin credit in a brokerage account maintained with
Friedman, Billings, Ramsey & Co., Inc. PGLP also purchased 181,818 shares of
Common Stock at a price of $5.63 per share in a private transaction with
Security Capital Preferred Growth Incorporated on August 4, 1998.
PGLP also purchased Common Units as follows in private sales: (a) 18,554
Common Units at a price of $6.00 per unit from William H. Carpenter, Jr. as
of July 28, 1998; (b) 18,553 Common Units at a price of $6.00 per unit from
Abraham Rosenthal as of July 28, 1998 and (c) 36,363 Common Units at a price
of $6.00 per unit from Security Capital Preferred Growth Incorporated on
July 21, 1998.
15
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ITEM 4. PURPOSE OF TRANSACTION.
Reschke and PGLP received shares of Common Stock and PGLP, PFLP,
PG-II, PG-III, PG-IV, and PG-V received Common Units in the Distribution and
intend to hold such securities for investment purposes. PGLP purchased the
additional shares of Common Stock and Common Units owned by it for investment
purposes.
None of Reschke, PGLPI, Prime Finance, PGLP, PFLP, PG-II, PG-III,
PG-IV, or PG-V 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) Reschke beneficially owns 8,206 shares of Common Stock, which
number of shares constitute approximately 0.3% of the total outstanding
shares of Common Stock. PGLP beneficially owns 453,818 shares of Common
Stock and 75,620 Common Units which, assuming exchange of the Common Units,
constitute approximately 18.6% of the outstanding shares of Common Stock.
PFLP beneficially owns 277,850 Common Units which, assuming exchange of the
Common Units, constitute approximately 9.1% of the outstanding shares of
Common Stock. PG-II beneficially owns 42,281 Common Units which, assuming
exchange of the Common Units, constitute approximately 1.5% of the
outstanding shares of Common Stock. PG-III beneficially owns 3,081 Common
Units which, assuming exchange of the Common Units, constitute approximately
0.1% of the outstanding shares of Common Stock. PG-IV beneficially owns
6,818 Common Units which, assuming exchange of the Common Units, constitute
approximately 0.3% of the outstanding shares of Common Stock. PG-V
beneficially owns 35,050 Common Units which, assuming exchange of the Common
Units, constitute approximately 1.3% of the outstanding shares of Common
Stock.
By virtue of his position as managing general partner of PGLP and
his ability to control PFLP, PG-II, PG-III, PG-IV and PG-V, Reschke may be
deemed to share beneficial ownership of the 453,818 shares of Common Stock
directly owned by PGLP and the 75,620, 277,850, 42,281, 3,081, 6,818, and
35,050 Common Units owned by PGLP, PFLP, PG-II, PG-III, PG-IV, and PG-V,
respectively. PGLPI may be deemed to share beneficial ownership of the
42,281, 3,081, 6,818 and 35,050 Common Units directly owned by PG-II, PG-III,
PG-IV and PG-V, respectively, because PGLPI is the managing general partner
of each of PG-II, PG-III, PG-IV and PG-V. Prime Finance may be deemed to
share beneficial ownership of the 277,850 Common Units directly owned by PFLP
because Prime Finance is the managing general partner of PFLP.
(b) Reschke has the sole power to direct the vote and disposition
of the 8,206 shares of Common Stock directly owned by Reschke. PGLP has the
sole power to direct the vote and disposition of the 453,818 shares of Common
Stock and 75,620 Common Units directly owned by PGLP. PFLP has the sole
power to direct the vote and disposition of the 277,850 Common Units directly
owned by PFLP. Each of PG-II, PG-III, PG-IV and PG-V has the sole power to
direct the vote and disposition of the 42,281, 3,081, 6,818 and 35,050 Common
Units directly owned by PG-II, PG-III, PG-IV and PG-V, respectively.
By virtue of his position as managing general partner of PGLP and
his ability to control PFLP, PG-II, PG-III, PG-IV and PG-V, Reschke may be
deemed to share the power to direct the vote and disposition of the 453,818
shares of Common Stock directly owned by PGLP and the 75,620, 277,850,
42,281, 3,081, 6,818, and 35,050 Common Units owned by PGLP, PFLP, PG-II,
PG-III, PG-IV, and PG-V, respectively. PGLPI may be deemed to share the
power to direct the vote and disposition of the 42,281, 3,081, 6,818 and
35,050 Common Units directly owned by PG-II, PG-III, PG-IV and PG-V,
respectively, because PGLPI is the managing general partner of each of PG-II,
PG-III, PG-IV and PG-V. Prime Finance may be deemed to share the power to
direct the vote and disposition of the 277,850 Common Units directly owned by
PFLP because Prime Finance is the managing general partner of PFLP.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
16
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Pursuant to a Pledge and Security Agreement dated as of October 1,
1996 by and between PGLP and The Northern Trust Company, PGLP pledged 2,150
Common Units as security for the obligations of PGLP under a guaranty issued
by PGLP with respect to a loan made by the Northern Trust Company to PGI.
Pursuant to a Customer Agreement by and between PGLP and Bear,
Stearns Securities Corp., PGLP pledged 453,818 Common Shares as security for
certain obligations of PGLP with respect to the securities margin account
PGLP maintains with Friedman, Billings, Ramsey & Co., Inc. for which the
clearing broker is Bear, Stearns Securities Corp.
Pursuant to a Pledge and Security Agreement dated as of October 1,
1996 by and between PG-III and The Northern Trust Company, PG-III pledged
3,081 Common Units as security for the obligations of PG-III under a guaranty
issued by PG-III with respect to loans made by the Northern Trust Company to
PGI.
Pursuant to a Pledge and Security Agreement dated as of March 22,
1994, as amended, by and between PG-V and Lumbermens Mutual Casualty Company
("LMCC"), PG-V pledged 29,917 Common Units as security for the obligations of
PG-V to LMCC under a guaranty issued by PG-V with respect to a loan made by
LMCC to an affiliate of PG-V.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Customer Agreement by and between PGLP and Bear, Stearns Securities
Corp. dated as of December 21, 1994.
17
<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. 1 to Schedule 13D is true, complete and correct.
/s/ Michael W. Reschke
------------------------------------------------
Michael W. Reschke
Dated: August 20, 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. 1 to Schedule 13D is true, complete and correct.
PGLP, INC.
By: /s/ Michael W. Reschke
------------------------------------------------
Name: Michael W. Reschke
Title: President
Dated: August 20, 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. 1 to Schedule 13D is true, complete and correct.
PRIME FINANCE, INC.
By: /s/ Michael W. Reschke
------------------------------------------------
Name: Michael W. Reschke
Title: President
Dated: August 20, 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. 1 to Schedule 13D is true, complete and correct.
PRIME GROUP LIMITED PARTNERSHIP
By: /s/ Michael W. Reschke
------------------------------------------------
Name: Michael W. Reschke
Title: Managing General Partner
Dated: August 20, 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. 1 to Schedule 13D is true, complete and correct.
PRIME FINANCING LIMITED PARTNERSHIP
By: Prime Finance, Inc., its managing general
partner
By: /s/ Michael W. Reschke
------------------------------------------------
Name: Michael W. Reschke
Title: President
Dated: August 20, 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. 1 to Schedule 13D is true, complete and correct.
PRIME GROUP II, L.P.
By: PGLP, Inc., its managing general partner
By: /s/ Michael W. Reschke
------------------------------------------------
Name: Michael W. Reschke
Title: President
Dated: August 20, 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. 1 to Schedule 13D is true, complete and correct.
PRIME GROUP III, L.P.
By: PGLP, Inc., its managing general partner
By: /s/ Michael W. Reschke
------------------------------------------------
Name: Michael W. Reschke
Title: President
Dated: August 20, 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. 1 to Schedule 13D is true, complete and correct.
PRIME GROUP IV, L.P.
By: PGLP, Inc., its managing general partner
By: /s/ Michael W. Reschke
------------------------------------------------
Name: Michael W. Reschke
Title: President
Dated: August 20, 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. 1 to Schedule 13D is true, complete and correct.
PRIME GROUP V, L.P.
By: PGLP, Inc., its managing general partner
By: /s/ Michael W. Reschke
------------------------------------------------
Name: Michael W. Reschke
Title: President
Dated: August 20, 1998
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Number Description
- -------------- -----------
<S> <C>
Exhibit 1 Customer Agreement by and between PGLP and Bear,
Stearns Securities Corp. dated as of December 21,
1994.
</TABLE>
<PAGE>
Exhibit 1
Customer Agreement by and between PGLP and Bear, Stearns Securities Corp.
dated as of December 21, 1994.
BEAR, STEARNS SECURITIES CORP.
BEAR STEARNS ONE METROTECH CENTER NORTH
BROOKLYN, NEW YORK 11201-3859
(212) 272-1000
CUSTOMER AGREEMENT
PLEASE READ CAREFULLY, SIGN AND RETURN
This agreement ("Agreement") sets forth the terms and conditions
under which Bear, Stearns Securities Corp., Bear, Stearns & Co. Inc., and
their successors and assigns (collectively "Bear Stearns") will transact
business with you including but not limited to the maintenance of your
account(s). If these accounts are cash accounts and you have fully paid for
all securities therein, the provisions of paragraphs 16 and 17 shall not bind
you unless you enter into a margin transaction.
1. APPLICABLE LAW AND REGULATIONS. All transactions shall be
subject to all applicable law and the rules and regulations of all federal,
state and self-regulatory agencies, including, but not limited to, the Board
of Governors of the Federal Reserve System and the constitution, rules and
customs of the exchange or market (and clearing house) where executed.
2. SECURITY INTEREST AND LIEN. As security for the payment of
all of your obligations and liabilities to Bear Stearns, Bear Stearns shall
have a continuing security interest in all property in which you have an
interest held by or through Bear Stearns or its affiliates, including, but
not limited to, securities, commodity futures contracts, commercial paper,
monies and any after-acquired property. In addition, in order to satisfy any
such outstanding liabilities or obligations, Bear Stearns may, at any time
and without prior notice to you, use, apply or transfer any such securities
or property interchangeably. In the event of a breach or default under this
Agreement Bear Stearns shall have all rights and remedies available to a
secured creditor under any applicable law in addition to the rights and
remedies provided herein.
3. DEPOSITS ON TRANSACTIONS. Whenever Bear Stearns, in its sole
discretion, considers it necessary for its protection, it may require you to
deposit cash or collateral immediately in your account(s) prior to any
applicable settlement date in order to assure due performance of your open
contractual commitments.
4. BREACH, BANKRUPTCY OR DEFAULT. Any breach of this Agreement
or the filing of a petition or other proceeding in bankruptcy, insolvency, or
for the appointment of a receiver by or against you, the levy of an
attachment against your account(s) with Bear Stearns, or your death, mental
incompetence or dissolution, or any other grounds for insecurity, as
determined by Bear Stearns, in its sole discretion, shall continue, at Bear
Stearns' election, a default by you under all agreements Bear Stearns may
then have with you, whether heretofore or hereafter entered
<PAGE>
into. In the event of default, Bear Stearns reserves the right to sell,
without prior notice to you, any and all property in which you have an
interest held by or through Bear Stearns or any of its affiliates, to buy any
or all property which may have been sold short to cancel any or all
outstanding transactions and/or to purchase or sell any other securities or
property to offset market risk, and to offset any indebtedness you may have
(either individually or jointly with others), after which you shall be liable
to Bear Stearns for any remaining deficiency, loss, cost or expenses
sustained by Bear Stearns for any remaining deficiency, loss, costs or
expenses sustained by Bear Stearns in connection therewith. Such purchases
and/or sales may be effected publicly or privately without notice or
advertisement in such manner as Bear Stearns may in its sole discretion
determine. At any such sale or purchase, Bear Stearns may purchase or sell
the property free of any right of redemption. In addition, Bear Stearns
shall have the right to set off and apply any amount owing from Bear Stearns
or any of its affiliates to you against any indebtedness in your accounts,
whether matured or unmatured.
5. FEES AND CHARGES. You understand that Bear Stearns may charge
commissions and other fees for execution, custody or any other service
furnished to you and you agree to pay such commissions and fees at Bear
Stearns then prevailing rates. You understand further that such commissions
and fees may be changed from time to time, upon thirty days' prior written
notice to you, and you agree to be bound thereby.
6. TRANSACTION REPORTS AND ACCOUNT STATEMENTS. Reports of the
execution of orders and statements of your account(s) shall be conclusive if
not objected to in writing within five days in the case of reports of
execution, and ten days in the case of account statements, after such
documents have been transmitted to you by mail or otherwise.
7. DEBIT BALANCES/TRUTH-IN-LENDING. You hereby acknowledge
receipt of Bear Stearns' Truth-in-Lending disclosure statement. You
understand that interest will be charged on any debit balances in your
account(s), in accordance with the methods described in such statement or in
any amendment or revision thereto which may be provided to you. Any debit
balance which is not paid at the close of an interest period will be added to
the opening balance for the next interest period.
8. CLEARANCE ACCOUNTS. Bear, Stearns Securities Corp. carries
your account(s) as clearing agent for your broker. Unless Bear, Stearns
Securities Corp. receives from you prior written notice to the contrary,
Bear, Stearns Securities Corp. may accept from such other broker, without any
inquiry or investigation: (a) orders for the purchase or sale of securities
and other property in your account(s) on margin or otherwise and (b) any
other instructions concerning your account(s) or the property therein. You
understand and agree that Bear Stearns shall have no responsibility or
liability to you for any acts or omissions of such broker, its officers,
employees or agents. You agree that your broker and its employees are
third-party beneficiaries of this Agreement, and that the terms and
conditions hereof, including the arbitration provision, shall be applicable
to all matters between or among any of you, your broker and its employees,
and Bear, Stearns and its employees.
29
<PAGE>
9. COST OF COLLECTION. You hereby authorize Bear Stearns to
charge you for any reasonable direct or indirect costs of collection,
including but not limited to, attorneys' fees, court costs and other expenses.
10. IMPARTIAL LOTTERY ALLOCATION. You agree that, in the event
Bear Stearns holds on your behalf bonds or preferred stocks in street name or
bearer form which are callable in part, you will participate in the impartial
lottery allocation system of the called securities in accordance with the
rules of the New York Stock Exchange, Inc., or any other appropriate
self-regulatory organization. When any such call is favorable, no allocation
will be made to any account(s) in which Bear Stearns has actual knowledge
that its officers, directors or employees have any financial interest until
all other customers are satisfied on an impartial lottery basis.
11. WAIVER, ASSIGNMENT AND NOTICES. Neither Bear Stearns' failure
to insist at any time upon strict compliance with the Agreement or with any
of the terms hereof nor any continued course of such conduct on its part
shall constitute or be considered a waiver by Bear Stearns of any of its
rights or privileges hereunder. Any assignment of your rights and
obligations hereunder or interest in any property held by or through Bear
Stearns without obtaining the prior written consent of an authorized
representative of Bear Stearns shall be null and void. Notices or other
communications, including margin calls, delivered or mailed to the address
provided by you, shall, until Bear Stearns has received notice in writing of
a different address, be deemed to have been personally delivered to you.
12. FREE CREDIT BALANCES. You hereby direct Bear Stearns to use
any free credit balance awaiting investment or reinvestment in your
account(s) in accordance with all applicable rules and regulations and to pay
interest thereon at such rate or rates and under such conditions as are
established from time to time by Bear Stearns for such account(s) and for the
amounts of cash so used.
13. RESTRICTIONS ON ACCOUNTS. You understand that Bear Stearns,
in its sole discretion, may restrict or prohibit trading of securities or
other property in your account(s).
14. CREDIT INFORMATION AND INVESTIGATION. You authorize Bear
Stearns and your broker in their discretion, to make and obtain reports
concerning your credit standing and business conduct. You may make a written
request within a reasonable period of time for description of the nature and
scope of the reports made or obtained by Bear Stearns.
15. SHORT AND LONG SALES. In placing any sell order to a short
account, you will designate the order as such and hereby authorize Bear
Stearns to mark the order as being "short". In placing any sell order for a
long account, you will designate the order as such and hereby authorize Bear
Stearns to mark the order as being "long". The designation of a sell order
as being for a long account shall constitute a representation that you own
the security with respect to which the order has been placed, that such
security may be sold without restriction in the open market and that, if Bear
Stearns does not have the security in its possession at the time you placed
the order, you shall deliver the security by settlement date in good
deliverable form or pay to Bear Stearns any losses or expenses incurred as a
result of your failure to make delivery.
30
<PAGE>
16. MARGIN ACCOUNTS. You hereby agree to deposit and maintain
such margin in your margin account(s) as Bear Stearns may in its sole
discretion require, and you agree to pay forthwith on demand any debt balance
owing with respect to any of your margin account(s). Upon your failure to
pay, or at any time Bear Stearns, in its discretion, deems necessary for its
protection, whether with or without prior demand, call or notice, Bear
Stearns shall be entitled to exercise all rights and remedies provided in
paragraphs 2 and 4 above. No demand, calls, tenders or notices that Bear
Stearns may have made or given in the past in any one or more instances shall
invalidate your waiver of the requirement to make or give the sum in the
future. Unless you advise Bear Stearns to the contrary, you represent that
you are not an affiliate (as defined in Rule 144(a)(1) under the Securities
Act of 1933) of the issuer of any security held in your account(s).
17. CONSENT TO LOAN OR PLEDGE OF SECURITIES. Within the limits of
applicable law and regulations, you hereby authorize Bear Stearns to lend
either to itself or to others any securities held by Bear Stearns in your
account(s), together with all attendant rights of ownership and to use all
such property as collateral for its general loans. Any such property,
together with all attendant rights of ownership, may be pledged, repledged,
hypothecated or rehypothecated either separately or in common with other such
property for any amounts due to Bear Stearns thereon for a greater sum, and
Bear Stearns shall have no obligation to retain a like amount of similar
property in its possession and control.
18. LEGALLY BINDING. You hereby agree that this Agreement and all
the terms hereof shall be binding upon you and your estate, heirs, executors,
administrators, personal representatives, successors and assigns. You agree
that all purchases and sales shall be for your account(s) in accordance with
your oral or written instructions. You hereby waive any and all defenses
that any such instruction was not in writing as may be required by the
Statute of Frauds or any other similar law, rule or regulation.
19. AMENDMENT; ENTIRE AGREEMENT. You agree that Bear Stearns may
modify the terms of this Agreement at any time upon prior written notice. By
continuing to accept services from Bear Stearns, you will have indicated your
acceptance of any such modifications. If you do not accept such
modifications, you must notify Bear Stearns in writing; your account may then
be terminated by Bear Stearns, after which you will remain liable to Bear
Stearns for all remaining liabilities or obligations. Otherwise, this
Agreement may not be waived or modified absent a written instrument signed by
an authorized representative of Bear Stearns. Except as set forth above,
this Agreement represents the entire agreement and understanding between you
and Bear Stearns concerning the subject matter hereof.
20. NEW YORK LAW TO GOVERN. THIS AGREEMENT SHALL BE DEEMED TO
HAVE BEEN MADE IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED, AND THE
RIGHTS AND LIABILITIES OF THE PARTIES DETERMINED, IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK.
21. ARBITRATION.
- ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
31
<PAGE>
- THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN
COURT, INCLUDING THE RIGHT TO JURY TRIAL.
- PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN AND
DIFFERENT FROM COURT PROCEEDINGS.
- THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL
FINDINGS OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL OR TO SEEK
MODIFICATION OF RULINGS BY THE ARBITRATORS IS STRICTLY LIMITED.
- THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A MINORITY OF
ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE SECURITIES INDUSTRY.
- NO PERSON SHALL BRING A PUTATIVE OR CERTIFIED CLASS ACTION TO
ARBITRATION, NOR SEEK TO ENFORCE ANY PRE-DISPUTE ARBITRATION AGREEMENT
AGAINST ANY PERSON WHO HAS INITIATED IN COURT A PUTATIVE CLASS ACTION OR WHO
IS A MEMBER OF A PUTATIVE CLASS WHO HAS NOT OPTED OUT OF THE CLASS WITH
RESPECT TO ANY CLAIMS ENCOMPASSED BY THE PUTATIVE CLASS ACTION UNTIL:
(i) THE CLASS CERTIFICATION IS DENIED;
(ii) THE CLASS IS DECERTIFIED; OR
(iii) THE CUSTOMER IS EXCLUDED FROM THE CLASS BY THE COURT. SUCH
FORBEARANCE TO ENFORCE AN AGREEMENT TO ARBITRATE SHALL NOT CONSTITUTE A WAIVER
OF ANY RIGHTS UNDER THIS AGREEMENT EXCEPT TO THE EXTENT STATED HEREIN.
YOU AGREE, AND BY MAINTAINING AN ACCOUNT FOR YOU BEAR STEARNS
AGREES, THAT CONTROVERSIES ARISING BETWEEN YOU AND BEAR STEARNS, ITS CONTROL
PERSONS, PREDECESSORS, SUBSIDIARIES AND AFFILIATES AND ALL RESPECTIVE
SUCCESSORS, ASSIGNS AND EMPLOYEES, WHETHER ARISING PRIOR TO, ON OR SUBSEQUENT
TO THE DATE HEREOF, SHALL BE DETERMINED BY ARBITRATION. ANY ARBITRATION
UNDER THIS AGREEMENT SHALL BE HELD AT THE FACILITIES AND BEFORE AN
ARBITRATION PANEL APPOINTED BY THE NEW YORK STOCK EXCHANGE, INC., THE
AMERICAN STOCK EXCHANGE, INC., OR THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC. (AND ONLY BEFORE SUCH EXCHANGES OR ASSOCIATION). YOU MAY ELECT
ONE OF THE FOREGOING FORUMS FOR ARBITRATION, BUT IF YOU FAIL TO MAKE SUCH
ELECTION BY REGISTERED MAIL OR TELEGRAM ADDRESSED TO BEAR, STEARNS SECURITIES
CORP. 245 PARK AVENUE, NEW YORK, NEW YORK 10167, ATTENTION: CHIEF LEGAL
OFFICER (OR ANY OTHER ADDRESS OF WHICH YOU ARE ADVISED IN WRITING), BEFORE
THE EXPIRATION OF TEN DAYS AFTER RECEIPT OF A WRITTEN REQUEST FROM BEAR
STEARNS TO MAKE SUCH ELECTION, THEN BEAR STEARNS MAY MAKE SUCH ELECTION. FOR
ANY ARBITRATION SOLELY BETWEEN YOU AND A BROKER FOR
32
<PAGE>
WHICH BEAR STEARNS ACTS AS CLEARING AGENT, SUCH ELECTION SHALL BE MADE BY
REGISTERED MAIL TO SUCH BROKER AT ITS PRINCIPAL PLACE OF BUSINESS. THE AWARD
OF THE ARBITRATORS, OR OF THE MAJORITY OF THEM, SHALL BE FINAL, AND JUDGMENT
UPON THE AWARD RENDERED MAY BE ENTERED IN ANY COURT, STATE OR FEDERAL, HAVING
JURISDICTION.
22. SEVERABILITY. If any provision herein is or should become
inconsistent with any present or future law, rule or regulation of any
sovereign government or regulatory body having jurisdiction over the subject
matter of this Agreement, such provision shall be deemed to be rescinded or
modified in accordance with any such law, rule or regulation. In all other
respects, this Agreement shall continue to remain in full force and effect.
23. CAPACITY TO CONTRACT; CUSTOMER AFFILIATION. You represent
that you are of legal age and that, unless you have notified Bear Stearns to
the contrary, neither you nor any member of your immediate family is an
employee of any exchange or member thereof, the National Association of
Securities Dealers, Inc. or a member thereof, or of any corporation, firm or
individual engaged in the business of dealing, as broker or principal, in
securities, options or futures, or of any bank, trust company or insurance
company.
24. EXTRAORDINARY EVENTS. Bear Stearns shall not be liable for
losses caused directly or indirectly by government restrictions, exchange or
market rulings, suspension of trading, war, strikes or other conditions
beyond its control.
25. HEADINGS. The headings of the provisions hereof are for
descriptive purposes only and shall not modify or qualify any of the rights
or obligations set forth in such provisions.
26. TELEPHONE CONVERSATIONS. For the protection of both you and
Bear Stearns, and as a tool to correct misunderstandings, you hereby
authorize Bear Stearns at Bear Stearns' discretion and without prior notice
to you, to monitor and/or record any or all telephone conversations between
you, Bear Stearns and any of Bear Stearns' employees or agents.
If this is a Joint Account, both parties must sign. Persons signing on behalf
of others should indicate the titles or capacities in which they are signing.
BY SIGNING THIS AGREEMENT YOU ACKNOWLEDGE THAT:
1. THE SECURITIES IN YOUR MARGIN ACCOUNT(S) AND ANY SECURITIES FOR WHICH
YOU HAVE NOT FULLY PAID, TOGETHER WITH ALL ATTENDANT OWNERSHIP RIGHTS, MAY BE
LOANED TO BEAR STEARNS OR LOANED OUT TO OTHERS; AND
2. YOU HAVE RECEIVED A COPY OF THIS AGREEMENT.
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE AT PARAGRAPH 21. THIS
AGREEMENT DATED AS OF DECEMBER 21, 1994.
<TABLE>
<CAPTION>
<S> <C>
Prime Group Limited Partnership 77 West Wacker Drive, Suite 3900
/s/ Michael W. Reschke Chicago, Illinois, 60601 Attn. Robert J. Rudnik
Michael W. Reschke, Managing General Partner Acct. No.
33
<PAGE>
(Typed or Printed Name)
X_______________________________ Date: December 21, 1994
_______________________________
(Signature)
Accepted By: __________________________ Date: __________________________________
(Bear, Stearns Securities Corp.)
</TABLE>
34
