<PAGE> 1
As filed with the Securities and Exchange Commission on February 21, 1997
Registration No. 33-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________________________
AMBASSADOR APARTMENTS, INC.
(Exact name of registrant as specified in its charter)
____________________________
Maryland 36-3948161
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
77 West Wacker Drive, Suite 4040
Chicago, Illinois 60601
(312) 917-1600
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
____________________________
David M. Glickman
Chairman of the Board and Copies to:
Chief Executive Officer Robert S. Osborne, P.C.
77 West Wacker Drive, Suite 4040 Kirkland & Ellis
Chicago, Illinois 60601 200 East Randolph Drive
(312) 917-1600 Chicago, Illinois 60601
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
____________________________
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement as
determined by the Selling Stockholders in light of market conditions.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under Securities Act of
1993, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==========================================================================================================
Proposed Maximum Proposed Maximum
Amount to be Aggregate Price Per Aggregate Amount of
Title of Shares to be Registered Unit (1) Offering Price Registration
Registered (1) Fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock ($.01 par value) 101,655 $24.0625 $2,446,074 $742
shares
==========================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee and
computed pursuant to Rule 457(c) under the Securities Act of 1933, as
amended, based on the average of the high and low sale prices reported
for the Common Stock on the New York Stock Exchange on February 18,
1997, which was $24.0625 per share.
The Registrant hereby amends this registration statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
================================================================================
<PAGE> 2
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS
DATED FEBRUARY 21, 1997
PROSPECTUS
101,655 Shares
AMBASSADOR APARTMENTS, INC.
Common Stock
***************************************************************************
* *
* Information contained herein is subject to completion or amendment. *
* A registration statement relating to these securities has been filed *
* with the Securities and Exchange Commission. These securities may *
* not be sold nor may offers to buy be accepted prior to the time the *
* registration statement becomes effective. This prospectus shall not *
* constitute an offer to sell or the solicitation of an offer to buy *
* nor shall there be any sale of these securities in any state in which *
* such offer, solicitation or sale would be unlawful prior to *
* registration or qualification under the securities laws of any such *
* state. *
* *
***************************************************************************
This Prospectus relates to the offer and sale from time to time of up to
101,655 shares (the "Shares") of common stock, par value $.01 per share ("Common
Stock"), of Ambassador Apartments, Inc. (the "Company") that may be issued by
the Company to Richard F. Cavenaugh and LG Trust (the "Selling Stockholders")
upon the exchange of up to 101,655 units of common limited partnership interest
(the "Common Units") in Ambassador Apartments, L.P. (the "Operating
Partnership"), of which the Company is the sole general partner and owns a
controlling interest, if and to the extent that such Selling Stockholders tender
such Common Units for exchange into shares of Common Stock. See "Selling
Stockholders."
The Shares will be sold from time to time by the Selling Stockholders
in one or more ordinary brokerage transactions on the New York Stock Exchange
("NYSE") at market prices prevailing at the time of such sale (subject to
customary or negotiated brokerage commissions) using Smith Barney Inc. or such
other broker-dealer as may enter into arrangements with the Selling
Stockholders. The Company will not receive any proceeds from the sale of the
Shares. The Company is registering the Shares in connection with a
Registration Rights Agreement, dated as of August 31, 1994, by and among the
Company and certain holders of Common Units (the "Registration Rights
Agreement"), pursuant to which the Company has agreed to indemnify the Selling
Stockholders against certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), and to bear the
expenses from the registration of the sale of the Shares other than any
underwriters discounts or commissions, Securities and Exchange Commission and
blue sky registration fees and transfer taxes relating to the sale of the
Shares. The expenses so payable by the Company are estimated to be
approximately $21,258. See "Plan of Distribution."
The Common Stock is listed on the NYSE under the symbol "AAH." The last
reported sale price of the Common Stock on the NYSE on February 20, 1997, was
$24-1/4 per share. To ensure that the Company maintains its qualification as a
real estate investment trust ("REIT"), the Charter of the Company provides that
no person may acquire or own more than 9.9% (by number or value, whichever is
more restrictive) of the aggregate of the outstanding shares of Common Stock and
the outstanding shares of Excess Stock (as defined) into which shares of Common
Stock have been converted or more than 9.9% (by value) of the aggregate of
outstanding shares of the Company's capital stock ("Capital Stock"), subject to
certain exceptions. See "The Company."
____________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
____________________________
The date of this Prospectus is __________________, 1997
<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and, in
accordance therewith, files reports, proxy and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy and
other information filed by the Company can be inspected and copied at the
public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission located at 7 World Trade Center, 13th Floor,
New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. Electronic reports, proxy statements and other
information filed through the Commission's Electronic Data Gathering, Analysis
and Retrieval system are publicly available through the Commission's Web site
(http://www.sec.gov). In addition, the Common Stock is listed on the NYSE, and
similar information concerning the Company can be inspected and copied at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, NY
10005.
The Company has filed with the Commission a Registration Statement on
Form S-3 (including all amendments thereto, the "Registration Statement') with
respect to the securities offered hereby. As permitted by the rules and
regulations, this Prospectus does not contain all of the information set forth
in the Registration Statement and the exhibits and schedules thereto. For
further information with respect to the Company and the securities offered
hereby, reference is made to the Registration Statement, including the exhibits
and schedules thereto, which may be examined without charge at the public
reference facilities maintained by the Commission at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20459, and copies of which may
be obtained from the Commission upon the payment of prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(a) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995;
(b) the Company's Quarterly Reports on Form 10-Q for the quarters
ended March 31, June 30, and September 30, 1996;
(c) the Company's Current Reports on Form 8-K dated May 29, 1996,
August 16, 1996, December 18, 1996, and February 21, 1997;
(d) all other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the Company's fiscal year
ended December 31, 1995; and
(e) the description of the Common Stock contained in the Company's
Registration Statement on Form 8-A filed on December 8, 1995,
and any amendments or reports filed for the purpose of
updating such description.
2
<PAGE> 4
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the securities offered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing such documents. Any statement contained herein
or in a document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
A copy of any or all of the documents incorporated herein by reference
(other than exhibits, unless such exhibits are specifically incorporated by
reference in any such document) will be provided without charge to any person,
including a beneficial owner, to whom a copy of this Prospectus is delivered,
upon written or oral request. Requests for copies should be directed to
Ambassador Apartments, Inc., 77 West Wacker Drive, Suite 4040, Chicago,
Illinois 60601, Attention: Corporate Secretary (telephone: (312) 917-1600).
THE COMPANY
The Company was formed in Maryland on April 15, 1994 and is a
self-administered and self-managed REIT engaged in the ownership and management
of garden style apartment properties leased primarily to middle income tenants.
As of December 31, 1996, the Company owned 49 apartment communities (the
"Properties") with a total of 14,564 units located in Arizona, Colorado,
Florida, Georgia, Illinois, Tennessee and Texas.
Management believes its overall portfolio size, management operations
and property concentrations in selected geographic markets provide economies of
scale regarding operating expenses, advertising, marketing and insurance.
Management also believes that a geographic distribution of properties in a
number of strategically selected markets helps insulate the overall portfolio's
economic returns from regional economic fluctuations. The Company will
continue to focus on acquisitions in its principal markets which represent
metropolitan areas in which the Company owns more than 700 apartment units
("Principal Markets"). The Company's Principal Markets currently include
Phoenix and Tucson, Arizona; Orlando, Tampa and West Palm Beach, Florida;
Atlanta, Georgia; Chicago, Illinois; Nashville, Tennessee; and Austin, Houston
and San Antonio, Texas.
The Company has elected to be taxed as a REIT for federal income tax
purposes since 1994 and expects to continue to elect such status. Although the
Company believes that it was organized and has operated in such a manner so as
to qualify as a REIT, no assurance can be given that the Company has so
qualified or will continue to qualify as a REIT. Qualification as a REIT
involves the application of highly technical and complex provisions of the
Internal Revenue Code of 1986, as amended (the "Code") for which there is only
limited judicial or administrative interpretations. If the Company fails to
qualify as a REIT in any taxable year, the Company would not be allowed a
deduction for distributions to stockholders in computing taxable income, and
such distributions would be subject to federal income tax at regular corporate
rates. As a result, such a failure could adversely affect the Company's
business, results of operations and financial condition, its ability to make
distributions to its stockholders, and the market value and marketability of
the Common Stock.
3
<PAGE> 5
The Company conducts substantially all of its activities through the
Operating Partnership. The Company is the sole general partner of the
Operating Partnership and as of February 20, 1997, owned 90.4% of the
outstanding Common Units (90.5% if the Selling Stockholders exchange all of the
Common Units owned by them for Common Stock) and 100% of the preferred units of
partnership interest of the Operating Partnership. Fee title to each of the
Properties is held in a property partnership in which the Operating Partnership
or another direct or indirect subsidiary of the Company is a general partner.
The Company believes that the Operating Partnership and each of the
other partnerships in which the Company has a direct or indirect interest
("Subsidiary Partnerships") are properly treated as partnerships for federal
income tax purposes. If the Operating Partnership or any Subsidiary
Partnership were to fail to qualify as a partnership for federal income tax
purposes, the Operating Partnership or the affected Subsidiary Partnership
would be taxable as a corporation, and the Company could cease to qualify as a
REIT for federal income tax purposes. In addition, the Subsidiary Partnerships
that own property in Texas presently fall outside of the jurisdiction of the
Texas franchise tax, which currently only applies to corporations and limited
liability companies. If such a Subsidiary Partnership is determined to be
taxable as a corporation or the Texas franchise tax law is amended to apply to
partnerships, such Subsidiary Partnership would be subject to Texas franchise
tax. The imposition of a corporate tax on the Operating Partnership or of a
corporate tax or Texas franchise tax on any of the Subsidiary Partnerships
could reduce substantially the amount of cash available for distribution to the
Company. This reduction, and together with a loss of REIT status of the
Company, if it occurs, would reduce substantially the amount of cash available
to repay the Company's obligations or for distribution to the Company's
stockholders and could adversely affect the Company's business, results of
operations and financial condition, its ability to make distributions to its
stockholders, and the market value and marketability of the Common Stock.
For the Company to maintain its qualification as a REIT, among other
requirements, not more than 50% in value of the outstanding Capital Stock may
be owned, actually or constructively under the applicable attribution rules of
the Code, by five or fewer individuals (including certain tax-exempt entities,
other than, in general, qualified domestic pension funds) at any time during
the last half of any taxable year of the Company other than the first taxable
year for which the election to be taxed as a REIT has been made (the "five or
fewer" requirement). The Company's Amended and Restated Articles of
Incorporation, as amended (the "Charter"), contains certain restrictions on the
ownership and transfer of Capital Stock, described below, which are intended to
prevent concentration of stock ownership. These restrictions, however, may not
ensure that the Company will be able to satisfy the "five or fewer" requirement
in all cases. If the Company fails to satisfy such requirement, the Company's
status as a REIT will terminate, and the Company will not be able to prevent
such termination.
The Charter provides that no person may acquire or own (either
actually or constructively under the applicable attribution rules of the Code)
(i) more than 9.9% (by number or value, whichever is more restrictive) of the
aggregate of the outstanding shares of Common Stock and the outstanding shares
of Excess Stock (defined below) into which shares of Common Stock have been
converted (see below) or (ii) more than 9.9% (by value) of the outstanding
shares of Capital Stock (the "Ownership Limit"), subject to certain exceptions.
In addition, the Charter provides that no holder may own or acquire (either
actually or under the constructive ownership rules of the Code) shares of any
class of Capital Stock if such ownership or acquisition (i) would cause more
than 50% in value of the outstanding Capital Stock to be owned by five or fewer
individuals or (ii) would otherwise result in the Company's failing to qualify
as a REIT.
4
<PAGE> 6
The Charter provides that any attempted acquisition (actual or
constructive) of shares by a person who, as a result of such acquisition, would
violate one of the limitations described above will cause the shares purportedly
transferred to be automatically converted into shares of a separate class of
Capital Stock with no voting rights and no rights to distributions ("Excess
Stock") or, under certain circumstances, the transfer resulting in such
violation will be deemed void ab initio. In addition, the Charter provides that
violations of the ownership limitations which are the result of certain other
events (such as a purchase by the Company of shares of outstanding Common Stock
or Preferred Stock of the Company) generally will result in an automatic
repurchase by the Company of the shares the ownership of which violates such
limits. The Board of Directors of the Company may waive the Ownership Limit with
respect to a particular stockholder if it is satisfied, based upon the advice of
tax counsel, that such ownership in excess of the Ownership Limit will not
jeopardize the Company's status as a REIT.
Limiting the ownership of more than 9.9% of the outstanding shares of
Capital Stock may (i) discourage a change of control of the Company, (ii) deter
tender offers for Capital Stock, which offers may be attractive to the Company's
stockholders, or (iii) limit the opportunity for stockholders to receive a
premium for their Capital Stock that might otherwise exist if an investor
attempted to assemble a block of Capital Stock in excess of the Ownership Limit
or to effect a change of control of the Company.
The Company is required by the Code to request annual written
statements from the record holders of designated percentages of its shares of
Common Stock disclosing the actual owners of the shares of Common Stock. The
Company must also maintain, within the Internal Revenue District in which it is
required to file its federal income tax return, permanent records showing the
information it has received as to the actual ownership of such shares of Common
Stock and a list of those persons failing or refusing to comply with such
request.
The Company's principal executive offices are located at 77 West
Wacker Drive, Suite 4040, Chicago, Illinois 60601, and its telephone number is
(312) 917-1600.
SELLING STOCKHOLDERS
All of the Shares offered hereby will be sold for the account of the
Selling Stockholders. The following table provides the name of each Selling
Stockholder, the number of shares of Common Stock owned by each Selling
Stockholder prior to the offering to which this Prospectus relates, the number
of shares of Common Stock offered hereby by each Selling Stockholder, and the
number of shares of Common Stock owned by each Selling Stockholder after the
offering to which this Prospectus relates, in each case assuming that each
Selling Stockholder exchanges all of his or its Common Units for shares of
Common Stock and sells all of such shares of Common Stock pursuant to this
Prospectus. Since the Selling Stockholders may sell all, some or none of their
shares of Common Stock, no estimate can be made of the actual number of shares
of Common Stock that will be offered hereby or that will be owned by each
Selling Stockholder upon completion of the offering to which this Prospectus
relates.
5
<PAGE> 7
<TABLE>
<CAPTION>
Number of Shares of Number of Shares of Number of Shares of
Common Stock Owned Common Stock Offer by Common Stock Owned
Selling Stockholder Prior to the Offering Selling Stockholder After the Offering
- ----------------------------- ------------------------- ----------------------- ----------------------
<S> <C> <C> <C>
Richard F. Cavenaugh (1) 17,280 17,280 0
LG Trust (2) 84,375 84,375 0
- ----------------------
</TABLE>
(1) Includes 17,280 shares of Common Stock issuable upon exchange of
17,280 Common Units owned by Mr. Cavenaugh, but excludes 84,375 shares
of Common Stock issuable upon exchange of 84,375 Common Units owned by
LG Trust. Mr. Cavenaugh is the trustee and a beneficiary of LG Trust
and may beneficially own such shares of Common Stock.
(2) Includes 84,375 shares of Common Stock issuable upon exchange of
84,375 Common Units owned by LG Trust, but excludes 17,280 shares of
Common Stock issuable upon exchange of 17,280 Common Units owned by
Mr. Cavenaugh. Mr. Cavenaugh is the trustee and a beneficiary of
LG Trust and may beneficially own such shares of Common Stock.
Except as set forth below, none of the Selling Stockholders has any
position, office or other material relationship with the Company or any of its
affiliates (or had such position, office or material relationship within the
past three years), or will own greater than one percent of the Common Stock
after the offering to which this Prospectus relates (assuming that each Selling
Stockholder exchanges all of his or its Common Units for Common Stock and sells
all of such shares of Common Stock pursuant to this Prospectus).
During the period from August 1994 until his resignation on December
20, 1996, Mr. Cavenaugh served as a director, President and Chief Operating
Officer of the Company and was a director and officer of certain of its
subsidiaries. Prior to August 1994, Mr. Cavenaugh served as Senior Vice
President of the Multifamily Division of The Prime Group, Inc., an entity which
contributed assets to the Company in connection with its formation. Mr.
Cavenaugh received the 17,280 Common Units owned by him in consideration for
the transfer of certain assets to the Operating Partnership in connection with
its formation in 1994. The Operating Partnership had the right until August
1997 to dilute Mr. Cavenaugh's 17,280 Common Units in the event that the
Company suffered a loss as a result of a breach of certain representations and
warranties made in connection with the transfer of such assets. The Company
released Mr. Cavenaugh from such indemnification obligations upon his
resignation from the Company in December 1996. In addition, Mr. Cavenaugh has
the right to receive up to an additional 9,000 Common Units in connection with
the transfer of certain assets to the Operating Partnership in connection with
its formation if certain performance criteria are met for the 12- month period
ending September 30, 1997.
The 84,375 Common Units owned by LG Trust were purchased with the
proceeds of a $1.35 million loan to Mr. Cavenaugh and LG Trust from the
Operating Partnership. The loan is secured by a pledge of the 84,375 Common
Units owned by LG Trust and the proceeds therefrom, including any Common Stock
received upon exchange of such Common Units. Interest on the loan accrues at a
rate of 0.5% per annum above the prime rate announced, from time to time, by
the First National Bank of Chicago, and interest and principal are payable
prior to maturity to the extent of any distributions paid by the Operating
Partnership in respect of such pledged Common Units. The loan matures on the
earlier to occur of (i) August 31, 2001 and (ii) the first anniversary of the
termination of Mr. Cavenaugh's employment with the Company for any reason. Mr.
Cavenaugh and LG Trust intend to use a portion of the net proceeds from the
sale by LG Trust of the Common Stock offered hereby to repay such loan. As of
December 31, 1996, the amount outstanding under the loan was $1.32 million and
the interest rate was 8.75% per annum.
6
<PAGE> 8
The Selling Stockholders and the Company are parties to an
Exchange Rights Agreement, dated as of August 31, 1994, pursuant to which,
subject to certain conditions, each Common Unit held by such Selling
Stockholder may be exchanged for one share of Common Stock (subject to
adjustment) or, at the option of the Company, cash equal to the fair market
value of a share of Common Stock on the date the Selling Stockholder notifies
the Company of its intent to exchange the Common Units. On December 20, 1996,
the Selling Stockholders notified the Company of their intent to exchange their
Common Units, and the Company elected not to exchange such Common Units for
cash. The exchange of the Common Units is expect to occur shortly after the
date of effectiveness of the Registration Statement to which this Prospectus
relates.
The Registration Rights Agreement grants to each of the Selling
Stockholders certain registration rights. Pursuant to the provisions
of the Registration Rights Agreement, the Company has agreed to indemnify the
Selling Stockholders against certain civil liabilities, including liabilities
under the Securities Act, and to bear the expenses arising from the exercise of
such rights, except that the Company is not obligated to pay any underwriting
discounts or commissions, Commission and blue sky registration fees and
transfer taxes relating to the sale of the Shares.
PLAN OF DISTRIBUTION
The Shares will be sold from time to time by the Selling Stockholders
in one or more ordinary brokerage transactions on the NYSE at market prices
prevailing at the time of such sale (subject to customary or negotiated
brokerage commissions) using Smith Barney Inc. or such other broker-dealer as
may enter into arrangements with the Selling Stockholders. The Selling
Stockholders will pay any such brokerage commissions applicable to such
transactions. The Company will not receive any proceeds from the sale of the
Shares offered hereby.
The Company is registering the Shares in connection with the
Registration Rights Agreement pursuant to which the Company has agreed to
indemnify the Selling Stockholders against certain civil liabilities, including
liabilities under the Securities Act, and to bear the expenses arising from the
registration of the Shares other than any underwriters discounts or
commissions, Commission and blue sky registration fees and transfer taxes
relating to the sale of the Shares. The expenses so payable by the Company are
estimated to be approximately $21,258.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Ballard Spahr Andrews & Ingersoll, Baltimore, Maryland.
7
<PAGE> 9
EXPERTS
The consolidated financial statements of Ambassador Apartments, Inc.
(formerly Prime Residential, Inc.) appearing in the Company's Annual Report
(Form 10-K) for the year ended December 31, 1995, and the statements of revenue
and certain expenses of Sun Lake Apartments and Haverhill Commons Apartments
for the year ended December 31, 1995, included in the Ambassador Apartments,
Inc. Current Report on Form 8-K dated February 21, 1997, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their reports thereon
included therein and incorporated herein by reference. Such financial
statements are incorporated herein by reference in reliance upon such reports
given upon the authority of such firm as experts in accounting and auditing.
The financial statements of Arbors and Ocean Oaks Real Estate Limited
Partnership as of December 31, 1995 and 1994 and for the year ended December 31,
1995 and the period from inception (March 28, 1994) through December 31, 1994,
included in the Ambassador Apartments, Inc. Current Report on Form 8-K dated
February 21, 1997, have been audited by Coopers & Lybrand L.L.P., independent
accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such financial statements are incorporated
herein by reference in reliance upon such reports given upon the authority of
such firm as experts in accounting and auditing.
8
<PAGE> 10
===================================================
No dealer, salesperson or other individual
has been authorized to give any information or to
make any representations other than those
contained or incorporated by reference in this
Prospectus in connection with the offer made by
this Prospectus and, if given or made, such
information or representations must not be relied
upon as having been authorized by the Company or
any agent, dealer or underwriter. Neither the
delivery of this Prospectus nor any sale made
hereunder shall under any circumstances create an
implication that there has been no change in the
affairs of the Company since the date hereof.
This Prospectus does not constitute an offer or
solicitation by anyone in any state in which such
offer or solicitation is not authorized or in
which the person making such offer or solicitation
is not qualified to do so or to anyone to whom it
is unlawful to make such offer or solicitation.
___________________
TABLE OF CONTENTS
Page
----
AVAILABLE INFORMATION . . . . . 2
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE . . 2
THE COMPANY . . . . . . . . . . 3
SELLING STOCKHOLDERS . . . . . . . . . 5
PLAN OF DISTRIBUTION . . . . . 7
LEGAL MATTERS . . . . . . . . . 7
EXPERTS . . . . . . . . . . . . 8
===================================================
===================================================
101,655 SHARES
AMBASSADOR APARTMENTS,
INC.
COMMON STOCK
___________________________________________________
PROSPECTUS
___________________________________________________
===================================================
<PAGE> 11
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses in connection with
the issuance and distribution of the securities being registered, other than
underwriting discounts and commissions. All such expenses will be paid by the
Company other than the Securities and Exchange Commission registration fee.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee . . . . . . . . . . $ 742
Accounting fees and expenses . . . . . . . . . . . . . . . . . . . . . . 8,000
Legal fees and expenses . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Blue sky fees and expenses . . . . . . . . . . . . . . . . . . . . . . . 1,500
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,758
--------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 22,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Charter and the Company's bylaws authorize the Company to
indemnify its present and former directors and officers and to pay or reimburse
expenses for such individuals in advance of the final disposition of a
proceeding to the maximum extent permitted from time to time under Maryland
law. The Maryland General Corporation Law ("MGCL") provides that
indemnification of a person who is a party, or threatened to be made a party,
to legal proceedings by reason of the fact such a person is or was a director,
officer, employee or agent of a corporation, or is or was serving as a
director, officer, employee or agent of a corporation or other firm at the
request of a corporation, against expenses, judgments, fines and amounts paid
in settlement, is mandatory in certain circumstances and permissive in others,
subject to authorization by the board of directors, so long as a person seeking
indemnification acted in good faith and in a manner reasonably believed to be
in or not opposed to the best interests of the corporation, did not act with
active and deliberate dishonesty or receive an improper personal benefit in
money, property or services and, with respect to criminal proceedings, had no
reason to believe that his or her conduct was unlawful.
The Company's officers and directors are also indemnified
pursuant to the Amended and Restated Agreement of Limited Partnership of
Ambassador Apartments, L.P., as amended, the 1994 Stock Incentive Plan for
Officers, Directors, Key Employees of Ambassador Apartments, Inc., Ambassador
Apartments, L.P. and Subsidiaries and their respective indemnification and
employment agreements.
The Charter provides that, to the fullest extent permitted by
Maryland law, a director or officer of the Company shall not be personally
liable to the Company or its stockholders for money damages. The MGCL provides
that a corporation formed in Maryland may include in its charter a provision
eliminating or limiting the liability of its directors and officers to the
corporation or its stockholders for money damages except for (i) active and
deliberate dishonesty established by a final judgment or (ii) actual receipt of
an improper benefit or profit in money, property or services.
II-1
<PAGE> 12
The Company purchased an insurance policy which purports to
insure the officers and directors of the Company against certain
liabilities incurred by them in the discharge of their functions as such
officers and directors except for liabilities resulting from any deliberately
dishonest or fraudulent act or omission, or any criminal or malicious act or
omission, or any willful violation of law or based upon or attributable to
their gaining in fact any personal profit or advantage to which they are not
legally entitled.
Insofar as indemnification by the Company for liabilities
arising under the Securities Act may be permitted to directors, officers and
controlling persons of the Company pursuant to the foregoing provisions, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
4.1 Amended and Restated Articles of Incorporation of the Company, as
amended, incorporated by reference to Exhibit 3.4 to the Company's
Current Report on Form 8-K dated May 29, 1996.
4.2 Articles Supplementary, incorporated by reference to Exhibit 3.5 to the
Company's Current Report on Form 8-K dated August 16, 1996.
4.3 Amended and Restated Bylaws of the Company, incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement on Form
S-11, as amended (Reg. No. 33-77972).
4.4 Specimen Common Stock Certificate.
5.1 Opinion of Ballard Spahr Andrews & Ingersoll as to the validity of the
Shares.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit 5.1).
24.1 Power of Attorney (included on pages II-4 and II-5).
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this Registration
Statement:
II-2
<PAGE> 13
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, unless the information
required to be included in such post-effective amendment is
contained in a periodic report filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant
to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 and incorporated herein by reference;
(ii) To reflect in the Prospectus any facts or
events arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
Registration Statement, unless the information required to be
included in such post-effective amendment is contained in a
periodic report filed with or furnished to the Securities and
Exchange Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Securities Exchange Act of 1934 and
incorporated herein by reference;
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the Registration Statement or any material change to such
information in the Registration Statement;
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof;
(3) To remove from registration by means of a
post-effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the provisions described in Item 15
above, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by it is
against public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-3
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Chicago, State of Illinois, on February 21,
1997.
AMBASSADOR APARTMENTS, INC.
By: /s/ David M. Glickman
------------------------------------------
David M. Glickman
Chairman of the Board and
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints David M. Glickman and Adam D.
Peterson, and each of them, his/her true and lawful attorneys-in-fact and
agents, with full power of substitution and resubstitution for him/her and in
his/her name, place and stead, in any and all capacities (including his/her
capacity as a director and/or officer of Ambassador Apartments, Inc.), to sign
and file any and all amendments or post-effective amendments to this
Registration Statement or any registration statement relating to this offering
that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act of 1933, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary in connection with such matters as he/she might or
could do in person and hereby ratifying and confirming all that each of such
attorneys-in-fact and agents or their or his substitute or substitutes may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed on February 21, 1997, by the following
persons in the capacities indicated.
SIGNATURE CAPACITY
/s/ David M. Glickman Chairman of the Board and
- -------------------------- Chief Executive Officer
David M. Glickman
/s/ Adam D. Peterson Executive Vice President and
- -------------------------- Chief Financial and
Adam D. Peterson Accounting Officer
/s/ Norman R. Bobins Director
- --------------------------
Norman R. Bobins
II-4
<PAGE> 15
SIGNATURE CAPACITY
/s/ David B. Heller Director
- --------------------------
David B. Heller
/s/ Matthew W. Kaplan Director
- --------------------------
Matthew W. Kaplan
/s/ Richard F. Levy Director
- --------------------------
Richard F. Levy
/s/ Jane R. Patterson Director
- --------------------------
Jane R. Patterson
/s/ Michael W. Reschke Director
- --------------------------
Michael W. Reschke
II-5
<PAGE> 16
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ----------------------
4.1 Amended and Restated Articles of Incorporation of the Company, as
amended, incorporated by reference to Exhibit 3.4 to the Company's
Current Report on Form 8-K dated May 29, 1996.
4.2 Articles Supplementary, incorporated by reference to Exhibit 3.5 to
the Company's Current Report on Form 8-K dated August 16, 1996.
4.3 Amended and Restated Bylaws of the Company, incorporated by
reference to Exhibit 3.2 to the Company's Registration Statement on
Form S-11, as amended (Reg. No. 33-77972).
4.4 Specimen Common Stock Certificate.
5.1 Opinion of Ballard Spahr Andrews & Ingersoll as to the validity of
the Shares.
23.1 Consent of Ernst & Young LLP.
23.2 Consent of Coopers & Lybrand L.L.P.
23.3 Consent of Ballard Spahr Andrews & Ingersoll (included in Exhibit
5.1).
24.1 Power of Attorney (included on pages II-4 and II-5).
<PAGE> 1
Exhibit 4.4
COMMON STOCK
PAR VALUE $.01 PER SHARE
CUSIP 02316A 10 2
NUMBER SHARES
AMBASSADOR APARTMENTS INC.
Incorporated under the laws See Reverse for certain
of the State of Maryland definitions
This Certifies that
is owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF
Ambassador Apartments Inc. transferable on the books of the Corporation in
person or by duly authorized Attorney upon surrender of this Certificate
properly endorsed.
This certificate is not valid until countersigned by the Transfer Agent and
registered by the Registrar.
Witness the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
President
Secretary
[AMBASSADOR APARTMENTS INC. CORPORATE SEAL 1994 MARYLAND]
Countersigned and registered:
AMERICAN STOCK TRANSFER & TRUST COMPANY
(NEW YORK, NEW YORK)
Transfer Agent and Registrar
By
Authorized Officer [Picture of woman]
<PAGE> 2
AMBASSADOR APARTMENTS INC.
The shares represented by this certificate are subject to restrictions
on Beneficial and Constructive Ownership and Transfer for the purpose of the
Corporations's maintenance of its status as a Real Estate Investment Trust
under the Internal Revenue Code of 1986, as amended (the "Code"). Subject to
certain further restrictions and except as expressly provided in the Articles
of Incorporation, no Person may (i) Beneficially or Constructively Own shares
of Common Stock in excess of 9.9% of the outstanding Common Stock; (ii)
Beneficially or Constructively Own shares of Capital Stock which have an
aggregate value greater than 9.9% of the total outstanding Capital Stock; (iii)
Beneficially or Constructively Own shares of Common Stock that would result in
the Corporation being "closely held" under Section 856(h) of the Code or
otherwise cause the Corporation to fail to qualify as a REIT; or (iv) Transfer
or Acquire shares of Common Stock if such Transfer or Acquisition would result
in the Capital Stock of the Corporation being owned by fewer than 100 Persons.
Any Person who Beneficially or Constructively Owns or attempts to Beneficially
or Constructively Own shares of Common Stock in violation of the above
restrictions must immediately notify the Corporation. If any of the
restrictions on Transfer or ownership applicable to Common Stock are violated,
the shares of Common Stock represented hereby will be automatically exchanged
for shares of Excess Common Stock which will be held in trust by the
Corporation or in certain circumstances will be automatically repurchased by
the Corporation. Excess Common Stock has no dividend rights and no voting
rights, and the Corporation has a right to acquire Excess Common stock under
certain circumstances. In addition, the Corporation may repurchase shares upon
the terms and conditions specified by the Board of Directors in its sole
discretion if the Board of Directors determines that ownership or a Transfer or
other event may violate the restrictions described above. In addition, upon
the occurrence of certain events, attempted Transfers in violation of the
restriction set forth in the Articles of Incorporation shall be void ab initio.
The Corporation will furnish to the holder hereof upon request and without
charge a complete written statement of the terms and conditions of each class
of Capital Stock. All capitalized terms in this legend have the meanings
defined in the Articles of Incorporation, as the same may be amended from time
to time, a copy of which, including the restrictions on transfer, will be sent
without charge to each holder of Common Stock who so requests.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - ___________________ Custodian__________________________
(Cust) (Minor)
under Uniform Gifts to Minors
Act _________________________
(State)
Additional abbreviations may also be used though not in the above list.
For value received, ______________________________________ hereby sell, assign
and transfer unto
Please insert social security or other
identifying number of assignee
______________________________
________________________________________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________shares
of the capital stock represented by the within certificate, and do hereby
irrevocably constitute and appoint ________________________________ Attorney to
transfer the said stock on the books of the within named Corporation with full
power substitution in the premises.
_______________________________________
Dated _______________________ Notice: The signature to this assignment
must correspond with the name
as written upon the face of the
certificate in every particular,
without alteration or enlargement
or any change whatever.
<PAGE> 1
EXHIBIT 5.1
[LETTERHEAD OF BALLARD SPAHR ANDREWS & INGERSOLL]
February 21, 1997
Ambassador Apartments, Inc.
77 West Wacker Drive
Suite 4040
Chicago, Illinois 60601
Re: Ambassador Apartments, Inc. - Registration
Statement on Form S-3 - 101,655 Shares of Common
Stock, Par Value - $.01 Per Share
------------------------------------------------
Ladies and Gentlemen:
In connection with the registration of 101,655 shares of Common Stock,
par value $.01 per share ( the "Shares"), under the Securities Act of 1933, as
amended (the "Act"), by Ambassador Apartments, Inc., a Maryland corporation
(the "Corporation"), on the Registration Statement on Form S-3 filed or to be
filed with the Securities and Exchange Commission (the "Commission") on or
about February 21, 1997 (the "Registration Statement"), you have requested our
opinion with respect to the matters set forth below.
We have acted as special Maryland corporate counsel to the Corporation
in connection with the matters described herein. In our capacity as special
Maryland corporate counsel to the Corporation, we have reviewed and are
familiar with the proceedings taken and proposed to be taken by the Corporation
in connection with the authorization and issuance of the Shares and, for
purposes of this Opinion, we have assumed that such proceedings will be timely
completed in the manner presently proposed. We have examined the current
Charter of the Corporation (the "Charter"), consisting of Articles of Amendment
and Restatement of the Corporation filed with the State Department of
Assessments and Taxation of Maryland (the "SDAT") on August 16, 1994, together
with Articles of Amendment filed with the SDAT on May 29, 1996, and Articles
Supplementary filed with the SDAT on August 16, 1996, and we have examined the
By-Laws of the Corporation, certain actions taken by the Corporation's Board of
Directors, including relevant authorizations and approvals, and a Certificate
as to factual matters executed and delivered to us by one or more officers of
the Corporation.
In addition, we have examined a copy of the Amended and Restated
Agreement of Limited Partnership of Ambassador Apartments, L.P., dated as of
August 31, 1994, together with amendments thereto dated as of September 20,
1994, June 1, 1996, and August 16, 1996 (collectively, the "Partnership
Agreement"), and we have examined copies of an Exchange Rights Agreement dated
as of August 31, 1994 (the "Exchange Rights Agreement") and a Registration
Rights Agreement, dated as of August 31, 1994 (the "Registration Rights
Agreement"), each by and between the Corporation and the Selling Stockholders
referred to in the Registration Statement.
<PAGE> 2
BALLARD SPAHR ANDREWS & INGERSOLL
Ambassador Apartments, Inc.
February 21, 1997
Page 2
We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals and the conformity to the originals
of all documents submitted to us as certified, photostatic, facsimile or
conformed copies. In addition, we have assumed that each person executing any
instrument, document or certificate referred to herein on behalf of any party
is duly authorized to do so, and that each certificate submitted to us is true
and accurate, both when given and as of the date hereof. We have also assumed
that the Common Units (as referred to in the Registration Statement) of limited
partnership interest in Ambassador Apartments, L.P., a Delaware limited
partnership (the "Partnership"), held by the Selling Stockholders, were duly
and validly issued to the Selling Stockholders as described in the Registration
Statement and in accordance with the Partnership Agreement, and that the
Selling Stockholders do not hold the Common Units, nor will the Shares be
issued upon exchange of the Common Units, in violation of the restrictions on
transferability and ownership of the capital stock of the Corporation as set
forth in the Charter.
Based on the foregoing and subject to the assumptions and
qualifications set forth herein, it is our opinion that, as of the date of this
letter, the Shares have been duly authorized, and that, when issued upon
exchange of the Common Units of limited partnership interest in the Partnership
in accordance with the terms of the Partnership Agreement and Exchange Rights
Agreement, and upon transfer and conveyance of such Common Units to the
Corporation in consideration for the issuance thereof, the Shares will be
validly issued, fully paid and non-assessable.
We consent to your filing of this Opinion as an exhibit to the
Registration Statement and to the reference to the name of our firm under the
heading "Legal Matters".
We are qualified to practice law in the State of Maryland and do not
express any opinions herein concerning any law other than the law of the State
of Maryland. Furthermore, the opinions presented in this letter are limited to
the matters specifically set forth herein and no other opinion shall be
inferred beyond the matters expressly stated.
The opinions expressed in this letter are solely for your use and may
not be relied upon by any person without our prior written consent.
Very truly yours,
/s/ Ballard Spahr Andrews & Ingersoll
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Ambassador
Apartments, Inc. for the registration of 101,655 shares of its common stock and
to the incorporation by reference therein of our report dated January 26, 1996,
except for Note 15, as to which the date is March 27, 1996, with respect to the
consolidated financial statements and schedule of Ambassador Apartments, Inc.
(formerly Prime Residential, Inc.) included in its Annual Report (Form 10-K)
for the year ended December 31, 1995, and our reports dated February 19, 1997,
with respect to the statements of revenue and certain expenses of Sun Lake
Apartments and Haverhill Commons Apartments for the year ended December 31,
1995, included in the Ambassador Apartments, Inc. Current Report on Form 8-K
dated February 21, 1997, both filed with the Securities and Exchange
Commission.
Chicago, Illinois Ernst & Young LLP
February 21, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Ambassador Apartments, Inc. on Form S-3 of our report dated February 15, 1996
on our audit of the financial statements of Arbors and Ocean Oaks Real Estate
Limited Partnership as of December 31, 1995 and 1994 and for the year ended
December 31, 1995 and the period from inception (March 28, 1994) through
December 31, 1994, which report is included in the Ambassador Apartments, Inc.
current report on Form 8-K dated February 21, 1997. We also consent to the
reference to our firm under the caption "Experts"
Coopers & Lybrand L.L.P.
Dallas, Texas
February 21, 1997
