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.
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
_______________
POST-EFFECTIVE
AMENDMENT NO. 1
TO
FORM
S-4
ON
FORM S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
________________
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AmREIT
(Exact
name of registrant as specified in its charter)
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Texas
(State
or other jurisdiction of incorporation or organization)
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76-0410050
(I.R.S.
Employer Identification No.)
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8
Greenway Plaza, Suite 1000
Houston
TX 77046
(713)
850-1400
(Address,
including zip code, and telephone number, including area code, of
registrant's principal executive offices)
|
|
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H.
Kerr Taylor
President,
Chief Executive Officer and Chairman of the Board
AmREIT
8
Greenway Plaza, Suite 1000
Houston
TX 77046
Telephone:
(713) 840-1400 - - Facsimile: (713)
850-0498
(Name,
address, including zip code, and telephone number, including area
code, of
agent for service)
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With
copies to:
Bryan
L. Goolsby
Gina
E. Betts
Locke
Lord Bissell & Liddell LLP
2200
Ross Avenue, Suite 2200
Dallas,
Texas 75201
Telephone:
(214) 740-8000 - - Facsimile: (214)
740-8800
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Approximate
date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration
Statement.
If
the
only securities being registered on this form are being offered pursuant to
divided 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 the Securities Act of 1933, other
than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. ý
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
this
Form is a registration statement pursuant to General Instruction I.D. or a
post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. ¨
If
this
Form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. ¨
Subject
to Completion, dated October __, 2007
The
information in this prospectus is not complete and may be changed. We
may not sell these securities until the Registration Statement filed with
the
Securities and Exchange Commission is effective. This prospectus is
not an offer to sell these securities and it not soliciting an offer to buy
these securities in any state where the offer or sale is not
permitted.
1,026,732
CLASS A COMMON SHARES
________________
This
prospectus relates to the redemption by us of your Class B Common Shares for
up
to an aggregate consideration of 1,026,732 Class A Common Shares, par value
$0.01 per share. If you elect to receive Class A Common Shares in the
redemption rather than $10.18 per share, you will receive one Class A Common
Share for each Class B Common Share we redeem. We will not receive
any proceeds from the issuance to you of the Class A Common Shares.
We
are
registering the Class A Common Shares being offered by this prospectus in order
to permit the recipient thereof to sell such shares without restriction in
the
open market or otherwise; however, the registration of the shares does not
necessarily mean that any holders of Class B Common Shares will elect to receive
shares instead of cash upon redemption or that any Class A Common Shares issued
upon redemption will be offered or sold by the recipient thereof.
Our
Class
A Common Shares are listed on the American Stock Exchange under the ticker
symbol "AMY." On October 10, 2007, the last reported sale price of
our Class A Common Shares was $8.01 per share.
Investing
in our common shares involves a high degree of risk. See "Risk
Factors" beginning on page 3 to read about factors you should
consider before electing to receive cash or Class A Common Shares in connection
with our redemption of your Class B Common Shares.
Our
executive offices are located at 8 Greenway Plaza, Suite 1000, Houston, Texas
77046.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or determined if this prospectus
is
truthful or complete. Any representation to the contrary is a
criminal offense.
________________
The
date
of this prospectus is October __, 2007
You
should rely only on the information contained or incorporated by reference
in
this prospectus. We have not authorized any other person to provide
you with different or additional information. If anyone provides you
with different or additional information, you should not rely on
it. We will not make an offer to sell these common shares in any
jurisdiction where offers and sales are not permitted. The
information in this prospectus and in the documents incorporated by reference
in
this prospectus is accurate only as of their respective dates of those documents
in which the information is contained, regardless of the time delivery of this
prospectus or of any sale of our common shares. Our business,
financial condition, results of operations and prospects may have changed since
those dates and may change again.
Certain
statements contained herein constitute forward-looking statements as such term
is defined in Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements are not guarantees of
performance. Our future results, financial condition and business may
differ materially from those expressed in these forward-looking
statements. You can find many of these statements by looking for
words such as "plans," "intends," "estimates," "anticipates," "expects,"
"believes" or similar expressions in this prospectus and the applicable
prospectus summary. These forward-looking statements are subject to
numerous assumptions, risks and uncertainties. Many of the factors
that will determine these items are beyond our ability to control or
predict.
These
forward-looking statements are subject to numerous assumptions, risks and
uncertainties. Factors that may cause actual results to differ
materially from those contemplated by the forward-looking statements include,
among others, those listed under the caption "Risk Factors" in our Annual Report
on Form 10-K for the fiscal year ended December 31, 2006 and, to the extent
applicable, our Quarterly Reports on Form 10-Q, and any applicable prospectus
supplement, as well as the following possibilities:
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national,
regional and local economic
conditions;
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consequences
of any armed conflict involving, or terrorist attack against, the
United
States;
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our
ability to secure adequate
insurance;
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local
conditions such as an oversupply of space or a reduction in demand
for the
real estate in the area;
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competition
from other available space;
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whether
tenants consider a property
attractive;
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the
financial condition of our tenants, including the extent of tenant
bankruptcies or defaults;
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whether
we are able to pass some or all of any increased operating costs
through
to our tenants;
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how
well we manage our properties;
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timing
of acquisitions;
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our
access to debt and equity capital;
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fluctuations
in interest rates;
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changes
in real estate taxes and other
expenses;
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changes
in market rental rates;
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the
timing and costs associated with property development, improvements
and
rentals;
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changes
in taxation or zoning laws;
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government
regulation;
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our
failure to continue to qualify as a real estate investment
trust;
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availability
of financing on acceptable terms or at
all;
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potential
liability under environmental or other laws or regulations;
and
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general
competitive factors.
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For
these
statements, we claim the protection of the safe harbor forward-looking
statements contained in the Private Securities Litigation Reform Act of
1995. You are cautioned not to place undue reliance on our
forward-looking statements, which speak only as of the date of this prospectus
or the date of any document incorporated by reference. All subsequent
written and oral forward-looking statements attributable to us or any person
acting on our behalf are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. We do not
undertake any obligation to release publicly any revisions to our
forward-looking statements to reflect events or circumstances after the date
of
this prospectus.
We
are an
established real estate company that, at our core, are value creators who have
delivered results to our investors for 22 years. We have elected to
be taxed as a REIT for federal income tax purposes. Our mission is to
build a real estate business with the potential to realize profits year over
year regardless of market cycles. Our structure consists of two
distinct companies, representing three synergistic businesses that provide
earnings potential from multiple sources. First, we own an
institutional-grade portfolio of Irreplaceable Corners – premier retail
properties in high-traffic, highly populated areas – which are held for
long-term value and provide a foundation to our FFO growth through a steady
stream of rental income. Second, our advisory/sponsorship
business broadens our avenues to capital and raises capital for a
series of merchant development funds. And third, as a real estate
development and operating company, we provide value through offering an array
of
services to our tenants and properties, to our advisory sponsorship business's
portfolios and to third parties. These three business segments add
value to the overall company and, together, give us the flexibility
to achieve our financial objectives over the long-term as we navigate the
changing market cycles that come our way.
Our
portfolio consists primarily of premier retail properties typically located
on
"Main and Main" intersections in high-traffic, highly populated affluent
areas. Because of their location and exposure as central gathering
places, we believe these centers attract well established tenants and can
withstand the test of time, providing our shareholders a steady rental income
stream.
As
of June 30, 2007, we owned a real estate portfolio
consisting of 50 properties located in 15 states. A majority of our
properties are located in densely populated suburban communities in and around
Houston, Dallas and San Antonio. Within these broad markets, we
target locations that we believe have the best demographics and highest long
term value. We refer to these properties as Irreplaceable
Corners. Our criteria for an Irreplaceable Corner includes: high
barriers to entry (typically infill locations in established communities without
significant raw land available for development), significant population within
a
three mile radius (typically in excess of 30,000 cars per day). We
believe that centers with these characteristics will provide for consistent
leasing demand and rents that increase at or above the rate of
inflation. Additionally, these areas have barriers to entry for
competitors seeking to develop new properties due to the lack of available
land. We take a very hands-on approach to ownership, and directly
manage the operations and leasing at all of our wholly owned
properties.
Our
advisory/sponsorship business invests in and actively manages six merchant
development partnership funds which were formed to develop, own, manage, and
add
value to properties with an average holding period of two to four
years. We invest as both the general partner and as a limited
partner, and our advisory/sponsorship business sells interests
in these funds to retail investors. We, as the general
partner, manage the funds and, in return, receive management fees as well as
potential profit participation interests. However, we strive to
create a structure that aligns the interests of our shareholders with those
of
our limited partners. In this spirit, the funds are structured so
that the general partner does not receive its profit participation interest
until after the limited partners in the funds have received their
targeted return, which links our success to that of the limited
partners.
Our
real
estate development and operating business is a fully integrated and wholly-owned
business, consisting of brokers and real estate professionals that provide
development, acquisition, brokerage, leasing, construction, general contracting,
asset and property management services to our portfolio of properties, to our
advisory sponsorship business, and to third parties. This operating
subsidiary, which is a taxable REIT subsidiary, is a transaction-oriented
subsidiary. This business can produce long-term and annual growth;
however, due to its heavy general and administrative costs, its financial
results will fluctuate, and therefore its contributions to our earnings will
be
volatile.
There
may be significant fluctuations in our quarterly
results.
Our
quarterly operating results fluctuate based on a number of factors, including,
among others:
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Interest
rate changes;
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The
volume and timing of our property acquisitions;
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The
amount and timing of income generated by our advisory/sponsorship
business
as well as our real estate development and operating
business;
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The
recognitions of gains or losses on property sales;
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The
level of competition in our market; and
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General
economic conditions, especially those affecting the retail
industries.
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As
a
result of these factors, results for any quarter should not be relied upon
as
being indicative of performance in future quarters. The market price of our
Class A Common Shares could fluctuate with fluctuations in our quarterly
results.
Our
Class A Common Shares have a limited average daily trading
volume.
Our
Class
A Common Shares are currently traded on the American Stock Exchange. Our
Class A
Common Shares have been listed since July 2002, and as of September 30, 2007,
the average daily trading volume was approximately 8,015 shares based
on a 90-day average. As a result, the Class A Common Shares currently have
limited liquidity.
The
conversion and conversion premium associated with the Class C and Class D
Common
Shares may dilute the interest of the Class A Common
Shares.
At
October 10, 2007, there were 4,142,474 Class C Common Shares outstanding
and 11,047,587 Class D Common Shares outstanding.
The
Class
C Common Shares were issued at $10.00 per share and have the ability to convert
into Class A Common Shares based on 110% of original investment (i.e. $1,000
of
original investment converts into $1,100 of Class A Common Shares) after
a
seven-year lock out period from the date of issuance. The shares were
issued between September 2003 and May 2004. We have the right to
force conversion of the shares into Class A Common Shares on a one-for-one
basis
or to redeem the shares at a cash redemption price of $11.00 per share at
the
holder’s option.
The
Class
D Common Shares were issued at $10.00 per share and have the ability to convert
into Class A Common Shares based on 107.7% of original investment (i.e. $1,000
of original investment converts into $1,077 of Class A Common Shares) after
a
seven-year lock out period from the date of issuance. The shares were
issued between July 2004 and September 2005. The Class D Common
Shares are redeemable by us one year after issuance for 100% of original
investment plus the pro rata portion of the 7.7% conversion
premium.
The
economic impact of the conversion of these non-traded shares can be affected
by
many factors, including the following:
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The
price of our publicly traded Class A Common Shares;
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The
multiple and valuation at which our Class A Common Shares
trade;
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Our
ability to grow earnings, net income and FFO as well as dividends;
and
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Our
ability to redeem these shares based on access to the debt and equity
markets as well as liquidity in our balance sheet based on asset
sales.
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Conversion
of Class B Common Shares could put downward pressure on the market price of
our Class A Common Shares.
As
of
October 10, 2007, there were 1,026,732 Class B Common Shares
outstanding, each of which is currently convertible into Class A Common Shares
on a one-for-one basis. The Class B Common Shares are not listed on any
exchange, and no trading market presently exists for the Class B Common
Shares. As a result, holders of the Class B Common Shares who convert to
Class A Common Shares may be doing so, in part, to be able to liquidate some
or
all of their investment in our company. Due to the limited average trading
volume of the Class A Common Shares, substantial sales of Class A Common
Shares
would result in short-term downward pressure on the price of the Class A
Common
Shares.
Distribution
payments in respect of our Class A Common Shares are subordinate to
payments on debt and other series of common shares.
We
have
paid distributions since our organization in 1993. Distributions to our
shareholders, however, are subordinate to the payment of our current debts
and
obligations. If we have insufficient funds to pay our debts and obligations,
future distributions to shareholders will be suspended pending the payment
of
such debts and obligations. Dividends may be paid on the Class A Common Shares
only if all dividends then payable on the class B common shares and Class C
Common Shares have been paid. As a result, the Class A Common Shares are
subordinate to the class B and Class C Common Shares as to
dividends.
The
economic performance and value of our shopping centers depend on many factors,
each of which could have an adverse impact on our cash flows and operating
results.
The economic performance and value of our properties can be affected by many factors, including the following:
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Changes
in the national, regional and local economic climate;
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Local
conditions such as an oversupply of space or a reduction in demand
for
retail real estate in the area;
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The
attractiveness of the properties to tenants;
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Competition
from other available space;
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Our
ability to provide adequate management services and to maintain our
properties;
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Increased
operating costs, if these costs cannot be passed through to tenants;
and
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The
expense of periodically renovating, repairing and re-leasing
spaces.
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Our
properties consist primarily of neighborhood and community shopping centers
and,
therefore, our performance is linked to general economic conditions in the
market for retail space. The market for retail space has been and may continue
to be adversely affected by weakness in the national, regional and local
economies where our properties are located, the adverse financial condition
of
some large retailing companies, the ongoing consolidation in the retail sector,
the excess amount of retail space in a number of markets and increasing consumer
purchases through catalogues and the Internet. To the extent that any of these
conditions occur, they are likely to affect market rents for retail space.
In
addition, we may face challenges in the management and maintenance of the
properties or encounter increased operating costs, such as real estate taxes,
insurance and utilities, which may make our properties unattractive to
tenants.
Our
dependence on rental income may adversely affect our ability to meet our
debt
obligations and make distributions to our
shareholders.
The
majority of our income is derived from rental income from our portfolio of
properties. As a result, our performance depends on our ability to
collect rent from tenants. Our income and therefore our ability to
make distributions would be negatively affected if a significant number of
our
tenants, or any of our major tenants:
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Delay
lease commencements;
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Decline
to extend or renew leases upon expiration;
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Fail
to make rental payments when due; or
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Close
stores or declare bankruptcy.
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Any
of
these actions could result in the termination of the tenant’s leases and the
loss of rental income attributable to the terminated leases. Lease
terminations by an anchor tenant or a failure by that anchor tenant to occupy
the premises could also result in lease terminations or reductions in rent
by
other tenants in the same shopping center under the terms of some
leases. In addition, we cannot be sure that any tenant whose lease
expires will renew that lease or that we will be able to re-lease space on
economically advantageous terms. The loss of rental revenues from a
number of our tenants and our inability to replace such tenants may adversely
affect our profitability and our ability to meet debt and other financial
obligations and make distributions to shareholders.
Tenant,
geographic or retail product concentrations in our real estate portfolio
could
make us vulnerable to negative economic and other
trends.
There
is
no limit on the number of properties that we may lease to a single tenant.
However, under investment guidelines established by our board, no single
tenant
may represent more than 15% of AmREIT’s total annual revenue unless
approved by our board. Our board reviews our properties and potential
investments in terms of geographic and tenant diversification. Kroger,
IHOP and
CVS/Pharmacy accounted for 7.5%, 5.0% and 2.5%, respectively, of our total
operating revenues for the quarter ended June 30, 2007. There is a risk
that any
adverse developments affecting either Kroger, IHOP or CVS/Pharmacy could
materially adversely affect our revenues (thereby affecting our ability
to make
distributions to shareholders).
Approximately
58% of our rental income for the six months ended June 30, 2007, was
generated from properties located in the Houston, Texas metropolitan area.
Additionally, approximately 92% of our rental income for the six months was
generated from properties located throughout major metropolitan areas in
the
State of Texas. Therefore, we are vulnerable to economic downturns
affecting Houston and Texas, or any other metropolitan area where we might
in
the future have a concentration of properties.
If
in the
future properties we acquire result in or extend geographic or tenant
concentrations or concentration of product types, such acquisitions may increase
the risk that our financial condition will be adversely affected by the poor
judgment of a particular tenant’s management group, by poor performance of our
tenants’ brands, by a downturn in a particular market sub-segment or by market
disfavor with a certain product type.
Our
profitability and our ability to diversify our investments, both geographically
and by type of properties purchased, will be limited by the amount of
capital at our disposal. An economic downturn in one or more of the markets
in
which we have invested could have an adverse effect on our financial condition
and our ability to make distributions.
We
may increase our leverage without shareholder
approval.
Our
bylaws provide that we will not incur recourse indebtedness if, after giving
effect to the incurrence thereof, aggregate recourse indebtedness, secured
and
unsecured, would exceed 55% of our gross asset value on a consolidated basis.
However, our operating at the maximum amount of leverage permitted by our
bylaws
could adversely affect our cash available for distribution to our shareholders
and could result in an increased risk of default on our obligations. We intend
to borrow funds through secured and/or unsecured credit facilities to finance
property investments in the future. These borrowings may require lump sum
payments of principal and interest at maturity. Because of the significant
cash
requirements necessary to make these large payments, our ability to make
these
payments may depend upon our access to capital markets and/or ability to
sell or
refinance properties for amounts sufficient to repay such loans. At such
times,
our access to capital might be limited or non-existent and the timing for
disposing of properties may not be optimal, which could cause us to default
on
our debt obligations and/or discontinue payment of dividends. In addition,
increased debt service may adversely affect cash flow and share
value.
At
September 30, 2007, AmREIT had outstanding debt totaling $157 million, $151
million of which was fixed-rate secured financing. This debt represented
approximately 42% of the market value of our real estate
investments.
If
we cannot meet our REIT distribution requirements, we may have to borrow
funds
or liquidate assets to maintain our REIT status.
REITs
generally must distribute 90% of their taxable income annually. In the event
that we do not have sufficient available cash to make these distributions,
our
ability to acquire additional properties may be limited. Also, for the purposes
of determining taxable income, we may be required to include interest payments,
rent and other items we have not yet received and exclude payments attributable
to expenses that are deductible in a different taxable year. As a result,
we
could have taxable income in excess of cash available for distribution. In
such
event, we could be required to borrow funds or sell assets in order to make
sufficient distributions and maintain our REIT status.
We
are subject to conflicts of interest arising out of our relationships with
our
merchant development funds.
We
experience competition for acquisition properties. In evaluating property
acquisitions, certain properties may be appropriate for acquisition by either
us
or one of our merchant development funds. Our shareholders do not have the
opportunity to evaluate the manner in which these conflicts of interest are
resolved. Generally, we evaluate each property, considering the investment
objectives, creditworthiness of the tenants, expected holding period of the
property, available capital and geographic and tenant concentration issues
when
determining the allocation of properties among us and our merchant development
funds.
There
are
competing demands on our management and board. Our management team and board
are
not only responsible for us, but also for our merchant development funds,
which
include entities that may invest in the same types of assets in which we
may
invest. For this reason, the management team and trust managers divide their
management time and services among those funds and us, will not devote all
of
their attention to us and could take actions that are more favorable to the
other entities than to us.
We
may
invest along side our merchant development funds. We may also invest in joint
ventures, partnerships or limited liability companies for the purpose of
owning
or developing retail real estate projects. In either event, we may be a general
partner and fiduciary for and owe certain duties to our other partners in
such
ventures. The interests, investment objectives and expectations regarding
timing
of dispositions may be different for the other partners than those of our
shareholders, and there are no assurances that your interests and investment
objectives will take priority.
We
may,
from time to time, purchase one or more properties from our merchant development
funds. In such circumstances, we will work with the applicable merchant
development fund to ascertain, and we will pay, the market value of the
property. By our dealing directly with our merchant development funds in
this
manner, generally no brokerage commissions will be paid; however, there can
be
no assurance that the price we pay for any property will be equal to or less
than the price we would have been able to negotiate from an independent third
party. These property acquisitions from the merchant development funds will
be
limited to properties that the merchant development funds
developed.
Risks
Associated with an Investment in Real Estate
Real
estate investments are relatively illiquid.
Real
estate investments are relatively illiquid. Illiquidity limits the owner’s
ability to vary its portfolio promptly in response to changes in economic
or
other conditions. In addition, federal income tax provisions applicable to
REITs
may limit our ability to sell properties at a time which would be in the
best
interest of our shareholders.
Our
properties are subject to general real estate operating
risks.
In
general, a downturn in the national or local economy, changes in zoning or
tax
laws or the lack of availability of financing could adversely affect occupancy
or rental rates. In addition, increases in operating costs due to inflation
and
other factors may not be offset by increased rents. If operating expenses
increase, the local rental market for properties similar to ours may limit
the
extent to which rents may be increased to meet increased expenses without
decreasing occupancy rates. If any of the above occurs, our ability to make
distributions to shareholders could be adversely affected.
We
may construct improvements, the cost of which may not be
recoverable.
We
may on
occasion acquire properties and construct improvements or acquire properties
under contract for development. Investment in properties to be developed
or
constructed is more risky than investments in fully developed and constructed
properties with operating histories. In connection with the acquisition of
these
properties, we may advance, on an unsecured basis, a portion of the purchase
price in the form of cash, a conditional letter of credit and/or a promissory
note. We will be dependent upon the seller or lessee of the property under
construction to fulfill its obligations, including the return of advances
and
the completion of construction. This party’s ability to carry out its
obligations may be affected by financial and other conditions which are beyond
our control.
If
we
acquire construction properties, the general contractors and the subcontractors
may not be able to control the construction costs or build in conformity
with
plans, specifications and timetables. The failure of a contractor to perform
may
necessitate our commencing legal action to rescind the construction contract,
to
compel performance or to rescind our purchase contract. These legal actions
may
result in increased costs to us. Performance may also be affected or delayed
by
conditions beyond the contractor’s control, such as building restrictions,
clearances and environmental
impact studies imposed or caused by governmental bodies, labor strikes, adverse
weather, unavailability of materials or skilled labor and by financial
insolvency of the general contractor or any subcontractors prior to completion
of construction. These factors can result in increased project costs and
corresponding depletion of our working capital and reserves and in the loss
of
permanent mortgage loan commitments relied upon as a primary source for
repayment of construction costs.
We
may
make periodic progress payments to the general contractors of properties
prior
to construction completion. By making these payments, we may incur substantial
additional risk, including the possibility that the developer or contractor
receiving these payments may not fully perform the construction obligations
in
accordance with the terms of his agreement with us and that we may be unable
to
enforce the contract or to recover the progress payments.
An
uninsured loss or a loss that exceeds the insurance policy limits on our
properties could subject us to lost capital or revenue on those
properties.
Under
the
terms and conditions of the leases currently in force on our properties,
tenants
generally are required to indemnify and hold us harmless from liabilities
resulting from injury to persons, air, water, land or property, on or off
the
premises, due to activities conducted on the properties, except for claims
arising from our negligence or intentional misconduct or that of our
agents. Tenants are generally required, at the tenant’s expense, to obtain
and keep in full force during the term of the lease, liability and property
damage insurance policies. We have obtained comprehensive liability, casualty,
property, flood and rental loss insurance policies on our properties. All
of
these policies may involve substantial deductibles and certain exclusions.
In
addition, we cannot assure the shareholders that the tenants will properly
maintain their insurance policies or have the ability to pay the deductibles.
Should a loss occur that is uninsured or in an amount exceeding the combined
aggregate limits for the policies noted above, or in the event of a loss
that is
subject to a substantial deductible under an insurance policy, we could lose
all
or part of our capital invested in, and anticipated revenue from, one or
more of
the properties, which could have a material adverse effect on our operating
results and financial condition, as well as our ability to make distributions
to
the shareholders.
We
will have no economic interest in leasehold estate
properties.
We
currently own properties, and may acquire additional properties, in which
we own
only the leasehold interest, and do not own or control the underlying land.
With
respect to these leasehold estate properties, we will have no economic interest
in the land at the expiration of the lease, and therefore may lose the right
to
the use of the properties at the end of the ground lease.
We
may invest in joint ventures.
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The
joint venture partner may have economic or business interest or goals
which are inconsistent with ours;
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The
potential inability of our joint venture partner to
perform;
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The
joint venture partner may take actions contrary to our requests or
instructions or contrary to our objectives or policies;
and
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The
joint venture partners may not be able to agree on matters relating
to the
property they jointly own. Although each joint owner will have a
right of
first refusal to purchase the other owner’s interest, in the event a sale
is desired, the joint owner may not have sufficient resources to
exercise
such right of first refusal.
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We
also
may participate with other investors, possibly including investment programs
or
other entities affiliated with our management, in investments as
tenants-in-common or in some other joint venture arrangement. The risks of
such
joint ownership may be similar to those mentioned above for joint ventures
and,
in the case of a tenancy-in-common, each co-tenant normally has the right,
if an
un-resolvable dispute arises, to seek partition of the property, which partition
might decrease the value of each portion of the divided
property.
Our
properties may be subject to environmental
liabilities.
Under
various federal and state environmental laws and regulations, as an owner
or
operator of real estate, we may be required to investigate and clean up
certain
hazardous or toxic substances, asbestos-containing materials, or petroleum
product releases at our properties. We may also be held liable to a governmental
entity or to third parties for property damage and for investigation and
cleanup
costs incurred by those parties in connection with the contamination. In
addition, some environmental laws create a lien in favor of the government
on
the contaminated site for damages and costs the government incurs in connection
with the contamination. The presence of contamination or the failure to
remediate contaminations at any of our properties may adversely affect
our
ability to sell or lease the properties or to borrow using the properties
as
collateral. We could also be liable under common law to third parties for
damages and injuries resulting from environmental contamination coming
from our
properties.
Certain
of our properties have had prior tenants such as gasoline stations and, as
a
result, have existing underground storage tanks and/or other deposits that
currently or in the past contained hazardous or toxic substances. Other
properties have known asbestos containing materials. The existence of
underground storage tanks, asbestos containing materials or other hazardous
substances on or under our properties could have the consequences described
above. Also, we have not recently had environmental reports produced for
many of
our older properties, and, as a result, many of the environmental reports
relating to our older properties are significantly outdated. In addition,
we
have not obtained environmental reports for five of our older properties.
These
properties could have environmental conditions with unknown
consequences.
All
of
our future properties will be acquired subject to satisfactory Phase I
environmental assessments, which generally involve the inspection of site
conditions without invasive testing such as sampling or analysis of soil,
groundwater or other media or conditions; or satisfactory Phase II
environmental site assessments, which generally involve the testing of soil,
groundwater or other media and conditions. Our board may determine that we
will
acquire a property in which a Phase I or Phase II environmental
assessment indicates that a problem exists and has not been resolved at the
time
the property is acquired, provided that (A) the seller has (1) agreed
in writing to indemnify us and/or (2) established in escrow cash equal to a
predetermined amount greater than the estimated costs to remediate the problem;
or (B) we have negotiated other comparable arrangements, including, without
limitation, a reduction in the purchase price. We cannot be sure, however,
that
any seller will be able to pay under an indemnity we obtain or that the amount
in escrow will be sufficient to pay all remediation costs. Further, we cannot
be
sure that all environmental liabilities have been identified or that no prior
owner, operator or current occupant has created an environmental condition
not
known to us. Moreover, we cannot be sure that (1) future laws, ordinances
or regulations will not impose any material environmental liability or
(2) the current environmental condition of our properties will not be
affected by tenants and occupants of the properties, by the condition of
land or
operations in the vicinity of the properties (such as the presence of
underground storage tanks), or by third parties unrelated to us. Environmental
liabilities that we may incur could have an adverse effect on our financial
condition or results of operations.
Our
failure to qualify as a REIT for tax purposes would result in taxation of
us as
a corporation and the reduction of funds available for shareholder
distribution.
Although
we believe we are organized and are operating so as to qualify as a REIT,
we may
not be able to continue to remain so qualified. In addition, REIT qualification
provisions under the tax laws may change. We are not aware, however, of any
currently pending tax legislation that would adversely affect our ability
to
continue to qualify as a REIT.
For
any
taxable year that we fail to qualify as a REIT, we will be subject to federal
income tax on our taxable income at corporate rates. In addition, unless
entitled to relief under certain statutory provisions, we also will be
disqualified from treatment as a REIT for the four taxable years following
the
year during which qualification is lost. This treatment would reduce the
net
earnings available for investment or distribution to shareholders because
of the
additional tax liability for the year or years involved. In addition,
distributions no longer would qualify for the dividends paid deduction nor
would
there be any requirement that such distributions be made. To the extent that
distributions to shareholders would have been made in anticipation of our
qualifying as a REIT, we might be required to borrow funds or to liquidate
certain of our investments to pay the applicable tax.
We
may be liable for prohibited transaction tax and/or
penalties.
A
violation of the REIT provisions, even where it does not cause failure
to
qualify as a REIT, may result in the imposition of substantial taxes, such
as
the 100% tax that applies to net income from a prohibited transaction if
we
are determined to be a dealer in real property. Because the question
of
whether that type of violation occurs may depend on the facts and circumstances
underlying a given transaction, these violations could inadvertently occur.
To
reduce the possibility of an inadvertent violation, the trust managers
intend to
rely on the advice of legal counsel in situations where they perceive REIT
provisions to be inconclusive or ambiguous.
Changes
in the tax laws may adversely affect our REIT status.
The
discussions of the federal income tax considerations are based on current
tax
laws. Changes in the tax laws could result in tax treatment that differs
materially and adversely from that described herein.
We
will
not receive any proceeds from the issuance of our Class A Common Shares to
our
holders of Class B Common Shares who elect to receive Class A Common Shares
rather than cash upon redemption of the Class B Common Shares.
This
prospectus relates to the issuance of our Class A Common Shares upon redemption
of our Class B Common Shares. Upon redemption of our Class B Common
Shares, the holders thereof have the right to select between receiving $10.18
per share or one Class A Common Share per one Class B Common Share
redeemed. For a more detailed description of how to redeem your Class
B Common Shares, see "Redemption of Class B Common Shares."
We
are
registering the Class A Common Shares covered by this prospectus in order to
permit the recipient thereof to sell such shares without restriction in the
open
market or otherwise; however, the registering of the shares does not
mean that any holder will elect to receive Class A Common Shares rather than
cash upon redemption or that any holder electing to receive shares will offered
or sold by the recipient thereof.
We
will
pay all expenses relating to the registration of the Class A Common
Shares.
Pursuant
to the terms of our Class B Common Shares, we have the right to redeem the
Class
B Common Shares by giving notice by mail and by newspaper
publication. We have given notice that the call date is ______,
2007. Each holder of Class B Common Shares has the right to receive
as consideration for the redemption and cancellation of the Class B Common
Shares, either $10.18 per share in cash or one Class A Common Share per Class
B
Common Share redeemed. Assuming that all of the class B common shares
outstanding as of October 10, 2007 (1,026,732 shares) are redeemed for cash,
approximately $10.5 million will be required to fund the
redemption. Such funds are available to us through a combination of
our line of credit as well as cash generated by operating
activities.
Upon
redemption, the rights of holders of Class B Common Shares shall cease,
including the right to receive dividends of $0.74 per share. If you
elect to receive Class A Common Shares in connection with the redemption, you
shall be entitled to the same rights as our other holders of Class A Common
Shares.
General
The
following summary of the material United States federal income tax consequences
to taxable U.S. shareholders (as defined below) of the redemption of Class
B
Common Shares including the issuance of Class A Common Shares upon such
redemption, the taxation of us, and the material United States federal income
tax consequences to holders of our Class A Common Shares, is for general
information purposes only. It is not tax advice. The tax
treatment of a holder of Class A Common Shares will vary depending upon the
holder's particular situation, and this discussion addresses only holders that
hold Class A Common Shares as capital assets and does not deal with all aspects
of taxation that may be relevant to particular holders in light of their
personal investment or tax circumstances. This section also does not
deal with all aspects of taxation that may be relevant to certain types of
holders to which special provisions of the federal income tax laws apply,
including, but not limited to: dealers in securities or currencies; traders
in
securities that elect to use mark-to-market method of accounting for their
securities holdings; banks; tax exempt organizations; certain insurance
companies; persons liable for the alternative minimum
tax; persons that hold securities that are a hedge, that are hedged against
currency risks or that are part of a straddle or conversion transactions; and
U.S. shareholders whose functional currency is not the U.S.
dollar.
This
summary is based on the current provisions of the Internal Revenue Code of
1986,
as amended (the "Code"), its legislative history, existing and proposed
regulations under the Code, published rulings and court
decisions. This summary describes the provisions of these sources of
law only as they are currently in effect. All the sources of law may
change at any time, and any change in the law may apply
retroactively. We do not plan to request any rulings from the
Internal Revenue Service ("IRS") concerning our tax treatment and the statements
in this discussion are not binding on the IRS or any court. Thus, we
can provide no assurance that these statements will not be challenged by the
IRS
or that such challenge will not be sustained by a court.
WE
URGE YOU TO CONSULT WITH YOUR OWN TAX ADVISORS REGARDING THE TAX CONSEQUENCES
TO
YOU OF THE REDEMPTION AND OF ACQUIRING, OWNING AND SELLING CLASS A COMMON
SHARES, INCLUDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF
THE
REDEMPTION AND OF ACQUIRING, OWNING AND SELLING CLASS A COMMON SHARES IN YOUR
PARTICULAR CIRCUMSTANCES AND POTENTIAL CHANGES IN APPLICABLE
LAWS.
United
States Federal Income Tax Consequences of Redemption to Class B Common
Shareholders
Election
to Receive Cash. If you elect to receive cash as
consideration for the redemption of your Class B Common Shares, the redemption
will be a taxable transaction. A holder of Class B Common Shares who
elects cash should be treated as if it has sold its shares if the transaction
(i) results in a complete termination of its share interest in AmREIT, (ii)
is
substantially disproportionate with respect to such shareholder or (iii) is
not
essentially equivalent to a dividend with respect to such
shareholder. In determining whether any of these tests has been met,
shares considered to be owned by such shareholder by reason of certain
constructive ownership rules set forth in Section 318 of the Code, as well
as
shares actually owned, must be taken into account. If Class B Common
Shares are redeemed by AmREIT in a transaction that meets one of the tests
described above, a shareholder who elects cash consideration will recognize
capital gain or loss equal to the difference between the tax basis of such
Class
B Common Shares and the amount of cash received in redemption
thereof. Such gain or loss will be long-term gain or loss if the
holding period for the Class B Common Shares is more than one year as of the
date of the sale of such Class B Common Shares. The transaction may
also be a taxable transaction under applicable state, local and other tax
laws.
If
the
transaction does not meet any of the tests described above, the shareholder
generally would be taxed on the cash received as a dividend to the extent paid
out of AmREIT’s current or accumulated earnings and profits. Any
amount in excess of AmREIT’s earnings and profits would first reduce such
shareholder’s tax basis in its shares and thereafter would be treated as capital
gain. If a redemption of the shares by AmREIT is treated as a
distribution that is taxable as a dividend with respect to a shareholder, such
holder’s basis in the redeemed shares would be transferred to the remaining
shares of AmREIT stock that such shareholder owns, if any.
Under
federal income tax law, a non-exempt shareholder who receives a cash payment
from AmREIT is required to provide a correct taxpayer identification
number. If a shareholder fails to provide such taxpayer
identification number, the shareholder may be subject to certain penalties
and
back-up withholding may be required to be deducted from any cash payment due
to
the shareholder.
Election
to Receive Class A Common Shares. If you elect to receive Class
A Common Shares as consideration for the redemption of your Class B Common
Shares, such share exchange is expected to qualify as a tax-free transaction
under Section 1036 of the Code and should also qualify as a tax-free
"reorganization" within the meaning of Section 368(a)(1)(E) of the
Code. As a consequence, a U.S. holder who elects to receive a Class A
Common Share as consideration for the redemption of a Class B Common Share
will
not recognize any gain or loss upon the redemption. Such holder will
have a tax basis in the Class A Common Share received in the share exchange
equal to the tax basis of the Class B Common Share redeemed. The
holding period for the Class A Common
Share received in the exchange will include the holder's holding period for
the
Class B Common Share surrendered therefor.
Taxation
of AmREIT
We
have
elected to be treated as a REIT under Sections 856 through 860 of the Internal
Revenue Code for federal income tax purposes commencing with our taxable year
ended December 31, 1994. We believe that we have been organized and have
operated in a manner that qualifies for taxation as a REIT under the Internal
Revenue Code. We also believe that we will continue to operate in a manner
that
will preserve our status as a REIT. We cannot however, assure you that such
requirements will be met in the future.
Locke
Lord Bissell & Liddell LLP, our legal counsel, is of the opinion that we
have been organized, and for the taxable year ended December 31, 2006, we have
operated in conformity with the requirements for qualification and taxation
as a
REIT and that our current form of organization and proposed manner of operation
should enable us to continue to satisfy the requirements for qualification
as a
REIT for taxable years ending after December 31, 2006 if we operate in
accordance with the methods of operations described herein including our
representations concerning our intended method of operation. However,
no opinion can be given that we will actually satisfy all REIT requirements
in
the future since this depends on future events. You should be aware
that opinions of counsel are not binding on the IRS or on the courts, and,
if
the IRS were to challenge these conclusions, no assurance can be given that
these conclusions would be sustained in court. The opinion of Locke Lord Bissell
& Liddell LLP is based on various assumptions as well as on certain
representations made by us as to factual matters, including a factual
representation letter provided by us. The rules governing REITs are highly
technical and require ongoing compliance with a variety of tests that depend,
among other things, on future operating results, asset diversification,
distribution levels and diversity of share ownership.
Locke
Lord Bissell & Liddell LLP will not monitor our compliance with these
requirements. While we expect to satisfy these tests, and will use our best
efforts to do so, no assurance can be given that we will qualify as a REIT
for
any particular year, or that the applicable law will not change and adversely
affect us and our shareholders. See "-- Failure to Qualify as a REIT." The
following is a summary of the material federal income tax considerations
affecting us as a REIT and the holders of our securities. This summary is
qualified in its entirety by the applicable Internal Revenue Code provisions,
relevant rules and regulations promulgated under the Internal Revenue Code,
and
administrative and judicial interpretations of the Internal Revenue Code and
these rules and regulations.
REIT
Qualification
We
must
be organized as an entity that would, if we do not maintain our REIT status,
be
taxable as a regular corporation. We cannot be a financial institution or an
insurance company. We must be managed by one or more trust managers. Our taxable
year must be the calendar year. Our beneficial ownership must be evidenced
by
transferable shares. Our capital shares must be held by at least 100 persons
during at least 335 days of a taxable year of 12 months or during a
proportionate part of a taxable year of less than 12 months. Not more than
50%
of the value of the shares of our capital shares may be held, directly or
indirectly, applying the applicable constructive ownership rules of the Internal
Revenue Code, by five or fewer individuals at any time during the last half
of
each of our taxable years. We must also meet certain other tests, described
below, regarding the nature of our income and assets and the amount of our
distributions.
Our
outstanding Class A Common Shares are owned by a sufficient number of investors
and in appropriate proportions to permit us to satisfy these share ownership
requirements. To protect against violations of these share ownership
requirements, our declaration of trust provides that no person is permitted
to
own, applying constructive ownership tests set forth in the Internal Revenue
Code, more than 9.0% of our outstanding capital shares, unless the trust
managers are provided evidence satisfactory to them in their sole discretion
that our qualification as a REIT will not be jeopardized. In addition, our
declaration of trust contains restrictions on transfers of capital shares,
as
well as provisions that automatically transfer capital shares to a charitable
trust for the benefit of a charitable beneficiary to the extent that another
investor's ownership of such capital shares otherwise might jeopardize our
REIT
status. These restrictions, however may not ensure that we will, in all cases,
be able to satisfy the share ownership requirements. If we fail to satisfy
these
share ownership requirements, except as provided below, our status
as
a REIT will terminate. However, if we comply with the rules contained in
applicable Treasury Regulations that require us to ascertain the actual
ownership of our shares and we do not know, or would not have known through
the
exercise of reasonable diligence, that we failed to meet the 50% requirement
described above, we will be treated as having met this requirement. See
"—Failure to Qualify as a REIT." We may also qualify for relief under certain
other provisions. See the section below entitled "—Relief from Certain Failures
of the REIT Qualification Requirements."
To
monitor our compliance with the share ownership requirements, we are required
to
and we do maintain records disclosing the actual ownership of our common shares.
To do so, we will demand written statements each year from the record holders
of
certain percentages of shares in which the record holders are to disclose the
actual owners of the shares (i.e., the persons required to include in gross
income the REIT dividends). A list of those persons failing or refusing to
comply with this demand will be maintained as part of our records.
Shareholders
who fail or refuse to comply with the demand must submit a statement with their
tax returns disclosing the actual ownership of the shares and certain other
information.
We
currently satisfy, and expect to continue to satisfy, each of these requirements
discussed above. We also currently satisfy, and expect to continue to satisfy,
the requirements that are separately described below concerning the nature
and
amounts of our income and assets and the levels of required annual
distributions.
Ownership
of a Partnership Interest. In the case of a REIT which
is a partner in a partnership or any other entity such as a limited liability
company that is treated as a partnership for federal income tax purposes,
Treasury Regulations provide that the REIT will be deemed to own its
proportionate share of the assets of the partnership. Also, the REIT will be
deemed to be entitled to its proportionate share of the income of the
partnership. The character of the assets and gross income of the partnership
retains the same character in the hands of the REIT for purposes of Section
856
of the Internal Revenue Code, including satisfying the gross income tests and
the asset tests. Thus, our proportionate share of the assets and items of income
of any partnership in which we own an interest are treated as our assets and
items of income for purposes of applying the requirements described in this
discussion, including the income and asset tests described below.
Sources
of Gross Income. In order to qualify as a REIT for a particular
year, we also must meet two tests governing the sources of our income - a 75%
gross income test and a 95% gross income test. These tests are designed to
ensure that a REIT derives its income principally from passive real estate
investments.
The
Internal Revenue Code allows a REIT to own and operate properties through
wholly-owned subsidiaries which are "qualified REIT subsidiaries." The Internal
Revenue Code provides that a qualified REIT subsidiary is not treated as a
separate corporation, and all of its assets, liabilities and items of income,
deduction and credit are treated as assets, liabilities and items of income,
deduction and credit of the REIT.
75%
Gross Income Test. At least 75% of a REIT’s gross income for each
taxable year must be derived from specified classes of income that principally
are real estate related. The permitted categories of principal importance to
us
are:
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interest
on loans secured by real property;
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gains
from the sale of real property or loans secured by real property
(excluding gain from the sale of property held primarily for sale
to
customers in the ordinary course of our business, referred to below
as
"dealer property");
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income
from the operation and gain from the sale of property acquired in
connection with the foreclosure of a mortgage securing that property
("foreclosure property");
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distributions
on, or gain from the sale of, shares of other qualifying
REITs;
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abatements
and refunds of real property taxes;
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amounts
received as consideration for entering into agreements to make loans
secured by real property or to purchase or lease real property;
and
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"qualified
temporary investment income" (described
below).
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In
evaluating our compliance with the 75% gross income test, as well as the 95%
gross income test described below, gross income does not include gross income
from "prohibited transactions." In general, a prohibited transaction is one
involving a sale of dealer property, not including foreclosure property and
not
including certain dealer property we have held for at least four
years.
We
expect
that substantially all of our operating gross income will be considered rent
from real property and interest income. Rent from real property is qualifying
income for purposes of the gross income tests only if certain conditions are
satisfied. Rent from real property includes charges for services customarily
rendered to tenants, and rent attributable to personal property leased together
with the real property so long as the personal property rent is not more than
15% of the total rent received or accrued under the lease for the taxable year.
We do not expect to earn material amounts in these categories.
Rent
from
real property generally does not include rent based on the income or profits
derived from the property. However, rent based on a percentage of gross receipts
or sales is permitted as rent from real property and we will have leases where
rent is based on a percentage of gross receipts or sales. We generally do not
intend to lease property and receive rentals based on the tenant’s income or
profit. Also excluded from "rents from real property" is rent received from
a
person or corporation in which we (or any of our 10% or greater owners) directly
or indirectly through the constructive ownership rules contained in Section
318
and Section 856(d)(5) of the Internal Revenue Code, own a 10% or greater
interest in either vote or value.
A
third
exclusion from qualifying rent income covers amounts received with respect
to
real property if we furnish services to the tenants or manage or operate the
property, other than through an "independent contractor" from whom we do not
derive any income or through a "taxable REIT subsidiary." A taxable REIT
subsidiary is a corporation in which a REIT owns stock, directly or indirectly,
and with respect to which the corporation and the REIT have made a joint
election to treat the corporation as a taxable REIT subsidiary. The obligation
to operate through an independent contractor or a taxable REIT subsidiary
generally does not apply, however, if the services we provide are "usually
or
customarily rendered" in connection with the rental of space for occupancy
only
and are not considered rendered primarily for the convenience of the tenant
(applying standards that govern in evaluating whether rent from real property
would be unrelated business taxable income when received by a tax-exempt owner
of the property). Further, if the amounts we receive
for non-customary services at a property, valued at no less than 150%
of our direct cost of performing such services, is 1% or less of the total
income derived from the property, then the provision of such non-customary
services shall not prohibit the rental income (except the non-customary service
income) from qualifying as "rents from real property."
We
believe that the only material services generally to be provided to tenants
will
be those usually or customarily rendered in connection with the rental of space
for occupancy only. We do not intend to provide services that might be
considered rendered primarily for the convenience of the tenants, such as hotel,
health care or extensive recreational or social services.
Consequently,
we believe that substantially all of our rental income will be qualifying income
under the gross income tests, and that our provision of services will not cause
the rental income to fail to be included under that test.
Upon
the
ultimate sale of our properties, any gains realized also are expected to
constitute qualifying income, as gain from the sale of real property (not
involving a prohibited transaction).
95%
Gross Income Test. In addition to earning 75% of our gross income
from the sources listed above, 95% of our gross income for each taxable year
must come either from those sources, or from dividends, interest or gains from
the sale or other disposition of stock or other securities that do not
constitute dealer property. This test permits a REIT to earn a significant
portion of its income from traditional "passive" investment sources that are
not
necessarily real estate related. The term "interest" (under both the 75% and
95%
tests) does not include amounts that are based on the income or profits of
any
person, unless the computation is based only on a fixed percentage of receipts
or sales.
Failing
the 75% or 95% Tests; Reasonable Cause. As a result of the 75% and
95% tests, REITs generally are not permitted to earn more than 5% of their
gross
income from active sources, including brokerage commissions or other fees for
services rendered. We may receive certain types of that income. This type of
income will not qualify for the 75% test or 95% test but is not expected to
be
significant and that income, together with other nonqualifying income, is
expected to be at all times less than 5% of our annual gross income. While
we do
not anticipate that we will earn substantial amounts of nonqualifying income,
if
nonqualifying income exceeds 5% of our gross income, we could lose our status
as
a REIT. We may establish taxable REIT subsidiaries to hold assets generating
non-qualifying income. The gross income generated by these subsidiaries would
not be included in our gross income. However, dividends we receive from these
subsidiaries would be included in our gross income and qualify for the 95%
income test.
If
we
fail to meet either the 75% or 95% income tests during a taxable year, we may
still qualify as a REIT for that year if, following the identification of such
failure, (1) we file a description of each item of our gross income in
accordance with Treasury regulations, and (2) the failure to meet the tests
is
due to reasonable cause and not to willful neglect. It is not possible, however,
to state whether in all circumstances we would be entitled to the benefit of
this relief provision. For example, if we fail to satisfy the gross income
tests
because nonqualifying income that we intentionally accrue or receive causes
us
to exceed the limits on nonqualifying income, the IRS could conclude that our
failure to satisfy the tests was not due to reasonable cause. If these relief
provisions do not apply to a particular set of circumstances, we will not
qualify as a REIT. As discussed below, even if these relief provisions apply,
and we retain our status as a REIT, a tax would be imposed with respect to
our
non-qualifying income equal to the product of (i) the greater of the amount
by
which we fail either the 75% or 95% income tests for that year and (ii) a
fraction intended to reflect our profitability. See "—Taxation as a REIT"
below.
Prohibited
Transaction Income. Any gain that we realize on the sale of any
property held as inventory or other property held primarily for sale
to customers in the ordinary course of business (including our share of any
such
gain realized by any subsidiary partnerships but excluding foreclosure property)
that does not qualify under safe harbor provisions of the Code, will be treated
as income from a prohibited transaction that is subject to a 100% penalty tax.
This prohibited transaction income may also adversely affect our ability to
satisfy the income tests for qualification as a REIT. Under existing law,
whether property is held as inventory or primarily for sale to customers in
the
ordinary course of a trade or business depends on all the facts and
circumstances surrounding the particular transaction. We intend to hold our
and
our subsidiary partnerships intend to hold their properties for investment
with
a view to long-term appreciation, to engage in the business of acquiring,
developing and owning properties, and to make occasional sales of the properties
as are consistent with their investment objectives. The IRS may contend,
however, that one or more of these sales is subject to the 100% penalty
tax.
Character
of Assets Owned. At the close of each calendar quarter of our
taxable year, we also must meet three tests concerning the nature of our
investments. First, at least 75% of the value of our total assets generally
must
consist of real estate assets, cash, cash items (including receivables) and
government securities. For this purpose, "real estate assets" include interests
in real property, interests in loans secured by mortgages on real property
or by
certain interests in real property, shares in other REITs and certain options,
but excluding mineral, oil or gas royalty interests. The temporary investment
of
new capital in stock or debt instruments also qualifies under this 75% asset
test, but only for the one-year period beginning on the date we receive the
new
capital.
Second,
although the balance of our assets generally may be invested without
restriction, we will not be permitted to own (1) securities of any one
non-governmental issuer (other than a taxable REIT subsidiary) that represent
more than 5% of the value of our total assets, (2) securities possessing more
than 10% of the voting power of the outstanding securities of any single issuer
or (3) securities having a value of more than 10% of the total value of
the
outstanding securities of any one issuer. A REIT, however, may own 100% of
the
stock of a qualified REIT subsidiary, in which case the assets, liabilities
and
items of income, deduction and credit of the subsidiary are treated as those
of
the REIT. A REIT may also own securities representing more than 10% of the
voting power or value of a taxable REIT subsidiary.
Third,
securities of a single taxable REIT subsidiary may represent more than 5% of
the
value of the total assets but not more than 20% of the value of a REIT’s total
assets may be represented by securities of one or more taxable REIT
subsidiaries. In evaluating a REIT’s assets, if the REIT invests in a
partnership, it is deemed to own its proportionate share of the assets of the
partnership.
After
initially meeting the asset tests at the close of any quarter, we will not
lose
our status as a REIT for failure to satisfy the asset tests at the end of a
later quarter solely by reason of changes in asset values. If we fail to satisfy
the asset tests because we acquire securities or other property during a
quarter, we can cure this failure by disposing of sufficient nonqualifying
assets within 30 days after the close of that quarter. We intend to take such
action within the 30 days after the close of any quarter as may be required
to
cure any noncompliance. If we fail to cure noncompliance with the asset tests
within this time period, we could cease to qualify as a REIT.
If
we
fail to satisfy one or more of the asset tests for any quarter of a taxable
year, we nevertheless may qualify as a REIT for such year if we qualify for
relief under certain provisions of the Code. Those relief provisions
generally will be available (i) for failures of the 5% asset test or the 10%
asset tests if the failure is due to the ownership of assets that do not exceed
the lesser of 1% of our total assets or $10 million, and the failure is
corrected within 6 months following the quarter in which it was discovered,
or
(ii) for the failure of any asset test (including the failure to satisfy the
5%
asset test or 10% asset tests where the failure is due to ownership of assets
that exceed the amount in (i) above) if the failure is due to reasonable cause
and not due to willful neglect, we file a schedule with a description of each
asset causing the failure in accordance with regulations prescribed by the
Treasury, the failure is corrected within 6 months following the quarter in
which it was discovered, and we pay a tax consisting of the greater of $50,000
or a tax computed at the highest corporate rate on the amount of net income
generated by the assets causing the failure from the date of failure until
the
assets are disposed of or we otherwise return to compliance with the asset
test. We may not qualify for the relief provisions in all
circumstances.
Annual
Distributions to Shareholders. To maintain our REIT status, we
generally must distribute as a dividend to our shareholders in each taxable
year
at least 90% of our net ordinary income. Capital gain is not required to be
distributed. More precisely, we must distribute an amount equal to (1) 90%
of
the sum of (a) our "REIT Taxable Income" before deduction of dividends paid
and
excluding any net capital gain and (b) any net income from foreclosure property
less the tax on such income, minus (2) certain limited categories of "excess
noncash income," including income attributable to certain payments for the
use
of property or services described under Section 4467 of the Internal Revenue
Code, cancellation of indebtedness and original issue discount income. REIT
Taxable Income is defined to be the taxable income of the REIT, computed as
if
it were an ordinary corporation, with certain modifications. For example, the
deduction for dividends paid is allowed, but neither net income from foreclosure
property, nor net income from prohibited transactions, is included. In addition,
the REIT may carry over, but not carry back, a net operating loss for 20 years
following the year in which it was incurred.
A
REIT
may satisfy the 90% distribution test with dividends paid during the taxable
year and with certain dividends paid after the end of the taxable
year.
Dividends
paid in January that were declared during the last calendar quarter of the
prior
year and were payable to shareholders of record on a date during the last
calendar quarter of that prior year are treated as paid on December 31 of the
prior year. Other dividends declared before the due date of our tax return
for
the taxable year, including extensions, also will be treated as paid in the
prior year if they are paid (1) within 12 months of the end of that taxable
year
and (2) no later than our next regular distribution payment. Dividends that
are
paid after the close of a taxable year that do not qualify under the rule
governing payments made in January (described above) will be taxable to the
shareholders in the year paid, even though we may take them into account for
a
prior year. A nondeductible excise tax equal to 4% will be imposed for each
calendar year to the extent that dividends declared and distributed or deemed
distributed on or before December 31 are less than the sum of (a) 85% of our
"ordinary income" plus (b) 95% of our capital gain net income plus (c) any
undistributed income from prior periods.
To
be
entitled to a dividends paid deduction, the amount distributed by a REIT must
not be preferential. For example, every shareholder of the class of shares
to
which a distribution is made must be treated the same as every other shareholder
of that class, and no class of shares may be treated otherwise than in
accordance with its dividend rights as a class.
We
will
be taxed at regular corporate rates to the extent that we retain any portion
of
our taxable income. For example, if we distribute only the required 90% of
our
taxable income, we would be taxed on the retained 10%. Under certain
circumstances we may not have sufficient cash or other liquid assets to meet
the
distribution requirement. This could arise because of competing demands for
our
funds, or due to timing differences between tax reporting and cash receipts
and
disbursements (i.e., income may have to be reported before cash is received,
or
expenses may have to be paid before a deduction is allowed).
Although
we do not anticipate any difficulty in meeting this requirement, no assurance
can be given that necessary funds will be available. In the event these
circumstances do occur, then in order to meet the 90% distribution requirement,
we may have to arrange for short-term, or possibly long-term, borrowings to
permit the payment of required dividends.
If
we
fail to meet the 90% distribution requirement because of an adjustment to our
taxable income by the IRS, we may be able to cure the failure retroactively
by
paying a "deficiency dividend," as well as applicable interest and penalties,
within a specified period.
Taxation
As a REIT
As
a
REIT, we generally will not be subject to corporate income tax to the extent
we
currently distribute our REIT taxable income to our shareholders. This treatment
effectively eliminates the "double taxation" imposed on investments in most
corporations. Double taxation refers to taxation that occurs once at the
corporate level when income is earned and once again at the shareholder level
when such income is distributed. We generally will be taxed only on the portion
of our taxable income that we retain, which will include any undistributed
net
capital gain, because we will be entitled to a deduction for dividends paid
to
shareholders during the taxable year. A dividends paid deduction is not
available for dividends that are considered preferential within any given class
of shares or as between classes except to the extent that class is entitled
to a
preference. We do not anticipate that we will pay any of those preferential
dividends.
Even
as a
REIT, we will be subject to tax in certain circumstances as
follows:
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we
would be subject to tax on any income or gain from foreclosure property
at
the highest corporate rate;
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a
confiscatory tax of 100% applies to any net income from prohibited
transactions;
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if
we fail to meet either the 75% or 95% source of income tests described
above, but still qualify for REIT status under the reasonable cause
exception to those tests, a tax would be imposed equal to the amount
obtained by multiplying (a) the greater of the amount, if any, by
which we
failed either the 75% income test or the 95% income test, times (b)
a
fraction intended to reflect our
profitability;
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if
we fail the 5% asset test or either of the 10% asset tests (and do
not
qualify for a de minimis safe harbor) or fail to satisfy one or more
of
the other asset tests for any quarter of a taxable year, but nonetheless
continue to qualify as a REIT because we qualify under certain relief
provisions, we may be required to pay a tax of the greater of $50,000
or a
tax computed at the highest corporate rate on the amount of net income
generated by the assets causing the failure from the date of failure
until
the assets are disposed of or we otherwise return to compliance with
the
asset test;
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if
we fail to satisfy one or more of the requirements for REIT qualification
(other than the income tests or the rules providing relief from asset
test
failures, described above), we nevertheless may
avoid
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termination
of our REIT election in such year if the failure is due to reasonable
cause and not due to willful neglect and we pay a penalty of $50,000
for
each failure to satisfy the REIT qualification
requirements;
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under
some circumstances, we may be subject to the alternative minimum
tax on
items of tax preference;
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if
we should fail to distribute with respect to each calendar year at
least
the sum of (a) 85% of our REIT ordinary income for that year, (b)
95% of
our REIT capital gain net income for that year (other than certain
long-term capital gain for which we make a capital gain designation
and
pay the applicable income tax), and (c) any undistributed taxable
income
from prior years, we would be subject to a 4% excise tax on the excess
of
the required distribution over the amounts actually
distributed;
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we
also will be taxed at the highest regular corporate tax rate on any
built-in gain attributable to assets that we acquire from a C corporation
in certain tax-free corporate transactions, to the extent the gain
is
recognized during the first ten years after we acquire those assets.
Built-in gain is the excess of (a) the fair market value of the asset
over
(b) our adjusted basis in the asset, in each case determined as of
the
beginning of the ten-year recognition period;
and
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we
will be taxed at regular corporate rates on any undistributed REIT
taxable
income, including undistributed net capital
gains.
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In
addition, a tax is imposed on a REIT equal to 100% of redetermined rents,
redetermined deductions and excess interest. Redetermined rents are
generally rents from real property which would otherwise be reduced on
distribution, apportionment or allocation to clearly reflect income as a result
of services furnished or rendered by a taxable REIT subsidiary to tenants of
the
REIT. There are a number of exceptions with regard to redetermined rents, which
are summarized below.
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The
redetermined rent provisions do not apply with respect to any services
rendered by a taxable REIT subsidiary to the tenants of the REIT,
as long
as the taxable REIT subsidiary renders a significant amount of similar
services to persons other than the REIT and to tenants who are unrelated
to the REIT or the taxable REIT subsidiary or the REIT tenants, and
the
charge for these services is substantially comparable to the charge
for
similar services rendered to such unrelated
persons.
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The
redetermined rent provisions do not apply to any services rendered
by a
taxable REIT subsidiary to a tenant of a REIT if the rents paid by
tenants
leasing at least 25% of the net leasable space in the REIT’s property who
are not receiving such services are substantially comparable to the
rents
paid by tenants leasing comparable space who are receiving the services
and the charge for the services is separately
stated.
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The
redetermined rent provisions do not apply to any services rendered
by a
taxable REIT subsidiary to tenants of a REIT if the gross income
of the
taxable REIT subsidiary from these services is at least 150% of the
taxable REIT subsidiary’s direct cost of rendering the
service.
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The
Secretary of the Treasury has the power to waive the tax that would
otherwise be imposed on redetermined rents if the REIT establishes
to the
satisfaction of the Secretary that rents charged to tenants were
established on an arm’s length basis even though a taxable REIT subsidiary
provided services to the tenants.
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Redetermined
deductions are deductions, other than redetermined rents, of a taxable REIT
subsidiary if the amount of these deductions would be decreased on distribution,
apportionment or allocation to clearly reflect income between the taxable REIT
subsidiary and the REIT. Excess interest means any deductions for interest
payments made by a taxable REIT subsidiary to the REIT to the extent that the
interest payments exceed a commercially reasonable rate of
interest.
Relief
From Certain Failures of the REIT Qualification Provisions
If
we
fail to satisfy one or more of the requirements for REIT qualification (other
than the income tests or the rules providing relief from asset test failures,
described above), we nevertheless may avoid termination of our REIT election
in
such year if the failure is due to reasonable cause and not due to willful
neglect and we pay a penalty of $50,000 for each failure to satisfy the REIT
qualification requirements. We may not qualify for this relief
provision in all circumstances.
Failure
To Qualify As a REIT
For
any
taxable year in which we fail to qualify as a REIT and certain relief provisions
do not apply, we would be taxed at regular corporate rates, including
alternative minimum tax rates on all of our taxable income.
Distributions
to our shareholders would not be deductible in computing that taxable income,
and distributions would no longer be required to be made. Any corporate level
taxes generally would reduce the amount of cash available for distribution
to
our shareholders and, because the shareholders would continue to be taxed on
the
distributions they receive, the net after tax yield to the shareholders from
their investment likely would be reduced substantially. As a result, failure
to
qualify as a REIT during any taxable year could have a material adverse effect
on an investment in our Class A Common Shares. If we lose our REIT status,
unless certain relief provisions apply, we would not be eligible to elect REIT
status again for the four taxable years following the year during which
qualification is lost. It is not possible to state whether in all
circumstances we would be entitled to this statutory relief.
Taxation
Of Taxable U.S. Shareholders
The
term
"taxable U.S. shareholder" means a holder of our Class A Common Shares that
for
U.S. federal income tax purposes is
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a
citizen or resident of the United
States;
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a
corporation, partnership, or other entity created or organized in
or under
the laws of the United States, any of its states or the District
of
Columbia;
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an
estate whose income is subject to U.S. federal income taxation regardless
of its source; or
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any
trust with respect to which (A) a U.S. court is able to exercise
primary
supervision over the administration of such trust and (B) one or
more U.S.
persons have the authority to control all substantial decisions of
the
trust. Notwithstanding the preceding sentence, to the extent
provided in the Treasury Regulations, some trusts in existence on
August
20, 1996, and treated as United States persons prior to this date
that
elect to continue to be treated as United States persons, shall be
considered taxable U.S.
shareholders.
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If
a partnership, including an entity that is treated as a partnership
for
U.S. federal income tax purposes, is a beneficial owner of our stock,
the
treatment of a partner in the partnership will generally depend on
the
status of the partner and the activities of the
partnership.
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Except
as
discussed below, distributions generally will be taxable to taxable U.S.
shareholders as ordinary income to the extent of our current or accumulated
earnings and profits. We may generate cash in excess of our net earnings. If
we
distribute cash to shareholders in excess of our current and accumulated
earnings and profits (other than as a capital gain dividend), the excess cash
will be deemed to be a return of capital to each shareholder to the extent
of
the adjusted tax basis of the shareholder’s shares. Distributions in excess of
the adjusted tax basis will be treated as gain from the sale or exchange of
the
shares. A shareholder who has received a distribution in excess of our current
and accumulated earnings and profits may, upon the sale of the shares, realize
a
higher taxable gain or a smaller loss because the basis of the shares as reduced
will be used for purposes of computing the amount of the gain or loss.
Distributions we make, whether characterized as ordinary income or as capital
gains, are not eligible for the dividends received deduction for
corporations.
Dividends
we declare in October, November or December of any year and payable to a
shareholder of record on a specified date in any of these months shall be
treated as both paid by us and received by the shareholder on December 31 of
that year, provided we actually pay the dividend on or before January 31 of
the
following calendar year. Shareholders may not include in their own income tax
returns any of our net operating losses or capital losses.
Because
we generally are not subject to U.S. federal income tax on the portion of our
REIT taxable income distribution to our shareholders, our ordinary dividends
generally are not eligible for the reduced 15% rate available to most non
corporate taxpayers through 2010 under the Tax Increase Prevention and
Reconciliation Act of 2006, and will continue to be taxed at the higher tax
rates applicable to ordinary income. However, the reduced 15% rate
does apply to our distributions designated as long term capital gain dividends
(except to the extent attributable to real estate depreciation, in which case
such distributions continue to be subject to tax at a 25% rate); to the extent
attributable to dividends received by us from non REIT corporations or taxable
REIT subsidiaries; and to the extent attributable to income upon which we paid
corporate income tax (for example, if we distribute taxable income that we
retained and paid tax on in the prior year).
Distributions
that we properly designate as capital gain dividends will be taxable to taxable
U.S. shareholders as gains from the sale or disposition of a capital asset
to
the extent that they do not exceed our actual net capital gain for the taxable
year. Depending on the period of time we have held the assets which produced
these gains, and on certain designations, if any, which we may make, these
gains
may be taxable to non-corporate U.S. shareholders at a 15% or 25% rate,
depending on the nature of the asset giving rise to the gain. U.S. shareholders
that are corporations may, however, be required to treat up to 20% of certain
capital gain dividends as ordinary income.
We
may
elect to retain, rather than distribute as a capital gain dividend, our net
long-term capital gains. If we make this election, we would pay tax on our
retained net long-term capital gains. In addition, to the extent we designate,
a
U.S. shareholder generally would:
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include
its proportionate share of our undistributed long-term capital gains
in
computing its long-term capital gains in its return for its taxable
year
in which the last day of our taxable year
falls;
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be
deemed to have paid the capital gains tax imposed on us on the designated
amounts included in the U.S. shareholder’s long-term capital
gains;
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receive
a credit or refund for the amount of tax deemed paid by it;
and
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increase
the adjusted basis of its common shares by the difference between
the
amount of includable gains and the tax deemed to have been paid by
it;
and, in the case of a U.S. shareholder that is a corporation,
appropriately adjust its earnings and profits for the retained capital
gains in accordance with Treasury Regulations to be prescribed by
the
IRS.
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Distributions
we make and gain arising from the sale or exchange by a U.S. shareholder
of our
shares will not be treated as income from a passive activity, within the
meaning
of Section 469 of the Internal Revenue Code, since income from a passive
activity generally does not include dividends and gain attributable to the
disposition of property that produces dividends. As a result, U.S. shareholders
subject to the passive activity rules will generally be unable to apply any
"passive losses" against this income or gain.
Distributions
we make, to the extent they do not constitute a return of capital, generally
will be treated as investment income for purposes of computing the investment
interest limitation. Gain arising from the sale or other disposition of our
shares, however, will be treated as investment income if a shareholder so
elects, in which case the capital gain is taxed at ordinary income
rates.
U.S.
shareholders who sell or exchange our Class A Common Shares will generally
recognize gain or loss for U.S. federal income tax purposes in an amount equal
to the difference between the amount of cash and the fair market value of any
property received on the sale or exchange and the holder's adjusted basis in
the
shares for tax purposes. If the shares were held as a capital asset,
then the gain or loss realized by a shareholder upon the sale of shares will
be
reportable as capital gain or loss. In general, capital gains
recognized by individuals and other non-corporate shareholders upon the sale
or
disposition of Class A Common Shares will be subject to a maximum federal income
tax rate of 15% if the Class A Common Shares are held for more than 12 months,
and will be taxed at ordinary income rates of up to 35% if the Class A Common
Shares are held for 12 months or less. Gains recognized by shareholders that
are
corporations are subject to federal income tax at a maximum rate of 35%, whether
or not classified as long-term capital gains. Capital losses recognized by
a
shareholder upon the disposition of Class A Common Shares held for more than
one
year at the time of disposition will be considered long-term capital losses,
and
are generally available only to offset capital gain income of the shareholder
but not ordinary income (except in the case of individuals, who may offset
up to
$3,000 of ordinary income each year). If a shareholder receives a
long-term capital gain dividend from us and has held the shares for six months
or less, any loss incurred on the sale or exchange of the shares is treated
as a
long-term capital loss to the extent of the corresponding long-term capital
gain
dividend received.
In
any
year in which we fail to qualify as a REIT, the shareholders generally will
continue to be treated in the same fashion described above, except that none
of
our dividends will be eligible for treatment as capital gains dividends,
corporate shareholders may qualify for the dividends received deduction and
the
shareholders will not be required to report any share of our tax preference
items. Also, dividend distributions would be "qualified dividend
income," which in the hands of individual shareholders is taxable at the
long-term capital gain rates for individuals.
The
tax
rate on both dividends and long-term capital gains for most non-corporate
taxpayers is 15% until 2010. This reduced maximum tax rate generally
does not apply to ordinary REIT dividends, which continue to be subject to
tax
at the higher tax rates applicable to ordinary income. The 15%
maximum tax rate, however, does apply to (1) long-term capital gains recognized
on the disposition of REIT shares; (2) REIT capital gain distributions (except
to the extent attributable to real estate depreciation, in which case such
distributions continue to be subject to a 25% tax rate), (3) REIT dividends
attributable to dividends received by the REIT from non-REIT corporations,
such
as taxable REIT subsidiaries, and (4) REIT dividends attributable to income
that
was subject to corporate income tax at the REIT level (e.g., when the REIT
distributes taxable income that had been retained and taxed at the REIT level
in
the prior taxable year).
Backup
Withholding
We
will
report to our shareholders and the IRS the amount of dividends paid during
each
calendar year and the amount of tax withheld, if any. If a shareholder is
subject to backup withholding, we will be required to deduct and withhold a
tax
from any dividends payable to that shareholder. These rules may apply (1) when
a
shareholder fails to supply a correct taxpayer identification number, (2) when
the IRS notifies us that the shareholder is subject to the rules or has
furnished an incorrect taxpayer identification number, or (3) in the case of
corporations or others within certain exempt categories, when they fail to
demonstrate that fact when required. A shareholder that does not provide a
correct taxpayer identification number may also be subject to penalties imposed
by the IRS. Any amount withheld as backup withholding may be credited against
the shareholder’s federal income tax liability. We also may be
required to withhold a portion of capital gain distributions made to
shareholders who fail to certify their non-foreign status.
Taxation
of Tax-Exempt Entities
In
general, a tax-exempt entity that is a shareholder will not be subject to tax
on
distributions or gain realized on the sale of shares. The IRS has confirmed
that
a REIT’s distributions to a tax-exempt employees’ pension trust do not
constitute unrelated business taxable income ("UBTI"). A tax-exempt entity
may
be subject to unrelated business taxable income, however, to the extent that
it
has financed the acquisition of its shares with "acquisition indebtedness"
within the meaning of the Internal Revenue Code. In determining the number
of
shareholders a REIT has for purposes of the 5/50 rule described above under
"—REIT Qualification," generally, any shares held by tax-exempt employees’
pension and profit sharing trusts which qualify under Section 401(a) of the
Internal Revenue Code and are exempt from tax under Section 501(a) of the
Internal Revenue Code will be treated as held directly by its beneficiaries
in
proportion to their interests in the trust and will not be treated as held
by
the trust.
One
of
these trusts owning more than 10% of a REIT may be required to treat a
percentage of dividends from the REIT as UBTI. The percentage is determined
by
dividing the REIT’s gross income (less direct expenses related thereto) derived
from an unrelated trade or business for the year (determined as if the REIT
were
a qualified trust) by the gross income of the REIT for the year in which the
dividends are paid. However, if this percentage is less than 5%, dividends
are
not treated as UBTI. These UBTI rules apply only if the REIT qualifies as a
REIT
because of the "look-thru" rule with respect to the 5/50 rule discussed above
and if the REIT is "predominantly held" by qualified trusts. A REIT is
predominantly held by qualified trusts if at least one pension trust owns more
than 25% of the value of the REIT or a group of pension trusts each owning
more
than 10% of the value of the REIT collectively own more than 50% of the value
of
the REIT. We do not currently meet either of these requirements.
For
social clubs, voluntary employee benefit associations, supplemental unemployment
benefit trusts and qualified group legal services plans exempt from federal
income taxation under Sections 501(c)(7), (c)(9), (c)(17) and (c)(20) of the
Internal Revenue Code, respectively, income from an investment in our Class
A
Common Shares will constitute UBTI unless the organization is able to deduct
an
amount properly set aside or placed in reserve for certain purposes so as to
offset the UBTI generated by the investment in our Class A Common Shares. These
prospective investors should consult their own tax advisors concerning the
"set
aside" and reserve requirements.
Taxation
of Foreign Investors
The
rules
governing federal income taxation of nonresident alien individuals, foreign
corporations, foreign partnerships and other foreign shareholders are complex
and no attempt will be made herein to provide more than a summary of such rules.
Prospective non-U.S. shareholders should consult with their own tax advisors
to
determine the impact of federal, state and local income tax laws with regard
to
an investment in Class A Common Shares, including any reporting requirements,
as
well as the tax treatment of such an investment under the laws of their home
country.
Dividends
that are not attributable to gain from any sales or exchanges we make of United
States real property interests and which we do not designate as capital gain
dividends will be treated as dividends of ordinary income to the extent that
they are made out of our current or accumulated earnings and profits. Those
dividends ordinarily will be subject to a withholding tax equal to 30% of the
gross amount of the dividend unless an applicable tax treaty reduces or
eliminates that tax. However, if income from the investment in the Class A
Common Shares is treated as effectively connected with the non-U.S.
shareholder’s conduct of a United States trade or business, the non-U.S.
shareholder generally will be subject to a tax at graduated rates, in the same
manner as U.S. shareholders are taxed with respect to those dividends, and
may
also be subject to the 30% branch profits tax in the case of a shareholder
that
is a foreign corporation. For withholding tax purposes, we are currently
required to treat all distributions as if made out of our current and
accumulated earnings and profits and thus we intend to withhold at the rate
of
30%, or a reduced treaty rate if applicable, on the amount of any distribution
(other than distributions designated as capital gain dividends) made to a
non-U.S. shareholder unless (1) the non-U.S. shareholder files on IRS
Form
W-8BEN claiming that a lower treaty rate applies or (2) the non-U.S. shareholder
files an IRS Form W-8ECI claiming that the dividend is effectively connected
income.
Under
certain Treasury Regulations, we would not be required to withhold at the 30%
rate on distributions we reasonably estimate to be in excess of our current
and
accumulated earnings and profits. Dividends in excess of our current and
accumulated earnings and profits will not be taxable to a shareholder to the
extent that they do not exceed the adjusted basis of the shareholder’s shares,
but rather will reduce the adjusted basis of those shares. To the extent that
those dividends exceed the adjusted basis of a non-U.S. shareholder’s shares,
they will give rise to tax liability if the non-U.S. shareholder would otherwise
be subject to tax on any gain from the sale or disposition of his shares, as
described below. If it cannot be determined at the time a dividend is paid
whether or not a dividend will be in excess of current and accumulated earnings
and profits, the dividend will be subject to such withholding. We do not intend
to make quarterly estimates of that portion of dividends that are in excess
of
earnings and profits, and, as a result, all dividends will be subject to such
withholding. However, the non-U.S. shareholder may seek a refund of those
amounts from the IRS.
For
periods through the 2004 taxable year in which we qualified as a REIT,
distributions that were attributable to gain from our sales or exchanges of
United States real property interests were taxed to a non-U.S. shareholder
under
the provisions of the Foreign Investment in Real Property Tax Act of 1980,
commonly known as "FIRPTA." Under FIRPTA, those dividends were taxed
to a non-U.S. shareholder as if the gain were effectively connected with a
United States business. Non-U.S. shareholders were thus taxed at the normal
capital gain rates applicable to U.S. shareholders subject to applicable
alternative minimum tax and a special alternative minimum tax in the case of
nonresident alien individuals. Also, dividends subject to FIRPTA may have been
subject to a 30% branch profits tax in the hands of a corporate non-U.S.
shareholder not entitled to treaty exemption. We were required by the Internal
Revenue Code and applicable Treasury Regulations to withhold 35% of any dividend
that could be designated as a capital gain dividend. This amount was creditable
against the non-U.S. shareholder’s FIRPTA tax liability.
Beginning
in the 2005 taxable year, the above taxation under FIRPTA of distributions
attributable to gains from our sales or exchanges of United States real property
interests (or such gains that are retained and deemed to be distributed) will
not apply, provided our common shares are "regularly traded" on an established
securities market in the United States, and the non-U.S. shareholder does not
own more than 5% of the common stock at any time during the one-year period
ending on the date of distribution. Instead, such amounts will be
taxable as a dividend of ordinary income not effectively connected to a U.S.
trade or business, as described earlier. A non-U.S. shareholder
owning more than 5% of our common stock could be subject to the prior
rules.
Gain
recognized by a non-U.S. shareholder upon a sale of shares generally will not
be
taxed under FIRPTA if we are a "domestically controlled REIT," defined generally
as a REIT in which at all times during a specified testing period less than
50%
in value of the shares was held directly or indirectly by foreign persons.
It is
currently anticipated that we will be a "domestically controlled REIT," and
therefore the sale of shares will not be subject to taxation under FIRPTA.
Because the Class A Common Shares will be publicly traded, however, no assurance
can be given that we will remain a "domestically controlled REIT." However,
gain
not subject to FIRPTA will be taxable to a non-U.S. shareholder if (1)
investment in the Class A Common Shares is effectively connected with the
non-U.S. shareholder’s United States trade or business, in which case the
non-U.S. shareholder will be subject to the same treatment as U.S. shareholders
with respect to that gain, and may also be subject to the 30% branch profits
tax
in the case of a corporate non-U.S. shareholder, or (2) the non-U.S. shareholder
is a nonresident alien individual who was present in the United States for
183
days or more during the taxable year and has a "tax home" in the United States,
in which case the nonresident alien individual will be subject to a 30%
withholding tax on the individual’s capital gains. If we were not a domestically
controlled REIT, whether or not a non-U.S. shareholder’s sale of shares would be
subject to tax under FIRPTA would depend on whether or not the common shares
were regularly traded on an established securities market (such as the American
Stock Exchange) and on the size of selling non-U.S. shareholder’s interest in
our capital shares. If the gain on the sale of shares were to be subject to
taxation under FIRPTA, the non-U.S. shareholder will be subject to the same
treatment as U.S. shareholders with respect to that gain (subject to applicable
alternative minimum tax and a special alternative minimum tax in the case of
nonresident alien individuals and the possible application of the 30% branch
profits tax in the case of foreign corporations) and the purchaser of our Class
A Common Shares may be required to withhold 10% of the gross purchase
price.
State
And Local Taxes
We,
and
our shareholders, may be subject to state or local taxation in various state
or
local jurisdictions, including those in which it or they transact business
or
reside. Consequently, prospective shareholders should consult their own tax
advisors regarding the effect of state and local tax laws on an investment
in
our capital shares.
Locke
Lord Bissell & Liddell LLP, Dallas, Texas, will pass on the legality of the
securities offered through this prospectus.
The
consolidated financial statements of AmREIT and subsidiaries as of and for
each
of the years in the three-year period ended December 31, 2006 have been
incorporated by reference herein in reliance upon the report of KPMG LLP,
independent registered public accounting firm, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and
auditing.
We
are
subject to the reporting requirements of the Securities and Exchange Act of
1934, as amended, and file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy
any document we file at the SEC's public reference room at 450 Fifth Street,
N.W., Washington, D.C. 20549. You can request copies of these
documents by writing to the SEC and paying a fee for the copying
cost. Please call the SEC at 1-800-SEC-0330 for more information
about the operation of the public reference room. Our SEC filings are
also available to the public at the SEC's web site at
http://www.sec.gov. In addition, you nay read and copy
our SEC filings at the offices of the American Stock Exchange, 86 Trinity Place,
New York, New York 10006. Our website address is
http://www.amreit.com.
This
prospectus is only part of a registration statement we filed with the SEC under
the Securities Act of 1933, as amended, and therefore omits certain information
contained in the registration statement. We have also filed exhibits
to the registration statement that we have excluded from this prospectus, and
you should refer to the applicable exhibit for a complete description of any
statement referring to any contract or document. You may inspect or
obtain a copy of the registration statement, including exhibits, as described
in
the previous paragraph.
The
SEC
allows us to "incorporate by reference" the information we file with
it. This means that we can disclose important information to you by
referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus and the information we
file later with the SEC will automatically update and supersede this
information.
We
incorporate by reference the documents listed below and any future filings
we
make with the SEC under Section 13(a), 13(c), 14 or 159d) of the Securities
Exchange Act of 1934 until this offering is completed:
|
|
·
|
Annual
Report on Form 10-K for the year ended December 31,
2006.
|
|
|
·
|
Quarterly
Report on Form 10-Q for the quarter ended March 31,
2007.
|
|
|
·
|
Quarterly
Report on Form 10-Q for the quarter and six months ended June 30,
2007.
|
|
|
·
|
Form
8-K filed on May 9, 2007.
|
|
|
·
|
Form
8-K filed on August 8, 2007.
|
|
|
·
|
The
description of our Class A Common Shares contained in our registration
statement on Form 8-A filed July 17,
2002.
|
You
may
request copies of these filings at no cost by writing or telephoning our Chief
Financial Officer at the following address and telephone number:
Chad
Braun
AmREIT
8
Greenway Plaza, Suite 1000
Houston
TX 77046
Telephone:
(713) 850-1400
PART
II
INFORMATION
NOT REQUIRED IN THE PROSPECTUS
ITEM
14. OTHER EXPENSES OF ISSUANCE AND
DISTRIBUTION.
The
following table sets forth the estimated expenses in connection with the
offering contemplated by this Registration Statement:
|
SEC
Registration Fee
|
$ | - | ||
|
Accounting
Fees and Expenses
|
10,000
|
* | ||
|
Legal
Fees and Expenses
|
30,000
|
* | ||
|
Printing
Expenses
|
10,000
|
* | ||
|
Miscellaneous
|
-
|
|||
|
Total
|
$ | 50,000 | * |
(1)Registration
fee
previously paid in connection with the filing of Form S-4.
*
Estimated
ITEM
15. INDEMNIFICATION OF TRUST MANAGERS AND OFFICERS.
Section
9.20 of the Texas REIT Act empowers a real estate investment trust to indemnify
any person who was, is, or is threatened to be made a named defendant or
respondent in any threatened, pending, or completed action, suit, or proceeding,
whether civil, criminal, administrative, arbitrative, or investigative, any
appeal in such an action, suit, or proceeding, or any inquiry or investigation
that can lead to such an action, suit or proceeding because the person is or
was
a trust manager, officer, employee or agent of the real estate investment trust
or is or was serving at the request of the real estate investment trust as
a
trust manager, director, officer, partner, venturer, proprietor, trustee,
employee, agent, or similar functionary of another real estate investment trust,
corporation, partnership, joint venture, sole proprietorship, trust, employee
benefit plan, or other enterprise against expenses (including court costs and
attorney fees), judgments, penalties, fines and settlements if he conducted
himself in good faith and reasonably believed his conduct was in or not opposed
to the best interests of the real estate investment trust and, in the case
of
any criminal proceeding, had no reasonable cause to believe that his conduct
was
unlawful.
The
Texas
REIT Act further provides that, except to the extent otherwise permitted
therein, a trust manager may not be indemnified in respect of a proceeding
in
which the person is found liable on the basis that a personal benefit was
improperly received by him or in which the person is found liable to the real
estate investment trust. Indemnification pursuant to Subsection (B) of Section
9.20 of the Texas REIT Act is limited to reasonable expenses actually incurred
and may not be made in respect of any proceeding in which the person has been
found liable for willful or intentional misconduct in the performance of his
duty to the real estate investment trust.
Subsection
(C) of Section 15.10 of the Texas REIT Act provides that a trust manager shall
not be liable for any claims or damages that may result from his acts in the
discharge of any duty imposed or power conferred upon him by the real estate
investment trust, if, in the exercise of ordinary care, he acted in good faith
and in reliance upon information, opinions, reports or statements, including
financial statements and other financial data, concerning the real estate
investment trust or another person, that were prepared or presented by officers
or employees of the real estate investment trust, legal counsel, public
accountants, investment bankers, or certain other professionals, or a committee
of trust managers of which the trust manager is not a member. In addition,
no
trust manager shall be liable to the real estate investment trust for any act,
omission, loss, damage, or expense arising from the performance of his duty
to a
real estate investment trust, save only for his own willful misfeasance, willful
malfeasance or gross negligence.
Our
Declaration of Trust provides that the liability of each trust manager for
monetary damages shall be eliminated to the fullest extent permitted by
applicable law. In general, under current Texas law, a trust manager is liable
to the trust only for liabilities arising from such trust manager's own willful
misfeasance or willful malfeasance or gross negligence. The Declaration of
Trust
also provides that no amendment thereto may limit or eliminate this limitation
of liability with respect to events occurring prior to the effective date of
such amendment.
AmREIT's
Declaration of Trust and the indemnification agreements that we have with our
officers provide that the trust managers and officers shall be indemnified
to
the maximum extent permitted by Texas law. Under current Texas law, the trust
will indemnify a person who was, is, or is threatened to be made a named
defendant or respondent in a proceeding because the person is or was a trust
manager or officer if it is determined that the person (1) conducted himself
in
good faith; (2) reasonably believed: (3) in the case of conduct in his official
capacity as a trust manager or officer of the real estate investment trust
(REIT), that his conduct was in the REIT's best interests; and (3) in all other
cases, that his conduct was at least not opposed to the REIT's best interests;
and (3) in the case of any criminal proceeding, had no reasonable cause to
believe that his conduct was unlawful. Except to the extent provided in the
following sentence, a trust manager or officer may not be indemnified (1) in
respect of a proceeding in which the person is found liable on the basis that
personal benefit was improperly received by hum, whether or not the benefit
resulted from an action taken in the person's official capacity; or (2) in
which
the person is found liable to the REIT. Notwithstanding the foregoing, a person
may be indemnified against judgments, penalties (including excise and similar
taxes), fines, settlements, and reasonable expenses actually incurred by the
person in connection with the proceeding; provided that if the person is found
liable to the REIT or is found liable on the basis that personal benefit was
improperly received by the person, the indemnification (1) is limited to
reasonable expenses actually incurred by the person in connection with the
proceeding, and (2) shall not be made in respect of any proceeding in which
the
person shall have been found liable for willful or intentional misconduct in
the
performance of his duty to the REIT. In addition, our Declaration of Trust,
Bylaws and indemnification agreements require us to pay or reimburse, in advance
of the final disposition of a proceeding, reasonable expenses incurred by a
present or former trust manager or officer made a party to a proceeding by
reason of his status as a trust manager or officer, provided that we shall
have
received (1) a written affirmation by the trust manager or officer of his good
faith belief that he has met the standard of conduct necessary for
indemnification by us as authorized by the Bylaws and (2) a written undertaking
by or on his behalf to repay the amount paid or reimbursed by us if it shall
ultimately be determined that the standard of conduct was not met. Our
Declaration of Trust, Bylaws and indemnification agreements also permit us
to
provide indemnification, payment or reimbursement of expenses to any of our
employees or agents in such capacity. Any indemnification, payment or
reimbursement of the expenses permitted by the Declaration of Trust, Bylaws
and
indemnification agreements shall be furnished in accordance with the procedures
provided for indemnification and payment or reimbursement of expenses under
Texas Real Estate Investment Trust Act for trust managers.
ITEM
16. EXHIBITS.
|
*3.1
|
Amended and Restated Declaration of Trust (included as Exhibit 3.1 of the Exhibits to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2002, and incorporated herein by reference). | |
|
*3.2
|
Bylaws, dated December 22, 2002 (included as Exhibit 3.1 of the Exhibits to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 2002, and incorporated herein by reference). | |
|
*5.1
|
Opinion of Locke Lord Bissell & Liddell LLP as to the legality of the securities being registered. | |
|
*8.1
|
Opinion of Locke Lord Bissell & Liddell LLP as to certain tax matters. | |
|
*23.1
|
Consent of KPMG LLP. | |
|
23.2
|
Consent of Locke Lord Bissell & Liddell LLP (included in Exhibit 5.1 hereto). | |
|
23.3
|
Consent of Locke Lord Bissell & Liddell LLP (included in Exhibit 8.1 hereto). | |
|
*99.1
|
Cover Letter to Letter of Transmittal | |
|
*99.2
|
Letter of Transmittal |
|
*
|
Filed herewith | |
|
†
|
Previously filed. | |
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: | |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act"); | |
|
(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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; and | |
|
(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; | |
provided,
however, that paragraphs (i), (ii) and (iii) do not apply if the Registration
Statement is on Form S-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in reports filed
with
or furnished to the Commission by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"),
that
are incorporated by reference in the Registration Statement, or is contained
in
a form of prospectus filed pursuant to Rule 424(b) that is part of the
registration statement.
|
(2)
|
That, for the purpose of determining any liability under the Securities Act, 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)
|
That, for the purpose of determining any liability under the Securities Act, 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. | |
|
(4)
|
That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
|
(i)
|
(A) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall
be
deemed to be part of the registration statement as of the date the
filed
prospectus was deemed part of and included in the registration statement;
and
|
|
|
(B) Each
prospectus required to be filed to Rule 424(b)(2), (b)(5) or (b)(7)
as
part of a registration statement in reliance on Rule 430B relating
to an
offering made pursuant to Rule 415(a)(l)(i), (vii) or (x) for the
purpose
of providing the information required by Section 10(a) of the Securities
Act shall be deemed to be part of and included in the registration
statement as of the earlier of the date such form of prospectus is
first
used after effectiveness or the date of the first contract of sale
of
securities in the offering described in prospectus. As provided
in Rule 430B, for liability purposes of the issuer and any
person that is at that date an underwriter, such date shall be deemed
to
be a new effective date of the registration statement relating to
the
securities in the registration statement to which the prospectus
relates,
and the offering of such securities at that time shall be deemed
to be the
initial bona fide offering thereof. Provided, however, that no
statement made in a registration statement or prospectus that is
part of
the registration statement or made in a document incorporated or
deemed
incorporated by reference into the registration statement or prospectus
that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to
such
effective date, supersede or modify any statement that was made in
the
registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such
effective
date; and
|
|
|
(5)
|
That,
for the purpose of determining liability of the registrant under
Securities Act to any purchaser in the initial distribution of the
securities, in a primary offering of securities of the undersigned
registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser,
if the securities are offered or sold to such purchaser by means
of any of
the following communications, the undersigned registrant will be
a seller
to the purchaser and will be considered to offer or sell such securities
to such purchaser:
|
|
|
(i) Any
preliminary prospectus or prospectus of the undersigned registrant
relating to the offering required to be filed pursuant to Rule
424;
|
|
|
(ii) Any
free writing prospectus relating to the offering prepared by or on
behalf
of the undersigned registrant or used or referred to by the undersigned
registrant;
|
|
|
(iii) The
portion of any other free writing prospectus relating to the offering
containing material information about the undersigned registrant
or its
securities provided by or on behalf of an undersigned registrant;
and
|
|
|
(iv) Any
other communication that is an offer in the offering made by the
undersigned registrant to the
purchaser.
|
(b) The
undersigned registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to
Section 15(d) of the Exchange Act) 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 may be
permitted to trust managers, officers and controlling persons of the registrant
pursuant to the provisions described in Item 15 of this Registration Statement
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 and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than in payment by the registrant of expenses incurred
or paid by a trust manager, director, officer or controlling person in the
successful defense of any action, suit or proceeding) is asserted against the
registrant by such trust manager, 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 whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such
issue.
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
Houston, State of Texas, on the ___ day of October, 2007.
AmREIT
By: /s/
H. Kerr
Taylor
H.
Kerr Taylor
President,
Chief
Executive Officer and Chairman of theBoard
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
|
Signature
|
Title
|
Date
|
|
By:
/s/ H. Kerr Taylor
H.
Kerr Taylor
|
President,
Chief Executive Officer and Chairman of the Board
|
October
__, 2007
|
|
By:*
Robert
S. Cartwright, Jr.
|
Trust
Manager
|
October
__, 2007
|
|
By:*
G.
Steven Dawson
|
Trust
Manager
|
October
__, 2007
|
|
By:*
Philip
W. Taggart
|
Trust
Manager
|
October
__, 2007
|
|
By:
*
H.
L. Rush, Jr.
|
Trust
Manger
|
October
__, 2007
|
|
By:
/s/ Brett P. Treadwell
Brett
P. Treadwell
|
Vice
President – Finance
(Principal
Accounting Officer)
|
October
__, 2007
|
*
The
undersigned, by signing his name hereto, does sign and execute this Registration
Statement pursuant to the Power of Attorney executed by the above-named
persons.
By: /s/
H. Kerr Taylor
H.
Kerr
Taylor
Attorney-in-Fact
EXHIBIT
INDEX
Exhibit
Number
|
†3.1
|
Amended
and Restated Declaration of Trust (included as Exhibit 3.1 of the
Exhibits
to the Company’s Annual Report on Form 10-KSB for the year ended December
31, 2002, and incorporated herein by
reference).
|
|
†3.2
|
Bylaws,
dated December 22, 2002 (included as Exhibit 3.1 of the Exhibits
to the
Company’s Annual Report on Form 10-KSB for the year ended December 31,
2002, and incorporated herein by
reference).
|
|
*5.1
|
Opinion
of Locke Lord Bissell & Liddell LLP as to the legality of the
securities being registered.
|
|
*8.1
|
Opinion
of Locke Lord Bissell & Liddell LLP as to certain tax
matters.
|
|
*23.1
|
Consent
of KPMG LLP.
|
|
23.2
|
Consent
of Locke Lord Bissell & Liddell LLP (included in Exhibit 5.1
hereto).
|
|
23.3
|
Consent
of Locke Lord Bissell & Liddell LLP (included in Exhibit 8.1
hereto).
|
| *99.1 | Cover Letter to Letter of Transmittal |
| *99.2 | Letter of Transmittal |
|
|
______
|
|
|
* Filed
herewith.
|
|
|
† Previously
filed.
|
~27~