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REGISTRATION NO.
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
TARRAGON REALTY INVESTORS, INC.
(Exact name of registrant as specified in governing instruments)
Nevada
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(State or other jurisdiction of incorporation or organization)
94-2432628
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(IRS Employer Identification No.)
280 Park Avenue, East Building, 20th Floor
New York, New York 10017
(212) 949-5000 o (212) 949-8001 (Fax)
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(Address of principal executive offices)
William S. Friedman, Esq.
280 Park Avenue, East Building, 20th Floor
New York, New York 10017
(212) 949-5000 o (212) 949-8001 (Fax)
(Name and address of agent for service)
With a Copy to:
Steven C. Metzger, Esq.
Prager, Metzger & Kroemer PLLC
2626 Cole Avenue, Suite 900
Dallas, Texas 75204
(214) 969-7600 o (214) 523-3838 (Fax)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this registration statement becomes effective.
If the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
452(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. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Amount to be Proposed maximum Proposed maximum Amount of
Securities to be registered offering price per unit aggregate offering registration
Registered price fee
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<S> <C> <C> <C> <C>
Tarragon Realty
Investors, Inc. common 36,250 shares $10.28(2) $372,650(2) $98.38
stock, par value $0.01
per share(1)
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</TABLE>
(1) Tarragon common stock is being offered for the account of pledgees,
donees, transferees, and other successors-in-interest of Tarragon.
(2) Pursuant to Rule 457(a), the proposed Maximum Offering Price Per
Unit and Proposed Maximum Aggregate Offering Price have been calculated as the
market value upon the basis of the average of the bid and asked price of
Tarragon common stock on March 28, 2000, which was $10.28.
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 SEC, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
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PROSPECTUS
TARRAGON REALTY INVESTORS, INC.
The Issuer
TARRAGON REALTY INVESTORS, INC. Tarragon is a fully integrated real
280 PARK AVENUE, estate development, acquisition and
EAST BUILDING, management company controlling
20TH FLOOR approximately 17,000 apartment
NEW YORK, NY 10017 units and almost 2.5 million square
(212) 949-5000 feet of commercial space located
throughout the continental United
States, with principal
concentrations in Florida, Texas,
Connecticut and California.
36,250 SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE
The Offering
YOU SHOULD CONSIDER CAREFULLY Up to 36,250 shares of Tarragon
THE RISK FACTORS DISCUSSED common stock may be offered for
BEGINNING ON PAGE 4 OF THIS sale from time to time by pledgees,
PROSPECTUS. donees, transferees or other
successors-in-interest of Tarragon.
These shares may be sold through
ordinary brokerage transactions in
the over-the-counter markets, in
negotiated transactions or
otherwise, at prices and on terms
that will be fixed at the time of
sale. The specific terms of sale,
and the names of underwriters, if
any, will be set forth in a
Prospectus supplement.
These shares are being registered
to facilitate their placement as a
security deposit for a commercial
lease. Tarragon does not intend to
sell any of the shares at this
time. Tarragon will not receive any
of the proceeds of the sale of the
shares if and when such a sale
occurs, except to the extent the
proceeds of any sale are applied to
reduce outstanding indebtedness of
Tarragon.
Tarragon's common stock is traded on the NASDAQ National Market System
under the symbol "TARR." On March 28, 2000, the closing price of Tarragon's
common stock on the NASDAQ was $10.25 per share.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES, OR DETERMINED THAT THIS
PROSPECTUS IS ADEQUATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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THE DATE OF THIS PROSPECTUS IS ________ ,2000
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ABOUT THIS PROSPECTUS
This Prospectus is part of a registration statement on Form S-3 that we
have filed with the Securities and Exchange Commission. This Prospectus does not
contain all of the information contained in the registration statement. You
should read this Prospectus and any supplement together with the additional
information contained in the registration statement and in the other documents
incorporated by reference into this Prospectus.
Whenever we refer in this Prospectus to "Tarragon," "we," "us," or
"our," we mean Tarragon Realty Investors, Inc., a Nevada corporation, and its
predecessors and subsidiaries.
ABOUT THE COMPANY
Tarragon is a fully integrated real estate development, acquisition and
management company, operated as a real estate investment trust (or "REIT") for
federal income tax purposes through December 31, 1999. We control approximately
17,000 apartment units and almost 2.5 million square feet of commercial space
throughout the United States. Our primary business is investing in and
developing income-producing real estate directly and through partnerships and
joint ventures.
Our acquisition strategy is opportunistic, but focuses on acquiring
properties that add to the efficiency of our real estate portfolio. We have a
policy of continuously improving and upgrading these properties, in order to
increase revenues and achieve value. Since 1997, we have also invested
increasing amounts in new construction and development projects, either directly
or in partnership with others.
We have financed acquisitions, development and capital improvements
largely through mortgages and internally generated funds, as well as through
property sales. We expect property sales and borrowings to provide the bulk of
funds available for investment in the future, so the availability and cost of
long-term mortgage funds are key factors in our ability to continue to make new
investments without additional equity offerings.
We were incorporated in Nevada on April 2, 1997. We are the ultimate
successor in interest to Vinland Property Trust, a California business trust
originally established in July, 1973, and National Income Realty Trust (or
"NIRT"), also a California business trust, organized in October, 1978.
In November 1998, we merged with NIRT, with Tarragon as the surviving
entity. In the merger, NIRT shareholders received 1.97 shares of Tarragon common
stock for each share of beneficial interest of NIRT they held. Immediately
following the merger, we acquired Tarragon Realty Advisors, Inc., our advisor
since March, 1994 and NIRT's advisor since April, 1994, from William S. Friedman
and his wife, Lucy N. Friedman, for 100,000 shares of Tarragon common stock and
options to acquire 350,000 additional shares at prices ranging between $13 and
$16 per share. Mr. Friedman also received options to acquire an additional
450,000 shares at prices ranging between $12 and $15 per share in connection
with his employment agreement with Tarragon. Mr. Friedman is our President,
Chief Executive Officer, and a member of our Board of Directors, and Mr. and
Mrs. Friedman are our principal stockholders.
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RECENT DEVELOPMENTS
ACQUISITION OF JOINT VENTURE INTERESTS. On February 7, 2000, Tarragon
acquired the interests of Robert C. Rohdie and his affiliates in ten apartment
communities recently completed or currently under construction, as well as in
all joint venture development projects still in the planning stages, for a total
value of up to $10,000,000. Mr. Rohdie, Tarragon's joint venture partner in the
development of these projects, contributed his equity interests to an operating
partnership formed by Tarragon, in exchange for a preferred interest in the
operating partnership and a guaranteed fixed return of $200,000 for the first
two years, increasing by $40,000 per year for the next five years, plus an
annual amount equal to the dividends payable on 96,385 shares of Tarragon common
stock. In addition, upon completion and lease up of each of the five identified
apartment communities presently under construction or in advanced stages of
development planning, Mr. Rohdie will receive an increase in his guaranteed
fixed return based on the agreed value of his equity in the completed property.
After one year, Mr. Rohdie has the right to convert his preferred interest in
the operating partnership into 96,385 shares of our common stock and preferred
stock with a face value of up to $8,000,000 and a like dividend to his preferred
interest in the operating partnership. If we do not have available an issue of
preferred stock outstanding at the time of the conversion, or at our discretion,
we may pay the cash value of Mr. Rohdie's preferred interest over three years.
FORMATION OF DEVELOPMENT SUBSIDIARY. In connection with the acquisition
transaction discussed above, we formed a new development subsidiary to expand
our real estate development and renovation program. Robert C. Rohdie, previously
Tarragon's joint venture partner on new development projects, joined Tarragon as
President and Chief Executive Officer of Tarragon Development Corporation, and
as a member of our Board of Directors, effective February 7, 2000.
TERMINATION OF REIT STATUS. On February 29, 2000, Tarragon filed a
"Revocation of REIT Election" with the Internal Revenue Service, effectively
terminating our REIT status for the 2000 tax year. We first issued a press
release announcing that we were contemplating terminating our REIT status on
October 28, 1999. The primary consideration in the Board's decision to revoke
our REIT election was the "5 or 50" rule: in order to qualify as a REIT for
federal income tax purposes, no more than 50% in value of our outstanding common
stock could be owned, actually or constructively, by five or fewer individuals.
Because our 5 largest stockholders already own close to 50% of our outstanding
common stock, the "5 or 50" rule limited our ability to attract institutional
investors and to continue our stock repurchase program. Our Board of Directors
determined that these actions were important to enhance stockholder value.
Also, as a REIT, Tarragon could not engage in certain types of real
estate operations, such as condominium conversions, which the Board considered
to be attractive and potentially profitable lines of business. Because we have
substantial net operating loss carry forwards, the historical advantage of REIT
status, i.e. the ability to shield our taxable income from double taxation at
the corporate and stockholder levels, appeared to be outweighed, in the Board's
judgment, by the disadvantages associated with these restrictions on operations
and stock ownership.
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RISK FACTORS
You should carefully consider the risk factors described below before
investing in our common stock. These or other unanticipated circumstances could
impair our business and financial condition, or otherwise have a material
adverse impact on our future operations and stock price.
WE ARE HIGHLY LEVERAGED, AND MAY NOT BE ABLE TO MEET OUR DEBT SERVICE
OBLIGATIONS.
We had total indebtedness at December 31, 1999 of approximately $287.8
million. After giving effect to the February 2000 transaction with Robert C.
Rohdie, whereby we effectively acquired his interests in our joint venture
projects with him, our total indebtedness at December 31, 1999 would have been
$372.4 million. Substantially all of our assets have been pledged to secure
debt. These borrowings increase our risk of loss because they represent a prior
claim on our assets and require fixed payments regardless of profitability. To
service this debt, we will have to use cash flow from operations, which would
otherwise be available for investment. Our highly leveraged position makes us
more vulnerable to changes in economic conditions and may limit our ability to
capitalize on significant business opportunities in the future.
WE MAY REQUIRE SIGNIFICANT ADDITIONAL FINANCING WHICH MAY NOT BE AVAILABLE ON
FAVORABLE TERMS, IF AT ALL.
Although we currently have substantial cash resources and positive cash
flow, we intend to use substantial portions for:
o property acquisitions
o working capital
o new construction
In addition, we require substantial cash flow to meet our debt service
obligations. If we are unable to generate sufficient cash flow from operations
to satisfy these obligations, or if we are required to make any substantial
principal repayments, we may have to refinance some or all of our debt or sell
assets. We cannot predict whether additional sources of financing for these
purposes will be available in the future or the cost of such financing. Nor can
we predict whether there will be a market for our assets in the time period we
desire or need to sell them, or that we will be able to sell them at a price
that will allow us to fully recoup our investment. If we default on secured
indebtedness, the lender may foreclose and we could lose our investment in the
asset securing the loan.
WE MAY NOT BE ABLE TO OBTAIN CAPITAL TO MAKE NEW INVESTMENTS.
We depend primarily on external financing to fund the growth of our
business. Our access to debt or equity financing depends on banks' willingness
to lend and on conditions in the capital markets. Although we believe that we
will be able to finance any investments we wish to make in the foreseeable
future, we may not be able to secure additional sources of financing on
acceptable terms.
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THE INTEREST RATES ON OUR VARIABLE RATE MORTGAGE DEBT MAY INCREASE, WHICH WOULD
RESULT IN A REDUCTION OF FUNDS AVAILABLE TO PAY DIVIDENDS TO STOCKHOLDERS.
As of December 31, 1999, we had approximately $104 million of variable
rate mortgage debt. After giving effect to the transaction with Mr. Rohdie in
February 2000, our variable rate debt at December 31, 1999 would have been $125
million. We may incur additional variable rate indebtedness in the future.
Accordingly, increases in interest rates could increase our interest expense,
which could adversely affect our results of operations, financial condition, and
ability to pay expected dividends to stockholders.
WE ACQUIRE NEW PROPERTIES FROM TIME TO TIME, AND THOSE ACQUISITIONS MAY REDUCE
THE VALUE OF YOUR INVESTMENT.
We regularly consider acquiring additional properties. Acquisitions
involve several risks, including the following:
o Acquired properties may not perform as well as we expected before
acquiring them.
o Improvements to the properties may cost more than we had
estimated.
o The costs of evaluating properties that are not acquired cannot be
recovered.
WE DEVELOP NEW APARTMENT COMMUNITIES FROM TIME TO TIME, AND THESE ACTIVITIES MAY
REDUCE THE VALUE OF YOUR INVESTMENT.
We plan to continue developing new apartment communities as
opportunities arise in the future. Development and construction activities
entail a number of risks, including the following:
o We may abandon a project after spending time and money determining
its feasibility.
o Construction costs may exceed the original estimates.
o The revenue from a new project may not be enough to make it
profitable.
o We may not be able to obtain financing on favorable terms for
development of a property.
o We may not complete construction and lease up on schedule,
resulting in increased costs.
o We may not be able to obtain, or may be delayed in obtaining,
necessary governmental permits.
o Even successful projects require a substantial portion of
management's time and attention.
WE HAVE TERMINATED OUR STATUS AS A REIT, WHICH COULD RESULT IN A REDUCTION OF
FUNDS AVAILABLE TO DISTRIBUTE TO STOCKHOLDERS, AND WE MAY CHANGE OUR DIVIDEND
POLICY FOR COMMON STOCK.
To maintain our status as a REIT, we were historically required to
distribute annually to our common stockholders at least 95% of our taxable
income, excluding any net capital gains.
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Since we have terminated our REIT status, we are no longer subject to this
requirement, and we may choose to reduce or discontinue our current policy of
paying annual dividends on common stock of an amount not greater than 50% of
funds from operations. Further, we will no longer be allowed a deduction for
distributions to stockholders in computing our taxable income and our income
could be taxed at regular corporate tax rates, so the funds available for
distribution to you may be reduced substantially.
WE HAVE TERMINATED OUR STATUS AS A REIT, WHICH WILL ALLOW US TO ENGAGE IN HIGHER
RISK INVESTMENTS.
To maintain our status as a REIT, we have historically complied with
certain operating restrictions relating to the nature and diversification of our
assets. We were required, among other things, to hold at least 75% of the value
of our assets in real estate, government securities, and cash and cash
equivalents at the close of each quarter of each taxable year. Since we have
terminated our REIT status, we are no longer subject to these restrictions, and
therefore could engage in real estate operations or invest in real estate assets
that may pose a greater risk to the value of your investment.
THE REGIONAL CONCENTRATION OF OUR ASSETS MAY INCREASE THE EFFECTS OF ADVERSE
TRENDS IN THOSE MARKETS.
A substantial number of our assets are located in Florida, Texas,
Connecticut and California. Due to this geographic concentration, any
deterioration in economic conditions in these markets could adversely affect the
value of your investment.
WE HAVE A LIMITED OPERATING HISTORY AS A COMBINED ENTITY.
Our merger with NIRT was accounted for as a reverse acquisition of
Tarragon by NIRT using the purchase method of accounting. As a result, the
pre-merger historical balances and operations found in documents filed after
November 24, 1998 are those of NIRT. These historical financial statements are
not necessarily indicative of what the actual results of operations of the
combined entity would have been or what the future results of operations of the
combined entity will be.
THE SALE OR ISSUANCE OF A LARGE VOLUME OF NEW SHARES OF OUR COMMON STOCK COULD
RESULT IN A DEPRESSION OF OUR STOCK PRICE.
Sales of a substantial number of new shares of our common stock in the
public market after this offering could adversely affect the market price of our
stock. Although contractual and statutory protections and prohibitions may
apply, there are a substantial number of our shares eligible for sale in the
public market pursuant to Rule 144 under the Securities Act of 1933, or which
will become eligible in the near future. In addition, we have issued options for
a substantial number of shares to our officers, directors and principal
stockholders. We may in the future register the resale of at least 308,798
shares of our common stock issuable upon the exercise of options granted to our
officers and employees under our Incentive Share Option Plan and options granted
to our directors under our Independent Director Option Plan, under the
Securities Act of 1933. Options covering an additional 800,000 shares are
presently exercisable by Mr. and Mrs. Friedman.
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We cannot predict the timing or amount of any sale of the shares
covered by this Prospectus, or any subsequently filed registration statements.
However, the simultaneous offering for public sale of a significant portion of
these shares could have a depressive effect on the market price of our common
stock.
THE ISSUANCE AND SALE OF PREFERRED STOCK COULD ADVERSELY AND MATERIALLY AFFECT
THE RIGHTS OF COMMON STOCKHOLDERS.
Our Articles of Incorporation authorize the issuance of up to
10,000,000 shares of special stock by action of the Board of Directors, without
stockholder approval. On February 25, 2000, the Board of Directors unanimously
voted to amend our Articles of Incorporation to provide for the issuance of a
single series of special stock, designated the 10% Cumulative Preferred Stock,
consisting of up to 2,500,000 shares. We have registered 2,000,000 shares of the
10% Cumulative Preferred Stock in connection with an exchange offer to holders
of our common stock. We cannot predict how many shares of the 10% Cumulative
Preferred Stock might be issued in the Exchange Offer or otherwise, or how the
distribution of the 10% Cumulative Preferred Stock will affect the market price
of our common stock. In the event that we issue shares of 10% Cumulative
Preferred Stock or other designations of special stock in the future, your
rights as a holder of our common stock may be adversely and materially affected.
OUR PRINCIPAL STOCKHOLDERS MAY CONTROL CORPORATE ACTIONS.
Williams S. Friedman, our President, Chief Executive Officer and a
member of our Board of Directors, and his wife, Lucy N. Friedman, together
control approximately 36.13% of our outstanding common stock. Accordingly, Mr.
and Mrs. Friedman and their family may elect a number of the members of our
Board of Directors and have substantial influence over our management and
affairs. In addition, they effectively have veto power over a limited number of
corporate actions requiring more than a simple majority vote, under certain
provisions presently contained in our Articles of Incorporation, as set forth
below.
OUR GOVERNING DOCUMENTS CONTAIN ANTI-TAKEOVER PROVISIONS THAT MAY MAKE IT MORE
DIFFICULT FOR A THIRD PARTY TO ACQUIRE TARRAGON.
Our Articles of Incorporation contain provisions designed to discourage
attempts to acquire control of Tarragon by merger, tender offer, proxy contest,
or removal of incumbent management without the approval of our Board of
Directors. As a result, a transaction which otherwise might appear to be in your
best interests as a stockholder could be delayed, deferred or prevented
altogether, and you may be deprived of an opportunity to receive a premium for
your shares over prevailing market prices. The safeguards against acquisition of
Tarragon contained in our Articles of Incorporation include:
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o the requirement of an 80% vote to make, adopt, alter, amend,
change or repeal Tarragon's Bylaws or certain key provisions of
Tarragon's Articles of Incorporation that embody, among other
things, the aforementioned acquisition-related safeguards;
o the requirement of a two-thirds super-majority vote for the
removal of a director from the Board of Directors, and certain
extraordinary transactions; and
o the inability generally of stockholders to call a meeting of
stockholders.
In light of the fact that our Board of Directors and management control
approximately 37.85% of our outstanding common stock, these acquisition-related
safeguards could help entrench the Board of Directors and may effectively give
our management the power to block any attempted change in control of Tarragon.
WE ARE IN A COMPETITIVE BUSINESS.
The real estate business is highly competitive, and we compete with
numerous entities engaged in real estate activities, with investment objectives
similar to those of ours, which have greater financial resources and are better
known than we are. This competition may result in increased prices for suitable
investments and may impair our ability to make additional acquisitions on
favorable terms in the future.
REAL ESTATE INVESTMENTS ARE ILLIQUID.
Tarragon is subject to all the risks incident to ownership of real
estate, many of which relate to the general lack of liquidity of real estate
investments. These risks include:
o changes in general or local economic conditions;
o changes in interest rates and availability of permanent mortgage
financing that may render the sale or refinancing and the
acquisition of a property difficult or unattractive and that may
make debt service more burdensome;
o changes in real estate and zoning laws;
o increases in real estate taxes;
o federal or local economic or rent control;
o floods, earthquakes and other similar acts.
Because of the lack of liquidity of real estate investments generally,
our ability to respond quickly to changing circumstances may be impaired.
SOME OF OUR POTENTIAL LOSSES MAY NOT BE COVERED BY INSURANCE.
We believe that the real property we own is adequately covered by
insurance. However, certain types of losses, generally of a catastrophic nature,
may be uninsurable or not economically insurable. These excluded risks generally
include war, earthquakes, floods, environmental liabilities and punitive damage
judgments. If any of these kinds of losses occur and are not covered by
insurance, the value of your investment could be adversely affected.
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OUR PROPERTIES MAY HAVE ENVIRONMENTAL CONTAMINATION, WHICH COULD REDUCE THE
VALUE OF YOUR INVESTMENT.
Various federal, state, and local environmental laws and regulations
subject property owners or operators to liability for the costs of removal or
remediation of hazardous or toxic substances on the property. These laws often
impose liability without regard to whether the owner or operator knew of, or was
responsible for, the presence of the hazardous or toxic substances. The presence
of, or the failure to properly remediate, such substances may adversely affect
our ability to sell or rent the property or to borrow using the property as
collateral.
THE OFFERING
Tarragon has pledged 36,250 shares of common stock as a security
deposit for the performance of our obligations under a commercial lease dated as
of January 26, 2000 by and between Tarragon, as tenant, and Devash LLC, a New
York limited liability company, as landlord. The lease is for a nine-year term,
and covers 7,255 square feet of office space located at 1775 Broadway, in New
York City, New York. The leased premises will serve as Tarragon's corporate
headquarters.
Pursuant to the terms of the lease, we were required to deposit with
Devash, as security for the performance of our obligations under the lease,
either cash in the amount of $362,500, a letter of credit in that amount, or
shares of our common stock equal in value to that amount, for the period
commencing with lease execution through May 31, 2002. Our Board of Directors
determined that it was in the best interests of Tarragon to issue and pledge
36,250 shares of treasury stock to satisfy this obligation.
Provided that Tarragon is not then in default under the terms of the
lease, on May 31, 2002, Devash is required to return to Tarragon a sufficient
number of shares such that the value of the remaining shares it holds is reduced
to $181,375; on May 1, 2005, Devash is required to return additional shares to
Tarragon, such that the value of the remaining shares it holds through the end
of the lease term is reduced to $90,687.
The shares pledged to Devash are treasury stock issued for that purpose
and would not otherwise be offered for sale. The lease requires that Tarragon
promptly register the shares, and authorizes Devash to withhold funds owed to
Tarragon for reimbursement of the costs of its initial leasehold improvements
until such time as the registration is effective. But for the requirement set
forth in the lease, we would not be seeking to register the shares pledged to
Devash. Because it is treasury stock, we do not have the right to vote these
shares. However, in the event that these shares are offered for sale by Devash
pursuant to this Prospectus, the purchaser(s) will acquire sole voting and
investment power over the shares they acquire, which will then be fully
outstanding.
USE OF PROCEEDS
Tarragon does not intend to sell the shares covered by this Prospectus.
However, the shares may be offered from time to time for the account of
pledgees, donees, transferees or other successors-in-interest of Tarragon,
including Devash, at prices and on terms that will be fixed at the time of sale.
The specific terms of such a sale, and the names of the underwriters, if any,
will be set forth in a Prospectus supplement.
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Tarragon will not receive any proceeds from the sale of the shares by
pledgees, donees, transferees or other successors-in-interest of Tarragon.
However, Tarragon may receive some benefit in the event of a sale of the shares
pledged to Devash, as the proceeds of such a sale should be applied to remedy
any default in the payment or performance of Tarragon's obligations under the
lease, described in detail under "The Offering."
PLAN OF DISTRIBUTION
All of the shares registered under this Prospectus may be sold from
time to time by pledgees, donees, transferees or other successors-in-interest of
Tarragon. Sales may be made on the NASDAQ at prices and on terms dictated by the
then current market price of the shares or in negotiated private transactions.
The shares may be sold by any one or more of the following methods:
o A block trade in which the broker or dealer so engaged
will attempt to sell the shares as agent, but may
position and resell a portion of a block as principal
to facilitate the transaction;
o Purchases by a broker or dealer as principal, and
resale by such broker or dealer, for its own account
pursuant to this Prospectus;
o Ordinary brokerage transactions and transactions in
which the broker solicits purchasers; and/or
o Privately negotiated transactions.
The pledgees, donees, transferees or other successors-in-interest of
Tarragon may sell the shares to or through brokers or dealers. Such brokers or
dealers will receive compensation in the form of discounts or commissions from
the seller and they may also receive commissions from the purchasers of the
shares for whom they may act as agents. Such discounts or commissions from the
pledgees, donees, transferees or other successors-in-interest of Tarragon or
such purchasers are not expected to exceed those customary in the types of
transactions involved.
Tarragon will pay all fees and expenses incident to registration of the
shares other than any underwriting discounts, any selling commissions payable in
respect of sales of the shares or any expenses incurred by the holder to retain
any counsel, accountant or other adviser; all of which will be paid by the
holder. It is estimated that total fees and expenses (including registration
fees) incurred in connection with the registration of the shares will not exceed
$10,000.
In the event the shares are offered to the public by pledgees, donees,
transferees or other successors-in-interest of Tarragon, such parties, as well
as any broker-dealer selling the shares as agent for one of them and any
broker-dealer purchasing or reselling the shares for its own account, may be
deemed to be "underwriters" within the meaning of the Securities Act of 1933, in
which case any commissions received by such parties, and any profit on the
resale of the shares purchased by them, may be deemed to be underwriting
commissions or discounts under the Securities Act.
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WHERE YOU CAN FIND MORE INFORMATION
We have filed a Form S-3 registration statement with the SEC relating
to the shares discussed in this Prospectus. This Prospectus does not contain all
of the information set forth in the registration statement, and so we strongly
urge you to read the registration statement in its entirety.
Tarragon also files annual, quarterly and special reports, proxy
statements and other information with the SEC. You may obtain a copy of the
registration statement or any other information we file with the SEC at the
SEC's public reference facilities at 450 Fifth Street, N.W., Washington, D.C.
20549 as well as at the SEC's regional offices at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661-2511 or 7 World Trade Center, Suite 1300, New
York, New York 10048. You may also obtain copies of these materials from the SEC
at prescribed rates by writing to the Public Reference Section of the SEC, 450
Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. Our SEC filings are also available to the public from
the SEC web site at www.sec.gov.
Our common stock is quoted on the NASDAQ National Market under the
symbol "TARR" and the information that we file with the SEC may also be
inspected at the offices of the National Association of Securities Dealers,
Inc., Reports Section, at 1735 K Street, Washington, D.C. 20006.
INCORPORATION OF DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" the information
contained in documents that we file with them, which means that we can disclose
important information to you by referring you to those documents. The
information incorporated by reference is considered to be a part of this
Prospectus. Information in this Prospectus updates and supersedes information
contained in documents incorporated by reference that we filed with the SEC
before the date of this Prospectus, while information that we file later with
the SEC will automatically update and supersede this information. To the extent
that there is a discrepancy between a statement made in this Prospectus or a
document referred to in this Prospectus, and a document which we subsequently
file with the SEC, you should rely only on the statement contained in the later
filed document.
We incorporate by reference the following documents, which we have
previously filed with the SEC (File No. 0-8003):
1. Tarragon's Annual Report on Form 10-K for the fiscal year ended
December 31, 1999.
2. Description of Tarragon's Common Stock set forth in a
registration statement on Form 8-B, filed with the SEC on August
20, 1997 (File No. 000-22999).
11
<PAGE> 14
In addition, we incorporate by reference all documents which we file
with the SEC after the date of this Prospectus and prior to the termination of
the offering of the shares described in this Prospectus, pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934.
You may request a copy of these filings, at no cost to you, by writing
or telephoning us at:
Tarragon Realty Investors, Inc.
Attn: Investor Relations
280 Park Avenue
20th Floor, East Building
New York, NY 10017
Telephone: (212) 949-5000
You are strongly urged to review the information and financial
statements (including notes to financial statements) for Tarragon appearing in
the documents incorporated by reference in this Prospectus.
SPECIAL NOTE ON FORWARD LOOKING STATEMENTS
We have made forward-looking statements in this Prospectus, and in the
documents incorporated by reference in this Prospectus. We may also make
forward-looking statements in our periodic reports to the SEC, and in our press
releases. Forward-looking statements are expressions of our current beliefs and
expectations, based on information currently available to us, estimates and
projections about our industry, and certain assumptions made by our management.
These statements are not historical facts. We use words such as "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates" and similar
expressions to identify our forward-looking statements.
Because we are unable to control or predict many of the factors that
will determine our future performance and financial results, our forward-looking
statements are not guarantees of future performance. They involve risks,
uncertainties, and assumptions. Our future results could differ materially from
those expressed in the forward-looking statements contained in this Prospectus
and in the documents incorporated by reference in this Prospectus. Many of these
risks and uncertainties are described in this Prospectus under "Risk Factors"
and in the documents incorporated by reference in this Prospectus.
We believe that our forward-looking statements are reasonable. However,
you should not place undue reliance on these forward-looking statements. They
only reflect our view and expectations as of the date of this Prospectus. We
undertake no obligation to publicly update or revise any forward-looking
statement in light of new information, future events or otherwise.
12
<PAGE> 15
LIMITATION ON DIRECTOR'S LIABILITY
Our Articles of Incorporation and Bylaws provide for indemnification of
our officers and directors to the fullest extent authorized or permitted by
Chapter 78 of the Nevada Revised Statutes and other applicable laws.
In general, Nevada law permits Tarragon to indemnify its officers and
directors so long as they act in good faith and in a manner that they reasonably
believe to be in, or not opposed to, the best interests of Tarragon.
Under the Management Liability Provision of the Articles of
Incorporation, our directors do not have personal liability to Tarragon or to
you, its stockholders, for monetary damages for any breach of their fiduciary
duties as directors (including, without limitation, any liability for gross
negligence in the performance of their duties), except
o for acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law or
o for the payment of dividends in violation of NRS 78.300.
By precluding personal liability for certain breaches of fiduciary
duty, including grossly negligent business decisions made in connection with
evaluating takeover proposals to acquire Tarragon, the Management Liability
Provision supplements indemnification rights afforded under Tarragon's Articles
of Incorporation and Bylaws.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
Tarragon under the foregoing provisions, we have been informed that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act and is therefore unenforceable.
LEGAL MATTERS
We are being advised on the legality of the common stock offered by
this Prospectus by Prager, Metzger & Kroemer PLLC, Dallas, Texas. Prager,
Metzger & Kroemer PLLC will rely as to all matters of Nevada law on Lewis and
Roca LLP, Las Vegas, Nevada.
EXPERTS
The consolidated balance sheets as of December 31, 1999 and 1998 and
the related consolidated statements of operations, shareholders' equity and cash
flows for each of the three years in the period ended December 31, 1999,
incorporated by reference in this Prospectus and elsewhere in the registration
statement, have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in giving
said reports.
13
<PAGE> 16
================================================================================
THIS PROSPECTUS CONTAINS INFORMATION CONCERNING TARRAGON REALTY
INVESTORS, INC. AND ITS COMMON STOCK. IT DOES NOT CONTAIN ALL OF THE INFORMATION
SET FORTH IN THE REGISTRATION STATEMENT THAT WE HAVE FILED WITH THE SECURITIES
AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933.
----------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
About this Prospectus......................................2
About the Company..........................................2
Recent Developments........................................3
Risk Factors...............................................4
The Offering...............................................9
Use of Proceeds............................................9
Plan of Distribution......................................10
Where You Can Find More Information.......................11
Incorporation of Documents by Reference...................11
Special Note on Forward-looking Statements................12
Limitation on Director's Liability........................13
Legal Matters.............................................13
Experts...................................................13
</TABLE>
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS,
THE REGISTRATION STATEMENT, AND THE OTHER DOCUMENTS WE HAVE INCORPORATED BY
REFERENCE IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
ANY ADDITIONAL OR DIFFERENT INFORMATION. THE INFORMATION CONTAINED IN THIS
PROSPECTUS, AND THE OTHER DOCUMENTS THAT WE HAVE REFERRED YOU TO, IS FULL,
COMPLETE AND ACCURATE AS OF THE DATE OF THIS PROSPECTUS. HOWEVER, BECAUSE
CHANGES IN OUR AFFAIRS MAY OCCUR AFTER THIS DATE, WE CANNOT REPRESENT THAT THIS
INFORMATION REMAINS ACCURATE AS OF ANY SUBSEQUENT DATE. THIS PROSPECTUS IS NOT
AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED.
================================================================================
36,250 SHARES
TARRAGON REALTY
INVESTORS, INC.
COMMON STOCK
(PAR VALUE $0.01 PER SHARE)
--------------
PROSPECTUS
--------------
______________________________, 2000
================================================================================
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<CAPTION>
ITEM APPROXIMATE
AMOUNT
<S> <C>
SEC Registration Fee ............................................... $ 98.38
Blue Sky Fee and Expenses (including legal fees)*(a) ............... $ 50.00
Legal Fees and Expenses* ........................................... $ 6,000.00
Accounting Fees and Expenses* ...................................... $ 1,200.00
Printing and Engraving Expenses* ................................... $ 700.00
Trustee, Transfer Agent and Registrar Fees* ........................ $ 300.00
Miscellaneous Fees and Expenses* ................................... $ 1,000.00
------------
TOTAL ..................................................... $ 9,348.38
</TABLE>
* Estimated
(a) includes filing fees paid and to be paid
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Tarragon's Articles of Incorporation provide that it "shall indemnify
to the fullest extent authorized or permitted by law . . . any person made or
threatened to be made a party or witness to any action, suit or proceeding
(whether civil, criminal or otherwise) by reason of the fact that such person is
or was a director, officer, employee or agent" of Tarragon. Further, Tarragon's
Bylaws provide that "[e]ach officer, director or employee . . . shall be
indemnified . . . to the full extent permitted under Chapter 78 of the Nevada
Revised Statutes . . . and other applicable law."
Pursuant to the NRS, a corporation may indemnify persons for expenses
related to an action, suit or proceeding, except an action by or in the right of
the corporation, by reason of the fact that such person is or was a director,
officer, employee or agent, if such person acted in good faith and in a manner
which he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, if such
person had no reasonable cause to believe his conduct was unlawful. The expenses
indemnified against in this provision include attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred in connection
with the action, suit or proceeding. The NRS further provides that a corporation
may indemnify persons for attorneys' fees related to an action, suit or
proceeding by or in the right of the corporation to procure a judgment in its
favor by reason of the fact that such person is or was a director, officer,
employee or agent, if such person acted in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
corporation. A corporation may also indemnify directors for amounts paid in
judgments and settlements in such a suit, but only if ordered by a court after
determining that the person is "fairly and reasonably" entitled to indemnity.
Under the Management Liability Provision of Tarragon's Articles of
Incorporation, directors do not have personal liability to Tarragon or to its
stockholders for monetary damages for any breach of their fiduciary duties as
directors (including, without limitation, any liability for gross negligence in
the performance of their duties), except
o for acts or omissions which involve intentional misconduct, fraud
or a knowing violation of law or
o for the payment of dividends in violation of NRS 78.300.
By precluding personal liability for certain breaches of fiduciary
duty, including grossly negligent business decisions made in connection with
evaluating takeover proposals to acquire Tarragon, the Management Liability
Provision supplements indemnification rights afforded under Tarragon's Articles
of Incorporation and Bylaws which provide, in substance, that Tarragon shall
indemnify its directors, officers, employees and agents to the fullest extent
permitted by the NRS and other applicable laws.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
Tarragon under the foregoing provisions, we have been advised that in the
opinion of the SEC 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 for the payment by
II-1
<PAGE> 18
Tarragon of expenses incurred or paid by a director, officer or controlling
person in the successful defense of any action, suit or proceeding) is asserted
against Tarragon by any director, officer or controlling person in connection
with the securities being registered, we will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
ITEM 16. EXHIBITS.
EXHIBIT
DESIGNATION DESCRIPTION
4.1 Indenture Agreement dated September 15, 1993 between
Vinland Property Trust and American Stock Transfer and
Trust Company (incorporation by reference is made to
Exhibit 4.7 to registration statement No. 33-66294 on
Form S-11).
*5.1 Form of opinion of Prager, Metzger & Kroemer PLLC as to
the legality of the securities.
*5.2 Form of opinion of Lewis and Roca LLP as to the legality
of the securities.
23.1 Consent of Prager, Metzger & Kroemer PLLC (included in
Exhibit 5.1)
23.2 Consent of Lewis and Roca LLP (included in Exhibit 5.2)
*23.3 Consent of Arthur Andersen LLP
24.1 Power of Attorney (set forth on page II-4)
* Filed with this registration statement.
ITEM 17. UNDERTAKINGS.
Tarragon hereby undertakes:
(a) 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;
(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;
(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 (a)(1)(i) and
(a)(1)(ii) do not apply if the information required
to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by
Tarragon pursuant to Section 13 or Section 15(d) of
the Exchange Act that are incorporated by reference
in the registration statement.
(b) 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
II-2
<PAGE> 19
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) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
Tarragon hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of our annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Tarragon hereby undertakes to deliver or cause to be delivered with the
Prospectus, to each person to whom the Prospectus is sent or given, the latest
annual report to security holders that is incorporated by reference in the
Prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3
or rule 14c-3 under the Securities Exchange Act of 1934; and, where interim
financial information required to be presented by Article 3 of Regulation S-X is
not set forth in the Prospectus, to deliver, or cause to be delivered to each
person to whom the Prospectus is sent or given, the latest quarterly report that
is specifically incorporated by reference in the Prospectus to provide such
interim financial information.
II-3
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Tarragon
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing a Form S-3 and has duly caused this registration
statement or amendment thereto to be signed on its behalf by the undersigned,
thereunto duly authorized, in New York, New York, on March 31, 2000.
TARRAGON REALTY INVESTORS, INC.
By: /s/ William S. Friedman
-----------------------------------
William S. Friedman, President,
Chief Executive Officer and Director
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below on this registration statement constitutes and appoints each of William S.
Friedman and Erin D. Davis his true and lawful attorney-in-fact and agent, with
full power of substitution and re-substitution for him or her and in his or her
name, place and stead, in any and all capacities (until revoked in writing) to
sign any and all amendments (including post-effective amendments thereto) to
this registration statement of Tarragon Realty Investors, Inc. and to file same,
with all exhibits thereto, and other documents in connection therewith with the
Securities and Exchange Commission, granting unto each said attorney-in-fact and
agents, or any of them, or their or his or her substitute or substitutes full
power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person hereby ratifying and confirming all that said attorney-in-fact and
agent or his substitute or substitutes may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement or amendment thereto has been signed below by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
Chairman of the Board of Directors
/s/ Carl B. Weisbrod and Director March 17, 2000
- -------------------------------
Carl B. Weisbrod
President, Chief Executive Officer and
/s/ William S. Friedman Director (Principal Executive Officer) March 31, 2000
- -------------------------------
William S. Friedman
Executive Vice President and Chief
/s/ Erin D. Davis Financial Officer (Principal Financial March 31, 2000
- ------------------------------- and Accounting Officer)
Erin D. Davis
/s/ Chester Beck Director March 31, 2000
- -------------------------------
Chester Beck
/s/ Willie K. Davis Director March 31, 2000
- -------------------------------
Willie K. Davis
/s/ Sally Hernandez-Pinero Director March 31, 2000
- -------------------------------
Sally Hernandez-Pinero
/s/ Lance Liebman Director March 21, 2000
- -------------------------------
Lance Liebman
/s/ Robert C. Rohdie Director March 31, 2000
- -------------------------------
Robert C. Rohdie
/s/ Lawrence G. Schafran Director March 31, 2000
- -------------------------------
Lawrence G. Schafran
/s/ Raymond V.J. Schrag Director March 31, 2000
- -------------------------------
Raymond V. J. Schrag
/s/ Michael E. Smith Director March 31, 2000
- -------------------------------
Michael E. Smith
</TABLE>
<PAGE> 21
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBERS DESCRIPTION
------- -----------
<S> <C>
4.1 Indenture Agreement dated September 15, 1993 between
Vinland Property Trust and American Stock Transfer and
Trust Company (incorporation by reference is made to
Exhibit 4.7 to registration statement No. 33-66294 on
Form S-11).
*5.1 Form of opinion of Prager, Metzger & Kroemer PLLC as to
the legality of the securities.
*5.2 Form of opinion of Lewis and Roca LLP as to the legality
of the securities.
23.1 Consent of Prager, Metzger & Kroemer PLLC (included in
Exhibit 5.1)
23.2 Consent of Lewis and Roca LLP (included in Exhibit 5.2)
*23.3 Consent of Arthur Andersen LLP
24.1 Power of Attorney (set forth on page II-4)
</TABLE>
* Filed with this registration statement.
<PAGE> 1
EXHIBIT 5.1
[PRAGER, METZGER & KROEMER PLLC LETTERHEAD]
March 30, 2000
Tarragon Realty Investors, Inc.
280 Park Avenue
East Building, 20th Floor
New York, New York 10017
RE: Tarragon Realty Investors, Inc. - up to 36,250 shares of
Common Stock, par value $0.01 per share
Ladies and Gentlemen:
We have acted as counsel for Tarragon Realty Investors, Inc., a Nevada
corporation (the "Company" or "Tarragon") in connection with the preparation by
the Company of a Registration Statement on Form S-3 (the "Registration
Statement") to be filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended covering the delayed future possible offer
and sale of up to an aggregate of 36,250 shares of the Company's Common Stock,
par value $0.01 per share (the "Shares") that may be offered for sale from time
to time by pledgees, donees, transferees or other successors-in-interest of the
Company including a lessor of real property to the Company holding such Shares
as a security deposit.
As counsel rendering the opinions hereinafter expressed, we have been
furnished with and examined the originals or copies certified or otherwise
identified to our satisfaction of the following documents and have made no
independent verification of the factual matters set forth in such documents:
A. Articles of Incorporation of the Company;
<PAGE> 2
Tarragon Realty Investors, Inc.
March 30, 2000
Page 2
B. Bylaws of the Company;
C. Officers Certificate dated March 27, 2000, certifying to the
matters stated therein;
D. The Registration Statement and any and all exhibits thereto;
and
E. Such other documents we have deemed necessary for the
expression of the opinions contained herein.
In making the foregoing examinations, we have assumed the genuineness
of all signatures, the authenticity of all documents submitted to us as
originals, and the conformity to original documents of all documents submitted
to us as certified or photostatic copies. As to various questions of fact
material to this opinion, where such facts have not been independently
established, we have relied, to the extent we deem reasonably appropriate, upon
representations or certificates of directors, officers or employees or other
authorized representatives of the Company, public officials and others without
independent check or verification of their accuracy.
Based upon the foregoing and having due regard for such legal
considerations as we have deemed relevant, we are of the opinion that a total of
36,250 shares of Common Stock covered by such Registration Statement have been
duly and validly authorized and issued by Tarragon as Treasury Stock, which
36,250 shares are fully-paid and non-assessable, with no personal liability
attaching to the ownership thereof.
The members of this firm are admitted to practice only in the State of
Texas and are not licensed to practice law in the State of Nevada. Our opinions
expressed herein may address certain matters of Nevada law. With respect to
opinions involving or based upon the interpretation of the laws of the State of
Nevada, we have relied upon, and our opinion is subject to, the limitations and
assumptions set forth in the opinion of Lewis and Roca LLP dated March 30, 2000,
and addressed to the Company and our firm upon which we are authorized to rely
(and which will be filed as Exhibit 5.2 to the Registration Statement). We have
made no independent examination of the laws of the State of Nevada.
<PAGE> 3
Tarragon Realty Investors, Inc.
March 30, 2000
Page 3
This opinion has been furnished to the Company at its request, is
rendered solely for its use and may not be relied upon by any other person or
for any other purpose without our prior written consent and is rendered as of
the date hereof. We do not undertake, and hereby disclaim any obligation to
advise anyone of any changes in or new developments which might affect any
matters or opinions set forth herein. No member of this firm is an officer or
director of the Company.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
come into the category of persons whose consent is required under Section 7 of
the Securities Act of 1933 or the rules and regulations of the Securities and
Exchange Commission promulgated thereunder.
Very truly yours,
PRAGER, METZGER & KROEMER PLLC
By: /s/ Steven C. Metzger
-------------------------------------
Steven C. Metzger, Manager
SCM:ab
<PAGE> 1
EXHIBIT 5.2
[LEWIS AND ROCA LLP LAWYERS LETTERHEAD]
March 30, 2000
Tarragon Realty Investors, Inc.
280 Park Avenue
East Building, 20th Floor
New York, New York 10017
Re: Tarragon Realty Investors, Inc. - S-3 Registration Statement
covering 36,250 shares of Common Stock, par value $0.01 per share
Ladies and Gentlemen:
We have acted as special Nevada counsel for Tarragon Realty Investors,
Inc., a Nevada corporation (the "Company" or "Tarragon") in connection with the
Company's Registration Statement on Form S-3 (the "Registration Statement") to
be filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, covering the delayed future possible offer and sale of up to
an aggregate of 36,250 shares of the Company's Common Stock, par value $0.01 per
share (the "Shares") that may be offered for sale from time to time by pledgees,
donees, transferees or other successors-in-interest of the Company including a
lessor of real property to the Company holding such Shares as a security
deposit.
As counsel rendering the opinions hereinafter expressed, we have been
furnished with and examined the originals or copies certified or otherwise
identified to our satisfaction of the following documents and have made no
independent verification of the factual matters set forth in such documents:
A. Articles of Incorporation of the Company;
B. Bylaws of the Company;
C. Secretary's Certificate dated March 27, 2000, certifying to
the matters stated therein; and
D. The Registration Statement and any and all exhibits thereto.
<PAGE> 2
Page 2
In our examination, we have assumed that each Document will be duly
completed (where blanks appear), duly executed and duly delivered, as may be
required. We assume the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity to original documents
of all copies. We assume the legal capacity of all natural persons who signed or
who will sign Documents, or documents necessarily contemplated by the
transactions related hereto. We assume that the Documents are the only material
documents governing the transaction and the affairs of the Company in relation
to the above-described transaction.
We assume that any documents necessary to consummate the transactions
contemplated by the Documents have been legally authorized by parties who have
the power to do so, and have been properly executed and delivered by such
parties. We further assume that the Documents are legal, valid, binding and
enforceable obligations of any party other than the Company. We assume that the
Documents have not been amended, modified, or rescinded in any manner whatsoever
as of the date of this opinion letter. As to various question of fact, we have
relied upon statements of the Company, various public officials and others. We
have not independently verified any of the factual matters set forth in any
certificate or other document provided to us in connection with this matter and
upon which we may have relied.
Based upon the foregoing, we are of the opinion that the Shares of
Common Stock covered by the Registration Statement have been duly and validly
authorized and issued by Tarragon, which Shares are fully paid and
nonassessable, with no personal liability attaching to the ownership thereof.
We are admitted to the bar of the State of Nevada. In rendering our
opinions stated above, we have relied upon the applicable laws of the State of
Nevada as those laws presently exist, and as they have been applied and
interpreted by courts having jurisdiction within the State of Nevada. We express
no opinion as to the laws of any other jurisdiction, or of the interpretation of
Nevada law by courts outside of the state of Nevada, or of the laws of the
United States of America.
The opinions expressed herein are effective as of the date hereof. We
disclaim any responsibility to update this opinion at any time following the
date hereof. No extensions of this opinion may be made by implication or
otherwise. We express no opinion other than as expressly set forth herein. This
opinion is solely for the benefit of the addressee and may be relied upon by
Prager, Metzger & Kroemer PLLC with regard to the issuance of its opinion in
this matter.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement. In giving this consent, we do not thereby admit that we
come into the category of persons whose consent is required under Section 7 of
the Securities Act of
<PAGE> 3
Page 3
1933 or the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Very truly yours,
/s/ LEWIS AND ROCA LLP
LEWIS AND ROCA LL
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report on the consolidated balance sheets as of December 31, 1999 and 1998 and
the related consolidated statements of operations, shareholders' equity, and
cash flows for each of the three years in the period ended December 31, 1999, of
Tarragon Realty Investors, Inc., dated March 30, 2000, and to all references to
our firm included in or made part of this registration statement on Form S-3.
/s/ ARTHUR ANDERSEN LLP
Dallas, Texas,
March 31, 2000
