Inland Retail Real Estate Trust, Inc.
Sticker Supplement
This Sticker Supplement No. 5 dated September 15, 1999 to our Prospectus
dated February 11, 1999 summarizes Supplement No. 5 which updates information
in the "Real Property Investments", "Plan of Distribution" and "Distribution
Reinvestment and Share Repurchase Programs" sections of our Prospectus.
Supplement No. 5 expands upon, supplements, modifies or supersedes certain
information contained in the Prospectus and its Supplement No. 4 dated August
2, 1999, (which Supplement No. 4 superseded Supplements Nos. 1, 2 and 3), and
must be read in conjunction with our Prospectus and that Supplement. Any word
that is capitalized in this Sticker Supplement but not defined has the same
meaning as in our Prospectus.
Real Property Investments
Lake Olympia Square, Ocoee, Florida
On September 1, 1999, we purchased Lake Olympia Square, an existing shopping
center containing 85,776 gross leasable square feet. We accomplished the
acquisition by acquiring 100% of the ownership interests in the two entities
that owned the shopping center from two companies within the Inland
Organization. This shopping center is located at the southwest intersection of
Silver Star Road and Clarke Road in Ocoee, Florida. We purchased this property
for $9,873,627, which represents the total cost incurred by the Inland
companies in connection with their purchase and financing of the property.
This price represents approximately $115 per square foot of leasable space. We
purchased this property subject to a mortgage in favor of LaSalle National
Bank, which secures a loan in the principal amount of $5,932,943. As of
September 1, 1999, our new property was 96% leased. The tenants leasing more
than 10% of the total square footage are Winn-Dixie with 44,000 square feet and
Tutor Time Child Care Systems with 10,000 square feet.
Bridgewater Marketplace, Orlando, Florida
On September 7, 1999, we purchased Bridgewater Marketplace, an existing
shopping center containing 58,050 gross leasable square feet. This shopping
center is located at the southwest corner of the intersection of State Road 50
and Bridgeway Boulevard in Orlando, Florida. We purchased this property for
$5,975,000 and incurred acquisition and financing costs of $118,855 for a total
acquisition cost of $6,093,955. This acquisition cost represents approximately
$105 per square foot of leasable space. We purchased this property subject to
a mortgage in favor of SouthTrust Bank, National Association in the principal
amount of $4,780,000. As of September 7, 1999, our new property was 97%
leased. The only tenant leasing more than 10% of the total square footage
currently is Winn-Dixie with 44,000 square feet.
Plan of Distribution
As of September 1, 1999, we had sold 2,651,771 shares resulting in gross
proceeds of $26,517,710. Inland Securities Corporation, an affiliate of our
Advisor, serves as dealer manager of this Offering and is entitled to receive
selling commissions and certain other fees, as discussed further in our
Prospectus. As of September 1, 1999, we have incurred $2,519,182 of
commissions and fees payable to Inland Securities Corporation, which will
result in our receipt of $23,998,528 of net proceeds from the sale of those
2,651,771 shares. An additional 9,822 shares have been sold pursuant to our
Distribution Reinvestment Program as of September 1, 1999, for which we have
received additional net proceeds of $93,309. We also pay an affiliate of our
Advisor fees to manage and lease our properties. As of August 31, 1999, we
have incurred and paid property management fees of $56,297. Our Advisor may
also receive an annual asset management fee of not more than 1% of our average
invested assets, to be paid quarterly. As of the end of the quarter ending
June 30, 1999, we had not paid or incurred any asset management fees. We may
pay expenses associated with property acquisitions of up to .5% of the money
that we raise in this Offering but in no event will we pay acquisition expenses
on any individual property that exceeds 6% of its purchase price. Acquisition
expenses totaling $134,394 are included in the purchase prices we paid for Lake
Olympia Square and Bridgewater Marketplace.
Distribution Reinvestment and Share Repurchase Programs
At a meeting of the Board of Directors held on August 11, 1999, our Share
Repurchase Program was amended, effective immediately, principally to provide
for higher share repurchase prices over time.
SUPPLEMENT NO. 5
DATED SEPTEMBER 15, 1999
TO THE PROSPECTUS DATED FEBRUARY 11, 1999
OF INLAND RETAIL REAL ESTATE TRUST, INC.
We are providing this Supplement No. 5 to you in order to supplement our
Prospectus. This Supplement No. 5 updates information in the "Real Property
Investments", "Plan of Distribution" and "Distribution Reinvestment and Share
Repurchase Programs" sections of our Prospectus. This Supplement No. 5 expands
upon, supplements, modifies or supersedes certain information contained in the
Prospectus and its Supplement No. 4 dated August 2, 1999, (which Supplement No.
4 superseded Supplements Nos. 1, 2 and 3), and must be read in conjunction with
our Prospectus and that Supplement. Any word that is capitalized in this
Supplement but not defined has the same meaning as in our Prospectus.
Real Property Investments
Lake Olympia Square, Ocoee, Florida
On September 1, 1999, we purchased a shopping center known as Lake Olympia
Square, containing 85,776 gross leasable square feet and an adjacent outparcel,
by acquiring the interests of Inland Southeast Investment Corporation and
Inland Southeast Acquisitions Corp. (collectively the "Lake Olympia Affiliated
Partners"), both of which are affiliates of our Advisor, in Inland Southeast
Lake Olympia Limited Partnership and Inland Southeast Lake Olympia Outparcel
Limited Partnership (collectively the "Lake Olympia Property Partnerships").
The Lake Olympia Property Partnerships own the entire fee simple interest in
Lake Olympia Square.
Lake Olympia Square is located at the southwest intersection of Silver Star
Road and Clarke Road in Ocoee, Florida. Ocoee is located three miles west of
the Orlando, Florida city limits.
The Lake Olympia Property Partnerships purchased Lake Olympia Square on June
24, 1998 from an unaffiliated third party. The $9,873,627 we paid for this
property represents the total costs incurred by the Lake Olympia Affiliated
Partners in connection with their acquisition and financing of the property as
of the date of our purchase of their interests. Such costs consists of the
following:
* Purchase Price.......................... $ 9,732,045
* Acquisition costs to third parties...... 80,106
* Financing costs to an Inland affiliate.. 46,281
* Financing costs to third parties........ 15,195
Total.......... $ 9,873,627
===========
Our acquisition cost is approximately $115 per square foot of leasable space.
We paid a total of $3,967,847 to the Lake Olympia Affiliated Partners, since
the outstanding balance of the mortgage loan and certain prorations were
credited against the purchase price. That amount, together with $205,310
provided by the Lake Olympia Affiliated Partners (for a total of $4,173,157),
was paid to Inland Mortgage Investment Corporation, an Inland Affiliated
Company, as payment in full of two promissory notes evidencing loans made to
the Lake Olympia Affiliated Partners in connection with their purchase in June
1998 of this property. The promissory notes provided for payments of interest
only at the rate of 10.9% per annum. There may be additional expenses incurred
relative to the acquisition of this property, which we will pay. We expect
these additional costs to be immaterial.
-1-
In evaluating this property as a potential acquisition, we considered a variety
of factors including location, demographics, tenant mix, price per foot,
occupancy and the fact that overall rental rates at the shopping center are
comparable to market rates. We believe that the shopping center is located
within a vibrant economic area. We did not consider any other factors
materially relevant to the decision to acquire this property.
We do not anticipate making any significant repairs and improvements to this
property over the next few years. However, if we were to make any repairs or
improvements, the tenants would be obligated to pay a substantial portion of
any monies spent pursuant to the provisions of their respective leases.
We believe that this property is well located, has acceptable roadway access,
attracts high-quality tenants, is well maintained and has been professionally
managed. This property will be subject to competition from similar shopping
centers within its market area, and its economic performance could be affected
by changes in local economic conditions.
We purchased this property subject to a mortgage and a collateral assignment of
rents and leases in favor of LaSalle National Bank, as trustee for Morgan
Stanley Capital I Inc., Commercial Mortgage Pass-Through Certificates, Series
1997-WF1, (the "Bank") , securing an indebtedness evidenced by a promissory
note (the "Note") held by the Bank in the original principal amount of
$6,200,000. Interest on the unpaid principal of the Note accrues at the rate
of 8.25% per annum. Principal and interest are payable on the first day of
each month, in installments of $50,978. The principal balance of the Note was
$5,932,943 as of the date of closing, and, provided all payments are made as
scheduled, the balance due the maturity date, which is on April 1, 2007, will
be $4,669,258. At any time after the third anniversary of the date of the Note
(i.e., March 26, 2000), and upon giving the holder of the Note 30 days prior
written notice, the principal amount and accrued interest may be prepaid with a
prepayment penalty which varies but in no event is less then 1% of the amount
of principal prepaid.
Lake Olympia Square, which was built in 1995, consists of a one-story, multi-
tenant retail building. As of September 1, 1999, this property was 96% leased.
Tenants leasing more than 10% of the total square footage currently include
Winn-Dixie. a supermarket, and Tutor Time Child Care Systems, a childcare
facility. The leases with these tenants require the tenants to pay base annual
rent on a monthly basis as follows:
Base Rent
Approximate Per Square
GLA Foot Per
Leased % of Total Annum Lease Term
Lessee (Sq. Ft.) GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Winn-Dixie 44,000 51.30 6.75 Currently 06/30/15
Options (1) 6.75 07/01/15 06/30/40
Tutor Time Child
Care Systems 10,000 11.66 12.00 Currently 01/31/07
Options (2) 12.00+ 02/01/07 01/31/17
(1) There are five successive five-year renewal options at the same base rent
per square foot per annum.
(2) There are two successive five-year renewal options with the base rent per
square foot per annum increasing according to increases in the CPI.
-2-
For federal income tax purposes, our depreciable basis in this property will be
approximately $7,306,484. When we calculate depreciation expense for tax
purposes, we will use the straight-line method. We depreciate buildings and
improvements based upon estimated useful lives of 40 and 15 years, respectively.
Real estate taxes for the year ended 1998 (the most recent tax year for which
information is generally available) were $131,617.
On September 1, 1999, a total of 82,450 square feet was leased to 18 tenants at
Lake Olympia Square. The following tables set forth certain information with
respect to our leases with those tenants:
Approximate
GLA Current Rent per
Leased Lease Renewal Annual Rent Square Foot
Lessee (Sq. Ft.) Ends Options ($) ($)
------ ---------- ----- ------- ----------- -----------
Winn-Dixie 44,000 06/15 5/5 yr. 297,000 6.75
Tutor Time Child
Care Systems 10,000 01/07 2/5 yr. 120,000 12.00
Froggers Restaurant 6,000 10/06 2/5 yr. 115,175 19.20
Movie Gallery 5,000 08/01 2/3 yr. 61,250 12.25
Countryside Home
Loans 2,290 10/01 2/3 yr. 28,000 12.23
Lake Olympia Dental 1,800 09/00 1/5 yr. 33,738 18.74
Beneficial Finance 1,600 12/05 1/5 yr. 22,400 14.00
First Choice
Restaurant 1,500 09/05 2/5 yr. 23,500 15.67
Sylvan Learning
Center 1,260 10/06 1/5 yr. 19,734 15.66
Harrison
Chiropractic 1,200 01/02 2/5 yr. 18,540 15.45
Mailboxes, Etc. 1,200 09/00 1/5 yr. 17,547 14.62
Subway 1,200 12/03 3/5 yr. 18,000 15.00
First Class
Cleaners 900 09/00 2/5 yr. 14,175 15.75
Hair Cuttery 900 09/01 1/5 yr. 14,700 16.33
H & R Block 900 04/02 2/3 yr. 14,625 16.25
Orlando Sentinel 900 11/99 5/1 yr. 14,127 15.70
The Preppy Puppy 900 10/01 1/3 yr. 13,500 15.00
Tan Bodies & Nails 900 09/00 1/5 yr. 13,160 14.62
Vacant 3,326
(1) Each tenant also pays its proportionate share of real estate taxes,
insurance and common area maintenance costs. In addition, Winn-Dixie pays,
as additional rent, a percentage of gross sales in excess of a prescribed
amount.
-3-
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 1 900 14,127 899,844 15.70 1.05 1.57
2000 4 3,900 80,213 889,727 20.57 4.55 9.02
2001 4 9,090 120,650 814,059 13.27 10.60 14.82
2002 2 2,100 34,050 695,624 16.21 2.45 4.89
2003 1 1,200 19,139 663,269 15.95 1.40 2.89
2004 1 3,326 46,564 645,238 14.00 3.88 7.22
2005 2 3,100 46,371 598,674 14.96 3.61 7.75
2006 2 7,260 135,304 552,304 18.64 8.46 24.50
2007 1 10,000 120,000 417,000 12.00 11.66 28.78
2008 - - - 297,000 - - -
(1) We made no assumptions regarding the re-leasing of expired leases. It is the opinion of
our management that the space will be re-leased at market rates at the time of re-leasing.
</TABLE>
We received an appraisal prepared in conformity with the Uniform Standards of
Professional Appraisal Practice of the Appraisal Institute and the Appraisal
Foundation by an independent appraiser who is a member of the Appraisal
Institute. The appraisal reported a fair market value for Lake Olympia Square,
as of August 27, 1999, of $10,225,000. Appraisals are estimates of value and
should not be relied on as a measure of true worth or realizable value.
Bridgewater Marketplace, Orlando, Florida
On September 7, 1999, we purchased an existing shopping center known as
Bridgewater Marketplace located on approximately 7.7 acres and containing
58,050 gross leasable square feet. Bridgewater Marketplace is located at the
southwest corner of the intersection of State Road 50 and Bridgeway Boulevard
in Orlando, Florida.
We purchased Bridgewater Marketplace from an unaffiliated third party. Our
total acquisition cost, including expenses, was $6,093,855. This amount may
increase by additional costs which have not yet been finally determined. We
expect any additional costs to be immaterial. Our acquisition cost is
approximately $105 per square foot of leasable space, which consists of the
following:
* Purchase Price.......................... $ 5,975,000
* Acquisition costs to third parties...... 54,288
* Financing costs to an Inland affiliate.. 23,900
* Financing costs to third parties........ 40,667
Total.......... $ 6,093,855
===========
-4-
In evaluating this property as a potential acquisition, we considered a variety
of factors including location, demographics, tenant mix, price per foot,
occupancy and the fact that overall rental rates at the shopping center are
comparable to market rates. We believe that the shopping center is located
within a vibrant economic area. We did not consider any other factors
materially relevant to the decision to acquire this property.
We do not anticipate making any significant repairs and improvements to this
property over the next few years. However, if we were to make any repairs or
improvements, the tenants would be obligated to pay a substantial portion of
any monies spent pursuant to the provisions of their respective leases.
We believe that this property is well located, has acceptable roadway access,
attracts high-quality tenants, is well maintained and has been professionally
managed. This property will be subject to competition from similar shopping
centers within its market area, and its economic performance could be affected
by changes in local economic conditions.
We purchased this property subject to a mortgage, security agreement and a
collateral assignment of rents and leases in favor of SouthTrust Bank, National
Association, which secures two promissory notes in the aggregate principal
amount of $4,780,000. One promissory note is in the principal amount of
$2,987,500, requires monthly payments of interest only at a floating rate per
annum of 1.75% over a LIBOR related index, is due September 7, 2006 and may be
prepaid at any time prior to maturity without penalty. The other note is in
the principal amount of $1,792,500, requires monthly payments of interest only
at a floating rate per annum of 1.75% over a LIBOR related index, is due
September 7, 2000, and may be prepaid at any time prior to maturity without
penalty.
Bridgewater Marketplace, which was built in 1998, consists of a single-story,
multi-tenant retail center. As of September 7, 1999, this property was 97%
leased. Approximately 5,300 square feet of the center still needs to be
finished into three smaller tenant spaces, and the funds required for this
tenant finish work have been escrowed by the Seller. The Seller has also
escrowed funds to cover base rent and recoverable expenses for 1,850 square
feet of vacant space for one year, and for leased but unoccupied spaces for the
periods until the tenants for those spaces are required to begin paying rent.
The only tenant leasing more than 10% of the total square footage currently is
Winn Dixie, a supermarket. The lease with this tenant requires the tenant to
pay base annual rent on a monthly basis as follows:
Base Rent
Approximate Per Square
GLA Foot Per
Leased % of Total Annum Lease Term
Lessee (Sq. Ft.) GLA ($) Beginning To
----------- ----------- ----------- ------------ ------------ ---------
Winn Dixie 44,000 75.80 8.30 12/1998 12/2018
Options (1) 8.30 01/2019 12/2118
(1) There are five successive twenty-year renewal options at the same base rent
per square foot per annum.
-5-
For federal income tax purposes, our depreciable basis in this property will be
approximately $5,274,000. When we calculate depreciation expense for tax
purposes, we will use the straight-line method. We depreciate buildings and
improvements based upon estimated useful lives of 40 and 15 years, respectively.
Real estate taxes for the year ended 1998 (the most recent tax year for which
information is generally available) were $13,435. As Bridgewater Marketplace
was under development during 1998, the property is subject to reassessment for
real estate taxes for 1999 and subsequent years. Real estate taxes for the year
ended December 1999 are expected to be approximately $60,000.
On September 7, 1999, a total of 54,800 square feet was leased to 10 tenants at
this property. The following tables set forth certain information with respect
to our leases with those tenants:
Approximate
GLA Current Rent per
Leased Lease Renewal Annual Rent Square Foot
Lessee (Sq. Ft.) Ends Options ($) ($)
------ ---------- ----- ------- ----------- -----------
Winn Dixie 44,000 12/18 5/20 yr. 365,200 8.30
A Slice of New York 2,000 06/04 1/5 yr. 30,000 15.00
Shanghai Restaurant 1,600 06/08 - 24,000 15.00
Subway 1,500 06/04 3/5 yr. 24,000 16.00
Luxury Hair Salon 1,200 03/03 - 18,000 15.00
Allstate Insurance 900 04/02 2/1 yr. 13,500 15.00
Jackson Hewitt 900 07/02 1/3 yr. 13,500 15.00
Community Cleaners 900 01/04 2/5 yr. 12,600 14.00
Polo Nails 900 03/04 - 13,500 15.00
A Touch of Bronze 900 03/04 1/5 yr. 13,500 15.00
Vacant 3,250
(1) Each tenant also pays its proportionate share of real estate taxes,
insurance and common area maintenance costs. In addition, Winn Dixie pays,
as additional rent, a percentage of gross sales in excess of a prescribed
amount.
-6-
<TABLE>
<CAPTION>
Average Percent of Percent of
Base Rent Total Annual Base
Annual Base Total Per Square Building GLA Rent
Approx. GLA Rent of Annual Foot Under Represented Represented
Year Number of of Expiring Expiring Base Expiring by Expiring By Expiring
Ending Leases Leases Leases Rent (1) Leases Leases Leases
December 31, Expiring (Sq. Ft.) ($) ($) ($) (%) (%)
- ----------- --------- ----------- ----------- ----------- ---------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
1999 - - - 477,175 - - -
2000 - - - 530,927 - - -
2001 - - - 534,513 - - -
2002 2 1,800 30,150 526,842 16.75 3.10 5.64
2003 1 1,200 20,400 500,375 17.00 2.07 3.87
2004 5 6,200 106,075 429,121 17.11 10.68 21.20
2005 - - - 390,800 - - -
2006 - - - 391,600 - - -
2007 - - - 392,400 - - -
2008 1 1,600 27,200 378,800 17.00 2.76 6.93
(1) We made no assumptions regarding the re-leasing of expired leases. It is the opinion of
our management that the space will be re-leased at market rates at the time of re-leasing.
</TABLE>
We received an appraisal prepared in conformity with the Uniform Standards of
Professional Appraisal Practice of the Appraisal Institute and the Appraisal
Foundation by an independent appraiser who is a member of the Appraisal
Institute. The appraisal reported a fair market value for Bridgewater
Marketplace, as of July 27, 1999, of $6,100,000. Appraisals are estimates of
value and should not be relied on as a measure of true worth or realizable
value.
Potential Property Acquisitions
We are currently considering a property acquisition, Bartow Marketplace
Shopping Center in Cartersville, Georgia. An affiliate of our Sponsor has
entered into a contract for the purchase of this property, with the intention
to assign its rights thereunder to us if we decide to acquire the property.
Our decision to acquire this property will generally depend upon:
* our receipt of an acceptable appraisal and environmental report;
* no material adverse change occurring in the property, the tenants or in
the local economic conditions; and
* our receipt of sufficient net proceeds from this Offering to make such an
acquisition.
Other properties may be identified in the future that we acquire before or
instead of this property. We cannot guarantee that we will complete this
acquisition.
-7-
Bartow Marketplace Shopping Center was constructed in 1995. It is a single-
story retail center containing 375,067 leasable square feet. The center has 17
tenant spaces. Tenants occupying more than 10% of the total square footage
currently are Wal-Mart and Lowe's Home Centers. As of the date of this
Supplement, the acquisition cost of this property is approximately $24,545,000.
This amount may increase by additional costs incurred which have not yet been
finally determined. We expect these additional costs to be immaterial.
Plan of Distribution
As of September 1, 1999, we had sold 2,651,771 shares resulting in gross
proceeds of $26,517,710. Inland Securities Corporation, an affiliate of our
Advisor, serves as dealer manager of this Offering and is entitled to receive
selling commissions and certain other fees, as discussed further in our
Prospectus. As of September 1, 1999, we have incurred $2,519,182 of
commissions and fees payable to Inland Securities Corporation, which will
result in our receipt of $23,998,528 of net proceeds from the sale of those
2,651,771 shares. An additional 9,822 shares have been sold pursuant to our
Distribution Reinvestment Program, for which we will receive additional net
proceeds of $93,309. We also pay an affiliate of our Advisor fees to manage
and lease our properties. As of August 31, 1999, we have incurred and paid
property management fees of $56,297. Our Advisor may also receive an annual
asset management fee of not more than 1% of our average invested assets, paid
quarterly. As of the end of the quarter ending June 30, 1999, we had not paid
or incurred any asset management fees. We may pay expenses associated with
property acquisitions of up to .5% of the money that we raise in this Offering
but in no event will we pay acquisition expenses on any individual property
that exceeds 6% of its purchase price. Acquisition expenses totaling $134,394
are included in the purchase prices we paid for Lake Olympia Square and
Bridgewater Marketplace.
Distribution Reinvestment and Share Repurchase Programs
Share Repurchase Program
The Share Repurchase Program ("SRP") may, subject to certain restrictions,
provide eligible Stockholders with limited, interim liquidity by enabling them
to sell shares back to us. The prices at which shares may be sold back to us
are as follows:
* During the Offering period at $9.05 per share (a reduction of $0.95
from the $10 Offering price per share, reflecting the elimination of
selling commissions and the Marketing Contribution and Due Diligence
Expense Allowance);
* During the 12 months following the end of the Offering period at $9.25
per share;
* During the next 12 months at $9.50 per share;
* During the next 12 months at $9.75 per share; and
* Thereafter, at the greater of: (i) $10 per share; or (ii) a price equal
to 10 times our "funds available for distribution" per weighted average
share outstanding for the prior calendar year.
-8-
A Stockholder must have beneficially held the shares for at lease one year
prior to offering them for sale to us through the SRP.
We will make repurchases under the SRP, if requested, at least once quarterly
on a first-come, first-served basis. Subject to funds being available, we will
limit the number of shares repurchased during any calendar year to one half of
one percent (0.5%) of the weighted average number of shares outstanding during
the prior calendar year. Funding for the SRP will come exclusively from
proceeds we receive from the sale of shares under our Distribution Reinvestment
Plan and such other operating funds, if any, as the Board, at its sole
discretion, may reserve for this purpose.
The Board, at its sole discretion, may choose to terminate the SRP after the
end of the Offering period, or reduce the number of shares purchased under the
SRP, if it determines that the funds allocated to the SRP are needed for other
purposes, such as the acquisition, maintenance or repair of properties, or for
use in making a declared distribution. A determination by the Board to
eliminate or reduce the SRP will require the unanimous affirmative vote of the
Independent Directors.
We cannot guarantee that the funds set aside for the SRP will be sufficient to
accommodate all requests made each year. If no funds are available for the SRP
when repurchase is requested, the Stockholder may: (i) withdraw the request; or
(ii) ask that we honor the request at such time, if any, when funds are
available. Such pending requests will be honored on a first-come, first-served
basis.
There is no requirement that Stockholders sell their shares to us. The SRP is
only intended to provide interim liquidity for Stockholders until a liquidity
event occurs, such as the listing of the shares on a national securities
exchange, inclusion of the shares for quotation on a national market system, or
our merger with a listed company. No assurance can be given that any such
liquidity event will occur.
Shares we purchase under the SRP will be canceled, and will have the status of
authorized but unissued shares. Shares we acquire through the SRP will not be
reissued unless they are first registered with the SEC under the Securities Act
and under appropriate state securities laws or otherwise issued in compliance
with such laws.
If we terminate, reduce or otherwise change the SRP, we will send a letter to
Stockholders informing them of the change, and disclose the changes in
quarterly reports filed with the SEC on Form 10-Q.
-9-
