As filed with the Securities and Exchange Commission on
August 20, 1996
Registration No. 333-8819
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
AMLI RESIDENTIAL PROPERTIES TRUST
(Exact name of Registrant as specified in its charter)
Maryland 36-3925916
(State of organization) (I.R.S. Employer
Identification Number)
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125 South Wacker Drive
Suite 3100
Chicago, Illinois 60606
(312) 984-5037
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
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ALLAN J. SWEET
125 South Wacker Drive
Suite 3100
Chicago, Illinois 60606
(312) 984-5037
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
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COPY TO:
Edward J. Schneidman
Mayer, Brown & Platt
190 South LaSalle Street
Chicago, Illinois 60603
Approximate date of commencement of proposed sale to the public:
From time to time after the
Registration Statement becomes effective.
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If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box: [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under 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
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ____________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
PROSPECTUS
AMLI RESIDENTIAL PROPERTIES TRUST
143,500 Common Shares
This Prospectus relates to 143,500 Common Shares of Beneficial
Interest, par value $.01 per share (the "Common Shares" and such 143,500
Common Shares, the "Shares"), of Amli Residential Properties Trust, a
Maryland real estate investment trust (the "Company"), which may be offered
from time to time by certain selling shareholder (the "Selling
Shareholder"). The Shares may be issued from time to time upon exchange of
143,500 limited partnership interests ("Units") in Amli Residential
Properties, L.P. (the "Operating Partnership") which were issued to the
Selling Shareholder on May 3, 1996, as consideration in the acquisition by
the Company of certain real property. See "Selling Shareholder." The
Shares are being registered to permit public secondary trading of the
Shares from time to time after the date of this Prospectus, but the
registration of the Shares does not necessarily mean that any of the Shares
will be offered or sold by the Selling Shareholder.
The Common Shares are listed on the New York Stock Exchange (the
"NYSE") under the symbol "AML." To ensure that the Company maintains its
qualification as a real estate investment trust ("REIT"), ownership by any
person is limited to 5% of the outstanding Common Shares and preferred
shares of beneficial interest of the Company, with certain exceptions. See
"Description of Capital Shares-Description of Common Shares-Restrictions on
Transfer."
The Selling Shareholder may from time to time offer and sell the
Shares on the NYSE or otherwise at market prices then prevailing or at
prices and upon terms then obtainable. Sales may be made in ordinary
brokerage transactions, in block transactions, in privately negotiated
transactions, pursuant to Rule 144 ("Rule 144") under the Securities Act of
1933, as amended (the "Securities Act"), or otherwise. If the Shares are
sold through brokers, customary brokerage commissions and charges are
expected to be paid by the Selling Shareholder.
The Company will not receive any of the proceeds from the sale of any
of the Shares by the Selling Shareholder but has agreed to bear certain
expenses of registration and sale of the Shares.
On August 19, 1996, the last reported sale price of the
Common Shares on the NYSE was $20.375 per share.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR
ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION
TO THE CONTRARY IS UNLAWFUL.
------------------------------
The date of this Prospectus is August 20, 1996
No person is authorized in connection with any offering made hereby to
give any information or to make any representation not contained in this
Prospectus, and, if given or made, such information or representation must
not be relied upon as having been authorized by the Company or the Selling
Shareholder. This Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any security other than the Common Shares
offered hereby, nor does it constitute an offer to sell or a solicitation
of an offer to buy any of the securities offered hereby to any person in
any jurisdiction in which it is unlawful to make such an offer or
solicitation to such person. Neither the delivery of this Prospectus nor
any sale made hereunder shall under any circumstance create any implication
that the information contained herein is correct as of any date subsequent
to the date hereof.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy
material and other information concerning the Company can be inspected and
copied at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at its regional offices, Citicorp Center, 500
West Madison Street, Chicago, Illinois 60661 and Seven World Trade Center,
New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Company's outstanding
Common Shares are listed on the New York Stock Exchange (the "NYSE") under
the symbol "AML", and all such reports, proxy material and other
information filed by the Company with the NYSE may be inspected at the
offices of the NYSE at 20 Broad Street, New York, New York 10005 or at the
Commission's worldwide web site at http://www.sec.gov.
The Company has filed with the Commission a registration statement on
Form S-3 (together with all amendments and exhibits, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Securities
Act"), with respect to the securities offered hereby. This prospectus
("Prospectus"), which constitutes a part of the Registration Statement,
does not contain all the information set forth in the Registration
Statement, certain items of which are contained in exhibits to the
Registration Statement as permitted by the rules and regulations of the
Commission. Statements made in this Prospectus as to the content of any
contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document
filed or incorporated by reference as an exhibit to the Registration
Statement, reference is made to the exhibit for a more complete description
of the matter involved, and each such statement shall be deemed qualified
in its entirety by such reference.
INCORPORATION BY REFERENCE
The following documents filed by the Company with the Commission (File
No. 1-12784) pursuant to the Exchange Act are incorporated by reference in
this Prospectus:
(1) The Company's Annual Report on Form 10-K , as amended on
Form 10-K/A (filed May 16, 1996), for the fiscal year ended
December 31, 1995;
(2) The Company's Quarterly Report on Form 10-Q , as amended on
Form 10-Q/A (filed June 25, 1996), for the fiscal quarter ended
March 31, 1996 and the Company's Quarterly Report on Form 10-Q
for the fiscal quarter ended June 30, 1996 ;
(3) The Company's Current Reports on Form 8-K dated January 18,
1996 and January 30, 1996 (two Reports dated this date); and
(4) Description of the Common Shares included in the Registration
Statement on Form 8-A dated February 1, 1994.
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All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering made hereby shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained
in a document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained herein, or
in any other subsequently filed document which is or is deemed to be
incorporated by reference herein, modifies or supersedes any such
statement. Any such statement so modified or superseded will not
be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the request of
such person, a copy of any of the foregoing documents incorporated herein
by reference (other than the exhibits to such documents unless such
exhibits are specifically incorporated by reference into such documents).
Requests should be directed to Amli Residential Properties Trust, 125 South
Wacker Drive, Chicago, Illinois 60606, Attention: Secretary, telephone
(312) 984-5037.
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THE COMPANY
The Company and its affiliates constitute a self-administered and
self-managed real estate investment trust (a "REIT") which was organized in
February, 1994 to continue and expand the multifamily property business
conducted by Amli Realty Co. and its affiliates ("Amli") since 1980. The
Company and its affiliates own, manage, lease, acquire and develop
institutional quality apartment communities. The Company's communities
(the "Communities") are located in specific markets in the Southwest,
Southeast and Midwest areas of the United States. The Company also holds
interests in co-investment ventures involving residential apartment
communities (the "Co-investment Communities"). Additionally, the Company
engages in development activities on its own and through co-investment
joint ventures.
The business of the Company is operated through the Operating
Partnership, Amli Management Company (the "Management Company"), Amli
Institutional Advisors, Inc. ("AIA") and Amli Residential Construction,
Inc. ("Amrescon" and together with the Management Company and AIA, the
"Service Companies"). The Company is the sole general partner of the
Operating Partnership, a Delaware limited partnership, through which it
owns the Communities and its interests in the Co-Investment Communities.
As of August 19, 1996, the Company held an 82% partnership interest in
the Operating Partnership. The Management Company provides management and
leasing services to each of the Communities, the Co-Investment Communities
and several additional properties in which the Company has no interest.
AIA, a "QPAM" (qualified professional asset manager), renders real estate
investment advice to institutional capital sources, primarily pension
plans, endowments, foundations and insurance companies. The Company
actively pursues co-investments through relationships administered by AIA,
in this way seeking to diversify the sources of its equity capital for
investment in apartment communities. Amrescon provides general
contracting, construction management and landscaping services to the
Company and its managed ventures.
The Company was formed as a Maryland real estate investment trust on
December 16, 1993. The Company's executive offices are located at 125
South Wacker Drive, Suite 3100, Chicago, Illinois 60606 and its telephone
number is (312) 984-5037. The Company's principal office is in Chicago,
Illinois with regional offices in Dallas, Texas and Atlanta, Georgia.
USE OF PROCEEDS
The Company will not receive any of the proceeds of the sale of the
Shares offered hereby. All proceeds from the sale of the Shares will be
received by the Selling Shareholder.
SELLING SHAREHOLDER
The name of the Selling Shareholder is Peachtree City Multifamily
Partners, L.P. Prior to the offering, the Selling Shareholder owned
143,500 Common Shares (assuming conversion of all Units owned by the
Selling Shareholder into Common Shares). The maximum number of Common
Shares offered hereby by the Selling Shareholder is 143,500. Since the
Selling Shareholder may sell all, some or none of the Shares, no estimate
can be made of the number of Shares that will be owned by the Selling
Shareholder upon completion of the offering to which this Prospectus
relates. Assuming all Common Shares offered hereby are sold, the Selling
Shareholder will own no Common Shares after the offering (based on the
total number of Common Shares and Units held by the Selling Shareholder as
of the date hereof), amounting to less than one percent of the outstanding
Common Shares. In 1994, the Operating Partnership acquired land in
Marietta, Georgia on which it subsequently built and leased a 232 unit
phase of an apartment community. The Selling Shareholder received a
$200,000 fee from the seller of the land in connection with this
transaction. There were no other transactions and no other material
relationships between the Selling Shareholder and the Company or Amli, or
any of their affiliates, within the past three years.
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DESCRIPTION OF CAPITAL SHARES
SHARES OF BENEFICIAL INTEREST AND SHAREHOLDER LIABILITY
The Declaration of Trust of the Company provides that the Company may
issue up to 150,000,000 shares of beneficial interest, par value $.01 per
share. No holder of any class of shares of beneficial interest of the
Company will have any preemptive right to subscribe for any securities of
the Company except as may be granted by the Board of Trustees in
authorizing the issuance of a class of preferred shares of beneficial
interest. Any class of preferred shares which may be issued in the future,
together with the Series A Cumulative Redeemable Preferred Shares of
Beneficial Interest, par value $.01 per share (the "Series A Preferred
Shares") are referred to herein as "Preferred Shares." The Company's
Declaration of Trust authorizes the Trustees to classify or reclassify any
unissued Common Shares or Preferred Shares by setting or changing the
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends, qualifications or terms or conditions of
redemption.
Both Maryland statutory law governing real estate investment trusts
organized under the laws of that state and the Company's Declaration of
Trust provide that no shareholder of the Company will be personally liable
for any obligations of the Company. The Company's Declaration of Trust
further provides, with certain limited exceptions, that the Company shall
indemnify each shareholder against claims or liabilities to which the
shareholder may become subject by reason of his being or having been a
shareholder and that the Company shall reimburse each shareholder for all
legal and other expenses reasonably incurred by him in connection with any
such claim or liability. In addition, it is the Company's policy to
include a clause in its contracts, including the Partnership Agreement of
the Operating Partnership, which provides that shareholders assume no
personal liability for obligations entered into on behalf of the Company.
However, with respect to tort claims, contractual claims where shareholder
liability is not so negated, claims for taxes and certain statutory
liability, a shareholder may, in some jurisdictions, be personally liable
to the extent that such claims are not satisfied by the Company. Inasmuch
as the Company will carry public liability insurance which it considers
adequate, any risk of personal liability to shareholders is limited to
situations in which the Company's assets plus its insurance coverage would
be insufficient to satisfy the claims against the Company and its
shareholders.
DESCRIPTION OF COMMON SHARES
General
The summary of certain terms and provisions of the Common Shares
contained in this Prospectus does not purport to be complete and is subject
to, and qualified in its entirety by reference to, the terms and provisions
of the Company's Declaration of Trust, as amended, and Bylaws, as amended,
which are incorporated by reference herein.
All outstanding Common Shares issued are duly authorized, fully paid
and, except as described under "Shares of Beneficial Interest and
Shareholder Liability," non-assessable. Subject to the provisions of the
Company's Declaration of Trust regarding Excess Shares (as defined below),
each outstanding Common Share entitles the holder thereof to one vote on
all matters voted on by shareholders, including the election of Trustees.
Holders of Common Shares do not have the right to cumulate their votes in
the election of Trustees, which means that the holders of a majority of the
outstanding Common Shares can elect all of the Trustees then standing for
election. Distributions may be paid to the holders of Common Shares if and
when declared by the Board of Trustees of the Company out of funds legally
available therefor, subject to the provisions of the Company's Declaration
of Trust regarding Excess Shares. The Company currently pays regular
quarterly dividends. Holders of Common Shares have no conversion,
redemption, preemptive or exchange rights to subscribe to any securities of
the Company. If the Company is liquidated, each outstanding Common Share
will be entitled to participate pro rata in the assets remaining after
payment of, or adequate provision for, all known debts and liabilities of
the Company and the rights of holders of any Preferred Shares. The rights
of holders of Common Shares are subject to the rights and preferences
established by the Board of Trustees for any Preferred Shares which have
been or may
5
be issued by the Company. For a description of the rights and preferences
of the Series A Preferred Shares, see "Description of Series A Preferred
Shares."
Restrictions on Transfer
The Company's Declaration of Trust contains certain restrictions on
the number of Common Shares and Preferred Shares that individual
shareholders may own. For the Company to qualify as a REIT under the Code,
no more than 50% in value of its shares of beneficial interest (after
taking into account options to acquire shares of beneficial interest) may
be owned, directly or indirectly, by five or fewer individuals (as defined
in the Code to include certain entities and constructive ownership among
specified family members) during the last half of a taxable year (other
than the first taxable year) or during a proportionate part of a shorter
taxable year. The shares of beneficial interest must also be beneficially
owned (other than during the first taxable year) by 100 or more persons
during at least 335 days of a taxable year or during a proportionate part
of a shorter taxable year. Because the Company expects to qualify as a
REIT, the Declaration of Trust of the Company contains restrictions on the
acquisition of Common Shares and Preferred Shares intended to ensure
compliance with these requirements.
Subject to certain exceptions specified in the Company's Declaration
of Trust, no holder may own, or be deemed to own by virtue of the
attribution provisions of the Code, more than 5% (the "Ownership Limit") of
the number or value of the issued and outstanding shares of beneficial
interest of the Company. The Company's Board of Trustees, upon receipt of
a ruling from the Internal Revenue Service (the "Service"), an opinion of
counsel or other evidence satisfactory to the Board of Trustees, and upon
such other conditions as the Board of Trustees may direct, may also exempt
a proposed transferee from the Ownership Limit. As a condition of such
exemption, the intended transferee must give written notice to the Company
of the proposed transfer no later than the fifteenth day prior to any
transfer which, if consummated, would result in the intended transferee
owning shares in excess of the Ownership Limit. The Board of Trustees of
the Company may require such opinions of counsel, affidavits, undertakings
or agreements as it may deem necessary or advisable in order to determine
or ensure the Company's status as a REIT. Any transfer of Common Shares or
Preferred Shares that would (i) create a direct or indirect ownership of
shares in excess of the Ownership Limit, (ii) result in the shares being
beneficially owned by fewer than 100 persons as provided in Section 856(a)
of the Code, or (iii) result in the Company being "closely held" within the
meaning of Section 856(h) of the Code, shall be null and void, and the
intended transferee will acquire no rights to the shares. The foregoing
restrictions on transferability and ownership will not apply if the Board
of Trustees determines, which determination must be approved by the
shareholders, that it is no longer in the best interests of the Company to
attempt to qualify, or to continue to qualify, as a REIT.
The Company's Board of Trustees by resolution has excluded from the
foregoing ownership restriction Amli, Gregory T. Mutz and Baldwin & Lyons,
Inc. ("Baldwin & Lyons"), a publicly traded casualty insurance company
based in Indianapolis which is Amli's largest stockholder, who collectively
may own up to 34.9% of the outstanding shares of beneficial interest of the
Company as a group, or, subject to certain limitations, individually
(subject to the group restrictions) up to 29.9% of the outstanding shares
of beneficial interest of the Company. The Company's Declaration of Trust
excludes certain investors (and their transferees) from whom apartment
communities were obtained in exchange for Units or Common Shares in
connection with the formation of the Company and who would exceed the
Ownership Limit as a result of the ownership of such Common Shares or the
exchange of such Units for Common Shares. In no event will such persons be
entitled to acquire additional shares of beneficial interest of the Company
such that the five largest beneficial owners of shares of beneficial
interest of the Company hold more than 50% of the total outstanding shares.
Any purported transfer of shares that would result in a person owning
shares in excess of the Ownership Limit or cause the Company to become
"closely held" under Section 856(h) of the Code that is not otherwise
permitted as provided above will constitute excess shares ("Excess
Shares"), which will be transferred pursuant to the Declaration of Trust to
the Company as trustee for the exclusive benefit of the person or persons
to whom the Excess Shares are ultimately transferred, until such time as
the purported transferee retransfers the Excess Shares. While these Excess
Shares are held in trust, they will not be entitled to vote or to share in
any dividends or other distributions. Subject to the Ownership Limit, the
Excess Shares may be transferred by the purported transferee to any person
(if the Excess Shares would not be Excess Shares in the hands of such
person) at a price not to exceed
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the price paid by the purported transferee (or, if no consideration was
paid, fair market value), at which point the Excess Shares will
automatically be exchanged for the shares to which the Excess Shares are
attributable. In addition, such Excess Shares held in trust are subject to
purchase by the Company at a purchase price equal to the lesser of the
price paid for the shares by the purported transferee (or, if no
consideration was paid, fair market value) and the fair market value of the
shares of beneficial interest (as reflected in the last reported sales
price reported on the NYSE on the trading day immediately preceding the
relevant date, or if not then traded on the NYSE, the last reported sales
price of such shares on the trading day immediately preceding the relevant
date as reported on any exchange or quotation system over which such shares
may be traded, or if not then traded over any exchange or quotation system,
then the market price of such shares on the relevant date as determined in
good faith by the Board of Trustees of the Company) on the date the Company
elects to purchase.
All certificates representing shares of beneficial interest will bear
a legend referring to the restrictions described above.
Transfer Agent and Registrar
Harris Trust and Savings Bank has been appointed as transfer agent and
registrar for the Common Shares.
DESCRIPTION OF SERIES A PREFERRED SHARES
The summary of certain terms and provisions of the Series A Preferred
Shares contained in this Prospectus does not purport to be complete and is
subject to, and qualified in its entirety by reference to, the terms and
provisions of the Articles Supplementary relating to the Series A Preferred
Shares and the Company's Declaration of Trust, as amended, and Bylaws, as
amended, which are incorporated by reference herein.
General
The Company's Board of Trustees is authorized to issue, from the
authorized but unissued shares of beneficial interest of the Company,
preferred shares in series and to establish from time to time the number of
preferred shares to be included in such series and to fix the designation
and any preferences, conversion and other rights, voting powers,
restrictions, limitations as to distributions, qualifications and terms and
conditions of redemption of the shares of each such series.
The outstanding Series A Preferred Shares are validly issued, fully
paid and, except as set forth under "-Shares of Beneficial Interest and
Shareholder Liability", nonassessable. The holders of the Series A
Preferred Shares have no preemptive rights with respect to any shares of
the capital securities of the Company or any other securities of the
Company convertible into or carrying rights or options to purchase any such
shares. The Series A Preferred Shares are not subject to any sinking fund
or other obligation of the Company to redeem or retire the Series A
Preferred Shares.
Ranking
The Series A Preferred Shares will rank senior to the Common Shares
with respect to payment of dividends and amounts upon liquidation,
dissolution or winding up.
While any Series A Preferred Shares are outstanding, the Company may
not authorize, create or increase the authorized amount of any class or any
security convertible into shares of any class that ranks senior to the
Series A Preferred Shares with respect to the payment of dividends or
amounts upon liquidation, dissolution or winding up without the consent of
the holders of two-thirds of the outstanding Series A Preferred Shares and
all other shares of Voting Preferred Shares (as defined below), voting as a
single class. However, the Company may create additional classes of
shares, increase the authorized number of preferred shares or issue series
of preferred shares ranking on a parity with the Series A Preferred Shares
with respect, in each case, to the payment of dividends and
7
amounts upon liquidation, dissolution and winding up (a "Parity Share")
without the consent of any holder of Series A Preferred Shares. See "-
Voting Rights" below.
Distributions
Holders of the Series A Preferred Shares shall be entitled to receive,
when and as declared by the Board of Trustees, out of funds legally
available for the payment of distributions, cumulative preferential cash
distributions in an amount per share equal to the greater (i) $1.72 per
annum or (ii) the cash distribution (determined on each of the quarterly
dividend payment dates referred to below) on the number of Common Shares,
or portion thereof, into which a Series A Preferred Share is convertible.
Such distributions shall be cumulative from the date of original issue and
shall be payable quarterly in arrears on the Tuesday which is nearest to
the twenty-first (21st) day of February, May, August and November or, if
not a business day, the next succeeding business day, (each, a "Dividend
Payment Date"). Such distribution and any distribution payable on the
Series A Preferred Shares for any partial distribution period will be
computed on the basis of the actual number of days in such period.
Distributions will be payable to holders of record as they appear in the
records of the Company at the close of business on the applicable record
date, which shall be on such date designated by the Board of Trustees of
the Company for the payment of distributions that is not more than 50 days
prior to such Dividend Payment Date (each, a "Dividend Record Date").
Except as provided in the next sentence, no distributions will be
declared or paid on any Parity Shares unless full cumulative distributions
have been declared and paid or are contemporaneously declared and funds
sufficient for payment set aside on the Series A Preferred Shares for all
prior distribution periods. If accrued dividends on the Series A Preferred
Shares for all prior dividend periods have not been paid in full, then any
dividend declared on the Series A Preferred Shares and on any Parity Shares
for any dividend period will be declared ratably in proportion to accrued
and unpaid dividends on the Series A Preferred Shares and such Parity
Shares.
The Company will not (i) declare, pay or set apart funds for the
payment of any dividend or other distribution with respect to any Junior
Shares (as defined below) or (ii) redeem, purchase or otherwise acquire for
consideration any Junior Shares through a sinking fund or otherwise (other
than a redemption or purchase or other acquisition of Common Shares made
for purposes of any employee incentive or benefit plan of the Company or
any entity in which the Company, either directly or indirectly, owns more
than a 50% economic interest), unless (A) all cumulative dividends with
respect to the Series A Preferred Shares and any Parity Shares at the time
such dividends are payable have been paid or declared and funds have been
set apart for payment of such dividends and (B) sufficient funds have been
paid or declared and set apart for the payment of the dividend for the
current dividend period with respect to the Series A Preferred Shares and
any Parity Shares. The limitations in this paragraph do not restrict the
Company's ability to take the actions in this paragraph with respect to any
Parity Shares.
As used herein, (i) the term "dividend" does not include dividends or
other distributions payable solely in Fully Junior Shares on Junior Shares,
or in options, warrants or rights to holders of Junior Shares to subscribe
for or purchase any Fully Junior Shares, (ii) the term "Junior Shares"
means the Common Shares and any other class of capital shares of the
Company now or hereafter issued and outstanding that ranks junior to the
Series A Preferred Shares as to the payment of distributions or amounts
upon liquidation, dissolution and winding up and (iii) the term "Fully
Junior Shares" means Junior Shares that rank junior to the Series A
Preferred Shares both as to the payment of dividends and amounts upon
liquidation, dissolution and winding up.
Redemption
Except as required by the limitation on ownership (see "-Restrictions
on Transfer"), the Series A Preferred Shares are not redeemable prior to
January 25, 2001. On and after January 25, 2001 the Company, at its
option, upon not less than 30 nor more than 90 days' written notice, may
redeem the Series A Preferred Shares, in whole or in part, at any time or
from time to time, (i) for one Common Share per Series A Preferred Share
(subject to possible future adjustment in certain circumstances) plus
accumulated, accrued and unpaid distributions, provided that for twenty
(20) consecutive trading days within the thirty (30) trading days ending on
the date on which notice
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of redemption is given by the Company, the closing price of the Common
Shares on the NYSE equals or exceeds the conversion price per share (see "-
Conversion Rights"), or (ii) cash at a redemption price equal to $20.00 per
share, plus accumulated, accrued and unpaid distributions thereon to the
date fixed for redemption. If fewer than all of the outstanding Series A
Preferred Shares are to be redeemed, the number of shares to be redeemed
will be determined by the Company and such shares may be redeemed pro rata
from the holders of record of such shares in proportion to the number of
such shares held by such holders (with adjustments to avoid redemption of
fractional shares) or by lot in a manner determined by the Company.
Unless full cumulative distributions on all Series A Preferred Shares
shall have been or contemporaneously are declared and paid or declared and
a sum sufficient for the payment thereof set apart for payment for all past
distribution periods and the then current distribution period, no Series A
Preferred Shares shall be redeemed or purchased by the Company except
pursuant to a purchase or exchange offer made on the same terms to holders
of all outstanding Series A Preferred Shares or Parity Shares.
Notice of redemption will be mailed at least 30 days but not more than
90 days before the redemption date to each holder of record of Series A
Preferred Shares at the address shown on the share transfer books of the
Company. Each notice shall state: (i) the redemption date; (ii) the number
of Series A Preferred Shares to be redeemed; (iii) the redemption price;
(iv) the place or places where certificates for Series A Preferred Shares
are to be surrendered for payment of the redemption price; and (v) that
distributions on the Series A Preferred Shares will cease to accrue on such
redemption date. If fewer than all Series A Preferred Shares are to be
redeemed, the notice mailed to each such holder thereof shall also specify
the number of Series A Preferred Shares to be redeemed from each such
holder. If notice of redemption of any Series A Preferred Shares has been
given and if the funds necessary for such redemption have been set aside by
the Company in trust for the benefit of the holders of Series A Preferred
Shares so called for redemption, then from and after the redemption date,
distributions will cease to accrue on the Series A Preferred Shares, such
Series A Preferred Shares shall no longer be deemed outstanding and all
rights of the holders of such shares will terminate, except the right to
receive the redemption price.
The holders of Series A Preferred Shares at the close of business on a
Dividend Record Date will be entitled to receive the distribution payable
with respect to such Series A Preferred Shares on the corresponding
Dividend Payment Date notwithstanding the redemption thereof between such
Dividend Record Date and the corresponding Dividend Payment Date or the
Company's default in the payment of the distribution due. Except as
provided above, the Company will make no payment or allowance for unpaid
distributions, whether or not in arrears, on Series A Preferred Shares
which have been called for redemption.
The Series A Preferred Shares have no stated maturity and will not be
subject to any sinking fund or mandatory redemption. However, in order to
preserve the Company's status as a REIT, as defined in the Code, the Series
A Preferred Shares may be subject to redemption or exchange as described
under "-Restrictions on Transfer."
Liquidation Preference
The holders of Series A Preferred Shares are entitled to receive in
the event of any liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary, $20.00 per Series A Preferred Share plus
an amount per Series A Preferred Share equal to all distributions (whether
or not earned or declared) accrued and unpaid thereon to the date of final
distribution to such holders, and no more.
Until the holders of Series A Preferred Shares and Parity Shares have
been paid their liquidation preference in full, no payment will be made to
any holder of Junior Shares upon the liquidation, dissolution or winding up
of the Company. If, upon any liquidation, dissolution or winding up of the
Company, the assets of the Company, or proceeds thereof, distributable
among the holders of the Series A Preferred Shares are insufficient to pay
in full the liquidation preference with respect to the Series A Preferred
Shares and any other Parity Shares, then such assets, or the proceeds
thereof, will be distributed among the holders of Series A Preferred Shares
and any such Parity Shares ratably in accordance with the respective
amounts which would be payable on such Series A Preferred Shares and any
such Parity Shares if all amounts payable thereon were paid in full.
Neither a consolidation or merger of
9
the Company with another corporation, a statutory share exchange by the
Company nor a sale or transfer of all or substantially all of the Company's
assets will be considered a liquidation, dissolution or winding up,
voluntary or involuntary, of the Company.
Voting Rights
Except as indicated below, or except as otherwise from time to time
required by applicable law, the holders of Series A Preferred Shares have
no voting rights.
If six quarterly distributions (whether or not consecutive) payable on
the Series A Preferred Shares or any Parity Shares are in arrears, whether
or not earned or declared, the number of Trustees then constituting the
Board of Trustees of the Company will be increased by two, and the holders
of Series A Preferred Shares, voting together as a class with the holders
of any other series of Parity Shares (any such other series, the "Voting
Preferred Shares"), will have the right to elect two additional Trustees to
serve on the Company's Board of Trustees at any annual meeting of
shareholders or a properly called special meeting of the holders of Series
A Preferred Shares and such Voting Preferred Shares and at each subsequent
annual meeting of shareholders until all such distributions and
distributions for the current quarterly period on the Series A Preferred
Shares and such other Voting Preferred Shares have been paid or declared
and paid or set aside for payment. Such voting right will terminate when
all such accrued and unpaid dividends have been declared and paid or set
aside for payment. The term of office of all Trustees so elected will
terminate with the termination of such voting rights.
The approval of two-thirds of the outstanding Series A Preferred
Shares and all other series of Voting Preferred Shares similarly affected,
voting as a single class, is required in order to (i) amend the Company's
Declaration of Trust to affect materially and adversely the rights,
preferences or voting power of the holders of the Series A Preferred Shares
or the Voting Preferred Shares, (ii) enter into a share exchange that
affects the Series A Preferred Shares, consolidate with or merge into
another entity, or permit another entity to consolidate with or merge into
the Company, unless in each such case each Series A Preferred Share remains
outstanding without a material adverse change to its terms and rights or is
converted into or exchanged for preferred stock of the surviving entity
having preferences, rights, voting powers, restrictions, limitations as to
distributions, qualifications and terms or conditions of redemption thereof
identical to that of a Series A Preferred Share (except for changes that do
not materially and adversely affect the holders of the Series A Preferred
Shares) or (iii) authorize, reclassify, create, or increase the authorized
amount of any class of capital shares having rights senior to the Series A
Preferred Shares with respect to the payment of distributions or amounts
upon liquidation, dissolution or winding up. However, the Company may
create additional classes of Parity Shares and Junior Shares, increase the
authorized number of Parity Shares and Junior Shares and issue additional
series of Parity Shares and Junior Shares without the consent of any holder
of Series A Preferred Shares.
Except as provided above and as required by law, the holders of Series
A Preferred Shares are not entitled to vote on any merger or consolidation
involving the Company or a sale of all or substantially all of the assets
of the Company.
Conversion Rights
The Series A Preferred Shares are convertible, in whole or in part, at
any time, unless previously redeemed, at the option of the holders thereof,
into authorized but previously unissued Common Shares at a conversion price
of $20.00 per Common Share (equivalent to a conversion rate of one Common
Share for each Series A Preferred Share), subject to adjustment as
described below (the "Conversion Price"). See "-Conversion Price
Adjustments." The right to convert Series A Preferred Shares called for
redemption will terminate at the close of business on the fifth business
day prior to the redemption date for such Series A Preferred Shares. For
information as to notices of redemption, see "-Redemption" above. For a
description of the Company's Common Shares, see "-Description of Common
Shares."
Conversion of Series A Preferred Shares, or a specified portion
thereof, may be effected by delivering certificates evidencing such shares,
together with written notice of conversion and a proper assignment of such
10
certificates to the Company or in blank, to the office or agency to be
maintained by the Company for that purpose. Initially such office will be
the office of the Transfer Agent.
Each conversion will be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for Series A
Preferred Shares shall have been surrendered and notice shall have been
received by the Company as aforesaid (and if applicable, payment of an
amount equal to the dividend payable on such shares shall have been
received by the Company as described below) and the conversion shall be at
the Conversion Price in effect at such time and on such date.
Holders of Series A Preferred Shares at the close of business on a
Dividend Record Date will be entitled to receive the dividend payable on
such shares on the corresponding Dividend Payment Date notwithstanding the
conversion of such shares following such Dividend Record Date and prior to
such Dividend Payment Date. However, Series A Preferred Shares surrendered
for conversion during the period between the close of business on any
Dividend Record Date and the opening of business on the corresponding
Dividend Payment Date (except shares converted after the issuance of a
notice of redemption with respect to a redemption date during such period,
which will be entitled to such dividend) must be accompanied by payment of
an amount equal to the distribution payable on such shares on such Dividend
Payment Date. A holder of Series A Preferred Shares on a Dividend Record
Date who (or whose transferee) tenders any such shares for conversion into
Common Shares on such Dividend Payment Date will receive the dividend
payable by the Company on such Series A Preferred Shares on such date, and
the converting holder need not include payment of the amount of such
dividend upon surrender of Series A Preferred Shares for conversion. Except
as provided above, the Company will make no payment or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends
on the Common Shares issued upon such conversion.
The Company will not issue fractional Common Shares upon conversion
but in lieu thereof will pay cash at the current market price of the Common
Shares on the day prior to the conversion date.
Conversion Price Adjustments
The Conversion Price is subject to adjustment upon certain events,
including without duplication (i) dividends (and other distributions)
payable in Common Shares, (ii) the issuance to all holders of Common Shares
of certain rights or warrants entitling them to subscribe for or purchase
Common Shares at a price per share less than the fair market value per
Common Share (which, as defined, includes an adjustment for underwriting
commissions avoided in rights offerings to shareholders), (iii)
subdivisions, combinations and reclassifications of Common Shares, and (iv)
distributions to all holders of Common Shares of any capital shares of the
Company (other than Common Shares), evidences of indebtedness of the
Company or assets (including securities, but excluding those dividends,
rights, warrants and distributions referred to above and excluding
Permitted Common Share Cash Distributions, as herein defined). "Permitted
Common Share Cash Distributions" are those cumulative cash dividends and
distributions paid with respect to the Common Shares after December 31,
1995 which are not in excess of the following: the sum of (i) the
Company's cumulative undistributed funds from operations at December 31,
1995; plus (ii) the cumulative amount of funds from operations, as
determined by the Board of Trustees of the Company, after December 31,
1995, minus (iii) the cumulative amount of distributions accrued or paid on
the Series A Preferred Shares or any other class of preferred shares after
January 18, 1996. In addition to the foregoing adjustments, the Company
will be permitted to make such reductions in the Conversion Price as it
considers to be advisable in order that any event treated for federal
income tax purposes as a dividend of stock or stock rights will not be
taxable to the holders of the Common Shares.
In the event that the Company shall be a party to any transaction
(including without limitation a merger, consolidation, statutory share
exchange, tender offer for all or substantially all of the Common Shares or
sale of all or substantially all of the Company's assets), in each case as
a result of which all or substantially all Common Shares are converted into
the right to receive stock, securities or other property (including cash or
any combination thereof), each Series A Preferred Share that is not
redeemed or converted prior to such transaction, will thereafter be
convertible into the kind and amount of shares of stock and other
securities and property receivable (including cash or any combination
thereof) upon the consummation of such transaction by a holder of that
number of Common
11
Shares or fraction thereof into which one Series A Preferred Share was
convertible immediately prior to such transaction (assuming such holder of
Common Shares failed to exercise any rights of election and received per
share the kind and amount received per share by a plurality of non-electing
shares). The Company may not become a party to any such transaction unless
the terms thereof are consistent with the foregoing.
No adjustment of the Conversion Price will be required to be made in
any case until cumulative adjustments amount to 1% or more of the
Conversion Price. Any adjustments not so required to be made will be
carried forward and taken into account in subsequent adjustments.
Restrictions on Transfer
For information regarding restrictions on ownership of the shares of
beneficial interest of the Company, see "Description of Common Shares-
Restrictions on Transfer."
Transfer Agent and Registrar
Harris Trust and Savings Bank has been appointed as transfer agent and
registrar for the Series A Preferred Shares.
CERTAIN PROVISIONS OF MARYLAND LAW AND OF THE COMPANY'S DECLARATION OF
TRUST AND BYLAWS
The following paragraphs summarize certain provisions of Maryland law
and the Company's Declaration of Trust and Bylaws. The summary does not
purport to be complete and reference is made to Maryland law as well as the
Company's Declaration of Trust and Bylaws, which are filed as exhibits to
the Registration Statement of which this Prospectus is part.
Board of Trustees
The Company's Declaration of Trust and Bylaws provide that the number
of Trustees of the Company may be established by a majority of the Board of
Trustees but may not be fewer than three nor more than fifteen. The
Declaration of Trust provides that a majority of the Trustees must be
persons who are not affiliated with Amli or its affiliates ("Disinterested
Trustees"). Any vacancy on the Board of Trustees will be filled, at any
regular meeting or at any special meeting called for that purpose, by a
majority of the remaining Trustees (even if less than a quorum), except
that a vacancy resulting from an increase in the number of Trustees will be
filled by a majority of the entire Board of Trustees and, in the event that
a majority of the Board of Trustees are not Disinterested Trustees by
reason of the resignation or removal of one or more Disinterested Trustees
or otherwise, the remaining Disinterested Trustees (or, if there are no
Disinterested Trustees, the remaining members of the Board of Trustees)
shall promptly appoint that number of Disinterested Trustees necessary to
cause the Board of Trustees to include a majority of Disinterested
Trustees.
Pursuant to the terms of the Declaration of Trust, the Trustees are
divided into three classes, holding office initially for one-year, two-year
and three-year terms, respectively. As these initial terms expire,
Trustees in each class are elected for terms of three years and until their
successors are duly elected and qualified. The Company believes that
classification of the Board of Trustees will help to assure the continuity
and stability of the Company's business strategies and policies as
determined by the Board of Trustees.
The classified Trustee provision could have the effect of making the
removal of incumbent Trustees more time-consuming and difficult, which
could discourage a third party from making a tender offer or otherwise
attempting to obtain control of the Company, even though such an attempt
might be beneficial to the Company and its shareholders. At least two
annual meetings of shareholders, instead of one, will generally be required
to effect a change in a majority of the Board of Trustees.
12
Holders of Common Shares have no right to cumulative voting for the
election of Trustees. Consequently, at each annual meeting of
shareholders, the holders of a majority of Common Shares voting together as
a single class will be able to elect all of the successors of the class of
Trustees whose term expires at that meeting.
Business Combinations
Under the Maryland General Corporation Law, as amended from time to
time (the "MGCL"), as applicable to Maryland real estate investment trusts,
certain "business combinations" (including a merger, consolidation, share
exchange, or, in certain circumstances, an asset transfer or issuance or
reclassification of equity securities) between a Maryland real estate
investment trust and any person who beneficially owns 10% or more of the
voting power of the shares of the trust or an affiliate of the trust who,
at any time within the two-year period prior to the date in question, was
the beneficial owner of 10% or more of the voting power of the then-
outstanding voting shares of beneficial interest of the trust (an
"Interested Shareholder") or an affiliate thereof are prohibited for five
years after the most recent date on which the Interested Shareholder became
an Interested Shareholder. Thereafter, any such business combination must
be (a) recommended by the Board of Trustees of such trust and (b) approved
by the affirmative vote of at least (i) 80% of the votes entitled to be
cast by holders of outstanding voting shares of the trust and (ii) two-
thirds of the votes entitled to be cast by holders of outstanding voting
shares (other than voting shares held by the Interested Shareholder with
whom the business combination is to be effected or by an affiliate or
associate thereof), voting together as a single group, unless, among other
things, the company's common shareholders receive a minimum price (as
defined in the statute) for their shares and the consideration is received
in cash or in the same form as previously paid by the Interested
Shareholder for his shares. These provisions of Maryland law do not apply,
however, to business combinations with a particular Interested Shareholder
or its existing or future affiliates that are approved or exempted by the
board of trustees of the trust prior to the time that the Interested
Shareholder becomes an Interested Shareholder or if the original
declaration of trust includes a provision electing not to be governed, in
whole or in part, as to business combinations generally, specifically or
generally by types, as to identified or unidentified existing or future
Interested Shareholders or their affiliates. The Company's Declaration of
Trust, in accordance with Maryland law, exempts Mr. Mutz, Baldwin & Lyons
and Amli and their respective affiliates and successors from the foregoing
restrictions. As a result, such persons and entities may be able to enter
into business combinations with the Company, which may not be in the best
interests of the shareholders, without compliance by the Company with the
super-majority voting requirements and the other provisions of the statute.
Control Share Acquisitions
The MGCL, as applicable to Maryland real estate investment trusts,
imposes limitations on the voting rights of shares acquired in a "control
share acquisition" relating to a Maryland real estate investment trust.
The MGCL defines a "control share acquisition" as the acquisition of
"control shares," which is defined as voting shares that would entitle the
acquiror to exercise voting power in electing trustees in excess of the
following levels of voting power: 20%, 33-1/3%, and 50%. The MGCL requires
a two-thirds shareholder vote (excluding shares owned by the acquiring person
and certain members of management) to accord voting rights to shares
acquired in a control share acquisition. The MGCL also requires a Maryland
real estate investment trust to hold a special meeting at the request of an
actual or proposed control share acquiror generally within 50 days after a
request is made with the submission of an "acquiring person statement," but
only if the acquiring person (a) delivers a written undertaking to pay the
expenses of such special meeting or, if required by the Board of Trustees,
posts a bond for the cost of the meeting and (b) submits a definitive
financing agreement to the extent that financing is not provided by the
acquiring person. In addition, unless the charter or bylaws provide
otherwise, the MGCL gives a Maryland real estate investment trust, within
certain time limitations, various redemption rights if there is a
shareholder vote on the issue and the grant of voting rights is not
approved, or if an "acquiring person statement" is not delivered to the
target company within 10 days following a control share acquisition.
Moreover, unless the charter or bylaws provide otherwise, the MGCL provides
that if, before a control share acquisition occurs, voting rights are
accorded to the control shares which results in the acquiring person having
a majority of voting power, then minority shareholders are entitled to
appraisal rights. The fair value of the shares as determined for purposes
of such appraisal rights may not be less than the highest price per share
paid by the acquiror in the control share acquisition. The control share
acquisition statute does not apply (a) to shares acquired in a merger,
consolidation or share
13
exchange if the trust is a party to the transaction or (b) to acquisitions
approved or exempted by the declaration of trust or bylaws of the trust.
The Company's Declaration of Trust, in accordance with Maryland law,
contains a provision exempting acquisitions of shares by Mr. Mutz, Baldwin
& Lyons and Amli and their respective affiliates and successors from the
foregoing provisions.
Amendment to the Declaration of Trust
The Company's Declaration of Trust may be amended only by the
affirmative vote or written consent of the holders of not less than a
majority of all of the shares of beneficial interest entitled to vote on
the matter, except that the Trustees by a two-thirds vote may amend
provisions of the Company's Declaration of Trust from time to time to
qualify as a real estate investment trust under the Code and Maryland law.
Termination of the Company
The Company's Declaration of Trust permits the termination of the
Company and the discontinuation of the operations of the Company by the
affirmative vote or written consent of the holders of not less than a
majority of the outstanding shares of beneficial interest.
Advance Notice of Trustee Nominations and New Business
The Bylaws of the Company provide that (a) with respect to an annual
meeting of shareholders, nominations of persons for election to the Board
of Trustees and the proposal of business to be considered by shareholders
may be made only (i) pursuant to the Company's notice of the meeting, (ii)
by the Board of Trustees, or (iii) by a shareholder who is entitled to vote
at the meeting and has complied with the advance notice procedures set
forth in the Bylaws, and (b) with respect to special meetings of
shareholders, only the business specified in the Company's notice of
meeting may be brought before the meeting of shareholders, and nominations
of persons for election to the Board of Trustees may be made only on terms
similar to those for annual meetings.
Anti-Takeover Effect of Certain Provisions of Maryland Law
and of the Declaration of Trust and Bylaws
The business combination provisions and the control share acquisition
provisions of the MGCL, the provisions of the Declaration of Trust on
classification of the Board of Trustees and the advance notice provisions
of the Bylaws could delay, defer or prevent a transaction or a change in
control of the Company that might involve a premium price for holders of
Common Shares or otherwise be in their best interest.
FEDERAL INCOME TAX CONSIDERATIONS
The following is a description of the material Federal income tax
consequences to the Company and its shareholders of the treatment of the
Company as a REIT. The discussion is general in nature and not exhaustive
of all possible tax considerations, nor does the discussion give a detailed
description of any state, local, or foreign tax considerations. The
discussion does not discuss all aspects of Federal income tax law that may
be relevant to a prospective shareholder in light of his particular
circumstances or to certain types of shareholders (including insurance
companies, financial institutions or broker-dealers, tax exempt
organizations, foreign corporations and persons who are not citizens or
residents of the United States) subject to special treatment under the
federal income tax laws nor does the discussion address special
considerations, if any, which may relate to the purchase of Preferred
Shares or Securities Warrants.
THIS DISCUSSION IS NOT INTENDED AS A SUBSTITUTE FOR CAREFUL TAX
PLANNING, AND EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT WITH ITS TAX
ADVISOR REGARDING THE SPECIFIC TAX CONSEQUENCES TO IT OF THE PURCHASE,
OWNERSHIP AND SALE OF THE OFFERED SECURITIES, INCLUDING THE FEDERAL, STATE,
LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP AND
SALE, AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
14
If certain detailed conditions imposed by the REIT provisions of the
Code are met, entities, such as the Company, that invest primarily in real
estate and that otherwise would be treated for Federal income tax purposes
as corporations, are generally not taxed at the corporate level on their
"REIT taxable income" that is currently distributed to shareholders. This
treatment substantially eliminates the "double taxation" (i.e., at both the
corporate and shareholder levels) that generally results from the use of
corporations.
If the Company fails to qualify as a REIT in any year, however, it
will be subject to Federal income taxation as if it were a domestic
corporation, and its shareholders will be taxed in the same manner as
shareholders of ordinary corporations. In this event, the Company could be
subject to potentially significant tax liabilities, and therefore the
amount of cash available for distribution to its shareholders would be
reduced or eliminated.
The Company has elected REIT status effective for the taxable year
ended December 31, 1994, and the Board of Trustees of the Company believes
that the Company has operated and expects that the Company will continue to
operate in a manner that will permit the Company to elect REIT status in
each taxable year thereafter. There can be no assurance, however, that
this belief or expectation will be fulfilled, since qualification as a REIT
depends on the Company continuing to satisfy numerous asset, income and
distribution tests described below, which in turn will be dependent in part
on the Company's operating results.
TAXATION OF THE COMPANY
GENERAL. In any year in which the Company qualifies as a REIT it will
not, in general, be subject to Federal income tax on that portion of its
REIT taxable income or capital gain which is distributed to shareholders.
The Company may, however, be subject to tax at normal corporate rates upon
any taxable income or capital gain not distributed.
Notwithstanding its qualification as a REIT, the Company may also be
subject to taxation in certain other circumstances. If the Company should
fail to satisfy either the 75% or the 95% gross income test (as discussed
below), and nonetheless maintains its qualification as a REIT because
certain other requirements are met, it will be subject to a 100% tax on the
greater of the amount by which the Company fails either the 75% or the 95%
test, multiplied by a fraction intended to reflect the Company's
profitability. The Company will also be subject to a tax of 100% on net
income from any "prohibited transaction" as described below, and if the
Company has (i) net income from the sale or other disposition of
"foreclosure property" which is held primarily for sale to customers in the
ordinary course of business or (ii) other non-qualifying income from
foreclosure property, it will be subject to tax on such income from
foreclosure property at the highest corporate rate. In addition, if the
Company should fail to distribute during each calendar year at least the
sum of (i) 85% of its REIT ordinary income for such year, (ii) 95% of its
REIT capital gain net income for such year, and (iii) any undistributed
taxable income from prior years, the Company would be subject to a 4%
excise tax on the excess of such required distribution over the amounts
actually distributed. The Company may also be subject to the corporate
alternative minimum tax, as well as tax in certain situations not presently
contemplated. Each of the Management Company, Amrescon and AIA will be
taxed on its income at regular corporate rates. The Company will use the
calendar year both for Federal income tax purposes and for financial
reporting purposes.
In order to qualify as a REIT, the Company must meet, among others,
the following requirements:
SHARE OWNERSHIP TESTS. The Company's shares of beneficial interest
must be held by a minimum of 100 persons for at least 335 days in each
taxable year (or a proportional number of days in any short taxable year).
In addition, at all times during the second half of each taxable year, no
more than 50% in value of the outstanding shares of beneficial interest of
the Company may be owned, directly or indirectly and by applying certain
constructive ownership rules, by five or fewer individuals, which for this
purpose includes certain tax-exempt entities. However, for purposes of
this test, any shares of beneficial interest held by a qualified domestic
pension or other retirement trust will be treated as held directly by its
beneficiaries in proportion to their actuarial interest in such trust
rather than by such trust.
15
In order to attempt to ensure compliance with the foregoing share
ownership tests, the Company has placed certain restrictions on the
transfer of its shares of beneficial interest to prevent additional
concentration of share ownership. Moreover, to evidence compliance with
these requirements, under Treasury regulations the Company must maintain
records which disclose the actual ownership of its outstanding shares of
beneficial interest. In fulfilling its obligations to maintain records,
the Company must and will demand written statements each year from the
record holders of designated percentages of its shares of beneficial
interest disclosing the actual owners of such shares of beneficial interest
(as prescribed by Treasury regulations). A list of those persons failing
or refusing to comply with such demand must be maintained as a part of the
Company's records. A shareholder failing or refusing to comply with the
Company's written demand must submit with his tax return a similar
statement disclosing the actual ownership of Company shares of beneficial
interest and certain other information. In addition, the Company's
Declaration of Trust provides restrictions regarding the transfer of its
shares of beneficial interest that are intended to assist the Company in
continuing to satisfy the share ownership requirements. See "Description
of Common Shares - Restrictions on Transfer" and "Description of Preferred
Shares - Restrictions on Transfer."
ASSET TESTS. At the close of each quarter of the Company's taxable
year, the Company must satisfy two tests relating to the nature of its
assets (with "assets" being determined in accordance with generally
accepted accounting principles). First, at least 75% of the value of the
Company's total assets must be represented by interests in real property,
interests in mortgages on real property, shares in other REITs, cash, cash
items, government securities and qualified temporary investments. Second,
although the remaining 25% of the Company's assets generally may be
invested without restriction, securities in this class may not exceed
(i) in the case of securities of any one non-government issuer, 5% of the
value of the Company's total assets or (ii) 10% of the outstanding voting
securities of any one such issuer. Where the Company invests in a
partnership (such as the Operating Partnership), it will be deemed to own a
proportionate share of the partnership's assets. See "-Tax Aspects of the
Company's Investments in Partnerships-General." Accordingly, the Company's
investment in the Communities and the Co-Investment Communities through its
interest in the Operating Partnership is intended to constitute an
investment in qualified assets for purposes of the 75% asset test.
The Operating Partnership owns 100% of the non-voting preferred stock
of each of the Management Company, Amrescon and AIA and 5% of the voting
common stock of each of the Management Company, Amrescon and AIA. See "The
Company." By virtue of its partnership interest in the Operating
Partnership, the Company is deemed to own its pro rata share of the assets
of the Operating Partnership, including the securities of the Management
Company, Amrescon and AIA, as described above. Because the Operating
Partnership owns only 5% of the voting securities of each of the Management
Company, Amrescon and AIA and the preferred stock's approval right in the
case of each of the Management Company, Amrescon and AIA is limited to
certain fundamental corporate actions that could adversely affect the
preferred stock as a class, the 10% limitation on holdings of voting
securities of any one issuer should not be exceeded.
Based upon its analysis of the total estimated value of the Management
Company stock, Amrescon stock and AIA stock and the Subordinated Notes,
respectively, owned by the Operating Partnership relative to the estimated
value of the total assets owned by the Operating Partnership and the other
assets of the Company, the Company believes that the Company's pro rata
share of the non-voting preferred stock, voting common stock and
Subordinated Note of the Management Company owned by the Operating
Partnership does not exceed, on the date of this Prospectus, 5% of the
value of the Company's total assets, that the Company's pro rata share of
the non-voting preferred stock and voting common stock of Amrescon owned by
the Operating Partnership does not exceed, on the date of this Prospectus,
5% of the value of the Company's total assets, and that the Company's pro
rata share of the non-voting preferred stock, voting common stock and
Subordinated Note of AIA owned by the Operating Partnership does not
exceed, on the date of this Prospectus, 5% of the value of the Company's
total assets. As to the securities of any Services Company, this 5%
limitation must be satisfied not only as of the date that the Company
(directly or through the Operating Partnership) acquired securities of the
Management Company, Amrescon or AIA, but also at the end of any quarter in
which the Company increases its interest in the Management Company,
Amrescon or AIA or so acquires other property. In this respect, if the
holder of a right to exchange Units for Common Shares exercises such
rights, the Company will thereby increase its proportionate (indirect)
ownership interest in the Management Company, Amrescon and AIA, thus
requiring the Company to meet the 5% test in any quarter in which such
conversion option is exercised. Although the Company plans to take steps
to
16
ensure that it satisfies the 5% value test for any quarter with respect to
which retesting is to occur, there can be no assurance that such steps will
always be successful or will not require a reduction in the Operating
Partnership's overall interest in the Management Company, Amrescon or AIA.
GROSS INCOME TESTS. There are three separate percentage tests
relating to the sources of the Company's gross income which must be
satisfied for each taxable year. For purposes of these tests, where the
Company invests in a partnership, the Company will be treated as receiving
its share of the income and loss of the partnership, and the gross income
of the partnership will retain the same character in the hands of the
Company as it has in the hands of the partnership. See "-Tax Aspects of
the Company's Investments in Partnerships-General" below. The three tests
are as follows:
THE 75% TEST. At least 75% of the Company's gross income for the
taxable year must be "qualifying income." Qualifying income generally
includes (i) rents from real property (except as modified below);
(ii) interest on obligations secured by mortgages on, or interests in, real
property; (iii) gains from the sale or other disposition of interests in
real property and real estate mortgages, other than gain from property held
primarily for sale to customers in the ordinary course of the Company's
trade or business ("dealer property"); (iv) dividends or other
distributions on shares in other REITs, as well as gain from the sale of
such shares; (v) abatements and refunds of real property taxes; (vi) income
from the operation, and gain from the sale, of property acquired at or in
lieu of a foreclosure of the mortgage secured by such property
("foreclosure property"); (vii) commitment fees received for agreeing to
make loans secured by mortgages on real property or to purchase or lease
real property; and (viii) certain qualified temporary investment income
attributable to the investment of new capital received by the Company in
exchange for its shares during the one-year period following the receipt of
such capital.
Rents received from a tenant will not, however, qualify as rents from
real property in satisfying the 75% test (or the 95% gross income test
described below) if the Company, or an owner of 10% or more of the Company,
directly or constructively owns 10% or more of such tenant. In addition,
if rent attributable to personal property leased in connection with a lease
of real property is greater than 15% of the total rent received under the
lease, then the portion of rent attributable to such personal property will
not qualify as rents from real property. Moreover, an amount received or
accrued will not qualify as rents from real property (or as interest
income) for purposes of the 75% and 95% gross income tests if it is based
in whole or in part on the income or profits of any person, although an
amount received or accrued generally will not be excluded from "rents from
real property" solely by reason of being based on a fixed percentage or
percentages of receipts or sales. Finally, for rents received to qualify
as rents from real property for purposes of the 75% and 95% gross income
tests, the Company generally must not operate or manage the property or
furnish or render services to tenants, other than through an "independent
contractor" from whom the Company derives no income, except that the
"independent contractor" requirement does not apply to the extent that the
services provided by the Company are "usually or customarily rendered" in
connection with the rental of space for occupancy only, or are not
otherwise considered "rendered to the occupant for his convenience."
The Management Company (which does not satisfy the independent
contractor standard) provides management and leasing services to each of
the Communities and each of the Co-Investment Communities and may provide
certain services on any newly acquired properties of the Operating
Partnership. The Company believes for purposes of the 75% and 95% gross
income tests, that the services provided by the Management Company on the
Operating Partnership's properties and any other services and amenities
provided by the Operating Partnership or its agents with respect to such
properties are and will continue to be of the type usually or customarily
rendered in connection with the rental of space for occupancy only. The
Company intends to monitor the services and amenities provided by the
Management Company as management agent as well as by others, if any, on the
properties of the Operating Partnership. The Company intends that services
that cannot be provided directly by the Operating Partnership, the
Management Company or other agents will be performed by independent
contractors.
THE 95% TEST. In addition to deriving 75% of its gross income from
the sources listed above, at least 95% of the Company's gross income for
the taxable year must be derived from the above-described qualifying
income, or from dividends, interest, or gains from the sale or other
disposition of stock or other securities that are not dealer
17
property. Dividends and interest on any obligations not collateralized by
an interest in real property are included for purposes of the 95% test, but
not for purposes of the 75% test.
For purposes of determining whether the Company complies with the 75%
and the 95% gross income tests, gross income does not include income from
prohibited transactions. A "prohibited transaction" is a sale of dealer
property (excluding foreclosure property); however, it does not include a
sale of property if such property is held by the Company for at least four
years and certain other requirements (relating to the number of properties
sold in a year, their tax bases, and the cost of improvements made thereto)
are satisfied. See "-Taxation of the Company-General" and "-Tax Aspects of
the Company's Investments in Partnerships-Sale of the Communities and Co-
Investment Communities."
The Company believes that, for purposes of both the 75% and the 95%
gross income tests, its investment in the Communities and the Co-Investment
Communities through the Operating Partnership will in major part give rise
to qualifying income in the form of rents, and that gains on sales of the
Communities and the Co-Investment Communities, or of the Company's interest
in the Operating Partnership, generally will also constitute qualifying
income.
The Management Company receives and anticipates continuing to receive
fee income in consideration of the performance of property management and
other services with respect to properties not owned by the Company or the
Operating Partnership, Amrescon receives and anticipates continuing to
receive fee income in consideration of the performance of general
contracting and construction management services, and AIA receives and
anticipates continuing to receive fee income for providing investment
advisory services; however, substantially all income derived by the Company
from the Management Company, Amrescon and AIA will be in the form of
dividends on the preferred stock and common stock of each of the Service
Companies owned by the Operating Partnership and interest on the
Subordinated Notes. Such dividends and interest income will satisfy the
95%, but not the 75%, gross income test (as discussed above). In addition,
the Company's share of any income realized on interest rate swap or cap
agreements, including income received at the time of entering into such
agreements, generally will satisfy the 95%, but not the 75%, gross income
test. The Company intends to closely monitor its non-qualifying income and
anticipates that non-qualifying income on its other investments and
activities, including such dividend income, interest income and interest
rate swap or cap income (if any), will not result in the Company failing
either the 75% or 95% gross income test.
Even if the Company fails to satisfy one or both of the 75% or 95%
gross income tests for any taxable year, it may still qualify as a REIT for
such year if it is entitled to relief under certain provisions of the Code.
These relief provisions will generally be available if: (i) the Company's
failure to comply was due to reasonable cause and not to willful neglect;
(ii) the Company reports the nature and amount of each item of its income
included in the tests on a schedule attached to its tax return; and
(iii) any incorrect information on this schedule is not due to fraud with
intent to evade tax. If these relief provisions apply, however, the
Company will nonetheless be subject to a 100% tax on the greater of the
amount by which it fails either the 75% or 95% gross income test,
multiplied by a fraction intended to reflect the Company's profitability.
THE 30% TEST. The Company must derive less than 30% of its gross
income for each taxable year from the sale or other disposition of (i) real
property held for less than four years (other than foreclosure property and
involuntary conversions); (ii) stock or securities (including an interest
rate swap or cap agreement) held for less than one year; and (iii) property
in a prohibited transaction. The Company does not anticipate that it will
have difficulty in complying with this test. However, if extraordinary
circumstances were to occur that give rise to dispositions of Communities
or Co-Investment Communities held for less than four years (for example, on
account of the inability to obtain refinancing), the 30% test could become
an issue.
ANNUAL DISTRIBUTION REQUIREMENTS. In order to qualify as a REIT, the
Company is required to distribute dividends (other than capital gain
dividends) to its shareholders each year in an amount at least equal to
(A) the sum of (i) 95% of the Company's REIT taxable income (computed
without regard to the dividends paid deduction and the Company's net
capital gain) and (ii) 95% of the net income (after tax), if any, from
foreclosure property, minus (B) the sum of certain items of non-cash
income. Such distributions must be paid in the taxable year to which they
18
relate, or in the following taxable year if declared before the Company
timely files its tax return for such year and if paid on or before the
first regular dividend payment after such declaration. To the extent that
the Company does not distribute all of its net capital gain or distributes
at least 95%, but less than 100%, of its REIT taxable income, as adjusted,
it will be subject to tax on the undistributed amount at regular capital
gains or ordinary corporate tax rates, as the case may be.
The Company intends to make timely distributions sufficient to satisfy
the annual distribution requirements described in the first sentence of the
preceding paragraph. In this regard, the Partnership Agreement authorizes
the Company, as general partner, to take such steps as may be necessary to
cause the Operating Partnership to distribute to its partners an amount
sufficient to permit the Company to meet these distribution requirements.
It is possible that the Company may not have sufficient cash or other
liquid assets to meet the 95% distribution requirement, due to timing
differences between the actual receipt of income and actual payment of
expenses on the one hand, and the inclusion of such income and deduction of
such expenses in computing the Company's REIT taxable income on the other
hand; due to the Operating Partnership's inability to control cash
distributions with respect to any properties as to which it does not have
decision making control; or for other reasons. To avoid a problem with the
95% distribution requirement, the Company will closely monitor the
relationship between its REIT taxable income and cash flow and, if
necessary, intends to borrow funds (or cause the Operating Partnership or
other affiliates to borrow funds) in order to satisfy the distribution
requirement. However, there can be no assurance that such borrowing would
be available at such time.
If the Company fails to meet the 95% distribution requirement as a
result of an adjustment to the Company's tax return by the Service, the
Company may retroactively cure the failure by paying a "deficiency
dividend" (plus applicable penalties and interest) within a specified
period.
FAILURE TO QUALIFY. If the Company fails to qualify for taxation as a
REIT in any taxable year and the relief provisions do not apply, the
Company will be subject to tax (including any applicable alternative
minimum tax) on its taxable income at regular corporate rates.
Distributions to shareholders in any year in which the Company fails to
qualify as a REIT will not be deductible by the Company, nor generally will
they be required to be made under the Code. In such event, to the extent
of current and accumulated earnings and profits, all distributions to
shareholders will be taxable as ordinary income, and, subject to certain
limitations in the Code, corporate distributees may be eligible for the
dividends received deduction. Unless entitled to relief under specific
statutory provisions, the Company also will be disqualified from
re-electing taxation as a REIT for the four taxable years following the
year during which qualification was lost.
TAX ASPECTS OF THE COMPANY'S INVESTMENTS IN PARTNERSHIPS
GENERAL. The Company holds a partnership interest in the Operating
Partnership. See "The Company." In general, a partnership is a
"pass-through" entity which is not subject to Federal income tax. Rather,
partners are allocated their proportionate shares of the items of income,
gain, loss, deduction and credit of a partnership, and are potentially
subject to tax thereon, without regard to whether the partners receive a
distribution from the partnership. The Company will include its
proportionate share of the foregoing partnership items for purposes of the
various REIT gross income tests and in the computation of its REIT taxable
income. See "-Taxation of the Company-General" and "-Gross Income Tests."
Accordingly, any resultant increase in the Company's REIT taxable
income from its interest in the Operating Partnership (whether or not a
corresponding cash distribution is also received from the Operating
Partnership) will increase its distribution requirements (see "-Taxation of
the Company-Annual Distribution Requirements"), but will not be subject to
Federal income tax in the hands of the Company provided that an amount
equal to such income is distributed by the Company to its shareholders.
Moreover, for purposes of the REIT asset tests (see "-Taxation of the
Company-Asset Tests"), the Company will include its proportionate share of
assets held by the Operating Partnership.
ENTITY CLASSIFICATION. The Company's interest in the Operating
Partnership involves special tax considerations, including the possibility
of a challenge by the Service of the status of the Operating Partnership as
19
a partnership (as opposed to an association taxable as a corporation for
Federal income tax purposes). If the Operating Partnership were to be
treated as an association, it would be taxable as a corporation and
therefore subject to an entity-level tax on its income. In such a
situation, the character of the Company's assets and items of gross income
would change, which would preclude the Company from satisfying the REIT
asset tests and the REIT gross income tests (see "-Taxation of the Company-
Asset Tests" and "-Gross Income Tests"), which in turn would prevent the
Company from qualifying as a REIT. (See "-Taxation of the Company-Failure
to Qualify" above, for a discussion of the effect of the Company's failure
to meet such tests.)
TAX ALLOCATIONS WITH RESPECT TO THE COMMUNITIES. Pursuant to
Section 704(c) of the Code, income, gain, loss and deduction attributable
to appreciated or depreciated property that is contributed to a partnership
in exchange for an interest in the partnership (such as certain of the
Communities), must be allocated in a manner such that the contributing
partner is charged with, or benefits from, respectively, the unrealized
gain or unrealized loss associated with the property at the time of the
contribution. The amount of such unrealized gain or unrealized loss is
generally equal to the difference between the fair market value of the
contributed property at the time of contribution, and the adjusted tax
basis of such property at the time of contribution (a "Book-Tax
Difference"). Such allocations are solely for Federal income tax purposes
and do not affect the book capital accounts or other economic arrangements
among the partners. The formation of the Operating Partnership included
contributions of appreciated property (including certain Communities or
interests therein). Consequently, the Partnership Agreement requires
certain allocations to be made in a manner consistent with Section 704(c)
of the Code.
In general, certain contributors of certain of the Communities or
interests therein will be allocated lower amounts of depreciation
deductions for tax purposes and increased taxable income and gain on sale
by the Operating Partnership on the contributed assets (including certain
of the Communities). This will tend to eliminate the Book-Tax Difference
over the life of the Operating Partnership. However, the special
allocation rules of Section 704(c) do not always entirely rectify the
Book-Tax Difference on an annual basis or with respect to a specific
taxable transaction such as a sale or a deemed sale, and accordingly
variations from normal Section 704(c) principles may arise, which could
result in the allocation of additional taxable income to the Company in
excess of corresponding cash proceeds in certain circumstances.
Treasury regulations issued under Section 704(c) of the Code provide
partnerships with a choice of several methods of accounting for Book-Tax
Differences, including retention of the method under current law. The
Operating Partnership and the Company will use the remedial method for
making allocations under Section 704(c) with respect to the existing
Communities.
With respect to any property purchased by the Operating Partnership
subsequent to the admission of the Company to the Operating Partnership, in
general, such property will initially have a tax basis equal to its fair
market value and Section 704(c) of the Code will not apply.
SALE OF THE COMMUNITIES AND CO-INVESTMENT COMMUNITIES. The Company's
share of any gain realized by the Operating Partnership on the sale of any
dealer property generally will be treated as income from a prohibited
transaction that is subject to a 100% penalty tax. See "Taxation of the
Company-General" and "Gross Income Tests-The 95% Test." Under existing
law, whether property is dealer property is a question of fact that depends
on all the facts and circumstances with respect to the particular
transaction. The Operating Partnership intends to hold the Communities and
Co-Investment Communities for investment with a view to long-term
appreciation, to engage in the business of acquiring, owning, operating and
developing the Communities, Co-Investment Communities and other multifamily
residential properties, and to make such occasional sales of the
Communities, Co-Investment Communities and other properties acquired
subsequent to the date hereof as are consistent with the Company's
investment objectives. Based upon the Company's investment objectives, the
Company believes that overall the Communities and Co-Investment Communities
should not be considered dealer property and that the amount of income from
prohibited transactions, if any, will not be material.
20
TAXATION OF SHAREHOLDERS
TAXATION OF TAXABLE DOMESTIC SHAREHOLDERS. As long as the Company
qualifies as a REIT, distributions made to the Company's taxable domestic
shareholders out of current or accumulated earnings and profits (and not
designated as capital gain dividends) will be taken into account by them as
ordinary income and will not be eligible for the dividends received
deduction for corporations. Distributions that are designated as capital
gain dividends will be taxed as long-term capital gains (to the extent they
do not exceed the Company's actual net capital gain for the taxable year)
without regard to the period for which the shareholder has held its shares
of beneficial interest of the Company. However, corporate shareholders may
be required to treat up to 20% of certain capital gain dividends as
ordinary income. To the extent that the Company makes distributions in
excess of current and accumulated earnings and profits, these distributions
are treated first as a tax-free return of capital to the shareholder,
reducing the tax basis of a shareholder's shares of beneficial interest by
the amount of such excess distribution (but not below zero), with
distributions in excess of the shareholder's tax basis being taxed as
capital gains (if the shares of beneficial interest are held as a capital
asset). In addition, any dividend declared by the Company in October,
November or December of any year and payable to a shareholder of record on
a specific date in any such month shall be treated as both paid by the
Company and received by the shareholder on December 31 of such year,
provided that the dividend is actually paid by the Company during
January of the following calendar year. Shareholders may not include in
their individual income tax returns any net operating losses or capital
losses of the Company. Federal income tax rules may also require that
certain minimum tax adjustments and preferences be apportioned to Company
shareholders.
In general, any loss upon a sale or exchange of shares of beneficial
interest by a shareholder who has held such shares of beneficial interest
for six months or less (after applying certain holding period rules) will
be treated as a long-term capital loss, to the extent of distributions from
the Company required to be treated by such shareholder as long-term capital
gains.
BACKUP WITHHOLDING. The Company will report to its domestic
shareholders and to the Service the amount of dividends paid for each
calendar year, and the amount of tax withheld, if any, with respect
thereto. Under the backup withholding rules, a shareholder may be subject
to backup withholding at the rate of 31% with respect to dividends paid
unless such shareholder (i) is a corporation or comes within certain other
exempt categories and, when required, demonstrates this fact or
(ii) provides a taxpayer identification number, certifies as to no loss of
exemption from backup withholding, and otherwise complies with applicable
requirements of the backup withholding rules. A shareholder that does not
provide the Company with its correct taxpayer identification number may
also be subject to penalties imposed by the Service. Any amount paid as
backup withholding is available as a credit against the shareholder's
income tax liability. In addition, the Company may be required to withhold
a portion of capital gain distributions made to any shareholders who fail
to certify their non-foreign status to the Company. See "Certain United
States Tax Considerations for Non-U.S. Shareholders-Distributions from the
Company-Capital Gain Dividends" below.
TAXATION OF TAX-EXEMPT SHAREHOLDERS. The Service has issued a revenue
ruling in which it held that amounts distributed by a REIT to a tax-exempt
employees' pension trust do not constitute unrelated business taxable
income ("UBTI"). Subject to the discussion below regarding a "pension-held
REIT," based upon such ruling and the statutory framework of the Code,
distributions by the Company to a shareholder that is a tax-exempt entity
should not constitute UBTI, provided that the tax-exempt entity has not
financed the acquisition of its shares with "acquisition indebtedness"
within the meaning of the Code, that the shares are not otherwise used in
an unrelated trade or business of the tax-exempt entity, and that the
Company, consistent with its present intent, does not hold a residual
interest in a real estate mortgage investment conduit.
However, if any pension or other retirement trust that qualifies under
Section 401(a) of the Code ("qualified pension trust") holds more than 10%
by value of the interests in a "pension-held REIT" at any time during a
taxable year, a portion of the dividends paid to the qualified pension
trust by such REIT may constitute UBTI. For these purposes, a
"pension-held REIT" is defined as a REIT if (i) such REIT would not have
qualified as a REIT but for the provisions of the Code which look through
such a qualified pension trust in determining ownership of shares of the
REIT and (ii) at least one qualified pension trust holds more than 25% by
value of the interests of such REIT
21
or one or more qualified pension trusts (each owning more than a 10%
interest by value in the REIT) hold in the aggregate more than 50% by value
of the interests in such REIT.
DIVIDEND REINVESTMENT PLAN. Shareholders participating in the
dividend reinvestment and share purchase plan adopted by the Company will
be deemed to have received the gross amount of any cash distributions which
would have been paid by the Company to such shareholders had they not
elected to participate. These deemed distributions will be treated as
actual distributions from the Company to the participating shareholders and
will retain the character and tax effects applicable to distributions from
the Company generally. See "-Taxation of Shareholders-Taxation of Taxable
Domestic Shareholders." Participants in the dividend reinvestment and
share purchase plan are subject to Federal income tax on the amount of the
deemed distributions to the extent that such distributions represent
dividends or gains, even though they receive no cash. In addition,
participants in the dividend reinvestment and share purchase plan are
subject to Federal income tax on payment by the Company of brokerage
commissions and bank fees on their behalf. Common Shares received under
the plan will have a holding period beginning with the day after purchase,
and a tax basis equal to their cost (which is the gross amount of the
deemed distribution plus the amount of any brokerage commissions and bank
fees paid on the holder's behalf).
OTHER TAX CONSIDERATIONS
THE MANAGEMENT COMPANY, AMRESCON AND AIA; OTHER CONSIDERATIONS. A
portion of the cash to be used by the Operating Partnership to fund
distributions to partners, including the Company, is expected to come from
the Management Company, Amrescon and AIA through dividends on the common
and preferred stock of the Management Company, Amrescon and AIA held by the
Operating Partnership and from interest on the Subordinated Notes. In
addition, the Management Company, Amrescon and AIA will each receive income
from the Company, the Operating Partnership and unrelated third parties.
Because the Company, the Operating Partnership, the Management Company,
Amrescon and AIA are related through stock or partnership ownership, income
of the Management Company, Amrescon or AIA from services performed for the
Company and the Operating Partnership may be subject to certain rules under
which additional income may be allocated to the Management Company,
Amrescon or AIA. On account of such ownership relationships, the
allocation of certain expenses and reimbursements thereof among the
Company, the Management Company, the Operating Partnership, Amrescon and
AIA could be subject to additional scrutiny by the Service.
Each of the Management Company, Amrescon and AIA will pay Federal and
state income taxes at the full applicable corporate rates on its income
prior to payment of any dividends. Each of the Management Company,
Amrescon and AIA will attempt to minimize the amount of such taxes, but
there can be no assurance whether or the extent to which measures taken to
minimize taxes will be successful. To the extent that the Management
Company, Amrescon and AIA are required to pay Federal, state, or local
taxes, the cash available for distribution by the Company to shareholders
will be reduced accordingly.
In addition, to the extent that tax exempt entities and foreign
persons hold shares of beneficial interest of the Company, the interest
expense deductions of the Management Company and AIA on the Subordinated
Notes could be reduced.
POSSIBLE LEGISLATIVE OR OTHER ACTIONS AFFECTING TAX CONSEQUENCES.
Prospective shareholders should recognize that the present Federal income
tax treatment of investment in the Company may be modified by legislative,
judicial or administrative action at any time and that any such action may
affect investments and commitments previously made. The rules dealing with
Federal income taxation are constantly under review by persons involved in
the legislative process and by the Service and the Treasury Department,
resulting in revisions of regulations and revised interpretations of
established concepts as well as statutory changes. No assurance can be
given as to the form or content (including with respect to effective dates)
of any tax legislation which may be enacted. Revisions in Federal tax laws
and interpretations thereof could adversely affect the tax consequences of
investment in the Company.
STATE AND LOCAL TAXES. The Company and its shareholders may be
subject to state or local taxation, and the Company and the Operating
Partnership may be subject to state or local tax withholding requirements,
in various
22
jurisdictions, including those in which it or they transact business or
reside. The state and local tax treatment of the Company and its
shareholders may not conform to the Federal income tax consequences
discussed above. Consequently, prospective shareholders should consult
their own tax advisors regarding the effect of state and local tax laws on
an investment in shares of beneficial interest of the Company.
CERTAIN UNITED STATES TAX CONSIDERATIONS
FOR NON-U.S. SHAREHOLDERS
The following is a discussion of certain anticipated U.S. Federal
income and U.S. Federal estate tax consequences of the ownership and
disposition of shares of beneficial interest applicable to Non-U.S.
Shareholders of such shares. A "Non-U.S. Shareholder" is (i) any
individual who is neither a citizen nor resident of the United States, (ii)
any corporation or partnership other than a corporation or partnership
created or organized in the United States or under the laws of the United
States or any state thereof or under the laws of the District of Columbia
or (iii) any estate or trust that is not "resident" in the United States.
The discussion is based on current law and is for general information only.
The discussion does not address other aspects of U.S. Federal taxation
other than income and estate taxation or all aspects of U.S. Federal income
and estate taxation. The discussion does not consider any specific facts
or circumstances that may apply to a particular Non-U.S. Shareholder.
PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS
REGARDING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. INCOME, ESTATE AND
OTHER TAX CONSEQUENCES OF HOLDING AND DISPOSING OF SHARES OF BENEFICIAL
INTEREST.
DISTRIBUTIONS FROM THE COMPANY
ORDINARY DIVIDENDS. The portion of dividends received by Non-U.S.
Shareholders payable out of the Company's earnings and profits that are not
attributable to capital gains of the Company and that are not effectively
connected with a U.S. trade or business of the Non-U.S. Shareholder will be
subject to U.S. withholding tax at the rate of 30% (unless reduced by
treaty or the Non-U.S. Shareholder files an Internal Revenue Service Form
4224 with the Company certifying that the investment to which the
distribution relates is effectively connected to a United States trade or
business of such Non-U.S. Shareholder). Under certain limited
circumstances, the amount of tax withheld may be refundable, in whole or in
part, because of the tax status of certain partners or beneficiaries of
Non-U.S. Shareholders that are either foreign partnerships or foreign
estates or trusts. In general, Non-U.S. Shareholders will not be
considered engaged in a U.S. trade or business solely as a result of their
ownership of shares of beneficial interest. In cases where the dividend
income from a Non-U.S. Shareholder's investment in shares of beneficial
interest is (or is treated as) effectively connected with the Non-U.S.
Shareholder's conduct of a U.S. trade or business, the Non-U.S. Shareholder
generally will be subject to U.S. tax at graduated rates, in the same
manner as U.S. shareholders are taxed with respect to such dividends (and
may also be subject to the 30% branch profits tax (unless reduced by
treaty) in the case of a Non-U.S. Shareholder that is a foreign
corporation).
Under currently applicable Treasury regulations, withholding agents
are required to determine the applicable withholding rate pursuant to the
appropriate tax treaty, and withhold the appropriate amount. Treasury
regulations proposed in 1996, which have not been adopted, and are,
therefore, not currently effective, would, if and when they become
effective, require Non-U.S. Shareholders to file a form W-8 to obtain the
benefit of any applicable tax treaty providing for a lower rate of
withholding tax on dividends paid after December 31, 1997. Such form would
require a representation by the holder as to foreign status, the holder's
name and permanent residence address, the basis for a reduced withholding
rate (e.g., the relevant tax treaty) and other pertinent information, to be
certified by such holder under penalties of perjury. Such information is
subject to being reported to the Internal Revenue Service. A permanent
resident address for this purpose generally is the address in the country
where the person claims to be a resident for the purpose of the country's
income tax. If the beneficial holder is a corporation, then the address is
where the corporation maintains its principal office in its country of
incorporation.
CAPITAL GAIN DIVIDENDS. Under the Foreign Investment in Real Property
Tax Act of 1980 ("FIRPTA"), any distribution made by the Company to a Non-
U.S. Shareholder, to the extent attributable to gains from
23
dispositions of United States Real Property Interests ("USRPIs") by the
Company ("USRPI Capital Gains"), will be considered effectively connected
with a U.S. trade or business of the Non-U.S. Shareholder and subject to
U.S. income tax at the rates applicable to U.S. individuals or
corporations, without regard to whether such distribution is designated as
a capital gain dividend. In addition, the Company will be required to
withhold tax equal to 35% of the amount of such distribution to the extent
it constitutes USRPI Capital Gains. Such distribution may also be subject
to the 30% branch profits tax (unless reduced by treaty) in the case of a
Non-U.S. Shareholder that is a foreign corporation.
NON-DIVIDEND DISTRIBUTIONS. Any distributions by the Company that
exceed both current and accumulated earnings and profits of the Company
will not be taxed as either ordinary dividends or capital gain dividends.
See "Federal Income Tax Considerations - Taxation of Shareholders -
Taxation of Taxable Domestic Shareholders." However, if it cannot be
determined at the time a distribution is made whether or not such
distribution will be in excess of current and accumulated earnings and
profits, the distribution will be subject to withholding. Should this
occur, the Non-U.S. Shareholder may seek a refund of over withholding from
the Service once it is subsequently determined that such distribution was,
in fact, in excess of current and accumulated earnings and profits of the
Company.
DISPOSITIONS OF SHARES OF BENEFICIAL INTEREST
Unless the shares of beneficial interest constitute USRPIs, a sale or
exchange of shares of beneficial interest by a Non-U.S. Shareholder
generally will not be subject to U.S. taxation under FIRPTA. The shares of
beneficial interest will not constitute USRPIs if the Company is a
"domestically controlled REIT." A domestically controlled REIT is a REIT
in which, at all times during a specified testing period, less than 50% in
value of its shares is held directly or indirectly by Non-U.S.
Shareholders. It is currently anticipated that the Company will be a
domestically controlled REIT and, therefore, that the sale of shares of
beneficial interest will not be subject to taxation under FIRPTA. No
assurance can be given that the Company will continue to be a domestically
controlled REIT.
If the Company does not constitute a domestically controlled REIT, a
Non-U.S. Shareholder's sale or exchange of shares of beneficial interest
generally will still not be subject to tax under FIRPTA as a sale of USRPIs
provided that (i) the Company's shares of beneficial interest are
"regularly traded" (as defined by applicable Treasury regulations) on an
established securities market (e.g., the NYSE, on which the Common Shares
are listed) and (ii) the selling Non-U.S. Shareholder held 5% or less of
the Company's outstanding shares of beneficial interest at all times during
a specified testing period.
If gain on the sale or exchange of shares of beneficial interest were
subject to taxation under FIRPTA, the Non-U.S. Shareholder would be subject
to U.S. income tax at the rates applicable to U.S. individuals or
corporations, and the purchaser of shares of beneficial interest could be
required to withhold 10% of the purchase price and remit such amount to the
Service. The branch profits tax would not apply to such sales or
exchanges.
Capital gains not subject to FIRPTA will nonetheless be taxable in the
United States to a Non-U.S. Shareholder in two cases: (i) if the Non-U.S.
Shareholder's investment in shares of beneficial interest is effectively
connected with a U.S. trade or business conducted by such Non-U.S.
Shareholder, the Non-U.S. Shareholder will be subject to the same treatment
as U.S. shareholders with respect to such gain or (ii) if the Non-U.S.
Shareholder is a nonresident alien individual who was present in the United
States for 183 days or more during the taxable year and has a "tax home" in
the United States, the nonresident alien individual will be subject to 30%
tax on the individual's capital gain (unless reduced or eliminated by
treaty).
FEDERAL ESTATE TAX
Shares of beneficial interest owned or treated as owned by an
individual who is not a citizen or "resident" (as specifically defined for
U.S. Federal estate tax purposes) of the United States at the time of death
will be includable in the individual's gross estate for U.S. Federal estate
tax purposes, unless an applicable estate tax treaty provides otherwise.
Such individual's estate may be subject to U.S. Federal estate tax on the
property includable in the estate for U.S. Federal estate tax purposes.
24
INFORMATION REPORTING AND BACKUP WITHHOLDING
The Company must report annually to the Service and to each Non-U.S.
Shareholder the amount of dividends (including any capital gain dividends)
paid to, and the tax withheld with respect to, each Non-U.S. Shareholder.
These reporting requirements apply regardless of whether withholding was
reduced or eliminated by an applicable tax treaty. Copies of these returns
may also be made available under the provisions of a specific treaty or
agreement with the tax authorities in the country in which the Non-U.S.
Shareholder resides.
U.S. backup withholding (which generally is imposed at the rate of 31%
on certain payments to persons that fail to furnish the information
required under the U.S. information reporting requirements) and information
reporting will generally not apply to dividends (including any capital gain
dividends) paid on shares of beneficial interest to a Non-U.S. Shareholder
at an address outside the United States. The proposed Treasury regulations
referred to under "Distributions from the Company-Ordinary Dividends," in
general, would similarly require a Non-U.S. Shareholder to provide the form
W-8 for dividends paid after December 31, 1997 to be exempt from backup
withholding and information reporting.
The payment of the proceeds from the disposition of shares of
beneficial interest to or through a U.S. office of a broker will be subject
to information reporting and backup withholding unless the owner, under
penalties of perjury, certifies, among other things, its status as a Non-
U.S. Shareholder, or otherwise establishes an exemption. The payment of
the proceeds from the disposition of shares of beneficial interest to or
through a non-U.S. office of a non-U.S. broker generally will not be
subject to backup withholding and information reporting, except as noted
below. In the case of a payment of proceeds from the disposition of shares
of beneficial interest to or through a non-U.S. office of a broker which is
(i) a U.S. person, (ii) a "controlled foreign corporation" for U.S. Federal
income tax purposes or (iii) a foreign person 50% or more of whose gross
income for certain periods is derived from a U.S. trade or business,
information reporting (but not backup withholding) will apply unless the
broker has documentary evidence in its files that the holder is a Non-U.S.
Shareholder (and the broker has no actual knowledge to the contrary) and
certain other conditions are met, or the holder otherwise establishes an
exemption. Under proposed Treasury regulations, a payment of the proceeds
from the disposition of shares of beneficial interest to or through such
broker will be subject to backup withholding if such broker has actual
knowledge that the holder is a U.S. person.
Backup withholding is not an additional tax. Any amounts withheld
under the backup withholding rules will be refunded or credited against the
Non-U.S. Shareholder's U.S. Federal income tax liability, provided that
required information is furnished to the Service.
These backup withholding and information reporting rules are currently
under review by the Treasury Department, and their application to shares of
beneficial interest is subject to change.
PLAN OF DISTRIBUTION
The Selling Shareholder may from time to time offer and sell the
Shares on the NYSE or otherwise at market prices then prevailing or at
prices and upon terms then obtainable. Sales may be made in ordinary
brokerage transactions, in block transactions, in privately negotiated
transactions, pursuant to Rule 144 or otherwise. If the Shares are sold
through brokers, the Selling Shareholder expects to pay customary brokerage
commissions and charges. The Shares are being registered to permit public
secondary trading of the Shares from time to time after the date of this
Prospectus. The Company will bear all expenses (other than selling
commissions, underwriting discounts and fees and expenses of counsel to the
Selling Shareholder) to the Selling Shareholder in connection with the
registration and sale of the Shares. The Company is registering the Shares
as required by the agreements between the Company, the Operating
Partnership and the Selling Shareholder, which agreements are filed as an
exhibit to the Registration Statement of which this Prospectus is a part.
The Selling Shareholder and any dealer, broker or other agent selling
securities offered hereby for the Selling Shareholder or purchasing any
such securities from the Selling Shareholder for purposes of resale may be
25
deemed to be an underwriter under the Securities Act and any compensation
received by the Selling Shareholder, dealer, broker or other agent may be
deemed underwriting compensation. The amount of such compensation cannot
currently be estimated. The Company knows of no existing arrangements
between the Selling Shareholder and any other dealer, broker or other
agent.
To comply with certain states' securities laws, if applicable, the
Shares offered hereby may be sold in such states only through brokers or
dealers. In addition, in certain states the Shares may not be sold unless
they have been registered or qualified for sale in such state or an
exemption from registration or qualification is available and is complied
with.
EXPERTS
The consolidated financial statements and schedule of Amli Residential
Properties Trust as of December 31, 1995 and 1994, and for each of the
years in the three-year period ended December 31, 1995, have been
incorporated by reference herein and in the Registration Statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, which report is incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing. To
the extent that KPMG Peat Marwick LLP audits and reports on financial
statements of Amli Residential Properties Trust issued at future dates, and
consents to the use of their report thereon, such financial statements also
will be incorporated by reference in the Registration Statement in reliance
upon their report and said authority.
LEGAL MATTERS
Certain legal matters relating to the validity of the Offered
Securities offered pursuant to this Prospectus will be passed upon for the
Company by Mayer, Brown & Platt. Mayer, Brown & Platt has in the past
represented and is currently representing the Company and certain of its
affiliates.
26
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection
with the issuance and distribution of the securities registered hereby, all
of which will be paid by the Registrant:
SEC registration fee . . . . . . . . . $ 1,008
Printing and duplicating expenses. . . 1,000
Legal fees and expenses. . . . . . . . 20,000
Accounting fees and expenses . . . . . 1,500
Miscellaneous expenses . . . . . . . . 1,492
-------
Total. . . . . . . $25,000
=======
ITEM 15. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
The Registrant's officers and Trustees are and will be indemnified
under the Declaration of Trust and Bylaws of the Registrant, and the
Partnership Agreement of the Operating Partnership against certain
liabilities. The Declaration of Trust requires the Registrant to indemnify
its Trustees and officers, among others, against claims and liabilities and
reasonable expenses actually incurred by them in connection with any claim
or liability by reason of their services in those or other capacities
unless it is established that the act or omission of the Trustee or officer
was material to the matter giving rise to the proceeding and was committed
in bad faith or was the result of active and deliberate dishonesty, or the
Trustee or officer actually received an improper personal benefit, or, in
the case of any criminal proceeding, the Trustee or officer had reasonable
cause to believe that the act or omission was unlawful.
As permitted by Maryland Law, the Declaration of Trust provides that a
Trustee or officer of the Registrant shall not be liable for monetary
damages to the Registrant or its shareholders for any act or omission in
the performance of his duties, except to the extent that (1) the person
actually received an improper benefit or (2) the person's action or failure
to act was the result of active and deliberate dishonesty and was material
to the cause of action adjudicated.
The Partnership Agreement of the Operating Partnership also provides
for indemnification of the Registrant and its officers and Trustees to the
same extent indemnification is provided to officers and Trustees of the
Registrant in its Declaration of Trust, and limits the liability of the
Registrant to the Operating Partnership and its partners to the same extent
the liability of the officers and Trustees of the Registrant to the
Registrant and its shareholders is limited under the Registrant's
Declaration of Trust.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
See Exhibit Index included herewith which is incorporated herein by
reference.
II-1
ITEM 17. UNDERTAKINGS.
The undersigned registrant 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 of 1933;
(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)(i) and (a)(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 with
or furnished to the Commission by the Registrant pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial BONA FIDE offering thereof.
(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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the Registrant's annual report pursuant to Section 13(a) or Section 15(d)
of the Securities Exchange Act of 1934 that is incorporated by reference in
the Registration Statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial BONA FIDE
offering thereof.
The undersigned Registrant hereby undertakes to supplement the
applicable prospectus supplement, after the expiration of the subscription
period, to set forth the results of the subscription offer, the
transactions by the underwriters during the subscription period, the amount
of unsubscribed securities to be purchased by the underwriters, and the
terms of any subsequent reoffering thereof. If any public offering by the
underwriters is to be made on terms differing from those set forth on the
cover page of the applicable prospectus supplement, a post-effective
amendment will be filed to set forth the terms of such offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to Trustees, officers and
controlling persons of the Registrant pursuant to the provisions set forth
or described in Item 15 of this Registration Statement, or otherwise, the
Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act of 1933 and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
Trustee, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such Trustee,
officer or
II-2
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Company certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Post-Effective Amendment to the Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the
City of Chicago, State of Illinois on August 20, 1996.
AMLI RESIDENTIAL PROPERTIES TRUST
By: /s/ JOHN E. ALLEN
John E. Allen
Its: Vice Chairman
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been
signed by the following persons in the capacities indicated on
August 20, 1996.
NAME TITLE
/s/ GREGORY T. MUTZ * Chairman of the Board of Trustee
Gregory T. Mutz (Principal Executive Officer)
/s/ JOHN E. ALLEN Vice-Chairman of the Board of Trustees
John E. Allen (Principal Financial Officer)
/s/ ALLAN J. SWEET * Trustee and President
Allan J. Sweet
/s/ CHARLES C. KRAFT * Treasurer
Charles C. Kraft (Principal Accounting Officer)
/s/ LAURA D. GATES * Trustee
Laura D. Gates
/s/ MARC S. HEILWEIL * Trustee
Marc S. Heilweil
/s/ STEPHEN G. McCONAHEY * Trustee
Stephen G. McConahey
/s/ QUINTIN E. PRIMO III * Trustee
Quintin E. Primo III
/s/ JOHN G. SCHREIBER * Trustee
John G. Schreiber
/s/ PHILIP N. TAGUE * Trustee
Philip N. Tague
*By: /s/ JOHN E. ALLEN
John E. Allen, by power of attorney
II-4
INDEX TO EXHIBITS
EXHIBIT
NUMBER DOCUMENT DESCRIPTION
4.1 Amended and Restated Declaration of Trust of the Registrant
(Incorporated by reference to exhibit 3.1 to Registration Statement No. 33-
71566).
4.2 Amended and Restated By-laws of the Registrant (Incorporated by
reference to exhibit 3.2 to Registration Statement No. 33-71566).
4.3 Amended and Restated Agreement of Limited Partnership of Amli
Residential Properties, L.P. (Incorporated by reference to exhibit 10.1 to
the Registrant's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1994).
4.3(a) First Amendment to the Amended and Restated Agreement of
Limited Partnership of Amli Residential Properties, L.P. (Incorporated by
reference to exhibit 10.1(a) to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995).
4.3(b) Second Amendment to the Amended and Restated Agreement of
Limited Partnership of Amli Residential Properties, L.P. (Incorporated by
reference to exhibit 10.1(b) to the Registrant's Annual Report on Form 10-K
for the year ended December 31, 1995).
4.4 Form of Common Share Certificate (Incorporated by reference to
exhibit 4.1 to Registration Statement No. 33-71566).
4.5 Articles Supplementary to the Amended and Restated Declaration
of Trust of the Registrant Classifying Unissued Shares of Beneficial
Interest in the Registrant as Series A Cumulative Convertible Preferred
Shares of Beneficial Interest (Incorporated by reference to exhibit 4.9 to
the Registrant's Current Report on Form 8-K dated January 30, 1996).
4.6 Form of Series A Preferred Share Certificate (Incorporated by
reference to exhibit 4.5 to the Registrant's Current Report on Form 8-K
dated January 18, 1996).
* 5.1 Opinion of Mayer, Brown & Platt.
*</R) 8.1 Tax Opinion of Mayer, Brown & Platt.
23.1 Consent of KPMG Peat Marwick LLP.
23.2 Consent of Mayer, Brown & Platt (Included in the opinions filed
as Exhibits 5.1 and 8.1 to this Registration Statement).
* 24.1 Power of Attorney .
* 99.1 (i) Side Agreement, dated as of May 3, 1996, between the
Registrant, Amli Residential Properties, L.P. and Peachtree City
Multifamily Partners, L.P., (ii) Two Letter Agreements, dated May 3, 1996,
between the Registrant and Peachtree City Multifamily Partners, L.P. (iii)
Letter Agreement, dated May 3, 1996, between Amli Residential Properties,
L.P. and Peachtree City Multifamily Partners, L.P.
* Previously filed.
II-5
EXHIBIT 23.1
ACCOUNTANTS' CONSENT
The Board of Trustees and Shareholders
Amli Residential Properties Trust:
We consent to the use of our report on the consolidated financial
statements and schedule of Amli Residential Properties Trust as of December
31, 1995 and 1994, and for each of the years in the three-year period ended
December 31, 1995, incorporated by reference herein and to the reference to
our Firm under the heading "EXPERTS".
KPMG PEAT MARWICK LLP
KPMG Peat Marwick LLP
Chicago, Illinois
August 19, 1996
