As filed with the Securities and Exchange Commission
on October 16, 2006
Registration No. 333-136107
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3 DPO
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
UNITED MORTGAGE TRUST
(Exact Name of Registrant as Specified
in its Governing Instruments)
1702 N Collins Blvd.,
Suite 100
Richardson, Texas 75080
(214) 237-9305
(address and telephone number of Registrant's
Principal Executive offices)
Christine A. Griffin
United Mortgage Trust
1702 N Collins Blvd.
Suite 100
Richardson, Texas 75080
(Name and Address of Agent for Service)
Copy to:
Robert A. Hudson, Esq.
Butzel Long
150 West Jefferson
Suite 100
Detroit, Michigan 48226
(313) 225-7000
Approximate date of commencement of proposed sale to the public: from time
to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [x]
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. [ ]
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 offer.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] __________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
- -----------------------------------------------------------------------
Calculation of Registration Fee
Title of Proposed
each class Proposed maximum
of securities Amount maximum aggregate Amount of
to be to be price offering registration
registered registered per share price (1) fee
- ------------- ---------- --------- ----------- -----------
Shares of
Beneficial
Interest 1,000,000 $20.00 $20,000,000 $10,700.00
Total Fee $10,700.00(2)
- ----------------------------------------------------------------------
(1)Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(d).
(2) Previously paid.
<Page>
PROSPECTUS
UNITED MORTGAGE TRUST
DIVIDEND REINVESTMENT PLAN
and
SHARE REPURCHASE PLAN
Through this prospectus, we are offering to existing holders of our shares
of beneficial interest participation in our Dividend Reinvestment Plan
(which we also sometimes refer to as the "Plan") and in our Share
Repurchase Plan (which we also sometimes refer to as the "SRP"). The Plan
provides investors with a convenient way to build their investment in our
company by investing cash dividends in additional shares. In addition, the
SRP provides limited liquidity for our shareholders with respect to shares
owned by them.
IF YOU ARE ALREADY A PARTICIPANT IN THE PLAN,
YOU DO NOT NEED TO TAKE ANY FURTHER ACTION.
YOU WILL BE BOUND BY THE REVISED PLAN
PROVISIONS CONTAINED IN THIS PROSPECTUS.
PLAN HIGHLIGHTS
You may elect to have the cash dividends you receive reinvested
in additional shares at a price of $20 per share.
You will not be charged a commission or other fee in connection
with purchases under the Plan.
Participation in the Plan is voluntary. You can end your
participation in the Plan at any time without any penalty.
You may elect to participate in the Plan by completing the enrollment form
at the back of this prospectus and submitting it to us. Participation in
the Plan will begin with the next dividend after receipt of your written
notice. We may amend or terminate the Plan for any reason at any time upon
30 days' written notice to participants. Your participation in the Plan
will also be terminated to the extent that a reinvestment of your dividends
in our shares would cause the percentage ownership limitation contained in
our Declaration of Trust to be exceeded.
The Plan has a number of restrictions and conditions and an investment in
our shares involves certain risks. Therefore, you should read this
prospectus and the documents incorporated by reference in this prospectus
carefully.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES ISSUED UNDER THE
PLAN OR HAVE DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with
the Securities and Exchange Commission is effective. This prospectus is not
an offer to sell these securities and it is not soliciting an offer to buy
these securities in any state where the offer or sale is not permitted.
Subject to completion dated October 16, 2006.
<Page>
Forward-Looking Statements
This prospectus contains or incorporates by reference certain "forward-
looking" statements within the meaning of Section 27A of the Securities Act
of 1933, as amended (the "Securities Act") and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") that are
based on our current expectations, estimates and projections. Pursuant to
those sections, we may obtain a "safe harbor" for forward-looking
statements by identifying those statements and by accompanying those
statements with cautionary statements, which identify factors that could
cause actual results to differ from those expressed in the forward-looking
statements. Statements that are not historical facts, including statements
about our beliefs and expectations, are forward-looking statements. Such
forward-looking statements may be identified by the words "anticipate,"
"believe," "estimate," "expect" or "intend" and similar expressions.
Forward looking statements are likely to address such matters as our
business strategy, future operating results, future sources of funding for
mortgage loans brokered by us, future economic conditions and litigation
against us. Such statements are not guarantees of future performance,
events or results and involve potential risks and uncertainties.
Accordingly, our actual results may differ from our current expectations,
estimates and projections. We do not undertake, and specifically disclaim
any obligation, to publicly release the result of any revisions which may
be made to any forward-looking statements to reflect the occurrence of
anticipated or unanticipated events or circumstances after the date of such
statements.
About United Mortgage Trust
United Mortgage Trust (which we refer to in this prospectus as "we,",
"us", "our" and the "Company") is a Maryland real estate investment trust
formed on July 12, 1996. We acquire mortgage investments from several
sources, including from affiliates of our Advisor. The amount of mortgage
investments to be acquired from such sources depends upon the mortgage
investments that are available from them or from other sources at the time
we have funds to invest. We believe that all mortgage investments purchased
from affiliates of the Advisor are at prices no higher than those that would
be paid to unaffiliated third parties for mortgages with comparable terms,
rates, credit risks and seasoning.
We invest exclusively in: (1) loans of 12 months or less in term, made
to investors, for the construction, purchase, renovation, and sale of
single-family homes (we refer to those investments as "interim mortgages");
and (2) secured loans under a line of credit to United Development Funding,
L.P. and United Development Funding II, L.P., both of which are Nevada
limited partnerships and affiliates of our Advisor ( we refer in this
prospectus to both entities collectively as "UDF"). UDF (a) originates and
acquires loans for the acquisition and development of single-family home
lots, (we refer to those loans as "land development loans"), and (b) enters
into participation agreements with single-family home residential real
estate developers under which UDF receives a portion of the gain, if any,
upon the sale of lots to home builders (we refer to those participation
agreements as "equity participations"). We purchase both of the types of
investments described above (other than the line of credit to UDF) and loan
funds to operating companies that originate such investments and pledge
them to us as collateral. As a result, references to the loans in our
portfolio include both loans purchased by us and loans in which we have a
security interest.
Our shares are not listed for trading on any national securities
exchange or over-the-counter market and therefore presently there is no
public market for our shares.
About Our Dividend Reinvestment Plan
Administrator
The Plan is administered by Continental Stock Transfer and Trust
Company ("Plan Administrator"). If you have any questions about the Plan,
please contact us at: United Mortgage Trust, 1702 N Collins Blvd, Suite
100, Richardson Texas 75080, Attn.: Lauren Dyess; telephone: (800) 955-
7917 x 160; email: ldyess@umth.com.
Enrollment
If you own our shares, you may participate in the Plan by completing
and submitting the enrollment form at the back of this prospectus.
IF YOU ARE ALREADY A PARTICIPANT IN THE PLAN, YOU DO NOT NEED TO TAKE ANY
FURTHER ACTION.
Reinvestment of Dividends
You may elect to have all or a stated amount of shares enrolled in the
Plan to purchase additional shares.
Purchase Price of Shares
The purchase price of shares under the Plan is $20 per share. We have
based this price on our estimate of their current market value. There is
no trading market in our shares that would allow you separately to
determine their value.
Brokerage Commissions
You will not be charged a brokerage commission, service fee or other
charge in connection with your purchases.
Limit on Share Ownership
For us to continue to qualify as a REIT under the Internal Revenue
Code, not more than 50% of our outstanding shares may be owned by five or
fewer individuals during the last half of the year, and the shares must be
owned by 100 or more persons during at least 335 days of a taxable year of
12 months or during a proportionate part of a shorter taxable year. In
order to prevent five or fewer individuals from acquiring more than 50% of
our outstanding shares, and our resulting failure to qualify as a REIT, we
will limit purchases of shares under the Plan.
Fractional Shares
Your dividends may be reinvested in whole or partial shares (computed
to four decimal places) depending upon the amount of each dividend
reinvestment.
Termination of Your Participation in the Plan
You may terminate your participation in the Plan at any time by
writing to us. There is no penalty for termination of participation.
Tax Considerations
You will incur a tax liability on dividends that are reinvested to
the same extent as if you received the cash. Please see the more detailed
discussion under the answer to Question 13 in this prospectus.
Amendment or Termination of the Plan
Our Trustees may amend or terminate the Plan at any time upon 30
days' written notice to you.
Resale of Shares
There is no established public market for our shares, so you may not
be able to resell your shares except through our Share Repurchase Plan.
That Plan has a number of limitations and restrictions and is subject to
modification or termination at any time.
DESCRIPTION OF THE PLAN
The United Mortgage Trust Amended and Restated Dividend Reinvestment
Plan consists entirely of the questions and answers appearing below. The
Amended and Restated Plan ("Plan") was adopted by our Trustees on June 13,
2006.
1. Q: What is the purpose of the Plan?
A: The Plan is intended to provide our existing shareholders with
a simple and efficient way to build their investment in our company by
reinvesting their dividends in additional purchases of our shares. In
addition, the Plan provides us with additional invested funds that we
may use to purchase additional mortgage investments or to use for
operating expenses and working capital.
2. Q: Who is eligible to participate in the Plan?
A: You may participate in the Plan if you qualify as either of the
following:
- - you are a "record owner," meaning a person who owns shares in
his or her name, or
- - you are a "beneficial owner," meaning a person who owns
shares in a name other than his or her name (for example, in
the name of a broker, bank or other nominee).
Record owners may participate in the Plan directly. If you are
not a record owner, you must either become a record owner by having
your shares transferred into your own name, or you must make
arrangements with your broker, bank or other nominee to participate
in the Plan on your behalf. Most major brokers, banks and other
nominees will make such arrangements on your request. See Question 4
for a discussion of the Plan's enrollment procedure.
We may terminate, by written notice, at any time, your
participation in the Plan if your participation would or could be in
violation of the restrictions contained in our Declaration of Trust.
Those restrictions prohibit any person or group of persons from
acquiring or holding, directly or indirectly, "Excess Shares,"
meaning ownership of shares in excess of 9.8% of our outstanding
shares. The meanings given to the terms "group" and "beneficial
ownership" may cause a person who individually owns less than 9.8% of
the shares outstanding to be deemed to be holding shares in excess of
that limitation.
In the event that at any time you obtain Excess Shares, the
following procedures will apply. Excess Shares shall be deemed to
have been offered for sale to us for a period of 120 days from the
date of (i) the transfer that created the Excess Shares, if we had
actual knowledge of the transfer, or (ii) if we do not know of the
transfer, the determination by the Trustees that a transfer creating
Excess Shares has taken place. The price for such Excess Shares
shall be their fair market value as of the date of either (i) or (ii)
above. After we give notice of our intention to purchase the Excess
Shares, those shares shall have no further rights (beyond the right
of the shareholder to receive payment therefore). In the event we
determine not to purchase the Excess Shares, those shares shall have
no further rights until they are held by a shareholder owning 9.8% or
less of our outstanding shares.
3. Q: What are the advantages and disadvantages of participation in
the Plan?
A: ADVANTAGES OF THE PLAN INCLUDE:
Automatic investment of dividends without the payment of any
brokerage commissions or service charges.
Choice of full reinvestment or partial reinvestment based on a
specified dollar or percentage amount.
The ability to obtain fractional shares, as well as full shares,
allowing the entire dividend to be reinvested.
Share dividends are automatically reinvested in additional shares.
Share certificates are held for you or, at your option, sent to you.
Regular statements showing the reinvestment of dividends made in your
account.
You may discontinue your participation at any time.
DISADVANTAGES OF THE PLAN INCLUDE:
No interest paid on dividends held pending investment.
Taxation on dividends that are reinvested even though no cash paid to
the participant.
We have the right to suspend or terminate the Plan at any time upon
notice to you or if required to comply with legal or regulatory
requirements applicable to us.
The same risks associated with the ownership of our shares of
beneficial interest will apply to additional shares purchased through
the Plan.
4. Q: How can I participate in the Plan?
A: IF YOU ARE ALREADY A PARTICIPANT IN THE PLAN, YOU NEED DO
NOTHING. We will continue to reinvest your dividends in accordance
with the instructions you have previously given to us and you will be
governed by the plan provisions that are contained in this
prospectus.
If you are not presently a participant and wish to participate,
please follow these instructions:
Record Owners
Please complete the enrollment form at the back of this
prospectus and return it to us at:
United Mortgage Trust
1702 N Collins Blvd.
Suite 100
Richardson Texas 75206
Attn: Shareholder Relations
You may also obtain additional enrollment forms at any time by
writing to us at the above address or by calling us at: (800) 955-
7917 x160.
Beneficial Owners
Please instruct your bank, broker or other nominee to make
arrangements to participate in the Plan on your behalf. Most such
nominees will make such arrangements by contacting the securities
depository holding your shares and then the securities depository
will provide us with the information necessary to permit
participation in the Plan.
Alternatively, you can transfer shares back into your own name
and then follow the procedure above for Record Owners.
5. Q: What are my choices for participation in the Plan?
A: By indicating your preference in the appropriate location on
the enrollment form, you may elect to
Enroll all of your shares in the Plan, or
Enroll a specific number of your shares in the Plan.
In each case, we will reinvest the amount of dividends you have
specified together with the dividends on the additional shares you
purchase through the Plan, in our shares at a price of $20 per share,
until you discontinue your participation in the Plan or until we
suspend or terminate the Plan. If you prefer that the dividends on
the additional shares you purchase through the Plan be paid to you in
cash, please so notify us in writing.
You may change your investment options at any time by
completing a new enrollment form and sending it to us.
IF YOU DO NOT SPECIFY ON YOUR ENROLLMENT FORM THE AMOUNT OF
YOUR DIVIDEND THAT YOU WANT REINVESTED, WE WILL ASSUME THAT YOU WANT
US TO REINVEST YOUR ENTIRE DIVIDEND.
6. Q: When can I begin my participation in the Plan?
A: At any time. We will begin reinvesting your dividends in
the Plan starting with the first dividend after we have received and
processed your enrollment form. We will process your enrollment
forms immediately however if we receive them after the 15th of the
month. Your first scheduled reinvestment will occur at the end of the
following month.
7. Q: What is the price of the shares purchased through the Plan?
A: $20 per share. There is no established trading market
for our shares. Our Trustees have established the $20 price based on
their business judgment regarding the value of the shares with
reference to our book value, our operations to date and general
market and economic conditions. We may change the selling price at
our discretion. The selling price of $20 may not be indicative of
the value at which the shares would trade if listed on an organized
exchange or the amount a shareholder would received if we liquidated
or dissolved.
If we list our shares on a national stock exchange or include
them for quotation on a national market system, we will, at our
option, either purchase shares for you under the Plan on the exchange
or market at the prevailing market price on the record date for
dividend or issue the shares to you directly from our authorized but
unissued shares. We cannot assure that the price we pay for the
shares will be the lowest possible price available.
8. Q: How many shares will I receive for my reinvested dividends?
A: We will take the amount of the dividend that you have specified
and will divide it by $20 to determine the number of shares that will
be registered on your behalf. We will issue partial or "fractional"
shares, computed to four decimal places, so that the full amount of
the dividend specified will be invested.
If at any time reinvestment would cause you to acquire Excess Shares,
we will suspend your participation in the Plan. See Question 2 above
for more information about Excess Shares.
9. Q: When will shares be purchased under the Plan?
A: We will purchase shares for you under the Plan on the record
date for the dividend used to purchase the shares. We pay dividends
monthly.
10. Q: Will I receive share certificates?
A: No. We will hold shares purchased for you. No certificates
will be issued to you for shares in the Plan unless you submit a
written request to us or until participation in the Plan is
terminated. At any time, you may request that we send you a
certificate for some or all of the whole shares credited to your
account. You should mail such request to us at the address set forth
in the answer to Question 4. Any remaining whole shares and any
fractions of shares will remain credited to your Plan account. We
will not issue certificates for fractional shares.
11. Q: Will I have to pay any commissions or other costs?
A: No. You will not be charged a brokerage commission, service
fee or other charge in connection with your purchases.
12. Q: What kind of information will I receive about my purchases
under the Plan?
A: Continental Stock Transfer & Trust Company will send a
monthly statement to the shareholder of record. Beneficial owners
will receive a copy of that statement sent by our shareholder
relations department.
13: Q: What are the tax consequences to me from my participation in
the Plan?
A: Dividends we pay to our shareholders are taxable to
shareholders who are not tax-exempt entities as ordinary income to
the extent of our current or accumulated earnings and profits. Those
dividends will not be eligible for the maximum federal income tax
rate of 15% that is generally available for dividends paid by
corporations that are not qualified as a REIT. Dividends we pay
which we designate as capital gains dividends will be taxed as long-
term capital gains to taxable shareholders to the extent that they do
not exceed our actual net capital gain for the taxable year.
Dividends paid to corporate shareholder will not be eligible for the
corporate dividends-received deduction for federal income tax
purposes.
Dividends we pay to shareholders which are not designated as
capital gains dividends and which are in excess of our current or
accumulated earnings and profits are treated as a return of capital
to the shareholders and reduce the tax basis of a shareholder's
shares (but not below zero). Any such dividend in excess of the tax
basis is taxable to any such shareholder that is not a tax-exempt
entity as a gain realized from the sale of the shares.
The initial tax basis of shares purchased under the Plan will
equal the amount treated as a dividend. The holding period of
acquired shares generally begins on the day after the dividend
payment date and the holding period of whole shares resulting from
the purchase of two or more fractional shares on different dividend
payment dates normally will be split between the holding periods of
the fractional components comprising the whole share.
The foregoing tax consequences will be applicable to the
dividends that are reinvested for you under the Plan even though you
will not receive any cash.
Based on various assumptions and factual representations that
we have made regarding our operations, in the opinion of Butzel Long,
our counsel, commencing with our taxable year ended December 31,
1997, we have been organized in conformity with the requirements for
qualification as a REIT under the Internal Revenue Code of 1986, as
amended (the "Code")and, we believe, our method of operating will
continue to enable us to meet the requirements for qualification and
taxation as a REIT. Our qualification as a REIT depends upon our
ability to meet the various requirements imposed under the Code
through actual operations. Our counsel will not review our
operations, and we cannot give any assurance that actual operations
will meet these requirements. The opinion of our counsel is based
upon existing law, U.S. Department of Treasury regulations, currently
published administrative positions of the IRS and judicial decisions,
all of which are subject to change either prospectively or
retroactively. The opinion of our counsel is not binding on the IRS
or any court.
The above discussion is intended only as a general discussion
of the current federal income tax consequences of participating in
the Plan. It does not address all potentially relevant federal income
tax matters and we have not requested a ruling from the Internal
Revenue Service regarding the Plan. Since each shareholder's
financial situation is different, you should consult your individual
tax advisor concerning any tax questions you may have about Plan
participation.
14. Q: Can I terminate my participation in the Plan?
A: Yes. You may terminate your participation in the Plan at any
time by sending us a written notice. If we receive your notice after
a dividend record date, the termination will become effective after
the dividend is paid and we will apply that dividend to your Plan
account.
Following termination of your participation we will send you a
certificate or certificates evidencing your ownership of the shares in
your Plan account that have not been previously certificated.
15. Q: Can the Plan be amended or terminated?
A: Yes. Our Trustees (by a majority vote, including a majority of
our Independent Trustees) may amend, suspend or terminate the Plan
for any reason, by providing 30 days' written notice (or less if
required to comply with legal or regulatory requirements applicable
to us) to all participants. If the Plan is terminated, we will send
certificates for shares not previously delivered to you.
16. Q: How will shares purchased under the Plan be voted?
A: We will vote shares in your Plan account as you direct. As a
shareholder, you receive a proxy card in connection with any annual
or special meeting of shareholders. This proxy will apply to all
shares registered in your name, including all shares credited to your
Plan account.
If you do not provide us with instructions on a properly signed
and returned proxy card when voting on discretionary items, we will
vote all of your shares--those registered in your name, if any, and
those credited to your account under the Plan--in accordance with the
recommendations of our Trustees. If the proxy card is not returned
or is returned unsigned, your shares may be voted only if you or a
duly appointed representative votes in person at the meeting.
17. Q. How are you offering participation in the Plan?
A. We are offering Plan participation directly. We are not
utilizing the services of broker dealers to assist us and will not
pay any commissions on reinvestments under the Plan.
18. Q: What law governs the Plan?
A: Maryland state law governs the terms and conditions of the
Plan, the enrollment form, account statements and all other aspects
of the Plan.
19. Q: What will United Mortgage Trust do with the proceeds it
receives from purchases of shares through the Plan?
A: We intend to use the net proceeds from the sale of shares under
the Plan for general company purposes including the purchase of
additional mortgage investments or to fund operating or capital
expenses. We do not have any way to estimate the number of shares
that will be sold through the Plan.
20. Q: What are the responsibilities of United Mortgage Trust under
the Plan?
A: We will not be liable for any act done in good faith, or for
any good faith omission to act including without limitation, for any
claims of liability:
- -- for failure to terminate your Plan account upon your death prior
to receipt of written notice of such death; or
- -- relating to the time and prices at which shares are purchased or
sold for your Plan account.
Notwithstanding the foregoing, nothing contained in the Plan limits
our liability under the federal securities laws.
21. Q: What if I have other questions about the Plan?
A: You should feel free to direct any other questions you have
about the Plan to us at the address or telephone number listed under
Question 4.
About our Share Repurchase Plan
Our Share Repurchase Program (SRP) may provide you with limited
interim liquidity with respect to your shares of United Mortgage Trust.
Subject to certain restrictions and limitations, the SRP may enable you to
sell shares back to us in accordance with the procedures described herein.
The SRP works as follows:
Q: Who is eligible?
A. Any shareholder who has held the shares for at least one year.
Q. When can I request shares to be repurchased?
A. At any time.
Q. How can I make a request to have my shares repurchased?
A. You must send us a letter specifying the number of shares you wish to
have repurchased together with the share certificate or certificates for at
least that number of shares. Your share certificate must be properly
endorsed, including any signature guarantee that we may request. All shares
to be repurchased will be repurchased within 30 days (following the end of
the calendar quarter) after receipt by the Company.
Q. Are there limits on the number of shares that will be repurchased?
A. Yes. In any consecutive twelve-month period, we will repurchase from
all shareholders in the aggregate an amount not exceed the greater of a) 5%
of the outstanding shares at the beginning of the twelve month period or,
b) the net proceeds of our Dividend Reinvestment Plan. Purchases will be on
a "first come, first served" basis. Therefore, in the event that more
shares are presented for repurchase under (1) or (2) above, each
shareholder presenting shares for repurchase will have their pro-rata
portion of shares presented repurchased. Also, we may decline to make any
share repurchases during any period of time that we believe that we are in
possession of material, non-public information about the Company or if we
believe that the repurchase would not be permitted under the laws of the
State of Maryland or if otherwise required in order for us to comply with
applicable securities laws or regulations.
We will notify you if we cannot repurchase your shares for any
reason. In such case, you will be given the opportunity to ask that we
repurchase the shares at such time, if any, as there are sufficient funds
or the reason for our inability to repurchase no longer exists. If you make
such a request, we will retain the shares you submitted to us and we will
repurchase those shares ahead of any subsequently received request for
repurchase. If you do not make such request by the date that we specify,
your request will be cancelled and the Shares will be returned to you.
Q. How much will the Company pay per share?
A. The repurchase price will be based on the value of the Company's net
assets or fixed pricing schedule, as determined by the Trustees' business
judgment based on the Company's book value, operations to date and general
market and economic conditions and will not, in any event, exceed any
current public offering price. Presently, that price is $20.00. In the
event we change the repurchase price, we will send a letter to shareholders
informing them of the change, and will disclose the change in quarterly
reports filed with the Commission on Form 10-Q.
Q. Will I continue to receive distributions after tendering my shares
for repurchase?
A. Yes. You will continue to receive distributions through the end of
the month preceding the date that we actually repurchase your shares.
Q. When will United Mortgage Trust pay for repurchased shares?
A. On a monthly basis when cash from our Dividend Reinvestment Plan or
our credit line is available.
Q. Are there any shares you will not repurchase?
A. We will not repurchase any shares that have been owned for less than
one year. In addition, we will not purchase any shares that are held by a
shareholder who bought them from someone other than the Company.
Q. How long will the SRP last?
A. The SRP will exist until: (i) at such time as a secondary market-
maker quotes a bid and ask price for at least 30 continuous trading days;
or (ii) upon the listing of the Shares on a national securities exchange or
the inclusion of the Shares for quotation on a national market system. We
cannot assure that those conditions will be satisfied. We may also
terminate the SRP at any time and we may thereafter adopt a new SRP. We
will provide thirty (30) days' advance notice prior to amending, suspending
or terminating the Plan except where suspension is required on the advice
of counsel in order to comply with applicable disclosure requirements.
Q. What happens to the shares repurchased?
A. Shares we purchase under the SRP will have the status of authorized
but unissued shares and will be available for all proper Company purposes.
Shares we purchase through the SRP will not be reissued in an amount that
would exceed the number of shares registered for the Dividend Reinvestment
Plan under this offering, unless they are first registered with the
Commission under the Act and under appropriate state securities laws or
otherwise issued in compliance with such laws.
Q. Do I have to offer my shares for repurchase under the SRP?
A. No. Shareholders have no obligation to sell their shares to us. The
SRP is only intended to provide interim liquidity for shareholders in the
absence of a secondary market for the shares. No such market presently
exists and we cannot assure that one will develop.
Q. What if I want to purchase shares again after having sold my shares
to the Company under the SRP?
A. You may purchase shares under our Dividend Reinvestment Plan provided
you meet the suitability requirements and live in a state where the shares
are authorized for sale.
Additional Information
We file reports, proxy materials and other information with the
Securities and Exchange Commission ("SEC"). You may read and copy these
reports and other information at the SEC's Public Reference Room at 450
Fifth Street, N.W., Washington, D.C. 20549. You may obtain copies by mail
from the SEC at prescribed rates from the Public Reference Room of the SEC.
You may obtain information on the operation of the Public Reference Room by
calling the SEC at 1-800-SEC-0330.
The SEC also maintains a site on the World Wide Web
(http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants that file
electronically with the SEC.
The SEC allows us to "incorporate by reference" the information we
file with it, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and later
information filed with the SEC will update and supersede this information.
The documents listed below and any future filings made with the SEC under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), until the Plan is terminated comprise the
incorporated documents:
(a) Our Annual Report on Form 10-K for the year ended December 31,
2005;
(b) Our Quarterly Reports on Form 10-Q for the quarters ended March
31, 2006 and June 30, 2006.
(c) Our Current Reports on Form 8-K filed on February 14, 2006,
February 16, 2006, June 13, 2006, June 20, 2006, June 21, 2006, July
31, 2006, August 2, 2006, August 16, 2006 and September 11, 2006.
(d) the description of shares set forth in our Registration Statement
on Form 8A-12G filed with the Commission on March 15, 2001.
Upon request, we will provide to you, without charge, a copy of any
or all of the documents incorporated by reference in this document other
than exhibits to those documents, unless the exhibits are specifically
incorporated by reference in those documents. Please send any requests for
copies to: United Mortgage Trust, 1702 N Collins Blvd., Suite 100,
Richardson, Texas 75080 , Attn.: Cricket Griffin; (214) 237-9305.
The SEC has assigned file number 000-32409 to the reports and other
information that we file with the SEC.
All documents subsequently filed by us pursuant to Section 13(a), 14
or 15(d) of the Securities Exchange Act, prior to the termination of the
offering, shall be deemed to be incorporated by reference into this
prospectus.
Any statement contained in a document incorporated or deemed to be
incorporated herein shall be deemed modified or superseded for purposes of
this prospectus to the extent that a statement contained herein or in any
other subsequently filed document that is deemed to be incorporated herein
modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
You should rely only on the information contained in this document or
to which we have referred you. We have not authorized anyone to provide
you with information that is inconsistent with information contained in
this document or any document incorporated herein. This prospectus is not
an offer to sell these securities in any state where the offer and sale of
these securities is not permitted. The information in this prospectus is
current as of the date it is mailed to security holders, and not
necessarily as of any later date. If any material change occurs during the
period that this prospectus is required to be delivered, this prospectus
will be supplemented or amended.
USE OF PROCEEDS
We cannot determine the number of shares that will ultimately be
purchased under the plan, or the prices at which these shares will be
purchased. We will use the proceeds from the sale of shares under the plan
to continue our purchase of real estate loans and for other general
corporate purposes.
PLAN OF DISTRIBUTION
The shares are being offered pursuant to our Amended and Restated Dividend
Reinvestment Plan, which is described in this prospectus. The Plan
Administrator will purchase the shares being offered directly from us. We
generally pay all fees and expenses incurred in connection with the Plan,
including annual administrative fees. Participants will not incur any
charges in connection with the purchase of shares or for receipt of current
year accounting statements.
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our Declaration of Trust provides that Trustees and officers shall
have the fullest limitation on liability permitted under Maryland law.
Pursuant to such statutory provisions, Trustees and officers have no
liability for breach of the duty of loyalty, unless such breach of duty
results in an improper personal benefit or was the result of active and
deliberate dishonesty and was material to the cause of action adjudicated
in the proceeding. In all situations in which the limitations of liability
contained apply, the remedies available to us or our shareholders are
limited to equitable remedies, such as injunctive relief or rescission, and
do not include the right to recover money damages. The Trustees and other
officers are liable to us or to our shareholders only (i) to the extent the
Trustee or officer actually received an improper benefit or profit in
money, property or services, in which case any such liability shall not
exceed the amount of the benefit or profit in money, property or services
actually received; or (ii) to the extent that a judgment or other final
adjudication adverse to such Trustee or officer is entered in a proceeding
based on a finding in the proceeding that such Trustee's or officer's
action or failure to act was the result of active and deliberate dishonesty
and was material to the cause of action adjudicated in the proceeding.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to trustees, officers or persons
controlling the registrant pursuant to the foregoing provisions, we have
been informed that, in the opinion of the Securities and Exchange
Commission, such indemnification is against public policy as expressed in
the Act and is therefore unenforceable.
EXPERTS
The consolidated financial statements as of December 31, 2005 and
2004 and for each of the three years in the period ended December 31, 2005
have been incorporated by reference herein in reliance on the report of
Whitley Penn LLP, independent registered public accounting firm, given upon
the authority of such firm as experts in auditing and accounting.
LEGAL MATTERS
Legal matters in connection with the validity of the shares offered
hereby will be passed on for us by Venable, LLP, Baltimore, Maryland. The
opinion described under the discussion of the tax consequences of
participation in the Plan is being rendered by Butzel Long, Detroit,
Michigan.
[UMT LOGO]
Please read carefully. This is not a proxy.
UNITED MORTGAGE TRUST
Enrollment Card for Dividend Reinvestment Plan
1. [ ] FULL DIVIDEND REINVESTMENT
Please apply dividends on all United Mortgage Trust shares held in my
account to the purchase of additional United Mortgage Trust shares.
2. [ ] PARTIAL DIVIDEND REINVESTMENT
Please apply dividend on ________shares of United Mortgage Trust
registered in my name to the purchase of additional United Mortgage
Trust shares.
________________________________ _____________________________
Name of Shareholder of Record Social Security Number
________________________________ _____________________________
Street Address or PO Box Shareholder Signature Date
________________________________ _____________________________
City State Zip Co-Shareholder Signature Date
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Expenses of Issuance and Distribution
The expenses expected to be incurred in connection with the issuance and
distribution of the securities being registered is as set forth below. All
such expenses, except for the SEC registration and filing fees, are
estimated:
SEC Registration Fee $ 10,700
Legal Fees and Expenses $ 2,500
Printing and Engraving Expenses $ 2,500
Accounting fees and expenses $ 2,000
Miscellaneous $ 0
TOTAL $ 17,700
Item 15. Indemnification of Officers and Directors
The Declaration of Trust provides that, to the fullest extent allowed
by Maryland law, we will indemnify the Trustees, the Advisor and their
Affiliates and employees of each against losses incurred by them arising in
connection with our business; provided that (1) the Trustees, the
President, or the Advisor has determined, in good faith, that the course
and conduct which caused the loss or liability was in our best interests,
(2) liability or loss was not the result of negligence or misconduct with
respect to the affiliated Trustee, the President, the Advisor and its
Affiliates or the result of bad faith, willful misfeasance, gross
negligence or reckless disregard of the Trustee's duties, and (3) the
indemnification or agreement to hold harmless is recoverable only out of
our assets and not from our shareholders.
To the extent that the indemnification of the Trustees may apply to
the liabilities arising under the Securities Act of 1933, we have been
advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is contrary to public policy and therefore
unenforceable. In the event that a claim for indemnification by us of
expenses incurred or paid by an indemnified party in the successful defense
of any action, suit or proceeding is asserted by that person in connection
with the offering of the Shares, we will, unless in the opinion of our
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether that
indemnification is against public policy as expressed in the Securities Act
of 1933. We will then be governed by the final adjudication of such issue.
In addition, we shall not indemnify the Trustees, the Advisor and their
Affiliates for liabilities arising under a violation of federal and state
II - 1
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securities laws associated with the offer and sale of Shares. We may
indemnify a Trustee, the Advisor and their Affiliates who are performing
services on our behalf for settlements and related expenses incurred in
successfully defending such lawsuits, provided, that (1) a court either (a)
approves the settlement and finds that indemnification of the settlement
and related costs should be made or (b) approves indemnification of
litigation costs if there has been a successful defense, or (2) there has
been a dismissal with prejudice on the merits (without a settlement). Any
person seeking indemnification shall inform the court of the published
position of the Securities and Exchange Commission with respect to
indemnification for securities law violations before seeking court approval
for indemnification.
Item 16. Exhibits
Number Description
- ------ -----------
4 Amended and Restated Dividend Reinvestment Plan as adopted on
June 13, 2006 *
5 Opinion of Venable LLP regarding the validity of the shares
being offered *
8 Opinion of Butzel Long as to certain tax matters *
23.1 Consent of Whitley Penn LLP, Independent Registered Public
Accounting Firm
23.2 Consent of Venable LLP (contained in Exhibit 5.1)*
23.3 Consent of Butzel Long (contained in Exhibit 8.1)*
24.1 Power of Attorney (included as part of page II-3 of this Post-
Effective Amendment to this Registration Statement)*
99.1 Form of Enrollment Form (included as part of prospectus)*
* Previously filed.
Item 37. Undertakings
The Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
i. To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
ii. To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement.
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price represent no more than 20% change in the
maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the
effective 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:
A. Paragraphs (1)(i) and (1)(ii) of this section
do not apply if the registration statement is
on Form S-8, and the information required to be
included in a post-effective amendment by those
paragraphs is contained in reports filed with
or furnished to the Commission by the
registrant pursuant to section 13 or section
15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the
registration statement; and
B. Paragraphs (1)(i), (1)(ii) and (1)(iii) of this
section do not apply if the registration statement
is on Form S-3 or Form F-3 and the information
required to be included in a post-effective
amendment by those paragraphs is contained in
reports filed with or furnished to the Commission
by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration
statement, or is contained in a form of prospectus
filed pursuant to Rule 424(b) that is part of the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
II - 2
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4. That, for the purpose of determining liability under the Securities
Act of 1933 to any purchaser:
i. If the registrant is relying on Rule 430B:
A. Each prospectus filed by the registrant
pursuant to Rule 424(b)(3)shall be deemed to be
part of the registration statement as of the
date the filed prospectus was deemed part of
and included in the registration statement; and
B. Each prospectus required to be filed pursuant
to Rule 424(b)(2), (b)(5), or (b)(7) as part of
a registration statement in reliance on Rule
430B relating to an offering made pursuant to
Rule 415(a)(1)(i), (vii), or (x) for the
purpose of providing the information required
by section 10(a) of the Securities Act of 1933
shall be deemed to be part of and included in
the registration statement as of the earlier of
the date such form of prospectus is first used
after effectiveness or the date of the first
contract of sale of securities in the offering
described in the prospectus. As provided in
Rule 430B, for liability purposes of the issuer
and any person that is at that date an
underwriter, such date shall be deemed to be a
new effective date of the registration
statement relating to the securities in the
registration statement to which that prospectus
relates, and the offering of such securities at
that time shall be deemed to be the initial
bona fide offering thereof. Provided, however,
that no statement made in a registration
statement or prospectus that is part of the
registration statement or made in a document
incorporated or deemed incorporated by
reference into the registration statement or
prospectus that is part of the registration
statement will, as to a purchaser with a time
of contract of sale prior to such effective
date, supersede or modify any statement that
was made in the registration statement or
prospectus that was part of the registration
statement or made in any such document
immediately prior to such effective date; or
ii. If the registrant is subject to Rule 430C, each
prospectus filed pursuant to Rule 424(b) as part of a
registration statement relating to an offering, other
than registration statements relying on Rule 430B or
other than prospectuses filed in reliance on Rule
430A, shall be deemed to be part of and included in
the registration statement as of the date it is first
used after effectiveness. Provided, however, that no
statement made in a registration statement or
prospectus that is part of the registration statement
or made in a document incorporated or deemed
incorporated by reference into the registration
statement or prospectus that is part of the
registration statement will, as to a purchaser with a
time of contract of sale prior to such first use,
supersede or modify any statement that was made in
the registration statement or prospectus that was
part of the registration statement or made in any
such document immediately prior to such date of first
use.
5. 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 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in
the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Dallas, State of Texas, on the
16th day of October 2006.
UNITED MORTGAGE TRUST
By:/s/ Christine A. Griffin
------------------------
Christine A. Griffin,
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below under the heading "Signature" constitutes and appoints
Christine A. Griffin as his true and lawful attorney-in-fact and agents
with full power of substitution and resubstitution, for him and in his
name, place and stead, in any and all capacities to sign any or all
amendments to this registration Statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact
and agents, each acting along, full power and authority to do and perform
each and every act and thing requisite and necessary to be done in and
about the foregoing, as fully for all intents and purpose as he might or
could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following persons in the
capacities on the dates indicated.
II-3
<Page>
Signature Capacity Date
/s/ Christine A. Griffin Trustee, Chairman of the 10-16-2006
- ------------------------ Board and President
Christine A. Griffin (Principal Executive and
Operating Officer)
/s/ Douglas R. Evans Trustee 10-16-2006
- ------------------------
Douglas R. Evans 10-16-2006
/s/ Michele Cadwell Trustee 10-16-2006
- ------------------------
Michele Cadwell
II-4
Exhibit 23.2 Consent of Independent Registered Public Accounting Firm
We hereby consent to the use in this Registration Statement on Form S-
3, Amendment No. 1, of our report dated February 23, 2006, relative to the
consolidate financial statements, which are incorporated by reference in
such Registration Statement. We also consent to the reference of our firm
under the heading "experts" in the Prospectus.
/s/ Whitley Penn LLP
- ----------------
Whitley Penn LLP
Dallas, Texas
September 29, 2006