Filed pursuant to Rule 424(b)(5)
Registration Statement No. 33-84536
Prospectus Supplement
(To Prospectus dated January 30, 1996)
260,000 SHARES
CAMDEN PROPERTY TRUST
COMMON SHARES OF BENEFICIAL INTEREST
All of the common shares of beneficial interest, par value
$0.01 per share (the "Common Shares"), of Camden Property Trust
(the "Company") offered hereby are being offered by the Company
(the "Offering"). PaineWebber Incorporated, acting as underwriter
(the "Underwriter"), has agreed to purchase from the Company the
Common Shares offered hereby for an aggregate price of
approximately $6,593,000. The Common Shares offered hereby may be
offered by the Underwriter from time to time in one or more
transactions on the New York Stock Exchange ("NYSE") or
otherwise, at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, or at negotiated
prices. See "Underwriting." Concurrently with the Offering, the
Company is offering for sale to one or more institutional
investors 830,000 Common Shares at a purchase price of $25.875
per share, or an aggregate purchase price of approximately
$21,476,000 (the "Concurrent Offering"). The Company has agreed
to pay a fee equal to 2% of the purchase price of the Common
Shares to PaineWebber Incorporated for its services as a finder
in connection with the shares to be sold in the Concurrent
Offering.
The Common Shares are listed on the NYSE under the symbol
"CPT." On October 10, 1996, the last reported sales price of the
Common Shares on the NYSE was $27.00 per share.
See "Risk Factors" on page S-3 for certain factors relevant to an
investment in the Common Shares.
____________________
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 SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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 Common Shares offered hereby are offered by the
Underwriter, subject to prior sale, when, as and if delivered to
and accepted by the Underwriter, and subject to its right to
reject orders in whole or in part. It is expected that delivery
of the Common Shares offered hereby will be made on or about
October 16, 1996.
____________________
PaineWebber Incorporated
____________________
The date of this Prospectus Supplement is October 11, 1996
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVER-ALLOT
OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET
PRICE OF THE COMMON SHARES AT A LEVEL ABOVE THAT WHICH MIGHT
OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE
EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE OVER-THE-COUNTER
MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified by the more detailed
information appearing elsewhere in this Prospectus Supplement and
the accompanying Prospectus or incorporated herein or therein by
reference.
The Company
Camden Property Trust (together with its subsidiaries, the
"Company") is a self-administered and self-managed real estate
investment trust (a "REIT") engaged in the acquisition,
renovation, construction, development and management of
multifamily properties. As of June 30, 1996, the Company owned
and operated 50 multifamily properties located in Houston,
Dallas/Fort Worth, Austin, Corpus Christi, El Paso and Tucson
(the "Operating Properties") containing 17,593 apartment units.
The Operating Properties had an average occupancy rate of 94.2%
for the quarter ended June 30, 1996.The Company also owns three
properties that it is developing (the "Development Properties")
in Houston and Phoenix, which will, when completed, add 1,096
units to its portfolio, and intends to begin construction in the
future on three properties (the "Future Development Properties"),
which the Company anticipates will, when completed, add 1,010
units. Upon completion of the Development Properties and the
Future Development Properties (which together with the Operating
Properties are referred to as the "Properties"), the Company will
own and operate 56 Properties containing a total of 19,699 units
(subject to acquisitions, dispositions or developments). The
foregoing amounts do not reflect the disposition of one property
which was sold in July 1996 containing 166 units.
The Company's predecessor was Centeq Investments, Inc. The
predecessors to Centeq Investments, Inc. and its related
affiliates, partnerships and companies (collectively, "Centeq"),
were formed in 1982 by Richard J. Campo, the Company's Chairman
of the Board and Chief Executive Officer, and D. Keith Oden, the
Company's President and Chief Operating Officer. Centeq was
involved in the acquisition or development, management and
marketing of 28 multifamily properties containing 8,564 units
prior to the Company's initial public offering in July 1993 (the
"IPO"). The Company's senior management began their association
over ten years ago with Centeq, and have an average of over
eighteen years of real estate experience.
The Company's common shares of beneficial interest, par
value $0.01 per share, are listed on the New York Stock Exchange
under the symbol "CPT".
Risk Factors
An investment in the Common Shares involves various risks,
and prospective investors should carefully consider the matters
discussed under "Risk Factors" prior to any investment in the
Company.
The Offering
Securities Offered . . . . . . 260,000 Common Shares.
Common Shares Outstanding
After the Offering and the
Concurrent Offering. . . . . . 16,133,676(A)
Use of Proceeds. . . . . . . . The net proceeds to the Company of
approximately $6,593,000 from the
Offering, together with the net
proceeds to the Company of
approximately $21,047,000 from the
Concurrent Offering, will be used
to reduce the Company's
indebtedness, including amounts
outstanding under the Company's
unsecured revolving credit
facility of $150 million (the
"Unsecured Credit Facility") and
certain secured construction
loans. See "Use of Proceeds."
NYSE Symbol. . . . . . . . . . CPT
- ---------------
(A) Does not include 605,200 Common Shares reserved for issuance
upon the exercise of 605,200 outstanding options issued pursuant
to the Company's 1993 Share Incentive Plan. Includes 830,000
Common Shares to be sold in the Concurrent Offering.
S-2
<PAGE>
RISK FACTORS
An investment in the Common Shares involves various risks.
Prospective investors should carefully consider the following
information in conjunction with the other information contained
or incorporated by reference in this Prospectus Supplement and
the attached Prospectus before making a decision to purchase
Common Shares.
Risks of Development, Construction and Acquisition Activities
The Company intends to actively continue development and
construction of multifamily properties. There can be no assurance
that the Company will undertake to develop any particular site or
that it will be able to complete such development if it is
undertaken. Risks associated with the Company's development and
construction activities include: development opportunities may be
abandoned; construction costs of a property may exceed original
estimates, possibly making the property uneconomical; occupancy
rates and rents at a newly completed property may not be
sufficient to make the property profitable; financing may not be
available on favorable terms for development of a property; and
construction and lease-up may not be completed on schedule,
resulting in increased debt service expense and construction
costs. Development activities are also subject to risks relating
to the inability to obtain, or delays in obtaining, all necessary
zoning, and land-use, building, occupancy, and other required
governmental permits and authorizations.
The Company intends to continue to acquire multifamily
apartment properties on a select basis. Acquisitions of
multifamily properties entail risks that investments will fail to
perform in accordance with expectations. Estimates of the costs
of improvements to bring an acquired property up to market
standards intended for that property may prove inaccurate.
The Company's strategy is to finance acquisitions and
development using borrowings under its Unsecured Credit Facility
and using internally generated funds. The Company intends to
repay amounts borrowed under the Unsecured Credit Facility using
funds raised in the capital markets in the form of equity and
long term unsecured debt, or through funds generated from
property sales. The use of equity financing, rather than debt,
for future developments or acquisitions could have a dilutive
effect on the interest of existing shareholders of the Company.
For any amounts outstanding under credit agreements, there is a
risk that capital or financing proceeds may not be available to
repay such amounts or, if available, may not be on terms
favorable to the Company.
Real Estate Financing Risks
No Limitation on Debt. The Company currently has a policy of
incurring debt only if upon such incurrence the ratio of total
debt to total market capitalization (i.e., the total consolidated
debt of the Company (excluding the Company's 7.33% Convertible
Subordinated Debentures due 2001 (the "Convertible Debentures"))
as a percentage of the market value of the Company's common
shares (including common shares issuable upon conversion of the
Convertible Debentures, but excluding common shares issuable upon
exercise of outstanding options) plus total consolidated debt
(excluding the Convertible Debentures)) would be 50% or less, but
the organizational documents of the Company do not contain any
limitation on the amount of indebtedness the Company may incur.
Accordingly, the Company's Trust Managers could alter or
eliminate this policy.
Existing Debt Maturities, Balloon Payments and Refinancing
Risks. The Company is subject to the risks normally associated
with debt financing, including the risk that the Company's cash
flow will be insufficient to meet required payments of principal
and interest. Because the Company anticipates that only a small
portion of the principal of the Company's indebtedness will be
repaid prior to maturity, it will be necessary for the Company to
refinance certain of this indebtedness. Accordingly, there is a
risk that existing indebtedness will not be able to be refinanced
or that the terms of such refinancing will not be as favorable as
the terms of the existing indebtedness.
Risk of Rising Interest Rates. The Company has incurred and
expects in the future to continue to incur floating rate
indebtedness in connection with the construction and acquisition
of multifamily properties, as well as for other purposes under
the Unsecured Credit Facility. Accordingly, increases in interest
rates would increase the Company's interest costs (to the extent
that the related indebtedness was not protected by interest rate
protection arrangements).
S-3
<PAGE>
Real Estate Investment Risks
General Risks. Real property investments are subject to
varying degrees of risk. If the Company's Properties do not
generate revenues sufficient to meet operating expenses,
including debt service and capital expenditures, the Company's
cash flow and ability to make distributions to its shareholders
will be adversely affected. A multifamily property's revenues and
value may be adversely affected by the general economic climate;
the local economic climate (including the fiscal condition of the
relevant governmental bodies); local real estate conditions (such
as oversupply of or reduced demand for apartment homes); the
perceptions by prospective residents of the safety, convenience
and attractiveness of the communities or neighborhoods in which
they are located and the quality of local schools and other
amenities; the ability of the owner to provide adequate
management, maintenance and insurance; and increased operating
costs (including real estate taxes and utilities). Certain
significant expenditures associated with each equity investment
(such as mortgage payments, if any, real estate taxes, insurance
and maintenance costs) are generally not reduced when
circumstances cause a reduction in income from the investment.
Dependence on Primary Markets. The Properties are located in
various metropolitan areas in the Southwest and Mountain regions
of the United States, particularly Houston and Dallas, and the
Company's performance and its ability to make distributions to
shareholders could be adversely affected by economic and social
conditions in these geographic areas.
Market Illiquidity. Equity real estate investments are
relatively illiquid. Such illiquidity will tend to limit the
ability of the Company to vary its portfolio promptly in response
to changes in economic or other conditions. In addition, the
Internal Revenue Code (the "Code") limits the Company's ability
to sell properties held for fewer than four years, which may
affect the Company's ability to sell properties without adversely
affecting returns to holders of the Common Shares.
Competition. There are numerous housing alternatives that
compete with the Properties in attracting residents. The
Properties compete directly with other multifamily rental
apartments and single family homes that are available for rent or
purchase in the markets in which the Properties are located. In
addition, other competitors for development and acquisitions of
properties, including other REITs, may have greater resources
than that of the Company. Increased supply of apartment homes in
the Company's principal markets over the past few years and the
next few years may adversely affect the current favorable demand
environment for apartment homes, including occupancy and rental
rates.
Limits on Changes in Control
Certain provisions contained in the Company's Declaration of
Trust (the "Declaration of Trust") and Bylaws and under Texas law
may have the effect of discouraging a third party from making an
acquisition proposal for the Company and may thereby inhibit a
change in control of the Company. For example, such provisions
may (i) deter tender offers for Common Shares, which offers may
be attractive to the shareholders, or (ii) deter purchases of
large blocks of Common Shares, thereby limiting the opportunity
for shareholders to receive a premium for their Common Shares
over then-prevailing market prices.
Possible Adverse Consequences of Limits on Ownership of Common
Shares
In order to maintain its qualification as a REIT, not more
that 50% in value of the outstanding shares of the Company may be
owned, directly or indirectly, by five or fewer individuals (as
defined in the Code to include certain entities) during the last
half of a taxable year, and such shares must be beneficially
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 protect the Company against the
risk of losing its status as a REIT due to a concentration of
ownership among its shareholders, the Company has limited
ownership of the issued and outstanding shares by any single
shareholder to 9.8% of the total outstanding shares, subject to
certain exceptions. The Trust Managers are not permitted to waive
this restriction. Shares acquired or transferred in breach of the
limitation will automatically be deemed to be Excess Securities
held by the Company in trust and not entitled to vote or to
participate in dividends or other distributions. In addition,
shares acquired or transferred in breach of the limitation may be
purchased by the Company for the lesser of the price paid and the
market price (as determined in the manner set forth in the
Declaration of Trust).
Adverse Consequences of Failure to Qualify as a REIT; Other Tax
Liabilities
The Company intends at all times to operate so as to qualify
as a REIT under the Code. Although management of the Company
believes that the Company is organized and operates in such a
manner, no assurance can be given that the Company qualifies or
S-4
<PAGE>
will remain qualified as a REIT. Qualification as a REIT involves
the application of highly technical and complex Code provisions
for which there are only limited judicial and administrative
interpretations. The determination of various factual matters and
circumstances not entirely within the Company's control may
affect the Company's ability to qualify as a REIT. If the Company
fails to qualify as a REIT, it will be subject to Federal income
tax (including any applicable alterative minimum tax) on its
taxable income at regular corporate rates. In addition, unless
entitled to relief under certain statutory provisions, the
Company will be disqualified from treatment as a REIT for the
four taxable years following the year during which qualification
is lost. The additional tax would significantly reduce the cash
flow available for the distribution to shareholders.
Possible Adverse Impact of Market Conditions on Market Price
The market value of the Common Shares could be substantially
affected by general market conditions, including changes in
interest rates, government regulatory action and changes in tax
laws. An increase in market interest rates may lead purchasers of
the Common Shares to demand a higher annual yield on the price
paid for shares from distributions by the Company, which could
adversely affect the market price of the Common Shares.
Possible Environmental Liabilities
Under various Federal, state and local environmental laws, a
current or previous owner or operator of real estate may be
required (typically regardless of knowledge or responsibility) to
investigate and clean up hazardous or toxic substances or
petroleum product releases at such property and may be held
liable to a governmental entity or to third parties for property
damage and for investigation and clean-up costs incurred by such
parties in connection with the contamination, which may be
substantial. The presence of such substances (or the failure to
properly remediate the contamination) may adversely affect the
owner's ability to borrow against, sell or rent such property.
USE OF PROCEEDS
The net proceeds to the Company from the sale of 260,000
Common Shares in the Offering are estimated to be approximately
$6,593,000, net of issuance costs. The net proceeds to the
Company from the sale of 830,000 Common Shares in the Concurrent
Offering are estimated to be approximately $21,047,000, net of
issuance costs. The Company intends to use all of the net
proceeds from both offerings to reduce indebtedness under the
Unsecured Credit Facility and/or certain secured indebtedness
related to properties recently constructed by the Company. The
Unsecured Credit Facility matures in July 1998 and the secured
loans mature in 1999. All currently bear interest at LIBOR plus
1.50% (6.96% per annum as of October 9, 1996). The Company will,
in the ordinary course of business, borrow under the Unsecured
Credit Facility to fund acquisition and development costs and
satisfy general working capital requirements, but does not intend
to use secured debt for new borrowings in the future.
S-5
<PAGE>
THE COMPANY
This Prospectus Supplement and the attached Prospectus,
including the information incorporated by reference herein,
contain forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Actual results could differ
materially from those projected in the forward-looking statements
as a result of the risk factors set forth under "Risk Factors,"
and prospective purchasers of the Common Shares offered hereby
should carefully review such risk factors.
General
Camden Property Trust is a self-administered and
self-managed REIT. The Company was formed in 1993 to continue the
multifamily property acquisition, development, management and
marketing operations and related business objectives and
strategies of Centeq. Centeq was formed in 1982 by Richard J.
Campo, the Company's Chairman of the Board of Trust Managers and
Chief Executive Officer, and D. Keith Oden, the Company's
President and Chief Operating Officer.
As of June 30, 1996, the Company owned and operated 50
Operating Properties located in Houston, Dallas/Fort Worth,
Austin, Corpus Christi, El Paso and Tucson. The Operating
Properties contained 17,593 units and had an occupancy rate of
94.2% for the quarter ended June 30, 1996. The Company also owns
three Development Properties, which will, when completed, add
1,096 units to its portfolio, and intends to begin construction
in the future on three Future Development Properties, which the
Company anticipates will, when completed, add 1,010 units to its
portfolio. Upon completion of the Development Properties and the
Future Development Properties, the Company will own and operate
56 Properties containing a total of 19,699 units (subject to
acquisitions, dispositions or developments, including the
disposition of one property which was sold in July 1996
containing 166 units).
At June 30, 1996, the Company employed 626 persons,
approximately 65 of whom were located at the Company's
headquarters and 561 of whom were "on-site" or in regional
operating offices. The Company's senior management has an average
of over eighteen years of experience in real estate management,
acquisitions, dispositions, development and finance. Three of the
Company's executive officers, Messrs. Campo, Oden and Stewart,
began their association in 1982 or earlier through Centeq. The
Trust Managers have been involved with the Company's senior
management as investors and advisors since 1989 or earlier. The
remaining members of the management team have been with the
Company and its predecessors for four to six years.
The Company's headquarters are located at 3200 Southwest
Freeway, Suite 1500, Houston, Texas 77027 and its telephone
number is (713) 964-3555. The Company's common shares of
beneficial interest, par value $0.01 per share, are listed on the
New York Stock Exchange under the symbol "CPT".
The Properties
The Properties typically consist of two and three story
buildings in a landscaped setting. Operating Properties units
average 776 square feet of living area and provide residents with
a variety of amenities. Most of the Properties have, or are
expected to have, one or more swimming pools and a clubhouse and
many have whirlpool spas, tennis courts and controlled access
gates. Many of the units offer additional features such as
fireplaces, vaulted ceiling, microwave ovens, covered parking,
icemakers, washers and dryers and ceiling fans.
For the six months ended June 30, 1996, no single Operating
Property accounted for greater than 4% of the Company's total
revenues. The Operating Properties had an average occupancy rate
of 94.2% for the quarter ended June 30, 1996. Resident leases are
generally for six-month to thirteen-month terms and require
security deposits. Forty-three of the Operating Properties have
in excess of 200 units, with the largest having 671 units. Eight
of the Operating Properties were constructed by the Company or
its predecessors and placed in service since 1992. Twenty-six
were placed in service between 1982 and 1987, fourteen were
placed in service between 1974 and 1981 and one was placed in
service in each of 1968 and 1969.
The Company or its predecessors acquired 42 and developed
eight of the Operating Properties. All of the acquired Operating
Properties have been renovated by the Company or its predecessors
within the past five years. The Company operates under a capital
improvements policy designed to maintain the competitive market
position of its portfolio and to generate favorable returns.
S-6
<PAGE>
The Company's real estate portfolio at December 31, 1995 and
June 30 1996 is summarized as follows:
<TABLE>
<CAPTION>
December 31, 1995 June 30, 1996
------------------- --------------------
Units Projects %*<F1> Units Projects %*<F1>
----- -------- -- ----- -------- --
<S> <C> <C> <C> <C> <C> <C>
Operating Properties
Texas
Houston 6,598 2 33% 7,397 20 37%
Dallas 6,065 17 30 6,045 17 31
Austin 1,745 6 9 1,745 6 9
Other 1,513 5 8 1,585 5 8
------ -- -- ------ -- --
Total Texas
Properties 15,921 48 79 16,772 48 85
Arizona 821 2 4 821 2 4
------ -- -- ------ -- --
Total Operating
Properties 16,742 50 83 17,593 50 89
------ -- -- ------ -- --
Projects Under
Development **<F2>
Texas
Houston 1,226 3 6 710 2 4
Dallas 920 2 5 464 1 2
Other 288 1 1 - - -
------ -- -- ------ -- --
Total Texas
Properties 2,434 6 12 1,174 3 6
Arizona 716 2 4 716 2 4
Colorado 216 1 1 216 1 1
------ -- -- ------ -- --
Total Projects
Under
Development 3,366 9 17 2,106 6 11
------ -- -- ------ -- --
Total Projects 20,10 59 100% 19,699 56 100%
====== == === ====== == ===
______________________________
<FN>
<F1>
* Based on units.
<F2>
** The totals for projects under development include three
projects comprising 1,010 units on which construction has not
commenced.
</FN>
</TABLE>
Recent Developments
On September 18, 1996, the Company entered into new
employment agreements, effective July 22, 1996, with Richard J.
Campo, Chairman of the Board of Trust Managers and Chief
Executive Officer, and D. Keith Oden, President and Chief
Operating Officer. These agreements contain terms and conditions
substantially similar to the expiring employment agreements, and
provided for the issuance of 12,500 restricted Common Shares to
each executive, vesting over the three-year term of these
agreements. The agreements also provide for the payment of 2.99
times the executive's annual compensation upon the termination of
employment (except for cause), or if the executives' employment
is terminated or adversely affected upon a change of control of
the Company. These new agreements may be extended annually for
additional one-year terms.
S-7
<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of the material federal
income tax considerations to the Company based on current law, is
not tax advice and is for general information only. The following
discussion is not exhaustive of all possible tax considerations
and is not tax advice. Moreover, this summary does not deal with
all tax aspects that might be relevant to a particular
prospective holder of Common Shares in light of its individual
investment or tax circumstances; nor does it deal with particular
types of holders that are subject to special treatment under the
Internal Revenue Code of 1986, as amended (the "Code"), such as
insurance companies, financial institutions and broker-dealers.
The Code provisions governing the federal income tax treatment of
REITs are highly technical and complex, and this summary is
qualified in its entirety by the applicable Code provisions,
rules and regulations promulgated thereunder, and administrative
and judicial interpretations thereof.
EACH PROSPECTIVE PURCHASER IS URGED TO CONSULT HIS OR HER
OWN TAX ADVISOR WITH RESPECT TO SUCH PURCHASER'S SPECIFIC
FEDERAL, STATE, LOCAL, FOREIGN AND OTHER TAX CONSEQUENCES OF THE
PURCHASE, HOLDING AND SALE OF NOTES AND OF POTENTIAL CHANGES IN
APPLICABLE TAX LAWS.
The Company has elected to be taxed as a REIT under the
Code. The Company believes that is has been organized, has
operated and will operate in such a manner as to qualify for
taxation as a REIT under the Code. No assurance can be given,
however, that such requirements will be met in the future.
Federal Income Taxation of the Company
If and as long as the Company qualifies for taxation as a
REIT, it generally will not be subject to federal corporate
income taxes on that portion of its ordinary income or capital
gain that is currently distributed to shareholders. The REIT
provisions of the Code generally allow a REIT to deduct dividends
paid to its shareholders. This deduction for dividends paid to
shareholders substantially eliminates the federal "double
taxation" on earnings (once at the corporate level and once again
at the shareholder level) that usually results from investments
in a corporation.
Even if the Company qualifies for taxation as a REIT, the
Company will be subject to federal income tax, however, as
follows:
First, the Company will be taxed at regular corporate
rates on its undistributed REIT taxable income, including
undistributed net capital gains.
Second, under certain circumstances, the Company may be
subject to the "alternative minimum tax" as a consequence
of its items of tax preference to the extent that such tax
exceeds its regular tax.
Third, if the Company has net income from the sale or
other disposition of "foreclosure property" that is held
primarily for sale to customers in the ordinary course of
business or other non-qualifying income from foreclosure
property, it will be subject to tax at the highest corporate
rate on such income.
Fourth, if the Company has net income from prohibited
transactions (which are, in general, certain sales or other
dispositions of property held primarily for sale to
customers in the ordinary course of business, but excluding
foreclosure property), such income will be subject to a 100%
tax.
Fifth, if the Company should fail to satisfy certain
gross income tests, but has nonetheless maintained its
qualification as a REIT because certain other requirements
had been met, it will be subject to a 100% tax on the net
income attributable to the greater of the amount by which
the Company fails such tests, multiplied by a fraction
intended to reflect the Company's profitability.
Sixth, if the Company fails to distribute during each
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 periods, the Company will be subject to a
4% excise tax on the excess of such required distributions
over the distributed amount.
Seventh, if the Company should acquire any asset from a
C corporation (i.e., a corporation subject to full
corporate-level tax) in a carryover-basis transaction and
the Company subsequently recognizes gain on the disposition
S-8
<PAGE>
of such asset during the ten-year period (the "Recognition
Period") beginning on the date on which the asset was
acquired by the Company, then the excess of (a) the fair
market value of the asset as of the beginning of the
applicable Recognition Period over (b) the Company's
adjusted basis in such asset as of the beginning of such
Recognition Period will be subject to tax at the highest
regular corporate rate, pursuant to guidelines issued by
the Internal Revenue Service (the "IRS").
Failure to Qualify
If the Company fails to qualify for taxation as a REIT in
any taxable year and certain 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 will they be required to be made.
In such event, to the extent of current and accumulated earnings
and profits, all distributions to shareholders will be dividends,
taxable as ordinary income, and subject to certain limitations of
the Code, corporate distributees may be eligible for the
dividends-received deduction. Unless the Company is entitled to
relief under specific statutory provisions, the Company also will
be disqualified from taxation as a REIT for the four taxable
years following the year during which qualification was lost. It
is not possible to state whether in all circumstances the Company
would be entitled to such statutory relief. For example, if the
Company fails to satisfy the gross income tests because
nonqualifying income that the Company intentionally incurs
exceeds the limit on such income, the IRS could conclude that the
Company's failure to satisfy the tests was not due to reasonable
cause.
UNDERWRITING
Subject to the terms and conditions contained in the
Underwriting Agreement between PaineWebber Incorporated (the
"Underwriter") and the Company (the "Underwriting Agreement"),
the Underwriter has agreed to purchase from the Company, and the
Company has agreed to sell to the Underwriter, 260,000 Common
Shares. The Underwriting Agreement provides that the
Underwriter's obligation to purchase Common Shares is subject to
the satisfaction of certain conditions, including the receipt of
certain legal opinions. The nature of the Underwriter's
obligation is such that it is committed to purchase all 260,000
Common Shares offered hereby if any are purchased.
The Underwriter has advised the Company that it proposes to
offer the Common Shares offered hereby for sale, from time to
time, to purchasers directly or through agents, or through
brokers in brokerage transactions on the NYSE, or to underwriters
or dealers in negotiated transactions or in a combination of such
methods of sale, at fixed prices which may be changed, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Brokers,
dealers, agents and underwriters that participate in the
distribution of the Common Shares offered hereby may be deemed to
be underwriters under the Securities Act of 1933, as amended.
Those who act as underwriter, broker, dealer or agent in
connection with the sale of the Common Shares offered hereby will
be selected by the Underwriter and may have other business
relationships with the Company and its subsidiaries or affiliates
in the ordinary course of business.
Concurrently with the Offering, the Company is offering for
sale to one or more institutional investors 830,000 Common Shares
at a purchase price of $25.875 per Common Share, or an aggregate
purchase price of approximately $21,476,000. The Company has
agreed to pay a fee equal to 2% of the purchase price of the
Common Shares to PaineWebber Incorporated for its services as a
finder in connection with the shares to be sold in the Concurrent
Offering.
The Company has agreed to indemnify the Underwriter against
certain liabilities, including liabilities under the Securities
Act of 1933, as amended, or to contribute to payments the
Underwriter may be required to make in respect thereof.
S-9
<PAGE>
EXPERTS
The consolidated financial statements of Camden Property
Trust as of December 31, 1995 and 1994 and for the years ended
December 31, 1995 and 1994 and for the period from July 29, 1993
to December 31, 1993, the related financial statement schedule
and the combined financial statements of Camden Predecessors for
the period from January 1, 1993 to July 28, 1993, incorporated in
this Prospectus Supplement and the attached Prospectus by
reference from the Annual Report on Form 10-K of Camden Property
Trust for the year ended December 31, 1995 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their
reports which are incorporated herein by reference, and have been
so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
S-10
<PAGE>
PROSPECTUS
CAMDEN PROPERTY TRUST
$400,000,000
Debt Securities, Preferred Shares,
Common Shares and Securities Warrants
Camden Property Trust (the "Company") may from time to time
offer and sell in one or more series (i) its unsecured senior
debt securities (the "Debt Securities"); (ii) shares of its
preferred shares of beneficial interest, par value $0.01 per
share (the "Preferred Shares"); (iii) common shares of beneficial
interest, par value $0.01 per share (the "Common Shares"); or
(iv) warrants to purchase Common Shares (the "Common Shares
Warrants"), warrants to purchase Debt Securities (the "Debt
Securities Warrants") and warrants to purchase Preferred Shares
(the "Preferred Shares Warrants"), with an aggregate public
offering price of up to $400,000,000, on terms to be determined
by market conditions at the time of offering. The Common Shares
Warrants, the Debt Securities Warrants and the Preferred Shares
Warrants shall be referred to herein collectively as the
"Securities Warrants." The Debt Securities, Preferred Shares,
Common Shares, and Securities Warrants (collectively, the
"Offered Securities") may be offered separately or together, in
separate series, in amounts and at prices and terms to be set
forth in an accompanying supplement to this Prospectus (a
"Prospectus Supplement").
With respect to the Debt Securities, the specific title,
aggregate principal amount, currency, form (which may be
registered or bearer, or certificated or global), authorized
denominations, maturity, rate (or manner of calculation thereof)
and time of payment of interest, terms for redemption at the
option of the Company or repayment at the option of the Holder,
any sinking fund provisions and any conversion provisions will be
set forth in the applicable Prospectus Supplement. The terms of
the Preferred Shares, including the specific designation and
stated value per share, any dividend, liquidation, redemption,
conversion, voting and other rights, and all other specific terms
of the Preferred Shares will be set forth in the applicable
Prospectus Supplement. In the case of the Common Shares, the
specific number of shares and issuance price per share will be
set forth in the applicable Prospectus Supplement. In the case
of the Securities Warrants, the duration, offering price,
exercise price and detachability, if applicable, will be set
forth in the applicable Prospectus Supplement. In addition, such
specific terms may include limitations on direct or beneficial
ownership and restrictions on transfer of the Offered Securities,
in each case as may be appropriate to preserve the status of the
Company as a real estate investment trust ("REIT") for United
States federal income tax purposes. The applicable Prospectus
Supplement will also contain information, where applicable, about
certain United States federal income tax considerations relating
to, and any listing on a securities exchange of, the Offered
Securities covered by such Prospectus Supplement.
The Offered Securities may be offered directly, through
agents designated from time to time by the Company, or to or
through underwriters or dealers. If any agents or underwriters
are involved in the sale of any of the Offered Securities, their
names, and any applicable purchase price, fee, commission or
discount arrangement between or among them, will be set forth, or
will be calculable from the information set forth, in the
applicable Prospectus Supplement. See "Plan of Distribution." No
Offered Securities may be sold without delivery of the applicable
Prospectus Supplement describing the method and terms
of the offering of such series of Offered Securities.
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.
____________________
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.
____________________
This Prospectus may not be used to consummate sales of
Offered Securities unless accompanied by a Prospectus Supplement.
____________________
The date of this Prospectus is January 30, 1996
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange
Commission (the "Commission"), 450 Fifth Street, N.W.,
Washington, D.C. 20549, a Registration Statement on Form S-under
the Securities Act of 1933, as amended (the "Securities Act") and
the rules and regulations promulgated thereunder with respect to
the securities offered pursuant to this Prospectus. This
Prospectus, which is part of the Registration Statement, does not
contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Offered
Securities, reference is made to the Registration Statement and
such exhibits and schedules. Statements contained in this
Prospectus as to the contents of any contract or other document
which is filed as an exhibit to the Registration Statement are
not necessarily complete, and each such statement is qualified in
its entirety by reference to the full text of such contract or
document.
The Company is subject to the information requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy and
information statements and other information with the Commission.
Such reports, proxy and information statements and other
information and the Registration Statement and exhibits and
schedules thereto filed by the Company with the Commission can be
inspected and copied at the Public Reference Section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports, proxy
and information statements and other information can also be
inspected at the offices of the New York Stock Exchange, 20 Broad
Street, New York, New York 10005.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the
Commission are incorporated by reference herein and shall be
deemed to be a part hereof:
(a) Annual Report on Form 10-K for the year ended
December 31, 1994;
(b) Quarterly Report on Form 10-Q for the quarters ended
March 31, 1995, June 30, 1995 and September 30,
1995; and
(c) The description of the Common Shares contained in
the Company's Registration Statement on Form 8-A
(File No. 1-12110).
All documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and prior to the termination of this
offering shall be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of the filing of
such documents. Any statement contained in a document
incorporated by reference 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
incorporated document or in an accompanying prospectus
supplement, if any, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this
Prospectus.
Upon written or oral request of any person to whom a
Prospectus is delivered, including any beneficial owner, the
Company will provide, without charge, a copy of the documents
which have been incorporated by reference (other than exhibits
unless such exhibits are specifically incorporated by reference
in any such document) in this Prospectus. Requests for such
documents should be directed to G. Steven Dawson, Sr. Vice
President - Finance and Chief Financial Officer, Camden Property
Trust, 3200 Southwest Freeway, Suite 1500, Houston, Texas 77027,
telephone number (713) 964-3555.
2
<PAGE>
THE COMPANY
Camden Property Trust (the "Company") is a self-administered
and self-managed real estate investment trust (a "REIT") formed
pursuant to the Texas Real Estate Investment Trust Act, as
amended (the "Texas REIT Act"). Unless the context otherwise
requires, all references herein to the "Company" shall mean
Camden Property Trust and its subsidiaries, and "Centeq" shall
mean Centeq Investments, Inc. and its predecessors and related
affiliates, partnerships and companies. As of December 31, 1995,
the Company owned and operated 50 multifamily properties (the
"Operating Properties") located in Houston, Dallas/Fort Worth,
Austin, Corpus Christi, El Paso, San Antonio and Tucson. The
Operating Properties contained 16,742 apartment units and had an
occupancy rate of 93.7% at December 31, 1995. The Company is
developing four multifamily properties in Houston, Dallas, Corpus
Christi and Phoenix (the "Development Properties") which will,
when completed, add 1,688 units to its portfolio, and has five
properties on which it intends to begin construction in the next
twelve months (the "Future Development Properties") which the
Company anticipates will, when completed, add an estimated 1,678
units to its portfolio. Through Apartment Connection, Inc., an
affiliate of the Company, the Company engages in apartment
marketing in the Houston metropolitan area utilizing a network of
32 independent licensed real estate agents operating in four
offices. The Company is vertically integrated, with operations
that encompass multifamily property acquisition, development,
construction services, management, marketing, finance, leasing,
brokerage and asset management.
The Company was formed in 1993 to continue the multifamily
property acquisition, development, management and marketing
operations and related business objectives and strategies of
Centeq (the "Multifamily Operations"). Upon completion of the
Company's initial public offering in July 1993 and the concurrent
completion of the transactions involved in the formation of the
Company ("Formation Transactions"), the Company succeeded to the
Multifamily Operations of Centeq and owned and operated 20 of the
Operating Properties located in the Houston, Dallas and Austin
metropolitan areas containing 7,054 units and owned contracts to
purchase two of the Development Properties. The predecessors of
Centeq were formed in 1982 by Richard J. Campo, the Company's
Chairman of the Board of Trust Managers and Chief Executive
Officer, and D. Keith Oden, the Company's President and Chief
Operating Officer, to provide real estate services to owners and
financial institutions. Centeq was involved in the acquisition,
development, management and marketing of approximately 28
multifamily properties containing 8,564 units in certain major
Texas and other markets and the development, marketing and
management of a number of other types of properties, including
office facilities, high-rise condominiums and research
facilities. The Company is operated under the direction of
Messrs. Campo and Oden and a management team consisting of
substantially all of the former personnel of Centeq.
In April 1994, the Company completed two concurrent offerings
(the "Subsequent Offerings"), consisting of a public offering of
3,450,000 Common Shares (including 450,000 Common Shares issued
pursuant to the underwriters' over-allotment option) and a public
offering of $86,250,000 aggregate principal amount of its 7.33%
Convertible Subordinated Debentures due 2001 (the "Convertible
Debentures") (including $11,250,000 aggregate principal amount of
the Convertible Debentures issued pursuant to the underwriters'
over-allotment option). The net proceeds of the Subsequent
Offerings of $159 million were used to repay approximately $108
million of floating rate indebtedness, to acquire additional
multifamily properties and to fund certain development
activities.
The Company elected to be taxed as a REIT for federal income
tax purposes for its taxable year ended December 31, 1994, and
expects to continue to elect such status. Although the Company
believes that it was organized and has been operating in
conformity with the requirements for qualification under the
Internal Revenue Code of 1986, as amended (the "Code"), no
assurance can be given that the Company will continue to qualify
as a REIT. Qualification as a REIT involves application of
highly technical and complex Code provisions for which there are
only limited judicial or administrative interpretations. If in
any taxable year the Company would fail to qualify as a REIT, the
Company would not be allowed a deduction for distributions to
shareholders for computing taxable income and would be subject to
federal taxation at regular corporate rates. Unless entitled to
relief under certain statutory provisions, the Company would also
be disqualified from treatment as a REIT for the four taxable
years following the year during which qualification was lost. As
a result, the Company's ability to make distributions to its
shareholders would be adversely affected.
To ensure that the Company qualifies as a REIT, transfer of
the Common Shares or Preferred Shares is subject to certain
restrictions and ownership of the outstanding Shares (as defined
in the Company's Declaration of Trust) by any single person is
limited to 9.8% of the total number of outstanding Shares,
subject to certain exceptions. As provided in the Declaration of
Trust of the Company, any purported transfer in violation the
above-described ownership limitations shall be void.
3
<PAGE>
The Common Shares of the Company are listed on the NYSE under
the symbol "CPT." On September 14, 1995, the Company declared a
regular quarterly distribution ($0.46 per Common Share) for the
third quarter of 1995 to all shareholders of record on September
29, 1995, paid on October 17, 1995. On December 14, 1995, the
Company declared a regular quarterly distribution ($0.46 per
Common Share) for the fourth quarter of 1995, bringing total
dividends for the year to $1.84 per Common Share. The fourth
quarter distribution was paid on January 17, 1996 to shareholders
of record as of December 27, 1995. The Company intends to
continue making regular quarterly distributions to its
shareholders. Distributions depend upon a variety of factors,
and there can be no assurance that distributions will be made.
The Company's principal executive offices are located at 3200
Southwest Freeway, Suite 1500, Houston, Texas 77027 and its
telephone number is (713) 964-3555.
USE OF PROCEEDS
Unless otherwise described in the Prospectus Supplement which
accompanies this Prospectus, the Company intends to use the net
proceeds from the sale of the Offered Securities for general
corporate purposes, which may include the acquisition and
development of multifamily properties as suitable opportunities
arise, the improvement of certain properties in the Company's
portfolio and the repayment of certain then-outstanding secured
or unsecured indebtedness.
DESCRIPTION OF COMMON SHARES
The Declaration of Trust of the Company provides that the
Company may issue up to 110,000,000 shares of beneficial interest
of the Company, par value $.01 per share, consisting of
100,000,000 Common Shares and 10,000,000 Preferred Shares. At
December 31, 1995, 14,513,526 Common Shares were issued and
outstanding and 84,783 Series A Preferred Shares were issued and
outstanding.
The following description of the Common Shares sets forth
certain general terms and provisions of the Common Shares to
which any Prospectus Supplement may relate, including a
Prospectus Supplement providing that Common Shares will be
issuable upon conversion of Debt Securities or Preferred Shares
of the Company or upon the exercise of the Common Shares Warrants
issued by the Company. The statements below describing the
Common Shares are in all respects subject to and qualified in
their entirety by reference to the applicable provisions of the
Company's Declaration of Trust and Bylaws.
General
Subject to the provisions of the Declaration of Trust
regarding Excess Securities (as defined therein), holders of
Common Shares are entitled to such dividends, in cash, property
or shares of beneficial interest, as may be declared from time to
time by the Board of Trust Managers. The Company is prohibited
from declaring or paying any dividend when the Company is unable
to pay its debts as they become due in the usual course or when
the payment of such dividend would result in the Company becoming
unable to pay its debts as they become due. Payment and
declaration of dividends on the Common Shares and purchases of
shares thereof by the Company will be subject to certain
restrictions if the Company fails to pay dividends on the
Preferred Shares. See "Description of Preferred Shares." In the
event of any liquidation, dissolution or winding-up of the
affairs of the Company, holders of Common Shares will be entitled
to share equally and ratably in the assets of the Company
remaining after provision for liabilities to creditors and
payment of liquidation preferences to holders of Preferred Shares
or senior debt securities and subject to the provisions of the
Declaration of Trust regarding Excess Securities. Each
outstanding Common Share entitles the holder to one vote on all
matters submitted to a vote of shareholders, including the
election of Trust Managers. There is no cumulative voting in the
election of Trust Managers. Upon receipt by the Company of
lawful payment therefor, the Common Shares will, when issued, be
fully paid and nonassessable, and will not be subject to
redemption except (as described in the Declaration of Trust) as
necessary to preserve the Company's status as a REIT. A
shareholder of the Company has no preemptive rights to subscribe
for additional Common Shares or other securities of the Company
except as may be granted by the Board of Trust Managers.
4
<PAGE>
Restrictions on Ownership
For the Company to qualify as a REIT under the Code, not more
than 50% in value of its outstanding Shares may be owned directly
or indirectly, by five or fewer individuals (as defined in the
Code to include certain entities) during the last half of a
taxable year, and such Shares must be beneficially 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.
Because the Board of Trust Managers believes it is essential
for the Company to continue to qualify as a REIT, the Declaration
of Trust, subject to certain exceptions, provides that no holder
may own, or be deemed to own by virtue of the attribution
provisions of the Code, more than 9.8% (the "Ownership Limit") of
the total outstanding Shares. The Trust Managers are not
permitted to waive the Ownership Limit. Any transfer of Shares
that would; (i) create a direct or indirect ownership of Shares
in excess of the Ownership Limit; (ii) result in the Shares being
owned by fewer than 100 persons; (iii) result in the Company
being "closely held" within the meaning of Section 856(h) of the
Code; or (iv) result in the disqualification of the Company as a
REIT, shall be null and void, and the intended transferee will
acquire no rights in the Shares, except as provided in the
Declaration of Trust regarding Excess Securities.
The Company's Declaration of Trust provides that Shares
owned, or deemed to be owned, or transferred to a shareholder in
excess of the Ownership Limit will automatically be deemed to be
Excess Securities and as such will be deemed to have been
transferred to the Company as trustee of a trust for the
exclusive benefit of the transferees to whom such Shares may
ultimately be transferred without violating the Ownership Limit.
While the Excess Securities are held in trust, they will not be
entitled to vote, and they will not be considered for purposes of
any shareholder vote or the determination of a quorum for such
vote, and they will not be entitled to participate in dividends
or other distributions. Any dividend or distribution paid to a
proposed transferee of Excess Securities prior to the discovery
by the Company that Shares have been transferred in violation of
the provisions of the Company's Declaration of Trust shall be
repaid to the Company upon demand. The Excess Securities are not
treasury shares, but rather constitute a separate class of issued
and outstanding Shares of the Company. The original
transferee-shareholder may, at any time the Excess Securities are
held by the Company in trust, transfer the interest in the trust
representing the Excess Securities to any individual whose
ownership of the Shares that have been deemed to be Excess
Securities would be permitted under the Ownership Limit, at a
price not in excess of the price paid by the original
transferee-shareholder for the Shares that were exchanged into
Excess Securities. Immediately upon the transfer to the
permitted transferee, the Excess Securities will automatically be
deemed to be Shares of the class from which they were converted.
If the foregoing transfer restrictions are determined to be void
or invalid by virtue of any legal decision, statute, rule or
regulation, then the intended transferee-shareholder of any
Excess Securities may be deemed, at the option of the Company, to
have acted as an agent on behalf of the Company in acquiring the
Excess Securities and to hold the Excess Securities on behalf of
the Company.
In addition to the foregoing transfer restrictions, the
Company will have the right, for a period of 90 days during the
time any Excess Securities are held by the Company in trust, to
purchase all or any portion of the Excess Securities from the
original transferee-shareholder at the lesser of the price paid
for the Shares by the original transferee-shareholder and the
market price (as determined in the manner set forth in the
Declaration of Trust) of the Shares on the date the Company
exercises its option to purchase. The 90-day period begins on
the later of the date of the violative transfer or date the Board
of Trust Managers determines that a violative transfer has been
made.
All certificates representing the Common Shares will bear a
legend referring to the restrictions described above.
Each shareholder shall upon demand be required to disclose to
the Company in writing any information with respect to the
direct, indirect and constructive ownership of beneficial
interests as the Board of Trust Managers deems necessary to
comply with the provisions of the Code applicable to REITs, to
comply with the requirements of any taxing authority or
governmental agency or to determine any such compliance.
The Ownership Limit may have the effect of precluding
acquisition of control of the Company unless the Board of Trust
Managers and the shareholders determine that maintenance of REIT
status is no longer in the best interest of the Company.
American Stock Transfer & Trust Company or its successor is
the transfer agent and registrar for the Common Shares.
5
<PAGE>
DESCRIPTION OF PREFERRED SHARES
The following description of the terms of the Preferred
Shares sets forth certain general terms and provisions of the
Preferred Shares to which any Prospectus Supplement may relate.
Certain other terms of any series of the Preferred Shares offered
by any Prospectus Supplement will be described in such Prospectus
Supplement. The description of certain provisions of the
Preferred Shares set forth below and in any Prospectus Supplement
does not purport to be complete and is subject to and qualified
in its entirety by reference to the Company's Declaration of
Trust and the Board of Trust Managers' resolution or resolutions
relating to each series of the Preferred Shares which will be
filed with the Commission and incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is
a part at or prior to the time of the issuance of such series of
Preferred Shares.
General
The Company is authorized to issue 10,000,000 preferred
shares of beneficial interest, par value $0.01 per share, of
which 84,783 Series A Preferred Shares were outstanding at
December 31, 1995.
Under the Company's Declaration of Trust, the Board of Trust
Managers, without further shareholder approval, may from time to
time establish and issue Preferred Shares in one or more series
with such designations, powers, preferences or rights of the
shares of such series and the qualifications, limitations or
restrictions thereon.
The Preferred Shares shall have the dividend, liquidation,
redemption and voting rights set forth below unless otherwise
provided in a Prospectus Supplement relating to a particular
series of the Preferred Shares. Reference is made to the
Prospectus Supplement relating to the particular series of the
Preferred Shares offered thereby for specific terms, including:
(i) the designation and stated value per share of such Preferred
Shares and the number of shares offered; (ii) the amount of
liquidation preference per share; (iii) the initial public
offering price at which such Preferred Shares will be issued;
(iv) the dividend rate (or method of calculation), the dates on
which dividends shall be payable and the dates from which
dividends shall commence to cumulate, if any; (v) any redemption
or sinking fund provisions; (vi) any conversion right; and (vii)
any additional voting, dividend, liquidation, redemption, sinking
fund and other rights, preferences, privileges, limitations and
restrictions not in conflict with the Declaration of Trust or the
Texas REIT Act. The Preferred Shares will, when issued for
lawful consideration therefor, be fully paid and nonassessable
and will have no preemptive rights.
Rank
Unless otherwise specified in the Prospectus Supplement, the
Preferred Shares will, with respect to dividend rights and rights
upon liquidation, dissolution or winding up of the Company, rank
(i) senior to all classes or series of Common Shares and to all
equity securities ranking junior to such Preferred Shares; (ii)
on a parity with all equity securities issued by the Company the
terms of which specifically provide that such equity securities
rank on a parity with the Preferred Shares; and (iii) junior to
all equity securities issued by the Company the terms of which
specifically provide that such equity securities rank senior to
the Preferred Shares. The rights of the holders of each series
of the Preferred Shares will be subordinate to those of the
Company's general creditors.
Dividends
Holders of each series of Preferred Shares shall be entitled
to receive, when, as and if declared by the Board of Trust
Managers of the Company, out of assets of the Company legally
available for payment, cash dividends at such rates and on such
dates as will be set forth in the applicable Prospectus
Supplement. Such rate may be fixed or variable or both. Each
such dividend shall be payable to holders of record as they
appear on the share transfer books of the Company on such record
dates as shall be fixed by the Board of Trust Managers of the
Company, as specified in the Prospectus Supplement relating to
such series of Preferred Shares.
Dividends on any series of the Preferred Shares may be
cumulative or non-cumulative, as provided in the applicable
Prospectus Supplement. Dividends, if cumulative, will be
cumulative from and after the date set forth in the applicable
Prospectus Supplement. If the Board of Trust Managers of the
Company fails to declare a dividend payable on a dividend payment
date on any series of the Preferred Shares for which dividends
are noncumulative, then the holders of such series of the
Preferred Shares will have no right to receive a dividend in
respect of the dividend period ending on such dividend payment
6
<PAGE>
date, and the Company will have no obligation to pay the dividend
accrued for such period, whether or not dividends on such series
are declared payable on any future dividend payment date.
Dividends on shares of each series of Preferred Shares for which
dividends are cumulative will accrue from the date on which the
Company initially issues shares of such series.
So long as any series of the Preferred Shares shall be
outstanding, unless (i) full dividends (including if such
dividends are cumulative, dividends for prior dividend periods)
shall have been paid or declared and set apart for payment on all
outstanding Preferred Shares of such series and all other classes
and series of Preferred Shares of the Company (other than Junior
Shares, as defined below); and (ii) the repurchase or other
mandatory retirement of, or with respect to any sinking or other
analogous fund for, any shares of Preferred Shares of such series
or any other Preferred Shares of the Company of any class or
series (other than Junior Shares), the Company may not declare
any dividends on any Common Shares of the Company or any other
shares of the Company ranking as to dividends or distributions of
assets junior to such series of Preferred Shares (the Common
Shares and any such other shares being herein referred to as
"Junior Shares"), or make any payment on account of, or set apart
money for, the purchase, redemption or other retirement of, or
for a sinking or other analogous fund for, any Junior Shares or
make any distribution in respect thereof, whether in cash or
property or in obligations or shares of the Company, other than
Junior Shares which are neither convertible into, nor
exchangeable or exercisable for, any securities of the Company
other than Junior Shares.
Any dividend payment made on a series of Preferred Shares
shall first be credited against the earliest accrued but unpaid
dividend due with respect to shares of such series which remains
payable.
Redemption
A series of Preferred Shares may be redeemable, in whole or
from time to time in part, at the option of the Company, and may
be subject to mandatory redemption pursuant to a sinking fund or
otherwise, in each case upon terms, at the times and at the
redemption prices set forth in the Prospectus Supplement relating
to such series. Shares of the Preferred Shares redeemed by the
Company will be restored to the status of authorized but unissued
Preferred Shares of the Company.
The Prospectus Supplement relating to a series of Preferred
Shares that is subject to mandatory redemption will specify the
number of shares of such Preferred Shares that shall be redeemed
by the Company in each year commencing after a date to be
specified, at a redemption price per share to be specified,
together with an amount equal to all accrued and unpaid dividends
thereon (which shall not, if such Preferred Shares do not have a
cumulative dividend, include any accumulation in respect of
unpaid dividends for prior dividend periods) to the date of
redemption. The redemption price may be payable in cash or other
property, as specified in the applicable Prospectus Supplement.
If the redemption price for Preferred Shares of any series is
payable only from the net proceeds of the issuance of shares of
beneficial interest of the Company, the terms of such Preferred
Shares may provide that, if no such shares shall have been issued
or to the extent the net proceeds from any issuance are
insufficient to pay in full the aggregate redemption price then
due, such Preferred Shares shall automatically and mandatorily be
converted into shares of the applicable shares of beneficial
interest of the Company pursuant to conversion provisions
specified in the applicable Prospectus Supplement.
So long as any dividends on shares of any series of the
Preferred Shares or any other series of Preferred Shares of the
Company ranking on a parity as to dividends and distribution of
assets with such series of the Preferred Shares are in arrears,
no shares of any such series of the Preferred Shares or such
other series of Preferred Shares of the Company will be redeemed
(whether by mandatory or optional redemption) unless all such
shares are simultaneously redeemed, and the Company will not
purchase or otherwise acquire any such shares; provided, however,
that the foregoing will not prevent the purchase or acquisition
of such shares pursuant to a purchase or exchange offer made on
the same terms to holders of all such shares outstanding.
In the event that fewer than all of the outstanding shares of
a series of the Preferred Shares are to be redeemed, whether by
mandatory or optional redemption, the number of shares to be
redeemed will be determined by lot or pro rata (subject to
rounding to avoid fractional shares) as may be determined by the
Company or by any other method as may be determined by the
Company in its sole discretion to be equitable. From and after
the redemption date (unless default shall be made by the Company
in providing for the payment of the redemption price plus
accumulated and unpaid dividends, if any), dividends shall cease
to accumulate on the Preferred Shares called for redemption and
all rights of the holders thereof (except the right to receive
the redemption price plus accumulated and unpaid dividends, if
any) shall cease.
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Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, then, before any
distribution or payment shall be made to the holders of any
Junior Shares, the holders of each series of Preferred Shares
shall be entitled to receive out of assets of the Company legally
available for distribution to shareholders, liquidating
distributions in the amount of the liquidation preference per
share (set forth in the applicable Prospectus Supplement), plus
an amount equal to all dividends accrued and unpaid thereon
(which shall not include any accumulation in respect of unpaid
dividends for prior dividend periods if such Preferred Shares do
not have a cumulative dividend). After payment of the full
amount of the liquidating distributions to which they are
entitled, the holders of Preferred Shares will have no right or
claim to any of the remaining assets of the Company. In the
event that, upon any such voluntary or involuntary liquidation,
dissolution or winding up, the available assets of the Company
are insufficient to pay the amount of the liquidating
distributions on all outstanding Preferred Shares and the
corresponding amounts payable on all shares of other classes or
series of shares of beneficial interest of the Company ranking on
a parity with the Preferred Shares in the distribution of assets,
then the holders of the Preferred Shares and all other such
classes or series of shares of beneficial interest shall share
ratably in any such distribution of assets in proportion to the
full liquidating distributions to which they would otherwise be
respectively entitled.
If liquidating distributions shall have been made in full to
all holders of Preferred Shares, the remaining assets of the
Company shall be distributed among the holders of Junior Shares,
according to their respective rights and preferences and in each
case according to their respective number of shares. For such
purposes, the consolidation or merger of the Company with or into
any other corporation, or the sale, lease or conveyance of all or
substantially all of the property or business of the Company,
shall not be deemed to constitute a liquidation, dissolution or
winding up of the Company.
Voting Rights
Except as indicated below or in a Prospectus Supplement
relating to a particular series of the Preferred Shares, or
except as required by applicable law, holders of the Preferred
Shares will not be entitled to vote for any purpose.
So long as any series of Preferred Shares remain outstanding,
the consent or the affirmative vote of the holders of at least
66-2/3% of the votes entitled to be cast with respect to the then
outstanding shares of such series of the Preferred Shares
together with any Other Preferred Shares (as defined below),
voting as one class, either expressed in writing or at a meeting
called for that purpose, will be necessary (i) to permit, effect
or validate the authorization, or any increase in the authorized
amount, of any class or series of shares of the Company ranking
prior to the Preferred Shares of such series as to dividends,
voting or upon distribution of assets; and (ii) to repeal, amend
or otherwise change any of the provisions applicable to the
Preferred Shares of such series in any manner which adversely
affects the powers, preferences, voting power or other rights or
privileges of such series of the Preferred Shares. In case any
series of the Preferred Shares would be so affected by any such
action referred to in clause (ii) above in a different manner
than one or more series of the Other Preferred Shares which will
be similarly affected, the holders of the Preferred Shares of
such series, together with any series of the Other Preferred
Shares which will be similarly affected, will be entitled to vote
as a class, and the Company will not take such action without the
consent or affirmative vote, as above provided, of at least
66-2/3% of the total number of votes entitled to be cast with
respect to each such series of the Preferred Shares and the Other
Preferred Shares, then outstanding, in lieu of the consent or
affirmative vote hereinabove otherwise required.
With respect to any matter as to which the Preferred Shares
of any series is entitled to vote, holders of the Preferred
Shares of such series and any other series of Preferred Shares of
the Company ranking on a parity with such series of the Preferred
Shares as to dividends and distributions of assets and which by
its terms provides for similar voting rights (the "Other
Preferred Shares") will be entitled to cast the number of votes
set forth in the Prospectus Supplement with respect to that
series of Preferred Shares. As a result of the provisions
described in the preceding paragraph requiring the holders of
shares of a series of the Preferred Shares to vote together as a
class with the holders of shares of one or more series of Other
Preferred Shares, it is possible that the holders of such shares
of Other Preferred Shares could approve action that would
adversely affect such series of Preferred Shares, including the
creation of a class of shares of beneficial interest ranking
prior to such series of Preferred Shares as to dividends, voting
or distributions of assets.
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Conversion Rights
The terms and conditions, if any, upon which shares of any
series of Preferred Shares are convertible into Common Shares
will be set forth in the applicable Prospectus Supplement
relating thereto. Such terms will include the number of shares
of Common Shares into which the Preferred Shares are convertible,
the conversion price (or manner of calculation thereof), the
conversion period, provisions as to whether conversion will be at
the option of the holders of the Preferred Shares or the Company,
the events requiring an adjustment of the conversion price and
provisions affecting conversion.
Restrictions on Ownership
See "Description of Common Shares--Restrictions on Ownership"
for a discussion of the restrictions on shares of beneficial
interest ownership necessary for the Company to qualify as a REIT
under the Code.
Transfer Agent and Registrar
Unless otherwise indicated in a Prospectus Supplement
relating thereto, American Stock Transfer & Trust Company will be
the transfer agent and registrar for shares of each series of the
Preferred Shares.
DESCRIPTION OF SECURITIES WARRANTS
The Company may issue Securities Warrants for the purchase of
Debt Securities, Preferred Shares or Common Shares. Securities
Warrants may be issued independently or together with any other
Offered Securities offered by any Prospectus Supplement and may
be attached to or separate from such Offered Securities. Each
series of Securities Warrants will be issued under a separate
warrant agreement (each, a "Warrant Agreement") to be entered
into between the Company and a warrant agent specified in the
applicable Prospectus Supplement (the "Warrant Agent"). The
Warrant Agent will act solely as an agent of the Company in
connection with the Securities Warrants of such series and will
not assume any obligation or relationship of agency or trust for
or with any holders or beneficial owners of Securities Warrants.
The following summaries of certain provisions of the Securities
Warrant Agreement and the Securities Warrants do not purport to
be complete and are subject to, and are qualified in their
entirety by reference to, all the provisions of the Securities
Warrant Agreement and the Securities Warrant certificates
relating to each series of Securities Warrants which will be
filed with the Commission and incorporated by reference as an
exhibit to the Registration Statement of which this Prospectus is
a part at or prior to the time of the issuance of such series of
Securities Warrants.
If Securities Warrants are offered, the applicable Prospectus
Supplement will describe the terms of such Securities Warrants,
including, in the case of Securities Warrants for the purchase of
Debt Securities, the following where applicable: (i) the offering
price; (ii) the denominations and terms of the series of Debt
Securities purchasable upon exercise of such Securities Warrants;
(iii) the designation and terms of any series of Debt Securities
with which such Securities Warrants are being offered and the
number of such Securities Warrants being offered with such Debt
Securities; (iv) the date, if any, on and after which such
Securities Warrants and the related series of Debt Securities
will be transferable separately; (v) the principal amount of the
series of Debt Securities purchasable upon exercise of each such
Securities Warrant and the price at which such principal amount
of Debt Securities of such series may be purchased upon such
exercise; (vi) the date on which the right to exercise such
Securities Warrants shall commence and the date on which such
right shall expire (the "Expiration Date"); (vii) whether the
Securities Warrants will be issued in registered or bearer form;
(viii) any special United States federal income tax consequences;
(ix) the terms, if any, on which the Company may accelerate the
date by which the Securities Warrants must be exercised; and (x)
any other material terms of such Securities Warrants.
In the case of Securities Warrants for the purchase of
Preferred Shares or Common Shares, the applicable Prospectus
Supplement will describe the terms of such Securities Warrants,
including the following where applicable: (i) the offering price;
(ii) the aggregate number of shares purchasable upon exercise of
such Securities Warrants, the exercise price, and in the case of
Securities Warrants for Preferred Shares, the designation,
aggregate number and terms of the series of Preferred Shares
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<PAGE>
purchasable upon exercise of such Securities Warrants; (iii) the
designation and terms of any series of Preferred Shares with
which such Securities Warrants are being offered and the number
of such Securities Warrants being offered with such Preferred
Shares; (iv) the date, if any, on and after which such Securities
Warrants and the related series of Preferred Shares or Common
Shares will be transferable separately; (v) the date on which the
right to exercise such Securities Warrants shall commence and the
Expiration Date; (vi) any special United States federal income
tax consequences; and (vii) any other material terms of such
Securities Warrants.
Securities Warrant certificates may be exchanged for new
Securities Warrant certificates of different denominations, may
(if in registered form) be presented for registration of
transfer, and may be exercised at the corporate trust office of
the Securities Warrant Agent or any other office indicated in the
applicable Prospectus Supplement. Prior to the exercise of any
Securities Warrant to purchase Debt Securities, holders of such
Securities Warrants will not have any of the rights of holders of
the Debt Securities purchasable upon such exercise, including the
right to receive payments of principal, premium, if any, or
interest, if any, on such Debt Securities or to enforce covenants
in the applicable indenture. Prior to the exercise of any
Securities Warrants to purchase Preferred Shares or Common
Shares, holders of such Securities Warrants will not have any
rights of holders of such Preferred Shares or Common Shares,
including the right to receive payments of dividends, if any, on
such Preferred Shares or Common Shares, or to exercise any
applicable right to vote.
Exercise of Securities Warrants
Each Securities Warrant will entitle the holder thereof to
purchase such principal amount of Debt Securities or number of
shares of Preferred Shares or Common Shares, as the case may be,
at such exercise price as shall in each case be set forth in, or
calculable from, the Prospectus Supplement relating to the
offered Securities Warrants. After the close of business on the
Expiration Date (or such later date to which such Expiration Date
may be extended by the Company), unexercised Securities Warrants
will become void.
Securities Warrants may be exercised by delivering to the
Securities Warrant Agent payment as provided in the applicable
Prospectus Supplement of the amount required to purchase the Debt
Securities, Preferred Shares or Common Shares, as the case may
be, purchasable upon such exercise together with certain
information set forth on the reverse side of the Securities
Warrant certificate. Securities Warrants will be deemed to have
been exercised upon receipt of payment of the exercise price,
ubject to the receipt within five (5) business days, of the
Securities Warrant certificate evidencing such Securities
Warrants. Upon receipt of such payment and the Securities
Warrant certificate properly completed and duly executed at the
corporate trust office of the Securities Warrant Agent or any
other office indicated in the applicable Prospectus Supplement,
the Company will, as soon as practicable, issue and deliver the
Debt Securities, Preferred Shares or Common Shares, as the case
may be, purchasable upon such exercise. If fewer than all of the
Securities Warrants represented by such Securities Warrant
certificate are exercised, a new Securities Warrant certificate
will be issued for the remaining amount of Securities Warrants.
Amendments and Supplements to Warrant Agreement
The Warrant Agreements may be amended or supplemented without
the consent of the holders of the Securities Warrants issued
thereunder to effect changes that are not inconsistent with the
provisions of the Securities Warrants and that do not adversely
affect the interests of the holders of the Securities Warrants.
Adjustments
Unless otherwise indicated in the applicable Prospectus
Supplement, the exercise price of, and the number of shares of
Common Shares covered by, a Common Shares Warrant are subject to
adjustment in certain events, including (i) payment of a dividend
on the Common Shares payable in shares of beneficial interest and
share splits, combinations or reclassification of the Common
Shares; (ii) issuance to all holders of Common Shares of rights
or warrants to subscribe for or purchase shares of Common Shares
at less than their current market price (as defined in the
Warrant Agreement for such series of Common Shares Warrants); and
(iii) certain distributions of evidences of indebtedness or
assets (including securities but excluding cash dividends or
distributions paid out of consolidated earnings or retained
earnings or dividends payable in Common Shares) or of
subscription rights and warrants (excluding those referred to
above).
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No adjustment in the exercise price of, and the number of
Common Shares covered by, a Common Shares Warrant will be made
for regular quarterly or other periodic or recurring cash
dividends or distributions or for cash dividends or distributions
to the extent paid from consolidated earnings or retained
earnings. No adjustment will be required unless such adjustment
would require a change of at least 1% in the exercise price then
in effect. Except as stated above, the exercise price of, and
the number of Common Shares covered by, a Common Shares Warrant
will not be adjusted for the issuance of Common Shares or any
securities convertible into or exchangeable for Common Shares, or
carrying the right or option to purchase or otherwise acquire the
foregoing, in exchange for cash, other property or services.
In the event of any (i) consolidation or merger of the
Company with or into any entity (other than a consolidation or a
merger that does not result in any reclassification, conversion,
exchange or cancellation of outstanding shares of Common Shares);
(ii) sale, transfer, lease or conveyance of all or substantially
all of the assets of the Company; or (iii) reclassification,
capital reorganization or change of the Common Shares (other than
solely a change in par value or from par value to no par value),
then any holder of a Common Shares Warrant will be entitled, on
or after the occurrence of any such event, to receive on exercise
of such Common Shares Warrant the kind and amount of shares of
beneficial interest or other securities, cash or other property
(or any combination thereof) that the holder would have received
had such holder exercised such holder's Common Shares Warrant
immediately prior to the occurrence of such event. If the
consideration to be received upon exercise of the Common Shares
Warrant following any such event consists of common shares of the
surviving entity, then from and after the occurrence of such
event, the exercise price of such Common Shares Warrant will be
subject to the same anti-dilution and other adjustments described
in the second preceding paragraph, applied as if such common
shares were Common Shares.
DESCRIPTION OF DEBT SECURITIES
The Debt Securities are to be issued under an Indenture, as
amended or supplemented from time to time (the "Indenture"),
between the Company and a trustee to be selected by the Company
(the "Trustee"). A form of the Indenture executed by the Company
will be filed as an exhibit to an amendment to the Registration
Statement of which this Prospectus is a part or to a Current
Report on Form 8-K incorporated by reference into the
Registration Statement of which this Prospectus is a part. The
Indenture will be subject to, and governed by, the Trust
Indenture Act of 1939, as amended (the "TIA"). The description
of the Indenture set forth below assumes that the Company has
entered into the Indenture. The Company will execute the
applicable Indenture when and if the Company issues Debt
Securities. The statements made hereunder relating to the
Indenture and the Debt Securities to be issued thereunder are
summaries of certain provisions thereof and do not purport to be
complete and are subject to, and are qualified in their entirety
by reference to, all provisions of the Indenture and such Debt
Securities. All section references appearing herein are to
sections of the Indenture, and capitalized terms used but not
defined herein shall have the respective meanings set forth in
the Indenture.
General
The Debt Securities will be direct, unsecured and
unsubordinated obligations of the Company and will rank equally
with all other unsecured and unsubordinated indebtedness of the
Company. The Indenture provides that the Debt Securities may be
issued without limit as to aggregate principal amount, in one or
more series, in each case as established from time to time in or
pursuant to authority granted by a resolution of the Board of
Trust Managers of the Company or as established in one or more
indentures supplemental to the Indenture. All Debt Securities of
one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened, without the consent
of the Holders of the Debt Securities of such series, for
issuances of additional Debt Securities of such series (Section
301).
The Indenture provides that there may be more than one
Trustee thereunder, each with respect to one or more series of
Debt Securities. Any Trustee under the Indenture may resign or
be removed with respect to one or more series of Debt Securities,
and a successor Trustee may be appointed to act with respect to
such series (Section 609). In the event that two or more persons
are acting as Trustee with respect to different series of Debt
Securities, each such Trustee shall be a Trustee of a trust under
the Indenture separate and apart from the trust administered by
any other Trustee (Section 610), and, except as otherwise
indicated herein, any action described herein to be taken by the
Trustee may be taken by each such Trustee with respect to, and
only with respect to, the one or more series of Debt Securities
for which it is Trustee under the Indenture.
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Reference is made to the Prospectus Supplement relating to
the series of Debt Securities being offered for the specific
terms thereof, including:
1. the title of such Debt Securities;
2. the aggregate principal amount of such Debt Securities
and any limit on such aggregate principal amount;
3. the date or dates, or the method for determining such
date or dates, on which the principal (and premium or Make-Whole
Amount, if any) of such Debt Securities will be payable;
4. the rate or rates (which may be fixed or variable), or
the method by which such rate or rates shall be determined, at
which such Debt Securities will bear interest, if any;
5. the date or dates, or the method for determining such
date or dates, from which any such interest will accrue, the
Interest Payment Dates on which any such interest will be
payable, the Regular Record Dates for such Interest Payment
Dates, or the method by which such dates shall be determined, the
Person to whom such interest shall be payable, and the basis upon
which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
6. the place or places where the principal of (and
premium or Make-Whole Amount, if any) and interest (including all
Additional Amounts), if any, on such Debt Securities will be
payable, such Debt Securities may be surrendered for conversion
or registration of transfer or exchange, and notices or demands
to or upon the Company in respect of such Debt Securities and the
Indenture may be served;
7. the period or periods within which, the price or
prices at which and the terms and conditions upon which such Debt
Securities may be redeemed, as a whole or in part, at the option
of the Company, if the Company is to have such an option;
8. the obligation, if any, of the Company to redeem,
repay or purchase such Debt Securities pursuant to any sinking
fund or analogous provision or at the option of a Holder thereof,
and the period or periods within which, the price or prices at
which and the terms and conditions upon which such Debt
Securities will be redeemed, repaid or purchased, as a whole or
in part, pursuant to such obligation;
9. the percentage of the principal amount at which such
Debt Securities will be issued and, if other than the principal
amount thereof, the portion of the principal amount thereof
payable upon declaration of acceleration of the maturity thereof,
or (if applicable) the portion of the principal amount of such
Debt Securities which is convertible into Common Shares,
Preferred Shares or Debt Securities of another series, or the
method by which any such portion shall be determined;
10. if other than U.S. dollars, the currency or currencies
in which such Debt Securities are denominated and payable, which
may be a foreign currency or units of two or more foreign
currencies or a composite currency or currencies, and the terms
and conditions relating thereto;
11. whether the amount of payments of principal of (and
premium or Make-Whole Amount, if any, including any amount due
upon redemption, if any) or interest and Additional Amounts, if
any, on such Debt Securities may be determined with reference to
an index, formula or other method (which index, formula or method
may, but need not be, based on a currency, currencies, currency
unit or units or composite currency or currencies) and the manner
in which such amounts shall be determined;
12. any additions to, modifications of or deletions from
the terms of such Debt Securities with respect to the Events of
Default or covenants set forth in the Indenture;
13. whether such Debt Securities will be issued in
certificated or book-entry form;
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14. whether such Debt Securities will be in registered or
bearer form and, if in registered form, the denominations thereof
if other than $1,000 and any integral multiple thereof and, if in
bearer form, the denominations thereof and terms and conditions
relating thereto;
15. the applicability, if any, of the defeasance and
covenant defeasance provisions of Article Fourteen of the
Indenture;
16. if such Debt Securities are to be issued upon the
exercise of Debt Securities Warrants, the time, manner and place
for such Debt Securities to be authenticated and delivered;
17. the terms, if any, upon which Debt Securities may be
convertible into Common Shares, Preferred Shares or Debt
Securities of another series of the Company and the terms and
conditions upon which such conversion will be effected,
including, without limitation, the initial conversion price or
rate and the conversion period;
18. if convertible, in connection with the preservation of
the Company's status as a REIT, any applicable limitations on the
ownership or transferability of the Common Shares, Preferred
Shares or other capital shares of the Company into which such
Debt Securities are convertible;
19. whether and under what circumstances the Company will
pay Additional Amounts as contemplated in the Indenture on such
Debt Securities in respect of any tax, assessment or governmental
charge and, if so, whether the Company will have the option to
redeem such Debt Securities in lieu of making such payment; and
20. any other terms of such Debt Securities not
inconsistent with the provisions of the Indenture (Section 301).
If so provided in the applicable Prospectus Supplement, the
Debt Securities may be issued at a discount below their principal
amount and may provide for less than the entire principal amount
thereof to be payable upon declaration of acceleration of the
maturity thereof or bear no interest or bear interest at a rate
which at the time of issuance is below market rates ("Original
Issue Discount Securities"). Special U.S. federal income tax,
accounting and other considerations applicable to Original Issue
Discount Securities will be described in the applicable
Prospectus Supplement.
Except as set forth below under "Certain Covenants-
Limitations on Incurrence of Debt," the Indenture does not
contain any ther provisions that would limit the ability of the
Company to incur ndebtedness or that would afford Holders of Debt
Securities protection in the event of a highly leveraged or
similar transaction involving the Company or in the event of a
change of control. However, restrictions on ownership and
transfers of the Company's Common Shares and Preferred Shares are
designed to preserve its status as a REIT and, therefore, may act
to prevent or hinder a change of control. See "Description of
Common Shares" and "Description of Preferred Shares." Reference
is made to the applicable Prospectus Supplement for information
with respect to any deletions from, modifications of or additions
to the Events of Default or covenants of the Company that are
described below, including any addition of a covenant or other
provision providing event risk or similar protection.
Denominations, Interest, Registration and Transfer
Unless otherwise described in the applicable Prospectus
Supplement, the Debt Securities of any series will be issuable in
denominations of $1,000 and integral multiples thereof (Section
302).
Unless otherwise specified in the applicable Prospectus
Supplement, the principal of (and premium or Make-Whole Amount,
if any) and interest or Additional Amounts, if any on any series
of Debt Securities will be payable at the corporate trust office
of the Trustee, provided that, at the option of the Company,
payment of interest may be made by check mailed to the address of
the Person entitled thereto as it appears in the Security
Register or by wire transfer of funds to such Person at an
account maintained within the United States (Sections 301, 305,
306, 307 and 1002).
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Any interest not punctually paid or duly provided for on any
Interest Payment Date with respect to a Debt Security ("Defaulted
Interest") will forthwith cease to be payable to the Holder on
the applicable Regular Record Date and may either be paid to the
person in whose name such Debt Security is registered at the
close of business on a special record date (the "Special Record
Date") for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to the Holder of such
Debt Security not less than 10 days prior to such Special Record
Date, or may be paid at any time in any other lawful manner, all
as more completely described in the Indenture.
Subject to certain limitations imposed upon Debt Securities
issued in book-entry form, the Debt Securities of any series will
be exchangeable for other Debt Securities of the same series and
of a like aggregate principal amount and tenor of different
authorized denominations upon surrender of such Debt Securities
at the corporate trust office of the Trustee. In addition,
subject to certain limitations imposed upon Debt Securities
issued in book-entry form, the Debt Securities of any series may
be surrendered for conversion or registration of transfer thereof
at the corporate trust office of the Trustee. Every Debt Security
surrendered for conversion, registration of transfer or exchange
shall be duly endorsed or accompanied by a written instrument of
transfer. No service charge will be made for any registration
of transfer or exchange of any Debt Securities, but the Company
may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith (Section
305). If the applicable Prospectus Supplement refers to any
transfer agent (in addition to the Trustee) initially designated
by the Company with respect to any series of Debt Securities, the
Company may at any time rescind the designation of any such
transfer agent or approve a change in the location through which
any such transfer agent acts, except that the Company will be
required to maintain a transfer agent in each Place of Payment
for such series. The Company may at any time designate
additional transfer agents with respect to any series of Debt
Securities (Section 1002).
Neither the Company nor the Trustee shall be required to (i)
issue, register the transfer of or exchange Debt Securities of
any series during a period beginning at the opening of business
15 days before any selection of Debt Securities of that series to
be redeemed and ending at the close of business on the day of
mailing of the relevant notice of redemption; (ii) register the
transfer of or exchange any Debt Security, or portion thereof,
called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part; or (iii) issue, register the
transfer of or exchange any Debt Security which has been
surrendered for repayment at the option of the Holder, except the
portion, if any, of such Debt Security not to be so repaid
(Section 305).
Merger, Consolidation or Sale
The Company, without the consent of the Holders of any of the
Debt Securities, may consolidate with, or sell, lease or convey
all or substantially all of its assets to, or merge with or into,
any other corporation, provided that (a) either the Company shall
be the continuing corporation or, the successor corporation (if
other than the Company) formed by or resulting from any such
consolidation or merger or which shall have received the transfer
of such assets shall expressly assume payment of the principal of
(and premium or Make-Whole Amount, if any) and interest
(including Additional Amounts, if any) on all of the Debt
Securities and the due and punctual performance and observance of
all of the covenants and conditions contained in the Indenture;
(b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the
Company or any Subsidiary as a result thereof as having been
incurred by the Company or such Subsidiary at the time of such
transaction, no Event of Default under the Indenture, and no
event which, after notice or the lapse of time, or both, would
become such an Event of Default, shall have occurred and be
continuing; and (c) an officers' certificate and legal opinion
covering such conditions shall be delivered to the Trustee
(Sections 801 and 803).
Certain Covenants
Existence. Except as permitted under "Merger, Consolidation
or Sale," the Company will do or cause to be done all things
necessary to preserve and keep in full force and effect its
corporate existence, rights (charter and statutory) and
franchises; provided, however, that the Company shall not be
required to preserve any right or franchise if it determines that
the preservation thereof is no longer desirable in the conduct of
its business and that the loss thereof is not disadvantageous in
any material respect to the Holders of the Debt Securities
(Section 1004).
Maintenance of Properties. The Company will cause all of its
properties used or useful in the conduct of its business or the
business of any Subsidiary to be maintained and kept in good
condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary
repairs, renewals, replacements and improvements thereof, all as
in the judgment of the Company may be necessary so that the
business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that
the Company and its Subsidiaries shall not be prevented from
selling or otherwise disposing for value its properties in the
ordinary course of business (Section 1005).
14
<PAGE>
Insurance. The Company will, and will cause each of its
Subsidiaries to, keep all of its insurable properties insured
against loss or damage in accordance with industry practices and
with insurers of recognized responsibility and of suitable
financial stability (Section 1006).
Payment of Taxes and Other Claims. The Company will pay or
discharge or cause to be paid or discharged, before the same
shall become delinquent, (i) all taxes, assessments and
governmental charges levied or imposed upon it or any Subsidiary
or upon the income, profits or property of the Company or any
Subsidiary; and (ii) all lawful claims for labor, materials and
supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however,
that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings (Section
1007).
Provision of Financial Information. Whether or not the
Company is subject to Section 13 or 15(d) of the Exchange Act,
the Company will, to the extent permitted under the Exchange Act,
file with the Commission the annual reports, quarterly reports
and other documents which the Company would have been required to
file with the Commission pursuant to such Section 13 or 15(d)
(the "Financial Statements") if the Company were so subject, such
documents to be filed with the Commission on or prior to the
respective dates (the "Required Filing Dates") by which the
Company would have been required so to file such documents if the
Company were so subject. The Company will also in any event (x)
within 15 days of each Required Filing Date file with the Trustee
copies of the annual reports, quarterly reports and other
documents which the Company would have been required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange
Act if the Company were subject to such Sections; and (y) if
filing such documents by the Company with the Commission is not
permitted under the Exchange Act, promptly upon written request
and payment of the reasonable cost of duplication and delivery,
supply copies of such documents to any prospective Holder
(Section 1008).
Events of Default, Notice and Waiver
The Indenture provides that the following events are "Events
of Default" with respect to a series of Debt Securities issued
thereunder: (a) default for 30 days in the payment of any
installment of interest or Additional Amount payable on any Debt
Security of such series when due and payable; (b) default in the
payment of the principal of (or premium or Make-Whole Amount, if
any) any Debt Security of such series when due and payable; (c)
default in the performance, or breach, of any covenant of the
Company contained in the Indenture (other than a covenant added
to the Indenture solely for the benefit of a series of Debt
Securities other than such series), which continues for 60 days
after written notice as provided in the Indenture; (d) default
under any bond, debenture, note, mortgage, indenture or
instrument under which there may be issued or by which there may
be secured or evidenced any indebtedness for money borrowed by
the Company (or by any Subsidiary, the repayment of which the
Company has guaranteed or for which the Company is directly
responsible or liable as obligor or guarantor) having an
aggregate principal amount outstanding of at least $10,000,000,
whether such indebtedness now exists or shall hereafter be
incurred or created, which default shall have resulted in such
indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable,
without such indebtedness having been discharged or such
acceleration having been rescinded or annulled within a period of
30 days after written notice to the Company as provided in the
Indenture; (e) the entry by a court of competent jurisdiction of
one or more judgments, orders or decrees against the Company or
any of its Subsidiaries in an aggregate amount (excluding amounts
covered by insurance) in excess of $10,000,000 and such
judgments, orders or decrees remain undischarged, unstayed and
unsatisfied in an aggregate amount (excluding amounts covered by
insurance) in excess of $10,000,000 for a period of 30
consecutive days; or (f) certain events of bankruptcy, insolvency
or reorganization, or court appointment of a receiver, liquidator
or trustee of the Company or any Significant Subsidiary or for
all or substantially all of either of its property (Section 501).
If an Event of Default under the Indenture with respect to
Debt Securities of any series at the time Outstanding occurs and
is continuing, then in every such case the Trustee or the Holders
of not less than 25% in principal amount of the Outstanding Debt
Securities of that series may declare the principal amount (or,
if the Debt Securities of that series are Original Issue Discount
Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms thereof) of all of the
Debt Securities of that series to be due and payable immediately
by written notice thereof to the Company (and to the Trustee if
given by the Holders). However, at any time after such a
15
<PAGE>
declaration of acceleration with respect to Debt Securities of
such series (or of all Debt Securities then Outstanding under the
Indenture, as the case may be) has been made, but before a
judgment or decree for payment of the money due has been obtained
by the Trustee, the Holders of not less than a majority in
principal amount of Outstanding Debt Securities of such series
(or of all Debt Securities then Outstanding under the Indenture,
as the case may be) may rescind and annul such declaration and
its consequences if (a) the Company shall have deposited with the
Trustee all required payments of the principal of (and premium
and Make-Whole Amount, if any) and interest on and any Additional
Amounts and any other amounts that may be payable in respect of
the Debt Securities of such series (or of all Debt Securities
then Outstanding under the Indenture, as the case may be), plus
certain fees, expenses, disbursements and advances of the Trustee
and (b) all Events of Default, other than the non-payment of
accelerated principal (or specified portion thereof), with
respect to Debt Securities of such series (or all Debt Securities
then Outstanding under the Indenture, as the case may be) have
been cured or waived as provided in the Indenture (Section 502).
The Indenture also provides that the Holders of not less than a
majority in principal amount of the Outstanding Debt Securities
of any series (or of all Debt Securities then Outstanding under
the Indenture, as the case may be) may waive any past default
with respect to such series and its consequences, except a
default (x) in the payment of the principal of (or premium and
Make-Whole Amount, if any) or interest on and any Additional
Amounts payable in respect of any Debt Security of such series or
(y) in respect of a covenant or provision contained in the
Indenture that cannot be modified or amended without the consent
of the Holder of each Outstanding Debt Security affected thereby
(Section 513).
The Trustee is required to give notice to the Holders of Debt
Securities within 90 days of a default under the Indenture;
provided, however, that the Trustee may withhold notice to the
Holders of any series of Debt Securities of any default with
respect to such series (except a default in the payment of the
principal of (or premium, if any) or interest on any Debt
Security of such series or in the payment of any sinking fund
installment in respect of any Debt Security of such series) if
the Responsible Officers of the Trustee consider such withholding
to be in the interest of such Holders (Section 601).
The Indenture provides that no Holders of Debt Securities of
any series may institute any proceedings, judicial or otherwise,
with respect to the Indenture or for any remedy thereunder,
except in the case of failure of the Trustee, for 60 days, to act
after it has received a written request to institute proceedings
in respect of an Event of Default from the Holders of not less
than 25% in principal amount of the Outstanding Debt Securities
of such series, as well as an offer of reasonable indemnity
(Section 507). This provision will not prevent, however, any
Holder of Debt Securities from instituting suit for the
enforcement of payment of the principal of (and premium, if any)
and interest on such Debt Securities at the respective due dates
thereof (Section 508).
Subject to provisions in the Indenture relating to its duties
in case of default, the Trustee is under no obligation to
exercise any of its rights or powers under the Indenture at the
request or direction of any Holders of any series of Debt
Securities then outstanding under the Indenture, unless such
Holders shall have offered to the Trustee reasonable security or
indemnity (Section 602). The Holders of not less than a majority
in principal amount of the Outstanding Debt Securities of any
series (or of all Debt Securities then Outstanding under the
Indenture, as the case may be) shall have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Trustee, or of exercising any trust or
power conferred upon the Trustee. However, the Trustee may
refuse to follow any direction which is in conflict with any law
or the Indenture, which may involve the Trustee in personal
liability or which may be unduly prejudicial to the Holders of
Debt Securities of such series not joining therein (Section 512).
Within 120 days after the close of each fiscal year, the
Company must deliver to the Trustee a certificate, signed by one
of several specified officers, stating whether or not such
officer has knowledge of any default under the Indenture and, if
so, specifying each such default and the nature and status
thereof (Section 1009).
Modification of the Indenture
Modifications and amendments of the Indenture may be made
only with the consent of the Holders of not less than a majority
in principal amount of all outstanding Debt Securities which are
affected by such modification or amendment; provided, however,
that no such modification or amendment may, without the consent
of the Holder of each such Debt Security affected thereby, (a)
change the Stated Maturity of the principal of, or any
installment of interest (or premium or Make-Whole Amount, if any)
on, any such Debt Security; (b) reduce the principal amount of,
or the rate or amount of interest on or Additional Amounts
payable in respect thereof, or any premium on redemption of, any
such Debt Security, or change any obligation of the Company to
pay Additional Amounts (except as provided in the Indenture), or
16
<PAGE>
reduce the amount of principal of an Original Issue Discount
Security that would be due and payable upon declaration of
acceleration of the maturity thereof or would be provable in
bankruptcy, or adversely affect any right of repayment of the
Holder of any such Debt Security; (c) change the Place of
Payment, or the coin or currency, for payment of principal of,
premium, if any, or interest on any such Debt Security; (d)
impair the right to institute suit for the enforcement of any
payment on or with respect to any such Debt Security; (e) reduce
the above-stated percentage of Outstanding Debt Securities of any
series necessary to modify or amend the Indenture, to waive
compliance with certain provisions thereof or certain defaults
and consequences thereunder or to reduce the quorum or voting
requirements set forth in the Indenture; or (f) modify any of the
foregoing provisions or any of the provisions relating to the
waiver of certain past defaults or certain covenants, except to
increase the required percentage to effect such action or to
provide that certain other provisions may not be modified or
waived without the consent of the Holder of such Debt Security
(Section 902).
The Holders of not less than a majority in principal amount
of each series of Outstanding Debt Securities have the right to
waive compliance by the Company with certain covenants in the
Indenture (Section 1011).
Modifications and amendments of the Indenture may be made by
the Company and the Trustee without the consent of any Holder of
Debt Securities for any of the following purposes: (i) to
evidence the succession of another person to the Company as
obligor under the Indenture; (ii) to add to the covenants of the
Company for the benefit of the Holders of all or any series of
Debt Securities or to surrender any right or power conferred upon
the Company in the Indenture; (iii) to add Events of Default for
the benefit of the Holders of all or any series of Securities;
(iv) to add or change any provisions of the Indenture to
facilitate the issuance of, or to liberalize certain terms of,
Debt Securities in bearer form, or to permit or facilitate the
issuance of Debt Securities in uncertificated form, provided that
such action shall not adversely affect the interest of the
Holders of the Debt Securities of any series in any material
respect; (v) to change or eliminate any provisions of the
Indenture, provided that any such change or elimination shall
become effective only when there are no Debt Securities
Outstanding of any series created prior thereto which are
entitled to the benefit of such provision; (vi) to secure the
Debt Securities; (vii) to establish the form or terms of Debt
Securities of any series, including the provisions and
procedures, if applicable, for the conversion of such Debt
Securities into Common Shares or Preferred Shares of the Company;
(viii) to provide for the acceptance of appointment by a
successor Trustee or facilitate the administration of the trusts
under the Indenture by more than one Trustee; (ix) to cure any
ambiguity, correct or supplement any provision which may be
defective or inconsistent or make any other provisions with
respect to matters or questions arising under the Indenture,
provided that such action shall not adversely affect the
interests of Holders of Debt Securities of any series in any
material respect; or (x) to supplement any of the provisions of
the Indenture to the extent necessary to permit or facilitate
defeasance and discharge of any series of such Debt Securities,
provided that such action shall not adversely affect the
interests of the Holders of the Debt Securities of any series in
any material respect (Section 901).
The Indenture provides that in determining whether the
Holders of the requisite principal amount of Outstanding Debt
Securities of a series have given any request, demand,
authorization, direction, notice, consent or waiver thereunder or
whether a quorum is present at a meeting of Holders of Debt
Securities, (i) the principal amount of an Original Issue
Discount Security that shall be deemed to be outstanding shall be
the amount of the principal thereof that would be due and payable
as of the date of such determination upon declaration of
acceleration of the maturity thereof; (ii) the principal amount
of a Debt Security denominated in a Foreign Currency that shall
be deemed outstanding shall be the U.S. dollar equivalent,
determined on the issue date for such Debt Security, of the
principal amount (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above);
(iii) the principal amount of an Indexed Security that shall be
deemed outstanding shall be the principal face amount of such
Indexed Security at original issuance, unless otherwise provided
with respect to such Indexed Security pursuant to Section 301 of
the Indenture; and (iv) Debt Securities owned by the Company or
any other obligor upon the Debt Securities or any Affiliate of
the Company or of such other obligor shall be disregarded
(Section 101).
The Indenture contains provisions for convening meetings of
the Holders of Debt Securities of a series (Section 1501). A
meeting may be called at any time by the Trustee, and also, upon
request, by the Company or the Holders of at least 10% in
principal amount of the Outstanding Debt Securities of such
series, in any such case upon notice given as provided in the
Indenture (Section 1502). Except for any consent that must be
given by the Holder of each Debt Security affected by certain
modifications and amendments of the Indenture, any resolution
presented at a meeting or adjourned meeting duly reconvened at
which a quorum is present may be adopted by the affirmative vote
17
<PAGE>
of the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series; provided, however,
that, except as referred to above, any resolution with respect to
any request, demand, authorization, direction, notice, consent,
waiver or other action that may be made, given or taken by the
Holders of a specified percentage, which is less than a majority,
in principal amount of the Outstanding Debt Securities of a
series may be adopted at a meeting or adjourned meeting duly
reconvened at which a quorum is present by the affirmative vote
of the Holders of such specified percentage in principal amount
of the Outstanding Debt Securities of that series. Any
resolution passed or decision taken at any meeting of Holders of
Debt Securities of any series duly held in accordance with the
Indenture will be binding on all Holders of Debt Securities of
that series. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be Persons
holding or representing a majority in principal amount of the
Outstanding Debt Securities of a series; provided, however, that
if any action is to be taken at such meeting with respect to a
consent or waiver which may be given by the Holders of not less
than a specified percentage in principal amount of the
Outstanding Debt Securities of a series, the Persons holding or
representing such specified percentage in principal amount of the
Outstanding Debt Securities of such series will constitute a
quorum (Section 1504).
Notwithstanding the foregoing provisions, if any action is to
be taken at a meeting of Holders of Debt Securities of any series
with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that the Indenture
expressly provides may be made, given or taken by the Holders of
a specified percentage in principal amount of all Outstanding
Debt Securities affected thereby, or of the Holders of such
series and one or more additional series: (i) there shall be no
minimum quorum requirement for such meeting; and (ii) the
principal amount of the Outstanding Debt Securities of such
series that vote in favor of such request, demand, authorization,
direction, notice, consent, waiver or other action shall be taken
into account in determining whether such request, demand,
authorization, direction, notice, consent, waiver or other action
has been made, given or taken under the Indenture (Section 1504).
Discharge, Defeasance and Covenant Defeasance
The Company may discharge certain obligations to Holders of
any series of Debt Securities that have not already been
delivered to the Trustee for cancellation and that either have
become due and payable or will become due and payable within one
year (or scheduled for redemption within one year) by irrevocably
depositing with the Trustee, in trust, funds in such currency or
currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount
sufficient to pay the entire indebtedness on such Debt Securities
in respect of principal (and premium or Make-Whole Amount, if
any) and interest to the date of such deposit (if such Debt
Securities have become due and payable) or to the Stated Maturity
or Redemption Date, as the case may be (Section 1401).
The Indenture provides that, if the provisions of Article
Fourteen are made applicable to the Debt Securities of or within
any series pursuant to Section 301 of the Indenture, the Company
may elect either (a) to defease and be discharged from any and
all obligations with respect to such Debt Securities (except for
the obligation to pay Additional Amounts, if any, upon the
occurrence of certain events of tax, assessment or governmental
charge with respect to payments on such Debt Securities and the
obligations to register the transfer or exchange of such Debt
Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in
respect of such Debt Securities and to hold moneys for payment in
trust) ("defeasance") (Section 1402) or (b) to be released from
its obligations with respect to such Debt Securities under
Section 1004 to 1008, inclusive, of the Indenture (being the
restrictions described under "Certain Covenants") or, if provided
pursuant to Section 301 of the Indenture, its obligations with
respect to any other covenant, and any omission to comply with
such obligations shall not constitute a default or an Event of
Default with respect to such Debt Securities ("covenant
defeasance") (Section 1403), in either case upon the irrevocable
deposit by the Company with the Trustee, in trust, of an amount,
in such currency or currencies, currency unit or units or
composite currency or currencies in which such Debt Securities
are payable at Stated Maturity, or Governmental Obligations (as
defined below), or both, applicable to such Debt Securities which
through the scheduled payment of principal and interest in
accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any) and
interest on such Debt Securities, and any mandatory sinking fund
or analogous payments thereon, on the scheduled due dates
therefor.
Such a trust may only be established if, among other things,
the Company has delivered to the Trustee an Opinion of Counsel
(as specified in the Indenture) to the effect that the Holders of
such Debt Securities will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such defeasance
or covenant defeasance and will be subject to U.S. federal income
tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance or covenant
defeasance had not occurred, and such Opinion of Counsel, in the
case of defeasance, must refer to and be based upon a ruling of
the Internal Revenue Service or a change in applicable United
States federal income tax law occurring after the date of the
Indenture (Section 1404).
18
<PAGE>
"Government Obligations" means securities which are (i)
direct obligations of the United States of America or the
government which issued the Foreign Currency in which the Debt
Securities of a particular series are payable, for the payment of
which its full faith and credit is pledged or (ii) obligations of
a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such
government which issued the Foreign Currency in which the Debt
Securities of such series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation
by the United States of America or such other government, which,
in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depository receipt
issued by a bank or trust company as custodian with respect to
any such Government Obligation or a specific payment of interest
on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt,
provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the
custodian in respect of the Government Obligation or the
specific payment of interest on or principal of the Government
Obligation evidenced by such depository receipt (Section 101).
Unless otherwise provided in the applicable Prospectus
Supplement, if after the Company has deposited funds and/or
Government Obligations to effect defeasance or covenant
defeasance with respect to Debt Securities of any series, (a) the
Holder of a Debt Security of such series is entitled to, and
does, elect pursuant to Section 301 of the Indenture or the terms
of such Debt Security to receive payment in a currency, currency
unit or composite currency other than that in which such deposit
has been made in respect of such Debt Security, or (b) a
Conversion Event (as defined below) occurs in respect of the
currency, currency unit or composite currency in which such
deposit has been made, the indebtedness represented by such Debt
Security shall be deemed to have been, and will be, fully
discharged and satisfied through the payment of the principal of
(and premium or Make-Whole Amount, if any) and interest on such
Debt Security as they become due out of the proceeds yielded by
converting the amount so deposited in respect of such Debt
Security into the currency, currency unit or composite currency
in which such Debt Security becomes payable as a result of such
election or such cessation of usage based on the applicable
market exchange rate (Section 1405). "Conversion Event" means
the cessation of use of (i) a currency, currency unit or
composite currency both by the government of the country which
issued such currency and for the settlement of transactions by a
central bank or other public institutions of or within the
international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions
by public institutions of or within the European Communities or
(iii) any currency unit or composite currency other than the ECU
for the purposes for which it was established. Unless otherwise
provided in the applicable Prospectus Supplement, all payments of
principal of (and premium or Make-Whole Amount, if any) and
interest on any Debt Security that is payable in a Foreign
Currency that ceases to be used by its government of issuance
shall be made in U.S. dollars (Section 101).
In the event the Company effects covenant defeasance with
respect to any Debt Securities and such Debt Securities are
declared due and payable because of the occurrence of any Event
of Default other than the Event of Default described in clause
(d) under "Events of Default, Notice and Waiver" with respect to
Sections 1004 to 1008, inclusive, of the Indenture (which
Sections would no longer be applicable to such Debt Securities)
or described in clause (g) under "Events of Default, Notice and
Waiver" with respect to any other covenant as to which there has
been covenant defeasance, the amount in such currency, currency
unit or composite currency in which such Debt Securities are
payable, and Government Obligations on deposit with the Trustee,
will be sufficient to pay amounts due on such Debt Securities at
the time of their Stated Maturity but may not be sufficient to
pay amounts due on such Debt Securities at the time of the
acceleration resulting from such Event of Default. However, the
Company would remain liable to make payment of such amounts due
at the time of acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant
defeasance, including any modifications to the provisions
described above, with respect to the Debt Securities of or within
a particular series.
Conversion Rights
The terms and conditions, if any, upon which the Debt
Securities are convertible into Common Shares, Preferred Shares
or Debt Securities of another series will be set forth in the
applicable Prospectus Supplement relating thereto. Such terms
19
<PAGE>
will include whether such Debt Securities are convertible into
Common Shares, Preferred Shares or Debt Securities of another
series, the conversion price (or manner of calculation thereof),
the conversion period, provisions as to whether conversion will
be at the option of the Holders or the Company, the events
requiring an adjustment of the conversion price and provisions
affecting conversion in the event of the redemption of such Debt
Securities. To protect the Company's status as a REIT, a Holder
may not convert any Debt Security, and such Debt Security shall
not be convertible by any Holder, if as a result of such
conversion any person would then be deemed to own, directly or
indirectly, more than 9.8% of the Company's capital shares.
Global Securities
The Debt Securities of a series may be issued in whole or in
part in the form of one more global securities (the "Global
Securities") that will be deposited with, or on behalf of, a
depositary (the "Depositary") identified in the applicable
Prospectus Supplement relating to such series. Global Securities
may be issued in either registered or bearer form and in either
temporary or permanent form. The specific terms of the
depositary arrangement with respect to a series of Debt
Securities will be described in the applicable Prospectus
Supplement relating to such series. The laws of some
jurisdictions require that certain purchasers of securities take
physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in
Debt Securities represented by Global Securities.
RATIO OF EARNINGS TO FIXED CHARGES
The ratio of earnings to fixed charges and the ratio of
earnings to combined fixed charges and preferred distributions
for the nine months ended September 30, 1995 and each of the last
five fiscal years for the Company (including its predecessors in
interest) are presented below. The ratio of earnings to fixed
charges for the Company is computed by dividing earnings by fixed
charges. The ratio of earnings to combined fixed charges and
preferred distributions is computed by dividing earnings by the
sum of fixed charges and preferred shares dividend requirements.
For purposes of computing these ratios, "earnings" have been
calculated by adding fixed charges to income from operations
before income taxes. "Fixed charges" consist of interest costs,
the interest component of capitalized lease obligations, a
portion of rental expense, other than on capitalized leases,
estimated to represent the interest factor in such rental expense
and the amortization of debt discounts and issue costs.
20
PAGE
<PAGE>
<TABLE>
<CAPTION>
Camden Property Trust
Camden Predecessors
-------------------------------------
- ------------------------------------
Nine Months
Ended Year Ended July 29 to
January 1
September 30, December 31, December 31, to
July 28, Years Ended December 31,
1995 1994 1993
1993 1992 1991 1990
------------- ------------ ------------
- ----------- ---- ---- ----
<S> <C> <C> <C> <C>
<C> <C> <C>
Ratio of earnings
to fixed charges 1.37x 1.60x 3.27x
1.10x 0.88x 0.48x 0.19x
Dollar amount of
coverage deficiency
(in thousands) -- -- --
- -- $(778) $(1,917) $(1,764)
Ratio of earnings
to combined fixed
charges and
preferred share
dividends <F1>(a) 1.36x 1.60x
____________________
<FN>
<F1>
(a) The ratio of earnings to combined fixed charges and
preferred share dividends is the same as
the ratio of earnings to fixed charges for fiscal years prior to
1994 as the Company had no
preferred share dividends prior to 1994.
</FN>
</TABLE>
<PAGE>
PLAN OF DISTRIBUTION
The Company may sell the Offered Securities to one or more
underwriters for public offering and sale by them or may sell the
Offered Securities to investors directly or through agents. Any
such underwriter or agent involved in the offer and sale of the
Offered Securities will be named in the applicable Prospectus
Supplement.
Underwriters may offer and sell the Offered Securities at a
fixed price or prices, which may be changed, at prices related to
the prevailing market prices at the time of sale or at negotiated
prices. The Company also may offer and sell the Offered
Securities in exchange for one or more of its then outstanding
issues of debt or convertible debt securities. The Company also
may, from time to time, authorize underwriters acting as the
Company's agents to offer and sell the Offered Securities upon
the terms and conditions as are set forth in the applicable
Prospectus Supplement. In connection with the sale of Offered
Securities, underwriters may be deemed to have received
compensation from the Company in the form of underwriting
discounts or commissions and may also receive commissions from
purchasers of Offered Securities for whom they may act as agent.
Underwriters may sell Offered Securities to or through dealers,
and such dealers may receive compensation in the form of
discounts, concessions or commissions from the underwriters
and/or commissions from the purchasers for whom they may act as
agent.
Any underwriting compensation paid by the Company to
underwriters or agents in connection with the offering of Offered
Securities, and any discounts, concessions or commissions allowed
by underwriters to participating dealers, will be set forth in
the applicable Prospectus Supplement. Underwriters, dealers and
agents participating in the distribution of the Offered
Securities may be deemed to be underwriters, and any discounts
and commissions received by them and any profit realized by them
on resale of the Offered Securities may be deemed to be
21
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underwriting discounts and commissions, under the Securities Act.
Underwriters, dealers and agents may be entitled, under
agreements entered into with the Company, to indemnification
against and contribution toward certain civil liabilities,
including liabilities under the Securities Act.
If so indicated in the applicable Prospectus Supplement, the
Company will authorize dealers acting as the Company's agents to
solicit offers by certain institutions to purchase Offered
Securities from the Company at the public offering price set
forth in such Prospectus Supplement pursuant to Delayed Delivery
Contracts ("Contracts") providing for payment and delivery on the
date or dates stated in such Prospectus Supplement. Each
Contract will be for an amount not less than, and the aggregate
principal amount of Offered Securities sold pursuant to Contracts
shall be not less nor more than, the respective amounts stated in
the applicable Prospectus Supplement. Institutions with whom
Contracts, when authorized, may be made include commercial and
savings banks, insurance companies, pension funds, investment
companies, educational and charitable institutions, and other
institutions but will in all cases be subject to the approval of
the Company. Contracts will not be subject to any conditions
except (i) the purchase by an institution of the Offered
Securities covered by its Contracts shall not at the time of
delivery be prohibited under the laws of any jurisdiction in the
United States to which such institution is subject; and (ii) if
the Offered Securities are being sold to underwriters, the
Company shall have sold to such underwriters the total principal
amount of the Offered Securities less the principal amount
thereof covered by the Contracts.
Certain of the underwriters and their affiliates may be
customers of, engage in transactions with and perform services
for the Company and its subsidiaries in the ordinary course of
business.
LEGAL MATTERS
Certain legal matters relating to the validity of the Offered
Securities will be passed upon for the Company by Liddell, Sapp,
Zivley, Hill & LaBoon, L.L.P., Dallas, Texas.
EXPERTS
The consolidated financial statements of Camden Property
Trust as of December 31, 1994 and 1993 and for the year ended
December 31, 1994 and for the period from July 29, 1993 to
December 31, 1993, the related financial statement schedules and
the combined financial statements of Camden Predecessors for the
period from January 1, 1993 to July 28, 1993 and for the year
ended December 31, 1992, incorporated in this Prospectus by
reference from the Annual Report on Form 10-K of Camden Property
Trust for the year ended December 31, 1994 have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their
reports which are incorporated herein by reference, and have been
so incorporated in reliance upon the reports of such firm given
upon their authority as experts in accounting and auditing.
22
<PAGE>
No person has been authorized to
give any information or to make any
representations other than those
contained or incorporated by reference
in this Prospectus Supplement or the
Prospectus, and, if given or made,
such information or representations
must not be relied upon as having
been authorized by the Company or the
Underwriter. This Prospectus Sup-
plement and the Prospectus do not
constitute an offer to sell or the
solicitation of an offer to buy any
securities other than the securities
to which they relate or any offer to
sell or the solicitation of any
offer to buy such securities in any
circumstances in which such offer or
solicitation is unlawful. Neither the
delivery of this Prospectus Supplement
nor the Prospectus nor any sale made
hereunder or thereunder shall, under
any circumstances, create any implica-
tion that there has been no change in
the affairs of the Company since the
date hereof or thereof or that the CAMDEN
information contained or incorporated PROPERTY TRUST
by reference herein or therein is
correct as to any time subsequent to 260,000 Common Shares
the date of such information. of Beneficial Interest
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TABLE OF CONTENTS
Page -----------------------
Prospectus Supplement
PROSPECTUS SUPPLEMENT
Prospectus Summary . . . . . . S-2
Risk Factors . . . . . . . . . S-3 October 11, 1996
Use of Proceeds. . . . . . . . S-5
The Company. . . . . . . . . . S-6 -----------------------
Certain Federal Income
Tax Considerations . . . . . S-8
Underwriting . . . . . . . . . S-9
Experts. . . . . . . . . . . . S-10
Prospectus PaineWebber Incorporated
Available Information. . . . . 2
Incorporation of Certain
Documents by Reference . . . 2
The Company. . . . . . . . . . 3
Use of Proceeds. . . . . . . . 4
Description of Common Shares . . 4
Description of Preferred Shares. 6
Description of Securities
Warrants . . . . . . . . . . . 9
Description of Debt Securities . 11
Ratio of Earnings to Fixed
Charges. . . . . . . . . . . . 20
Plan of Distribution . . . . . . 21
Legal Matters. . . . . . . . . . 22
Experts. . . . . . . . . . . . . 22
