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As filed with the Securities and Exchange Commission on August 22, 1997.
Registration No. 333-28099
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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CAMDEN PROPERTY TRUST
(Exact name of registrant as specified in its charter)
TEXAS 76-6088377
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3200 SOUTHWEST FREEWAY, SUITE 1500
HOUSTON, TEXAS 77027
(713) 964-3555
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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RICHARD J. CAMPO
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
CAMDEN PROPERTY TRUST
3200 SOUTHWEST FREEWAY, SUITE 1500
HOUSTON, TEXAS 77027
(713) 964-3555
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
Bryan L. Goolsby
Liddell, Sapp, Zivley, Hill &
LaBoon, L.L.P.
2200 Ross Avenue, Suite 900
Dallas, Texas 75201
(214) 220-4800
FAX: (214) 220-4899
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to divided or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED AUGUST 22, 1997
380,800 SHARES
CAMDEN PROPERTY TRUST
COMMON SHARES OF BENEFICIAL INTEREST
(PAR VALUE $0.01 PER SHARE)
This Prospectus relates to the offer and sale from time to time of up
to 380,800 common shares (the "Merger Shares") of beneficial interest, par
value $0.01 per share ("Common Shares"), of Camden Property Trust (the
"Company") by FWP, L.P., (the "Selling Shareholder") or by pledgees, donees,
transferees or other successors in interest thereto. The Merger Shares
referred to in this Prospectus are the Common Shares acquired by the Selling
Shareholder in exchange for its shares of common stock of Paragon Group, Inc.,
a Maryland corporation ("Paragon"), pursuant to the Agreement and Plan of
Merger dated December 16, 1996 among the Company, Camden Subsidiary, Inc. and
Paragon (the "Merger Agreement"). The Selling Shareholder also currently owns
571,278 units of limited partnership interest ("OP Units") in Camden Operating,
L.P., a Delaware limited partnership (the "Operating Partnership"), which the
Company controls through its ownership of the sole general partner thereof and
in which the Company owns a controlling limited partnership interest through
another subsidiary. The Common Shares that the Selling Shareholder may acquire
upon presentation of the OP Units to the Operating Partnership for redemption,
all in accordance with the terms of the Operating Partnership's Third Amended
and Restated Agreement of Limited Partnership, have been registered separately.
The Company is registering the Merger Shares pursuant to the Company's
obligations under the Registration Rights Agreement dated as of April 15, 1997
among the Company, the Operating Partnership and the parties set forth in
Exhibit A attached thereto (the "Registration Rights Agreement"), but the
registration of the Merger Shares does not necessarily mean that any of the
Merger Shares will be offered or sold by the Selling Shareholder hereunder.
The Common Shares are listed on the New York Stock Exchange (the
"NYSE") under the symbol "CPT." To ensure that the Company maintains its
qualification as a real estate investment trust (a "REIT") under the Internal
Revenue Code of 1986, as amended (the "Code"), ownership by any person is
limited to 9.8% of the number of outstanding Common Shares, with certain
exceptions. See "Description of Securities to be Registered -- Restrictions on
Ownership."
SEE "RISK FACTORS" ON PAGE 5 FOR MATERIAL RISKS 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. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
The Selling Shareholder from time to time may offer and sell any
Merger Shares directly or through agents or broker-dealers on terms to be
determined at the time of sale. To the extent required, the names of any agent
or broker-dealer and applicable commissions or discounts and any other
required information with respect to any particular offer will be set forth in
an accompanying Prospectus Supplement. See "Plan of Distribution." The
Selling Shareholder reserves the right to accept or reject, in whole or in
part, any proposed purchase of the Merger Shares to be made directly or through
agents.
The Selling Shareholder and any agents or broker-dealers that
participate with the Selling Shareholder in the distribution of the Merger
Shares may be deemed to be "underwriters" within the meaning of the Securities
Act of 1933, as amended (the "Securities Act"), and any commissions received by
them and any profit on the resale of the Merger Shares may be deemed to be
underwriting commissions or discounts under the Securities Act. See
"Registration Rights" for a description of certain indemnification arrangements
between the Company and the Selling Shareholder.
The Company will not receive any proceeds from the sale of the Merger
Shares by the Selling Shareholder, but has agreed to bear the expenses of
registration of such shares under federal and state securities laws.
The date of this Prospectus is __________, 1997
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-3 under 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 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, and at the
regional offices of the Commission located at 7 World Trade Center, 13th Floor,
New York, New York 10048 and at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Copies of such material can be obtained from the Public
Reference Section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission also
maintains a Web site at (http://www.sec.gov) that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. Such reports, proxy and information
statements and other information also can 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 (File
No. 1-12110) 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,
1996;
(b) Quarterly Report on Form 10-Q for the quarter ended March 31,
1997;
(c) Quarterly Report on Form 10-Q for the quarter ended June 30,
1997;
(d) Current Report on Form 8-K dated March 20, 1997, filed with
the Commission on March 21, 1997, Current Report on Form 8-K
dated April 15, 1997, filed with the Commission on April 30,
1997, as amended by Form 8-K/A filed with the Commission on
June 16, 1997 (the "Paragon 8-K"), Current Report on Form 8-K
dated May 9, 1997, filed with the Commission on May 21, 1997,
Current Report on Form 8-K dated June 30, 1997, filed with the
Commission on July 8, 1997, as amended by Form 8-K/A filed
with the Commission on July 18, 1997, and Current Report on
Form 8-K dated July 21, 1997, filed with the Commission on
July 21, 1997; and
(e) 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, SENIOR VICE PRESIDENT -
FINANCE AND CHIEF FINANCIAL OFFICER, CAMDEN PROPERTY TRUST, 3200 SOUTHWEST
FREEWAY, SUITE 1500, HOUSTON, TEXAS 77027, TELEPHONE NUMBER (713) 964-3555.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information included elsewhere in this Prospectus or incorporated
herein by reference. Unless the context otherwise requires, all references in
this Prospectus to the "Company" shall mean Camden Property Trust and its
subsidiaries on a consolidated basis (including the Operating Partnership) or,
if the context so requires, Camden Property Trust only, and, as the context may
require, their predecessors.
This Prospectus, including incorporated documents, contains
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act. The Company's actual results could
differ materially from those set forth in the forward-looking statements.
Certain factors, among others, that might cause such a difference are set forth
under the caption "Risk Factors" on page 5 of this Prospectus.
THE COMPANY
General. Camden Property Trust is a fully integrated,
self-administered and self-managed REIT formed pursuant to the Texas Real
Estate Investment Trust Act, as amended (the "Texas REIT Act"). The Company
owns, operates and develops multifamily properties in six states primarily in
the Southwest, Southeast and Midwest regions of the United States. The Company
is one of the largest publicly-traded REIT owners of multifamily properties
(based on the number of apartment units owned) in the United States. As of
June 30, 1997, the Company owned, or had interests in, 103 multifamily
properties (the "Properties") containing 35,460 units located in 12
metropolitan markets. The Properties include 95 stabilized properties (the
"Stabilized Properties"), five newly-constructed multifamily properties
containing 1,524 units in the lease-up phase (the "Lease-Up Properties"), and
three multifamily properties under development in Houston and Dallas which
will, when completed, add 1,110 units to the Company's portfolio (the
"Development Properties"). In addition to the Properties, the Company has
several additional sites, including land in Denver, which it intends to develop
into multifamily apartment communities. Additionally, the Company manages
4,673 apartment units in sixteen properties for third parties and affiliates.
Paragon Acquisition. Effective on April 15, 1997, the Company
acquired Paragon pursuant to the terms and provisions of the Merger Agreement
(the "Paragon Acquisition"). The Paragon Acquisition increased the size of the
Company's portfolio from 53 to 103 multifamily properties (after combining the
operations of seven of the acquired properties with adjacent properties) and
from 19,389 to 35,364 apartment units. As a result of the Paragon Acquisition,
the Company owns and operates its portfolio in part directly and in part
through the Operating Partnership. The Company believes that the Paragon
Acquisition provided a unique opportunity for geographic expansion into
attractive growth- oriented markets in the Southeast and Midwest.
Property Ownership Structure. As a result of the Paragon Acquisition,
the Company now owns 45.2% of its assets (based on apartment units) through the
Operating Partnership, which the Company controls through a wholly-owned
subsidiary which serves as the general partner (owning 1% of the Operating
Partnership) (the "General Partner") and by the ownership of 79.1% of the OP
Units (through another wholly-owned subsidiary).
Development Activity. Two of the Lease-Up Properties containing 668
units were completed in 1997, for a total investment of $35.4 million. The
Company acquired the remaining three Lease-Up Properties, which represent a
total investment of $44.2 million in 856 units, in the Paragon Acquisition.
The Lease-Up Properties are expected to stabilize in the third quarter of 1997.
The Development Properties are expected to be completed and stabilized by the
third quarter of 1998 and represent a total investment of $64.1 million in
1,110 units.
Distributions. As a result of the Company's improved operating
performance, in March 1997 the Company announced a 3.2% increase in its regular
quarterly distribution, commencing with the Company's distribution with respect
to the first quarter of 1997, from $0.475 per Common Share to $0.49 per Common
Share (equivalent to $1.96 per Common Share on an annualized basis). This
represents the Company's fourth consecutive annual dividend increase since
becoming a public company in 1993.
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RISK FACTORS
An investment in the Merger Shares involves various risks.
Prospective investors should carefully consider the matters discussed under the
caption "Risk Factors" prior to any investment in the Company.
TAX STATUS OF THE COMPANY
The Company intends at all times to operate so as to qualify as a REIT
under the Code. If and as long as the Company qualifies for taxation as a
REIT, the Company generally will not be subject to federal income tax on that
portion of its ordinary income and capital gains that is currently distributed
to its shareholders. REITs are subject to a number of highly technical and
complex organizational and operational requirements. Although the Company
believes it has operated, and intends to continue to operate, in such a manner
as to qualify as a REIT under the Code, no assurance can be given that the
Company has qualified and will at all times so qualify. If the Company fails
to qualify as a REIT in any taxable year, the Company will be subject to
federal income tax (including any applicable alternative minimum tax) on its
taxable income at regular corporate rates. Even if the Company qualifies for
taxation as a REIT, the Company may be subject to certain state and local taxes
on its income and property and to federal income and excise taxes on its
undistributed income. See "Certain Federal Income Tax Consequences."
SECURITIES TO BE OFFERED
This Prospectus relates to the possible offer and sale from time to
time of 380,800 Merger Shares by the Selling Shareholder. The Merger Shares
are Common Shares that were acquired by the Selling Shareholder on April 15,
1997, the effective date of the Paragon Acquisition, in exchange for shares of
Paragon common stock pursuant to the terms and provisions of the Merger
Agreement. The Company is registering the Merger Shares for sale by the
Selling Shareholder pursuant to its obligations under the Registration Rights
Agreement. The Company will not receive any proceeds from the sale of any
Merger Shares.
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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 before making a decision to purchase any Merger Shares.
This Prospectus, including incorporated documents, contains forward-looking
statements within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. The Company's actual results could differ materially
from those set forth in the forward-looking statements. Certain factors, among
others, which may cause such a difference are set forth below.
REAL ESTATE INVESTMENT RISKS
GENERAL.
Real property investments are subject to varying degrees of risk. The
yields from equity investments in real estate depend upon the amount of income
generated and expenses incurred. If the Company's multifamily property
portfolio does not generate income sufficient to meet operating expenses, debt
service and capital expenditures, the Company's ability to make distributions
to its shareholders will be adversely affected. Income from multifamily
properties may be adversely affected by the general economic climate, local
conditions such as oversupply of apartments or a reduction in demand for
apartments in the area, the attractiveness of the properties to residents,
competition from other available apartments, inability to collect rent from
residents, changes in market rental rates, the need to periodically repair,
renovate and relet space, and the ability of the owner to pay for adequate
maintenance and insurance and increased operating costs (including real estate
taxes). Certain significant expenditures associated with each equity
investment (such as mortgage payments, if any, real estate taxes and
maintenance costs) are generally not reduced when circumstances cause a
reduction in income from the investment. In addition, income from properties
and real estate values also are affected by such factors as applicable laws,
including tax laws, interest rate levels and the availability of financing.
ACQUISITION RISKS.
As a result of the Paragon Acquisition, the Company increased its
portfolio of apartment units owned from 19,389 to 35,364, an increase of over
82%. Several of the properties acquired by the Company through the Paragon
Acquisition are in markets where the Company has not historically managed
properties. Due primarily to the number and relative geographic diversity of
the Properties after the Paragon Acquisition, the Company may not have adequate
management or other personnel or adequate systems or other resources to manage
its portfolio or the Properties to the same level of efficiency as before the
Paragon Acquisition, which could adversely affect operations and result in less
cash available for distributions to shareholders. Though the Company believes
that through operating efficiencies, implementation of renovation programs and
enhancement of marketing efforts, a significant cost savings in operating costs
and general and administrative expenses can be achieved, there can be no
assurance as to the timing or extent of such savings.
The Company, in the normal course of its business, is continually
evaluating a number of potential acquisitions and entering into non-binding
letters of intent and may at any time, or from time to time, enter into
contracts to acquire and may acquire additional properties. No assurance can be
given, however, that the Company will have the opportunity to continue to make
suitable property acquisitions on terms favorable to the Company.
DEPENDENCE ON GEOGRAPHICAL REGIONS.
The Properties are located primarily in the Southwest, Southeast and
Midwest regions of the United States. A decline in the economic conditions in
those regions and in the market for apartments therein may have an adverse
impact on the performance of the Company's property portfolio.
DEVELOPMENT RISKS.
Risks associated with the Company's development and construction
activities include: development opportunities may be abandoned; construction
costs of a multifamily property may exceed original estimates, possibly making
the multifamily property uneconomical; occupancy rates and rents at a newly
completed multifamily property may not be sufficient to make the multifamily
property profitable; financing may not be available on favorable terms for
development of a multifamily property;
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and construction and lease-up may not be completed on schedule, resulting in
increased debt service and construction costs. Development activities are also
subject to risks relating to the inability to obtain, or delays in obtaining,
all necessary zoning, land-use, building, occupancy, and other required
governmental permits and authorizations. 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.
FINANCING OF DEVELOPMENT AND ACQUISITIONS.
The Company anticipates that future development and acquisitions will
be financed, in whole or in part, under existing unsecured credit facilities,
unsecured medium term notes or other forms of unsecured financing or through
the issuance of additional equity by the Company. The use of equity financing,
rather than debt, for future developments or acquisitions could have a dilutive
effect on the interests of existing shareholders of the Company. If new
developments are financed under existing unsecured lines of credit, there is a
risk that, unless substitute financing is obtained, further availability under
the lines of credit for new development may not be available or may be
available only on disadvantageous terms.
ILLIQUIDITY OF REAL ESTATE.
Real estate investments are relatively illiquid and, therefore, 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 Code
places limits on a REIT'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 shareholders.
NO LIMITATION ON AMOUNT OF DEBT THAT MAY BE INCURRED AND POSSIBLE INABILITY TO
REPAY DEBT
NO LIMITATION ON DEBT AND INCREASED INDEBTEDNESS.
The Company intends to adhere to a policy of maintaining a
debt-to-total-market-capitalization ratio of less than 50% and has maintained
on a quarterly basis a financial structure with no more than 40%
debt-to-total-market- capitalization since July 1993. However, the
organizational documents of the Company do not limit the amount or percentage
of indebtedness that it may incur. Therefore, the Company's Board of Trust
Managers (the "Board") may alter or eliminate this policy without shareholder
approval. Accordingly, the Company could become more leveraged, resulting in
an increased risk of default on its obligations and in an increase in its debt
service requirements, both of which could adversely affect the financial
condition of the Company. An increase in the Company's total
debt-to-total-market- capitalization ratio may adversely affect the Company's
ability to access debt as well as equity capital markets in the future due to
the resulting decreased ability to service debt.
DEBT FINANCING AND EXISTING DEBT MATURITIES.
The Company is subject to the risks normally associated with debt
financing, including the risk that the Company's funds from operations might be
insufficient to meet required payments of principal and interest, the risk that
existing indebtedness on the Properties (which in all cases will not have been
fully amortized at maturity) might not be able to be refinanced or that the
terms of such refinancing might not be as favorable as the terms of the
existing indebtedness.
The Company incurred and expects in the future to incur floating rate
indebtedness in connection with the construction of multifamily properties, as
well as for other purposes. In addition, additional indebtedness that the
Company incurs under the Company's $150 million unsecured revolving credit
facility also bears interest at a floating rate. 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).
OWNERSHIP LIMITS
In order to maintain its qualification as a REIT, not more than 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's Amended and Restated Declaration of Trust, as amended (the
"Declaration of Trust"), authorizes the Board to take such action as may be
required to
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preserve the Company's qualification as a REIT. Additionally, the Declaration
of Trust provides that, subject to certain exceptions, no holder may own, or be
deemed to own, more than 9.8% of the total outstanding Shares (as defined
therein) of the Company. The Board is not permitted to waive this restriction.
Shares acquired or transferred in breach of this limitation will automatically
be deemed to be Excess Securities (as defined in the Declaration of Trust) held
by the Company in trust and not entitled to vote or to participate in dividends
or other distributions. Additionally, Shares acquired or transferred in breach
of this 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).
These ownership limits, as well as the ability of the Company to issue
other classes of equity securities, may delay, defer or prevent a change in
control of the Company and may also deter tender offers for the Common Shares,
which offers may be attractive to the shareholders, or limit the opportunity of
shareholders to receive a premium for their Common Shares that might otherwise
exist if an investor were attempting to effect a change in control of the
Company.
COMPETITION
All of the Properties are located in developed areas. There are
numerous other multifamily properties and real estate companies within the
market areas of the Properties that compete with the Company for residents and
development and acquisition opportunities, some of whom may have greater
resources than the Company. The number of competitive multifamily properties
and real estate companies in such areas could have a material effect on the
Company's ability to rent its apartments, its ability to raise or maintain the
rents charged and its development and acquisition opportunities.
ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT
The Company believes that it has operated so as to qualify as a REIT
under the Code since its formation. Although management of the Company
believes that the Company is organized and is operating in such a manner, no
assurance can be given that the Company will be able to continue to operate in
a manner so as to qualify or remain so qualified. Qualification as a REIT
involves the application of highly technical and complex Code provisions for
which there are only limited judicial or administrative interpretations and the
determination of various factual matters and circumstances not entirely within
the Company's control. For example, in order to qualify as a REIT, at least 95%
of the Company's gross income in any year must be derived from qualifying
sources and the Company must make distributions to shareholders aggregating
annually at least 95% of its REIT taxable income (excluding net capital gains).
In addition, no assurance can be given that new legislation, regulations,
administrative interpretations or court decisions will not change the tax laws
with respect to qualification as a REIT or the federal income tax consequences
of such qualification. The Company is not aware, however, of any currently
pending tax legislation that would adversely affect its ability to continue to
qualify as a REIT.
For any taxable year that the Company fails to qualify as a REIT, the
Company will be subject to federal income tax (including any applicable
alternative minimum tax) on its taxable income at corporate rates. In
addition, unless entitled to relief under certain statutory provisions, the
Company also will be disqualified from treatment as a REIT for the four taxable
years following the year during which qualification is lost. This treatment
would reduce the net earnings of the Company available for investment or
distribution to shareholders because of the additional tax liability to the
Company for the year or years involved. In addition, distributions no longer
would be required to be made. To the extent that distributions to shareholders
would have been made in anticipation of the Company's qualifying as a REIT, the
Company might be required to borrow funds or to liquidate certain of its
investments to pay the applicable tax.
Prior to the Paragon Acquisition, Paragon represented to the Company
that, since its formation, it had operated so as to qualify as a REIT under the
Code. Under certain circumstances, the Company's qualification as a REIT could
depend upon Paragon's qualification as a REIT for periods prior to the Paragon
Acquisition, and in any event, the liabilities that the Company assumed in the
Paragon Acquisition include Paragon's liability for any unpaid taxes, including
taxes resulting if Paragon failed to qualify as a REIT for any period prior to
the Paragon Acquisition.
CONSEQUENCES OF FAILURE TO QUALIFY THE OPERATING PARTNERSHIP AS A PARTNERSHIP
If the Internal Revenue Service (the "IRS") were to successfully
challenge the tax status of the Operating Partnership as a partnership for
federal income tax purposes, the Operating Partnership would be taxable as a
corporation. In such event, since the value of the Company's ownership
interest in the Operating Partnership could exceed 5% of the value of its
assets, the
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<PAGE> 10
Company could cease to qualify as a REIT. The same consequence could follow
from a determination that the Company owned more than 10% of the voting stock
of the Operating Partnership when treated as a corporation. In addition, the
imposition of a corporate tax on the Operating Partnership would likely reduce
the cash available for distribution to shareholders. See "Certain Federal
Income Tax Consequences."
EFFECT OF MARKET INTEREST RATES ON PRICE OF COMMON SHARES
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 prospective purchasers of the Common Shares to demand a higher
anticipated annual yield from future dividends. Such an increase in the
required anticipated dividend yield may adversely affect the market price of
outstanding Common Shares.
CHANGES IN POLICIES
The major policies of the Company, including its policies with respect
to acquisitions, financings, growth, operations, development, debt
capitalization and distributions, are determined by the Board. The Board may
from time to time amend or revise these and other policies without a vote of
the shareholders of the Company. Accordingly, shareholders will have no control
over changes in these and similar policies of the Company, and changes in the
Company's policies may not fully serve the interest of all shareholders.
UNINSURED AND UNDERINSURED LOSSES COULD RESULT IN LOSS OF VALUE OF PROPERTY
The Company carries comprehensive liability, fire, flood, extended
coverage and rental loss insurance with respect to its properties and
management believes such coverage is of the type and amount customarily
obtained for or by an owner of real property assets. Similar coverage will be
obtained for properties acquired in the future. The Company exercises its
discretion in determining amounts, coverage limits and deductibility provisions
of insurance, with a view to maintaining appropriate insurance on the Company's
investments at a reasonable cost and on suitable terms. This may result in
insurance coverage that in the event of a substantial loss would not be
sufficient to pay the full current market value or current replacement cost of
the Company's lost investment. Inflation, changes in building codes and
ordinances, environmental considerations and other factors also might make it
infeasible to use insurance proceeds to replace the property after such
property has been damaged or destroyed.
POSSIBLE ENVIRONMENTAL LIABILITIES
Under various federal, state and local laws, ordinances and
regulations, a current or previous owner of real estate is liable to a
governmental entity or third party for the costs of removal or remediation of
certain hazardous or toxic substances or petroleum product releases on or in
such property. Such laws often impose such liability without regard to whether
the owner knew of, or was responsible for, the presence of such hazardous or
toxic substances or petroleum product releases. The presence of such
substances, or the failure to properly remediate such substances, may adversely
affect the owner's ability to sell or rent such property or to borrow using
such property as collateral. All of the Properties have been subjected to Phase
I or similar environmental audits (which involve inspection without soil
sampling or ground water analysis) by independent environmental consultants.
None of the environmental audit reports have revealed any significant
environmental liability, nor is the Company aware of any environmental
liability with respect to the Properties that management believes would have a
material adverse effect on the Company's business, assets or results of
operations. No assurance can be given that existing environmental studies with
respect to the Properties reveal all environmental liabilities or that any
prior owner of any of the Properties did not create any material environmental
condition not known to the Company.
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<PAGE> 11
COSTS OF COMPLIANCE WITH AMERICANS WITH DISABILITIES ACT, FAIR HOUSING
AMENDMENTS ACT AND SIMILAR LAWS
Under the Americans with Disabilities Act of 1990 (the "ADA"), whose
requirements became effective in 1992, all places of public accommodation are
required to meet certain federal requirements related to access and use by
disabled persons. Although the ADA does not consider residential properties,
such as multifamily properties, to be public accommodations or commercial
facilities, except to the extent portions of such facilities are open to the
public, and management of the Company believes that the Company's multifamily
properties are substantially in compliance with the present requirements of the
ADA, the Company may incur additional costs of complying with final ADA
regulations.
Failure to comply with the ADA could result in an imposition of fines
or the award of damages to private litigants. If required changes involve
greater expenditures than the Company currently anticipates, or if the changes
must be made on a more accelerated basis than it anticipates, the Company's
ability to make expected distributions could be adversely affected. The Company
believes that its competitors face similar costs in complying with the
requirements of the ADA.
The Fair Housing Amendments Act of 1988 (the "FHAA") imposes certain
requirements related to access by physically handicapped persons on multifamily
properties first occupied after March 13, 1990. Noncompliance with the FHAA
could result in the imposition of fines or the award of damages to private
litigants. The Company believes that the Properties that are subject to the
FHAA are in compliance with such law.
A number of federal, state and local laws exist that may require
modifications to the Properties, or restrict certain further renovations
thereof, with respect to access thereto by disabled persons. Additional and
future legislation may impose other burdens or restrictions on owners with
respect to access by disabled persons. The ultimate costs of complying with the
ADA, FHAA and other similar legislation are not currently ascertainable and,
while such costs are not expected to have a material effect on the Company,
such costs could be substantial. Limitations or restrictions on the completion
of certain renovations may limit application of the Company's investment
strategy in certain instances or reduce overall returns on the Company's
investments.
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<PAGE> 12
THE COMPANY
GENERAL
The Company is a fully integrated, self-administered and self-managed
REIT formed pursuant to the Texas REIT Act. The Company owns, operates and
develops multifamily properties in six states primarily in the Southwest,
Southeast and Midwest regions of the United States. The Company is one of the
largest publicly-traded REIT owners of multifamily properties (based on the
number of apartment units owned) in the United States. As of June 30, 1997, the
Company owned, or had interests in, 103 Properties containing 35,460 units
located in 12 metropolitan markets. The Properties include 95 Stabilized
Properties, five Lease-Up Properties containing 1,524 units and three
Development Properties in Houston and Dallas which will, when completed, add
1,110 units to the Company's portfolio. In addition to the Properties, the
Company has several additional sites, including land in Denver, which it
intends to develop into multifamily apartment communities. As a result of the
Paragon Acquisition, the Company also owns indirect minority ownership
interests in three commercial properties, which the Company does not manage.
Additionally, the Company manages 4,673 apartment units in sixteen properties
for third parties and affiliates.
The Company has approximately 1,190 employees. The Company's
principal executive office is located at 3200 Southwest Freeway, Suite 1500,
Houston, Texas 77027 and its phone number is (713) 964-3555.
THE PARAGON ACQUISITION
The Paragon Acquisition was effected on April 15, 1997, pursuant to
the terms and provisions of the Merger Agreement. The Paragon Acquisition
increased the size of the Company's portfolio from 53 to 103 multifamily
properties (after combining the operations of seven of the acquired properties
with adjacent properties) and from 19,389 to 35,364 apartment units. In
connection with the Paragon Acquisition, each outstanding share of Paragon
common stock was converted into the right to receive 0.64 Common Shares and a
total of 9,466,346 Common Shares were issued by the Company (not including
2,352,161 Common Shares issuable in the future upon conversion of OP Units).
In connection with the Paragon Acquisition, the Company assumed approximately
$296 million of Paragon debt, at fair value. As a result of the Paragon
Acquisition, the Company owns and operates its portfolio in part directly and
in part through the Operating Partnership (an umbrella partnership). See "--
Property Ownership Structure" below.
The Company believes that the Paragon Acquisition provided a unique
opportunity for geographic expansion into attractive growth-oriented markets in
the Southeast and Midwest, resulting in increased strength and predictability
of the Company's cash flows. Geographic diversification reduces the
vulnerability of the Company to economic cycles in any particular region.
PROPERTY OWNERSHIP STRUCTURE
Before the Paragon Acquisition, the Company owned all of its assets
directly or through wholly-owned subsidiaries. Paragon had conducted
substantially all of its business, however, through an operating partnership
structure. As a result of the Paragon Acquisition, the Company now owns 45.2%
of its assets (based on apartment units) through the Operating Partnership,
which the Company controls through the General Partner (owning 1% of the
Operating Partnership) and by the ownership of 79.1% of the OP Units (through a
wholly-owned subsidiary). The remaining 19.9% of the Operating Partnership
interests are held by former officers, directors and investors in Paragon, who
collectively owned 2,346,640 OP Units as of June 30, 1997. The OP Units are
redeemable for cash or, at the election of the Company, Common Shares on the
basis of one OP Unit for one Common Share. Holders of OP Units are not
entitled to rights as shareholders of the Company prior to redemption of their
OP Units. No member of the Company's management team owns OP Units, and only
two of the seven Trust Managers of the Company own OP Units (such Trust
Managers being former Paragon directors).
The Company, through its general partner interest in the Operating
Partnership, holds exclusive power over the business and affairs of the
Operating Partnership without the consent of the holders of OP Units, subject
to certain limitations. As the general partner, subject to the limitations
discussed below, the Company may engage in transactions (including transactions
with affiliates of the Company) to purchase, sell or finance the real estate
assets of the Operating Partnership, and may borrow or lend funds, as long as
such transactions are fair and reasonable to the Operating Partnership.
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<PAGE> 13
As the holder of more than two-thirds of the OP Units, the Company has
the power to dissolve and liquidate the Operating Partnership at any time, and
in connection therewith, sell or otherwise dispose of any part or all of the
Operating Partnership's assets. Either (i) the sale of all or substantially
all of the assets of the Operating Partnership without liquidation of the
partnership or (ii) a merger in which the holders of OP Units do not receive
the same consideration as the Company's shareholders requires the majority
consent of holders of OP Units, excluding OP Units held by the Company.
Otherwise, the Company generally has complete discretion to manage the
Operating Partnership and its assets without consent of the other holders of OP
Units.
DEVELOPMENT ACTIVITY
During 1997, the Company completed two of the Lease-Up Properties
containing 668 units, which represent a total investment of $35.4 million.
These properties are currently in the lease-up phase and are expected to be
stabilized during the third quarter of 1997. The Company acquired the
remaining three Lease-Up Properties in the Paragon Acquisition. These
properties represent a total investment of $44.2 million in 856 units and are
expected to be stabilized in the third quarter of 1997. The Development
Properties in Houston and Dallas, when completed, will add 1,110 units and
represent a total projected investment of $64.1 million. Completion and
stabilization of the Development Properties are expected to be achieved by the
third quarter of 1998. There can be no assurance that the Company's
expectations with respect to completion and stabilization will be realized.
See "Risk Factors."
DISTRIBUTIONS
The Company has paid quarterly distributions to its shareholders
continuously since 1993, its first year of operation as a public company. As a
result of the Company's improved operating performance, in March 1997 the
Company announced a 3.2% increase in its regular quarterly distribution,
commencing with the Company's distribution with respect to the first quarter of
1997, from $0.475 per Common Share to $0.49 per Common Share (equivalent to
$1.96 per Common Share on an annualized basis). This represents the Company's
fourth consecutive annual dividend increase since 1993. The first quarter
dividend was paid on April 17, 1997, and the second quarter dividend was paid
on July 17, 1997. The Company's current policy is to review the distributions
in February of each year, increasing the dividend at a rate which is less than
the projected rate of growth in funds from operations per share for the coming
year. The amount of such distributions will not be less than such amounts as
may be necessary to continue the Company's qualification as a REIT under the
Code.
DESCRIPTION OF SECURITIES TO BE REGISTERED
The Company's Declaration of Trust provides that the Company may issue
up to 110,000,000 shares of beneficial interest, par value $0.01 per share,
consisting of 100,000,000 Common Shares and 10,000,000 preferred shares of
beneficial interest, par value $0.01 per share ("Preferred Shares"). As of
August 21, 1997, 31,637,763 Common Shares were issued and outstanding and no
Preferred Shares were issued and outstanding. The outstanding Common Shares do
not include: (i) 897,733 Common Shares reserved for issuance upon the exercise
of outstanding options granted pursuant to the Company's 1993 Share Incentive
Plan (the "Plan"), (ii) 2,346,640 Common Shares issuable upon conversion of OP
Units, (iii) 297,083 Common Shares issuable upon conversion of the Company's
outstanding convertible debentures, and (iv) 183,434 Common Shares awarded
under the Plan to certain executive officers of the Company and held in trust
by the Company.
The following description of the Common Shares sets forth certain
general terms and provisions of the Common Shares. 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 Amended and Restated 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. 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 of business or when the payment of such
dividend would result in the Company becoming unable to pay its debts as they
become due in the usual course of business. 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. 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
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<PAGE> 14
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 or removal of Trust Managers, amendments
to the Declaration of Trust, proposals to terminate, reorganize, merge or
consolidate the Company or to sell or dispose of substantially all of the
Company's property and with respect to certain business combinations. There is
no cumulative voting in the election of Trust Managers. The Company will have
perpetual existence unless and until dissolved and terminated. The Merger
Shares have been validly issued and are fully paid and nonassessable, and are
not 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.
RESTRICTIONS ON OWNERSHIP
In order to maintain its qualification 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 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 (as defined therein). 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. For purposes of such
Ownership Limit, convertible securities will be treated as if such securities
had been converted in calculating the Ownership Limit. While the Excess
Securities are held in trust, they will not be entitled to vote (except as
required by law), 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 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 the date
the Board 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 shares of beneficial interest as the Board deems
necessary to comply with the
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<PAGE> 15
Code provisions 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 and the shareholders determine that
maintenance of REIT status is no longer in the best interest of the Company.
SHAREHOLDER LIABILITY
The Declaration of Trust provides that no shareholder shall be
personally or individually liable in any manner whatsoever for any debt, act,
omission or obligation incurred by the Company or the Board. A shareholder
shall be under no obligation to the Company or to its creditors with respect to
such Shares other than the obligation to pay to the Company the full amount of
the consideration for which such Shares were issued or to be issued. By
statute, the State of Texas provides limited liability for shareholders of a
REIT organized under the Texas REIT Act.
TRANSFER AGENT AND REGISTRAR
American Stock Transfer & Trust Company or its successor is the
transfer agent and registrar for the Common Shares.
REGISTRATION RIGHTS
The registration of the Merger Shares pursuant to the registration
statement of which this Prospectus is a part is made pursuant to the Company's
obligations with respect to the Selling Shareholder under the terms of the
Registration Rights Agreement. The following summary does not purport to be
complete and is qualified in its entirety by reference to the Registration
Rights Agreement.
Pursuant to the Registration Rights Agreement, the Company is
obligated to cause to be filed, within forty-five days after the date thereof,
a registration statement under Rule 415 under the Securities Act covering the
offer and sale by the Selling Shareholder of the Merger Shares which the
Selling Shareholder acquired in exchange for its shares of Paragon common stock
pursuant to the terms and provisions of the Merger Agreement. The Company is
further obligated to use its best efforts to cause such registration statement
to be declared effective by the Commission ninety days after the date thereof
and to keep such registration statement continuously effective until the
earlier of (i) such time as the Form S-3 Registration Statement (or similar
successor form of registration statement) is not available to the Company for
registration of the Merger Shares, or (ii) the date on which the Selling
Shareholder has consummated the sale of all of its Merger Shares to a person or
persons, or an entity or entities, that is not an affiliate or are not
affiliates, as the case may be, of the Company. If a Registration Statement on
Form S-3 (or similar form) does not continue to be available to the Company for
registration of the Merger Shares, then the Selling Shareholder will be
entitled to certain demand and piggyback registration rights. As a result of
the filing and effectiveness of the Registration Statement of which this
Prospectus is a part, any Merger Shares sold by the Selling Shareholder
pursuant to this Prospectus will no longer be entitled to the benefits of the
Registration Rights Agreement.
Pursuant to the Registration Rights Agreement, the Company is
obligated to bear all expenses of effecting the registration of the Merger
Shares (other than brokerage and sales commissions and transfer taxes of any
kind and other than for any legal and other expenses incurred by the Selling
Shareholder). The Company also has agreed to indemnify the Selling Shareholder
under the Registration Rights Agreement against certain losses, liabilities,
claims, damages and expenses arising under the securities laws in connection
with the Registration Statement or this Prospectus, subject to certain
limitations. In addition, the Selling Shareholder under the Registration
Rights Agreement has agreed to indemnify the Company and its respective trust
managers, officers and any person who controls the Company against all losses,
liabilities, claims, damages and expenses arising under the securities laws
insofar as such loss, claim, damage or expense relates to written information
furnished to the Company by the Selling Shareholder for use in the Registration
Statement or Prospectus or an amendment or supplement thereto or the failure by
the Selling Shareholder to deliver or cause to be delivered this Prospectus or
any amendment or supplement thereto to any purchaser of the Merger Shares
covered by the Registration Statement from the Selling Shareholder through no
fault of the Company.
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<PAGE> 16
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general summary of the material federal income tax
considerations and consequences to the Company based on current law and is for
general information only. The following discussion is not exhaustive of all
possible tax considerations and consequences 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 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, HER OR ITS 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 COMMON
SHARES AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
The Company elected to be taxed as a REIT for federal income tax
purposes for its taxable year ended December 31, 1996 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 as a
REIT under 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. No assurance can be given 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
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<PAGE> 17
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 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 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.
SELLING SHAREHOLDER
The following table provides the name of and the number of Common
Shares and OP Units beneficially owned by the Selling Shareholder as of August
21, 1997. The Merger Shares set forth below as being beneficially owned as of
such date represent the Common Shares that the Selling Shareholder acquired
upon exchange of its shares of Paragon common stock pursuant to the Merger
Agreement.
The Merger Shares offered by this Prospectus will be offered from time
to time by the Selling Shareholder, or by pledgees, donees, transferees or
other successors in interest thereto.
<TABLE>
<CAPTION>
COMMON SHARES AND OP APPROXIMATE
UNITS BENEFICIALLY OWNED COMMON SHARES TO BE PERCENT OF ALL SHARES
AS OF COMMON SHARES BENEFICIALLY OWNED AFTER AFTER
NAME AUGUST 21, 1997 OFFERED HEREBY OFFERING(1) OFFERING
---- ----------------- -------------- ------------------ ----------------
<S> <C> <C> <C> <C>
FWP, L.P. 952,078 380,800 571,278 1.81%
- -------------------
</TABLE>
(1) Assumes that all the Merger Shares registered hereby will be sold by
the Selling Shareholder. There is no assurance that any of the Merger
Shares will be offered or sold by the Selling Shareholder. The
571,278 Common Shares that the Selling Shareholder may acquire upon
presentation of the OP Units to the Operating Partnership for
redemption have been registered with the Commission separately.
USE OF PROCEEDS
The Common Shares offered hereby are being registered for the account
of the Selling Shareholder and, accordingly, the Company will not receive any
of the proceeds from the sale of the Merger Shares by the Selling Shareholder.
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<PAGE> 18
PLAN OF DISTRIBUTION
This Prospectus relates to the offer and sale from time to time of up
to an aggregate of 380,800 Merger Shares by the Selling Shareholder, or by
pledgees, donees, transferees or other successors in interest thereto. The
Company is registering the Merger Shares pursuant to the Company's obligations
under the Registration Rights Agreement, but the registration of the Merger
Shares does not necessarily mean that any of the Merger Shares will be offered
or sold by the Selling Shareholder thereunder. The Company will not receive
any proceeds from the sale of the Merger Shares by the Selling Shareholder.
The distribution of the Merger Shares may be effected from time to
time in one or more underwritten transactions at a fixed price or prices, which
may be changed, or at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. Any such
underwritten offering may be on a "best efforts" or a "firm commitment" basis.
In connection with any such underwritten offering, underwriters or agents may
receive compensation in the form of discounts, concessions or commissions from
the Selling Shareholder. Underwriters may sell the Merger Shares 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 act as agents.
The Selling Shareholder and any underwriters, dealers or agents that
participate in the distribution of the Merger Shares may be deemed to be
"underwriters" within the meaning of the Securities Act, and any profit on the
sale of the Merger Shares by them and any discounts, commissions or concessions
received by any such underwriters, dealers or agents might be deemed to be
underwriting discounts and commissions under the Securities Act.
At a time a particular offer of Merger Shares is made by the Selling
Shareholder, a Prospectus Supplement, if required, will be distributed that
will set forth the names of any underwriters, dealers or agents and any
discounts, commissions and other terms constituting compensation from the
Selling Shareholder and any other required information.
The sale of Merger Shares by the Selling Shareholder may also be
effected from time to time by selling Merger Shares directly to purchasers or
to or through broker-dealers. In connection with any such sale, any such
broker-dealer may act as agent for the Selling Shareholder or may purchase from
the Selling Shareholder all or a portion of the Merger Shares as principal, and
may be made pursuant to any of the methods described below. Such sales may be
made on the NYSE or other exchanges on which the Common Shares are then traded,
in the over-the-counter market, in negotiated transactions or otherwise at
prices and at terms then prevailing or at prices related to the then-current
market prices or at prices otherwise negotiated.
The Merger Shares may also be sold in one or more of the following
transactions: (a) block transactions in which a broker-dealer may sell all or a
portion of such shares as agent but may position and resell all or a portion of
the block as principal to facilitate the transaction; (b) purchases by any such
broker-dealer as principal and resale by such broker-dealer for its own account
pursuant to a Prospectus Supplement; (c) a special offering, an exchange
distribution or a secondary distribution in accordance with applicable NYSE or
other stock exchange rules; (d) ordinary brokerage transactions and
transactions in which any such broker-dealer solicits purchasers; (e) sales "at
the market" to or through a market maker or into an existing trading market, on
an exchange or otherwise, for such shares; and (f) sales in other ways not
involving market makers or established trading markets, including direct sales
to purchasers. In effecting sales, broker-dealers engaged by the Selling
Shareholder may arrange for other broker-dealers to participate.
Broker-dealers will receive commissions or other compensation from the Selling
Shareholder in amounts to be negotiated immediately prior to the sale that will
not exceed those customary in the types of transactions involved.
Broker-dealers may also receive compensation from purchasers of the Merger
Shares which is not expected to exceed that customary in the types of
transactions involved.
In order to comply with the securities laws of certain states, if
applicable, the Merger Shares may be sold only through registered or licensed
brokers or dealers. In addition, in certain states, Merger Shares may not be
sold unless they have been registered or qualified for sale in such state or an
exemption from such registration or qualification requirement is available and
is complied with.
All expenses incident to the offering and sale of the Merger Shares,
other than commissions, discounts and fees of underwriters, broker-dealers or
agents, shall be paid by the Company. The Company has agreed to indemnify the
Selling Shareholder against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act. See "Registration Rights."
- 16 -
<PAGE> 19
LEGAL MATTERS
Certain legal matters with respect to the Common Shares offered hereby
will be passed upon for the Company by Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P., Dallas, Texas.
EXPERTS
The consolidated financial statements and the related financial
statement schedule of the Company as of December 31, 1996 and 1995 and for each
of the three years in the period ended December 31, 1996 included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996 and
incorporated by reference in this Prospectus 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.
The consolidated and combined financial statements and the related
financial statement schedule of Paragon for the years ended December 31, 1996,
1995, and 1994 as restated, included in the Paragon 8-K and incorporated by
reference in this Prospectus, have been audited by Ernst & Young 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 up their authority as experts in accounting and auditing.
- 17 -
<PAGE> 20
================================================================================
No dealer, salesperson or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus, and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or the Selling Shareholder. This Prospectus does not constitute
an offer to sell or the solicitation of an offer to buy the shares by anyone in
any jurisdiction in which such offer or solicitation is not authorized, or in
which the person making the offer or solicitation is not qualified to do so, or
to any person to whom it is unlawful to make such offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall
create an implication that the information contained or incorporated by
reference herein is correct as of any time subsequent to its date.
--------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Available Information ..................................................... 2
Incorporation of Certain Documents
by Reference ............................................................. 2
Prospectus Summary ........................................................ 3
Risk Factors .............................................................. 5
The Company ............................................................... 10
Description of Securities to be Registered ................................ 11
Registration Rights ....................................................... 13
Certain Federal Income Tax Consequences ................................... 14
Selling Shareholder ....................................................... 15
Use of Proceeds ........................................................... 15
Plan of Distribution ...................................................... 16
Legal Matters ............................................................. 17
Experts ................................................................... 17
</TABLE>
================================================================================
380,800 SHARES
CAMDEN PROPERTY
TRUST
Common Shares of
Beneficial Interest
(Par Value $0.01 Per Share)
-------------------------------------------------
PROSPECTUS
-------------------------------------------------
____________, 1997
================================================================================
<PAGE> 21
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection
with the offering contemplated by this Registration Statement, all of which
will be paid by Camden Property Trust (the "Company"):
<TABLE>
<S> <C>
SEC Registration Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,382
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,618
------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,000
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subsection (B) of Section 9.20 of the Texas Real Estate Investment
Trust Act, as amended (the "Texas REIT Act"), empowers a real estate investment
trust to indemnify any person who was, is, or is threatened to be made a named
defendant or respondent in any threatened, pending, or completed action, suit
or proceeding, whether civil, criminal, administrative, arbitrative, or
investigative, any appeal in such an action, suit or proceeding, or any inquiry
or investigation that can lead to such an action, suit or proceeding because
the person is or was a trust manager, officer, employee or agent of the real
estate investment trust or is or was serving at the request of the real estate
investment trust as a trust manager, director, officer, partner, venturer,
proprietor, trustee, employee, agent, or similar functionary of another real
estate investment trust, corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise against
expenses (including court costs and attorney fees), judgments, penalties, fines
and settlements if he conducted himself in good faith and reasonably believed
his conduct was in or not opposed to the best interests of the real estate
investment trust and, in the case of any criminal proceeding, had no reasonable
cause to believe that his conduct was unlawful.
The Texas REIT Act further provides that, except to the extent
otherwise permitted by the Texas REIT Act, a person may not be indemnified in
respect of a proceeding in which the person is found liable on the basis that
personal benefit was improperly received by him or in which the person is found
liable to the real estate investment trust. Indemnification pursuant to
Subsection (B) of Section 9.20 of the Texas REIT Act is limited to reasonable
expenses actually incurred and may not be made in respect of any proceeding in
which the person has been found liable for willful or intentional misconduct in
the performance of his duty to the real estate investment trust.
Subsection (C) of Section 15.10 of the Texas REIT Act provides that a
trust manager shall not be liable for any claims or damages that may result
from his acts in the discharge of any duty imposed or power conferred upon him
by the real estate investment trust if, in the exercise of ordinary care, he
acted in good faith and in reliance upon information, opinions, reports or
statements, including financial statements and other financial data, concerning
the real estate investment trust, that were prepared or presented by officers
or employees of the real estate investment trust, legal counsel, public
accountants, investment bankers, or certain other professionals, or a committee
of trust managers of which the trust manager is not a member. In addition, no
trust manager shall be liable to the real estate investment trust for any act,
omission, loss, damage or expense arising from the performance of his duty to a
real estate investment trust, save only for his own willful misfeasance,
willful malfeasance or gross negligence.
Article Sixteen of the Company's Amended and Restated Declaration of
Trust, as amended, provides that the Company shall indemnify officers and trust
managers, as set forth below:
(a) The Company shall indemnify, to the extent permitted by Texas
law in accordance with the Company's Amended and Restated
Bylaws (the "Bylaws"), every person who is or was a trust
manager or officer of the Company or its corporate predecessor
and any person who is or was serving at the request of the
Company or its corporate predecessor as a director, officer,
partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another foreign or domestic
corporation, partnership, joint venture, sole proprietorship,
trust, employee benefit plan or other enterprise with respect
to all costs and expenses incurred by such person as a result
of such person being made or threatened to be made a defendant
or respondent in a proceeding by reason of his holding or
having held a position named above in this paragraph.
II-1
<PAGE> 22
(b) If the indemnification provided in paragraph (a) is either (i)
insufficient to cover all costs and expenses incurred by any
person named in such paragraph as a result of such person
being made or threatened to be made a defendant or
respondent in a proceeding by reason of his holding or having
held a position named in such paragraph or (ii) not permitted
by Texas law, the Company shall indemnify, to the fullest
extent that indemnification is permitted by Texas law, every
person who is or was a trust manager or officer of the Company
or its corporate predecessor and any person who is or was
serving at the request of the Company or its corporate
predecessor as a director, officer, partner, venturer,
proprietor, trustee, employee, agent or similar functionary of
another foreign or domestic corporation, partnership, joint
venture, sole proprietorship, trust, employee benefit plan or
other enterprise with respect to all costs and expenses
incurred by such person as a result of such person being made
or threatened to be made a defendant or respondent in a
proceeding by reason of his holding or having held a position
named above in this paragraph.
The Company's Bylaws provide that the Company may indemnify any trust
manager or officer of the Company who was, is or is threatened to be made a
party to any suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, because the person is or was a trust manager,
officer, employee or agent of the Company, or is or was serving at the request
of the Company in the same or another capacity in another corporation or
business association, against judgments, penalties, fines, settlements and
reasonable expenses actually incurred if it is determined that the person: (i)
conducted himself in good faith, (ii) reasonably believed that, in the case of
conduct in his official capacity, his conduct was in the best interests of the
Company, and that, in all other cases, his conduct was at least not opposed to
the best interests of the Company, and (iii) in the case of any criminal
proceeding, had no reasonable cause to believe his conduct was unlawful;
provided that, if the person is found liable to the Company, or is found liable
on the basis that personal benefit was improperly received by the person, the
indemnification (A) is limited to reasonable expenses actually incurred by the
person in connection with the proceeding and (B) will not be made in respect of
any proceeding in which the person shall have been found liable for willful or
intentional misconduct in the performance of his duty to the Company.
ITEM 16. EXHIBITS.
<TABLE>
<S> <C>
4.1 Amended and Restated Declaration of Trust of the Company, as amended (filed as Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (File No. 1-12110), and
incorporated herein by reference)
4.2 Amended and Restated Bylaws of the Company (filed as Exhibit 3.1 to the Company's Current Report on
Form 8-K dated October 31, 1996, filed with the Securities and Exchange Commission (the "Commission")
on November 18, 1996 (File No. 1-12110), and incorporated herein by reference)
4.3 Specimen certificate for Common Shares of the Company (filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-11 filed with the Commission on September 15, 1993 (File No.
33-68736), and incorporated herein by reference)
4.4 Registration Rights Agreement dated April 15, 1997 among the Company, Camden Operating, L.P.
and certain investors set forth therein (filed as Exhibit 99.1 to the Company's Registration
Statement on Form S-3 filed with the Commission on April 22, 1997 (File No. 333-25637), and
incorporated herein by reference)
* 5.1 Opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. as to the legality of the securities being
registered
* 8.1 Opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. as to certain tax matters
* 23.1 Consent of Deloitte & Touche LLP
* 23.2 Consent of Ernst & Young LLP
23.3 Consent of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. (included in Exhibit 5.1 hereto)
23.4 Consent of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. (included in Exhibit 8.1 hereto)
24.1 Power of Attorney (previously filed)
</TABLE>
___________________________
* Filed herewith
II-2
<PAGE> 23
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
Registration Statement:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of
1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post- effective
amendment shall be deemed to be a new registration
statement relating to the securities offered therein,
and the offering of such securities at that time
shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Exchange Act (and, where
applicable, each filing of an employee benefit plan's annual
report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the Registration Statement shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to trust managers, directors,
officers and controlling persons of the registrant pursuant to
the provisions described in Item 15 of this Registration
Statement or otherwise, the registrant has been advised that
in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than in
payment by the registrant of expenses incurred or paid by a
trust manager, director, officer or controlling person in the
successful defense of any action, suit or proceeding) is
asserted against the registrant by such trust manager,
director, officer or controlling person in connection with the
securities being registered hereby, the registrant will,
unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 24
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement on Form S-3 to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Houston,
State of Texas, on the 22nd of August, 1997.
CAMDEN PROPERTY TRUST
By: /s/ G. Steven Dawson
----------------------------------------------
G. Steven Dawson
Senior Vice President-Finance, Chief Financial
Officer, Treasurer and Assistant Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement on Form S-3 has been signed by
the following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Richard J. Campo Chairman of the Board of Trust Managers August 22, 1997
------------------------------ and Chief Executive Officer
Richard J. Campo (Principal Executive Officer)
/s/ D. Keith Oden President, Chief Operating Officer and August 22, 1997
------------------------------
D. Keith Oden Trust Manager
/s/ G. Steven Dawson Senior Vice President-Finance, Chief August 22, 1997
------------------------------ Financial Officer, Treasurer and Assistant
G. Steven Dawson Secretary
(Principal Financial and Accounting
Officer)
/s/ William R. Cooper Trust Manager August 22, 1997
------------------------------
William R. Cooper
/s/ George R. Hrdlicka Trust Manager August 22, 1997
------------------------------
George R. Hrdlicka
/s/ Lewis A. Levey Trust Manager August 22, 1997
------------------------------
Lewis A. Levey
</TABLE>
II-4
<PAGE> 25
<TABLE>
<S> <C> <C>
/s/ F. Gardner Parker Trust Manager August 22, 1997
------------------------------
F. Gardner Parker
/s/ Steven A. Webster Trust Manager August 22, 1997
------------------------------
Steven A. Webster
</TABLE>
II-5
<PAGE> 26
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number
- ------
<S> <C>
4.1 Amended and Restated Declaration of Trust of the Company, as amended (filed as Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1997 (File No. 1-12110), and
incorporated herein by reference)
4.2 Amended and Restated Bylaws of the Company (filed as Exhibit 3.1 to the Company's Current Report on
Form 8-K dated October 31, 1996, filed with the Commission on November 18, 1996 (File No. 1-12110), and
incorporated herein by reference)
4.3 Specimen certificate for Common Shares of the Company (filed as Exhibit 4.1 to the Company's
Registration Statement on Form S-11 filed with the Commission on September 15, 1993 (File No. 33-
68736), and incorporated herein by reference)
4.4 Registration Rights Agreement dated April 15, 1997 among the Company, Camden Operating, L.P. and
certain investors set forth therein (filed as Exhibit 99.1 to the Company's Registration Statement on
Form S-3 filed with the Commission on April 22, 1997 (File No. 333-25637), and incorporated herein by
reference)
* 5.1 Opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. as to the legality of the securities being
registered
* 8.1 Opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. as to certain tax matters
* 23.1 Consent of Deloitte & Touche LLP
* 23.2 Consent of Ernst & Young LLP
23.3 Consent of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. (included in Exhibit 5.1 hereto)
23.4 Consent of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. (included in Exhibit 8.1 hereto)
24.1 Power of Attorney (previously filed)
</TABLE>
___________________________
* Filed herewith
<PAGE> 1
Exhibit 5.1
[Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. Letterhead]
August 21, 1997
Camden Property Trust
3200 Southwest Freeway
Suite 1500
Houston, Texas 77027
Re: Camden Property Trust/Registration Statement on Form S-3
Gentlemen:
We have acted as securities counsel to Camden Property Trust, a Texas
real estate investment trust (the "Company"), in connection with the proposed
offering and sale from time to time of up to 380,800 common shares of
beneficial interest of the Company, par value $0.01 per share (the "Camden
Common Shares"), by a certain holder thereof and the registration under the
Securities Act of 1933, as amended, of the Camden Common Shares by means of the
Registration Statement on Form S-3 (the "Registration Statement"), as filed
with the Securities and Exchange Commission (the "Commission").
We have examined and are familiar with originals or copies, certified
or otherwise identified to our satisfaction, of such documents, corporate
records, certificates of public officials and other instruments as we have
deemed necessary or advisable in connection with this opinion, including (a)
the Amended and Restated Declaration of Trust of the Company and the Amended
and Restated Bylaws of the Company, as amended to date, (b) minutes of the
proceedings of the Board of Trust Managers of the Company, (c) the Registration
Rights Agreement dated April 15, 1997 among the Company, Camden Operating, L.P.
and certain investors named therein, and (d) the Registration Statement. In
our examination, we have assumed the genuineness of all signatures, the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted
to us as certified or photostatic copies, the authenticity of the originals of
such copies and the authenticity of telegraphic or telephonic confirmations of
public officials and others. As to facts material to our opinion, we have
relied upon certificates or telegraphic or telephonic confirmations of public
officials and certificates, documents, statements and other information of the
Company or representatives or officers thereof.
<PAGE> 2
Camden Property Trust
August 21, 1997
Page 2
The opinions set forth herein are subject to the qualification that we
are admitted to practice law in the State of Texas and we express no opinion as
to laws other than the law of the State of Texas and the federal law of the
United States of America.
Based upon the foregoing, and subject to the assumption, qualifications
and limitations hereinabove and hereinafter stated, it is our opinion that the
Camden Common Shares have been duly authorized and, assuming (a) that the
Registration Statement shall have been declared effective by the Commission,
and (b) the Camden Common Shares shall have been issued and delivered to the
selling shareholder listed in the Registration Statement upon exchange of its
shares of Paragon Group, Inc. ("Paragon") common stock pursuant to the merger
agreement dated December 16, 1996 among the Company, Camden Subsidiary, Inc.
and Paragon, we are of the opinion that the Camden Common Shares, when issued,
shall be validly issued, fully paid and nonassessable.
This opinion is rendered as of the date hereof, and we undertake no,
and disclaim any, obligation to advise you of any change in or any new
development that might affect any matters or opinions set forth herein.
We consent to the reference to our Firm under the heading "Legal
Matters" in the Prospectus included in the Registration Statement, and to the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
/s/ LIDDELL, SAPP, ZIVLEY, HILL & LABOON, L.L.P.
<PAGE> 1
Exhibit 8.1
[Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. Letterhead]
August 21, 1997
Camden Property Trust
3200 Southwest Freeway
Suite 1500
Houston, Texas 77027
Ladies and Gentlemen:
We have acted as counsel to Camden Property Trust, a Texas real estate
investment trust (the "Company"), in connection with the proposed offering and
sale from time to time of up to 380,800 common shares of beneficial interest of
the Company, par value $0.01 per share (the "Camden Common Shares") by a
certain holder thereof and the registration under the Securities Act of 1933,
as amended, of the Camden Common Shares by means of the Registration Statement
on Form S-3 (such Registration Statement, the Prospectus forming a part thereof
and all exhibits thereto shall be collectively referred to herein as the
"Registration Statement"), as filed with the Securities and Exchange
Commission.
The opinions set forth in this letter are based on relevant provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations thereunder (including proposed and temporary Regulations), and
interpretations of the foregoing as expressed in court decisions,
administrative determinations, and the legislative history as of the date
hereof. These provisions and interpretations are subject to change, which may
or may not be retroactive in effect, that might result in modifications of our
opinion.
In rendering the following opinion, we have examined such statutes,
regulations, records, certificates and other documents as we have considered
necessary or appropriate as a basis for such opinion, including the following:
(1) the Registration Statement (including all amendments made thereto through
the date hereof); (2) the Amended and Restated Declaration of Trust and the
Amended and Restated Bylaws of the Company, as amended to date; (3) the Third
Amended and Restated Agreement of Limited Partnership (the "Partnership
Agreement") of Camden Operating, L.P. (the "Operating Partnership"); and (4)
certain written representations of the Company contained in a letter addressed
to Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P., dated on or about the date
hereof (the "Representation Letter").
<PAGE> 2
Camden Property Trust
August 21, 1997
Page 2
In our examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, the authenticity
of the originals of such copies and the authenticity of telegraphic or
telephonic confirmations of public officials and others. As to facts material
to our opinion, we have relied upon certificates or telegraphic or telephonic
confirmations of public officials as well as the Representation Letter and
other certificates, documents, statements and other information of the Company,
the Operating Partnership or representatives or officers thereof.
For purposes of rendering our opinion, we have not made an independent
investigation of the facts set forth in any of the above-referenced documents,
including the Registration Statement and the Representation Letter. We have
consequently relied upon your representations that the information presented in
such documents or otherwise furnished to us accurately and completely describes
all material facts relevant to our opinions.
Based upon, and subject to the foregoing and the next paragraph below
and provided that the Company filed a proper election to be taxed as a real
estate investment trust ("REIT") with its timely filed federal income tax
return for the taxable year ending December 31, 1993, which has not been
terminated or revoked, we are of the opinion that:
1. The Company has met the requirements for qualification and
taxation as a REIT for the taxable year ended December 31,
1996.
2. The Company's diversity of equity ownership, operations
through the date hereof and proposed method of operation
should allow it to qualify as a REIT for the 1997 taxable
year.
3. As of the date hereof, the Operating Partnership is treated
for federal income tax purposes as a partnership, and not as
an association taxable as a corporation.
4. The discussion in the Registration Statement under the heading
"Certain Federal Income Tax Consequences," to the extent that
it describes matters of law or legal conclusions, is correct
in all material respects.
We express no opinion with respect to the transactions described
herein and in the Registration Statement other than those set forth herein. We
assume no obligation to advise you of any changes in our opinion subsequent to
the delivery of this opinion letter. The Company's qualification and taxation
as a REIT depend upon the Company's ability to meet on a continuing basis,
through actual annual operating and other results, the various requirements
under the Code with regard to, among other things, the sources of its income,
the composition of its assets, the level
<PAGE> 3
Camden Property Trust
August 21, 1997
Page 3
of its distributions to shareholders, and the diversity of its share ownership.
Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. will not review the Company's
compliance with these requirements on a continuing basis. Accordingly, no
assurance can be given that the actual operating results of the Company, the
Operating Partnership and the other entities in which the Company or Operating
Partnership own interests, the sources of their income, the nature of their
assets, the level of distributions to shareholders and the diversity of share
ownership for any given taxable year will satisfy the requirements under the
Code for qualification and taxation as a REIT. Additionally, you should
recognize that our opinions are not binding on the Internal Revenue Service
(the "IRS") and that the IRS may disagree with the opinions contained herein.
This opinion letter has been prepared and furnished to you solely for
use in connection with the filing of the Registration Statement. We hereby
consent to the use and filing of this opinion as an exhibit to the Registration
Statement and to all references to us in the Registration Statement.
Very truly yours,
/s/ LIDDELL, SAPP, ZIVLEY, HILL & LABOON, L.L.P.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Amendment No. 1 to
Registration Statement No. 333-28099 of Camden Property Trust on Form S-3 of
our reports dated February 21, 1997, included and incorporated by reference in
the Annual Report on Form 10-K of Camden Property Trust for the year ended
December 31, 1996, and to the reference to us under the heading "Experts" in
the Prospectus, which is part of this Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Houston, Texas
August 21, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 1 to the Registration Statement on Form S-3 (Registration No.
333-28099) of Camden Property Trust, and to the incorporation by reference
therein of our report dated March 21, 1997, with respect to the consolidated
and combined financial statements and financial statement schedule of Paragon
Group, Inc. for the years ended December 31, 1996, 1995, and 1994 as restated,
included in the Current Report (Form 8-K) dated April 15, 1997, as amended by
the Form 8-K/A filed June 16, 1997, of Camden Property Trust filed with the
Securities and Exchange Commission.
/s/ ERNST & YOUNG LLP
Dallas, Texas
August 19, 1997
