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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): March 20, 1997
CAMDEN PROPERTY TRUST
(Exact name of Registrant as specified in its Charter)
TEXAS 1-12110 76-6088377
(State or other jurisdiction of (Commission file number) (I.R.S. Employer
incorporation or organization) Identification Number)
3200 Southwest Freeway, Suite 1500, Houston, Texas 77027
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 964-3555
Not applicable
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
Camden Property Trust, a Texas real estate investment trust (the
"Company"), has commenced a Medium Term Note program (the "Program") which
provides that the Company may offer and sell from time to time its unsecured
senior Medium Term Notes due Nine Months or More in an aggregate principal
amount of up to $196,000,000 (the "MTNs") as described in the Company's
Prospectus Supplement dated March 20, 1997 to the Company's Prospectus dated
January 30, 1996. The MTNs will be issued pursuant to the Company's existing
shelf registration statement.
The MTNs will be offered and sold by NationsBanc Capital Markets, Inc.,
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P.
Morgan Securities Inc., Smith Barney Inc. and UBS Securities LLC as Agents for
the Company (the "Agents") pursuant to that certain Distribution Agreement among
the Company and the Agents dated March 20, 1997. The MTNs will be issued under
an Indenture between the Company and U.S. Trust Company of Texas, N.A., as
trustee.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits.
1.1 Distribution Agreement among the Company and the Agents dated
March 20, 1997 relating to the MTNs.
4.1 Indenture dated as of February 15, 1996 between the Company
and U.S. Trust Company of Texas, N.A., as trustee (filed as
Exhibit 4.1 to the Company's Current Report on Form 8-K dated
February 15, 1996 and incorporated herein by reference).
4.2 First Supplemental Indenture dated as of February 15, 1996
(filed as Exhibit 4.2 to the Company's Current Report on Form
8-K dated February 15, 1996 and incorporated herein by
reference).
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: March 20, 1997
CAMDEN PROPERTY TRUST
By: /s/ G. Steven Dawson
----------------------
G. Steven Dawson
Senior Vice President - Finance, Chief
Financial Officer and Treasurer
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CAMDEN PROPERTY TRUST
INDEX TO EXHIBITS
EXHIBIT PAGE
- ------- ----
1.1 Distribution Agreement among the Company and the
Agents dated March 20, 1997 relating to the MTNs.
4.1 Indenture dated as of February 15, 1996 between the
Company and U.S. Trust Company of Texas, N.A., as
trustee (filed as Exhibit 4.1 to the Company's Current
Report on Form 8-K dated February 15, 1996 and
incorporated herein by reference).
4.2 First Supplemental Indenture dated as of February 15,
1996 (filed as Exhibit 4.2 to the Company's Current
Report on Form 8-K dated February 15, 1996 and
incorporated herein by reference).
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EXHIBIT 1.1
CAMDEN PROPERTY TRUST
Medium-Term Notes, Series A
Due Nine Months or More from Date of Issue
DISTRIBUTION AGREEMENT
March 20, 1997
NationsBanc Capital Markets, Inc.
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
J.P. Morgan Securities Inc.
Smith Barney Inc.
UBS Securities LLC
c/o NationsBanc Capital Markets, Inc.
NationsBank Corporate Center
100 North Tryon Street
Charlotte, North Carolina 28255-0065
Dear Sirs and Madams:
Camden Property Trust, a Texas real estate investment trust (the
"Company"), confirms its agreement with NationsBanc Capital Markets, Inc.,
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P.
Morgan Securities Inc., Smith Barney Inc. and UBS Securities LLC (each, an
"Agent" and collectively, the "Agents") with respect to the issue and sale by
the Company of its Medium-Term Notes, Series A, described herein (the "Notes").
The Notes are to be issued pursuant to an indenture and a supplemental
indenture, both dated as of February 15, 1996 (together, the "Indenture"),
between the Company and U.S. Trust Company of Texas, N.A., as trustee (the
"Trustee"), and pursuant to resolutions adopted by the Board of Trust Managers
of the Company. As of the date hereof, the Company has authorized the issuance
and sale of up to U.S. $196,000,000 aggregate principal amount of Notes through
the Agents pursuant to the terms of this Agreement. The Notes shall have the
maturity ranges, interest rates, if any, redemption provisions and other terms
set forth in the Prospectus referred to below as it may be amended or
supplemented from time to time.
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This Agreement provides both for the sale of Notes by the Company through
the Agents as agents and to the Agents as principals for resale to investors and
other purchasers and for the sale of Notes by the Company directly to investors
on its own behalf.
The Company has filed with the Securities and Exchange Commission (the
"SEC") a registration statement on Form S-3 (No. 33-84536) for the registration
of equity and debt securities, including the Notes, under the Securities Act of
1933, as amended (the "1933 Act"), and the offering thereof from time to time in
accordance with Rule 415 of the rules and regulations of the SEC under the 1933
Act (the "1933 Act Regulations"). Such registration statement has been declared
effective by the SEC and the Indenture has been qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"). Such registration statement
(and any further registration statements which may be filed by the Company for
the purpose of registering additional Notes in connection with this Agreement)
and the prospectus constituting a part thereof, and any prospectus supplements
relating to the Notes, including all documents incorporated therein by
reference, as from time to time amended or supplemented by the filing of
documents pursuant to the Securities Exchange Act of 1934, as amended (the "1934
Act"), or the 1933 Act or otherwise, are referred to herein as the "Registration
Statement" and the "Prospectus", respectively, except that if any revised
prospectus shall be provided to the Agents by the Company for use in connection
with the offering of the Notes which is not required to be filed by the Company
pursuant to Rule 424(b) of the 1933 Act Regulations, the term "Prospectus" shall
refer to such revised prospectus from and after the time it is first provided to
the Agents for such use.
SECTION 1. Appointment as Agents.
(a) Appointment. Subject to the terms and conditions stated herein and
subject to the reservation by the Company of the right to sell Notes directly on
its own behalf, the Company hereby appoints each Agent as an agent of the
Company for the purpose of soliciting and receiving offers to purchase the Notes
from the Company and agrees that Notes will be sold exclusively to or through
the Agents. Each of the Agents is authorized to engage the services of any
other broker or dealer in connection with the offer or sale of the Notes
purchased by an Agent as principal for resale to others but is not authorized to
appoint sub-agents.
(b) Sale of Notes. The Company shall not sell or approve the solicitation
of purchases of Notes in excess of the amount which shall be authorized by the
Company from time to time or in excess of the principal amount of Notes
registered pursuant to the Registration Statement. The Agents will have no
responsibility for
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maintaining records with respect to the aggregate principal amount of Notes
sold, or of otherwise monitoring the availability of Notes for sale, under the
Registration Statement. Notwithstanding anything to the contrary herein, the
Company may authorize any other person, partnership or corporation (an
"Additional Agent") to act as its agent to solicit offers for the purchase of
all or part of the Notes and/or accept offers to purchase the Notes from any
such Additional Agent, provided that any such Additional Agent shall have
entered into an agreement with the Company upon the same terms and conditions as
set forth in this Agreement (including, but not limited to, the commission
schedule set forth herein).
So long as this Agreement shall remain in effect with respect to any Agent
or Agents, the Company shall not, without the consent of such Agent or Agents,
solicit or accept offers to purchase, or sell, any debt securities with a
maturity at the time of original issuance of nine months or more except pursuant
to this Agreement or any Terms Agreement (as defined below), or except pursuant
to a private placement not constituting a public offering under the 1933 Act, or
except in connection with a firm commitment underwriting pursuant to an
underwriting agreement that does not provide for a continuous offering of
medium-term debt securities. However, the Company reserves the right to sell,
and may solicit and accept offers to purchase, the Notes directly on its own
behalf, and in the case of any such sale not resulting from a solicitation made
by any Agent, no commission will be payable with respect to such sale.
(c) Purchases as Principal. The Agents shall not have any obligation to
purchase Notes from the Company as principal, but the Agents may agree from time
to time to purchase Notes as principal. Any such purchase of Notes by any Agent
as principal shall be made in accordance with Section 3(a) hereof and in
accordance with such additional terms agreed upon by the Agents and the Company
(which terms shall be, at the option of the Agents, either (i) set forth in a
separate agreement (each, a "Terms Agreement"), substantially in the form of
Exhibit A hereto or (ii) agreed upon orally, with written confirmation prepared
by the Agents and mailed to the Company).
(d) Solicitations as Agent. In soliciting purchases of the Notes on behalf
of the Company each Agent will act solely as agent for the Company and not as
principal. Each Agent will communicate to the Company, orally, each offer to
purchase Notes solicited by such Agent on an agency basis, other than those
offers rejected by such Agent. Each Agent shall have the right, in its
discretion reasonably exercised, to reject any proposed purchase of Notes, in
whole or in part, and any such rejection shall not be deemed a breach of such
Agent's agreement contained herein. The Company may accept or reject any
proposed purchase of the Notes, in whole or in part. Each Agent shall make
reasonable efforts to assist the
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Company in obtaining performance by each purchaser whose offer to purchase Notes
has been solicited by such Agent and accepted by the Company. The Agents shall
not have any liability to the Company in the event any such agency purchase is
not consummated for any reason. If the Company shall default on its obligation
to deliver Notes to a purchaser whose offer it has accepted, the Company shall
(i) hold each Agent harmless against any loss, claim or damage arising from or
as a result of such default by the Company and (ii) notwithstanding such
default, pay to each Agent any commission to which it would be entitled in
connection with such sale.
(e) Reliance. The Company and the Agents agree that any Notes purchased by
an Agent as principal shall be purchased, and any Notes the placement of which
an Agent arranges shall be placed by such Agent, in reliance on the
representations, warranties, covenants and agreements of the Company contained
herein and on the terms and conditions and in the manner provided herein.
SECTION 2. Representations and Warranties.
(a) The Company represents and warrants to each Agent as of the date
hereof, as of the date of each acceptance by the Company of an offer for the
purchase of Notes (whether to any Agent as principal or through any Agent as
agent), as of the date of each delivery of Notes (whether to any Agent as
principal or through any Agent as agent) (the date of each such delivery to an
Agent as principal being hereafter referred to as a "Settlement Date"), and as
of any time that the Registration Statement or the Prospectus shall be amended
or supplemented or there is filed with the SEC any document incorporated by
reference into the Prospectus (each of the times referenced above being referred
to herein as a "Representation Date") as follows:
(i) Due Formation and Foreign Qualification. The Company has been
duly formed and is validly existing as a real estate investment trust with
transferable shares of beneficial interest under the laws of the State of
Texas, with power and authority to own or lease its properties and conduct
its business as described in the Prospectus, and is qualified for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its subsidiaries taken as
a whole; except for investments in securities as described in the
Registration Statement or the Prospectus, the Company has no equity or
other interest in any
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corporation, partnership, trust, joint venture or other entity.
(ii) Subsidiaries. The subsidiary entities of the Company identified
in Exhibit D hereto or subsequently identified in a document incorporated
by reference in the Registration Statement (the "Subsidiaries") are all of
the Company's Subsidiaries, have full power and authority to conduct their
business as described in the Registration Statement and the Prospectus,
have been duly organized and are validly existing as corporations or
limited partnerships, as the case may be, in good standing under the laws
of their states of organization, and have been duly qualified as foreign
corporations or limited partnerships, as the case may be, for the
transaction of business and are in good standing under the laws of each
other jurisdiction in which they own or lease properties, or conduct any
business, so as to require such qualification, other than where the failure
to be so qualified or in good standing would not have a material adverse
effect on the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries taken as
a whole; and except for investments in securities as described in the
Registration Statement or the Prospectus, the Subsidiaries have no equity
or other interest in any corporation, partnership, trust, joint venture or
other entity; all of the issued and outstanding capital stock of each
Subsidiary that is a corporation or similar entity has been duly authorized
and validly issued, is fully paid and nonassessable and, except as
otherwise disclosed in the Registration Statement or the Prospectus, is
owned by the Company, directly or through Subsidiaries, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
restriction.
(iii) Registration Statement and Prospectus. The Registration
Statement has become effective; no stop order suspending the effectiveness
of the Registration Statement is in effect, and no proceedings for such
purpose are pending before or, to the Company's knowledge, threatened by
the SEC. At the time the Registration Statement became effective, the
Registration Statement complied, and as of the applicable Representation
Date will comply, in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the rules and
regulations of the SEC promulgated thereunder. The Registration Statement,
at the time it became effective, did not, and at each time thereafter at
which any amendment to the Registration Statement becomes effective and as
of each Representation Date, will not, contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or
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necessary to make the statements therein not misleading. The Prospectus,
as of the date hereof does not, and as of each Representation Date will
not, include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the representations and warranties in this
subsection shall not apply to statements in or omissions from the
Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by an Agent
expressly for use in the Registration Statement or the Prospectus to relate
to a particular issuance of Notes or to that part of the Registration
Statement which shall constitute the Statement of Eligibility and the
Qualification under the Trust Indenture Act (Form T-1) of the Trustee under
the Indenture.
(iv) Incorporated Documents. The documents incorporated by reference
in the Registration Statement and the Prospectus, at the time they were or
hereafter are filed with the SEC, complied or when so filed will comply, as
the case may be, in all material respects with the applicable requirements
of the 1933 Act and the 1934 Act and the 1933 Act Regulations and the rules
and regulations promulgated under the 1934 Act (the "1934 Act
Regulations"), and did not and will not include an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they were or are made, not misleading.
(v) Accountants. The accountants who certified the Company's
financial statements included or incorporated by reference in the
Registration Statement and the Prospectus are independent public
accountants within the meaning of the 1933 Act and the 1933 Act
Regulations.
(vi) Financial Statements. The financial statements and any
supporting schedules of the Company and its consolidated Subsidiaries
included or incorporated by reference in the Registration Statement and the
Prospectus present fairly the consolidated financial position of the
Company and its consolidated Subsidiaries as of the dates indicated and the
consolidated results of their operations and the changes in their cash
flows for the periods specified; and, except as stated therein, said
financial statements have been prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis, and the supporting schedules included or incorporated by reference
in
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the Registration Statement or the Prospectus present fairly the information
required to be stated therein.
(vii) Authorization and Validity of this Agreement, Terms Agreements,
the Indenture and the Notes. Each of this Agreement and any applicable
Terms Agreement has been duly authorized, executed and delivered by the
Company and, upon execution and delivery by the Agents, will be a valid and
binding agreement of the Company; the Indenture has been duly authorized,
executed and delivered by the Company and the Trustee, and constitutes a
valid and binding agreement enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or
affecting enforcement of creditors' rights generally or by general equity
principles; the Notes have been duly and validly authorized for issuance,
offer and sale pursuant to this Agreement and, when issued, authenticated
and delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor specified in the
Prospectus or agreed upon pursuant to the provisions of this Agreement and
any applicable Terms Agreement, the Notes will constitute valid and binding
obligations of the Company enforceable against the Company in accordance
with their terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or affecting enforcement of creditors' rights generally or by general
equity principles; the Notes will be substantially in the form heretofore
delivered to the Agents and will conform in all material respects to all
statements relating thereto contained in the Prospectus; and each holder of
Notes will be entitled to the benefits of the Indenture.
(viii) Material Changes or Material Transactions. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as may otherwise be stated therein (a)
there has been no material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its Subsidiaries taken as a whole, whether or not arising
in the ordinary course of business and (b) there have been no material
transactions entered into by the Company or any of its Subsidiaries other
than those in the ordinary course of business.
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(ix) No Defaults; Regulatory Approvals. Neither the Company nor any
of its Subsidiaries is in violation of its declaration of trust, charter or
by-laws or in default, in any material respect, in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, or any indenture, mortgage, deed of trust, loan
agreement, note, lease or other agreement or other instrument or obligation
to which the Company or any Subsidiary is a party or by which it or any of
them or their properties may be bound; the execution and delivery of this
Agreement, any applicable Terms Agreement and the Indenture and the
consummation by the Company of the transactions contemplated herein and
therein have been duly authorized by all necessary action and will not
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any of its Subsidiaries pursuant to, any
contract, indenture, mortgage, deed of trust, loan agreement, note, lease
or other instrument to which the Company or any Subsidiary is a party or by
which the Company or any Subsidiary is bound or to which any of the
property or assets of the Company or any Subsidiary is subject, the result
of which violation would be material to the Company and its Subsidiaries
taken as a whole or would adversely affect the consummation of the
transactions contemplated hereby, nor will any such action result in any
violation of the provisions of the declaration of trust, charter or by-laws
of the Company or any law, administrative regulation or administrative or
court order or decree, and no consent, approval, authorization, order, or
decree of any court or governmental agency or body (including the SEC) is
required for the consummation by the Company of the transactions
contemplated by this Agreement in connection with the sale of Notes
hereunder, except such as have been obtained or as may be required under
state securities ("Blue Sky") laws.
(x) Legal Proceedings; Contracts. Except as disclosed in the
Prospectus, there is no action, suit or proceeding before or by any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened against or affecting, the Company
or any of its Subsidiaries, which could reasonably be expected to result in
any material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Company and its
Subsidiaries taken as a whole, or might materially and adversely affect the
properties or assets thereof or which could reasonably be expected to
materially and adversely affect the consummation of the transactions
contemplated by this Agreement, the Indenture or the Notes; and there are
no contracts,
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indentures, mortgages, deeds of trust, loan agreements, notes, leases or
other instruments or documents which are required to be described or
referred to in the Prospectus or to be filed as exhibits to the
Registration Statement other than those described or referred to therein or
filed or incorporated by reference as exhibits thereto and the descriptions
thereof or references thereto are correct in all material respects.
(xi) Licenses. Neither the Company nor any of its Subsidiaries is,
in any material respect, in violation of any law, ordinance, governmental
rule or regulation or court decree to which it may be subject or has failed
to obtain any license, permit, franchise or other governmental
authorization necessary to the ownership of its property or to the conduct
of its business, which violation or failure would materially adversely
affect the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries
considered as one enterprise; and the Company and its Subsidiaries own or
possess or have obtained all material governmental licenses, permits,
consents, orders, approvals and other authorizations necessary to lease or
own their respective properties and to carry on their respective businesses
as presently conducted.
(xii) Trademarks; Service Marks. The Company and its Subsidiaries
own or possess, or can acquire on reasonable terms, adequate trademarks,
service marks and trade names necessary to conduct the business now
operated by them, except as set forth or incorporated by reference in the
Registration Statement, and neither the Company nor any of its Subsidiaries
has received any notice of infringement of or conflict with asserted rights
of others with respect to any trademarks, service marks or trade names
which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would materially adversely affect the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Company and its Subsidiaries considered as one
enterprise.
(xiii) Investment Company Act. Neither the Company nor any of its
Subsidiaries is required to be registered under the Investment Company Act
of 1940, as amended (the "1940 Act").
(xiv) Ratings. The Notes are rated Baa3 by Moody's Investors
Service, Inc., BBB- by Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc., and BBB- by Duff & Phelps Credit Rating
Co.
(xv) Real Estate Matters. The Company and the Subsidiaries have
indefeasible title to all of the real
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properties and assets reflected in the financial statements (or as
described in the Registration Statement) hereinabove described, subject to
no lien, mortgage, pledge, charge or encumbrance of any kind except those
reflected in such financial statements (or as described in the Registration
Statement) or which are not material in amount and which do not materially
affect the value of such property or materially interfere with the use made
or proposed to be made of such property by the Company or any of the
Subsidiaries; the Company and the Subsidiaries occupy their leased
properties under valid and binding leases conforming to the description
thereof set forth in the Registration Statement and the Prospectus.
(xvi) REIT Qualification. The Company is organized, and has
operated, operates and intends to continue to operate in a manner so as to
qualify as a real estate investment trust (a "REIT") under Sections 856
through 860 of the Internal Revenue Code of 1986, as amended, and the
Company's management believes the Company's present and contemplated
operations, assets and income continue to meet such requirements.
(xvii) Environmental Matters. With respect to the properties of the
Company described in the Prospectus or reflected in the Company's
consolidated financial statements included or incorporated by reference
therein,
(1) the Company and its Subsidiaries (x) are in compliance with any
and all applicable Federal, state and local laws and regulations
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (y) have obtained all permits, licenses or
other approvals required of them under applicable Environmental Laws
to conduct their respective businesses and (z) are in compliance with
all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to
obtain required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals are otherwise disclosed in the Prospectus or would not,
singly or in the aggregate, have a material adverse effect on the
condition (financial or otherwise), business (affairs or other),
prospects, earnings, net worth or results of operations of the Company
and the Subsidiaries taken as a whole;
(2) none of the Company or the Subsidiaries has at any time, and, to
the knowledge of the Company, no other
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party has at any time, handled, buried, stored, retained, refined,
transported, processed, manufactured, generated, produced, spilled,
allowed to seep, leak, escape or leach, or be pumped, poured, emitted,
emptied, discharged, injected, dumped, transferred or otherwise
disposed of or dealt with, Hazardous Materials (as hereinafter
defined) on, to or from the properties of the Company or the
Subsidiaries, other than any such action taken in compliance with all
applicable Environmental Laws or by tenants in connection with the
ordinary use of residential properties owned by the Company or the
Subsidiaries; the Company does not intend to use the properties or any
subsequently acquired properties described in the Prospectus for the
purpose of handling, burying, storing, retaining, refining,
transporting, processing, manufacturing, generating, producing,
spilling, seeping, leaking, escaping, leaching, pumping, pouring,
emitting, emptying, discharging, injecting, dumping, transferring or
otherwise disposing of or dealing with Hazardous Materials other than
in compliance with all applicable Environmental Laws;
(3) the Company does not know of any seepage, leak, escape, leaching,
discharge, injection, release, emission, spill, pumping, pouring,
emptying or dumping of Hazardous Materials into waters on or adjacent
to its properties or onto lands from which such hazardous or toxic
waste or substances might seep, flow or drain into such waters; and
(4) except as may be set forth in the Registration Statement, neither
the Company nor any of the Subsidiaries has received notice of, or has
knowledge of any occurrence or circumstance which, with the giving of
notice or the passage of time or both, would give rise to, any claim
under or pursuant to any Environmental Law pertaining to Hazardous
Material or toxic waste or substances on or originating from their
respective properties or arising out of the conduct of any such party,
including, without limitation, pursuant to any Environmental Law.
As used herein, "Hazardous Material" shall include, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related
materials, asbestos or any material as defined by any Federal, state
or local environmental law, ordinance, rule, or regulation including,
without limitation, Environmental Laws, the Comprehensive
Environmental Response,
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Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601, et seq.) ("CERCLA"), the Hazardous Materials Transportation Act,
as amended (49 U.S.C. Section 1801, et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Section 9601, et
seq.), and in the regulations adopted and publications promulgated
pursuant to each of the foregoing or by any Federal, state or local
governmental authority having or claiming jurisdiction over the
Company's properties as described in the Prospectus.
(xviii) Miscellaneous.
(1) The Company has complied with all provisions of Article 6138A of
the Texas Civil Statutes;
(2) None of the assets of the Company or the Subsidiaries constitute,
nor will such assets, as of any Representation Date, constitute, "plan
assets" under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
(3) The Company maintains a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for
assets; (iii) access to financial and corporate books and records is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is
compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences;
(4) All liens, charges, encumbrances, claims or restrictions on or
affecting the properties of the Company which are required to be
disclosed in the Prospectus are disclosed therein; to the knowledge of
the Company, (i) no lessee of any portion of any of its properties is
in default under any of the leases governing such properties and there
is no event which, but for the passage of time or the giving of
notice, or both, would constitute a default under any of such leases,
except such defaults that would not have a material adverse effect on
the condition (financial or otherwise), business, prospects, net worth
or results of operations of the Company and the Subsidiaries taken as
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a whole; (ii) the intended use and occupancy of each of the Company's
properties complies with all applicable codes and zoning laws and
regulations, if any, except for such failures to comply which would
not individually or in the aggregate have a material adverse effect on
the condition (financial or otherwise), business prospects, net worth
or results of operations of the Company and the Subsidiaries taken as
a whole; and (iii) there is no pending or, to the best knowledge of
the Company, threatened condemnation, zoning change, environmental or
other proceeding or action that will in any material respect affect
the size of, use of, improvements on, construction on, or access to
the Properties, except such proceedings or actions that would not have
a material adverse effect on the condition (financial or otherwise),
business, prospects, net worth or results of operations of the Company
and the Subsidiaries taken as a whole.
(5) The Company has and will maintain, property and casualty insurance
in favor of the Company and the Subsidiaries, as the case may be, with
respect to each of the properties, in an amount and on such terms as
is reasonable and customary for businesses of the type proposed to be
conducted by the Company and the Subsidiaries; the Company has not
received from any insurance company written notice of any material
defects or deficiencies affecting the insurability of any such
properties.
(b) Any certificate signed by any Trust Manager or officer of the Company
and delivered to any Agent or to counsel for the Agents in connection with any
offering of Notes through any Agent as agent or the sale of Notes to any Agent
as principal shall be deemed a representation and warranty by the Company to
such Agent as to the matters covered thereby on the date of such certificate and
at each Representation Date subsequent thereto.
SECTION 3. Purchases as Principal: Solicitations as Agent.
(a) Purchases as Principal. Unless otherwise agreed by the Agents and the
----------------------
Company, Notes may be purchased by the Agents as principals. Each Agent's
commitment to purchase Notes as principal shall be deemed to have been made on
the basis of the representations and warranties of the Company herein contained
and shall be subject to the terms and conditions herein set forth. Each
purchase of Notes, unless otherwise agreed, shall be at a discount equivalent to
the applicable commission set forth in Exhibit B hereto. In the event that any
nationally recognized statistical credit rating organization assigns a rating to
a Note of below investment grade (i.e., below the four highest rating
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categories of such agency, without giving effect to any qualifiers), then the
discount otherwise applicable to the sale of such Note shall be increased by
1/8th of 1.0% (.00125). The Agents may engage the services of any other broker
or dealer in connection with the resale of the Notes purchased as principal and
may allow all or any portion of the discount received in connection with such
purchases from the Company to such brokers and dealers. At the time of each
purchase of Notes by any Agent as principal, such Agent shall specify the
requirements for the stand-off agreement, officer's certificate, opinion of
counsel and comfort letter pursuant to Sections 4(k), 7(b), 7(c) and 7(d)
hereof, respectively, and any requirement for an opinion from counsel to the
Agents.
(b) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein set
forth, when agreed by the Company and an Agent, such Agent agrees, as an agent
of the Company, to use its reasonable efforts to solicit offers to purchase the
Notes upon the terms and conditions set forth herein and in the Prospectus. All
Notes sold through any Agent as agent will be sold at 100% of their principal
amount unless otherwise agreed to by the Company and such Agent.
The Company reserves the right, in its sole discretion, to suspend
solicitation of purchases of the Notes through the Agents, as agent, commencing
at any time for any period of time or permanently. As soon as practicable, but
in any event not later than one business day after receipt of instructions from
the Company, the Agents will suspend solicitation of purchases from the Company
until such time as the Company has advised the Agents that such solicitation may
be resumed.
The Company agrees to pay each Agent a commission (subject to increase
as set forth in Section 3(a)), in the form of a discount from the principal
amount of the Notes (or as otherwise agreed by such Agent and the Company),
equal to the applicable percentage of the principal amount of each Note sold by
the Company as a result of a solicitation made by such Agent as set forth in
Exhibit B hereto.
(c) Administrative Procedures. The purchase price, interest rate or
formula, maturity date and other terms of the Notes (as applicable) specified in
Exhibit C hereto shall be agreed upon by the Company and the Agents and set
forth in a pricing supplement to the Prospectus to be prepared in connection
with each sale of Notes (a "Pricing Supplement"). Except as may be otherwise
provided in such supplement to the Prospectus, the Notes will be issued in
denominations of $1,000 or any larger amount that is an integral multiple of
$1,000. Administrative procedures with respect to the
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sale of Notes shall be agreed upon from time to time by the Agents, the Company
and the Trustee (the "Procedures"). The Agents and the Company agree to perform
the respective duties and obligations specifically provided to be performed by
them in the Procedures set forth in Exhibit E hereto, as it may be amended from
time to time by written agreement between the Agents and the Company. The
Company will furnish to the Trustee a copy of the Procedures as from time to
time in effect.
SECTION 4. Covenants of the Company.
The Company covenants with each Agent as follows:
(a) Notice of Certain Events. The Company will notify such Agent
immediately (i) of the effectiveness of any amendment to the Registration
Statement, (ii) of the transmittal to the SEC for filing of any supplement to
the Prospectus relating to the Notes or any document to be filed pursuant to the
1934 Act which will be incorporated by reference in the Prospectus, (iii) of the
receipt of any comments from the SEC with respect to the Registration Statement
or the Prospectus, (iv) of any request by the SEC for any amendment to the
Registration Statement or any amendment or supplement to the Prospectus relating
to the Notes or for additional information, (v) of the issuance by the SEC of
any stop order suspending the effectiveness of the Registration Statement or the
initiation of any proceedings for that purpose, (vi) of any change in any rating
assigned to the Company by any rating agency, and (vii) of the receipt by the
Company of any notification with respect to the suspension of qualification of
the Notes for sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose. The Company will make every reasonable effort to
prevent the issuance of any stop order or notice of suspension of qualification
and, if issued, to obtain the lifting thereof as soon as possible.
(b) Notice of Certain Proposed Filings. The Company will give such Agent
advance notice of its intention to file or prepare any additional registration
statement with respect to the registration of additional Notes, any amendment to
the Registration Statement or any amendment or supplement to the Prospectus
(other than any Pricing Supplement) relating to the Notes, whether by the filing
of documents pursuant to the 1934 Act, the 1933 Act or otherwise, and will
furnish such Agent with copies of any such amendment or supplement or other
documents proposed to be filed or used a reasonable time in advance of such
proposed filing or use, as the case may be, and will not file any such amendment
or supplement or other documents in a form to which such Agents or counsel for
the Agents shall reasonably object.
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(c) Copies of the Registration Statement and the Prospectus. The Company
will deliver to each Agent as many copies of the Registration Statement (as
originally filed) and of each amendment thereto (including exhibits filed
therewith or incorporated by reference therein and documents filed pursuant to
the 1934 Act and incorporated by reference in the Prospectus) as such Agent may
reasonably request. The Company will furnish to each Agent as many copies of
the Prospectus (as amended or supplemented) as such Agent shall reasonably
request so long as such Agent is required to deliver a Prospectus in connection
with sales or solicitations of offers to purchase the Notes.
(d) Preparation of Pricing Supplements. The Company will prepare, with
respect to any Notes to be sold through or to such Agent pursuant to this
Agreement, a Pricing Supplement with respect to such Notes in a form previously
approved by the Agents and will file such Pricing Supplement pursuant to Rule
424(b)(3) under the 1933 Act not later than the close of business of the SEC on
the fifth business day after the date on which such Pricing Supplement is first
used.
(e) Revisions of Prospectus -- Material Changes. Except as otherwise
provided in subsection (l) of this Section, if at any time during the term of
this Agreement any event shall occur or condition exist as a result of which it
is necessary, in the reasonable opinion of counsel for the Agents or counsel for
the Company, to further amend or supplement the Prospectus in order that the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein not
misleading in the light of the circumstances existing at the time the Prospectus
is delivered to a purchaser, or if it shall be necessary, in the reasonable
opinion of either such counsel, to amend or supplement the Registration
Statement or the Prospectus in order to comply with the requirements of the 1933
Act or the 1933 Act Regulations, immediate notice shall be given, and confirmed
in writing, to the Agents to cease the solicitation of offers to purchase the
Notes in such Agents' capacity as agent and to cease sales of any Notes such
Agent may then own as principal (and, if so notified, such Agent shall cease
such solicitations as soon as practicable, but in any event not later than one
business day later), and the Company will promptly amend the Registration
Statement and the Prospectus, whether by filing documents pursuant to the 1934
Act, the 1933 Act or otherwise, as may be necessary to correct such untrue
statement or omission or to make the Registration Statement and the Prospectus
comply with such requirements.
(f) Prospectus Revisions -- Periodic Financial Information. Except as
otherwise provided in subsection (l) of this Section, on or about the date on
which there shall be released to the general
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public interim financial statement information related to the Company with
respect to each of the first three quarters of any fiscal year or preliminary
financial statement information with respect to any fiscal year, the Company
shall furnish copies of such information to such Agent.
(g) Prospectus Revisions -- Audited Financial Information. Except as
otherwise provided in subsection (l) of this Section, on or about the date on
which there shall be released to the general public financial information
included in or derived from the audited financial statements of the Company for
the preceding fiscal year, the Company shall cause the Registration Statement
and the Prospectus to be amended, whether by the filing of documents pursuant to
the 1934 Act, the 1933 Act or otherwise, to include or incorporate by reference
such audited financial statements and the report or reports, and consent or
consents to such inclusion or incorporation by reference, of the independent
accountants with respect thereto, as well as such other information and
explanations as shall be necessary for an understanding of such financial
statements or as shall be required by the 1933 Act or the 1933 Act Regulations.
In the event that only information derived from the audited financial statements
of the Company is released to the general public, the Company shall, on or prior
to the date of release of such information, furnish copies of such information
to such Agent.
(h) Earnings Statements. The Company will make generally available to its
security holders as soon as practicable, but not later than 90 days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the 1933 Act) covering each twelve month
period beginning, in each case, not later than the first day of the Company's
fiscal quarter next following the "effective date" (as defined in such Rule 158)
of the Registration Statement with respect to each sale of Notes.
(i) Blue Sky Qualifications. If necessary, the Company will endeavor, in
cooperation with the Agents, to qualify the Notes for offering and sale under
the applicable securities laws of such states and other jurisdictions of the
United States as the Agents may designate, and will maintain such qualifications
in effect for as long as may be required for the distribution of the Notes;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified. The Company will file such
statements and reports as may be required by the laws of each jurisdiction in
which the Notes have been qualified as above provided.
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(j) 1934 Act Filings. The Company, during the period when the Prospectus
is required to be delivered under the 1933 Act, will file all documents required
to be filed with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
1934 Act within the prescribed time periods therefor.
(k) Stand-Off Agreement. Unless otherwise specified by an Agent or Agents
in connection with a purchase of Notes as principal, between the date of the
agreement to purchase such Notes and the Settlement Date with respect to such
purchase, the Company will not, without such Agent's prior written consent,
offer or sell, or enter into any agreement to sell, any debt securities of the
Company similar to the Notes (other than the Notes that are to be sold pursuant
to such agreement and commercial paper in the ordinary course of business).
(l) Suspension of Certain Obligations. The Company shall not be required
to comply with the provisions of subsections (e), (f) or (g) of this Section
during any period from the time the Agents shall have suspended solicitation of
purchases of the Notes in their capacity as agents pursuant to a request from
the Company pursuant to Section 3(b), provided that no Agent shall then hold any
Notes purchased as principal pursuant hereto, until the time the Company shall
determine that solicitation of purchases of the Notes should be resumed or an
Agent shall subsequently purchase Notes from the Company as principal.
SECTION 5. Conditions of Obligations.
The obligations of any Agent to purchase Notes as principal and to
solicit offers to purchase the Notes as agent of the Company, and the
obligations of any purchasers of the Notes sold through any Agent as agent, will
be subject to the accuracy of the representations and warranties on the part of
the Company herein and to the accuracy of the statements of the Company's
officers made in any certificate furnished pursuant to the provisions hereof, to
the performance and observance by the Company of all its covenants and
agreements herein contained and to the following additional conditions
precedent:
(a) Legal Opinions. On the date hereof, the Agents shall have received the
following legal opinions, of even date herewith and in form and substance
satisfactory to the Agents:
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(1) Opinion of Company Counsel. The opinion of Liddell, Sapp, Zivley,
Hill & LaBoon, L.L.P., counsel to the Company, to the effect that:
(i) The Company has been duly organized and is validly existing
as a real estate investment trust under the laws of the State of
Texas.
(ii) The Company has power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus.
(iii) The Company is qualified for the transaction of business
and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties, or conducts any business, so as to
require such qualification, other than where the failure to be so
qualified or in good standing would not have a material adverse effect
of the condition, financial or otherwise, or the earnings, business
affairs or business prospects of the Company and its Subsidiaries
taken as a whole.
(iv) Each of the Subsidiaries has been duly organized and is
validly existing as a corporation or limited partnership, as the case
may be, in good standing under the laws of the jurisdiction of its
organization, with power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus as
amended or supplemented; except as disclosed in the Registration
Statement or the Prospectus, the Subsidiaries own no capital stock or
other beneficial interest in any corporation, partnership, trust,
joint venture or other business entity; and except as otherwise stated
in the Registration Statement and the Prospectus, all of the issued
and outstanding capital stock or other ownership interests of each
Subsidiary have been duly authorized and are validly issued, are fully
paid and non-assessable and, to the best of the knowledge of such
counsel, are owned by the Company, directly or through Subsidiaries,
free and clear of any security interest, mortgage, pledge, lien,
encumbrance or claim; and the Subsidiaries have been duly qualified as
foreign corporations or limited partnerships, as the case may be, for
the transaction of business and are in good standing under the laws of
each other jurisdiction in which they own or lease properties, or
conduct any business, so as to require such qualification, other than
where the failure to be so qualified or in good standing would not
have a
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material adverse effect on the Company and its Subsidiaries taken as a
whole.
(v) The Distribution Agreement has been duly and validly
authorized by the Company, and the Distribution Agreement has been
executed and delivered by the Company.
(vi) The Indenture has been duly and validly authorized, executed
and delivered by the Company and (assuming the Indenture has been duly
authorized, executed and delivered by the Trustee) constitutes a valid
and binding agreement, enforceable against the Company in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting enforcement of creditors' rights generally,
or by general equity principles.
(vii) The Notes, in the form(s) certified by the Company as of
the date hereof, have been duly authorized for issuance, offer and
sale pursuant to this Agreement and, when issued, authenticated and
delivered pursuant to the provisions of this Agreement and the
Indenture against payment of the consideration therefor specified in
the Prospectus or agreed upon pursuant to the provisions of this
Agreement and any applicable Terms Agreement, will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with its terms, except as enforcement thereof
may be limited by bankruptcy, insolvency, reorganization, moratorium
or other laws relating to or affecting enforcement of creditors'
rights generally or by general equity principles; and each holder of
Notes will be entitled to the benefits of the Indenture.
(viii) (A)(1) the statements in the Prospectus under the captions
"Description of Common Shares," "Description of Preferred Shares,"
"Description of Securities Warrants," and "Description of Debt
Securities," and (2) the statements in the Prospectus Supplement under
the caption "Description of Notes," and (3) other statements in the
Prospectus and each document incorporated by reference from the
Company's Annual Report on Form 10-K for the year ended December 31,
1995 and in the Registration Statement, in the case of (1), (2) and
(3), insofar as such statements constitute a summary of the legal
matters, documents or proceedings referred to therein, in each case
fairly present the information
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called for with respect to such legal matters, documents or
proceedings; (B) the descriptions in the Registration Statement and
Prospectus of contracts and other documents which are filed as
exhibits to the Registration Statement are accurate in all material
respects and fairly present the information required to be shown; and
(C) to such counsel's knowledge there are no statutes or legal or
governmental proceedings required to be described in the Prospectus
that are not described as required;
(ix) The Indenture has been duly qualified under the 1939 Act.
(x) The Registration Statement is effective under the 1933 Act
and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
SEC.
(xi) At the time the Registration Statement became effective, the
Registration Statement appeared appropriately responsive in all
material respects to the requirements of the 1933 Act, the 1939 Act
and the regulations under each of those Acts (except that such counsel
need not express an opinion as to the financial statements, schedules
and other financial information included or incorporated by reference
or required to be included or incorporated by reference therein, and
as to the Statement of Eligibility on Form T-1 of the Trustee).
(xii) Other than as set forth or contemplated in the Prospectus,
there are no legal or governmental proceedings pending or, to the best
of such counsel's knowledge, threatened to which the Company or any of
its Subsidiaries is or may be a party or to which any property of the
Company or any of its Subsidiaries is or may be the subject which, if
determined adversely to the Company or such Subsidiary, could
individually or in the aggregate reasonably be expected to have a
material adverse effect on the general affairs, business, prospects,
management, properties, financial position, shareholders' equity or
results of operations of the Company and its Subsidiaries taken as a
whole; to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others.
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(xiii) To the best of such counsel's knowledge, neither the
Company nor the Subsidiaries are, nor with the giving of notice or the
lapse of time or both would be, in violation of or in default under,
their respective Declarations of Trust, Articles of Incorporation or
By-Laws or any indenture, mortgage, deed of trust, loan agreement or
other agreement or instrument known to such counsel to which the
Company or any of the Subsidiaries is a party or by which they or any
of their respective properties are bound, except for violations and
defaults which individually and in the aggregate are not material to
the Company or to the holders of the Notes; the issue and sale of the
Notes and the performance by the Company of its obligations under the
Notes, the Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which the Company or any Subsidiary is a party or by which the Company
or any Subsidiary is bound or to which any of the property or assets
of the Company or any Subsidiary is subject, nor will any such action
result in any violation of the provisions of the Declaration of Trust
or the By-Laws of the Company or any applicable law or statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties.
(xiv) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents required to be described or referred to
in the Prospectus or to be filed as exhibits the Registration
Statement other than those described or referred to therein or filed
or incorporated by reference as exhibits thereto, and the descriptions
thereof or references thereto are fairly presented in all material
respects.
(xv) No consent, approval, authorization, order or decree of any
court or governmental agency or body (including the SEC) is required
for the consummation by the Company of the transactions contemplated
by this Agreement or in connection with the sale of Notes hereunder,
except such as have been obtained or rendered, as the case may be, or
as may be required under the state securities laws, as to which such
counsel need not express an opinion.
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(xvi) Although such counsel need not pass upon, nor independently
verify, the accuracy, completeness or fairness of the statements
contained in such documents, the documents incorporated by reference
in the Prospectus (other than the financial statements and related
schedules therein, as to which such counsel need not express an
opinion), at the time they were filed with the SEC, appeared
appropriately responsive as to form in all material respects with the
applicable requirements of the 1933 Act and the 1934 Act and the 1933
Act Regulations and the 1934 Act Regulations thereunder, and, such
counsel has no reason to believe that such documents included an
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(xvii) Neither the Company nor any of its Subsidiaries is
required to be registered under the 1940 Act.
(2) Opinion of Counsel to the Agents. The opinion of Brown & Wood
LLP, counsel to the Agents, covering the matters referred to in
subparagraph (1) under the subheadings (v) to (vii), (viii)(A)(2) and (ix)
to (xi) inclusive, above.
(3) In giving their opinions required by subsection (a)(1) and (a)(2)
of this Section, Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P. and Brown &
Wood LLP shall each additionally state that nothing has come to their
attention that would lead them to believe that the Registration Statement,
at the time it became effective or, if an amendment to the Registration
Statement or an Annual Report on Form 10-K has been filed by the Company
with the SEC subsequent to the effectiveness of the Registration Statement,
then at the time such amendment became effective or at the time of the most
recent such filing, as the case may be, or at the date hereof, contained or
contains an untrue statement of a material fact or omitted or omits to
state a material fact required to be stated therein or necessary in order
to make the statements therein not misleading or that the Prospectus, as
amended or supplemented at the date hereof, or (if such opinion is being
delivered in connection with the purchase of Notes by an Agent as principal
pursuant to Section 7(c) hereof) at the date of any agreement by an Agent
to purchase Notes as principal and at the Settlement Date with respect
thereto, as the case may be, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in
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order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering the above opinions, Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P. may rely (A) as to matters involving the application of laws other
than the laws of the United States and the State of Texas, to the extent
such counsel deems proper and to the extent specified in such opinion, if
at all, upon an opinion or opinions (in form and substance reasonably
satisfactory to Agents' counsel) of other counsel reasonably acceptable to
the Agents' counsel, familiar with the applicable laws; (B) as to matters
of fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and certificates or other written
statements of officials of jurisdictions having custody of documents
respecting the corporate existence or good standing of the Company. The
opinion of such counsel for the Company shall state that the opinion of any
such other counsel is in form satisfactory to such counsel and, in such
counsel's opinion, the Agents and they are justified in relying thereon.
With respect to the matters to be covered in subsection (a)(3) above
counsel may state that its opinion and belief is based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendment or supplement thereto (other than the
documents incorporated by reference therein) and review and discussion of
the contents thereof (including the documents incorporated by reference
therein) but is without independent check or verification except as
specified.
(4) The opinion of Liddell, Sapp, Zivley, Hill & LaBoon, L.L.P., tax
counsel to the Company, to the effect that:
(i) the Company met the requirements for qualification and
taxation as a real estate investment trust ("REIT") for the taxable
years 1993 through 1996;
(ii) the Company's diversity of equity ownership and proposed
method of operation should allow it to qualify as a REIT for 1997; and
(iii) the discussion contained under the caption "Certain
Federal Income Tax Considerations" and "United States Taxation" in the
Prospectus accurately reflects existing law and fairly addresses the
material federal income tax issues described therein.
In rendering such opinion, Liddell, Sapp, Zivley, Hill & LaBoon,
L.L.P. may rely as to matters of fact, to the extent they deem proper, on
certificates of officers of the Company
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and public officials so long as such counsel states that no facts have come
to the attention of such counsel which lead them to believe that they are
not justified in relying on such certificates. In addition, Liddell, Sapp,
Zivley, Hill & LaBoon, L.L.P. may state that their opinions are based upon
the procedures and assumptions set forth in such opinion letter and that it
is limited to the tax matters specifically covered thereby and that they
have not addressed any other tax consequences.
(b) Officer's Certificate. At the date hereof, the Agents shall have
received a certificate of the President or any Senior Vice President and the
chief financial or chief accounting officer of the Company, of even date
herewith, to the effect that (i) since the respective dates as of which
information is given in the Registration Statement and the Prospectus or since
the date of any agreement by an Agent to purchase Notes as principal, there has
not been any material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, (ii) the other representations and warranties of the Company
contained in Section 2 hereof are true and correct with the same force and
effect as though expressly made at and as of the date of such certificate, (iii)
the Company has performed or complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to the date of
such certificate, (iv) no stop order suspending the effectiveness of the
Registration Statement has been issued and, to their knowledge, no proceedings
for that purpose have been initiated or threatened by the SEC and (v) no order
suspending the sale of the Notes in any jurisdiction designated by the Agents
has been issued and, to their knowledge, no proceedings for that purpose have
been initiated or threatened.
(c) Comfort Letter. On the date hereof, the Agents shall have received a
letter from Deloitte & Touche LLP, of even date herewith and in form and
substance satisfactory to the Agents, to the effect that:
(i) They are independent public accountants with respect to the
Company and its Subsidiaries within the meaning of the 1933 Act and the
1933 Act Regulations.
(ii) In their opinion, the consolidated financial statements and
supporting schedule(s) of the Company and its Subsidiaries examined by them
and included or incorporated by reference in the Registration Statement
comply as to form in all material respects with the applicable accounting
requirements of the 1933 Act, the 1933 Act Regulations, the
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1934 Act and the 1934 Act Regulations with respect to registration
statements on Form S-3 and the 1934 Act and the 1934 Act Regulations.
(iii) They have performed specified procedures, not constituting an
audit, including a reading of the latest available interim financial
statements of the Company and its indicated Subsidiaries, a reading of the
minute books of the Company and such Subsidiaries since the end of the most
recent fiscal year with respect to which an audit report has been issued,
inquiries of and discussions with certain officials of the Company and such
Subsidiaries responsible for financial and accounting matters with respect
to the unaudited consolidated financial statements included or incorporated
by reference in the Registration Statement and the Prospectus and the
latest available interim unaudited financial statements of the Company and
its Subsidiaries in accordance with Statement of Financial Accounting
Standards No. 71, and such other inquiries and procedures as may be
specified in such letter, and on the basis of such inquiries and procedures
nothing came to their attention that caused them to believe that: (A) the
unaudited consolidated financial statements of the Company and its
Subsidiaries included or incorporated by reference in the Registration
Statement and the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act and
the 1934 Act Regulations or any material modifications should be made to
such statements incorporated by reference in the Registration Statement and
the Prospectus for them to be in conformity with generally accepted
accounting principles in the United States applied on a basis substantially
consistent with that of the audited financial statements included or
incorporated by reference therein, or (B) at a specified date not more than
three business days prior to the date of such letter, there was any change
in the consolidated capital stock or any increase in consolidated notes
payable of the Company and its Subsidiaries or any increases or decreases
in any other items specified by the Agents, in each case as compared with
the amounts shown on the most recent balance sheet of the Company and its
Subsidiaries included or incorporated by reference in the Registration
Statement and the Prospectus or, during the period from the date of such
balance sheet to a specified date not more than three business days prior
to the date of such letter, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated total revenues
or the total or per share amounts of consolidated net income of the Company
and its Subsidiaries or any increases or decreases in any other items
specified by the Agents, except in each such case as set forth in or
contemplated by the Registration Statement and the Prospectus
26
<PAGE>
or except for such exceptions enumerated in such letter as shall have been
agreed to by the Agents and the Company.
(iv) In addition to the examination referred to in their report
included or incorporated by reference in the Registration Statement and the
Prospectus, and the limited procedures referred to in clause (iii) above,
they have carried out certain other specified procedures, not constituting
an audit, with respect to certain amounts, percentages and financial
information which are included or incorporated by reference in the
Registration Statement and the Prospectus and which are specified by the
Agents, and have found such amounts, percentages and financial information
to be in agreement with the relevant accounting, financial and other
records of the Company and its Subsidiaries identified in such letter.
(d) Other Documents. On the date hereof and on each Settlement Date,
counsel to the Agents shall have been furnished with such documents and opinions
as such counsel may reasonably require for the purpose of enabling such counsel
to pass upon the issuance and sale of Notes as herein contemplated and related
proceedings, or in order to evidence the accuracy and completeness of any of the
representations and warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance or sale of Notes as herein contemplated shall be satisfactory in
form and substance to the Agents and to counsel to the Agents.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement (or, at the
option of any Agent, any applicable Terms Agreement by such Agent to purchase
Notes as principal) may be terminated by any Agent by notice to the Company at
any time and any such termination shall be without liability of any party to any
other party, except that the covenant regarding provision of an earnings
statement set forth in Section 4(h) hereof, the provisions concerning payment of
expenses under Section 10 hereof, the indemnity and contribution agreement set
forth in Sections 8 and 9 hereof, the provisions concerning the representations,
warranties and agreements to survive delivery in Section 11 hereof, the
provisions relating to governing law set forth in Section 14 and the provisions
set forth under "Parties" of Section 15 hereof shall remain in effect.
SECTION 6. Delivery of and Payment for Notes Sold through
the Agents.
Delivery of Notes sold through an Agent as agent shall be made by the
Company to such Agent for the account of any purchaser
27
<PAGE>
only against payment therefor in immediately available funds. In the event that
a purchaser shall fail either to accept delivery of or to make payment for a
Note on the date fixed for settlement, the Agent shall promptly notify the
Company and deliver the Note to the Company, and, if the Agent has theretofore
paid the Company for such Note, the Company will promptly return such funds to
the Agent. If such failure occurred for any reason other than default by the
Agent in the performance of its obligations hereunder, the Company will
reimburse the Agent on an equitable basis for its loss of the use of the funds
for the period such funds were credited to the Company's account.
SECTION 7. Additional Covenants of the Company.
The Company further covenants and agrees with each Agent that:
(a) Reaffirmation of Representations and Warranties. Each acceptance by it
of an offer for the purchase of Notes (whether to such Agent as principal or
through such Agent as agent), and each delivery of Notes to such Agent (whether
to such Agent as principal or through such Agent as agent), shall be deemed to
be an affirmation that the representations and warranties of the Company
contained in this Agreement and in any certificate theretofore delivered to such
Agent pursuant hereto are true and correct at the time of such acceptance or
sale, as the case may be, and an undertaking that such representations and
warranties will be true and correct at the time of delivery to the purchaser or
its agent, or to such Agent, of the Note or Notes relating to such acceptance or
sale, as the case may be, as though made at and as of each such time (and it is
understood that such representations and warranties shall relate to the
Registration Statement and the Prospectus as amended and supplemented to each
such time).
(b) Subsequent Delivery of Officer's Certificates. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by a Pricing Supplement, and, unless such Agent shall otherwise specify,
other than by an amendment or supplement which relates exclusively to an
offering of securities other than the Notes), (ii) there is filed with the SEC
any document incorporated by reference into the Prospectus (other than any
Current Report on Form 8-K relating exclusively to the issuance of debt
securities under the Registration Statement or filed pursuant to Item 5 of Form
8-K, unless such Agent shall otherwise reasonably specify), (iii) (if required
in connection with the purchase of Notes by such Agent as principal) the Company
sells Notes to such Agent as principal or (iv) if the Company issues and sells
Notes in a form not previously certified to the Agents by the Company, the
Company shall furnish or cause to be furnished to such Agent forthwith a
certificate dated the date of
28
<PAGE>
filing with the SEC of such supplement or document, the date of effectiveness of
such amendment, or the date of such sale, as the case may be, in form
satisfactory to such Agent to the effect that the statements contained in the
certificate referred to in Section 5(b) hereof which were last furnished to such
Agent are true and correct at the time of such amendment, supplement, filing or
sale, as the case may be, as though made at and as of such time (except that
such statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time) or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to in
said Section 5(b), modified as necessary to relate to the Registration Statement
and the Prospectus as amended and supplemented to the time of delivery of such
certificate.
(c) Subsequent Delivery of Legal Opinions. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented (other
than by a Pricing Supplement or an amendment or supplement providing solely for
the inclusion of additional financial information, and, unless such Agent shall
otherwise specify, other than by an amendment or supplement which relates
exclusively to an offering of securities other than the Notes), (ii) there is
filed with the SEC any document incorporated by reference into the Prospectus
(other than any Current Report on Form 8-K relating exclusively to the issuance
of debt securities under the Registration Statement or filed pursuant to Item 5
of Form 8-K, unless such Agent shall otherwise reasonably specify), (iii) (if
required in connection with the purchase of Notes by such Agent as principal)
the Company sells Notes to such Agent as principal or (iv) if the Company issues
and sells Notes in a form not previously certified to the Agents by the Company,
the Company shall furnish or cause to be furnished forthwith to such Agent and
to counsel to the Agents a written opinion or opinions of Liddell, Sapp, Zivley,
Hill & LaBoon, L.L.P., counsel to the Company, or other counsel satisfactory to
the Agents dated the date of filing with the SEC of such supplement or document,
the date of effectiveness of such amendment, or the date of such sale, as the
case may be, in form and substance satisfactory to such Agent, of the same tenor
as the opinions referred to in Sections 5(a)(1), (a)(3) and (a)(4) hereof, but
modified, as necessary, to relate to the Registration Statement and the
Prospectus as amended and supplemented to the time of delivery of such opinion;
or, in lieu of such opinion, counsel last furnishing such opinion to such Agent
shall furnish such Agent with a letter to the effect that such Agent may rely on
such last opinion to the same extent as though it was dated the date of such
letter authorizing reliance (except that statements in such last opinion shall
be deemed to relate to the Registration Statement and the Prospectus as amended
and supplemented to the time of delivery of such letter authorizing reliance).
29
<PAGE>
(d) Subsequent Delivery of Comfort Letters. Each time that (i) the
Registration Statement or the Prospectus shall be amended or supplemented to
include additional financial information or there is filed with the SEC any
document incorporated by reference into the Prospectus which contains additional
financial information, or (ii) (if required in connection with the purchase of
Notes by such Agent as principal) the Company sells Notes to such Agent as
principal, the Company shall cause Deloitte & Touche LLP forthwith to furnish
such Agent a letter, dated the date of effectiveness of such amendment,
supplement or document with the SEC, or the date of such sale, as the case may
be, in form satisfactory to such Agent, of the same tenor as the portions of the
letter referred to in clauses (i) and (ii) of Section 5(c) hereof but modified
to relate to the Registration Statement and the Prospectus, as amended and
supplemented to the date of such letter, and of the same general tenor as the
portions of the letter referred to in clauses (iii) and (iv) of said Section
5(c) with such changes as may be necessary to reflect changes in the financial
statements and other information derived from the accounting records of the
Company; provided, however, that if the Registration Statement or the Prospectus
is amended or supplemented solely to include financial information as of and for
a fiscal quarter, Deloitte & Touche LLP may limit the scope of such letter to
the unaudited financial statements included in such amendment or supplement
unless any other information included therein of an accounting, financial or
statistical nature is of such a nature that, in the reasonable judgment of the
Agent, such letter should cover such other information.
SECTION 8. Indemnification.
(a) Indemnification of the Agents. The Company agrees to indemnify and
hold harmless each Agent and each person, if any, who controls an Agent within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage or expense
whatsoever, joint or several, as incurred, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact included in the Prospectus (or
any amendment or supplement thereto) or the omission or alleged omission
therefrom of a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading,
unless such untrue statement or
30
<PAGE>
omission or such alleged untrue statement or omission was made in reliance
upon and in conformity with written information furnished to the Company
through, by or on behalf of any of the Agents expressly for use in the
Registration Statement or the Prospectus to relate to a particular issuance
of Notes;
(ii) against any and all loss, liability, claim, damage or expense
whatsoever, joint or several, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever arising out of or based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, joint or several, as
incurred (including the fees and disbursements of counsel chosen by the
Agents), reasonably incurred in investigating, preparing or defending
against any litigation, or investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever arising
out of or based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any such expense
is not paid under (i) or (ii) above.
(b) Indemnification of Company. Each Agent, severally and not jointly,
agrees to indemnify and hold harmless the Company, its Trust Managers, each of
its officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act against
any and all loss, liability, claim, damage or expense described in the indemnity
contained in subsection (a) of this Section, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto) or the Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company through, by or on behalf of such
Agent expressly for use in the Registration Statement (or any amendment thereto)
or the Prospectus (or any amendment or supplement thereto) to relate to a
particular issuance of Notes.
(c) General. Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement. An indemnifying
party may participate at its own expense in the defense of such action. In no
event shall the indemnifying parties be liable for the fees and
31
<PAGE>
expenses of more than one counsel (in addition to any local counsel) for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
SECTION 9. Contribution.
In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in Section 8 hereof
is for any reason held to be unavailable to or insufficient to hold harmless the
indemnified parties although applicable in accordance with its terms, the
Company and the Agents shall contribute to the aggregate losses, liabilities,
claims, damages and expenses of the nature contemplated by said indemnity
agreement incurred by the Company and the Agents, as incurred, in such
proportions so that each Agent is responsible for that portion represented by
the percentage that the total commission or underwriting discount received by
such Agent in respect of the Notes from which such loss, liability, claim,
damage and expense arise, to the date of such loss, liability, claim, damage and
expense bears to the total sales price of such Notes from the sale to or through
such Agent, and the Company is responsible for the balance; provided, however,
that (i) in no case shall an Agent be responsible for any amount in excess of
the commissions and underwriting discounts received by such Agent in connection
with the Notes from which such losses, liabilities, claims, damages and expenses
arise and (ii) no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For
purposes of this Section, each person, if any, who controls an Agent within the
meaning of Section 15 of the 1933 Act shall have the same rights to contribution
as such Agent, and each Trust Manager of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act shall have
the same rights to contribution as the Company.
SECTION 10. Payment of Expenses.
The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including:
(a) The preparation and filing of the Registration Statement and all
amendments thereto and the Prospectus and any amendments or supplements thereto;
(b) The preparation, filing and reproduction of this Agreement;
32
<PAGE>
(c) The preparation, printing, issuance and delivery of the Notes,
including any fees and expenses relating to the use of book-entry notes;
(d) The fees and disbursements of the Company's accountants and counsel, of
the Trustee and its counsel, and of any Calculation Agent, Depositary, Paying
Agent or Issuing Agent;
(e) The reasonable fees and disbursements of counsel to the Agents incurred
in connection with the establishment of the program relating to the Notes and
incurred from time to time in connection with the transactions contemplated
hereby;
(f) If necessary, the qualification of the Notes under state securities
laws in accordance with the provisions of Section 4(i) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the Agents in
connection therewith and in connection with the preparation and printing of any
Blue Sky Survey and any Legal Investment Survey;
(g) The printing and delivery to the Agents in quantities as hereinabove
stated of copies of the Registration Statement and any amendments thereto, and
of the Prospectus and any amendments or supplements thereto, and the delivery by
the Agents of the Prospectus and any amendments or supplements thereto in
connection with solicitations or confirmations of sales of the Notes;
(h) The preparation, printing, reproducing and delivery to the Agents of
copies of the Indenture and all supplements and amendments thereto;
(i) Any fees charged by rating agencies for the rating of the Notes;
(j) The fees and expenses incurred in connection with the listing of the
Notes on any securities exchange;
(k) The fees and expenses, if any, incurred with respect to any filing with
The National Association of Securities Dealers, Inc.;
(l) Any advertising and other out-of-pocket expenses of the Agents incurred
with the approval of the Company; and
(m) The cost of providing any CUSIP or other identification numbers for the
Notes.
33
<PAGE>
SECTION 11. Representations Warranties and Agreements
to Survive Delivery.
All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto or thereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Agents or any
controlling person of the Agent, or by or on behalf of the Company, and shall
survive each delivery of and payment for any of the Notes.
SECTION 12. Termination.
(a) Termination of this Agreement. This Agreement (excluding any Terms
Agreement hereunder by an Agent to purchase Notes as principal) may be
terminated for any reason, at any time by either the Company as to any Agent or
the Agent as to such Agent upon the giving of written notice of such termination
to the other party hereto.
(b) Termination of Agreement to Purchase Notes as Principal. Any Agent may
terminate any Terms Agreement hereunder by such Agent to purchase Notes as
principal, immediately upon notice to the Company, at any time prior to the
Settlement Date relating thereto (i) if there has been, since the date of such
Terms Agreement or since the respective dates as of which information is given
in the Prospectus, any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its Subsidiaries taken as a whole, whether or not arising in the ordinary course
of business, or (ii) if there shall have occurred any material adverse change in
the financial markets in the United States or any outbreak or escalation of
hostilities or other national or international calamity or crisis the effect of
which is such as to make it, in the judgment of such Agent, impracticable to
market the Notes or enforce contracts for the sale of the Notes, or (iii) if
trading in any securities of the Company has been suspended by the SEC or a
national securities exchange, or if trading generally on either the American
Stock Exchange or the New York Stock Exchange shall have been suspended, or
minimum or maximum prices for trading have been fixed, or maximum ranges for
prices for securities have been required, by either of said exchanges or by
order of the SEC or any other governmental authority, or if a banking moratorium
shall have been declared by either Federal, New York or Texas authorities or if
a banking moratorium shall have been declared by the relevant authorities in the
country or countries of origin of any foreign currency or currencies in which
the Notes are denominated or payable, or (iv) if the rating assigned by any
nationally recognized statistical rating organization to any debt securities
34
<PAGE>
of the Company as of the date of any applicable principal purchase shall have
been lowered since that date or if any such rating agency shall have publicly
announced that it has under surveillance or review, with possible negative
implications, its rating of any debt securities of the Company, or (v) if there
shall have come to such Agent's attention any facts that would cause such Agent
to believe that the Prospectus, at the time it was required to be delivered to a
purchaser of Notes, included an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
light of the circumstances existing at the time of such delivery, not
misleading.
(c) General. In the event of any such termination, neither party will
have any liability to the other party hereto, except that (i) the Agents shall
be entitled to any commission earned in accordance with the third paragraph of
Section 3(b) hereof, (ii) if at the time of termination (a) an Agent shall own
any Notes purchased by it as principal with the intention of reselling them or
(b) an offer to purchase any of the Notes has been accepted by the Company but
the time of delivery to the purchaser or his agent of the Note or Notes relating
thereto has not occurred, the covenants set forth in Sections 4 and 7 hereof
shall remain in effect until such Notes are so resold or delivered, as the case
may be, and (iii) the covenant set forth in Section 4(h) hereof, the provisions
of Section 10 hereof, the indemnity and contribution agreements set forth in
Sections 8 and 9 hereof, and the provisions of Sections 11, 14 and 15 hereof
shall remain in effect.
SECTION 13. Notices.
Unless otherwise provided herein, all notices required under the terms and
provisions hereof shall be in writing, either delivered by hand, by mail or by
telex, telecopier or telegram, and any such notice shall be effective when
received at the address specified below.
If to the Company:
Camden Property Trust
3200 Southwest Freeway
Suite 1500
Houston, Texas 77027
Attention: G. Steven Dawson
Senior Vice President,
Chief Financial Officer
Fax: (713) 964-3599
35
<PAGE>
If to the Agents:
NationsBanc Capital Markets, Inc.
NationsBank Corporate Center
NC 1007-07-01
100 North Tryon Street
Charlotte, North Carolina 28255-0065
Attention: Lynn T. McConnell
Director
Fax: (704) 388-9939
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower, 10th Floor
250 Vesey Street
New York, New York 10281-1326
Attention: MTN Product Management
Fax: (212) 449-2234
J.P. Morgan Securities Inc.
Medium-Term Note Desk
60 Wall Street, 3rd Floor
New York, New York 10260
Attention: Dan Benton
Vice President
Fax: (212) 648-5907
Smith Barney Inc.
Debt Origination Group
390 Greenwich Street
4th Floor
New York, New York 10013
Attention: MTN Product Management/Origination
Fax: (212) 723-8853
UBS Securities LLC
Real Estate/Investment Banking Group
299 Park Avenue
New York, New York 10171-0026
Attention: Albert Rabil
Managing Director
Fax: (212) 821-3943
36
<PAGE>
or at such other address as such party may designate from time to time by notice
duly given in accordance with the terms of this Section 13.
SECTION 14. Governing Law.
This Agreement and all the rights and obligations of the parties shall be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed in such State. Any suit,
action or proceeding brought by the Company against the Agent in connection with
or arising under this Agreement shall be brought solely in the state or federal
court of appropriate jurisdiction located in the Borough of Manhattan, The City
of New York.
SECTION 15. Parties.
This Agreement shall inure to the benefit of and be binding upon the Agents
and the Company and their respective successors. Nothing expressed or mentioned
in this Agreement is intended or shall be construed to give any person, firm or
corporation, other than the parties hereto and their respective successors and
the controlling persons and officers and Trust Managers referred to in Sections
8 and 9 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the parties hereto and respective
successors and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Notes shall be deemed to be a successor by reason
merely of such purchase.
If the foregoing is in accordance with the Agents' understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument along with all counterparts will become a binding agreement
between the Agents and the Company in accordance with its terms.
Very truly yours,
CAMDEN PROPERTY TRUST
By: /s/ G. Steven Dawson
--------------------------
Name: G. Steven Dawson
Title: Senior Vice President - Finance,
Chief Financial Officer, Treasurer
and Assistant Secretary
37
<PAGE>
Accepted:
NATIONSBANC CAPITAL MARKETS, INC.
By: /s/ Lynn McConnell
-------------------------------
Name: Lynn McConnell
Title: Director
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Elizabeth Anne Casey
-------------------------------
Name: Elizabeth Anne Casey
Title: Vice President
J.P. MORGAN SECURITIES INC.
By: /s/ Keysha Bailey
-------------------------------
Name: Keysha Bailey
Title: Vice President
SMITH BARNEY INC.
By: /s/ Robert R. Holloman
-------------------------------
Name: Robert R. Holloman
Title: Managing Director
UBS SECURITIES LLC
By: /s/ Richard Messina
-------------------------------
Name: Richard Messina
Title: Vice President
38
<PAGE>
EXHIBIT A
CAMDEN PROPERTY TRUST
Medium Term Notes, Series A
Due Nine Months or More From
Date of Issue
Terms Agreement
_______________ , 199_
[Name(s) and address(es) of Agent(s)]
Dear Sirs and Madams:
Camden Property Trust (the "Company") proposes, subject to the terms
and conditions stated herein and in the Distribution Agreement, dated March __,
1997 (the "Distribution Agreement"), between the Company on the one hand and
[name(s) of Agent(s)] (each, an "Agent" and collectively, the "Agents") on the
other, to issue and sell to the Agents the securities specified in the Schedule
hereto (the "Purchased Securities"). Each of the provisions of the Distribution
Agreement not specifically related to the solicitation by the Agents, as agent
of the Company, of offers to purchase securities is incorporated herein by
reference in its entirety, and shall be deemed to be part of this Terms
Agreement to the same extent as if such provisions had been set forth in full
herein. Nothing contained herein or in the Distribution Agreement shall make
any party hereto an agent of the Company or make such party subject to the
provisions therein relating to the solicitation of offers to purchase securities
from the Company, solely by virtue of its execution of this Terms Agreement.
Each of the representations and warranties set forth therein shall be deemed to
have been made at and as of the date of this Terms Agreement, except that each
representation and warranty in Section 2 of the Distribution Agreement which
makes reference to the Prospectus shall be deemed to be a representation and
warranty as of the date of the Distribution Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Terms Agreement in relation to the Prospectus as amended and
supplemented to relate to the Purchased Securities.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the
39
<PAGE>
Purchased Securities, in the form heretofore delivered to you is now proposed to
be filed with the SEC.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, the Company agrees to
issue and sell to [name(s) of Agent(s)] and [name(s) of Agent(s)] agree[s][,
severally and not jointly,] to purchase from the Company the Purchased
Securities, at the time and place, in the principal amount and at the purchase
price set forth in the Schedule hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us ___________ counterparts hereof, and upon acceptance hereof
by you this letter and such acceptance hereof, including those provisions of
the Distribution Agreement incorporated herein by reference, shall constitute a
binding agreement between you and the Company.
CAMDEN PROPERTY TRUST
By:__________________
Name:
Title:
Accepted:
[NAME(S) OF AGENT(S)]
By:_________________________
Name:
Title:
40
<PAGE>
Schedule to Exhibit A
Title of Purchased Securities:
[ %] Medium-Term Notes, Series A
Principal Amount:
[$ ]
[Price to Public:]
Purchase Price by [Name of Agent(s)]
% of the principal amount of the Purchased Securities[, plus accrued
interest from to ][and accrued amortization, if any from
to ]
Method of, and Specified Funds for, Payment of Purchase Price:
[By certified or official bank check or checks, payable to the order of the
Company, in [[New York] Clearing House [immediately available] funds]
[By wire transfer to a bank account specified by the Company in [next day]
[immediately available] [funds]]
Indenture:
Indenture and Supplemental Indenture, both dated as of February 15, 1996,
between the Company and U.S Trust Company of Texas, N.A., as Trustee
Time of Delivery:
41
<PAGE>
Closing Location:
Interest Rate:
If Fixed Rate Note:
Interest Rate:
Interest Payment Dates:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Spread or Spread Multiplier, if any:
Interest Reset Date(s):
Interest Payment Date(s): [Months and Dates]
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Reset Period:
Interest Payment Period:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Make-Whole Amount:
If Repayable:
Optional Repayment Date(s):
Default Rate:
Original Issue Date:
Interest Payment Dates:
Date of Maturity:
Purchase Price: __%
Settlement Date and Time:
Currency of Denomination:
Denominations (if currency is other than U.S. Dollar):
Currency of Payment:
Exchange Rate Agent:
Additional Terms:
42
<PAGE>
Documents to be Delivered:
The following documents referred to the Distribution Agreement shall
be delivered as a condition to the Closing:
1. The opinions of counsel to the Company referred to in Section
7(c) of the Distribution Agreement.
2. The accountants' letter referred to in Section 7(d) of the
Distribution Agreement.
3. The officer's certificate referred to in Section 7(b) of the
Distribution Agreement.
4. Stand-off Agreement pursuant to Section 4(k) of the
Distribution Agreement.
Other Provisions:
43
<PAGE>
EXHIBIT B
SCHEDULE OF COMMISSIONS
Range of Maturities Commission Rate/1/
- ------------------- ------------------
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 6 years .500%
From 6 years to less than 7 years .550%
From 7 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years to less than 30 years .750%
From 30 years............. negotiable among the Company and
the Agents at the time such Notes
are issued
- ---------------
/1/Subject to increase as provided in Section 3(a) and (b).
44
<PAGE>
EXHIBIT C
The following terms, if applicable, shall be agreed to by the Agents and
the Company in connection with each sale of Notes:
Principal Amount: $_________________
(or principal amount of foreign currency)
Interest Rate:
If Fixed Rate Note, Interest Rate:
If Fixed Rate Note, OID:
If Floating Rate Note:
Interest Rate Basis:
Initial Interest Rate:
Spread or Spread Multiplier, if any:
Interest Reset Date(s):
Interest Payment Date(s): [Months and Dates]
Index Maturity:
Maximum Interest Rate, if any:
Minimum Interest Rate, if any:
Interest Reset Period:
Interest Payment Period:
Day Count Convention:
Calculation Agent:
If Redeemable:
Initial Redemption Date:
Initial Redemption Percentage:
Annual Redemption Percentage Reduction:
Make-Whole Amount:
If Repayable:
Optional Repayment Date(s):
Default Rate:
Original Issue Date:
Interest Payment Dates:
Date of Maturity:
Purchase Price: __%
Agent's Discount or Commission:
Net Proceeds to Company:
Settlement Date and Time:
Denomination:
Exchange Rate Agent:
Additional Terms:
Also, in connection with the purchase of Notes by an Agent as principal,
agreement as to whether the following will be required to be delivered:
45
<PAGE>
Officer's Certificate pursuant to Section 7(b) of the Distribution
Agreement.
Legal Opinion pursuant to Section 7(c) of the Distribution Agreement.
Comfort Letter pursuant to Section 7(d) of the Distribution Agreement.
Stand-off Agreement pursuant to Section 4(k) of the Distribution Agreement.
46
<PAGE>
EXHIBIT D
SUBSIDIARIES OF CAMDEN PROPERTY TRUST
Subsidiary State of Incorporation Qualification States
- ---------- ---------------------- --------------------
Apartment Connection, Inc. Delaware - 6/19/93 Texas - 7/21/93
Camden Development, Inc. Delaware - 11/3/93 Texas - 11/5/93
Arizona - 6/30/94
Colorado - 7/13/94
TeleServ, Inc. Delaware - 3/2/95 Texas - 4/4/95
CPT Arizona, Inc. Delaware - 3/2/94 Arizona - 4/20/94
Camden Colorado, Inc. Delaware - 2/1/94 Colorado - 2/14/94
CPT Texas, Inc. Delaware - 5/9/94 Texas - 5/13/94
Camden Bay Crest, Inc. Delaware - 6/11/93 Texas - 6/21/93
Camden Glen Lakes, Inc. Delaware - 6/11/93 Texas - 6/21/93
Camden Hayes Place, Inc. Delaware - 6/11/93 Texas - 6/21/93
Camden Roseland Place, Inc. Delaware - 6/11/93 Texas - 6/21/93
Camden Wilshire Place, Inc. Delaware - 6/11/93 Texas -6/21/93
Camden Acquisition, Inc. Delaware - 7/11/96 Texas - 7/15/96
Camden Building, Inc. Delaware - 8/19/96 Texas - 8/29/96
Camden Housing, Inc. Delaware - 5/17/96 N/A
Camden Subsidiary, Inc. Delaware - 12/12/96 Texas - 12/12/96
47
<PAGE>
EXHIBIT E
CAMDEN PROPERTY TRUST
ADMINISTRATIVE PROCEDURES
FOR FIXED RATE AND FLOATING RATE MEDIUM-TERM NOTES, SERIES A
(Dated as of March 20, 1997)
Medium-Term Notes, Series A, Due 9 Months or More From Date of Issue
(the "Notes") are to be offered on a continuous basis by Camden Property Trust,
a Texas real estate investment trust (the "Company"), to or through NationsBanc
Capital Markets, Inc., Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, J.P. Morgan Securities Inc., Smith Barney Inc. and UBS
Securities LLC (each, an "Agent" and, collectively, the "Agents") pursuant to a
Distribution Agreement, dated March 20, 1997 (the "Distribution Agreement"), by
and among the Company and the Agents. The Distribution Agreement provides both
for the sale of Notes by the Company through one or more of the Agents as agents
and to one or more of the Agents as principal for resale to investors and other
purchasers and for the sale of Notes by the Company directly to investors.
Unless otherwise agreed by the related Agent or Agents and the
Company, Notes may be purchased by the related Agent or Agents as principal.
Such purchases will be made in accordance with terms agreed upon by the related
Agent or Agents and the Company (which terms shall be, at the option of the
Agents, either (i) set forth in a separate agreement (each, a "Terms
Agreement"), substantially in the form of Exhibit A to the Distribution
Agreement or (ii) agreed upon orally, with written confirmation prepared by the
Agents and mailed to the Company). If agreed upon by any Agent or Agents and
the Company, the Agent or Agents, acting solely as agent or agents for the
Company and not as principal, will use reasonable efforts to solicit offers to
purchase the Notes. Only those provisions in these Administrative Procedures
that are applicable to the particular role to be performed by the related Agent
or Agents shall apply to the offer and sale of the relevant Notes.
The Notes will be issued as a series of debt securities under an
Indenture and Supplemental Indenture, both dated as of February 15, 1996,
(together, as so modified, the "Indenture"), between the Company and U.S. Trust
Company of Texas, N.A., as trustee (together with any successor in such
capacity, the "Trustee"). The Company has filed a Registration Statement with
the Securities and Exchange Commission (the "Commission") registering, among
other securities, debt securities (which
<PAGE>
include the Notes) (the "Registration Statement", which term shall include any
additional registration statements filed in connection with the Notes). The
most recent base prospectus deemed part of the Registration Statement, as
supplemented with respect to the Notes, is herein referred to as "Prospectus".
The most recent supplement to the Prospectus setting forth the purchase price,
interest rate or formula, maturity date and other terms of the Notes (as
applicable) is herein referred to as the "Pricing Supplement".
The Notes will either be issued (a) in book-entry form and represented
by one or more fully registered Notes without coupons (each, a "Global Note")
delivered to the Trustee, as agent for The Depository Trust Company ("DTC"), and
recorded in the book-entry system maintained by DTC, or (b) in certificated form
(each, a "Certificated Note") delivered to the investor or other purchaser
thereof or a person designated by such investor or other purchaser.
General procedures relating to the issuance of all Notes are set forth
in Part I hereof. Additionally, Notes issued in book-entry form will be issued
in accordance with the procedures set forth in Part II hereof and Certificated
Notes will be issued in accordance with the procedures set forth in Part III
hereof. Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Indenture or the Notes, as the case may be.
PART I: PROCEDURES OF GENERAL
APPLICABILITY
Date of Issuance/
Authentication: Each Note will be dated as of the date of its
authentication by the Trustee. Each Note shall also
bear an original issue date (each, an "Original Issue
Date"). The Original Issue Date shall remain the same
for all Notes subsequently issued upon transfer,
exchange or substitution of an original Note regardless
of their dates of authentication.
Maturities: Each Note will mature on a date nine months or more
from its Original Issue Date (the "Stated Maturity
Date") selected by the investor or other purchaser and
agreed to by the Company.
2
<PAGE>
Registration: Unless otherwise provided in the applicable Pricing
Supplement, Notes will be issued only in fully
registered form.
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Notes will be issued in denominations
of $1,000 and integral multiples of $1,000 in excess
thereof.
Interest Rate Bases
applicable to
Floating Rate
Notes: Unless otherwise provided in the applicable Pricing
Supplement, Floating Rate Notes will bear interest at a
rate or rates determined by reference to the CD Rate,
the CMT Rate, the Commercial Paper Rate, the Eleventh
District Cost of Funds Rate, the Federal Funds Rate,
LIBOR, the Prime Rate, the Treasury Rate, or such other
interest rate basis or formula as may be set forth in
applicable Pricing Supplement, or by reference to two
or more such rates, as adjusted by the Spread and/or
Spread Multiplier, if any, applicable to such Floating
Rate Notes.
Redemption/Repayment: The Notes will be subject to redemption by the Company
in accordance with the terms of the Notes, which will
be fixed at the time of sale and set forth in the
applicable Pricing Supplement. If no Initial
Redemption Date is indicated with respect to a Note,
such Note will not be redeemable prior to its Stated
Maturity Date.
The Notes will be subject to repayment at the option of
the Holders thereof in accordance with the terms of the
Notes, which will be fixed at the time of sale and set
forth in the applicable Pricing Supplement. If no
Optional Repayment Date is indicated with respect to a
Note, such Note will not be repayable at the option of
the Holder prior to its Stated Maturity Date.
3
<PAGE>
Calculation of
Interest: In case of Fixed Rate Notes, interest (including
payments for partial periods) will be calculated and
paid on the basis of a 360-day year of twelve 30-day
months.
The interest rate on each Floating Rate Note will be
calculated by reference to the specified Interest Rate
Basis or Bases plus or minus the applicable Spread, if
any, and/or multiplied by the applicable Spread
Multiplier, if any.
Unless otherwise provided in the applicable Pricing
Supplement, interest on each Floating Rate Note will be
calculated by multiplying its principal amount by an
accrued interest factor. Such accrued interest factor
is computed by adding the interest factor calculated
for each day in the period for which accrued interest
is being calculated. Unless otherwise provided in the
applicable Pricing Supplement, the interest factor for
each such day is computed by dividing the interest rate
applicable to such day by 360 if the CD Rate,
Commercial Paper Rate, Eleventh District Cost of Funds
Rate, Federal Funds Rate, LIBOR or Prime Rate is an
applicable Interest Rate Basis, or by the actual number
of days in the year if the CMT Rate or Treasury Rate is
an applicable Interest Rate Basis. As provided in the
applicable Pricing Supplement, the interest factor for
Notes for which the interest rate is calculated with
reference to two or more Interest Rate Bases will be
calculated in each period in the same manner as if only
the lowest of the applicable Interest Rate Bases
applied.
Interest: General. Each Note will bear interest in accordance
with its terms. Unless otherwise provided in the
applicable Pricing Supplement, interest on each Note
will accrue from and including the Original Issue Date
of such Note for the
4
<PAGE>
first interest period or from the most recent Interest
Payment Date (as defined below) to which interest has
been paid or duly provided for all subsequent interest
periods to but excluding applicable Interest Payment
Date or the Stated Maturity Date or date of earlier
redemption or repayment, as the case may be (the Stated
Maturity Date or date of earlier redemption or
repayment is referred to herein as the "Maturity Date"
with respect to the principal repayable on such date).
If an Interest Payment Date or the Maturity Date with
respect to any Fixed Rate Note falls on a day that is
not a Business Day (as defined below), the required
payment to be made on such day need not be made on such
day, but may be made on the next succeeding Business
Day with the same force and effect as if made on such
day, and no interest shall accrue on such payment for
the period from and after such day to the next
succeeding Business Day. If an Interest Payment Date
other than the Maturity Date with respect to any
Floating Rate Note would otherwise fall on a day that
is not a Business Day, such Interest Payment Date will
be postponed to the next succeeding Business Day,
except that in the case of a Note for which LIBOR is an
applicable Interest Rate Basis, if such Business Day
falls in the next succeeding calendar month, such
Interest Payment Date will be the immediately preceding
Business Day. If the Maturity Date with respect to any
Floating Rate Note falls on a day that is not a
Business Day, the required payment to be made on such
day need not be made on such day, but may be made on
the next succeeding Business Day with the same force
and effect as if made on such day, and no interest
shall accrue on such payment for the period from and
after the Maturity Date to the next succeeding Business
Day. Unless otherwise provided in the applicable
5
<PAGE>
Pricing Supplement, "Business Day" means any day, other
than a Saturday or Sunday, that is neither a legal
holiday nor a day on which banking institutions are
authorized or required by law, regulation or executive
order to close in The City of New York; provided,
however, that, with respect to Notes the payment of
which is to be made in a currency other than U.S.
dollars or composite currencies (such currency or
composite currency in which a Note is denominated is
the "Specified Currency"), such day is also not a day
on which banking institutions are authorized or
required by law, regulation or executive order to close
in the Principal Financial Center (as defined below) of
the country issuing such Specified Currency (or, in the
case of European Currency Units ("ECUs"), is not a day
that appears as an ECU non-settlement day on the
display designated as "ISDE" on the Reuters Monitor
Money Rates Service (or a day so designated by the ECU
Banking Association) or, if ECU non-settlement days do
not appear on that page (and are not so designated), is
not a day on which payments in ECU cannot be settled in
the international interbank market); provided, further,
that, with respect to Notes for which LIBOR is an
applicable Interest Rate Basis, such day is also a
London Business Day (as defined below). "London
Business Day" means (i) if the currency (including
composite currencies) specified in the applicable
Pricing Supplement as the currency (the "Index
Currency") for which LIBOR is calculated is other than
European currency Units ("ECUs"), any day on which
dealings in such Index Currency are transacted in the
London interbank market or (ii) if the Index Currency
is ECU, any day that does not appear as an ECU non-
settlement day on the display designated as "ISDE" on
the Reuters Monitor Money Rates Service (or a day so
designated by the ECU Banking
6
<PAGE>
Association) or, if ECU non-settlement days do not
appear on that page (and are not so designated), is not
a day on which payments in ECU cannot be settled in the
international interbank market. It being understood
that if no such currency or composite currency is
specified in the applicable Pricing Supplement, the
Index Currency shall be U.S. dollars. "Principal
Financial Center" means the capital city of the country
issuing the currency or composite currency in which any
payment in respect of the Notes is to be made or,
solely with respect to the calculation of LIBOR, the
Index Currency, except that with respect to U.S.
dollars, Australian dollars, Deutsche marks, Dutch
guilders, Italian lire, Swiss francs and ECUs, the
Principal Financial Center shall be The City of New
York, Sydney, Frankfurt, Amsterdam, Milan, Zurich and
Luxembourg, respectively.
Regular Record Dates. Unless otherwise provided in the
applicable Pricing Supplement, the "Regular Record
Date" for a Note shall be the date 15 calendar days
(whether or not a Business Day) preceding the
applicable Interest Payment Date.
Interest Payment Dates. Interest payments will be made
on each Interest Payment Date commencing with the first
Interest Payment Date following the Original Issue
Date; provided, however, the first payment of interest
on any Note originally issued between a Regular Record
Date and an Interest Payment Date will occur on the
Interest Payment Date following the next succeeding
Regular Record Date.
Unless otherwise provided in the applicable Pricing
Supplement, interest payments on Fixed Rate Notes will
be made semiannually in arrears on March 15 and
September 15 of each year and on the
7
<PAGE>
Maturity Date, while interest payments on Floating Rate
Notes will be made as specified in the applicable
Pricing Supplement.
Acceptance and
Rejection of Offers
from Solicitation
as Agents: If agreed upon by any Agent and the Company, then such
Agent acting solely as agent for the Company and not as
principal will solicit purchases of the Notes. Each
Agent will communicate to the Company, orally or in
writing, each reasonable offer to purchase Notes
solicited by such Agent on an agency basis, other than
those offers rejected by such Agent. Each Agent has
the right, in its discretion reasonably exercised, to
reject any proposed purchase of Notes, as a whole or in
part, and any such rejection shall not be a breach of
such Agent's agreement contained in the Distribution
Agreement. The Company has the sole right to accept or
reject any proposed purchase of Notes, in whole or in
part, and any such rejection shall not be a breach of
the Company's agreement contained in the Distribution
Agreement. Each Agent has agreed to make reasonable
efforts to assist the Company in obtaining performance
by each purchaser whose offer to purchase Notes has
been solicited by such Agent and accepted by the
Company.
Preparation of
Pricing Supplement: If any offer to purchase a Note is accepted by the
Company, the Company will promptly prepare a Pricing
Supplement reflecting the terms of such Note.
Information to be included in the Pricing Supplement
shall include:
1. the name of the Company;
2. the title of the Notes;
3. the date of the Pricing Supplement and the date of
the Prospectus to
8
<PAGE>
which the Pricing Supplement relates;
4. the name of the Offering Agent (as defined below);
5. whether such Notes are being sold to the Offering
Agent as principal or to an investor or other
purchaser through the Offering Agent acting as
agent for the Company;
6. with respect to Notes sold to the Offering Agent
as principal, whether such Notes will be resold by
the Offering Agent to investors and other
purchasers at (i) a fixed public offering price of
a specified percentage of their principal amount
or (ii) at varying prices related to prevailing
market prices at the time of resale to be
determined by the Offering Agent;
7. with respect to Notes sold to an investor or other
purchaser through the Offering Agent acting as
agent for the Company, whether such Notes will be
sold at (i) 100% of their principal amount or (ii)
a specified percentage of their principal amount;
8. the Offering Agent's discount or commission;
9. Net proceeds to the Company;
10. the Principal Amount, Specified Currency, Original
Issue Date, Stated Maturity Date, Interest Payment
Date(s), Authorized Denomination, Initial
Redemption Date, if any, Initial Redemption
Percentage, if any, Annual Redemption Percentage
Reduction, if any, Make-Whole Amount, if any,
Optional Repayment Date(s), if any, Exchange Rate
Agent, if any,
9
<PAGE>
Default Rate, if any, and, in the case of Fixed
Rate Notes, the Interest Rate, and whether such
Fixed Rate Note is an Original Issue Discount Note
(and, if so, the Issue Price), and, in the case of
Floating Rate Notes, the Interest Category, the
Interest Rate Basis or Bases, the Day Count
Convention, Index Maturity (if applicable),
Initial Interest Rate, if any, Maximum Interest
Rate, if any, Minimum Interest Rate, if any,
Initial Interest Reset Date, Interest Reset Dates,
Spread and/or Spread Multiplier, if any, and
Calculation Agent; and
11. any other additional provisions of the Notes
material to investors or other purchasers of the
Notes not otherwise specified in the Prospectus.
The Company shall use its reasonable best efforts to
send such Pricing Supplement by telecopy or overnight
express (for delivery by the close of business on the
applicable trade date, but in no event later than 11:00
a.m. New York City time, on the Business Day following
the applicable trade date) to the Agent which made or
presented the offer to purchase the applicable Note (in
such capacity, the "Offering Agent") and the Trustee at
the following applicable address: NationsBanc Capital
Markets, Inc., NationsBank Corporate Center, 100 N.
Tryon Street, NC 1-007-07-01, Charlotte, North Carolina
28255-0065, (704) 386-6616, telecopier: (704) 388-9939,
Attention: Lynn T. McConnell; Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated,
World Financial Center, North Tower, 10th Floor, 250
Vesey Street, New York, New York 10281-1326, (212)
449-1923, telecopier: (212) 449-2234, Attention: MTN
Product Management; J.P. Morgan Securities Inc.,
10
<PAGE>
Medium-Term Note Desk, 60 Wall Street, 3rd Floor, New
York, New York 10260, (212) 648-0591, telecopier:
(212) 648-5907, Attention: Dan Benton; Smith Barney
Inc., Debt Origination Group, 390 Greenwich Street, 4th
Floor, New York, New York 10013, (212) 723-5132,
telecopier: (212) 723-8853, Attention: MTN Product
Management/Origination; UBS Securities LLC, Real
Estate/Investment Banking Group, 229 Park Avenue, New
York, New York 10171-0026, (212) 821-6772, telecopier:
(212) 821-3943, Attention: Albert Rabil; and if to the
Trustee, to: U.S. Trust Company of Texas, N.A., 2001
Ross Avenue, Suite 2700, Dallas, Texas 75201, (214)
754-1255, telecopier: (214) 754-1303, Attention:
William Barber. For record keeping purposes, one copy
of such Pricing Supplement shall also be mailed or
telecopied to Liddell, Sapp, Zivley, Hill & LaBoon
L.L.P., 2200 Ross Avenue, Suite 900, Dallas, Texas
75201, (214) 220-4819, telecopier: (214) 220-4899
Attention: Bryan L. Goolsby, Esq. and to Brown & Wood
llp, One World Trade Center, New York, New York 10048,
(212) 839-5381, telecopier: (212) 839-5599, Attention:
Howard G. Godwin, Jr., Esq.
The Company will arrange to have the Pricing Supplement
filed with the Commission no later than the close of
business of the Commission on the fifth business day
following the date on which such Pricing Supplement
first is used.
In each instance that a Pricing Supplement is prepared,
the Offering Agent will provide a copy of such Pricing
Supplement to each investor or purchaser of the
relevant Notes or its agent. Pursuant to Rule 434
("Rule 434") of the Securities Act of 1933, as amended,
the Pricing Supplement may be delivered separately from
the Prospectus. Outdated Pricing Supplements (other
than those retained for files) will be destroyed.
11
<PAGE>
Settlement: The receipt of immediately available funds by the
Company in payment for a Note and the authentication
and delivery of such Note shall, with respect to such
Note, constitute "settlement". Offers accepted by the
Company will be settled in three Business Days, or at
such time as the purchaser, the applicable Agent and
the Company shall agree, pursuant to the timetable for
settlement set forth in Parts II and III hereof under
"Settlement Procedure Timetable" with respect to Global
Notes and Certificated Notes, respectively (each such
date fixed for settlement is hereinafter referred to as
a "Settlement Date"). If procedures A and B of the
applicable Settlement Procedures with respect to a
particular offer are not completed on or before the
time set forth under the applicable "Settlement
Procedures Timetable", such offer shall not be settled
until the Business Day following the completion of
settlement procedures A and B or such later date as the
purchaser and the Company shall agree.
The foregoing settlement procedures may be modified
with respect to any purchase of Notes by an Agent as
principal if so agreed by the Company and such Agent.
Procedure for Changing
Rates or Other
Variable Terms: When a decision has been reached to change the
interest rate or any other variable term on any
Notes being sold by the Company, the Company will
promptly advise the Agents and the Trustee by
facsimile transmission and the Agents will forthwith
suspend solicitation of offers to purchase such Notes.
The Agents will telephone the Company with
recommendations as to the changed interest rates or
other variable terms. At such time as the Company
notifies the Agents and the Trustee of the new
interest rates or other variable terms, the Agents may
resume solicitation of offers to purchase such
Notes. Until
12
<PAGE>
such time, only "indications of interest" may be
recorded. Immediately after acceptance by the Company
of an offer to purchase Notes at a new interest rate or
new variable term, the Company, the Offering Agent and
the Trustee shall follow the procedures set forth under
the applicable "Settlement Procedures".
Suspension of
Solicitation;
Amendment or
Supplement: The Company may instruct the Agents to suspend
solicitation of offers to purchase Notes at any time.
Upon receipt of such instructions, the Agents will
forthwith suspend solicitation of offers to purchase
from the Company until such time as the Company has
advised the Agents that solicitation of offers to
purchase may be resumed. If the Company decides to
amend or supplement the Registration Statement or the
Prospectus (other than by a Pricing Supplement or to
establish or change interest rates or formulas,
maturities, prices or other similar variable terms with
respect to the Notes), it will promptly advise the
Agents and will furnish the Agents and their counsel
with copies of the proposed amendment or supplement.
Copies of such amendment or supplement will be
delivered or mailed to the Agents, their counsel and
the Trustee in quantities which such parties may
reasonably request at the following respective
addresses: NationsBanc Capital Markets, Inc.,
NationsBank Corporate Center, 100 N. Tryon Street,
Charlotte, North Carolina 28255-0065, (704) 386-6616,
telecopier: (704) 388-9939, Attention: Lynn T.
McConnell; Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, World Financial Center,
North Tower, 10th Floor, 250 Vesey Street, New York,
New York 10281-1326, (212) 449-1923, telecopier:
(212) 449-2234, Attention: MTN Product
13
<PAGE>
Management; J.P. Morgan Securities Inc., Medium-Term
Note Desk, 60 Wall Street, 3rd Floor, New York, New
York 10260, (212) 648-0591, telecopier: (212) 648-
5907, Attention: Dan Benton; Smith Barney Inc., Debt
Origination Group, 390 Greenwich Street, 4th Floor, New
York, New York 10013, (212) 723-5132, telecopier:
(212) 723-8853, Attention: MTN Product
Management/Origination; UBS Securities LLC, Real
Estate/Investment Banking Group, 229 Park Avenue, New
York, New York 10171-0026, (212) 821-6772, telecopier:
(212) 821-3943, Attention: Albert Rabil; and if to the
Trustee, to: U.S. Trust Company of Texas, N.A., 2001
Ross Avenue, Suite 2700, Dallas, Texas 75201, (214)
754-1255, telecopier: (214) 754-1303, Attention:
William Barber. For record keeping purposes, one copy
of each such amendment or supplement shall also be
mailed or telecopied to Liddell, Sapp, Zivley, Hill &
LaBoon L.L.P., 2200 Ross Avenue, Suite 900, Dallas,
Texas 75201, telecopier: (214) 220-4899, Attention:
Bryan L. Goolsby, Esq. and to Brown & Wood llp One
World Trade Center, New York, New York 10048, (212)
839-5381, telecopier: (212) 839-5599, Attention:
Howard G. Godwin, Jr. Esq.
In the event that at the time the solicitation of
offers to purchase from the Company is suspended (other
than to establish or change interest rates or formulas,
maturities, prices or other similar variable terms with
respect to the Notes) there shall be any offers to
purchase Notes that have been accepted by the Company
which have not been settled, the Company will promptly
advise the Offering Agent and the Trustee whether such
offers may be settled and whether copies of the
Prospectus as theretofore amended and/or supplemented
as in effect at the time of the suspension may be
delivered in connection with the settlement of such
offers. The Company will have the sole
14
<PAGE>
responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such offers may not be settled
or that copies of such Prospectus may not be so
delivered.
Delivery of Prospectus
and applicable
Pricing Supplement: A copy of the most recent Prospectus and the applicable
Pricing Supplement, which pursuant to Rule 434 may be
delivered separately from the Prospectus, must
accompany or precede the earlier of (a) the written
confirmation of a sale sent to an investor or other
purchaser or its agent and (b) the delivery of Notes
to an investor or other purchaser or its agent.
Authenticity of
Signatures: The Agents will have no obligation or liability to
the Company or the Trustee in respect of the
authenticity of the signature of any officer, employee
or agent of the Company or the Trustee on any Note.
Documents Incorporated
by Reference: The Company shall supply the Agents with a reasonable
supply of all documents incorporated by reference in
the Registration Statement and the Prospectus.
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PART II: PROCEDURES FOR NOTES ISSUED
IN BOOK-ENTRY FORM
In connection with the qualification of Notes issued in book-entry
form for eligibility in the book-entry system maintained by DTC, the Trustee
will perform the custodial, document control and administrative functions
described below, in accordance with its respective obligations under a Letter of
Representations from the Company and the Trustee to DTC, dated March 20, 1997,
and a Certificate Agreement, dated December 12, 1990, between the Trustee and
DTC, as amended (the "Certificate Agreement"), and its obligations as a
participant in DTC, including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued in book-entry form having the
same Original Issue Date, Specified Currency, Interest Rate,
Default Rate, Interest Payment Dates, redemption and/or
repayment terms, if any, and Stated Maturity Date
(collectively, the "Fixed Rate Terms") will be represented
initially by a single Global Note; and all Floating Rate
Notes issued in book-entry form having the same Original
Issue Date, Specified Currency, Interest Category, formula
for the calculation of interest (including the Interest Rate
Basis or Bases, which may be the CD Rate, the CMT Rate, the
Commercial Paper Rate, the Eleventh District Cost of Funds
Rate, the Federal Funds Rate, LIBOR, the Prime Rate or the
Treasury Rate or any other interest rate basis or formula,
and Spread and/or Spread Multiplier, if any), Day Count
Convention, Initial Interest Rate, Default Rate, Index
Maturity (if applicable), Minimum Interest Rate, if any,
Maximum Interest Rate, if any, redemption and/or repayment
terms, if any, Interest Payment Dates, Initial Interest
Reset Date, Interest Reset Dates and Stated Maturity Date
(collectively, the "Floating Rate Terms") will be
represented initially by a single Global Note.
For other variable terms with respect to the Fixed Rate
Notes and Floating Rate Notes, see the Prospectus and the
applicable Pricing Supplement. Owners of beneficial
interests in Global Notes will be entitled to physical
delivery of Certificated Notes equal in
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principal amount to their respective beneficial interests
only upon certain limited circumstances described in the
Prospectus.
Identification: The Company has arranged with the CUSIP Service Bureau of
Standard & Poor's Ratings Services (the "CUSIP Service
Bureau") for the reservation of one series of CUSIP numbers,
which series consists of approximately 900 CUSIP numbers
which have been reserved for and relating to Global Notes
and the Company has delivered to each of the Trustee and DTC
such list of such CUSIP numbers. The Company will assign
CUSIP numbers to Global Notes as described below under
Settlement Procedure B. DTC will notify the CUSIP Service
Bureau periodically of the CUSIP numbers that the Company
has assigned to Global Notes. The Trustee will notify the
Company at any time when fewer than 100 of the reserved
CUSIP numbers remain unassigned to Global Notes, and, if it
deems necessary, the Company will reserve and obtain
additional CUSIP numbers for assignment to Global Notes.
Upon obtaining such additional CUSIP numbers, the Company
will deliver a list of such additional numbers to the
Trustee and DTC. Notes issued in book-entry form in excess
of $200,000,000 aggregate principal amount and otherwise
required to be represented by the same Global Note will
instead be represented by two or more Global Notes which
shall all be assigned the same CUSIP number.
Registration: Unless otherwise specified by DTC, each Global Note will
be registered in the name of Cede & Co., as nominee for DTC,
on the register maintained by the Trustee under the
Indenture. The beneficial owner of a Note issued in book-
entry form (i.e., an owner of a beneficial interest in a
Global Note) (or one or more indirect participants in DTC
designated by such owner) will designate one or more
participants in DTC (with respect to such Note issued in
book-entry form, the "Participants") to act as agent for
such beneficial owner in connection with the book-entry
system maintained by DTC, and DTC will record in book-entry
form, in accordance
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with instructions provided by such Participants, a credit
balance with respect to such Note issued in book-entry form
in the account of such Participants. The ownership interest
of such beneficial owner in such Note issued in book-entry
form will be recorded through the records of such
Participants or through the separate records of such
Participants and one or more indirect participants in DTC.
Transfers: Transfers of beneficial ownership interests in a Global Note
will be accomplished by book entries made by DTC and, in
turn, by Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of beneficial
transferors and transferees of such Global Note.
Exchanges: The Trustee may deliver to DTC and the CUSIP Service Bureau
at any time a written notice specifying (a) the CUSIP
numbers of two or more Global Notes outstanding on such date
that represent Global Notes having the same Fixed Rate Terms
or Floating Rate Terms, as the case may be (other than
Original Issue Dates), and for which interest has been paid
to the same date; (b) a date, occurring at least 30 days
after such written notice is delivered and at least 30 days
before the next Interest Payment Date for the related Notes
issued in book-entry form, on which such Global Notes shall
be exchanged for a single replacement Global Note; and (c) a
new CUSIP number, obtained from the Company, to be assigned
to such replacement Global Note. Upon receipt of such a
notice, DTC will send to its Participants (including the
Trustee) a written reorganization notice to the effect that
such exchange will occur on such date. Prior to the
specified exchange date, the Trustee will deliver to the
CUSIP Service Bureau written notice setting forth such
exchange date and the new CUSIP number and stating that, as
of such exchange date, the CUSIP numbers of the Global Notes
to be exchanged will no longer be valid. On the specified
exchange date, the Trustee will exchange such Global Notes
for a single Global Note bearing the new CUSIP number and
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the CUSIP numbers of the exchanged Notes will, in accordance
with CUSIP Service Bureau procedures, be canceled and not
immediately reassigned.
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, Notes issued in book-entry form will be issued
in denominations of $1,000 and integral multiples of $1,000
in excess thereof.
Payments of Principal
and Interest: Payments of Interest Only. Promptly after each Regular
Record Date, the Trustee will deliver to the Company and DTC
a written notice specifying by CUSIP number the amount of
interest to be paid on each Global Note on the following
Interest Payment Date (other than an Interest Payment Date
coinciding with the Maturity Date) and the total of such
amounts. DTC will confirm the amount payable on each Global
Note on such Interest Payment Date by reference to the daily
bond reports published by Standard & Poor's Corporation. On
such Interest Payment Date, the Company will pay to the
Trustee in immediately available funds an amount sufficient
to pay the interest then due and owing on the Global Notes,
and upon receipt of such funds from the Company, the Trustee
in turn will pay to DTC such total amount of interest due on
such Global Notes (other than on the Maturity Date) which is
payable in U.S. dollars, at the times and in the manner set
forth below under "Manner of Payment". The Trustee shall
make payment of that amount of interest due and owing on any
Global Notes that Participants have elected to receive in
foreign or composite currencies directly to such
Participants.
Notice of Interest Rates. Promptly after each Interest
Determination Date or Calculation Date, as the case may be,
for Floating Rate Notes issued in book-entry form, the
Trustee will notify each of Moody's Investors Service, Inc.
and Standard & Poor's Corporation of the interest rates
determined as of such Interest Determination Date.
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Payments at Maturity. On or about the first Business Day of
each month, the Trustee will deliver to the Company and DTC
a written list of principal, premium, if any, and interest
to be paid on each Global Note maturing or otherwise
becoming due in the following month. The Trustee, the
Company and DTC will confirm the amounts of such principal,
premium, if any, and interest payments with respect to each
such Global Note on or about the fifth Business Day
preceding the Maturity Date of such Global Note. On the
Maturity Date, the Company will pay to the Trustee in
immediately available funds an amount sufficient to make the
required payments, and upon receipt of such funds the
Trustee in turn will pay to DTC the principal amount of
Global Notes, together with premium, if any, and interest
due on the Maturity Date, at the times and in the manner set
forth below under "Manner of Payment". The Trustee shall
make payment of the principal, premium, if any, and interest
to be paid on the Maturity Date of each Global Note that
Participants have elected to receive in foreign or composite
currencies directly to such Participants. Promptly after
(i) payment to DTC of the principal, premium, if any, and
interest due on the Maturity Date of such Global Note which
are payable in U.S. dollars and (ii) payment of the
principal, premium, if any, and interest due on the Maturity
Date of such Global Note to those Participants who have
elected to receive such payments in foreign or composite
currencies, the Trustee will cancel such Global Note and
deliver it to the Company with an appropriate debit advice.
On the first Business Day of each month, the Trustee will
deliver to the Company a written statement indicating the
total principal amount of outstanding Global Notes as of the
close of business on the immediately preceding Business Day.
Manner of Payment. The total amount of any principal,
premium, if any, and interest due on Global Notes on any
Interest Payment Date or the Maturity Date, as the case may
be, which is payable in U.S. dollars shall be paid by the
Company to the Trustee in funds
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available for use by the Trustee no later than 10:00 a.m.,
New York City time, on such date. The Company will make
such payment on such Global Notes to an account specified by
the Trustee. Upon receipt of such funds, the Trustee will
pay by separate wire transfer (using Fedwire message entry
instructions in a form previously specified by DTC) to an
account at the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate use by
DTC, each payment in U.S. dollars of principal, premium, if
any, and interest due on Global Notes on such date.
Thereafter on such date, DTC will pay, in accordance with
its SDFS operating procedures then in effect, such amounts
in funds available for immediate use to the respective
Participants in whose names the beneficial interests in such
Global Notes are recorded in the book-entry system
maintained by DTC. Neither the Company nor the Trustee
shall have any responsibility or liability for the payment
in U.S. dollars by DTC of the principal of, or premium, if
any, or interest on, the Global Notes. The Trustee shall
make all payments of principal, premium, if any, and
interest on each Global Note that Participants have elected
to receive in foreign or composite currencies directly to
such Participants.
Withholding Taxes. The amount of any taxes required under
applicable law to be withheld from any interest payment on a
Global Note will be determined and withheld by the
Participant, indirect participant in DTC or other Person
responsible for forwarding payments and materials directly
to the beneficial owner of such Global Note.
Settlement
Procedures: Settlement Procedures with regard to each Note in book-entry
form sold by an Agent, as agent of the Company, or purchased
by an Agent, as principal, will be as follows:
A. The Offering Agent will advise the Company by telephone,
confirmed by facsimile, of the following settlement
information:
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1. Principal Amount and Authorized Denomination.
2. Exchange Rate Agent, if any.
3. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is being issued
with Original Issue Discount and, if
so, the terms thereof.
(b) Floating Rate Notes:
(i) Interest Category.
(ii) Interest Rate Basis or Bases.
(iii) Initial Interest Rate.
(iv) Spread and/or Spread Multiplier, if
any.
(v) Initial Interest Reset Date or
Interest Reset Dates.
(vi) Interest Payment Dates.
(vii) Index Maturity, if any.
(viii) Maximum and/or Minimum Interest
Rates, if any.
(ix) Day Count Convention.
(x) Calculation Agent.
3. Price to public, if any, of such Note (or whether
such Note is being
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<PAGE>
offered at varying prices relating to prevailing
market prices at time of resale as determined by
the Offering Agent).
4. Trade Date.
5. Settlement Date (Original Issue Date).
6. Stated Maturity Date.
7. Redemption provisions, if any.
8. Repayment provisions, if any.
9. Default Rate, if any.
10. Net proceeds to the Company.
11. The Offering Agent's discount or commission .
12. Whether such Note is being sold to the Offering
Agent as principal or to an investor or other
purchaser through the Offering Agent acting as
agent for the Company.
13. Such other information specified with respect to
such Note (whether by Addendum or otherwise).
B. The Company will assign a CUSIP number to the Global
Note representing such Note and then advise the Trustee
by facsimile transmission or other electronic
transmission of the above settlement information
received from the Offering Agent, such CUSIP number and
the name of the Offering Agent. The Company will also
advise the Offering Agent of the CUSIP number assigned
to the Global Note.
C. The Trustee will communicate to DTC and the Offering
Agent through DTC's Participant Terminal System a
pending deposit message specifying the following
settlement information:
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1. The information set forth in the Settlement
Procedure A.
2. Identification numbers of the participant accounts
maintained by DTC on behalf of the Trustee and the
Offering Agent.
3. Identification of the Global Note as a Fixed Rate
Global Note or Floating Rate Global Note.
4. Initial Interest Payment Date for such Note,
number of days by which such date succeeds the
related record date for DTC purposes (or, in the
case of Floating Rate Notes which reset daily or
weekly, the date five calendar days preceding the
Interest Payment Date) and, if then calculable,
the amount of interest payable on such Interest
Payment Date (which amount shall have been
confirmed by the Trustee).
5. CUSIP number of the Global Note representing such
Note.
6. Whether such Global Note represents any other
Notes issued or to be issued in book-entry form.
DTC will arrange for each pending deposit message
described above to be transmitted to Standard & Poor's
Corporation, which will use the information in the
message to include certain terms of the related Global
Note in the appropriate daily bond report published by
Standard & Poor's Corporation.
D. The Trustee will complete and authenticate the Global
Note representing such Note.
E. DTC will credit such Note to the participant account
of the Trustee maintained by DTC.
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<PAGE>
F. The Trustee will enter an SDFS delivery order through
DTC's Participant Terminal System instructing DTC (i)
to debit such Note to the Trustee's participant account
and credit such Note to the participant account of the
Offering Agent maintained by DTC and (ii) to debit the
settlement account of the Offering Agent and credit the
settlement account of the Trustee maintained by DTC, in
an amount equal to the price of such Note less such
Offering Agent's discount or underwriting commission,
as applicable. Any entry of such a deliver order shall
be deemed to constitute a representation and warranty
by the Trustee to DTC that (i) the Global Note
representing such Note has been issued and
authenticated and (ii) the Trustee is holding such
Global Note pursuant to the Certificate Agreement.
G. In the case of Notes in book-entry form sold through
the Offering Agent, as agent, the Offering Agent will
enter an SDFS deliver order through DTC's Participant
Terminal System instructing DTC (i) to debit such Note
to the Offering Agent's participant account and credit
such Note to the participant account of the
Participants maintained by DTC and (ii) to debit the
settlement accounts of such Participants and credit the
settlement account of the Offering Agent maintained by
DTC in an amount equal to the initial public offering
price of such Note.
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures F and G will
be settled in accordance with SDFS operating procedures
in effect on the Settlement Date.
I. Upon receipt, the Trustee will pay the Company, by wire
transfer of immediately available funds to an account
specified by the Company to the Trustee from time to
time, the amount transferred to the
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Trustee in accordance with Settlement Procedure F.
J. The Trustee will send a copy of the Global Note by
first class mail to the Company together with a
statement setting forth the principal amount of Notes
Outstanding as of the related Settlement Date after
giving effect to such transaction and all other offers
to purchase Notes of which the Company has advised the
Trustee but which have not yet been settled.
K. If such Note was sold through the Offering Agent, as
agent, the Offering Agent will confirm the purchase of
such Note to the investor or other purchaser either by
transmitting to the Participant with respect to such
Note a confirmation order through DTC's Participant
Terminal System or by mailing a written confirmation to
such investor or other purchaser.
Settlement Procedures
Timetable: For offers to purchase Notes accepted by the Company,
Settlement Procedures A through K set forth above shall
be completed as soon as possible following the trade
but not later than the respective times (New York City
time) set forth below:
SETTLEMENT
PROCEDURE TIME
A 11:00 a.m. on the trade date or within
one hour following the trade
B 12:00 noon on the trade date or within
one hour following the trade
C No later than the close of business on
the trade date
D 9:00 a.m. on Settlement Date
E 10:00 a.m. on Settlement Date
F-G No later than 2:00 p.m. on Settlement
Date
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H 4:00 p.m. on Settlement Date
I-K 5:00 p.m. on Settlement Date
Settlement Procedure H is subject to extension in accordance
with any extension of Fedwire closing deadlines and in the
other events specified in the SDFS operating procedures in
effect on the Settlement Date.
If settlement of a Note issued in book-entry form is
rescheduled or canceled, the Trustee will deliver to DTC,
through DTC's Participant Terminal System, a cancellation
message to such effect by no later than 5:00 p.m., New York
City time, on the Business Day immediately preceding the
scheduled Settlement Date.
Failure to Settle: If the Trustee fails to enter an SDFS deliver order with
respect to a Note issued in book-entry form pursuant to
Settlement Procedure F, the Trustee may deliver to DTC,
through DTC's Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to debit
such Note to the participant account of the Trustee
maintained at DTC. DTC will process the withdrawal message,
provided that such participant account contains a principal
amount of the Global Note representing such Note that is at
least equal to the principal amount to be debited. If
withdrawal messages are processed with respect to all the
Notes represented by a Global Note, the Trustee will mark
such Global Note "canceled", make appropriate entries in its
records and send certification of destruction of such
canceled Global Note to the Company. The CUSIP number
assigned to such Global Note shall, in accordance with CUSIP
Service Bureau procedures, be canceled and not immediately
reassigned. If withdrawal messages are processed with
respect to a portion of the Notes represented by a Global
Note, the Trustee will exchange such Global Note for two
Global Notes, one of which shall represent the Global Notes
for which withdrawal messages are processed and shall
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be canceled immediately after issuance and the other of
which shall represent the other Notes previously represented
by the surrendered Global Note and shall bear the CUSIP
number of the surrendered Global Note.
In the case of any Note in book-entry form sold through the
Offering Agent, as agent, if the purchase price for any such
Note is not timely paid to the Participants with respect
thereto by the beneficial investor or other purchaser
thereof (or a person, including an indirect participant in
DTC, acting on behalf of such investor or other purchaser),
such Participants and, in turn, the related Offering Agent
may enter SDFS delivery orders through DTC'S Participant
Terminal System reversing the orders entered pursuant to
Settlement Procedures F and G, respectively. Thereafter,
the Trustee will deliver the withdrawal message and take the
related actions described in the preceding paragraph. If
such failure shall have occurred for any reason other than
default by the applicable Offering Agent to perform its
obligations hereunder or under the Distribution Agreement,
the Company will reimburse such Offering Agent on an
equitable basis for its reasonable loss of the use of funds
during the period when the funds were credited to the
account of the Company.
Notwithstanding the foregoing, upon any failure to settle
with respect to a Note in book-entry form, DTC may take any
actions in accordance with its SDFS operating procedures
then in effect. In the event of a failure to settle with
respect to a Note that was to have been represented by a
Global Note also representing other Notes, the Trustee will
provide, in accordance with Settlement Procedure D, for the
authentication and issuance of a Global Note representing
such remaining Notes and will make appropriate entries in
its records.
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PART III: PROCEDURES FOR CERTIFICATED NOTES
Denominations: Unless otherwise provided in the applicable Pricing
Supplement, the Certificated Notes will be issued in
denominations of $1,000 and integral multiples thereof.
Payments of
Principal,
Premium, if
any, and
Interest: Upon presentment and delivery of the Certificated Note, the
Trustee upon receipt of immediately available funds from the
Company will pay the principal of, premium, if any, and
interest on, each Certificated Note on the Maturity Date in
immediately available funds. All interest payments on a
Certificated Note, other than interest due on the Maturity
Date, will be made by check mailed to the address of the
person entitled thereto as such address shall appear in the
Security Register; provided, however, that Holders of
$10,000,000 or more in aggregate principal amount of
Certificated Notes (whether having identical or different
terms and provisions) shall be entitled to receive such
interest payments by wire transfer of immediately available
funds if appropriate wire transfer instructions have been
received in writing by the Trustee not less than 15
calendar days prior to the applicable Interest Payment Date.
The Trustee will provide monthly to the Company a list of
the principal, premium, if any, and interest to be paid on
Certificated Notes maturing in the next succeeding month.
The Trustee will be responsible for withholding taxes on
interest paid as required by applicable law.
Certificated Notes presented to the Trustee on the Maturity
Date for payment will be canceled by the Trustee. All
canceled Certificated Notes held by the Trustee shall be
returned to the Company.
Settlement
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Procedures: Settlement Procedures with regard to each Certificated
Note purchased by an Agent, as principal, or through an
Agent, as agent, shall be as follows:
A. The Offering Agent will advise the Company by telephone
of the following Settlement information with regard to
each Certificated Note:
1. Exact name in which the Certificated Note(s) is to
be registered (the "Registered Owner").
2. Exact address or addresses of the Registered Owner
for delivery, notices and payments of principal,
premium, if any, and interest.
3. Taxpayer identification number of the Registered
Owner.
4. Principal Amount and Authorized Denomination.
5. Exchange Rate Agent, if any.
6. (a) Fixed Rate Notes:
(i) Interest Rate.
(ii) Interest Payment Dates.
(iii) Whether such Note is being issued
with Original Issue Discount and, if
so, the terms thereof.
(b) Floating Rate Notes:
(i) Interest Category.
(ii) Interest Rate Basis or Bases.
(iii) Initial Interest Rate.
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(iv) Spread and/or Spread Multiplier, if
any.
(v) Initial Interest Reset Date and
Interest Reset Dates.
(vi) Interest Payment Dates.
(vii) Index Maturity, if any.
(viii) Maximum and/or Minimum Interest
Rates, if any.
(ix) Day Count Convention.
(x) Calculation Agent.
6. Price to public of such Certificated Note (or
whether such Note is being offered at varying
prices relating to prevailing market prices at
time of resale as determined by the Offering
Agent).
7. Trade Date.
8. Settlement Date (Original Issue Date).
9. Stated Maturity Date.
10. Redemption provisions, if any.
11. Repayment provisions, if any.
12. Default Rate, if any.
13. Net proceeds to the Company.
14. The Offering Agent's discount or commission.
15. Whether such Note is being sold to the Offering
Agent as principal or to an investor or other
purchaser
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<PAGE>
through the Offering Agent acting as agent for the
Company.
16. Such other information specified with respect to
such Note (whether by Addendum or otherwise).
B. After receiving such settlement information from the
Offering Agent, the Company will advise the Trustee of
the above settlement information by facsimile
transmission confirmed by telephone. The Company will
cause the Trustee to issue, authenticate and deliver
the Certificated Note.
C. The Trustee will complete the Certificated Note in the
form approved by the Company and the Offering Agent,
and will make three copies thereof (herein called "Stub
1", "Stub 2" and "Stub 3"):
1. Certificated Note with the Offering Agent's
confirmation, if traded on a principal basis, or
the Offering Agent's customer confirmation, if
traded on an agency basis.
2. Stub 1 for Trustee.
3. Stub 2 for Offering Agent.
4. Stub 3 for the Company.
D. With respect to each trade, the Trustee will deliver
the Certificated Note and Stub 2 thereof to the
Offering Agent at the following applicable address:
NationsBanc Capital Markets, Inc., NationsBank
Corporate Center, 100 N. Tryon Street, NC 1-007-07-01,
Charlotte, North Carolina 28255-0065, (704) 386-6616,
telecopier: (704) 388-9939, Attention: Lynn T.
McConnell; Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, World Financial Center,
North Tower, 10th Floor, 250 Vesey Street, New York,
New York 10281-1326, (212) 449-1923,
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<PAGE>
telecopier: (212) 449-2234, Attention: MTN Product
Management; J.P. Morgan Securities Inc., Medium-Term
Note Desk, 60 Wall Street, 3rd Floor, New York, New
York 10260, (212) 648-0591, telecopier: (212) 648-
5907, Attention: Dan Benton; Smith Barney Inc., Debt
Origination Group, 390 Greenwich Street, 4th Floor, New
York, New York 10013, (212) 723-5132, telecopier:
(212) 723-8853, Attention: MTN Product
Management/Origination; UBS Securities LLC, Real
Estate/Investment Banking Group, 229 Park Avenue, New
York, New York 10171-0026, (212) 821-6772, telecopier:
(212) 821-3943, Attention: Albert Rabil; and the
Trustee will keep Stub 1. The Offering Agent will
acknowledge receipt of the Certificated Note through a
broker's receipt and will keep Stub 2. Delivery of the
Certificated Note will be made only against such
acknowledgment of receipt. Upon determination that the
Certificated Note has been authorized, delivered and
completed as aforementioned, the Offering Agent will
wire the net proceeds of the Certificated Note after
deduction of its applicable commission to the Company
pursuant to standard wire instructions given by the
Company.
E. In the case of a Certificated Note sold through the
Offering Agent, as agent, the Offering Agent will
deliver such Certificated Note (with the confirmation)
to the purchaser against payment in immediately
available funds.
F. The Trustee will send Stub 3 to the Company.
Settlement
Procedures
Timetable: For offers to purchase Certificated Notes accepted by the
Company, Settlement Procedures A through F set forth above
shall be completed as soon as possible following the trade
but not later than the respective times (New York City time)
set forth below:
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<PAGE>
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 a.m. on the trade date or within
one hour following the trade
B 12:00 noon on the trade date or within
one hour following the trade
C-D 2:15 p.m. on Settlement Date
E 3:00 p.m. on Settlement Date
F 5:00 p.m. on Settlement Date
Failure to Settle: In the case of Certificated Notes sold through the Offering
Agent, as agent, if an investor or other purchaser of a
Certificated Note from the Company shall either fail to
accept delivery of or make payment for such Certificated
Note on the date fixed for settlement, the Offering Agent
will forthwith notify the Trustee and the Company by
telephone, confirmed in writing, and return such
Certificated Note to the Trustee.
The Trustee, upon receipt of such Certificated Note from the
Offering Agent, will immediately advise the Company and the
Company will promptly arrange to credit the account of the
Offering Agent in an amount of immediately available funds
equal to the amount previously paid to the Company by such
Offering Agent in settlement for such Certificated Note.
Such credits will be made on the Settlement Date if
possible, and in any event not later than the Business Day
following the Settlement Date; provided that the Company has
received notice on the same day. If such failure shall have
occurred for any reason other than fail by such Offering
Agent to perform its obligations hereunder or under the
Distribution Agreement, the Company will reimburse such
Offering Agent on an equitable basis for its reasonable loss
of the use of funds during the period when the funds were
credited to the account of the Company. Immediately upon
receipt of the Certificated Note in respect of which the
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<PAGE>
failure occurred, the Trustee will cancel and destroy such
Certificated Note, make appropriate entries in its records
to reflect the fact that such Certificated Note was never
issued, and accordingly notify in writing the Company.
35
