EXHIBIT 6.1
SUBSCRIPTION AGREEMENT
BY AND AMONG
REGENCY REALTY CORPORATION
SECURITY CAPITAL HOLDINGS S.A.
AND
SECURITY CAPITAL U.S. REALTY
DATED AS OF
DECEMBER 4, 1997
TABLE OF CONTENTS
SECTION Page
1. SUBSCRIPTION; CLOSING................................ 2
1.1 Subscription for Company Common Stock......... 2
1.2 Acceptance of Subscription.................... 3
1.3 Purchase Price................................ 3
1.4 Closing....................................... 3
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY........ 3
2.1 Due Incorporation, etc........................ 3
2.2 Due Authorization; Consents; No Violations.... 4
2.3 Capitalization................................ 5
2.4 Valid Issuance of Shares...................... 6
2.5 Regency Exchange Act Reports.................. 6
2.6 Permits....................................... 7
2.7 No Adverse Change............................. 7
2.8 No Defaults or Violations..................... 7
2.9 Litigation.................................... 8
2.10 Title to Properties; Leasehold Interests...... 8
2.11 Environmental Matters......................... 8
2.12 Taxes......................................... 10
2.13 Employees: ERISA............................. 10
2.14 Accuracy of Statements........................ 10
2.15 Tax Matters; REIT and Partnership Status...... 11
2.16 Compliance with Organization Documents........ 11
2.17 Florida Takeover Law.......................... 11
2.18 Brokers or Finders............................ 12
2.19 Shareholder Approval.......................... 12
2.20 Amended Company Charter; Modification
of Ownership Limit............................ 12
2.21 Consents...................................... 12
2.22 HSR Act....................................... 12
2.23 Related Tenant Limit Waiver................... 12
3. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER
AND THE ADVANCING PARTY.............................. 13
3.1 Organization and Standing..................... 13
3.2 Due Authorization............................. 13
3.3 Conflicting Agreements and Other Matters...... 13
3.4 Source of Funds............................... 14
3.5 Brokers or Finders............................ 14
3.6 REIT Qualification Matters.................... 14
3.7 Investment Company Matters.................... 14
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3.8 Investment Representations.................... 14
3.9 No Substantial Investment in Company's
Tenants..................................... 15
4. SURVIVAL; INDEMNIFICATION............................ 15
4.1 Survival...................................... 15
4.2 Indemnification by Subscriber or the Company.. 15
5. MISCELLANEOUS........................................ 17
5.1 Counterparts.................................. 17
5.2 Governing Law................................. 17
5.3 Entire Agreement.............................. 17
5.4 Notices....................................... 17
5.5 Successors and Assigns........................ 18
5.6 Headings...................................... 18
5.7 Amendments and Waivers........................ 19
5.8 Expenses...................................... 19
5.9 Severability.................................. 19
5.10 Further Assurances............................ 19
5.11 Joint and Several Liability; Guaranty......... 19
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SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is entered into as
of December 4, 1997 by and among Regency Realty Corporation, a Florida
corporation (the "Company"), Security Capital U.S. Realty, a Luxembourg
corporation (the "Advancing Party"), and Security Capital Holdings
S.A., a Luxembourg corporation and a wholly-owned subsidiary of the
Advancing Party ("Subscriber" or "Investor"). Capitalized terms not
otherwise defined herein have the meanings ascribed to them in the
Stock Purchase Agreement (as hereinafter defined).
WHEREAS, in connection with the Company's initial issuance and
sale to Subscriber of shares of the Company's common stock, par value
$0.01 per share (the "Company Common Stock"), pursuant to a Stock
Purchase Agreement dated as of June 11, 1996, as amended (the "Stock
Purchase Agreement"), the Company, the Advancing Party and Subscriber
entered into a Stockholders Agreement on July 10, 1996 (the
"Stockholders Agreement");
WHEREAS, pursuant to the terms of the Stockholders Agreement, in
the event that the Company issues or sells shares of capital stock of
the Company, Investor is, during a specified term, entitled (except in
certain limited circumstances) to a participation right to purchase, or
subscribe for, a total number of shares equal to up to 42.5% of the
total number of shares of capital stock proposed to be issued by the
Company in its first offering after the final closing under the above-
referenced Stock Purchase Agreement (the "Participation Rights");
WHEREAS, the Company entered into a Contribution Agreement and
Plan of Reorganization (the "Contribution Agreement"), dated as of
February 10, 1997, by and among Branch Properties, L.P., Branch Realty,
Inc. and the Company (the "Branch Transaction");
WHEREAS, pursuant to Section 4.2 of the Stockholders Agreement,
the transactions contemplated by the Contribution Agreement would have
triggered a participation right of Investor to purchase or subscribe
for up to 2,900,421 shares of Company Common Stock at a purchase price
of $22 1/8 per share;
WHEREAS, simultaneously with the execution of the Contribution
Agreement, the parties hereto entered into Amendment No. 1 to
Stockholders Agreement dated as of February 10, 1997 ("Amendment No. 1
to Stockholders Agreement"), pursuant to Section 1 of which Investor
waived those participation rights under Section 4.2 of the Stockholders
Agreement which arose in connection with the Branch Transaction, and,
in lieu thereof, received the right to purchase from the Company at a
purchase price of $22 1/8 a certain number of shares of Company Common
Stock on the terms and conditions set forth in Amendment No. 1 to
Stockholders Agreement (the "Special Purchase Right");
WHEREAS, pursuant to a Subscription Agreement dated August 28,
1997, Investor partially exercised the Special Purchase Right for
1,050,000 shares of Company Common Stock, and the parties agreed that
the remainder of the Special Purchase Right would extend to certain
additional shares through October 31, 1997;
WHEREAS, pursuant to a letter agreement dated October 31, 1997,
the parties agreed to extend the deadline for the exercise of the
remainder of the Special Purchase Right for 700,000 shares of Company
Common Stock representing the Subsequent Number of Shares through
December 5, 1997;
WHEREAS, pursuant to Section 4.2 of the Stockholders Agreement,
Investor currently has the right to purchase from the Company, at a
purchase price less than $22 1/8 per share, a certain number of shares
of Company Common Stock based on previous issuances by the Company from
time to time each quarter since July 10, 1996 of shares pursuant to the
Company's Dividend Reinvestment Plan, its Long-Term Omnibus Plan and
certain other employee benefit plans, all of which possible purchase
rights through September 30, 1997 are described on Exhibit A hereto and
none of which have been the subject of any previous notices from the
Company to Investor under Section 4.2 of the Stockholders Agreement
(collectively, the "Catch-Up Purchase Right"); and
WHEREAS, in accordance with Investor's desire to complete its
exercise of its Special Purchase Right by purchasing the Subsequent
Number of Shares and to exercise the Catch-Up Purchase Right, the
Company desires to issue and sell to Subscriber shares of Company
Common Stock in an offering (collectively, the "Special Purchase") from
the Company to Subscriber.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual covenants and agreements hereinafter set forth, the parties
hereto hereby agree as follows:
1. SUBSCRIPTION; CLOSING
1.1 Subscription for Company Common Stock
Subject to the terms and conditions hereof, Subscriber
hereby subscribes (the "Subscription") to purchase 735,000 shares
of Company Common Stock (the "Special Purchase Shares"), 700,000
shares of which are with respect to the Subsequent Number of
Shares which represent the remainder of the Special Purchase Right
and 35,000 shares of which represent shares which the parties
hereby agree shall constitute the Catch-Up Purchase Right in its
entirety through September 30, 1997. Subscriber acknowledges
receipt of an oral Special Purchase Notice (as defined in
Amendment No. 1 to Stockholders Agreement) and an oral
Participation Notice (as defined in Section 4.2 of the
Stockholders Agreement) from the Company and hereby waives the
requirement that such notices have been in writing. The Company
acknowledges receipt of an oral Special Exercise Notice (as
defined in Amendment No. 1 to the Stockholders Agreement) and an
oral Exercise Notice (as defined in Section 4.2 of the
Stockholders Agreement) and hereby waives the requirement that
such notices have been in writing.
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1.2 ACCEPTANCE OF SUBSCRIPTION
Subject to the terms and conditions hereof, the Company
hereby accepts the Subscription. With respect to the Subsequent
Number of Shares and the Catch-Up Purchase Right, respectively,
the Company has previously delivered an oral Special Purchase
Notice and an oral Participation Notice to Subscriber, which the
Company hereby confirms in writing, and Subscriber has previously
delivered an oral Special Exercise Notice and an oral Exercise
Notice to the Company, which Subscriber hereby confirms in
writing, and the Company hereby confirms that the Company intends
to use the proceeds from the sale of the Special Purchase Shares
to reduce outstanding indebtedness of the Company.
1.3 PURCHASE PRICE
Of the Special Purchase Shares, the per share purchase
price for the 700,000 Subsequent Number of Shares which represent
the remainder of the Special Purchase Right shall be $22 1/8 per
share and the per share purchase price for the 35,000 shares which
represent the Catch-Up Purchase Right Shares shall be $21.79 per
Share, for an aggregate purchase price of $16,250,150 (the
"Purchase Price").
1.4 CLOSING
Subject to the terms and conditions hereof, the closing
of the Special Purchase (the "Closing") shall occur on the date
hereof. At the Closing, the Company will sell, convey, assign,
transfer and deliver, and Subscriber will purchase and acquire
(and the Advancing Party shall advance sufficient funds for such
purchase) from the Company, the Special Purchase Shares, and
Subscriber will pay to the Company the Purchase Price by wire
transfer of immediately-available funds in U.S. dollars to the
account or accounts specified by the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Subscriber as
follows:
2.1 DUE INCORPORATION, ETC.
(a) The Company is duly organized, validly existing and
in good standing under the Laws of the State of Florida, with all
requisite power and authority to own, lease, operate and sell its
assets and to carry on its business as it is now being conducted.
The Company is in good standing as a foreign entity authorized to
do business in each jurisdiction where it engages in business,
except to the extent such violation or failure does not cause or
is not reasonably expected to cause a Material Adverse Effect.
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(b) The Company owns all of the outstanding capital
stock of its subsidiaries listed on Exhibit 21 of the Company's
Form 10-K annual report filed with the SEC for the fiscal year
ended December 31, 1996, except that the Company owns 100% of the
outstanding preferred stock and 5% of the outstanding common stock
of Regency Realty Group II, Inc., which in turn owns 100% of the
preferred stock and 5% of the common stock of Regency Realty
Group, Inc. Except for its interests in its subsidiaries and
minority interests in Village Commons Shopping Center, Ltd.,
Regency Ocean East Partnership, Ltd., RRC Operating Partnership of
Georgia, L.P. and Hyde Park Partners, L.P., the Company does not
hold any interest in any security issued by any other person.
2.2 DUE AUTHORIZATION; CONSENTS; NO VIOLATIONS
(a) The Company has full power and authority to enter
into this Agreement and to consummate the transactions
contemplated hereby. The execution, delivery and performance by
the Company of this Agreement have been duly and validly approved
by the Company, and no other proceeding on the part of the Company
is necessary to authorize this Agreement and the transactions
contemplated hereby. This Agreement has been duly and validly
executed and delivered by the Company and, assuming due
authorization, execution and delivery of this Agreement by
Investor, this Agreement constitutes a valid and binding
obligation of the Company enforceable in accordance with its
terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization, similar laws
or court decisions from time to time in effect that affect
creditors' rights generally and by legal and equitable limitations
on the availability of specific remedies.
(b) No consents, waivers, exemptions or approvals of,
or filings or registrations by the Company with, any Government
Authority or any other person not a party to this Agreement are
necessary in connection with the execution, delivery and
performance by the Company of this Agreement or the consummation
of the transactions contemplated hereby except to the extent the
failure to obtain the same does not cause or is not expected to
cause a Material Adverse Effect on the Company or the transactions
contemplated by this Agreement except for the consents obtained
pursuant to Section 7.1(d) of the Stock Purchase Agreement.
(c) Except to the extent same does not cause or is not
reasonably expected to cause a Material Adverse Effect, the
execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated
hereby and thereby, do not and will not (i) violate any Order
applicable to or binding on the Company or its assets; (ii)
violate any statute, law, ordinance, rule, regulation or judicial
decision ("Law"); (iii) violate or conflict with, result in a
breach of, constitute a default (or an event which with the
passage of time or the giving of notice, or both, would constitute
a default) under, permit cancellation of, accelerate the
performance required by, or result in the creation of any Lien
upon any of the
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Company's assets under, any contract or other arrangement of any
kind or character to which the Company is a party or by which the
Company or any of its assets are bound; (iv) permit the
acceleration of the maturity of any indebtedness of the Company,
or any indebtedness secured by any of the Company's assets; or (v)
violate or conflict with any provision of the Company's Articles
of Incorporation or Bylaws.
2.3 CAPITALIZATION
(a) The authorized capital stock of the Company
consists of (i) 150,000,000 shares of Common Stock, (ii)
10,000,000 shares of Special Common Stock, $0.01 par value, and
(iii) 10,000,000 shares of preferred stock, $0.01 par value. As
of November 13, 1997, there were 23,256,277 shares of Common Stock
issued and outstanding, and 2,500,000 shares of Class B Non-voting
Common Stock, par value $0.01 issued and outstanding.
(b) No shares of the Company's stock are entitled to
preemptive rights. Except as disclosed in the Company's reports
filed with the Securities and Exchange Commission ("SEC") under
the Securities Exchange Act of 1934 ("Regency Exchange Act
Reports"), in the Articles of Incorporation relating to the Class
B Non-voting Common Stock, or on Schedule 2.3(b), there are no
outstanding options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock
of the Company or any of its subsidiaries, or contracts or other
arrangements by which the Company or any of its subsidiaries is or
may become bound to issue additional shares of capital stock of
the Company or any of its subsidiaries. The Company has furnished
to Investor true and correct copies of the Articles of
Incorporation and the Company's Bylaws, as in effect on the date
hereof.
(c) Except as set forth on Schedule 2.3(c), the Company
has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any of its capital stock or any interest therein
or to pay any dividend or make any other distribution in respect
thereof.
(d) Except for the agreements listed on Schedule
2.3(d), the Company has no knowledge of any voting agreements,
voting trusts, stockholders' agreement, proxies or other
agreements or understandings that are currently in effect or that
are currently contemplated with respect to the voting of any
capital stock of the Company.
(e) All of the outstanding securities of the Company
were issued in compliance with all applicable federal and state
securities laws.
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2.4 VALID ISSUANCE OF SHARES
The Special Purchase Shares which are being issued
hereunder, when issued and delivered in accordance with the terms
hereof for the consideration expressed herein, will be duly and
validly issued, fully paid and nonassessable and, based upon the
representations of Investor in this Agreement, will be issued in
compliance with all applicable federal and state securities laws.
2.5 REGENCY EXCHANGE ACT REPORTS
(a) Since November 5, 1993, the Company has timely
filed all the Regency Exchange Act Reports. As of their
respective dates, (i) the Regency Exchange Act Reports complied in
all material respects with the requirements of the Exchange Act
and the rules and regulations of the SEC promulgated thereunder
applicable to the Regency Exchange Act Reports, and (ii) no
Regency Exchange Act Report contained any untrue statement of
material fact or omitted a material fact necessary to make the
statements contained therein, in light of the circumstances under
which they were made, not misleading.
(b) The financial statements of the Company included in
the Regency Exchange Act Reports comply as to form in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except
(i) as may be otherwise indicated in such financial statements or
the notes thereto or (ii) in the case of unaudited interim
statements, to the extent they may not include footnotes or may be
condensed or summary statements) and on that basis present fairly
in all material respects the consolidated financial position and
assets and Liabilities of the entities included therein (including
the Company's subsidiaries) as going concerns, and the results of
the operations of such entities and changes in their financial
position for the periods covered thereby and as of the dates
thereof. Such financial statements are in accordance with the
books and records of the entities included therein (including the
Company's subsidiaries), do not reflect any transactions which are
not bona fide transactions and do not contain any untrue
statements of a material fact or omit to state any material fact
necessary to make the statements contained therein, in light of
the circumstances in which they were made, not misleading. Such
financial statements make full and adequate disclosure of, and
provision for all material Liabilities of the entities included
therein (including the Company's subsidiaries) as of the dates
thereof. Except as set forth in the balance sheets included in
the Regency Exchange Act Reports, there are no Liabilities
(including "off-balance sheet" Liabilities), whether due or to
become due, which have had or are reasonably likely to have a
Material Adverse Effect.
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2.6 PERMITS
The Company holds all licenses, certificates, permits,
franchises, rights, variances, interim permits, approvals,
authorizations or consents, whether federal, state, local or
foreign, which are currently necessary for the lawful operation of
the Company's business, except for those the absence of which
would not cause and would not be reasonably expected to cause a
Material Adverse Effect on the Company.
2.7 NO ADVERSE CHANGE
Since June 30, 1997, there has not been (i) any change
in the Company which would cause or reasonably be expected to
result in a Material Adverse Effect on the Company, (ii) any
material loss, damage or destruction to any of the Company's
assets (whether or not covered by insurance) or any other event or
condition which has had or could have a Material Adverse Effect on
the Company, (iii) any contract or other transaction entered into
by the Company relating to, or otherwise affecting in any way, its
business or the operation thereof, other than in the ordinary
course of business, (iv) any sale, lease or other transfer or
disposition of any of the Company's assets, or any cancellation of
any debts or claim of the Company, except in the ordinary course
of business, and (v) any changes in the accounting systems,
policies or practices of the Company. Since June 30, 1997, the
Company's business has been conducted in all material respects
only in the ordinary course and consistent with past practices.
2.8 NO DEFAULTS OR VIOLATIONS
Except to the extent any default or non-compliance does
not cause or is not reasonably expected to cause a Material
Adverse Effect as to the Company: (a) the Company has not
materially breached any provision of, nor is it in material
default under the terms of, any lease, contract or commitment to
which it is a party or under which it has any rights or by which
it is bound or which relates to its business or its assets and, to
the Company's knowledge, no other party to any such lease,
contract, or other commitment has breached such lease, contract or
commitment or is in default thereunder (nor has the Company waived
any such default) in any material respect, and no event has
occurred and no condition or state of facts exists which with the
passage of time or the giving of notice, or both, would constitute
such a default or breach by the Company, or to the Company's
knowledge, by any such other party, or give right to an automatic
termination or the right of discretionary termination thereof; (b)
the Company is in material compliance with, and no Liability or
material violation exists under, any Law or order applicable in
any way to the Company; and (c) no notice from any Government
Authority has been received by the Company claiming any violation
of any Law (including any building, zone or other ordinance) or
order, or requiring any work, construction or expenditure.
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2.9 LITIGATION
Except for certain matters which, to the Company's
knowledge, do not have a Material Adverse Effect on the Company or
the transactions contemplated by this Agreement, there is no
litigation pending or, to the Company's knowledge, threatened
against any of the properties or businesses of the Company or
relating to its assets or the transactions contemplated by this
Agreement. Neither the Company nor any of its assets are subject
to any order which has had or could have had a Material Adverse
Effect on the Company.
2.10 TITLE TO PROPERTIES; LEASEHOLD INTERESTS
The Company has good and marketable title to each of the
properties and assets owned by it. Certain real and personal
property used by the Company in the conduct of its business is
held under lease, and, to the Company's knowledge, there is no
pending or threatened Claim by any lessor of any such property to
terminate any such lease. None of the properties owned or leased
by the Company is subject to any Liens which could reasonably be
expected to materially and adversely affect the assets,
properties, liabilities, business, affairs, results of operations,
condition (financial or otherwise) or prospects of the Company.
Each lease or agreement to which the Company is a party under
which it is the lessee of any property, real or personal, is a
valid and subsisting agreement without any material default of the
Company thereunder and, to the best of the Company's knowledge,
without any material default thereunder of any other party
thereto. No event has occurred and is continuing which, with due
notice or lapse of time or both, would constitute a default or
event of default by the Company under any such lease or agreement
or, to the best of the Company's knowledge, by any party thereto,
except for such defaults that would not individually or in the
aggregate have a Material Adverse Effect on the Company. The
Company's possession of such property has not been disturbed and,
to the best of the Company's knowledge, no claim has been asserted
against it adverse to its rights in such leasehold interests.
2.11 ENVIRONMENTAL MATTERS
For purposes of this Section 2.11, the term "Regency"
means the Company and its Affiliates, and the term "Regency
Property" means a property owned or leased by the Company or its
Affiliates and any property in which the Company or its Affiliates
has an interest. The parties acknowledge that Regency does not
possess any expertise with regard to Materials of Environmental
Concern and, accordingly, the following representations and
warranties are based exclusively on reports prepared by
environmental consultants to Regency.
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(a) Except for those matters described in Schedule 2.11
with respect to ▇▇▇▇▇▇ Plaza, Regency is and each Regency Property
is not presently in violation of any applicable Environmental Law;
(b) Regency has not stored or used any Materials of
Environmental Concern at any Regency Property;
(c) Regency has not received any notice, complaint,
warning letter or notice of violation from any Government
Authority or any other person that Regency is in violation of any
Environmental Law or environmental permit or that they are
responsible (or potentially responsible) for the assessment or
remediation of any release of any Material of Environmental
Concern at, on or beneath any Regency Property;
(d) Regency is not the subject of any actual or
threatened federal, state, local or private litigation involving a
claim of liability or a demand for damages arising out of
violation of any Environmental Law or from the release or
threatened release of any Material of Environmental Concern;
(e) Except for those matters described in Schedule 2.11
with respect to ▇▇▇▇▇▇ Plaza, Regency has timely filed all reports
required by any applicable Environmental Law and has generated and
maintained all data, documentation, and records required under any
Environmental Law;
(f) Except for those matters described in Schedule
2.11, which, to Regency's knowledge, do not have a Material
Adverse Effect on Regency, Regency is not aware of any release or
threatened release of a Material of Environmental Concern, the
presence of any current or former drycleaning facility, the
presence of any current or former storage tanks, the presence of
any asbestos containing material, or the presence of any condition
or circumstance which could subject the owner or operator of any
Regency Property to liability or claims under the Environmental
Laws or any private cause of action arising out of an
environmental condition;
(g) No Regency Property is subject to, and Regency has
no knowledge of any imminent restriction on the ownership,
occupancy, use, or transferability of any Regency Property; or
(h) To Regency's knowledge, there are no conditions or
circumstances at any Regency Property which pose a risk to the
environment or the health or safety of any Person.
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2.12 TAXES
The Company has filed all federal, state, local and other
Tax returns and reports (except for foreign returns and reports
the failure to file which has not and is not reasonably expected
to cause a Material Adverse Effect), and any other material
returns and reports with any Government Authority, required to be
filed by it. The Company has paid or caused to be paid all Taxes
that are due and payable, except those which are being contested by
it in good faith by appropriate proceedings and in respect of
which adequate reserves are being maintained on its books in
accordance with GAAP consistently applied. The Company does not
have any material Liabilities for Taxes other than those incurred
in the ordinary course of business and in respect of which
adequate reserves are being maintained by it in accordance with
GAAP consistently applied. Federal and state income Tax returns
for the Company have not been audited by the IRS or any state
authority. No deficiency assessment with respect to or proposed
adjustment of the Company's federal, state, local or other Tax
returns is pending or, to the best of the Company's knowledge,
threatened. There is no Tax Lien, whether imposed by any federal,
stare, local or other tax authority outstanding against the
assets, properties or business of the Company. There are no
applicable Taxes, fees or other governmental charges payable by
the Company in connection with the execution and delivery of this
Agreement.
2.13 EMPLOYEES: ERISA
The Company has good relationships with its employees
and has not had and does not expect any substantial labor
problems. The Company does not have any knowledge as to any
intentions of any key employee or any group of employees to leave
the employ of the Company. Other than as disclosed in the Regency
Exchange Act Reports and materials provided to Investor, the
Company has not established, sponsored, maintained, made any
contributions to or been obligated by law to establish, maintain,
sponsor or make any contributions to any "employee pension benefit
plan" or "employee welfare benefit plan" (as such terms are
defined in ERISA), including, without limitation, any "multi-
employer plan." The Company has complied in all material respects
with all applicable Laws relating to the employment of labor,
including provisions relating to wages, hours, equal opportunity,
collective bargaining and the payment of Social Security and other
Taxes, and with ERISA.
2.14 ACCURACY OF STATEMENTS
To the Company's knowledge, neither this Agreement nor
any document, instrument, schedule, exhibit, statement, list,
certificate or other information furnished or to be furnished by
or on behalf of the Company to Investor in connection with this
Agreement or any of the transactions contemplated hereby contains
or will contain any untrue statement of a material fact or omits
or will omit to state a material fact necessary
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to make the statements contained herein or therein, in light of
the circumstances in which they are made, not misleading.
2.15 TAX MATTERS; REIT AND PARTNERSHIP STATUS
(a) The Company (i) intends in its federal income tax
return for the tax year that will end on December 31, 1997, to
elect to be taxed as a REIT within the meaning of Section 856 of
the Code, and has complied (or will comply) with all applicable
provisions of the Code relating to a REIT for 1997, (ii) has
operated, and intends to continue to operate, in such a manner as
to qualify as a REIT for 1997, (iii) has not taken or omitted to
take any action which would reasonably be expected to result in a
challenge to its status as a REIT, and, to the Company's
knowledge, no such challenge is pending or threatened, and (iv) to
the Company's knowledge, and assuming the accuracy of Subscriber's
representation in Section 3.7, 3.8, will not be rendered unable to
qualify as a REIT for federal income tax purposes as a consequence
of the transactions contemplated hereby.
(b) The Company was eligible to and did validly elect
to be taxed as a REIT for federal income tax purposes for calendar
years 1993, 1994, 1995 and 1996. Each Partnership and each
subsidiary of the Company organized as a partnership (and any
other subsidiary of the Company that files tax returns as a
partnership for federal income tax purposes) was and continues to
be classified as a partnership for federal income tax purposes.
(c) For purposes of this Section 2.15, no
representation set forth in Section 2.15 shall be deemed to be
untrue unless such untruths would, individually or in the
aggregate, be reasonably expected to result in a Material Adverse
Effect.
2.16 COMPLIANCE WITH ORGANIZATION DOCUMENTS
Neither the Company nor any of its Subsidiaries is in
default under or in violation of any provision of its charter,
bylaws or partnership agreement (or equivalent organizational
documents), except for such defaults or violations which would
not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
2.17 FLORIDA TAKEOVER LAW
The terms of Sections 607.0901 and 607.0902 of the
Florida Business Corporation Act will not apply to Subscriber, the
Subscription or any other transaction contemplated hereby.
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2.18 BROKERS OR FINDERS
No agent, broker, investment banker or other firm or
person, including any of the foregoing that is an Affiliate of the
Company, is or will be entitled to any broker's or finder's fee or
any other commission or similar fee from the Company in connection
with this Agreement or any of the transactions contemplated hereby
for which Subscriber will be responsible.
2.19 SHAREHOLDER APPROVAL
The issuance of Company Common Stock pursuant to this
Agreement has been approved by the requisite vote of the Company's
Shareholders.
2.20 AMENDED COMPANY CHARTER; MODIFICATION OF OWNERSHIP LIMIT
The amendment to the Company Charter in the form
attached as Exhibit E to the Stock Purchase Agreement has been
approved by the requisite vote of holders of Company Common Stock,
all as required by and in accordance with the Company Charter, and
duly filed with the Secretary of State of Florida and is full
force and effect.
2.21 CONSENTS
Company has obtained the consents required by Section
7.1(d) of the Stock Purchase Agreement (other than that of Fortis
Benefits Insurance Co., which was waived by the Parties).
2.22 HSR ACT
No action has been instituted by the United States
Department of Justice or the United States Federal Trade
Commission challenging the consummation of the transactions
contemplated by the Stock Purchase Agreement or the transactions
contemplated hereby, and no filing under the HSR Act is required
with respect to the transactions contemplated thereby or hereby.
2.23 RELATED TENANT LIMIT WAIVER
The Board of Directors of the Company has granted a
waiver of the Related Tenant Limit (as such term is defined in the
Company Charter) to Investor.
12
2.24 NO INJUNCTION
There is no order, decree or injunction of a court or
agency of competent jurisdiction which enjoins or prohibits
consummation of the transactions contemplated hereby and there are
no pending Actions which would reasonably be expected to have a
material adverse effect on the ability of the Company to
consummate the transactions contemplated hereby or to issue the
Special Purchase Shares.
2.25 DOMESTICALLY-CONTROLLED REIT
To the best of the Company's knowledge, the Company is,
and after giving effect to the Closing will be, a "domestically-
controlled" REIT within the meaning of Code Section 897(h)(4)(B).
3. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER AND THE ADVANCING
PARTY
Subscriber and the Advancing Party hereby jointly and
severally represent and warrant to the Company as follows:
3.1 ORGANIZATION AND STANDING
Each of Subscriber and the Advancing Party is a
corporation duly incorporated, validly existing and in good
standing under the laws of Luxembourg. Subscriber has all
requisite corporate power and authority to own, operate, lease and
encumber its properties and carry on its business as now
conducted, and to enter into this Agreement and to perform its
obligations hereunder.
3.2 DUE AUTHORIZATION
The execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary
corporate action on the part of Subscriber and the Advancing
Party. This Agreement has been duly executed and delivered by
each of Subscriber and the Advancing Party for itself and
constitutes the valid and legally binding obligations of
Subscriber and the Advancing party, enforceable against Subscriber
or the Advancing Party, as the case may be, in accordance with its
terms, subject to applicable bankruptcy, insolvency, moratorium or
other similar laws relating to creditors' rights or general
principles of equity.
3.3 CONFLICTING AGREEMENTS AND OTHER MATTERS
Neither the execution and delivery of this Agreement nor
the performance by Subscriber or the Advancing Party, as the case
may be, of its obligations hereunder will conflict with, result in
a breach of the terms, conditions or provisions of, constitute
13
a default under, result in the creation of any mortgage, security
interest, encumbrance, lien or charge of any kind upon any of the
properties or assets of Subscriber or the Advancing Party, as the
case may be, pursuant to, or require any consent, approval or
other action by or any notice to or filing with any Government
Authority pursuant to, the organization documents or agreements of
Subscriber or the Advancing Party, as the case may be, or any
agreement, instrument, order, judgment, decree, statute, law, rule
or regulation by which Subscriber or the Advancing Party, as the
case may be, is bound, except for filings after the Closing under
Section 13(d) of the Exchange Act.
3.4 SOURCE OF FUNDS
At the Closing, the Advancing Party shall have available
and shall advance to Subscriber all of the funds necessary to
satisfy Subscriber's obligations hereunder and to pay any related
fees and expenses in connection with the foregoing.
3.5 BROKERS OR FINDERS
No agent, broker, investment banker or other firm or
person, including any of the foregoing that is an Affiliate of
Subscriber or the Advancing Party, is or will be entitled to any
broker's or finder's fee or any other commission or similar fee
from Subscriber or the Advancing Party in connection with this
Agreement or the transactions contemplated hereby for which the
Company will be responsible.
3.6 REIT QUALIFICATION MATTERS
To Subscriber's knowledge, no person which would be
treated as an "individual" for purposes of Section 542(a)(2) of
the Code (as modified by Section 856(h) of the Code) owns or would
be considered to own (taking into account the ownership
attribution rules under Section 544 of the Code, as modified by
Section 856(h) of the Code) in excess of 9.8% of the value of the
outstanding equity interest in Subscriber or the Advancing Party.
3.7 INVESTMENT COMPANY MATTERS
Neither the Advancing Party nor Subscriber is, and after
giving effect to the purchase of the Special Purchase Shares,
neither will be, an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended.
3.8 INVESTMENT REPRESENTATIONS
Investor is acquiring the Special Purchase Shares for
investment purposes and not with a view to the distribution
thereof. Investor acknowledges and agrees that the Special
Purchase Shares may only be sold or otherwise disposed of in one
or more
14
transactions registered under the Security Act and, where
applicable, relevant state securities laws or as to which an
exemption from the registration requirements of the Securities Act
and, where applicable, such state securities laws is applicable,
and Investor agrees that the Certificates representing such
Company Common Stock will bear a legend to that effect.
3.9 NO SUBSTANTIAL INVESTMENT IN COMPANY'S TENANTS
As of the date hereof, Investor does not own, directly
or indirectly, an interest in a tenant listed on Schedule 3.9
attached hereto, which interest is equal to or greater than (i)
10% of the combined voting power of all classes of stock of such
tenant, (ii) 10% of the total number of shares in all classes of
stock of such tenant, or (iii) if such tenant is not a
corporation, 10% of the assets or net profits of such tenant. For
purposes of this section, the rules prescribed by Section 318(a)
of the Code, for determining the ownership of stock, as modified
by Section 856(d)(5) of the Code, shall apply in determining
direct and indirect ownership of stock, assets, or net profits.
4. SURVIVAL; INDEMNIFICATION
4.1 SURVIVAL
All representations, warranties, covenants and
agreements of the parties contained herein, including indemnity or
indemnification agreements contained herein, shall survive the
Closing until the first anniversary of the Closing. No Action or
proceeding may be brought with respect to any of the
representations, warranties, covenants or agreements unless
written notice thereof, setting forth in reasonable details the
claimed misrepresentations or breach of warranty or breach of
covenant or agreement, shall have been delivered to the party
alleged to have breached such representation or warranty or such
covenant or agreement prior to the first anniversary of the
Closing. Those covenants or agreements that contemplate or may
involve actions to be taken or obligations in effect after the
Closing shall survive in accordance with their terms.
4.2 INDEMNIFICATION BY SUBSCRIBER OR THE COMPANY
(a) Subject to Section 4.1, from and after the Closing,
Subscriber shall indemnify and hold harmless the Company, its
successors and assigns, from and against any and all Loss and
Expenses suffered, directly or indirectly, by the Company by
reason of, or arising out of (i) any breach as of the date made or
deemed made or required to be true of any representations or
warranty made by Subscriber in or pursuant to this Agreement, or
(ii) any failure by Subscriber to perform or fulfill any of its
covenants or agreements set forth herein. Notwithstanding any
other provision of this Agreement to
15
the contrary, in no event shall Loss and Expenses include a
party's incidental or consequential damages.
(b) Subject to Section 4.1, from and after the Closing,
the Company shall indemnify and hold harmless Subscriber, its
successors and assigns, from and against any and all Loss and
Expenses, suffered, directly or indirectly, by Subscriber by
reason of, or arising out of, any breach as of the date made or
deemed made or required to be true of any representations or
warranty made by the Company in or pursuant to this Agreement and
any statements made in any certificate delivered pursuant to this
Agreement, or (ii) any failure by the Company to perform or
fulfill any of its covenants or agreements set forth herein.
Notwithstanding any other provision of this Agreement to the
contrary, in no event shall Loss and Expenses include a party's
incidental or consequential damages.
(c) Notwithstanding the foregoing, (i) neither
Subscriber nor the Company shall be responsible for any Loss and
Expenses as provided by paragraphs (a) and (b), respectively, of
this Section 4.2, until the cumulative aggregate amount of such
Loss and Expenses suffered by Subscriber or the Company, as the
case may be, exceeds $500,000, in which case Subscriber or the
Company, as the case may be, shall then be liable for all such
Loss and Expenses, and (ii) the cumulative aggregate indemnity
obligations of each of Subscriber and the Company under this
Section 4.2 shall in no event exceed the Purchase Price. Except
with respect to third-party claims being defended in good faith or
claims for indemnification with respect to which there exists a
good faith dispute, the indemnifying party shall satisfy its
obligations hereunder within 30 days of receipt of a notice of
claim under this Section 4.
4.3 THIRD-PARTY CLAIMS
If a claim by a third party is made against Subscriber
or the Advancing Party or the Company (each, an "Indemnified
Party") and if such Indemnified Party intends to seek indemnity
with respect thereto under this Section 4, such Indemnified Party
shall promptly notify the indemnifying party in writing of such
claims setting forth such claims in reasonable detail. The
indemnifying party shall have 20 days after receipt of such notice
to undertake, through counsel of its own choosing and at its own
expense, the settlement or defense thereof, and the Indemnified
Party shall cooperate with it in connection therewith; provided,
however, that the Indemnified Party may participate in such
settlement or defense through counsel chosen by such Indemnified
Party, provided that the fees and expenses of such counsel shall
be borne by such Indemnified Party. The Indemnified Party shall
not pay or settle any claim which the indemnifying party is
contesting. Notwithstanding the foregoing, the Indemnified Party
shall have the right to pay or settle any such claim, provided
that in such event it shall waive any right to indemnity therefor
by the indemnifying party. If the indemnifying party does not
notify the Indemnified Party within 20 days after the receipt of
the Indemnified Party's notice of a claim of indemnity hereunder
that it elects to undertake the defense thereof, the
16
Indemnified Party shall have the right to contest, settle or
compromise the claim but shall not thereby waive any right to
indemnity therefor pursuant to this Agreement.
5. MISCELLANEOUS
5.1 COUNTERPARTS
This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same
agreement, and shall be effective when one or more counterparts
have been signed by each party hereto and delivered to the other
party. Copies of executed counterparts transmitted by telecopy,
telefax or other electronic transmission service shall be
considered original executed counterparts for purposes of this
Section, provided receipt of copies of such counterparts is
confirmed.
5.2 GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REFERENCE
TO THE CHOICE OF LAW PRINCIPLES THEREOF.
5.3 ENTIRE AGREEMENT
This Agreement contains the entire agreement between the
parties hereto with respect to the subject matter hereof and there
are no agreements, understandings, representations or warranties
between the parties other than those set forth or referred to
herein. This Agreement is not intended to confer upon any person
not a party hereto (and their successors and assigns) any rights
or remedies hereunder.
5.4 NOTICES
All notices and other communications hereunder shall be
sufficiently given for all purposes hereunder if in writing and
delivered personally, sent by documented overnight delivery
service or, to the extent receipt is confirmed, telecopy, telefax
or other electronic transmission service to the appropriate
address or numbers as set forth below. Notices to the Company
shall be addressed to:
Regency Realty Corporation
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
17
with a copy (which shall not constitute notice) to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ Building
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. Commander, III, Esq.
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Notices to Subscriber or the Advancing Party shall be
addressed to:
Security Capital Holdings S.A.
▇▇, ▇▇▇▇▇ ▇'▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
Telecopy Number: (▇▇▇) ▇▇▇▇-▇▇▇▇
with a copy (which shall not constitute notice) to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
5.5 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and insure to the
benefit of the parties hereto and their respective successors.
Neither Subscriber nor the Advancing Party shall be permitted to
assign any of its rights hereunder to any third party; provided,
however, that Subscriber and the Advancing Party may assign all
(but not less than all) of their rights hereunder to any other
Investor so long as such other Investor agrees in writing, in a
form reasonably acceptable to the Company, to be bound by all the
terms and conditions of this Agreement.
5.6 HEADINGS
The Section and other headings contained in this
Agreement are inserted for convenience of reference only and shall
not affect the meaning or interpretation of this Agreement.
18
5.7 AMENDMENTS AND WAIVERS
This Agreement may not be modified or amended except by
an instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment is
sought. Any party hereto may, only by an instrument in writing,
waive compliance by the other parties hereto with any term or
provision hereof on the part of such other party hereto to be
performed or complied with. The waiver by any party hereto of a
breach of any term or provision hereof shall not be construed as a
waiver of any subsequent breach.
5.8 EXPENSES
Except as set forth in this Agreement, whether or not
the Closing is consummated, all legal and other costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such
costs and expenses.
5.9 SEVERABILITY
Any provision hereof which is invalid or unenforceable
shall be ineffective to the extent of such invalidity or
unenforceability, without affecting in any way the remaining
provisions hereof.
5.10 FURTHER ASSURANCES
The Company, Subscriber and the Advancing Party agree
that, from time to time, whether before, at or after the Closing,
each of them will execute and deliver such further instruments of
conveyance and transfer and take such other action as may be
necessary to carry out the purposes and intents hereof.
5.11 JOINT AND SEVERAL LIABILITY; GUARANTY
The obligations and liability of Subscriber and the
Advancing Party under or in connection with this Agreement are
joint and several. The Advancing Party hereby unconditionally and
irrevocably guarantees and agrees to be responsible for the
payment and performance of all of Subscriber's obligations
hereunder.
19
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement or have caused this Agreement to be duly
executed on their behalf, as of the day and year first above
written.
REGENCY REALTY CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
SECURITY CAPITAL U.S. REALTY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
20
EXHIBIT A
Shares Total
Issue Or Units Common Class B Total Total Equity
Date Issued $/Share Purpose Shares Common Equity Units & Units
----- -------- ------- -------- ------ ------- ------ ----- -------
10-Jun-96 Signing US Realty Agree 6,849,453 2,975,468 9,824,921 9,327 9,934,248
29-Jun-96 94,282 $20.330 Schmickler Conversion 6,943,735 2,975,468 9,919,203 9,327 9,928,530
01-Jul-96 338 Employee Stock Grant 6,944,073 2,975,468 9,919,541 9,327 9,928,868
01-Jul-96 20,515 RRC Georgia OP LP 6,964,588 2,975,468 9,940,056 28,846 9,968,902
10-Jul-96 830 $20.500 401k match 6,944,903 2,975,468 9,920,371 28,846 9,949,217
10-Jul-96 934,400 $17.625 US Realty #1 7,879,303 2,975,468 10,854,771 28,846 10,883,617
18-Jul-96 2,049 $20.500 Directors 7,881,352 2,975,468 10,856,820 28,846 10,885,666
18-Jul-96 402 $15.875 401k over $150,000 7,881,754 2,975,468 10,857,222 28,846 10,886,068
18-Jul-96 929 $16.375 401k over $150,000 7,882,683 2,975,468 10,858,151 28,846 10,886,997
29-Aug-96 514 $21.250 DRIP 7,882,268 2,975,468 10,857,736 28,846 10,886,582
02-Oct-96 208 $22.375 Employee Stock Grant 7,882,476 2,975,468 10,857,944 28,846 10,886,790
02-Oct-96 26 $22.375 Employee Stock Grant 7,882,502 2,975,468 10,857,970 28,846 10,886,816
16-Oct-96 2,313 $22.375 Directors 7,884,789 2,975,468 10,860,257 28,846 10,889,103
16-Oct-96 940 $22.375 401k match 7,885,729 2,975,468 10,861,197 28,846 10,890,043
01-Dec-96 540 $24.500 DRIP 7,886,269 2,975,468 10,861,737 28,846 10,890,583
05-Dec-96 3 $24.000 Employee Stock Grant 7,886,272 2,975,468 10,861,740 28,846 10,890,586
31-Dec-96 2,717,400 $17.625 US Realty #2 10,603,672 2,975,468 13,579,140 28,846 13,607,986
31-Dec-96 8,327 $19.820 Directors' Purchase and M 10,611,999 2,975,468 13,587,467 28,846 13,616,313
31-Dec-96 1,952 $23.060 Same- ▇. ▇▇▇▇▇▇ 10,613,951 2,975,468 13,589,419 28,846 13,618,265
31-Dec-96 (1) $19.820 Rounding Correction 10,611,998 2,975,468 13,587,466 28,846 13,616,312
17-Jan-97 104 $23.430 Employee Stock Grant 10,612,102 2,975,468 13,587,570 28,846 13,616,416
17-Jan-97 679 $23.430 401k Match 10,612,781 2,975,468 13,588,249 28,846 13,617,095
17-Jan-97 29,014 $26.250 Restricted Stock 10,641,795 2,975,468 13,617,263 28,846 13,646,109
17-Jan-97 2,043 $19.820 401k match over $150k 10,643,838 2,975,468 13,619,306 28,846 13,648,152
17-Jan-97 2,207 $23.430 Directors/JWS 10,646,045 2,975,468 13,621,513 28,846 13,650,359
23-Jan-97 13,910 $19.820 401k match Profit Sharing 10,659,955 2,975,468 13,635,423 28,846 13,664,269
10-Feb-97 22,978 $19.820 AIM Plan 10,682,933 2,975,468 13,658,401 28,846 13,687,247
10-Feb-97 5,622 $19.820 Mid Mgmt Performance P 10,688,555 2,975,468 13,664,023 28,846 13,692,869
01-Mar-97 746 $27.000 DRIP Plan 10,689,301 2,975,468 13,664,769 28,846 13,693,615
03-Mar-97 1,475,178 $17.625 US Realty 12,164,479 2,975,468 15,139,947 28,846 15,168,793
07-Mar-97 155,797 $17.625 Branch Reorg Shares 12,320,276 2,975,468 15,295,744 28,846 15,324,590
07-Mar-97 3,572,427 $17.625 Branch Partnership Units 12,320,276 2,975,468 15,295,744 3,601,273 18,897,017
16-Apr-97 260 $26.750 1st Q Stock Grants 12,320,536 2,975,468 15,296,004 3,601,273 18,897,277
16-Apr-97 624 $26.750 1996 Excess Profit Sharin 12,321,160 2,975,468 15,296,628 3,601,273 18,897,901
16-Apr-97 1,742 $19.820 Directors SPP 12,322,902 2,975,468 15,298,370 3,601,273 18,899,643
16-Apr-97 1,940 $19.820 Directors/JWS 12,324,842 2,975,468 15,300,310 3,601,273 18,901,583
21-Apr-97 10 $19.820 Stock Grants 12,324,852 2,975,468 15,300,320 3,601,273 18,901,593
12-May-97 1,726 $26.670 401k Match 12,326,578 2,975,468 15,302,046 3,601,273 18,903,319
12-May-97 34,833 $26.875 Options Net 12,361,411 2,975,468 15,336,879 3,601,273 18,938,152
28-May-97 2,000 $19.250 Options ▇▇▇▇▇▇▇ 12,363,411 2,975,468 15,338,879 3,601,273 18,940,152
29-May-97 707 $26.375 Options Net 12,364,118 2,975,468 15,339,586 3,601,273 18,940,859
12-Jun-97 3,027,080 $22.125 Branch Conversion 15,391,198 2,975,468 18,366,666 574,193 18,940,859
26-Jun-97 2,372,422 $17.625 US Realty Final 17,763,620 2,975,468 20,739,088 574,193 21,313,281
16-Jul-97 2,415,000 $27.250 Follow On 20,178,620 2,975,468 23,154,088 574,193 23,728,281
16-Jul-97 1,785,000 $27.250 Follow On-US Realty 21,963,620 2,975,468 24,939,088 574,193 25,513,281
22-Jul-97 78 $27.250 Employee Stock Grant 21,963,698 2,975,468 24,939,166 574,193 25,513,359
22-Jul-97 6,113 $26.640 Directors 21,969,811 2,975,468 24,945,279 574,193 25,519,472
22-Jul-97 1,088 $26.640 401k match 21,970,899 2,975,468 24,946,367 574,193 25,520,560
11-Aug-97 129,800 $27.250 Follow On (Shoe) 22,100,699 2,975,468 25,076,167 574,193 25,650,360
11-Aug-97 95,939 $27.250 Follow On-US Realty (Sh 22,196,638 2,975,468 25,172,106 574,193 25,746,299
19-Aug-97 375 $26.640 Director Match 22,197,013 2,975,468 25,172,481 574,193 25,746,674
28-Aug-97 777 $26.000 DRIP 22,197,790 2,975,468 25,173,258 574,193 25,747,451
28-Aug-97 1,050,000 $22.125 US Realty Branch 23,247,790 2,975,468 26,223,258 574,193 26,797,451
30-Sep-97 23,247,790 2,975,468 26,223,258 574,195 26,800,360
US REALTY ANALYSIS INCLUDING ALL POTENTIAL US REALTY ANALYSIS FOR SHARES < $22.125
---------------------------------------------------------------- -----------------------------------------------
POTENTIAL CUMULATIVE POTENTIAL < $22.125 CUMULATIVE
--------------------------------- --------------------------- ------------------- ---------------------------
SHARES COST COST/SHARE SHARES COST $/SHARE SHARES COST SHARES COST $/SHARE
------ ---- ---------- ------ ---- ------- ------ ---- ------ ---- -------
77.73% 77.73%
▇▇ ▇▇ ▇▇ ▇▇ ▇▇
▇▇ ▇▇ ▇▇ ▇▇ ▇▇
▇▇ ▇▇ ▇▇ NA NA
NA NA NA NA NA
NA NA NA NA NA NA
1,593 $32,650 $20.50 1,593 $32,650 $20.50 1,593 $32,650 1,593 $32,650 $20.50
NA NA NA 1,593 $32,650 $20.50 NA NA 1,593 $32,650 $20.50
NA NA NA 1,593 $32,650 $20.50 NA NA 1,593 $32,650 $20.50
400 $8,490 $21.25 1,992 $41,140 $20.65 400 $8,490 1,992 $41,140 $20.65
162 $3,618 $22.38 2,154 $44,758 $20.78 0 $0 1,992 $41,140 $20.65
20 $452 $22.38 2,174 $45,210 $20.79 0 $0 1,992 $41,140 $20.65
1,798 $40,228 $22.38 3,952 $84,986 $21.51 0 $0 1,992 $41,140 $20.65
NA NA NA 3,952 $84,986 $21.51 NA NA 1,992 $41,140 $20.65
420 $10,284 $24.50 4,372 $95,269 $21.79 0 $0 1,992 $41,140 $20.65
2 $56 $24.00 4,374 $95,325 $21.79 0 $0 1,992 $41,140 $20.65
NA NA NA 4,374 $95,325 $21.79 NA NA 1,992 $41,140 $20.65
6,473 $128,286 $19.82 10,846 $223,612 $20.62 6,473 $128,286 8,465 $169,427 $20.02
1,517 $34,989 $23.06 12,364 $258,600 $20.92 0 $0 8,465 $169,427 $20.02
(1) ($15) $19.82 10,846 $223,596 $20.62 NA NA 8,465 $169,427 $20.02
81 $1,894 $23.43 10,927 $225,490 $20.64 0 $0 8,465 $169,427 $20.02
NA NA NA 10,927 $225,490 $20.64 NA NA 8,465 $169,427 $20.02
NA NA NA 10,927 $225,490 $20.64 NA NA 8,465 $169,427 $20.02
1,588 $31,475 $19.82 12,515 $256,965 $20.53 8,465 $169,427 $20.02
1,716 $40,194 $23.43 14,230 $297,159 $20.88 0 $0 8,465 $169,427 $20.02
NA NA NA 14,230 $297,159 $20.88 NA NA 8,465 $169,427 $20.02
17,861 $354,001 $19.82 32,091 $651,160 $20.29 17,861 $354,001 26,326 $523,428 $19.88
4,370 $86,613 $19.82 36,461 $737,773 $20.23 4,370 $86,613 30,696 $610,041 $19.87
580 $15,656 $27.00 37,041 $753,430 $20.34 0 $0 30,696 $610,041 $19.87
NA NA NA 37,041 $753,430 $20.34 NA NA 30,696 $610,041 $19.87
NA NA NA 37,041 $753,430 $20.34 NA NA 30,696 $610,041 $19.87
NA NA NA 37,041 $753,430 $20.34 NA NA 30,696 $610,041 $19.87
202 $5,406 $26.75 37,243 $758,836 $20.38 0 $0 30,696 $610,041 $19.87
485 $12,975 $26.75 37,728 $771,810 $20.46 0 $0 30,696 $610,041 $19.87
1,354 $26,837 $19.82 39,082 $798,648 $20.44 1,354 $26,837 32,050 $636,878 $19.87
1,508 $29,888 $19.82 40,590 $828,536 $20.41 1,508 $29,888 33,558 $666,766 $19.87
8 $154 $19.82 40,598 $828,690 $20.41 8 $154 33,565 $666,920 $19.87
1,342 $35,781 $26.67 41,939 $864,471 $20.61 0 $0 33,565 $666,920 $19.87
NA NA NA 41,939 $864,471 $20.61 NA NA 33,565 $666,920 $19.87
NA NA NA 41,939 $864,471 $20.61 NA NA 33,565 $666,920 $19.87
NA NA NA 41,939 $864,471 $20.61 NA NA 33,565 $666,920 $19.87
NA NA NA 41,939 $864,471 $20.61 NA NA 33,565 $666,920 $19.87
NA NA NA 41,939 $864,471 $20.61 NA NA 33,565 $666,920 $19.87
NA NA NA 41,939 $864,471 $20.61 NA NA 33,565 $666,920 $19.87
NA NA NA 41,939 $864,471 $20.61 NA NA 33,565 $666,920 $19.87
61 $1,652 $27.25 42,000 $866,123 $20.62 0 $0 33,565 $666,920 $19.87
4,752 $126,583 $26.64 46,751 $992,706 $21.23 0 $0 33,565 $666,920 $19.87
846 $22,529 $26.64 47,597 $1,015,235 $21.33 0 $0 33,565 $666,920 $19.87
NA NA NA 47,597 $1,015,235 $21.33 NA NA 33,565 $666,920 $19.87
NA NA NA 47,597 $1,015,235 $21.33 NA NA 33,565 $666,920 $19.87
291 $7,765 $26.64 47,889 $1,023,001 $21.36 0 $0 33,565 $666,920 $19.87
604 $15,703 $26.00 48,493 $1,038,704 $21.42 0 $0 33,565 $666,920 $19.87
NA NA NA 48,493 $1,038,704 $21.42 NA NA 33,565 $666,920 $19.87
48,493 $1,038,704 $21.42 33,565 $666,920 $19.87
Shaded lines represent excluded issuances. Prior to the initial funding all
issuances were excluded. Issuances related to US Realty, Branch and the
follow on are obviously excluded. Finally, any issuances related to comp
plans in place prior to signing the agreement are excluded (January 17 and
May 12, 28 & 29). Also exclude are 401k issuances related to 1996 contri-
butions.
SCHEDULE 2.3(B)
COMMITMENTS TO ISSUE STOCK
AUTHORIZED
AGREEMENTS TO ISSUE COMMON STOCK SHARES
Dividend Reinvestment and
Stock Purchase Plan 600,000
Non-officer Stock Grant Plan 10,000
401K Profit Sharing Plan 225,000
Officer AIM bonus Plan Determined by
Compensation Committee
Long-Term Omnibus Plan Lesser of 3 million shares
or 12% of Outstanding Fully
Diluted shares at the end of
the most previous year
RRC Operating Partnership Issuance of 28,848 shares
of GA, L.P. in exchange for 28,848 partnership
units
Regency Retail Partnership, L.P Issuance of 545,347 shares in
exchange for 545,347 partnership units
plus up to 1,742,058 shares issuable
pursuant to earnout provisions
Stock Purchase Agreement with Additional shares based upon
Security Capital U.S. Realty and new shares issued by RRC
Security Capital Holdings S.A. subsequent to the Agreement
Class B Common Stockholder 2,975,468 shares
SCHEDULE 2.3(C)
OBLIGATION TO REDEEM
1. RRC Operating Partnership Redemption of 28,848 partnership
of GA., L.P. units
2. Regency Retail Partnership, L.P. Redemption of 543,347
partnership units
3. Class B Common Stockholder Redemption of 2,500,000 shares
of Class B Common Stock
4. Hyde Park Partners, L.P. Redemption of 6,694 partnership
units
SCHEDULE 2.3(D)
VOTING AGREEMENTS
1. Stock Purchase Agreement and Exhibits thereto dated June 11, 1996
by and between Regency Realty Corporation and Security Capital
Holdings, S.A. and Security Capital U.S. Realty.
2. The Regency Group, Inc. Voting Trust
SCHEDULE 2.11
RRC
OCTOBER 30, 1997
ENVIRONMENTAL MATTERS SUMMARY
I. Anastasia Shopping Center:
St. Augustine Beach, Florida
Closing Date: November 4, 1993
BACKGROUND:
This center was bought at the time of our IPO. During due diligence,
it was determined that there was some soil and groundwater
contamination behind the dry cleaner. As a result, the contaminated
area was carved out of the purchase and ownership of the carve-out was
retained by the seller. An easement was granted to Regency over the
carve-out. The seller agreed 1) to remediate the contamination based
on a State of Florida approved plan; and 2) place in escrow $250,000,
which is the estimated cost of remediation (See Regency Realty
Corporation's Prospectus dated October 29, 1993, page 16, and Indemnity
Agreement between buyer and seller dated September 30, 1993)
STATUS:
Seller has registered the contaminated site with the State and has
prepared a contamination assessment plan ("CAP") which has not yet been
approved. Seller continues testing in order to develop an acceptable
CAP. Seller has obtained approvals for a trail catalyst injection
system. We continue to monitor Seller's progress.
II. Village Center
Tampa, Florida
Closing Date: December 21, 1995
BACKGROUND:
This center was bought from the proceeds of the $50,000,000 private
placement from a ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ partnership fund. The seller
disclosed that there was groundwater and soil contamination in the
southwest corner of the site caused by a dry cleaning plant. The dry
cleaning plant has been shut-down and there is currently only a drop
facility at this location. Regency agreed to purchase this property by
acquiring the contaminated property in a separate single asset entity.
The seller also agreed to establish an $502,000 escrow to remediate
this contamination based on an estimated cost to remediate of $392,950,
prepared by Dames & ▇▇▇▇▇ ("D & M").
STATUS
A CAP has been prepared by D & M and approved by the State. RRC
recently received approval of its Remedial Action Plan and is in the
process of implementation. Equipment has been ordered and a draft
Ground Water Discharge Permit has been received from the Florida
Department of Environmental Protection. Work will commence upon
receipt of the final Ground Water Discharge Permit from the State.
III. ▇▇▇▇▇▇ Plaza
Orange Park, Florida
Closing Date: June 30, 1994
BACKGROUND:
This property was purchased in June of 1994. RS&H Environmental
Services provided a Phase I environmental survey for the property that
was developed at that time. (The property was subsequently expanded.)
This report indicated that there was no reason to believe the property
had contamination. Subsequently, as part of the due diligence required
by a financing commitment from Wachovia Bank of Georgia, Law
Engineering was hired to do an environmental survey. Unfortunately,
contamination was discovered that was from a dry cleaner that was
formerly located on the site. This contaminated site qualifies for the
State of Florida Dry Cleaning Solvent Clean-Up Program.
STATUS:
The Company's consultant D & M has also been engaged to determine the
extent of the contamination and recommend alternatives to contain and
mitigate this contamination in accordance with the State law. D & M
has completed Phase II testing and has prepared a Dry Cleaning Solvent
Clean-up Program application, which has been submitted to the state.
D & M is currently conducting additional testing to determine if
procedures recently authorized by the FDEP might be applied to this
site. If so, remediation costs could be reduced substantially from
those estimated in June 1996 by D&M to be approximately $964,500.
IV. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Closing Date: December 29, 1995
BACKGROUND:
There is limited contamination at the edge of the parking lot. The
seller has agreed to fully indemnify Regency for any and all claims and
is responsible for completing and paying for the remediation work at
this center, if such remediation work is required by the State of
Georgia (See Purchase and Sale Agreement pages 19-21).
STATUS:
Received a "no listing/no further action" letter from the GA-DEP.
V. Welleby Plaza Shopping Center
Sunrise, Florida
Closing Date: May 31, 1996
BACKGROUND/STATUS:
This center was recently purchased from Connecticut General Life
Insurance Company, on account of Separate Account R ("Seller"). During
contract negotiations it was disclosed that there was soil and
groundwater contamination in the rear of the shopping center caused by
a dry cleaning facility located in the shopping center. As part of the
purchase contact, seller agreed to in a separate Environmental
Indemnity and Remediation Agreement to have the shopping center
declared eligible for remediation of contamination by the State of
Florida and, if eligible to have the State of Florida conduct this
remediation. In the event that this site is ineligible for the State
of Florida remediation , then seller would conduct this remediation.
Furthermore, the seller agreed to indemnify the buyer from all costs
relating to this contamination. Seller made application to the State
to be eligible for the program remediation. Site received a score of
30.
VI. Woodcroft Shopping Center
Durham, North Carolina
Closing Date: December 20, 1996
BACKGROUND/STATUS:
This center was recently purchased from Durham Woodcroft Associates
Limited Partnership. Limited contamination was discovered during due
diligence around a space that was occupied by a dry cleaner from 1985
through 1986. D & M's opinion is that only monitoring will be required
at this site, as the contamination has not reached levels that would
require remediation. D & M has begun a Comprehensive Site Assessment
(CSA) which is required by the North Carolina Department of
Environment, Health, and Natural Resources. The cost of the CSA will
be between $65,000 and $85,000.
VII. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
Closing Date: July 31, 1996
BACKGROUND/STATUS
The center was bought earlier this year. Dry cleaner contamination has
been discovered on site. The contamination appears to have migrated to
adjacent property. All contamination should be successfully remediated
using pump and treat technologies and soil excavation. Law
Engineering's estimate is that remediation should take three to six
years to complete at a cost of $300,000 to $600,000. RRC and the
seller have an environmental insurance policy issued by Zurich-American
which will cover the costs of remediation, subject to a $50,000
deductible which was placed in escrow by the seller at closing. Law is
currently conducting tests to determine equipment needs for Remedial
Action Plan.
VIII. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Closing Date: December 13, 1996
BACKGROUND/STATUS
The seller was aware of contamination by an existing dry cleaner, and
had a remediation plan in place. The Company's consultant, D & M, was
hired to review the plan and suggest any necessary changes. The plan,
which was proposed by the seller's consultant, Groundwater
Technologies, Inc., was found to be deficient in several respects by
D & M. D & M's proposed system would run for a period of two years and
cost $273,000. RRC received a price reduction of $150,000 to offset
remediation costs. D & M is examining the Florida Department of
Environmental Protection voluntary clean up guidelines to determine
remediation options.
IX. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Closing Date: April 10, 1997
BACKGROUND/STATUS
Seller detected mild dry cleaner contamination, and PSI has completed
Phase II and III reports. The site is eligible for the Florida clean
up program, receiving a score of 112. Regency was given a price
reduction of $120,000.
X. Cumming 400
Cumming, Georgia
Closing Date: March 7, 1997
BACKGROUND/STATUS
The seller was aware of contamination by a former dry cleaner, and had
a vapor extraction system in place, administered by the Company's
consultant, ▇▇▇▇▇▇▇ Engineering. The remediation cost estimate is
$59,000, plus $6,000 per year to operate the system. The site has
received a "no listing letter" from the state.
XI. Dunwoody Hall
Atlanta, Georgia
Closing Date: March 7, 1997
BACKGROUND/STATUS
The site is currently undergoing soil remediation, which will cost no
more than $74,000. The property has received a HSRA No Listing Letter.
The system will run at least until January, 1998, at which time the
Company's consultant, ▇▇▇▇▇▇▇ Engineering will reevaluate. There is
still an operating dry cleaning plant in the center.
XII. Dunwoody Village
Dunwoody, Georgia
Closing Date: March 7, 1997
BACKGROUND/STATUS
The remediation system was put into place in May, 1997, with an
estimated total cost of $120,000. The system will run through the end
of the year and then be evaluated by the Company's consultant, ▇▇▇▇▇▇▇
Engineering. This is a voluntary remediation, as soil and groundwater
contamination are below reportable levels.
XIII. Powers Ferry Square
Atlanta, Georgia
Closing Date: March 7, 1997
BACKGROUND/STATUS
There is petroleum contamination in the soil and groundwater from a
former gas station. A remediation system is presently being installed.
This will be a voluntary remediation, as the operator of the gas
station closed and removed underground storage tanks (USTs) prior to
enactment of the UST law. This means that the property owner is
exempt, but the buyer and seller both agreed that there are potential
liabilities involved, so a price reduction of $300,000 was agreed upon.
▇▇▇▇▇▇▇ Engineering estimated that the cost of remediation would be
$307,910, and that the remediation should take approximately 3 years to
complete.
XIV. Powers Ferry Village
Atlanta, Georgia
Closing Date: March 7, 1997
BACKGROUND/STATUS
Groundwater remediation is currently underway, with a cost estimate of
$150,000. Contamination levels have been reduced drastically, and the
Company's consultant, ▇▇▇▇▇▇▇ Engineering is assessing how much longer
remediation will continue. A "no listing letter" from the state of
Georgia has been received, therefore this is a voluntary remediation.
XV. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Closing Date: March 7, 1997
BACKGROUND/STATUS
Soil behind former dry cleaner was contaminated. The remediation
system was operational in April, 1997, with the entire remediation
costing no more than $18,000. A state of Georgia "no listing letter"
has been issued for this site. This will be a voluntary remediation.
XVI. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Closing Date: March 7, 1997
BACKGROUND/STATUS
Soil and groundwater contamination is below state levels. This is a
voluntary cleanup, with a total estimated cost of $235,000, which was
placed in escrow by the seller. We have $60,000 left in escrow, which
should cover operation costs for another 2-3 years according to our
consultant, ▇▇▇▇▇▇▇ Engineering.
SCHEDULE 3.9
Regency Realty Corporation
Summary of Principal Tenants
30-Sep-97
% TO COMPANY
TENANT TOTAL RENT
Publix 9.71%
▇▇▇▇ ▇▇▇▇▇ 4.83%
Kroger 3.09%
▇▇▇▇▇▇ ▇▇▇▇▇▇ 2.57%
Walgreens 2.17%
Eckerd 2.08%
K-Mart 1.97%
Wal-Mart 1.90%
Blockbuster 1.75%
AMC Theater 1.09%
Brunos 1.06%
Thriftway 0.00%
CVS Drugs 0.78%
T.J. Maxx 0.77%
Office Max 0.72%
0.00%
Delchamps 0.67%
Michaels 0.62%
Office Depot 0.59%
Coastal Care 0.54%
Waccamaw 0.54%
A & P 0.50%
Uptons 0.50%
▇▇▇▇▇ Mart 0.50%
▇▇▇▇▇▇ & Noble 0.50%
▇▇-▇▇▇ Fabrics 0.46%
BI-LO 0.39%
Haverty's 0.38%
Sears Homelife 0.35%
Dockside Imports 0.34%
Safra Bank 0.33%
United Artists Theatres 0.32%
Staples 0.31%
Ace Hardware 0.29%
Ben Franklin 0.29%
Cato 0.28%
▇▇▇▇▇▇▇▇'▇ 0.27%
Drugs for Less 0.26%
Consolidated Theaters 0.26%
Beall's 0.25%
Baby Superstore 0.25%
Linen Supermarket 0.25%
▇▇▇▇▇▇▇ Bank 0.25%
Shoe Station 0.25%
Stuart Fine Foods 0.24%
Pearl Arts & Craft 0.23%
CompUSA 0.22%
Petstuff 0.22%
Gap 0.22%
Party City 0.22%
Squiggles 0.22%
Sports Authority 0.21%
Marshalls 0.21%
Just For Feet 0.20%
PruCare 0.19%
Food Lion 0.27%
Hollywood Video 0.17%
Chase Federal 0.15%
Famous Footwear 0.15%
Cloth World 0.14$
Blue Ridge Grill 0.14%
Fresh Market 0.14%
Drug Emporium 0.13%
▇▇▇▇▇ ▇. Cheese 0.13%
Discovery Zone 0.13%
▇▇▇▇▇▇'▇ Macaroni Grill 0.12%
Big Lots 0.12%
Outback Steakhouse 0.11%
S & K 0.11%
BEALLS 0.11%