EXHIBIT 2.1A
AMENDMENT NO. 1 TO STOCKHOLDERS AGREEMENT
THIS AMENDMENT NO. 1 TO STOCKHOLDERS AGREEMENT (the
"Amendment"), dated as of February 10, 1997, is made by and
among Regency Realty Corporation, a Florida corporation (the
"Company"), Security Capital U.S. Realty, a Luxembourg corpora-
tion, and Security Capital Holdings S.A., a Luxembourg corpora-
tion (together with Security Capital U.S. Realty and others
specified in the Stockholders Agreement, "Investor").
Capitalized terms used and not defined herein shall have the
meanings ascribed to them in the Stockholders Agreement.
RECITALS:
WHEREAS, the parties hereto and The Regency Group,
Inc. entered into a Stockholders Agreement, dated as of July
10, 1996 (the "Stockholders Agreement"); and
WHEREAS, simultaneously with the execution hereof,
the Company has entered into a Contribution Agreement and Plan
of Reorganization (the "Contribution Agreement"), of even date
herewith, by and among Branch Properties, L.P., Branch Realty,
Inc. and the Company; and
WHEREAS, pursuant to Section 4.2 of the Stockholders
Agreement, the transactions contemplated by the Contribution
Agreement would, if consummated, trigger a participation right
of Investor to purchase or subscribe for up to 2,743,545 shares
of Company Common Stock with respect to the First Closing (as
such term is defined in the Contribution Agreement) and up to
156,876 shares of Company Common Stock with respect to Class A
Units (as such term is defined in the Contribution Agreement)
to be issued within six months of the First Closing, in each
case, at a purchase price of $22 1/8 per share; and
WHEREAS, the Company and Investor desire to modify
Investor's participation right which would be triggered by the
transactions contemplated by the Contribution Agreement in the
manner set forth herein; and
WHEREAS, Section 5.1 of the Stockholders Agreement
provides, subject to certain limitations set forth therein, for
the termination of the Standstill Period upon, among other
things, the acquisition by any person or Group other than
Investor, its Affiliates or any person or Group acting in
concert with or at the direction of Investor or its Affiliates
of more than 9.8% of the voting power of the outstanding shares
of Voting Securities; and
WHEREAS, the transactions contemplated by the
Contribution Agreement provide for the issuance of up to
approximately 2,027,848 Units (as such term is defined in the
Contribution Agreement) convertible into shares of Company
Common Stock on a one-for-one basis to Opportunity Capital
Partners II Limited Partners ("OCP") (the "OCP Shares"), or ap-
proximately up to 10.91% of the voting power of the outstanding
shares of Voting Securities; and
WHEREAS, subject to the terms hereof, Investor agrees
that OCP's ownership of the OCP Shares shall not give rise to a
termination of the Standstill Period; and
WHEREAS, pursuant to, and in accordance with, Section
7.8 of the Stockholders Agreement, the parties wish to amend
the Stockholders Agreement on the terms contained herein to
reflect the foregoing and as otherwise set forth below.
NOW, THEREFORE, in consideration of the mutual
covenants and agreements contained in this Amendment and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Special Purchase Right. (a) Investor hereby
waives its participation rights under Section 4.2 of the
Stockholders Agreement with respect to the initial issuance at
or within six months of the First Closing (as defined in the
Contribution Agreement) by the Company of up to an aggregate of
3,771,622 shares of Company Common Stock, including securities
exchangeable, convertible or redeemable on a one-for-one basis
into shares of Company Common Stock (the latter being referred
to herein as the "Convertible Securities"), and in lieu
thereof, Investor and the Company hereby agree that (i)
Investor shall have the right to purchase (the "Special
Purchase Right"), and the Company shall be obligated to offer
Investor the right to purchase up to (x) the Initial Number of
Shares (as defined below) on or prior to August 31, 1997, and
(y) the Subsequent Number of Shares (as defined below), if such
number is greater than zero, after August 31, 1997, in each
case at a purchase price of $22 1/8 per share, and (ii) prior
to such time as all of the Applicable Number of Shares (as
defined below) shall have been offered to Investor in ac-
cordance with the terms hereof and Investor shall have either
purchased or declined to purchase all of such shares, the Com-
pany shall in no event issue or sell any capital stock other
than (A) to the Company or any of its Subsidiaries, (B)
pursuant to options, rights or warrants or other commitments or
securities which were in effect or outstanding on the date of
the Stock Purchase Agreement or, in the case of the Long-Term
Omnibus Plan, the Dividend Reinvestment Plan, the Company's
401(k) Plan and the Employee Stock Grant Plan, collectively,
which are granted from time to time in the ordinary course, (C)
pursuant to the Contribution Agreement, or (D) to the extent
that an issuance of shares of capital stock solely to Investor
would cause the Company to cease being a "domestically-
controlled" REIT within the meaning of Section 897(h)(4)(B) of
the Code ("domestically-controlled"), to persons other than
Non-U.S. Persons (as such term is defined in the Articles of
Incorporation of the Company), provided that such shares of
capital stock issued or sold to such persons may only be issued
or sold simultaneously with an equal number of shares of
capital stock issued or sold to Investor. The "Initial Number
of Shares" means the lesser of (x) 1,750,000 shares of Company
Common Stock or (y) the maximum number of shares of Company
Common Stock, as reasonably determined by Investor, the
purchase of which by Investor will not result in the Company
ceasing to be domestically-controlled, but in no event less
than 850,000 shares of Company Common Stock, and the
"Subsequent Number of Shares" means the excess, if any, of
1,050,000 shares of Company Common Stock over the Initial
Number of Shares. The "Applicable Number of Shares" shall be
1,750,000 on or prior to August 31, 1997 and 1,050,000 after
August 31, 1997. Notwithstanding the above, nothing in this
Section 1 shall be deemed to alter, in any way, Investor's
participation right with respect to (x) the exchange,
conversion or redemption of any Convertible Securities, (y) any
additional shares of Company Common Stock or other securities
issued pursuant to the Contribution Agreement, or (z) any other
sale or issuance of securities with respect to
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which Investor would otherwise have participation rights.
Notwithstanding the foregoing or any other contrary agreement
or understanding, the Company agrees that it will not issue any
shares of Company Common Stock or Convertible Securities to any
partner of Roswell Village, Ltd. (the partners of Roswell
Village Ltd. being shown as having approximately 103,400 shares
of Common Stock or Convertible Securities on Schedule 1 to that
certain Waiver and Consent Agreement attached as Exhibit C to
the Partnership Agreement (as defined in the Contribution
Agreement)) unless any Company Common Stock to be issued to any
such person (including upon the redemption, conversion or
exchange of Convertible Securities) will not (and by the terms
of any relevant Convertible Securities cannot) be issued until
the first anniversary of the First Closing (the "First
Anniversary").
(b) The Special Purchase Right shall become
exercisable from time to time by Investor upon receipt by
Investor of a written notice from the Company (a "Special
Purchase Notice"), which Special Purchase Notice shall set
forth the number of shares of Company Common Stock that the
Company offers Investor at such time, and the Company's
intended use of the proceeds of such proposed issuance;
provided, however, that (i) the Company may only request
Investor to purchase shares of Company Common Stock in one or
more installments of not less than $15,000,000 per installment,
(ii) the Company shall provide Investor a Special Purchase
Notice with respect to a sufficient number of shares such that
Investor maintains, by March 31, 1997 and at each quarter end
thereafter, ownership (within the meaning of Section 1296(c) of
the Code) of at least 27.5% by value of the stock of the
Company, (iii) the Company shall provide Investor a Special
Purchase Notice with respect to all of the Initial Number of
Shares on or before August 31, 1997, and if and to the extent
one or more Special Purchase Notices shall not have been
provided to Investor with respect to all of the Initial Number
of Shares prior to August 31, 1997, then a Special Purchase
Notice shall be deemed to have been provided on August 31, 1997
so that Investor's Special Purchase Right shall have become
exercisable on or before such date with respect to all of the
Initial Number of Shares, and (iv) the Company shall provide
Investor a Special Purchase Notice with respect to all of the
Subsequent Number of Shares, if any, on or before the First
Anniversary, and if and to the extent one or more Special
Purchase Notices shall not have been provided to Investor with
respect to all of the Subsequent Number of Shares, if any,
prior to the First Anniversary, then a Special Purchase Notice
shall be deemed to have been provided on the day after the
First Anniversary so that Investor's Special Purchase Right
shall have become exercisable on or before such date with
respect to all of the Subsequent Number of Shares, if any.
Subject to the Company's compliance with the immediately
preceding sentence and with clause (ii) of the first sentence
of the foregoing paragraph (a), the Company shall be under no
obligation to provide Investor with any Special Purchase Notice
or to include any number of shares of Company Common Stock in
any Special Purchase Notice.
(c) At any time within 20 days after its receipt of
a Special Purchase Notice, Investor may, but shall have no
obligation to, exercise the Special Purchase Right with respect
to up to the number of shares of Company Common Stock offered
by the Company in such Special Purchase Notice by informing the
Company in writing of such exercise (a "Special Exercise
Notice"). Each Special Exercise Notice shall state the number
of shares of Company Common Stock that Investor elects to
purchase, which number shall be no greater than the number of
shares specified by the Company in the Special Purchase Notice,
and shall be irrevocable. The closing of the Special Purchase
Right, or any part thereof, shall be subject to the conditions
set forth in Sections 7.2 and 7.3 of the Stock Purchase
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Agreement. Investor may choose to exercise any Special
Purchase Right or any part thereof in its sole and absolute
discretion.
2. Ownership by OCP and its Affiliates of greater
than 9.8% of the Voting Securities. Notwithstanding clause
(ii) of Section 5.1(a), the Standstill Period shall not
terminate as a result of the acquisition of the OCP Shares by
OCP and for so long as the OCP Shares are held directly and
beneficially by OCP (it being understood and agreed that this
waiver (x) shall cease to be effective in the event of any
direct or indirect transfer of any Beneficial Ownership of any
of the OCP Shares, if after giving effect to such transfer the
Standstill Period would otherwise have terminated other than as
a result of the Beneficial Ownership of the OCP Shares by OCP,
and (y) shall not in any event apply to any additional Voting
Securities that might be Beneficially Owned by OCP or any
Affiliate or Group of which OCP is a member, other than 223,750
shares of Common Stock held of record on the date hereof by the
parties listed on a schedule delivered to Security Capital by
the Company on the date hereof entitled "Holdings in Regency,"
dated 2/7/97, which 223,750 shares are beneficially owned by
ABKB/La Salle Securities Limited, including 32,300 shares of
Common Stock held of record by the Oregon Public Employees
Retirement Fund ("OPERF"), the limited partner of OCP
(collectively, the "Existing Shares") and only for so long as
the Existing Shares are held continuously of record and
beneficially by such listed parties and ABKB/LaSalle Securities
Limited, respectively, it being further understood that in the
event OCP or any such Affiliate or Group should acquire
Beneficial Ownership of any such additional Voting Securities
(other than Beneficial Ownership by LaSalle Advisors Limited
Partnership of up to 4.9% of Company Common Stock as a result
of the conversion of Class B Common Stock outstanding as of the
date hereof (the "LaSalle Shares")), all Voting Securities
Beneficially Owned by OCP or any such Affiliate or Group
(including the OCP Shares, the Existing Shares and the LaSalle
Shares) shall be considered together, without regard to the
provisions of this Amendment, for the purposes of the Stock-
holders Agreement).
3. Other Branch-Related Matters. Regency hereby
agrees to maintain, at all times after the Shareholder Approval
Date (as such term is defined in the Partnership Agreement set
forth on Exhibit A to the Contribution Agreement (the
"Partnership Agreement")), a general partnership interest equal
and entitled to at least 75% of the capital or profits interest
in the Partnership (as defined in the Contribution Agreement)
and to manage the assets and employees of the Partnership in
accordance with the terms of the Partnership Agreement, as such
Partnership Agreement and Contribution Agreement exist, respec-
tively, on the date hereof. In addition, pursuant to Section
6.2 of the Stockholders Agreement, the Company shall provide to
Investor within 45 days after the close of each fiscal quarter
of the Company a quarterly report of the Company's and its
Subsidiaries' (including the Partnership) assets and income
during the preceding fiscal quarter sufficient in each case to
enable Investor to monitor compliance with the Corporate Action
Covenants during such fiscal quarter.
4. Amendment of Partnership Agreement. Regency
hereby agrees that it will not agree to any amendment or
modification to the Partnership Agreement, and the Partnership
Agreement shall not be amended, modified or supplemented, in
any such case, without the prior written consent of Security
Capital.
5. No Effect on Consistent Terms. All terms of the
Stockholders Agreement not inconsistent with this Amendment
shall remain in place and in full force and effect and
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shall be unaffected by this Amendment, and shall continue to
apply to the Stockholders Agreement as amended hereby and to
this amendment. From and after the date hereof, each reference
to the Stockholders Agreement in any other instrument or docu-
ment shall be deemed a reference to the Stockholders Agreement
as amended hereby, unless the context otherwise requires.
6. Headings. The headings contained in this Amend-
ment are inserted for convenience of reference only and shall
not affect the meaning or interpretation of this Amendment.
7. Counterparts. This Amendment may be executed in
one or more counterparts, all of which shall be considered one
and the same agreement, and shall become effective when one or
more counterparts have been signed by each party hereto and
delivered to the other party.
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IN WITNESS WHEREOF, this Amendment has been signed by
or on behalf of each of the parties hereto as of the day first
above written.
REGENCY REALTY CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: President
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
SECURITY CAPITAL U.S. REALTY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
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