UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1998
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-12298
REGENCY REALTY CORPORATION
(Exact name of registrant as specified in its charter)
FLORIDA 59-3191743
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
121 West Forsyth Street, Suite 200 (904) 356-7000
Jacksonville, Florida 32202 (Registrant's telephone No.)
(Address of principal
executive offices) (zip code)
Securities registered pursuant to Section 12(b)
of the Act:
Common Stock, $.01 par value
(Title of Class)
New York Stock Exchange
(Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months and (2) has been subject to such filing requirements for
the past 90 days. YES (X) NO ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
The aggregate market value of the voting and non-voting common stock held by
non-affiliates of the Registrant was approximately $463,468,086 based on the
closing price on the New York Stock Exchange for such stock on March 10, 1999.
The approximate number of shares of Registrant's voting common stock outstanding
was 57,831,620 as of March 10, 1999.
Documents Incorporated by Reference
Portions of the Registrant's Proxy Statement in connection with its 1999 Annual
Meeting of Shareholders are incorporated by reference in Part III.
<PAGE>
TABLE OF CONTENTS
Form 10-K
Item No. Report Page
- -------- -----------
PART I
1. Business...................................................................1
2. Properties.................................................................5
3. Legal Proceedings.........................................................12
4. Submission of Matters to a Vote of Security Holders.......................12
PART II
5. Market for the Registrant's Common Equity and Related Shareholder
Matters...................................................................12
6. Selected Consolidated Financial Data......................................14
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.....................................................15
7a. Quantitative and Qualitative Disclosures About Market Risk................22
8. Consolidated Financial Statements and Supplementary Data..................22
9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure......................................................22
PART III
10. Directors and Executive Officers of the Registrant........................23
11. Executive Compensation....................................................23
12. Security Ownership of Certain Beneficial Owners and Management............24
13. Certain Relationships and Related Transactions............................24
PART IV
14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K.........24
<PAGE>
PART I
Item 1. Business
Regency Realty Corporation ("Regency" or "Company") acquires, owns, develops and
manages neighborhood shopping centers in targeted infill markets. As of December
31, 1998, Regency owned, directly or indirectly, 129 properties in the eastern
half of the United States, containing approximately 14.7 million square feet of
gross leasable area ("GLA").
As of December 31, 1998, Regency had an investment in real estate of
approximately $1.3 billion and approximately 58% of Regency's GLA was located in
Georgia and Florida. Regency's shopping centers (excluding centers under
development) were approximately 93% leased as of December 31, 1998.
On February 26, 1999, Regency's shareholders approved the merger of Pacific
Retail Trust ("Pacific") into the Company in a stock for stock transaction (0.48
Regency share for 1 Pacific share). At December 31, 1998, Pacific owned 71
retail shopping centers that are operating or under construction containing 8.4
million SF of GLA. The total cost to acquire Pacific is expected to be $1.157
billion based on the value of Regency shares issued, the assumption of $379
million of outstanding debt and other liabilities, and estimated transaction
costs. Pacific's shopping centers are located primarily in California and Texas.
The Company, a Florida corporation organized in 1993, commenced operations as a
real estate investment trust (REIT) in 1993 with the completion of its initial
public offering, and was the successor to the real estate business of The
Regency Group, Inc. which had operated since 1963.
Regency formed Regency Centers, L.P. (RCLP), a limited partnership and a public
registrant, in 1996, and consolidated substantially all of its retail shopping
centers into RCLP during 1998. RCLP is now the primary entity through which
Regency owns its properties and through which Regency intends to expand its
ownership and operation of retail shopping centers. At December 31, 1998,
Regency owned approximately 96% of the outstanding operating partnership units
of RCLP. Regency, the general partner of RCLP, fully controls the operating and
investing decisions and activities of RCLP, and accordingly, the following
discussion of Regency's business also includes the business of RCLP.
Operating and Investment Philosophy
Regency's key operating and investment objective is to create long-term
shareholder value by:
o growing its high quality real estate portfolio of grocery-anchored
neighborhood shopping centers in attractive infill markets,
o maximizing the value of the portfolio through its "Retail
Operating System," developed in conjunction with Security Capital
Holdings, S.A. ("SC-USREALTY"), which incorporates research based
investment strategies, value-added leasing and management systems,
and customer-driven development programs, and
o using conservative financial management and Regency's substantial
capital base to access the most cost effective capital to fund
Regency's growth.
Management believes that the key to achieving its objective is its single focus
on, and growing critical mass of, quality grocery-anchored neighborhood shopping
centers. In the opinion of management, Regency's premier platform of shopping
centers in targeted markets, its proprietary research capabilities, its value
enhancing Retail Operating System, its cohesive and experienced management team
and its access to competitively priced capital enable it to maintain a
competitive advantage over other operators.
Regency believes that ownership of the approximately 30,000 shopping centers
throughout the United States is highly fragmented, with less than 10% owned by
REITs, and that many centers are held by unsophisticated and undercapitalized
owners. Regency has identified approximately 1,000 centers in its target markets
as potential acquisition opportunities, of which less than 10% are owned by
REITs. As a result, Regency believes that an opportunity exists for it to be a
consolidating force in the industry. In addition, Regency believes that through
proprietary demographic research and targeting, its portfolio and tenant mix can
be customized for and marketed to national and regional retailers, thereby
producing greater sales and a value-added shopping environment for both retailer
and shopper.
Regency's shopping center properties feature some of the most attractive
characteristics in the industry:
o an average age of 8 years,
o an average remaining grocery-anchor lease term of 14 years, and
o an average grocery-anchor size of 49,000 square feet (43% of the
square footage of the grocery-anchored centers on average).
Grocery-Anchored Infill Strategy
Regency focuses its investment strategy on grocery-anchored infill shopping
centers. Infill locations are situated in densely populated residential
communities where there are significant barriers to entry, such as zoning
restrictions, growth management laws or limited availability of sites for
development or expansions. Regency is focused on building a platform of
grocery-anchored neighborhood shopping centers because grocery stores provide
convenience shopping for daily necessities, generate foot traffic for adjacent
"side shop" tenants and should be better able to withstand adverse economic
conditions. By developing close relationships with the leading supermarket
chains, Regency believes it can attract the best "side shop" merchants and
enhance revenue potential.
Research Driven Market Selection
Regency has identified 21 markets in the eastern half of the United States as
target markets. These markets were selected because, in general, they offer
greater growth in population, household income and employment than the national
averages. In addition, Regency believes that it can achieve "critical mass" in
these markets (defined as owning or managing 4 to 5 shopping centers) and that
it can generate sustainable competitive advantages, through long-term leases to
the predominant grocery-anchor and other barriers to entry from competition.
Within these markets, Regency's research staff further defines and selects
submarkets and trade areas based on additional analysis of the above data.
Regency then identifies target properties and their owners (including
development opportunities) within these submarkets and trade areas based on
3-mile radius demographic data and ranks potential properties for purchase. The
properties currently owned by Regency are in submarkets with an average 3-mile
population of 69,000, average household income of $62,000 and projected 5-year
population growth of 12%.
Retail Operating System
Regency's Retail Operating System drives its value-added operating strategy.
Its Retail Operating System is characterized by:
o proactive leasing and management;
o value enhancing remerchandising initiatives;
o Regency's "preferred customer initiative"; and
o a customer-driven development and redevelopment program.
a) Proactive leasing and management
Regency's integrated approach to property management strengthens its leasing and
management efforts. Property managers are an integral component of the
acquisition and integration teams. Thorough, candid tenant interviews by
property managers during acquisition due diligence allow Regency to quickly
assess both problem areas as well as opportunities for revenue enhancement prior
to closing. Property managers are responsible not only for the general
operations of their centers, but also for coordinating leasing efforts, thereby
aligning their interests with Regency's. In addition, Regency's information
systems allow managers to spot future lease expirations and to proactively
market and remerchandise spaces several years in advance of such expirations.
b) Value enhancing remerchandising initiatives
Regency believes that certain shopping centers under serve their customers,
reducing foot traffic and negatively affecting the tenants located in the
shopping center. In response, Regency is initiating a remerchandising program
directed at obtaining the optimum mix of tenants offering goods, personal
services and entertainment and dining options in each of its shopping centers.
By re-tenanting shopping centers with tenants that more effectively service the
community, Regency expects to increase sales, and therefore the value of its
shopping centers.
c) Preferred customer initiative
Regency has established a preferred customer initiative with dedicated personnel
whose goal is to establish new or strengthen existing strategic relationships
with successful retailers at the national, regional and local levels. Regency
achieves this goal by establishing corporate relationships, negotiating standard
lease forms and working with the preferred customers to match expansion plans
with future availability in Regency's shopping centers. Regency monitors retail
trends and the operating performance of these preferred customers. Management
expects the benefits of the preferred customer initiative to improve the
merchandising and performance of the shopping centers, establish brand
recognition among leading operators, reduce turnover of tenants and reduce
vacancies. Regency currently has identified and is developing relationships with
45 preferred customers, including Radio Shack, GNC, Hallmark Cards, Mailboxes,
Etc. and Starbucks Coffee, and continues to target additional tenants with which
to establish preferred customer relationships.
d) Customer-driven development and redevelopment program
Regency conducts its development and redevelopment program in close cooperation
with its major customers, including Kroger, Publix and Eckerd. Regency uses its
development capabilities to service its customer's growth needs by building or
re-developing modern properties with state of the art supermarket formats that
generate higher returns for Regency under new long-term leases. In 1998, Regency
began development on 21 retail projects, including new developments,
redevelopments and build-to-suits and upon completion, Regency will have
invested $152 million in these projects. During 1997, Regency began development
on 16 retail projects, including new developments, redevelopments and
build-to-suits and upon completion, Regency will have invested $87 million in
these projects. Regency manages its development risk by obtaining signed anchor
leases prior to beginning construction.
Acquisition Track Record
Regency has grown its asset base significantly through acquisitions over the
last several years, acquiring properties totaling $384.3 million in 1998, $395.7
million in 1997 and $107.1 million in 1996. Through these acquisitions, Regency
has diversified geographically from its predominantly Florida-based portfolio
and established a presence in many of its target markets. Upon identifying an
acquisition target, Regency utilizes expertise from all of its functional areas,
including acquisitions, due diligence and property management, to determine the
appropriate purchase price and to develop a business plan for the center and
design an integration plan for the management of the center. Regency believes
that its established acquisition and integration procedures produce higher
returns on its portfolio, reduce risk and position Regency to capitalize on
consolidation in the shopping center industry.
Capital Strategy
Regency intends to maintain a conservative capital structure designed to enhance
access to capital on favorable terms, to allow growth through development and
acquisition and to promote future earnings growth, however, neither Regency
Realty Corporation's nor Regency Centers, L.P.'s organizational documents limit
the amount of debt that may be incurred. Limitations have been established
within the covenants of certain loan agreements related to the Partnership's
line of credit and medium term notes.
As of December 31, 1998, Regency had secured and unsecured debt of $309.2
million and $238.9 million, respectively. Substantially all of Regency's debt is
cross-defaulted, but not cross-collateralized. Pursuant to Regency's $300
million unsecured line of credit (increased to $635 million with the merger of
Pacific Retail Trust), Regency is required to comply, and is complying with
certain financial and other covenants customary with this type of unsecured
financing. These financial covenants include (1) maintenance of minimum net
worth, (2) ratio of total liabilities to gross asset value, (3) ratio of secured
indebtedness to gross asset value, (4) ratio of EBITDA to interest expense, (5)
ratio of EBITDA to debt service and reserve for replacements, and (6) ratio of
unencumbered net operating income to interest expense on unsecured indebtedness.
In addition, Regency may not enter into a negative pledge agreement with another
lender and may not incur other floating rate debt in excess of 25% of gross
asset value without interest rate protection. The line is used primarily to
finance the acquisition and development of real estate, but is also available
for general working capital purposes.
Since Regency's initial public offering in 1993, Regency has financed its growth
in part through a series of public and private offerings of Regency equity and
RCLP units totaling, as of December 31, 1998, approximately $677 million,
including the utilization by RCLP of its units as consideration for
acquisitions. RCLP units (with the exception of Series A preferred units) issued
and owned by limited partners are convertible into Regency common stock on a one
for one basis, and receive quarterly distributions equal to the dividends paid
on each Regency common share.
Risk Factors Relating to Ownership of Regency Common Stock
The Company is subject to certain business risks arising in connection with
owning real estate which include, among others:
o the bankruptcy or insolvency of, or a downturn in the business
of, any of its major tenants could reduce cash flow,
o the possibility that such tenants will not renew their leases as
they expire or renew at lower rental rates could reduce cash flow,
o vacated anchor space will affect the entire shopping center
because of the loss of the departed anchor tenant's customer
drawing power,
o poor market conditions could create an over supply of space or a
reduction in demand for real estate in markets where the Company
owns shopping centers,
o the Company's rapid growth could place strains on its resources,
o risks relating to leverage, including uncertainty that the Company
will be able to refinance its indebtedness, and the risk of higher
interest rates,
o unsuccessful development activities could reduce cash flow,
o the Company's inability to satisfy its cash requirements for
operations and the possibility that the Company may be required to
borrow funds to meet distribution requirements in order to
maintain its qualification as a REIT,
o potential liability for unknown or future environmental matters
and costs of compliance with the Americans with Disabilities Act,
o the risk of uninsured losses, and
o unfavorable economic conditions could also result in the inability
of tenants in certain retail sectors to meet their lease
obligations and otherwise could adversely affect the Company's
ability to attract and retain desirable tenants.
Compliance with Governmental Regulations
Under various federal, state and local laws, ordinances and regulations, an
owner or manager of real estate may be liable for the costs of removal or
remediation of certain hazardous or toxic substances on such property. These
laws often impose liability without regard to whether the owner knew of, or was
responsible for, the presence of the hazardous or toxic substances. The cost of
required remediation and the owner's liability for remediation could exceed the
value of the property and/or the aggregate assets of the owner. The presence of
such substances, or the failure to properly remediate such substances, may
adversely affect the owner's ability to sell or rent the property or borrow
using the property as collateral. Regency has approximately 31 properties that
will require or are currently undergoing varying levels of environmental
remediation. These remediations are not expected to have a material financial
effect on the Company due to financial statement reserves and various
state-regulated programs that shift the responsibility and cost for remediation
to the state.
Competition
The Company believes the ownership of shopping centers is highly fragmented,
with less than 10% owned by REITs. Regency faces competition from other REITs in
the acquisition, ownership and leasing of shopping centers as well as from
numerous small owners. Regency competes for the development of shopping centers
with other REITs engaged in development activities as well as with local,
regional and national real estate developers. Regency develops properties by
applying its proprietary research methods to identify development and leasing
opportunities and by pre-leasing an average of 85% of a center before beginning
construction. Regency competes for the acquisition of properties through
proprietary research that identifies opportunities in markets with high barriers
to entry and higher-than-average population growth and household income. Regency
seeks to maximize rents per square foot by establishing relationships with
supermarket chains that are first or second in their markets and leasing
non-anchor space in multiple centers to national or regional tenants. There can
be no assurance, however, that other real estate owners or developers will not
utilize similar research methods and target the same markets and anchor tenants
that Regency targets or that such entities will successfully control these
markets and tenants to the exclusion of Regency.
Changes in Policies
The Company's Board of Directors determines policies with respect to certain
activities, including its debt capitalization, growth, distributions, REIT
status, and investment and operating strategies. The Board of Directors has no
present intention to amend or revise these policies. However, the Board of
Directors may do so at any time without a vote of the Company's stockholders.
Employees
The Company's headquarters are located in Jacksonville, Florida. The Company
presently maintains offices in which it conducts management and leasing
activities located in Florida, Georgia, North Carolina, Ohio, and Missouri. As
of December 31, 1998, the Company had approximately 240 employees and believes
that relations with its employees are good.
Item 2. Properties
<TABLE>
The Company's properties summarized by state including their gross
leasable areas (GLA) follows:
<CAPTION>
Location December 31, 1998 December 31, 1997
-------- ----------------- -----------------
# Properties GLA % Leased # Properties GLA % Leased
------------ --- -------- ------------ --- --------
<S> <C> <C> <C> <C> <C> <C>
Florida 46 5,728,347 91.4% 45 5,267,894 91.5%
Georgia 27 2,737,590 93.1% 25 2,539,507 92.4%
Ohio 13 1,786,521 93.4% 2 629,920 89.1%
North Carolina 12 1,239,783 98.3% 6 554,332 99.0%
Alabama 5 516,060 99.0% 5 516,080 99.9%
Texas 5 479,900 84.7% - - -
Colorado 5 447,569 89.4% - - -
Tennessee 4 295,179 96.8% 3 208,386 98.5%
Virginia 2 197,324 97.7% - - -
Mississippi 2 185,061 97.6% 2 185,061 96.9%
Michigan 2 177,929 81.5% - - -
South Carolina 2 162,056 100.0% 1 79,743 84.3%
Delaware 1 232,752 94.8% - - -
Kentucky 1 205,060 95.6% - - -
Illinois 1 178,600 86.9% - - -
Missouri 1 82,498 99.8% - - -
------------- ---------- ------- ------------ --------- ------
Total 129 14,652,229 92.9% 89 9,980,923 92.8%
============= ========== ======= ============ ========= ======
</TABLE>
The following table summarizes the largest tenants occupying the Company's
shopping centers based upon a percentage of total annualized base rent exceeding
.5% at December 31, 1998:
<TABLE>
Summary of Principal Tenants > .5% of Annualized Base Rent
(including Properties Under Development)
<CAPTION>
% to Company % of Annualized # of
Tenant SF Owned GLA Rent Base Rent Stores
------ -- ------------ ---- --------------- ------
<S> <C> <C> <C> <C> <C>
Kroger 2,180,363 14.9% $18,496,049 13.8% 36
Publix 1,439,762 9.8% 9,254,154 6.9% 33
Winn Dixie 748,329 5.1% 5,131,795 3.8% 16
Blockbuster 214,818 1.5% 3,163,928 2.4% 35
K-Mart 507,645 3.5% 2,615,359 2.0% 6
Harris Teeter 187,363 1.3% 2,261,650 1.7% 4
Walgreens 206,795 1.4% 2,070,754 1.5% 15
Wal-Mart 486,168 3.3% 1,993,728 1.5% 6
Eckerd 218,305 1.5% 1,670,155 1.2% 22
A & P 116,666 0.8% 866,593 0.6% 3
CVS Drugs 103,206 0.7% 818,721 0.6% 11
Albertsons 55,377 0.4% 630,772 0.5% 1
Delchamps 82,845 0.6% 613,122 0.5% 2
</TABLE>
The Company's leases have lease terms generally ranging from three to five years
for tenant space under 5,000 square feet. Leases greater than 10,000 square feet
generally have lease terms in excess of five years, mostly comprised of anchor
tenants. Many of the anchor leases contain provisions allowing the tenant the
option of extending the term of the lease at expiration. The Company's leases
provide for the monthly payment in advance of fixed minimum rentals, additional
rents calculated as a percentage of the tenant's sales, the tenant's pro rata
share of real estate taxes, insurance, and common area maintenance expenses, and
reimbursement for utility costs if not directly metered. The following table
sets forth a schedule of lease expirations for the next ten years, assuming that
no tenants exercise renewal options:
Future
Percent of Minimum Percent of
Lease Total Rent Total
Expiration Expiring Company Expiring Minimum
Year GLA GLA Leases Rent (2)
---- --- --- ------ --------
(1) 88,448 0.7% $941,247 0.8%
1999 933,156 7.5% $10,973,054 9.0%
2000 892,964 7.2% $10,484,173 8.6%
2001 1,163,072 9.3% $13,710,368 11.3%
2002 1,212,519 9.7% $13,155,318 10.8%
2003 992,177 8.0% $10,360,431 8.5%
2004 492,469 4.0% $4,018,968 3.3%
2005 254,877 2.0% $2,644,771 2.2%
2006 598,066 4.8% $4,993,560 4.1%
2007 435,154 3.5% $3,853,728 3.2%
2008 759,825 5.9% $5,311,987 4.3%
--------------------------------------------------------
10 Yr Total 7,822,727 60.7% 80,447,605 65.5%
--------------------------------------------------------
(1) leased currently under month to month rent or in process of renewal
(2) total minimum rent includes current minimum rent and future contractual
rent steps for all properties, but excludes additional rent such as
percentage rent, common area maintenance, real estate taxes and insurance
reimbursements.
See the property table below and also see Item 7, Management's Discussion and
Analysis for further information about the Company's properties.
<PAGE>
<TABLE>
<CAPTION>
Gross
Year Leasable
Year Con- Area Percent Grocery
Property Name Acquired structed (1) (GLA) Leased (2) Anchor
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
FLORIDA
Jacksonville /
North Florida
Anastasia 1993 1988 102,342 95.1% Publix
Bolton Plaza 1994 1988 172,938 100.0% --
Carriage Gate 1994 1978 76,833 100.0% --
Courtyard (3) 1993 1987 67,794 45.8% Albertsons(4)
Ensley Square (5) 1997 1977 62,361 100.0% Delchamps
Fleming Island 1998 1994 80,205 98.9% Publix
Highlands Square (6) 1998 1999 226,682 87.1% Publix/Winn-Dixie
Millhopper (3) 1993 1974 84,064 97.0% Publix
Newberry Square 1994 1986 180,524 98.0% Publix
Old St. Augustine Plaza 1996 1990 170,220 98.2% Publix
Palm Harbour 1996 1991 171,891 94.6% Publix
Pine Tree Plaza (6) 1997 1999 60,752 94.1% Publix
Regency Court 1997 1992 218,665 78.3% --
South Monroe 1996 1998 80,187 97.0% Winn-Dixie
Tampa / Orlando
Beneva 1998 1987 141,532 97.1% Publix
Bloomingdale Square 1998 1987 267,935 99.0% Publix
Mainstreet Square 1997 1988 107,159 90.5% Winn-Dixie
Mariner's Village 1997 1986 117,665 94.4% Winn-Dixie
Market Place - St. Petersburg 1995 1983 90,296 100.0% Publix
Peachland Promenade 1995 1991 82,082 96.5% Publix
Regency Square 1993 1986 341,446 87.3% --
at Brandon (3)
Seven Springs 1994 1986 162,580 93.1% Winn-Dixie
Terrace Walk (3) 1993 1990 50,926 40.4% --
Town Square 1997 1986 42,969 40.2% --
University Collections 1996 1984 106,627 96.8% Kash N Karry(4)
Village Center-Tampa 1995 1993 181,110 95.5% Publix
West Palm Beach /
Treasure Coast
Boynton Lakes Plaza 1997 1993 130,724 91.0% Winn-Dixie
Chasewood Plaza (3) 1993 1986 141,034 87.5% Publix
Chasewood Storage (3) 1993 1986 42,810 99.9% --
East Port Plaza 1997 1991 235,842 94.9% Publix
Martin Downs Village Center(3) 1993 1985 121,956 90.9% --
Martin Downs 1993 1998 49,773 94.0% --
Village Shop (3)(6)
Ocean Breeze (3) 1993 1985 111,551 83.9% Publix
Ocean East (5) 1996 1997 112,894 60.5% Stuart Foods
Tequesta Shoppes 1996 1986 109,766 92.9% Publix
Town Center at Martin Downs 1996 1996 64,546 93.5% Publix
Wellington Market Place 1995 1990 178,155 94.1% Winn-Dixie
Wellington Town Square 1996 1982 105,150 98.2% Publix
Miami / Ft. Lauderdale
Aventura (3) 1994 1974 102,876 96.4% Publix
Berkshire Commons 1994 1992 106,534 99.8% Publix
Garden Square 1997 1991 90,258 97.1% Publix
North Miami (3) 1993 1988 42,500 100.0% Publix
Palm Trails Plaza 1997 1998 76,067 95.9% Winn-Dixie
Shoppes @ 104 1998 1990 108,189 95.4% Winn Dixie
Tamiami Trail 1997 1987 110,867 100.0% Publix
University Market Place 1993 1990 129,121 73.3% Albertsons(4)
Welleby 1996 1982 109,949 93.5% Publix
------------------------------
Subtotal/Weighted
Average(Florida) 5,728,347 91.4%
------------------------------
<PAGE>
GEORGIA
Atlanta
Ashford Place 1997 1993 53,345 100.0% --
Braelin Village (5) 1997 1991 226,522 98.8% Kroger
Briarcliff LaVista 1997 1962 39,201 100.0% --
Briarcliff Village (6) 1997 1990 192,660 89.0% Publix
Buckhead Court 1997 1984 55,227 93.9% --
Cambridge Square 1996 1979 68,725 77.8% --
Cromwell Square 1997 1990 81,826 81.7% --
Cumming 400 1997 1994 126,899 94.8% Publix
Delk Spectrum (3)(5) 1998 1991 100,880 100.0% A&P
Dunwoody Hall 1997 1986 82,525 97.6% A&P
Dunwoody Village (5) 1997 1975 114,657 94.1% Ingles
Loehmann's Plaza 1997 1986 137,635 90.8% --
Lovejoy Station 1997 1995 77,336 98.3% Publix
Memorial Bend 1997 1995 182,778 93.9% Publix
Orchard Square 1995 1987 85,940 94.6% A&P
Paces Ferry Plaza 1997 1987 61,693 91.4% --
Powers Ferry Square 1997 1987 97,809 96.1% Harry's
Powers Ferry Village 1997 1994 78,995 100.0% Publix
Rivermont Station 1997 1996 90,267 100.0% Harris Teeter
Roswell Village (6) 1997 1997 143,980 97.2% Publix
Russell Ridge 1994 1995 98,556 96.6% Kroger
Sandy Plains Village 1996 1992 175,034 94.4% Kroger
Sandy Springs Village 1997 1997 48,245 11.2% --
Trowbridge Crossing (5) 1997 1997 62,558 86.8% Publix
Other Markets
Evans Crossing 1998 1993 83,680 100.0% Kroger
LaGrangeMarketplace(3) 1993 1989 76,327 95.5% Winn-Dixie
Parkway Station (5) 1996 1983 94,290 94.5% Kroger
------------------------------
Subtotal/Weighted
Average(Georgia) 2,737,590 93.1%
------------------------------
OHIO
Cincinnati
Beckett Commons 1998 1995 80,434 100.0% Kroger
Cherry Grove 1998 1997 186,040 93.5% Kroger
Hamilton Meadows 1998 1989 126,251 97.8% Kroger(4)
Hyde Park Plaza (5) 1997 1995 374,743 97.4% Kroger/Winn-Dixie
Shoppes at Mason 1998 1997 80,880 95.1% Kroger
Silverlake 1998 1988 100,245 91.0% Kroger
Westchester Plaza 1998 1988 88,181 100.0% Kroger
Columbus
East Pointe 1998 1993 86,520 100.0% Kroger
Kingsdale (3)(6) 1997 1999 259,011 73.0% Big Bear
North Gate/(Maxtown) 1998 1996 85,100 95.9% Kroger
Park Place 1998 1988 106,832 96.2% Big Bear
Windmiller Plaza 1998 1997 119,192 97.1% Kroger
Worthington 1998 1991 93,092 100.0% Kroger
------------------------------
Subtotal/Weighted
Average(Ohio) 1,786,521 93.4%
------------------------------
<PAGE>
NORTH CAROLINA
Asheville
Oakley Plaza 1997 1988 118,727 98.7% Bi-Lo
Charlotte
Carmel Commons 1997 1979 132,648 95.3% Fresh Market
City View 1996 1993 77,550 100.0% Winn-Dixie
Union Square 1996 1989 97,191 100.0% Harris Teeter
Raleigh / Durham
Bent Tree Plaza 1998 1994 79,503 100.0% Kroger
Garner Town Square 1998 1998 221,450 100.0% Kroger
Glenwood Village 1997 1983 42,864 100.0% Harris Teeter
Lake Pine Plaza 1998 1997 87,690 97.6% Kroger
Maynard Crossing 1998 1997 122,813 100.0% Kroger
Southpoint Crossing (7) 1998 1998 101,404 89.4% Kroger
Woodcroft 1996 1984 85,353 100.0% Food Lion
Winston-Salem
Kernersville Marketplace 1998 1997 72,590 100.0% Kroger
------------------------------
Subtotal/Weighted
Average(North Carolina) 1,239,783 98.3%
- -------------------------------------------------------------------------------------------------------------
ALABAMA
Birmingham
Villages of Trussville (3) 1993 1987 69,280 97.7% Bruno's
West County Marketplace (3) 1993 1987 129,155 100.0% Food World (4)
Montgomery
Country Club (3) 1993 1991 67,622 96.3% Winn-Dixie
Other Markets
Bonner's Point (3) 1993 1985 87,280 98.6% Winn-Dixie
Marketplace - 1993 1987 162,723 100.0% Winn-Dixie
Alexander City (3)
------------------------------
Subtotal/Weighted
Average(Alabama) 516,060 99.0%
------------------------------
COLORADO
Colorado Springs
Cheyenne Meadows (5) 1998 1998 89,085 97.6% King Soopers
Jackson Creek (6)(7) 1998 1999 85,259 89.4% Kroger
Woodman Plaza (6)(7) 1998 1998 103,313 70.4% King Soopers
Denver
Lloyd King Center (5) 1998 1998 83,286 98.4% King Soopers
Stroh Ranch (6)(7) 1998 1998 86,626 95.2% King Soopers
------------------------------
Subtotal/Weighted
Average(Colorado) 447,569 89.4%
------------------------------
<PAGE>
TEXAS
Dallas
Bethany Lake (5)(6) 1998 1998 91,674 68.3% Kroger
Creekside (5) 1998 1998 96,816 94.2% Kroger
Preston Brook - Frisco (5)(6) 1998 1998 91,373 77.8% Kroger
Shiloh Springs (7) 1998 1998 81,865 94.0% Kroger
Village Center - Southlake (5) 1998 1998 118,172 88.6% Kroger
------------------------------
Subtotal/Weighted
Average(Texas) 479,900 84.7%
------------------------------
TENNESSEE
Nashville
Harpeth Village (5) 1997 1998 70,091 100.0% Albertsons
Marketplace - 1997 1997 23,500 100.0% --
Murphreesburo (5)
Nashboro Village (7) 1998 1998 86,793 89.1% Kroger
Peartree Village 1997 1997 114,795 100.0% Harris Teeter
------------------------------
Subtotal/Weighted
Average(Tennessee) 295,179 96.8%
------------------------------
VIRGINIA
Brookville Plaza 1998 1991 63,664 97.6% Kroger
Statler Square 1998 1996 133,660 97.7% Kroger
------------------------------
Subtotal/Weighted
Average(Virginia) 197,324 97.7%
------------------------------
MISSISSIPPI
Columbia Marketplace(3) 1993 1988 136,002 98.7% Winn-Dixie
Lucedale Marketplace(3) 1993 1989 49,059 94.7% Delchamps
------------------------------
Subtotal/Weighted
Average(Mississippi) 185,061 97.6%
------------------------------
MICHIGAN
Lakeshore 1998 1996 85,478 99.0% Kroger
Waterford 1998 1998 92,451 65.3% Kroger
------------------------------
Subtotal/Weighted
Average(Michigan) 177,929 81.5%
------------------------------
SOUTH CAROLINA
Merchants Village 1997 1997 79,723 100.0% Publix
Queensborough (5) 1998 1993 82,333 100.0% Publix
------------------------------
Subtotal/Weighted
Average(South Carolina) 162,056 100.0%
-----------------------------
<PAGE>
DELAWARE
Pike Creek 1998 1981 232,752 94.8% Acme
KENTUCKY
Franklin Square 1998 1988 205,060 95.6% Kroger
ILLINOIS
Hinsdale Lake Commons 1998 1986 178,600 86.9% Dominick's
MISSOURI
St. Ann Square 1998 1986 82,498 99.8% National
------------------------------
Total Weighted Average 14,652,229 92.9%
==============================
<CAPTION>
Drug Store & Other
Property Name Other Anchors Tenants
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FLORIDA
Jacksonville /
North Florida
Anastasia -- Hallmark, Schmagel's Bagels, Mailboxes
Bolton Plaza Wal-Mart Radio Shack, Payless Shoes, Mailboxes
Carriage Gate TJ Maxx Brueggers Bagels, Bedfellows, Alterations
Courtyard (3) -- Olan Mills, Heavenly Ham, Beauty Warehouse
Ensley Square (5) -- Radio Shack, Hallmark, Amsouth Bank
Fleming Island -- Mail Boxes, Etc., Radio Shack, GNC
Highlands Square (6) Eckerd, Consolidated Stores Hair Cuttery, Rent Way, Precision Printing
Millhopper (3) Eckerd Book Gallery, Postal Svc., Chesapeake Bagel
Newberry Square Kmart H & R Block, Cato Fashions, Olan Mills
Old St. Augustine Plaza Eckerd, Waccamaw Mail Boxes, Etc., Hallmark, Hair Cuttery
Palm Harbour Eckerd, Bealls Mail Boxes, Etc., Hallmark, Meale Norman
Pine Tree Plaza (6) -- Great Clips, CiCi's Pizza, Soupersalad
Regency Court CompUSA, Office Depot H & R Block, Mail Boxes Etc.
Sports Authority Loop Restaurant
South Monroe Eckerd Rent-A-Center, H & R Block
Tampa / Orlando
Beneva Walgreen's Stride Rite, GNC, Subway
Bloomingdale Square Eckerd, Wal-Mart, Beall's Radio Shack, H&R Block, Hallmark
Mainstreet Square Walgreen's Rent-A-Center, Discount Auto Parts, Norwest
Mariner's Village Walgreen's Supercuts. Pak Mail, Allstate Insurance
Market Place - St. Petersburg Eckerd Mail Boxes, Etc., Republic, Weight Watchers
Peachland Promenade Ace Hardware State Farm, Subway, GNC
Regency Square TJ Maxx, AMC, Pak Mail, Lens Crafter
at Brandon (3) Staples, Marshalls Famous Footware
Seven Springs Kmart State Farm, Subway, H & R Block
Terrace Walk (3) -- Olan Mills, Norwest, Cellular Mart
Town Square -- Baskin Robbins, Coldwell Banker, Hallmark
University Collections Eckerd Hallmark, Pak Mail, Dockside Imports
Village Center-Tampa Walgreen's, Stein Mart Hallmark, Pak Mail, Mens Warehouse
West Palm Beach /
Treasure Coast
Boynton Lakes Plaza Walgreen's Radio Shack, Baskin Robbins, Dunkin Donuts
Chasewood Plaza (3) Walgreen's Hallmark, GNC, Supercuts
Chasewood Storage (3) --
East Port Plaza Walgreen's, Kmart, Sears H & R Block, Pak Mail, Subway
Martin Downs Village Center(3) Coastal Care Burger King, Hallmark, Barnett Bank
Martin Downs Walgreen's Mailbox Plus, Allstate, Optical Outlet
Village Shop (3)(6)
Ocean Breeze (3) Walgreen's, Coastal Care Mail Boxes, Barnett Bank, World Travel
Ocean East (5) Coastal Care Mail Boxes, Nations Bank, Ocean Cleaners
Tequesta Shoppes Walgreen's Mail Boxes, Etc., Hallmark, Radio Shack
Town Center at Martin Downs -- Mail Boxes, Health Exchange, Champs Hair
Wellington Market Place Walgreen's, United Artists Pak Mail, Subway, Papa John's
Wellington Town Square Eckerd Mail Boxes, Hallmark, Coldwell Banker
Miami / Ft. Lauderdale
Aventura (3) Eckerd, Humana Pak Mail, Bank United, City of Aventura
Berkshire Commons Walgreen's H & R Block, Century 21, Postal Station
Garden Square Eckerd Subway, GNC, Hair Cuttery
North Miami (3) Eckerd
Palm Trails Plaza -- Mail Boxes, Sal's Pizza, Personnel One
Shoppes @ 104 Rite Aid Mail Boxes Etc., GNC, Pet Superstore
Tamiami Trail Eckerd Mail Boxes, Etc., Radio Shack, Pizza Hut
University Market Place -- H & R Block, Mail Boxes Etc., Olan Mills
Welleby Walgreen's H & R Block, Mail Boxes Plus, Pizza Hut
Subtotal/Weighted
Average(Florida)
<PAGE>
GEORGIA
Atlanta
Ashford Place Pier 1 Imports Baskin Robbin, Mail Boxes Merle Norman
Braelin Village (5) Kmart Baskin Robbins, Mail Boxes Etc.,
Manhattan Bagel
Briarcliff LaVista Drug Emporium Supercuts, Trust Company Bank
Briarcliff Village (6) Eckerd, TJ Maxx, Office Depot Subway, Hair Cuttery, Famous Footware
Buckhead Court -- Hallmark, Bellsouth Mobility
Outback Steakhouse
Cambridge Square -- Papa John's, AAA Mail & Pkg., Wachovia
Cromwell Square CVS Drug First Union, Bellsouth Mobility
Haverty's Furniture Hancock Fabrics
Cumming 400 Big Lots Pizza Hut, Hair Cuttery, Autozone
Delk Spectrum (3)(5) -- Mail Boxes, Etc., GNC, Wolf Camera
Dunwoody Hall Eckerd Texaco, Blimpie, Nations Bank
Dunwoody Village (5) -- Federal Express, Jiffy Lube, Hallmark
Loehmann's Plaza Eckerd, Loehmann's Mail Boxes, Etc., GNC, H & R Block
Lovejoy Station -- State Farm, Pizza Hut, Supercuts
Memorial Bend TJ Maxx Pizza Hut, GNC, H & R Block
Orchard Square CVS Drug Mail Boxes Unlimited, State Farm, Remax
Paces Ferry Plaza -- Chapter 11 Bookstore, Banksouth
Sherwin Williams
Powers Ferry Square Drugs for Less Domino's Pizza, Dunkin Donuts, Supercuts
Powers Ferry Village CVS Drug Mail Boxes, Etc., Southtrust Bank, Blimpies
Rivermont Station CVS Drug Pak Mail, GNC, Wolf Camera
Roswell Village (6) Eckerd, Ace Hardware Hallmark, Pizza Hut, Scholtzyky's
Russell Ridge -- Pizza Hut, Pak Mail, Hallmark
Sandy Plains Village Ace Hardware H & R Block, Mail Boxes Etc., Subway
Sandy Springs Village -- Air Touch
Trowbridge Crossing (5) -- Domino's, Postal Services, Hair Cuttery
Other Markets
Evans Crossing -- Subway, Hair Cuttery, Dollar Tree
LaGrangeMarketplace(3) Eckerd Lee's Nails, It's Fashions, One Price Clothing
Parkway Station (5) -- H & R Block, Pizza Hut, Olan Mills
Subtotal/Weighted
Average(Georgia)
OHIO
Cincinnati
Beckett Commons -- Mail Boxes, Etc., Subway, Taco Bell
Cherry Grove CVS Drug, TJ Maxx GNC, Hallmark, Sally Beauty Supply
Hancock Fabrics
Hamilton Meadows Kmart Radio Shack, H&R Block, GNC
Hyde Park Plaza (5) Walgreen's, Micheals Radio Shack, H&R Block, Hallmark
Barnes & Noble, Old Navy
Shoppes at Mason -- Pizza Hut, GNC, Great Clips
Silverlake -- Radio Shack, H&R Block, Great Clips
Westchester Plaza -- Pizza Hut, Subway, GNC
Columbus
East Pointe -- Mail Boxes, Etc., Hallmark, Liberty Mutual
Kingsdale (3)(6) Stein Mart, Limited Hallmark, Sherwin Williams
S&K Menswear Famous Footware
North Gate/(Maxtown) -- Domino's Pizza, GNC, Great Clips
Park Place -- Mail Boxes, Etc., Domino's, Subway
Windmiller Plaza Sears Hardware Radio Shack, Sears Optical, Great Clips
Worthington CVS Drug Little Caesar's, Hallmark, Radio Shack
Subtotal/Weighted
Average(Ohio)
<PAGE>
NORTH CAROLINA
Asheville
Oakley Plaza CVS Drug, Western Auto Little Caesar's, Subway
Baby Superstore Life Uniform
Charlotte
Carmel Commons Eckerd, Piece Goods Little Caesar's, Radio Shack, Blimpies
City View VS Drug, Public Library Little Caesar's, Bellsouth, Willie's
Union Square CVS Drug Mail Boxes, Etc., Subway, TCBY
Consolidated Theatres
Raleigh / Durham
Bent Tree Plaza Pizza Hut, Manhattan Bagel, Parcel Plus
Garner Town Square United Artists, Office Max Sears Optical, Friedman's Jewelers
Petsmart H & R Block
Glenwood Village -- Domino's Pizza, Threadbenders II
Lake Pine Plaza -- H & R Block, GNC, Great Clips
Maynard Crossing -- Mail Boxes, Etc., GNC, Hallmark
Southpoint Crossing (7) -- Wolf Camera, GNC, Manhattan Bagel
Woodcroft Eckerd, True Value Domino's Pizza, Subway, Allstate
Winston-Salem
Kernersville Marketplace -- Mail Boxes, Little Caesar's, Great Clips
Subtotal/Weighted
Average(North Carolina)
ALABAMA
Birmingham
Villages of Trussville (3) CVS Drug Head Start, Cellular One, Mattress Max
West County Marketplace (3) Harco, Wal-Mart Domino's Pizza, GNC, Cato Plus
Montgomery
Country Club (3) Rite Aid Radio Shack, Subway, Beltone
Other Markets
Bonner's Point (3) Wal-Mart Subway, Domino's Pizza, It's Fashion
Marketplace - Wal-Mart Domino's Pizza, Subway, Hallmark
Alexander City (3)
Subtotal/Weighted
Average(Alabama)
COLORADO
Colorado Springs
Cheyenne Meadows (5) -- Hallmark, Nail Center, Cost Cutters
Jackson Creek (6)(7) -- Cost Cutters, Polo Cleaners
Woodman Plaza (6)(7) -- Cost Cutters
Denver
Lloyd King Center (5) -- GNC, Cost Cutters, Hollywood Video
Stroh Ranch (6)(7) -- Cost Cutters, Post Net, Dry Clean Station
Subtotal/Weighted
Average(Colorado)
<PAGE>
TEXAS
Dallas
Bethany Lake (5)(6) -- Boss Cleaners, Mr. Parcel, Fantastic Sams
Creekside (5) -- Hollywood Video, CICI's,Fantastic Sams
Preston Brook - Frisco (5)(6) -- Coldwell Banker
Shiloh Springs (7) -- GNC, Great Clips, Cardsmart
Village Center - Southlake (5) -- Radio Shack, Papa Johns, Smoothie King
Subtotal/Weighted
Average(Texas)
TENNESSEE
Nashville
Harpeth Village (5) -- Mail Boxes, Etc., Heritage Cleaners, Cat's
Marketplace - Office Max Shoe Carnival
Murphreesburo (5)
Nashboro Village (7) -- Hallmark, Fantastic Sams, Cellular
Peartree Village Eckerd, Office Max Hollywood Video, AAA Auto, Royal Thai
Subtotal/Weighted
Average(Tennessee)
VIRGINIA
Brookville Plaza -- H&R Block, House of Frames, Jenny Craig
Statler Square CVS Drugs, Staples Hallmark, H & R Block, Hair Cuttery
Subtotal/Weighted
Average(Virginia)
MISSISSIPPI
Columbia Marketplace(3) Wal-Mart GNC, Radio Shack, Cato
Lucedale Marketplace(3) Wal-Mart(4) Subway, First Family Financial, Byrd's Cleaners
Subtotal/Weighted
Average(Mississippi)
MICHIGAN
Lakeshore Rite Aid Hallmark, Subway, Baskin Robins
Waterford --
Subtotal/Weighted
Average(Michigan)
SOUTH CAROLINA
Merchants Village -- Mail Boxes, Hollywood Video, Hallmark
Queensborough (5) -- Mail Boxes, Etc., Supercuts, Pizza Hut
Subtotal/Weighted
Average(South Carolina)
<PAGE>
DELAWARE
Pike Creek Eckerd, K-mart Radio Shack, H & R Block, TCBY
KENTUCKY
Franklin Square Rite Aid, JC Penney Mail Boxes, Baskin Robbins, Kay Jewelers
ILLINOIS
Hinsdale Lake Commons Ace Hardware Hallmark, McDonalds, Fannie Mae
MISSOURI
St. Ann Square Vic Tanny Great Clips, US Navy, US Marines
Total Weighted Average
</TABLE>
- -------------------------------------------------------
(1) Or latest renovation
(2) Includes development properties. If development properties are excluded,
the total percentage leased would be 94.6% for Partnership shopping centers
and 94.0% for Company shopping centers.
(3) Company-owned property not owned by the the Partnership.
(4) Tenant owns its own building.
(5) Owned by a partnership with outside investors in which the Partnership
(or the Company in the case of a property referred to in note (3)
above) or an affiliate is the general partner.
(6) Property under development or redevelopment.
(7) Owned by a joint venture in which the Partnership owns less than a 100%
interest.
Item 3. Legal Proceedings
The Company is, from time to time, a party to legal proceedings which arise in
the ordinary course of its business. The Company is not currently involved in
any litigation nor, to management's knowledge, is any litigation threatened
against the Company, the outcome of which would, in management's judgement based
on information currently available, have a material adverse effect on the
financial position or results of operations of the Company.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted for shareholder vote during the fourth quarter of
1998.
PART II
Item 5. Market for the Registrant's Common Equity and Related Shareholder
Matters
The Company's common stock is traded on the New York Stock Exchange ("NYSE")
under the symbol "REG". The Company currently has approximately 3,500
shareholders. The following table sets forth the high and low prices and the
cash dividends declared on the Company's common stock by quarter for 1998 and
1997. All amounts are in thousands except per share data.
<TABLE>
<CAPTION>
1998 1997
----------------------------------- -----------------------------------
Cash Cash
High Low Dividends High Low Dividends
Price Price Declared Price Price Declared
----- ----- --------- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C>
March 31 $ 27.812 24.750 .44 28.000 25.000 .42
June 30 26.687 24.062 .44 28.125 24.875 .42
September 30 26.500 20.500 .44 28.250 24.875 .42
December 31 23.437 20.250 .44 28.000 24.250 .42
</TABLE>
The following describes the registrant's sales of unregistered securities
during the periods covered by this report, each sold in reliance on Rule 506 of
the Securities Act.
During 1998, the Company acquired 32 shopping centers from various entities
comprising the Midland Group ("Midland"). The Company's investment in the
properties acquired from Midland is $236.6 million at December 31, 1998. As
part of the acquisition of Midland, the Company issued 425,982 Operating
Partnership Units ("Units") of Regency Centers, L.P. to the Midland principals.
Units are exchangeable into Regency common stock on a one for one basis. In
addition, during 1999 and 2000, the Company may pay contingent consideration of
up to an estimated $23 million, through the issuance of Units and the payment of
cash. The amount of such consideration, if issued, will depend on the
satisfaction of certain performance criteria relating to the assets acquired
from Midland. Transferors who received cash at the initial Midland closing will
receive contingent future consideration in cash rather than Units. The
acquisition of Midland is discussed further in note 2, Acquisitions of Shopping
Centers, of the notes to the 1998 consolidated financial statements.
On June 29, 1998, the Company through RCLP issued $80 million of 8.125%
Series A Cumulative Redeemable Preferred Units ("Series A Preferred Units") to
Belair Capital Fund LLC in a private placement. The issuance involved the sale
of 1.6 million Series A Preferred Units for $50.00 per unit. The Series A
Preferred Units, which may be called by the Company at par on or after June 25,
2003, have no stated maturity or mandatory redemption, and pay a cumulative,
quarterly dividend at an annualized rate of 8.125%. At any time after June 25,
2008, the Series A Preferred Units may be exchanged for shares of 8.125% Series
A Cumulative Redeemable Preferred Stock of the Company at an exchange rate of
one share of Series A Preferred Stock for one Series A Preferred Unit. The
Series A Preferred Units and Series A Preferred Stock are not convertible into
common stock of the Company.
In November 1998, the Company acquired Park Place shopping center in
exchange for 79,466 Units of Regency Centers, L.P. valued at $26 per Unit plus
the assumption of debt secured by Park Place.
The Company acquired 35 shopping centers during 1997 (the "1997 Acquisitions")
for approximately $395.7 million. Included in the 1997 Acquisitions are 26
shopping centers acquired from Branch Properties ("Branch") for $232.4 million.
During 1998, the Company issued 721,997 additional Units and shares of common
stock valued at $18.2 million to Branch as contingent consideration for the
satisfaction of certain performance criteria of the properties acquired. The
Company expects to issue the remaining contingent consideration, 298,064 Units,
during 1999. In connection with the Units and shares of common stock issued to
Branch in March 1998, SC-USREALTY acquired 435,777 shares at $22.125 per share
in accordance with their rights to purchase common stock. The acquisition of
Branch is discussed further in note 2, Acquisitions of Shopping Centers, of the
notes to the 1998 consolidated financial statements.
The Company intends to pay regular quarterly distributions to its common
shareholders. Future distributions will be declared and paid at the discretion
of the Board of Directors, and will depend upon cash generated by operating
activities, the Company's financial condition, capital requirements, annual
distribution requirements under the REIT provisions of the Internal Revenue Code
of 1986, as amended, and such other factors as the Board of Directors deems
relevant. The Company anticipates that for the foreseeable future cash available
for distribution will be greater than earnings and profits due to non-cash
expenses, primarily depreciation and amortization, to be incurred by the
Company. Distributions by the Company to the extent of its current and
accumulated earnings and profits for federal income tax purposes will be taxable
to shareholders as ordinary dividend income. Distributions in excess of earnings
and profits generally will be treated as a non-taxable return of capital. Such
distributions have the effect of deferring taxation until the sale of a
shareholder's common stock. In order to maintain its qualification as a REIT,
the Company must make annual distributions to shareholders of at least 95% of
its taxable income. Under certain circumstances, which management does not
expect to occur, the Company could be required to make distributions in excess
of cash available for distributions in order to meet such requirements. The
Company currently maintains the Regency Realty Corporation Dividend Reinvestment
and Stock Purchase Plan which enables its shareholders to automatically reinvest
distributions as well as make voluntary cash payments towards the purchase of
additional shares.
The Company declares quarterly cash dividends on the 2.5 million Class B common
shares outstanding. At December 31, 1998 the Class B common was owned by a
single shareholder. During 1998 a distribution of $.5378 per share was paid
quarterly. The 2.5 million Class B common shares are convertible into 2,975,468
common shares, subject to certain ownership limitations.
Under the loan agreement with the lenders of the Company's line of credit,
distributions may not exceed 95% of Funds from Operations ("FFO") based on the
immediately preceding four quarters. FFO is defined in accordance with the
NAREIT definition as described under Item 7., Management's Discussion and
Analysis. Also in the event of any monetary default, the Company will not make
distributions to shareholders.
<PAGE>
Item 6. Selected Consolidated Financial Data
(in thousands, except per share data and number of properties)
The following table sets forth Selected Financial Data on a historical basis for
the five years ended December 31, 1998, for the Company. This information should
be read in conjunction with the financial statements of the Company (including
the related notes thereto) and Management's Discussion and Analysis of the
Financial Condition and Results of Operations, each included elsewhere in this
Form 10-K. This historical Selected Financial Data has been derived from the
audited financial statements.
<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating Data:
Revenues:
Rental revenues $ 130,487 88,855 43,433 31,555 25,673
Management, leasing and
brokerage fees 11,863 8,448 3,444 2,426 2,332
Equity in income of investments
in real estate partnerships 946 33 70 4 17
------------- ----------- ----------- ----------- ------------
Total revenues 143,296 97,336 46,948 33,985 28,022
------------- ----------- ----------- ----------- ------------
Operating expenses:
Operating, maintenance and real
estate taxes 30,844 22,904 12,065 8,683 7,140
General and administrative 15,064 9,964 6,048 4,894 4,531
Depreciation and amortization 25,046 16,303 8,059 5,854 5,266
------------- ----------- ----------- ----------- ------------
Total operating expenses 70,954 49,171 26,172 19,431 16,937
------------- ----------- ----------- ----------- ------------
Interest expense, net of income 26,829 18,667 10,811 8,969 5,701
------------- ----------- ----------- ----------- ------------
Income before minority interests and sale of
real estate investments 45,513 29,498 9,965 5,585 5,384
Gain on sale of real estate investments 10,726 451 - - -
------------- ----------- ----------- ----------- ------------
Income before minority interests 56,239 29,948 9,965 5,585 5,384
Minority interest of exchangeable
operating partnership units (1,826) (2,042) - - -
Minority interest of limited partners (464) (505) - - -
Minority interest preferred unit distribution (3,359) - - - -
------------- ----------- ----------- ----------- ------------
Net income 50,590 27,402 9,965 5,585 5,384
Preferred stock dividends - - 58 591 283
----------- ----------- ------------
============= ===========
Net income for common stockholders $ 50,590 $27,402 9,907 4,994 5,101
============= =========== =========== =========== ============
Earnings per share:
Basic $ 1.80 1.28 0.82 0.75 0.80
============= =========== =========== =========== ============
Diluted $ 1.75 1.23 0.82 0.75 0.80
============= =========== =========== =========== ============
Other Data:
Common stock outstanding including
Class B common if converted 28,464 26,967 13,590 9,704 6,455
Exchangeable operating partnership units
outstanding 1,361 574 29 - -
Company owned gross leasable area 14,652 9,981 5,512 3,981 3,182
Number of properties (at end of period) 129 89 50 36 30
Ratio of earnings to fixed 2.1 2.3 1.8 1.5 1.7
charges
Balance Sheet Data:
Real estate investments at cost $ 1,250,332 $834,402 393,403 279,046 217,539
Total assets 1,240,107 826,849 386,524 271,005 214,082
Total debt 548,126 278,050 171,607 115,617 107,998
Stockholders' equity 550,741 513,627 206,726 147,007 101,760
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the accompanying
Consolidated Financial Statements and Notes thereto of Regency Realty
Corporation ("Regency" or "Company") appearing elsewhere within.
Organization
- ------------
The Company is a qualified real estate investment trust ("REIT") which began
operations in 1993. The Company invests in real estate primarily through its
general partnership interest in Regency Centers, L.P., ("RCLP" or "Partnership")
an operating partnership in which the Company currently owns approximately 96%
of the outstanding common partnership units ("Units"). Of the 129 properties
included in the Company's portfolio at December 31, 1998, 109 properties were
owned either fee simple or through partnerships interests by RCLP. At December
31, 1998, the Company had an investment in real estate, at cost, of
approximately $1.3 billion of which $1.1 billion or 86% was owned by RCLP.
Shopping Center Business
- ------------------------
The Company's principal business is owning, operating and developing grocery
anchored neighborhood infill shopping centers. Infill refers to shopping
centers within a targeted investment market offering sustainable competitive
advantages such as barriers to entry resulting from zoning restrictions, growth
management laws, or limited new competition from development or expansions. The
Company's properties summarized by state and in order by largest holdings
including their gross leasable areas (GLA) follows:
<TABLE>
<CAPTION>
Location December 31, 1998 December 31, 1997
-------- ----------------- -----------------
# Properties GLA % Leased # Properties GLA % Leased
------------ --- -------- ------------ --- --------
<S> <C> <C> <C> <C> <C> <C>
Florida 46 5,728,347 91.4% 45 5,267,894 91.5%
Georgia 27 2,737,590 93.1% 25 2,539,507 92.4%
Ohio 13 1,786,521 93.4% 2 629,920 89.1%
North Carolina 12 1,239,783 98.3% 6 554,332 99.0%
Alabama 5 516,060 99.0% 5 516,080 99.9%
Texas 5 479,900 84.7% - - -
Colorado 5 447,569 89.4% - - -
Tennessee 4 295,179 96.8% 3 208,386 98.5%
Virginia 2 197,324 97.7% - - -
Mississippi 2 185,061 97.6% 2 185,061 96.9%
Michigan 2 177,929 81.5% - - -
South Carolina 2 162,056 100.0% 1 79,743 84.3%
Delaware 1 232,752 94.8% - - -
Kentucky 1 205,060 95.6% - - -
Illinois 1 178,600 86.9% - - -
Missouri 1 82,498 99.8% - - -
------------- ---------- ------- ------------ --------- ------
Total 129 14,652,229 92.9% 89 9,980,923 92.8%
============= ========== ======= ============ ========= ======
</TABLE>
The Company is focused on building a platform of grocery anchored neighborhood
shopping centers because grocery stores provide convenience shopping of daily
necessities, foot traffic for adjacent local tenants, and should withstand
adverse economic conditions. The Company's current investment markets have
continued to offer strong stable economies, and accordingly, the Company expects
to realize growth in net income as a result of increasing occupancy in the
portfolio, increasing rental rates, development and acquisition of shopping
centers in targeted markets, and redevelopment of existing shopping centers. The
following table summarizes the four largest grocery tenants occupying the
Company's shopping centers at December 31, 1998:
Grocery Number of % of % of Annualized Avg Remaining
Anchor Stores Total GLA Base Rent Lease Term
------- --------- --------- --------------- -------------
Kroger 36 14.9% 13.8% 19 yrs
Publix 33 9.8% 6.9% 13 yrs
Winn-Dixie 16 5.1% 3.8% 13 yrs
Harris Teeter 4 1.3% 1.7% 11 yrs
Acquisition and Development of Shopping Centers
- -----------------------------------------------
During 1998, the Company acquired 31 shopping centers fee simple for
approximately $355.9 million and also invested $28.4 million in 12 joint
ventures ("JV Properties"), for a total investment of $384.3 million in 43
shopping centers ("1998 Acquisitions"). Included in the 1998 Acquisitions are 32
shopping centers acquired from various entities comprising the Midland Group
("Midland"). Of the 32 Midland centers, 31 are anchored by Kroger, and 12 are
owned through joint ventures in which the Company's ownership interest is 50% or
less. The Company's investment in the properties acquired from Midland is $236.6
million at December 31, 1998. The Company expects to acquire all of the
interests in two of the JV Properties for approximately $20.3 million during
1999 which will increase its total investment in the Midland properties to
$256.9 million. In addition, during 1999 and 2000, the Company may pay
contingent consideration of up to an estimated $23 million, through the issuance
of Partnership units and the payment of cash. The amount of such consideration,
if issued, will depend on the satisfaction of certain performance criteria
relating to the assets acquired from Midland. Transferors who received cash at
the initial Midland closing will receive contingent future consideration in cash
rather than units.
The Company acquired 35 shopping centers during 1997 (the "1997 Acquisitions")
for approximately $395.7 million. Included in the 1997 Acquisitions are 26
shopping centers acquired from Branch Properties ("Branch") for $232.4 million.
During 1998, the Company issued 721,997 additional Units and shares of common
stock valued at $18.2 million to Branch as contingent consideration for the
satisfaction of certain performance criteria of the properties acquired. The
Company expects to issue the remaining contingent consideration, 298,064 Units,
during 1999.
Results from Operations
- -----------------------
Comparison of 1998 to 1997
Revenues increased $46.0 million or 47% to $143.3 million in 1998. The increase
was due primarily to the 1998 and 1997 Acquisitions providing increases in
revenues of $37.5 million during 1998. At December 31, 1998, the real estate
portfolio contained approximately 14.7 million SF and was 92.9% leased. Minimum
rent increased $33.3 million or 47%, and recoveries from tenants increased $7.5
million or 45%. On a same property basis (excluding the 1998 and 1997
Acquisitions, and the office portfolio sold during 1998) gross rental revenues
increased $3.4 million or 6.7%, primarily due to higher base rents. Revenues
from property management, leasing, brokerage, and development services (service
operation segment) provided on properties not owned by the Company were $11.9
million in 1998 compared to $8.4 million in 1997, the increase due primarily to
increased brokerage fees and increased activity in construction and development
for third parties. During 1998, the Company sold four office buildings and a
parcel of land for $30.7 million, and recognized a gain on the sale of $10.7
million. As a result of these transactions the Company's real estate portfolio
is comprised entirely of retail shopping centers. The proceeds from the sale
were used to reduce the balance of the line of credit.
Operating expenses increased $21.8 million or 44% to $71.0 million in 1998.
Combined operating and maintenance, and real estate taxes increased $7.9 million
or 35% during 1998 to $30.8 million. The increases are due to the 1998 and 1997
Acquisitions generating operating and maintenance expenses and real estate tax
increases of $9.4 million during 1998, partially offset by the sale of the
office buildings. On a same property basis, operating and maintenance expenses
and real estate taxes increased $100,000 or 1%. General and administrative
expenses increased 51% during 1998 to $15.1 million due to the hiring of new
employees and related office expenses necessary to manage the shopping centers
acquired during 1998 and 1997, as well as, the shopping centers the Company
began managing for third parties during 1998 and 1997. Depreciation and
amortization increased $8.7 million during 1998 or 54% primarily due to the 1998
and 1997 Acquisitions.
Interest expense increased to $28.8 million in 1998 from $19.7 million
in 1997 or 46% due to increased average outstanding loan balances related to the
financing of the 1998 and 1997 Acquisitions on the Line and the assumption of
debt. Weighted average interest rates increased 0.1% during 1998. See further
discussion under Acquisition and Development of Shopping Centers and Liquidity
and Capital Resources.
Net income for common stockholders was $50.6 million in 1998 vs. $27.4
million in 1997, a $23.2 million or 85% increase for the reasons previously
described. Diluted earnings per share in 1998 was $1.75 vs. $1.23 in 1997 due to
the increase in net income combined with the dilutive impact from the increase
in weighted average common shares and equivalents of 7.2 million primarily due
to the acquisition of Branch and Midland, the issuance of shares to SC-USREALTY
during 1998 and 1997, and the public offering completed in July, 1997. (see
notes 2, 6 and 7, to the 1998 consolidated financial statements for related
discussions).
Comparison of 1997 to 1996
Revenues increased $50.4 million or 107% to $97.3 million in 1997. The increase
was due primarily to the 1997 Acquisitions and properties acquired in 1996 (the
"1996 Acquisitions") providing increases in revenues of $49.8 million during
1997. At December 31, 1997, the real estate portfolio contained approximately 10
million SF and was 92.8% leased. Minimum rent increased $35.4 million or 102%,
and recoveries from tenants increased $8.9 million or 115%. On a same property
basis (excluding the 1997 and 1996 Acquisitions) revenues increased $925,000 or
2%, primarily due to higher percentage rents and operating expense recoveries
from tenants. Revenues from property management, leasing, brokerage, and
development services provided on properties not owned by the Company were $8.4
million in 1997 compared to $3.4 million in 1996, the increase due to fees
earned from third party property management and leasing contracts acquired as
part of the acquisition of Branch.
Operating expenses increased $23.0 million or 88% to $49.2 million in 1997.
Combined operating and maintenance, and real estate taxes increased $10.8
million or 89% during 1997 to $22.9 million. The increases are due to the 1997
and 1996 Acquisitions generating operating and maintenance expenses, and real
estate tax increases of $10.6 million during 1997. On a same property basis,
operating and maintenance expenses and real estate taxes increased $226,000, or
2%. General and administrative expense increased 64.7% during 1997 to $10.0
million due to the hiring of new employees and related office expenses necessary
to manage the 52 shopping centers acquired during 1996 and 1997, as well as, the
44 shopping centers that the Company began managing for third parties during
1997. Depreciation and amortization increased $8.2 million during 1997 or 102%
primarily due to the 1997 and 1996 Acquisitions generating $7.7 million in
depreciation and amortization.
Interest expense increased to $19.7 million in 1997 from $11.5 million
in 1996 or 71% due primarily to increased average outstanding loan balances
related to the financing of the 1997 and 1996 Acquisitions on the Line and the
assumption of debt. Weighted average interest rates decreased 0.2% during 1997.
See further discussion under Acquisition and Development of Shopping Centers and
Liquidity and Capital Resources.
Net income for common stockholders was $27.4 million in 1997 vs. $9.9
million in 1996, a $17.5 million or 177% increase for the reasons previously
described. Diluted earnings per share in 1997 was $1.23 vs. $0.82 in 1996, an
increase of 50% due to the increase in net income combined with the dilutive
impact from the increase in weighted average common shares and equivalents of
12.4 million primarily due to the Acquisition of the Branch Properties, the
issuance of shares to SC-USREALTY, and the public offering discussed previously.
Funds from Operations
The Company considers funds from operations ("FFO"), as defined by the National
Association of Real Estate Investment Trusts as net income (computed in
accordance with generally accepted accounting principles) excluding gains (or
losses) from debt restructuring and sales of income producing property held for
investment, plus depreciation and amortization of real estate, and after
adjustments for unconsolidated investments in real estate partnerships and joint
ventures, to be the industry standard for reporting the operations of real
estate investment trusts ("REITs"). Adjustments for investments in real estate
partnerships are calculated to reflect FFO on the same basis. While management
believes that FFO is the most relevant and widely used measure of the Company's
performance, such amount does not represent cash flow from operations as defined
by generally accepted accounting principles, should not be considered an
alternative to net income as an indicator of the Company's operating
performance, and is not indicative of cash available to fund all cash flow
needs. Additionally, the Company's calculation of FFO, as provided below, may
not be comparable to similarly titled measures of other REITs.
FFO increased by 50% from 1997 to 1998 as a result of the activity discussed
above under "Results of Operations". FFO for the periods ended December 31,
1998, 1997 and 1996 are summarized in the following table (in thousands):
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Net income for common stockholders $ 50,590 27,402 9,907
Add (subtract):
Real estate depreciation and amortization 24,529 15,671 8,049
Gain on sale of operating property (9,824) (451) -
Minority interests in net income of
Exchangeable partnership units
1,826 2,042 -
----------- --------- ---------
Funds from operations $ 67,121 44,664 17,956
=========== ========= =========
Cash flow provided by (used in):
Operating activities $ 65,002 43,044 16,004
Investing activities (236,393) (188,533) (109,842)
Financing activities 174,725 153,782 98,730
</TABLE>
Liquidity and Capital Resources
- -------------------------------
Management anticipates that cash generated from operating activities will
provide the necessary funds on a short-term basis for its operating expenses,
interest expense and scheduled principal payments on outstanding indebtedness,
recurring capital expenditures necessary to properly maintain the shopping
centers, and distributions to share and unit holders. Net cash provided by
operating activities was $65 million and $43 million for the twelve months ended
December 31, 1998 and 1997, respectively. The Company incurred recurring and
non-recurring capital expenditures (non-recurring expenditures pertain to
immediate building improvements on new acquisitions and anchor tenant
improvements on new leases) of $8.3 million and $5.2 million, during 1998 and
1997, respectively. The Company paid scheduled principal payments of $3.4
million and $2.2 million during 1998 and 1997, respectively. The Company paid
dividends and distributions of $54.9 million and $35.9 million, during 1998 and
1997, respectively, to its share and unit holders.
Management expects to meet long-term liquidity requirements for term debt
payoffs at maturity, non-recurring capital expenditures, and acquisition,
renovation and development of shopping centers from: (i) excess cash generated
from operating activities, (ii) working capital reserves, (iii) additional debt
borrowings, and (iv) additional equity raised in the public markets. Net cash
used in investing activities was $236.4 million and $188.5 million, during 1998
and 1997, respectively, primarily for purposes discussed above under
Acquisitions and Development of Shopping Centers. Net cash provided by financing
activities was $174.7 million and $153.8 million during 1998 and 1997,
respectively, primarily related to the proceeds from the preferred unit and debt
offerings completed during 1998, and the proceeds from the common stock offering
in 1997, further discussed below. At December 31, 1998, the Company had 12
shopping centers under construction or undergoing major renovations, with costs
to date of $121.7 million. Total committed costs necessary to complete the
properties under development is estimated to be $47.4 million and will be
expended through 1999.
The Company's outstanding debt at December 31, 1998 and 1997 consists of the
following (in thousands):
1998 1997
---- ----
Notes Payable:
Fixed rate mortgage loans $ 298,148 199,078
Variable rate mortgage loans 11,051 30,841
Fixed rate unsecured loans 121,296 -
------- -------
Total notes payable 430,495 229,919
Acquisition and development line of credit 117,631 48,131
------- -------
Total $ 548,126 278,050
======= =======
The weighted average interest rate on total debt at December 31, 1998 and 1997
was 7.4% and 7.3%, respectively. The Company's debt is typically
cross-defaulted, but not cross-collateralized, and includes usual and customary
affirmative and negative covenants.
The Company is a party to a credit agreement dated as of March 27, 1998,
providing for an unsecured line of credit (the "Line") from a group of
lenders currently consisting of Wells Fargo, First Union, Wachovia Bank,
NationsBank, AmSouth Bank, Commerzbank AG, PNC Bank, and Star Bank. This credit
agreement provides for a $300 million commitment, and incorporates a competitive
bid facility of up to $150 million of the commitment amount. Maximum
availability under the Line is based on the discounted value of a pool of
eligible unencumbered assets (determined on the basis of capitalized net
operating income) less the amount of the Company's outstanding unsecured
liabilities. The Line matures in May 2000, but may be extended annually for one
year periods. Borrowings under the Line bear interest at a variable rate based
on LIBOR plus a specified spread, (.875% currently), which is dependent on the
Company's investment grade rating. The Company's ratings are currently Baa2 from
Moody's Investor Service, BBB from Duff and Phelps, and BBB- from Standard and
Poors. The Company is required to comply, and is in compliance, with certain
financial and other covenants customary with this type of unsecured financing.
These financial covenants include among others (i) maintenance of minimum net
worth, (ii) ratio of total liabilities to gross asset value, (iii) ratio of
secured indebtedness to gross asset value, (iv) ratio of EBITDA to interest
expense, (v) ratio of EBITDA to debt service and reserve for replacements, and
(vi) ratio of unencumbered net operating income to interest expense on unsecured
indebtedness. The Line is used primarily to finance the acquisition and
development of real estate, but is also available for general working capital
purposes.
On February 26, 1999, the Company entered into an agreement with the
various banks that provide the Line to increase the unsecured commitment amount
to $635 million.
On June 29, 1998, the Company through RCLP issued $80 million of 8.125%
Series A Cumulative Redeemable Preferred Units ("Series A Preferred Units") to
an institutional investor, Belair Capital Fund, LLC, in a private placement. The
issuance involved the sale of 1.6 million Series A Preferred Units for $50.00
per unit. The Series A Preferred Units, which may be called by the Company at
par on or after June 25, 2003, have no stated maturity or mandatory redemption,
and pay a cumulative, quarterly dividend at an annualized rate of 8.125%. At any
time after June 25, 2008, the Series A Preferred Units may be exchanged for
shares of 8.125% Series A Cumulative Redeemable Preferred Stock of the Company
at an exchange rate of one share of Series A Preferred Stock for one Series A
Preferred Unit. The Series A Preferred Units and Series A Preferred Stock are
not convertible into common stock of the Company. The net proceeds of the
offering were used to reduce the Line.
On July 17, 1998 the Company, through RCLP, completed a $100 million
offering of seven year term notes at an effective interest rate of 7.17%. The
Notes were priced at 162.5 basis points over the current yield for seven year US
Treasury Bonds. The net proceeds of the offering were used to reduce the balance
of the Line.
Mortgage loans are secured by certain real estate properties, but generally may
be prepaid subject to a prepayment of a yield-maintenance premium. Mortgage
loans are generally due in monthly installments of interest and principal and
mature over various terms through 2018. Variable interest rates on mortgage
loans are currently based on LIBOR plus a spread in a range of 125 basis points
to 150 basis points. Fixed interest rates on mortgage loans range from 7.04% to
9.8%.
During 1998, the Company assumed mortgage loans with a fair value of $132.8
million related to the acquisition of shopping centers, which includes debt
premiums of $12.4 million based upon the above market interest rates of the debt
instruments. Debt premiums are being amortized over the terms of the related
debt instruments.
As of December 31, 1998, scheduled principal repayments on notes payable and the
Line for the next five years were as follows (in thousands):
Scheduled
Principal Term Loan Total
Scheduled Payments by Year Payments Maturities Payments
-------------------------- --------- ---------- --------
1999 $ 3,771 21,579 25,350
2000 3,996 174,674 178,670
2001 3,911 41,928 45,839
2002 3,098 44,117 47,215
2003 2,914 13,291 16,205
Beyond 5 Years 17,811 206,607 224,418
Net unamortized debt
payments - 10,429 10,429
------- ------- -------
Total $ 35,501 512,625 548,126
======= ======= =======
Unconsolidated partnerships and joint ventures had mortgage loans payable of
$76.7 million at December 31, 1998, and the Company's proportionate share of
these loans was $34.4 million.
The Company qualifies and intends to continue to qualify as a REIT under the
Internal Revenue Code. As a REIT, the Company is allowed to reduce taxable
income by all or a portion of its distributions to stockholders. As
distributions have exceeded taxable income, no provision for federal income
taxes has been made. While the Company intends to continue to pay dividends to
its stockholders, it also will reserve such amounts of cash flow as it considers
necessary for the proper maintenance and improvement of its real estate, while
still maintaining its qualification as a REIT.
The Company's real estate portfolio has grown substantially during 1998 as a
result of the acquisitions and development discussed above. The Company intends
to continue to acquire and develop shopping centers in the near future, and
expects to meet the related capital requirements from borrowings on the Line.
The Company expects to repay the Line from time to time from additional public
and private equity and debt offerings, such as those completed during 1997 and
1998. Because such acquisition and development activities are discretionary in
nature, they are not expected to burden the Company's capital resources
currently available for liquidity requirements. The Company expects that cash
provided by operating activities, unused amounts available under the Line, and
cash reserves are adequate to meet liquidity requirements.
Pacific Retail Trust Merger
- ---------------------------
On September 23, 1998, the Company entered into an Agreement of Merger
("Agreement") with Pacific Retail Trust ("Pacific"), a privately held real
estate investment trust. The Agreement, among other matters, provides for the
merger of Pacific into Regency, and the exchange of each Pacific common or
preferred share into 0.48 shares of Regency common or preferred stock. The
stockholders approved the merger at a Special Meeting of Stockholders held
February 26, 1999. At the time of the merger, Pacific owned 71 retail shopping
centers that are operating or under construction containing 8.4 million SF of
gross leaseable area. On February 28, 1999, the effective date of the merger,
the Company issued equity instruments valued at $770.6 million to the Pacific
stockholders in exchange for their outstanding common and preferred shares, and
units. The total cost to acquire Pacific is expected to be $1.157 billion based
on the value of Regency shares issued including the assumption of $379 million
of outstanding debt and other liabilities of Pacific, and estimated closing
costs of $7.5 million. The price per share used to determine the purchase price
is $23.325 based on the five day average of the closing stock price of Regency's
common stock as listed on the New York Stock Exchange immediately before, during
and after the date the terms of the merger were agreed to and announced to the
public. The merger will be accounted for as a purchase with the Company as the
acquiring entity.
New Accounting Standards and Accounting Changes
- -----------------------------------------------
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities " (FAS 133), which is effective for all fiscal quarters of all fiscal
years beginning after June 15, 1999. FAS 133 establishes accounting and
reporting standards for derivative instruments and hedging activities. FAS 133
requires entities to recognize all derivatives as either assets or liabilities
in the balance sheet and measure those instruments at fair value. The Company
does not believe FAS 133 will materially effect its financial statements. g.
Environmental Matters
- ---------------------
The Company like others in the commercial real estate industry, is subject to
numerous environmental laws and regulations and the operation of dry cleaning
plants at the Company's shopping centers is the principal environmental concern.
The Company believes that the dry cleaners are operating in accordance with
current laws and regulations and has established procedures to monitor their
operations. The Company has approximately 31 properties that will require or are
currently undergoing varying levels of environmental remediation. These
remediations are not expected to have a material financial effect on the Company
due to financial statement reserves and various state-regulated programs that
shift the responsibility and cost for remediation to the state. Based on
information presently available, no additional environmental accruals were made
and management believes that the ultimate disposition of currently known matters
will not have a material effect on the financial position, liquidity, or
operations of the Company.
Inflation
- ---------
Inflation has remained relatively low during 1998 and 1997 and has had a minimal
impact on the operating performance of the shopping centers, however,
substantially all of the Company's long-term leases contain provisions designed
to mitigate the adverse impact of inflation. Such provisions include clauses
enabling the Company to receive percentage rentals based on tenants' gross
sales, which generally increase as prices rise, and/or escalation clauses, which
generally increase rental rates during the terms of the leases. Such escalation
clauses are often related to increases in the consumer price index or similar
inflation indices. In addition, many of the Company's leases are for terms of
less than ten years, which permits the Company to seek increased rents upon
re-rental at market rates. Most of the Company's leases require the tenants to
pay their share of operating expenses, including common area maintenance, real
estate taxes, insurance and utilities, thereby reducing the Company's exposure
to increases in costs and operating expenses resulting from inflation.
Year 2000 System Compliance
- ---------------------------
Management recognizes the potential effect Year 2000 may have on the Company's
operations and, as a result, has implemented a Year 2000 Compliance Project. The
term "Year 2000 compliant" means that the software, hardware, equipment, goods
or systems utilized by, or material to the physical operations, business
operations, or financial reporting of an entity will properly perform date
sensitive functions before, during and after the year 2000.
The Company's Year 2000 Compliance Project includes an awareness phase, an
assessment phase, a renovation phase, and a testing phase of our data processing
network, accounting and property management systems, computer and operating
systems, software packages, and building management systems. The project also
includes surveying our major tenants and financial institutions. Total costs
incurred to date associated with the Company's Year 2000 compliance project have
been reflected in the Company's income statement throughout 1998 and 1997, and
were approximately $250,000.
The Company's computer hardware, operating systems, general accounting and
property management systems and principal desktop software applications are Year
2000 compliant as certified by the various vendors. We are currently testing
these systems, and expect to complete the testing phase by June 30, 1999. Based
on initial testing, Management does not anticipate any Year 2000 issues that
will materially impact operations or operating results.
An assessment of the Company's building management systems has been completed.
This assessment has resulted in the identification of certain lighting,
telephone, and voice mail systems that may not be Year 2000 compliant. While we
have not yet begun renovations, Management believes that the cost of upgrading
these systems will not exceed $500,000. It is anticipated that the renovation
and testing phases will be complete by June 30, 1999, and the Company expects to
be compliant upon completion of these phases.
The Company has surveyed its major tenants and financial institutions to
determine the extent to which the Company is vulnerable to third parties'
failure to resolve their Year 2000 issues. The Company will be able to more
adequately assess its third party risk when responses are received from the
majority of the entities contacted.
Management believes its planning efforts are adequate to address the Year 2000
issue and that its risk factors are primarily those that it cannot directly
control, including the readiness of its major tenants and financial
institutions. Failure on the part of these entities to become Year 2000
compliant could result in disruption in the Company's cash receipt and
disbursement functions. There can be no guarantee, however, that the systems of
unrelated entities upon which the Company's operations rely will be corrected on
a timely basis and will not have a material adverse effect on the Company.
The Company does not have a formal contingency plan or a timetable for
implementing one. Contingency plans will be established, if they are deemed
necessary, after the Company has adequately assessed the impact on operations
should third parties fail to properly respond to their Year 2000 issues.
Item 7a. Quantitative and Qualitative Disclosures About Market Risk
Market Risk
- -----------
The Company is exposed to interest rate changes primarily as a result of its
line of credit and long-term debt used to maintain liquidity and fund capital
expenditures and expansion of the Company's real estate investment portfolio and
operations. The Company's interest rate risk management objective is to limit
the impact of interest rate changes on earnings and cash flows and to lower its
overall borrowing costs. To achieve its objectives the Company borrows primarily
at fixed rates and may enter into derivative financial instruments such as
interest rate swaps, caps and treasury locks in order to mitigate its interest
rate risk on a related financial instrument. The Company has no plans to enter
into derivative or interest rate transactions for speculative purposes, and at
December 31, 1998, the Company did not have any borrowings hedged with
derivative financial instruments.
The Company's interest rate risk is monitored using a variety of techniques. The
table below presents the principal amounts maturing (in thousands), weighted
average interest rates of remaining debt, and the fair value of total debt (in
thousands), by year of expected maturity to evaluate the expected cash flows and
sensitivity to interest rate changes.
<TABLE>
<CAPTION>
Fair
1999 2000 2001 2002 2003 Thereafter Total Value
---- ---- ---- ---- ---- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed rate debt $23,243 60,907 37,027 47,215 16,205 224,418 409,014 419,444
Average interest rate for all debt 7.83% 7.75% 7.91% 7.87% 7.70% 7.62% - -
Variable rate LIBOR debt 2,107 117,763 8,813 - - - 128,682 128,682
Average interest rate for all debt 6.16% 6.16% 6.55% - - - - -
</TABLE>
As the table incorporates only those exposures that exist as of December 31,
1998, it does not consider those exposures or positions which could arise after
that date. Moreover, because firm commitments are not presented in the table
above, the information presented therein has limited predictive value. As a
result, the Company's ultimate realized gain or loss with respect to interest
rate fluctuations will depend on the exposures that arise during the period, the
Company's hedging strategies at that time, and interest rates.
Forward Looking Statements
- --------------------------
The Private Securities Litigation Reform Act of 1995 (the "Act") provides a safe
harbor for forward-looking statements made by or on behalf of the Company. The
Company and its representatives may from time to time make written or oral
statements that are "forward-looking," including statements contained in this
report and other filings with the Securities and Exchange Commission and in
reports to the Company's stockholders. All statements that express expectations
and projections with respect to future matters, including the launching or
prospective development of new business initiatives; anticipated yields on real
estate acquisitions or developments; "Year 2000" remediation efforts; and
environmental remediation efforts, are forward-looking within the meaning of the
Act. Such statements involve unknown risks and uncertainties of business and
economic conditions pertaining to the operation, acquisition, or development of
shopping centers including the retail business sector, and may cause actual
results of the Company in the future to significantly differ from any future
results that may be implied by such forward-looking statements.
Item 8. Consolidated Financial Statements and Supplementary Data
The Consolidated Financial Statements and supplementary data included in this
Report are listed in Part IV, Item 14(a).
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information concerning the directors of the Company is incorporated herein by
reference to the Company's definitive proxy statement to be filed with the
Securities and Exchange Commission within 120 days after the end of the fiscal
year covered by this Form 10-K with respect to its 1999 Annual Meeting of
Shareholders. The following table provides information concerning the executive
officers of the Company
Executive Officer Positions with the Company
(Age) Principal Occupations During the Past Five Years
----------------- ------------------------------------------------
Martin E. Stein, Jr. Chairman, Chief Executive Officer, and Director
(age 46) of the Company since its initial public offering in
October 1993; previously President of the Company's
predecessor real estate division since 1976.
MaryLou Rogers President and Chief Operating Officer since
(age 47) January, 1999 and Director of the Company since
March, 1997; Managing Director - Security Capital
U.S. Realty Strategic Group From March 1997 to
January 1999; Senior Vice President and
Director of Stores, New England - Macy's East/
Federated Department Stores from 1994 to March
1997; various retailing positions since joining
Macy's in 1977, including Senior Vice President
for Federated's Burdines Division and Henri
Bendel.
James G. Buis Managing Director - Southwestern U.S. Investments
(age 54) of the Company since February 1999; Managing
Director - Pacific Retail Trust from October,
1995 to February 1999; Executive Vice President
- Madison Property Corporation from 1993 to
October, 1995; Executive Vice President -
Rosewood Property Company from 1989 to 1993;
Retail Partner - Lincoln Property Company from
1979 to 1989.
John S. Delatour Managing Director - Western U.S. Operations of the
(age 40) Company since February, 1999; Managing Director -
Pacific Retail Trust from June, 1996 to February
1999; Senior Vice President - Lincoln Property
Company from 1983 to June, 1996.
Robert C. Gillander Managing Director - Eastern U.S. Investments of the
(age 45) Company since its initial public offering in
October 1993, and Vice President of the
Company's predecessor real estate division
since 1978.
Bruce M. Johnson Managing Director and Chief Financial Officer of
(age 51) the Company since its initial public offering in
October 1993, and Executive Vice President of
the Company's predecessor real estate division
since 1979.
Brian M. Smith Managing Director - Pacific Investments of the
(age 44) Company since February, 1999; Managing Director -
Pacific Retail Trust from February, 1997 to
February 1999; Senior Vice President - Lowe
Enterprises, Inc. from 1994 to February 1997;
Managing Director - Trammell Crow Company from
1983 to 1994.
James D. Thompson Managing Director - Eastern Operations of the
(age 42) Company since its initial public offering in
October 1993, and Vice President of the Company's
predecessor real estate division since 1981.
Lee S. Wielansky Managing Director - Investments and Director of the
(age 48) Company since March 1998; President and Chief
Executive Officer - Midland Development Group
from 1983 to March 1998.
Item 11. Executive Compensation
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 1999 Annual
Meeting of Shareholders.
Item 12. Security Ownership of Certain Beneficial Owner and Management
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 1999 Annual
Meeting of Shareholders.
Item 13. Certain Relationships and Related Transactions
Incorporated herein by reference to the Company's definitive proxy statement to
be filed with the Securities and Exchange Commission within 120 days after the
end of the fiscal year covered by this Form 10-K with respect to its 1999 Annual
Meeting of Shareholders.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
(a) Financial Statements and Financial Statement Schedules:
The Company's 1998 financial statements and financial statement schedule,
together with the report of KPMG LLP dated February 1, 1999, except for Note 13
as to which the date is March 1, 1999, are listed on the index immediately
preceding the financial statements at the end of this report.
(b) Reports on Form 8-K:
None
(c) Exhibits:
2. Agreement and Plan of Merger dated as of September 23, 1998 between
Regency Realty Corporation and Pacific Retail Trust (incorporated by
reference to Exhibit 2.1 to the registration statement on Form S-4 of
Regency Realty Corporation, No. 333-65491)
3. Articles of Incorporation
# (i) Restated Articles of Incorporation of Regency Realty
Corporation as amended.
#(ii) Restated Bylaws of Regency Realty Corporation.
4. (a) See exhibits 3(i) and 3(ii) for provisions of the Articles of
Incorporation and Bylaws of Regency Realty Corporation defining
rights of security holders.
(b) Indenture dated July 20, 1998 between Regency Centers, L.P., the
guarantors named therein and First Union National Bank, as trustee
(incorporated by reference to Exhibit 4.1 to the registration
statement on Form S-4 of Regency Centers, L.P., No. 333-63723).
10. Material Contracts
~*(a) Regency Realty Corporation 1993 Long Term Omnibus Plan
~*(b) Form of Stock Purchase Award Agreement
~*(c) Form of Management Stock Pledge Agreement, relating to the
Stock Purchase Award Agreement filed as Exhibit 10(b)
~*(d) Form of Promissory Note, relating to the Stock Purchase Award
Agreement filed as Exhibit 10(b)
~*(e) Form of Option Award Agreement for Key Employees
~*(f) Form of Option Award Agreement for Non-Employee Directors
~*(g) Annual Incentive for Management Plan
~*(h) Form of Director/Officer Indemnification Agreement
~*(i) Form of Non-Competition Agreement between Regency Realty
Corporation and Joan W. Stein, Robert L. Stein, Richard W.
Stein, the Martin E. Stein Testamentary Trust A and the
Martin E. Stein Testamentary Trust B.
~*(j) Form of Employment Agreement with Martin E. Stein, Jr.
~*** (k) Form of Employment Agreements entered into with the following
executive officers:
(i) Bruce M. Johnson
(ii) Robert C. Gillander, Jr.
(iii) James D. Thompson
(l) The following documents, all dated November 5, 1993,
relating to a $51 million loan from Salomon Brothers
Inc. to corporations and subsidiaries wholly owned by
the Company.
** (i) Loan Agreement between RSP IV Criterion, Ltd.,
Regency Rosewood Temple Terrace, Ltd., Treasure
Coast Investors, Ltd., Landcom Regency Mandarin,
Ltd., RRC FL SPC, Inc., RRC AL SPC, Inc., RRC MS
SPC, Inc., and RRC GA SPC, Inc.(as borrowers) and
RRC Lender, Inc. (as lender)
** (ii) Promissory Note in the original principal amount of
$51 million
** (iii) Undertaking executed by the Registrant and RRC FL
SPC, Inc., RRC AL SPC, Inc., RRC MS SPC, Inc., and
RRC GA SPC, Inc.
** (iv) Certificate Purchase Agreement between RRC Lender,
Inc. (as seller) and Salomon Brothers, Inc. (as
lender)
(m) The following documents relating to the purchase by Security
Capital U.S. Realty and Security Capital Holdings, S.A. of up
to 45% of the Registrant's outstanding common stock:
++ (i) Stock Purchase Agreement dated June 11, 1996.
++ (ii) Stockholders' Agreement dated July 10, 1996.
+++ (A) First Amendment of Stockholders' Agreement dated
February 10, 1997.
(B) Amendment No. 2 to Stockholders' Agreement dated
December 4, 1997 (incorporated by reference to
Exhibit 6.2 to Schedule 13D/A filed by Security
Capital U.S. Realty on December 11, 1997)
++ (iii) Registration Rights Agreement dated July 10, 1996.
+ (n) Stock Grant Plan adopted on January 31, 1994 to grant stock to
employees.
~@ (o) Criteria for Restricted Stock Awards under 1993 Long Term
Omnibus Plan.
~@ (p) Form of 1996 Stock Purchase Award Agreement.
~@ (q) Form of 1996 Management Stock Pledge Agreement relating to the
Stock Purchase Award Agreement filed as Exhibit 10(p).
~@ (r) Form of Promissory Note relating to 1996 Stock Purchase Award
Agreement filed as Exhibit 10(p).
+++ Filed as an exhibit to the Company's Form 8-K report filed
March 14, 1997 and incorporated herein by reference.
@ Filed as an exhibit to the Company's Form 10-K filed March 25,
1997 and incorporated herein by reference.
@@ Included as an exhibit to the Company's Form 10-Q filed May 15,
1997 and incorporated herein by reference.
@@@ Included as an exhibit to the Company's Form 8-K/A report filed
March 19, 1998 and incorporated herein by reference.
@@@ (s) Second Amended and Restated Agreement of Limited Partnership of
Regency Centers, L.P.
(t) Amendment No. 1 to the Second Amended and Restated Agreement of
Limited Partnership of Regency Centers, L.P. (incorporated by
reference to Exhibit 3.2 to the Registration Statement on Form
10 of Regency Centers, L.P.)
(u) Amended and Restated Credit Agreement dated as of February 26,
1999 by and among Regency Centers, L.P., a Delaware limited
partnership (the "Borrower"), Regency Realty Corporation, a
Florida corporation (the "Parent"), each of the financial
institutions initially a signatory hereto together with their
assignees, (the "Lenders"), and Wells Fargo Bank, National
Association, as contractual representative of the Lenders to
the extent and in the manner provided.
(v) Assignment and Acceptance Agreement dated as of February 26,
1999 by and among Regency Centers, L.P., Regency Realty
Corporation and Wells Fargo Bank, National Association, as
Agent.
- -------------------------
~ Management contract or compensatory plan or arrangement filed
pursuant to S-K 601(10)(iii)(A).
# Included as an exhibit to the Company's Form 10-Q filed August 11,
1997 and incorporated herein by reference.
* Included as an exhibit to the Pre-effective Amendment No. 2 to the
Company's S-11 filed October 5, 1993, and incorporated herein by
reference
** Included as an exhibit to the Company's Form 10-Q filed December 13,
1993, and incorporated herein by reference
*** Included as an exhibit to the Company's Form 10-Q filed November 14,
1996, and incorporated herein by reference
+ Included as an exhibit to the Company's Form 10-Q filed May 12, 1994,
and incorporated herein by reference
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference.
+++ Filed as an exhibit to the Company's Form 8-K report filed March 14,
1997 and incorporated herein by reference.
@ Filed as an exhibit to the Company's Form 10-K filed March 25, 1997
and incorporated herein by reference.
@@ Included as an exhibit to the Company's Form 10-Q filed May 15, 1997
and incorporated herein by reference.
@@@ Included as an exhibit to the Company's Form 8-K/A report filed
March 19, 1998 and incorporated herein by reference.
21. Subsidiaries of the Registrant
23. Consent of KPMG LLP
27. Financial Data Schedule
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
REGENCY REALTY CORPORATION
Date: March 12, 1999 By: /s/ Martin E. Stein, Jr.
-----------------------------------------
Martin E Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 12, 1999 By: /s/ Bruce M. Johnson
------------------------------------------
Bruce M. Johnson, Managing Director and
Principal Financial Officer
Date: March 12, 1999 By: /s/ J. Christian Leavitt
------------------------------------------
J. Christian Leavitt, Senior Vice
President, Finance and Principal
Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
Date: March 12, 1999 /s/ Martin E. Stein, Jr.
---------------------------------------------
Martin E. Stein, Jr., Chairman of the Board
and Chief Executive Officer
Date: March 12, 1999 /s/ Mary Lou Rogers
---------------------------------------------
Mary Lou Rogers, President, Chief Operating
Officer and Director
Date: March 12, 1999 /s/ Thomas B. Allin
---------------------------------------------
Thomas B. Allin, Director
Date: March 12, 1999 /s/ Raymond L. Bank
---------------------------------------------
Raymond L. Bank, Director
Date: March 12, 1999 /s/ A. R. Carpenter
---------------------------------------------
A. R. Carpenter, Director
Date: March 12, 1999 /s/ Jeffrey A. Cozad
---------------------------------------------
Jeffrey A. Cozad, Director
Date: March 12, 1999 /s/ J. Dix Druce, Jr.
---------------------------------------------
J. Dix Druce, Jr., Director
Date: March 12, 1999 /s/ John T. Kelley
---------------------------------------------
John T. Kelley, Director
Date: March 12, 1999 /s/ Douglas S. Luke
---------------------------------------------
Douglas S. Luke, Director
Date: March 12, 1999 /s/ John C. Schweitzer
---------------------------------------------
John C. Schweitzer, Director
Date: March 12, 1999 /s/ Lee Wielansky
---------------------------------------------
Lee Wielansky, Director
Date: March 12, 1999 /s/ Terry N. Worrell
---------------------------------------------
Terry N. Worrell, Director
<PAGE>
REGENCY REALTY CORPORATION
INDEX TO FINANCIAL STATEMENTS
Regency Realty Corporation
Independent Auditors' Report F-2
Consolidated Balance Sheets as of December 31, 1998 and 1997 F-3
Consolidated Statements of Operations for the years ended
December 31, 1998, 1997, and 1996 F-4
Consolidated Statements of Stockholders' Equity for the years ended
December 31, 1998, 1997 and 1996 F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1998, 1997, and 1996 F-6
Notes to Consolidated Financial Statements F-8
Financial Statement Schedule
Independent Auditors' Report on Financial Statement Schedule S-1
Schedule III - Regency Realty Corporation Combined Real Estate and
Accumulated Depreciation - December 31, 1998 S-2
All other schedules are omitted because they are not applicable or
because information required therein is shown in the financial
statements or notes thereto.
<PAGE> F-2
Independent Auditors' Report
The Shareholders and Board of Directors
Regency Realty Corporation:
We have audited the accompanying consolidated balance sheets of Regency Realty
Corporation as of December 31, 1998 and 1997, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1998. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Regency Realty
Corporation as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1998 in conformity with generally accepted accounting
principles.
KPMG LLP
Jacksonville, Florida
February 1, 1999, except for Note 13,
as to which the date is March 1, 1999
<PAGE> F-3
<TABLE>
<CAPTION>
REGENCY REALTY CORPORATION
Consolidated Balance Sheets
December 31, 1998 and 1997
1998 1997
---- ----
<S> <C> <C>
Assets
Real estate investments, at cost (notes 2, 5 and 9):
Land $ 257,669,018 177,245,784
Buildings and improvements 925,514,995 622,555,583
Construction in progress - development for investment 15,647,659 13,427,370
Construction in progress - development for sale 20,869,915 20,173,039
------------------ ------------------
1,219,701,587 833,401,776
Less: accumulated depreciation 58,983,738 40,795,801
------------------ ------------------
1,160,717,849 792,605,975
Investments in real estate partnerships (note 4) 30,630,540 999,730
------------------ ------------------
Net real estate investments 1,191,348,389 793,605,705
Cash and cash equivalents 19,919,693 16,586,094
Tenant receivables, net of allowance for uncollectible accounts of
$1,787,686 and $1,162,570 at December 31, 1998 and
1997, respectively 16,758,917 9,546,584
Deferred costs, less accumulated amortization of $5,295,336 and
$3,842,914 at December 31, 1998 and 1997, respectively 6,872,023 4,252,991
Other assets 5,208,278 2,857,217
------------------ ------------------
$ 1,240,107,300 826,848,591
================== ==================
Liabilities and Stockholders' Equity
Liabilities:
Notes payable (note 5) 430,494,910 229,919,242
Acquisition and development line of credit (note 5) 117,631,185 48,131,185
Accounts payable and other liabilities 19,936,424 11,597,232
Tenants' security and escrow deposits 3,110,370 2,319,941
------------------ ------------------
Total liabilities 571,172,889 291,967,600
------------------ ------------------
Series A preferred units (note 6) 78,800,000 -
Exchangeable operating partnership units (notes 2 and 6) 27,834,330 13,777,156
Limited partners' interest in consolidated partnerships 11,558,618 7,477,182
------------------ ------------------
118,192,948 21,254,338
------------------ ------------------
Stockholders' equity (notes 2, 6, 7 and 8):
Common stock $.01 par value per share: 150,000,000 shares
authorized; 25,488,989 and 23,992,037 shares issued and
outstanding at December 31, 1998 and 1997 254,889 239,920
Special common stock - 10,000,000 shares authorized:
Class B $.01 par value per share, 2,500,000
shares issued and outstanding 25,000 25,000
Additional paid in capital 578,466,708 535,498,878
Distributions in excess of net income (19,395,744) (20,494,893)
Stock loans (8,609,390) (1,642,252)
------------------ ------------------
Total stockholders' equity 550,741,463 513,626,653
------------------ ------------------
Commitments and contingencies (notes 9, 10 and 13)
$ 1,240,107,300 826,848,591
================== ==================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> F-4
<TABLE>
<CAPTION>
REGENCY REALTY CORPORATION
Consolidated Statements of Operations
Years ended December 31, 1998, 1997 and 1996
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Revenues:
Minimum rent (note 9) $ 103,365,322 70,102,765 34,705,905
Percentage rent 3,012,105 2,151,379 997,981
Recoveries from tenants 24,109,519 16,600,925 7,729,404
Management, leasing and brokerage fees 11,862,784 8,447,615 3,444,287
Equity in income of investments in
real estate partnerships (note 4) 946,271 33,311 69,990
---------------- ---------------- ----------------
Total revenues 143,296,001 97,335,995 46,947,567
---------------- ---------------- ----------------
Operating expenses:
Depreciation and amortization 25,046,001 16,303,159 8,058,643
Operating and maintenance 18,455,672 14,212,555 7,655,934
General and administrative 15,064,148 9,963,926 6,048,140
Real estate taxes 12,388,521 8,691,576 4,409,460
---------------- ---------------- ----------------
Total operating expenses 70,954,342 49,171,216 26,172,177
---------------- ---------------- ----------------
Interest expense (income):
Interest expense 28,786,431 19,667,483 11,476,555
Interest income (1,957,575) (1,000,227) (666,031)
---------------- ---------------- ----------------
Net interest expense 26,828,856 18,667,256 10,810,524
---------------- ---------------- ----------------
Income before minority interests and sale
of real estate investments 45,512,803 29,497,523 9,964,866
Gain on sale of real estate investments 10,725,975 450,902 -
---------------- ---------------- ----------------
Income before minority interest 56,238,778 29,948,425 9,964,866
Minority interest of exchangeable partnership units (1,826,273) (2,041,823) -
Minority interest of limited partners (464,098) (504,947) -
Minority interest preferred unit distribution (3,358,333) - -
---------------- ---------------- ----------------
Net income 50,590,074 27,401,655 9,964,866
Preferred stock dividends - - (57,721)
---------------- ---------------- ----------------
Net income for common stockholders $ 50,590,074 27,401,655 9,907,145
================ ================ ================
Net income per share (note 7):
Basic $ 1.80 1.28 0.82
================ ================ ================
Diluted $ 1.75 1.23 0.82
================ ================ ================
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE> F-5
<TABLE>
<CAPTION>
REGENCY REALTY CORPORATION
Consolidated Statements of Stockholders' Equity
Years ended December 31, 1998, 1997 and 1996
Class B Additional Distributions Total
Preferred Common Common Paid In in excess of Stock Stockholders'
Stock Stock Stock Capital Net Income Loans Equity
----------- --------- -------- ------------- ------------ ------------ --------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at
December 31, 1995 $ 1,916,268 67,287 25,000 155,221,241 (8,073,188) (2,150,034) 147,006,574
Common stock issued to
SC-USREALTY (note 6) - 36,518 - 63,373,745 - - 63,410,263
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - 1,401 - 2,570,506 - (1,273,000) 1,298,907
Series A Preferred stock converted
to common stock (1,916,268) 943 - 1,915,339 - - 14
Partial forgiveness of
stock loans - - - - - 918,601 918,601
Cash dividends declared:
Preferred stock - - - - (57,721) - (57,721)
Common stock, $1.62 per share - - - - (15,815,727) - (15,815,727)
Net income - - - - 9,964,866 - 9,964,866
----------- --------- -------- ------------- ------------ ------------ -------------
Balance at
December 31, 1996 $ - 106,149 25,000 223,080,831 (13,981,770) (2,504,433) 206,725,777
Common stock issued to
SC-USREALTY (note 6) - 75,135 - 158,475,802 - - 158,550,937
Common stock issued in
secondary offering, net - 25,448 - 65,487,586 - - 65,513,034
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - 1,359 - 3,026,241 - - 3,027,600
Common stock issued for
partnership units redeemed - 30,271 - 81,246,827 - - 81,277,098
Common stock issued to
acquire real estate (note 2) - 1,558 - 4,181,591 - - 4,183,149
Partial forgiveness or
repayment of stock loans - - - - - 862,181 862,181
Cash dividends declared:
Common stock, $1.68 per share - - - - (33,914,778) - (33,914,778)
Net income - - - - 27,401,655 - 27,401,655
----------- --------- -------- ------------- ------------ ------------ -------------
Balance at
December 31, 1997 $ - 239,920 25,000 535,498,878 (20,494,893) (1,642,252) 513,626,653
Common stock issued to
SC-USREALTY (note 6) - 4,358 - 9,637,208 - - 9,641,566
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - 4,208 - 10,746,701 - (7,409,151) 3,341,758
Common stock issued for
partnership units redeemed - 752 - 1,670,631 - - 1,671,383
Common stock issued to
acquire real estate (note 2) - 5,651 - 14,263,472 - - 14,269,123
Reallocation of minority interest - - - 6,649,818 - - 6,649,818
Partial forgiveness or
repayment of stock loans - - - - - 442,013 442,013
Cash dividends declared:
Common stock, $1.76 per share - - - - (49,490,925) - (49,490,925)
Net income - - - - 50,590,074 - 50,590,074
----------- --------- -------- ------------- ------------ ------------ -------------
Balance at
December 31, 1998 $ - 254,889 25,000 578,466,708 (19,395,744) (8,609,390) 550,741,463
=========== ========= ======== ============= ============ ============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> F-6
<TABLE>
<CAPTION>
REGENCY REALTY CORPORATION
Consolidated Statements of Cash Flows
Years Ended December 31, 1998, 1997 and 1996
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 50,590,074 27,401,655 9,964,866
Adjustments to reconcile net income to net
Cash provided by operating activities:
Depreciation and amortization 25,046,001 16,303,159 8,058,643
Deferred financing cost and debt premium amortization (822,276) 907,224 699,424
Stock based compensation 2,422,547 2,561,139 2,940,414
Minority interest of redeemable partnership units 1,826,273 2,041,823 -
Minority interest preferred unit distribution 3,358,333 - -
Minority interest of limited partners 464,098 504,947 -
Equity in income of investments in real estate partnerships (946,271) (33,311) (69,990)
Gain on sale of real estate investments (10,725,975) (450,902) -
Changes in assets and liabilities:
Tenant receivables (5,143,938) (3,596,964) (2,660,656)
Deferred leasing commissions (2,337,253) (1,120,184) (585,889)
Other assets (4,059,535) (1,641,108) (1,019,637)
Tenants' security deposits 517,396 480,743 405,158
Accounts payable and other liabilities 4,811,991 (314,001) (1,728,414)
---------------- ----------------- -----------------
Net cash provided by operating activities 65,001,465 43,044,220 16,003,919
---------------- ----------------- -----------------
Cash flows from investing activities:
Acquisition and development of real estate (229,348,139) (162,244,207) (102,933,980)
Investment in real estate partnerships (29,068,392) - (881,309)
Capital improvements (8,325,492) (5,226,138) (2,898,250)
Construction in progress for sale, net of reimbursement (696,876) (23,776,953) (3,360,206)
Proceeds from sale of real estate investments 30,662,197 2,645,229 -
Distributions received from real estate partnership investments 383,853 68,688 231,581
---------------- ----------------- -----------------
Net cash used in investing activities (236,392,849) (188,533,381) (109,842,164)
---------------- ----------------- -----------------
Cash flows from financing activities:
Net proceeds from common stock issuance 10,225,529 225,094,980 63,617,263
Proceeds from issuance of partnership units 7,694 2,255,140 -
Distributions to partnership unit holders (2,023,132) (1,954,375) (16,846)
Contributions from limited partners in consolidated partnerships 4,289,995 - -
Net distributions to limited partners in consolidated partnerships (672,656) (1,124,480) -
Distributions to preferred unit holders (3,358,333) - -
Dividends paid to stockholders (49,490,925) (33,914,778) (16,179,518)
Net proceeds from issuance of Series A preferred units 78,800,000 - -
Net proceeds from term notes 99,758,000 - -
Proceeds (repayment) of acquisition and development
line of credit, net 69,500,000 (25,570,000) 51,361,382
Proceeds from mortgage loans payable 7,345,000 15,972,920 1,518,331
Repayment of mortgage loans payable (37,354,368) (26,408,932) (808,068)
Deferred financing costs (2,301,821) (568,449) (762,771)
---------------- ----------------- -----------------
Net cash provided by financing activities 174,724,983 153,782,026 98,729,773
---------------- ----------------- -----------------
Net increase in cash and cash equivalents 3,333,599 8,292,865 4,891,528
Cash and cash equivalents at beginning of year 16,586,094 8,293,229 3,401,701
---------------- ----------------- -----------------
Cash and cash equivalents at end of year $ 19,919,693 16,586,094 8,293,229
================ ================= =================
Supplemental disclosure of cash flow information - cash paid
for interest (net of capitalized interest of approximately
$3,417,000, $1,896,000 and $381,000 in 1998, 1997 and 1996,
respectively) $ 24,693,895 18,631,091 10,598,841
================ ================= =================
Supplemental disclosure of non-cash transactions:
Mortgage loans assumed to acquire real estate $ 132,832,342 142,448,966 3,918,752
================ ================= =================
Exchangeable operating partnership units and common
stock issued to acquire real estate $ 37,023,849 96,380,706 525,332
================ ================= =================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> F-8
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
1. Summary of Significant Accounting Policies
(a) Organization and Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of Regency Realty Corporation, its wholly owned qualified
REIT subsidiaries, and its majority owned or controlled
subsidiaries and partnerships (the "Company" or "Regency"). All
significant intercompany balances and transactions have been
eliminated in the consolidated financial statements. The Company
owns approximately 96% of the outstanding common units of Regency
Centers, L.P. ("RCLP" or the "Partnership" formerly known as
Regency Retail Partnership, L.P.) and partnership interests
ranging from 51% to 93% in five majority owned real estate
partnerships (the "Majority Partnerships"). The equity interests
of third parties held in RCLP and the Majority Partnerships are
included in the consolidated financial statements as exchangeable
operating partnership units and limited partners' interests in
consolidated partnerships, respectively. The Company is a
qualified real estate investment trust ("REIT") which began
operations in 1993.
(b) Revenues
The Company leases space to tenants under agreements with varying
terms. Leases are accounted for as operating leases with minimum
rent recognized on a straight-line basis over the term of the
lease regardless of when payments are due. Accrued rents are
included in tenant receivables. Minimum rent has been adjusted to
reflect the effects of recognizing rent on a straight line basis.
Substantially all of the lease agreements contain provisions which
provide additional rents based on tenants' sales volume
(contingent or percentage rent) or reimbursement of the tenants'
share of real estate taxes and certain common area maintenance
(CAM) costs. These additional rents are reflected on the accrual
basis. On May 22, 1998, the Emerging Issues Task Force (EITF)
reached a consensus on Issue 98-9 "Accounting for Contingent Rent
in Interim Financial Periods". The EITF has stated that lessors
should defer recognition of contingent rent that is based on
meeting specified targets until those specified targets are met
and not ratably throughout the year. The Company has previously
recognized contingent rent ratably over the year based on the
historical trends of its tenants. Although the EITF subsequently
reversed its original consensus related to contingent rent, the
Company has adopted the provisions of Issue 98-9 prospectively and
has ceased the recognition of contingent rents until such time as
its tenants have achieved their specified target. The effect of
the adoption was not material to the financial statements during
1998, since most of the Company's tenants had met their specified
targets prior to year end and contingent rents were appropriately
recognized.
Management, leasing, brokerage and development fees are recognized
as revenue when earned.
<PAGE> F-9
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
(c) Real Estate Investments
Land, buildings and improvements are recorded at cost. All direct
and indirect costs clearly associated with the acquisition,
development and construction of real estate projects owned by the
Company are capitalized as buildings and improvements except for
operating properties acquired. Effective March 19, 1998, the EITF
ruled in Issue 97-11, "Accounting for Internal Costs Relating to
Real Estate Property Acquisitions", that only internal costs of
identifying and acquiring non-operating properties that are
directly identifiable with the acquired properties should be
capitalized, and that all internal costs associated with
identifying and acquiring operating properties should be expensed
as incurred. The Company had previously capitalized direct costs
associated with the acquisition of operating properties as a cost
of the real estate. The Company has adopted EITF 97-11 effective
March 19, 1998. During 1997, the Company capitalized approximately
$1.5 million of internal costs related to acquiring operating
properties. Through the effective date of EITF 97-11, the Company
has capitalized $855,000 of internal acquisition costs. For the
remainder of 1998, the Company incurred approximately $1.5 million
of internal costs related to acquiring operating properties which
was expensed.
Maintenance and repairs which do not improve or extend the useful
lives of the respective assets are reflected in operating and
maintenance expense. The property cost includes the capitalization
of interest expense incurred during construction in accordance
with generally accepted accounting principles.
Depreciation is computed using the straight line method over
estimated useful lives up to forty years for buildings and
improvements, term of lease for tenant improvements, and five to
seven years for furniture and equipment.
(d) Income Taxes
The Company qualifies and intends to continue to qualify as a REIT
under the Internal Revenue Code. As a REIT, the Company is allowed
to reduce taxable income by all or a portion of its distributions
to stockholders. As distributions have exceeded taxable income, no
provision for federal income taxes has been made in the
accompanying consolidated financial statements.
Earnings and profits, which determine the taxability of dividends
to stockholders, differ from net income reported for financial
reporting purposes primarily because of different depreciable
lives and bases of rental properties and differences in the timing
of recognition of earnings upon disposition of properties.
Regency Realty Group, Inc., the Company's management company
subsidiary ("RRG"), is subject to Federal and State income taxes
and files separate tax returns. RRG had taxable income of
$1,052,233, $918,763 and $0 for the years ended December 31, 1998,
1997 and 1996, respectively. RRG incurred Federal and State income
tax of $344,833 and $327,021 in 1998 and 1997, respectively, and
paid no tax in 1996.
<PAGE> F-10
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
(d) Income Taxes (continued)
At December 31, 1998 and 1997, the net book basis of real estate
assets exceeds the tax basis by approximately $122 million and
$39.6 million, respectively, primarily due to the difference
between the cost basis of the assets acquired and their carryover
basis recorded for tax purposes.
The following summarizes the tax status of dividends paid during
the years ended December 31 (unaudited):
1998 1997 1996
---- ---- ----
Dividend per share $1.76 1.68 1.62
Ordinary income 71% 85% 77%
Capital gain 2% - -
Return of capital 27% 15% 23%
(e) Deferred Costs
Deferred costs consist of internal and external commissions
associated with leasing the rental property and loan costs
incurred in obtaining financing which are limited to initial
direct and incremental costs. The net leasing commission balance
was $3.3 and $1.7 million at December 31, 1998 and 1997,
respectively. The net loan cost balance was $3.5 and $2.5 million
at December 31, 1998 and 1997, respectively. Such costs are
deferred and amortized over the terms of the respective leases and
loans.
(f) Earnings Per Share
The Company applies the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 128, "Earnings per Share" to the
computation, presentation, and disclosure requirements of earnings
per share. Basic net income per share of common stock is computed
based upon the weighted average number of common shares
outstanding during the year. Diluted net income per share also
includes common share equivalents for stock options, exchangeable
partnership units, and Class B common stock when dilutive. See
note 7 for the calculation of earnings per share.
(g) Cash and Cash Equivalents
Any instruments which have an original maturity of ninety days or
less when purchased are considered cash equivalents.
(h) Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the Company's
management to make estimates and assumptions that affect the
reported amounts of assets and liabilities, and disclosure of
contingent assets and liabilities, at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
<PAGE> F-11
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
(i) Impairment of Long-Lived Assets
The Company applies the provisions of SFAS No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed Of". This Statement requires that long-lived assets
and certain identifiable intangibles be reviewed for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability
of assets to be held and used is measured by a comparison of the
carrying amount of an asset to future net cash flows expected to
be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the
amount by which the carrying amount of the assets exceed the fair
value of the assets. Adoption of this Statement did not have a
material impact on the Company's financial position, results of
operations, or liquidity.
(j) Stock Option Plan
The Company applies the provisions of SFAS No. 123, "Accounting
for Stock Based Compensation", which allows companies a choice in
the method of accounting for stock options. Entities may recognize
as expense over the vesting period the fair value of all
stock-based awards on the date of grant or SFAS No. 123 also
permits entities to continue to apply the provisions of APB
Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants
made as if the fair-value-based method defined in SFAS No. 123 had
been applied. APB Opinion No. 25 "Accounting for Stock Issued to
Employees", and related interpretations states that compensation
expense would be recorded on the date of grant only if the current
market price of the underlying stock exceeded the exercise price.
The Company has elected to continue to apply the provisions of APB
Opinion No. 25 and provide the pro forma disclosure provisions of
SFAS No. 123.
(k) Statement of Financial Accounting Standards No. 131
The FASB issued Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related
Information" ("FAS 131"), which is effective for fiscal years
beginning after December 15, 1997. FAS 131 establishes standards
for the way that public business enterprises report information
about operating segments in annual financial statements and
requires that those enterprises report selected information about
operating segments in interim and annual financial reports. The
Company adopted FAS 131 as disclosed in note 3.
(l) Reclassifications
Certain reclassifications have been made to the 1997 amounts to
conform to classifications adopted in 1998.
<PAGE> F-12
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
2. Acquisitions of Shopping Centers
During 1998, the Company acquired 31 shopping centers fee simple
for approximately $355.9 million and also invested $28.4 million in 12
joint ventures ("JV Properties"), for a total investment of $384.3
million in 43 shopping centers ("1998 Acquisitions"). Included in the
1998 Acquisitions are 32 shopping centers acquired from various entities
comprising the Midland Group ("Midland"). Of the 32 Midland centers, 31
are anchored by Kroger, and 12 are owned through joint ventures in which
the Company's ownership interest is 50% or less. The Company's investment
in the properties acquired from Midland is $236.6 million at December 31,
1998. The Company expects to acquire all of the interests in two of the
JV Properties for approximately $20.3 million during 1999 which will
increase its total investment in the Midland properties to $256.9
million. In addition, during 1999 and 2000, the Company may pay
contingent consideration of up to an estimated $23 million, through the
issuance of Partnership units and the payment of cash. The amount of such
consideration, if issued, will depend on the satisfaction of certain
performance criteria relating to the assets acquired from Midland.
Transferors who received cash at the initial Midland closing will receive
contingent future consideration in cash rather than units.
The Company acquired 35 shopping centers during 1997 (the "1997
Acquisitions") for approximately $395.7 million. Included in the 1997
Acquisitions are 26 shopping centers acquired from Branch Properties
("Branch") for $232.4 million. During 1998, the Company issued 721,997
additional Units and shares of common stock valued at $18.2 million to
Branch as contingent consideration for the satisfaction of certain
performance criteria of the properties acquired. The Company expects to
issue the remaining contingent consideration, 298,064 Units, during 1999.
The operating results of the 1998 and 1997 Acquisitions are included in
the Company's consolidated financial statements from the date each
property was acquired. The following unaudited pro forma information
presents the consolidated results of operations as if all 1998 and 1997
Acquisitions had occurred on January 1, 1997. Such pro forma information
reflects adjustments to 1) increase depreciation, interest expense, and
general and administrative costs, 2) remove the office buildings sold,
and 3) adjust the weighted average common shares, and common equivalent
shares outstanding issued to acquire the properties. Pro forma revenues
would have been $156.4 and $144.4 million in 1998 and 1997, respectively.
Pro forma net income for common stockholders would have been $44.5 and
$28.0 million in 1998 and 1997, respectively. Pro forma basic net income
per share would have been $1.55 and $1.31 in 1998 and 1997, respectively.
Pro forma diluted net income per share would have been $1.52 and $1.22,
in 1998 and 1997, respectively. This data does not purport to be
indicative of what would have occurred had the Acquisitions been made on
January 1, 1997, or of results which may occur in the future.
<PAGE> F-13
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
3. Segments
The Company was formed, and currently operates, for the purpose of 1)
operating and developing Company owned retail shopping centers (Retail
segment), and 2) providing services including property management,
leasing, brokerage, and construction and development management for
third-parties (Service operations segment). The Company had previously
operated four office buildings, all of which have been sold during 1998
and 1997 (Office buildings segment). The Company's reportable segments
offer different products or services and are managed separately because
each requires different strategies and management expertise. There are no
material inter-segment sales or transfers.
The Company assesses and measures operating results starting with Net
Operating Income for the Retail and Office Buildings segments and Income
for the Service operations segment and converts such amounts into a
performance measure referred to as Funds From Operations (FFO). The
operating results for the individual retail shopping centers have been
aggregated since all of the Company's shopping centers exhibit highly
similar economic characteristics as neighborhood shopping centers, and
offer similar degrees of risk and opportunities for growth. FFO as
defined by the National Association of Real Estate Investment Trusts
consists of net income (computed in accordance with generally accepted
accounting principles) excluding gains (or losses) from debt
restructuring and sales of income producing property held for investment,
plus depreciation and amortization of real estate, and adjustments for
unconsolidated investments in real estate partnerships and joint
ventures. The Company considers FFO to be the industry standard for
reporting the operations of real estate investment trusts ("REITs").
Adjustments for investments in real estate partnerships are calculated to
reflect FFO on the same basis. While management believes that FFO is the
most relevant and widely used measure of the Company's performance, such
amount does not represent cash flow from operations as defined by
generally accepted accounting principles, should not be considered an
alternative to net income as an indicator of the Company's operating
performance, and is not indicative of cash available to fund all cash
flow needs. Additionally, the Company's calculation of FFO, as provided
below, may not be comparable to similarly titled measures of other REITs.
The accounting policies of the segments are the same as those described
in note 1. The revenues, FFO, and assets for each of the reportable
segments are summarized as follows for the years ended as of December 31,
1998, 1997, and 1996. Non-segment assets to reconcile to total assets
include cash, accounts receivable and deferred financing costs.
<PAGE> F-14
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
3. Segments (continued)
<TABLE>
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Revenues:
Retail segment $ 130,900,785 84,203,386 39,004,931
Service operations segment 11,862,784 8,447,615 3,444,287
Office buildings segment 532,432 4,684,994 4,498,349
================ ================ =================
Total revenues $ 143,296,001 97,335,995 46,947,567
================ ================ =================
Funds from Operations:
Retail segment net operating income $ 100,239,863 63,056,124 28,652,114
Service operations segment income 11,862,784 8,447,615 3,444,287
Office buildings segment net operating income 349,161 2,928,125 2,785,772
Adjustments to calculate consolidated FFO:
Interest expense (28,786,431) (19,667,483) (11,476,555)
Interest income 1,957,575 1,000,227 666,031
Earnings from recurring land sales 901,853 - -
General and administrative (15,064,148) (9,963,926) (6,048,140)
Non-real estate depreciation (679,740) (406,113) (49,200)
Minority interests of limited partners (464,098) (504,947) -
Minority interests in depreciation
and amortization (526,018) (285,280) -
Share of joint venture depreciation
and amortization 688,686 59,038 39,626
Dividends on preferred shares and units (3,358,333) 0 (57,721)
---------------- ---------------- -----------------
Funds from Operations 67,121,154 44,663,380 17,956,214
---------------- ---------------- -----------------
Reconciliation to net income for common
stockholders:
Real estate related depreciation
and amortization (24,366,261) (15,897,046) (8,009,443)
Minority interests in depreciation
and amortization 526,018 285,280 -
Share of joint venture depreciation
and amortization (688,686) (59,038) (39,626)
Earnings from property sales 9,824,122 450,902 -
Minority interests of exchangeable
partnership units (1,826,273) (2,041,823) -
---------------- ---------------- -----------------
Net income available for common
stockholders $ 50,590,074 27,401,655 9,907,145
================ ================ =================
As of December 31
Assets (in thousands): 1998 1997 1996
---------------------- ---- ---- ----
Retail segment $ 1,170,478 754,174 342,900
Service operations segment 20,870 20,173 1,695
Office buildings segment - 19,258 21,559
Cash and other assets 48,759 33,244 20,370
================ ================ =================
Total assets $ 1,240,107 826,849 386,524
================ ================ =================
</TABLE>
<PAGE> F-15
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
4. Investments in Real Estate Partnerships
The Company accounts for all investments in which it owns less than 50%
and does not have controlling financial interest, using the equity
method. The Company's combined investment in these partnerships was $30.6
million and $999,730 at December 31, 1998 and 1997, respectively. Net
income is allocated in accordance with each of the partnership
agreements.
5. Notes Payable and Acquisition and Development Line of Credit
The Company's outstanding debt at December 31, 1998 and 1997 consists of
the following (in thousands):
1998 1997
---- ----
Notes Payable:
Fixed rate mortgage loans $ 298,148 199,078
Variable rate mortgage loans 11,051 30,841
Fixed rate unsecured loans 121,296 -
------- -------
Total notes payable 430,495 229,919
Acquisition and development
line of credit 117,631 48,131
------- -------
Total $ 548,126 278,050
======= =======
The Company has an acquisition and development line of credit (the
"Line") which provides for a commitment up to $300 million, and
incorporates a competitive bid facility of up to $150 million of the
commitment amount. Maximum availability under the Line is based on the
discounted value of a pool of eligible unencumbered assets less the
amount of the Company's outstanding unsecured liabilities. The Line,
which is unsecured, matures in May 2000, but may be extended annually for
one year periods. Borrowings under the Line bear interest at a variable
rate based on LIBOR plus a specified spread, (.875% currently), which is
dependent on the Company's investment grade rating. The interest rate on
the Line was 6.56% at December 31, 1998. The Company's ratings are
currently Baa2 from Moody's Investor Service, BBB from Duff and Phelps,
and BBB- from Standard and Poors. The Company is required to comply, and
is in compliance, with certain financial covenants customary with this
type of unsecured financing. The Line is used primarily to finance the
acquisition and development of real estate, but is also available for
general working capital purposes.
On July 17, 1998 the Company through RCLP, completed a $100 million
offering of seven year term notes at an effective interest rate
of 7.17%. The Notes were priced at 162.5 basis points over the current
yield for seven year US Treasury Bonds. The notes are unsecured and
mature on July 15, 2005. The net proceeds of the offering were used to
repay borrowings under the Line.
Mortgage loans are secured by certain real estate properties, but
generally may be prepaid subject to a prepayment of a yield-maintenance
premium. Mortgage loans are generally due in monthly installments of
interest and principal and mature over various terms through 2018.
Variable interest rates on mortgage loans are currently based on LIBOR
plus a spread in a range of 125 basis points to 150 basis points. Fixed
interest rates on mortgage loans range from 7.04% to 9.8%.
<PAGE> F-16
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
5. Notes Payable and Acquisition and Development Line of Credit (continued)
During 1998, the Company assumed mortgage loans with a fair value of
$132.8 million related to the acquisition of shopping centers, which
includes debt premiums of $12.4 million based upon the above market
interest rates of the debt instruments. Debt premiums are being amortized
over the terms of the related debt instruments.
As of December 31, 1998, scheduled principal repayments on notes payable
and the Line were as follows (in thousands):
Scheduled
Scheduled Principal Term Loan Total
Payments by Year Payments Maturities Payments
---------------- --------- ---------- --------
1999 $ 3,771 21,579 25,350
2000 3,996 174,674 178,670
2001 3,911 41,928 45,839
2002 3,098 44,117 47,215
2003 2,914 13,291 16,205
Beyond 5 Years 17,811 206,607 224,418
Net unamortized debt
payments - 10,429 10,429
------- ------- -------
Total $ 35,501 512,625 548,126
======= ======= =======
Unconsolidated partnerships and joint ventures had mortgage loans payable
of $76.7 million at December 31, 1998, and the Company's proportionate
share of these loans was $34.4 million.
The fair value of the Company's notes payable and Line are estimated
based on the current rates available to the Company for debt of the same
remaining maturities. Variable rate notes payable, and the Company's
Line, are considered to be at fair value since the interest rates on such
instruments reprice based on current market conditions. Notes payable
with fixed rates, that have been assumed in connection with acquisitions,
are recorded in the accompanying financial statements at fair value. The
Company considers the carrying value of all other fixed rate notes
payable to be a reasonable estimation of their fair value based on the
fact that the rates of such notes are similar to rates available to the
Company for debt of the same terms.
6. Stockholders' Equity
On June 11, 1996, the Company entered into a Stockholders Agreement (the
"Agreement") with SC-USREALTY granting it certain rights such as
purchasing common stock, nominating representatives to the Company's
Board of Directors, and subjecting SC-USREALTY to certain restrictions
including voting and ownership restrictions. The Agreement primarily
granted SC-USREALTY (i) the right to acquire 7,499,400 shares for
approximately $132 million and also participation rights entitling it
to purchase additional equity in the Company, at the same price as that
offered to other purchasers, each time that the Company sells additional
shares of capital stock or options or other rights to acquire capital
stock, in order to preserve SC-USREALTY's pro rata ownership position;
and (ii) the right to nominate a
<PAGE> F-17
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
6. Stockholders' Equity (continued)
proportionate number of directors on the Company's Board, rounded down
to the nearest whole number, based upon SC-USREALTY's percentage
ownership of outstanding common stock (but not to exceed 49% of the
Board). SC-USREALTY has acquired all of the 7,499,400 shares
related to the Agreement. In connection with the Units and shares of
common stock issued in exchange for Branch's assets. SC-USREALTY acquired
1,750,000 shares during August and December, 1997 at $22.125 per share in
accordance with their rights as provided for in the Agreement. In
connection with the Units and shares of common stock issued for Branch in
March 1998, SC-USREALTY acquired 435,777 shares at $22.125 per share in
accordance with their rights as provided for in the Agreement. The
acquisition of Branch is discussed further in note 2.
For a period of at least five years (subject to certain exceptions),
SC-USREALTY is precluded from, among other things, (i) acquiring more
than 45% of the outstanding common stock on a diluted basis, (ii)
transferring shares without the Company's approval in a negotiated
transaction that would result in any transferee beneficially owning more
than 9.8% of the Company's capital stock, or (iii) acting in concert with
any third parties as part of a 13D group. Subject to certain exceptions,
SC-USREALTY is required to vote its shares either as recommended by the
Board of Directors or proportionately in accordance with the vote of the
other stockholders.
On July 11, 1997, the Company sold 2,415,000 shares to the public at
$27.25 per share. In connection with that offering, SC-USREALTY purchased
an additional 1,785,000 shares at $27.25 directly from the Company. On
August 11, 1997, the Underwriters exercised the over-allotment option and
the Company issued an additional 129,800 shares to the public and 95,939
shares to SC-USREALTY at $27.25 per share. Total proceeds from the sale
of common stock to the public and SC-USREALTY of approximately $117
million net of offering expenses was used to reduce the balance of the
Line.
In connection with the acquisition of shopping centers, RCLP has issued
Exchangeable Operating Partnership Units to limited partners convertible
on a one for one basis into shares of common stock of the Company. There
are currently 1,361,396 Exchangeable Operating Partnership Units
outstanding.
On June 29, 1998, the Company through RCLP issued $80 million of 8.125%
Series A Cumulative Redeemable Preferred Units ("Series A Preferred
Units") to an institutional investor in a private placement. The
issuance involved the sale of 1.6 million Series A Preferred Units
for $50.00 per unit. The Series A Preferred Units, which may be called by
the Partnership at par on or after June 25, 2003, have no stated maturity
or mandatory redemption, and pay a cumulative, quarterly dividend at an
annualized rate of 8.125%. At any time after June 25, 2008, the Series A
Preferred Units may be exchanged for shares of 8.125% Series A Cumulative
Redeemable Preferred Stock of the Company at an exchange rate of one
share of Series A Preferred Stock for one Series A Preferred Unit. The
Series A Preferred Units and Series A Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were
used to reduce the acquisition and development line of credit.
<PAGE> F-18
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
<TABLE>
7. Earnings Per Share
The following summarizes the calculation of basic and diluted earnings
per share for the years ended, December 31, 1998, 1997 and 1996 (in
thousands except per share data):
<CAPTION>
1998 1997 1996
---- ---- ----
<S> <C> <C> <C>
Basic Earnings Per Share (EPS) Calculation:
Weighted average common shares outstanding 25,150 17,424 7,331
======= ======= ======
Net income for common $ 50,590 27,402 9,907
stockholders
Less: dividends paid on Class B common stock
5,378 5,140 3,879
------- ------- ------
Net income for Basic EPS 45,212 22,262 6,028
======= ======= ======
Basic EPS $ 1.80 1.28 .82
======= ======= ======
Diluted Earnings Per Share (EPS)
Calculation:
Weighted average shares outstanding
for Basic EPS 25,150 17,424 7,331
Exchangeable operating partnership units 1,223 1,243 18
Incremental shares to be issued under common
stock options using the Treasury method 14 80 3
Contingent units or shares for the acquisition
of real estate 511 955 -
------- ------- ------
Total diluted shares 26,898 19,702 7,352
======= ======= ======
Net income for Basic EPS $ 45,212 22,262 6,028
Add: minority interest of exchangeable
partnership units 1,826 2,042 -
------- ------- ------
Net income for Diluted EPS 47,038 24,304 6,028
======= ======= ======
Diluted EPS $ 1.75 1.23 .82
======= ======= ======
</TABLE>
Class B common stock is not included in the above calculation because
it is anti-dilutive.
8. Long-Term Stock Incentive Plans
In 1993, the Company adopted a Long-Term Omnibus Plan (the "Plan")
pursuant to which the Board of Directors may grant stock and stock
options to officers, directors and other key employees. The Plan provides
for the issuance of up to 12% of the Company's common shares outstanding
not to exceed 3.0 million shares. Stock options are granted with an
exercise price equal to the stock's fair market value at the date of
grant. All stock options granted have ten year terms, and with respect to
<PAGE> F-19
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
8. Long-Term Stock Incentive Plans (continued)
officers and other key employees, become fully exercisable after four
years from the date of grant, and with respect to directors, become
fully exercisable after one year.
At December 31, 1998, there were approximately 300,000 shares available
for grant under the Plan. The per share weighted-average fair value of
stock options granted during 1998 and 1997 was $2.22 and $3.26 on the
date of grant using the Black Scholes option-pricing model with the
following weighted-average assumptions: 1998 - expected dividend yield
7.5%, risk-free interest rate of 4.8%, expected volatility 21%, and an
expected life of 6.5 years; 1997 - expected dividend yield 6.3%,
risk-free interest rate of 6.3%, expected volatility 21%, and an expected
life of 5.7 years; The Company applies APB Opinion No. 25 in accounting
for its Plan and, accordingly, no compensation cost has been recognized
for its stock options in the consolidated financial statements.
Had the Company determined compensation cost based on the fair value at
the grant date for its stock options under SFAS No. 123, the Company's
net income for common stockholders would have been reduced to the pro
forma amounts indicated below (in thousands except per share data):
Net income for
Common stockholders 1998 1997 1996
------------------- ---- ---- ----
As reported: $50,590 $27,402 $9,907
Net income per share:
Basic $ 1.80 $ 1.28 $ 0.82
Diluted $ 1.75 $ 1.23 $ 0.82
Pro forma: $49,565 $25,777 $9,897
Net income per share:
Basic $ 1.76 $ 1.18 $ 0.82
Diluted $ 1.71 $ 1.15 $ 0.82
Pro forma net income for common stockholders reflects only
options granted subsequent to the issuance of SFAS 123 in
1995. Therefore, the full impact of calculating compensation
cost for stock options under SFAS No. 123 is not reflected in
the pro forma net income for common stockholders amounts
presented above because compensation cost is reflected over
the options' vesting period and compensation cost for options
granted prior to January 1, 1995 is not considered.
<PAGE> F-20
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
8. Long-Term Stock Incentive Plans (continued)
Stock option activity during the periods indicated is as follows:
Weighted
Average
Number of Exercise
Shares Price
--------- --------
Outstanding, December 31, 1995 186,000 $ 19.09
Granted 12,000 24.67
---------
Outstanding, December 31, 1996 198,000 19.43
---------
Granted 1,252,276 25.39
Forfeited (7,000) 23.54
Exercised (124,769) 19.25
---------
Outstanding, December 31, 1997 1,318,507 25.08
---------
Granted 741,265 24.39
Forfeited (123,495) 25.33
Exercised (227,700) 24.97
---------
Outstanding, December 31, 1998 1,708,577 $ 24.71
=========
The following table presents information regarding all options outstanding at
December 31, 1998.
Weighted
Average Weighted
Number of Remaining Range of Average
Options Contractual Exercise Exercise
Outstanding Life Prices Price
----------- ----------- -------- --------
51,731 5.0 years $ 16.75 - 19.25 $ 18.93
1,231,578 8.6 years 22.25 - 25.25 24.26
425,268 8.4 years 26.19 - 27.75 26.69
----------- --------- ----------------- ------------
1,708,577 8.5 years $ 16.75 - 27.75 $ 24.71
=========== ========= ================= ============
<PAGE> F-21
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
8. Long-Term Stock Incentive Plans (continued)
The following table presents information regarding options currently
exercisable at December 31, 1998:
Weighted
Number of Range of Average
Options Exercise Exercise
Exercisable Prices Price
----------- -------- ---------
51,731 $ 16.75 - 19.25 $ 18.93
98,300 25.25 25.25
88,881 26.25 - 27.75 26.99
------ ------------- --------
238,912 $ 16.75 - 27.75 $ 24.53
======= ================== ========
Also as part of the Plan, in 1993, 1996 and 1998, certain officers and
employees purchased common stock at fair market value directly from the
Company, of which 90%, 95% and 95%, respectively, was financed by a stock
purchase loan provided by the Plan. These recourse loans are fully
secured by stock, bear interest at fixed rates of 6% to 7.79% and mature
after ten years. The Board of Directors may authorize the forgiveness of
all or a portion of the principal balance based on the Company's
achievement of specified financial objectives, and total stockholder
return performance targets. During 1998, 1997, and 1996, $662,196,
$601,516, and $646,598 was forgiven, respectively, and is included as a
charge to income on the consolidated statements of operations. The
Company also has a performance based restricted stock plan for officers
whereby a portion of the shares authorized under the Plan may be granted
upon the achievement of certain total stockholder return performance
targets. Shares granted under the plan become fully vested by January 1,
2000. During 1998, 1997 and 1996, the Company charged $250,000, $259,600
and $809,400 to income on the consolidated statement of operations
related to the restricted stock plan. In addition, the Company provided
it's officers, directors and employees with other stock based
compensation totaling $1.5, $1.7, and $1.5 million during 1998, 1997 and
1996, respectively.
9. Operating Leases
The Company's properties are leased to tenants under operating leases
with expiration dates extending to the year 2028. Future minimum rent
under noncancelable operating leases as of December 31,1998, excluding
tenant reimbursements of operating expenses and excluding additional
contingent rentals based on tenants' sales volume are as follows:
Year ending December 31, Amount
1999 110,538,266
2000 105,061,943
2001 89,224,053
2002 74,990,466
2003 64,644,898
Thereafter 481,164,703
------------
Total $ 925,624,329
============
<PAGE> F-22
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
9. Operating Leases (continued)
At December 31, 1998, the real estate portfolio as a whole was
approximately 93% leased.
The shopping centers' tenant base includes primarily national and
regional supermarkets, drug stores, discount department stores and other
retailers and, consequently, the credit risk is concentrated in the
retail industry. There were no tenants which individually represented 10%
or more of the Company's combined minimum rent. The combined annualized
rent from the Company's four largest retail tenants represented
approximately 26.9% of annualized base rent at December 31, 1998.
10. Contingencies
The Company like others in the commercial real estate industry, is
subject to numerous environmental laws and regulations and the operation
of dry cleaning plants at the Company's shopping centers is the principal
environmental concern. The Company believes that the dry cleaners are
operating in accordance with current laws and regulations and has
established procedures to monitor their operations. While the Company has
registered the plants located in Florida under a state funded program
designed to substantially fund the clean up, if necessary, of any
environmental issues, the owner or operator is not relieved from the
ultimate responsibility for clean up. The Company also has established
due diligence procedures to identify and evaluate potential environmental
issues on properties under consideration for acquisition. In connection
with acquisitions during 1998 and 1997, the Company has established
environmental reserves which amounted to $2.2 million and $1.9 million at
December 31, 1998 and 1997, respectively. While it is not possible to
predict with certainty, management believes that the reserves are
adequate to cover future clean-up costs related to these sites. The
Company's policy is to accrue environmental clean-up costs when it is
probable that a liability has been incurred and that amount is reasonably
estimable. Based on information presently available, no additional
environmental accruals were made and management believes that the
ultimate disposition of currently known matters will not have a material
effect on the financial position, liquidity, or operations of the
Company.
11. Market and Dividend Information (Unaudited)
The Company's common stock is traded on the New York Stock Exchange
("NYSE") under the symbol "REG". The Company currently has approximately
3,500 shareholders. The following table sets forth the high and low
prices and the cash dividends declared on the Company's common stock by
quarter for 1998 and 1997. All amounts are in thousands except per share
data.
<TABLE>
<CAPTION>
1998 1997
----------------------------------- -----------------------------------
Cash Cash
High Low Dividends High Low Dividends
Price Price Declared Price Price Declared
----- ----- --------- ----- ----- --------
<S> <C> <C> <C> <C> <C> <C>
March 31 $ 27.812 24.750 .44 28.000 25.000 .42
June 30 26.687 24.062 .44 28.125 24.875 .42
September 30 26.500 20.500 .44 28.250 24.875 .42
December 31 23.437 20.250 .44 28.000 24.250 .42
</TABLE>
<PAGE> F-23
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1998
12. Summary of Quarterly Financial Data (Unaudited)
<TABLE>
Presented below is a summary of the consolidated quarterly financial data
for the years ended December 31, 1998 and 1997 (amounts in thousands,
except per share data):
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
------- ------- ------- -------
1998:
<S> <C> <C> <C> <C>
Revenues $ 30,909 35,187 37,199 40,001
Net income for
common stockholders 19,556 10,798 10,061 10,175
Net income per share:
Basic .74 .38 .34 .35
Diluted .72 .36 .34 .34
1997:
Revenues $ 17,733 24,626 26,790 28,187
Net income for
common stockholders 4,037 4,727 8,743 9,895
Net income per share:
Basic .25 .26 .34 .37
Diluted .25 .26 .32 .35
</TABLE>
13. Subsequent Event
On September 23, 1998, the Company entered into an Agreement of Merger
("Agreement") with Pacific Retail Trust ("Pacific"), a privately held
real estate investment trust. The Agreement, among other matters,
provides for the merger of Pacific into Regency, and the exchange of each
Pacific common or preferred share into 0.48 shares of Regency common or
preferred stock. The stockholders approved the merger at a Special
Meeting of Stockholders held February 26, 1999. At the time of the
merger, Pacific owned 71 retail shopping centers that are operating or
under construction containing 8.4 million SF of gross leaseable area. On
February 28, 1999, the effective date of the merger, the Company issued
equity instruments valued at $770.6 million to the Pacific stockholders
in exchange for their outstanding common and preferred shares, and units.
The total cost to acquire Pacific is $1.157 billion based on the value of
Regency shares issued, including the assumption of $379 million of
outstanding debt and other liabilities of Pacific, and estimated closing
costs of $7.5 million. The price per share used to determine the purchase
price is $23.325 based on the five day average of the closing stock price
of Regency's common stock as listed on the New York Stock Exchange
immediately before, during and after the date the terms of the merger
were agreed to and announced to the public. The merger will be accounted
for as a purchase with the Company as the acquiring entity.
On February 26, 1999, the Company entered into an agreement with
the various banks that provide the Line to increase the unsecured
commitment amount to $635 million.
<PAGE> S-1
Independent Auditors' Report
On Financial Statement Schedule
The Shareholders and Board of Directors
Regency Realty Corporation
Under date of February 1, 1999, except for Note 13 as to which the date is March
1, 1999, we reported on the consolidated balance sheets of Regency Realty
Corporation as of December 31, 1998 and 1997, and the related consolidated
statements of operations, stockholders' equity, and cash flows for each of the
years in the three-year period ended December 31, 1998, as contained in the
annual report on Form 10-K for the year 1998. In connection with our audits of
the aforementioned consolidated financial statements, we also audited the
related financial statement schedule as listed in the accompanying index on page
F-1 of the annual report on Form 10-K for the year 1998. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on the financial statement schedule
based on our audits.
In our opinion, the related financial statement schedule, when considered in
relation to the basic consolidated financial statements taken as a whole,
presents fairly, in all material respects, the information set forth therein.
KPMG LLP
Jacksonville, Florida
February 1, 1999
<PAGE> S-2
<TABLE>
Schedule III
<CAPTION>
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1998
Initial Cost Total Cost
---------------------------- Cost Capitalized ------------------------------------------
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements Total
----------- ------------ ---------------- ---------- -------------- ------------
<S> <C> <C> <C> <C> <C> <C>
ANASTASIA SHOPPING PLAZA 1,072,451 3,617,493 159,607 1,072,451 3,777,100 4,849,551
ASHFORD PLACE 2,803,998 9,943,994 (761,970) 2,583,998 9,402,024 11,986,022
AVENTURA SHOPPING CENTER 2,751,094 9,317,790 157,829 2,751,094 9,475,619 12,226,713
BECKETT COMMONS 1,625,242 5,844,871 - 1,625,242 5,844,871 7,470,113
BENEVA 2,483,547 8,851,199 - 2,483,547 8,851,199 11,334,746
BENT TREE PLAZA 1,927,712 6,659,082 - 1,927,712 6,659,082 8,586,794
BERKSHIRE COMMONS 2,294,960 8,151,236 76,079 2,294,960 8,227,315 10,522,275
BLOOMINGDALE 3,861,759 14,100,891 - 3,861,759 14,100,891 17,962,650
BOLTON PLAZA 2,660,227 6,209,110 1,219,398 2,634,664 7,454,071 10,088,735
BONNERS POINT 859,854 2,878,641 166,034 859,854 3,044,675 3,904,529
BOYNTON LAKES PLAZA 2,783,000 10,043,027 37,669 2,783,000 10,080,696 12,863,696
BRAELINN VILLAGE EQUIPORT 4,191,214 12,389,585 876,936 4,191,214 13,266,521 17,457,735
BRIARCLIFF LA VISTA 694,120 2,462,819 - 694,120 2,462,819 3,156,939
BRIARCLIFF VILLAGE 4,597,018 16,303,813 334,677 4,597,018 16,638,490 21,235,508
BROOKVILLE PLAZA 1,208,012 4,205,994 - 1,208,012 4,205,994 5,414,006
BUCKHEAD COURT 1,737,569 6,162,941 1,229,361 1,627,569 7,502,302 9,129,871
CAMBRIDGE SQUARE 792,000 2,916,034 59,747 792,000 2,975,781 3,767,781
CARMEL COMMONS 2,466,200 8,903,187 1,526,996 2,466,200 10,430,183 12,896,383
CARRIAGE GATE 740,960 2,494,750 1,101,049 740,960 3,595,799 4,336,759
CENTER OF SEVEN SPRINGS 1,737,994 6,290,048 1,452,432 1,757,440 7,723,034 9,480,474
CHASEWOOD PLAZA 1,675,000 11,390,727 4,500,773 2,476,486 15,090,014 17,566,500
CHERRY GROVE 3,533,146 12,710,297 - 3,533,146 12,710,297 16,243,443
CITY VIEW SHOPPING CENTER 1,207,204 4,341,304 46,444 1,207,204 4,387,748 5,594,952
COLUMBIA MARKETPLACE 1,280,158 4,285,745 177,291 1,280,158 4,463,036 5,743,194
COUNTRY CLUB 1,105,201 3,709,452 87,739 1,105,201 3,797,191 4,902,392
COURTYARD SHOPPING CENTER 1,761,567 4,187,039 263,527 1,761,567 4,450,566 6,212,133
CROMWELL SQUARE 1,771,892 6,285,288 27,249 1,771,892 6,312,537 8,084,429
CUMMING 400 2,374,562 8,420,776 134,871 2,374,562 8,555,647 10,930,209
DELK SPECTRUM 2,984,577 11,048,896 - 2,984,577 11,048,896 14,033,473
DUNWOODY HALL 1,819,209 6,450,922 329,740 1,819,209 6,780,662 8,599,871
DUNWOODY VILLAGE 2,326,063 7,216,045 2,064,462 2,326,063 9,280,507 11,606,570
EAST POINTE 1,868,120 6,742,983 - 1,868,120 6,742,983 8,611,103
EAST PORT PLAZA 3,257,023 11,611,363 164,282 3,257,023 11,775,645 15,032,668
ENSLEY SQUARE 915,493 3,120,928 410,219 915,493 3,531,147 4,446,640
EVANS CROSSING 1,468,743 5,123,617 - 1,468,743 5,123,617 6,592,360
FLEMING ISLAND 3,076,701 6,291,505 - 3,076,701 6,291,505 9,368,206
FRANKLIN SQUARE 2,584,025 9,379,749 - 2,584,025 9,379,749 11,963,774
GARDEN SQUARE 2,073,500 7,614,748 361,367 2,136,135 7,913,480 10,049,615
GARNER FESTIVAL 5,591,099 19,897,197 - 5,591,099 19,897,197 25,488,296
GLENWOOD VILLAGE 1,194,198 4,235,476 81,175 1,194,198 4,316,651 5,510,849
HAMILTON MEADOWS 2,034,566 6,582,429 - 2,034,566 6,582,429 8,616,995
HARPETH VILLAGE FIELDSTONE 2,283,874 5,559,498 3,537,926 2,283,874 9,097,424 11,381,298
HIGHLAND SQUARE 2,615,250 9,359,722 - 2,615,250 9,359,722 11,974,972
HINSDALE LAKE COMMONS 4,217,840 15,039,854 - 4,217,840 15,039,854 19,257,694
HYDE PARK 9,240,000 33,340,181 2,625,631 9,735,102 35,470,710 45,205,812
KERNERSVILLE PLAZA 1,741,562 6,081,020 - 1,741,562 6,081,020 7,822,582
KINGSDALE SHOPPING CENTER 3,866,500 14,019,614 153,027 3,866,500 14,172,641 18,039,141
LAGRANGE MARKETPLACE 983,923 3,294,003 98,595 983,923 3,392,598 4,376,521
LAKE PINE PLAZA 2,008,110 6,908,986 - 2,008,110 6,908,986 8,917,096
LAKESHORE 1,617,940 5,371,499 - 1,617,940 5,371,499 6,989,439
LOEHMANNS PLAZA 3,981,525 14,117,891 11,371 3,981,525 14,129,262 18,110,787
LOVEJOY STATION 1,540,000 5,581,468 1,654 1,540,000 5,583,122 7,123,122
LUCEDALE MARKETPLACE 641,565 2,147,848 64,089 641,565 2,211,937 2,853,502
MAINSTREET SQUARE 1,274,027 4,491,897 34,392 1,274,027 4,526,289 5,800,316
MARINERS VILLAGE 1,628,000 5,907,835 134,497 1,628,000 6,042,332 7,670,332
MARKETPLACE ST PETE 1,287,000 4,662,740 223,490 1,287,000 4,886,230 6,173,230
MARKETPLACE CENTER OLD FORT 2,432,942 1,755,643 1,813,070 2,432,942 3,568,713 6,001,655
MARTIN DOWNS VILLAGE CENTER 2,000,000 5,133,495 2,981,179 2,437,664 7,677,010 10,114,674
MARTIN DOWNS VILLAGE SHOPPES 700,000 1,207,861 879,527 817,135 1,970,253 2,787,388
MAXTOWN ROAD (NORTHGATE) 1,753,136 6,244,449 - 1,753,136 6,244,449 7,997,585
MAYNARD CROSSING 4,066,381 14,083,800 - 4,066,381 14,083,800 18,150,181
MEMORIAL BEND SHOPPING CENTER 3,256,181 11,546,660 1,481,282 3,366,181 12,917,942 16,284,123
MERCHANTS VILLAGE 1,054,306 3,162,919 3,185,485 1,054,306 6,348,404 7,402,710
MILLHOPPER 1,073,390 3,593,523 928,847 1,073,390 4,522,370 5,595,760
NEWBERRY SQUARE 2,341,460 8,466,651 784,841 2,341,460 9,251,492 11,592,952
NORTH MIAMI SHOPPING CENTER 603,750 2,021,250 85,433 603,750 2,106,683 2,710,433
OAKLEY PLAZA 1,772,540 6,406,975 65,103 1,772,540 6,472,078 8,244,618
OCEAN BREEZE 1,250,000 3,341,199 2,424,031 1,527,400 5,487,830 7,015,230
OLD ST AUGUSTINE PLAZA 2,047,151 7,355,162 233,330 2,047,151 7,588,492 9,635,643
ORCHARD SQUARE 1,155,000 4,135,353 252,060 1,155,000 4,387,413 5,542,413
PACES FERRY PLAZA 2,811,522 9,967,557 1,627,529 2,811,622 11,594,986 14,406,608
PALM HARBOUR SHOPPING VILLAGE 2,899,928 10,998,230 1,058,599 2,899,928 12,056,829 14,956,757
PALM TRAILS PLAZA 2,438,996 5,818,523 - 2,438,996 5,818,523 8,257,519
PARAGON BRANDON JV 570,000 2,472,537 (3,042,537) - - -
PARK PLACE 2,231,745 7,974,362 - 2,231,745 7,974,362 10,206,107
PARKWAY STATION 1,123,200 4,283,917 142,744 1,123,200 4,426,661 5,549,861
PEACHLAND PROMENADE 1,284,562 5,143,564 61,087 1,284,561 5,204,652 6,489,213
PEARTREE VILLAGE 5,196,653 8,732,711 10,122,933 5,196,653 18,855,644 24,052,297
PIKE CREEK 5,077,406 18,860,183 - 5,077,406 18,860,183 23,937,589
PINE TREE PLAZA 539,000 1,995,927 (84,927) 539,000 1,911,000 2,450,000
POWERS FERRY SQUARE 3,607,647 12,790,749 3,253,948 3,607,647 16,044,697 19,652,344
POWERS FERRY 1,190,822 4,223,606 19,564 1,190,822 4,243,170 5,433,992
QUADRANT AT SOUTHPOINT I 2,342,823 15,541,967 (17,884,790) - - -
QUEENSBOROUGH 1,826,000 6,501,056 - 1,826,000 6,501,056 8,327,056
REGENCY COURT 3,571,337 12,664,014 285,562 3,571,337 12,949,576 16,520,913
REGENCY SQUARE BRANDON 577,975 18,156,719 7,542,763 4,491,461 21,785,996 26,277,457
RIVERMONT STATION 2,887,213 10,445,109 79,795 2,887,213 10,524,904 13,412,117
ROSWELL VILLAGE 2,304,345 6,777,200 181,066 2,304,345 6,958,266 9,262,611
RUSSELL RIDGE 2,153,214 - 6,565,264 2,215,341 6,503,137 8,718,478
SANDY PLAINS VILLAGE 2,906,640 10,412,440 433,698 2,906,640 10,846,138 13,752,778
SANDY SPRINGS VILLAGE 733,126 2,565,411 168,915 733,126 2,734,326 3,467,452
SHOPPES @ 104 2,651,000 9,523,429 - 2,651,000 9,523,429 12,174,429
SHOPPES AT MASON 1,576,656 5,357,855 - 1,576,656 5,357,855 6,934,511
SILVERLAKE 2,004,860 7,161,869 - 2,004,860 7,161,869 9,166,729
SOUTH MONROE 1,200,000 6,566,974 - 1,200,000 6,566,974 7,766,974
SOUTH POINTE CROSSING - 13,000 - - 13,000 13,000
ST ANN SQUARE 1,541,883 5,597,282 - 1,541,883 5,597,282 7,139,165
STATLER SQUARE 2,227,819 7,479,952 - 2,227,819 7,479,952 9,707,771
TAMIAMI TRAILS 2,046,286 7,462,646 108,330 2,046,286 7,570,976 9,617,262
TEQUESTA SHOPPES 1,782,000 6,426,042 235,213 1,782,000 6,661,255 8,443,255
TERRACE WALK 1,196,286 2,935,683 105,916 1,196,286 3,041,599 4,237,885
THE MARKETPLACE 1,211,605 4,056,242 2,840,716 1,758,434 6,350,129 8,108,563
TOWN CENTER AT MARTIN DOWNS 1,364,000 4,985,410 17,547 1,364,000 5,002,957 6,366,957
TOWN SQUARE 438,302 1,555,481 1,501,322 768,302 2,726,803 3,495,105
TROWBRIDGE CROSSING EQUIPORT 910,263 1,914,551 1,050,010 910,263 2,964,561 3,874,824
UNION SQUARE SHOPPING CENTER 1,578,654 5,933,889 386,260 1,578,656 6,320,147 7,898,803
UNIVERSITY COLLECTION 2,530,000 8,971,597 108,317 2,530,000 9,079,914 11,609,914
UNIVERSITY MARKETPLACE 3,250,562 7,044,579 2,409,463 3,532,046 9,172,558 12,704,604
VILLAGE CENTER 6 3,885,444 10,799,316 337,899 3,885,444 11,137,215 15,022,659
VILLAGE IN TRUSSVILLE 973,954 3,260,627 109,895 973,954 3,370,522 4,344,476
WELLEBY 1,496,000 5,371,636 346,882 1,496,000 5,718,518 7,214,518
WELLINGTON MARKET PLACE 5,070,384 13,308,972 319,657 5,070,384 13,628,629 18,699,013
WELLINGTON TOWN SQUARE 1,914,000 7,197,934 609,258 1,914,000 7,807,192 9,721,192
WEST COUNTY 1,491,462 4,993,155 126,744 1,491,462 5,119,899 6,611,361
WESTCHESTER PLAZA 1,857,048 6,456,178 - 1,857,048 6,456,178 8,313,226
WESTLAND I 198,344 1,747,391 (1,945,735) - - -
WINDMILLER PLAZA PHASE I 2,620,355 11,190,526 - 2,620,355 11,190,526 13,810,881
WOODCROFT SHOPPING CENTER 1,419,000 5,211,981 384,592 1,419,000 5,596,573 7,015,573
WORTHINGTON PARK CENTRE 3,346,203 10,053,858 - 3,346,203 10,053,858 13,400,061
--------------------------------------------------------------------------------------------
253,680,855 871,635,824 57,867,342 257,669,018 925,514,995 1,183,184,013
============================================================================================
<CAPTION>
Total Cost
Net of
Accumulated Accumulated
Depreciation Depreciation Mortgages
-------------- ------------ ---------
<S> <C> <C> <C>
ANASTASIA SHOPPING PLAZA 575,105 4,274,446 -
ASHFORD PLACE 580,642 11,405,380 4,651,887
AVENTURA SHOPPING CENTER 2,111,008 10,115,705 8,602,768
BECKETT COMMONS 128,560 7,341,553 -
BENEVA - 11,334,746 -
BENT TREE PLAZA 148,955 8,437,839 5,615,296
BERKSHIRE COMMONS 1,062,021 9,460,254 7,784,755
BLOOMINGDALE 300,874 17,661,776 -
BOLTON PLAZA 928,470 9,160,265 -
BONNERS POINT 535,045 3,369,484 1,613,000
BOYNTON LAKES PLAZA 251,445 12,612,251 -
BRAELINN VILLAGE EQUIPORT 729,122 16,728,613 12,356,039
BRIARCLIFF LA VISTA 139,030 3,017,909 1,649,897
BRIARCLIFF VILLAGE 968,021 20,267,487 13,282,120
BROOKVILLE PLAZA 103,342 5,310,664 3,668,969
BUCKHEAD COURT 389,391 8,740,480 -
CAMBRIDGE SQUARE 151,176 3,616,605 -
CARMEL COMMONS 434,794 12,461,589 -
CARRIAGE GATE 735,440 3,601,319 -
CENTER OF SEVEN SPRINGS 1,115,924 8,364,550 -
CHASEWOOD PLAZA 2,660,845 14,905,655 8,000,000
CHERRY GROVE 265,335 15,978,108 -
CITY VIEW SHOPPING CENTER 273,129 5,321,823 -
COLUMBIA MARKETPLACE 679,672 5,063,522 2,586,000
COUNTRY CLUB 563,066 4,339,326 2,264,000
COURTYARD SHOPPING CENTER 1,228,647 4,983,486 1,378,000
CROMWELL SQUARE 372,007 7,712,422 4,464,426
CUMMING 400 501,697 10,428,512 6,419,476
DELK SPECTRUM 304,219 13,729,254 8,138,553
DUNWOODY HALL 387,763 8,212,108 -
DUNWOODY VILLAGE 459,895 11,146,675 7,264,800
EAST POINTE 129,414 8,481,689 5,267,546
EAST PORT PLAZA 534,694 14,497,974 -
ENSLEY SQUARE 206,478 4,240,162 -
EVANS CROSSING 117,619 6,474,741 4,379,981
FLEMING ISLAND 78,219 9,289,987 3,522,104
FRANKLIN SQUARE 198,248 11,765,526 9,136,752
GARDEN SQUARE 244,096 9,805,519 6,516,686
GARNER FESTIVAL 124,404 25,363,892 -
GLENWOOD VILLAGE 257,101 5,253,748 2,211,233
HAMILTON MEADOWS 167,943 8,449,052 5,612,141
HARPETH VILLAGE FIELDSTONE 213,202 11,168,096 -
HIGHLAND SQUARE 135,556 11,839,416 3,942,071
HINSDALE LAKE COMMONS 31,394 19,226,300 -
HYDE PARK 1,381,919 43,823,893 24,750,000
KERNERSVILLE PLAZA 123,771 7,698,811 5,218,476
KINGSDALE SHOPPING CENTER 447,889 17,591,252 -
LAGRANGE MARKETPLACE 510,946 3,865,575 1,645,000
LAKE PINE PLAZA 144,204 8,772,892 5,986,557
LAKESHORE 113,706 6,875,733 3,729,331
LOEHMANNS PLAZA 835,982 17,274,805 -
LOVEJOY STATION 209,663 6,913,459 -
LUCEDALE MARKETPLACE 340,083 2,513,419 1,390,000
MAINSTREET SQUARE 204,362 5,595,954 -
MARINERS VILLAGE 273,727 7,396,605 -
MARKETPLACE ST PETE 375,700 5,797,530 -
MARKETPLACE CENTER OLD FORT 167,760 5,833,895 1,986,409
MARTIN DOWNS VILLAGE CENTER 1,298,279 8,816,395 4,150,000
MARTIN DOWNS VILLAGE SHOPPES 337,325 2,450,063 1,313,000
MAXTOWN ROAD (NORTHGATE) 107,300 7,890,285 5,440,112
MAYNARD CROSSING 286,993 17,863,188 11,711,134
MEMORIAL BEND SHOPPING CENTER 696,953 15,587,170 8,335,963
MERCHANTS VILLAGE 196,291 7,206,419 -
MILLHOPPER 932,895 4,662,865 2,401,000
NEWBERRY SQUARE 1,366,907 10,226,045 -
NORTH MIAMI SHOPPING CENTER 605,557 2,104,876 1,160,000
OAKLEY PLAZA 290,343 7,954,275 -
OCEAN BREEZE 929,096 6,086,134 2,805,000
OLD ST AUGUSTINE PLAZA 440,733 9,194,910 -
ORCHARD SQUARE 332,356 5,210,057 -
PACES FERRY PLAZA 630,953 13,775,655 -
PALM HARBOUR SHOPPING VILLAGE 700,457 14,256,300 -
PALM TRAILS PLAZA 84,337 8,173,182 -
PARAGON BRANDON JV - - -
PARK PLACE 33,228 10,172,879 -
PARKWAY STATION 319,124 5,230,737 -
PEACHLAND PROMENADE 571,096 5,918,117 -
PEARTREE VILLAGE 673,528 23,378,769 12,777,420
PIKE CREEK 226,061 23,711,528 12,442,166
PINE TREE PLAZA 48,350 2,401,650 -
POWERS FERRY SQUARE 798,322 18,854,022 -
POWERS FERRY 238,707 5,195,285 2,917,943
QUADRANT AT SOUTHPOINT I - - -
QUEENSBOROUGH 13,544 8,313,512 -
REGENCY COURT 718,475 15,802,438 -
REGENCY SQUARE BRANDON 6,100,596 20,176,861 12,000,000
RIVERMONT STATION 395,653 13,016,464 -
ROSWELL VILLAGE 300,168 8,962,443 -
RUSSELL RIDGE 633,539 8,084,939 -
SANDY PLAINS VILLAGE 640,709 13,112,069 -
SANDY SPRINGS VILLAGE 131,641 3,335,811 -
SHOPPES @ 104 138,509 12,035,920 -
SHOPPES AT MASON 111,748 6,822,763 3,925,611
SILVERLAKE 104,315 9,062,414 -
SOUTH MONROE 54,424 7,712,550 -
SOUTH POINTE CROSSING - 13,000 -
ST ANN SQUARE 143,068 6,996,097 4,972,117
STATLER SQUARE 157,923 9,549,848 5,472,654
TAMIAMI TRAILS 275,743 9,341,519 -
TEQUESTA SHOPPES 385,668 8,057,587 -
TERRACE WALK 624,306 3,613,579 683,000
THE MARKETPLACE 857,541 7,251,022 2,647,000
TOWN CENTER AT MARTIN DOWNS 260,896 6,106,061 -
TOWN SQUARE 97,568 3,397,537 -
TROWBRIDGE CROSSING EQUIPORT 109,285 3,765,539 1,800,000
UNION SQUARE SHOPPING CENTER 374,850 7,523,953 -
UNIVERSITY COLLECTION 502,408 11,107,506 -
UNIVERSITY MARKETPLACE 1,826,835 10,877,769 -
VILLAGE CENTER 6 878,291 14,144,368 -
VILLAGE IN TRUSSVILLE 529,193 3,815,283 1,775,000
WELLEBY 554,962 6,659,556 -
WELLINGTON MARKET PLACE 1,127,296 17,571,717 -
WELLINGTON TOWN SQUARE 486,760 9,234,432 -
WEST COUNTY 844,740 5,766,621 3,190,000
WESTCHESTER PLAZA 172,301 8,140,925 5,815,752
WESTLAND I - - -
WINDMILLER PLAZA PHASE I 141,017 13,669,864 -
WOODCROFT SHOPPING CENTER 299,819 6,715,754 -
WORTHINGTON PARK CENTRE 192,029 13,208,032 4,967,081
------------------------------------------------
58,983,738 1,124,200,275 297,736,226
================================================
</TABLE>
<PAGE>
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1998
Depreciation and amortization of the Company's investment in buildings and
improvements reflected in the statement of operation is calculated over the
estimated useful lives of the assets as follows:
Buildings and improvements up to 40 years
The aggregate cost for Federal income tax purposes was approximately
$1.029 billion at December 31, 1998.
The changes in total real estate assets for the period ended December 31,
1998, 1997 and 1996:
<TABLE>
<CAPTION>
1998 1997 1996
--------------- -------------- ------------
<S> <C> <C> <C>
Balance, beginning of period 799,801,367 389,007,481 278,731,167
Developed or acquired properties 399,305,955 408,475,251 107,378,064
Sale of property (24,248,801) (2,907,503) -
Improvements 8,325,492 5,226,138 2,898,250
---------------- -------------- ------------
Balance, end of period 1,183,184,013 799,801,367 389,007,481
================ ============== ============
The changes in accumulated depreciation for the period ended December 31,
1998, 1997 and 1996:
1998 1997 1996
--------------- -------------- ------------
Balance, beginning of period 40,795,801 26,213,225 18,631,310
Sale of property (5,121,929) (713,176) -
Depreciation for period 23,309,866 15,295,752 7,581,915
--------------- -------------- ------------
Balance, end of period 58,983,738 40,795,801 26,213,225
=============== ============== ============
</TABLE>
REINSTATEMENT AGREEMENT
THIS REINSTATEMENT AGREEMENT ("Reinstatement Agreement") is made as of
this ________ day of October, 1998, by and between BENEVA SHOPS ASSOCIATES,
LTD., a Florida limited partnership ("Seller"), and RRC ACQUISITIONS, INC., a
Florida corporation ("Buyer").
WHEREAS, Seller and Buyer entered into that certain Purchase and Sale
Agreement dated October 21, 1997, whereby Seller agreed to sell and convey to
Buyer and Buyer agreed to purchase from Seller certain real and personal
property described therein, as subsequently amended by letter agreements dated
December 8, 1997, December 23, 1997, December 29, 1997, January 15, 1998, and
January 17, 1998 (the "Agreement"); and
WHEREAS, the Purchase Agreement terminated in accordance with its terms
on January 27, 1998, but Buyer and Seller have agreed to reinstate the Purchase
Agreement and amend certain provisions thereof, as more particularly set forth
herein.
NOW, THEREFORE, in consideration of the sum of Ten and No/100 Dollars
($10.00), and other valuable consideration, the receipt of which is hereby
acknowledged, Seller and Buyer acknowledge and agree as follows:
1. Buyer and Seller hereby agree that the Purchase Agreement is hereby
reinstated, subject to and in accordance with the terms and conditions of this
Reinstatement Agreement. As amended and modified hereby, the Purchase Agreement
is in full force and effect. In the event of a conflict between the provisions
hereof and those of the Purchase Agreement, the provisions hereof shall control.
2. The Purchase Agreement is amended and restated in its entirety as
set forth in Exhibit "A" attached hereto.
3. Buyer hereby assigns its interest in the Purchase Agreement, as
modified hereby, to RRC Acquisitions Two, Inc., a Florida corporation
("Assignee"), which assumes the obligations of Buyer under the Purchase
Agreement, as modified hereby, from and after the date hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Witnesses: RRC ACQUISITIONS, INC.,
a Florida corporation
Name:
By:
Its:
Name: Date:
Tax Identification No. 59-3210155
"BUYER"
RRC ACQUISITIONS TWO, INC.,
a Florida corporation
Name:
By:
Its:
Name: Date:
Tax Identification No. 59-3478325
"ASSIGNEE"
- - 2 -
<PAGE>
BENEVA SHOPS ASSOCIATES, LTD.,
a Florida limited partnership
By Its General Partner:
Sarasota Beneva Company, Ltd.,
a Florida limited partnership
By Its General Partners:
RAB Holdings, Inc., a Florida
Name: corporation
By:
Name: Richard A. Beard, III
As to RAB Holdings, Inc. President
WRC Holdings, Inc., a Texas
Name: corporation
By:
Name: William R. Cooper
As to WRC Holdings, Inc. President
Tax Identification No: 75-2018292
"SELLER"
- 3 -
<PAGE>
JOINDER OF ESCROW AGENT
1. Duties. Escrow Agent joins herein for the purpose of agreeing to
comply with the terms hereof insofar as they apply to Escrow Agent. Escrow Agent
shall receive and hold the Earnest Money Deposit in trust, to be disposed of in
accordance with the provisions of this joinder and the foregoing Agreement. The
Earnest Money Deposit shall be invested by Escrow Agent in an interest bearing
account at First Union National Bank.
2. Indemnity. Escrow Agent shall not be liable to either party except
for claims resulting from the gross negligence or willful misconduct of Escrow
Agent. If the escrow is involved in any controversy or litigation, the parties
hereto shall jointly and severally indemnify and hold Escrow Agent free and
harmless from and against any and all loss, cost, damage, liability or expense,
including costs of reasonable attorneys' fees to which Escrow Agent may be put
or which Escrow Agent may incur by reason of or in connection with such
controversy or litigation, except to the extent it is finally determined that
such controversy or litigation resulted from Escrow Agent's gross negligence or
willful misconduct. If the indemnity amounts payable hereunder result from the
fault of Buyer or Seller (or their respective agents), the party at fault shall
pay, and hold the other party harmless against, such amounts.
3. Conflicting Demands. If conflicting demands are made upon Escrow
Agent or Escrow Agent is uncertain with respect to the escrow, the parties
hereto expressly agree that Escrow Agent shall have the absolute right to do
either or both of the following: (i) withhold and stop all proceedings in
performance of this escrow and await settlement of the controversy by final
appropriate legal proceedings or otherwise as it may require; or (ii) file suit
for declaratory relief and/or interpleader and obtain an order from the court
requiring the parties to interplead and litigate in such court their several
claims and rights between themselves. Upon the filing of any such declaratory
relief or interpleader suit and tender of the Earnest Money Deposit to the
court, Escrow Agent shall thereupon be fully released and discharged from any
and all obligations to further perform the duties or obligations imposed upon
it. Buyer and Seller agree to respond promptly in writing to any request by
Escrow Agent for clarification, consent or instructions. Any action proposed to
be taken by Escrow Agent for which approval of Buyer and/or Seller is requested
shall be considered approved if Escrow Agent does not receive written notice of
disapproval within fourteen (14) days after a written request for approval is
received by the party whose approval is being requested. Escrow Agent shall not
be required to take any action for which approval of Buyer and/or Seller has
been sought unless such approval has been received or deemed received. No
disbursements shall be made, other than as provided in Sections and of Exhibit
"A" to this Agreement, or to a court in an interpleader action, unless Escrow
Agent shall have given written notice of the proposed disbursement to Buyer and
Seller
- 4 -
<PAGE>
and neither Buyer nor Seller shall have delivered any written objection to the
disbursement within 14 days after receipt of Escrow Agent's notice. No notice by
Buyer or Seller to Escrow Agent of disapproval of a proposed action shall affect
the right of Escrow Agent to take any action as to which such approval is not
required.
4. Continuing Counsel. Seller acknowledges that Escrow Agent is counsel
to Buyer herein and Seller agrees that in the event of a dispute hereunder or
otherwise between Seller and Buyer, Escrow Agent may continue to represent Buyer
notwithstanding that it is acting and will continue to act as Escrow Agent
hereunder, it being acknowledged by all parties that Escrow Agent's duties
hereunder are ministerial in nature.
5. Tax Identification. Seller and Buyer shall provide to Escrow Agent
appropriate Federal tax identification numbers.
ROGERS, TOWERS, BAILEY, JONES & GAY
By:
Its Authorized Agent
Date:
"ESCROW AGENT"
- - 5 -
<PAGE>
EXHIBIT "A"
TO
REINSTATEMENT AGREEMENT
In consideration of the mutual agreements herein, and other good and
valuable consideration, the receipt of which is hereby acknowledged, Seller
agrees to sell and Buyer agrees to purchase the Property (as hereinafter
defined) on the following terms and conditions:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 Agreement means this instrument as it may be amended from time to
time.
1.2 Allocation Date means the close of business on the day immediately
prior to the Closing Date.
1.3 Audit Representation Letter means the form of Audit Representation
Letter attached hereto as Exhibit .
1.4 Buyer means RRC Acquisitions Two, Inc.
1.5 Closing means generally the execution and delivery of those
documents and funds necessary to effect the sale of the Property by Seller to
Buyer.
1.6 Closing Date means the date on which the Closing occurs.
1.7 Contracts means service contracts and similar agreements affecting
the Shopping Center (excluding Leases) which are freely terminable by the owner
of the Shopping Center upon not more than thirty (30) days' written notice.
1.8 Day means a calendar day, whether or not the term is capitalized.
1.9 Earnest Money Deposit means the deposits delivered by Buyer to
Escrow Agent prior to the Closing under Sections and of this Agreement, together
with the earnings thereon, if any.
1.10 Environmental Claim means any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Material or actual or alleged Hazardous
<PAGE>
Material Activity, (c) from any abatement, removal, remedial, corrective, or
other response action in connection with a Hazardous Material, Environmental Law
or other order of a governmental authority or (d) from any actual or alleged
damage, injury, threat, or harm to health, safety, natural resources, or the
environment.
1.11 Environmental Assessments means the environmental assessment
reports identified in Exhibit attached hereto.
1.12 Environmental Escrow Agreement is the agreement attached hereto as
Exhibit .
1.13 Environmental Law means any current legal requirement in effect at
the Closing Date pertaining to (a) the protection of health, safety, and the
indoor or outdoor environment, (b) the conservation, management, protection or
use of natural resources and wildlife, (c) the protection or use of source water
and groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to, any
Hazardous Material or (e) pollution (including any Release to air, land, surface
water, and groundwater); and includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 USC ss.ss.9601 et
seq., Solid Waste Disposal Act, as amended by the Resource Conservation Act of
1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC ss.ss.6901 et
seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 USC ss.ss.1251 et seq., Clean Air Act of 1966, as amended, 42 USC
ss.ss.7401 et seq., Toxic Substances Control Act of 1976, 15 USC ss.ss.2601 et
seq., Hazardous Materials Transportation Act, 49 USC App. ss.ss.1801,
Occupational Safety and Health Act of 1970, as amended, 29 USC ss.ss.651 et
seq., Oil Pollution Act of 1990, 33 USC ss.ss.2701 et seq., Emergency Planning
and Community Right-to-Know Act of 1986, 42 USC App. ss.ss.11001 et seq.,
National Environmental Policy Act of 1969, 42 USC ss.ss.4321 et seq., Safe
Drinking Water Act of 1974, as amended by 42 USC ss.ss.300(f) et seq., and any
similar, implementing or successor law, any amendment, rule, regulation, order
or directive, issued thereunder.
1.14 Escrow Agent means Rogers, Towers, Bailey, Jones & Gay, Attorneys,
whose address is 1301 Riverplace Blvd., Suite 1500, Jacksonville, Florida 32207
(Fax 904/396-0663), or any successor Escrow Agent.
1.15 Governmental Approval means any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, decision, action or
approval of a governmental authority.
- - 2 -
<PAGE>
1.16 Hazardous Material means any asbestos, petroleum, petroleum
product, drycleaning solvent or chemical, biological or medical waste, "sharps"
or any other hazardous or toxic substance as defined in or regulated by any
Environmental Law in effect at the pertinent date or dates.
1.17 Hazardous Material Activity means any activity, event, or
occurrence at or prior to the Closing Date involving a Hazardous Material,
including, without limitation, the manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation, handling or corrective or response
action to any Hazardous Material.
1.18 Improvements means any buildings, structures or other improvements
situated on the Real Property.
1.19 Inspection Period means the period of time which expires at
midnight on the thirtieth (30th) day after the earlier of (i) November 1, 1998,
or (ii) the date upon which the Remedial Action Plan is approved by the Florida
Department of Environmental Protection. If such expiration date is a weekend or
national holiday, the Inspection Period shall expire at midnight on the next
immediately succeeding business day.
1.20 Leases means all leases and other occupancy agreements permitting
persons to lease or occupy all or a portion of the Property.
1.21 Materials means all plans, drawings, specifications, soil test
reports, environmental reports, market studies, surveys, and similar
documentation, if any, owned by or in the possession of Seller with respect to
the Property, Improvements and any proposed improvements to the Property, which
Seller may lawfully transfer to Buyer except that, as to financial and other
records, Materials shall include only photostatic copies.
1.22 Permitted Exceptions means only the following interests, liens and
encumbrances:
(a) Liens for ad valorem taxes not payable on or before Closing;
(b) Rights of tenants under Leases; and
(c) Other matters determined by Buyer to be acceptable.
1.23 Personal Property means all (a) sprinkler, plumbing, heating,
air-conditioning, electric power or lighting, incinerating, ventilating and
cooling systems, with each of their respective appurtenant furnaces, boilers,
engines, motors, dynamos,
- - 3 -
<PAGE>
radiators, pipes, wiring and other apparatus, equipment and fixtures, elevators,
partitions, fire prevention and extinguishing systems located in or on the
Improvements, (b) all Materials, and (c) all other personal property used in
connection with the Improvements, provided the same are now owned or are
acquired by Seller prior to the Closing.
1.24 Property means collectively the Real Property, the Improvements
and the Personal Property.
1.25 Prorated means the allocation of items of expense or income
between Buyer and Seller based upon that percentage of the time period as to
which such item of expense or income relates which has expired as of the date at
which the proration is to be made.
1.26 Purchase Price means the consideration agreed to be paid by Buyer
to Seller for the purchase of the Property as set forth in Section (subject to
adjustments as provided herein).
1.27 Real Property means the lands more particularly described on
Exhibit , together with all easements, licenses, privileges, rights of way and
other appurtenances pertaining to or accruing to the benefit of such lands.
1.28 Release means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks, and other
receptacles containing or previously containing any Hazardous Material at or
prior to the Closing Date.
1.29 Remedial Action Plan is the plan to be prepared at the cost and
expense of Seller (subject to reimbursement as provided herein) for the
remediation of certain contamination of the Property described in the
Environmental Assessments, said plan to be subject to review by and approval of
Buyer.
1.30 Rent Roll means the list of Leases attached hereto as Exhibit ,
identifying with particularity the space leased by each tenant, the term
(including extension options), square footage and applicable rent, common area
maintenance, tax and other reimbursements, security deposits and similar data.
1.31 Seller means Beneva Shops Associates, Ltd., a Florida limited partnership.
1.32 Seller Financial Statements means the unaudited balance sheets and
statements of income, cash flows and changes in financial positions prepared by
Seller for the Property, as of and for the two (2) calendar years next preceding
the date of this
- - 4 -
<PAGE>
Agreement and all monthly reports of income, expense and cash flow prepared by
Seller for the Property, which shall be consistent with past practice, for any
period beginning after the latest of such calendar years, and ending prior to
Closing.
1.33 Shopping Center means the Shopping Center identified on the
initial page hereof.
1.34 Survey means the survey prepared by George F. Young, Inc., dated
August 18, 1989, last revised and recertified on November 7, 1997, to be updated
to a date not earlier than thirty (30) days prior to the Closing, and which is
certified to Buyer, Seller, the Title Insurance company providing Title
Insurance to Buyer, and Buyer's lender, and dated as of the date the Survey was
made.
1.35 Tenant Estoppel Letter means a letter or other certificate from a
tenant certifying as to certain matters regarding such tenant's Lease, in
substantially the same form as attached hereto as Exhibit , or in the case of
national or regional "credit" tenants identified as such on the Rent Roll, the
form customarily used by such tenant provided the information disclosed is
acceptable to Buyer.
1.36 Title Defect means any exception in the Title Insurance Commitment
or any matter disclosed by the Survey, other than a Permitted Exception.
1.37 Title Insurance means an ALTA Form B Owners Policy of Title
Insurance for the full Purchase Price insuring marketable title in Buyer in fee
simple, subject only to the Permitted Exceptions, issued by a title insurer
acceptable to Buyer.
1.38 Title Insurance Commitment means the Commitment for Title
Insurance issued by Commonwealth Land Title Insurance Company, bearing an
effective date of November 3, 1997, at 8:00 A.M., to be updated within the
Inspection Period and "marked down" at Closing.
1.39 Transaction Documents means this Agreement, the deed conveying the
Property, the assignment of leases, the bill of sale conveying the Personal
Property and all other documents required or appropriate in connection with the
transactions contemplated hereby.
2. PURCHASE PRICE AND PAYMENT
2.1 Purchase Price; Payment.
(a) Purchase Price and Terms. The total Purchase Price for the
Property (subject to adjustment as provided herein) shall be $11,422,781. The
Purchase Price shall be payable in cash at Closing.
- - 5 -
<PAGE>
(b) Adjustments at Closing. Notwithstanding anything to the
contrary contained in this Agreement or applicable law, the provisions of this
Section shall survive the Closing. All income and obligations attributable to
periods ending on or before the Allocation Date shall be allocated to Seller,
and all income and obligations attributable to periods ending after the
Allocation Date (including the Closing Date) shall be allocated to Buyer.
Without limitation upon the foregoing the following items shall be adjusted or
prorated between Seller and Buyer as set forth below:
(1) The Closing year's real and tangible personal property taxes
shall be prorated between Seller and Buyer as of the Allocation Date (if the
amount of the current year's property taxes are not available, such taxes will
be prorated based upon the prior year's assessment);
(2) Except as provided in subparagraph below, all
income and operating expenses of the Property, including, without limitation,
public utility charges, maintenance, management, and other service charges,
costs and expenses associated with leases entered into between the date of this
Agreement and the Closing Date, and all other normal operating charges shall be
prorated at the Closing effective as of the Allocation Date based upon the best
available information.
(3) Seller will credit Buyer with any prepaid rents and
reimbursements, or unforfeited security deposits with respect to the Leases, but
only to the extent that the same were actually paid by tenants as reflected by
Tenant Estoppel Letters, or if a Tenant Estoppel Letter is not received from a
particular tenant, by the Lease. If the Seller's records disagree with those of
a particular tenant, Seller and Buyer shall negotiate in good faith during the
Inspection Period to resolve the disagreement.
(4) Any rents, percentage rents or tenant reimbursements
payable by tenants after the Allocation Date but applicable to periods on or
prior to the Allocation Date shall be remitted to Seller by Buyer within thirty
(30) days after receipt, less any expenses of the Property found to be
attributable to pre-Allocation Date periods but discovered by Buyer after
Closing. Buyer shall have no obligation to collect delinquencies, but should
Buyer collect any delinquent rents or other sums which cover periods prior to
the Allocation Date and for which Seller has received no proration or credit,
Buyer shall remit same to Seller within thirty (30) days after receipt. Buyer
will not interfere in Seller's efforts to collect sums due it prior to the
Closing. Seller will remit to Buyer promptly after receipt any rents, percentage
rents or tenant reimbursements received by Seller after Closing which are
attributable to periods occurring after the Allocation Date. Receipts after
Closing of either Buyer or Seller from tenants who do not designate the period
to which they are to be applied shall be applied first to then current rents and
reimbursements for such tenant(s), then to
- 6 -
<PAGE>
delinquent rents and reimbursements attributable to post-Allocation Date
periods, and then to pre-Allocation Date periods.
(5) An escrow will be established with Escrow Agent pursuant
to the Environmental Escrow Agreement, in the initial amount of $900,000 to
accomplish the preparation of the Remedial Action Plan and removal of the
Hazardous Materials which are the subject of the Environmental Assessments. The
escrowed sum will be deposited with Escrow Agent by Seller from the proceeds of
sale. If this transaction closes, the costs incurred by Seller in the
preparation of the Remedial Action Plan, including without limitation additional
testing, if any, shall be reimbursed from such escrow (but such preparation cost
reimbursement not to exceed $25,000 in the aggregate), and the balance held and
disbursed as provided in the Environmental Escrow Agreement.
2.2 Earnest Money Deposit. An Earnest Money Deposit in the amount of
$12,500 shall be delivered to Escrow Agent within three (3) days after the date
of execution by the last of Buyer or Seller to execute and transmit a copy of
this Agreement to the other. This Agreement may be terminated by Seller if the
Earnest Money Deposit is not received by Escrow Agent by such deadline. The
Earnest Money Deposit paid by Buyer shall be deposited by Escrow Agent in an
interest bearing account at First Union National Bank, and shall be held and
disbursed by Escrow Agent as specifically provided in this Agreement. The
Earnest Money Deposit shall be applied to the Purchase Price at the Closing.
2.3 Closing Costs.
(a) Seller shall pay:
(1) Documentary stamp and other transfer taxes imposed upon
the transactions contemplated hereby;
(2) Cost of satisfying any liens on the Property;
(3) Cost of title insurance and the costs, if any, of curing title
defects and recording any curative title documents;
(4) Cost of preparation of the Remedial Action Plan (subject to
reimbursement as provided herein);
(5) All broker's commissions, finders' fees and similar expenses
incurred by either party in connection with the sale of the
Property, subject however to Buyer's indemnity given in Section of
this Agreement; and
- - 7 -
<PAGE>
(6) Seller's attorneys' fees relating to the sale of
the Property.
(b) Buyer shall pay:
(1) Cost of Buyer's due diligence inspection;
(2) Cost of the Survey;
(3) Cost of recording the deed; and
(4) Buyer's attorneys' fees.
3. INSPECTION PERIOD AND CLOSING
3.1 Inspection Period.
(a) Buyer agrees that it will have the Inspection Period to
physically inspect the Property, review the economic data, underwrite the
tenants and review their Leases, and to otherwise conduct its due diligence
review of the Property and all books, records and accounts of Seller related
thereto. Buyer hereby agrees to indemnify and hold Seller harmless from any
damages, liabilities or claims for property damage or personal injury arising
out of such inspection and investigation by Buyer or its agents or independent
contractors, such indemnification obligations to survive the termination, breach
or Closing of this Agreement, as the case may be. Within the Inspection Period,
Buyer may, in its sole discretion and for any reason or no reason, elect to go
forward with this Agreement to closing, which election shall be made by notice
to Seller given within the Inspection Period. If such notice is not timely
given, this Agreement and all rights, duties and obligations of Buyer and Seller
hereunder, except any which expressly survive termination, shall terminate and
Escrow Agent shall forthwith return to Buyer the Earnest Money Deposit. If Buyer
so elects to go forward, the Earnest Money Deposit shall be increased by an
additional deposit of $87,500 (to be deposited with Escrow Agent no later than
three (3) business days following the end of the Inspection Period), and shall
not be refundable except upon the terms otherwise set forth herein.
(b) Seller will promptly furnish or make available to Buyer
the documents enumerated on Exhibit attached hereto, to the extent such
documents exist and are within Seller's possession or that of Seller's property
manager. Subject to subparagraph (d) below, Buyer, through its officers,
employees and other authorized representatives, shall have the right to
reasonable access to the Property and all records of Seller related thereto,
including without limitation all Leases and Seller Financial Statements, at
reasonable times during the Inspection Period for the purpose of inspecting the
Property, taking soil and ground water samples, conducting
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Hazardous Materials inspections, reviewing the books and records of Seller
concerning the Property and otherwise conducting its due diligence review of the
Property. Seller shall cooperate with and assist Buyer in making such
inspections and reviews. Seller shall give Buyer any authorizations which may be
required by Buyer in order to gain access to records or other information
pertaining to the Property or the use thereof maintained by any governmental or
quasi-governmental authority or organization. Buyer, for itself and its agents,
agrees not to enter into any contract with existing tenants without the written
consent of Seller if such contract would be binding upon Seller should this
transaction fail to close. Buyer shall have the right to have due diligence
interviews and other discussions or negotiations with tenants, provided Buyer
furnishes Seller reasonable notice of the time and place of any such interview
or discussion and affords Seller an opportunity to be present.
(c) Buyer, through its officers or other authorized
representatives, shall have the right to reasonable access to all Materials
(other than privileged or confidential materials) for the purpose of reviewing
and copying the same.
(d) Buyer shall not have the right, without first obtaining
Seller's prior written consent, to pierce or penetrate the roof, walls,
foundation, or structural component of any of the Improvements or paved areas.
Buyer shall give Seller reasonable notice of all inspections and other
activities of Buyer or its representatives, agents or contractors that will take
place on the Property and afford Seller the opportunity to be present during all
or any part of such inspections and other activities on the Property. All
interior inspections shall be made only (x) with the prior consent of Seller,
(y) on business days and (z) during such hours that will not, in Seller's
opinion, interfere with or disturb the quiet enjoyment of the Property by
tenants. Any inspections of any space leased by a tenant shall be made only with
advance notice to and consent of such tenant and with the opportunity having
been given to Seller to be present. The costs and expenses of Buyer's
investigations shall be borne solely by Buyer and Buyer shall deliver to Seller
a copy of each such test, report and inspection conducted or obtained by Buyer
with respect to the Property. Buyer shall immediately repair and restore any
damage to the Property resulting from the performance of any of Buyer's
activities on the Property. Buyer shall not have the right to perform or cause
to be performed on the Property any investigation, inspection, testing, or
on-site visitation unless and until Buyer delivers to Seller evidence that Buyer
and all persons acting for and on behalf of Buyer in performing any
investigation, inspection, testing and on-site work are covered by comprehensive
general liability insurance, having Seller as a named insured and liability
limits that are acceptable to Seller.
(e) Buyer agrees that all information pertaining to the
Property that Buyer obtains from Seller or in connection with the performance of
its rights under this Agreement shall be held in confidence and not disclosed to
any persons other than Buyer's agents, attorneys and representatives. Buyer
further agrees that, until the
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Closing, neither the Buyer nor its agents will disclose the contents of such
information or the terms of this Agreement except to financial institutions who
may provide financing to Buyer for the Property. If this Agreement is terminated
for any reason, Buyer shall promptly return to Seller all materials in Buyer's
or any agent of Buyer's possession furnished by Seller, or resulting from
testing performed by Buyer, relating to the Property and all such information
and the terms of this Agreement shall continue to be held in confidence by Buyer
and its agents. The provisions of this paragraph shall survive the termination
of this Agreement.
3.2 Hazardous Material. Seller has made available to Buyer the
Environmental Assessments. Buyer and Seller will cooperate to cause the Remedial
Action Plan to be prepared and approved as expeditiously as possible. Seller
shall engage Dames & Moore, environmental consultants, to prepare a
contamination assessment report and the Remedial Action Plan and secure their
approval by the Florida Department of Environmental Protection. If the Remedial
Action Plan is approved prior to the end of the Inspection Period, the
adjustment to the Escrow Deposit contemplated by Section 5 of the Environmental
Escrow Agreement shall be made such that the component of the Escrow Deposit
attributable to the cost of the Remediation Work shall be based upon the
Engineer's estimate of such cost. If the Remedial Action Plan has not been
approved prior to the end of the Inspection Period, the initial escrow shall be
$900,000, to be made at Closing. After Closing, the terms of the Environmental
Escrow Agreement shall govern the determination and adjustment of the amount of
the Escrow Deposit and the disbursement thereof.
3.3 Time and Place of Closing. Unless otherwise agreed by the parties,
the Closing shall take place at the offices of Escrow Agent at 10:00 A.M. on the
date which is the fifteenth (15th) day following the expiration of the
Inspection Period.
4. WARRANTIES, REPRESENTATIONS AND COVENANTS OF SELLER
Seller warrants and represents as follows as of the date of this
Agreement and as of the Closing and where indicated covenants and agrees as
follows:
4.1 Organization; Authority. Seller is duly organized and validly
existing as a limited partnership, duly authorized to transact business in the
state of its organization and the state in which the Shopping Center is located,
and has full power and authority to enter into and perform this Agreement in
accordance with its terms, and the persons executing this Agreement and other
Transaction Documents have been duly authorized to do so on behalf of Seller.
Seller is not a "foreign person" under Sections 1445 or 897 of the Internal
Revenue Code nor is this transaction subject to any withholding under any state
or federal law.
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4.2 Authorization; Validity. The execution and delivery of this
Agreement by Seller and Seller's consummation of the transactions contemplated
by this Agreement have been duly and validly authorized. This Agreement
constitutes a legal, valid and binding agreement of Seller enforceable against
it in accordance with its terms.
4.3 Title. Seller will transfer to Buyer, and Buyer will acquire
hereunder, good, marketable and insurable title to, and the entire right, title
and interest in the Property, free and clear of all liens, encumbrances,
liabilities, agreements, leases, judgments, claims, rights, easements,
restrictions and other matters affecting title, except the Permitted Exceptions
and the Leases. At Closing, the issuance of the Title Insurance and the deliver
of the closing documents contemplated by Section shall terminate this
representation and warranty, but shall not limit the representations and
warranties, if any, contained in the closing documents.
4.4 Commissions. Seller has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Seller, Buyer or the Property for a brokerage commission or finder's fee or like
payment arising out of or in connection with the transaction provided herein
except for R.A. Beard Co. and Richard A. Beard, III, and Seller agrees to
indemnify Buyer from any such claim arising by, through or under Seller.
4.5 Sale Agreements. The Property is not subject to any outstanding
agreement(s) of sale, option(s), or other right(s) of third parties to acquire
any interest therein, except for Permitted Exceptions and this Agreement.
4.6 Litigation. There is no litigation or proceeding pending, or to the
best of Seller's knowledge, threatened against Seller relating to the Property.
4.7 Leases. There are no Leases affecting the Property, oral or
written, except as listed on the Rent Roll, and any Leases or modifications
entered into between the date of this Agreement and the Closing Date with the
consent of Buyer. Copies of the Leases, which have been delivered to Buyer or
shall be delivered to Buyer within five (5) days from the date hereof, are, to
the best knowledge of Seller, true, correct and complete copies thereof, subject
to the matters set forth on the Rent Roll. Between the date hereof and the close
of business on the date which is the fifth (5th) business day preceding the end
of the Inspection Period, Seller may terminate or modify existing Leases or
enter into new Leases without the consent of Buyer, provided Seller furnishes
Buyer a copy of any proposed modification, termination or new Lease and consults
with Buyer concerning same. Thereafter, Seller will not terminate or modify
existing Leases or enter into any new Leases without the consent of Buyer. All
of the Property's tenant leases are in good standing and to the best of Seller's
knowledge no defaults exist thereunder except as noted on the Rent Roll. No rent
or reimbursement has been paid more than one (1) month in advance and no
security deposit has been paid, except as
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stated on the Rent Roll. No tenants under the Leases are entitled to interest on
any security deposits. No tenant under any Lease has or will be promised any
inducement, concession or consideration by Seller other than as expressly stated
in such Lease, and except as stated therein there are and will be no side
agreements between Seller and any tenant.
4.8 Financial Statements. Each of the Seller Financial Statements
delivered or to be delivered to Buyer hereunder has or will have been prepared
in accordance with the books and records of Seller and presents fairly in all
material respects the financial condition, results of operations and cash flows
for the Property as of and for the periods to which they relate. All are in
conformity with generally accepted accounting principles applied on a consistent
basis. There has been no material adverse change in the operations of the
Property or its prospects since the date of the most recent Seller Financial
Statements. Seller covenants to furnish promptly to Buyer copies of the Seller
Financial Statements together with unaudited updated monthly reports of cash
flow for interim periods beginning after December 31, 1997. Buyer and its
independent certified accountants shall be given access to Seller's books and
records at any time prior to and for six (6) months following Closing upon
reasonable advance notice in order that they may verify the financial statements
prior to Closing. Seller agrees to execute and deliver or to cause its property
manager to execute and deliver to Buyer or its accountants the Audit
Representation Letter should Buyer's accountants audit the records of the
Shopping Center.
4.9 Contracts. There are no contracts or agreements affecting the
Property, oral or written, which will extend beyond the Closing Date other than
the Contracts. All Contracts are in full force and effect in accordance with
their respective terms, and all obligations of Seller under the Contracts
required to be performed to date have been performed in all material respects;
to Seller's knowledge, no party to any Contract has asserted any claim of
default or offset against Seller with respect thereto and no event has occurred
or failed to occur, which would in any way affect the validity or enforceability
of any such Contract; and the copies of the Contracts delivered to Buyer prior
to the date hereof are true, correct and complete copies thereof. Between the
date hereof and the Closing, Seller covenants to fulfill all of its obligations
under all Contracts, and covenants not to terminate or modify any such Contracts
or enter into any new contractual obligations relating to the Property without
the consent of Buyer (not to be unreasonably withheld) except such obligations
as are freely terminable without penalty by Seller upon not more than thirty
(30) days' written notice.
4.10 Maintenance and Operation of Property. From and after the date
hereof and until the Closing, Seller covenants to keep and maintain and operate
the Property substantially in the manner in which it is currently being
maintained and operated and covenants not to cause or permit any waste of the
Property nor undertake any action with respect to the operation thereof outside
the ordinary course of business without
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Buyer's prior written consent, which consent shall not be unreasonably withheld.
In connection therewith, Seller covenants to make all necessary repairs and
replacements until the Closing so that the Property shall be of substantially
the same quality and condition at the time of Closing as on the date hereof.
Seller covenants not to remove from the Improvements or the Real Property any
article included in the Personal Property. Seller covenants to maintain such
casualty and liability insurance on the Property as it is presently being
maintained.
4.11 Permits and Zoning. To the best knowledge of Seller, the Property
is properly zoned for its present use, and there are no outstanding assessments,
impact fees or other charges related to the Property.
4.12 Rent Roll; Tenant Estoppel Letters. The Rent Roll is true and
correct in all material respects. Seller agrees to use reasonable efforts to
obtain Tenant Estoppel Letters dated within thirty (30) days of Closing from all
Tenants under Leases, which Tenant Estoppel Letters shall confirm the matters
reflected by the Rent Roll as to the particular tenant.
4.13 Condemnation. Neither the whole nor any portion of the Property,
including access thereto or any easement benefitting the Property, is subject to
temporary requisition of use by any governmental authority or has been
condemned, or taken in any proceeding similar to a condemnation proceeding, nor
is there now pending any condemnation, expropriation, requisition or similar
proceeding against the Property or any portion thereof. Seller has received no
notice nor has any knowledge that any such proceeding is contemplated.
4.14 Governmental Matters. Seller has not entered into any commitments
or agreements with any governmental authorities or agencies affecting the
Property that have not been disclosed in writing to Buyer and Seller has
received no notices from any such governmental authorities or agencies of
uncured violations at the Property of building, fire, air pollution or zoning
codes, rules, ordinances or regulations, environmental and hazardous substances
laws, or other rules, ordinances or regulations relating to the Property. Seller
shall be responsible for the remittance of all sales tax for periods occurring
prior to the Allocation Date directly to the appropriate state department of
revenue.
4.15 Repairs. Seller has received no notice of any requirements or
recommendations by any lender, insurance companies, or governmental body or
agencies requiring or recommending any repairs or work to be done on the
Property which have not already been completed.
4.16 Consents and Approvals. Seller has obtained all consents and
permissions necessary to carry out and perform its obligations under this
Agreement.
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4.17 Environmental Matters. Seller represents and warrants as of the
date hereof and as of the Closing that Seller has not, and to Seller's knowledge
except for the matters reflected in the Environmental Assessments, no other
person has, caused any Release, threatened Release, or disposal of any Hazardous
Material at the Property in any material quantity.
4.18 Disclaimer of Certain Warranties. NOTHING IN THIS ARTICLE 4, NOR
ANY OTHER PROVISION OF THIS AGREEMENT, IS INTENDED OR SHALL BE CONSTRUED TO
CONSTITUTE A REPRESENTATION OR WARRANTY BY SELLER WITH RESPECT TO (I) THE FAIR
MARKET VALUE OF THE PROPERTY, OR (II) THE ACCURACY OF ANY PROJECTIONS OR
ESTIMATES OF FUTURE INCOME OR EXPENSES FROM THE OPERATION OF THE PROPERTY.
4.19 Disclaimer of Additional Warranties. BUYER ACKNOWLEDGES THAT THE
CONVEYANCE OF THE PROPERTY IS SPECIFICALLY MADE "AS-IS" AND "WHERE-IS", WITHOUT
ANY REPRESENTATIONS OR WARRANTIES EXPRESS OR IMPLIED (EXCEPT FOR ANY EXPRESS
REPRESENTATIONS AND WARRANTIES SET FORTH IN THIS AGREEMENT AND THE EXHIBITS
ATTACHED HERETO AND THE CLOSING DOCUMENTS), INCLUDING, WITHOUT LIMITATION,
IMPLIED WARRANTIES OF FITNESS FOR ANY PARTICULAR PURPOSE OR MERCHANTABILITY OR
ANY OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE UNIFORM
COMMERCIAL CODE OR OTHERWISE.
BUYER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT
AND THE EXHIBITS ATTACHED HERETO AND IN THE CLOSING DOCUMENTS, NEITHER SELLER
NOR ANY OF ITS AGENTS HAVE MADE, AND SPECIFICALLY NEGATE AND DISCLAIM, ANY
REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF
ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN,
OF, AS TO, CONCERNING, OR WITH RESPECT TO, (i) THE VALUE, NATURE, QUALITY OR
CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND
GEOLOGY, (ii) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND
USES THAT MAY BE CONDUCTED THEREON, (iii) THE COMPLIANCE OF OR BY THE PROPERTY
WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL
AUTHORITY, (iv) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY
OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY, OR (v) ANY OTHER MATTER
WITH RESPECT TO THE PROPERTY. BUYER SHALL RELY SOLELY ON ITS OWN INVESTIGATION
OF THE PROPERTY WITH REGARD TO ENVIRONMENTAL MATTERS, THE ASSESSMENT REPORTS,
THE REMEDIAL ACTION PLAN TO BE PREPARED BY DAMES & MOORE, AND THE CLOSING
DOCUMENTS, INCLUDING WITHOUT LIMITATION THE ENVIRONMENTAL ESCROW AGREEMENT.
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4.20 No Untrue Statement. To the best knowledge of Seller, neither this
Agreement nor any exhibit nor any written statement or Transaction Document
furnished or to be furnished by Seller to Buyer in connection with the
transactions contemplated by this Agreement contains or will contain any untrue
statement of material fact or omits or will omit any material fact necessary to
make the statements contained therein, in light of the circumstances under which
they were made, not misleading.
5. WARRANTIES, REPRESENTATIONS AND COVENANTS OF BUYER
Buyer hereby warrants and represents as of the date of this Agreement
and as of the Closing and where indicated covenants and agrees as follows:
5.1 Organization; Authority. Buyer is a corporation duly organized,
validly existing and in good standing under laws of Florida and has full power
and authority to enter into and perform this Agreement in accordance with its
terms, and the persons executing this Agreement and other Transaction Documents
on behalf of Buyer have been duly authorized to do so.
5.2 Authorization; Validity. The execution, delivery and performance of
this Agreement and the other Transaction Documents have been duly and validly
authorized by the Board of Directors of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and (assuming the valid execution and
delivery of this Agreement by Seller) constitutes a legal, valid and binding
agreement of Buyer enforceable against it in accordance with its terms.
5.3 Commissions. Buyer has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Buyer or Seller for a brokerage commission or finder's fee or like payment
arising out of or in connection with the transaction provided herein except R.A.
Beard Co. and Richard A. Beard, III, whose commission shall be paid by Seller;
and Buyer agrees to indemnify Seller from any other such claim arising by,
through or under Buyer.
5.4 Independent Representation. Each party is represented by legal
counsel of its own selection in connection with the negotiation and execution of
this Agreement and the closing of the acquisition of the Property and such legal
counsel is not and has not been directly or indirectly identified, suggested or
selected by the other party. With respect to this Agreement, neither party is in
a significant disparate bargaining position.
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6. POSSESSION; RISK OF LOSS
6.1 Possession. Possession of the Property will be transferred to Buyer
at the conclusion of the Closing.
6.2 Risk of Loss. All risk of loss to the Property shall remain upon
Seller until the conclusion of the Closing. If, before the possession of the
Property has been transferred to Buyer, any material portion of the Property is
damaged by fire or other casualty and will not be restored by the Closing Date
or if any material portion of the Property is taken by eminent domain or there
is a material obstruction of access to the Improvements by virtue of a taking by
eminent domain, Seller shall, within ten (10) days of such damage or taking,
notify Buyer thereof and Buyer shall have the option to:
(a) terminate this Agreement upon notice to Seller given
within ten (10) business days after such notice from Seller, in which case Buyer
shall receive a return of its Earnest Money Deposit; or
(b) proceed with the purchase of the Property, in which event
Seller shall assign to Buyer all Seller's right, title and interest in all
amounts due or collected by Seller under the insurance policies or as
condemnation awards. In such event, the Purchase Price shall be reduced by the
amount of any insurance deductible to the extent it reduced the insurance
proceeds payable.
7. TITLE MATTERS
7.1 Title.
(a) Title Insurance and Survey. Seller has provided or caused
to be provided to Buyer the Title Insurance Commitment and the Survey (each of
which are to be updated), and Buyer hereby acknowledges receipt of the same.
Buyer has made comments concerning a previously issued title insurance
commitment (but not the Survey), by letter dated October 27, 1997, which
comments were not resolved by the Title Insurance Commitment, and such comments
are hereby renewed. Buyer will have through the last day of the Inspection
Period to notify Seller in writing of any additional objections, encroachments
or other matters not acceptable to Buyer. Any unresolved objection on which
Buyer commented in its October 27, 1997, letter, or which Buyer hereafter raises
during the Inspection Period shall be deemed an objection. Seller shall notify
Buyer in writing within five (5) days of Buyer's notice if Seller intends to
cure any Title Defect or other objection. If Seller elects to cure, Seller shall
use diligent efforts to cure the Title Defects and/or objections by the Closing
Date (as it may be extended). If Seller elects not to cure or if such Title
Defects and/or objections are not cured, Buyer shall have the right, in lieu of
any other remedies, to: (i) refuse to purchase the Property, terminate this
Agreement and receive a return of the Earnest Money Deposit;
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or (ii) waive such Title Defects and/or objections and close the purchase of the
Property subject to them.
(b) Miscellaneous Title Matters. If a search of the title
discloses judgments, bankruptcies or other returns against other persons having
names the same as or similar to that of Seller, Seller shall on request deliver
to Buyer an affidavit stating, if true, that such judgments, bankruptcies or the
returns are not against Seller. Seller further agrees to execute and deliver to
the Title Insurance agent at Closing such documentation, if any, as the Title
Insurance underwriter shall reasonably require to evidence that the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and that there are no mechanics'
liens on the Property or parties in possession of the Property other than
tenants under Leases and Seller.
8. CONDITIONS PRECEDENT
8.1 Conditions Precedent to Buyer's Obligations. The obligations of
Buyer under this Agreement are subject to satisfaction or waiver by Buyer of
each of the following conditions or requirements on or before the Closing Date:
(a) Seller's warranties and representations under this
Agreement shall be true and correct as of the Closing Date, and Seller shall not
be in default hereunder.
(b) All obligations of Seller contained in this Agreement,
shall have been fully performed in all material respects and Seller shall not be
in default under any covenant, restriction, right-of-way or easement affecting
the Property.
(c) None of the following tenants leasing space in the
Shopping Center shall have become a Bankrupt Tenant:
Publix Walgreens
Ross Dress for Less Shaner's, Inc.
Mae's Fabrics
For purposes of this Agreement, the term "Bankrupt Tenant" shall mean any tenant
(a) that (i) makes a general assignment for the benefit of creditors; (ii) files
a voluntary bankruptcy petition; (iii) becomes the subject of an order for
relief or is declared insolvent in any federal or state bankruptcy or insolvency
proceedings; (iv) files a petition or answer seeking for the tenant a
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any law; (v) files an answer or other pleading admitting
or failing to contest the material allegations of a petition filed against the
tenant in a proceeding of the type described in subclauses (i) through (iv) of
this clause (a); or (vi) seeks, consents to or acquiesces in the appointment of
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a trustee, receiver, or liquidator of the tenant or of all or any substantial
part of the tenant's properties; or (b) against which a proceeding seeking
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any law has been commenced and one hundred twenty (120)
days have expired without dismissal thereof or with respect to which, without
the tenant's consent or acquiescence, a trustee, receiver or liquidator of the
tenant or of all or any substantial part of the tenant's properties has been
appointed and ninety (90) days have expired without the appointment having been
vacated or stayed, or ninety (90) days have expired after the date of expiration
of a stay, if the appointment has not previously been vacated.
(d) A Title Insurance Commitment in the full amount of the
Purchase Price shall have been issued and "marked down" through Closing, subject
only to Permitted Exceptions.
(e) The physical and environmental condition of the Property
shall be unchanged from the date of this Agreement, ordinary wear and tear
excepted and except for any activities conducted in the preparation or
implementation of the Remedial Action Plan.
(f) Seller shall have delivered to Buyer the following in form
reasonably satisfactory to Buyer:
(1) A special warranty deed in proper form for recording, duly
executed and acknowledged so as to convey to Buyer the fee simple
title to the Property, subject only to the Permitted Exceptions;
(2) Originals, if available, or if not, true copies of
the Leases and of the contracts, agreements, permits and
licenses, and such Materials as may be in the possession
or control of Seller;
(3) A blanket assignment (the "Assignment") to Buyer of
all Leases and the Contracts, together with such permits
and licenses (to the extent assignable) as may affect the
Property, including an indemnity against breach of
such instruments by Seller prior to the Closing Date,
which indemnity shall be reciprocated by Buyer for breaches
occurring from and after the Closing Date;
(4) A bill of sale with respect to the Personal
Property and Materials;
(5) Notices of sale to tenants of the Shopping Center
in form mutually agreeable to Seller and Buyer, duly executed by
Seller;
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(6) A current rent roll for all Leases in effect showing no changes
from the rent roll attached to this Agreement other than those set
forth in the Leases or approved in writing by Buyer;
(7) All Tenant Estoppel Letters obtained by Seller, which must include
Publix, Walgreens, Ross Dress for Less, Shaner's, Inc., Mae's
Fabrics and eighty percent (80%) of the other tenants who have
signed leases for any portion of the Property, without any material
exceptions, covenants or changes to the form approved by Buyer and
distributed to the tenants by Seller, the substance of which Tenant
Estoppel Letters must confirm the Rent Roll;
(8) A general assignment of all assignable existing warranties relating
to the Property;
(9) A mechanics lien and possessory affidavit, non-foreign affidavit,
non-tax withholding certificates and such other documents as may
reasonably be required by Buyer or its counsel in order to effectuate
the provisions of this Agreement and the transactions contemplated
herein;
(10) The originals or copies of any real and tangible personal property
tax bills for the Property for the tax year of Closing and the previous
year, and, if requested, the originals or copies of any current water,
sewer and utility bills which are in Seller's custody or control;
(11) Certificates of Seller and its constituent entities as may be
reasonably required by the title insurance company which affect the
authorization of the transactions described herein;
(12) All keys and other means of access to the Improvements in the
possession of Seller or its agents;
(13) The Environmental Escrow Agreement, executed by Seller;
(14) Materials; and
(15) Such other documents as Buyer may reasonably request to effect the
transactions contemplated by this Agreement.
In the event that all of the foregoing provisions of this
Section are not satisfied and Buyer elects in writing to terminate this
Agreement, then the Earnest
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Money Deposit shall be promptly delivered to Buyer by Escrow Agent and, upon the
making of such delivery, neither party shall have any further claim against the
other by reasons of this Agreement, except as provided in Article .
8.2 Conditions Precedent to Seller's Obligations. The obligations of
Seller under this Agreement are subject to satisfaction or waiver by Seller of
each of the following conditions or requirements on or before the Closing date:
(a) Buyer's warranties and representations under this
Agreement shall be true and correct as of the Closing Date, and Buyer shall not
be in default hereunder.
(b) All of the obligations of Buyer contained in this
Agreement shall have been fully performed by or on the date of Closing in
compliance with the terms and provisions of this Agreement.
(c) Buyer shall have delivered to Seller at or prior to the
Closing the following, which shall be reasonably satisfactory to Seller:
(1) Delivery and/or payment of the balance of the Purchase Price
in accordance with Section at Closing;
(2) Notices of sale to tenants of the Shopping Center in form
mutually agreeable to Seller and Buyer, duly executed by
Buyer;
(3) The Environmental Escrow Agreement, executed by Buyer.
(4) An original counterpart of the Assignment, executed by
Buyer; and
(5) Such other documents as Seller may reasonably request to
effect the transactions contemplated by this Agreement.
In the event that all conditions precedent to Buyer's
obligation to purchase shall have been satisfied but the foregoing provisions of
this Section have not, and Seller elects in writing to terminate this Agreement,
then the Earnest Money Deposit shall be promptly delivered to Seller by Escrow
Agent and, upon the making of such delivery, neither party shall have any
further claim against the other by reasons of this Agreement, except as provided
in Article .
9. PRE-CLOSING BREACH; REMEDIES
9.1 Breach by Seller. In the event of a breach of Seller's covenants or
warranties herein and failure by Seller to cure such breach within the time
- - 20 -
<PAGE>
provided for Closing, Buyer may, at Buyer's election (i) terminate this
Agreement and receive a return of the Earnest Money Deposit, and the parties
shall have no further rights or obligations under this Agreement (except as
survive termination); (ii) enforce this Agreement by suit for specific
performance; or (iii) waive such breach and close the purchase contemplated
hereby, notwithstanding such breach.
9.2 Breach by Buyer. In the event of a breach of Buyer's covenants or
warranties herein and failure of Buyer to cure such breach within the time
provided for Closing, Seller's sole remedy shall be to terminate this Agreement
and retain Buyer's Earnest Money Deposit as agreed liquidated damages for such
breach, and upon payment in full to Seller of such amounts, the parties shall
have no further rights, claims, liabilities or obligations under this Agreement
(except as survive termination). The limitation on Seller's remedies contained
in this Section does not apply to (i) defaults or breaches by Buyer in respect
of any obligation or agreement contained herein (or in any other document or
agreement executed in connection with the Closing) that survives Closing, or
(ii) any action taken by Buyer to interfere with the delivery of the Earnest
Money Deposit to Seller if Seller is entitled to the delivery of the Earnest
Money Deposit under this Agreement.
10. INTENTIONALLY OMITTED
11. MISCELLANEOUS
11.1 Disclosure. Neither party shall disclose the transactions
contemplated by this Agreement without the prior approval of the other, except
to its attorneys, accountants and other consultants, their lenders and
prospective lenders, or where disclosure is required by law.
11.2 Radon Gas. Radon is a naturally occurring radioactive gas which,
when it has accumulated in a building in sufficient quantities, may present
health risks to persons who are exposed to it over time. Levels of radon which
exceed federal and state guidelines have been found in buildings in the state in
which the Property is located. Additional information regarding radon and radon
testing may be obtained from the county public health unit.
11.3 Entire Agreement. This Agreement, together with the exhibits
attached hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and may not be modified, amended or
otherwise changed in any manner except by a writing executed by Buyer and
Seller.
11.4 Notices. All written notices and demands of any kind which either
party may be required or may desire to serve upon the other party in connection
with this Agreement shall be served by personal delivery, certified or overnight
mail, reputable
- - 21 -
<PAGE>
overnight courier service or facsimile (followed promptly by hard copy) at the
addresses set forth below:
As to Seller: Beneva Shops Associates, Ltd.
c/o Sarofim Realty Advisors Co.
Attention: Jeff C. Spelman
8201 Preston Road, Suite 300
Dallas, Texas 75225
Facsimile: (214) 692-4222
Beneva Shops Associates, Ltd.
c/o R. A. Beard Co.
Attention: Richard A. Beard, III
100 North Tampa Street, Suite 3175
Tampa, Florida 33602
Facsimile: (813) 221-7296
Beneva Shops Associates, Ltd.
c/o Mr. William R. Cooper
10000 N. Central Expressway, Suite 1150
Dallas, Texas 75231
Facsimile: (214) 360-1844
With copies to: Donohoe, Jameson & Carroll, P.C.
Attention: Rebecca Hurley, Esq.
3400 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Facsimile: (214) 744-0231
Stutzman & Bromberg, P.C.
Attention: Myron D. Stutzman, Esq.
2323 Bryan Street, Suite 2200
Dallas, Texas 75201
Facsimile: (214) 969-4999
As to Buyer: RRC Acquisitions Two, Inc.
Attention: Robert L. Miller
Suite 200, 121 W. Forsyth St.
Jacksonville, Florida 32202
Facsimile: (904) 354-1832
- - 22 -
<PAGE>
With a copy to: Rogers, Towers, Bailey, Jones & Gay
Attention: William E. Scheu, Esq.
1301 Riverplace Blvd., Suite 1500
Jacksonville, Florida 32207
Facsimile: (904) 396-0663
Any notice or demand so served shall constitute proper notice hereunder upon
delivery to the United States Postal Service or to such overnight courier. A
party may change its notice address by notice given in the aforesaid manner.
11.5 Headings. The titles and headings of the various sections hereof
are intended solely for means of reference and are not intended for any purpose
whatsoever to modify, explain or place any construction on any of the provisions
of this Agreement.
11.6 Validity. If any of the provisions of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement by the application of
such provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable shall not be affected thereby,
and every provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11.7 Attorneys' Fees. In the event of any litigation between the
parties hereto to enforce any of the provisions of this Agreement or any right
of either party hereto, the unsuccessful party to such litigation agrees to pay
to the successful party all costs and expenses, including reasonable attorneys'
fees, whether or not incurred in trial or on appeal, incurred therein by the
successful party, all of which may be included in and as a part of the judgment
rendered in such litigation. Any indemnity provisions herein shall include
indemnification for reasonable attorneys' fees and costs, whether or not suit be
brought and including fees and costs on appeal.
11.8 Time of Essence. Time is of the essence of this Agreement.
11.9 Governing Law. This Agreement shall be governed by the laws of the
state in which the Property is located, and the parties hereto agree that any
litigation between the parties hereto relating to this Agreement shall take
place (unless otherwise required by law) in a court located in the county in
which Escrow Agent's principal place of business is located. Each party waives
its right to jurisdiction or venue in any other location.
11.10 Successors and Assigns. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
- - 23 -
<PAGE>
and their respective successors and assigns. No third parties, including any
brokers or creditors, shall be beneficiaries hereof.
11.11 Exhibits. All exhibits attached hereto are incorporated herein by
reference to the same extent as though such exhibits were included in the body
of this Agreement verbatim.
11.12 Gender; Plural; Singular; Terms. A reference in this Agreement to
any gender, masculine, feminine or neuter, shall be deemed a reference to the
other, and the singular shall be deemed to include the plural and vice versa,
unless the context otherwise requires. The terms "herein," "hereof,"
"hereunder," and other words of a similar nature mean and refer to this
Agreement as a whole and not merely to the specified section or clause in which
the respective word appears unless expressly so stated.
11.13 Further Instruments, Etc. Seller and Buyer shall, at or after
Closing, execute any and all documents and perform any and all acts reasonably
necessary to fully implement this Agreement.
11.14 Survival. The obligations of Seller and Buyer intended to be
performed after the Closing shall survive the closing.
11.15 No Recording. Neither this Agreement nor any notice, memorandum
or other notice or document relating hereto shall be recorded.
- - 24 -
<PAGE>
EXHIBIT
Audit Representation Letter
--------------------------
(Acquisition Completion Date)
KPMG Peat Marwick LLP
Suite 2700
One Independent Drive
Jacksonville, Florida 32202
Dear Sirs:
We are providing this letter in connection with your audit of the
Statement of Revenues and Certain Expenses for the twelve months ended
________________, for the purpose of expressing an opinion as to whether the
financial statement presents fairly, in all material respects, the results of
its operations of __________________ in conformity with generally accepted
accounting principles.
Certain representations in this letter are described as being limited
to matters that are material. Items are considered material, regardless of size,
if they involve an omission or misstatement of accounting information that, in
the light of surrounding circumstances, makes it probable that the judgment of a
reasonable person relying on the information would be changed or influenced by
the omission or misstatement.
We confirm, to the best of our knowledge and belief, the following
representations made to you during your audit:
1. The financial statement referred to above is fairly presented
in conformity with generally accepted accounting principles.
2. We have made available to you:
a. All financial records and related data.
b. All agreements or amendments to agreements which
would have a material impact on the Statement of
Revenues and Certain Expenses.
3. There have been no:
a. Instances of fraud involving management or employees
who have significant roles in internal control.
b. Instances of fraud involving others that could have a
material effect on the Statement of Revenue and
Certain Expenses.
c. Violations or possible violations of laws or
regulations, the effects of which should be
considered for disclosure in the Statement of Revenue
and Certain Expenses or as a basis for recording a
loss contingency.
<PAGE>
4. There are no:
a. Unasserted claims or assessments that our lawyers
have advised us are probable of assertion and must be
disclosed in accordance with Statement of Financial
Accounting Standards No. 5 Accounting for
Contingencies (SFAS No. 5).
b. Material gain or loss contingencies (including oral
and written guarantees) that are required to be
accrued or disclosed by SFAS No. 5.
c. Material transactions that have not been properly
recorded in the accounting records underlying the
Statement of Revenues and Certain Expenses.
d. Events that have occurred subsequent to
______________ and through the date of this letter
that would require adjustment to or disclosure in the
Statement of Revenues and Certain Expenses.
5. The Company has complied with all aspects of contractual
agreements that would have a material effect on the Statement
of Revenues and Certain Expenses in the event of
noncompliance.
6. All related party transactions have been properly recorded or
disclosed in the Statement of Revenues and Certain Expenses.
Further, we acknowledge that we are responsible for the fair
presentation of the Statements of Revenue and Certain Expenses in conformity
with generally accepted accounting principles.
Very truly yours,
"Seller/Manager"
Name
Title
<PAGE>
EXHIBIT
Environmental Assessment Reports
1. Phase II Soil and Groundwater Sampling; Malcolm-Pirnie, Inc. (MPI),
September, 1996
2. Site Screening Report; HSA Environmental, Inc., September, 1996
3. Additional Phase II Assessment Report, LFR, April, 1997
4. Revised Site Screening Report; LFR, June, 1997
5. Source Area Delineation Report; LFR, July, 1997
6. Phase II Environmental Property Assessment for Beneva Place Apartments;
Nutting Environmental of Florida, Inc., November, 1997
7. Pilot Test Results - Vacuum-Enhanced Recovery for Interim Remediation
of Tetrachloroethene; LFR, December, 1997
8. Deep Well Installation and Sampling Report (Draft); LFR, February, 1998
9. Contamination Assessment Report; LFR, June, 1998
10. Additional Phase II Assessment Report; LFR, April, 1997
11. Contamination Assessment Report; LFR, June 1, 1998
<PAGE>
EXHIBIT
Environmental Escrow Agreement
<PAGE>
EXHIBIT
Legal Description of Real Property
<PAGE>
EXHIBIT
Rent Roll
<PAGE>
EXHIBIT
Form of Estoppel Letter
_____________________, 199_
RRC Acquisitions Two, Inc.
Regency Centers, L.P.
121 W. Forsyth St., Suite 200
Jacksonville, Florida 32202
RE: ___________________________ (Name of Shopping Center)
Ladies and Gentlemen:
The undersigned (Tenant) has been advised you may purchase the above
Shopping Center, and we hereby confirm to you that:
1. The undersigned is the Tenant of ___________________________, Landlord, in
the above Shopping Center, and is currently in possession and paying rent on
premises known as Store No. _______________ [or Address:
________________________________________________________________], and
containing approximately _____________ square feet, under the terms of the
lease dated ______________________, which has (not) been amended by amendment
dated ________________________ (the "Lease"). There are no other written or
oral agreements between Tenant and Landlord. Tenant neither expects nor has
been promised any inducement, concession or consideration for entering into
the Lease except as stated therein, and there are no side agreements or
understandings between Landlord and Tenant.
2. The term of the Lease commenced on ____________________,
expiring on ___________________, with options to extend of
________________ (____) years each.
3. As of ____________________, monthly minimum rental is
$_______________ a month.
4. Tenant is required to pay its pro rata share of Common Area
Expenses and its pro rata share of the Center's real property
taxes and insurance cost. Current additional monthly payments
for expense reimbursement total $____________ per month for
common area maintenance, property insurance and real estate
taxes.
5. Tenant has given [no security deposit] [a security deposit of
$______________].
6. No payments by Tenant under the Lease have been made for more than one (1)
month in advance, and minimum rents and other charges under the Lease are
current.
7. All matters of an inducement nature and all obligations Landlord under the
Lease concerning the construction of the Tenant's premises and
development of the Shopping Center, including without limitation, parking
requirements, have been performed by Landlord.
<PAGE>
8. The Lease contains no first right of refusal, option to expand, option
to terminate, or exclusive business rights, except as follows:
9. Tenant knows of no default by either Landlord or Tenant under
the Lease, and knows of no situations which, with notice or
the passage of time, or both, would constitute a default.
Tenant has no rights to off-set or defense against Landlord as
of the date hereof.
10. The undersigned has not entered into any sublease, assignment
or any other agreement transferring any of its interest in the
Lease or the Premises except as follows:
11. Tenant has not generated, used, stored, spilled, disposed of, or released
any hazardous substances at, on or in the Premises. "Hazardous Substances"
means any flammable, explosive, toxic, carcinogenic, mutagenic, or
corrosive substance or waste, including volatile petroleum products and
derivatives and drycleaning solvents. To the best of Tenant's knowledge,
no asbestos or polychlorinated biphenyl ("PCB") is located at, on or in the
Premises. The term "Hazardous Substances" does not include those materials
which are technically within the definition set forth above but which
are contained in pre-packaged office supplies, cleaning materials or
personal grooming items or other items which are sold for consumer or
commercial use and typically used in other similar buildings or space.
The undersigned makes this statement for your benefit and protection with the
understanding that you intend to rely upon this statement in connection with
your intended purchase of the above described Premises from Landlord. The
undersigned agrees that it will, upon receipt of written notice from Landlord,
commence to pay all rents to you or to any Agent acting on your behalf.
Very truly yours,
-------------------------------------------
____________________________________(Tenant)
Mailing Address:
____________________________ By:________________________________________
Its:_________________________________
- ----------------------------
<PAGE>
EXHIBIT
DOCUMENT REQUEST LIST
Items To Be Provided By Seller (to the extent they are in existence and in
Seller's possession or in the possession of Seller's property manager):
1) Property Specifications (Zoning)
2) As Built Plans & Specs (arch. and engineering)
3) Site Plan (including suite numbers)
4) Legal Description
5) Parking Information - Space count
6) Copy of All Leases (and amendments) & Lease Briefs
7) Certificates of Occupancy - All current tenants
8) Schedule of Security Deposits
9) Most recent Rent Roll (with suite #'s, rent escalations, and
option period info)
10) Sales Reports (most recent 3 Years) for tenants reporting
11) Current Rent Billings (by category, base, CAM, etc.)
12) Current Delinquency Report (with explanations for balances >
$1,000)
13) Tenant Activity Register for all Current Tenants (billings
& payments)
14) Tenant Estoppels
15) Property Operating Results - Most recent 3 Years
16) Property Capital Expenditures - Most recent 3 Years
17) Audited Financial Statements - 3 Years
18) Real Estate and other tax bills - 3 Years
19) Year to Date Financials & YTD detail general Ledger
20) Existing Service Agreements and Warranties
21) Three years loss history - reported claims
22) Most Recent Year Expense Recovery Reconciliation
23) Breakdown of CAM Pools
24) Proof Sales Tax Payments are Current
25) Seller's Budget for up-coming/current year
26) Utility Bills for last 12 mths/deposits
27) Personal Property Inventory
28) Existing Title Insurance Policy
29) Available Inspection Reports (environmental, roof, structural,
etc.)
30) Summary of Tenant Contacts (with address and telephone
numbers) With local (incld store#) & national addresses
31) Survey
32) Tax plat map
<PAGE>
FIRST AMENDMENT TO
REINSTATEMENT AGREEMENT
THIS AGREEMENT, is made as of November 30, 1998, by and between BENEVA
SHOPS ASSOCIATES, LTD., a Florida limited partnership ("Seller") and RRC
ACQUISITIONS TWO, INC., a Florida corporation ("Buyer").
W I T N E S S E T H:
Seller and Buyer and RRC ACQUISITIONS, INC. heretofore entered into a
Reinstatement Agreement dated as of October 28, 1998 (the "Agreement"),
concerning the sale by Seller and acquisition by Buyer, as Assignee of RRC
ACQUISITIONS, INC., of certain real and personal property described therein,
located in Sarasota, Florida. Seller and Buyer desire to amend the Agreement as
provided herein.
NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other
valuable consideration, including the covenants herein contained, Seller and
Buyer acknowledge and agree as follows:
1. Section 1.19 of Exhibit "A" of the Agreement is amended to read as
follows:
1.19 Inspection Period means the period of time which expires
at 11:59 PM, eastern standard time, on Tuesday, December 8, 1998.
2. As modified hereby, the Agreement continues in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Witnesses: RRC ACQUISITIONS TWO, INC.,
a Florida corporation
Name:
By:
Its:
Name: Date:
Tax Identification No. 59-3210155
"BUYER"
- 1 -
<PAGE>
BENEVA SHOPS ASSOCIATES, LTD.,
a Florida limited partnership
By Its General Partner:
Sarasota Beneva Company, Ltd.,
a Florida limited partnership
By Its General Partners:
RAB Holdings, Inc., a Florida
Name: corporation
By:
Name: Richard A. Beard, III
As to RAB Holdings, Inc. President
WRC Holdings, Inc., a Texas
Name: corporation
By:
Name: William R. Cooper
As to WRC Holdings, Inc. President
Tax Identification No: 75-2018292
Date:
- - 2 -
<PAGE>
SECOND AMENDMENT TO
REINSTATEMENT AGREEMENT
THIS AGREEMENT, is made as of December 8, 1998, by and between BENEVA
SHOPS ASSOCIATES, LTD., a Florida limited partnership ("Seller") and RRC
ACQUISITIONS TWO, INC., a Florida corporation ("Buyer").
W I T N E S S E T H:
Seller and Buyer and RRC ACQUISITIONS, INC. heretofore entered into a
Reinstatement Agreement dated as of October 28, 1998, as amended (the
"Agreement"), concerning the sale by Seller and acquisition by Buyer, as
Assignee of RRC ACQUISITIONS, INC., of certain real and personal property
described therein, located in Sarasota, Florida. Seller and Buyer desire to
amend the Agreement as provided herein.
NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other
valuable consideration, including the covenants herein contained, Seller and
Buyer acknowledge and agree as follows:
1. Buyer hereby notifies Seller, that subject to the conditions to
Closing set forth in the Agreement and to the additional conditions set forth
herein, Buyer has elected to proceed to closing of the transaction contemplated
hereby.
2. Section 2.1(a) of Exhibit "A" of the Agreement is replaced with the
following:
(a) Purchase Price and Terms. The total Purchase Price for the
Property (subject to adjustment as provided herein) shall be
$11,288,850.00. The Purchase Price shall be payable in cash at
Closing.
3. As modified hereby, the Agreement continues in full force and
effect.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Witnesses: RRC ACQUISITIONS TWO, INC.,
a Florida corporation
Name:
By:
Its:
Name: Date:
Tax Identification No. 59-3210155
"BUYER"
- - 1 -
<PAGE>
BENEVA SHOPS ASSOCIATES, LTD.,
a Florida limited partnership
By Its General Partner:
Sarasota Beneva Company, Ltd.,
a Florida limited partnership
By Its General Partners:
RAB Holdings, Inc., a Florida
Name: corporation
By:
Name: Richard A. Beard, III
As to RAB Holdings, Inc. President
WRC Holdings, Inc., a Texas
Name: corporation
By:
Name: William R. Cooper
As to WRC Holdings, Inc. President
Tax Identification No: 75-2018292
Date:
A-8
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT A
FORM OF ASSIGNMENT AND Acceptance AGREEMENT
THIS ASSIGNMENT AND Acceptance AGREEMENT dated as of ___________, 199__
(the "Agreement") by and among _________________________ (the "Assignor"),
_________________________ (the "Assignee"), REGENCY CENTERS, L.P. (the
"Borrower"), REGENCY REALTY CORPORATION (the "Parent") and Wells Fargo BANK,
NATIONAL ASSOCIATION, as Agent (the "Agent").
WHEREAS, the Assignor is a Lender under that certain Amended and
Restated Credit Agreement dated as of February 26 1999 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
by and among the Borrower, the Parent, the financial institutions party thereto
and their assignees under Section 12.8 thereof, the Agent, and the Syndication
Agent, Documentation Agent and Managing Agents named therein;
WHEREAS, the Assignor desires to assign to the Assignee all or a
portion of the Assignor's Commitment under the Credit Agreement, all on the
terms and conditions set forth herein;
WHEREAS, the Borrower and the Agent consent to such assignment on the
terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
Section 1. Assignment.
(a) Subject to the terms and conditions of this Agreement and in
consideration of the payment to be made by the Assignee to the Assignor pursuant
to Section 2 of this Agreement, effective as of ____________, 199__ (the
"Assignment Date") the Assignor hereby irrevocably sells, transfers and assigns
to the Assignee, without recourse, a $__________ interest (such interest being
the "Assigned Commitment") in and to the Assignor's Commitment and all of the
other rights and obligations of the Assignor under the Credit Agreement, such
Assignor's Revolving Note and the other Loan Documents representing ______% in
respect of the aggregate amount of all Lenders' Commitments, including without
limitation, a principal amount of outstanding Revolving Loans equal to
$_________, all voting rights of the Assignor associated with the Assigned
Commitment, all rights to receive interest on such amount of Loans and all
commitment and other fees with respect to the Assigned Commitment and other
rights of the Assignor under the Credit Agreement and the other Loan Documents
with respect to the Assigned Commitment, all as if the Assignee were an original
Lender under and signatory to the Credit Agreement having a Commitment equal to
such amount of the Assigned Commitment. The Assignee, subject to the terms and
conditions hereof, hereby assumes all obligations of the Assignor with respect
to the Assigned Commitment as if the Assignee were an original Lender under and
signatory to the Credit Agreement having a Commitment equal to the Assigned
Commitment, which obligations shall include, but shall not be limited to, the
obligation of the Assignor to make Revolving Loans to the Borrower with respect
to the Assigned Commitment and the obligation to indemnify the Agent as provided
therein (the foregoing enumerated obligations, together with all other similar
obligations more particularly set forth in the Credit Agreement and the other
Loan Documents, shall be referred to hereinafter, collectively, as the "Assigned
Obligations"). [In addition, the Assignor hereby irrevocably sells, transfers
and assigns to the Assignee, without recourse, a $____________ interest in and
to the Assignor's Bid Rate Note, including without limitation, a principal
amount of outstanding Bid Rate Loans owing to the Assignor in an aggregate
amount equal to $__________, all rights to receive interest on such amount of
Bid Rate Loans and other rights of the Assignor under the Credit Agreement and
the other Loan Documents with respect to such Bid Rate Loans, all as if the
Assignee had originally made such amount of Bid Rate Loans to the Borrower. The
obligations assigned pursuant to the immediately preceding sentence shall
constitute Assigned Obligations hereunder.] The Assignor shall have no further
duties or obligations with respect to, and shall have no further interest in,
the Assigned Obligations or the Assigned Commitment from and after the
Assignment Date.
(b) The assignment by the Assignor to the Assignee hereunder is without
recourse to the Assignor. The Assignee makes and confirms to the Agent, the
Assignor, and the other Lenders all of the representations, warranties and
covenants of a Lender under Article XI of the Credit Agreement. Not in
limitation of the foregoing, the Assignee acknowledges and agrees that, except
as set forth in Section 4 below, the Assignor is making no representations or
warranties with respect to, and the Assignee hereby releases and discharges the
Assignor for any responsibility or liability for: (i) the present or future
solvency or financial condition of the Borrower, (ii) any representations,
warranties, statements or information made or furnished by the Borrower in
connection with the Credit Agreement or otherwise, (iii) the validity, efficacy,
sufficiency, or enforceability of the Credit Agreement, any Loan Document or any
other document or instrument executed in connection therewith, or the
collectibility of the Assigned Obligations, (iv) the perfection, priority or
validity of any Lien with respect to any collateral at any time securing the
<PAGE>
Obligations or the Assigned Obligations under the Notes or the Credit Agreement
and (v) the performance or failure to perform by the Borrower of any obligation
under the Credit Agreement or any document or instrument executed in connection
therewith. Further, the Assignee acknowledges that it has, independently and
without reliance upon the Agent, or on any affiliate or subsidiary thereof, or
any other Lender and based on the financial statements supplied by the Borrower
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to become a Lender under the Credit Agreement.
The Assignee also acknowledges that it will, independently and without reliance
upon the Agent or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement or any Note
or pursuant to any other obligation. The Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide the
Assignee with any credit or other information with respect to the Borrower or to
notify the undersigned of any Event of Default except as expressly provided in
the Credit Agreement. The Assignee has not relied on the Agent as to any legal
or factual matter in connection therewith or in connection with the transactions
contemplated thereunder.
Section 2. Payment by Assignee. In consideration of the assignment made
pursuant to Section 1 of this Agreement, the Assignee agrees to pay to the
Assignor on the Assignment Date, an amount equal to $_________ representing the
aggregate principal amount outstanding of the Revolving Loans owing to the
Assignor under the Credit Agreement and the other Loan Documents being assigned
hereby. [Further, the Assignee agrees to pay to the Assignor on the Assignment
Date, an amount equal to $____________ representing the aggregate principal
amount outstanding of the Bid Rate Loans owing to the Assignor under the Credit
Agreement and the other Loan Documents being assigned hereby.]
Section 3. Payments by Assignor. The Assignor agrees to pay to the
Agent on the Assignment Date the administration fee, if any, payable under the
applicable provisions of the Credit Agreement.
Section 4. Representations and Warranties of Assignor. The Assignor
hereby represents and warrants to the Assignee that (a) as of the Assignment
Date (i) the Assignor is a Lender under the Credit Agreement having a Commitment
under the Credit Agreement immediately prior to the Assignment Date, equal to
$____________ and that the Assignor is not in default of its obligations under
the Credit Agreement; and (ii) the outstanding balance of Revolving Loans owing
to the Assignor [and the outstanding principal balance of Bid Rate Loans owing
to the Assignor] (without reduction by any assignments thereof which have not
yet become effective) is $____________[and $__________ , respectively]; and (b)
it is the legal and beneficial owner of the Assigned Commitment which is free
and clear of any adverse claim created by the Assignor.
Section 5. Representations, Warranties and Agreements of Assignee. The
Assignee (a) represents and warrants that it is legally authorized to enter into
this Agreement; (b) it is an "accredited investor" (as such term is used in
Regulation D of the Securities Act); (c) confirms that it has received a copy of
the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant thereto and such other documents and information
(including without limitation the Loan Documents) as it has deemed appropriate
to make its own credit analysis and decision to enter into this Agreement; (d)
appoints and authorizes the Agent to take such action as agent on its behalf and
to exercise such powers under the Loan Documents as are delegated to the Agent
by the terms thereof together with such powers as are reasonably incidental
thereto; (e) agrees that it will become a party to and shall be bound by the
Credit Agreement, the other Loan Documents to which the other Lenders are a
party on the Assignment Date and will perform in accordance therewith all of the
obligations which are required to be performed by it as a Lender.
Section 6. Recording and Acknowledgment by the Agent. Following the
execution of this Agreement, the Assignor will deliver to the Agent (a) a duly
executed copy of this Agreement for acknowledgment and recording by the Agent
and (b) the Assignor's Revolving Note [and Bid Rate Note]. The Borrower agrees
to exchange such Note[s] for [a] new Note[s] as provided in Section 12.8(c) of
the Credit Agreement. Upon such acknowledgment and recording, from and after the
Assignment Date, the Agent shall make all payments in respect of the interest
assigned hereby (including payments of principal, interest, fees and other
amounts) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Assignment Date directly between themselves. The Agent may unilaterally amend
Annex I to the Credit Agreement to reflect the assignment effected hereby.
<PAGE>
Section 7. Addresses. The Assignee specifies as its address for
notices and its Lending Office for all Loans, the offices set forth below:
Notice Address:
Telephone No.:
Telecopy No.:
Domestic Lending Office:
Telephone No.:
Telecopy No.:
LIBOR Lending Office:
Telephone No.:
Telecopy No.:
Section 8. Payment Instructions. All payments to be made to the
Assignee under this Agreement by the Assignor, and all payments to be made to
the Assignee under the Credit Agreement, shall be made as provided in the Credit
Agreement in accordance with the following instructions:
Section 9. Effectiveness of Assignment. This Agreement, and the
assignment and assumption contemplated herein, shall not be effective until (a)
this Agreement is executed and delivered by each of the Assignor, the Assignee,
the Borrower and the Agent and (b) the payment to the Assignor of the amounts
owing by the Assignee pursuant to Section 2 hereof and (c) the payment to the
Agent of the amounts owing by the Assignor pursuant to Section 3 hereof. Upon
recording and acknowledgment of this Agreement by the Agent, from and after the
Assignment Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Agreement, have the rights and obligations of a
Lender thereunder and (ii) the Assignor shall, to the extent provided in this
Agreement, relinquish its rights and be released from its obligations under the
Credit Agreement; provided, however, that if the Assignor does not assign its
entire interest under the Loan Documents, it shall remain a Lender entitled to
all of the benefits and subject to all of the obligations thereunder with
respect to its Commitment.
Section 10. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
Section 11. Counterparts. This Agreement may be executed in any number
of counterparts each of which, when taken together, shall constitute one and the
same agreement.
Section 12. Headings. Section headings have been inserted herein for
convenience only and shall not be construed to be a part hereof.
Section 13. Amendments; Waivers. This Agreement may not be amended,
changed, waived or modified except by a writing executed by the Assignee and the
Assignor.
Section 14. Entire Agreement. This Agreement embodies the entire
agreement between the Assignor and the Assignee with respect to the subject
matter hereof and supersedes all other prior arrangements and understandings
relating to the subject matter hereof.
Section 15. Binding Effect.This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
Section 16. Definitions. Terms not otherwise defined herein are used
herein with the respective meanings given them in the Credit Agreement.
[Include this Section only if the Borrower's consent is required under
Section 12.8.(c) of the Credit Agreement]Section 17. Agreements of the Borrower.
The Borrower hereby agrees that the Assignee shall be a Lender under the Credit
Agreement having a Commitment equal to the Assigned Commitment. The Borrower
agrees that the Assignee shall have all of the rights and remedies of a Lender
under the Credit Agreement and the other Loan Documents as if the Assignee were
an original Lender under and signatory to the Credit Agreement, including, but
not limited to, the right of a Lender to receive payments of principal and
interest with respect to the Assigned Obligations, if any, and to the Revolving
Loans made by the Lenders after the date hereof and to receive the commitment
and other fees payable to the Lenders as provided in the Credit Agreement.
Further, the Assignee shall be entitled to the indemnification provisions from
the Borrower in favor of the Lenders as provided in the Credit Agreement and the
other Loan Documents. The Borrower further agrees, upon the execution and
delivery of this Agreement, to execute in favor of the Assignee a Revolving Note
in an initial amount equal to the Assigned Commitment [and a Bid Rate Note].
Further, the Borrower agrees that, upon the execution and delivery of this
Agreement, the Borrower shall owe the Assigned Obligations to the Assignee as if
the Assignee were the Lender originally making such Loans and entering into such
other obligations.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Assignment and Acceptance Agreement as of the date and year first written above.
ASSIGNOR:
[Name of Assignor]
By:
Title:
ASSIGNEE:
[Name of Assignee]
By:
Title:
Agreed and Consented to as of the date first written above.
[Include signature of the Borrower only
if required under Section 12.8.(c) of the
Credit Agreement]
BORROWER:
Regency Centers, L.P.
By: Regency Realty Corporation, its sole general partner
By:
Title:
PARENT:
REGENCY REALTY CORPORATION
By:
Title:
<PAGE>
Accepted as of the date first written above.
AGENT:
Wells Fargo BANK, NATIONAL ASSOCIATION, as Agent
By:
Title:
<PAGE>
B-5
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT B
FORM OF designation AGREEMENT
THIS designation AGREEMENT dated as of ___________, _____ (the
"Agreement") by and among _________________________ (the "Designating Lender"),
_________________________ (the "Designated Lender") and
Wells Fargo Bank, National Association, as Agent (the "Agent").
WHEREAS, the Designating Lender is a Lender under that certain Amended
and Restated Credit Agreement dated as of February 26, 1999 (as amended,
restated, supplemented or otherwise modified from time to time, the "Credit
Agreement"), by and among Regency Centers, L.P., a Delaware limited partnership
(the "Borrower"), Regency Realty Corporation, the financial institutions party
thereto and their assignees under Section 12.8 thereof (the "Lenders"), Wells
Fargo Bank, National Association, as Agent, and the Syndication Agent,
Documentation Agent and Managing Agents named therein;
WHEREAS, pursuant to Section 12.8(d), the Designating Lender desires to
designate the Designated Lender as its "Designated Lender" under and as defined
in the Credit Agreement; and
WHEREAS, the Agent consents to such designation on the terms and
conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
Section 1. Designation. Subject to the terms and conditions of this
Agreement, the Designating Lender hereby designates the Designated Lender, and
the Designated Lender hereby accepts such designation, to have a right to make
Bid Rate Loans on behalf of the Designating Lender pursuant to Section 2.2. of
the Credit Agreement. Any assignment by the Designating Lender to the Designated
Lender of rights to make a Bid Rate Loan shall only be effective at the time
such Bid Rate Loan is funded by the Designated Lender. The Designated Lender,
subject to the terms and conditions hereof, hereby agrees to make such accepted
Bid Rate Loans and to perform such other obligations as may be required of it as
a Designated Lender under the Credit Agreement.
Section 2. Designating Lender Not Discharged. Notwithstanding the
designation of the Designated Lender hereunder, the Designating Lender shall be
and remain obligated to the Borrower, the Agent and the Lenders for each and
every of the obligations of the Designating Lender and its related Designated
Lender with respect to the Credit Agreement and the other Loan Documents,
including, without limitation, any indemnification obligations under Section
11.7 and any sums otherwise payable to the Borrower by the Designated Lender.
Section 3. No Representations by Designating Lender. The Designating
Lender makes no representation or warranty and, except as set forth in Section 8
below, assumes no responsibility pursuant to this Agreement with respect to (a)
any statements, warranties or representations made in or in connection with any
Loan Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of any Loan Document or any other instrument and document
furnished pursuant thereto and (b) the financial condition of the Borrower or
any of its Subsidiaries or the performance or observance by the Borrower of any
of its obligations under any Loan Document or any other instrument or document
furnished pursuant thereto.
Section 4. Representations and Covenants of Designated Lender. The
Designated Lender makes and confirms to the Agent, the Designating Lender, and
the other Lenders all of the representations, warranties and covenants of a
Lender under Article XI of the Credit Agreement. Not in limitation of the
foregoing, the Designated Lender (a) represents and warrants that it (i) is
legally authorized to enter into this Agreement; (ii) is an "accredited
investor" (as such term is used in Regulation D of the Securities Act) and (iii)
meets the requirements of a "Designated Lender" contained in the definition of
such term contained in the Credit Agreement; (b) confirms that it has received a
copy of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant thereto and such other documents and information
(including without limitation the Loan Documents) as it has deemed appropriate
to make its own credit analysis and decision to enter into this Agreement; (c)
confirms that it has, independently and without reliance upon the Agent, or on
any affiliate thereof, or any other Lender and based on such financial
statements and such other documents and information, made its own credit
analysis and decision to become a Designated Lender under the Credit Agreement;
(d) appoints and authorizes the Agent to take such action as contractual
representative on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof together with such
powers as are reasonably incidental thereto; and (e) agrees that it will become
a party to and shall be bound by the Credit Agreement, the other Loan Documents
to which the other Lenders are a party on the Effective Date (as defined below)
and will perform in accordance therewith all of the obligations which are
required to be performed by it as a Designated Lender. The Designated Lender
also acknowledges that it will, independently and without reliance upon the
<PAGE>
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement or any Note or pursuant
to any other obligation. The Designated Lender acknowledges and agrees that
except as expressly required under the Credit Agreement, the Agent shall have no
duty or responsibility whatsoever, either initially or on a continuing basis, to
provide the Designated Lender with any credit or other information with respect
to the Borrower or any other Loan Party or to notify the Designated Lender of
any Default or Event of Default.
Section 5. Appointment of Designating Lender as Attorney-In-Fact. The
Designated Lender hereby appoints the Designating Lender as the Designated
Lender's agent and attorney-in-fact, and grants to the Designating Lender an
irrevocable power of attorney, to receive any and all payments to be made for
the benefit of the Designated Lender under the Credit Agreement, to deliver and
receive all notices and other communications under the Credit Agreement and
other Loan Documents and to exercise on the Designated Lender's behalf all
rights to vote and to grant and make approvals, waivers, consents of amendments
to or under the Credit Agreement or other Loan Documents. Any document executed
by the Designating Lender on the Designated Lender's behalf in connection with
the Credit Agreement or other Loan Documents shall be binding on the Designated
Lender. The Borrower, each Agent and each of the Lenders may rely on and are
beneficiaries of the preceding provisions.
Section 6. Acceptance by the Agent. Following the execution of this
Agreement by the Designating Lender and the Designated Lender, the Designating
Lender will (i) deliver to the Agent a duly executed original of this Agreement
for acceptance by the Agent and (ii) pay to the Agent the fee, if any, payable
under the applicable provisions of the Credit Agreement whereupon this Agreement
shall become effective as of the date of such acceptance or such other date as
may be specified on the signature page hereof (the "Effective Date").
Section 7. Effect of Designation. Upon such acceptance and recording by
the Agent, as of the Effective Date, the Designated Lender shall be a party to
the Credit Agreement with a right to make Bid Rate Loans as a Lender pursuant to
Section 2.2. of the Credit Agreement and the rights and obligations of a Lender
related thereto; provided, however, that the Designated Lender shall not be
required to make payments with respect to such obligations except to the extent
of excess cash flow of such Designated Lender which is not otherwise required to
repay obligations of such Designated Lender which are then due and payable.
Notwithstanding the foregoing, the Designating Lender, as Agent for the
Designated Lender, shall be and remain obligated to the Borrower, the Agent and
the Lenders for each and every of the obligations of the Designated Lender and
its Designating Lender with respect to the Credit Agreement.
Section 8. Indemnification of Designated Lender. The Designating Lender
unconditionally agrees to pay or reimburse the Designated Lender and save the
Designated Lender harmless against all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed or asserted by any of the
parties to the Loan Documents against the Designated Lender, in its capacity as
such, in any way relating to or arising out of this Agreement or any other Loan
Documents or any action taken or omitted by the Designated Lender hereunder or
thereunder, provided that the Designating Lender shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same results from the
Designated Lender's gross negligence or willful misconduct.
Section 9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
Section 10. Counterparts. This Agreement may be executed in any number
of counterparts each of which, when taken together, shall constitute one and the
same agreement.
Section 11. Headings. Section headings have been inserted herein for
convenience only and shall not be construed to be a part hereof.
Section 12. Amendments; Waivers. This Agreement may not be amended,
changed, waived or modified except by a writing executed by all parties hereto.
Section 13. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
Section 14. Definitions. Terms not otherwise defined herein are used
herein with the respective meanings given them in the Credit Agreement.
[Signatures on Following Page]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Designation Agreement as of the date and year first written above.
Effective Date:
DESIGNATING LENDER:
[Name of Designating Lender]
Name:
Title:
Designated Lender:
[Name of Designated Lender]
By:
Name:
Title:
Accepted as of the date first written above.
AGENT:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent
By:
Name:
Title:
<PAGE>
EXHIBIT C
Form of REVOLVING NOTE
$______________ _________, 199_
FOR VALUE RECEIVED, the undersigned, REGENCY CENTERS, L.P., a Delaware
limited partnership (the "Borrower") hereby unconditionally promises to pay to
the order of ___________________________ (the "Lender"), in care of Wells Fargo
Bank, National Association, as Agent (the "Agent"), to Wells Fargo Bank,
National Association, 111 Sutter Street, 8th Floor, San Francisco, California
94104 or at such other address as may be specified by the Agent to the Borrower,
the principal sum of ___________________ AND ___/100 DOLLARS ($_____________),
or such lesser amount as may be the then outstanding and unpaid balance of all
Revolving Loans or the Term Loan made by the Lender to the Borrower pursuant to,
and in accordance with the terms of, the Credit Agreement.
The Borrower further agrees to pay interest at said office, in like
money, on the unpaid principal amount owing hereunder from time to time on the
dates and at the rates and at the times specified in the Credit Agreement.
This Revolving Note is one of the "Revolving Notes" referred to in that
certain Amended and Restated Credit Agreement dated as of February 26, 1999 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among the Borrower, Regency Realty Corporation, the
financial institutions party thereto and their assignees under Section 12.8
thereof (the "Lenders"), the Agent, and the Syndication Agent, Documentation
Agent and Managing Agents named therein, and is subject to, and entitled to, all
provisions and benefits thereof. Capitalized terms used herein and not defined
herein shall have the respective meanings given to such terms in the Credit
Agreement. The Credit Agreement, among other things, (a) provides for the making
of Revolving Loans by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the Dollar amount first
above mentioned, (b) permits the prepayment of the Loans by the Borrower subject
to certain terms and conditions and (c) provides for the acceleration of the
Revolving Loans and Term Loans upon the occurrence of certain specified events.
The Borrower hereby waives presentment, demand, protest and notice of
any kind. No failure to exercise, and no delay in exercising any rights
hereunder on the part of the holder hereof shall operate as a waiver of such
rights.
[The following text is to be included in only those Revolving Notes
executed in favor of the Lenders who were a party to the Existing Credit
Agreement at the time of the amendment and restatement thereof --This Note
amends and restates that certain Note dated ___________, 199_, in the original
principal amount of $___________ executed and delivered by the Borrower, payable
to the order of the Lender. THIS NOTE IS NOT INTENDED TO BE, AND SHALL NOT BE
CONSTRUED TO BE, A NOVATION OF ANY OF THE OBLIGATIONS OWING UNDER OR IN
CONNECTION WITH SUCH OTHER NOTE.]
Time is of the essence for this Note.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF GEORGIA.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Note under seal as of the date written above.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation, its sole general partner
By:
Name:
Title:
[CORPORATE SEAL]
STATE OF GEORGIA
COUNTY OF
BEFORE ME, a Notary Public in and for said County, personally appeared
_____________________, known to me to be a person who, as
____________________________ of Regency Realty Corporation, as the general
partner of Regency Centers, L.P., the entity which executed the foregoing Note,
signed the same, and acknowledged to me that he did so sign said instrument in
the name and upon behalf of said corporation as an officer of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed
my official seal, this ____ day of _______________, ___________.
Notary Public
My Commission Expires:
<PAGE>
EXHIBIT D
FORM OF BID RATE NOTE
____________, 19__
FOR VALUE RECEIVED, the undersigned, REGENCY CENTERS, L.P., a Delaware
limited partnership (the "Borrower"), hereby promises to pay to the order of
________________ (the "Lender"), in care of Wells Fargo Bank, National
Association, as Agent (the "Agent"), to Wells Fargo Bank, National Association,
111 Sutter Street, 8th Floor, San Francisco, California 94104, or at such other
address as may be specified by the Agent to the Borrower, the aggregate unpaid
principal amount of Bid Rate Loans made by the Lender to the Borrower under the
Credit Agreement, on the dates and in the principal amounts provided in the
Credit Agreement, and to pay interest on the unpaid principal amount of each
such Bid Rate Loan, at such office at the rates and on the dates provided in the
Credit Agreement.
The date, amount, interest rate and maturity date of each Bid Rate Loan
made by the Lender to the Borrower, and each payment made on account of the
principal thereof, shall be recorded by the Lender on its books and, prior to
any transfer of this Note, endorsed by the Lender on the schedule attached
hereto or any continuation thereof, provided that the failure of the Lender to
make any such recordation or endorsement shall not affect the obligations of the
Borrower to make a payment when due of any amount owing under the Credit
Agreement or hereunder in respect of the Bid Rate Loans made by the Lender.
This Note is one of the Bid Rate Notes referred to in the Amended and
Restated Credit Agreement dated as of February 26, 1999 (as amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the "Credit Agreement") among the Borrower, Regency Realty Corporation,
the financial institutions initially party thereto and their assignees under
Section 12.8. thereof, Wells Fargo Bank, National Association, as Agent, and the
Syndication Agent, Documentation Agent and Managing Agents named therein, and
evidences Bid Rate Loans made by the Lender thereunder. Terms used but not
otherwise defined in this Note have the respective meanings assigned to them in
the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Bid Rate
Loans upon the terms and conditions specified therein.
Except as permitted by Section 12.8. of the Credit Agreement, this Note
may not be assigned by the Lender to any other Person.
This Note shall be governed by, and construed in accordance with, the
laws of the State of GEORGIA.
The Borrower hereby waives presentment for payment, demand, notice of
demand, notice of non-payment, protest, notice of protest and all other similar
notices.
[The following text is to be included in only those Bid Rate Notes
executed in favor of the Lenders who were a party to the Existing Credit
Agreement at the time of the amendment and restatement thereof --This Note
amends and restates that certain Bid Rate Note dated ___________, 199_, executed
and delivered by the Borrower, payable to the order of the Lender. THIS NOTE IS
NOT INTENDED TO BE, AND SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE
OBLIGATIONS OWING UNDER OR IN CONNECTION WITH SUCH OTHER NOTE.]
Time is of the essence for this Note.
IN WITNESS WHEREOF, the undersigned has executed and delivered this Bid
Rate Note under seal as of the date first written above.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
[CORPORATE SEAL]
STATE OF GEORGIA
COUNTY OF
BEFORE ME, a Notary Public in and for said County, personally appeared
, known to me to be a person who, as ____________________________ of Regency
Realty Corporation, as the general partner of Regency Centers, L.P., the entity
which executed the foregoing Note, signed the same, and acknowledged to me that
he did so sign said instrument in the name and upon behalf of said corporation
as an officer of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed
my official seal, this ____ day of __________________, __________.
Notary Public
My Commission Expires:
<PAGE>
SCHEDULE OF BID RATE LOANS
This Note evidences Bid Rate Loans made under the within-described
Credit Agreement to the Borrower, on the dates, in the principal amounts,
bearing interest at the rates and maturing on the dates set forth below, subject
to the payments and prepayments of principal set forth below:
Principal Maturity Amount Unpaid
Date of Amount of Interest Date of Paid or Principal Notation
Loan Loan Rate Loan Prepaid Amount Made By
- ---- ---- ---- ---- ------- ------ -------
<PAGE>
EXHIBIT E
FORM OF SWINGLINE NOTE
$30,000,000 February 26, 1999
FOR VALUE RECEIVED, the undersigned, regency centers, l.p. (the
"Borrower"), hereby promises to pay to the order of WELLS FARGO BANK, NATIONAL
ASSOCIATION (the "Swingline Lender") to its address at 111 Sutter Street, 8th
Floor, San Francisco, California 94104, or at such other address as may be
specified by the Swingline Lender to the Borrower, the principal sum of THIRTY
MILLION AND NO/100 DOLLARS ($30,000,000) (or such lesser amount as shall equal
the aggregate unpaid principal amount of Swingline Loans made by the Swingline
Lender to the Borrower under the Credit Agreement), on the dates and in the
principal amounts provided in the Credit Agreement, and to pay interest on the
unpaid principal amount owing hereunder, at the rates and on the dates provided
in the Credit Agreement.
The date, amount of each Swingline Loan, and each payment made on
account of the principal thereof, shall be recorded by the Swingline Lender on
its books and, prior to any transfer of this Note, endorsed by the Swingline
Lender on the schedule attached hereto or any continuation thereof, provided
that the failure of the Swingline Lender to made any such recordation or
endorsement shall not affect the obligations of the Borrower to make a payment
when due of any amount owing under the Credit Agreement or hereunder in respect
of the Swingline Loans.
This Note is the Swingline Note referred to in the Amended and Restated
Credit Agreement dated as of February 26, 1999 (as amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the "Credit Agreement") among the Borrower, Regency Realty Corporation,
the financial institutions initially party thereto and their assignees under
Section 12.8 thereof, Wells Fargo Bank, National Association, as Agent, and the
Syndication Agent, Documentation Agent and Managing Agents named therein, and
evidences Swingline Loans made thereunder. Terms used but not otherwise defined
in this Note have the respective meanings assigned to them in the Credit
Agreement.
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Swingline
Loans upon the terms and conditions specified therein.
This Note shall be governed by, and construed in accordance with, the
laws of the State of GEORGIA.
The Borrower hereby waives presentment for payment, demand, notice of
demand, notice of non-payment, protest, notice of protest and all other similar
notices.
This Note amends and restates that certain Swingline Note dated March
27, 1998, in the original principal amount of $20,000,000 executed and delivered
by the Borrower, payable to the order of the Swingline Lender. THIS NOTE IS NOT
INTENDED TO BE, AND SHALL NOT BE CONSTRUED TO BE, A NOVATION OF ANY OF THE
OBLIGATIONS OWING UNDER OR IN CONNECTION WITH SUCH OTHER SWINGLINE NOTE.
Time is of the essence for this Note.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Swingline Note under seal as of the date first written above.
Regency Centers, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
[CORPORATE SEAL]
STATE OF GEORGIA
COUNTY OF
BEFORE ME, a Notary Public in and for said County, personally appeared
, known to me to be a person who, as ____________________________ of Regency
Realty Corporation, as the general partner of Regency Centers, L.P., the entity
which executed the foregoing Note, signed the same, and acknowledged to me that
he did so sign said instrument in the name and upon behalf of said corporation
as an officer of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed
my official seal, this ____ day of __________________, ____________.
Notary Public
My Commission Expires:
<PAGE>
SCHEDULE OF SWINGLINE LOANS
This Note evidences Swingline Loans made under the within-described
Credit Agreement to the Borrower, on the dates and in the principal amounts set
forth below, subject to the payments and prepayments of principal set forth
below:
Principal Amount Amount Paid or Unpaid Principal Notation
Date of Loan of Loan Prepaid Amount Made By
<PAGE>
F-2
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT F
FORM OF NOTICE OF BORROWING
____________, 199__
Wells Fargo Bank, National Association
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attention: Mary Ann Kelly
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999, as amended (the "Credit Agreement"), by and among
Regency Centers, L.P. (the "Borrower"), Regency Realty Corporation, the
financial institutions party thereto and their assignees under Section 12.8
thereof, Wells Fargo Bank, National Association, as Agent (the "Agent"), and the
Syndication Agent, Documentation Agent and Managing Agents named therein.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Credit Agreement.
1. Pursuant to Section 2.1(b) of the Credit Agreement, the
Borrower hereby requests that the Lenders make a Revolving
Loan to the Borrower in an amount equal to
$___________________.
2. The Borrower requests that the Revolving Loan be made
available to the Borrower on ____________, 199__.
3. The Borrower hereby requests that the requested Revolving Loan be of
the following Type:
[Check one box only]
Base Rate Loan
LIBOR Loan, with an initial Interest Period for a duration of:
[Check one box only] one month
two months
three months
six months
4. The proceeds of the Revolving Loan will be used for the following:
--------------------------------------------------
--------------------------------------------------.
The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof, as of the date of the making of the requested Revolving Loan,
and after making such Revolving Loan, (a) no Default or Event of Default shall
have occurred and be continuing, and (b) the representations and warranties of
the Borrower contained in the Credit Agreement and the other Loan Documents are
and shall be true and correct in all material respects, except to the extent
such representations or warranties specifically relate to an earlier date or
such representations or warranties become untrue by reason of events or
conditions otherwise permitted under the Credit Agreement or the other Loan
Documents.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
<PAGE>
G-2
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT G
FORM OF NOTICE OF CONTINUATION
____________, 199__
Wells Fargo Bank, National Association
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attention: Mary Ann Kelly
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999, as amended (the "Credit Agreement"), by and among
Regency Centers, L.P. (the "Borrower"), Regency Realty Corporation, the
financial institutions party thereto and their assignees under Section 12.8
thereof, Wells Fargo Bank, National Association, as Agent (the "Agent"), and the
Syndication Agent, Documentation Agent and Managing Agents named therein.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Credit Agreement.
Pursuant to Section 2.5 of the Credit Agreement, the Borrower hereby
requests a Continuation of a Revolving Loan under the Credit Agreement, and in
that connection sets forth below the information relating to such Continuation
as required by such Section of the Credit Agreement:
1. The requested date of such Continuation is ____________, 199__.
2. The aggregate principal amount of the Revolving Loan subject
to the requested Continuation is $________________________ and
the portion of such principal amount subject to such
Continuation is $__________________________.
3. The current Interest Period of the Revolving Loan subject to
such Continuation ends on ________________, 199__.
4. The duration of the Interest Period for the Revolving Loan or
portion thereof subject to such Continuation is:
[Check one box only] one month
two months
three months
six months
The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof, as of the proposed date of the requested Continuation, and
after giving effect to such Continuation, no Event of Default shall have
occurred and be continuing.
If notice of the requested Continuation was given previously by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.5 of the Credit Agreement.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
<PAGE>
H-2
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT H
FORM OF NOTICE OF CONVERSION
____________, 199__
Wells Fargo Bank, National Association
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attention: Mary Ann Kelly
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999, as amended (the "Credit Agreement"), by and among
Regency Centers, L.P. (the "Borrower"), Regency Realty Corporation, the
financial institutions party thereto and their assignees under Section 12.8
thereof, Wells Fargo Bank, National Association, as Agent (the "Agent"), and the
Syndication Agent, Documentation Agent and Managing Agents named therein.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Credit Agreement.
Pursuant to Section 2.6 of the Credit Agreement, the Borrower hereby
requests a Conversion of a Revolving Loan of one Type into a Revolving Loan of
another Type under the Credit Agreement, and in that connection sets forth below
the information relating to such Conversion as required by such Section of the
Credit Agreement:
1. The requested date of such Conversion is ______________, 199__.
2. The Type of Revolving Loan to be Converted pursuant hereto is
currently:
[Check one box only] Base Rate Loan
LIBOR Loan
3. The aggregate principal amount of the Revolving Loan subject
to the requested Conversion is $_____________________ and the
portion of such principal amount subject to such Conversion is
$-------------------.
4. The amount of such Revolving Loan to be so Converted is to be
converted into a Revolving Loan of the following Type:
[Check one box only]
Base Rate Loan
LIBOR Loan, with an initial Interest Period for a duration of:
[Check one box only] one month
two months
three months
six months
The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof, as of the proposed date of the requested Conversion, and after
giving effect to such Conversion, no Event of Default shall have occurred and be
continuing.
If notice of the requested Conversion was given previously by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.6 of the Credit Agreement.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
<PAGE>
I-2
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT I
FORM OF BID RATE QUOTE REQUEST
--------------, -----
Wells Fargo Bank, National Association
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attention: Mary Ann Kelly
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999, as amended (the "Credit Agreement"), by and among
Regency Centers, L.P. (the "Borrower"), Regency Realty Corporation, the
financial institutions party thereto and their assignees under Section 12.8
thereof, Wells Fargo Bank, National Association, as Agent (the "Agent"), and the
Syndication Agent, Documentation Agent and Managing Agents named therein.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Credit Agreement.
1.The Borrower hereby requests Bid Rate Quotes for the following proposed Bid
Rate Borrowings:
Borrowing Date Amount1 Type2 Interest Period3
______________, ______ $____________ ____________ ______ days
2. The Borrower's Credit Rating as of the date hereof is:
S&P _______
Moody's _______
3. The proceeds of this Bid Rate borrowing will be used for the
following purpose:
---------------------------------------------------
---------------------------------------------------.
4. After giving effect to the Bid Rate Borrowing requested
herein, the total amount of Bid Rate Loans outstanding shall
be $______________ [must not be in excess of the lesser of (i)
$250,000,000 or (ii) one-half of the aggregate amount of all
existing Commitments].
The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof, as of the date of the making of the requested Bid Rate Loans,
and after making such Bid Rate Loans, (a) no Default or Event of Default shall
have occurred and be continuing, and (b) the representations and warranties of
the Borrower contained in the Credit Agreement and the other Loan Documents are
and shall be true and correct in all material respects, except to the extent
such representations or warranties specifically relate to an earlier date or
such representations or warranties become untrue by reason of events or
conditions otherwise permitted under the Credit Agreement or the other Loan
Documents. In addition, the Borrower certifies to the Agent and the Lenders that
all conditions to the making of the requested Bid Rate Loans contained in
Article VI. of the Credit Agreement will have been satisfied at the time such
Bid Rate Loans are made.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
<PAGE>
J-2
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT J
FORM OF BID RATE QUOTE
----------------, ----
Wells Fargo Bank, National Association
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attention: Mary Ann Kelly
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999, as amended (the "Credit Agreement"), by and among
Regency Centers, L.P. (the "Borrower"), Regency Realty Corporation, the
financial institutions party thereto and their assignees under Section 12.8
thereof, Wells Fargo Bank, National Association, as Agent (the "Agent"), and the
Syndication Agent, Documentation Agent and Managing Agents named therein.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Credit Agreement.
In response to the Borrower's Bid Rate Quote Request dated
_____________, 19__, the undersigned hereby makes the following Bid Rate
Quote(s) on the following terms:
1. Quoting Lender:____________________________
2. Person to contact at quoting Lender:____________________________
3. The undersigned offers to make Bid Rate Loan(s) in the
following principal amount(s), for the following Interest
Period(s) and at the following Bid Rate(s):
Borrowing Date Amount1 Type2 Interest Period3 Bid Rate
__________, 19___ $_____________ __________ ______days ______%
__________, 19___ $_____________ __________ ______days ______%
__________, 19___ $_____________ __________ ______days ______%
The undersigned understands and agrees that the offer(s) set forth
above, subject to satisfaction of the applicable conditions set forth in the
Credit Agreement, irrevocably obligate[s] the undersigned to make the Bid Rate
Loan(s) for which any offer(s) [is/are] accepted, in whole or in part.
By:
Name:
Title:
<PAGE>
K-2
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT K
FORM OF BID RATE QUOTE ACCEPTANCE
__________________, 19__
Wells Fargo Bank, National Association
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attention: Mary Ann Kelly
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999, as amended (the "Credit Agreement"), by and among
Regency Centers, L.P. (the "Borrower"), Regency Realty Corporation, the
financial institutions party thereto and their assignees under Section 12.8
thereof, Wells Fargo Bank, National Association, as Agent (the "Agent"), and the
Syndication Agent, Documentation Agent and Managing Agents named therein.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Credit Agreement.
The Borrower hereby accepts the following offer(s) of Bid Rate Quotes
to be made available to the Borrower on ____________, _____:
Quote Date Quoting Lender Type Amount Accepted
____________, 19____ _______________ __________ $___________
____________, 19____ _______________ __________ $___________
____________, 19____ _______________ __________ $___________
The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof, as of the date of the making of the requested Bid Rate Loans,
and after making such Bid Rate Loans, (a) no Default or Event of Default shall
have occurred and be continuing, and (b) the representations and warranties of
the Borrower contained in the Credit Agreement and the other Loan Documents are
and shall be true and correct in all material respects, except to the extent
such representations or warranties specifically relate to an earlier date or
such representations or warranties become untrue by reason of events or
conditions otherwise permitted under the Credit Agreement or the other Loan
Documents. In addition, the Borrower certifies to the Agent and the Lenders that
all conditions to the making of the requested Bid Rate Loans contained in
<PAGE>
Article VI. of the Credit Agreement will have been satisfied at the time such
Bid Rate Loans are made.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
<PAGE>
L-2
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT L
FORM OF NOTICE OF SWINGLINE BORROWING
------------, -----
Wells Fargo Bank, National Association
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attention: Mary Ann Kelly
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999, as amended (the "Credit Agreement"), by and among
Regency Centers, L.P. (the "Borrower"), Regency Realty Corporation, the
financial institutions party thereto and their assignees under Section 12.8
thereof, Wells Fargo Bank, National Association, as Agent (the "Agent"), and the
Syndication Agent, Documentation Agent and Managing Agents named therein.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Credit Agreement.
1. Pursuant to Section 2.3.(b) of the Credit Agreement, the
Borrower hereby requests that the Swingline Lender make a
Swingline Loan to the Borrower in an amount equal to
$-------------------.
2. The Borrower requests that such Swingline Loan be made
available to the Borrower on ______________, ________.
3. The proceeds of this Swingline Loan will be used for the
following purpose:
------------------------------------------------------------
-----------------------------------------------------------.
4. The Borrower requests that the proceeds of such Swingline Loan
be made available to the Borrower by _______________________.
The Borrower hereby certifies to the Agent, the Swingline Lender and
the Lenders that as of the date hereof, as of the date of the making of the
requested Swingline Loan, and after making such Swingline Loan, (a) no Default
or Event of Default shall have occurred and be continuing, and (b) the
representations and warranties of the Borrower contained in the Credit Agreement
and the other Loan Documents are and shall be true and correct in all material
respects, except to the extent such representations or warranties specifically
relate to an earlier date or such representations or warranties become untrue by
reason of events or conditions otherwise permitted under the Credit Agreement or
the other Loan Documents. In addition, the Borrower certifies to the Agent and
the Lenders that all conditions to the making of the requested Swingline Loan
contained in Article VI. of the Credit Agreement will have been satisfied at the
time such Swingline Loan is made.
If notice of the requested borrowing of this Swingline Loan was
previously given by telephone, this notice is to be considered the written
confirmation of such telephone notice required by Section 2.3.(b) of the Credit
Agreement.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
<PAGE>
M-1
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT M
FORM OF EXTENSION REQUEST
____________, 199__
Wells Fargo Realty Bank, National Association, as
Agent
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attention: Mary Ann Kelly
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999, as amended (the "Credit Agreement"), by and among
Regency Centers, L.P. (the "Borrower"), Regency Realty Corporation, the
financial institutions party thereto and their assignees under Section 12.8
thereof, Wells Fargo Bank, National Association, as Agent (the "Agent"), and the
Syndication Agent, Documentation Agent and Managing Agents named therein.
Capitalized terms used herein, and not otherwise defined herein, have their
respective meanings given them in the Credit Agreement.
Pursuant to Section 2.10 of the Credit Agreement, the Borrower hereby
requests that the Lenders and the Agent extend the current Revolving Credit
Termination Date of ____________, 199__ by a one-year period to
________________, 199__.
The Borrower hereby certifies to the Agent and the Lenders that as of
the date hereof (a) no Default or Event of Default has occurred and is
continuing, and (b) the representations and warranties of the Borrower contained
in the Credit Agreement and the other Loan Documents are true and correct in all
material respects, except to the extent such representations or warranties
specifically relate to an earlier date or such representations or warranties
become untrue by reason of events or conditions otherwise permitted under the
Credit Agreement or the other Loan Documents.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
<PAGE>
EXHIBIT O
FORM OF GUARANTY
THIS GUARANTY dated as of February 26, 1999 executed and delivered by
each of the undersigned and the other Persons from time to time party hereto
pursuant to the execution and delivery of an Accession Agreement in the form of
Annex I hereto (all of the undersigned, together with such other Persons each a
"Guarantor" and collectively, the "Guarantors") in favor of (a) WELLS FARGO
BANK, NATIONAL ASSOCIATION, in its capacity as Agent (the "Agent") for the
Lenders under that certain Amended and Restated Credit Agreement dated as of
February 26, 1999, among Regency Centers, L.P. (the "Borrower"), Regency Realty
Corporation (the "Parent"), the financial institutions party thereto and their
assignees under Section 12.8 thereof (the "Lenders"), the Agent, and the
Syndication Agent, Documentation Agent and Managing Agents named therein (as the
same may be amended, restated, supplemented or otherwise modified from time to
time in accordance with its terms, the "Credit Agreement") and (b) the Lenders
and the Swingline Lender.
WHEREAS, pursuant to the Credit Agreement, the Agent, the Lenders and
the Swingline Lender have agreed to make available to the Borrower certain
financial accommodations on the terms and conditions set forth in the Credit
Agreement;
WHEREAS, the Parent is the sole general partner of the Borrower;
WHEREAS, each other Guarantor is owned or controlled by the Borrower,
the Parent or is otherwise an Affiliate of the Borrower or the Parent;
WHEREAS, the Borrower, each Guarantor and the other Subsidiaries of the
Borrower and the Parent, though separate legal entities, are mutually dependent
on each other in the conduct of their respective businesses as an integrated
operation and have determined it to be in their mutual best interests to obtain
financing from the Agent, the Lenders and the Swingline Lender through their
collective efforts;
WHEREAS, each Guarantor acknowledges that it will receive direct and
indirect benefits from the Agent the Lenders and the Swingline Lender making
such financial accommodations available to the Borrower under the Credit
Agreement and, accordingly, each Guarantor is willing to guarantee the
Borrower's obligations to the Agent, the Lenders and the Swingline Lender on the
terms and conditions contained herein; and
WHEREAS, each Guarantor's execution and delivery of this Guaranty is
one of the conditions precedent to the Agent, the Lenders and the Swingline
Lender making, or continuing to make, such financial accommodations to the
Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor
agrees as follows:
Section 1. Guaranty. Each Guarantor hereby absolutely, irrevocably and
unconditionally guaranties the due and punctual payment and performance when
due, whether at stated maturity, by acceleration or otherwise, of all of the
following (collectively referred to as the "Guarantied Obligations"): (a) all
indebtedness and obligations owing by the Borrower to any Lender, the Swingline
Lender or the Agent under or in connection with the Credit Agreement and any
other Loan Document to which the Borrower is a party, including without
limitation, the repayment of all principal of the Loans and the payment of all
interest, fees, charges, reasonable attorneys fees and other amounts payable to
any Lender, the Swingline Lender or the Agent thereunder or in connection
therewith; (b) any and all extensions, renewals, modifications, amendments or
substitutions of the foregoing; (c) all expenses, including, without limitation,
reasonable attorneys' fees and disbursements, that are incurred by the Lenders,
the Swingline Lender and the Agent in the enforcement of any of the foregoing or
any obligation of such Guarantor hereunder and (d) all other Obligations.
Section 2. Guaranty of Payment and Not of Collection. This Guaranty is
a guaranty of payment, and not of collection, and a debt of each Guarantor for
its own account. Accordingly, the Lenders, the Swingline Lender and the Agent
shall not be obligated or required before enforcing this Guaranty against any
Guarantor: (a) to pursue any right or remedy the Lenders, the Swingline Lender
or the Agent may have against the Borrower, any other Loan Party or any other
Person or commence any suit or other proceeding against the Borrower, any other
Loan Party or any other Person in any court or other tribunal; (b) to make any
claim in a liquidation or bankruptcy of the Borrower, any other Loan Party or
any other Person; or (c) to make demand of the Borrower, any other Loan Party or
any other Person or to enforce or seek to enforce or realize upon any collateral
security held by the Lenders, the Swingline Lender or the Agent which may secure
any of the Guarantied Obligations. In this connection, each Guarantor hereby
waives the right of such Guarantor to require any holder of the Guarantied
Obligations to take action against the Borrower as provided in Official Code of
Georgia Annotated ss.10-7-24.
<PAGE>
Section 3. Guaranty Absolute. Each Guarantor guarantees that the
Guarantied Obligations will be paid strictly in accordance with the terms of the
documents evidencing the same, regardless of any Applicable Law now or hereafter
in effect in any jurisdiction affecting any of such terms or the rights of the
Agent, the Lenders or the Swingline Lender with respect thereto. The liability
of each Guarantor under this Guaranty shall be absolute and unconditional in
accordance with its terms and shall remain in full force and effect without
regard to, and shall not be released, suspended, discharged, terminated or
otherwise affected by, any circumstance or occurrence whatsoever, including
without limitation, the following (whether or not such Guarantor consents
thereto or has notice thereof):
(a)(i) any change in the amount, interest rate or due date or other
term of any of the Guarantied Obligations, (ii) any change in the time, place or
manner of payment of all or any portion of the Guarantied Obligations, (iii) any
amendment or waiver of, or consent to the departure from or other indulgence
with respect to, the Credit Agreement, any other Loan Document, or any other
document or instrument evidencing or relating to any Guarantied Obligations, or
(iv) any waiver, renewal, extension, addition, or supplement to, or deletion
from, or any other action or inaction under or in respect of, the Credit
Agreement, any of the other Loan Documents, or any other documents, instruments
or agreements relating to the Guarantied Obligations or any other instrument or
agreement referred to therein or evidencing any Guarantied Obligations or any
assignment or transfer of any of the foregoing;
(b) any lack of validity or enforceability of the Credit Agreement, any
of the other Loan Documents, or any other document, instrument or agreement
referred to therein or evidencing any Guarantied Obligations or any assignment
or transfer of any of the foregoing;
(c) any furnishing to the Agent, the Lenders or the Swingline Lender of
any security for the Guarantied Obligations, or any sale, exchange, release or
surrender of, or realization on, any collateral securing any of the Obligations;
(d) any settlement or compromise of any of the Guarantied Obligations,
any security therefor, or any liability of any other party with respect to the
Guarantied Obligations, or any subordination of the payment of the Guarantied
Obligations to the payment of any other liability of the Borrower or any other
Loan Party;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to such
Guarantor, the Borrower, any other Loan Party or any other Person, or any action
taken with respect to this Guaranty by any trustee or receiver, or by any court,
in any such proceeding;
(f) any act or failure to act by the Borrower, any other Loan Party or
any other Person which may adversely affect such Guarantor's subrogation rights,
if any, against the Borrower to recover payments made under this Guaranty;
(g) any application of sums paid by the Borrower, any other Loan Party
or any other Person with respect to the liabilities of the Borrower to the
Agent, the Lenders or the Swingline Lender, regardless of what liabilities of
the Borrower remain unpaid;
(h)any defect, limitation or insufficiency in the borrowing powers of
the Borrower or in the exercise thereof; or
(i) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, such Guarantor hereunder (other than
termination of this Guaranty as provided in Section 20. hereof).
Section 4. Action with Respect to Guarantied Obligations. The Lenders,
the Swingline Lender and the Agent may, at any time and from time to time,
without the consent of, or notice to, any Guarantor, and without discharging any
Guarantor from its obligations hereunder take any and all actions described in
Section 3. and may otherwise: (a) amend, modify, alter or supplement the terms
of any of the Guarantied Obligations, including, but not limited to, extending
or shortening the time of payment of any of the Guarantied Obligations or
changing the interest rate that may accrue on any of the Guarantied Obligations;
(b) amend, modify, alter or supplement the Credit Agreement or any other Loan
Document; (c) sell, exchange, release or otherwise deal with all, or any part,
of any collateral securing any of the Obligations; (d) release any Loan Party or
other Person liable in any manner for the payment or collection of the
Guarantied Obligations; (e) exercise, or refrain from exercising, any rights
against the Borrower, any other Loan Party or any other Person; and (f) apply
any sum, by whomsoever paid or however realized, to the Guarantied Obligations
in such order as the Lenders or the Swingline Lender shall elect.
Section 5. Representations and Warranties. Each Guarantor hereby makes
to the Agent, the Lenders and the Swingline Lender all of the representations
and warranties made by the Borrower with respect to or in any way relating to
such Guarantor in the Credit Agreement and the other Loan Documents, as if the
same were set forth herein in full.
<PAGE>
Section 6. Covenants. Each Guarantor will comply with all covenants
which the Borrower is to cause such Guarantor to comply with under the terms of
the Credit Agreement or any of the other Loan Documents.
Section 7. Waiver. Each Guarantor, to the fullest extent permitted by
Applicable Law, hereby waives notice of acceptance hereof or any presentment,
demand, protest or notice of any kind, and any other act or thing, or omission
or delay to do any other act or thing, which in any manner or to any extent
might vary the risk of such Guarantor or which otherwise might operate to
discharge such Guarantor from its obligations hereunder.
Section 8. Inability to Accelerate Loan. If the Agent, the Lenders
and/or the Swingline Lender are prevented under Applicable Law or otherwise from
demanding or accelerating payment of any of the Guarantied Obligations by reason
of any automatic stay or otherwise, the Agent, the Lenders and/or the Swingline
Lender shall be entitled to receive from each Guarantor, upon demand therefor,
the sums which otherwise would have been due had such demand or acceleration
occurred.
Section 9. Reinstatement of Guarantied Obligations. If claim is ever
made on the Agent, any Lender or the Swingline Lender for repayment or recovery
of any amount or amounts received in payment or on account of any of the
Guarantied Obligations, and the Agent, such Lender or the Swingline Lender
repays all or part of said amount by reason of (a) any judgment, decree or order
of any court or administrative body of competent jurisdiction, or (b) any
settlement or compromise of any such claim effected by the Agent, such Lender or
the Swingline Lender with any such claimant (including the Borrower or a trustee
in bankruptcy for the Borrower), then and in such event each Guarantor agrees
that any such judgment, decree, order, settlement or compromise shall be binding
on it, notwithstanding any revocation hereof or the cancellation of the Credit
Agreement, any of the other Loan Documents, or any other instrument evidencing
any liability of the Borrower, and such Guarantor shall be and remain liable to
the Agent, such Lender or the Swingline Lender for the amounts so repaid or
recovered to the same extent as if such amount had never originally been paid to
the Agent, such Lender or the Swingline Lender.
Section 10. Subrogation. Upon the making by any Guarantor of any
payment hereunder for the account of the Borrower, such Guarantor shall be
subrogated to the rights of the payee against the Borrower; provided, however,
that such Guarantor shall not enforce any right or receive any payment by way of
subrogation or otherwise take any action in respect of any other claim or cause
of action such Guarantor may have against the Borrower arising by reason of any
payment or performance by such Guarantor pursuant to this Guaranty, unless and
until all of the Guarantied Obligations have been indefeasibly paid and
performed in full. If any amount shall be paid to such Guarantor on account of
or in respect of such subrogation rights or other claims or causes of action,
such Guarantor shall hold such amount in trust for the benefit of the Agent, the
Lenders and the Swingline Lender and shall forthwith pay such amount to the
Agent to be credited and applied against the Guarantied Obligations, whether
matured or unmatured, in accordance with the terms of the Credit Agreement or to
be held by the Agent as collateral security for any Guarantied Obligations
existing.
Section 11. Payments Free and Clear. All sums payable by each Guarantor
hereunder, whether of principal, interest, fees, expenses, premiums or
otherwise, shall be paid in full, without set-off or counterclaim or any
deduction or withholding whatsoever (including any Taxes), and if such Guarantor
is required by Applicable Law or by any Governmental Authority to make any such
deduction or withholding, such Guarantor shall pay to the Agent, the Lenders and
the Swingline Lender such additional amount as will result in the receipt by the
Agent, the Lenders and the Swingline Lender of the full amount payable hereunder
had such deduction or withholding not occurred or been required.
Section 12. Set-off. In addition to any rights now or hereafter granted
under any of the other Loan Documents or Applicable Law and not by way of
limitation of any such rights, each Guarantor hereby authorizes the Agent, at
any time or from time to time upon the occurrence and during the continuance of
an Event of Default, without any prior notice to such Guarantor or to any other
Person, any such notice being hereby expressly waived, to set-off and to
appropriate and to apply any and all deposits (general or special, including,
but not limited to, indebtedness evidenced by certificates of deposit, whether
matured or unmatured) and any other indebtedness at any time held or owing by
the Agent, or any affiliate of the Agent, to or for the credit or the account of
such Guarantor against and on account of any of the Guarantied Obligations,
although such obligations shall be contingent or unmatured. Each Guarantor
agrees, to the fullest extent permitted by Applicable Law, that any Participant
may exercise rights of setoff or counterclaim and other rights with respect to
its participation as fully as if such Participant were a direct creditor of such
Guarantor in the amount of such participation.
<PAGE>
Section 13. Subordination. Each Guarantor hereby expressly covenants
and agrees for the benefit of the Agent, the Lenders and the Swingline Lender
that all obligations and liabilities of the Borrower to such Guarantor of
whatever description, including without limitation, all intercompany receivables
of such Guarantor from the Borrower (collectively, the "Junior Claims") shall be
subordinate and junior in right of payment to all Guarantied Obligations. If an
Event of Default shall have occurred and be continuing, then no Guarantor shall
accept any direct or indirect payment (in cash, property, securities by setoff
or otherwise) from the Borrower on account of or in any manner in respect of any
Junior Claim until all of the Guarantied Obligations have been indefeasibly paid
in full.
Section 14. Avoidance Provisions. It is the intent of each Guarantor,
the Agent, the Lenders and the Swingline Lender that in any Proceeding, such
Guarantor's maximum obligation hereunder shall equal, but not exceed, the
maximum amount which would not otherwise cause the obligations of such Guarantor
hereunder (or any other obligations of such Guarantor to the Agent, the Lenders
and the Swingline Lender) to be avoidable or unenforceable against such
Guarantor in such Proceeding as a result of Applicable Law, including without
limitation, (a) Section 548 of the Bankruptcy Code of 1978, as amended (the
"Bankruptcy Code") and (b) any state fraudulent transfer or fraudulent
conveyance act or statute applied in such Proceeding, whether by virtue of
Section 544 of the Bankruptcy Code or otherwise. The Applicable Laws under which
the possible avoidance or unenforceability of the obligations of such Guarantor
hereunder (or any other obligations of such Guarantor to the Agent, the Lenders
and the Swingline Lender) shall be determined in any such Proceeding are
referred to as the "Avoidance Provisions". Accordingly, to the extent that the
obligations of any Guarantor hereunder would otherwise be subject to avoidance
under the Avoidance Provisions, the maximum Guarantied Obligations for which
such Guarantor shall be liable hereunder shall be reduced to that amount which,
as of the time any of the Guarantied Obligations are deemed to have been
incurred under the Avoidance Provisions, would not cause the obligations of any
Guarantor hereunder (or any other obligations of such Guarantor to the Agent,
the Lenders and the Swingline Lender), to be subject to avoidance under the
Avoidance Provisions. This Section is intended solely to preserve the rights of
the Agent, the Lenders and the Swingline Lender hereunder to the maximum extent
that would not cause the obligations of any Guarantor hereunder to be subject to
avoidance under the Avoidance Provisions, and no Guarantor or any other Person
shall have any right or claim under this Section as against the Agent, the
Lenders and the Swingline Lender that would not otherwise be available to such
Person under the Avoidance Provisions.
Section 15. Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the financial condition of the Borrower and
the other Loan Parties, and of all other circumstances bearing upon the risk of
nonpayment of any of the Guarantied Obligations and the nature, scope and extent
of the risks that such Guarantor assumes and incurs hereunder, and agrees that
none of the Agent, any Lender or the Swingline Lender shall have any duty
whatsoever to advise any Guarantor of information regarding such circumstances
or risks.
Section 16. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
SECTION 17. WAIVER OF JURY TRIAL. (a) EACH GUARANTOR, AND EACH OF THE
AGENT, THE LENDERS AND THE SWINGLINE LENDER BY ACCEPTING THE BENEFITS HEREOF,
ACKNOWLEDGE THAT ANY DISPUTE OR CONTROVERSY BETWEEN OR AMONG SUCH GUARANTOR, THE
AGENT, ANY OF THE LENDERS OR THE SWINGLINE LENDER WOULD BE BASED ON DIFFICULT
AND COMPLEX ISSUES OF LAW AND FACT. ACCORDINGLY, EACH GUARANTOR, AND EACH OF THE
AGENT, THE LENDERS AND THE SWINGLINE LENDER BY ACCEPTING THE BENEFITS HEREOF, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY WAIVES TRIAL BY JURY IN
ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY COURT OR TRIBUNAL IN WHICH
AN ACTION MAY BE COMMENCED BY OR AGAINST SUCH GUARANTOR ARISING OUT OF THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT OR BY REASON OF ANY OTHER CAUSE OR DISPUTE
WHATSOEVER BETWEEN OR AMONG SUCH GUARANTOR, THE AGENT, ANY OF THE LENDERS OR THE
SWINGLINE LENDER OF ANY KIND OR NATURE.
(b) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND
WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE
THE PAYMENT OF THE OBLIGATIONS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER
THE OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS GUARANTY.
Section 18. Loan Accounts. The Agent, each Lender and the Swingline
Lender may maintain books and accounts setting forth the amounts of principal,
interest and other sums paid and payable with respect to the Guarantied
Obligations, and in the case of any dispute relating to any of the outstanding
amount, payment or receipt of any of the Guarantied Obligations or otherwise,
the entries in such books and accounts shall constitute prima facie evidence of
the outstanding amount of such Guarantied Obligations and the amounts paid and
payable with respect thereto. The failure of the Agent, any Lender or the
Swingline Lender to maintain such books and accounts shall not in any way
relieve or discharge any Guarantor of any of its obligations hereunder.
Section 19. Waiver of Remedies. No delay or failure on the part of the
Agent, any Lender or the Swingline Lender in the exercise of any right or remedy
it may have against any Guarantor hereunder or otherwise shall operate as a
waiver thereof, and no single or partial exercise by the Agent, any Lender or
the Swingline Lender of any such right or remedy shall preclude other or further
exercise thereof or the exercise of any other such right or remedy.
<PAGE>
Section 20. Termination. This Guaranty shall remain in full force and
effect until the earlier of (a) indefeasible payment in full of the Obligations
and the termination or cancellation of the Credit Agreement and (b) the release
by the Agent of each Guarantor herefrom pursuant to Section 4.2 of the Credit
Agreement.
Section 21. Successors and Assigns. Each reference herein to the Agent,
the Lenders or the Swingline Lender shall be deemed to include such Person's
respective successors and assigns (including, but not limited to, any holder of
the Guarantied Obligations) in whose favor the provisions of this Guaranty also
shall inure, and each reference herein to each Guarantor shall be deemed to
include such Guarantor's successors and assigns, upon whom this Guaranty also
shall be binding. The Lenders and the Swingline Lender may, in accordance with
the applicable provisions of the Credit Agreement, assign, transfer or sell any
Guarantied Obligations, or grant or sell participation in any Guarantied
Obligations, to any Person without the consent of, or notice to, any Guarantor
and without releasing, discharging or modifying any Guarantor's obligations
hereunder. Each Guarantor hereby consents to the delivery by the Agent, any
Lender or the Swingline Lender to any Assignee or Participant (or any
prospective Assignee or Participant) of any financial or other information
regarding the Borrower or any Guarantor. No Guarantor may assign or transfer its
obligations hereunder to any Person.
Section 22. Joint and Several Obligations. the obligationS of the
Guarantors HEREUNDER SHALL BE joint and several, and ACCORDINGLY, each Guarantor
CONFIRMS THAT IT is liable for the full amount of the "GUARANTiED Obligations"
AND ALL OF THE OBLIGATIONS AND LIABILITIES OF EACH OF THE OTHER gUARANTORS
HEREUNDER.
Section 23. Amendments. This Guaranty may not be amended except in
writing signed by the Agent and each Guarantor.
Section 24. Payments. All payments to be made by any Guarantor pursuant
to this Guaranty shall be made in Dollars, in immediately available funds to the
Agent at its Lending Office, not later than 11:00 a.m., on the date one Business
Day after demand therefor.
Section 25. Notices. All notices, requests and other communications
hereunder shall be in writing (including facsimile transmission or similar
writing) and shall be given (a) to each Guarantor at its address set forth below
its signature hereto, (b) to the Agent, any Lender or the Swingline Lender at
its address for notices provided for in the Credit Agreement, or (c) as to each
such party at such other address as such party shall designate in a written
notice to the other parties. Each such notice, request or other communication
shall be effective (i) if mailed, when received; (ii) if telecopied, when
transmitted; or (iii) if hand delivered, when delivered; provided, however, that
any notice of a change of address for notices shall not be effective until
received.
Section 26. Severability. In case any provision of this Guaranty shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 27. Headings. Section headings used in this Guaranty are for
convenience only and shall not affect the construction of this Guaranty.
Section 28. Definitions. (a) For the purposes of this Guaranty:
"Proceeding" means any of the following: (i) a voluntary or involuntary
case concerning any Guarantor shall be commenced under the Bankruptcy Code of
1978, as amended; (ii) a custodian (as defined in such Bankruptcy Code or any
other applicable bankruptcy laws) is appointed for, or takes charge of, all or
any substantial part of the property of any Guarantor; (iii) any other
proceeding under any Applicable Law, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up or composition for adjustment
of debts, whether now or hereafter in effect, is commenced relating to any
Guarantor; (iv) any Guarantor is adjudicated insolvent or bankrupt; (v) any
order of relief or other order approving any such case or proceeding is entered
by a court of competent jurisdiction; (vi) any Guarantor makes a general
assignment for the benefit of creditors; (vii) any Guarantor shall fail to pay,
or shall state that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; (viii) any Guarantor shall call a meeting of its
creditors with a view to arranging a composition or adjustment of its debts;
(ix) any Guarantor shall by any act or failure to act indicate its consent to,
approval of or acquiescence in any of the foregoing; or (x) any corporate action
shall be taken by any Guarantor for the purpose of effecting any of the
foregoing.
(b) Terms not otherwise defined herein are used herein with the
respective meanings given them in the Credit Agreement.
<PAGE>
Section 29. NO NOVATION. THE PARTIES HERETO HAVE ENTERED INTO THIS
GUARANTY SOLELY TO AMEND AND RESTATE THE TERMS OF THE EXISTING GUARANTY. THE
PARTIES DO NOT INTEND THIS AGREEMENT, NOR THE TRANSACTIONS CONTEMPLATED HEREBY,
TO BE, AND THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY SHALL NOT BE
CONSTRUED TO BE, A NOVATION OR WAIVER OF ANY OF THE OBLIGATIONS OWING BY ANY
EXISTING GUARANTOR UNDER OR IN CONNECTION WITH THE EXISTING GUARANTY.
[Signatures on Next Page]
<PAGE>
IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this
Guaranty as of the date and year first written above.
[GUARANTOR]
[GUARANTOR]
By:
Name:
Title:
Address for Notices for all Guarantors:
c/o Regency Realty Corporation
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
Attention: Bruce Johnson
Telecopier: (904) 634-3428
Telephone: (904) 356-7000
<PAGE>
ANNEX I
FORM OF ACCESSION AGREEMENT
THIS ACCESSION AGREEMENT dated as of ____________, ____, executed and
delivered by ______________________, a _____________ (the "New Guarantor") in
favor of (a) WELLS FARGO BANK, NATIONAL ASSOCIATION, in its capacity as Agent
(the "Agent") for the Lenders under that certain Amended and Restated Credit
Agreement dated as of February 26, 1999 (as the same may be amended, restated,
supplemented or otherwise modified from time to time in accordance with its
terms, the "Credit Agreement"), by and among Regency Centers, L.P., a Delaware
limited partnership (the "Borrower"), Regency Realty Corporation, a Florida
corporation (the "Parent"), the financial institutions initially party thereto
and their assignees under Section 12.8 thereof (the "Lenders"), the Agent, and
the Syndication Agent, Documentation Agent and Managing Agents named therein and
(b) the Lenders and the Swingline Lender.
WHEREAS, pursuant to the Credit Agreement, the Agent, the Lenders and
the Swingline Lender have agreed to make available to the Borrower certain
financial accommodations on the terms and conditions set forth in the Credit
Agreement;
WHEREAS, the New Guarantor is owned or controlled by the Borrower, the
Parent or is otherwise an Affiliate of the Borrower or the Parent;
WHEREAS, the Borrower, the New Guarantor, the other Subsidiaries of the
Borrower and the Parent, though separate legal entities, are mutually dependent
on each other in the conduct of their respective businesses as an integrated
operation and have determined it to be in their mutual best interests to obtain
financing from the Agent, the Lenders and the Swingline Lender through their
collective efforts;
WHEREAS, the New Guarantor acknowledges that it will receive direct and
indirect benefits from the Agent, the Lenders and the Swingline Lenders making
such financial accommodations available to the Borrower under the Credit
Agreement and, accordingly, the New Guarantor is willing to guarantee the
Borrower's obligations to the Agent, the Lenders and the Swingline Lenders on
the terms and conditions contained herein; and
WHEREAS, the New Guarantor's execution and delivery of this Agreement
is a condition to the Agent, the Lenders and the Swingline Lenders continuing to
make such financial accommodations to the Borrower.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the New Guarantor, the New
Guarantor agrees as follows:
Section 1. Accession to Guaranty. The New Guarantor hereby agrees that
it is a "Guarantor" under that certain Guaranty dated as of February 26, 1999
(the "Guaranty"), made by each Subsidiary a party thereto in favor of the Agent,
the Lenders and the Swingline Lender and assumes all obligations of a
"Guarantor" thereunder, all as if the New Guarantor had been an original
signatory to the Guaranty. Without limiting the generality of the foregoing, the
New Guarantor hereby:
(a) irrevocably and unconditionally guarantees the due and punctual
payment and performance when due, whether at stated maturity, by acceleration or
otherwise, of all Guarantied Obligations;
(b) makes to the Agent, the Lenders and the Swingline Lender as of the
date hereof each of the representations and warranties contained in Section 5 of
the Guaranty and agrees to be bound by each of the covenants contained in
Section 6 of the Guaranty; and
(c) consents and agrees to each provision set forth in the Guaranty.
SECTION 2. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF GEORGIA.
Section 3. Definitions.Capitalized terms used herein and not otherwise
defined herein shall have their respective defined meanings given them in the
Credit Agreement.
[Signatures on Next Page]
<PAGE>
IN WITNESS WHEREOF, the New Guarantor has caused this Accession
Agreement to be duly executed and delivered under seal by its duly authorized
officers as of the date first written above.
[NEW GUARANTOR]
By:_________________________________________
Name:_______________________________________
Title:______________________________________
(CORPORATE SEAL)
Address for Notices:
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
Attention: Bruce Johnson
Telecopier: (904) 634-3428
Telephone: (904) 356-7000
Accepted:
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Agent
By: ________________________
Name:__________________
Title:_________________
<PAGE>
P-2
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT P
FORM OF UNENCUMBERED POOL CERTIFICATE
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999 (as amended, supplemented or restated from time to
time, the "Credit Agreement") among Regency Centers, L.P., Regency Realty
Corporation, the financial institutions party thereto and their assignees under
Section 12.8 thereof (the "Lenders"), Wells Fargo Bank, National Association, as
Agent (the "Agent"), and the Syndication Agent, Documentation Agent and Managing
Agents named therein. Capitalized terms used herein, and not otherwise defined
herein, have their respective meanings given to them in the Credit Agreement.
Pursuant to Section [4.1(b)(ii)][4.1(c)(x)][8.1] of the Credit
Agreement, the undersigned hereby certifies to the Lenders and the Agent that
Schedule 1 attached hereto accurately and completely sets forth, as of the date
hereof: (i) the Net Operating Income of each Unencumbered Pool Property for the
fiscal quarter most recently ended, (ii) the Unencumbered Pool Value, (iii) all
Unsecured Liabilities (other than the Loans) of the Parent and its Subsidiaries
on a consolidated basis, (iv) the aggregate amount of the Commitments, (v) the
Maximum Loan Availability; (vi) the percentage amount of the Unencumbered Pool
Value attributable to all Unencumbered Pool Properties which are owned by
Subsidiaries of the Borrower that are not Wholly Owned Subsidiaries (which
percentage amount shall not exceed 20%); and (vii) the weighted average
Occupancy Rate of all Unencumbered Pool Properties calculated in accordance with
Section 4.3 of the Credit Agreement.*
[For certificates delivered pursuant to Sections 4.1(b)(ii) and
4.1(c)(x) only For each Property submitted as an Eligible Property pursuant to
Section [4.1(b)(ii)][ 4.1(c)(x)] on the date hereof Schedule 1 attached hereto
also sets forth:
(I) the Occupancy Rate of such Property; and
[for certificates delivered pursuant to Section 4.1(b)(ii)
only (II) the percentage amount of the total Unencumbered Pool Value
attributable to each Unencumbered Pool Property (which percentage
amount shall not exceed 5%)]];
The undersigned further certifies to the Agent, the Lenders and the
Swingline Lender that as of the date hereof (a) no Default or Event of Default
has occurred and is continuing, and (b) the representations and warranties of
the Borrower contained in the Credit Agreement and the other Loan Documents are
true and correct in all material respects, except to the extent such
representations or warranties specifically relate to an earlier date or such
representations or warranties become untrue by reason of events or conditions
otherwise permitted under the Credit Agreement or the other Loan Documents.
IN WITNESS WHEREOF, the undersigned has signed this Unencumbered Pool
Certificate on and as of ___________, 19__.
- -------------------------------------------------------------------------------
Name: __________________________________________
Title: Chief Financial Officer
<PAGE>
Q-2
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT Q
FORM OF COMPLIANCE CERTIFICATE
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999 (as amended, supplemented or restated from time to
time, the "Credit Agreement") among Regency Centers, L.P. (the "Borrower"),
Regency Realty Corporation, the financial institutions party thereto and their
assignees under Section 12.8 thereof (the "Lenders"), Wells Fargo Bank, National
Association, as Agent (the "Agent"), and the Syndication Agent, Documentation
Agent and Managing Agents named therein. Capitalized terms used herein, and not
otherwise defined herein, have their respective meanings given to them in the
Credit Agreement.
Pursuant to Section 8.1(c) of the Credit Agreement, the undersigned
hereby certifies to the Agent, the Lenders and the Swingline Lender that:
1._______(a) The undersigned has reviewed the terms of the Credit
Agreement and has made a review of the transactions, financial condition and
other affairs of the Parent, the Borrower and each other Guarantor as of, and
during the relevant accounting period ending on, _______________, 19__ and (b)
such review has not disclosed the existence during such accounting period, and
the undersigned does not have knowledge of the existence, as of the date hereof,
of any condition or event constituting a Default or Event of Default [except as
set forth on Attachment A hereto, which accurately describes the nature of the
conditions(s) or event(s) that constitute (a) Default(s) or (an) Event(s) of
Default and the actions which the Borrower (is taking)(is planning to take) with
respect to such condition(s) or event(s)].
2._______Schedule 1 attached hereto accurately and completely sets
forth the calculations required to establish compliance with Sections 8.12 and
8.23 and each of the Sections contained in Article IX of the Credit Agreement on
date of the financial statements for the accounting period set forth above.
3._______The aggregate outstanding principal amount of the Loans as of
the date hereof is equal to or less than the Maximum Loan Availability and the
aggregate outstanding principal amount of the Bid Rate Loans as of the date
hereof is equal to or less than $250,000,000.
4._______(a) No Default or Event of Default has occurred and is
continuing, and (b) the representations and warranties of the Borrower contained
in the Credit Agreement and the other Loan Documents are true and correct in all
material respects, except to the extent such representations or warranties
specifically relate to an earlier date or such representations or warranties
become untrue by reason of events or conditions otherwise permitted under the
Credit Agreement or the other Loan Documents.
IN WITNESS WHEREOF, the undersigned has signed this Unencumbered Pool
Certificate on and as of ___________, 19__.
- -------------------------------------------------------------------------------
Name: __________________________________________
Title: Chief Financial Officer
<PAGE>
R-4
ATL01/10402478v5 A&B Draft 02/19/99
EXHIBIT R
FORM OF PROPERTY CERTIFICATE
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999 (as amended, supplemented, restated or otherwise
modified from time to time, the "Credit Agreement") among Regency Centers, L.P.
(the "Borrower"), Regency Realty Corporation, the financial institutions party
thereto and their assignees under Section 12.8 thereof (the "Lenders"), Wells
Fargo Bank, National Association, as Agent (the "Agent"), and the Syndication
Agent, Documentation Agent and Managing Agents named therein. Capitalized terms
used herein, and not otherwise defined herein, have their respective meanings
given to them in the Credit Agreement.
Pursuant to Section 4.1(b)(iv) of the Credit Agreement, the undersigned
hereby certifies to the Agent and the Lenders, with respect to each of the
properties listed on Schedule 1 attached hereto, that:
(a) such property is improved with one or more operating retail shopping
centers and includes a grocery store as an anchor tenant.
(b) such property is owned in fee simple by the entity designated as the
owner of such property on Schedule 1. Schedule 1 sets forth the capital
structure of each such owner if such owner is not the Borrower.
(c) (i) such Property is owned in fee simple by only the Borrower or a
Subsidiary of the Borrower;
(ii) neither such Property, nor any interest of the Borrower or such
Subsidiary therein, is subject to any Lien other than Permitted Liens or
to any agreement (other than this Agreement or any other Loan Document)
that prohibits the creation of any Lien thereon as security for
Indebtedness; (iii) if such Property is owned by a Subsidiary of the
Borrower, (A) none of the Borrower's direct or indirect ownership
interest in such Subsidiary is subject to any Lien other than Permitted
Liens or to any agreement (other than this Agreement or any other Loan
Document) that prohibits the creation of any Lien thereon as security
for Indebtedness and (B) the Borrower directly, or indirectly through a
Subsidiary, has the right to take the following actions without the need
to obtain the consent of any Person: (I) to create Lien on such Property
as security for Indebtedness of the Borrower or such Subsidiary, as
applicable and (II) to sell, transfer or otherwise dispose of such
Property; (iv) such Property is not a Development Property and has an
Occupancy Rate which has remained stabilized; (v) such Property is free
of all structural defects, title defects, environmental conditions or
other adverse matters except for defects, conditions or matters
individually or collectively which are not material to the profitable
operation of such Property; (vi) such Property is not subject to a
ground lease (other than a lease of land on such Property by the
Borrower or such Subsidiary to a Person which is not an Affiliate) and
(vii) such Property is improved with a shopping center with a shopping
center or a stand-alone building containing a grocery store occupied by
a Credit Tenant.
(d) the value of the Property (when calculated in accordance with the
definition of Unencumbered Pool Value), will not exceed 5% of the
Unencumbered Pool Value (determined as if such Property were an
Unencumbered Pool Property).
(e) such Property is located in the United States.
(f) (i) (A) Borrower has obtained, with respect to such property a "Phase
I" environmental assessment, prepared as of the date indicated
on Schedule 1, by the consultant identified on Schedule 1;
(B) such consultant is of good repute within the region
in which such property is located and is believed by
Borrower to be competent;
(C) Borrower has reviewed such assessment and believes it
reasonable to rely upon such assessment; and
(D) such assessment does not (1) identify any
contamination or potential contamination that has
resulted in, or that could reasonably be anticipated
to result in a materially adverse effect upon the
condition, market value, Net Operating Income or
prospects of such property, (2) recommend that any
further material investigation be undertaken or (3)
identify any potential or actual recognized
environmental condition; and
<PAGE>
(ii) (A) Borrower has obtained, with respect to such
property a structural/physical report, prepared as of
the date indicated on Schedule 1, by the consultant
identified on Schedule 1;
(B) such consultant is of good repute within the region
in which such property is located and is believed by
Borrower to be competent;
(C) Borrower has reviewed such report and believes it
reasonable to rely upon such report; and
(D) such report does not identify any material defect in
construction or physical condition of the property,
material variance from any available plans and
specifications for the property or material violation
of applicable law, or other item of material concern
with respect to the structural integrity or physical
condition of the property.
(g) the value of all Properties which are owned by Subsidiaries that are
not Wholly Owned Subsidiaries, including the Property described herein,
if applicable (when calculated in accordance with the definition of
Unencumbered Pool Value), does not exceed 20% of the Unencumbered Pool
Value (determined as if such Property were an Unencumbered Pool
Property). Schedule 1 sets forth the percentage of the Unencumbered
Pool Value attributable to Unencumbered Pool Properties which are owned
by Subsidiaries that are not Wholly Owned Subsidiaries (determined as
if such Property were an Unencumbered Pool Property).
IN WITNESS WHEREOF, the undersigned has signed this Property
Certificate on and as of ___________, 19__.
- -------------------------------------------------------------------------------
Name: __________________________________________
Title: Chief Financial Officer
<PAGE>
SCHEDULE 1
TO PROPERTY CERTIFICATE
A. Property Description [For each Property]
1. Property Name:
2. Owner: [If not Borrower, set forth capital structure of the owner]
3. Environmental Information:
a._______Date Phase 1 prepared: ___________________________.
b._______The Phase 1 was prepared by _________________________.
4. Structural/Physical Report:
a. _______Date Structural/Physical Report Prepared: __________________.
b. The Structural/Physical Report was prepared by ______________________.
5. Percentage of Unencumbered Pool Value Attributable to Unencumbered Pool
Properties owned by Subsidiaries which are not Wholly Owned
Subsidiaries: ____%
1 Minimum amount of $15,000,000 or larger multiple of $1,000,000.
2 Insert either Absolute Rate (for Absolute Rate Loan) or LIBOR Margin
(for LIBOR Margin Loan).
3 Must be 30, 60 or 90 days.
1 Minimum amount of $5,000,000 or larger multiple of $1,000,000.
2 Insert either Absolute Rate (for Absolute Rate Loan) or LIBOR Margin
(for LIBOR Margin Loan).
3 Must be 30, 60 or 90 days.
* When the Unencumbered Pool Certificate is delivered in connection with
Sections 4.1(b)(ii) and 4.1(c)(x) of the Credit Agreement the
calculations set forth in items (i) through (v) should be determined on
a pro forma basis assuming that the Eligible Property being submitted
as an Unencumbered Pool Property is accepted as an Unencumbered Pool
Property.
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT is made as of the ____ day of August, 1998, between PP
CENTER LIMITED, an Ohio limited liability company ("Seller"), and RRC
ACQUISITIONS TWO, INC., a Florida corporation, its designees, successors and
assigns ("Buyer").
Background
Buyer wishes to purchase a shopping center in the City of Columbus,
State of Ohio, owned by Seller, known as Park Place Shopping Center (the
"Shopping Center");
Seller wishes to sell the Shopping Center to Buyer;
In consideration of the mutual agreements herein, and other good and
valuable consideration, the receipt of which is hereby acknowledged, Seller
agrees to sell and Buyer agrees to purchase the Property (as hereinafter
defined) on the following terms and conditions:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
1.1 Agreement means this instrument as it may be amended from time to
time.
1.2 Allocation Date means the close of business on the day immediately
prior to the Closing Date.
1.3 Audit Representation Letter means the form of Audit Representation
Letter attached hereto as Exhibit .
1.4 Buyer means the party identified as Buyer on the initial page
hereof.
1.5 Closing means generally the execution and delivery of those
documents and funds necessary to effect the sale of the
Property by Seller to Buyer.
1.6 Closing Date means the date on which the Closing occurs.
1.7 Contracts means all service contracts, agreements or other
instruments to be assigned by Seller to Buyer at Closing.
1.8 Day means a calendar day, whether or not the term is capitalized.
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1.9 Earnest Money Deposit means the deposit delivered by Buyer to
Escrow Agent prior to the Closing under Sections and of this Agreement, together
with the earnings thereon, if any.
1.10 Effective Date means the date which is the later of the date of
execution by the last of Buyer or Seller to execute this Agreement and transmit
a copy of the fully executed Agreement to the other, or (b) receipt by the Buyer
of documents asterisked in Exhibit .
1.11 Environmental Claim means any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Law, (b) in connection with any
Hazardous Material or actual or alleged Hazardous Material Activity, (c) from
any abatement, removal, remedial, corrective, or other response action in
connection with a Hazardous Material, Environmental Law or other order of a
governmental authority or (d) from any actual or alleged damage, injury, threat,
or harm to health, safety, natural resources, or the environment.
1.12 Environmental Law means any current legal requirement in effect at
the Closing Date pertaining to (a) the protection of health, safety, and the
indoor or outdoor environment, (b) the conservation, management, protection or
use of natural resources and wildlife, (c) the protection or use of source water
and groundwater, (d) the management, manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation or handling of, or exposure to, any
Hazardous Material or (e) pollution (including any Release to air, land, surface
water, and groundwater); and includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 USC ss.ss.9601 et
seq., Solid Waste Disposal Act, as amended by the Resource Conservation Act of
1976 and Hazardous and Solid Waste Amendments of 1984, 42 USC ss.ss.6901 et
seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 USC ss.ss.1251 et seq., Clean Air Act of 1966, as amended, 42 USC
ss.ss.7401 et seq., Toxic Substances Control Act of 1976, 15 USC ss.ss.2601 et
seq., Hazardous Materials Transportation Act, 49 USC App. ss.ss.1801,
Occupational Safety and Health Act of 1970, as amended, 29 USC ss.ss.651 et
seq., Oil Pollution Act of 1990, 33 USC ss.ss.2701 et seq., Emergency Planning
and Community Right-to-Know Act of 1986, 42 USC App. ss.ss.11001 et seq.,
National Environmental Policy Act of 1969, 42 USC ss.ss.4321 et seq., Safe
Drinking Water Act of 1974, as amended by 42 USC ss.ss.300(f) et seq., and any
similar, implementing or successor law, any amendment, rule, regulation, order
or directive, issued thereunder.
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1.13 Escrow Agent means Ohio Title Corporation, as agent for First
American Title Insurance Company, 115 W. Main Street, Columbus, Ohio 43215;
Telephone 614/221-7701; Facsimile 614/221-8954, or any successor Escrow Agent.
1.14 Governmental Approval means any permit, license, variance,
certificate, consent, letter, clearance, closure, exemption, decision, action or
approval of a governmental authority.
1.15 Hazardous Material means any asbestos, petroleum, petroleum
product, drycleaning solvent or chemical, biological or medical waste, "sharps"
or any other hazardous or toxic substance as defined in or regulated by any
Environmental Law in effect at the pertinent date or dates.
1.16 Hazardous Material Activity means any activity, event, or
occurrence at or prior to the Closing Date involving a Hazardous Material,
including, without limitation, the manufacture, possession, presence, use,
generation, transportation, treatment, storage, disposal, Release, threatened
Release, abatement, removal, remediation, handling or corrective or response
action to any Hazardous Material.
1.17 Improvements means all buildings, structures or other improvements
situated on the Real Property.
1.18 Inspection Period means the period of time which expires at
midnight on the fortieth (40th) day after the later of the (a) date of execution
by the last of Buyer or Seller to execute this Agreement and transmit a copy of
the fully executed Agreement to the other, or (b) receipt by the Buyer of
documents asterisked in Exhibit . If such expiration date is a weekend or
national holiday, the Inspection Period shall expire at midnight on the next
immediately succeeding business day.
1.19 Leases means all leases and other occupancy agreements permitting
persons to lease or occupy all or a portion of the Property.
1.20 Materials means all plans, drawings, specifications, soil test
reports, environmental reports, market studies, surveys, and similar
documentation, if any, owned by or in the possession of Seller with respect to
the Property, Improvements and any proposed improvements to the Property, which
Seller may lawfully transfer to Buyer except proprietary, confidential
Materials, and except that, as to financial and other records, Materials shall
include only photostatic copies.
1.21 Partnership means Regency Centers, L.P., a Delaware limited
partnership, of which Regency is the sole general partner.
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1.22 Partnership Agreement means the Amended and Restated Partnership
Agreement of the Partnership, a copy of which is attached hereto as Exhibit
1.23 Partnership Units means units representing limited partnership
interests in the Partnership.
1.24 Permitted Exceptions means only the following interests, liens and
encumbrances:
(a) Liens for ad valorem taxes not payable on or before Closing;
(b) The Surviving Mortgage and related loan documents;
(c) Rights of tenants under Leases;
(d) Zoning ordinances; and
(e) Other matters determined by Buyer to be acceptable.
1.25 Personal Property means all (a) sprinkler, plumbing, heating,
air-conditioning, electric power or lighting, incinerating, ventilating and
cooling systems, with each of their respective appurtenant furnaces, boilers,
engines, motors, dynamos, radiators, pipes, wiring and other apparatus,
equipment and fixtures, elevators, partitions, fire prevention and extinguishing
systems located in or on the Improvements, (b) all Materials, and (c) all other
personal property used in connection with the Improvements, provided the same
are now owned or are acquired by Seller prior to the Closing.
1.26 Property means collectively the Real Property, the Improvements
and the Personal Property.
1.27 Prorated means the allocation of items of expense or income
between Buyer and Seller based upon that percentage of the time period as to
which such item of expense or income relates which has expired as of the date at
which the proration is to be made.
1.28 Purchase Price means the consideration agreed to be paid by Buyer
to Seller for the purchase of the Property as set forth in Section (subject to
adjustments as provided herein).
1.29 Real Property means the lands more particularly described on
Exhibit , together with all easements, licenses, privileges, rights of way and
other appurtenances pertaining to or accruing to the benefit of such lands.
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1.30 Redemption Agreement means the form of Redemption Agreement
attached hereto as Exhibit .
1.31 Regency means Regency Realty Corporation, a Florida corporation.
1.32 Release means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the indoor or outdoor environment, including, without limitation, the
abandonment or discarding of barrels, drums, containers, tanks, and other
receptacles containing or previously containing any Hazardous Material at or
prior to the Closing Date.
1.33 Rent Roll means the list of Leases attached hereto as Exhibit,
identifying with particularity the space leased by each tenant, the term
(including extension options), square footage and applicable rent,common area
maintenance, tax and other reimbursements, security deposits and similar data.
1.34 Seller means the party identified as Seller on the initial page
hereof.
1.35 Seller Financial Statements means the unaudited balance sheets and
statements of income, cash flows and changes in financial positions prepared by
Seller for the Property, as of and for the two (2) calendar years next preceding
the date of this Agreement and all monthly reports of income, expense and cash
flow prepared by Seller for the Property, which shall be consistent with past
practice, for any period beginning after the latest of such calendar years, and
ending prior to Closing.
1.36 Shopping Center means the Shopping Center identified on the
initial page hereof.
1.37 Survey means a map of a stake survey of the Real Property which
shall comply with Minimum Standard Detail Requirements for ALTA/ACSM Land Title
Surveys, jointly established and adopted by ALTA and ACSM in 1992, and includes
items 1, 2, 3, 4, 6, 7, 8, 9, 10 and 11 of Table "A" thereof, which meets the
accuracy standards (as adopted by ALTA and ACSM and in effect on the date of the
Survey) of an urban survey, which is dated not earlier than thirty (30) days
prior to the Closing, and which is certified to Buyer, Seller, the Title
Insurance company providing Title Insurance to Buyer and the holder of the
Surviving Mortgage.
1.38 Surviving Mortgage. means a mortgage or other instrument dated
September 26, 1995, from Seller to USG Annuity and Life Company with a principal
balance of $7,570,482.74 as of July 1, 1998, bearing interest at eight percent
(8.0%) per annum, amortizing over a twenty-five (25) year period, and maturing
on October 1, 2002.
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1.39 Tenant Estoppel Letter means a letter or other certificate from a
tenant certifying as to certain matters regarding such tenant's Lease, in
substantially the same form as attached hereto as Exhibit , or in the case of
national or regional "credit" tenants identified as such on the Rent Roll, the
form customarily used by such tenant provided the information disclosed is
acceptable to Buyer.
1.40 Title Defect means any exception in the Title Insurance Commitment
or any matter disclosed by the Survey, other than a Permitted Exception.
1.41 Title Insurance means an ALTA Form B Owners Policy of Title
Insurance for the full Purchase Price insuring marketable title in Buyer in fee
simple, subject only to the Permitted Exceptions, issued by a title insurer
acceptable to Buyer.
1.42 Title Insurance Commitment means a binder whereby the title
insurer agrees to issue the Title Insurance to Buyer.
1.43 Transaction Documents means this Agreement, the deed conveying the
Property, the assignment of leases, the bill of sale conveying the Personal
Property and all other documents required or appropriate in connection with the
transactions contemplated hereby.
2. PURCHASE PRICE AND PAYMENT
2.1 Purchase Price; Payment.
(a) Purchase Price and Terms. The total Purchase Price for the
Property (subject to adjustment as provided herein) shall be $10,750,000, less
the outstanding principal balance of the Surviving Mortgage as of the Allocation
Date. The Purchase Price shall be payable in cash at Closing, or alternatively
as provided in Section below, Seller may elect to contribute the Property to the
Partnership in exchange for Partnership Units therein.
(b) Adjustments to the Purchase Price. The Purchase Price
shall be adjusted as of the Closing Date by:
(1) prorating the Closing year's real and tangible personal
property taxes as of the Allocation Date (if the amount of the current year's
property taxes are not available, such taxes will be prorated based upon the
prior year's assessment);
(2) prorating as of the Allocation Date cash receipts and expenditures for
the Shopping Center, interest on the debt secured by the Surviving Mortgage
and other items customarily prorated in transactions of this sort; and
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(3) subtracting the amount of tenant security deposits held by Seller the
obligations for which are to be assumed by Buyer, prepaid rents from tenants
under the Leases, and credit balances, if any, of any tenants. Any rents,
percentage rents or tenant reimbursements payable by tenants after the
Allocation Date but applicable to periods on or prior to the Allocation Date
shall be remitted to Seller by Buyer within thirty (30) days after receipt, less
any reasonable expenses of the Property actually incurred on or prior to the
Allocation Date but discovered by Buyer after Closing. Buyer shall have no
obligation to collect delinquencies, but should Buyer collect any delinquent
rents or other sums which cover periods prior to the Allocation Date and for
which Seller have received no proration or credit, Buyer shall remit same to
Seller within thirty (30) days after receipt, less any reasonable costs of
collection. Buyer will not interfere in Seller's efforts to collect sums due it
prior to the Closing. Seller will remit to Buyer promptly after receipt any
rents, percentage rents or tenant reimbursements received by Seller after
Closing which are attributable to periods occurring after the Allocation Date.
Undesignated receipts after Closing of either Buyer or Seller from tenants in
the Shopping Center shall be applied first to then current rents and
reimbursements for such tenant(s), then to delinquent rents and reimbursements
attributable to post-Allocation Date periods, and then to pre-Allocation Date
periods. Utility deposits and similar deposits made by Seller shall be
transferred to Buyer, who shall reimburse Seller therefor, or Buyer shall make
its own deposits and Seller shall obtain refunds of the deposits made by Seller,
as Buyer and Seller shall agree prior to Closing.
2.2 Earnest Money Deposit. An Earnest Money Deposit in the amount of
$25,000 shall be delivered to Escrow Agent within three (3) days after the date
of execution by the last of Buyer or Seller to execute and transmit a copy of
this Agreement to the other. This Agreement may be terminated by Seller if the
Earnest Money Deposit is not received by Escrow Agent by such deadline. The
Earnest Money Deposit paid by Buyer shall be deposited by Escrow Agent in an
interest bearing account at First Union National Bank, and shall be held and
disbursed by Escrow Agent as specifically provided in this Agreement. The
Earnest Money Deposit shall be applied to the Purchase Price at the Closing.
2.3 Closing Costs.
(a) Seller shall pay:
(1) Transfer taxes imposed upon the transactions contemplated
hereby;
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(2) Cost of satisfying any liens on the Property other than
the Surviving Mortgage;
(3) Cost of title insurance and the costs, if any, of curing
title defects and recording any curative title documents;
(4) Transfer fees, assumption charges and other costs and fees
charged by the holder of the Surviving Mortgage, if any;
(5) Seller's attorneys' fees relating to the sale of the
Property.
(b) Buyer shall pay:
(1) Cost of Buyer's due diligence inspection;
(2) Costs of the Phase 1 environmental site assessment to be
obtained by Buyer;
(3) Cost of the Survey;
(4) Brokerage commission to R.A. Kennedy and Associates/Mark
Kennedy in the amount of $50,000.00, if and when the
transaction closes; and
(5) Cost of recording the deed; and
(6) Buyer's attorneys' fees.
2.4 Contribution Alternative. As an alternative to selling the Property
to Buyer, and if Buyer does not elect to terminate during the Inspection Period,
Seller, by notice to Buyer given within ten (10) business days after the end of
the Inspection Period, may elect to contribute the Property to the Partnership
in exchange for Partnership Units, as hereinafter provided. In such event the
Purchase Price for the Property shall be payable by exchanging for the Property,
Partnership Units in the Partnership having an aggregate value equal to the
Purchase Price, adjusted by the allocations, credits, charges and adjustments
provided in this Agreement, in which event there shall be no credit against the
Purchase Price for the Earnest Money Deposit, which shall be returned to Buyer
at Closing. The number of Partnership Units to be issued to Seller shall be
established by dividing such adjusted Purchase Price by the average closing
price of a share of the common stock of Regency over the twenty trading days
immediately preceding the fifth (5th) trading day prior to the Closing Date on
the New York Stock Exchange (or the exchange or quotation system on which the
common stock of Regency is then listed for trading). Under the terms of the
Redemption Agreement Seller, as a limited partner of the Partnership, shall have
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the right to require Regency to acquire all of its Partnership Units in the
Partnership (i) in exchange for common stock of Regency on the basis of one
Regency share for each Partnership Unit exchanged (the "Put Price"),
provided that such shares shall have such restrictions as are agreed upon in
the Partnership Agreement and in the Redemption Agreement, and further
provided such rights shall not be exercised in a manner or at any time
which would be or cause a violation of any law or regulation governing the sale
or disposition of securities, including without limitation Rule 144 or (ii)
in exchange for cash, as provided in the Redemption Agreement. If such exercise
results in a fractional share, Regency shall pay cash in lieu thereof in an
amount equal to such fraction multiplied by the average closing price of a
Regency share during the twenty (20) business days preceding the date of
Seller's notice. Regency or Seller may elect to pay or receive the Put Price
in cash instead of shares with respect to all or any portion of the Partner-
ship Units to be exchanged. The Redemption Agreement shall also provide that:
(a) Partnership and Seller agree that for federal income tax
purposes, they will report the transfer of the Property to the Partnership as a
contribution to the Partnership pursuant to Section 721 of the Internal Revenue
Code of 1986 (the "Code") for consideration consisting solely of Partnership
Units;
(b) For purposes of Section 704(c) of the Internal Revenue
Code of 1986, as amended (the "Code"), the Partnership will use the "traditional
method" described in Treasury Regulation Section 1.704-3(b) with respect to the
Property or any interest therein;
(c) So long as the Partnership Units held by the original
limited partners executing the Redemption Agreement (the "L.P.'s"), which L.P.'s
are intended to be Tod J. Ortlip and Jay Ortlip, constitute no less than fifty
percent (50%) in the aggregate of the Partnership Units originally issued to
such L.P.'s, until the maturity date of the Surviving Mortgage, the Partnership
will not take any action which will cause a reduction in the amount of
Partnership liabilities allocable to the L.P.'s pursuant to Treas. Reg. ss.
1.752-3(a)(2), except for scheduled payments of debt service; and
(d) So long as the Partnership Units held by the L.P.'s
constitute no less than fifty percent (50%) in the aggregate of the Partnership
Units originally issued to such L.P.'s, until the fifth anniversary of the
Closing, the Partnership shall not voluntarily dispose of the Property except in
a Section 1031 transaction under the Internal Revenue Code (or in a similar
transaction that would not be taxable to such L.P.'s for federal income tax
purposes).
(e) So long as the Partnership Units held by the L.P.'s
constitute no less than fifty percent (50%) in the aggregate of the Partnership
Units originally issued
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to such L.P.'s, from and after the maturity date of the Surviving Mortgage (or
at any earlier time with the consent of the general partner, which consent shall
not be unreasonably withheld), the general partner, if requested by one of the
L.P.'s shall cooperate with the L.P.'s to allow the L.P.'s to timely incur the
"economic risk of loss" for purposes of Section 752 of the Code (the
"guarantee") with respect to the bottom portion of any indebtedness of the
Partnership (such indebtedness to be reasonably selected by the general
partner), provided that the bottom portion guaranteed does not constitute more
than thirty-five percent (35%) of the then outstanding principal balance of the
indebtedness. Such guarantee shall be limited to a maximum aggregate balance of
$_______________ (the "Amount") at any one time. The guarantee shall be joint
and several as to the L.P.'s electing to execute the guarantee and in the
absence of any agreement among the L.P.'s to the contrary, the portion of the
indebtedness to be guaranteed shall be allocated among the L.P.'s electing to
execute the guarantee in proportion to the number of Partnership Units held by
each. An election to execute the guarantee of any indebtedness of the
Partnership shall be made by delivery of a written election notice to the
general partner, which indicates that a majority of the L.P.'s then holding
Partnership Units have elected to guarantee Partnership indebtedness pursuant to
this Section 2.4(d), the amount of the indebtedness (up to the limit set forth
above) and the allocation of responsibility of such guarantee among the L.P.'s
making the election. The election may be made only once. In satisfying its
obligations hereunder, the general partner of the Partnership shall reasonably
endeavor to identify an amount of indebtedness such that the guarantee can be
made in an amount approximately equal to the Amount, to cooperate with the
L.P.'s to structure any guarantee in a manner that the guarantee terminates at a
time determined by the L.P.'s and to provide indebtedness to be guaranteed that
the Partnership anticipates will be outstanding for no less than five (5) years
after the date of the guarantee. The general partner shall not be obligated to
incur any expenses with respect to the foregoing other than expenses for which
they will be reimbursed by the L.P.'s.
3. INSPECTION PERIOD AND CLOSING
3.1 Inspection Period.
(a) Buyer agrees that it will have the Inspection Period to
physically inspect the Property, review the economic data, underwrite the
tenants and review their Leases, and to otherwise conduct its due diligence
review of the Property and all books, records and accounts of Seller related
thereto. Buyer hereby agrees to indemnify and hold Seller harmless from any
damages, liabilities or claims for property damage or personal injury arising
out of such inspection and investigation by Buyer or its agents or independent
contractors; and Buyer agrees to repair and restore the Property to its
condition immediately prior to Buyer's entry thereon to the extent any damage to
the Property arose because of Buyer's entry thereon or the entry thereon
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of Buyer's agents, employees, contractors and consultants. Within the Inspection
Period, Buyer may, in its sole discretion and for any reason or no reason, elect
to go forward with this Agreement to Closing, which election shall be made by
notice to Seller given within the Inspection Period. If such notice is not
timely given, this Agreement and all rights, duties and obligations of Buyer and
Seller hereunder, except any which expressly survive termination, shall
terminate and Escrow Agent shall forthwith return to Buyer the Earnest Money
Deposit. If Buyer so elects to go forward, the Earnest Money Deposit shall be
increased by an additional deposit of $100,000 (to be deposited with Escrow
Agent no later than three (3) business days following the end of the Inspection
Period), and shall not be refundable except upon the terms otherwise set forth
herein.
(b) Seller will promptly furnish or make available to Buyer
the documents enumerated on Exhibit attached hereto, and Buyer agrees to keep
confidential any information derived from such documents, except as necessary to
share with its attorneys, consultants and lenders. Buyer further agrees to
return said documents to Seller should this transaction fail to close. Buyer,
through its officers, employees and other authorized representatives, shall have
the right to reasonable access to the Property and all records of Seller related
thereto, including without limitation all Leases and Seller Financial
Statements, at reasonable times during the Inspection Period for the purpose of
inspecting the Property, taking soil and ground water samples, conducting
Hazardous Materials inspections, reviewing the books and records of Seller
concerning the Property and otherwise conducting its due diligence review of the
Property. Seller shall cooperate with and assist Buyer in making such
inspections and reviews. Seller shall give Buyer any authorizations which may be
required by Buyer in order to gain access to records or other information
pertaining to the Property or the use thereof maintained by any governmental or
quasi-governmental authority or organization. Buyer, for itself and its agents,
agrees not to enter into any contract with existing tenants without the written
consent of Seller if such contract would be binding upon Seller should this
transaction fail to close. Buyer shall have the right to have due diligence
interviews and other discussions or negotiations with tenants.
(c) Buyer, through its officers or other authorized
representatives, shall have the right to reasonable access to all Materials
(other than privileged or confidential litigation materials) for the purpose of
reviewing and copying the same.
3.2 Hazardous Material. Prior to the end of the Inspection Period Buyer
may order environmental assessments of the Property. A copy of any assessment
report, if made, shall be furnished by Buyer to Seller promptly upon its
completion. If an assessment report discloses the existence of any Hazardous
Material or any other matters concerning the environmental condition of the
Property or its environs, Buyer may notify Seller in writing, within ten (10)
business days after receipt of the
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assessment report that it elects to terminate this Agreement, whereupon this
Agreement shall terminate and Escrow Agent shall return to Buyer its Earnest
Money Deposit.
3.3 Time and Place of Closing. Unless otherwise agreed by the parties,
the Closing shall take place at the offices of Escrow Agent at 10:00 A.M. on the
date which is the fifteenth (15th) business day following the expiration of the
Inspection Period, provided that Buyer may designate an earlier date for
Closing.
4. WARRANTIES, REPRESENTATIONS AND COVENANTS OF SELLER
Seller warrants and represents as follows as of the date of this
Agreement and as of the Closing and where indicated covenants and agrees as
follows:
4.1 Organization; Authority. Seller is duly organized, validly existing
and in good standing under the laws of the state of its organization and the
state in which the Shopping Center is located, and has full power and authority
to enter into and perform this Agreement in accordance with its terms, and the
persons executing this Agreement and other Transaction Documents have been duly
authorized to do so on behalf of Seller. Seller is not a "foreign person" under
Sections 1445 or 897 of the Internal Revenue Code nor is this transaction
subject to any withholding under any state or federal law.
4.2 Authorization; Validity. The execution and delivery of this
Agreement by Seller and Seller's consummation of the transactions contemplated
by this Agreement have been duly and validly authorized. This Agreement
constitutes a legal, valid and binding agreement of Seller enforceable against
it in accordance with its terms.
4.3 Title. Seller is the owner in fee simple of all of the Property,
subject only to the Permitted Exceptions.
4.4 Commissions. Seller has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Seller, Buyer or the Property for a brokerage commission or finder's fee or like
payment arising out of or in connection with the transaction provided herein
except for R.G. Kennedy & Associates/Mark Heath (whose commission is payable by
Buyer). Seller agrees to indemnify Buyer from any other such claim arising by,
through or under Seller. The provisions of this section shall survive Closing
indefinitely.
4.5 Sale Agreements. The Property is not subject to any outstanding
agreement(s) of sale, option(s), or other right(s) of third parties to acquire
any interest therein, except for Permitted Exceptions and this Agreement.
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4.6 Litigation. There is no litigation or proceeding pending, or to the
best of Seller's knowledge, threatened against Seller relating to the Property.
4.7 Leases. There are no Leases affecting the Property, oral or
written, except as listed on the Rent Roll, and any Leases or modifications
entered into between the date of this Agreement and the Closing Date with the
reasonable consent of Buyer. Copies of the Leases, which have been delivered to
Buyer or shall be delivered to Buyer within five (5) days from the date hereof,
are, to the best knowledge of Seller, true, correct and complete copies thereof,
subject to the matters set forth on the Rent Roll. Between the date hereof and
the Closing Date, Seller will not terminate or modify existing Leases or enter
into any new Leases without the reasonable consent of Buyer. All of the
Property's tenant leases are in good standing and to the best of Seller's
knowledge no defaults exist thereunder except as noted on the Rent Roll. No rent
or reimbursement has been paid more than one (1) month in advance and no
security deposit has been paid, except as stated on the Rent Roll. No tenants
under the Leases are entitled to interest on any security deposits. No tenant
under any Lease has or will be promised any inducement, concession or
consideration by Seller other than as expressly stated in such Lease, and except
as stated therein there are and will be no side agreements between Seller and
any tenant.
4.8 Financial Statements. Each of the Seller Financial Statements
delivered or to be delivered to Buyer hereunder has or will have been prepared
in accordance with the books and records of Seller and presents fairly in all
material respects the financial condition, results of operations and cash flows
for the Property as of and for the periods to which they relate. All are in
conformity with Seller's customary income tax accounting standards applied by
Seller on a consistent basis. There has been no material adverse change in the
operations of the Property or its prospects since the date of the most recent
Seller Financial Statements. Seller covenants to furnish promptly to Buyer
copies of the Seller Financial Statements together with unaudited updated
monthly reports of cash flow for interim periods beginning after December 31,
1997. Buyer and its independent certified accountants shall be given access to
Seller's books and records at any time prior to and for six (6) months following
Closing upon reasonable advance notice in order that they may verify the
financial statements prior to Closing. Seller agrees to execute and deliver to
Buyer or its accountants the Audit Representation Letter should Buyer's
accountants audit the records of the Shopping Center.
4.9 Contracts. Except for Leases and Permitted Exceptions, there are no
management, service, maintenance, utility or other contracts or agreements
affecting the Property, oral or written, which extend beyond the Closing Date
and which would bind Buyer or encumber the Property, at Buyer's option, more
than thirty (30) days after Closing. All such Contracts are in full force and
effect in accordance with their respective terms, and all obligations of Seller
under the Contracts required to be
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<PAGE>
performed to date have been performed in all material respects; no party to any
Contract has asserted any claim of default or offset against Seller with respect
thereto and no event has occurred or failed to occur, which would, to the best
of Seller's knowledge, in any way materially and adversely affect the validity
or enforceability of any such Contract; and the copies of the Contracts
delivered to Buyer prior to the date hereof are true, correct and complete
copies thereof. Between the date hereof and the Closing, Seller covenants to
fulfill all of its obligations under all Contracts, and covenants not to
terminate or modify any such Contracts or enter into any new contractual
obligations relating to the Property without the consent of Buyer (not to be
unreasonably withheld) except such obligations as are freely terminable without
penalty by Seller upon not more than thirty (30) days' written notice.
4.10 Maintenance and Operation of Property. From and after the date
hereof and until the Closing, Seller covenants to keep and maintain and operate
the Property substantially in the manner in which it is currently being
maintained and operated and covenants not to cause or permit any waste of the
Property nor undertake any action with respect to the operation thereof outside
the ordinary course of business without Buyer's prior written consent. In
connection therewith, Seller covenants to make all necessary repairs and
replacements until the Closing so that the Property shall be of substantially
the same quality and condition at the time of Closing as on the date hereof.
Seller covenants not to remove from the Improvements or the Real Property any
article included in the Personal Property. Seller covenants to maintain such
casualty and liability insurance on the Property as it is presently being
maintained.
4.11 Permits and Zoning. To the best knowledge of Seller, there are no
material permits and licenses (collectively referred to as "Permits") required
to be issued to Seller by any governmental body, agency or department having
jurisdiction over the Property which materially affect the ownership or the use
thereof which have not been issued. The Property is properly zoned for its
present use and is not subject to any local, regional or state development
order. The use of the Property is consistent with the land use designation for
the Property under the comprehensive plan or plans applicable thereto. There are
no outstanding assessments, impact fees or other charges related to the
Property.
4.12 Rent Roll; Tenant Estoppel Letters. The Rent Roll is true and
correct in all respects. Seller agrees to use commercially reasonable efforts to
obtain current Tenant Estoppel Letters acceptable to Buyer from all Tenants
under Leases, which Tenant Estoppel Letters shall confirm the matters reflected
by the Rent Roll as to the particular tenant and shall be otherwise acceptable
to Buyer in all respects.
4.13 Condemnation. Neither the whole nor any portion of the Property,
including access thereto or any easement benefitting the Property, is subject to
temporary requisition of use by any governmental authority or has been
condemned,
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or taken in any proceeding similar to a condemnation proceeding, nor is there
now pending any condemnation, expropriation, requisition or similar proceeding
against the Property or any portion thereof. Seller has received no notice nor
has any knowledge that any such proceeding is contemplated.
4.14 Governmental Matters. Seller has not entered into any commitments
or agreements with any governmental authorities or agencies affecting the
Property that have not been disclosed in writing to Buyer and Seller has
received no notices from any such governmental authorities or agencies of
uncured violations at the Property of building, fire, air pollution or zoning
codes, rules, ordinances or regulations, environmental and hazardous substances
laws, or other rules, ordinances or regulations relating to the Property. Seller
shall be responsible for the remittance of all sales tax for periods occurring
prior to the Allocation Date directly to the appropriate state department of
revenue.
4.15 Repairs. Seller has received no notice of any requirements or
recommendations by any lender, insurance companies, or governmental body or
agencies requiring or recommending any repairs or work to be done on the
Property which have not already been completed.
4.16 Consents and Approvals; No Violation. Neither the execution and
delivery of this Agreement by Seller nor the consummation by Seller of the
transactions contemplated hereby will (a) require Seller to file or register
with, notify, or obtain any permit, authorization, consent, or approval of, any
governmental or regulatory authority; (b) conflict with or breach any provision
of the organizational documents of Seller; (c) violate or breach any provision
of, or constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, any note, bond, mortgage, indenture,
deed of trust, license, franchise, permit, lease, contract, agreement or other
instrument, commitment or obligation to which Seller is a party, or by which
Seller, the Property or any of Seller's material assets may be bound, except the
Surviving Mortgage, the transactions contemplated hereby requiring the consent
of the holder of the Surviving Mortgage; or (d) violate any order, writ,
injunction, decree, judgment, statute, law or ruling of any court or
governmental authority applicable to Seller, the Property or any of Seller's
material assets.
4.17 Environmental Matters.
(a) Seller represents and warrants as of the date hereof and as of
the Closing that:
(1) Seller has not, and has no knowledge of any other person who
has, caused any Release, threatened Release, or disposal
of any Hazardous Material at the Property in any material
quantity.
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(2) The Property does not now contain and to the best of Seller's
knowledge has not contained any: (a) underground storage
tank, (b) material amounts of asbestos-containing building
material, (c) landfills or dumps, or (d) hazardous waste
management facility as defined pursuant to the Resource
Conservation and Recovery Act ("RCRA") or any comparable state
law. The Property is not a site on or nominated for
the National Priority List promulgated pursuant to
Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA") or any state remedial priority
list promulgated or published pursuant to any comparable
state law. Seller discloses and Buyer acknowledges that a
drycleaning facility is presently being operated on the
Property.
(3) There are to the best of Seller's knowledge no conditions or
circumstances at the Property which pose a risk to the
environment or the health or safety of persons in violation of
Environmental Law.
(b) Seller shall indemnify, hold harmless, and hereby waives any
claim for contribution against Buyer for any damages to the
extent they arise from the inaccuracy or breach of any repre-
sentation or warranty by Seller in this section of this Agreement.
This indemnity shall survive Closing for a period of two (2)
years and shall be in addition to the post-closing indemnities
contained in Section .
4.18 Surviving Mortgage. To Seller's knowledge, the Surviving Mortgage
is presently held by USG Annuity and Life Company and is in good standing with
no defaults existing thereunder. The principal balance outstanding as of July 1,
1998, is $7,570,482.74, and the monthly payment of principal and interest is
$60,780.53. The interest rate is eight percent (8.0%) per annum. Seller has
deposits with the holder of the Surviving Mortgage totalling $14,036.11 for
taxes. Such deposits will be assigned at Closing, Buyer to reimburse Seller
therefor. The transfer of the Property to Buyer will require the consent of the
holder of the Surviving Mortgage. Prior to the end of the Inspection Period,
Seller shall use reasonable efforts to cause the holder of the Surviving
Mortgage to execute and deliver to Buyer an estoppel letter and consent
consenting to this transaction and certifying as to the foregoing matters in
form and substance reasonably satisfactory to Buyer. Seller will maintain the
Surviving Mortgage in good standing, without default, until Closing.
4.19 No Untrue Statement. Neither this Agreement nor any exhibit nor
any written statement or Transaction Document furnished or to be furnished by
Seller to Buyer in connection with the transactions contemplated by this
Agreement contains or will contain any untrue statement of material fact or
omits or will omit any material fact necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading.
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5. WARRANTIES, REPRESENTATIONS AND COVENANTS OF BUYER
Buyer hereby warrants and represents as of the date of this Agreement
and as of the Closing and where indicated covenants and agrees as follows:
5.1 Organization; Authority. Buyer is a corporation duly organized,
validly existing and in good standing under laws of Florida and has full power
and authority to enter into and perform this Agreement in accordance with its
terms, and the persons executing this Agreement and other Transaction Documents
on behalf of Buyer have been duly authorized to do so.
5.2 Authorization; Validity. The execution, delivery and performance of
this Agreement and the other Transaction Documents have been duly and validly
authorized by the Board of Directors of Buyer. This Agreement has been duly and
validly executed and delivered by Buyer and (assuming the valid execution and
delivery of this Agreement by Seller) constitutes a legal, valid and binding
agreement of Buyer enforceable against it in accordance with its terms.
5.3 Partnership and Regency Organization. Partnership is a Delaware
limited partnership, the sole general partner of which is Regency. Partnership
is or at Closing will be qualified to transact business in the state in which
the Property is located. Buyer is a wholly owned subsidiary of Regency, whose
common shares are traded on the New York Stock Exchange. The authorized capital
stock of Regency 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 March 31, 1998, there were
24,865,205 shares of Common Stock issued and outstanding, and 2,500,000 shares
of Special Common Stock in the form of Class B Non-voting Common Stock, par
value $0.01 issued and outstanding. The Class B Common Stock is held by a single
investor and is convertible in stages beginning in December, 1998, into a total
of 2,975,468 shares of Common Stock.
5.4 Commissions. Buyer has neither dealt with nor does it have any
knowledge of any broker or other party who has or may have any claim against
Buyer or Seller for a brokerage commission or finder's fee or like payment
arising out of or in connection with the transaction provided herein except R.G.
Kennedy & Associates/Mark Heath, whose commission shall be paid by Buyer. Buyer
agrees to indemnify Seller from any other such claim arising by, through or
under Buyer. The provisions of this section shall survive Closing indefinitely.
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<PAGE>
6. POSSESSION; RISK OF LOSS
6.1 Possession. Possession of the Property will be transferred to Buyer
at the conclusion of the Closing.
6.2 Risk of Loss. All risk of loss to the Property shall remain upon
Seller until the conclusion of the Closing. If, before the possession of the
Property has been transferred to Buyer, any material portion of the Property is
damaged by fire or other casualty and will not be restored by the Closing Date
or if any material portion of the Property is taken by eminent domain or there
is a material obstruction of access to the Improvements by virtue of a taking by
eminent domain, Seller shall, within ten (10) days of such damage or taking,
notify Buyer thereof and Buyer shall have the option to:
(a) terminate this Agreement upon notice to Seller given
within ten (10) business days after such notice from Seller, in which case Buyer
shall receive a return of its Earnest Money Deposit; or
(b) proceed with the purchase of the Property, in which event
Seller shall assign to Buyer all Seller's right, title and interest in all
amounts due or collected by Seller under the insurance policies or as
condemnation awards. In such event, the Purchase Price shall be reduced by the
amount of any insurance deductible to the extent it reduced the insurance
proceeds payable.
7. TITLE MATTERS
7.1 Title.
(a) Title Insurance and Survey. Promptly after the full
execution hereof Buyer's counsel shall order the Title Insurance Commitment and
a Survey (Seller agreeing to furnish to Buyer copies of any existing surveys and
title information in its possession promptly after execution of this Agreement).
Buyer will have ten (10) days from receipt of the Title Commitment (including
legible copies of all recorded exceptions noted therein) and Survey within which
to notify Seller in writing of any Title Defects, encroachments or other matters
not acceptable to Buyer which are not permitted by this Agreement. Any Title
Defect or other objection disclosed by the Title Insurance Commitment (other
than liens removable by the payment of money, except the Surviving Mortgage) or
the Survey which is not timely specified in Buyer's written notice to Seller of
Title Defects shall be deemed a Permitted Exception. Seller shall notify Buyer
in writing within five (5) days of Buyer's notice if Seller intends to cure any
Title Defect or other objection. If Seller elects to cure, Seller shall use
diligent efforts to cure the Title Defects and/or objections by the Closing Date
(as it may be extended). If Seller elects not to cure or if such Title Defects
and/or objections are not cured,
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<PAGE>
Buyer shall have the right, in lieu of any other remedies, to: (i) refuse to
purchase the Property, terminate this Agreement and receive a return of the
Earnest Money Deposit as its sole remedy; or (ii) waive such Title Defects
and/or objections and close the purchase of the Property subject to such Title
Defects.
(b) Miscellaneous Title Matters. If a search of the title
discloses judgments, bankruptcies or other returns against other persons having
names the same as or similar to that of Seller, Seller shall on request deliver
to Buyer an affidavit stating, if true, that such judgments, bankruptcies or the
returns are not against Seller. Seller further agrees to execute and deliver to
the Title Insurance agent at Closing such documentation, if any, as the Title
Insurance underwriter shall reasonably require to evidence that the execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and that there are no mechanics'
liens on the Property or parties in possession of the Property other than
tenants under Leases and Seller.
8. CONDITIONS PRECEDENT
8.1 Conditions Precedent to Buyer's Obligations. The obligations of
Buyer under this Agreement are subject to satisfaction or waiver by Buyer of
each of the following conditions or requirements on or before the Closing Date:
(a) Seller's warranties and representations under this
Agreement shall be true and correct in all material respects as of the Closing
Date, and Seller shall not be in default hereunder.
(b) All obligations of Seller contained in this Agreement,
shall have been fully performed in all material respects and Seller shall not be
in default under any covenant, restriction, right-of-way or easement affecting
the Property.
(c) There shall have been no material adverse change in the
Property, its operations or future prospects, the Leases or the financial
condition of tenants leasing space in the Shopping Center.
(d) A Title Insurance Commitment in the full amount of the
Purchase Price shall have been issued and "marked down" through Closing, subject
only to Permitted Exceptions.
(e) The physical and environmental condition of the Property
shall be unchanged from the date of this Agreement, ordinary wear and tear
excepted.
(f) Seller shall have delivered to Buyer the following in form
reasonably satisfactory to Buyer:
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(1) A limited warranty deed in proper form for recording, duly
executed and acknowledged so as to convey to Buyer the fee simple title to the
Property, subject only to the Permitted Exceptions;
(2) Originals, if available, or if not, true copies of the Leases and
of the contracts, agreements, permits and licenses, and such Materials as may be
in the possession or control of Seller, including without limitation all tenant
files and correspondence;
(3) A blanket assignment to Buyer of all Leases and the
contracts, agreements, permits and licenses (to the extent assignable) as they
affect the Property, including an indemnity against breach of such instruments
by Seller prior to the Closing Date;
(4) A bill of sale with respect to the Personal Property and
Materials;
(5) The Survey;
(6) A current rent roll for all Leases in effect showing no
changes from the rent roll attached to this Agreement other than those set forth
in the Leases or approved in writing by Buyer;
(7) All Tenant Estoppel Letters obtained by Seller, which must
include Big Bear, Blockbuster, H&R Block, Society Bank and Subway, and eighty
percent (80%) of the other tenants who have signed leases for any portion of the
Property, without any material exceptions, covenants, or changes to the form
approved by Buyer and distributed to the tenants by Seller, the substance of
which Tenant Estoppel Letters must be acceptable to Buyer in all respects;
(8) A general assignment of all assignable existing warranties
relating to the Property;
(9) An owner's affidavit, non-foreign affidavits, non-tax
withholding certificates and such other documents as may reasonably be required
by Buyer or its counsel in order to effectuate the provisions of this Agreement
and the transactions contemplated herein;
(10) The originals or copies of any real and tangible personal
property tax bills for the Property for the tax year of Closing and the previous
year, and, if requested, the originals or copies of any current water, sewer and
utility bills which are in Seller's custody or control;
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<PAGE>
(11) Resolutions and/or affidavits of Seller authorizing the
transactions described herein;
(12) All keys and other means of access to the Improvements in
the possession of Seller or its agents;
(13) Materials; and
(14) Such other documents as Buyer may reasonably request to
effect the transactions contemplated by this Agreement.
(g) Buyer shall have received from the holder of the Surviv-
ing Mortgage, and approved, the estoppel letter and the documents by which
such holder approves the transfer of the Property to Buyer and the assumption
by Buyer, if necessary, of the obligations of the Surviving Mortgage.
(h) If applicable, Regency and Seller shall have executed the
Partnership Agreement and the Redemption Agreement.
In the event that all of the foregoing provisions of this
Section are not satisfied and Buyer elects in writing to terminate this
Agreement, then the Earnest Money Deposit shall be promptly delivered to Buyer
by Escrow Agent and, upon the making of such delivery, neither party shall have
any further claim against the other by reasons of this Agreement, except as
provided in Article .
8.2 Conditions Precedent to Seller's Obligations. The obligations of
Seller under this Agreement are subject to satisfaction or waiver by Seller of
each of the following conditions or requirements on or before the Closing date:
(a) Buyer's warranties and representations under this
Agreement shall be true and correct in all material respects as of the Closing
Date, and Buyer shall not be in default hereunder.
(b) All of the obligations of Buyer contained in this
Agreement shall have been fully performed by or on the date of Closing in
compliance with the terms and provisions of this Agreement.
(c) Buyer shall have delivered to Seller at or prior to the
Closing the following, which shall be reasonably satisfactory to Seller:
(1) If applicable, delivery and/or payment of the balance
of the Purchase Price in accordance with Section at Closing;
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(2) Such other documents as Seller may reasonably request
to effect the transactions contemplated by this Agreement.
(d) Seller shall have received and approved the estoppel
letter from the holder of the Surviving Mortgage and the terms and conditions of
the release of Seller from the obligations imposed by the Surviving Mortgage.
(e) If applicable, Regency and Seller shall have executed the
Partnership Agreement and the Redemption Agreement.
In the event that all conditions precedent to Buyer's
obligation to purchase shall have been satisfied but the foregoing provisions of
this Section have not, and Seller elects in writing to terminate this Agreement,
then the Earnest Money Deposit shall be promptly delivered to Seller by Escrow
Agent and, upon the making of such delivery, neither party shall have any
further claim against the other by reasons of this Agreement, except as provided
in Article .
8.3 Best Efforts. Each of the parties hereto agrees to use reasonable
best efforts to take or cause to be taken all actions necessary, proper or
advisable to consummate the transactions contemplated by this Agreement.
9. PRE-CLOSING BREACH; REMEDIES
9.1 Breach by Seller. In the event of a breach of Seller's covenants or
warranties herein and failure by Seller to cure such breach within the time
provided for Closing, Buyer may, at Buyer's election (i) terminate this
Agreement and receive a return of the Earnest Money Deposit, and the parties
shall have no further rights or obligations under this Agreement (except as
survive termination); (ii) enforce this Agreement by suit for specific
performance; or (iii) waive such breach and close the purchase contemplated
hereby, notwithstanding such breach.
9.2 Breach by Buyer. In the event of a breach of Buyer's covenants or
warranties herein and failure of Buyer to cure such breach within the time
provided for Closing, Seller's sole remedy shall be to terminate this Agreement
and retain Buyer's Earnest Money Deposit as agreed liquidated damages for such
breach, and upon payment in full to Seller of such amounts, the parties shall
have no further rights, claims, liabilities or obligations under this Agreement
(except as survive termination).
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<PAGE>
10. POST CLOSING INDEMNITIES AND COVENANTS
10.1 Seller's Indemnity. Should this transaction close, Seller, subject
to the limitations set forth herein, shall indemnify, defend and hold harmless
Buyer from all claims, demands, liabilities, damages, penalties, costs and
expenses, including, without limitation, reasonable attorneys' fees and
disbursements, which may be imposed upon, asserted against or incurred or paid
by Buyer by reason of, or on account of, any breach by Seller of Seller's
warranties, representations and covenants. Except as set forth in this Agreement
to the contrary, Seller's warranties, representations and covenants, and the
foregoing indemnity, shall survive the Closing for a period of two (2) years.
Buyer's rights and remedies herein against Seller shall be in addition to, and
not in lieu of all other rights and remedies of Buyer at law or in equity.
10.2 Buyer's Indemnity. Should this transaction close, Buyer shall
indemnify, defend and hold harmless Seller from all claims, demands,
liabilities, damages, penalties, costs and expenses, including, without
limitation, reasonable attorneys' fees and disbursements, which may be imposed
upon, asserted against or incurred or paid by Seller by reason of, or on account
of, any breach by Buyer of Buyer's warranties, representations and covenants.
Except as set forth in this Agreement to the contrary, Buyer's warranties,
representations and covenants, and the foregoing indemnity, shall survive the
Closing for a period of two (2) years. Seller's rights and remedies herein
against Buyer shall be in addition to, and not in lieu of all other rights and
remedies of Seller at law or in equity.
11. MISCELLANEOUS
11.1 Disclosure. Neither party shall disclose the transactions
contemplated by this Agreement without the prior approval of the other, except
to its attorneys, accountants and other consultants, their lenders and
prospective lenders, or where disclosure is required by law.
11.2 Partnership Issues. Buyer and Seller agree that in the event
Seller elects the Contribution Alternative in Section 2.4 of this Agreement,
that Buyer shall assign this Agreement to Partnership, which shall assume all of
Buyer's obligations hereunder. Partnership has joined in this Agreement for the
purpose of agreeing to assume such obligations and be bound hereby if this
Agreement is assigned to it.
11.3 Entire Agreement. This Agreement, together with the exhibits
attached hereto, constitutes the entire agreement between the parties hereto
with respect to the subject matter hereof and may not be modified, amended or
otherwise changed in any manner except by a writing executed by Buyer and
Seller.
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11.4 Notices. All notices and demands of any kind which either party
may be required or may desire to serve upon the other party in connection with
this Agreement shall be in writing and shall be served by personal delivery,
certified or overnight mail, reputable overnight courier service or fax
(followed promptly by hard copy) at the addresses set forth below:
As to Seller: PP Center Limited
Attention: Terry L. Sternad
110-B Northwoods Drive
Columbus, Ohio 43235
Phone: (614) 846-5330
Fax: (614) 846-7783
With a copy to: Jones, Day
Attention: Harlan W. Robins, Esq.
1900 Huntington Center
Columbus, Ohio 43215
Phone: (614) 469-3925
Fax: (614) 461-4198
As to Buyer: RRC Acquisitions Two, Inc.
Attention: Robert L. Miller
Suite 200, 121 W. Forsyth St.
Jacksonville, Florida 32202
Phone: (904) 356-7000
Fax: (904) 354-1832
With a copy to: Rogers, Towers, Bailey, Jones & Gay
Attention: William E. Scheu, Esq.
1301 Riverplace Blvd., Suite 1500
Jacksonville, Florida 32207
Phone: (904) 398-3911
Fax: (904) 396-0663
Any notice or demand so served shall constitute proper notice hereunder upon
delivery to the United States Postal Service or to such overnight courier. A
party may change its notice address by notice given in the aforesaid manner.
11.5 Headings. The titles and headings of the various sections hereof
are intended solely for means of reference and are not intended for any purpose
whatsoever to modify, explain or place any construction on any of the provisions
of this Agreement.
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<PAGE>
11.6 Validity. If any of the provisions of this Agreement or the
application thereof to any persons or circumstances shall, to any extent, be
invalid or unenforceable, the remainder of this Agreement by the application of
such provision or provisions to persons or circumstances other than those as to
whom or which it is held invalid or unenforceable shall not be affected thereby,
and every provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
11.7 Attorneys' Fees. In the event of any litigation between the
parties hereto to enforce any of the provisions of this Agreement or any right
of either party hereto, the unsuccessful party to such litigation agrees to pay
to the successful party all costs and expenses, including reasonable attorneys'
fees actually incurred, whether or not incurred in trial or on appeal, incurred
therein by the successful party, all of which may be included in and as a part
of the judgment rendered in such litigation. Any indemnity provisions herein
shall include indemnification for reasonable attorneys' fees and costs, whether
or not suit be brought and including fees and costs actually incurred, whether
or not suit be brought and including fees and costs actually occurred on appeal.
11.8 Time of Essence. Time is of the essence of this Agreement.
11.9 Governing Law. This Agreement shall be governed by the laws of
the state in which the Property is located.
11.10 Successors and Assigns. The terms and provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. No third parties, including any
brokers or creditors, shall be beneficiaries hereof.
11.11 Exhibits. All exhibits attached hereto are incorporated herein by
reference to the same extent as though such exhibits were included in the body
of this Agreement verbatim.
11.12 Gender; Plural; Singular; Terms. A reference in this Agreement to
any gender, masculine, feminine or neuter, shall be deemed a reference to the
other, and the singular shall be deemed to include the plural and vice versa,
unless the context otherwise requires. The terms "herein," "hereof,"
"hereunder," and other words of a similar nature mean and refer to this
Agreement as a whole and not merely to the specified section or clause in which
the respective word appears unless expressly so stated.
11.13 Further Instruments, Etc. This Agreement may be executed in
counterparts and when so executed shall be deemed executed as one agreement.
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Seller and Buyer shall execute any and all documents and perform any and all
acts reasonably necessary to fully implement this Agreement.
11.14 Survival. The obligations of Seller and Buyer intended to be
performed after the Closing shall survive the closing.
11.15 No Recording. Neither this Agreement nor any notice, memorandum
or other notice or document relating hereto shall be recorded.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
Witnesses:
RRC ACQUISITIONS TWO, INC.,
a Florida corporation
Name:
By:
Name:
Name: Title:
Date: August , 1998
Tax Identification No: 59-3478325
"BUYER"
REGENCY CENTERS, L.P., a Delaware
limited partnership
By its General Partner:
REGENCY REALTY CORPORATION,
a Florida corporation
Name:
By:
Name:
Name: Title:
Date: August , 1998
Tax Identification No: 59-3429602
"PARTNERSHIP"
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<PAGE>
PP CENTER LIMITED, an Ohio
limited liability company
By Its Authorized Member:
Name:
By:
Name:
Name: Title:
Date: August , 1998
Tax Identification No:
"SELLER"
JOINDER OF ESCROW AGENT
1. Duties. Escrow Agent joins herein for the purpose of agreeing to
comply with the terms hereof insofar as they apply to Escrow Agent. Escrow Agent
shall receive and hold the Earnest Money Deposit in trust, to be disposed of in
accordance with the provisions of this joinder and the foregoing Agreement. The
Earnest Money Deposit shall be invested by Escrow Agent in an interest bearing
account at a national bank acceptable to Buyer and Seller.
2. Indemnity. Escrow Agent shall not be liable to either party except
for claims resulting from the gross negligence or willful misconduct of Escrow
Agent. If the escrow is involved in any controversy or litigation, the parties
hereto shall jointly and severally indemnify and hold Escrow Agent free and
harmless from and against any and all loss, cost, damage, liability or expense,
including costs of reasonable attorneys' fees actually incurred by Escrow Agent
or to which Escrow Agent may be put incur by reason of or in connection with
such controversy or litigation, except to the extent it is finally determined
that such controversy or litigation resulted from Escrow Agent's gross
negligence or willful misconduct. If the indemnity amounts payable hereunder
result from the fault of Buyer or Seller (or their respective agents), the party
at fault shall pay, and hold the other party harmless against, such amounts.
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3. Conflicting Demands. If conflicting demands are made upon Escrow
Agent or Escrow Agent is uncertain with respect to the escrow, the parties
hereto expressly agree that Escrow Agent shall have the absolute right to do
either or both of the following: (i) withhold and stop all proceedings in
performance of this escrow and await settlement of the controversy by final
appropriate legal proceedings or otherwise as it may require; or (ii) file suit
for declaratory relief and/or interpleader and obtain an order from the court
requiring the parties to interplead and litigate in such court their several
claims and rights between themselves. Upon the filing of any such declaratory
relief or interpleader suit and tender of the Earnest Money Deposit to the
court, Escrow Agent shall thereupon be fully released and discharged from any
and all obligations to further perform the duties or obligations imposed upon
it. Buyer and Seller agree to respond promptly in writing to any request by
Escrow Agent for clarification, consent or instructions. Any action proposed to
be taken by Escrow Agent for which approval of Buyer and/or Seller is requested
shall be considered approved if Escrow Agent does not receive written notice of
disapproval within five (5) business days after a written request for approval
is received by the party whose approval is being requested. Escrow Agent shall
not be required to take any action for which approval of Buyer and/or Seller has
been sought unless such approval has been received. No disbursements shall be
made, other than as provided in Sections and of the foregoing Agreement, or to a
court in an interpleader action, unless Escrow Agent shall have given written
notice of the proposed disbursement to Buyer and Seller and neither Buyer nor
Seller shall have delivered any written objection to the disbursement within
five (5) business days after receipt of Escrow Agent's notice. No notice by
Buyer or Seller to Escrow Agent of disapproval of a proposed action shall affect
the right of Escrow Agent to take any action as to which such approval is not
required.
4. Tax Identification. Seller and Buyer shall provide to Escrow Agent
appropriate Federal tax identification numbers.
OHIO TITLE CORPORATION, AS AGENT FOR
FIRST AMERICAN TITLE INSURANCE
COMPANY
By:
Its Authorized Agent
Date: , 1998
"ESCROW AGENT"
- - 28 -
<PAGE>
EXHIBIT
Audit Representation Letter
--------------------------
(Acquisition Completion Date)
KPMG Peat Marwick LLP
Suite 2700
One Independent Drive
Jacksonville, Florida 32202
Dear Sirs:
We are providing this letter in connection with your audit of the
Statement of Revenues and Certain Expenses for the twelve months ended
________________, for the purpose of expressing an opinion as to whether the
financial statement presents fairly, in all material respects, the results of
its operations of Park Place Shopping Center.
Certain representations in this letter are described as being limited
to matters that are material. Items are considered material, regardless of size,
if they involve an omission or misstatement of accounting information that, in
the light of surrounding circumstances, makes it probable that the judgment of a
reasonable person relying on the information would be changed or influenced by
the omission or misstatement.
We confirm, to the best of our knowledge and belief, the following
representations made to you during your audit:
1. The financial statement referred to above is fairly presented
in conformity with Seller's customary accounting standards,
consistently applied.
2. We have made available to you:
a. All financial records and related data.
- - 29 -
<PAGE>
b. All agreements or amendments to agreements which
would have a material impact on the Statement of
Revenues and Certain Expenses.
3. There have been no:
a. Instances of fraud involving management or employees
who have significant roles in internal control.
b. Instances of fraud involving others that could have a
material effect on the Statement of Revenue and
Certain Expenses.
c. Violations or possible violations of laws or
regulations, the effects of which should be
considered for disclosure in the Statement of Revenue
and Certain Expenses or as a basis for recording a
loss contingency.
4. There are no:
a. Unasserted claims or assessments that our lawyers
have advised us are probable of assertion and must be
disclosed in accordance with Statement of Financial
Accounting Standards No. 5 Accounting for
Contingencies (SFAS No. 5).
b. Material gain or loss contingencies (including oral
and written guarantees) that are required to be
accrued or disclosed by SFAS No. 5.
c. Material transactions that have not been properly
recorded in the accounting records underlying the
Statement of Revenues and Certain Expenses.
d. Events that have occurred subsequent to
______________ and through the date of this letter
that would require adjustment to or disclosure in the
Statement of Revenues and Certain Expenses.
5. The Company has complied with all aspects of contractual
agreements that would have a material effect on the Statement
of Revenues and Certain Expenses in the event of
noncompliance.
6. All related party transactions have been properly recorded or
disclosed in the Statement of Revenues and Certain Expenses.
- 30 -
<PAGE>
Further, we acknowledge that we are responsible for the fair
presentation of the Statements of Revenue and Certain Expenses in conformity
with generally accepted accounting principles.
Very truly yours,
"Seller/Manager"
Name
Title
- 31 -
<PAGE>
EXHIBIT
Partnership Agreement
- - 32 -
<PAGE>
EXHIBIT
Legal Description of Real Property
- - 33 -
<PAGE>
EXHIBIT
Redemption Agreement
- - 34 -
<PAGE>
EXHIBIT
Rent Roll
- 35 -
<PAGE>
EXHIBIT
Form of Estoppel Letter
_____________________, 199_
RRC Acquisitions Two, Inc.
Regency Centers, L.P.
121 W. Forsyth St., Suite 200
Jacksonville, Florida 32202
RE: ___________________________ (Name of Shopping Center)
Ladies and Gentlemen:
The undersigned (Tenant) has been advised you may purchase the above
Shopping Center, and we hereby confirm to you that:
1. The undersigned is the Tenant of ___________________________,
Landlord, in the above Shopping Center, and is currently in
possession and paying rent on premises known as Store No.
_______________ [or Address:
-----------------------------------------------------------],
and containing approximately _____________ square feet, under
the terms of the lease dated ______________________, which has
(not) been amended by amendment dated ________________________
(the "Lease"). There are no other written or oral agreements
between Tenant and Landlord. Tenant neither expects nor has
been promised any inducement, concession or consideration for
entering into the Lease, except as stated therein, and there
are no side agreements or understandings between Landlord and
Tenant.
2. The term of the Lease commenced on ____________________,
expiring on ___________________, with options to extend of
________________ (____) years each.
3. As of ____________________, monthly minimum rental is
$_______________ a month.
4. Tenant is required to pay its pro rata share of Common Area
Expenses and its pro rata share of the Center's real property
taxes and insurance cost. Current additional monthly payments
for expense reimbursement total $____________ per month for
common area maintenance, property insurance and real estate
taxes.
5. Tenant has given [no security deposit] [a security deposit of
$--------------].
- 36 -
<PAGE>
6. No payments by Tenant under the Lease have been made for more
than one (1) month in advance, and minimum rents and other
charges under the Lease are current.
7. All matters of an inducement nature and all obligations of the
Landlord under the Lease concerning the construction of the
Tenant's premises and development of the Shopping Center,
including without limitation, parking requirements, have been
performed by Landlord.
8. The Lease contains no first right of refusal, option to
expand, option to terminate, or exclusive business rights,
except as follows:
9. Tenant knows of no default by either Landlord or Tenant under
the Lease, and knows of no situations which, with notice or
the passage of time, or both, would constitute a default.
Tenant has no rights to off-set or defense against Landlord as
of the date hereof.
10. The undersigned has not entered into any sublease, assignment
or any other agreement transferring any of its interest in the
Lease or the Premises except as follows:
11. Tenant has not generated, used, stored, spilled, disposed of,
or released any hazardous substances at,on or in the Premises.
"Hazardous Substances" means any flammable, explosive, toxic,
carcinogenic, mutagenic, or corrosive substance or waste,
including volatile petroleum products and derivatives and
drycleaning solvents. To the best of Tenant's knowledge, no
asbestos or polychlorinated biphenyl ("PCB") is located at, on
or in the Premises. The term "Hazardous Substances" does not
include those materials which are technically within the
definition set forth above but which are contained in
pre-packaged office supplies, cleaning materials or personal
grooming items or other items which are sold for consumer or
commercial use and typically used in other similar
buildings or space.
The undersigned makes this statement for your benefit and protection with the
understanding that you intend to rely upon this statement in connection with
your intended purchase of the above described Premises from Landlord. The
undersigned agrees that it will, upon receipt of written notice from Landlord,
commence to pay all rents to you or to any Agent acting on your behalf.
Very truly yours,
___________________________________(Tenant)
Mailing Address:
____________________________ By:________________________________________
Its:_________________________________
- ----------------------------
- - 37 -
<PAGE>
EXHIBIT
Document Request List
Items Required from the Seller:
1) Property Specifications (Zoning)
2) As Built Plans & Specs (arch. and engineering)
** 3) Site Plan (including suite numbers)
4) Location maps
5) Aerial photographs
6) Demographics (including traffic counts)
7) Legal Description
8) Parking Information - Space count
** 9) Copy of All Leases (and amendments) & Lease Briefs
10) Certificates of Occupancy - All current tenants
11) Schedule of Security Deposits
** 12) Most recent Rent Roll (with suite #'s, rent escalations, and option
period info)
** 13) Sales Reports (most recent 3 Years) for tenants reporting
14) Current Rent Billings (by category, base, CAM, etc.)
** 15) Current Delinquency Report (with explanations for balances > $1,000)
16) Tenant Activity Register for all Current Tenants (billings & payments)
17) Tenant Estoppels
** 18) Property Operating Results - Most recent 3 Years 19) Property
Capital Expenditures - Most recent 3 Years 20) Audited Financial
Statements - 3 Years 21) Real Estate and other tax bills - 3 Years 22)
Year to Date Financials & YTD detail general Ledger
** 23) Existing Service Agreements and Warranties
24) Three years loss history - reported claims
** 25) Most Recent Year Expense Recovery Reconciliation
26) Breakdown of CAM Pools
27) Proof Sales Tax Payments are Current
28) Appraisal (last available)
** 29) Seller's Budget for up-coming/current year
30) Utility Bills for last 12 mths/deposits
31) Personal Property Inventory
32) Existing Title Insurance Policy
** 33) Available Inspection Reports (environmental, roof, structural, etc.)
34) Summary of Tenant Contacts (with address and telephone numbers)
With local (incld store#) & national addresses
**35) Seller's Existing Survey
36) Tax plat map
** Required documents for commencement of Inspection Period.
- - 38 -
<PAGE>
AGREEMENT
THIS AGREEMENT, dated as of the _____ day of July, 1998, by and between
REAL SUB, INC., a Florida corporation, whose address is 1936 George Jenkins
Blvd., Lakeland, Florida 33815 ("Partner One"), and REGENCY CENTERS, L.P., a
Delaware limited partnership, whose address is Suite 200, 121 W. Forsyth Street,
Jacksonville, Florida 32202 ("Regency").
W I T N E S S E T H:
Partner One is the Class A Limited Partner under that certain Limited
Partnership Agreement of Queensborough Associates, L.P., a Georgia limited
partnership (the "Partnership"), dated July 16, 1992, as amended by First
Amendment dated December 31, 1992 (the "Agreement"). There are no additional
amendments to the Agreement. The Partnership owns a shopping center and related
expansion properties. The partners of the Partnership and their respective
percentage interests are as follows:
Partnership Interest
General Partner: Branch Investment Partners, L.P. 25%
Class A Limited Partner: Real Sub, Inc. 37.5%
Limited Partner: Branch/Interallianz Realty Fund, L.P. 18.75%
Limited Partner: G. Kloiber 18.75%
Under Article 18 of the Agreement, a buy-sell procedure is established.
In Section 18.1, special treatment is designated for the respective partners:
Partner One is treated as one Partner, and all remaining partners are aggregated
and treated as one Partner. The Article therefore operates as if there were only
two partners, which for purposes of this agreement are designated as Partner One
(Real Sub, Inc.), and Partner Two (the other partners).
Partner One has determined to institute the buy-sell procedures under
the Agreement, and to make an offer (the "First Offer") to Partner Two. Partner
One has made such determination based on the agreement of Regency and/or its
affiliate(s) to become the general partner and a limited partner of the
Partnership, such that if the First Offer is accepted or deemed accepted by
Partner Two, upon closing of the transactions contemplated by the First Offer,
Regency will have acquired fifty percent (50%) of the aggregate capital and
profits interests in the Partnership, and become with Partner One, all of the
partners of the Partnership. It is intended that upon such closing, Regency and
its affiliate(s) will own fifty percent (50%) of the aggregate percentage
interests of the Partnership, and that Partner One will continue as the Class A
Limited Partner, also owning fifty percent (50%) of the aggregate percentage
interests of the Partnership. It is also contemplated that upon closing, the
third party debt of the Partnership would be paid in full and that the capital
accounts of Partner One, on the one hand, and Regency (and its affiliate[s]) on
the other, would be equal.
Partner One and Regency desire to memorialize their agreements
concerning the foregoing matters.
NOW THEREFORE, in consideration of Ten Dollars ($10.00) and other
valuable consideration, receipt of which is acknowledged, Partner One and
Regency acknowledge and agree as follows:
1. The foregoing recitals are true.
2. Attached hereto as Exhibit "1" is the "First Offer" to be delivered
by Partner One to Partner Two under the provisions of Article 18 of the
Agreement, the said "First Offer" being acceptable to each of Partner One and
Regency. The "First Offer" is contingent upon (i) the status of title to the
Partnership's property not changing between the date the "First Offer" is made
and the date of the closing, and (ii) the interests being purchased being free
of any lien or encumbrance.
3. Partner One shall promptly execute and cause the First Offer to be
delivered to Partner Two in accordance with the provisions of the Agreement and
upon making the First Offer shall designate Regency as the entity to receive
title to fifty percent (50%) of the aggregate capital and profits interests in
the Partnership should the First Offer be accepted. Partner One shall furnish
Regency with a copy of the executed First Offer accompanied by such designation
and a schedule of the required responses and consequent events following
thereon. Upon receipt, Regency will accept such designation, Regency hereby
agreeing to assume and perform the obligations of the First Offer to the extent
of the interests to be acquired by Regency thereunder. Regency shall promptly
notify Partner Two of its acceptance of such designation and of its assumption
of such obligations. Partner One shall keep Regency regularly and fully advised
of the status of the First Offer and of responses made by Partner Two, if any.
Partner One shall furnish to Regency promptly after receipt, copies of all
correspondence and responses made by Partner Two in connection herewith.
Partner One shall not modify or amend the First Offer without the prior consent
of Regency.
4. Attached hereto collectively as Exhibit "2" are (i) a current rent
roll; (ii) a copy of a recent title insurance policy covering the Partnership's
property, and (iii) a survey of the Partnership's property dated July 17, 1995,
all of which are acceptable to Regency. Partner One shall not do any act or
permit any act or omission which would cause a change in occupancy, the state of
the title or the condition of the property from the date hereof to the closing,
without the prior consent of Regency.
5. Should Partner Two make or be deemed to have made a counteroffer in
accordance with the provisions of the Agreement, this agreement shall terminate
and neither party shall have any further liability hereunder.
6. Should the First Offer be or be deemed to have been accepted,
Partner One and Regency shall proceed as expeditiously as possible to close the
transaction as contemplated by the First Offer and the Agreement. Immediately
following closing the Partnership shall be constituted as follows:
General Partner Regency 25%
Limited Partner Regency 25%
Class A Limited Partner Real Sub, Inc. 50%
Regency shall thereupon pay to Partner Two, or reimburse Partner One, as the
case may be, an amount equal to (i) 100% of that portion of the First Offer
payable to Partner Two which is attributable to Partner Two's Preferred Return
Accounts and Adjusted Capital (as defined in the Agreement) of Partner Two, and
(ii) eighty percent (50/62.5) of the balance of the amounts paid or payable by
Partner One to Partner Two under the terms of the First Offer, if any.
Simultaneously therewith, Partner One shall pay Partner Two the remaining
amounts due under the terms of the First Offer. Prior to the closing Partner One
shall cause the Development Agreement and the Property Management Agreement to
be terminated, effective as of the closing. Upon closing (i) the Agreement and
the Partnership's Certificate of Limited Partnership shall be amended to reflect
the transactions contemplated hereby and any other matters to which Partner One
and Regency may agree; and (ii) the Partnership will enter into an agreement
with Regency Centers, L.P. prior to the closing of the transaction contemplated
by the First Offer for the management of the property, upon terms and conditions
and in form mutually agreeable to the parties hereto.
7. Promptly after closing Partner One and Regency (and/or its
affiliate[s]) shall each contribute or cause to be contributed to the
Partnership an amount equal to one-half (1/2) of the aggregate sums necessary to
satisfy all of the Partnership's third party debt, it being intended that upon
consummation of this transaction that except for ordinary and necessary
operational expenses, similar liabilities, the Partnership shall have no debt
unless and until the partners shall otherwise agree.
8. It is the intention of the parties that upon consummation of the
transactions contemplated hereby, Partner One, on the one hand, and Regency and
its affiliate(s) on the other, shall have equal percentage interests and capital
accounts in the Partnership. For that reason Partner One and Regency agree to
share equally the out-of-pocket costs of this transaction, including transfer
charges and similar closing expenses (excluding however the fees of their
respective counsel, which shall be paid separately by each).
9. Neither Partner One nor Regency have employed a broker or real
estate agent in connection with these matters and to the best of their knowledge
no brokerage fee or commission is or will be due in connection with this
transaction. The parties have considered such issues as casualty, condemnation
and the financial condition of tenants in the shopping center, and agree that
none shall have a bearing on this transaction, except that the proceeds of any
insurance or condemnation payable hereafter shall be shared in such fashion that
each of Partner One and Regency shall be entitled to the benefits thereof as
partners of the Partnership.
10. This Agreement and the benefits and obligations hereunder are not
assignable by either party except as specifically agreed in writing by both
parties. This Agreement constitutes the entire agreement of the parties with
respect to the matters contemplated hereby.
11. This Agreement shall be construed and enforced in accordance with
the laws of Florida.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
day and year first above written.
Witnesses:
REAL SUB, INC.,
a Florida corporation
Name:
By:
Name: "Partner One"
REGENCY CENTERS, L.P.,
a Delaware limited partnership
By its sole general partner:
REGENCY REALTY CORPORATION,
a Florida corporation
Name:
By:
Name:
Name: Title:
"Regency"
ATL01/10397815v9 A&B Draft 02/24/99
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement") dated as
of February 26, 1999 by and among REGENCY CENTERS, L.P., a Delaware limited
partnership (the "Borrower"), REGENCY REALTY CORPORATION, a Florida corporation
(the "Parent"), each of the financial institutions initially a signatory hereto
together with their assignees under Section 12.8. (the "Lenders"), FIRST UNION
NATIONAL BANK, as Syndication Agent (the "Syndication Agent"), WACHOVIA BANK,
N.A., as Documentation Agent (the "Documentation Agent"), each of COMMERZBANK
AKTIENGESELLSCHAFT, ATLANTA AGENCY and pnc bank, national Association, as a
Managing Agent (each a "Managing Agent"), and WELLS FARGO BANK, NATIONAL
ASSOCIATION, as contractual representative of the Lenders to the extent and in
the manner provided in Article XI. below (in such capacity, the "Agent").
WHEREAS, certain of the Lenders and other financial institutions have
made available to Borrower a $300,000,000 revolving credit facility on the terms
and conditions contained in that certain Credit Agreement dated as of March 27,
1998 (as amended and in effect immediately prior to the date hereof, the
"Existing Regency Credit Agreement") by and among the Borrower, the Parent, such
Lenders, such other financial institutions and Wells Fargo Bank, National
Association, as Agent;
WHEREAS, pursuant to the Merger Agreement (as defined below), Pacific
Retail Trust, a Maryland real estate investment trust ("PRT"), is to merge with
and into the Parent;
WHEREAS, certain of the Lenders and other financial institutions have
made available to PRT a $325,000,000 revolving credit facility on the terms and
conditions contained in that certain Amended and Restated Credit Agreement dated
as of May 18, 1998 (as amended and in effect immediately prior to the date
hereof, the "Existing PRT Credit Agreement") by and among PRT, certain of the
Lenders and other financial institutions, and Wells Fargo Bank, National
Association, as Agent;
WHEREAS, the proceeds of the initial loans to be borrowed by the
Borrower hereunder on the Effective Date (as defined below) will be used to
satisfy in full all outstanding financial obligations owing by PRT under the
Existing PRT Credit Agreement; and
WHEREAS, the Borrower, the Lenders and the Agent desire to amend and
restate the terms of the Existing Regency Credit Agreement in order to make
available to Borrower a $635,000,000 revolving credit facility, including a
$30,000,000 swingline subfacility and a $2,000,000 letter of credit subfacility,
all pursuant to the terms hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree that the Existing Regency Credit Agreement is amended and restated
in its entirety as follows:
ARTICLE I. DEFINITIONS
SECTION 1.1. Definitions.
The following terms, as used herein, have the following meanings:
"Absolute Rate" has the meaning given that term in Section
2.2.(c)(ii)(C).
"Absolute Rate Auction" means a solicitation of Bid Rate Quotes setting
forth Absolute Rates pursuant to Section 2.2.
"Absolute Rate Loan" means a Bid Rate Loan the interest rate on which
is determined on the basis of an Absolute Rate pursuant to an Absolute Rate
Auction.
"Accession Agreement" means an Accession Agreement substantially in the
form of Annex I to the Guaranty.
"Acquisition" means any transaction, or any series of related
transactions, by which a Person directly or indirectly acquires any assets of
another Person, whether through purchase of assets, merger or otherwise.
"Additional Costs" has the meaning given that term in Section 5.1.
"Adjusted Base Rents" means the total rentals from a given Property
which are denominated as base rent or minimum rent under the applicable leases
which shall in any event exclude all percentage rent and reimbursements for
operating expenses, taxes or insurance, and shall be based on actual rents
presently being paid without any rent leveling adjustments.
"Affiliate" means any Person (other than the Agent or any Lender): (a)
directly or indirectly controlling, controlled by, or under common control with,
the Borrower; (b) directly or indirectly owning or holding ten percent (10%) or
more of any equity interest in the Borrower; or (c) ten percent (10%) or more of
whose voting stock or other equity interest is directly or indirectly owned or
held by the Borrower. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with") means the possession directly or indirectly of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities or by contract or otherwise.
"Agreement Date" means February 26, 1999.
"Applicable Facility Fee" means the percentage set forth in the table
below corresponding to the Level at which the "Applicable Margin" is determined
in accordance with the definition thereof:
- ---------------- --------------------------------
Level Facility Fee
- ---------------- --------------------------------
1 0.20%
- ---------------- --------------------------------
- ---------------- --------------------------------
2 0.25%
- ---------------- --------------------------------
- ---------------- --------------------------------
3 0.30%
- ---------------- --------------------------------
- ---------------- --------------------------------
4 0.30%
- ---------------- --------------------------------
- ---------------- --------------------------------
5 0.40%
- ---------------- --------------------------------
As of the Agreement Date, the Applicable Facility Fee equals 0.30%.
"Applicable Law" means all applicable provisions of local, state,
federal and foreign constitutions, statutes, rules, regulations, ordinances,
decrees, permits, concessions and orders of all governmental bodies and all
orders and decrees of all courts, tribunals and arbitrators.
"Applicable Margin" shall mean, as of any date of determination, the
respective percentage rates set forth below corresponding to the Borrower's
Credit Rating as assigned by the Rating Agencies:
Level Borrower's Credit Rating Applicable Margin Applicable Margin
(S&P/Moody's or equivalent) for LIBOR Loans for
Base Rate Loans
1 A-/A3 or equivalent or higher 0.85% 0.00%
2 BBB+/Baa1 or equivalent 0.90% 0.00%
3 BBB/Baa2 or equivalent 1.00% 0.00%
4 BBB-/Baa3 or equivalent 1.15% 0.00%
5 Less than BBB-/Baa3 or equivalent 1.35% 0.00%
The Agent shall determine the Applicable Margin from time to time in
accordance with the above table and the provisions of this definition and notify
the Borrower and the Lenders of such determination. If the Rating Agencies
assign Credit Ratings which correspond to different Levels in the above table
resulting in different Applicable Margin determinations, the Applicable Margin
will be determined based on the Level corresponding to the lower of the two
Credit Ratings. During any period that the Borrower receives more than two
Credit Ratings and such Credit Ratings are not equivalent, the Applicable Margin
shall equal the average of the Applicable Margins as determined in accordance
with the two lowest of such Credit Ratings; provided that one of such Credit
Ratings has been issued by either S&P or Moody's and such Credit Rating is an
Investment Grade Rating. Each change in the Applicable Margin resulting from a
change in a Credit Rating of the Borrower shall take effect on the first
calendar day of the month following the month in which such Credit Rating is
publicly announced by the relevant Rating Agency. As of the Agreement Date, the
Applicable Margin for LIBOR Loans equals 1.075% and for Base Rate Loans equals
0.0%.
"Asset Value" means
(a) with respect to any Subsidiary at a given time, the sum of (i) the
Capitalized EBITDA of such Subsidiary at such time, plus (ii) the Capitalized
Fee Income of such Subsidiary at such time, plus (iii) the book value of all
Construction in Process of such Subsidiary as of the end of the Parent's fiscal
quarter most recently ended, and
(b) with respect to any Unconsolidated Affiliate at a given time the
sum of (i) with respect to any of such Unconsolidated Affiliate's Properties
under construction, the Parent's pro rata share of the book value of
Construction in Process for such Property as of the end of the Parent's fiscal
quarter most recently ended and (ii) with respect to any of such Unconsolidated
Affiliate's Properties which have been completed, the Parent's pro rata share of
Capitalized EBITDA of such Unconsolidated Affiliate attributable to such
Properties.
"Assignee" has the meaning given that term in Section 12.8.(c).
"Assignment and Acceptance Agreement" means an Assignment and
Acceptance Agreement among a Lender, an Assignee and the Agent, substantially in
the form of Exhibit A.
"Base Rate" means the greater of (a) the rate of interest per annum
established from time to time by Wells Fargo, San Francisco, California and
designated as its prime rate (which rate of interest may not be the lowest rate
charged by such bank, the Agent or any of the Lenders on similar loans) and (b)
the Federal Funds Rate plus one-half of one percent (0.5%). Each change in the
Base Rate shall become effective without prior notice to the Borrower or the
Lenders automatically as of the opening of business on the date of such change
in the Base Rate.
"Base Rate Loan" means any Revolving Loan or Term Loan hereunder with
respect to which the interest rate is calculated by reference to the Base Rate.
"Bid Rate Borrowing" has the meaning given that term in Section
2.2.(b).
"Bid Rate Loan" means a loan made by a Lender under Section 2.2.(b).
"Bid Rate Note" has the meaning given that term in Section 2.12.
"Bid Rate Quote" means an offer in accordance with Section 2.2.(c) by a
Lender to make a Bid Rate Loan with one single specified interest rate.
"Bid Rate Quote Request" has the meaning given that term in Section
2.2.(b).
"Bridge Facility" has the meaning given that term in Section
6.1.(v)(ii).
"Business Day" means (a) any day other than Saturday, Sunday or other
day on which commercial banks in Atlanta, Georgia or San Francisco, California
are authorized or required to close and (b) with reference to LIBOR Loans, any
such day on which dealings in Dollar deposits are carried out in the London
interbank market.
"Capitalized EBITDA" means, with respect to a Person and as of a given
date, (a) such Person's EBITDA for the fiscal quarter most recently ended times
(b) 4 and divided by (c) 9.25%. In determining Capitalized EBITDA (i) EBITDA
attributable to real estate properties either acquired or disposed of by such
Person during such fiscal quarter shall be disregarded, (ii) Fee Income for the
applicable period shall be excluded from EBITDA, (iii) any amounts deducted from
the net earnings of Properties owned by Consolidated Subsidiaries in which a
third party owns a minority equity interest shall be included in EBITDA; and
(iv) distributions of cash received by such Person during such period from any
of its Unconsolidated Affiliates shall be excluded from EBITDA.
"Capitalized Fee Income" means, with respect to a Person and as of a
given date, (a) such Person's Fee Income for the fiscal quarter most recently
ended times (b) 4 and divided by (c) 20.0%.
"Capitalized Lease Obligation" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with such principles.
"Collateral Account" means a special non-interest bearing deposit
account maintained by the Agent under its sole dominion and control.
"Commitment" means, as to each Lender, such Lender's obligation to make
Revolving Loans pursuant to Section 2.1. and to issue (in the case of the Agent)
or participate in (in the case of the Lenders other than the Agent in such
capacity) Letters of Credit pursuant to Section 2.15.(a) and 2.15.(f)
respectively, in an amount up to, but not exceeding (but in the case of the
Agent, excluding the aggregate amount of participations in the Letters of Credit
held by other Lenders), the amount set forth for such Lender on its signature
page hereto as such Lender's "Commitment Amount" or as set forth in the
applicable Assignment and Acceptance Agreement, as the same may be reduced from
time to time pursuant to Section 2.9. or as appropriate to reflect any
assignments to or by such Lender effected in accordance with Section 12.8.
"Compliance Certificate" means the certificate described in Section
8.1.(c).
"Consolidated Subsidiary" means, with respect to a Person at any date,
any Subsidiary or other entity the accounts of which would be consolidated with
those of such Person in its consolidated financial statements in accordance with
GAAP, if such statements were prepared as of such date. The term "Consolidated
Subsidiary" shall also include any Preferred Stock Entity the accounts of which
are consolidated with those of such Person in its consolidated financial
statements in accordance with GAAP.
"Construction Budget" means the fully budgeted costs for the
construction, development and redevelopment of a given Development Property,
such budget to include an adequate operating deficiency reserve. For purposes of
this definition the "fully budgeted costs" of a Development Property to be
acquired by a Person upon completion pursuant to a contract in which the seller
is required to develop or renovate prior to, and as a condition precedent to,
such acquisition shall equal the maximum amount reasonably estimated to be
payable by such Person under the contract assuming performance by the seller of
its obligations under the contract which amount shall include, without
limitation, any amounts payable after consummation of such acquisition which may
be based on certain performance levels or other related criteria.
"Construction in Process" means construction in process as determined
in accordance with GAAP.
"Contingent Obligation" means, for any Person, any commitment,
undertaking, Guarantee or other obligation constituting a contingent liability
that must be accrued under GAAP.
"Continue", "Continuation" and "Continued" each refers to the
continuation of a LIBOR Loan from one Interest Period to the next Interest
Period pursuant to Section 2.5.
"Convert", "Conversion" and "Converted" each refers to the conversion
of a Revolving Loan of one Type into a Revolving Loan of another Type pursuant
to Section 2.6.
"Credit Rating" means the lowest rating assigned by a Rating Agency to
each series of rated senior unsecured long term indebtedness of the Borrower.
"Credit Tenant" means any Person which has entered into, and continues
to be subject to, a lease of any portion of a Property and has a rating of at
least BBB- assigned to its senior long-term debt obligations by S&P or Moody's.
For purposes of this Agreement, Publix Super Markets, Inc. shall be deemed a
Credit Tenant.
"Debt Service" means, with respect to any Person and for any period,
the sum of (a) Interest Expense of such Person for such period plus (b)
regularly scheduled principal payments on Indebtedness of such Person during
such period, other than any balloon, bullet or similar principal payment payable
on any Indebtedness of such Person which repays such Indebtedness in full.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Defaulting Lender" has the meaning given that term in Section 3.5.
"Designated Lender" means a special purpose corporation which is an
affiliate of, or sponsored by, a Lender, that is engaged in making, purchasing
or otherwise investing in commercial loans in the ordinary course of its
business and that issues (or the parent of which issues) commercial paper rated
at least P-1 (or the then equivalent grade) by Moody's or A-1 (or the then
equivalent grade) by S&P that, in either case, (a) is organized under the laws
of the United States of America or any state thereof, (b) shall have become a
party to this Agreement pursuant to Section 12.8.(d) and (c) is not otherwise a
Lender.
"Designated Lender Note" means a Bid Rate Note of the Borrower
evidencing the obligation of the Borrower to repay Bid Rate Loans made by a
Designated Lender.
"Designating Lender" has the meaning given that term in Section 12.8.(d).
"Designation Agreement" means a Designation Agreement between a Lender
and a Designated Lender and accepted by the Agent, substantially in the form of
Exhibit B or such other form as may be agreed to by such Lender, such Designated
Lender and the Agent.
"Development Property" means either (a) a real estate project acquired
by the Borrower, any Subsidiary, any Unconsolidated Affiliate or any Preferred
Stock Entity as unimproved real estate to be developed as a Property or (b) a
Property acquired by the Borrower, any Subsidiary, any Unconsolidated Affiliate
or any Preferred Stock Entity on which the Borrower, such Subsidiary, such
Unconsolidated Affiliate or such Preferred Stock Entity is to increase
materially the rentable square footage of such Property, in each case for which
an 85% Occupancy Rate has not been achieved. The term "Development Property"
shall include real property of the type described in the immediately preceding
clause (a) or (b) to be (but not yet) acquired by the Borrower, any Subsidiary,
any Unconsolidated Affiliate or any Preferred Stock Entity upon completion of
construction pursuant to a contract in which the seller of such real property is
required to develop or renovate prior to, and as a condition precedent to, such
acquisition, but shall not include any build-to-suit Property which is 100%
preleased by a single tenant having an investment grade rating assigned to its
senior long-term unsecured debt obligations by a nationally recognized
securities rating agency.
"Dollars" or "$" means the lawful currency of the United States of
America.
"EBITDA" means, with respect to any Person for any period and without
duplication, net earnings (loss) of such Person for such period (excluding
equity in net earnings or net loss of Unconsolidated Affiliates) plus the sum of
the following amounts (but only to the extent included in determining net
earnings (loss) for such period): (a) depreciation and amortization expense and
other non-cash charges of such Person for such period plus (b) interest expense
of such Person for such period plus (c) income tax expense of such Person in
respect of such period plus (d) distributions of cash received by such Person
during such period from any of its Unconsolidated Affiliates. EBITDA shall
exclude extraordinary gains of such Person and gains from sales of assets of
such Person for such period but will include extraordinary losses of such
Person, losses from sales of assets of such Person and losses resulting from
forgiveness by such Person of Indebtedness for such period. For purposes of this
definition, net earnings (loss) shall be determined before minority interests
and distributions to holders of Preferred Stock.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 6.1.
"Eligible Assignee" means any Person who is, at the time of
determination: (a) a Lender; (b) a commercial bank, trust company, savings and
loan association, savings bank, insurance company, investment bank or pension
fund organized under the laws of the United States of America, or any state
thereof, and having total assets in excess of $5,000,000,000; or (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development ("OECD"), or a
political subdivision of any such country, and having total assets in excess of
$10,000,000,000, provided that such bank is acting through a branch or agency
located in the United States of America. If such Person is not currently a
Lender, such Person's senior unsecured long term indebtedness must be rated BBB
or higher by S&P, Baa2 or higher by Moody's, or the equivalent or higher of
either such rating by another rating agency acceptable to the Agent.
"Eligible Property" means a Property which satisfies all of the
following requirements as confirmed by the Agent: (a) such Property is owned in
fee simple by only the Borrower or a Subsidiary of the Borrower; (b) neither
such Property, nor any interest of the Borrower or such Subsidiary therein, is
subject to any Lien other than Permitted Liens or to any agreement (other than
this Agreement or any other Loan Document) that prohibits the creation of any
Lien thereon as security for Indebtedness; (c) if such Property is owned by a
Subsidiary of the Borrower, (i) none of the Borrower's direct or indirect
ownership interest in such Subsidiary is subject to any Lien other than
Permitted Liens or to any agreement (other than this Agreement or any other Loan
Document) that prohibits the creation of any Lien thereon as security for
Indebtedness and (ii) the Borrower directly, or indirectly through a Subsidiary,
has the right to take the following actions without the need to obtain the
consent of any Person: (A) to create Lien on such Property as security for
Indebtedness of the Borrower or such Subsidiary, as applicable and (B) to sell,
transfer or otherwise dispose of such Property; (d) such Property is not a
Development Property and has an Occupancy Rate which has remained stabilized;
(e) such Property is free of all structural defects, title defects,
environmental conditions or other adverse matters except for defects, conditions
or matters individually or collectively which are not material to the profitable
operation of such Property; (f) such Property is not subject to a ground lease
(other than a lease of land on such Property by the Borrower or such Subsidiary
to a Person which is not an Affiliate) and (g) such Property is improved with a
shopping center or a stand-alone building containing a grocery store occupied by
a Credit Tenant. Prior to March 31, 1999, the requirements contained in the
immediately preceding clauses (a) through (c), shall be disregarded with respect
to each Regency Office Property so long as (1) such Regency Office Property is
otherwise an Eligible Property; (2) such Regency Office Property is owned in fee
simple by Regency Office; (3) Regency Office is a Wholly Owned Subsidiary of the
Parent; (4) such Regency Office Property is not, nor is any interest of Regency
Office therein, subject to any Lien other than Permitted Liens or to any
agreement (other than this Agreement or any other Loan Document) that prohibits
the creation of any Lien thereon as security for Indebtedness; and (5) none of
the Parent's direct or indirect ownership interest in Regency Office is subject
to any Lien other than Permitted Liens or to any agreement (other than this
Agreement or any other Loan Document) that prohibits the creation of any Lien
thereon as security for Indebtedness. For purposes of this definition only, when
determining the Occupancy Rate for a given Property which is a retail shopping
center, an anchor tenant who has vacated its space shall nonetheless be deemed
to occupy such space if such tenant is continuing to pay all rental payments
when due under its lease and either of the following two conditions apply, as
the case may be: (i) if such Property has two or more anchor tenants and the
other anchor tenants still actually occupy their respective spaces or (ii) such
space is undergoing construction to meet the specific needs of a new anchor
tenant who has either subleased the space from the existing tenant or who is
obligated to lease such space upon substantial completion of such construction.
"Environmental Laws" means any Applicable Law relating to environmental
protection or the manufacture, storage, disposal or clean-up of Hazardous
Materials including, without limitation, the following: Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et
seq.; Solid Waste Disposal Act, 42 U.S.C. ss. 6901 et seq.; Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 et
seq.; National Environmental Policy Act, 42 U.S.C. ss. 4321 et seq.; regulations
of the Environmental Protection Agency and any applicable rule of common law and
any judicial interpretation thereof relating primarily to the environment or
Hazardous Materials.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
that are treated as a single employer under Section 414 of the Internal Revenue
Code.
"ERISA Plan" means any employee benefit plan subject to Title I of
ERISA.
"Event of Default" means the occurrence of any of the events specified
in Section 10.1., whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
governmental or nongovernmental body; provided that any requirement for notice
or lapse of time or any other condition has been satisfied.
"Executive Memorandum" means the set of information provided to the
investment committee of the Parent's board of directors in connection with the
purchase or acquisition of a Property. The Executive Memorandum shall include,
at a minimum, the following information relating to such Property: (a) a
description of such Property, such description to include the age, location,
site plan and current occupancy rate of such Property; (b) the purchase price
paid or to be paid for such Property; (c) the capitalization rate for such
Property; (d) a summary of the existing tenants of such Property; (e) grocery
sales information for any grocery store tenants of such Property and a
competitive retail inventory for such Property; (f) either current operating
statements for such Property for the immediately preceding fiscal year and for
current fiscal year through the fiscal quarter most recently ending (to the
extent reasonably available to Borrower) or pro forma operating statements for
such Property; and (g) other demographic and trade information relating to such
Property.
"Existing PRT Credit Agreement" is defined in the recitals herein.
"Existing Regency Credit Agreement" is defined in the recitals herein.
"Extension Request" has the meaning given that term in Section 2.10.(a).
"Federal Funds Rate" means, on any day, the rate per annum (rounded
upward, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to the Agent on
such day on such transactions as reasonably determined by the Agent.
"Fee Income" means, with respect to a Person and for a given period,
the amount of net income accrued by such Person during such period from fees,
commissions and other compensation derived from (a) managing and/or leasing
properties owned by third parties; (b) developing properties for third parties;
(c) arranging for property acquisitions by third parties; (d) arranging
financing for third parties and (e) consulting and business services performed
for third parties.
"Funds From Operations" means, with respect to a Person and for a given
period, net earnings (loss) of such Person for such period (excluding equity in
net earnings or net loss of Unconsolidated Affiliates) plus the sum of the
following amounts (but only to the extent included in determining net income
(loss) for such period): (a) depreciation and amortization expense, deferred
taxes and other non-cash charges of such Person with respect to its real estate
assets for such period plus (b) losses from sales of assets of such Person and
losses resulting from restructuring of Indebtedness of such Person, all for such
period minus (c) gains from sales of assets of such Person and gains resulting
from restructuring of Indebtedness of such Person, all for such period plus (d)
such Person's pro rata share of Funds From Operations of such Person's
Unconsolidated Affiliates plus (e) adjustments for straight-line rent leveling
for such period.
"GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of determination.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory instrumentality,
authority, body, agency, bureau or entity (including, without limitation, the
Federal Deposit Insurance Corporation, the Comptroller of the Currency or the
Federal Reserve Board, any central bank or any comparable authority) or any
arbitrator with authority to bind a party at law.
"Gross Asset Value" means, at a given time, the sum of (a) the
Capitalized EBITDA of the Parent and its Consolidated Subsidiaries at such time,
plus (b) the Capitalized Fee Income of the Parent and its Consolidated
Subsidiaries at such time, plus (c) the purchase price paid by the Parent or any
Consolidated Subsidiary (less any amounts paid to the Parent or such
Consolidated Subsidiary as a purchase price adjustment, held in escrow, retained
as a contingency reserve, or other similar arrangements) for any real property
acquired by the Parent or such Consolidated Subsidiary as a Property other than
a Development Property during the Parent's fiscal quarter most recently ended,
plus (d) all of Parent's and its Consolidated Subsidiaries' cash and cash
equivalents as of the end of such fiscal quarter (excluding tenant deposits and
other cash and cash equivalents the disposition of which is restricted in any
way (excluding restrictions in the nature of early withdrawal penalties)), plus
(e) with respect to each of the Parent's Unconsolidated Affiliates, (i) with
respect to any of such Unconsolidated Affiliate's Properties under construction,
the Parent's pro rata share of the book value of Construction in Process for
such Property as of the end of such fiscal quarter and (ii) with respect to any
of such Unconsolidated Affiliate's Properties which have been completed, the
Parent's pro rata share of Capitalized EBITDA of such Unconsolidated Affiliate
attributable to such Properties, plus (f) the book value of all Construction in
Process for real property acquired for development the Parent or any
Consolidated Subsidiary as a Property as such book value is set forth on the
Parent's consolidated balance sheet most recently delivered to the Lenders under
Section 8.1.(a) or (b) plus (g) the contractual purchase price of any property
subject to a purchase obligation, repurchase obligation or forward commitment
which at such time could be specifically enforced by the seller of such
property, but only to the extent such obligations are included in the Parent's
or any Consolidated Subsidiary's Total Liabilities plus (h) in the case of any
property subject to a purchase obligation, repurchase obligation or forward
commitment which at such time could not be specifically enforced by the seller
of such property, the aggregate amount of due diligence deposits, earnest money
payments and other similar payments made under the applicable contract which, at
such time, would be subject to forfeiture upon termination of the contract, but
only to the extent such amounts are included in the Parent's or any Consolidated
Subsidiary's Total Liabilities.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part), provided that the term Guarantee shall
not include endorsements for collection or deposit in the ordinary course of
business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means any Person that is party to the Guaranty as a
"Guarantor"
"Guaranty" means the Guaranty executed and delivered by the Guarantors
substantially in the form of Exhibit O.
"Hazardous Materials" means all or any of the following: (a) substances
that are defined or listed in, or otherwise classified pursuant to, any
applicable Environmental Laws as "hazardous substances", "hazardous materials",
"hazardous wastes", "toxic substances" or any other formulation intended to
define, list or classify substances by reason of deleterious properties such as
ignitability, corrosivity, reactivity, carcinogenicity, reproductive toxicity or
"TLCP" toxicity, "EP toxicity"; (b) oil, petroleum or petroleum derived
substances, natural gas, natural gas liquids or synthetic gas and drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal resources; (c)
any flammable substances or explosives or any radioactive materials; and (d)
asbestos in any form or (e) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
"Hedge Agreements" means, collectively, Interest Rate Agreements,
commodity future or option contracts, currency swap agreements, currency future
or option contracts and other similar agreements.
"Indebtedness" means, with respect to a Person, at the time of
computation thereof, all of the following (without duplication and determined on
a consolidated basis): (a) obligations of such Person in respect of money
borrowed; (b) obligations of such Person (other than trade debt incurred in the
ordinary course of business), whether or not for money borrowed (i) represented
by notes payable, or drafts accepted, in each case representing extensions of
credit, (ii) evidenced by bonds, debentures, notes or similar instruments, or
(iii) constituting purchase money indebtedness, conditional sales contracts,
title retention debt instruments or other similar instruments, upon which
interest charges are customarily paid or that are issued or assumed as full or
partial payment for property; (c) Capitalized Lease Obligations of such Person;
(d) all reimbursement obligations of such Person under any letters of credit or
acceptances (whether or not the same have been presented for payment); (e) all
Indebtedness of other Persons which (i) such Person has Guaranteed or which is
otherwise recourse to such Person or (ii) is secured by a Lien on any property
of such Person; (f) all Indebtedness of any other Person of which such Person is
a general partner; and (g) with respect to Indebtedness of an Unconsolidated
Affiliate, (i) all such Indebtedness which such Person has Guaranteed or is
otherwise obligated on a recourse basis and (ii) such Person's Ownership Share
of all other Indebtedness of such Unconsolidated Affiliate.
"Interest Expense" means, with respect to a Person and for any period,
(a) the total interest expense (including, without limitation, capitalized
interest expense and interest expense attributable to Capitalized Lease
Obligations) of such Person and in any event shall include all letter of credit
fees and all interest expense with respect to any Indebtedness in respect of
which such Person is wholly or partially liable whether pursuant to any
repayment, interest carry, performance Guarantee or otherwise, plus (b) to the
extent not already included in the foregoing clause (a) such Person's Ownership
Share of all paid, accrued or capitalized interest expense for such period of
Unconsolidated Affiliates of such Person.
"Interest Period" means,
(a) with respect to any LIBOR Loan, each period commencing on the date
such LIBOR Loan is made or the last day of the next preceding Interest Period
for such Loan and ending on the numerically corresponding day in the first,
second, third or sixth calendar month thereafter, as the Borrower may select in
a Notice of Borrowing, Notice of Continuation or Notice of Conversion, as the
case may be, except that each Interest Period that commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
In addition to such periods, the Borrower may request Interest Periods for LIBOR
Loans having durations of at least 7, but not more than 30, days no more than
ten times during any 12-month period beginning during the term of this Agreement
but only in anticipation of (i) the Borrower's prepayment of such LIBOR Loans
from equity or debt offerings, financings or proceeds resulting from the sale or
other disposition of major assets of the Borrower or any of its Subsidiaries or
(ii) changes in the amount of the Lenders' Commitments associated with a
modification of this Agreement;
(b) with respect to any Absolute Rate Loan, the period commencing on
the date such Absolute Rate Loan is made and ending on the numerically
corresponding day in the first, second, or third calendar month thereafter, as
the Borrower may select as provided in Section 2.2.(b), except that each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month; and
(c) with respect to any LIBOR Margin Loan, each period commencing on
the date such LIBOR Margin Loan is made and ending on the numerically
corresponding day in the first, second or third calendar month thereafter, as
the Borrower may select as provided in Section 2.2.(b), except that each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month.
Notwithstanding the foregoing: (i) if any Interest Period for a Revolving Loan
or a Bid Rate Loan would otherwise end after the Revolving Credit Termination
Date, such Interest Period shall end on the Revolving Credit Termination Date;
(ii) if any Interest Period would otherwise end after the Termination Date, such
Interest Period shall end on the Termination Date; (iii) each Interest Period
that would otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day (or, if such next succeeding Business Day falls in
the next succeeding calendar month, on the next preceding Business Day); and
(iv) notwithstanding either of the immediately preceding clauses (i) and (ii)
but except as otherwise provided in the second sentence of the immediately
preceding clause (a), no Interest Period for any LIBOR Loan shall have a
duration of less than one month and, if the Interest Period for any LIBOR Loan
would otherwise be a shorter period, such Loan shall not be available hereunder
for such period.
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
contractual agreement or arrangement entered into by a Person with a nationally
recognized then rated investment grade financial institution for the purpose of
protecting such Person against fluctuations in interest rates.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" means, with respect to any Person and whether or not such
investment constitutes a controlling interest in such Person: (a) the purchase
or other acquisition of any share of capital stock or other equity interest,
evidence of Indebtedness or other security issued by any other Person; (b) any
loan, advance or extension of credit to, or contribution to the capital of, any
other Person; (c) any Guarantee of the Indebtedness of any other Person; (d) the
subordination of any claim against a Person to other Indebtedness of such
Person; and (e) any other investment in any other Person.
"Investment Grade Rating" means a Credit Rating of BBB- or higher by
S&P or Baa3 or higher by Moody's.
"L/C Commitment Amount" means an amount equal to $2,000,000.
"Lender" means each financial institution from time to time party
hereto as a "Lender" or a "Designated Lender," together with its respective
successors and assigns; provided, however, that the term "Lender" shall exclude
each Designated Lender when used in reference to any Loan other than a Bid Rate
Loan, the Commitments or terms relating to any Loan other than a Bid Rate Loan
and the Commitments and shall further exclude each Designated Lender for all
other purposes hereunder except that any Designated Lender which funds a Bid
Rate Loan shall, subject to Section 12.8.(d), have the rights (including the
rights given to a Lender contained in Sections 12.3. and 12.5.) and obligations
of a Lender associated with holding such Bid Rate Loan.
"Lending Office" means, for each Lender and for each Type of Loan, the
office of such Lender specified as such on its signature page hereto, or in any
applicable Assignment or Acceptance Agreement or such other office of such
Lender as such Lender may notify the Agent from time to time.
"Letter of Credit" has the meaning set forth in Section 2.15.(a).
"Letter of Credit Documents" means, with respect to any Letter of
Credit, collectively, any application therefor, any certificate or other
document presented in connection with a drawing under such Letter of Credit and
any other agreement, instrument or other document governing or providing for (a)
the rights and obligations of the parties concerned or at risk with respect to
such Letter of Credit or (b) any collateral security for any of such
obligations.
"Letter of Credit Liabilities" shall mean, without duplication, at any
time and in respect of any Letter of Credit, the sum of (a) the Stated Amount of
such Letter of Credit plus (b) the aggregate unpaid principal amount of all
Reimbursement Obligations of the Borrower at such time due and payable in
respect of all drawings made under such Letter of Credit. For purposes of this
Agreement, a Lender (other than the Agent in its capacity as such) shall be
deemed to hold a Letter of Credit Liability in an amount equal to its
participation interest in the related Letter of Credit under Section 2.15.(f),
and the Agent shall be deemed to hold a Letter of Credit Liability in an amount
equal to its retained interest in the related Letter of Credit after giving
effect to the acquisition by the Lenders other than the Agent of their
participation interests under such Section.
"LIBO Rate" means, with respect to each Interest Period, for any LIBOR
Loan or LIBOR Margin Loan, the average rate of interest per annum (rounded
upwards, if necessary, to the next highest 1/16th of 1%) at which deposits in
immediately available funds in Dollars are offered to Wells Fargo Bank, National
Association (at approximately 9:00 a.m., two Business Days prior to the first
day of such Interest Period) by first class banks in the interbank Eurodollar
market, for delivery on the first day of such Interest Period, such deposits
being for a period of time equal or comparable to such Interest Period and in an
amount equal to or comparable to the principal amount of the LIBOR Loan to which
such Interest Period relates. Each determination of the LIBO Rate by the Agent
shall, in absence of demonstrable error, be conclusive and binding.
"LIBOR Auction" means a solicitation of Bid Rate Quotes setting forth
LIBOR Margins based on the LIBO Rate pursuant to Section 2.2.
"LIBOR Loan" means any Revolving Loan or Term Loan hereunder with
respect to which the interest rate is calculated by reference to the LIBO Rate
for a particular Interest Period.
"LIBOR Margin" shall have the meaning assigned to such term in
Section 2.2.(c)(ii)(D).
"LIBOR Margin Loan" means a Bid Rate Loan the interest rate on which is
determined on the basis of the LIBO Rate pursuant to a LIBOR Auction.
"Lien" as applied to the property of any Person means: (a) any
mortgage, deed to secure debt, deed of trust, pledge, lien, charge or lease
constituting a Capitalized Lease Obligation, conditional sale or other title
retention agreement, or other security interest, security title or encumbrance
of any kind in respect of any property of such Person, or upon the income or
profits therefrom; (b) any arrangement, express or implied, under which any
property of such Person is transferred, sequestered or otherwise identified for
the purpose of subjecting the same to the payment of Indebtedness or performance
of any other obligation in priority to the payment of the general, unsecured
creditors of such Person; and (c) the filing of, or any agreement to give, any
financing statement under the Uniform Commercial Code or its equivalent in any
jurisdiction.
"Loan" means a Revolving Loan, a Bid Rate Loan, a Swingline Loan or a Term Loan.
"Loan Document" means this Agreement, each of the Notes, each Letter of
Credit Document, the Guaranty, each Accession Agreement, any agreement
evidencing the fees referred to in Section 3.1.(e) and each other document or
instrument executed and delivered by the Borrower or any other Loan Party in
connection with this Agreement or any of the other foregoing documents.
"Loan Party" means each of the Borrower and each Guarantor.
"Majority Lenders" means, as of any date, (a) all Lenders, if there are
fewer than three Lenders party hereto at such time and (b) the Lenders whose
combined Pro Rata Shares equal or exceed 66-2/3%, if there are three or more
Lenders party hereto at such time.
"Material Contract" means any agreement, lease, Mortgage, indenture, or
other contract or other arrangement (other than Loan Documents), whether written
or oral, to which the Borrower, any Guarantor or any other Subsidiary is a party
as to which the breach, nonperformance, cancellation or failure to renew by any
party thereto could have a Materially Adverse Effect.
"Materially Adverse Effect" means a materially adverse effect on (a)
the business, assets, liabilities, financial condition, results of operations or
business prospects of the Borrower and Consolidated Subsidiaries, or the Parent
and its Consolidated Subsidiaries, taken as a whole, (b) the ability of the
Borrower or any other Loan Party to perform its obligations under any Loan
Document to which it is a party, (c) the validity or enforceability of any of
such Loan Documents, (d) the rights and remedies of the Lenders and the Agent
under any of such Loan Documents or (e) the timely payment of the principal of
or interest on the Loans or other amounts payable in connection therewith.
Except with respect to representations made or deemed made by the Borrower under
Article VII. or in any of the other Loan Documents to which it is a party, all
determinations of materiality shall be made by the Agent in its reasonable
judgment unless expressly provided otherwise.
"Maximum Loan Availability" means, at any time, the lesser of (a) an
amount equal to the positive difference, if any, of (i) the Unencumbered Pool
Value divided by 1.75, minus (ii) all Unsecured Liabilities (other than the
Loans and the Letter of Credit Liabilities), of the Parent and its Subsidiaries
determined on a consolidated basis and (b) the aggregate amount of the
Commitments at such time.
"Merger Agreement" means that certain Agreement and Plan of Merger
dated as of September 23, 1998, between the Parent and PRT pursuant to which,
among other things, PRT will merge with and into the Parent.
"Moody's" means Moody's Investors Services, Inc.
"Mortgage" means a mortgage, deed of trust, deed to secure debt or
similar security instrument made or to be made by a Person owning an interest in
real estate granting a Lien on such interest in real estate as security for the
payment of Indebtedness.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Borrower or
any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Operating Income" means, for any Property and for a given period,
the sum of the following (without duplication): (a) rents and other revenues
received in the ordinary course from such Property (including proceeds of rent
loss insurance but excluding pre-paid rents and revenues and security deposits
except to the extent applied in satisfaction of tenants' obligations for rent)
minus (b) all expenses paid or accrued related to the ownership, operation or
maintenance of such property, including but not limited to taxes, assessments
and the like, insurance, utilities, payroll costs, maintenance, repair and
landscaping expenses, marketing expenses, and general and administrative
expenses (including an appropriate allocation for legal, accounting,
advertising, marketing and other expenses incurred in connection with such
property, but specifically excluding general overhead expenses of Borrower and
any property management fees) minus (c) the Reserve for Replacements for such
Property as of the end of such period minus (d) the greater of (i) the actual
property management fee paid during such period and (ii) an imputed management
fee in the amount of four percent (4.0%) of the gross revenues for such Property
for such period.
"Net Worth" means, for any Person and as of a given date, such Person's
total consolidated stockholder's equity plus, in the case of the Parent and its
Consolidated Subsidiaries, increases in accumulated depreciation accrued after
the Agreement Date minus (to the extent reflected in determining stockholders'
equity of such Person): (a) the amount of any write-up in the book value of any
assets contained in any balance sheet resulting from revaluation thereof or any
write-up in excess of the cost of such assets acquired, and (b) the aggregate of
all amounts appearing on the assets side of any such balance sheet for
franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, trade names, goodwill, treasury stock, experimental or
organizational expenses and other like assets which would be classified as
intangible assets under GAAP, all determined on a consolidated basis.
"Non-ERISA Plan" means any Plan subject to Section 4975 of the Internal
Revenue Code.
"Non-Guarantor Entity" means (a) any Subsidiary not required to become
a party to the Guaranty under to Section 8.24.(a); (b) any Preferred Stock
Entity; and (c) any Unconsolidated Affiliate of the Parent or the Borrower.
"Nonrecourse Indebtedness" means, with respect to a Person,
Indebtedness for borrowed money in respect of which recourse for payment (except
for customary exceptions for fraud, environmental matters, waste, misapplication
of insurance proceeds, and other similar exceptions acceptable to the Agent in
its sole discretion) is contractually limited to specific assets of such Person
encumbered by a Lien securing such Indebtedness.
"Note" means a Revolving Note, a Bid Rate Note or a Swingline Note.
"Notice of Borrowing" means a notice in the form of Exhibit F to be
delivered to the Agent pursuant to Section 2.1. evidencing the Borrower's
request for a borrowing of Revolving Loans.
"Notice of Continuation" means a notice in the form of Exhibit G to be
delivered to the Agent pursuant to Section 2.5. evidencing the Borrower's
request for the Continuation of a borrowing of Revolving Loans.
"Notice of Conversion" means a notice in the form of Exhibit H to be
delivered to the Agent pursuant to Section 2.6. evidencing the Borrower's
request for the Conversion of a borrowing of Revolving Loans.
"Notice of Swingline Borrowing" means a notice in the form of Exhibit L
to be delivered to the Swingline Lender pursuant to Section 2.3.(b) evidencing
the Borrower's request for a Swingline Loan.
"Obligations" means, individually and collectively: (a) the aggregate
principal balance of, and all accrued and unpaid interest on, all Loans; (b) all
Reimbursement Obligations and all other Letter of Credit Liabilities; (c) any
and all renewals and extensions of any of the foregoing and (d) all other
indebtedness, liabilities, obligations, covenants and duties of the Borrower
owing to the Agent and/or the Lenders and/or the Swingline Lender of every kind,
nature and description, under or in respect of this Agreement or any of the
other Loan Documents, whether direct or indirect, absolute or contingent, due or
not due, contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any promissory note.
"Occupancy Rate" means, with respect to a Property at any time, the
ratio, expressed as a percentage, of (a) the net rentable square footage of such
Property actually occupied by tenants paying rent pursuant to binding leases as
to which no monetary default has occurred and is continuing to (b) the aggregate
net rentable square footage of such Property.
"Ownership Share" means, with respect to any Subsidiary of a Person
that is not a Wholly Owned Subsidiary, and any Preferred Stock Entity or any
Unconsolidated Affiliate of a Person, the greater of (a) such Person's relative
nominal direct and indirect ownership interest (expressed as a percentage) in
such Subsidiary, Preferred Stock Entity or Unconsolidated Affiliate or (b)
subject to compliance with Section 8.1.(t), such Person's relative direct and
indirect economic interest (calculated as a percentage) in such Subsidiary,
Preferred Stock Entity or Unconsolidated Affiliate determined in accordance with
the applicable provisions of the declaration of trust, articles or certificate
of incorporation, articles of organization, partnership agreement, joint venture
agreement or other applicable organizational document of such Subsidiary,
Preferred Stock Entity or Unconsolidated Affiliate.
"Parent" means Regency Realty Corporation, a Florida corporation.
"Participant" has the meaning given that term in Section 12.8.(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Liens" means (a) pledges or deposits made to secure payment
of worker's compensation (or to participate in any fund in connection with
worker's compensation insurance), unemployment insurance, pensions or social
security programs; (b) encumbrances consisting of zoning restrictions,
easements, or other restrictions on the use of real property, provided that such
items do not materially impair the use of such property for the purposes
intended and none of which is violated in any material respect by existing or
proposed structures or land use; (c) the following to the extent no Lien has
been filed in any jurisdiction or agreed to: (i) Liens for taxes not yet due and
payable; or (ii) Liens imposed by mandatory provisions of Applicable Law such as
for materialmen's, mechanic's, warehousemen's and other like Liens arising in
the ordinary course of business, securing payment of Indebtedness the payment of
which is not yet due; (d) Liens for taxes, assessments and governmental charges
or assessments that are being contested in good faith by appropriate proceedings
diligently conducted, and in which reserves acceptable to the Agent have been
provided; (e) Liens expressly permitted under the terms of the Loan Documents;
and (f) any extension, renewal or replacement of the foregoing to the extent
such Lien as so extended, renewed or replaced would otherwise be permitted
hereunder.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan which is
covered by Title IV of ERISA or subject to the minimum funding standards under
Section 412 of the Internal Revenue Code.
"Preferred Stock" means, with respect to any Person, shares of capital
stock of, or other equity interests in, such Person which are entitled to
preference or priority over any other capital stock of, or other equity interest
in, such Person in respect of the payment of dividends or distribution of assets
upon liquidation or both.
"Preferred Stock Entity" means any Person (other than a Subsidiary) in
whom the Borrower or the Parent owns, directly or indirectly, all of the
Preferred Stock or other equity interests which are not Voting Stock and which
Preferred Stock or other equity interests entitle the Borrower to receive the
majority of all economic benefits associated with ownership of all equity
interests issued by such Person.
"Principal Office" means the office of the Agent located at 2120 E.
Park Place, Suite 100, El Segundo, California 90245, or such other office of the
Agent as the Agent may designate from time to time.
"Pro Rata Share" means, with respect to any Lender, the percentage
obtained by dividing (a) the amount of such Lender's Commitment by (b) the
aggregate amount of Commitments of all the Lenders, or, if the Commitments shall
have been terminated, the percentage obtained by dividing (i) the aggregate
unpaid principal amount of Loans and Letter of Credit Liabilities owing to such
Lender by (ii) the aggregate unpaid principal amount of all Loans and Letter of
Credit Liabilities.
"Property" means real property improved with (a) one or more operating
retail shopping centers or (b) a stand-alone building containing a grocery store
occupied by a Credit Tenant, in either case that is owned directly or
indirectly, in whole or in part, by the Borrower, or solely for purposes of
determining Unencumbered NOI, owned directly or indirectly, in whole or in part,
by the Parent.
"Property Certificate" means a certificate substantially in the form of
Exhibit R.
"PRT" means Pacific Retail Trust, a Maryland real estate investment
trust.
"PRT Acquisition" means the Acquisition by the Parent of all of the
shares of beneficial interest of PRT pursuant to the terms and conditions of the
Merger Agreement.
"Rating Agencies" means any two nationally recognized securities rating
agencies designated by the Borrower and acceptable to the Agent. One of such
ratings agencies must be either (a) Moody's or (b) S&P, but if both such
corporations cease to act as a securities rating agency or cease to provide
ratings with respect to the senior long-term unsecured debt obligations of the
Borrower, the Borrower may designate as a replacement Rating Agency any
nationally recognized securities rating agency acceptable to the Agent.
"Regency Office" means Regency Office Partnership, L.P.
"Regency Office Properties" means the two Properties owned by Regency
Office and referred to as the "Cherry Grove" shopping center and the
"Bloomingdale" shopping center.
"Regulations U and X" means Regulations U and X of the Board of
Governors of the Federal Reserve System, as in effect from time to time.
"Regulatory Change" means, with respect to any Lender, any change
effective after the Agreement Date in Applicable Law (including without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks, including such Lender, of or
under any Applicable Law (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) by any Governmental Authority
or monetary authority charged with the interpretation or administration thereof
or compliance by any Lender with any request or directive regarding capital
adequacy.
"Reimbursement Obligation" means the absolute, unconditional and
irrevocable obligation of the Borrower to reimburse the Agent for any drawing
honored by the Agent under a Letter of Credit.
"REIT" means a Person qualifying for treatment as a "real estate
investment trust" under the Internal Revenue Code.
"Reportable Event" has the meaning set forth in Section 4043(b) of
ERISA, but shall not include a Reportable Event as to which the provision for 30
days' notice to the PBGC is waived under applicable regulations.
"Reserve for Replacements" means, for any period and with respect to
any Property, an amount equal to (a)(i) the aggregate square footage of all
completed space of such Property if such Property is owned by the Parent or any
of its Subsidiaries or (ii) the Parent's or such Subsidiary's Ownership Share of
the aggregate square footage of all completed space of such Property if such
Property is owned by an Unconsolidated Affiliate or Preferred Stock Entity times
(b) $0.15 times (c) the number of days in such period divided by (d) 365.
"Restricted Payment" means, with respect to a Person: (a) any dividend
or other distribution, direct or indirect, on account of any shares or other
equity units of any class of stock, partnership interest or other equity
interest, as applicable, of such Person now or hereafter outstanding, except a
dividend payable solely in shares or other equity units of that class of stock,
partnership interest or other equity interest, as applicable, to the holders of
that class; (b) any redemption, conversion, exchange, retirement, sinking fund
or similar payment, purchase or other acquisition for value, direct or indirect,
of any shares or other equity units of any class of stock, partnership interests
or other equity interests, as applicable, of such Person now or hereafter
outstanding; and (c) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares or other
equity units of any class of stock, partnership interests or other equity
interests, as applicable, of such Person now or hereafter outstanding.
"Revolving Credit Termination Date" means the earlier to occur of (a)
February 26, 2001, or such later date to which such date may be extended in
accordance with Section 2.10. or (b) the date on which the Revolving Loans are
converted into Term Loans pursuant to Section 2.11.
"Revolving Loan" means a loan made by a Lender under Section 2.1.
"Revolving Note" has the meaning given that term in Section 2.12.
"Revolving Period" means the period commencing on the Effective Date
and ending on the earlier of (a) the Revolving Credit Termination Date or (b)
the date on which the Revolving Loans are converted into the Term Loan pursuant
to Section 2.11.
"Secured Indebtedness" means, with respect to any Person, any
Indebtedness of such Person that is secured in any manner by any Lien on any
real property and shall include such Person's Ownership Share of the Secured
Indebtedness of any of such Person's Unconsolidated Affiliates.
"Securities Act" means the Securities Act of 1933, as amended, and all
rules and regulations issued pursuant thereto.
"Single Asset Subsidiary" means a Subsidiary that meets all of the
following requirements: (a) such Subsidiary only owns a single Property; (b)
such Subsidiary is engaged only in the business of leasing such Property to
other Persons; (c) such Subsidiary receives substantially all of its gross
revenues from the leasing of such Property; and (d) such Subsidiary is not
obligated in respect of any Indebtedness other than Indebtedness for borrowed
money secured by a Lien encumbering such Property.
"Solvent" means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Indebtedness
due from any Affiliate of such Person) are each in excess of the fair valuation
of its total liabilities (including all contingent liabilities); and (b) such
Person is able to pay its debts or other obligations in the ordinary course as
they mature and (c) that the Person has capital not unreasonably small to carry
on its business and all business in which it proposes to be engaged.
"S&P" means Standard & Poor's Rating Services, a division of
McGraw-Hill Companies, Inc.
"Stated Amount" means the amount available to be drawn by a beneficiary
under a Letter of Credit from time to time, as such amount may be increased or
reduced from time to time in accordance with the terms of such Letter of Credit.
"Stein Parties" means (a) Joan Stein, Richard Stein, Robert Stein and
Martin E. Stein, Jr. and (b) The Regency Group, Inc.,The Regency Group II, Ltd.
and Regency Square II but only so long as the foregoing individuals own,
directly or indirectly, all of the capital stock of any such entity.
"Subsidiary" means, for any Person, any corporation, partnership or
other entity of which at least a majority of the securities or other ownership
interests having by the terms thereof ordinary voting power to elect a majority
of the board of directors or other persons performing similar functions of such
corporation, partnership or other entity (without regard to the occurrence of
any contingency) is at the time directly or indirectly owned or controlled by
such Person or one or more Subsidiaries of such Person or by such Person and one
or more Subsidiaries of such Person. "Wholly Owned Subsidiary" means any such
corporation, partnership or other entity of which all of the equity securities
or other ownership interests (other than, in the case of a corporation,
directors' qualifying shares) are so owned or controlled.
"Swingline Commitment" means the Swingline Lender's obligation to make
Swingline Loans pursuant to Section 2.3. in an amount up to, but not exceeding,
$30,000,000, as such amount may be reduced from time to time in accordance with
the terms hereof.
"Swingline Lender" means Wells Fargo Bank, National Association,
together with its respective successors and assigns.
"Swingline Loan" means a loan made by the Swingline Lender to the
Borrower pursuant to Section 2.3.(a).
"Swingline Termination Date" means the date which is seven Business
Days prior to the Revolving Credit Termination Date.
"Swingline Note" means the promissory note of the Borrower payable to
the order of the Swingline Lender in a principal amount equal to the amount of
the Swingline Commitment as originally in effect and otherwise duly completed,
substantially in the form of Exhibit E.
"Taxes" has the meaning given that term in Section 3.11.
"Term Loan" has the meaning given that term in Section 2.11.
"Termination Date" means the date two years after the Revolving Credit
Termination Date.
"Termination Event" means (a) a Reportable Event; (b) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA or (c) the institution of proceedings to
terminate a Plan by the PBGC under Section 4042 of ERISA, or the appointment of
a trustee to administer any Plan.
"Total Liabilities" means, as to any Person as of a given date, all
liabilities which would, in conformity with GAAP, be properly classified as a
liability on the consolidated balance sheet of such Person as of such date, and
in any event shall include (without duplication): (a) all Indebtedness of such
Person; (b) all accounts payable of such Person; (c) all purchase and repurchase
obligations and forward commitments of such Person to the extent such
obligations or commitments are evidenced by a binding purchase agreement
(forward commitments shall include without limitation (i) forward equity
commitments and (ii) commitments to purchase any real property under
development, redevelopment or renovation); (d) all unfunded obligations of such
Person; (e) all lease obligations of such Person (including ground leases) to
the extent required under GAAP to be classified as a liability on the balance
sheet of such Person; (f) all Contingent Obligations of such Person including,
without limitation, all Guarantees of Indebtedness by such Person; and (g) all
liabilities of any Unconsolidated Affiliate of such Person, which liabilities
such Person has Guaranteed or is otherwise obligated on a recourse basis. For
purposes of clauses (c) and (d) of this definition, the amount of Total
Liabilities of a Person at any given time in respect of a contract to purchase
or otherwise acquire unimproved or fully developed real property shall be equal
to (i) the total purchase price payable by such Person under the contract if, at
such time, the seller of such real property would be entitled to specifically
enforce the contract against such Person, otherwise, (ii) the aggregate amount
of due diligence deposits, earnest money payments and other similar payments
made by such Person under the contract which, at such time, would be subject to
forfeiture upon termination of the contract. For purposes of clauses (c) and (d)
of this definition, the amount of Total Liabilities of a Person at any given
time in respect of a contract relating to the acquisition of real property which
the seller is required to develop or renovate prior to, and as a condition
precedent to, such acquisition shall equal the maximum amount reasonably
estimated to be payable by such Person under the contract assuming performance
by the seller of its obligations under the contract which amount shall include,
without limitation, any amounts payable after consummation of such acquisition
which may based on certain performance levels or other related criteria.
"Type" with respect to any Revolving Loan or Term Loan, refers to
whether such Loan is a LIBOR Loan or a Base Rate Loan, or in the case of a Bid
Rate Loan only, an Absolute Rate Loan or a LIBOR Margin Loan.
"Unconsolidated Affiliate" shall mean, with respect to any Person, any
other Person in whom such Person holds an Investment, which Investment is
accounted for in the financial statements of such Person on an equity basis of
accounting and whose financial results would not be consolidated under GAAP with
the financial results of such Person on the consolidated financial statements of
such Person. The term "Unconsolidated Affiliate" shall also include any
Preferred Stock Entity in which a Person has made an Investment, which
Investment is accounted for in the financial statements of such Person on an
equity basis of accounting and whose financial results would not be consolidated
under GAAP with the financial results of such Person on the consolidated
financial statements of such Person.
"Unencumbered NOI" means, for any period, the aggregate Net Operating
Income for such period of Unencumbered Pool Properties and any other Property
which satisfies the following requirements: (a) such Property is owned in fee
simple by only the Parent or a Subsidiary; (b) neither such Property, nor any
interest of the Parent or such Subsidiary therein, is subject to any Lien other
than Permitted Liens or to any agreement (other than this Agreement or any other
Loan Document) that prohibits the creation of any Lien thereon as security for
Indebtedness; (c) if such Property is owned by a Subsidiary, (i) none of the
Parent's direct or indirect ownership interest in such Subsidiary is subject to
any Lien other than Permitted Liens or to any agreement (other than this
Agreement or any other Loan Document) that prohibits the creation of any Lien
thereon as security for Indebtedness and (ii) the Parent directly, or indirectly
through a Subsidiary, has the right to take the following actions without the
need to obtain the consent of any Person: (A) to create Lien on such Property as
security for Indebtedness of the Parent or such Subsidiary, as applicable and
(B) to sell, transfer or otherwise dispose of such Property; and (d) such
Property is free of all structural defects, title defects, environmental
conditions or other adverse matters except for defects, conditions or matters
individually or collectively which are not material to the profitable operation
of such Property.
"Unencumbered Pool Certificate" means a report, certified by the chief
financial officer of the Borrower in the manner provided for in Exhibit P,
setting forth the calculations required to establish the Unencumbered Pool Value
as of a specified date, all in form and detail satisfactory to the Agent.
"Unencumbered Pool Properties" means those Eligible Properties that
have been approved pursuant to Article IV. for inclusion when calculating the
Maximum Loan Availability.
"Unencumbered Pool Value" means, at any time, the sum of the following
amounts as determined for each Unencumbered Pool Property: (a) the Net Operating
Income of such Unencumbered Pool Property for the fiscal quarter most recently
ended times (b) 4 and divided by (c) 9.25%. For purposes of this definition, the
Unencumbered Pool Value for any period for any Unencumbered Pool Property owned
by a Subsidiary which is not a Wholly Owned Subsidiary shall be limited to the
Borrower's Ownership Share of the distributed Net Operating Income of such
Unencumbered Pool Property for such period. Notwithstanding anything set forth
in this definition to the contrary, not more than 20% of the total Unencumbered
Pool Value can be attributable to Unencumbered Pool Properties owned by
Subsidiaries of the Borrower that are not Wholly Owned Subsidiaries.
"Unprotected Floating Rate Debt" means all Indebtedness of a Person
(including, without limitation, Indebtedness of Unconsolidated Affiliates of
such Person which Indebtedness is recourse to such Person) which bears interest
at a variable rate that fluctuates during the scheduled life of such
Indebtedness and for which such Person has not obtained Interest Rate Agreements
which effectively cause such variable rates to be equivalent to fixed rates less
than or equal to 9% per annum.
"Unsecured Indebtedness" means, with respect to a Person, all
Indebtedness of such Person that is not Secured Indebtedness.
"Unsecured Liabilities" means, as to any Person as of a given date, (a)
all liabilities which would, in conformity with GAAP, be properly classified as
a liability on the consolidated balance sheet of such Person as at such date
plus (b) all Indebtedness of such Person (to the extent not included in the
preceding clause (a)) minus (c) all Secured Indebtedness of such Person. When
determining the Unsecured Liabilities of the Parent and its Subsidiaries: (i)
the following (to the extent not in excess of $1,500,000 in the aggregate) shall
be excluded: (A) any amounts related to contributions by the Borrower paid in
the Borrower's capital stock to the 401(k) plan maintained by the Borrower and
(B) contributions paid by the Borrower to the Borrower's Long-term Omnibus Plan;
(ii) accounts payable and accrued dividends payable shall be included only to
the extent the aggregate amount thereof exceeds the aggregate amount of
unrestricted cash then reportable on a consolidated balance sheet of the
Borrower and (iii) accrued property taxes in respect of real property shall be
included only to the extent the aggregate amount thereof exceeds the aggregate
amount of cash held by the Borrower and its Subsidiaries in escrow for the
payment of such taxes at such time.
"Unsecured Interest Expense" means, with respect to a Person and for a
given period, all Interest Expense for such period attributable the Unsecured
Indebtedness of such Person.
"U.S. Realty" means Security Capital U.S. Realty, a Luxembourg societe
d'investment a capital variable.
"Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are ordinarily,
in the absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even if the right so
to vote has been suspended by the happening of such a contingency
"Wells Fargo" means Wells Fargo Bank, National Association.
SECTION 1.2. General; References to Time.
Unless otherwise indicated, all accounting terms, ratios and
measurements shall be interpreted or determined in accordance with, and all
financial statements required to be delivered under any Loan Document shall be
prepared in accordance with, GAAP. With respect to any Property which has not
been owned by a Loan Party for a full fiscal quarter, financial amounts with
respect to such Property shall be adjusted appropriately to account for such
lesser period of ownership unless specifically provided otherwise herein.
References in this Agreement to "Sections", "Articles", "Exhibits" and
"Schedules" are to sections, articles, exhibits and schedules herein and hereto
unless otherwise indicated. references in this Agreement to any document,
instrument or agreement (a) shall include all exhibits, schedules and other
attachments thereto, (b) shall include all documents, instruments or agreements
issued or executed in replacement thereof, and (c) shall mean such document,
instrument or agreement, or replacement or predecessor thereto, as amended,
supplemented, restated or otherwise modified from time to time and in effect at
any given time. Wherever from the context it appears appropriate, each term
stated in either the singular or plural shall include the singular and plural,
and pronouns stated in the masculine, feminine or neuter gender shall include
the masculine, the feminine and the neuter. Unless explicitly set forth to the
contrary, a reference to "Subsidiary" means a Subsidiary of the Parent or a
Subsidiary of such Subsidiary and a reference to an "Affiliate" means a
reference to an Affiliate of the Borrower. Unless otherwise indicated, all
references to time are references to San Francisco, California time.
ARTICLE II. CREDIT FACILITY
SECTION 2.1. Revolving Loans.
(a) Making of Revolving Loans. Subject to the terms and conditions set
forth in this Agreement and the limitations set forth in Section 2.14., each
Lender severally and not jointly agrees to make Revolving Loans to the Borrower
during the period from and including the Effective Date to but excluding the
Revolving Credit Termination Date, in an aggregate principal amount at any one
time outstanding up to, but not exceeding such, Lender's Pro Rata Share of the
Maximum Loan Availability. Each borrowing of Revolving Loans hereunder shall be
in an aggregate principal amount of $1,000,000 and integral multiples of
$100,000 in excess of that amount (except that any such borrowing of Revolving
Loans may be in the aggregate amount of the unused Commitments, which Revolving
Loans, if less than $1,000,000, must be Base Rate Loans). Within the foregoing
limits and subject to the other terms of this Agreement, the Borrower may
borrow, repay and reborrow Revolving Loans. Upon the Effective Date, all
Revolving Loans (as defined under the Existing Regency Credit Agreement) then
outstanding under the Existing Regency Credit Agreement shall be deemed to be
Revolving Loans to the Borrower outstanding hereunder being of the same Types,
and in the case of LIBOR Loans, having the same Interest Periods. As of the
Effective Date, such Revolving Loans shall be allocated among the Lenders in
accordance with their respective Pro Rata Shares. Each Lender agrees to make
such payments to the other Lenders and any Person who ceased to be a "Lender"
under the Existing Regency Credit Agreement upon the Effective Date in such
amounts as are necessary to effect such allocation. All such payments shall be
made to the Agent for the account of the Person to be paid.
(b) Requests for Revolving Loans. Not later than 9:00 a.m. at least two
Business Days prior to a borrowing of Base Rate Loans and not later than 9:00
a.m. at least three Business Days prior to a borrowing of LIBOR Loans, the
Borrower shall deliver to the Agent a Notice of Borrowing. Each Notice of
Borrowing shall specify the principal amount of the Revolving Loan to be
borrowed, the date such Revolving Loan is to be borrowed (which must be a
Business Day), the use of the proceeds of such Revolving Loan, the Type of the
requested Revolving Loan and if such Revolving Loan is to be a LIBOR Loan, the
initial Interest Period for such Revolving Loan. Each Notice of Borrowing shall
be irrevocable once given and binding on the Borrower. Prior to delivering a
Notice of Borrowing, the Borrower may (without specifying whether a Revolving
Loan will be a Base Rate Loan or a LIBOR Loan) request that the Agent provide
the Borrower with the most recent LIBO Rate available to the Agent. The Agent
shall provide such quoted rate to the Borrower and to the Lenders on the date of
such request or as soon as possible thereafter.
(c) Funding of Revolving Loans. Promptly after receipt of a Notice of
Borrowing under Section 2.1.(b), the Agent shall notify each Lender by telex or
telecopy, or other similar form of transmission of the proposed borrowing. Each
Lender shall deposit an amount equal to its Pro Rata Share of the Revolving Loan
requested by the Borrower with the Agent at the Principal Office, in immediately
available funds not later than 9:00 a.m. on the date of such proposed Revolving
Loan. Upon fulfillment of all applicable conditions set forth herein, the Agent
shall make available to the Borrower at the Principal Office, not later than
12:00 noon on the date of the requested Revolving Loan, the proceeds of such
amounts received by the Agent. The failure of any Lender to deposit the amount
described above with the Agent shall not relieve any other Lender of its
obligations hereunder to make its Pro Rata Share of a Revolving Loan.
(d) Unless the Agent shall have been notified by any Lender that such
Lender will not make available to the Agent such Lender's Pro Rata Share of a
proposed Revolving Loan, the Agent may in its discretion assume that such Lender
has made such Pro Rata Share of such Revolving Loan available to the Agent in
accordance with this Section and the Agent may, if it chooses, in reliance upon
such assumption, make such Pro Rata Share of such Revolving Loan available to
the Borrower.
SECTION 2.2. Bid Rate Loans.
(a) Bid Rate Loans. In addition to borrowings of Revolving Loans, at
any time during the period from the Effective Date to but excluding the
Revolving Credit Termination Date, and so long as the Borrower continues to
maintain an Investment Grade Rating from both S&P and Moody's, the Borrower may,
as set forth in this Section, request the Lenders to make offers to make Bid
Rate Loans to the Borrower in Dollars. The Lenders may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section.
Upon the Effective Date, all Bid Rate Loans owing to a Lender then outstanding
under the Existing Credit Agreement shall be deemed to be Bid Rate Loans to
Borrower and made by such Lender outstanding hereunder being of the same Types
and having the same Interest Periods.
(b) Requests for Bid Rate Loans. When the Borrower wishes to request
from the Lenders offers to make Bid Rate Loans, it shall give the Agent notice
(a "Bid Rate Quote Request") so as to be received no later than 9:00 a.m. on (x)
the Business Day immediately preceding the date of borrowing proposed therein,
in the case of an Absolute Rate Auction and (y) on the date four Business Days
prior to the proposed date of borrowing, in the case of a LIBOR Auction. The
Agent shall deliver to each Lender a copy of each Bid Rate Quote Request
promptly upon receipt thereof by the Agent. The Borrower may request offers to
make Bid Rate Loans for up to 3 different Interest Periods in each Bid Rate
Quote Request (for which purpose Interest Periods in different lettered clauses
of the definition of the term "Interest Period" shall be deemed to be different
Interest Periods even if they are coterminous); provided that the request for
each separate Interest Period shall be deemed to be a separate Bid Rate Quote
Request for a separate borrowing (a "Bid Rate Borrowing"). Each Bid Rate Quote
Request shall be substantially in the form of Exhibit I and shall specify as to
each Bid Rate Borrowing:
(i) the proposed date of such borrowing, which shall be a
Business Day;
(ii) the aggregate amount of such Bid Rate Borrowing which
shall be in a minimum amount of $15,000,000 and integral multiples
of $1,000,000 in excess thereof which shall not cause any of the
limits specified in Section 2.14. to be violated;
(iii) whether the Bid Rate Quote Request is for LIBOR Margin
Loans or Absolute Rate Loans; and
(iv) the duration of the Interest Period applicable thereto.
The Borrower shall deliver no more than one Bid Rate Quote Request in
any calendar month and no Bid Rate Quote Request shall be delivered within five
Business Days of the giving of any other Bid Rate Quote Request.
(c) Bid Rate Quotes.
(i) Each Lender may submit one or more Bid Rate Quotes, each
containing an offer to make a Bid Rate Loan in response to any Bid Rate
Quote Request; provided that, if the Borrower's request under Section
2.2.(b) specified more than one Interest Period, such Lender may make a
single submission containing only one Bid Rate Quote for each such
Interest Period. Each Bid Rate Quote must be submitted to the Agent not
later than 7:30 a.m. (x) on the proposed date of borrowing, in the case
of an Absolute Rate Auction and (y) on the date three Business Days
prior to the proposed date of borrowing, in the case of a LIBOR
Auction, and in either case the Agent shall disregard any Bid Rate
Quote received after such time; provided that the Lender then acting as
the Agent may submit a Bid Rate Quote only if it notifies the Borrower
of the terms of the offer contained therein not later than 30 minutes
prior to the latest time by which the Lenders must submit applicable
Bid Rate Quotes. Subject to Articles VI. and X., any Bid Rate Quote so
made shall be irrevocable. Such Bid Rate Loans may be funded by a
Lender's Designated Lender (if any) as provided in Section 12.8.(d),
however such Lender shall not be required to specify in its Bid Rate
Quote whether such Bid Rate Loan will be funded by such Designated
Lender.
(ii) Each Bid Rate Quote shall be substantially in the form of
Exhibit J and shall specify:
(A) the proposed date of borrowing and the Interest Period
therefor;
(B) the principal amount of the Bid Rate Loan for
which each such offer is being made; provided that the
aggregate principal amount of all Bid Rate Loans for which a
Lender submits Bid Rate Quotes (x) may be greater or less than
the Commitment of such Lender but (y) shall not exceed the
principal amount of the Bid Rate Borrowing for a particular
Interest Period for which offers were requested;
(C) in the case of an Absolute Rate Auction, the rate
of interest per annum (rounded upwards, if necessary, to the
nearest 1/1,000th of 1%) offered for each such Absolute Rate
Loan (the "Absolute Rate");
(D) in the case of a LIBOR Auction, the margin above
or below applicable LIBOR (the "LIBOR Margin") offered for
each such LIBOR Margin Loan, expressed as a percentage
(rounded upwards, if necessary, to the nearest 1/1,000th of
1%) to be added to (or subtracted from) the applicable LIBOR;
(E) the identity of the quoting Lender; and
(F) any Bid Rate Quote shall be in a minimum amount
of $5,000,000 and integral multiples of $1,000,000 in excess
thereof.
No Bid Rate Quote shall contain qualifying, conditional or
similar language or propose terms other than or in addition to those
set forth in the applicable Bid Rate Quote Request and, in particular,
no Bid Rate Quote may be conditioned upon acceptance by the Borrower of
all (or some specified minimum) of the principal amount of the Bid Rate
Loan for which such Bid Rate Quote is being made.
(d) Notification by Agent. The Agent shall, as promptly as practicable
after the Bid Rate Quotes are submitted (but in any event not later than 8:30
a.m. (x) on the proposed date of borrowing, in the case of an Absolute Rate
Margin and (y) on the date three Business Days prior to the proposed date of
borrowing, in the case of a LIBOR Auction), notify the Borrower of the terms (i)
of any Bid Rate Quote submitted by a Lender that is in accordance with Section
2.2.(c) and (ii) of any Bid Rate Quote that amends, modifies or is otherwise
inconsistent with a previous Bid Rate Quote submitted by such Lender with
respect to the same Bid Rate Quote Request. Any such subsequent Bid Rate Quote
shall be disregarded by the Agent unless such subsequent Bid Rate Quote is
submitted solely to correct a manifest error in such former Bid Rate Quote. The
Agent's notice to the Borrower shall specify (A) the aggregate principal amount
of the Bid Rate Borrowing for which offers have been received and (B) the
principal amounts and Absolute Rates or LIBOR Margins, as applicable, so offered
by each Lender.
(e) Acceptance by Borrower.
(i) Not later than 9:30 a.m. (x) on the proposed date of
borrowing, in the case of an Absolute Rate Margin and (y) on the date
three Business Days prior to the proposed date of borrowing, in the
case of LIBOR Auction, the Borrower shall notify the Agent of its
acceptance or nonacceptance of the offers so notified to it pursuant to
Section 2.2.(d) which notice shall be in the form of Exhibit K. In the
case of acceptance, such notice shall specify the aggregate principal
amount of offers for each Interest Period that are accepted. The
failure of the Borrower to give such notice by such time shall
constitute nonacceptance. The Borrower may accept any Bid Rate Quote in
whole or in part; provided that:
(A) the aggregate principal amount of each Bid Rate
Borrowing may not exceed the applicable amount set forth in
the related Bid Rate Quote Request;
(B) the aggregate principal amount of each Bid Rate
Borrowing shall comply with the provisions of Section
2.2.(b)(ii) but shall not cause the limits specified in
Section 2.14. to be violated;
(C) acceptance of offers may be made only in
ascending order of Absolute Rates or LIBOR Margins, as
applicable, in each case beginning with the lowest rate so
offered;
(D) any acceptance in part by the Borrower shall be
in a minimum amount of $5,000,000 and integral multiples of
$1,000,000 in excess thereof; and
(E) the Borrower may not accept any offer that fails
to comply with Section 2.2.(c) or otherwise fails to comply
with the requirements of this Agreement.
(ii) If offers are made by two or more Lenders with the same
Absolute Rates or LIBOR Margins, as applicable, for a greater aggregate
principal amount than the amount in respect of which offers are
accepted for the related Interest Period, the principal amount of Bid
Rate Loans in respect of which such offers are accepted shall be
allocated by the Agent among such Lenders in proportion to the
aggregate principal amount of such offers. Determinations by the Agent
of the amounts of Bid Rate Loans shall be conclusive in the absence of
manifest error.
(f) Obligation to Make Bid Rate Loans. The Agent shall promptly (and in
any event not later than (x) 10:00 a.m. on the proposed date of borrowing of
Absolute Rate Loans and (y) on the date three Business Days prior to the
proposed date of borrowing of LIBOR Margin Loans) notify each Lender that
submitted a Bid Rate Quote as to whose Bid Rate Quote has been accepted and the
amount and rate thereof. A Lender who is notified that it has been selected to
make a Bid Rate Loan may designate its Designated Lender (if any) to fund such
Bid Rate Loan on its behalf, as described in Section 12.8. Any Designated Lender
which funds a Bid Rate Loan shall on and after the time of such funding become
the obligee under such Bid Rate Loan and be entitled to receive payment thereof
when due. No Lender shall be relieved of its obligation to fund a Bid Rate Loan,
and no Designated Lender shall assume such obligation, prior to the time the
applicable Bid Rate Loan is funded. Any Lender whose offer to make any Bid Rate
Loan has been accepted shall, not later than 11:00 a.m. on the date specified
for the making of such Loan, make the amount of such Loan available to the Agent
at its Principal Office in immediately available funds, for the account of the
Borrower. The amount so received by the Agent shall, subject to the terms and
conditions of this Agreement, be made available to the Borrower not later than
12:00 noon on such date by depositing the same, in immediately available funds,
in an account of the Borrower designated by the Borrower.
(g) No Effect on Commitment. Except for the purpose and to the extent
expressly stated in Section 2.9., the amount of any Bid Rate Loan made by any
Lender shall not constitute a utilization of such Lender's Commitment.
SECTION 2.3. Swingline Loans.
(a) Swingline Loans. Subject to the terms and conditions hereof,
including, without limitation Section 2.14., if necessary to meet Borrower's
funding deadline, the Swingline Lender agrees to make Swingline Loans to the
Borrower, during the period from the Effective Date to but excluding the
Swingline Termination Date, in an aggregate principal amount at any one time
outstanding up to, but not exceeding, the amount of the Swingline Commitment. If
at any time the aggregate principal amount of the Swingline Loans outstanding at
such time exceeds the Swingline Commitment in effect at such time, the Borrower
shall immediately pay the Agent for the account of the Swingline Lender the
amount of such excess. Subject to the terms and conditions of this Agreement,
the Borrower may borrow, repay and reborrow Swingline Loans hereunder.
(b) Procedure for Borrowing Swingline Loans. The Borrower shall give
the Agent and the Swingline Lender notice pursuant to a Notice of Swingline
Borrowing delivered to the Swingline Lender no later than 9:00 a.m. on the
proposed date of such borrowing. Any such telephonic notice shall include all
information to be specified in a written Notice of Swingline Borrowing. Not
later than 11:00 a.m. on the date of the requested Swingline Loan and subject to
satisfaction of the applicable conditions set forth in Article VI. for such
borrowing, the Swingline Lender will make the proceeds of such Swingline Loan
available to the Borrower in Dollars, in immediately available funds, at the
account specified by the Borrower in the Notice of Swingline Borrowing.
(c) Interest. Swingline Loans shall bear interest at a per annum rate
equal to the Base Rate as in effect from time to time or at such other rate or
rates as the Borrower and the Swingline Lender may agree from time to time in
writing. Interest payable on Swingline Loans is solely for the account of the
Swingline Lender. All accrued and unpaid interest on Swingline Loans shall be
payable on the dates and in the manner provided in Section 2.8. with respect to
interest on Base Rate Loans (except as the Swingline Lender and the Borrower may
otherwise agree in writing in connection with any particular Swingline Loan).
(d) Swingline Loan Amounts, Etc. Each Swingline Loan shall be in the
minimum amount of $1,000,000 and integral multiples of $100,000 in excess
thereof, or such other minimum amounts agreed to by the Swingline Lender and the
Borrower. Any voluntary prepayment of a Swingline Loan must be in integral
multiples of $100,000 or the aggregate principal amount of all outstanding
Swingline Loans (or such other minimum amounts upon which the Swingline Lender
and the Borrower may agree) and in connection with any such prepayment, the
Borrower must give the Swingline Lender prior written notice thereof no later
than 10:00 a.m. on the day prior to the date of such prepayment. The Swingline
Loans shall, in addition to this Agreement, be evidenced by the Swingline Note.
(e) Repayment and Participations of Swingline Loans. The Borrower
agrees to repay each Swingline Loan within one Business Day of demand therefor
by the Swingline Lender and in any event, within 5 Business Days after the date
such Swingline Loan was made. Notwithstanding the foregoing, the Borrower shall
repay the entire outstanding principal amount of, and all accrued but unpaid
interest on, the Swingline Loans on the Swingline Termination Date (or such
earlier date as the Swingline Lender and the Borrower may agree in writing). In
lieu of demanding repayment of any outstanding Swingline Loan from the Borrower,
the Swingline Lender may, on behalf of the Borrower (which hereby irrevocably
directs the Swingline Lender to act on its behalf), request a borrowing of Base
Rate Loans from the Lenders in an amount equal to the principal balance of such
Swingline Loan. The amount limitations contained in the second sentence of
Section 2.1.(a) shall not apply to any borrowing of Base Rate Loans made
pursuant to this subsection. The Swingline Lender shall give notice to the Agent
of any such borrowing of Base Rate Loans not later than 9:00 a.m. at least one
Business Day prior to the proposed date of such borrowing. Each Lender will make
available to the Agent at the Principal Office for the account of Swingline
Lender, in immediately available funds, the proceeds of the Base Rate Loan to be
made by such Lender. The Agent shall pay the proceeds of such Base Rate Loans to
the Swingline Lender, which shall apply such proceeds to repay such Swingline
Loan. If the Lenders are prohibited from making Loans required to be made under
this subsection for any reason whatsoever, including without limitation, the
occurrence of any of the Defaults or Events of Default described in Sections
10.1.(g) or 10.1.(h), each Lender shall purchase from the Swingline Lender,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender's Pro Rata Share of such Swingline Loan, by directly
purchasing a participation in such Swingline Loan in such amount and paying the
proceeds thereof to the Agent for the account of the Swingline Lender in Dollars
and in immediately available funds. A Lender's obligation to purchase such a
participation in a Swingline Loan shall be absolute and unconditional and shall
not be affected by any circumstance whatsoever, including without limitation,
(i) any claim of setoff, counterclaim, recoupment, defense or other right which
such Lender or any other Person may have or claim against the Agent, the
Swingline Lender or any other Person whatsoever, (ii) the occurrence or
continuation of a Default or Event of Default (including without limitation, any
of the Defaults or Events of Default described in Sections 10.1.(g) or 10.1.(h))
or the termination of any Lender's Commitment, (iii) the existence (or alleged
existence) of an event of condition which has had or could have a Materially
Adverse Effect, (iv) any breach of any Loan Document by the Agent, any Lender or
the Borrower or (v) any other circumstance, happening or event whatsoever,
whether or not similar to any of the foregoing. If such amount is not in fact
made available to the Swingline Lender by any Lender, the Swingline Lender shall
be entitled to recover such amount on demand from such Lender, together with
accrued interest thereon for each day from the date of demand thereof, at the
Federal Funds Rate. If such Lender does not pay such amount forthwith upon the
Swingline Lender's demand therefor, and until such time as such Lender makes the
required payment, the Swingline Lender shall be deemed to continue to have
outstanding Swingline Loans in the amount of such unpaid participation
obligation for all purposes of the Loan Documents (other than those provisions
requiring the other Lenders to purchase a participation therein). Further, such
Lender shall be deemed to have assigned any and all payments made of principal
and interest on its Loans, and any other amounts due to it hereunder, to the
Swingline Lender to fund Swingline Loans in the amount of the participation in
Swingline Loans that such Lender failed to purchase pursuant to this Section
until such amount has been purchased (as a result of such assignment or
otherwise).
SECTION 2.4. Number of Interest Periods.
Anything herein to the contrary notwithstanding, there may be no more
than 8 different Interest Periods outstanding at the same time.
SECTION 2.5. Continuation.
So long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may on any Business Day, with respect to any LIBOR
Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan
by selecting a new Interest Period for such LIBOR Loan. Each new Interest Period
selected under this Section shall commence on the last day of the immediately
preceding Interest Period. Each selection of a new Interest Period shall be made
by the Borrower's giving of a Notice of Continuation not later than 9:00 a.m. on
the third Business Day prior to the date of any such Continuation by the
Borrower to the Agent. Promptly after receipt of a Notice of Continuation, the
Agent shall notify each Lender by telex or telecopy, or other similar form of
transmission of the proposed Continuation. Such notice by the Borrower of a
Continuation shall be by telephone or telecopy, confirmed immediately in writing
if by telephone, in the form of a Notice of Continuation, specifying (a) the
date of such Continuation, (b) the LIBOR Loan and portion thereof subject to
such Continuation and (c) the duration of the selected Interest Period, all of
which shall be specified in such manner as is necessary to comply with all
limitations on Loans outstanding hereunder. Each Notice of Continuation shall be
irrevocable by and binding on the Borrower once given. If the Borrower shall
fail to select in a timely manner a new Interest Period for any LIBOR Loan in
accordance with this Section, such Loan will automatically, on the last day of
the current Interest Period therefore, Convert into a Base Rate Loan
notwithstanding failure of the Borrower to comply with Section 2.6. In the case
of the Continuation of only a portion of a LIBOR Loan, such portion shall be in
the aggregate amount for all of the Lenders of $1,000,000 or integral multiples
of $100,000 in excess of that amount.
SECTION 2.6. Conversion.
So long as no Default or Event of Default shall have occurred and be
continuing, the Borrower may on any Business Day, upon the Borrower's giving of
a Notice of Conversion to the Agent, Convert the entire amount of all or a
portion of a Revolving Loan of one Type into a Revolving Loan of another Type.
Promptly after receipt of a Notice of Conversion, the Agent shall notify each
Lender by telex or telecopy, or other similar form of transmission of the
proposed Conversion. Any Conversion of a LIBOR Loan into a Base Rate Loan shall
be made on, and only on, the last day of an Interest Period for such LIBOR Loan.
Each such Notice of Conversion shall be given not later than 9:00 a.m. on the
Business Day prior to the date of any proposed Conversion into Base Rate Loans
and on the third Business Day prior to the date of any proposed Conversion into
LIBOR Loans. Subject to the restrictions specified above, each Notice of
Conversion shall be by telephone or telecopy confirmed immediately in writing if
by telephone in the form of a Notice of Conversion specifying (a) the requested
date of such Conversion, (b) the Type of Revolving Loan to be Converted, (c) the
portion of such Type of Revolving Loan to be Converted, (d) the Type of
Revolving Loan such Revolving Loan is to be Converted into and (e) if such
Conversion is into a LIBOR Loan, the requested duration of the Interest Period
of such Revolving Loan. Each Notice of Conversion shall be irrevocable by and
binding on the Borrower once given. Each Conversion from a Base Rate Loan to a
LIBOR Loan shall be in an aggregate amount for the Revolving Loans of all the
Lenders of not less than $1,000,000 or integral multiples of $100,000 in excess
of that amount.
SECTION 2.7. Interest Rate.
(a) All Loans. The unpaid principal of each Base Rate Loan shall bear
interest from the date of the making of such Loan to but not including the date
of repayment thereof at a rate per annum equal to the Base Rate in effect from
day to day plus the Applicable Margin. The unpaid principal of each LIBOR Loan
shall bear interest from the date of the making of such Loan to but not
including the date of repayment thereof at a rate per annum equal to the LIBO
Rate for such Loan for the Interest Period therefor plus the Applicable Margin.
The unpaid principal of each Absolute Rate Loan shall bear interest at the
Absolute Rate for such Loan for the Interest Period therefor quoted by the
Lender making such Loan in accordance with Section 2.2. The unpaid principal of
each LIBOR Margin Loan shall bear interest at the LIBO Rate for such Loan for
the Interest Period therefor plus the LIBOR Margin quoted by the Lender making
such Loan in accordance with Section 2.2.
(b) Default Rate. All past-due principal of, and to the extent
permitted by Applicable Law, interest on, the Loans and all Reimbursement
Obligations shall bear interest until paid at the Base Rate from time to time in
effect plus four percent (4%).
SECTION 2.8. Repayment of Loans.
(a) Payment of Interest. All accrued and unpaid interest on the unpaid
principal amount of each Loan shall be payable (i) in the case of a Base Rate
Loan or a LIBOR Loan, monthly in arrears on the first day of each month,
commencing with the first full calendar month occurring after the Effective
Date, (ii) in the case of a Bid Rate Loan, on the last day of each Interest
Period therefor and, if such Interest Period is longer than a month, monthly in
arrears on the first day of each month, commencing with the first full calendar
month following the first day of such Interest Period, and (iii) for all Loans,
(A) on the Revolving Credit Termination Date, (B) on the Termination Date and
(C) on any date on which the principal balance of such Loan is due and payable
in full.
(b) Payment of Principal of Revolving Loans. Subject to Section 2.11.,
the Borrower shall repay the aggregate outstanding principal balance of all
Revolving Loans in full on the Revolving Credit Termination Date.
(c) Bid Rate Loans. The Borrower shall repay the entire outstanding
principal amount of each Bid Rate Loan on the last day of the Interest Period of
such Bid Rate Loan.
(d) Payment of Principal of Term Loans. The Borrower shall repay the
aggregate principal balance of the Term Loans in eight equal consecutive
quarterly installments due on the first day of June first following the date of
conversion of the Revolving Loans into the Term Loans and on the first day of
each subsequent September, December, March and June until the Term Loans are
paid in full. Each installment shall be in an amount equal to one-eighth of the
initial aggregate principal balance of the Term Loans. Notwithstanding the
foregoing, the entire outstanding principal balance of each Term Loan shall be
due and payable in full on the Termination Date.
(e) Optional Prepayments. The Borrower may, upon at least one Business
Day's prior notice to the Agent, prepay any Revolving Loan or Term Loan in whole
at any time, or from time to time in part in an amount equal to $500,000 or
integral multiples of $100,000 in excess of that amount, by paying the principal
amount to be prepaid. If the Borrower shall prepay the principal of any LIBOR
Loan on any date other than the last day of the Interest Period applicable
thereto, the Borrower shall pay the amounts, if any, due under Section 5.4. Bid
Rate Loans may not be prepaid at the option of the Borrower.
(f) Mandatory Prepayments. If at any time the aggregate outstanding
principal balance of Loans and the aggregate amount of Letter of Credit
Liabilities exceeds the Maximum Loan Availability, then the Borrower shall,
within 15 days of the Borrower obtaining actual knowledge of the occurrence of
such excess, deliver to the Agent and each Lender a written plan acceptable to
the Lenders to eliminate such excess, whether by the designation of additional
Properties as Unencumbered Pool Properties, by the Borrower repaying an
appropriate amount of Loans, or otherwise. If such excess is not eliminated
within 45 days of the Borrower obtaining actual knowledge of the occurrence
thereof, then the entire outstanding principal balance of all Loans, together
with all accrued interest thereon, and an amount equal to all Letter of Credit
Liabilities for deposit into the Collateral Account, shall be immediately due
and payable in full. If at any time the aggregate principal amount of all
outstanding Bid Rate Loans exceeds the lesser of (i) $250,000,000 or (ii)
one-half of the aggregate amount of all Commitments at such time, then the
Borrower shall immediately pay to the Agent for the accounts of the applicable
Lenders the amount of such excess. Such payment shall be applied as provided in
Section 3.3.(f).
(g) General Provisions as to Payments. Except to the extent otherwise
provided herein, all payments of principal, interest and other amounts to be
made by the Borrower under this Agreement, the Notes or any other Loan Document
shall be made in Dollars, in immediately available funds, without setoff,
deduction or counterclaim, to the Agent at the Principal Office, not later than
11:00 a.m. on the date on which such payment shall become due (each such payment
made after such time on such due date to be deemed to have been made on the next
succeeding Business Day). Each payment received by the Agent for the account of
a Lender under this Agreement or any Note shall be paid to such Lender (i) on
the date of receipt by the Agent if received not later than 11:00 a.m. on the
due date of such payment or (ii) not later than the Business Day immediately
following the date of receipt by the Agent if received after 11:00 a.m. on the
due date of such payment. Such payments by the Agent shall be paid to a Lender
by wire transfer of immediately available funds in accordance with the wiring
instructions provided by such Lender to the Agent from time to time, for the
account of such Lender at the applicable Lending Office of such Lender. In the
event the Agent fails to pay such amounts to such Lender within the time period
provided in the immediately preceding clause (i) or (ii), as applicable, the
Agent shall pay interest on such amount at a rate per annum equal to the Federal
Funds rate from time to time in effect. If the due date of any payment under
this Agreement or any other Loan Document would otherwise fall on a day which is
not a Business Day such date shall be extended to the next succeeding Business
Day and interest shall continue to accrue at the rate, if any, applicable to
such payment for the period of such extension.
SECTION 2.9. Voluntary Reductions of the Commitments.
The Borrower may terminate or reduce the amount of the Commitments (for
which purpose use of the Commitments shall be deemed to include the aggregate
principal amount of all outstanding Bid Rate Loans and Swingline Loans and the
aggregate amount of all Letter of Credit Liabilities) at any time and from time
to time without penalty or premium upon not less than five Business Days prior
notice to the Agent of each such termination or reduction, which notice shall
specify the effective date thereof and the amount of any such reduction (which
in the case of any partial reduction of the Commitments shall not be less than
$5,000,000 and integral multiples of $5,000,000 in excess of that amount in the
aggregate) and shall be irrevocable once given and effective only upon receipt
by the Agent. The Commitments, once reduced pursuant to this Section, may not be
increased. The Borrower shall pay all interest and fees on the Revolving Loans
accrued to the date of such reduction or termination of the Commitments to the
Agent for the account of the Lenders. Any reduction in the aggregate amount of
the Commitments shall result in a proportionate reduction (rounded to the next
lowest integral multiple of multiple of $100,000) in the Swingline Commitment
and the L/C Commitment Amount.
SECTION 2.10. Extension of Revolving Credit Termination Date.
(a) The Borrower may request that the Agent and the Lenders extend the
current Revolving Credit Termination Date by successive one-year intervals by
executing and delivering to the Agent at least 60 days but no more than 90 days
prior to the date one year prior to the current Revolving Credit Termination
Date, a written request in the form of Exhibit M (an "Extension Request"). The
Agent shall forward to each Lender a copy of each Extension Request delivered to
the Agent promptly upon receipt thereof. If all of the Lenders shall have
notified the Agent on or prior to the date which is 30 days prior to the date
one year prior to the current Revolving Credit Termination Date that they accept
such Extension Request, the Revolving Credit Termination Date shall be extended
for one year. If any Lender shall not have notified the Agent on or prior to the
date which is 30 days prior to the date one year prior to the Revolving Credit
Termination Date that it accepts such Extension Request, the Revolving Credit
Termination Date shall not be extended except as otherwise permitted under the
immediately following subsection (b). The Agent shall promptly notify the
Borrower whether the Extension Request has been accepted or rejected as well as
which Lender or Lenders rejected Borrower's Extension Request (each such Lender,
a "Rejecting Lender"). The Borrower understands that this Section has been
included in this Agreement for the Borrower's convenience in requesting an
extension and acknowledges that none of the Lenders nor the Agent has promised
(either expressly or impliedly), nor has any obligation or commitment
whatsoever, to extend the Revolving Credit Termination Date at any time.
(b) Notwithstanding the preceding subsection (a), if the Borrower
receives notification from the Agent that an Extension Request has been rejected
(a "Notice of Rejection"), and provided that the aggregate amount of all
Commitments of the Rejecting Lenders does not exceed 20% of the aggregate amount
of Commitments then outstanding, the Borrower may elect, with respect to each
such Rejecting Lender, by giving written notice to the Agent of any such
election within 15 days after receipt by the Borrower of a Notice of Rejection,
to either (i) require such Rejecting Lender to assign its respective Commitment
to an Eligible Assignee as contemplated in the immediately following clause (x)
or (ii) pay in full the amount of Loans, interest and fees, together with all
amounts, if any, payable under Section 5.4., owing to such Rejecting Lender and
terminate such Rejecting Lender's Commitment as contemplated in the immediately
following clause (y). If the Borrower has made a timely election as permitted by
the preceding sentence, then the Borrower shall take either of the following
actions as specified in such election: (x) demand that such Rejecting Lender,
and upon such demand such Rejecting Lender shall promptly, assign its respective
Commitment to an Eligible Assignee subject to and in accordance with the
provisions of Section 12.8.(c) for a purchase price equal to the aggregate
principal balance of Loans then outstanding and owing to such Rejecting Lender
plus any accrued but unpaid interest thereon and accrued but unpaid fees owing
to such Rejecting Lender, any such assignment to be completed within 30 days
after receipt by the Borrower of a Notice of Rejection or (y) within 30 days
after receipt by the Borrower of a Notice of Rejection, pay to such Rejecting
Lender the aggregate principal balance of Loans then outstanding and owing to
such Rejecting Lender plus any accrued but unpaid interest thereon and accrued
but unpaid fees owing to such Rejecting Lender, together with all amounts, if
any, payable under Section 5.4., whereupon such Rejecting Lender's Commitment
shall terminate, and such Rejecting Lender shall no longer be a party hereto or
have any rights or obligations hereunder or under any of the other Loan
Documents. None of the Agent, such Rejecting Lender, or any other Lender shall
be obligated in any way whatsoever to initiate any such replacement or to assist
in finding an Assignee. If all Rejecting Lenders have either assigned their
Commitments to Eligible Assignees as contemplated by the preceding clause (x) or
have been paid the amounts specified in the preceding clause (y), then the
Borrower's Extension Request which was initially rejected shall be deemed to
have been granted and accordingly the Revolving Credit Termination Date shall be
extended by one year, otherwise the Revolving Credit Termination Date shall not
be extended. If the aggregate amount of Commitments of the Rejecting Lenders
exceeds 20% of the aggregate amount of Commitments then outstanding, the
Revolving Credit Termination Date shall not be extended.
SECTION 2.11. Term Loan Conversion.
Subject to the terms and conditions of this Agreement, if any Extension
Request of the Borrower shall be denied, the Borrower may then elect to convert
each Lender's Pro Rata Share of the aggregate principal amount of Revolving
Loans outstanding on the date one year prior to the current Revolving Credit
Termination Date into a term loan owing to such Lender (each a "Term Loan")
provided (a) the Borrower has given the Agent at least 15 days prior notice of
the Borrower's intention to so convert the Revolving Loans and (b) the
conditions set forth in Section 6.3. have been satisfied as of the date one year
prior to the current Revolving Credit Termination Date. Subject to the terms and
conditions hereof, any such conversion shall be effective as of the date one
year prior to the current Revolving Credit Termination Date. Upon the
effectiveness of the conversion of the outstanding principal balance of
Revolving Loans into Term Loans as contemplated by this Section, the Borrower
shall have no right to borrow, and no Lender shall have any obligation to make,
any Revolving Loans.
SECTION 2.12. Notes.
The Revolving Loans and the Term Loan made by each Lender shall, in
addition to this Agreement, also be evidenced by a promissory note of the
Borrower substantially in the form of Exhibit C (each a "Revolving Note"),
payable to the order of such Lender in a principal amount equal to the amount of
its Commitment as originally in effect and otherwise duly completed. The Bid
Rate Loans made by any Lender shall, in addition to this Agreement, also be
evidenced by a single promissory note of the Borrower substantially in the form
of Exhibit D (each a "Bid Rate Note"), dated the date hereof, payable to the
order of such Lender and otherwise duly completed.
SECTION 2.13. Option to Replace Lenders.
If any Lender, other than the Agent in its capacity as such, shall:
(a) have notified Agent of a determination under Section 5.1.(a) or
become subject to the provisions of Section 5.3.; or
(b) make any demand for payment or reimbursement pursuant to Section
5.1.(c) or Section 5.4.;
then, provided that (x) there does not then exist any Default or Event of
Default and (y) the circumstances resulting in such demand for payment or
reimbursement under Section 5.1.(c) or Section 5.4. or the applicability of
Section 5.1.(a) or Section 5.3. are not applicable to the Majority Lenders
generally, the Borrower may either (x) demand that such Lender, and upon such
demand such Lender shall promptly, assign its respective Commitment to an
Eligible Assignee subject to and in accordance with the provisions of Section
12.8.(c) for a purchase price equal to the aggregate principal balance of Loans
then outstanding and owing to such Lender plus any accrued but unpaid interest
thereon and accrued but unpaid fees owing to such Lender, any such assignment to
be completed within 30 days after the making by such Lender of such
determination or demand for payment or (y) within 30 days after the making by
such Lender of such determination or demand for payment, pay to Agent, for
deposit into the Collateral Account, an amount equal to such Lender's Pro Rata
Share of all outstanding Letter of Credit Liabilities and pay to such Lender the
aggregate principal balance of Loans then outstanding and owing to such Lender
plus any accrued but unpaid interest thereon and accrued but unpaid fees owing
to such Lender, whereupon such Lender's Commitment shall terminate, and such
Lender shall no longer be a party hereto or have any rights or obligations
hereunder or under any of the other Loan Documents. None of the Agent, such
Lender, or any other Lender shall be obligated in any way whatsoever to initiate
any such replacement or to assist in finding an Assignee.
SECTION 2.14. Amount Limitations.
Notwithstanding any other term of this Agreement or any other Loan
Document, at no time may (a) the aggregate principal amount of all outstanding
Revolving Loans, together with the aggregate principal amount of all outstanding
Swingline Loans, the aggregate amount of all outstanding Bid Rate Loans and the
aggregate amount of all Letter of Credit Liabilities, exceed the Maximum Loan
Availability at such time or (b) the aggregate principal amount of all
outstanding Bid Rate Loans exceed the lesser of (i) $250,000,000 or (ii)
one-half of the aggregate amount of all Commitments at such time.
SECTION 2.15. Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions of this
Agreement including, without limitation, Section 2.14., the Agent, on behalf of
Lenders, agrees to issue for the account of the Borrower during the period from
and including the Effective Date to, but excluding, the Revolving Credit
Termination Date one or more letters of credit (each a "Letter of Credit") in
such form and containing such terms as may be requested from time to time by the
Borrower and acceptable to the Agent, up to a maximum aggregate Stated Amount at
any one time outstanding not to exceed the L/C Commitment Amount.
(b) Terms of Letters of Credit. At the time of issuance, the amount,
terms and conditions of each Letter of Credit, and of any drafts or acceptances
thereunder, shall be subject to approval by the Agent and the Borrower.
Notwithstanding the foregoing, in no event may (i) the expiration date of any
Letter of Credit extend beyond the Revolving Credit Termination Date, (ii) any
Letter of Credit have an initial duration in excess of one year or (iii) a
Letter of Credit be issued within 30 days of the Revolving Credit Termination
Date. The initial Stated Amount of each Letter of Credit shall be at least
$100,000.
(c) Requests for Issuance of Letters of Credit. In connection with the
proposed issuance of a Letter of Credit, the Borrower shall give Agent written
notice (or telephonic notice promptly confirmed in writing) prior to the
requested date of issuance of a Letter of Credit, such notice to describe in
reasonable detail the proposed terms of such Letter of Credit and the nature of
the transactions or obligations proposed to be supported by such Letter of
Credit, and in any event shall set forth with respect to such Letter of Credit
(i) the proposed initial Stated Amount, (ii) the beneficiary, (iii) whether such
Letter of Credit is a commercial or standby letter of credit and (iv) the
proposed expiration date. The Borrower shall also execute and deliver such
customary applications and agreements for standby letters of credit, standby
letter of credit agreements, applications for amendment to letter of credit, and
other forms as requested from time to time by the Agent. Provided the Borrower
has given the notice prescribed by the first sentence of this subsection and the
Borrower has executed and delivered to the Agent the agreements, applications
and other forms as required by the immediately preceding sentence of this
subsection, and subject to the terms and conditions of this Agreement, including
the satisfaction of any applicable conditions precedent set forth in Article
VI., the Agent agrees to issue the requested Letter of Credit on the requested
date of issuance for the benefit of the stipulated beneficiary but in no event
prior to the date 5 Business Days following the date after which the Agent
received the items required to be delivered to it under this subsection. Upon
the written request of the Borrower, the Agent shall deliver to the Borrower a
copy of (i) any Letter of Credit proposed to be issued hereunder prior to the
issuance thereof and (ii) each issued Letter of Credit within a reasonable time
after the date of issuance thereof. To the extent any term of a Letter of Credit
Document is inconsistent with a term of any Loan Document, the term of the
Letter of Credit Document shall control.
(d) Reimbursement Obligations. Upon receipt by the Agent from the
beneficiary of a Letter of Credit of any demand for payment under such Letter of
Credit, the Agent shall promptly notify the Borrower of the amount to be paid by
the Agent as a result of such demand and the date on which payment is to be made
by the Agent to such beneficiary in respect of such demand. The Borrower hereby
unconditionally and irrevocably agrees to pay and reimburse the Agent for the
amount of each demand for payment under such Letter of Credit at or prior to the
date on which payment is to be made by the Agent to the beneficiary thereunder,
without presentment, demand, protest or other formalities of any kind. Upon
receipt by the Agent of any payment in respect of any Reimbursement Obligation,
the Agent agrees to pay to each Lender that has acquired a participation therein
under the second sentence of Section 2.15.(f) such Lender's Pro Rata Share of
such payment.
(e) Manner of Reimbursement. Upon its receipt of a notice referred to
in the immediately preceding subsection (d), the Borrower shall advise the Agent
whether or not the Borrower intends to borrow hereunder to finance its
obligation to reimburse the Agent for the amount of the related demand for
payment and, if it does, the Borrower shall submit a timely request for such
borrowing as provided in the applicable provisions of this Agreement. If
Borrower fails to reimburse the Agent for a demand for payment under a Letter of
Credit by the date of such payment, the Agent shall give each Lender prompt
notice thereof and of the amount of the demand for payment, specifying such
Lender's Pro Rata Share of the amount of the related demand for payment.
(f) Lenders' Participation in Letters of Credit. Immediately upon the
issuance by the Agent of any Letter of Credit each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from the Agent,
without recourse or warranty, an undivided interest and participation to the
extent of such Lender's Pro Rata Share of the liability of the Agent with
respect to such Letter of Credit and each Lender thereby shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as surety,
and shall be unconditionally obligated to the Agent to pay and discharge when
due, such Lender's Pro Rata Share of the Agent's liability under such Letter of
Credit. In addition, upon the making of each payment by a Lender to the Agent in
respect of any Letter of Credit pursuant to the immediately following subsection
(g), such Lender shall, automatically and without any further action on the part
of the Agent or such Lender, acquire (i) a participation in an amount equal to
such payment in the Reimbursement Obligation owing to the Agent by the Borrower
in respect of such Letter of Credit and (ii) a participation in a percentage
equal to such Lender's Pro Rata Share in any interest or other amounts payable
by the Borrower in respect of such Reimbursement Obligation (other than fees
owing only to the Agent).
(g) Payment Obligation of Lenders. Each Lender severally agrees to pay
to the Agent on demand in immediately available funds in Dollars the amount of
such Lender's Pro Rata Share of each drawing paid by the Agent under each Letter
of Credit to the extent such amount is not reimbursed by the Borrower pursuant
to Section 2.15.(d) and (e) or the other Letter of Credit Documents. Each such
Lender's obligation to make such payments to the Agent under this subsection,
and the Agent's right to receive the same, shall be absolute, irrevocable and
unconditional and shall not be affected in any way by any circumstance
whatsoever, including without limitation, (i) the failure of any other Lender to
make its payment under this subsection, (ii) the financial condition of the
Borrower, (iii) the existence of any Default or Event of Default, including any
Event of Default described in Section 10.1.(g) or (h) or (iv) the termination of
the Commitments. Each such payment to the Agent shall be made without any
offset, abatement, withholding or deduction whatsoever.
(h) Agent's Duties Regarding Letters of Credit; Unconditional Nature of
Reimbursement Obligation. In examining documents presented in connection with
drawings under Letters of Credit and making payments under such Letters of
Credit against such documents, the Agent shall only be required to use the same
standard of care as it uses in connection with examining documents presented in
connection with drawings under letters of credit in which it has not sold
participations and making payments under such letters of credit. The Borrower
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, neither the Agent nor any of
Lenders shall be responsible (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored under
any Letter of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit, or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order to draw
upon such Letter of Credit; (iv) for errors, omissions, interruptions or delays
in transmission or delivery of any messages, by mail, cable, telex, telecopy or
otherwise, whether or not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or otherwise of
any document required in order to make a drawing under any Letter of Credit, or
of the proceeds thereof; (vii) for the misapplication by the beneficiary of any
such Letter of Credit, or the proceeds of any drawing under such Letter of
Credit; and (viii) for any consequences arising from causes beyond the control
of the Agent or the Lenders. None of the above shall affect, impair or prevent
the vesting of any of the Agent's rights or powers hereunder. Any action taken
or omitted to be taken by the Agent under or in connection with any Letter of
Credit, if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create against the Agent any liability to the Borrower or
any Lender. In this connection, the obligation of the Borrower to reimburse the
Agent for any drawing made under any Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid strictly in accordance with the
terms of this Agreement or any other applicable Letter of Credit Document under
all circumstances whatsoever, including without limitation, the following
circumstances: (i) any lack of validity or enforceability of any Letter of
Credit Document or any term or provisions therein; (ii) any amendment or waiver
of or any consent to departure from all or any of the Letter of Credit
Documents; (iii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against the Agent, any Lender, any
beneficiary of a Letter of Credit or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or in the Letter of
Credit Documents or any unrelated transaction; (iv) any breach of contract or
dispute between Borrower, the Agent, any Lender or any other Person; (v) any
demand, statement or any other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect or any
statement therein or made in connection therewith being untrue or inaccurate in
any respect whatsoever; (vi) any non-application or misapplication by the
beneficiary of a Letter of Credit of the proceeds of any drawing under such
Letter of Credit; (vii) payment by the Agent under the Letter of Credit against
presentation of a draft or certificate which does not strictly comply with the
terms of the Letter of Credit; and (viii) any other act, omission to act, delay
or circumstance whatsoever that might, but for the provisions of this Section,
constitute a legal or equitable defense to or discharge of the Borrower's
Reimbursement Obligations.
(i) Amendments, Etc. The issuance by the Agent of any amendment,
supplement or other modification to any Letter of Credit shall be subject to the
same conditions applicable under this Agreement to the issuance of new Letters
of Credit, and no such amendment, supplement or other modification shall be
issued unless either (i) the respective Letter of Credit affected thereby would
have complied with such conditions had it originally been issued hereunder in
such amended, supplemented or modified form or (ii) the Majority Lenders shall
have consented thereto.
(j) Information to Lenders. Promptly following the issuance of any
Letters of Credit, the Agent shall deliver to the Borrower, and each Lender a
notice describing the aggregate amount of all Letters of Credit outstanding at
such time. Upon the request of any Lender from time to time, the Agent shall
deliver any other information reasonably requested by such Lender with respect
to each Letter of Credit then outstanding. Other than as set forth in this
subsection, the Agent shall have no duty to notify Lenders regarding the
issuance or other matters regarding Letters of Credit issued hereunder. The
failure of the Agent to perform its requirements under this subsection shall not
relieve any Lender from its obligations under Section 2.15.(g).
(k) Effect of Letters of Credit on Commitments. Upon the issuance by
the Agent of any Letter of Credit and until such Letter of Credit shall have
expired or been terminated, the Commitment of each Lender shall be deemed to be
utilized for all purposes of this Agreement in an amount equal to such Lender's
Pro Rata Share of the Stated Amount of such Letter of Credit plus any related
Reimbursement Obligations then outstanding.
(l) Termination of Agreement Prior to Expiration of Letters of Credit;
Letter of Credit Liabilities in Excess of L/C Commitment Amount. If on the date
(the "Facility Termination Date") this Agreement is terminated (whether
voluntarily, by reason of the occurrence of an Event of Default or otherwise)
any Letters of Credit are outstanding, the Borrower shall, on the Facility
Termination Date, pay to the Agent an amount of money equal to the Stated Amount
of such Letter(s) of Credit, together with the amount of any fees which would
otherwise be payable by the Borrower to the Agent or the Lenders in respect of
such Letters of Credit but for the occurrence of the Facility Termination Date
for deposit into a the Collateral Account. If at any time the aggregate Stated
Amount of all outstanding Letters of Credit shall exceed the L/C Commitment
Amount then in effect, the Borrower shall pay to the Agent for deposit into the
Collateral Account an amount equal to such excess. If a drawing pursuant to any
such Letter of Credit occurs on or prior to the expiration date of such Letter
of Credit, the Borrower authorizes the Agent to disburse the monies deposited in
the Collateral Account to make payment to the beneficiary with respect to such
drawing. If no drawing occurs on or prior to the expiration date of any such
Letter of Credit, the Agent shall return to the Borrower the monies deposited in
the Collateral Account with respect to such outstanding Letter of Credit on or
before the date 30 Business Days after the expiration date with respect to the
Letter of Credit.
(m) Additional Costs in Respect of Letters of Credit. If as a result of
the adoption of any Applicable Law or guideline of general applicability
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or if as a result of any risk-based capital guideline or other
requirement heretofore or hereafter issued by any Governmental Authority, there
shall be imposed, modified or deemed applicable any tax, reserve, special
deposit, capital adequacy or similar requirement against or with respect to or
measured by reference to Letters of Credit and the result shall be to increase
the cost to the Agent of issuing (or any Lender purchasing participations in) or
maintaining its obligation hereunder to issue (or purchase participations in)
any Letter of Credit or reduce any amount receivable by the Agent or any Lender
hereunder in respect of any Letter of Credit, then, upon demand by the Agent or
such Lender, the Borrower shall pay immediately to the Agent or such Lender, as
applicable, from time to time as specified by the Agent or a Lender, such
additional amounts as shall be sufficient to compensate the Agent or such Lender
for such increased costs or reductions in amount.
ARTICLE III. GENERAL LOAN PROVISIONS
SECTION 3.1. Fees.
(a) Facility Fee. During the period commencing on the Agreement Date to
but excluding the Revolving Credit Termination Date, the Borrower agrees to pay
the Agent for the account of the Lenders a facility fee equal to the daily
aggregate amount of the Commitments (whether or not utilized) times a rate per
annum equal to the Applicable Facility Fee. Such fee shall accrue through the
last day of each calendar quarter and shall be payable in arrears on the fifth
day following the end of such calendar quarter. The Borrower acknowledges that
the fee payable hereunder is a bona fide commitment fee and is intended as
reasonable compensation to the Lenders for committing to make funds available to
the Borrower as described herein and for no other purposes.
(b) Extension Fee. If, pursuant to Section 2.10., the Revolving Credit
Termination Date is extended, the Borrower agrees to pay to the Agent for the
account of each Lender (other than a Rejecting Lender) an extension fee equal to
one-fifth of one percent (0.20%) of the amount of such Lender's Commitment at
such time. Such fee shall be payable on the date five days following the sooner
of the date on which the Agent notified the Borrower of such extension or the
date on which such extension is effective.
(c) Term Loan Conversion Fee. If, pursuant to Section 2.11., the
outstanding balance of Revolving Loans is converted into Term Loans, the
Borrower agrees to pay to the Agent for the account of each Lender a conversion
fee equal to one-quarter of one percent (0.25%) per annum of the outstanding
principal balance of such Lender's Term Loan on the first anniversary of the
date of the conversion of the Revolving Loans into the Term Loans, such fee to
be payable on such anniversary date.
(d) Bid Rate Loan Fees. The Borrower agrees to pay to the Agent such
fees for services rendered by the Agent in connection with the Bid Rate Loans as
shall be separately agreed upon between the Borrower and the Agent.
(e) Agent's Fees. The Borrower agrees to pay to the Agent such fees for
services rendered by the Agent as shall be separately agreed upon between the
Borrower and the Agent.
(f) Letter of Credit Fees. The Borrower agrees to pay to the Agent for
account of each Lender a letter of credit fee at a rate per annum equal to one
and seventy-five one-thousandths percent (1.075%) of the Stated Amount of each
Letter of Credit on the date of issuance of such Letter of Credit and on each
annual anniversary of the date of issuance thereof until such Letter of Credit
has expired. The fee provided for in the immediately preceding sentence shall be
nonrefundable. The Borrower shall pay directly to the Agent from time to time on
demand all commissions, charges, costs and expenses in the amounts customarily
charged by the Agent from time to time in like circumstances with respect to the
issuance of each Letter of Credit, drawings, amendments and other transactions
relating thereto.
SECTION 3.2. Computation of Interest and Fees.
Unless set forth to the contrary herein, accrued interest on the Loans
and the Letter of Credit Liabilities and all fees due hereunder shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day of a period).
SECTION 3.3. Pro Rata Treatment.
Except to the extent otherwise provided herein: (a) each borrowing from
the Lenders under Section 2.1.(a) and Section 2.3.(e) shall be made from the
Lenders, each payment of the fees under Sections 3.1.(a) through (c) shall be
made for account of the Lenders, and each termination or reduction of the amount
of the Commitments under Section 2.9. shall be applied to the respective
Commitments of the Lenders, pro rata according to the amounts of their
respective Commitments; (b) each payment or prepayment of principal of Revolving
Loans by the Borrower shall be made for account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Revolving Loans
held by them, provided that if immediately prior to giving effect to any such
payment in respect of any Revolving Loans the outstanding principal amount of
the Revolving Loans shall not be held by the Lenders pro rata in accordance with
their respective Commitments in effect at the time such Loans were made, then
such payment shall be applied to the Revolving Loans in such manner as shall
result, as nearly as is practicable, in the outstanding principal amount of the
Revolving Loans being held by the Lenders pro rata in accordance with their
respective Commitments; (c) each payment or prepayment of principal of Term
Loans by the Borrower shall be made for account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Term Loan then
owing to each of them; (d) each payment of interest on Revolving Loans and Term
Loans by the Borrower shall be made for account of the Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders; (e) the making of Revolving Loans, and the Conversion
and Continuation of Revolving Loans and Term Loans of a particular Type (other
than Conversions provided for by Section 5.5.), shall be made pro rata among the
Lenders according to the amounts of their respective Commitments (in the case of
making of Revolving Loans) or their respective Loans (in the case of Conversions
and Continuations of Revolving Loans or Term Loans) and the then current
Interest Period for each Lender's portion of each Revolving Loan or Term Loan of
such Type shall be coterminous; (f) each prepayment of principal of Bid Rate
Loans by the Borrower pursuant to Section 2.8.(f) shall be made for account of
the Lenders then owed Bid Rate Loans pro rata in accordance with the respective
unpaid principal amounts of the Bid Rate Loan then owing to each such Lender;
(g) the Lenders' participation in, and payment obligations in respect of,
Swingline Loans under Section 2.3., shall be in accordance with their respective
Pro Rata Shares, and (h) the Lenders' participation in, and payment obligations
in respect of, Letters of Credit under Section 2.15., shall be pro rata in
accordance with their respective Commitments. All payments of principal,
interest, fees and other amounts in respect of the Swingline Loans shall be for
the account of the Swingline Lender only (except to the extent any Lender shall
have acquired a participating interest in any such Swingline Loan pursuant to
Section 2.3.(e)).
SECTION 3.4. Sharing of Payments, Etc.
The Borrower agrees that, in addition to (and without limitation of)
any right of set-off, bankers' lien or counterclaim a Lender may otherwise have,
each Lender shall be entitled, at its option, upon the occurrence and during the
continuance of an Event of Default but subject to the Agent's prior written
consent, to offset balances held by it for the account of the Borrower at any of
such Lender's offices, in Dollars or in any other currency, against any
principal of, or interest on, any of such Lender's Loans hereunder (or other
Obligations owing to such Lender hereunder) which is not paid when due
(regardless of whether such balances are then due to the Borrower), in which
case such Lender shall promptly notify the Borrower, all other Lenders and the
Agent thereof; provided, however, such Lender's failure to give such notice
shall not affect the validity of such offset. If a Lender shall obtain payment
of any principal of, or interest on, any Loan under this Agreement, or shall
obtain payment on any other Obligation owing by the Borrower or any other Loan
Party through the exercise of any right of set-off, banker's lien or
counterclaim or similar right or otherwise or through voluntary prepayments
directly to a Lender or other payments made by the Borrower or any other Loan
Party to a Lender not in accordance with the terms of this Agreement and such
payment, pursuant to the immediately preceding Section, should be distributed to
the Lenders in accordance with their Pro Rata Shares, such Lender shall promptly
purchase from the other Lenders participations in (or, if and to the extent
specified by such Lender, direct interests in) the Loans made by the other
Lenders or other Obligations owed to such other Lenders in such amounts, and
make such other adjustments from time to time as shall be equitable, to the end
that all the Lenders shall share the benefit of such payment (net of any
expenses which may be incurred by such Lender in obtaining or preserving such
benefit) in accordance with their respective Pro Rata Shares. To such end, all
the Lenders shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. The Borrower agrees that any Lender so purchasing a
participation (or direct interest) in the Loans or other Obligations owed to
such other Lenders may exercise all rights of set-off, bankers' lien,
counterclaim or similar rights with respect to such participation as fully as if
such Lender were a direct holder of Loans in the amount of such participation.
Nothing contained herein shall require any Lender to exercise any such right or
shall affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Borrower.
SECTION 3.5. Defaulting Lenders.
If for any reason any Lender (a "Defaulting Lender") shall fail or
refuse to perform its obligations under this Agreement or any other Loan
Document to which it is a party within the time period specified for performance
of such obligation or, if no time period is specified, if such failure or
refusal continues for a period of 5 Business Days after notice from the Agent,
then, in addition to the rights and remedies that may be available to the Agent
or the Borrower under this Agreement or Applicable Law, such Defaulting Lender's
right to participate in the administration of the Loans, this Agreement and the
other Loan Documents, including without limitation, any right to vote in respect
of, to consent to or to direct any action or inaction of the Agent or to be
taken into account in the calculation of Majority Lenders, shall be suspended
during the pendency of such failure or refusal. If for any reason a Lender fails
to make timely payment to the Agent of any amount required to be paid to the
Agent hereunder (without giving effect to any notice or cure periods), in
addition to other rights and remedies which the Agent or the Borrower may have
under the immediately preceding provisions or otherwise, the Agent shall be
entitled (i) to collect interest from such Defaulting Lender on such delinquent
payment for the period from the date on which the payment was due until the date
on which the payment is made at the Federal Funds Rate, (ii) to withhold or
setoff and to apply in satisfaction of the defaulted payment and any related
interest, any amounts otherwise payable to such Lender under this Agreement or
any other Loan Document and (iii) to bring an action or suit against such Lender
in a court of competent jurisdiction to recover the defaulted amount and any
related interest. Any amounts received by the Agent in respect of a Defaulting
Lender's Pro Rata Share of the Loans shall not be paid to such Defaulting Lender
and shall be held by the Agent and either (a)(i) if any Swingline Loans are
outstanding, applied first, to the Swingline Lender to fund the amount of the
Defaulting Lender's participation in the outstanding Swing Line Loans or (ii) if
no Swingline Loans are outstanding, applied against the purchase price of such
Pro Rata Share of the Loans under Section 3.6. or (b) paid to such Defaulting
Lender upon the Defaulting Lender's curing of its default.
SECTION 3.6. Purchase of Defaulting Lender's Pro Rata Share.
(a) Any Lender who is not a Defaulting Lender shall have the right, but
not the obligation, in its sole discretion, to acquire all of a Defaulting
Lender's Pro Rata Share of the Loans. If more than one Lender exercises such
right, each such Lender shall have the right to acquire such proportion of such
Defaulting Lender's Pro Rata Share of the Loans as they may mutually agree. Upon
any such purchase of the Pro Rata Share of the Loans of a Defaulting Lender, the
Defaulting Lender's interest in the Loans and its rights hereunder (but not its
liability in respect thereof or under the Loan Documents or this Agreement to
the extent the same relate to the period prior to the effective date of the
purchase) shall terminate on the date of purchase, and the Defaulting Lender
shall promptly execute all documents reasonably requested to surrender and
transfer such interest to the purchaser thereof, including an appropriate
Assignment and Acceptance Agreement.
(b) The purchase price for the Pro Rata Share of the Loans of a
Defaulting Lender shall be equal to the amount of the principal balance of the
Loans outstanding and owed by the Borrower to the Defaulting Lender. Prior to
payment of such purchase price to the Defaulting Lender, the Agent shall apply
against such purchase price any amounts payable in respect of such Pro Rata
Share of the Loans as contemplated by the last sentence of Section 3.5. The
Defaulting Lender shall be entitled to receive amounts owed to it by the
Borrower under the Loan Documents which accrued prior to the date of the default
by the Defaulting Lender, to the extent the same are received by the Agent from
or on behalf of the Borrower. There shall be no recourse against any Lender or
the Agent for the payment of such sums except to the extent of the receipt of
payments from any other party or in respect of the Loans.
SECTION 3.7. Usury.
In no event shall the amount of interest due or payable on the Loans
exceed the maximum rate of interest allowed by Applicable Law and, in the event
any such payment is paid by the Borrower or received by any Lender, then such
excess sum shall be credited as a payment of principal. It is the express intent
of the parties hereto that the Borrower not pay and the Lenders not receive,
directly or indirectly, in any manner whatsoever, interest in excess of that
which may be lawfully paid by the Borrower under Applicable Law.
SECTION 3.8. Agreement Regarding Interest and Charges.
THE PARTIES HERETO HEREBY AGREE AND STIPULATE THAT THE ONLY CHARGE
IMPOSED UPON THE BORROWER FOR THE USE OF MONEY IN CONNECTION WITH THIS AGREEMENT
IS AND SHALL BE THE INTEREST DESCRIBED IN SECTION 2.7. AND WITH RESPECT TO
SWINGLINE LOANS, IN SECTION 2.3.(C). THE PARTIES HERETO FURTHER AGREE AND
STIPULATE THAT ALL OTHER CHARGES IMPOSED BY LENDERS AND THE AGENT ON THE
BORROWER IN CONNECTION WITH THIS AGREEMENT, INCLUDING ALL AGENCY FEES,
COMMITMENT FEES, FACILITY FEES, UNUSED FACILITY FEES, EXTENSION FEES,
UNDERWRITING FEES, LETTER OF CREDIT FEES, DEFAULT CHARGES, LATE CHARGES,
ATTORNEYS' FEES AND REIMBURSEMENT FOR COSTS AND EXPENSES PAID BY THE AGENT OR
ANY LENDER TO THIRD PARTIES OR FOR DAMAGES INCURRED BY THE AGENT OR ANY LENDER,
ARE CHARGES MADE TO COMPENSATE THE AGENT OR ANY SUCH LENDER FOR UNDERWRITING OR
ADMINISTRATIVE SERVICES AND COSTS OR LOSSES PERFORMED OR INCURRED, AND TO BE
PERFORMED OR INCURRED, BY THE AGENT AND LENDERS IN CONNECTION WITH THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS AND SHALL UNDER NO CIRCUMSTANCES BE
DEEMED TO BE CHARGES FOR THE USE OF MONEY PURSUANT TO OFFICIAL CODE OF GEORGIA
ANNOTATED SECTION 7-4-2 OR 7-4-18. ALL CHARGES OTHER THAN CHARGES FOR THE USE OF
MONEY SHALL BE FULLY EARNED AND NONREFUNDABLE WHEN DUE.
SECTION 3.9. Statements of Account.
The Agent will account to the Borrower monthly with a statement of
Loans, Letters of Credit, charges and payments made pursuant to this Agreement
and the other Loan Documents, and such account rendered by the Agent shall be
deemed final, binding and conclusive upon the Borrower absent demonstrable
error. The failure of the Agent or any Lender to maintain or deliver such a
statement of accounts shall not relieve or discharge the Borrower from its
obligations hereunder.
SECTION 3.10. Reliance.
Neither the Agent nor any Lender shall incur any liability to the
Borrower for acting upon any telephonic notice permitted under this Agreement
which the Agent or such Lender believes reasonably and in good faith to have
been given by an individual authorized to deliver a Notice of Borrowing, Notice
of Conversion, Notice of Continuation, Extension Request or a request for
issuance of a Letter of Credit on behalf of the Borrower.
SECTION 3.11. Taxes.
(a) Taxes Generally. All payments by the Borrower of principal of, and
interest on, the Loans and all other Obligations shall be made free and clear of
and without deduction for any present or future excise, stamp or other taxes,
fees, duties, levies, imposts, charges, deductions, withholdings or other
charges of any nature whatsoever imposed by any taxing authority, but excluding
(without duplication): (i) franchise taxes, (ii) any taxes (other than
withholding taxes) that would not be imposed but for a connection between the
Agent or a Lender and the jurisdiction imposing such taxes (other than a
connection arising solely by virtue of the activities of the Agent or such
Lender pursuant to or in respect of this Agreement or any other Loan Document),
(iii) any withholding taxes payable with respect to payments hereunder or under
any other Loan Document under Applicable Law in effect on the Agreement Date,
(iv) any taxes imposed on or measured by any Lender's assets, net income,
receipts or branch profits and (v) any taxes arising after the Agreement Date
solely as a result of or attributable to a Lender changing its designated
Lending Office after the date such Lender becomes a party hereto (such
non-excluded items being collective called "Taxes"). If any withholding or
deduction from any payment to be made by the Borrower hereunder is required in
respect of any Taxes pursuant to any Applicable Law, then the Borrower will:
(i) pay directly to the relevant Governmental Authority the
full amount required to be so withheld or deducted;
(ii) promptly forward to the Agent an official receipt or
other documentation satisfactory to the Agent evidencing such payment
to such Governmental Authority; and
(iii) pay to the Agent for its account or the account of the
applicable Lender, as the case may be, such additional amount or
amounts as is necessary to ensure that the net amount actually received
by the Agent or such Lender will equal the full amount that the Agent
or such Lender would have received had no such withholding or deduction
been required.
(b) Tax Indemnification. If the Borrower fails to pay any Taxes when
due to the appropriate Governmental Authority or fails to remit to the Agent,
for its account or the account of the respective Lender, as the case may be, the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Agent and the Lenders for any incremental Taxes, interest or
penalties that may become payable by the Agent or any Lender as a result of any
such failure. For purposes of this Section, a distribution hereunder by the
Agent or any Lender to or for the account of any Lender shall be deemed a
payment by the Borrower.
(c) Tax Forms. Each Lender or Participant organized under the laws of a
jurisdiction other than the United States of America agrees to deliver to the
Borrower and the Agent such certificates, documents or other evidence, as
required by the Internal Revenue Code, correctly completed and executed by such
Lender or Participant establishing that such payment is not subject to United
States federal withholding tax under the Internal Revenue Code because such
payment is either effectively connected with the conduct by such Lender or
Participant of a trade or business in the United States or totally exempt from
United States federal withholding tax by reason of the application of the
provisions of a treaty to which the United States is a party or such Lender is
otherwise exempt.
(d) Refunds. If the Agent or any Lender shall become aware that it is
entitled to a refund in respect of Taxes for which it has been indemnified by
the Borrower pursuant to this Section, the Agent or such Lender shall promptly
notify the Borrower of the availability of such refund and shall, within 30 days
after receipt of a written request by the Borrower, apply for such refund at the
Borrower's sole cost and expense. So long as no Event of Default shall have
occurred and be continuing, if the Agent or any Lender shall receive a refund in
respect of any such Taxes as to which it has been indemnified by the Borrower
pursuant to this Section, the Agent or such Lender shall promptly notify the
Borrower of such refund and shall, within 30 days of receipt, pay such refund
(to the extent of amounts that have been paid by the Borrower under this Section
with respect to such refund and not previously reimbursed) to the Borrower, net
of all reasonable out-of-pocket expenses of such Lender or the Agent and without
interest (other than the interest, if any, included in such refund).
ARTICLE IV. UNENCUMBERED POOL PROPERTIES
SECTION 4.1. Acceptance of Unencumbered Pool Properties.
(a) Existing Unencumbered Pool Properties.Subject to compliance with the terms
and conditions of Section 6.1. and subject to any limitations set forth on
Schedule 4.1., as of the Effective Date the Lenders have accepted the Properties
listed on Schedule 4.1. as Unencumbered Pool Properties.
(b) Submission of Additional Properties. If the Borrower desires that
the Lenders accept an additional Property as an Unencumbered Pool Property after
the Effective Date, the Borrower shall so notify the Agent in writing and the
Agent shall promptly notify each Lender. No Property will be evaluated by the
Lenders unless it is an Eligible Property, and unless and until the Borrower
delivers to the Agent the following, in form and substance satisfactory to the
Agent:
(i) An Executive Memorandum regarding such Property;
(ii) An Unencumbered Pool Certificate setting forth (A) on a
pro forma basis the Maximum Loan Availability, assuming that such
Property is accepted as an Unencumbered Pool Property, (B) the
Occupancy Rate of such Property, (C) calculations evidencing continued
compliance with Section 4.3., assuming that such Property is accepted
as an Unencumbered Pool Property, (D) the percentage amount of the
total Unencumbered Pool Value, assuming that such Property is accepted
as an Unencumbered Pool Property, attributable to such Property (which
percentage amount shall not exceed 5%) and (E) the amount of the
Unencumbered Pool Value, assuming that such Property is accepted as an
Unencumbered Pool Property, attributable to all Unencumbered Pool
Properties which are owned by Subsidiaries that are not Wholly Owned
Subsidiaries;
(iii) copy of the most recent ALTA Owner's Policy of Title
Insurance (or commitment to issue such a policy to the Loan Party
owning or to own such Property) relating to such Property showing the
identity of the fee titleholder thereto and all matters of record; and
(iv) A Property Certificate executed by the chief financial
officer or controller of the Borrower (which officer shall be
authorized to execute such certificate).
Following receipt of the foregoing items (i) through (iv) for such Property, the
Agent will promptly submit such documents and information to Lenders for review
and approval by all Lenders of such Property as an Unencumbered Pool Property.
Each Lender shall have 10 Business Days from the day on which the Agent receives
such documents and information from the Borrower (the "Review Period") to take
one of the following actions: (I) notify the Agent of such Lender's approval of
the Property as an Unencumbered Pool Property or (II) request from the Agent
further information relating to such Property in accordance with the following
paragraph. If neither of such actions is taken by a Lender prior to the
expiration of the Review Period, such Lender shall be deemed to have accepted
such Property as an Unencumbered Pool Property.
At any time during the Review Period, any Lender may request, in
writing, that the Agent obtain one or more of the items described in subsection
(c) below from the Borrower for such Lender's review to confirm the information
set forth in the Property Certificate. If a request is made for such further
information by a Lender during the Review Period, the Borrower shall promptly
(but in any event within 10 calendar days of receipt of such request) deliver
the requested information to the Agent who shall promptly deliver it to the
requesting Lender. Such requesting Lender shall then have 10 calendar days (the
"Extended Review Period") after the Agent's receipt from the Borrower of the
requested information to notify the Agent of its acceptance or rejection of such
Property. If such requesting Lender notifies the Agent of its rejection of such
Property, such Property shall not be accepted as an Unencumbered Pool Property
under this subsection (b). If such requesting Lender fails to notify the Agent
prior to the expiration of the Extended Review Period, such requesting Lender
shall be deemed to have accepted such Property as Unencumbered Pool Property.
Upon any acceptance of a Property pursuant to this subsection (b), and
upon execution and delivery of all of the following, such Property shall become
an Unencumbered Pool Property:
(1) If such Property is owned (or is being acquired) by a
Subsidiary that is not yet a party to the Guaranty, an Accession
Agreement executed by such Subsidiary and all other items required to
be delivered by a Subsidiary under Section 8.24.; and
(2)Such other items or documents as may be appropriate under the circumstances
as requested by the Agent.
(c) Alternative Acceptance Procedure. At the Borrower's option or if a
Property fails to be accepted as an Unencumbered Pool Property pursuant to the
immediately preceding subsection (b), the Borrower may submit or resubmit, as
applicable, such Property for consideration by notifying the Agent in writing of
the Borrower's intent to submit or resubmit, as applicable, such Property and by
delivering the following additional items, in form and substance satisfactory to
the Agent:
(i) A description of such Property, such description to
include the age, location and current occupancy rate of such Property;
(ii) Operating statements for such Property for the
immediately preceding fiscal year and for current fiscal year through
the fiscal quarter most recently ending, in each case audited or
certified by a representative of the Borrower as being true and correct
in all material respects and prepared in accordance with GAAP, provided
that, with respect to any period such Property was not owned by a Loan
Party, such information shall only be required to be delivered to the
extent reasonably available to the Borrower and such certification may
be based upon the best of the Borrower's knowledge;
(iii) If prepared by the Borrower, a pro forma operating
statement for such Property;
(iv) A current rent roll and occupancy report for such
Property, certified by a representative of the Borrower as being true
and correct in all material respects, and a two-year occupancy history
of such Property, certified by a representative of the Borrower to be
true and correct, provided that, with respect to any period such
Property was not owned by a Loan Party, such information shall only be
required to be delivered to the extent reasonably available to the
Borrower and such certification may be based upon the best of the
Borrower's knowledge;
(v) An operating budget for such Property with respect to the
current fiscal year if available;
(vi) Copies of all Material Contracts affecting such Property;
(vii) Copies of all engineering, mechanical, structural and
maintenance studies performed with respect to such Property;
(viii) A "Phase I" environmental assessment of such Property
not more than 12 months old prepared by an environmental engineering
firm acceptable to the Agent, and any additional environmental studies
or assessments available to the Borrower performed with respect to such
Property;
(ix) With respect to any Property being acquired by a Loan
Party, a copy of the materials relating to such Property submitted by
the Borrower to its board of directors for their approval of such
Property (but only to the extent such materials have not already been
provided under any of the preceding subsections);
(x) An Unencumbered Pool Certificate setting forth (A) on a
pro forma basis the Maximum Loan Availability, assuming that such
Property is accepted as an Unencumbered Pool Property, (B) the
Occupancy Rate of such Property, (C) calculations evidencing continued
compliance with Section 4.3., assuming that such Property is accepted
as an Unencumbered Pool Property, and (D) the amount of the
Unencumbered Pool Value, assuming that such Property is accepted as an
Unencumbered Pool Property, attributable to all Unencumbered Pool
Properties which are owned by Subsidiaries that are not Wholly Owned
Subsidiaries; and
(xi) Such other information the Agent may reasonably request
in order to evaluate the Property.
Following receipt of the foregoing documents and information, the Agent shall
promptly submit such documents and information to the Lenders for approval. Upon
approval by the Majority Lenders (which must include the Agent in its capacity
as a Lender), and upon execution and delivery of all of the following, such
Property shall become an Unencumbered Pool Property:
(1) A copy of the most recent ALTA Owner's Policy of Title
Insurance (or commitment to issue such a policy to the Loan Party
owning or to own such Property) relating to such Property showing the
identity of the fee titleholder thereto and all matters of record;
(2) If such Property is owned (or is being acquired) by a
Subsidiary that is not yet a party to the Guaranty, an Accession
Agreement executed by such Subsidiary and all other items required to
be delivered by a Subsidiary under Section 8.24.; and
(3) Such other items or documents as may be appropriate under
the circumstances as requested by the Agent.
SECTION 4.2. Termination of Designation as Unencumbered Pool Property.
From time to time the Borrower may request, upon not less than 20 days
prior written notice to the Agent and the Lenders, that an Unencumbered Pool
Property cease to be an Unencumbered Pool Property. The Agent shall grant such
request if all of the following conditions are satisfied:
(a) no Default or Event of Default shall have occurred and be
continuing both at the time of such request and immediately after giving effect
to such request; and
(b) the Borrower shall have delivered to the Agent an Unencumbered Pool
Certificate demonstrating on a pro forma basis, and the Agent shall have
determined, that the outstanding principal balance of the Loans will not exceed
the Maximum Loan Availability after giving effect to such request and any
prepayment to be made and/or the acceptance of any Property as an additional or
replacement Unencumbered Pool Property to be given concurrently with such
request.
After giving effect to any request that an Unencumbered Pool Property cease to
be designated as such, the Borrower may request in writing that the Agent
release, and upon receipt of such request the Agent shall release, a Guarantor
from the Guaranty so long as: (i) such Guarantor is a Subsidiary; (ii) such
Guarantor owns no other Unencumbered Pool Property, nor any direct or indirect
equity interest in any Subsidiary that does own an Unencumbered Pool Property;
(iii) such Guarantor is not otherwise required to be a party to the Guaranty
under Section 8.24.; and (iv) no Default or Event of Default shall then be in
existence or would occur as a result of such release.
SECTION 4.3. Additional Requirements of Unencumbered Pool Properties.
The ratio (expressed as a percentage) of (a) the net rentable square
footage of all Unencumbered Pool Properties actually occupied by tenants paying
rent pursuant to binding leases as to which no monetary default has occurred and
is continuing to (b) the aggregate net rentable square footage of all
Unencumbered Pool Properties shall at all times equal or exceed 90%. A Property
shall cease to be an Unencumbered Pool Property if it shall cease to be an
Eligible Property.
ARTICLE V. YIELD PROTECTION, ETC.
SECTION 5.1. Additional Costs; Capital Adequacy.
(a) Additional Costs. The Borrower shall promptly pay to the Agent for
the account of a Lender from time to time such amounts as such Lender may
determine to be necessary to compensate such Lender for any costs incurred by
such Lender that it determines are attributable to its making or maintaining of
any LIBOR Loans or its obligation to make any LIBOR Loans hereunder, any
reduction in any amount receivable by such Lender under this Agreement or any of
the other Loan Documents in respect of any of such LIBOR Loans or such
obligation or the maintenance by such Lender of capital in respect of its LIBOR
Loans or its Commitment (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), resulting from any
Regulatory Change that: (i) changes the basis of taxation of any amounts payable
to such Lender under this Agreement or any of the other Loan Documents in
respect of any of such LIBOR Loans or its Commitments (other than taxes imposed
on or measured by the overall net income of such Lender or of its Lending Office
for any of such LIBOR Loans by the jurisdiction in which such Lender has its
principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit or similar requirements relating to any extensions of
credit or other assets of, or any deposits with or other liabilities of, or
other credit extended by, or any other acquisition of funds by such Lender (or
its parent corporation), or any commitment of such Lender (including, without
limitation, the Commitment of such Lender hereunder); or (iii) has or would have
the effect of reducing the rate of return on capital of such Lender to a level
below that which such Lender could have achieved but for such Regulatory Change
(taking into consideration such Lender's policies with respect to capital
adequacy).
(b) Lender's Suspension of LIBOR Loans. Without limiting the effect of
the provisions of the immediately preceding subsection (a), if by reason of any
Regulatory Change, any Lender either (i) incurs Additional Costs based on or
measured by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes deposits by reference
to which the interest rate on LIBOR Loans is determined as provided in this
Agreement or a category of extensions of credit or other assets of such Lender
that includes LIBOR Loans or (ii) becomes subject to restrictions on the amount
of such a category of liabilities or assets that it may hold, then, if such
Lender so elects by notice to the Borrower (with a copy to the Agent), the
obligation of such Lender to make or Continue, or to Convert Base Rate Loans
into, LIBOR Loans hereunder shall be suspended until such Regulatory Change
ceases to be in effect (in which case the provisions of Section 5.5. shall
apply).
(c) Notification and Determination of Additional Costs. Each of the
Agent and each Lender, as the case may be, agrees to notify the Borrower of any
event occurring after the Agreement Date entitling the Agent or such Lender to
compensation under any of the preceding subsections of this Section as promptly
as practicable; provided, however, that the failure of the Agent or any Lender
to give such notice shall not release the Borrower from any of its obligations
hereunder. Each Lender agrees to furnish to the Borrower and the Agent a
certificate setting forth the basis and amount of each request for compensation
under this Section. Determinations by such Lender of the effect of any
Regulatory Change shall be conclusive, provided that such determinations are
made on a reasonable basis and in good faith.
SECTION 5.2. Suspension of LIBOR Loans.
Anything herein to the contrary notwithstanding, if, on or prior to the
determination of any LIBO Rate for any Interest Period:
(a) the Agent reasonably determines (which determination shall
be conclusive) that quotations of interest rates for the relevant
deposits referred to in the definition of LIBO Rate are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for LIBOR Loans as provided
herein or is otherwise unable to determine the LIBO Rate, or
(b) any Lender reasonably determines (which determination
shall be conclusive) that the relevant rates of interest referred to in
the definition of LIBO Rate upon the basis of which the rate of
interest for LIBOR Loans for such Interest Period is to be determined
are not likely adequately to cover the cost to such Lender of making or
maintaining LIBOR Loans for such Interest Period; or
(c) any Lender that has outstanding a Bid Rate Quote with
respect to a LIBOR Margin Loan reasonably determines (which
determination shall be conclusive) that the LIBO Rate will not
adequately and fairly reflect the cost to such Lender of making or
maintaining such LIBOR Margin Loan;
then the Agent shall give the Borrower and each Lender prompt notice
thereof and, so long as such condition remains in effect, (i) in the case of
clause (a) or (b) above, the Lenders shall be under no obligation to, and shall
not, make additional LIBOR Loans, Continue LIBOR Loans or Convert Loans into
LIBOR Loans and the Borrower shall, on the last day of each current Interest
Period for each outstanding LIBOR Loan, either prepay such Loan or Convert such
Loan into a Base Rate Loan and (ii) in the case of clause (c) above, no Lender
that has outstanding a Bid Rate Quote with respect to a LIBOR Margin Loan shall
be under any obligation to make such Loan.
SECTION 5.3. Illegality.
Notwithstanding any other provision of this Agreement, if any Lender
shall determine (which determination shall be conclusive and binding) that it is
unlawful for such Lender to honor its obligation to make or maintain LIBOR Loans
hereunder, then such Lender shall promptly notify the Borrower thereof (with a
copy of such notice to the Agent) and such Lender's obligation to make or
Continue, or to Convert Revolving Loans of any other Type into, LIBOR Loans
shall be suspended until such time as such Lender may again make and maintain
LIBOR Loans (in which case the provisions of Section 5.5. shall be applicable).
SECTION 5.4. Compensation.
The Borrower shall pay to the Agent for account of each Lender, upon
the request of such Lender through the Agent, such amount or amounts as shall be
sufficient to compensate such Lender for any loss, cost or expense that such
Lender reasonably determines is attributable to:
(a) any payment or prepayment (whether mandatory or optional)
of a LIBOR Loan or Bid Rate Loan, or Conversion of a LIBOR Loan, made
by such Lender for any reason (including, without limitation,
acceleration) on a date other than the last day of the Interest Period
for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any of the applicable conditions
precedent specified in Article VI. to be satisfied) to borrow a LIBOR
Loan or Bid Rate Loan from such Lender on the date for such borrowing,
or to Convert a Base Rate Loan into a LIBOR Loan or Continue a LIBOR
Loan on the requested date of such Conversion or Continuation.
Not in limitation of the foregoing, such compensation shall include,
but shall not be limited to: (i) in the case of a LIBOR Loan, an amount equal to
the then present value of (A) the amount of interest that would have accrued on
such LIBOR Loan for the remainder of the Interest Period at the rate applicable
to such LIBOR Loan, less (B) the amount of interest that would accrue on the
same LIBOR Loan for the same period if the LIBO Rate were set on the date on
which such LIBOR Loan was repaid, prepaid or Converted or the date on which the
Borrower failed to borrow, Convert or Continue such LIBOR Loan, as applicable,
calculating present value by using as a discount rate the LIBO Rate quoted on
such date; and (ii) in the case of a Bid Rate Loan, the sum of such losses and
expenses as the Lender or Designated Lender who made such Bid Rate Loan may
reasonably incur by reason of such prepayment, including without limitation any
losses or expenses incurred in obtaining, liquidating or employing deposits from
third parties.
Upon the Borrower's request, any Lender requesting compensation under
this Section shall provide the Borrower with a statement setting forth the basis
for requesting such compensation and the method for determining the amount
thereof. Any such statement shall be conclusive absent manifest error.
SECTION 5.5. Treatment of Affected Loans.
If the obligation of any Lender to make LIBOR Loans or to Continue, or
to Convert Base Rate Loans into, LIBOR Loans shall be suspended pursuant to
Section 5.1.(b), Section 5.2. or Section 5.3., then such Lender's LIBOR Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for LIBOR Loans (or, in the case of a Conversion
required by Section 5.1.(b) or 5.3., on such earlier date as such Lender may
specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 5.1., Section 5.2. or 5.3.
that gave rise to such Conversion no longer exist:
(a) to the extent that such Lender's LIBOR Loans have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's LIBOR Loans shall be applied instead to its Base Rate
Loans; and
(b) all Revolving Loans that would otherwise be made or Continued by
such Lender as LIBOR Loans shall be made or Continued instead as Base Rate
Loans, and all Base Rate Loans of such Lender that would otherwise be Converted
into LIBOR Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent)
that the circumstances specified in Section 5.1. or 5.3. that gave rise to the
Conversion of such Lender's LIBOR Loans pursuant to this Section no longer exist
(which such Lender agrees to do promptly upon such circumstances ceasing to
exist) at a time when LIBOR Loans made by other Lenders are outstanding, then
such Lender's Base Rate Loans shall be automatically Converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding LIBOR
Loans, to the extent necessary so that, after giving effect thereto, all Loans
held by the Lenders holding LIBOR Loans and by such Lender are held pro rata (as
to principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.
SECTION 5.6. Change of Lending Office.
Each Lender agrees that it will use reasonable efforts to designate an
alternate Lending Office with respect to any of its Loans affected by the
matters or circumstances described in Sections 3.11., 5.1. or 5.3. to reduce the
liability of the Borrower or avoid the results provided thereunder, so long as
such designation is not disadvantageous to such Lender as determined by such
Lender in its sole discretion, except that such Lender shall have no obligation
to designate a Lending Office located in the United States of America.
ARTICLE VI. CONDITIONS
SECTION 6.1. Effectiveness.
The effectiveness of the amendment and restatement of the Existing
Regency Credit Agreement contemplated hereby, as well as the obligation of the
Lenders to make any Revolving Loans, of the Swingline Lender to make any
Swingline Loans, and of the Agent to issue Letters of Credit, to or for the
account of the Borrower in accordance with the terms hereof, are subject to the
condition precedent that the Borrower deliver to the Agent each of the
following, each of which shall be in form and substance satisfactory to the
Agent:
(a) counterparts of this Agreement executed by each of the parties
hereto;
(b) Revolving Notes and Bid Rate Notes executed by the Borrower,
payable to all Lenders or any Designated Lender, if applicable, and complying
with the terms of Section 2.12. and the Swingline Note executed by the Borrower,
payable to the Swingline Lender;
(c) the Guaranty executed by each "Guarantor" under the Existing Credit
Agreement and any other Subsidiary that would be required under Section 8.24.(a)
to become a party to the Guaranty as of the Effective Date;
(d) an opinion of Foley & Lardner, counsel to the Borrower and the
Guarantors, and addressed to the Agent and the Lenders in substantially the form
of Exhibit N-1;
(e) an opinion of Alston & Bird, LLP, counsel to the Agent, and
addressed to the Agent and the Lenders in substantially the form of Exhibit N-2;
(f) all of the documents and information required to be delivered under
Section 4.1. with respect to each of the Properties listed on Schedule 4.1. and
which have not previously been delivered to the Agent;
(g) an Unencumbered Pool Certificate dated the Agreement Date;
(h) the certificate of limited partnership of the Borrower certified as
of a recent date by the Secretary of State of the State of Delaware;
(i) a Certificate of Good Standing issued as of a recent date by the
Secretary of State of the State of Delaware and certificates of qualification to
transact business or other comparable certificates issued by each Secretary of
State (and any state department of taxation, as applicable) of each state in
which the Borrower is required to be so qualified;
(j) a certificate of incumbency signed by the Secretary or Assistant
Secretary of the general partner of the Borrower with respect to each of the
officers of the general partner of the Borrower authorized to execute and
deliver the Loan Documents to which the Borrower is a party;
(k) certified copies (certified by the Secretary or Assistant Secretary
of the general partner of the Borrower) of the partnership agreement of the
Borrower and of all necessary action taken by the Borrower (and any of the
partners of the Borrower) to authorize the execution, delivery and performance
of the Loan Documents to which it is a party;
(l) the articles of incorporation, articles of organization,
certificate of limited partnership or other comparable organizational instrument
(if any) of each Guarantor certified as of a recent date by the Secretary of
State of the State of formation of such Guarantor;
(m) a Certificate of Good Standing or certificate of similar meaning
with respect to each Guarantor issued as of a recent date by the Secretary of
State of the State of formation of each such Guarantor and certificates of
qualification to transact business or other comparable certificates issued by
each Secretary of State (and any state department of taxation, as applicable) of
each state in which such Guarantor is required to be so qualified;
(n) a certificate of incumbency signed by the Secretary or Assistant
Secretary (or other individual performing similar functions) of each Guarantor
with respect to each of the officers of such Guarantor authorized to execute and
deliver the Loan Documents to which such Guarantor is a party;
(o) copies certified by the Secretary or Assistant Secretary of each
Guarantor (or other individual performing similar functions) of (i) the by-laws
of such Guarantor, if a corporation, the operating agreement, if a limited
liability company, the partnership agreement, if a limited or general
partnership, or other comparable document in the case of any other form of legal
entity and (ii) all corporate, partnership, member or other necessary action
taken by such Guarantor to authorize the execution, delivery and performance of
the Loan Documents to which it is a party;
(p) all loan closing fees and any other fees then due and payable to
the Agent and the Lenders in connection with this Agreement;
(q) evidence of the assignment of an Investment Grade Rating by both
Moody's and S&P to the senior unsecured long term indebtedness of the Borrower;
(r) a pro forma Compliance Certificate dated as of the Agreement
Date calculated on a projected basis for the fiscal quarter
ending March 31, 1999;
(s) certified copies (certified by a senior executive officer of the
general partner of the Borrower) of the following documents and instruments
relating to the PRT Acquisition:
(i) the Merger Agreement and any amendments thereto; and
(ii) the Registration Statement on Form S-4, Registration No.
333-65491, as filed with the Securities and
Exchange Commission on October 9, 1998 by the Parent, as amended;
(t) a certificate of a senior executive officer of the Parent stating
that all conditions precedent to the consummation of the PRT Acquisition as set
forth in the Merger Agreement have been satisfied or waived in writing, together
with a copy of any such waiver;
(u) copies of all opinion letters delivered in connection with the
Merger Agreement and regarding the PRT Acquisition, either addressed to the
Agent and the Lenders or accompanied by reliance letters from the issuers of
such letters addressed to the Agent and the Lenders;
(v) evidence of the transfer of ownership from the Parent to the
Borrower of all Properties owned directly or indirectly by PRT and acquired by
the Parent pursuant to the PRT Acquisition other than (i) Properties owned by
Retail Property Partners Limited Partnership and (ii) the Properties identified
on Schedule 8.25.;
(w) evidence as to the termination of (i) the Existing PRT Credit
Agreement and (ii) that certain Credit Agreement dated as of December 7, 1998
(as amended, the "Bridge Facility"), among PRT, each of the financial
institutions a party thereto and Wells Fargo Bank, National Association, as
Agent and repayment in full of all obligations thereunder;
(x) a copy (certified by a senior executive officer of the general
partner of the Borrower) of the Indenture dated as of July 20, 1998 by and among
the Borrower, the Guarantors named therein and First Union National Bank, as
Trustee, relating to the Borrower's $100,000,000 Notes dues July 15, 2005,
together with all supplemental indentures executed and delivered in connection
therewith; and
(y) such other documents, instruments and agreements as the Agent or
any Lender may reasonably request.
SECTION 6.2. Conditions to All Loans and Letters of Credit.
The obligation of the Lenders to make any Revolving Loans, and of the
Swingline Lender to make any Swingline Loans, and of the Agent to issue Letters
of Credit is subject to the condition precedent that the following conditions be
satisfied in the judgment of the Agent:
(a) in the case of a Revolving Loan, timely receipt by the Agent of a
Notice of Borrowing, or in the case of a Swingline Loan, timely receipt by the
Swingline Lender of a Notice of Swingline Borrowing;
(b) the proposed use of proceeds of such Loan or Letter of Credit, as
the case may be, set forth in the Notice of Borrowing or Notice of Swingline
Borrowing, as the case may be, is consistent with the provisions of Section
8.14.;
(c) immediately before and after the making of such Loan or the
issuance of such Letter of Credit, no Default (including without limitation, the
existence of the condition described in Section 2.8.(f)) or Event of Default
shall have occurred and be continuing; and
(d) the representations and warranties of the Borrower and the
Guarantors contained in the Loan Documents shall be true in all material
respects on and as of the date of such Loan or issuance of such Letter of
Credit, as applicable, except to the extent such representations or warranties
specifically relate to an earlier date or such representations or warranties
become untrue by reason of events or conditions otherwise permitted hereunder
and the other Loan Documents.
The delivery of each Notice of Borrowing and each Notice of Swingline Borrowing
and the making of each Loan and the issuance of each Letter of Credit shall
constitute a certification by the Borrower to the Agent and the Lenders that the
statements in the immediately preceding clauses (b) through (d) are true.
SECTION 6.3. Conditions to Conversion to Term Loans.
The right of the Borrower to convert Revolving Loans into Term Loans
under Section 2.11. is subject to the condition precedent that the following
conditions be satisfied in the judgment of the Agent:
(a) timely receipt by the Agent of the notice required under such
Section;
(b) immediately before and after such conversion, no Default (including
without limitation, the existence of the condition described in Section 2.8.(f))
or Event of Default shall have occurred and be continuing; and
(c) the representations and warranties of the Borrower contained in the
Loan Documents to which it is a party shall be true in all material respects on
and as of the date of such conversion except to the extent such representations
or warranties specifically relate to an earlier date or such representations or
warranties become untrue by reason of events or conditions otherwise permitted
hereunder and the other Loan Documents.
The delivery of the notice required under such Section shall constitute a
certification by the Borrower to the Agent and the Lenders that the statements
in the immediately preceding clauses (b) and (c) are true.
ARTICLE VII. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and each Lender as
follows:
SECTION 7.1. Existence and Power.
Each of the Borrower, each Guarantor and its other Subsidiaries is a
corporation, partnership or other legal entity, duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, and
has all requisite power and authority and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted and is duly qualified and is in good standing, authorized to do
business, in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification or authorization.
SECTION 7.2. Ownership Structure.
Part I of Schedule 7.2. is a complete and correct list of all
Subsidiaries of the Parent (including all Subsidiaries of the Borrower), setting
forth for each such Subsidiary, (a) the jurisdiction of organization of such
Subsidiary, (b) each Person holding ownership interests in such Subsidiary and
(c) the nature of the ownership interests held by each such Person and (d) the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in such Schedule (i) each of the Parent and its
Subsidiaries owns, free and clear of all Liens, and has the unencumbered right
to vote, all outstanding ownership interests in each Person shown to be held by
it on such Schedule, (ii) all of the issued and outstanding capital stock of
each such Person organized as a corporation is validly issued, fully paid and
nonassessable and (iii) there are no outstanding subscriptions, options,
warrants, commitments, preemptive rights or agreements of any kind (including,
without limitation, any stockholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or outstanding securities convertible
into, any additional shares of capital stock of any class, or partnership or
other ownership interests of any type in, any such Person. Part II of Schedule
7.2. correctly sets forth all Unconsolidated Affiliates and Preferred Stock
Entities of the Parent, including the correct legal name of such Person, the
type of legal entity which each such Person is, and all ownership interests in
such Person held directly or indirectly by the Parent.
SECTION 7.3. Authorization of Agreement, Notes, Loan Documents and Borrowings.
The Borrower and each Guarantor has the right and power, and has taken
all necessary action to authorize it, to borrow hereunder (in the case of the
Borrower) and to execute, deliver and perform this Agreement, the Notes and the
other Loan Documents to which it is a party in accordance with their respective
terms and to consummate the transactions contemplated hereby and thereby, as the
case may be. This Agreement, the Notes and each of the other Loan Documents to
which the Borrower or a Guarantor is a party have been duly executed and
delivered by such Loan Party and each is a legal, valid and binding obligation
of such Loan Party enforceable against such Loan Party in accordance with its
respective terms, except as the same may be limited by bankruptcy, insolvency,
and other similar laws affecting the rights of creditors generally and the
availability of equitable remedies for the enforcement of certain obligations
(other than the payment of principal) contained herein or therein may be limited
by equitable principles generally.
SECTION 7.4. Compliance of Agreement, Notes, Loan Documents and Borrowing with
Laws, etc.
The execution, delivery and performance of this Agreement, the Notes
and the other Loan Documents to which the Borrower or any Guarantor is a party
in accordance with their respective terms and the borrowing of Loans hereunder
do not and will not, by the passage of time, the giving of notice or otherwise
(a) require any Governmental Approval or violate any Applicable Law relating to
the Borrower or any Guarantor the failure to possess or to comply with which
would have a Materially Adverse Effect; (b) conflict with, result in a breach of
or constitute a default under the articles of incorporation, bylaws, operating
agreement, partnership agreement or other organizational or constituent
documents of the Borrower or any Guarantor, or any indenture, agreement or other
instrument to which the Borrower or any Guarantor is a party or by which it or
any of its properties may be bound and the violation of which would have a
Materially Adverse Effect; or (c) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by the Borrower or any Guarantor other than Permitted Liens.
SECTION 7.5. Compliance with Law; Governmental Approvals.
Each of the Borrower and the Guarantors is in compliance with each
Governmental Approval applicable to it and in compliance with all other
Applicable Law relating to it, except for noncompliances which, and Governmental
Approvals the failure to possess which, would not, singly or in the aggregate,
cause a Default or Event of Default or have a Materially Adverse Effect and in
respect of which (if the Borrower has actual knowledge of such Applicable Law or
Governmental Approval) adequate reserves have been established on the books of
such Loan Party.
SECTION 7.6. Existing Indebtedness.
Other than the Indebtedness hereunder and as set forth on Schedule
7.6., neither the Borrower, any Guarantor nor any of its other Subsidiaries,
Preferred Stock Entities or any other Non-Guarantor Entity has any Indebtedness.
The Borrower, each Guarantor and each of the other Subsidiaries, Preferred Stock
Entities and Affiliates have performed and are in compliance with all of the
terms of such Indebtedness and all instruments and agreements relating thereto,
and no default or event of default, or event or condition which with the giving
of notice, the lapse of time, a determination of materiality, the satisfaction
of any other condition or any combination of the foregoing, would constitute
such a default or event of default, exists with respect to any such
Indebtedness.
SECTION 7.7. Title to Properties; Liens.
Each of the Borrower, each Guarantor and its other Subsidiaries has
good, marketable and legal title to, or a valid leasehold interest in, its
respective assets. Each of the Unencumbered Pool Properties is free and clear of
all Liens except for Permitted Liens.
SECTION 7.8. Unencumbered Pool Properties.
Each of the Unencumbered Pool Properties qualifies as an Eligible Property.
SECTION 7.9. Leases.
Except as reflected on the most current rent rolls delivered to the
Agent, all tenant leases of any Unencumbered Pool Property are in full force and
effect and no default or event of default (or event or occurrence which upon
with the passage of time or the giving of notice, or both, will constitute a
default or event of default) exists or will exist thereunder as a result of the
consummation of the transactions contemplated by the Loan Documents.
SECTION 7.10. Material Contracts.
Schedule 7.10. is a true, correct and complete listing of all Material
Contracts. Each of the Borrower, each Guarantor and its other Subsidiaries that
are parties to any Material Contract has performed and is in compliance with all
of the terms of such Material Contract, and no default or event of default, or
event or condition which with the giving of notice, the lapse of time, a
determination of materiality, the satisfaction of any other condition or any
combination of the foregoing, would constitute such a default or event of
default, exists with respect to any such Material Contract.
SECTION 7.11. Margin Stock.
Neither the Borrower, any Guarantor nor any other Subsidiary is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose, whether immediate, incidental or ultimate, of buying or
carrying "margin stock" within the meaning of Regulations U and X, and no part
of the proceeds of any extension of credit hereunder will be used to buy or
carry any such "margin stock."
SECTION 7.12. Transactions with Affiliates.
Except as set forth on Schedule 7.12., neither the Borrower, any
Guarantor nor any other Subsidiary is a party to any transaction with any
Affiliate which is in violation of Section 8.20.
SECTION 7.13. Absence of Defaults.
Neither the Borrower nor any Guarantor is in default under its articles
of incorporation, bylaws, operating agreement, partnership agreement or other
organizational or constituent document, and no event has occurred, which has not
been remedied, cured or waived (a) which constitutes a Default or an Event of
Default; or (b) which constitutes, or which with the passage of time, the giving
of notice or otherwise, would constitute, a default or event of default by the
Borrower, any Guarantor or any other Subsidiary under any Material Contract
(other than this Agreement or any other Loan Document) or judgment, decree or
order to which the Borrower, any Guarantor or any other Subsidiary is a party or
by which it or any of its properties may be bound.
SECTION 7.14. Financial Information.
The Borrower has furnished to each Lender copies of (a) the audited
consolidated balance sheet of the Parent and its Consolidated Subsidiaries as at
December 31, 1996 and December 31, 1997, and the audited consolidated related
statements of income, retained earnings and cash flow for the periods covered
thereby (the "Parent's Audited Statements"), (b) the unaudited consolidated
balance sheet of the Parent and its Consolidated Subsidiaries as at September
30, 1998 and the related unaudited consolidated statement of income, retained
earnings and cash flow for the nine-month period then ending (the "Parent's
Unaudited Statements", the Parent's Unaudited Statements and the Parent's
Audited Statements together referred to as the "Parent's Financial Statements")
and (c) the pro forma condensed consolidated balance sheet of the Parent and its
Consolidated Subsidiaries (giving effect to the PRT Acquisition) as at September
30, 1998, and the unaudited pro forma condensed consolidated related statements
of income, retained earnings and cash flow for the nine month period ending
September 30, 1998 (the "Combined Statements"), each certified by the President
or Chief Financial Officer of the Borrower to be, in his opinion, in compliance
with the next sentence. The balance sheets and statements (including in each
case related schedules and notes) contained in the Parent's Financial Statements
are complete and correct and present fairly, in accordance with GAAP
consistently applied throughout the periods involved, the consolidated financial
position of the Parent and its Consolidated Subsidiaries as at their respective
dates and the results of operations and the cash flow for such periods (subject,
in the case of quarterly financial statements, to normal year-end audit
adjustments and the absence of certain footnotes). The Combined Statements have
been prepared by the Parent and PRT, based on their respective financial
statements for such periods and at such date together with available information
and certain assumptions which the Parent believes to be reasonable, and give pro
forma effect to the PRT Acquisition under the pooling-of-interest method of
accounting. Each of the operating statements pertaining to each of the
Unencumbered Pool Properties delivered to the Agent was prepared in accordance
with GAAP and fairly presents the results of operations of such Unencumbered
Pool Property for the period then ended. Each of the projections, financial
plans and budgets delivered, or required to be delivered, to the Agent or any
Lender, whether prior to, on or after, the date hereof (a) has been, or will be,
as applicable, prepared for each Unencumbered Pool Property in light of the past
business and performance of such Unencumbered Pool Property and (b) represents
or will represent, as of the date thereof, the reasonable good faith estimates
of Borrower's financial performance. None of the Borrower, the Parent nor any of
its Consolidated Subsidiaries has on the Agreement Date any material contingent
liabilities, liabilities, liabilities for taxes, unusual or long-term
commitments or unrealized or forward anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in said
financial statements. Since December 31, 1995, there has been no material
adverse change in the financial condition, operations, business or prospects of
the Parent or any of its Subsidiaries. Each of the Parent and its Subsidiaries
is Solvent.
SECTION 7.15. Litigation.
Except as set forth on Schedule 7.15., there are no actions, suits or
proceedings pending against, or to the knowledge of the Parent threatened
against or affecting, the Borrower, any Guarantor or any of its other
Subsidiaries before any court or arbitrator or any governmental body, agency or
official (a) which could reasonably be expected to have a Materially Adversely
Effect or (b) which in any manner draws into question the validity or
enforceability of any Loan Document.
SECTION 7.16. ERISA.
(a) Existing Plans. Except for Plans as set forth on Schedule 7.16.,
neither the Borrower nor any Guarantor maintains, nor has the Borrower or any
Guarantor at any time maintained, any Plan subject to the provisions of ERISA.
Neither the Borrower nor any Guarantor is, nor has at any time been, a member of
any ERISA Group with any Person that has at any time maintained any such Plan.
(b) ERISA and Internal Revenue Code Compliance and Liability. Each of
the Borrower and the Guarantors is in compliance with all applicable provisions
of ERISA and the regulations and published interpretations thereunder with
respect to all Plans except where failure to comply would not result in a
Materially Adverse Effect and except for any required amendments for which the
remedial amendment period as defined in Section 401(b) of the Code has not yet
expired. Each Plan that is intended to be qualified under Section 401(a) of the
Internal Revenue Code has been determined by the Internal Revenue Service to be
so qualified, and each trust related to such plan has been determined to be
exempt under Section 501(a) of the Internal Revenue Code. No material liability
has been incurred by the Borrower or any Guarantor which remains unsatisfied for
any taxes or penalties with respect to any Plan or any Multiemployer Plan.
(c) Funding. No Plan has been terminated, nor has any accumulated
funding deficiency (as defined in Section 412 of the Internal Revenue Code) been
incurred (without regard to any waiver granted under Section 412 of the Internal
Revenue Code), nor has any funding waiver from the IRS been received or
requested with respect to any Plan, nor has the Borrower or any Guarantor failed
to make any contributions or to pay any amounts due and owing as required by
Section 412 of the Internal Revenue Code, Section 302 of ERISA or the terms of
any Plan prior to the due dates of such contributions under Section 412 of the
Internal Revenue Code or Section 302 of ERISA, nor has there been any event
requiring any disclosure under Section 4041(c)(3)(C), 4063(a) or 4068(f) of
ERISA with respect to any Plan.
(d) Prohibited Transactions and Payments. Neither the Borrower nor any
Guarantor has: (1) engaged in a nonexempt prohibited transaction described in
Section 406 of ERISA or Section 4975 of the Internal Revenue Code; (2) incurred
any liability to the PBGC which remains outstanding other than the payment of
premiums and there are no prepayments which are due and unpaid; (3) failed to
make a required contribution or payment to a Multiemployer Plan; or (4) failed
to make a required installment or other required payment under Section 412 of
the Internal Revenue Code.
(e) No ERISA Termination Event. No Termination Event has occurred or is
reasonably expected to occur.
(f) ERISA Litigation. No material proceeding, claim, lawsuit and/or
investigation is existing or, to the best knowledge of the Borrower after due
inquiry, threatened concerning or involving any (1) employee welfare benefit
plan (as defined in Section 3(1) of ERISA) currently maintained or contributed
to by the Borrower, (2) Plan or (3) Multiemployer Plan.
SECTION 7.17. Environmental Matters.
Each of the Borrower, the Guarantors and the other Subsidiaries has
obtained all Governmental Approvals which are required under Environmental Laws
and is in compliance in all material respects with all terms and conditions of
such Governmental Approvals and all such Environmental Laws. The Parent is not
aware of, and has not received notice of, any past, present, or future events,
conditions, circumstances, activities, practices, incidents, actions, or plans
which, with respect to the Borrower, the Guarantors or any of the other
Subsidiaries, may interfere with or prevent compliance or continued compliance
with Environmental Laws, or may give rise to any common-law or legal liability,
or otherwise form the basis of any claim, action, demand, suit, proceeding,
hearing, study, or investigation, based on or related to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport, or
handling or the emission, discharge, release or threatened release into the
environment, of any pollutant, contaminant, chemical, or industrial, toxic, or
other Hazardous Material. There is no civil, criminal, or administrative action,
suit, demand, claim, hearing, notice, or demand letter, notice of violation,
investigation, or proceeding pending or, to the Parent's knowledge, threatened,
against the Borrower, any Guarantor or any other Subsidiary relating in any way
to Environmental Laws.
SECTION 7.18. Taxes.
All federal, state and other tax returns of the Borrower, the
Guarantors and the other Subsidiaries required by Applicable Law to be filed
have been duly filed, and all federal, state and other taxes, assessments and
other governmental charges or levies upon the Borrower, any Guarantor or any
other Subsidiary and their respective properties, income, profits and assets
which are due and payable have been paid, except any such nonpayment which is at
the time permitted under Section 8.3. None of the United States income tax
returns of the Borrower, any Guarantor or any other Subsidiary are under audit.
No tax liens have been filed and no claims are being asserted with respect to
any such taxes. All charges, accruals and reserves on the books of the Borrower,
each Guarantor and each other Subsidiary in respect of any taxes or other
governmental charges are in accordance with GAAP.
SECTION 7.19. Investment Company; Public Utility Holding Company.
Neither the Borrower, any Guarantor nor any other Subsidiary is (i) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended, (ii) a "holding
company" or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended, or
(iii) subject to any other Applicable Law which purports to regulate or restrict
its ability to borrow money or to consummate the transactions contemplated by
this Agreement or to perform its obligations under any Loan Document to which it
is a party.
SECTION 7.20. Full Disclosure.
All written information furnished by or on behalf of the Borrower or
any Guarantor to the Agent and the Lenders for purposes of or in connection with
this Agreement and the other Loan Documents or any transaction contemplated
hereby is, and all such information hereafter furnished by or on behalf of the
Borrower or any Guarantor to the Agent or any of the Lenders will be true and
accurate in all material respects on the date as of which such information is
stated or certified and does not, and will not, fail to state any material facts
necessary to make the statements contained therein not misleading. The Parent
has disclosed to the Agent in writing any and all facts known to the Parent
which materially and adversely affect or may affect (to the extent the Parent
can now reasonably foresee), the business, operations or financial condition of
the Borrower, each Guarantor and each of the other Consolidated Subsidiaries, or
the ability of the Borrower or any Guarantor to perform its obligations under
the Loan Documents to which it is a party.
SECTION 7.21. Not Plan Assets.
Neither the assets of the Borrower nor any Guarantor constitute, nor
will constitute, plan assets, within the meaning of ERISA, the Internal Revenue
Code and the respective regulations promulgated thereunder, of any ERISA Plan or
Non-ERISA Plan. The execution, delivery and performance of this Agreement, and
the borrowing and repayment of amounts thereunder, do not and will not
constitute "prohibited transactions" under ERISA or the Internal Revenue Code.
SECTION 7.22. Business.
The Parent and its Consolidated Subsidiaries, are engaged in the
business of owning, managing and developing community and neighborhood shopping
centers and other activities incidental thereto.
SECTION 7.23. Title to Properties; Necessary Agreements, Licenses, Permits;
Adverse Contracts.
Each of the Borrower, the Guarantors and the other Subsidiaries (i) has
good and marketable title to its assets and properties except as disclosed in
the consolidated financial statements of the Parent delivered to the Agent and
the Lenders, (ii) is in compliance with all real and personal property leases
where the failure to so be in compliance would have a Materially Adverse Effect,
(iii) possess all necessary and appropriate agreements, contracts, franchise
arrangements, patents, trademarks, licenses, permits and other intellectual
property rights free from burdensome or undue restriction and (iv) has not
infringed upon or otherwise violated any trademark, patent, license or other
intellectual property agreement where such infringement would have a Materially
Adverse Effect. Neither the Borrower, any Guarantor nor any of the other
Subsidiaries has assumed liability under or is a party to nor is it or any of
its property subject to or bound by any forward purchase contract, futures
contract, covenant not to compete, unconditional purchase, take or pay or other
agreement which restricts its ability to conduct its business or, either
individually or in the aggregate, has a Materially Adverse Effect or could
reasonably be expected to have a Materially Adverse Effect.
SECTION 7.24. Non-Guarantor Entities.
Schedule 7.24. is as of the date hereof a complete and correct list of
all Non-Guarantor Entities, setting forth for each such Person, the correct
legal name of such Person, the type of legal entity which each such Person is,
and all equity interests in such Person held directly or indirectly by the
Parent. No Non-Guarantor Entity satisfies any condition contained in clause (i)
or (ii) of Section 8.24.(a).
ARTICLE VIII. COVENANTS
The Borrower agrees that, so long as the Lenders have any Commitments
hereunder or any Obligation remains unpaid:
SECTION 8.1. Information.
The Borrower and the Parent, as applicable will deliver to the Agent:
(a) Within 100 days after the end of each fiscal year of the Parent,
the audited consolidated balance sheet of the Parent and its Subsidiaries as at
the end of such fiscal year and the related audited consolidated statements of
income, retained earnings and cash flows of the Parent and its Subsidiaries for
such fiscal year, setting forth in comparative form the figures as at the end of
and for the previous fiscal year, all of which shall be certified by the chief
financial officer of the Parent in his or her opinion, to present fairly, in
accordance with GAAP, the financial position of the Parent and its Subsidiaries,
as applicable as at the date thereof and the result of operations for such
period and by independent certified public accountants of recognized national
standing acceptable to the Agent, whose certificate shall be in scope and
substance satisfactory to the Agent and who shall have authorized the Parent to
deliver such financial statements and certification thereof to the Agent and the
Lenders pursuant to this Agreement;
(b) As soon as available and in any event within 50 days after the
close of each of the first, second and third fiscal quarters of the Parent, the
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such period and the related consolidated statements of income, retained earnings
and cash flows of the Parent and its Subsidiaries for such period, setting forth
in each case in comparative form the figures for the corresponding periods of
the previous fiscal year, all of which shall be certified by the chief financial
officer of the Parent in his or her opinion, to present fairly, in accordance
with GAAP, the consolidated financial position of the Parent and its
Subsidiaries as at the date thereof and the results of operations for such
period (subject to normal year-end audit adjustments);
(c) simultaneously with the delivery of each set of financial
statements referred to in the immediately preceding clauses (a) and (b), a
certificate of the chief financial officer of the Parent substantially in the
form of Exhibit Q (i) setting forth in reasonable detail the calculations
required to establish whether the Parent was in compliance with the requirements
of Sections 8.12., 8.23. and 8.27. and Article IX. on the date of such financial
statements, (ii) setting forth a schedule of all current Contingent Obligations
of the Parent, the Borrower, all Subsidiaries, all Preferred Stock Entities and
all Unconsolidated Affiliates and (iii) stating whether any Default or Event of
Default exists on the date of such certificate and, if any Default or Event of
Default then exists, setting forth the details thereof and the action which the
Parent and the Borrower are taking or proposes to take with respect thereto;
(d) as soon as available and in any event within 50 days after the end
of each fiscal quarter of the Borrower, (i) an Unencumbered Pool Certificate
setting forth the information to be contained therein as of the last day of such
fiscal quarter and (ii) a list of all Non-Guarantor Entities as of the last day
of such fiscal quarter, setting forth for each such Person, the correct legal
name of such Person, the type of legal entity which each such Person is, and all
equity interests in such Person held directly or indirectly by the Parent;
(e) simultaneously with the delivery of each set of financial
statements referred to in the immediately preceding clause (a), a statement of
the firm of independent public accountants which reported on such statements
whether anything has come to their attention to cause them to believe that any
Default or Event of Default existed on the date of such statements;
(f) simultaneously with the delivery of each set of financial
statements referred to in the immediately preceding clauses (a) and (b), a "Line
Availability and Debt Capacity" report, certified by the chief financial officer
of the Parent, substantially in the form of such report provided to the Agent as
of December 11, 1998;
(g) no later than November 1 of each calendar year, the annual plan of
the Parent and its Consolidated Subsidiaries which plan shall at least include
capital and operating expense budgets, projections of sources and applications
of funds, a projected balance sheet, profit and loss projections of the Parent
and its Consolidated Subsidiaries for each quarter of the next succeeding fiscal
year and a update copy of Schedule 7.6., all itemized in reasonable detail and
shall also set forth the pro forma calculations required (including any
assumptions, where appropriate) to establish whether or not the Parent, and when
appropriate its Consolidated Subsidiaries, will be in compliance with the
covenants contained in Sections 8.12. and 8.23. and Article IX. at the end of
each fiscal quarter of the next succeeding fiscal year;
(h) promptly upon receipt thereof, copies of all reports submitted to
the Borrower or the Parent or either the Borrower's general partner's or the
Parent's Board of Directors, as applicable, by the Borrower's or Parent's, as
applicable, independent public accountants, including without limitation, any
management report;
(i) within five days after any executive officer of either the Borrower
or the Parent obtains knowledge of any Default or Event of Default, a
certificate of the president or chief financial officer of the Borrower or
Parent, as applicable, setting forth the details thereof and the action which
the Borrower or Parent is taking or proposes to take with respect thereto;
(j) promptly upon the mailing thereof to the shareholders of the Parent
generally, copies of all financial statements, reports, offering memoranda and
proxy statements so mailed;
(k) within 10 days of the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements on
Form S-8 or its equivalent), reports on Forms 10-K, 10-Q and 8-K (or their
equivalents) and all other periodic reports which the Parent shall file with the
Securities and Exchange Commission (or any Governmental Authority substituted
therefor) or any national securities exchange;
(l) promptly upon the release thereof, copies of all press releases of
the Borrower and the Parent and any of its Subsidiaries;
(m) promptly upon obtaining knowledge thereof, a description in
reasonable detail of any action, suit or proceeding commenced or threatened
against the Borrower, any Guarantor, any Subsidiary or any Unencumbered Pool
Property which is reasonably likely to have a Materially Adverse Effect;
(n) promptly upon the occurrence thereof, written notice of any
material change in the senior management of the Borrower or the Parent;
(o) promptly upon the occurrence thereof, a copy of any amendment to
the articles of incorporation, bylaws, operating agreement, partnership
agreement or other organizational or constituent document of the Parent, the
Borrower or any Guarantor;
(p) upon request by the Agent, all financial information maintained on
the Parent, the Borrower, any Guarantor and the individual real estate projects
owned by the Parent, the Borrower or any Guarantor, including, but not limited
to, property cash flow reports, property budgets, operating statements, leasing
status reports (both actual occupancy and leased occupancy), contingent
liability summary, note receivable summary, summary of cash and cash equivalents
and overhead and capital improvement budgets;
(q) within 10 days of the filing thereof, each federal or state income
tax return of the Parent, the Borrower, each Guarantor and each other
Subsidiary;
(r) written notice not later than public disclosure of any material
Investments, material acquisitions, dispositions, disposals, divestitures or
similar transactions involving Property, the raising of additional equity or the
incurring or repayment of material Indebtedness, by or with the Parent, the
Borrower, any Guarantor or any other Subsidiary;
(s) if, in connection with a request by the Borrower that a Property be
accepted as an Unencumbered Pool Property, the Borrower was unable to provide
any operating statement or occupancy report for the entire period called for
under clause (ii) or (iv) of Section 4.1.(a) because such information was not
reasonably available to the Borrower but such information does later become
available to the Borrower, the Borrower will promptly provide such reports to
the Agent and the Lenders;
(t) promptly upon the request of the Agent, evidence of the Borrower's
calculation of the Ownership Share with respect to a Subsidiary or an
Unconsolidated Affiliate, such evidence to be in form and detail satisfactory to
the Agent and the Majority Lenders; and
(u) from time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or further
information regarding the business, assets, liabilities, financial condition,
results of operations or business prospects of the Parent, the Borrower, any
Guarantor or any other Subsidiary as the Agent or any Lender may reasonably
request.
SECTION 8.2. ERISA Reporting.
The Borrower shall deliver to the Agent as soon as possible, and in any
event within 10 Business Days after the Borrower knows that any of the events or
conditions specified below with respect to any Plan or Multiemployer Plan has
occurred or exists, a statement signed by the chief financial officer of the
Borrower setting forth details respecting such event or condition and the
action, if any, that the Borrower or its ERISA Affiliate proposes to take with
respect thereto (and a copy of any report or notice required to be filed with or
given to PBGC by the Borrower or an ERISA Affiliate with respect to such event
or condition):
(a) any reportable event, as defined in Section 4043(b) of ERISA and
the regulations issued thereunder, with respect to a Plan, as to which PBGC has
not by regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within 30 days of the occurrence of such event (provided that a failure
to meet the minimum funding standard of Section 412 of the Internal Revenue Code
or Section 302 of ERISA, including, without limitation, the failure to make on
or before its due date a required installment under Section 412(m) of the
Internal Revenue Code or Section 302(e) of ERISA, shall be a reportable event
regardless of the issuance of any waivers in accordance with Section 412(d) of
the Internal Revenue Code); and any request for a waiver under Section 412(d) of
the Internal Revenue Code for any Plan;
(b) the distribution under Section 4041 of ERISA of a notice of intent
to terminate any Plan or any action taken by the Borrower or an ERISA Affiliate
to terminate any Plan;
(c) the institution by PBGC of proceedings under Section 4042 of ERISA
for the termination of, or the appointment of a trustee to administer, any Plan,
or the receipt by the Borrower or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by PBGC with respect to such
Multiemployer Plan;
(d) the complete or partial withdrawal from a Multiemployer Plan by the
Borrower or any ERISA Affiliate that results in liability under Section 4201 or
4204 of ERISA (including the obligation to satisfy secondary liability as a
result of a purchaser default) or the receipt by the Borrower or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA;
(e) the institution of a proceeding by a fiduciary of any Multiemployer
Plan against the Borrower or any ERISA Affiliate to enforce Section 515 of
ERISA, which proceeding is not dismissed within 30 days; and
(f) the adoption of an amendment to any Plan that, pursuant to Section
401 (a)(29) of the Internal Revenue Code or Section 307 of ERISA, would result
in the loss of tax-exempt status of the trust of which such Plan is a part if
the Borrower or an ERISA Affiliate fails to timely provide security to the Plan
in accordance with the provisions of said Sections.
SECTION 8.3. Payment of Obligations.
The Borrower and the Parent will pay and discharge, and will cause each
Guarantor and each other Subsidiary of the Parent to pay and discharge, at or
before maturity, all their respective material obligations and liabilities,
including, without limitation, tax liabilities, except where the same may be
contested in good faith by appropriate proceedings unless the contest thereof
would have a Materially Adverse Effect, and will maintain, and will cause each
Guarantor and each other Subsidiary of the Parent to maintain, in accordance
with GAAP, appropriate reserves for the accrual of any of the same.
SECTION 8.4. Preservation of Existence and Similar Matters.
The Borrower and the Parent shall preserve and maintain, and cause each
Guarantor and each other Subsidiary of the Parent to preserve and maintain, its
respective existence, rights, franchises, licenses and privileges in the
jurisdiction of its formation and qualify and remain qualified and authorized to
do business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization and where
the failure to be so authorized and qualified would have a Materially Adverse
Effect.
SECTION 8.5. Maintenance of Property.
The Borrower and the Parent shall, and shall cause each other Guarantor
and each other Subsidiary of the Parent to, (a) protect and preserve all of its
material properties, including without limitation, all Unencumbered Pool
Properties, and maintain in good repair, working order and condition all
tangible properties, and (b) from time to time make or cause to be made all
needed and appropriate repairs, renewals, replacements and additions to such
properties.
SECTION 8.6. Conduct of Business.
The Borrower and the Parent shall at all times carry on, and cause each
other Guarantor and each other Subsidiary of the Parent to carry on, its
respective businesses in the same fields as engaged in on the Agreement Date and
not enter, and not permit any other Guarantor or any other Subsidiary of the
Parent to enter, into any line of business not otherwise engaged in by such
Person as of the Agreement Date.
SECTION 8.7. Insurance.
The Borrower and the Parent shall maintain, and cause each other
Guarantor and each other Subsidiary of the Parent to maintain, insurance with
financially sound and reputable insurance companies against such risks and in
such amounts as is customarily maintained by similar businesses or as may be
required by Applicable Law. Such insurance shall, in any event, include fire and
extended coverage, public liability, property damage, workers' compensation and
flood insurance (if required under Applicable Law). The Borrower and the Parent
shall from time to time deliver to the Agent or any Lender upon its request a
detailed list, together with copies of all policies of the insurance then in
effect, stating the names of the insurance companies, the amounts and rates of
the insurance, the dates of the expiration thereof and the properties and risks
covered thereby.
SECTION 8.8. Modifications to Material Contracts.
The Borrower and the Parent shall not enter into, or permit any other
Guarantor or any other Subsidiary of the Parent to enter into, any amendment or
modification to any Material Contract or default in the performance of any
obligations of the Parent, the Borrower, any other Guarantor or any other
Subsidiary of the Parent in any Material Contract or permit any Material
Contract to be canceled or terminated prior to its stated maturity.
SECTION 8.9. Environmental Laws.
The Borrower and the Parent shall comply, and cause all other
Guarantors and all other Subsidiaries of the Parent to comply, in all material
respects with all Environmental Laws. If the Parent, the Borrower, any other
Guarantor or any other Subsidiary shall (a) receive notice that any violation of
any Environmental Law may have been committed or is about to be committed by
such Person, (b) receive notice that any administrative or judicial complaint or
order has been filed or is about to be filed against the Parent, the Borrower,
any other Guarantor or any other Subsidiary alleging violations of any
Environmental Law or requiring the Parent, the Borrower, any other Guarantor or
any other Subsidiary to take any action in connection with the release of
Hazardous Materials or (c) receive any notice from a Governmental Authority or
private party alleging that the Parent, the Borrower, any other Guarantor or any
other Subsidiary may be liable or responsible for costs associated with a
response to or cleanup of a release of Hazardous Materials or any damages caused
thereby, the Parent shall promptly provide the Agent with a copy of such notice
and in any event within 10 days after the receipt thereof by the Parent, the
Borrower, any other Guarantor or any other Subsidiary. The Borrower and the
Parent shall, and shall cause each other Guarantor and each other Subsidiary to,
promptly take all actions necessary to prevent the imposition of any Liens on
any of their respective properties arising out of or related to any
Environmental Laws.
SECTION 8.10. Compliance with Laws and Material Contracts.
The Borrower and the Parent will comply, and cause each other Guarantor
and each other Subsidiary to comply, with (a) all Applicable Laws, except where
the failure to so comply would not have a Materially Adverse Effect and (b) all
terms and conditions of all Material Contracts to which it is a party.
SECTION 8.11. Inspection of Property, Books and Records.
The Borrower and the Parent will keep, and will cause each other
Guarantor and each other Subsidiary of the Parent to keep, proper books of
record and account in which full, true and correct entries shall be made of all
dealings and transactions in relation to its business and activities; and will
permit, and will cause each other Guarantor and each other Subsidiary of the
Parent to permit, representatives of the Agent or any Lender to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants in the Borrower's presence prior to an Event of
Default, all at such reasonable times during business hours and as often as may
reasonably be desired and with reasonable notice so long as no Event of Default
shall have occurred and be continuing.
SECTION 8.12. Indebtedness.
The Borrower and the Parent will not, and will not permit any other
Guarantor or any Subsidiary to, incur, assume or suffer to exist any
Indebtedness other than:
(a) Indebtedness under this Agreement;
(b) Indebtedness set forth in Schedule 7.6.;
(c) Indebtedness represented by declared but unpaid dividends; and
(d) Secured Indebtedness and other Unsecured Indebtedness that is pari
passu with and is not subordinate in right of payment or otherwise to the Loans
and the other Obligations, so long as (i) no Default or Event of Default shall
have occurred and be continuing and (ii) the incurrence of such Secured
Indebtedness or other Unsecured Indebtedness would not cause the occurrence of a
Default or Event of Default, including without limitation, a Default or Event of
Default resulting from a violation of Section 9.2.
or 9.3.
SECTION 8.13. Consolidations, Mergers and Sales of Assets.
The Borrower and the Parent shall not, and shall not permit any other
Guarantor or any other Subsidiary of the Parent to, (a) enter into any
transaction of merger or consolidation; (b) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution) or (c) convey, sell, lease,
sublease, transfer or otherwise dispose of, in one or a series of transactions,
any Unencumbered Pool Property or any interest therein, or all or any
substantial part of its business or assets, or the capital stock of or other
equity interests in any Subsidiary, except that (i) a Subsidiary may merge or
consolidate with the Borrower or a Wholly Owned Subsidiary of the Borrower and
(ii) a Subsidiary may sell, transfer or dispose of its assets to the Borrower or
a Wholly Owned Subsidiary. Further, the Borrower and the Parent shall not, and
shall not permit any Guarantor nor any other Subsidiary of the Parent to, enter
into any sale-leaseback transactions or other transaction by which the Parent,
the Borrower, any other Guarantor or any other Subsidiary shall remain liable as
lessee (or the economic equivalent thereof) of any real or personal property
that it has sold or leased to another Person.
SECTION 8.14. Use of Proceeds and Letters of Credit.
The Borrower will only use the proceeds of the Loans for
pre-development costs, development costs, acquisitions, capital expenditures,
working capital and general corporate purposes, equity investments, repayment of
Indebtedness or scheduled amortization payments on Indebtedness, financing loans
to Subsidiaries, Unconsolidated Affiliates, Preferred Stock Entities and other
Affiliates of the Borrower for development activities, and for no other
purposes. The Borrower will not use any proceeds of the Loans for the purpose of
purchasing or carrying any "margin stock" within the meaning of Regulations U
and X. The Borrower will use the Letters of Credit only for the same purposes
for which it may use the proceeds of Loans. The Borrower shall use the proceeds
of the initial Revolving Loans made on the Effective Date to satisfy in full all
outstanding financial obligations owing by PRT under the Existing PRT Credit
Agreement and other Loan Documents (as defined in the Existing PRT Credit
Agreement) and the Bridge Facility and the other Loan Documents (as defined in
the Bridge Facility).
SECTION 8.15. Tenant Concentration.
Neither the Borrower nor the Parent shall permit the Adjusted Base
Rents from any single tenant (excluding Credit Tenants but including all
Affiliates of such tenant other than Credit Tenants), to exceed 15% of Adjusted
Base Rents from all Properties of the Parent and its Subsidiaries.
SECTION 8.16. Acquisitions.
The Borrower and the Parent shall not, and shall not permit any
Subsidiary to, make any Acquisition in which the consideration paid (whether by
way of payment of cash, issuance of capital stock, assumption of Indebtedness,
or otherwise) by the Borrower, the Parent or such Subsidiary equals or exceeds
35% of the sum of (a) total consolidated assets of the Parent plus (b)
consolidated accumulated depreciation of the Parent unless (i) no Default or
Event of Default shall have occurred and be continuing, (ii) the Parent shall
have given the Agent and the Lenders at least 30 days prior written notice of
such Acquisition and (iii) the Parent shall have delivered to the Agent and the
Lenders a Compliance Certificate, calculated on a pro forma basis, evidencing
the Borrower's and Parent's continued compliance with the terms and conditions
of this Agreement and the other Loan Documents, including without limitation,
the financial covenants contained in Article IX., after giving effect to such
Acquisition.
SECTION 8.17. Exchange Listing.
The Parent shall cause its common stock to be listed for trading on
either the New York Stock Exchange or the American Stock Exchange.
SECTION 8.18. REIT Status.
Parent will at all times maintain its status as a REIT.
SECTION 8.19. Negative Pledge; Restriction on Distribution Rights.
The Borrower and Parent shall not, and shall not permit any other
Guarantor or other Subsidiary of the Parent, to (a) create, assume, incur or
permit or suffer to exist any Lien upon any of the Unencumbered Pool Properties
or any direct or indirect ownership interest of the Borrower in any Guarantor
owning any Unencumbered Pool Property, other than Permitted Liens; (b) enter
into or assume any agreement (other than the Loan Documents) prohibiting the
creation or assumption of any Lien upon its properties or assets, whether now
owned or hereafter acquired; or (c) create or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any Subsidiary to: (i) pay dividends or make any other distribution
on any of such Subsidiary's capital stock or other equity interest owned by the
Parent or any other Subsidiary; (ii) pay any Indebtedness owed to the Parent or
any other Subsidiary; (iii) make loans or advances to the Parent or any other
Subsidiary; or (iv) transfer any of its property or assets to the Parent or any
other Subsidiary.
SECTION 8.20. Agreements with Affiliates.
The Borrower and the Parent shall not, and shall not permit any other
Guarantor or any other Subsidiary of the Parent to, enter into any transaction
requiring such Person to pay any amounts to or otherwise transfer property to,
or pay any management or other fees to, any Affiliate other than on terms and
conditions substantially as favorable to the Parent, the Borrower, such other
Guarantor or such other Subsidiary as would be obtainable at the time in a
comparable arm's-length transaction with a Person not an Affiliate.
SECTION 8.21. ERISA Exemptions.
The Borrower and the Parent shall not, and shall not permit any other
Guarantor or any other Subsidiary to, permit any of its respective assets to
become or be deemed to be "plan assets" within the meaning of ERISA, the
Internal Revenue Code and the respective regulations promulgated thereunder, of
any ERISA Plan or any Non-ERISA Plan.
SECTION 8.22. Compliance with and Amendment of Charter or Bylaws.
The Borrower and the Parent will, and will cause each other Guarantor
to (a) comply with the terms of its articles of incorporation, bylaws, operating
agreement, partnership agreement or other organizational or constituent document
and (b) not amend, supplement, restate or otherwise materially modify its
articles of incorporation, by-laws, operating agreement, partnership agreement
or other organizational or constituent document without the prior written
consent of the Lenders whose combined Pro Rata Shares equal or exceed 51% except
as is required (i) under Applicable Laws or (ii) in order to maintain compliance
with Section 8.18.
SECTION 8.23. Distributions.
If no Event of Default shall have occurred and be continuing, none of
the Parent, the Borrower or any Subsidiary (other than Wholly Owned
Subsidiaries) shall directly or indirectly declare or make, or incur any
liability to make, any Restricted Payments other than (a)(i) distributions to
its shareholders, partners or members, as applicable, and (ii) payments made by
the Parent to purchase outstanding shares of the common stock of the Parent,
which distributions and payments in the aggregate shall not exceed 95% of Funds
From Operations as of the end of each fiscal quarter for the four fiscal quarter
period then ending; provided, however, that any payments made pursuant to clause
(ii) above shall not exceed 10% of Funds from Operations for such four quarter
period and (b) distributions of capital gains resulting from certain asset sales
to the extent necessary to maintain compliance with Section 8.18. If an Event of
Default under Section 10.1.(a) shall have occurred and be continuing as a result
of the Borrower's failure to pay any principal of or interest on any of the
Obligations, none of the Parent, the Borrower or any Subsidiary (other than
Wholly-Owned Subsidiaries) shall directly or indirectly declare or make, or
incur any liability to make, any Restricted Payments. If any other Event of
Default shall have occurred and be continuing, none of the Parent, the Borrower
or any Subsidiary (other than Wholly Owned Subsidiaries) shall directly or
indirectly declare or make, or incur any liability to make, any Restricted
Payments except that the Parent may make distributions to its shareholders in
the minimum amount necessary to maintain compliance with Section 8.18.
SECTION 8.24. New Guarantors.
(a) Generally. The Parent shall cause any Subsidiary that is not
already a Guarantor and to which any of the following conditions apply (each a
"New Guarantor") to execute and deliver to the Agent an Accession Agreement,
together with the other items required to be delivered under the immediately
following subsection (b):
(i) any Subsidiary that Guarantees, or otherwise becomes
obligated in respect of, any Indebtedness of (1) the Parent; (2) the
Borrower; (3) any other Subsidiary of the Parent or the Borrower or (4)
any Non-Guarantor Entity; and
(ii) any other Subsidiary that can become a party to the
Guaranty without violating: (1) terms of its articles of incorporation,
bylaws, operating agreement, partnership agreement, declaration of
trust or other similar organizational document, which terms expressly
prohibit such Subsidiary from providing Guarantees of Indebtedness of
any other Person or otherwise incurring any Indebtedness or (2) any
fiduciary obligation owing by such Subsidiary to the holders of equity
interest in such Subsidiary and imposed under Applicable Law; provided,
however, the condition of this clause (ii) shall be deemed not to apply
to (A) Retail Property Partners Limited Partnership at any time prior
to June 30, 1999 nor (B) any Single Asset Subsidiary.
Any such Accession Agreement and the other items required under the immediately
following subsection (b) must be delivered to the Agent no later than 10 days
following the date on which any of the above conditions first applies to a
Subsidiary.
(b) Required Deliveries. Each Accession Agreement required to be
delivered by a New Guarantor under the immediately preceding subsection (a)
shall be accompanied by all of the following items, each in form and substance
satisfactory to the Agent:
(i) the articles of incorporation, articles of organization,
certificate of limited partnership or other comparable organizational
instrument (if any) of such New Guarantor certified as of a recent date
by the Secretary of State of the State of formation of such New
Guarantor;
(ii) a Certificate of Good Standing or certificate of similar
meaning with respect to such New Guarantor issued as of a recent date
by the Secretary of State of the State of formation of such New
Guarantor and certificates of qualification to transact business or
other comparable certificates issued by each Secretary of State (and
any state department of taxation, as applicable) of each state in which
such New Guarantor is required to be so qualified;
(iii) a certificate of incumbency signed by the Secretary or
Assistant Secretary (or other individual performing similar functions)
of such New Guarantor with respect to each of the officers of such New
Guarantor authorized to execute and deliver the Loan Documents to which
such New Guarantor is a party;
(iv) copies certified by the Secretary or Assistant Secretary
of New Guarantor (or other individual performing similar functions) of
(1) the by-laws of New Guarantor, if a corporation, the operating
agreement, if a limited liability company, the partnership agreement,
if a limited or general partnership, or other comparable document in
the case of any other form of legal entity and (2) all corporate,
partnership, member or other necessary action taken by such New
Guarantor to authorize the execution, delivery and performance of the
Loan Documents to which it is a party;
(v) an opinion of Foley & Lardner, counsel to Borrower,
addressed to the Agent and Lenders, and regarding, among other things,
the authority of such New Guarantor to execute, deliver and perform the
Guaranty, and such other matters as the Agent or its counsel may
request; and
(vi) such other documents and instruments as the Agent may
reasonably request.
SECTION 8.25. Acquisitions or Developments of Properties.
Neither the Parent nor any of its Subsidiaries other than the Borrower
and its Subsidiaries shall acquire or develop any Property directly or
indirectly through the Acquisition of a Subsidiary other than Properties
acquired or developed by the Parent and such Subsidiaries on or before December
31, 1997; provided, however, that (a) Delk Spectrum, L.P., a Subsidiary of the
Parent, may acquire and develop Properties after December 31, 1997 so long as
the aggregate value of such Properties is equal to or less than $13,000,000; (b)
Regency Office may acquire the Regency Office Properties; (c) the Parent may
acquire Preferred Stock (that is not Voting Stock) of PRT Development
Corporation, and its Wholly Owned Subsidiary Fountain Valley LLC (which only
owns the Property referred to as "Fountain Valley"), pursuant to the PRT
Acquisition; (d) the Parent may acquire a general partner interest in Retail
Property Partners Limited Partnership pursuant to the PRT Acquisition so long as
(i) the Parent transfers such interest to the Borrower (or Retail Property
Partners Limited Partnership merges with and into the Borrower) prior to June
30, 1999 and (ii) the Properties held by Retail Property Partners Limited
Partnership have an aggregate book value plus accumulated depreciation of no
more than $140,000,000; (e) the Parent may acquire PRT Sunnyside LLC as a
Subsidiary pursuant to the PRT Acquisition so long as the Parent transfers all
of its ownership interest in such Subsidiary to the Borrower prior to June 30,
1999 and (f) the Parent may acquire the Properties described on Schedule 8.25.
pursuant to the PRT Acquisition.
SECTION 8.26. Transfer of Properties to Borrower.
The Parent shall cause each of RRC General SPC, Inc., RRC Limited SPC,
Inc., RSP IV Criterion, Ltd., Regency Rosewood Temple Terrace, Ltd., Treasure
Coast Investors, Ltd., Landcom Regency Mandarin, Ltd., RRC FL SPC, Inc., RRC AL
SPC, Inc., and RRC MS SPC, Inc. to transfer all Properties owned by such
entities to the Borrower upon the earlier of the prepayment or the maturity of
the those certain Mortgage Pass-Through Certificates (Series 1993-1) issued by
RRC Lender, Inc. in the aggregate principal amount $51,000,000 pursuant to that
certain Trust Agreement dated as of November 5, 1993, between RRC Lender, Inc.,
as depositor and Banker's Trust Company, as Trustee (the foregoing transaction
referred to herein as the "Banker's Trust Securitized Loan") provided, however,
that the Parent may sell any of such Properties to a third party prior to the
maturity of the Banker's Trust Securitized Loan. The maturity date of the
Banker's Trust Securitized Loan shall not be extended beyond its current
maturity of November 5, 2000. Notwithstanding the foregoing, the Parent shall
not be required to transfer such Properties if this Agreement is amended, in
form and substance satisfactory to the Agent, to provide that the financial
covenants set forth in Article IX. be tested separately for the Borrower and its
Consolidated Subsidiaries and the Parent and its Consolidated Subsidiaries.
SECTION 8.27. Asset Value of Non-Guarantor Entities.
At no time shall the aggregate Asset Value of the Non-Guarantor
Entities obligated in respect of any Indebtedness other than Nonrecourse
Indebtedness exceed 10% of the Gross Asset Value of the Parent and its
Subsidiaries determined on a consolidated basis.
SECTION 8.28. Year 2000 Compliance.
The Borrower will take all action necessary to assure that the
Borrower's and its Subsidiaries' computer systems are able to operate and
effectively process data including dates on and after January 1, 2000. At the
request of the Agent, the Borrower will provide the Agent assurance acceptable
to the Agent of such "Year 2000" compatibility.
SECTION 8.29. Hedging Agreements.
The Borrower and the Parent shall not, and shall not permit any
Subsidiary of the Parent to, create, incur or suffer to exist any obligations in
respect of Hedging Agreements other than (a) Hedging Agreements existing on the
date hereof and described in Schedule 8.29.; (b) interest rate cap agreements
and (c) interest rate Hedging Agreements (excluding interest rate cap
agreements) entered into from time to time after the date hereof with
counterparties that are nationally recognized, investment grade financial
institutions in an aggregate notional amount not to exceed $635,000,000 at any
time outstanding; provided that, no Hedging Agreement otherwise permitted
hereunder may be speculative in nature.
Article IX. Financial Covenants
SECTION 9.1. Minimum Net Worth.
The Parent shall not at any time permit its Net Worth determined on a
consolidated basis to be less than :
(a) At any time prior to the Parent's delivery of the financial
statements described in Section 8.1.(b) for the fiscal quarter ending March 31,
1999, an amount equal to (i) 90% of the Net Worth of the Parent as of September
30, 1998 determined on a consolidated basis giving pro forma effect to the PRT
Acquisition plus (ii) 90% of the sum of (x) the amount of proceeds (net of
transaction costs) received by the Parent from the sale or issuance of shares,
options, warrants or other equity securities of any class or character of the
Parent after September 30, 1998 (excluding any such equity securities issued in
connection with the PRT Acquisition) which affect the Net Worth of the Parent
plus (y) any positive change in the Parent's Net Worth occurring upon the
issuance of any shares of the Parent in exchange for the limited partnership
units held by the limited partners of the Borrower; and
(b) At any time after the Parent's delivery of the financial statements
described in Section 8.1.(b) for the fiscal quarter ending March 31, 1999, an
amount equal to (i) 90% of the Net Worth of the Parent determined on a
consolidated basis as of the end of such fiscal quarter plus (ii) 90% of the sum
of (x) the amount of proceeds (net of transaction costs) received by the Parent
from the sale or issuance of shares, options, warrants or other equity
securities of any class or character of the Parent after March 31, 1999 which
affect the Net Worth of the Parent plus (y) any positive change in the Parent's
Net Worth occurring upon the issuance of any shares of the Parent in exchange
for the limited partnership units held by the limited partners of the Borrower.
SECTION 9.2. Ratio of Total Liabilities to Gross Asset Value.
The Parent shall not at any time permit the ratio of Total Liabilities
of the Parent and its Subsidiaries determined on a consolidated basis to Gross
Asset Value of the Parent and its Subsidiaries determined on a consolidated
basis to exceed 0.525 to 1.00 at any time.
SECTION 9.3. Ratio of Secured Indebtedness to Gross Asset Value.
The Parent shall not at any time permit the ratio of Secured
Indebtedness of the Parent and its Subsidiaries determined on a consolidated
basis to Gross Asset Value of the Parent and its Subsidiaries determined on a
consolidated basis to exceed 0.35 to 1.00 at any time.
SECTION 9.4. Ratio of EBITDA to Interest Expense.
The Parent shall not permit the ratio of EBITDA of the Parent and its
Subsidiaries determined on a consolidated basis to Interest Expense of the
Parent and its Subsidiaries determined on a consolidated basis for any fiscal
quarter to be less than 2.0 to 1.0 at the end of such fiscal quarter.
SECTION 9.5. Ratio of EBITDA to Debt Service, Preferred Stock
Distributions and Reserve for Replacements.
The Parent shall not permit the ratio of (a) EBITDA of the Parent and
its Subsidiaries determined on a consolidated basis to (b) the sum of (i) Debt
Service of the Parent and its Subsidiaries determined on a consolidated basis
plus (ii) any distributions by the Parent or any Subsidiary to the holders of
Preferred Stock issued by the Parent or any such Subsidiary plus (iii) Reserve
for Replacements for all of the Properties of the Parent and its Consolidated
Subsidiaries for any fiscal quarter to be less than 1.75 to 1.00 for such fiscal
quarter.
SECTION 9.6. Unsecured Interest Expense Coverage.
The Parent shall not permit the ratio of Unencumbered NOI to Interest
Expense on Unsecured Indebtedness of the Parent and its Subsidiaries determined
on a consolidated basis for any fiscal quarter to be less than 1.75 to 1.00 for
such fiscal quarter.
SECTION 9.7. Permitted Investments.
(a) The Parent shall not make any Investment in or otherwise own, and
shall not permit the Borrower, any other Guarantor or any other Subsidiary to
make an Investment in or otherwise own, the following items which would cause
the aggregate value of such holdings of the Parent, the Borrower and the other
Subsidiaries to exceed the following percentages of the Parent's Gross Asset
Value:
(i) unimproved real estate, such that the aggregate book value
of all such unimproved real estate exceeds 10% of the Parent's Gross
Asset Value;
(ii) Common stock, preferred stock, other capital stock,
beneficial interest in trust, membership interest in limited liability
companies and other equity interests in Persons (other than
Subsidiaries and Unconsolidated Affiliates), such that the aggregate
value of such interests calculated on the basis of the lower of cost or
market, exceeds 5% of the Parent's Gross Asset Value;
(iii) Mortgages in favor of the Parent, the Borrower or any
other Subsidiary, such that the aggregate book value of Indebtedness
secured by such Mortgages exceeds 5% of the Parent's Gross Asset Value;
(iv) Investments in Unconsolidated Affiliates, such that the
aggregate value of such Investments exceeds 15% of the Parent's Gross
Asset Value. For purposes of this clause (iv), the "value" of any such
Investment in such a non-corporate Person shall equal (1) with respect
to any of such Person's Properties under construction, the Parent's
Ownership Share of the book value of Construction in Process for such
Property as of the date of determination and (2) with respect to any of
such Person's Properties which have been completed, the Parent's
Ownership Share of Capitalized EBITDA of such Person attributable to
such Properties; and
In addition to the foregoing limitations, the aggregate value of the
Investments subject to the limitations in the preceding clauses (i) through (iv)
shall not exceed 25% of the Parent's Gross Asset Value.
Additionally, the aggregate amount of the Construction Budgets for
Development Properties in which the Parent either has a direct or indirect
ownership interest shall not exceed 20% of the Parent's Gross Asset Value. If a
Development Property is owned by an Unconsolidated Affiliate of the Parent, the
Borrower or any Subsidiary, then the greater of (1) the product of (A) the
Parent's, the Borrower's or such Subsidiary's Ownership Share in such
Unconsolidated Affiliate and (B) the amount of the Construction Budget for such
Development Property or (2) the recourse obligations of the Parent, the Borrower
or such Subsidiary relating to the Indebtedness of such Unconsolidated
Affiliate, shall be used in calculating such investment limitation.
SECTION 9.8. Floating Rate Debt.
The Parent will not and will not permit any of its Subsidiaries to
incur, assume or suffer to exist any Unprotected Floating Rate Debt of the
Parent and its Subsidiaries determined on a consolidated basis in an aggregate
outstanding principal amount in excess of 25% of Gross Asset Value of the Parent
and its Subsidiaries determined on a consolidated basis at any time.
SECTION 9.9. Limitation on Non-Wholly Owned Subsidiaries, Preferred
Stock Entities and Unconsolidated Affiliates.
The Borrower shall not permit the sum of (a) the value of Investments
in Unconsolidated Affiliates plus (b) the Capitalized EBITDA of Consolidated
Subsidiaries which are not Wholly Owned Subsidiaries to exceed 25% of the Gross
Asset Value of the Parent and its Subsidiaries determined on a consolidated
basis as of the end of each fiscal quarter. For purposes of this section, the
"value" of an Investment in an Unconsolidated Affiliate shall equal (1) with
respect to any of such Unconsolidated Affiliate's Properties under construction,
the Parent's Ownership Share of the book value of Construction in Process for
such Property as of the date of determination and (2) with respect to any of
such Unconsolidated Affiliate's Properties which have been completed, the
Parent's Ownership Share of Capitalized EBITDA of such Unconsolidated Affiliate
attributable to such Properties
ARTICLE X. DEFAULTS
SECTION 10.1. Events of Default.
If one or more of the following events shall have occurred and be
continuing:
(a) Default in Payment. The Borrower shall fail to pay the principal
amount of any Loan or any Reimbursement Obligation when due or (ii) any interest
on any Loan or other Obligation, or any fees or other Obligations within 5
Business Days of the due date thereof;
(b) Default in Performance. The Parent or the Borrower shall fail to
observe or perform any covenant or agreement contained in Section 8.12., Section
8.13. or Section 8.19. on its part to be performed;
(c) Default in Performance-Cure. The Parent or the Borrower shall fail
to observe or perform any covenant or agreement contained in this Agreement
(other than those covered by the immediately preceding subsections (a) or (b))
for a period of 30 days after written notice thereof has been given to the
Borrower or the Parent by the Agent;
(d) Other Loan Documents. An Event of Default under and as defined in
any Loan Document shall occur and be continuing or the Parent or the Borrower
shall fail to observe or perform any covenant or agreement contained in any of
the Loan Documents to which it is a party and such failure shall continue beyond
any applicable period of grace;
(e) Misrepresentations. Any written statement, representation or
warranty made or deemed made by or on behalf of the Parent, the Borrower or any
other Guarantor under this Agreement or under any other Loan Document, or any
amendment hereto or thereto, or in any other writing or statement at any time
furnished or made or deemed made by or on behalf of the Parent, the Borrower or
any other Guarantor to the Agent or any Lender, shall at any time prove to have
been incorrect or misleading in any material respect when furnished or made.
(f) Indebtedness Cross-Default.
(i) The Parent, the Borrower, any other Guarantor or any other
Subsidiary shall fail to pay when due and payable the principal of, or
interest on, any Indebtedness (other than the Loans) or any Contingent
Obligations, which Indebtedness or Contingent Obligations have an
aggregate outstanding principal amount of $5,000,000 or more;
(ii) Any such Indebtedness or Contingent Obligations shall
have (x) been accelerated in accordance with the provisions of any
indenture, contract or instrument evidencing, providing for the
creation of or otherwise concerning such Indebtedness or (y) been
required to be prepaid prior to the stated maturity thereof; or
(iii) Any other event shall have occurred and be continuing
which, with or without the passage of time, the giving of notice, a
determination of materiality, the satisfaction of any condition or any
combination of the foregoing, would permit any holder or holders of
such Indebtedness or Contingent Obligations, any trustee or agent
acting on behalf of such holder or holders or any other Person, to
accelerate the maturity of any such Indebtedness or Contingent
Obligations or require any such Indebtedness or Contingent Obligations
to be prepaid prior to its stated maturity.
(g) Voluntary Bankruptcy Proceeding. The Parent, the Borrower, any
other Guarantor or any other Affiliates shall: (i) commence a voluntary case
under the Bankruptcy Code of 1978, as amended or other federal bankruptcy laws
(as now or hereafter in effect); (ii) file a petition seeking to take advantage
of any other Applicable Laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of debts;
(iii) consent to, or fail to contest in a timely and appropriate manner, any
petition filed against it in an involuntary case under such bankruptcy laws or
other Applicable Laws or consent to any proceeding or action described in the
immediately following subsection; (iv) apply for or consent to, or fail to
contest in a timely and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of itself or of a
substantial part of its property, domestic or foreign; (v) admit in writing its
inability to pay its debts as they become due; (vi) make a general assignment
for the benefit of creditors; (vii) make a conveyance fraudulent as to creditors
under any Applicable Law; or (viii) take any corporate or partnership action for
the purpose of effecting any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Parent, the Borrower, any other Guarantor or any other
Affiliates, in any court of competent jurisdiction seeking: (i) relief under the
Bankruptcy Code of 1978, as amended or other federal bankruptcy laws (as now or
hereafter in effect) or under any other Applicable Laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts; or (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of such Person, or of all or any substantial
part of the assets, domestic or foreign, of such Person, and such case or
proceeding shall continue undismissed or unstayed for a period of 60 consecutive
calendar days, or an order granting the relief requested in such case or
proceeding against the Parent, the Borrower, such Guarantor or such Affiliate
(including, but not limited to, an order for relief under such Bankruptcy Code
or such other federal bankruptcy laws) shall be entered.
(i) Change of Control/Change in Management.
(w) (A) If any Person (or two or more Persons acting in
concert) (other than the Stein Parties or US Realty) shall acquire
"beneficial ownership" within the meaning of Rule 13d-3 of the
Securities and Exchange Act of 1934, as amended, of the capital stock
or securities of the Parent representing 20% or more of the aggregate
voting power of all classes of capital stock and securities of the
Parent entitled to vote for the election of directors or (B) during any
twelve-month period (commencing both before and after the Agreement
Date), individuals who at the beginning of such period were directors
of the Parent shall cease for any reason (other than death or mental or
physical disability) to constitute a majority of the board of directors
of the Parent;
(x) If the Persons comprising the Stein Parties shall cease to
own, in the aggregate, at least 570,000 shares of the outstanding
common stock of the Parent (without regard to any dilution thereof);
(y) If US Realty shall cease to own at least 25% of the total
outstanding common stock of the Parent; or
(z) the general partner of the Borrower shall cease to be the
Parent;
(j) ERISA. The assets of the Parent, the Borrower or any other
Guarantor at any time constitute assets, within the meaning of ERISA, the
Internal Revenue Code and the respective regulations promulgated thereunder, of
any ERISA Plan or Non-ERISA Plan;
(k) Litigation. The Parent, the Borrower or any other Guarantor shall
disavow, revoke or terminate any Loan Document to which it is a party or shall
otherwise challenge or contest in any action, suit or proceeding in any court or
before any Governmental Authority the validity or enforceability of this
Agreement, any Note or any other Loan Document.
(l) Judgment. A judgment or order for the payment of money (not
adequately covered by insurance as to which the insurance company has
acknowledged coverage in writing) shall be entered against the Parent, the
Borrower or any Subsidiary by any court or other tribunal which exceeds,
individually or together with all other such judgments or orders entered against
the Parent, the Borrower or such Subsidiary, $5,000,000 in amount (or which
could otherwise have a Materially Adverse Effect) and such judgment or order
shall continue for a period of 30 days without being stayed or dismissed through
appropriate appellate proceedings.
(m) Attachment. A warrant, writ of attachment, execution or similar
process shall be issued against any property of the Parent, the Borrower or any
Subsidiary which exceeds, individually or together with all other such warrants,
writs, executions and processes, $5,000,000 in amount and such warrant, writ,
execution or process shall not be discharged, vacated, stayed or bonded for a
period of 30 days.
(n) Damage; Strike; Casualty. Any material damage to, or loss, theft or
destruction of, any Property, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, act of God or public enemy, or other
casualty which causes, for more than 30 consecutive days beyond the coverage
period of any applicable business interruption insurance, the cessation or
substantial curtailment of revenue producing activities of the Parent, the
Borrower, any other Guarantor or any other Subsidiary if any such event or
circumstance could reasonably be expected to have a Materially Adverse Effect.
(o) Guarantors. Any Guarantor shall fail to comply with any term,
covenant, condition or agreement contained in the Guaranty or any Guarantor
shall disavow, revoke or terminate or attempt to do any of the foregoing with
respect to the Guaranty.
SECTION 10.2. Remedies.
Upon the occurrence of an Event of Default, and in every such event,
the Agent shall, upon the direction of the Majority Lenders, (i) by notice to
the Borrower terminate the Commitments, which shall thereupon terminate, and
(ii) by notice to the Borrower declare the Loans and all other Obligations and
an amount equal to the Stated Amount of all Letters of Credit then outstanding
to be, and the Loans and all other Obligations and an amount equal to the Stated
Amount of all Letters of Credit then outstanding for deposit into the Collateral
Account shall thereupon become, immediately due and payable without presentment,
demand, protest or notice of intention to accelerate, all of which are hereby
waived by the Borrower. If the Agent has exercised any of the rights provided
under the preceding sentence, the Swingline Lender shall: (I) declare the
principal of, and accrued interest on, the Swingline Loans and the Swingline
Note at the time outstanding, and all of the other Obligations owing to the
Swingline Lender, to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived by the Borrower and (II)
terminate the Swingline Commitment and the obligation of the Swingline Lender to
make Swingline Loans. Notwithstanding the foregoing, upon the occurrence of any
of the Events of Default specified in Section 10.1.(g) or (h) above, without any
notice to the Borrower or any other act by the Agent, the Commitments and the
Swingline Commitment shall thereupon immediately and automatically terminate and
the Loans and all other Obligations and an amount equal to the Stated Amount of
all Letters of Credit then outstanding for deposit into the Collateral Account
shall become immediately due and payable without presentment, demand, protest,
notice of intention to accelerate or notice of acceleration, or other notice of
any kind, all of which are hereby waived by the Borrower. Upon the occurrence
and during the continuance of a Default under Section 10.1.(h) or Section
10.1.(i)(y), the right of the Borrower to request Revolving Loans and Swingline
Loans shall be suspended.
SECTION 10.3. Allocation of Proceeds.
If an Event of Default shall have occurred and be continuing and the
maturity of the Notes has been accelerated, all payments received by the Agent
under any of the Loan Documents, in respect of any principal of or interest on
the Obligations or any other amounts payable by the Borrower hereunder or
thereunder, shall be applied by the Agent in the following order and priority:
(a) amounts due to the Agent and the Lenders in respect of
fees and expenses due under Section 12.3.;
(b) payments of interest on Swingline Loans;
(c) payments of interest on all other Loans and Reimbursement
Obligations, to be applied for the ratable benefit of the Lenders;
(d) payments of principal of Swingline Loans;
(e) payments of principal of all other Loans and Reimbursement
Obligations, to be applied for the ratable benefit of the Lenders;
(f) amounts to be deposited into the Collateral Account;
(g) amounts due to the Agent and the Lenders pursuant to
Sections 11.8. and 12.5.;
(h) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the
Lenders; and
(i) any amount remaining after application as provided above,
shall be paid to the Borrower or whomever else may be legally entitled
thereto.
SECTION 10.4. Rights Cumulative.
The rights and remedies of the Agent and the Lenders under this
Agreement and each of the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies which any of them may otherwise have under
Applicable Law. In exercising their respective rights and remedies the Agent and
the Lenders may be selective and no failure or delay by the Agent or any of the
Lenders in exercising any right shall operate as a waiver of it, nor shall any
single or partial exercise of any power or right preclude its other or further
exercise or the exercise of any other power or right.
SECTION 10.5. Recission of Acceleration by Majority Lenders.
If at any time after acceleration of the maturity of the Loans and the
other Obligations, the Borrower shall pay all arrears of interest and all
payments on account of principal of the Obligations which shall have become due
otherwise than by acceleration (with interest on principal and, to the extent
permitted by Applicable Law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Defaults (other than nonpayment of
principal of and accrued interest on the Obligations due and payable solely by
virtue of acceleration) shall be remedied or waived to the satisfaction of the
Majority Lenders, then by written notice to the Borrower, the Majority Lenders
may elect, in the sole discretion of such Majority Lenders, to rescind and annul
the acceleration and its consequences. The provisions of the preceding sentence
are intended merely to bind all of the Lenders to a decision which may be made
at the election of the Majority Lenders, and are not intended to benefit the
Borrower and do not give the Borrower the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are satisfied.
SECTION 10.6. Collateral Account.
(a) As collateral security for the prompt payment in full when due of
all Letter of Credit Liabilities, the Borrower hereby pledges and grants to the
Agent, for the benefit of the Lenders as provided herein, a security interest in
all of the Borrower's right, title and interest in and to the Collateral Account
and the balances from time to time in the Collateral Account (including the
investments and reinvestments therein provided for below). The balances from
time to time in the Collateral Account shall not constitute payment of any
Letter of Credit Liabilities until applied by the Agent as provided herein.
Anything in this Agreement to the contrary notwithstanding, funds held in the
Collateral Account shall be subject to withdrawal only as provided in this
Section.
(b) Amounts on deposit in the Collateral Account shall be invested and
reinvested by the Agent in such investments as the Agent shall determine in its
sole discretion. All such investments and reinvestments shall be held in the
name of and be under the sole dominion and control of the Agent. The Agent shall
exercise reasonable care in the custody and preservation of any funds held in
the Collateral Account and shall be deemed to have exercised such care if such
funds are accorded treatment substantially equivalent to that which the Agent
accords other funds deposited with the Agent, it being understood that the Agent
shall not have any responsibility for taking any necessary steps to preserve
rights against any parties with respect to any funds held in the Collateral
Account.
(c) If an Event of Default shall have occurred and be continuing, the
Agent may (and, if instructed by the Majority Lenders, shall) in its (or their)
discretion at any time and from time to time elect to liquidate any such
investments and reinvestments and credit the proceeds thereof to the Collateral
Account and apply or cause to be applied such proceeds and any other balances in
the Collateral Account to the payment of any of the Letter of Credit Liabilities
then due and payable.
(d) When all of the Obligations shall have been indefeasibly paid in
full and no Letters of Credit remain outstanding, the Agent shall promptly
deliver to the Borrower, against receipt but without any recourse, warranty or
representation whatsoever, the balances remaining in the Collateral Account.
(e) The Borrower shall pay to the Agent from time to time such fees as
the Agent normally charges for similar services in connection with the Agent's
administration of the Collateral Account and investments and reinvestments of
funds therein.
ARTICLE XI. THE AGENT
SECTION 11.1. Appointment and Authorization.
Each Lender irrevocably appoints and authorizes the Agent to take such
action as the contractual representative on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Agent by the terms
thereof, together with all such powers as are reasonably incidental thereto. The
Borrower shall be entitled to rely conclusively upon a written notice or written
response from the Agent as being made pursuant to the requisite concurrence or
consent of the Lenders necessary to take such action without investigation or
otherwise contacting the Lenders hereunder. Nothing herein shall be construed to
deem the Agent a trustee for any Lender nor to impose on the Agent duties or
obligations other than those expressly provided for herein. Not in limitation of
the foregoing, each Lender agrees the Agent has no fiduciary obligations to such
Lender under this Agreement, any other Loan Document or otherwise. At the
request of a Lender, the Agent will forward to each Lender copies or, where
appropriate, originals of the documents delivered to the Agent pursuant to
Section 6.1. The Agent shall deliver to each Lender, promptly upon receipt
thereof by the Agent, copies of each of the financial statements, certificates,
notices and other documents delivered to the Agent pursuant to Sections 8.1.(a)
through (t). The Agent will also furnish to any Lender, upon the request of such
Lender, a copy of any certificate or notice furnished to the Agent by the
Borrower pursuant to this Agreement or any other Loan Document not already
delivered to such Lender pursuant to the terms of this Agreement or any such
other Loan Document. As to any matters not expressly provided for by the Loan
Documents (including, without limitation, enforcement or collection of the
Notes), the Agent shall not be required to exercise any discretion or take any
action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Majority Lenders, and such instructions shall be binding upon all the
Lenders and all holders of Notes; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement or any other Loan Document or Applicable
Law. The Agent shall not be deemed to have knowledge or notice of the occurrence
of a Default or Event of Default unless the Agent has obtained knowledge of such
Default or Event of Default in the manner provided for under Section 11.5. In
the event that the Agent has actual knowledge of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders.
Each Lender authorizes and directs the Agent to enter into the Loan Documents
for the benefit of the Lenders. Each Lender hereby agrees that, except as
otherwise set forth herein, any action taken by the Majority Lenders in
accordance with the provisions of this Agreement or the Loan Documents, and the
exercise by the Majority Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. Not in limitation of the
foregoing, the Agent shall not exercise any right or remedy it or the Lenders
may have under any Loan Document upon the occurrence of a Default or an Event of
Default unless the Majority Lenders have so directed the Agent to exercise such
right or remedy.
SECTION 11.2. The Agent and Affiliates.
Wells Fargo, as a Lender, shall have the same rights and powers under
this Agreement and any other Loan Document as any other Lender and may exercise
the same as though it were not the Agent; and the term "the Lender" or "the
Lenders" shall, unless otherwise expressly indicated, include Wells Fargo in
each case in its individual capacity. Wells Fargo and its affiliates and the
other Lenders and their respective affiliates may each accept deposits from,
maintain deposits or credit balances for, invest in, lend money to, act as
trustee under indentures of, and generally engage in any kind of business with
the Borrower and any Affiliate of the Borrower as if Wells Fargo or such Lender
were any other bank and without any duty to account therefor to the other
Lenders.
SECTION 11.3. Collateral Matters.
Each Lender authorizes and directs the Agent to enter into the Loan
Documents for the benefit of the Lenders. Each Lender hereby agrees that, except
as otherwise set forth herein, any action taken by the Majority Lenders in
accordance with the provisions of this Agreement or the Loan Documents, and the
exercise by the Majority Lenders of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders.
SECTION 11.4. Approvals of the Lenders.
All communications from the Agent to any Lender requesting such
Lender's determination, consent, approval or disapproval (a) shall be given in
the form of a written notice to such Lender, (b) shall be accompanied by a
description of the matter or thing as to which such determination, approval,
consent or disapproval is requested, or shall advise such Lender where such
matter or thing may be inspected, or shall otherwise describe the matter or
issue to be resolved, (c) shall include, if reasonably requested by such Lender
and to the extent not previously provided to such Lender, written materials and
a summary of all oral information provided to the Agent by the Borrower in
respect of the matter or issue to be resolved, and (d) shall include the Agent's
recommended course of action or determination in respect thereof. Unless a
Lender shall give written notice to the Agent that it objects to the
recommendation or determination of the Agent (together with a written
explanation of the reasons behind such objection) within 10 Business Days (or
such lesser period as may be required under the Loan Documents for the Agent to
respond), such Lender shall be deemed to have conclusively approved of or
consented to such recommendation or determination.
SECTION 11.5. Notice of Defaults.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless the Agent has received notice
from a Lender or the Borrower referring to this Agreement, describing with
reasonable specificity such Default or Event of Default and stating that such
notice is a "notice of default." If any Lender becomes aware of any Default or
Event of Default, it shall promptly send to the Agent such "notice of default."
Further, if the Agent receives such a "notice of default", the Agent shall give
prompt notice thereof to the Lenders.
SECTION 11.6. Consultation with Experts.
The Agent may consult with legal counsel (who may be counsel for the
Borrower), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or experts.
SECTION 11.7. Liability of the Agent.
Neither the Agent nor any of its affiliates nor any of their respective
directors, officers, the Agents or employees shall be liable for any action
taken or not taken by the Agent in connection with any of the Loan Documents in
the absence of its own gross negligence or willful misconduct. Neither the Agent
nor any of its affiliates nor any of their respective directors, officers, the
Agents or employees shall be responsible for or have any duty to ascertain,
inquire into or verify (a) any statement, warranty or representation made in
connection with any of the Loan Documents, or any borrowing hereunder, (b) the
performance or observance of any of the covenants or agreements of the Borrower
or a Guarantor, (c) the satisfaction of any condition specified in Article VI.,
or (d) the validity, effectiveness or genuineness of any of the Loan Documents
or any other instrument or writing furnished in connection herewith or
therewith. The Agent shall not incur any liability by acting in reliance upon
any notice, consent, certificate, statement, or other writing (which may be a
bank wire, telex or similar writing) believed by it to be genuine or to be
signed by the proper party or parties.
SECTION 11.8. Indemnification of the Agent.
The Lenders agree to indemnify the Agent (to the extent not reimbursed
by the Borrower and without limiting the obligation of the Borrower to do so) in
accordance with the Lenders' respective Pro Rata Shares, from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may at any time be imposed on, incurred by, or asserted against
the Agent in any way relating to or arising out of the Loan Documents or any
action taken or omitted by the Agent under the Loan Documents; provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (i) to the extent arising from the Agent's gross
negligence or willful misconduct or (ii) if the Agent fails to follow the
written direction of the Majority Lenders unless such failure is pursuant to the
Agent's good faith reliance on the advice of counsel of which the Lenders have
received notice. Without limiting the generality of the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) reasonably incurred by the Agent
in connection with the preparation, execution, administration, or enforcement
of, or legal advice with respect to the rights or responsibilities of the
parties under, the Loan Documents, to the extent that the Agent is not
reimbursed for such expenses by the Borrower. The agreements in this Section
shall survive the payment of the Loans and all other amounts payable hereunder
or under the other Loan Documents and the termination of this Agreement.
SECTION 11.9. Credit Decision.
Each Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or other
affiliates has made any representations or warranties to such Lender and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Borrower or Guarantors, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, any other Lender or counsel
to the Agent, and based on the financial statements of the Borrower or
Guarantors and its affiliates, its review of the Loan Documents, the legal
opinions required to be delivered to it hereunder, the advice of its own counsel
and such other documents and information as it has deemed appropriate, made its
own credit and legal analysis and decision to enter into this Agreement and the
transaction contemplated hereby. Each Lender also acknowledges that it will,
independently and without reliance upon the Agent, any other Lender or counsel
to the Agent, and based on such review, advice, documents and information as it
shall deem appropriate at the time, continue to make its own decisions in taking
or not taking action under the Loan Documents. Except for notices, reports and
other documents expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall have no duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower, any
Guarantor or any other Affiliate which may come into possession of the Agent or
any of its officers, directors, employees, the Agents, attorneys-in-fact or
other affiliates. Each Lender acknowledges that the Agent's legal counsel in
connection with the transactions contemplated by this Agreement is only acting
as counsel to the Agent and is not acting as counsel to such Lender.
SECTION 11.10. Successor Agent.
The Agent may resign at any time by giving 30 days' prior written
notice thereof, to the Lenders and the Borrower. The Agent may be removed as the
Agent under the Loan Documents for good cause upon 30 days' prior written notice
to the Agent by the Majority Lenders. Upon any such resignation or removal, the
Majority Lenders shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Lenders, and shall
have accepted such appointment, within 30 days after the current Agent's giving
of notice of resignation or the Majority Lenders' removal of the current Agent,
then the current Agent may, on behalf of the Lenders, appoint a successor Agent,
which shall be a Lender, if any Lender shall be willing to serve. Any successor
Agent must be a bank whose debt obligations (or whose parent's debt obligations)
are rated not less than investment grade or its equivalent by a Rating Agency
and which has total assets in excess of $10,000,000,000. Upon the acceptance of
its appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights and duties of
the current Agent, and the current Agent shall be discharged from its duties and
obligations hereunder. After any current Agent's resignation hereunder as Agent,
the provisions of this Article shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent. Notwithstanding
anything contained herein to the contrary, the Agent may assign its rights and
duties hereunder to any of its affiliates by giving the Borrower and each Lender
prior written notice thereof.
SECTION 11.11. Approvals and Other Actions by Majority Lenders.
Each of the following shall require the approval of, or may be taken at
the request of, the Majority Lenders:
(a) Approval of Eligible Properties as Unencumbered Pool Properties as
provided in Section 4.1.(c);
(b) Termination of the Commitments and acceleration of the Obligations
upon the occurrence of an Event of Default as provided in Section
10.2.;
(c) Recission of acceleration of any of the Obligations as provided in
Section 10.5.;
(d) Removing the Agent for good cause and approving of its replacement
as provided in Section 11.10.; and
(e) Except as specifically provided otherwise in Section 12.7., any
consent or approval regarding, any waiver of the performance or
observance by the Borrower of and the waiver of the continuance
of any Default or Event of Default in respect of, any term of this
Agreement or any other Loan Document.
SECTION 11.12. Documentation, Syndication and Managing Agents.
None of the Documentation Agent, the Syndication Agent or the Managing
Agents (each in such capacity, a "Titled Agent") assumes any responsibility or
obligation hereunder, including, without limitation, for servicing, enforcement
or collection of any of the Loans, nor any duties as an agent hereunder for
Lenders. The titles of "Documentation Agent", "Syndication Agent" and "Managing
Agent" are solely honorific and imply no fiduciary responsibility on the part of
the Titled Agents to the Agent, the Borrower or any Lender and the use of such
titles does not impose on the Titled Agents any duties or obligations greater
than those of any other Lender or entitle the Titled Agents to any rights other
than those to which any other Lender is entitled.
ARTICLE XII. MISCELLANEOUS
SECTION 12.1. Notices.
All notices, requests and other communications to any party under the
Loan Documents shall be in writing (including bank wire, facsimile transmission
or similar writing) and shall be given to such party as follows:
If to the Borrower:
Regency Realty Corporation
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
Attention: Chief Financial Officer
Telecopier: (904) 634-3428
Telephone: (904) 356-7000
If to a Lender or the Agent:
To such Lender's or the Agent's Lending Office
or as to each party at such other address as such party shall designate in a
written notice to the other parties. Each such notice, request or other
communication shall be effective (a) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid or (b) if given by any other means (including facsimile),
when delivered at the applicable address provided for in this Section; provided
that notices to the Agent under Article II., and any notice of a change of
address for notices, shall not be effective until received. In addition to the
Agent's Lending Office, the Borrower shall send copies of the information
described in Section 8.1. to the following address of the Agent:
Wells Fargo Bank, National Association
Real Estate Group
Koll Center
2030 Main Street, Suite 800
Irvine, California 92714
Attention: Ms. Rita Swayne
SECTION 12.2. No Waivers.
No failure or delay by the Agent or any Lender in exercising any right,
power or privilege under any Loan Document shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
rights and remedies provided in the Loan Documents shall be cumulative and not
exclusive of any rights or remedies provided by law.
SECTION 12.3. Expenses.
The Borrower will pay on demand all present and future reasonable
expenses of:
(a) the Agent in connection with the negotiation, preparation,
execution and delivery (including reasonable out-of-pocket costs and expenses
incurred in connection with the assignment of Commitments pursuant to Section
12.8.) of this Agreement, the Notes and each of the other Loan Documents,
whenever the same shall be executed and delivered, including appraisers' fees,
search fees, recording fees and the reasonable fees and disbursements of: (i)
Alston & Bird LLP, counsel for the Agent, and (ii) each local counsel retained
by the Agent;
(b) the Agent in connection with the negotiation, preparation,
execution and delivery of any waiver, amendment or consent by the Agent or any
Lender relating to this Agreement, the Notes or any of the other Loan Documents
or sales of participations in any Lender's Commitment, including the reasonable
fees and disbursements of counsel to the Agent;
(c) the Agent and each of the Lenders in connection with any
restructuring, refinancing or "workout" of the transactions contemplated by this
Agreement, the Notes and the other Loan Documents, including the reasonable fees
and disbursements of counsel to the Agent actually incurred;
(d) the Agent and each of the Lenders, after the occurrence of a
Default or Event of Default, in connection with the collection or enforcement of
the obligations of the Borrower under this Agreement, the Notes or any other
Loan Document, including the reasonable fees and disbursements of counsel to the
Agent or to any Lender actually incurred if such collection or enforcement is
done by or through an attorney;
(e) subject to any limitation contained in Section 12.5., the Agent and
each of the Lenders in connection with prosecuting or defending any claim in any
way arising out of, related to, or connected with this Agreement, the Notes or
any of the other Loan Documents, including the reasonable fees and disbursements
of counsel to the Agent or any Lender actually incurred and of experts and other
consultants retained by the Agent or any Lender in connection therewith;
(f) the Agent and each of the Lenders, after the occurrence of a
Default or Event of Default, in connection with the exercise by the Agent or any
Lender of any right or remedy granted to it under this Agreement, the Notes or
any of the other Loan Documents including the reasonable fees and disbursements
of counsel to the Agent or any Lender actually incurred;
(g) the Agent in connection with costs and expenses incurred by the
Agent in gaining possession of, maintaining, appraising, selling, preparing for
sale and advertising to sell any collateral security, whether or not a sale is
consummated; and
(h) the Agent and each of the Lenders, to the extent not already
covered by any of the preceding subsections, in connection with any bankruptcy
or other proceeding of the type described in Sections 10.1.(g) or (h), and the
reasonable fees and disbursements of counsel to the Agent and any Lender
actually incurred in connection with the representation of the Agent or such
Lender in any matter relating to or arising out of any such proceeding,
including without limitation (i) any motion for relief from any stay or similar
order, (ii) the negotiation, preparation, execution and delivery of any document
relating to the Agent or such Lender and (iii) the negotiation and preparation
of any plan of reorganization of the Borrower, whether proposed by the Borrower,
the Lenders or any other Person, and whether such fees and expenses are incurred
prior to, during or after the commencement of such proceeding or the
confirmation or conclusion of any such proceeding.
SECTION 12.4. Stamp, Intangible and Recording Taxes.
The Borrower will pay any and all stamp, intangible, registration,
recordation and similar taxes, fees or charges and shall indemnify the Agent and
each Lender against any and all liabilities with respect to or resulting from
any delay in the payment or omission to pay any such taxes, fees or charges,
which may be payable or determined to be payable in connection with the
execution, delivery, recording, performance or enforcement of this Agreement,
the Notes and any of the other Loan Documents or the perfection of any rights or
Liens thereunder.
SECTION 12.5. Indemnification.
The Borrower shall and hereby agrees to indemnify, defend and hold
harmless the Agent and each of the Lenders and their respective directors,
officers, the Agents and employees from and against (a) any and all losses,
claims, damages, liabilities, deficiencies, judgments or expenses incurred by
any of them (except to the extent that it results from their own gross
negligence or willful misconduct) arising out of or by reason of any litigation,
investigations, claims or proceedings which arise out of or are in any way
related to: (i) this Agreement or the transactions contemplated thereby; (ii)
the making of Loans or issuance of Letters of Credit; (iii) any actual or
proposed use by the Borrower of the proceeds of the Loans or of Letters of
Credit; or (iv) the Agent's or the Lenders' entering into this Agreement, the
other Loan Documents or any other agreements and documents relating hereto,
including, without limitation, amounts paid in settlement, court costs and the
reasonable fees and disbursements of counsel incurred in connection with any
such litigation, investigation, claim or proceeding or any advice rendered in
connection with any of the foregoing and (b) any such losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred in connection with any
remedial or other similar action taken by the Borrower, the Agent or any of the
Lenders in connection with the required compliance by the Borrower or any of the
Subsidiaries, or any of their respective properties, with any federal, state or
local Environmental Laws or other material environmental rules, regulations,
orders, directions, ordinances, criteria or guidelines. If and to the extent
that the obligations of the Borrower hereunder are unenforceable for any reason,
the Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under Applicable Law. The
Borrower's obligations hereunder shall survive any termination of this Agreement
and the other Loan Documents and the payment in full of the Obligations, and are
in addition to, and not in substitution of, any other of its other obligations
set forth in this Agreement and the other Loan Documents.
SECTION 12.6. Setoff.
In addition to any rights now or hereafter granted under Applicable Law
and not by way of limitation of any such rights, each Lender is hereby
authorized by the Borrower, at any time or from time to time upon the occurrence
and during the continuance of an Event of Default but subject to the Agent's
prior written consent, without notice to the Borrower or to any other Person,
any such notice being hereby expressly waived, to set-off and to appropriate and
to apply any and all deposits (general or special, including, but not limited
to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by such Lender
or any Affiliate of such Lender, to or for the credit or the account of the
Borrower against and on account of any of the Obligations then due and owing.
The Borrower agrees, to the fullest extent it may effectively do so under
Applicable Law, that any holder of a participation in a Note, whether or not
acquired pursuant to the foregoing arrangements, may exercise rights of setoff
or counterclaim and other rights with respect to such participation as fully as
if such holder of a participation were a direct creditor of the Borrower in the
amount of such participation.
SECTION 12.7. Amendments.
Any consent or approval required or permitted by this Agreement or in
any other Loan Document (other than any agreement evidencing the fees referred
to in Section 3.1.(e)) to be given by the Lenders may be given, and the
performance or observance by the Borrower of any terms of any such Loan Document
or the continuance of any Default or Event of Default may be waived (either
generally or in a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Majority Lenders. Any provision
of this Agreement or of any other Loan Document (other than any agreement
evidencing the fees referred to in Section 3.1.(e)) may be amended or otherwise
modified with, but only with, the written consent of the Borrower and the
Majority Lenders. Any provision of any agreement evidencing the fees referred to
in Section 3.1.(e) may be amended or otherwise modified only in writing by the
Agent and the Borrower, and the performance or observance by the Borrower of any
terms of any such agreement may be waived only with the written consent of the
Agent. Notwithstanding the foregoing, none of the following may be amended or
otherwise modified, nor may compliance by the Borrower, as applicable thereunder
or with respect thereto be waived, without the written consent of all the
Lenders and the Borrower:
(a) the principal amount of any Loan (including forgiveness of any
amount of principal);
(b) the rates of interest on the Loans and the amount of any
interest payable on the Loans (including the forgiveness of
any accrued but unpaid interest);
(c) the dates on which any principal or interest payable by the
Borrower under any Loan Document is due;
(d) the provisions of the first sentence of Section 2.1.(a), Section 2.2.
(a), Section 2.8.(f), Section 9.2. and this Section;
(e) the Revolving Credit Termination Date;
(f) the Termination Date;
(g) the obligations of a Guarantor under the Guaranty, including
the release of a Guarantor therefrom (except as specifically
permitted in the last sentence of Section 4.2.);
(h) the definition of Commitment, Majority Lenders (or any minimum
requirement necessary for the Lenders or Majority Lenders to
take action hereunder), Pro Rata Share, Commitment and Maximum
Loan Availability and Unencumbered Pool Value (and the
definitions used in either such definition and the percentages
and rates used in the calculation thereof); and
(i) the amount and payment date of any fees.
Further, no amendment, waiver or consent unless in writing and signed by the
Agent, in addition to the Lenders required hereinabove to take such action,
shall affect the rights or duties of the Agent under this Agreement or any of
the other Loan Documents. Any amendment, waiver or consent relating to Section
2.3. or the obligations of the Swingline Lender under this Agreement or any
other Loan Document shall, in addition to the Lenders required hereinabove to
take such action, require the written consent of the Swingline Lender. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or delay or omission on the part
of any Lender or the Agent in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon the
Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
SECTION 12.8. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or otherwise transfer any of its rights
under this Agreement without the prior written consent of all the Lenders.
(b) Any Lender may at any time grant to one or more banks or other
financial institutions (each a "Participant") participating interests in its
Commitment or the Obligations owing to such Lender. Except as otherwise provided
in Section 12.6., no Participant shall have any rights or benefits under this
Agreement or any other Loan Document. In the event of any such grant by a Lender
of a participating interest to a Participant, such Lender shall remain
responsible for the performance of its obligations hereunder, and the Borrower
and the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which any Lender may grant such a participating interest
shall provide that such Participant may not grant to any other Person any
participating interest in such Participant's interest and that such Lender shall
retain the sole right and responsibility to enforce the obligations of the
Borrower hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided,
however, such Lender may agree with the Participant that it will not, without
the consent of the Participant, agree to (i) increase such Lender's Commitment,
(ii) extend the date fixed for the payment of principal on the Loans or portions
thereof owing to such Lender, or (iii) reduce the rate at which interest is
payable thereon. An assignment or other transfer which is not permitted by
subsection (c) or (d) below shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance with this
subsection (b).
(c) Any Lender may with the prior written consent of the Agent and the
Borrower (which consent, in each case, shall not be unreasonably withheld) at
any time assign to one or more Eligible Assignees (each an "Assignee") all or a
portion of its rights and obligations under this Agreement and the Notes;
provided, however, (i) no such consent by Borrower shall be required (x) if a
Default or Event of Default shall have occurred and be continuing or (y) in the
case of an assignment to another Lender or an affiliate of another Lender; (ii)
any partial assignment shall be in an amount at least equal to $10,000,000 and
after giving effect to such assignment the assigning Lender retains a
Commitment, or if the Commitments have been terminated, holds Notes having an
aggregate outstanding principal balance, of at least $10,000,000; (iii) after
giving effect to any such assignment by the Agent, the Agent in its capacity as
a Lender shall retain a Commitment, or if the Commitments have been terminated,
hold Notes having an aggregate outstanding principal balance, greater than or
equal to the Commitment of each other Lender (other than any Lender whose
Commitment has increased as a result of a merger or combination with another
Lender) and (iv) each such assignment shall be effected by means of an
Assignment and Acceptance Agreement. Upon execution and delivery of such
instrument and payment by such Assignee to such transferor Lender of an amount
equal to the purchase price agreed between such transferor Lender and such
Assignee, such Assignee shall be deemed to be a Lender party to this Agreement
and shall have all the rights and obligations of a Lender with a Commitment as
set forth in such Assignment and Acceptance Agreement, and the transferor Lender
shall be released from its obligations hereunder to a corresponding extent, and
no further consent or action by any party shall be required. Upon the
consummation of any assignment pursuant to this subsection (c), the transferor
Lender, the Agent and the Borrower shall make appropriate arrangements so that
new Notes are issued to the Assignee and such transferor Lender, as appropriate.
In connection with any such assignment, the transferor Lender shall pay to the
Agent an administrative fee for processing such assignment in the amount of
$3,000.
(d) Any Lender (each, a "Designating Lender") may at any time while the
Borrower has been assigned an Investment Grade Rating from either S&P or Moody's
designate one Designated Lender to fund Bid Rate Loans on behalf of such
Designating Lender subject to the terms of this subsection (d) and the
provisions in the immediately preceding subsections (b) and (c) shall not apply
to such designation. No Lender may designate more than one Designated Lender.
The parties to each such designation shall execute and deliver to the Agent for
its acceptance a Designation Agreement. Upon such receipt of an appropriately
completed Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Lender, the Agent will accept such
Designation Agreement and give prompt notice thereof to the Borrower, whereupon,
(i) the Borrower shall execute and deliver to the Designating Lender a
Designated Lender Note payable to the order of the Designated Lender, (ii) from
and after the effective date specified in the Designation Agreement, the
Designated Lender shall become a party to this Agreement with a right to make
Bid Rate Loans on behalf of its Designating Lender pursuant to Section 2.2.
after the Borrower has accepted a Bid Rate Loan (or portion thereof) of the
Designating Lender, and (iii) the Designated Lender shall not be required to
make payments with respect to any obligations in this Agreement except to the
extent of excess cash flow of such Designated Lender which is not otherwise
required to repay obligations of such Designated Lender which are then due and
payable; provided, however, that regardless of such designation and assumption
by the Designated Lender, the Designating Lender shall be and remain obligated
to the Borrower, the Agent and the Lenders for each and every of the obligations
of the Designating Lender and its related Designated Lender with respect to this
Agreement, including, without limitation, any indemnification obligations under
Section 11.8. and any sums otherwise payable to the Borrower by the Designated
Lender. Each Designating Lender shall serve as the Agent of the Designated
Lender and shall on behalf of, and to the exclusion of, the Designated Lender:
(i) receive any and all payments made for the benefit of the Designated Lender
and (ii) give and receive all communications and notices and take all actions
hereunder, including, without limitation, votes, approvals, waivers, consents
and amendments under or relating to this Agreement and the other Loan Documents.
Any such notice, communication, vote, approval, waiver, consent or amendment
shall be signed by the Designating Lender as Agent for the Designated Lender and
shall not be signed by the Designated Lender on its own behalf and shall be
binding on the Designated Lender to the same extent as if signed by the
Designated Lender on its own behalf. The Borrower, the Agent and the Lenders may
rely thereon without any requirement that the Designated Lender sign or
acknowledge the same. No Designated Lender may assign or transfer all or any
portion of its interest hereunder or under any other Loan Document, other than
assignments to the Designating Lender which originally designated such
Designated Lender. The Borrower, the Lenders and the Agent each hereby agrees
that it will not institute against any Designated Lender or join any other
Person in instituting against any Designated Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding under any
federal or state bankruptcy or similar law, until the later to occur of (x) one
year and one day after the payment in full of the latest maturing commercial
paper note issued by such Designated Lender and (y) the Termination Date. In
connection with any such designation the Designating Lender shall pay to the
Agent an administrative fee for processing such designation in the amount of
$2,000.
(e) In addition to the assignments and participations permitted under
the foregoing provisions of this Section, any Lender may assign and pledge all
or any portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular issued
by such Federal Reserve Bank, and such Loans and Notes shall be fully
transferable as provided therein. No such assignment shall release the assigning
Lender from its obligations hereunder.
(f) A Lender may furnish any information concerning the Borrower or any
of its Subsidiaries in the possession of such Lender from time to time to
Assignees and Participants (including prospective Assignees and Participants).
(g) Anything in this Section to the contrary notwithstanding, no Lender
may assign or participate any interest in any Loan held by it hereunder to the
Borrower, the Parent or any of their respective affiliates or Subsidiaries.
SECTION 12.9. Governing Law.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF GEORGIA.
SECTION 12.10. Litigation.
(a) EACH PARTY HERETO ACKNOWLEDGES THAT ANY DISPUTE OR CONTROVERSY
BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF LENDERS WOULD BE BASED ON
DIFFICULT AND COMPLEX ISSUES OF LAW AND FACT AND THAT A TRIAL BY JURY COULD
RESULT IN SIGNIFICANT DELAY AND EXPENSE. ACCORDINGLY, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF LENDERS, THE AGENT AND THE BORROWER HEREBY
WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING OF ANY KIND OR NATURE IN ANY
COURT OR TRIBUNAL IN WHICH AN ACTION MAY BE COMMENCED BY OR AGAINST THE BORROWER
ARISING OUT OF THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT OR IN
CONNECTION WITH THE COLLATERAL OR ANY LIEN OR BY REASON OF ANY OTHER CAUSE OR
DISPUTE WHATSOEVER BETWEEN OR AMONG THE BORROWER, THE AGENT OR ANY OF LENDERS OF
ANY KIND OR NATURE.
(b) THE BORROWER, THE AGENT AND EACH LENDER EACH HEREBY AGREES THAT THE
FEDERAL DISTRICT COURT OF THE NORTHERN DISTRICT OF GEORGIA OR, AT THE OPTION OF
THE AGENT, ANY STATE COURT LOCATED IN FULTON COUNTY, GEORGIA, SHALL HAVE
NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN
OR AMONG THE BORROWER, THE AGENT OR ANY OF LENDERS, PERTAINING DIRECTLY OR
INDIRECTLY TO THIS AGREEMENT, THE NOTES OR ANY OTHER LOAN DOCUMENT OR TO ANY
MATTER ARISING HEREFROM OR THEREFROM OR THE COLLATERAL. THE BORROWER EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR PROCEEDING
COMMENCED IN SUCH COURTS. THE CHOICE OF FORUM SET FORTH IN THIS SECTION SHALL
NOT BE DEEMED TO PRECLUDE THE BRINGING OF ANY ACTION BY THE AGENT OR ANY LENDER
OR THE ENFORCEMENT BY THE AGENT OR ANY LENDER OF ANY JUDGMENT OBTAINED IN SUCH
FORUM IN ANY OTHER APPROPRIATE JURISDICTION. further, the Borrower irrevocably
waives, to the fullest extent permitted by APPLICABLE law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
(c) THE FOREGOING WAIVERS HAVE BEEN MADE WITH THE ADVICE OF COUNSEL AND
WITH A FULL UNDERSTANDING OF THE LEGAL CONSEQUENCES THEREOF, AND SHALL SURVIVE
THE PAYMENT OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE HEREUNDER OR UNDER THE
OTHER LOAN DOCUMENTS AND THE TERMINATION OF THIS AGREEMENT.
SECTION 12.11. Confidentiality.
Except as otherwise provided by Applicable Law, the Agent and each
Lender shall utilize all non-public information obtained pursuant to the
requirements of this Agreement in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe and
sound banking practices but in any event may make disclosure: (a) to any of
their respective affiliates (provided they shall agree to keep such information
confidential in accordance with the terms of this Section); (b) as reasonably
required by any bona fide Assignee, Participant or other transferee in
connection with the contemplated transfer of any Commitment or participations
therein as permitted hereunder (provided they shall agree to keep such
information confidential in accordance with the terms of this Section); (c) as
required by any Governmental Authority or representative thereof or pursuant to
legal process; (d) to the Agent's or such Lender's independent auditors and
other professional advisors (provided they shall be notified of the confidential
nature of the information); and (e) after the happening and during the
continuance of an Event of Default, to any other Person, in connection with the
exercise by the Agent or the Lenders of rights hereunder or under any of the
other Loan Documents.
SECTION 12.12. Counterparts; Integration.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement, together with the
other Loan Documents, constitutes the entire agreement and understanding among
the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof.
SECTION 12.13. Invalid Provisions.
Any provision of this Agreement or any other Loan Document held by a
court of competent jurisdiction to be illegal, invalid or unenforceable shall
not invalidate the remaining provisions of such Loan Document which shall remain
in full force and effect and the effect thereof shall be confined to the
provision held invalid or illegal.
SECTION 12.14. No Novation.
This Agreement and the other Loan Documents are being amended and
restated in their entirety for the convenience of the parties hereto. This
Agreement and the other Loan Documents merely amend, modify and restate the
indebtedness, liabilities and obligations evidenced hereby and thereby and do
not constitute, and it is the express intent of the parties hereto that this
Agreement and the other Loan Documents do not effect, a novation of the existing
indebtedness, liabilities and obligations incurred by the Borrower and the other
Loan Parties pursuant to the Existing Credit Agreement. Such indebtedness,
liabilities and obligations continue to remain outstanding and are amended and
modified only to the extent this Agreement and the other Loan Documents amend
and modify the Existing Credit Agreement and the original Loan Documents
executed and delivered in connection therewith.
[Signatures on Next Page]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amended and
Restated Credit Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.
REGENCY CENTERS, L.P.
By: Regency Realty Corporation,
its sole general partner
By:
Name:
Title:
REGENCY REALTY CORPORATION
By:
Name:
Title:
STATE OF GEORGIA
COUNTY OF
BEFORE ME, a Notary Public in and for said County, personally appeared
, known to me to be a person who, as ____________________________ of Regency
Realty Corporation, on its own behalf and as the general partner of Regency
Centers, L.P., the entity which executed the foregoing Amended and Restated
Credit Agreement, signed the same, and acknowledged to me that he did so sign
said instrument in the name and upon behalf of said corporation as an officer of
said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name, and affixed
my official seal, this ____ day of February, 1999.
Notary Public
My Commission Expires:
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
WELLS FARGO BANK, NATIONAL ASSOCIATION, as the Agent, as the Swingline Lender
and as a Lender
By:
Name:
Title:
Lending Office (all Types of Loans):
Wells Fargo Bank, National Association
2859 Paces Ferry Road, Suite 1805
Atlanta, Georgia 30339
Attention: Mary Ann Kelly
Telecopier: (404) 435-2262
Telephone: (404) 435-3800
Commitment Amount:
$100,000,000
[Signatures Continued on Next Page]
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
FIRST UNION NATIONAL BANK
By:
Name:
Title:
Lending Office (all Types of Loans):
First Union National Bank
REIT Banking Unit
One First Union Center
Charlotte, North Carolina 28288-0166
Attention: John A. Schissel
Telecopier: (704) 383-6205
Telephone: (704) 383-1967
Commitment Amount:
$100,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
WACHOVIA BANK, N.A.
By:
Name:
Title:
Lending Office (all Types of Loans):
Wachovia Bank, N.A.
191 Peachtree Street, N.E., 30th Floor
Atlanta, Georgia 30303
Attention: Cathy A. Casey
Telecopier: (404) 332-4066
Telephone: (404) 332-5649
Commitment Amount:
$85,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
COMMERZBANK AG, ATLANTA AGENCY
By:
Name:
Title:
By:
Name:
Title:
Lending Office (all Types of Loans)
Commerzbank AG, Atlanta Agency
2 World Financial Center
New York, New York 10281
Attention: David Schwartz/ Christine Finkel
Telecopier: (212) 266-7565
Telephone: (212) 266-7632 / 7375
Commitment Amount:
$50,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
Lending Office (all Types of Loans):
PNC Bank, National Association
One PNC Plaza, 19th Floor
249 Fifth Avenue
Mail Stop- PI-POPP-19-2
Pittsburgh, Pennsylvania 15222
Attention: Jan Dotchin
Telecopier: (412) 768-5754
Telephone: (412) 762-3986
Commitment Amount:
$50,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
AMSOUTH BANK
By:
Name:
Title:
Lending Office (all Types of Loans):
AmSouth Bank
1900 5th Avenue North
AmSouth-Sonat Tower, 9th Floor
Birmingham, Alabama 35203
Attention: Buddy Sharbel
Telecopier: (205) 326-4075
Telephone: (205) 581-7647
Commitment Amount:
$40,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
CHASE BANK OF TEXAS, N.A.
By:
Name:
Title:
Lending Office (all Types of Loans):
Chase Bank of Texas, N.A.
707 Travis, 6th Floor North
Houston, Texas 77572
Attention: Kent Kaiser
Telecopier: (713) 216-7713
Telephone: (713) 216-8699
Commitment Amount:
$35,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
SOUTHTRUST BANK, N.A.
By:
Name:
Title:
Lending Office (all Types of Loans):
SouthTrust Bank, N.A.
420 North 20th Street, 11th Floor
Birmingham, Alabama 35203
Attention: Sam Boroughs- Corporate Banking
Telecopier: (205) 254-8270
Telephone: (205) 254-5039
Commitment Amount:
$35,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
SUNTRUST BANK, ATLANTA
By:
Name:
Title:
Lending Office (all Types of Loans):
SunTrust Bank, Atlanta
Real Estate Finance MC 081
P.O. Box 4418, 50 Hurt Plaza, Suite 700
Atlanta, Georgia 30303
Attention: John Neill
Telecopier: (404) 827-6774
Telephone: (404) 588-8248
Commitment Amount:
$30,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
ING (U.S.) CAPITAL LLC
By:
Name:
Title:
Lending Office (all Types of Loans):
ING Barings
55 E. 52nd Street, 35th Floor
New York, New York 10055
Attention: Wendy Spears/ Layne Poma
Telecopier: (212) 409-5853
Telephone: (212) 409-1854 / 1760
Commitment Amount:
$25,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
LASALLE NATIONAL BANK
By:
Name:
Title:
Lending Office (all Types of Loans):
LaSalle National Bank
135 S. LaSalle Street, Suite 1225
Chicago, Illinois 60603
Attention: Peter Margolin
Telecopier: (312) 904-6691
Telephone: (312) 904-8509
Commitment Amount:
$25,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
STAR BANK, N.A.
By:
Name:
Title:
Lending Office (all Types of Loans):
Star Bank, N.A.
425 Walnut Street, 10th Floor, ML #9205
Cincinnati, Ohio 45202
Attention: Glenn Baumann
Telecopier: (513) 632-5590
Telephone: (513) 632-4473
Commitment Amount:
$25,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
BANK ONE, ARIZONA, NA, a national banking association
By:
Name:
Lending Office (all Types of Loans):
Bank One, Arizona, NA
201 N. Central Avenue, 19th Floor
Phoenix, Arizona 85004
Attention: Todd Popovich
Telecopier: (602) 221-4435
Telephone: (602) 221-2375
Commitment Amount:
$20,000,000
<PAGE>
[Signature Page to Amended and Restated Credit Agreement dated as of
February 26, 1999 with Regency Centers, L.P.]
MELLON BANK, N.A.
By:
Name:
Title:
Lending Office (all Types of Loans)
Mellon Bank, N.A.
One Mellon Bank Center, Room 2940
Pittsburgh, Pennsylvania 15258-0001
Attention: Theresa Sicuro
Telecopier: (412) 234-4146
Telephone: (412) 234-6757
Commitment Amount:
$15,000,000
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
February 26, 1999
among
REGENCY CENTERS, L.P.,
as the Borrower,
REgency realty corpoRation,
as the Parent,
The financial institutions party hereto and their assignees under Section 12.8.
hereof,as the Lenders,
FIRST UNION NATIONAL BANK,
as Syndication Agent,
WACHOVIA BANK, N.A.,
as Documentation Agent,
Each of
COMMERZBANK AKTIENGESELLSCHAFT, ATLANTA AGENCY
and
pnc bank, national Association,
as a Managing Agent,
and
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as the Administrative Agent
<PAGE>
- v -
ATL01/10397815v9 A&B Draft 02/24/99
TABLE OF CONTENTS
ARTICLE I. DEFINITIONS........................................................2
SECTION 1.1. Definitions.................................................2
SECTION 1.2. General; References to Time................................25
ARTICLE II. CREDIT FACILITY..................................................25
SECTION 2.1. Revolving Loans............................................25
SECTION 2.2. Bid Rate Loans.............................................27
SECTION 2.3. Swingline Loans............................................30
SECTION 2.4. Number of Interest Periods.................................32
SECTION 2.5. Continuation...............................................32
SECTION 2.6. Conversion.................................................33
SECTION 2.7. Interest Rate..............................................33
SECTION 2.8. Repayment of Loans.........................................34
SECTION 2.9. Voluntary Reductions of the Commitments....................35
SECTION 2.10. Extension of Revolving Credit Termination Date............36
SECTION 2.11. Term Loan Conversion......................................37
SECTION 2.12. Notes.....................................................37
SECTION 2.13. Option to Replace Lenders.................................37
SECTION 2.14. Amount Limitations........................................38
SECTION 2.15. Letters of Credit.........................................38
ARTICLE III. GENERAL LOAN PROVISIONS.........................................43
SECTION 3.1. Fees.......................................................43
SECTION 3.2. Computation of Interest and Fees...........................44
SECTION 3.3. Pro Rata Treatment.........................................44
SECTION 3.4. Sharing of Payments, Etc...................................45
SECTION 3.5. Defaulting Lenders.........................................45
SECTION 3.6. Purchase of Defaulting Lender's Pro Rata Share.............46
SECTION 3.7. Usury......................................................46
SECTION 3.8. Agreement Regarding Interest and Charges...................47
SECTION 3.9. Statements of Account......................................47
SECTION 3.10. Reliance..................................................47
SECTION 3.11. Taxes.....................................................48
ARTICLE IV. UNENCUMBERED POOL PROPERTIES.....................................49
SECTION 4.1. Acceptance of Unencumbered Pool Properties..................49
SECTION 4.2. Termination of Designation as Unencumbered
Pool Property....................................... ..52
SECTION 4.3. Additional Requirements of Unencumbered Pool Properties....53
ARTICLE V. YIELD PROTECTION, ETC........................................... ..53
SECTION 5.1. Additional Costs; Capital Adequacy.........................53
SECTION 5.2. Suspension of LIBOR Loans..................................54
SECTION 5.3. Illegality............................................. ...55
SECTION 5.4. Compensation.............................................. 55
SECTION 5.5. Treatment of Affected Loans.............................. .56
SECTION 5.6. Change of Lending Office...................................56
ARTICLE VI. CONDITIONS.......................................................56
SECTION 6.1. Effectiveness..............................................56
SECTION 6.2. Conditions to All Loans and Letters of Credit..............59
SECTION 6.3. Conditions to Conversion to Term Loans.....................60
ARTICLE VII. REPRESENTATIONS AND WARRANTIES..................................60
SECTION 7.1. Existence and Power........................................60
SECTION 7.2. Ownership Structure..................... ..................60
SECTION 7.3. Authorization of Agreement, Notes, Loan Documents and
Borrowings................................................61
SECTION 7.4. Compliance of Agreement, Notes, Loan Documents and Borrowing
with Laws, etc.............................................61
SECTION 7.5. Compliance with Law; Governmental Approvals................61
SECTION 7.6. Existing Indebtedness......................................62
SECTION 7.7. Title to Properties; Liens.................................62
SECTION 7.8. Unencumbered Pool Properties...............................62
SECTION 7.9. Leases.....................................................62
SECTION 7.10. Material Contracts........................................62
SECTION 7.11. Margin Stock..............................................63
SECTION 7.12. Transactions with Affiliates..............................63
SECTION 7.13. Absence of Defaults......................................63
SECTION 7.14. Financial Information.....................................63
SECTION 7.15. Litigation................................................64
SECTION 7.16. ERISA.....................................................64
SECTION 7.17. Environmental Matters.....................................65
SECTION 7.18. Taxes.....................................................66
SECTION 7.19. Investment Company; Public Utility Holding Company........66
SECTION 7.20. Full Disclosure...........................................66
SECTION 7.21. Not Plan Assets...........................................66
SECTION 7.22. Business..................................................67
SECTION 7.23. Title to Properties; Necessary Agreements, Licenses,
Permits; Adverse Contracts...............................67
SECTION 7.24. Non-Guarantor Entities................... ................67
ARTICLE VIII. COVENANTS......................................................67
SECTION 8.1. Information................................................67
SECTION 8.2. ERISA Reporting............................................70
SECTION 8.4. Preservation of Existence and Similar Matters..............71
SECTION 8.5. Maintenance of Property....................................72
SECTION 8.6. Conduct of Business........................................72
SECTION 8.7. Insurance..................................................72
SECTION 8.8. Modifications to Material Contracts........................72
SECTION 8.9. Environmental Laws.........................................72
SECTION 8.10. Compliance with Laws and Material Contracts...............73
SECTION 8.11. Inspection of Property, Books and Records.................73
SECTION 8.12. Indebtedness..............................................73
SECTION 8.13. Consolidations, Mergers and Sales of Assets...............74
SECTION 8.14. Use of Proceeds and Letters of Credit.....................74
SECTION 8.15. Tenant Concentration.......................................74
SECTION 8.16. Acquisitions...............................................74
SECTION 8.17. Exchange Listing..........................................75
SECTION 8.18. REIT Status...............................................75
SECTION 8.19. Negative Pledge; Restriction on Distribution Rights.......75
SECTION 8.20. Agreements with Affiliates................................75
SECTION 8.21. ERISA Exemptions..........................................75
SECTION 8.22. Compliance with and Amendment of Charter or Bylaws........76
SECTION 8.23. Distributions.............................................76
SECTION 8.24. New Guarantors............................................76
SECTION 8.25. Acquisitions or Developments of Properties................78
SECTION 8.26. Transfer of Properties to Borrower........................78
SECTION 8.27. Asset Value of Non-Guarantor Entities.....................79
SECTION 8.28. Year 2000 Compliance......................................79
SECTION 8.29. Hedging Agreements........................................79
Article IX. Financial Covenants..............................................79
SECTION 9.1. Minimum Net Worth..........................................79
SECTION 9.2. Ratio of Total Liabilities to Gross Asset Value............80
SECTION 9.3. Ratio of Secured Indebtedness to Gross Asset Value.........80
SECTION 9.4. Ratio of EBITDA to Interest Expense........................80
SECTION 9.5. Ratio of EBITDA to Debt Service, Preferred Stock
Distributions and Reserve for Replacements.................80
SECTION 9.6. Unsecured Interest Expense Coverage........................80
SECTION 9.7. Permitted Investments......................................80
SECTION 9.8. Floating Rate Debt.........................................81
SECTION 9.9. Limitation on Non-Wholly Owned Subsidiaries,
Preferred Stock Entities and Unconsolidated Affiliates.....82
ARTICLE X. DEFAULTS..........................................................82
SECTION 10.1. Events of Default.........................................82
SECTION 10.2. Remedies..................................................85
SECTION 10.3. Allocation of Proceeds....................................85
SECTION 10.4. Rights Cumulative.........................................86
SECTION 10.5. Recission of Acceleration by Majority Lenders.............86
SECTION 10.6. Collateral Account........................................87
ARTICLE XI. THE AGENT........................................................87
SECTION 11.1. Appointment and Authorization.........................87
SECTION 11.2. The Agent and Affiliates..............................88
SECTION 11.3. Collateral Matters....................................89
SECTION 11.4. Approvals of the Lenders..............................89
SECTION 11.5. Notice of Defaults....................................89
SECTION 11.6. Consultation with Experts.............................89
SECTION 11.7. Liability of the Agent................................90
SECTION 11.8. Indemnification of the Agent..........................90
SECTION 11.9. Credit Decision.......................................90
SECTION 11.10. Successor Agent......................................91
SECTION 11.11. Approvals and Other Actions by Majority Lenders......91
SECTION 11.12. Documentation, Syndication and Managing Agents.......92
ARTICLE XII. MISCELLANEOUS...................................................92
SECTION 12.1. Notices...............................................92
SECTION 12.2. No Waivers............................................93
SECTION 12.3. Expenses..............................................93
SECTION 12.4. Stamp, Intangible and Recording Taxes.................94
SECTION 12.5. Indemnification.......................................94
SECTION 12.6. Setoff................................................95
SECTION 12.7. Amendments............................................95
SECTION 12.8. Successors and Assigns................................97
SECTION 12.9. Governing Law.........................................99
SECTION 12.10. Litigation...........................................99
SECTION 12.11. Confidentiality.....................................100
SECTION 12.12. Counterparts; Integration...........................101
SECTION 12.13. Invalid Provisions..................................101
SECTION 12.14. No Novation.........................................101
Exhibit A Form of Assignment and Acceptance Agreement
Exhibit B Form of Designation Agreement
Exhibit C Form of Revolving Note
Exhibit D Form of Bid Rate Note
Exhibit E Form of Swingline Note
Exhibit F Form of Notice of Borrowing
Exhibit G Form of Notice of Continuation
Exhibit H Form of Notice of Conversion
Exhibit I Form of Bid Rate Quote Request
Exhibit J Form of Bid Rate Quote
Exhibit K Form of Bid Rate Quote Acceptance
Exhibit L Form of Notice of Swingline Borrowing
Exhibit M Form of Extension Request
Exhibit N Form of Opinion of Borrower's Counsel
Exhibit O Form of Guaranty
Exhibit P Form of Unencumbered Pool Certificate
Exhibit Q Form of Compliance Certificate
Exhibit R Form of Property Certificate
Schedule 4.1. Unencumbered Pool Properties
Schedule 7.2. Ownership Structure
Schedule 7.6. Existing Indebtedness
Schedule 7.10. Material Contracts
Schedule 7.12. Transactions with Affiliates
Schedule 7.15. Litigation
Schedule 7.16. ERISA
Schedule 7.24. Non-Guarantor Entities
Schedule 8.25. Acquisition or Development of Properties
Schedule 8.29. Hedging Agreements
<TABLE>
<CAPTION>
East Disclosure Schedule
Subsidiaries of Regency Realty Corporation and Equity Ownership Thereof
NATURE OF % OF
ENTITY JURISDICTION OWNER(S) INTEREST OWNERSHIP
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Regency Centers, L.P. Delaware Regency Realty Corporation General Partnership 95%
Outside Investors Limited Partnership 5%
Regency Realty Group, Inc Florida The Regency Group, Inc. Common Stock 93%
(formerly Regency Realty Regency Centers, L.P. Common Stock 7%
Group II, Inc.) Regency Centers, L.P. Preferred Stock 100%
RRC Lender, Inc. Florida Regency Realty Group, Inc. Common Stock 100%
Chestnut Powder, LLC Georgia Regency Realty Group, Inc. Member 100%
Marietta Outparcel, Inc. Georgia Regency Realty Group, Inc. Common Stock 100%
Barnett Shoales, LLC Georgia Regency Realty Group, Inc. Member 100%
Panama Cove, Inc. Florida Regency Realty Group, Inc. Common Stock 100%
Thompson-Nolensville, LLC Florida Regency Realty Group, Inc. Member 100%
Dixon, LLC Florida Regency Realty Group, Inc. Member 100%
Rhett-Remount, LLC Florida Regency Realty Group, Inc. Member 100%
Dunn & Briarcliff, Inc. Florida Regency Realty Group, Inc. Common Stock 100%
Edmunson Orange Corp. Tennessee Regency Realty Group, Inc. Common Stock 100%
Tulip Grove, LLC Florida Edmunson Orange Corp. Member 100%
Hermitage Development, LLC Florida Edmunson Orange Corp. Member 100%
West End Property, LLC Florida Edmunson Orange Corp. Member 100%
RRC FL SPC, Inc. Florida Regency Realty Corporation Common Stock 100%
RRC GA SPC, Inc. Georgia Regency Realty Corporation Common Stock 100%
RRC AL SPC, Inc. Alabama Regency Realty Corporation Common Stock 100%
RRC MS SPC, Inc. Mississippi Regency Realty Corporation Common Stock 100%
RRC General SPC, Inc. Florida Regency Realty Corporation Common Stock 100%
RRC Limited SPC, Inc. Florida Regency Realty Corporation Common Stock 100%
RRC FL Five, Inc. Florida Regency Realty Corporation Common Stock 100%
RRC Acquisitions, Inc. Florida Regency Realty Corporation Common Stock 100%
Regency Office Partnership, L.P. Delaware Regency Centers, L.P. General Partnership 99%
Regency Realty Corporation Limited Partnership 1%
Equiport Associates, L.P. Georgia Regency Centers, L.P. General Partnership 55%
Outside Investors Limited Partnership 45%
Branch/HOP Associates, l.P. Georgia Regency Centers, L.P. General Partnership 50.01%
Outside Investors Limited Partnership 49.99%
Old Fort Associates, L.P. Georgia Regency Centers, L.P. General Partnership 66.70%
Outside Investors Limited Partnership 33.30%
Fieldstone Associates, L.P. Georgia Regency Centers, L.P. General Partnership 7%
Outside Investors Limited Partnership 30%
Treasure Coast Investors, Ltd. Florida RRC General SPC, Inc. General Partnership 99%
RRC Limited SPC, Inc. Limited Partnership 1%
Regency Rosewood Temple Terrace, Florida RRC General SPC, Inc. General Partnership 99%
Ltd. RRC Limited SPC, Inc. Limited Partnership 1%
Landcom Regency Mandarin, Ltd. Florida RRC General SPC, Inc. General Partnership 99%
RRC Limited SPC, Inc. Limited Partnership 1%
RSP IV Criterion, Ltd. Florida RRC General SPC, Inc. General Partnership 99%
RRC Limited SPC, Inc. Limited Partnership 1%
RRC Operating Partnership of Georgia Regency Centers, L.P. General Partnership 16%
Georgia, L.P. Outside Investors Limited Partnership 84%
Regency Ocean East Partnership Florida Regency Centers, L.P. General Partnership 25%
Limited Outside Investors Limited Partnership 75%
R&M Western Partnership, L.P. Delaware Regency Realty Group, Inc. General Partnership 24.00%
Regency Centers, L.P. Limited Partnership 1.00%
Delk Spectrum, L.P. Georgia Regency Realty Corporation General Partnership 6.21%
Outside Investors Limited Partnership 93.79%
OTR/Regency Colorado Realty Ohio R&M Western Partnership, L.P. General Partnership 30%
Holdings, L.P.
OTR/Regency Texas Realty Holdings, Ohio R&M Western Partnership, L.P. General Partnership 30%
L.P.
T&M Allen Development Company Texas R&M Western Partnership, L.P. General Partnership 50%
Topvalco
T&M Arlington Development Company Texas R&M Western Partnership, L.P. General Partnership 50%
Topvalco General Partnership 50%
M&KS Arvada Development, LLC Colorado R&M Western Partnership, L.P. Member 50%
Dillon Real Estate Member 50%
M&KS Parker Development, LLC Colorado R&M Western Partnership, L.P. Member 50%
Dillon Real Estate Member 50%
M&KS Cheyenne Meadows Development, Colorado R&M Western Partnership, L.P. Member 50%
LLC Dillon Real Estate Member 50%
Woodmen Development, LLC Colorado R&M Western Partnership, L.P. Member 50%
Outside Investors Members 50%
R&KS Dell Range, LLC Wyoming R&M Western Partnership, L.P. Member 50%
Dillon Real Estate Member 50%
T&M Frisco Development Company Texas R&M Western Partnership, L.P. General Partnership 50%
Topvalco General Partnership 50%
T&M Shiloh Development Company Texas R&M Western Partnership, L.P. General Partnership 50%
Topvalco General Partnership 50%
T&M Realty No. 1, LLC Georgia Regency Centers, L.P. Member 50%
Topvalco Member 50%
Queensboro Associates, L.P. Delaware Regency Centers, L.P. General Partnership 50%
Outside Investors Limited Partnership 50%
</TABLE>
Exhibit 23
Independent Auditors' Consent
The Board of Directors
Regency Realty Corporation:
We consent to incorporation by reference in the registration statements
(No. 33-86886, No. 333-930, No. 333-2546, and No.333-52089) on Form S-3 and (No.
333-24971) on Form S-8 of Regency Realty Corporation, and to incorporation by
reference in the registration statements (No. No. 333-72899) on Form S-3 and
(No. 333-63723) on Form S-4 of Regency Centers, L.P., of our reports dated
February 1, 1999, except for Note 13 as to which the date is March 1, 1999,
relating to the consolidated balance sheets of Regency Realty Corporation as of
December 31, 1998 and 1997, and the related consolidated statements of
operations, stockholders' equity, and cash flows for each of the years in the
three year period ended December 31, 1998, and related schedule, which reports
appear in the December 31, 1998, annual report on Form 10-K of Regency Realty
Corporation.
KPMG LLP
Jacksonville, Florida
March 12, 1999
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM REGENCY
REALTY CORPORATION'S ANNUAL REPORT FOR THE YEAR ENDED 12/31/98
</LEGEND>
<CIK> 0000910606
<NAME> REGENCY REALTY CORPORATION
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> DEC-31-1998
<CASH> 19,919,693
<SECURITIES> 0
<RECEIVABLES> 18,546,603
<ALLOWANCES> 1,787,686
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 1,250,332,127
<DEPRECIATION> 58,983,738
<TOTAL-ASSETS> 1,240,107,300
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 254,889
<OTHER-SE> 550,486,574
<TOTAL-LIABILITY-AND-EQUITY> 1,240,107,300
<SALES> 0
<TOTAL-REVENUES> 143,296,001
<CGS> 0
<TOTAL-COSTS> 30,844,193
<OTHER-EXPENSES> 25,046,001
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28,786,431
<INCOME-PRETAX> 50,590,074
<INCOME-TAX> 0
<INCOME-CONTINUING> 50,590,074
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 50,590,074
<EPS-PRIMARY> 1.80
<EPS-DILUTED> 1.75
</TABLE>
