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, 1999
( ) 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 $400,826,415 based on the
closing price on the New York Stock Exchange for such stock on March 16, 2000.
The approximate number of shares of Registrant's voting common stock outstanding
was 56,510,825 as of March 16, 2000.
Documents Incorporated by Reference
Portions of the Registrant's Proxy Statement in connection with its 2000 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 markets. As of
December 31, 1999, Regency owned, directly or indirectly, 216 properties in the
United States, containing approximately 24.8 million square feet of gross
leasable area ("GLA").
As of December 31, 1999, Regency had an investment in real estate of
approximately $2.6 billion. Regency's shopping centers were approximately 92.4%
leased as of December 31, 1999.
On February 26, 1999, Regency's stockholders 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 were operating or under construction containing 8.4
million SF of GLA. The total cost to acquire Pacific was $1.157 billion based on
the value of Regency shares issued, the assumption of $379 million of
outstanding debt and other liabilities, and transaction costs.
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" or "Partnership"), a limited
partnership and a public registrant, in 1996, and consolidated substantially all
of its retail shopping centers into RCLP during 1999. 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, 1999, Regency owned approximately 97% of the outstanding common
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.
See also footnote 3, Segments, to the consolidated financial statements included
herein, for a related discussion of the Company's business.
Operating and Investment Philosophy
Regency's key operating and investment objective is to create long-term
shareholder value by:
growing its high quality real estate portfolio of grocery-anchored
neighborhood shopping centers in attractive markets,
maximizing the value of the portfolio through its "Retail Operating
System," which incorporates research based investment strategies,
value-added leasing and management systems, and customer-driven development
programs, and
using conservative financial management and Regency's substantial capital
base to access the most cost effective capital to fund Regency's growth.
Grocery-Anchored Strategy
Regency focuses its investment strategy on grocery-anchored neighborhood
shopping centers which are located in infill locations or high growth corridors.
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
marketing to leading supermarket chains, Regency believes it can attract the
best "side shop" merchants and enhance revenue potential.
<PAGE>
Research Driven Market Selection
Regency targets specific markets in the United States that 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 and investment staff further defines and selects
submarkets and trade areas based on additional analysis of the above data. This
research is used to support either the acquisiton or development decision and
assist in the leasing of major and local tenant space.
Retail Operating System
Regency's Retail Operating System drives its value-added operating strategy.
Its Retail Operating System is characterized
by:
proactive leasing and management;
value enhancing remerchandising initiatives;
Regency's "preferred customer initiative"; and
a customer-driven development and redevelopment program.
Proactive leasing and management
Regency's integrated approach to asset management strengthens its leasing and
management efforts. Asset managers are an integral component of the acquisition
and development teams. Asset 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.
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 has 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.
Preferred customer initiative
Regency is implementing the "Preferred Customer Initiative" to enable the
Company to profit from the platform's national and individual market strength
and to enhance internal growth. The "Preferred Customer Initiative" is Regency's
relationship based operating system that focuses on national and regional
retailers that are the best operators in their merchandising categories. With
this customer focused operating system that is augmented by merchandising
research, the Company is in a unique position to continue to attract and better
serve strong retailers by offering multiple leasing opportunities in centers
that have the anchors and demographics that drive retail sales. The Company also
serves the tenants by creating standard lease forms. Regency's objective is to
create a brand with our tenant customers as the preferred neighborhood center
operator and developer. 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.
Customer-driven development and redevelopment program
Regency conducts its development and redevelopment program in close cooperation
with its major grocery customers including Kroger, Publix, Safeway, and
Albertsons. 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. Regency's developments are customer driven with an executed
lease from the anchor typically in hand prior to purchase of the land. As a
result of the anchor commitment and Regency's relationship with key, side shop
neighborhood retailers, a significant percentage of the GLA is pre-committed
before commencement of construction.
<PAGE>
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. Regency's organizational
documents do not limit the amount of debt that may be incurred; however,
limitations have been established within the covenants of certain loan
agreements related to RCLP's unsecured acquisition and development line of
credit (the "Line') and medium term notes.
Regency's strategy to add shareholder value is designed to enable the Company to
profit from the anomaly between low current pricing for public equity and the
attractive private market valuations of quality neighborhood centers and to
increase returns on invested capital by leveraging Regency's core competencies.
Asset optimization will enable Regency to recycle capital from the sale of
developments at low cap rates and dispositions of properties with limited growth
prospects in the private market at attractive valuations. The proceeds will be
used to finance new development of shopping centers and repurchases of Regency
common stock at attractive yields.
Regency is actively pursuing a joint venture structure to leverage the Company's
expertise and the quality of the operating properties and development pipeline.
Value would be realized by contributing centers and selling developments to the
venture at private market pricing. The joint venture structure will contribute
to cost effectively financing Regency's development program, allow Regency to
recognize profits from sales and expand the shopping center platform. All of
these actions are expected to lead to higher returns on the Company's invested
capital.
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:
the bankruptcy or insolvency of, or a downturn in the business of, any of
its major tenants could reduce cash flow,
the possibility that such tenants will not renew their leases as they
expire or renew at lower rental rates could reduce cash flow,
risks related to the internet and e-commerce reducing the demand for
shopping centers,
vacated anchor space will affect the entire shopping center because of the
loss of the departed anchor tenant's customer drawing power,
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,
the Company's rapid growth could place strains on its resources,
risks relating to leverage, including uncertainty that the Company will be
able to refinance its indebtedness, and the risk of higher interest rates,
unsuccessful development activities could reduce cash flow,
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,
potential liability for unknown or future environmental matters and costs
of compliance with the Americans with Disabilities Act,
the risk of uninsured losses, and
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 a number of 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.
<PAGE>
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 significantly pre-leasing development centers 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 may
amend these policies at any time without a vote of the Company's shareholders.
Employees
The Company's headquarters are located in Jacksonville, Florida. The Company
presently maintains 16 offices in 10 states where it conducts management,
leasing and development activities. As of December 31, 1999, the Company had
approximately 342 employees and believes that relations with its employees are
good.
<TABLE>
<CAPTION>
Item 2. Properties
The Company's properties summarized by state including their gross leasable areas (GLA) follows:
December 31, 1999 December 31, 1998
Location # Properties GLA % Leased # Properties GLA % Leased
-------- ------------ --------- -------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Florida 48 5,909,534 89.9% 46 5,728,347 91.4%
California 36 3,858,628 96.4% - - -
Texas 29 3,849,549 88.8% 5 479,900 84.7%
Georgia 27 2,716,763 92.3% 27 2,737,590 93.1%
Ohio 14 1,923,100 94.0% 13 1,786,521 93.4%
North Carolina 12 1,241,639 97.9% 12 1,239,783 98.3%
Washington 9 1,066,962 90.6% - - -
Colorado 10 903,502 94.1% 5 447,569 89.4%
Oregon 7 616,070 89.2% - - -
Alabama 5 516,061 99.5% 5 516,060 99.0%
Arizona 2 326,984 99.7% - - -
Tennessee 3 271,697 98.9% 4 295,179 96.8%
Michigan 3 250,655 81.7% 2 177,929 81.5%
Delaware 1 232,754 96.3% 1 232,752 94.8%
Kentucky 1 205,061 91.8% 1 205,060 95.6%
Virginia 2 197,324 96.1% 2 197,324 97.7%
Mississippi 2 185,061 96.6% 2 185,061 97.6%
Illinois 1 178,600 85.9% 1 178,600 86.9%
South Carolina 2 162,056 98.8% 2 162,056 100.0%
Missouri 1 82,498 95.8% 1 82,498 99.8%
Wyoming 1 75,000 81.3% - - -
--- ---------- ----- --- ---------- ------
Total 216 24,769,498 92.4% 129 14,652,229 92.9%
=== ========== ===== === ========== ======
</TABLE>
<PAGE>
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, 1999. The table includes 100% of the base rent from leases
of properties owned by joint ventures. Excluding the portion of base rent of
joint ventures not owned by the Company, Kroger's percentage of annualized
Company base rent is 8.96%.
<TABLE>
<CAPTION>
Summary of Principal Tenants > .5% of Annualized Base Rent
(including Properties Under Development)
% to Company Total % of Annualized # of
Tenant SF Owned GLA Rent Base Rent Stores
------- --------- -------------- -------- ---------- -------
<S> <C> <C> <C> <C> <C>
Kroger 3,023,033 12.2% $26,792,538 10.8% 52
Publix 1,589,522 6.4% 10,913,249 4.4% 36
Safeway 1,237,432 5.0% 10,824,727 4.4% 26
Albertsons 727,353 2.9% 6,943,882 2.8% 14
Blockbuster 387,607 1.6% 6,657,620 2.7% 66
Winn Dixie 801,461 3.2% 5,440,487 2.2% 17
Harris Teeter 275,075 1.1% 2,967,636 1.2% 6
Hallmark 208,897 0.8% 2,927,996 1.2% 51
K-Mart 507,645 2.0% 2,615,359 1.1% 6
Walgreens 247,331 1.0% 2,421,341 1.0% 18
Eckerd 253,730 1.0% 2,089,310 0.8% 26
Wal-Mart 486,168 2.0% 1,993,727 0.8% 6
Long's Drugs 207,715 0.8% 1,943,129 0.8% 9
Hollywood Video 102,105 0.4% 1,763,850 0.7% 16
H.E.B. Grocery 150,682 0.6% 1,674,162 0.7% 2
Rite Aid 140,265 0.6% 1,368,549 0.6% 9
Stein Mart 217,445 0.9% 1,262,297 0.5% 6
Gigante 138,286 0.6% 1,246,379 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) 753,072 3.3% $ 7,289,259 2.9%
2000 1,421,654 6.3% 18,741,279 7.4%
2001 1,900,419 8.4% 26,044,118 10.3%
2002 2,067,832 9.1% 26,474,089 10.5%
2003 1,881,410 8.3% 25,000,774 9.9%
2004 2,096,070 9.2% 29,057,071 11.5%
2005 983,698 4.3% 10,588,958 4.2%
2006 941,374 4.1% 10,388,261 4.1%
2007 955,386 4.2% 9,469,798 3.8%
2008 1,056,659 4.7% 8,677,459 3.4%
2009 871,219 3.8% 8,691,709 3.4%
---------- ----- ------------- -----
10 Yr Total 14,928,793 65.8% $ 180,422,775 71.5%
---------- ----- ------------- -----
(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>
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- -------------- -------- ----------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
FLORIDA
Jacksonville /
North Florida
- -------------
Anastasia 1993 1988 102,342 90.2% Publix
Bolton Plaza 1994 1988 172,938 100.0% --
Carriage Gate 1994 1978 76,833 78.6% --
Courtyard (3) 1993 1987 67,794 12.7% Albertson's (4)
Ensley Square (5) 1997 1977 62,362 97.3% Delchamps
Fleming Island 1998 1994 80,205 100.0% Publix
Highlands Square (6) 1998 1999 262,549 80.4% Publix/Winn-Dixie
Julington Village (6) 1999 1999 81,820 69.9% Publix
Millhopper (3) 1993 1974 84,065 97.0% Publix
Newberry Square 1994 1986 180,524 96.8% Publix
Old St. Augustine Plaza 1996 1990 170,220 97.6% Publix
Palm Harbour 1996 1991 172,758 90.7% Publix
Pine Tree Plaza 1997 1999 60,787 98.4% Publix
Regency Court 1997 1992 218,665 96.6% --
South Monroe 1996 1998 80,188 95.5% Winn-Dixie
Tampa / Orlando
- ---------------
Beneva Village Shops 1998 1987 141,532 96.0% Publix
Bloomingdale Square 1998 1987 267,935 95.5% Publix
Kings Crossing Sun City (6) 1999 75,020 68.5% Publix
Mainstreet Square 1997 1988 107,159 93.0% Winn-Dixie
Mariner's Village 1997 1986 117,665 94.4% Winn-Dixie
Market Place - St. Petersburg 1995 1983 86,496 100.0% Publix
Peachland Promenade 1995 1991 82,082 89.9% Publix
Regency Square 1993 1986 341,446 87.7% --
at Brandon (3)
Seven Springs 1994 1986 162,580 86.7% Winn-Dixie
Terrace Walk (3) 1993 1990 50,926 41.3% --
Town Square (6) 1997 1999 43,796 0.0% --
University Collections 1996 1984 106,627 82.6% Kash N Karry (4)
Village Center-Tampa 1995 1993 174,780 90.2% Publix
West Palm Beach /
Treasure Coast
- --------------
Boynton Lakes Plaza 1997 1993 130,925 100.0% Winn-Dixie
Chasewood Plaza (3) 1993 1986 141,034 91.0% Publix
Chasewood Storage (3) 1993 1986 42,810 100.0% --
East Port Plaza 1997 1991 235,842 93.4% Publix
Martin Downs Village Center(3) 1993 1985 121,946 91.7% --
Martin Downs Village Shoppes 1993 1998 49,773 93.0% --
Ocean Breeze (3) 1993 1985 108,209 85.4% Publix
Ocean East (5) 1996 1997 113,328 92.9% Stuart Foods
Tequesta Shoppes 1996 1986 109,766 93.4% Publix
Town Center at Martin Downs 1996 1996 64,546 93.5% Publix
Wellington Market Place 1995 1990 178,155 90.7% Winn-Dixie
Wellington Town Square 1996 1982 105,150 95.8% Publix
Miami / Ft. Lauderdale
- ----------------------
Aventura 1994 1974 102,876 100.0% Publix
Berkshire Commons 1994 1992 106,354 98.5% Publix
Garden Square 1997 1991 90,033 94.0% Publix
North Miami (3) 1993 1988 42,500 100.0% Publix
Palm Trails Plaza 1997 1998 76,067 98.3% Winn-Dixie
Shoppes @ 104 1998 1990 108,189 95.4% Winn Dixie
Tamiami Trail 1997 1987 110,867 94.9% Publix
University Market Place 1993 1990 129,121 78.4% Albertson's (4)
Welleby 1996 1982 109,949 89.9% Publix
--------- ------
Subtotal/Weighted
Average(Florida) 5,909,534 89.9%
--------- ------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- ------------- -------- ----------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
CALIFORNIA
Los Angeles / SCA
- -----------------
Bristol and Warner 1999 1998 121,677 95.6% Food 4 Less
Costa Verde 1999 1988 178,619 100.0% Albertson's
Crossroads Plaza 1999 1988 60,638 100.0% Gigante
El Camino 1999 1995 135,883 99.3% Von's Food & Drug
El Norte Parkway Plaza 1984 87,990 96.9% Von's Food & Drug
Folsom (6) 1999 1999 - 0.0% --
Friars Mission 1999 1989 145,608 100.0% Ralph's
Hawthorne 1999 1999 92,496 99.5% Lucky's
Heritage Plaza 1999 1981 231,883 99.9% Ralph's
Long Beach Corporate Sq. (6) 1999 54,923 100.0% Ralph's
Monrovia (6) 1999 1999 48,187 96.9% --
Morningside Plaza 1999 1996 91,599 100.0% Albertson's
Newland Center 1999 1985 166,492 97.1% Lucky's
Oakbrook Plaza 1999 1982 83,278 94.4% Albertson's
Plaza de Hacienda 1999 1991 125,602 95.6% Food 4 Less
Plaza Hermosa 1999 1984 94,939 100.0% Von's Food & Drug
Rancho Santa Margarita (6) 1999 152,260 51.9% --
Rona Plaza 1999 1989 51,779 100.0% Food 4 Less
Santa Ana Downtown Plaza 1987 100,305 100.0% Food 4 Less
Twin Peaks 1999 1988 198,139 97.6% Lucky's
Ventura Village 1999 1984 76,070 95.7% Von's Food & Drug
Westlake Village Plaza 1975 190,655 98.9% Von's Food & Drug
Woodman - Van Nuys 1999 1992 107,570 96.3% Gigante
San Francisco / NCA
- -------------------
Arden Square 1999 1994 100,162 94.8% --
Blossom Valley 1999 1990 91,969 96.8% Safeway
Country Club 1999 1994 111,251 100.0% Albertson's
Diablo Plaza 1999 1982 63,265 100.0% Safeway (4)
Encina Grande 1999 1965 102,499 100.0% Safeway
Loehmann's Plaza 1999 1983 113,309 94.9% Safeway (4)
San Leandro 1999 1982 50,853 100.0% Safeway (4)
Sequoia Station 1999 1996 103,388 99.5% Safeway (4)
Strawflower Village 1999 1985 78,827 95.4% Safeway
Tassajara Crossing 1999 1990 141,790 98.1% Safeway
The Promenade 1999 1989 136,022 96.2% Bel Air Market
West Park Plaza 1999 1996 88,103 100.0% Safeway
Woodside Central 1999 1993 80,598 100.0% --
--------- ------
Subtotal/Weighted
Average(California) 3,858,628 96.4%
--------- ------
TEXAS
Austin
- ------
Hancock Center 1999 1998 413,757 97.6% H.E.B.
North Hills 1999 1995 144,019 98.7% H.E.B.
Dallas / Ft. Worth
- ------------------
Arapaho Village 1999 1997 108,816 82.4% Tom Thumb
Bethany Lake (5) 1998 1998 74,066 100.0% Kroger
Casa Linda Plaza 1999 1997 324,620 87.4% Albertson's
Cooper Street 1999 1992 133,239 100.0% --
Creekside (5) 1998 1998 96,816 96.0% Kroger
Harwood Hills PH I & II 1996 122,860 93.9% Tom Thumb
Hebron Park (6) 1999 1999 47,312 76.2% Albertson's (4)
Hillcrest Village 1999 1991 14,488 100.0% --
Keller Town Center (6) 1999 113,000 62.4% Tom Thumb
MacArthur Park Phase II (6) 1999 197,643 59.5% Kroger
Market @ Preston Forest 1990 90,170 100.0% Tom Thumb
Market @ Round Rock 1987 123,345 99.8% Albertson's
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- ------------- -------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
TEXAS
Dallas / Ft. Worth (Continued)
- ------------------------------
Mills Pointe 1999 1986 126,238 97.4% Tom Thumb
Mockingbird Commons 1987 121,415 93.2% Tom Thumb
Northview Plaza 1999 1991 117,034 91.6% Kroger
Preston Brook - Frisco (5)(6) 1998 1998 91,274 96.5% Kroger
Preston Park 1999 1985 268,869 99.4% Tom Thumb
Prestonwood (6) 1999 1999 100,421 48.6% Albertson's (4)
Ridglea Plaza 1999 1986 197,961 79.6% Tom Thumb
Shiloh Springs (5) 1998 1998 88,865 96.8% Kroger
Southpark 1999 1997 146,225 93.9% Albertson's
Tarrant Pkwy Plaza (6) 1999 33,500 12.5% Albertson's (4)
The Village 1999 1982 95,148 90.7% Tom Thumb
Trophy Club (6) 1999 1999 107,700 72.1% Tom Thumb
Valley Ranch PH I, II & III 1997 117,281 99.9% Tom Thumb
Village Center - Southlake (5) 1998) 1998 118,172 88.6% Kroger
Houston
- -------
Champions Forest 1999 1983 115,295 96.9% Randall's Food
--------- ------
Subtotal/Weighted
Average(Texas) 3,849,549 88.8%
--------- ------
GEORGIA
Atlanta
- -------
Ashford Place 1997 1993 53,345 100.0% --
Braelin Village (5) 1997 1991 226,522 97.0% Kroger
Briarcliff LaVista 1997 1962 41,098 100.0% --
Briarcliff Village (6) 1997 1990 183,752 92.3% Publix
Buckhead Court 1997 1984 55,227 91.3% --
Cambridge Square 1996 1979 69,650 76.4% Harris Teeter
Cromwell Square 1997 1990 70,282 95.1% --
Cumming 400 1997 1994 126,899 93.7% Publix
Delk Spectrum (3)(5) 1998 1991 100,880 100.0% A&P
Dunwoody Hall 1997 1986 82,527 48.4% --
Dunwoody Village (5) 1997 1975 114,658 92.5% Ingles
Loehmann's Plaza 1997 1986 137,635 95.7% --
Lovejoy Station 1997 1995 77,336 100.0% Publix
Memorial Bend 1997 1995 182,781 92.4% Publix
Orchard Square 1995 1987 85,941 52.3% --
Paces Ferry Plaza 1997 1987 61,693 92.3% --
Powers Ferry Square 1997 1987 97,809 97.1% Harry's
Powers Ferry Village 1997 1994 78,995 99.9% Publix
Rivermont Station 1997 1996 90,267 100.0% Harris Teeter
Roswell Village 1997 1997 143,980 97.7% Publix
Russell Ridge 1994 1995 98,556 100.0% Kroger
Sandy Plains Village 1996 1992 175,035 92.1% Kroger
Sandy Springs Village 1997 1997 45,039 100.0% --
Trowbridge Crossing (5) 1997 1997 62,558 96.3% Publix
Other Markets
- -------------
Evans Crossing 1998 1993 83,681 100.0% Kroger
LaGrangeMarketplace(3) 1993 1989 76,327 95.2% Winn-Dixie
Parkway Station (5) 1996 1983 94,290 85.0% Kroger
--------- ------
Subtotal/Weighted
Average(Georgia) 2,716,763 92.3%
--------- ------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- ------------- -------- ----------- --------- ---------- --------
<S> <C> <C> <C> <C> <C>
OHIO
Cincinnati
- ----------
Beckett Commons 1998 1995 112,936 100.0% Kroger
Cherry Grove 1998 1997 185,498 100.0% Kroger
Hamilton Meadows 1998 1989 126,252 97.8% Kroger (4)
Hyde Park Plaza 1997 1995 374,544 98.1% Kroger/Winn-Dixie
Shoppes at Mason 1998 1997 80,880 95.1% Kroger
Silverlake 1998 1988 100,246 93.4% Kroger
Westchester Plaza 1998 1988 88,181 100.0% Kroger
Columbus
East Pointe 1998 1993 86,524 95.1% Kroger
Hampstead Village (6) 1999 91,805 82.5% Kroger
Kingsdale (6) 1997 1999 270,697 74.0% Big Bear
North Gate/(Maxtown) 1998 1996 85,101 100.0% Kroger
Park Place 1998 1988 106,833 98.6% Big Bear
Windmiller Plaza 1998 1997 120,509 97.1% Kroger
Worthington 1998 1991 93,094 100.0% Kroger
--------- ------
Subtotal/Weighted
Average(Ohio) 1,923,100 94.0%
--------- ------
NORTH CAROLINA
Asheville
- ---------
Oakley Plaza 1997 1988 118,728 100.0% Bi-Lo
Charlotte
- ---------
Carmel Commons 1997 1979 132,651 96.5% Fresh Market
City View 1996 1993 77,550 95.4% Winn-Dixie
Union Square 1996 1989 97,191 98.8% Harris Teeter
Raleigh / Durham
- ----------------
Bent Tree Plaza 1998 1994 79,503 100.0% Kroger
Garner Town Square 1998 1998 221,576 98.1% Kroger
Glenwood Village 1997 1983 42,864 100.0% Harris Teeter
Lake Pine Plaza 1998 1997 87,691 97.6% Kroger
Maynard Crossing 1998 1997 122,814 98.2% Kroger
Southpoint Crossing (5) 1998 1998 103,128 92.6% Kroger
Woodcroft 1996 1984 85,353 100.0% Food Lion
Winston-Salem
- -------------
Kernersville Marketplace 1998 1997 72,590 100.0% Harris Teeter
--------- ------
Subtotal/Weighted
Average(North Carolina) 1,241,639 97.9%
--------- ------
WASHINGTON
Seattle
- -------
Cascade Plaza (6) 1999 1999 215,477 67.1% Safeway
Inglewood Plaza 1999 1985 17,253 100.0% --
James Center (6) 1999 1999 114,175 86.9% Fred Myer
Lake Meridian 1999 1989 165,210 92.7% Fred Myer
Pine Lake Village 1999 1989 100,953 100.0% Quality Foods
Sammamish Highlands 1992 101,289 100.0% Safeway (4)
South Point Plaza 1999 1997 190,454 98.9% Cost Cutters
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- ------------- -------- ----------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
WASHINGTON
Seattle (Continued)
- -------------------
Southcenter 1999 1990 58,281 100.0% --
Thomas Lake 1999 1998 103,870 100.0% Albertson's
--------- ------
Subtotal/Weighted
Average(Washington) 1,066,962 90.6%
--------- ------
COLORADO
Colorado Springs
- ----------------
Cheyenne Meadows (5) 1998 1998 89,893 100.0% King Soopers
Jackson Creek (5) 1998 1999 85,259 98.4% Kroger
Woodman Plaza (6)(5) 1998 1998 97,913 85.7% King Soopers
Denver
- ------
Boulevard Center 1999 1986 92,483 95.2% Safeway (4)
Buckley Square 1999 1978 116,206 93.2% King Soopers
Leetsdale Marketplace 1993 119,916 98.7% Safeway
Littleton Square 1999 1997 94,257 100.0% King Soopers
Lloyd King Center (5) 1998 1998 83,326 100.0% King Soopers
Redlands Marketplace (6) 1999 37,817 36.3% Albertson's (4)
Stroh Ranch (5) 1998 1998 86,432 100.0% King Soopers
--------- ------
Subtotal/Weighted
Average(Colorado) 903,502 94.1%
--------- ------
OREGON
Portland
- --------
Cherry Park Market (Grmr) 1997 113,518 78.5% Safeway
Murrayhill Marketplace 1988 149,214 98.4% Thriftway
Sherwood II (6) 1999 1999 32,600 0.0% Safeway (4)
Sherwood Market Center 1995 124,256 97.3% Albertson's
Sunnside 205 1999 1988 53,279 93.6% --
Walker Center 1999 1987 89,624 100.0% --
West Hills 1999 1998 53,579 100.0% QFC
--------- ------
Subtotal/Weighted
Average(Oregon) 616,070 89.2%
--------- ------
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 67,622 100.0% Winn-Dixie
Other Markets
- -------------
Bonner's Point (3) 1993 1985 87,281 98.6% Winn-Dixie
Marketplace -
Alexander City (3) 1993 1987 162,723 100.0% Winn-Dixie
--------- ------
Subtotal/Weighted
Average(Alabama) 516,061 99.5%
--------- ------
ARIZONA
- -------
Paseo Village 1999 1998 92,399 100.0% ABCO
Pima Crossing 1999 1996 234,585 99.5% Basha's
--------- ------
Subtotal/Weighted
Average(Arizona) 326,984 99.7%
--------- ------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Gross
Year Con- Leasable Percent Grocery
Property Name Acquired structed(1) Area(GLA) Leased(2) Anchor
- -------------- ----------- ----------- --------- --------- -------
<S> <C> <C> <C> <C> <C>
TENNESSEE
Nashville
- ---------
Harpeth Village (5) 1997 1998 70,091 100.0% Albertson's
Nashboro Village 1998 1998 86,811 96.5% Kroger
Peartree Village 1997 1997 114,795 100.0% Harris Teeter
---------- --------
Subtotal/Weighted
Average(Tennessee) 271,697 98.9%
--------- --------
MICHIGAN
- --------
Fenton Marketplace (6) 1999 73,339 73.3% Farmer Jack
Lakeshore 1998 1996 85,395 98.7% Kroger
Waterford (6) 1998 1998 91,921 72.6% Kroger
---------- --------
Subtotal/Weighted
Average(Michigan) 250,655 81.7%
---------- --------
VIRGINIA
- --------
Brookville Plaza 1998 1991 63,664 95.8% Kroger
Statler Square 1998 1996 133,660 96.3% Kroger
---------- --------
Subtotal/Weighted
Average(Virginia) 197,324 96.1%
---------- --------
MISSISSIPPI
- -----------
Columbia Marketplace(3) 1993 1988 136,002 98.7% Winn-Dixie
Lucedale Marketplace(3) 1993 1989 49,059 91.0% Delchamps
---------- --------
Subtotal/Weighted
Average(Mississippi) 185,061 96.6%
---------- --------
SOUTH CAROLINA
- --------------
Merchants Village 1997 1997 79,723 100.0% Publix
Queensborough (5) 1998 1993 82,333 97.7% Publix
---------- --------
Subtotal/Weighted
Average(South Carolina) 162,056 98.8%
---------- --------
DELAWARE
- --------
Pike Creek 1998 1981 232,754 96.3% Acme
KENTUCKY
- --------
Franklin Square 1998 1988 205,061 91.8% Kroger
ILLINOIS
- --------
Hinsdale Lake Commons 1998 1986 178,600 85.9% Dominick's
MISSOURI
- --------
St. Ann Square 1998 1986 82,498 95.8% National
WYOMING
- -------
Dell Range Road (5)(6) 1999 75,000 81.3% King Soopers
---------- --------
Total Weighted Average 24,769,498 92.4%
========== ========
</TABLE>
<PAGE>
<TABLE>
<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) -- Buffalo's Cafe, Olan Mills
Ensley Square (5) -- Radio Shack, Hallmark, Amsouth Bank
Fleming Island -- Mail Boxes, Etc. ,Radio Shack, Hallmark
Highlands Square (6) Eckerd, Big Lots Hair Cuttery, Rent Way, Precision Printing
Julington Village (6) -- Mailboxes, Etc., H&R Block, Hair Cuttery
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, Merle Norman
Pine Tree Plaza -- Great Clips, CiCi's Pizza, Soupersalad
Regency Court CompUSA, Office Depot H&R Block, Mail Boxes Etc., Payless Shoes
Sports Authority Loop Restaurant, Ashley Furniture Homestore
South Monroe Eckerd Rent-A-Center, H&R Block, Blockbuster
Tampa / Orlando
- ----------------
Beneva Village Shops Walgreen's, Ross Dress for Less Stride Rite, GNC, Subway, H&R Block
Bloomingdale Square Eckerd, Wal-Mart, Beall's Radio Shack, H&R Block, Hallmark
Kings Crossing Sun City (6) -- --
Mainstreet Square Walgreen's Rent-A-Center, Discount Auto Parts, Norwest
Mariner's Village Walgreen's Supercuts. Pak Mail, Allstate Insurance
Market Place - St. Peters Eckerd Mail Boxes, Etc., Republic, Weight Watchers
Peachland Promenade -- Southern Video, Subway, GNC
Regency Square TJ Maxx, AMC Pak Mail, Lens Crafter, Jo-Ann Fabrics
at Brandon (3) Staples, Marshalls S&K Famous Brands, Shoe Carnival
Seven Springs Kmart State Farm, Subway, H & R Block
Terrace Walk (3) -- Cici's Pizza, Norwest Financial
Town Square (6) -- --
University Collections Eckerd Hallmark, Jo-Ann's Fabrics, Dockside Imports
Village Center-Tampa Walgreen's, Stein Mart Hallmark, Blockbuster, 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 Homelife H & R Block, GNC, Subway, Cato
Martin Downs Village Center(3) Walgreen's, Coastal Care Payless Theater, Hallmark, Nations Bank
Martin Downs Village Shoppes Walgreen's Mailbox Plus, Allstate, Optical Outlet
Ocean Breeze (3) Walgreen's, Coastal Care Mail Boxes, National Bank, World Travel
Ocean East (5) Coastal Care Mail Boxes, Nations Bank, Royal Dry Cleaners
Tequesta Shoppes Walgreen's Mail Boxes, Etc., Hallmark, Radio Shack
Town Center at Martin Dow -- 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, State Farm, Coldwell Banker
Miami / Ft. Lauderdale
- -----------------------
Aventura Eckerd Footlabs, Bank United, City of Aventura
Berkshire Commons Walgreen's H & R Block, Century 21, Allstate
Garden Square Eckerd Subway, GNC, Hair Cuttery
North Miami (3) Eckerd --
Palm Trails Plaza -- Mail Boxes, Sal's Pizza, Personnel One
Shoppes @ 104 -- Mail Boxes Etc., GNC, Subway
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)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
<S> <C> <C>
CALIFORNIA
Los Angeles / SCA
- -----------------
Bristol and Warner -- Banner Central, Party Supply, Domino's
Costa Verde Pier 1, Bookstar Blockbuster Video, US Post Office, Subway
Crossroads Plaza -- --
El Camino Sav-On Drugs Kinkos, Bank America, State Farm
El Norte Parkway Plaza -- Our Fitness, Great Clips
Folsom (6) -- --
Friars Mission Long's Drugs H&R Block, Mail Boxes Etc., Subway
Hawthorne -- Hollywood Video, Radio Shack, GNC
Heritage Plaza Sav-On Drugs, Ace Hardware Bank of America, H&R Block, Hallmark
Long Beach Corporate Sq. -- --
Monrovia (6) Ross Dress for Less Simmons Beautyrest, Airtouch Cellular
Morningside Plaza -- Hallmark, Subway, Mail Boxes Etc.
Newland Center -- Wells Fargo Bank, Kinko's, Starbucks
Oakbrook Plaza -- Century 21, TCBY Yogurt, Subway
Plaza de Hacienda -- Kragen Auto Parts, Taco Bell
Plaza Hermosa Sav-On Drugs Blockbuster Video, Hallmark, Mail Boxes Etc.
Rancho Santa Margarita (6 Marshalls, Staples --
Rona Plaza -- Home Video, Acapulco Travel
Santa Ana Downtown Plaza Thrifty Drug Blockbuster Video, Little Caesars Pizza
Twin Peaks Target Starbucks, Subway, GNC, Clothestime
Ventura Village -- Blockbuster Video, Papa Johns Pizza
Westlake Village Plaza Long's Drugs Bank of America, Citibank, Blockbuster Video
Woodman - Van Nuys -- Supercuts, H&R Block, Chief Auto Parts
San Francisco / NCA
- -------------------
Arden Square Jo-Ann Fabrics, Office Max Beverages & More, Great Clips
Blossom Valley Long's Drugs US Post Office, Hallmark, Great Clips
Country Club Long's Drugs Blockbuster Video, Subway, GNC
Diablo Plaza Jo-Ann Fabrics Hallmark, Mail Boxes Etc., Clothestime
Encina Grande Walgreens Blockbuster Video, Radio Shack, Mail Boxes
Loehmann's Plaza Long's Drugs, Loehmann's Starbucks, Hallmark, Blockbuster Video
San Leandro -- Radio Shack, Hallmark, Blockbuster Video
Sequoia Station Long's Drugs, Old Navy Starbucks, Sees Candie, United Airlines
Barnes and Noble
Strawflower Village -- Hallmark, Mail Boxes Etc., Subway
Tassajara Crossing Long's Drugs, Ace Hardware Citibank, Hallmark, Petco, GNC
The Promenade Long's Drugs Bank of America, Mail Boxes Etc., GNC
West Park Plaza Rite Aid Blockbuster Video, Starbucks, Supercuts
Woodside Central Marshalls Hollywood Video, Pier 1 Imports, GNC
Subtotal/Weighted
Average(California)
TEXAS
Austin
- -------
Hancock Center Sears, Old Navy Hollywood Video, Radio Shack, GNC
North Hills -- Hollywood Video, Hallmark, Subway
Dallas / Ft. Worth
- ------------------
Arapaho Village -- H&R Block, Hallmark, GNC, Mail Boxes Etc.
Bethany Lake (5) -- Boss Cleaners, Mr. Parcel, Fantastic Sams
Casa Linda Plaza Eckerd, Petco Mail Boxes Etc, Blockbuster Video, Hallmark
Cooper Street Circuit City, Office Max, Jo-Ann Fabrics, Mail Boxes Etc., State Farm
Sears Homelife
Creekside (5) -- Hollywood Video, CICI's,Fantastic Sams
Harwood Hills PH I & II -- Good Year, Sport Clips, Pac N Mail
Hebron Park (6) -- Blockbuster Video, Hallmark, GNC
Hillcrest Village -- Blockbuster Video, American Airlines
Keller Town Center (6) -- Sports Clips, Custom Cleaners
MacArthur Park Phase II ( Barnes & Noble Coldwell Bankers, Great Clips
Market @ Preston Forest -- Nations Bank, Fantastic Sams
Market @ Round Rock -- Radio Shack, H&R Block, Merle Norman
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
<S> <C> <C>
TEXAS
Dallas / Ft. Worth (Continued)
- ------------------------------
Mills Pointe -- Blockbuster Video, Hallmark, H&R Block
Mockingbird Commons -- State Farm, GNC, Starbucks
Northview Plaza -- Blockbuster Video, Merle Norman, Pro-Cuts
Preston Brook - Frisco (5 -- Coldwell Banker, GNC, Hair Cuttery
Preston Park Sony Theatres Bath & Body Works, Blockbuster Video
Hallmark, Mail Boxes Etc., Starbucks
Prestonwood (6) -- Hallmark, Blockbuster Video, McAlister's
Ridglea Plaza Eckerd, Stein Mart Radio Shack, Mail Boxes Etc., Pro-Cuts
Shiloh Springs (5) -- GNC, Great Clips, Cardsmart
Southpark Bealls H & R Block, GNC, Mail Boxes Etc.
Tarrant Pkwy Plaza (6) -- Subway, Great Clips, Custom Cleaners
The Village -- Famous Footwear, Hallmark, Boston Market
Trophy Club (6) -- Blockbuster, Bank of America, Subway
Valley Ranch PH I, II & I -- Mail Boxes Etc., GNC, H&R Block
Village Center - Southlak -- Radio Shack, Papa Johns, Smoothie King
Houston
- --------
Champions Forest Eckerd Mail Boxes Etc., GNC, Fantastic Sams
Subtotal/Weighted
Average(Texas)
GEORGIA
Atlanta
- -------
Ashford Place Pier 1 Imports Baskin Robbin, Mail Boxes, Merle Norman
Braelin Village (5) Kmart Baskin Robbins, Mail Boxes Etc.,
Manhattan Bagel, Blockbuster Video, GNC
Briarcliff LaVista Drug Emporium Supercuts, Trust Company Bank
Briarcliff Village (6) Eckerd, TJ Maxx, Office Depot Subway, Hair Cuttery, Famous Footwear
Buckhead Court -- Pavillion, Bellsouth Mobility
Outback Steakhouse
Cambridge Square -- Allstate, AAA Mail & Pkg., Wachovia
Cromwell Square CVS Drug, Haverty's Furniture First Union, Bellsouth Mobility
Hancock Fabrics
Cumming 400 Big Lots Pizza Hut, Hair Cuttery, Autozone
Delk Spectrum (3)(5) Eckerd Mail Boxes, Etc., GNC, Blockbuster Video
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 -- Blockbuster Video, Nations Bank
Sherwin Williams
Powers Ferry Square CVS Drug Domino's Pizza, Dunkin Donuts, Supercuts
Powers Ferry Village CVS Drug Mail Boxes, Etc., Blimpies
Rivermont Station CVS Drug Pak Mail, GNC, Wolf Camera
Roswell Village Eckerd, Ace Hardware Hallmark, Pizza Hut, Scholtzyky's
Russell Ridge -- Pizza Hut, Pak Mail, Hallmark, GNC
Sandy Plains Village Stein Mart H & R Block, Mail Boxes Etc., Subway
Sandy Springs Village -- Air Touch, Blockbuster Video, Steinway Piano
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)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
<S> <C> <C>
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 Walgreen's, Michaels, Radio Shack, H&R Block, Hallmark
Barnes & Noble, Old Navy Blockbuster Video, US Post Office, Kinkos
Shoppes at Mason -- Mail Boxes Etc., 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
Hampstead Village (6) -- Blockbuster Video, Great Clips
Kingsdale (6) Stein Mart, Limited Hallmark, Goodyear, Jenny Craig
S&K Menswear Famous Footware
North Gate/(Maxtown) -- Hallmark, 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)
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 CVS Drug, Public Library Bellsouth, Willie's Music
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, Shoe Carnival
Glenwood Village -- Domino's Pizza, Simple Pleasures
Lake Pine Plaza -- H & R Block, GNC, Great Clips
Maynard Crossing -- Mail Boxes, Etc., GNC, Hallmark
Southpoint Crossing (5) -- Wolf Camera, GNC, H&R Block
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)
- -------------------------
WASHINGTON
Seattle
- -------
Cascade Plaza (6) Long's Drugs JoAnn Fabrics, Fashion Bug
Inglewood Plaza -- Subway, Domino's Pizza
James Center (6) -- Kinko's, Hollywood Video, U.S. Bank
Lake Meridian Bartell Drugs Mail Boxes Etc., Starbucks, Home Video
Pine Lake Village Rite Aid Blockbuster Video, Starbucks, Mail Post
Sammamish Highlands Bartell Drugs, Ace Hardware Hollywood Video, Starbucks, GNC, H&R Block
South Point Plaza Rite Aid, Office Depot, Outback Steakhouse, Mail Boxes Etc.
Pep Boys
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
<S> <C> <C>
WASHINGTON
Seattle (Continued)
- -------------------
Southcenter Target (4) GTE Wireless, Supercuts, Starbucks
Thomas Lake Rite Aid Blockbuster Video, Great Clips, Subway
Subtotal/Weighted
Average(Washington)
- -------------------------
COLORADO
Colorado Springs
- ----------------
Cheyenne Meadows (5) -- Hallmark, Nail Center, Cost Cutters
Jackson Creek (5) -- Cost Cutters, Polo Cleaners
Woodman Plaza (6)(5) -- Cost Cutters, GNC, The Nail Center
Denver
- ------
Boulevard Center -- Bennigans, Great Clips, Mail Boxes Etc.
Buckley Square True Value Hardware Hollywood Video, Radio Shack, Subway
Leetsdale Marketplace -- Blockbuster Video, Radio Shack, GNC
Littleton Square Walgreens Blockbuster Video, Hallmark, H&R Block
Lloyd King Center (5) -- GNC, Cost Cutters, Hollywood Video
Redlands Marketplace (6) -- Redland Floral & Gifts
Stroh Ranch (5) -- Cost Cutters, Post Net, Dry Clean Station
Subtotal/Weighted
Average(Colorado)
OREGON
Portland
- --------
Cherry Park Market (Grmr) -- Hollywood Video, Subway, Baskin Robbins
Murrayhill Marketplace -- True Value, World Gym, State Farm
Sherwood II (6) -- --
Sherwood Market Center -- Hallmark, Blimpies, GNC, Supercuts
Sunnside 205 -- Kinko's, State Farm, Coffee Bistro
Walker Center Sportmart Blockbuster Video, Postal Annex
West Hills -- Blockbuster Video, GNC, Starbucks
Subtotal/Weighted
Average(Oregon)
ALABAMA
Birmingham
- ----------
Villages of Trussville (3) CVS Drug Head Start, Cellular One, Mattress Max
West County Marketplace (3) Rite Aid, Wal-Mart Domino's Pizza, GNC, Cato Plus
Montgomery
- ----------
Country Club (3) Rite Aid Radio Shack, Subway, Beltone, GNC
Other Markets
- -------------
Bonner's Point (3) Wal-Mart Subway, Domino's Pizza, Cato
Marketplace - Wal-Mart Domino's Pizza, Subway, Hallmark
Alexander City (3)
Subtotal/Weighted
Average(Alabama)
ARIZONA
- -------
Paseo Village Walgreens Domino's Pizza, Fantastic Sams
Pima Crossing Stein Mart Pier 1 Imports, Blockbuster Video, GNC
Subtotal/Weighted
Average(Arizona)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Drug Store & Other
Property Name Other Anchors Tenants
- ---------------------------- -------------------------- ----------------------------------------------------
<S> <C> <C>
TENNESSEE
Nashville
- ---------
Harpeth Village (5) -- Mail Boxes, Etc., Heritage Cleaners, Great Clips
Nashboro Village -- Hallmark, Fantastic Sams, Cellular Sales
Peartree Village Eckerd, Office Max Hollywood Video, AAA Auto, Royal Thai
Subtotal/Weighted
Average(Tennessee)
MICHIGAN
- --------
Fenton Marketplace (6) -- --
Lakeshore Rite Aid Hallmark, Subway, Baskin Robbins
Waterford (6) -- Supercuts, Hollywood Entertainment
Subtotal/Weighted
Average(Michigan)
VIRGINIA
- --------
Brookville Plaza -- H&R Block, Cost Cutters, Jenny Craig
Statler Square CVS Drug, 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 Subway, Cato, Byrd's Cleaners
Subtotal/Weighted
Average(Mississippi)
SOUTH CAROLINA
- --------------
Merchants Village -- Mail Boxes Etc., Hollywood Video, Hallmark
Queensborough (5) -- Mail Boxes, Etc., Supercuts, Pizza Hut
Subtotal/Weighted
Average(South Carolina)
- -------------------------
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, Blockbuster Video, Fannie Mae
MISSOURI
- --------
St. Ann Square Bally Total Fitness Great Clips, US Navy, US Marines
WYOMING
- -------
Dell Range Road (5)(6) -- --
</TABLE>
<PAGE>
(1) Or latest renovation
(2) Includes development properties. If development properties are excluded,
the total percentage leased would be 95.5% for Partnership shopping centers
and 95.0% for Company shopping centers.
(3) Company-owned property not owned by 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.
<PAGE>
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 stockholder vote during the fourth quarter of
1999.
PART Il
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 1999 and
1998.
<TABLE>
<CAPTION>
1999 1998
----------------------------------- --------------------------------------
Cash Cash
High Low Dividends High Low Dividends
Price Price Declared Price Price Declared
------- -------- --------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
March 31 $ 23.125 18.750 .46 27.812 24.750 .44
June 30 22.500 19.000 .46 26.687 24.062 .44
September 30 22.125 19.875 .46 26.500 20.500 .44
December 31 20.813 18.750 .46 23.437 20.250 .44
</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.
The Company intends to pay regular quarterly distributions to its common
stockholders. 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 stockholders 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
stockholder's common stock. In order to maintain its qualification as a REIT,
the Company must make annual distributions to stockholders of at least 95% of
its taxable income (90% effective January 1, 2001). 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
stockholders to automatically reinvest distributions, as well as, make voluntary
cash payments towards the purchase of additional shares.
<PAGE>
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 stockholders.
On September 3, 1999, the Company through RCLP issued $85 million of 8.75%
Series B Cumulative Redeemable Preferred Units ("Series B Preferred Units") to
an institutional investor in a private placement. The issuance involved the sale
of 850,000 Series B Preferred Units for $100.00 per unit. The Series B Preferred
Units, which may be called by the Partnership at par on or after September 3,
2004, have no stated maturity or mandatory redemption, and pay a cumulative,
quarterly dividend at an annualized rate of 8.75%. At any time after September
3, 2009, the Series B Preferred Units may be exchanged for shares of 8.75%
Series B Cumulative Redeemable Preferred Stock of the Company at an exchange
rate of one share of Series B Preferred Stock for one Series B Preferred Unit.
The Series B Preferred Units and Series B Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were used to
reduce the Line.
On September 3, 1999, the Company through RCLP issued $75 million of 9.0% Series
C Cumulative Redeemable Preferred Units ("Series C Preferred Units") to an
institutional investor in a private placement. The issuance involved the sale of
750,000 Series C Preferred Units for $100.00 per unit. The Series C Preferred
Units, which may be called by the Partnership at par on or after September 3,
2004, have no stated maturity or mandatory redemption, and pay a cumulative,
quarterly dividend at an annualized rate of 9.0%. At any time after September 3,
2009, the Series C Preferred Units may be exchanged for shares of 9.0% Series C
Cumulative Redeemable Preferred Stock of the Company at an exchange rate of one
share of Series C Preferred Stock for one Series C Preferred Unit. The Series C
Preferred Units and Series C Preferred Stock are not convertible into common
stock of the Company. The net proceeds of the offering were used to reduce the
Line.
On September 29, 1999, the Company through RCLP issued $50 million of 9.125%
Series D Cumulative Redeemable Preferred Units ("Series D Preferred Units") to
an institutional investor in a private placement. The issuance involved the sale
of 500,000 Series D Preferred Units for $100.00 per unit. The Series D Preferred
Units, which may be called by the Partnership at par on or after September 29,
2004, have no stated maturity or mandatory redemption, and pay a cumulative,
quarterly dividend at an annualized rate of 9.125%. At any time after September
29, 2009, the Series D Preferred Units may be exchanged for shares of 9.125%
Series D Cumulative Redeemable Preferred Stock of the Company at an exchange
rate of one share of Series D Preferred Stock for one Series D Preferred Unit.
The Series D Preferred Units and Series D Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were used to
reduce the Line.
During 1998, the Company acquired 43 shopping centers and joint ventures for a
total investment of $384.3 million ("1998 Acquisitions"). With respect to these
acquisitions, during 1999, the Company paid contingent consideration valued at
$9.0 million consisting of 69,555 Units, 3,768 shares of common stock, and $7.0
million. During 2000, the Company may pay contingent consideration of up to an
estimated $7.5 million, through the issuance of Units, stock and the payment of
cash.
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 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. During 1999, 3,682 additional units
were issued as contingent consideration.
<PAGE>
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 1999, the Company issued 298,064 additional Units and shares of common
stock valued at $5.9 million to Branch as contingent consideration for the
satisfaction of certain performance criteria of the properties acquired. 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. 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.
During 1999, the holders of all of Regency's Class B stock converted 2,500,000
shares into 2,975,468 shares of common stock.
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 stockholders.
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, 1999, 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.
<PAGE>
<TABLE>
<CAPTION>
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Operating Data:
Revenues:
Rental revenues $ 278,960 130,487 88,855 43,433 31,555
Other non-rental revenues 18,239 11,863 8,448 3,444 2,426
Equity in income of investments
in real estate partnerships 4,688 946 33 70 4
------------- ----------- ----------- ----------- ------------
Total revenues 301,887 143,296 97,336 46,948 33,985
------------- ----------- ----------- ----------- ------------
Operating expenses:
Operating, maintenance and real
estate taxes 67,457 30,844 22,904 12,065 8,683
General and administrative 19,747 15,064 9,964 6,048 4,894
Depreciation and amortization 48,612 25,046 16,303 8,059 5,854
------------- ----------- ----------- ----------- -----------
- - Total operating expenses 135,816 70,954 49,171 26,172 19,431
------------- ----------- ----------- ----------- ------------
Interest expense, net of interest income 57,870 26,829 18,667 10,811 8,969
------------- ----------- ----------- ----------- ------------
Income before minority interests and sale of
real estate investments 108,201 45,513 29,498 9,965 5,585
(Loss) gain on sale of real estate investments (233) 10,726 451 - -
------------- ----------- ----------- ----------- ------------
Income before minority interests 107,968 56,239 29,948 9,965 5,585
Minority interest of exchangeable
operating partnership units (2,898) (1,826) (2,042) - -
Minority interest of limited partners (2,856) (464) (505) - -
Minority interest preferred unit distribution (12,368) (3,359) - - -
------------- ----------- ----------- ----------- ------------
Net income 89,846 50,590 27,402 9,965 5,585
Preferred stock dividends (2,245) - - 58 591
------------- ----------- ----------- ----------- ------------
Net income for common stockholders $ 87,601 50,590 $27,402 9,907 4,994
============= ============ =========== =========== ============
Earnings per share:
Basic $ 1.61 1.80 1.28 0.82 0.75
============= ============ =========== =========== ============
Diluted $ 1.61 1.75 1.23 0.82 0.75
============= =========== =========== =========== ============
Other Data:
Common stock outstanding 56,924 25,489 23,992 13,590 9,704
Common Units, preferred stock and Class B
common stock outstanding 3,565 4,337 3,550 29 -
Company owned gross leasable area 24,769 14,652 9,981 5,512 3,981
Number of properties (at end of period) 216 129 89 50 36
Ratio of earnings to fixed charges 1.9 2.1 2.3 1.8 1.5
Balance Sheet Data:
Real estate investments at cost $ 2,636,193 1,250,332 834,402 393,403 279,046
Total assets 2,654,936 1,240,107 826,849 386,524 271,005
Total debt 1,011,967 548,126 278,050 171,607 115,617
Stockholders' equity 1,247,249 550,741 513,627 206,726 147,007
</TABLE>
<PAGE>
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 97%
of the outstanding common partnership units ("Units"). Of the 216 properties
included in the Company's portfolio at December 31, 1999, 198 properties were
owned either fee simple or through partnership interests by RCLP. At December
31, 1999, the Company had an investment in real estate, at cost, of
approximately $2.6 billion of which $2.4 billion or 96% was owned by RCLP.
Shopping Center Business
The Company's principal business is owning, operating and developing
grocery anchored neighborhood shopping centers which are located in infill
locations or high growth corridors. The Company's properties (both operating and
under construction) summarized by state and in order by largest holdings
including their gross leasable areas (GLA) follows: <TABLE>
<CAPTION>
December 31, 1999 December 31, 1998
----------------- -----------------
Location # Properties GLA % Leased * # Properties GLA % Leased *
-------- ------------ --------- ---------- ------------ ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Florida 48 5,909,534 91.7% 46 5,728,347 92.0%
California 36 3,858,628 98.2% - - -
Texas 29 3,849,549 94.2% 5 479,900 86.3%
Georgia 27 2,716,763 92.3% 27 2,737,590 93.4%
Ohio 14 1,923,100 98.1% 13 1,786,521 96.8%
North Carolina 12 1,241,639 97.9% 12 1,239,783 98.3%
Washington 9 1,066,962 98.1% - - -
Colorado 10 903,502 98.0% 5 447,569 95.2%
Oregon 7 616,070 94.2% - - -
Alabama 5 516,061 99.5% 5 516,060 99.0%
Arizona 2 326,984 99.7% - - -
Tennessee 3 271,697 98.9% 4 295,179 96.8%
Michigan 3 250,655 98.7% 2 177,929 99.0%
Delaware 1 232,754 96.3% 1 232,752 94.8%
Kentucky 1 205,061 91.8% 1 205,060 95.6%
Virginia 2 197,324 96.1% 2 197,324 97.7%
Mississippi 2 185,061 96.6% 2 185,061 97.6%
Illinois 1 178,600 85.9% 1 178,600 86.9%
South Carolina 2 162,056 98.8% 2 162,056 100.0%
Missouri 1 82,498 95.8% 1 82,498 99.8%
Wyoming 1 75,000 - - - -
--- ---------- ----- --- ---------- ------
Total 216 24,769,498 95.0% 129 14,652,229 94.3%
=== ========== ===== === ========== ======
</TABLE>
* Excludes properties under construction
<PAGE>
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, 1999:
<TABLE>
<CAPTION>
Grocery Anchor Number of % of % of Annualized Avg Remaining
Stores * Total GLA Base Rent Lease Term
-------------- ---------- ---------- ---------------- ---------------
<S> <C> <C> <C> <C>
Kroger 53 12.2% 10.8% 16 yrs
Publix 36 6.4% 4.4% 12 yrs
Safeway 33 5.0% 4.4% 10 yrs
Albertsons 20 2.9% 2.8% 14 yrs
<FN>
* Includes grocery owned stores
</FN>
</TABLE>
Acquisition and Development of Shopping Centers
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, provided 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 were 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 was approximately $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 closing costs. The
price per share used to determine the purchase price was $23.325 based on the
five day average of the closing stock price of Regency's common stock 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 was accounted
for as a purchase with the Company as the acquiring entity.
During 1998, the Company acquired 43 shopping centers and joint ventures for a
total investment of $384.3 million ("1998 Acquisitions"). With respect to these
acquisitions, during 1999, the Company paid contingent consideration valued at
$9.0 million consisting of 69,555 Units, 3,768 shares of common stock, and $7.0
million. During 2000, the Company may pay contingent consideration of up to an
estimated $7.5 million, through the issuance of Units, stock and the payment of
cash.
Results from Operations
Comparison 1999 to 1998
Revenues increased $158.6 million or 111% to $301.9 million in 1999. The
increase was due primarily to Pacific and the 1998 Acquisitions providing
increases in revenues of $143.9 million during 1999. At December 31, 1999, the
real estate portfolio contained approximately 24.8 million SF and was 92.4%
leased. Minimum rent increased $114.7 million or 111%, and recoveries from
tenants increased $31.8 million or 132%. On a same property basis (excluding
Pacific, the 1998 Acquisitions, and the office portfolio sold during 1998) gross
rental revenues increased $8.9 million or 8%, primarily due to higher base
rents. Other non-rental revenues from property management, leasing, brokerage,
and development services (service operation segment) provided on properties not
owned by the Company were $18.2 million and $11.9 million in 1999 and 1998,
respectively. This increase of $6.3 million was the result of higher gains on
developments sold. 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 unsecured acquisition and development
line of credit (the "Line").
<PAGE>
Operating expenses increased $64.9 million or 91% to $135.8 million in 1999.
Combined operating and maintenance, and real estate taxes increased $36.6
million or 118% during 1999 to $67.5 million. The increases are due to Pacific
and the 1998 Acquisitions generating operating and maintenance expenses and real
estate tax increases of $35.9 million during 1999. On a same property basis,
operating and maintenance expenses and real estate taxes increased $879,000 or
3.4%. General and administrative expenses increased 32% during 1999 to $19.3
million due to the hiring of new employees and related office expenses necessary
to manage the shopping centers acquired during 1999 and 1998. Depreciation and
amortization increased $23.6 million during 1999 or 94% primarily due to Pacific
and the 1998 Acquisitions.
Interest expense increased to $60.1 million in 1999 from $28.8 million in 1998
or 109% due to increased average outstanding loan balances related to the
financing of the 1998 Acquisitions on the Line, the assumption of debt for
Pacific and the debt offerings completed in 1999. Weighted average interest
rates decreased .05% during 1999. See further discussion under Acquisition and
Development of Shopping Centers and Liquidity and Capital Resources.
Net income for common stockholders was $87.6 million in 1999 vs. $50.6 million
in 1998, a $37 million or 73% increase for the reasons previously described.
Diluted earnings per share in 1999 was $1.61 vs. $1.75 in 1998 due to the
increase in net income offset by the dilutive impact from the increase in
weighted average common shares and equivalents of 28.6 million primarily due to
the acquisition of Pacific.
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. Other
non-rental 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.
<PAGE>
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 $151.3 million and $65.0 million for the years ended
December 31, 1999 and 1998, 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 $21.5 million and $8.3 million, during 1999 and
1998, respectively. The Company paid scheduled principal payments of $6.1
million and $3.4 million during 1999 and 1998, respectively. The Company paid
dividends and distributions of $113.1 million and $54.9 million, during 1999 and
1998, 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 $216.6 million and $236.4 million, during 1999
and 1998, respectively, primarily for purposes discussed above under
Acquisitions and Development of Shopping Centers. Net cash provided by financing
activities was $99.5 million and $174.7 million during 1999 and 1998,
respectively, primarily related to the proceeds from the preferred unit and debt
offerings completed during 1999 and 1998. At December 31, 1999, the Company had
50 shopping centers or build to suit projects under construction or undergoing
major renovations, with costs to date of $271.3 million. Total committed costs
necessary to complete the properties under development is estimated to be $135
million and will be expended through 2000.
During 1999, the Board of Directors authorized the repurchase of up to $65
million of the Company's outstanding shares from time to time through periodic
open market transactions or through privately negotiated transactions. At
December 31, 1999, the Company had repurchased 2.7 million shares for $54.5
million.
The Company's outstanding debt at December 31, 1999 and 1998 consists of the
following (in thousands):
1999 1998
---- ----
Notes Payable:
Fixed rate mortgage loans $ 382,715 298,148
Variable rate mortgage loans 11,376 11,051
Fixed rate unsecured loans 370,696 121,296
--------- --------
Total notes payable 764,787 430,495
Acquisition and development line of credit 247,179 117,631
--------- --------
Total $ 1,011,966 548,126
========= ========
During February, 1999, the Company modified the terms of its unsecured line of
credit (the "Line") by increasing the commitment to $635 million. This credit
agreement also provides for a competitive bid facility of up to $250 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 February 2001, 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, (1.00% currently),
which is dependent on the Company's investment grade rating. 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.
Mortgage loans are secured by certain real estate properties, and may be
prepaid, but could be subject to a yield-maintenance premium. Mortgage loans are
generally due in monthly installments of interest and principal and mature over
various terms through 2019. 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>
During 1999, the Company assumed debt with a fair value of $402.6 million
related to the acquisition of real estate, which includes debt premiums of $4.1
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.
On April 15, 1999 the Company, through RCLP, completed a $250 million unsecured
debt offering in two tranches. The Company issued $200 million 7.4% notes due
April 1, 2004, priced at 99.922% to yield 7.42%, and $50 million 7.75% notes due
April 1, 2009, priced at 100%. The net proceeds of the offering were used to
reduce the balance of the Line.
As of December 31, 1999, scheduled principal repayments on notes payable and the
Line were as follows (in thousands):
Scheduled
Principal Term Loan Total
Scheduled Payments by Year Payments Maturities Payments
--------------- -------------- ---------------
2000 $ 5,711 92,942 98,653
2001 8,053 293,027 301,080
2002 4,943 44,091 49,034
2003 4,933 13,299 18,232
2004 5,327 199,866 205,193
Beyond 5 Years 36,883 290,365 327,248
Net unamortized debt premiums - 12,527 12,527
------ ------- ---------
Total $ 65,850 946,117 1,011,967
====== ======= =========
Unconsolidated partnerships and joint ventures had mortgage loans payable of
$50.3 million at December 31, 1999, and the Company's proportionate share of
these loans was $21.2 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 1999 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 or debt offerings, such as those completed in previous years.
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.
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, 2000. 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.
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 38 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.
<PAGE>
Inflation
Inflation has remained relatively low during 1999 and 1998 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 recognized the potential effect Year 2000 could have on the Company's
operations and, as a result, implemented a Year 2000 Compliance Project. The
project included an awareness phase, an assessment phase, a renovation phase,
and a testing phase of the data processing network, accounting and property
management systems, computer and operating systems, software packages, and
building management systems. The project also included surveying major tenants
and financial institutions. The Company's computer hardware, operating systems,
business systems, general accounting and property management systems and
principal desktop software applications are Year 2000 compliant. Additionally,
the Company did not incur and does not expect any business interruption as a
result of any of its customers or financial institutions not being Year 2000
compliant.
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, 1999, 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
2000 2001 2002 2003 2004 Thereafter Total Value
---- ---- ---- ---- ---- ---------- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Fixed rate debt 98,521 42,656 49,034 18,232 205,193 327,248 740,884 753,411
Average interest rate for all debt 7.72% 7.81% 7.78% 7.70% 7.66% 7.81% - -
Variable rate LIBOR debt 131 258,424 - - - - 258,555 258,555
Average interest rate for all debt 6.13% 6.13% - - - - - -
</TABLE>
As the table incorporates only those exposures that exist as of December 31,
1999, 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.
<PAGE>
Forward Looking Statements
This report contains certain forward-looking statements (as such term is defined
in the Private Securities Litigation Reform Act of 1995) and information
relating to the Company that is based on the beliefs of the Company's
management, as well as assumptions made by and information currently available
to management. When used in this report, the words "estimate," "project,"
"believe," "anticipate," "intend," "expect" and similar expressions are intended
to identify forward-looking statements. Such statements involve known and
unknown risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the Company, or industry results, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following: general economic and business conditions; changes
in customer preferences; competition; changes in technology; the integration of
acquisitions, including Pacific; changes in business strategy; the indebtedness
of the Company; quality of management, business abilities and judgment of the
Company's personnel; the availability, terms and deployment of capital; and
various other factors referenced in this report. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date hereof. The Company does not undertake any obligation to publicly
release any revisions to these forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
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 2000 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 47) of the Company since its initial public offering in
October 1993; previously President of the
Company's predecessor real estate division since 1976
Mary Lou Fiala President and Chief Operating Officer since January,
(age 48) 1999 and Director of (age 48) 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.
Bruce M. Johnson Managing Director and Chief Financial Officer of the
(age 52) Company since its initial public offering in October
1993, and Executive Vice President of the Company's
predecessor real estate division since 1979.
<PAGE>
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 2000 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 2000 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 2000 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 1999 financial statements and financial statement schedule,
together with the reports of KPMG LLP are listed on the index immediately
preceding the financial statements at the end of this report.
(b) Reports on Form 8-K:
None
<PAGE>
(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 and Bylaws
(i) Restated Articles of Incorporation of Regency Realty Corporation
as amended to date.
(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).
(c) Indenture dated March 9, 1999 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-3 of Regency Centers, L.P.,
No. 333-72899)
10. Material Contracts
~(a) Regency Realty Corporation 1993 Long Term Omnibus
Plan, as amended, (incorporated by reference to
Exhibit 10(a) to the Company's Form 10-Q filed August 11, 1999)
~*(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
- -------------------------
~ Management contract or compensatory plan or arrangement filed
pursuant to S-K 601(10)(iii)(A).
* Included as an exhibit to Pre-effective Amendment No. 2 to the Company's
registration statement on Form S-11 filed October 5, 1993 (33-67258),
and incorporated herein by reference
<PAGE>
~*(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) 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 (incorporated by reference to the
Company's Form 10-Q filed December 13, 1993)
(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)
(k) 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
(incorporated by reference to the
Company's Form 8-K report filed
March 14, 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)
- --------------------------
~ Management contract or compensatory plan or arrangement filed pursuant to
S-K 601(10)(iii)(A).
* Included as an exhibit to Pre-effective Amendment No. 2 to the Company's
registration statement on Form S-11 filed October 5, 1993 (33-67258), and
incorporated herein by reference
++ Filed as appendices to the Company's definitive proxy statement dated
August 2, 1996 and incorporated herein by reference.
<PAGE>
(C) Amendment No. 3 to Stockholders
Agreement dated September 23, 1998
(incorporated by reference to
Exhibit 8.2 to Schedule 13D/A filed
by Security Capital U.S. Realty on
October 2, 1998)
++ (iii) Registration Rights Agreement dated July 10, 1996.
(l) Stock Grant Plan adopted on January 31, 1994 to grant
stock to employees (incorporated by reference to the
Company's Form 10-Q filed May 12, 1994).
~@ (m) Criteria for Restricted Stock Awards under 1993 Long Term
Omnibus Plan.
~@ (n) Form of 1996 Stock Purchase Award Agreement.
@ (o) Form of 1996 Management Stock Pledge Agreement
relating to the Stock Purchase Award Agreement filed
as Exhibit 10(o).
~@ (p) Form of Promissory Note relating to 1996 Stock Purchase Award
Agreement filed as Exhibit 10(o).
(q) Third Amended and Restated Agreement of Limited Partnership of
Regency Centers, L.P., as amended.
(r) 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.
(i) Letter Agreement dated August 30, 1999
amending the Amended and Restated Credit
Agreement dated February 26, 1999.
(ii) Letter Agreement dated October 29, 1999
amending the Amended and Restated Credit
Agreement dated February 26, 1999.
(s) Purchase and Sale Agreemendment dated as of December 22,
1999 between Regency Realty Group, Inc. and Security
Capital Holdings, S.A. for the purchase of all
outstanding voting stock in PRT Development Corporation.
21.Subsidiaries of the Registrant
23.Consent of KPMG LLP
27.Financial Data Schedule
- --------------------------
~ Management contract or compensatory plan or arrangement filed pursuant
to S-K 601(10)(iii)(A).
++ 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 10-K filed March 25, 1997 and incorporated herein by
reference.
<PAGE>
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 17, 2000 /s/ Martin E. Stein, Jr.
------------------------
Martin E. Stein, Jr.,
Chairman of the Board and
Executive Officer
Date: March 17, 2000 /s/ Mary Lou Fiala
------------------------
Mary Lou Rogers,
President, Chief Operating Officer
and Director
Date: March 17, 2000 /s/ Thomas B. Allin
------------------------
Thomas B. Allin, Director
Date: March 17, 2000 /s/ Raymond L. Bank
------------------------
Raymond L. Bank, Director
Date: March 17, 2000 /s/ A. R. Carpenter
------------------------
A. R. Carpenter, Director
Date: March 17, 2000 /s/ Jeffrey A. Cozad
-------------------------
Jeffrey A. Cozad, Director
Date: March 17, 2000 /s/ J. Dix Druce, Jr.
-------------------------
J. Dix Druce, Jr., Director
Date: March 17, 2000 /s/ John T. Kelley
-------------------------
John T. Kelley, Director
Date: March 17, 2000 /s/ Douglas S. Luke
-------------------------
Douglas S. Luke, Director
Date: March 17, 2000 /s/ John C. Schweitzer
-------------------------
John C. Schweitzer, Director
Date: March 17, 2000 /s/ Lee Wielansky
-------------------------
Lee Wielansky, Director
Date: March 17, 2000 /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, 1999 and 1998 F-3
Consolidated Statements of Operations for the years ended
December 31, 1999, 1998, and 1997 F-4
Consolidated Statements of Stockholders'Equity for the years ended
December 31, 1999, 1998 and 1997 F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998, and 1997 F-7
Notes to Consolidated Financial Statements F-9
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, 1999 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.
F-1
<PAGE>
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, 1999 and 1998, 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, 1999. 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, 1999 and 1998, and the results of their
operations and their cash flows for each of the years in the three-year period
ended December 31, 1999 in conformity with generally accepted accounting
principles.
KPMG LLP
Jacksonville, Florida
January 26, 2000
F-2
<PAGE>
REGENCY REALTY CORPORATION
Consolidated Balance Sheets
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
------- ------
<S> <C> <C>
Assets
Real estate investments, at cost (notes 2, 5 and 9):
Land $ 567,673,872 257,669,018
Buildings and improvements 1,834,279,432 925,514,995
Construction in progress - development for investment 81,995,169 15,647,659
Construction in progress - development for sale 85,305,724 20,869,915
-------------- ---------------
2,569,254,197 1,219,701,587
Less: accumulated depreciation 104,467,176 58,983,738
-------------- ---------------
2,464,787,021 1,160,717,849
Investments in real estate partnerships (note 4) 66,938,784 30,630,540
-------------- ---------------
Net real estate investments 2,531,725,805 1,191,348,389
Cash and cash equivalents 54,117,443 19,919,693
Notes receivable 15,673,125 -
Tenant receivables, net of allowance for uncollectible accounts of
$1,883,547 and $1,787,686 at December 31, 1999
and 1998, respectively 33,515,040 16,758,917
Deferred costs, less accumulated amortization of $8,802,559 and
$5,295,336 at December 31, 1999 and 1998, respectively 12,530,546 6,872,023
Other assets 7,374,019 5,208,278
-------------- ---------------
$ 2,654,935,978 1,240,107,300
============== ===============
Liabilities and Stockholders' Equity
Liabilities:
Notes payable (notes 2 and 5) 764,787,207 430,494,910
Acquisition and development line of credit (note 5) 247,179,310 117,631,185
Accounts payable and other liabilities 48,886,111 19,936,424
Tenants' security and escrow deposits 7,952,707 3,110,370
-------------- ---------------
Total liabilities 1,068,805,335 571,172,889
-------------- ---------------
Preferred units (note 6) 283,816,274 78,800,000
Exchangeable operating partnership units (notes 2 and 6): 44,589,873 27,834,330
Limited partners' interest in consolidated partnerships 10,475,321 11,558,618
-------------- --------------
Total minority interest 338,881,468 118,192,948
-------------- ---------------
Stockholders' equity (notes 2, 6, 7 and 8):
Cumulative convertible preferred stock Series 1 and paid
in capital $.01 par value per share: 542,532 shares
authorized; 537,107 issued and outstanding; liquidation
preference $20.83 per share 12,528,032 -
Cumulative convertible preferred stock Series 2 and paid
in capital $.01 par value per share: 1,502,532 shares authorized;
950,400 shares issued and outstanding; liquidation preference
$20.83 per share 22,168,080 -
Common stock $.01 par value per share: 150,000,000 shares authorized;
59,639,536 and 25,488,989 shares issued at December 31, 1999 and
1998, respectively 596,395 254,889
Special common stock - 10,000,000 shares authorized: Class B $.01 par
value per share: 2,500,000 shares issued and outstanding at
December 31, 1998 - 25,000
Treasury stock; 2,715,851 shares held at December 31, 1999, at cost (54,536,612) -
Additonal paid in capital 1,304,257,610 578,466,708
Distributions in excess of net income (26,779,538) (19,395,744)
Stock loans (10,984,792) (8,609,390)
-------------- ---------------
Total stockholders' equity 1,247,249,175 550,741,463
-------------- ---------------
Commitments and contingencies (notes 9 and 10)
$ 2,654,935,978 1,240,107,300
============== ===============
See accompanying notes to consolidated financial statements
</TABLE>
F-3
<PAGE>
REGENCY REALTY CORPORATION
Consolidated Statements of Operations
For the Years ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
------- ------ ------
<S> <C> <C> <C>
Revenues:
Minimum rent (note 9) $ 218,039,441 103,365,322 70,102,765
Percentage rent 5,000,272 3,012,105 2,151,379
Recoveries from tenants 55,919,788 24,109,519 16,600,925
Other non-rental revenues 18,239,486 11,862,784 8,447,615
Equity in income of investments in
real estate partnerships 4,687,944 946,271 33,311
--------------- --------------- ---------------
Total revenues 301,886,931 143,296,001 97,335,995
--------------- --------------- ---------------
Operating expenses:
Depreciation and amortization 48,611,519 25,046,001 16,303,159
Operating and maintenance 39,204,109 18,455,672 14,212,555
General and administrative 19,274,225 14,564,148 9,324,926
Real estate taxes 28,253,961 12,388,521 8,691,576
Other expenses 472,526 500,000 639,000
--------------- --------------- ---------------
Total operating expenses 135,816,340 70,954,342 49,171,216
--------------- --------------- ---------------
Interest expense (income):
Interest expense 60,067,007 28,786,431 19,667,483
Interest income (2,196,954) (1,957,575) (1,000,227)
--------------- --------------- ---------------
Net interest expense 57,870,053 26,828,856 18,667,256
--------------- --------------- ---------------
Income before minority interests and sale
of real estate investments 108,200,538 45,512,803 29,497,523
(Loss) gain on sale of real estate investments (232,989) 10,725,975 450,902
--------------- --------------- ---------------
Income before minority interests 107,967,549 56,238,778 29,948,425
Minority interest preferred unit distributions (12,368,403) (3,358,333) -
Minority interest of exchangeable partnership units (2,897,778) (1,826,273) (2,041,823)
Minority interest of limited partners (2,855,404) (464,098) (504,947)
--------------- --------------- ---------------
Net income 89,845,964 50,590,074 27,401,655
Preferred stock dividends (2,244,593) - -
--------------- --------------- ---------------
Net income for common stockholders $ 87,601,371 50,590,074 27,401,655
=============== =============== ===============
Net income per share (note 7):
Basic $ 1.61 1.80 1.28
=============== =============== ===============
Diluted $ 1.61 1.75 1.23
=============== =============== ===============
</TABLE>
See accompanying notes to consolidated financial statements
F-4
<PAGE>
REGENCY REALTY CORPORATION
Consolidated Statements of Stockholders' Equity For the Years ended December 31,
1999, 1998 and 1997
<TABLE>
<CAPTION>
Class B
Series 1 Series 2 Common Common Treasury
Preferred Stock Preferred Stock Stock Stock Stock
----------------- ----------------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Balance at
December 31, 1996 $ - - 106,149 25,000 -
Common stock issued to
SC-USREALTY (note 6) - - 75,135 - -
Common stock issued in
secondary offering, net - - 25,448 - -
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - - 1,359 - -
Common stock issued for
partnership units redeemed - - 30,271 - -
Common stock issued to
acquire real estate - - 1,558 - -
Partial forgiveness or
repayment of stock loans - - - - -
Cash dividends declared:
Common stock, $1.68 per share - - - - -
Net income - - - - -
------------- ----------- ---------- ---------- -----------
Balance at
December 31, 1997 $ - - 239,920 25,000 -
Common stock issued to
SC-USREALTY (note 6) - - 4,358 - -
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - - 4,208 - -
Common stock issued for
partnership units redeemed - - 752 - -
Common stock issued to
acquire real estate (note 2) - - 5,651 - -
Reallocation of minority interest - - - - -
Partial forgiveness or
repayment of stock loans - - - - -
Cash dividends declared:
Common stock, $1.76 per share - - - - -
Net income - - - - -
------------- ----------- ----------- ---------- -----------
Balance at
December 31, 1998 $ - - 254,889 25,000 -
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options - - 2,499 - -
Common stock issued or cancelled
under stock loans - - (528) - -
Common stock issued for
partnership units redeemed - - 3,961 - -
Common stock issued for
class B conversion (note 6) - - 29,755 (25,000) -
Preferred stock issued to
acquire Pacific (note 2) 12,654,570 22,392,000 - - -
Common stock issued to
acquire Pacific (note 2) - - 305,669 - -
Common stock issued for
Preferred stock conversion (126,538) (223,920) 150 - -
Repurchase of common stock (note 6) - - - - (54,536,612)
Cash dividends declared:
Common stock ($1.84 per share)
and preferred stock - - - - -
Net income - - - - -
------------- ------------ ----------- ----------- ------------
Balance at December 31, 1999 $ 12,528,032 22,168,080 596,395 - (54,536,612)
============= ============ =========== =========== ============
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
REGENCY REALTY CORPORATION
Consolidated Statements of Stockholders' Equity For the Years ended December 31,
1999, 1998 and 1997
<TABLE>
<CAPTION>
Additional Distributions Total
Paid In in exess of Stock Stockholders'
Capital Net Income Loans Equity
---------- ------------- ----------- -----------
<S> <C> <C> <C> <C>
Balance at
December 31, 1996 $ 223,080,831 (13,981,770) (2,504,433) 206,725,777
Common stock issued to
SC-USREALTY (note 6) 158,475,802 - - 158,550,937
Common stock issued in
secondary offering, net 65,487,586 - - 65,513,034
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options 3,026,241 - - 3,027,600
Common stock issued for
partnership units redeemed 81,246,827 - - 81,277,098
Common stock issued to
acquire real estate 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 $ 535,498,878 (20,494,893) (1,642,252) 513,626,653
Common stock issued to
SC-USREALTY (note 6) 9,637,208 - - 9,641,566
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options 10,746,701 - (7,409,151) 3,341,758
Common stock issued for
partnership units redeemed 1,670,631 - - 1,671,383
Common stock issued to
acquire real estate (note 2) 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 $ 578,466,708 (19,395,744) (8,609,390) 550,741,463
Common stock issued as
compensation, purchased by
directors or officers, or issued
under stock options 3,731,625 - - 3,734,124
Common stock issued or cancelled
under stock loans (1,312,203) - 1,623,552 310,821
Common stock issued for
partnership units redeemed 7,591,712 - - 7,595,673
Common stock issued for
class B conversion (note 6) (4,755) - - -
Preferred stock issued to
acquire Pacific (note 2) - - - 35,046,570
Common stock issued to
acquire Pacific (note 2) 715,434,215 - (3,998,954) 711,740,930
Common stock issued for
Preferred stock conversion 350,308 - - -
Repurchase of common stock (note 6) - - - (54,536,612)
Cash dividends declared:
Common stock ($1.84 per share)
and preferred stock - (97,229,758) - (97,229,758)
Net income - 89,845,964 - 89,845,964
-------------- -------------- ------------- --------------
Balance at December 31, 1999 $ 1,304,257,610 (26,779,538) (10,984,792) 1,247,249,175
============== ============== ============= ==============
</TABLE>
See accompanying notes to consolidated financial statements.
F-6
<PAGE>
REGENCY REALTY CORPORATION
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1999, 1998 and 1997
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ -----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 89,845,964 50,590,074 27,401,655
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 48,611,519 25,046,001 16,303,159
Deferred financing cost and debt premium
amortization 556,100 (822,276) 907,224
Stock based compensation 2,411,907 2,422,547 2,561,139
Minority interest preferred unit distributions 12,368,403 3,358,333 -
Minority interest of exchangeable partnership units 2,897,778 1,826,273 2,041,823
Minority interest of limited partners 2,855,404 464,098 504,947
Equity in income of investments in real estate
partnerships (4,687,944) (946,271) (33,311)
Loss (gain) on sale of real estate investments 232,989 (10,725,975) (450,902)
Changes in assets and liabilities:
Tenant receivables (12,342,419) (5,143,938) (3,596,964)
Deferred leasing commissions (5,025,687) (2,337,253) (1,120,184)
Other assets 74,863 (4,059,535) (1,641,108)
Tenants' security and escrow deposits 1,238,955 517,396 480,743
Accounts payable and other liabilities 12,264,438 4,811,991 (314,001)
---------------- --------------- ---------------
Net cash provided by operating activities 151,302,270 65,001,465 43,044,220
---------------- --------------- ---------------
Cash flows from investing activities:
Acquisition and development of real estate (123,125,133) (229,348,139) (162,244,207)
Acquisition of Pacific, net of cash acquired (9,046,230) - -
Investment in real estate partnerships (30,752,019) (29,068,392) -
Capital improvements (21,535,961) (8,325,492) (5,226,138)
Construction in progress for sale, net of reimbursement (38,246,886) (696,876) (23,776,953)
Proceeds from sale of real estate investments 5,389,760 30,662,197 2,645,229
Distributions received from real estate partnership
investments 704,474 383,853 68,688
---------------- --------------- ---------------
Net cash used in investing activities (216,611,995) (236,392,849) (188,533,381)
---------------- --------------- ---------------
Cash flows from financing activities:
Net proceeds from common stock issuance 223,375 10,225,529 225,094,980
Cash paid for Company stock repurchase program (54,536,612) - -
Proceeds from issuance of exchangeable partnership units - 7,694 2,255,140
Redemption of exchangeable partnership units (1,620,939) - -
Purchase of limited partners'interest in consolidated
partnerships (633,673) - -
Contributions from limited partners in consolidated
partnerships - 4,289,995 -
Net distributions to limited partners in consolidated
partnerships (1,071,831) (672,656) (1,124,480)
Distributions to exchangeable partnership unit holders (3,534,515) (2,023,132) (1,954,375)
Distributions to preferred unit holders (12,368,403) (3,358,333) -
Dividends paid to common stockholders (94,985,165) (49,490,925) (33,914,778)
Dividends paid to preferred stockholders (2,244,593) - -
Net proceeds from fixed rate unsecured loans 249,845,300 99,758,000 -
Net proceeds from issuance of preferred units 205,016,274 78,800,000 -
(Repayment) proceeds of acquisition and development
line of credit, net (142,051,875) 69,500,000 (25,570,000)
Proceeds from mortgage loans 445,207 7,345,000 15,972,920
Repayment of mortgage loans (38,620,067) (37,354,368) (26,408,932)
Deferred financing costs (4,355,008) (2,301,821) (568,449)
---------------- --------------- ---------------
Net cash provided by financing activities 99,507,475 174,724,983 153,782,026
---------------- --------------- ---------------
Net increase in cash and cash equivalents 34,197,750 3,333,599 8,292,865
Cash and cash equivalents at beginning of period 19,919,693 16,586,094 8,293,229
---------------- ---------------- ---------------
Cash and cash equivalents at end of period $ 54,117,443 19,919,693 16,586,094
================ ================ ===============
</TABLE>
F-7
<PAGE>
REGENCY REALTY CORPORATION
Consolidated Statements of Cash Flows
For the Years Ended December 31, 1999, 1998 and 1997
continued
<TABLE>
<CAPTION>
1999 1998 1997
---------- --------- --------
<S> <C> <C> <C>
Supplemental disclosure of cash flow information -
cash paid for interest (net) of capitalized interest
of approximately $11,029,000, $3,417,000 and $1,896,000
in 1999, 1998 and 1997 respectively) $ 52,914,976 24,693,895 18,631,091
================ =============== ===============
Supplemental disclosure of non-cash transactions:
Mortgage loans assumed for the acquisition of
Pacific and real estate $ 402,582,015 132,832,342 142,448,966
================ =============== ===============
Common stock and exchangeable operating partnership units
issued to acquire investments in real estate partnerships $ 1,949,020 - -
================ =============== ===============
Exchangeable operating partnership units, preferred and
common stock issued for the acquisition of Pacific and
real estate $ 771,351,617 37,023,849 96,380,706
================ =============== ===============
Other liabilities assumed to acquire Pacific $ 13,897,643 - -
================ =============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
F-8
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
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 97% of the outstanding common units of Regency
Centers, L.P., ("RCLP" or the "Partnership") 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 preferred or exchangeable operating partnership units and
limited partners' interests in consolidated partnerships. 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 recognized as the tenants
achieve the specified targets as defined in the lease agreements.
Other non-rental revenues from management, leasing and brokerage
fees are recognized as revenue when earned.
F-9
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
(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 are
capitalized as buildings and improvements.
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.
The Company reviews its real estate investments for impairment
whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable.
(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., ("RRG") and PRT Development
Corporation ("PRTDC") are taxable subsidiaries of the Company. RRG
and PRTDC are subject to Federal and state income taxes and file
separate tax returns. RRG and PRTDC had combined taxable income of
$3,465,262, $774,756 and $890,404 for the years ended December 31,
1999, 1998 and 1997, respectively. RRG and PRTDC incurred Federal
and state income tax of $1,502,876, $223,657 and $327,013 in 1999,
1998 and 1997, respectively.
At December 31, 1999 and 1998, the net book basis of real estate
assets exceeds the tax basis by approximately $197 million and
$122 million, respectively, primarily due to the difference
between the cost basis of the assets acquired and their carryover
basis recorded for tax purposes.
F-10
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
(d) Income Taxes (continued)
The following summarizes the tax status of dividends paid during
the years ended December 31 (unaudited):
1999 1998 1997
---- ---- ----
Dividend per share $ 1.84 1.76 1.68
Ordinary income 75% 71% 85%
Capital gain 2% 2% -
Return of capital 23% 27% 15%
(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 $7.1 and $3.3 million at December 31, 1999 and 1998,
respectively. The net loan cost balance was $5.4 and $3.5 million
at December 31, 1999 and 1998, respectively. Such costs are
deferred and amortized over the terms of the respective leases and
loans.
(f) 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,
preferred stock, 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.
(i) 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
F-11
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
(i) Stock Option Plan (continued)
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.
(j) Reclassifications
Certain reclassifications have been made to the 1998 amounts to
conform to classifications adopted in 1999.
2. Acquisitions of Shopping Centers
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,
provided 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. 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 was approximately $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 closing costs. The
price per share used to determine the purchase price was $23.325 based on
the five day average of the closing stock price of Regency's common stock
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 was accounted for as a purchase with the Company as the
acquiring entity.
During 1998, the Company acquired 43 shopping centers and joint ventures
for a total investment of $384.3 million ("1998 Acquisitions"). With
respect to these acquisitions, during 1999, the Company paid contingent
consideration valued at $9.0 million consisting of 69,555 Units, 3,768
shares of common stock, and $7.0 million. During 2000, the Company may
pay contingent consideration of up to an estimated $7.5 million, through
the issuance of Units, stock and the payment of cash.
The operating results of Pacific and the 1998 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 Pacific and all
1998 Acquisitions had occurred on January 1, 1998. 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 $324.7 and $289.9 million as of
December 31, 1999 and 1998, respectively. Pro forma net income for common
stockholders would have been $94.1 and $81.0 million as of December 31,
1999 and 1998,
F-12
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
2. Acquisitions of Shopping Centers (continued)
respectively. Pro forma basic net income per share would have been $1.58
and $1.35 as of December 31, 1999 and 1998, respectively. Pro forma
diluted net income per share would have been $1.58 and $1.34, as of
December 31, 1999 and 1998, respectively. This data does not purport to
be indicative of what would have occurred had Pacific and the 1998
Acquisitions been made on January 1, 1998, or of results which may occur
in the future.
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 that were 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 further adjusts FFO by distributions made to
holders of Units and preferred stock that results in a diluted FFO
amount. The Company considers diluted 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 diluted FFO on the same basis. While management believes that
diluted 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 diluted
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, diluted FFO, and assets for each of the
reportable segments are summarized as follows for the years ended as of
December 31, 1999, 1998, and 1997. Non-segment assets to reconcile to
total assets include cash and deferred costs.
F-13
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
3. Segments (continued)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Revenues:
Retail segment $ 283,647,445 130,900,785 84,203,386
Service operations segment 18,239,486 11,862,784 8,447,615
Office buildings segment - 532,432 4,684,994
------------ ------------ ------------
Total revenues $ 301,886,931 143,296,001 97,335,995
============ ============ ============
Funds from Operations:
Retail segment net operating income $ 216,189,375 100,239,863 63,056,124
Service operations segment income 18,239,486 11,862,784 8,447,615
Office buildings segment net operating income - 349,161 2,928,125
Adjustments to calculate diluted FFO:
Interest expense (60,067,007) (28,786,431) (19,667,483)
Interest income 2,196,954 1,957,575 1,000,227
Earnings from recurring land sales - 901,853 -
General and administrative (19,746,751) (15,064,148) (9,963,926)
Non-real estate depreciation (1,003,092) (679,740) (406,113)
Minority interest of limited partners (2,855,404) (464,098) (504,947)
Minority interest in depreciation
and amortization (584,048) (526,018) (285,280)
Share of joint venture depreciation
and amortization 987,912 688,686 59,038
Dividends on preferred units (12,368,403) (3,358,333) -
------------ ------------ ------------
Funds from Operations - diluted 140,989,022 67,121,154 44,663,380
------------ ------------ ------------
Reconciliation to net income for common stockholders:
Real estate related depreciation
and amortization (47,608,427) (24,366,261) (15,897,046)
Minority interest in depreciation
and amortization 584,048 526,018 285,280
Share of joint venture depreciation
and amortization (987,912) (688,686) (59,038)
(Loss) gain from property sales (232,989) 9,824,122 450,902
Minority interest of exchangeable
partnership units (2,897,778) (1,826,273) (2,041,823)
------------ ------------ ------------
Net income $ 89,845,964 50,590,074 27,401,655
============ ============ ============
</TABLE>
<TABLE>
<CAPTION>
As of December 31
Assets (in thousands): 1999 1998 1997
---------------------- ---- ---- ----
<S> <C> <C> <C>
Retail segment $ 2,463,639 1,187,238 763,721
Service operations segment 123,233 20,870 20,173
Office buildings segment - - 19,258
Cash and other assets 68,064 31,999 23,697
--------- --------- -------
Total assets $ 2,654,936 1,240,107 826,849
========= ========= =======
</TABLE>
F-14
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
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 $66.9
and $30.6 million at December 31, 1999 and 1998, respectively. Net income
is allocated to the Company in accordance with the respective partnership
agreement.
5. Notes Payable and Acquisition and Development Line of Credit
The Company's outstanding debt at December 31, 1999 and 1998 consists of
the following (in thousands):
1999 1998
---- ----
Notes Payable:
Fixed rate mortgage loans $ 382,715 298,148
Variable rate mortgage loans 11,376 11,051
Fixed rate unsecured loans 370,696 121,296
--------- -------
Total notes payable 764,787 430,495
Acquisition and development line of credit 247,179 117,631
--------- -------
Total $ 1,011,966 548,126
========= =======
During February, 1999, the Company modified the terms of its unsecured
acquisition and development line of credit (the "Line") by increasing the
commitment to $635 million. This credit agreement also provides for a
competitive bid facility of up to $250 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 February 2001, 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,
(1.00% currently), which is dependent on the Company's investment grade
rating. 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.
Mortgage loans are secured by certain real estate properties, and 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 2019. 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 1999, the Company assumed debt with a fair value of $402.6 million
related to the acquisition of real estate, which includes debt premiums
of $4.1 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 an adjustment to interest expense.
F-15
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
5. Notes Payable and Acquisition and Development Line of Credit (continued)
On April 15, 1999 the Company, through RCLP, completed a $250 million
unsecured debt offering in two tranches. The Company issued $200 million
7.4% notes due April 1, 2004, priced at 99.922% to yield 7.42%, and $50
million 7.75% notes due April 1, 2009, priced at 100%. The net proceeds
of the offering were used to reduce the balance of the Line.
As of December 31, 1999, scheduled principal repayments on notes payable
and the Line were as follows (in thousands):
<TABLE>
<CAPTION>
Scheduled
Principal Term Loan Total
Scheduled Payments by Year Payments Maturities Payments
------------ ----------- ----------
<S> <C> <C> <C>
2000 $ 5,711 92,942 98,653
2001 8,053 293,027 301,080
2002 4,943 44,091 49,034
2003 4,933 13,299 18,232
2004 5,327 199,866 205,193
Beyond 5 Years 36,883 290,365 327,248
Net unamortized debt premiums - 12,527 12,527
---------- --------- ----------
Total $ 65,850 946,117 1,011,967
========== ========= ==========
</TABLE>
Unconsolidated partnerships and joint ventures had mortgage loans payable
of $50.3 million at December 31, 1999, and the Company's proportionate
share of these loans was $21.2 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 and Minority Interest
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. In connection with the Units
and shares of common stock issued in March 1998 related to earnout
payments, SC-USREALTY acquired 435,777 shares at $22.125 per share in
accordance with their rights as provided for in the Agreement. In
conjunction with the acquisition of Pacific, SC-USREALTY exchanged their
Pacific shares for 22.6 million Regency common shares.
F-16
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
6. Stockholders' Equity and Minority Interest (continued)
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.
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 Line.
On September 3, 1999, the Company through RCLP issued $85 million of
8.75% Series B Cumulative Redeemable Preferred Units ("Series B Preferred
Units") to an institutional investor in a private placement. The issuance
involved the sale of 850,000 Series B Preferred Units for $100.00 per
unit. The Series B Preferred Units, which may be called by the
Partnership at par on or after September 3, 2004, have no stated maturity
or mandatory redemption, and pay a cumulative, quarterly dividend at an
annualized rate of 8.75%. At any time after September 3, 2009, the Series
B Preferred Units may be exchanged for shares of 8.75% Series B
Cumulative Redeemable Preferred Stock of the Company at an exchange rate
of one share of Series B Preferred Stock for one Series B Preferred Unit.
The Series B Preferred Units and Series B Preferred Stock are not
convertible into common stock of the Company. The net proceeds of the
offering were used to reduce the Line.
On September 3, 1999, the Company through RCLP issued $75 million of 9.0%
Series C Cumulative Redeemable Preferred Units ("Series C Preferred
Units") to an institutional investor in a private placement. The issuance
involved the sale of 750,000 Series C Preferred Units for $100.00 per
unit. The Series C Preferred Units, which may be called by the
Partnership at par on or after September 3, 2004, have no stated maturity
or mandatory redemption, and pay a cumulative, quarterly dividend at an
annualized rate of 9.0%. At any time after September 3, 2009, the Series
C Preferred Units may be exchanged for shares of 9.0% Series C Cumulative
Redeemable Preferred Stock of the Company at an exchange rate of one
share of Series C Preferred Stock for one Series C Preferred Unit. The
Series C Preferred Units and Series C Preferred Stock are not convertible
into common stock of the Company. The net proceeds of the offering were
used to reduce the Line.
On September 29, 1999, the Company through RCLP issued $50 million of
9.125% Series D Cumulative Redeemable Preferred Units ("Series D
Preferred Units") to an institutional investor in a private placement.
The issuance involved the sale of 500,000 Series D Preferred Units for
$100.00 per unit. The Series D Preferred Units, which may be called by
the Partnership at par on or after September 29, 2004, have no stated
maturity or mandatory redemption, and pay a cumulative, quarterly
dividend at an annualized rate of 9.125%. At any time after September 29,
2009, the Series D Preferred Units may be exchanged for shares of 9.125%
Series D Cumulative Redeemable Preferred Stock of the Company at an
exchange rate of one share of Series D Preferred Stock for one Series D
Preferred Unit. The Series D Preferred Units and Series D Preferred Stock
are not convertible into common stock of the Company. The net proceeds of
the offering were used to reduce the Line.
As part of the acquisition of Pacific Retail Trust, the Company issued
Series 1 and Series 2 preferred shares. Series 1 preferred shares are
convertible into Series 2 preferred shares on a one-for-one basis and
contain provisions for adjustment to prevent dilution. The Series 1
preferred shares are entitled to a quarterly dividend in an amount equal
to $0.0271 less than the common dividend and are cumulative. Series 2
preferred shares are convertible into common shares on a one-for-one
basis. The Series 2 preferred shares are entitled to quarterly dividends
in an amount equal to the common dividend and are cumulative. The Company
may redeem the preferred shares any time after October 20, 2010 at a
price of $20.83 per share, plus all accrued but unpaid dividends. During
1999, a holder of Series 2 preferred shares converted their shares into
14,987 shares of common stock.
F-17
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
6. Stockholders' Equity and Minority Interest (continued)
During the fourth quarter, the Board of Directors authorized the
repurchase of up to $65 million of the Company's outstanding shares from
time to time through periodic open market transactions or through
privately negotiated transactions. At December 31, 1999, the Company had
repurchased 2.7 million shares for $54.5 million.
During 1999, the holders of all of Regency's Class B stock converted
2,500,000 shares into 2,975,468 shares of common stock.
7. Earnings Per Share
The following summarizes the calculation of basic and diluted earnings
per share for the years ended, December 31, 1999, 1998 and 1997 (in
thousands except per share data):
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
Basic Earnings Per Share (EPS) Calculation:
Weighted average common shares outstanding 53,494 25,150 17,424
======= ======= =======
Net income for common stockholders $ 87,601 50,590 27,402
Less: dividends paid on Class B common stock 1,409 5,378 5,140
------- ------- -------
Net income for Basic EPS $ 86,192 45,212 22,262
======= ======= =======
Basic EPS $ 1.61 1.80 1.28
======= ======= =======
Diluted Earnings Per Share (EPS) Calculation
Weighted average shares outstanding
for Basic EPS 53,494 25,150 17,424
Exchangeable operating partnership units 2,004 1,223 1,243
Incremental shares to be issued under common
stock options using the Treasury method 4 14 80
Contingent units or shares for the acquisition
of real estate - 511 955
------- ------- -------
Total diluted shares 55,502 26,898 19,702
======= ======= =======
Net income for Basic EPS $ 86,192 45,212 22,262
Add: minority interest of exchangeable partnership
units 2,898 1,826 2,042
------- ------- -------
Net income for Diluted EPS $ 89,090 47,038 24,304
======= ======= =======
Diluted EPS $ 1.61 1.75 1.23
======= ======= =======
</TABLE>
The Preferred Series 1 and Series 2 stock and the Class B common stock
are not included in the above calculation because their effects are
anti-dilutive.
F-18
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
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 8.5 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 become fully
exercisable after four years from the date of grant, with the exception
of options issued to directors prior to 1999 which become fully
exercisable after one year.
At December 31, 1999, there were approximately 2.7 million shares
available for grant under the Plan. The per share weighted-average fair
value of stock options granted during 1999 and 1998 was $1.23 and $2.22
on the date of grant using the Black Scholes option-pricing model with
the following weighted-average assumptions: 1999 - expected dividend
yield 9.2%, risk-free interest rate of 5.7%, expected volatility 21%, and
an expected life of 5.3 years; 1998 - expected dividend yield 7.5%,
risk-free interest rate of 4.8%, expected volatility 21%, and an expected
life of 6.5 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 1999 1998 1997
------------------- ---- ---- ----
As reported: $ 87,601 50,590 27,402
Net income per share:
Basic $ 1.61 1.80 1.28
Diluted $ 1.61 1.75 1.23
Pro forma: $ 85,448 49,565 25,777
Net income per share:
Basic $ 1.57 1.76 1.18
Diluted $ 1.57 1.71 1.15
Stock option activity during the periods indicated is as follows:
Number of Weighted-Average
Shares Exercise Price
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
------------- -----------
Granted 860,767 20.70
Pacific Retail Merger 1,251,719 24.24
Forfeited (87,395) 25.69
Exercised (4,000) 17.88
------------- -----------
Outstanding, December 31, 1999 3,729,668 $ 23.61
============= ===========
F-19
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
8. Long-Term Stock Incentive Plans (continued)
The following table presents information regarding all options
outstanding at December 31, 1999.
<TABLE>
<CAPTION>
Weighted
Average Weighted
Number of Remaining Range of Average
Options Contractual Exercise Exercise
Outstanding Life Prices Price
--------------- --------------- --------------- -------------
<S> <C> <C> <C>
423,220 9.31 $ 16.75 - 19.81 $ 19.73
1,388,098 8.68 20.83 - 22.94 21.86
1,918,350 7.42 25.00 - 27.69 25.73
--------- --------- ------------------ ------------
3,729,668 8.10 $ 16.75 - 27.69 $ 23.61
========= ========= ================== =============
</TABLE>
The following table presents information regarding options currently
exercisable at December 31, 1999:
Weighted
Number of Range of Average
Options Exercise Exercise
Exercisable Prices Price
------------ ------------------ --------------
45,731 $ 16.75 - 19.25 $ 19.01
15,899 22.25 - 25.00 23.34
88,681 26.25 - 27.75 26.98
------- ------------------ --------------
150,311 $ 16.75 - 27.75 $ 24.17
======= ================== ==============
Also as part of the Plan, certain officers and employees have received
loans to purchase stock at market rates of interest, have been granted
restricted stock, and have been granted dividend equivalents. During
1999, 1998 and 1997, the Company charged $1,030,645, $1,322,164 and
$1,115,906, respectively, to income on the consolidated statement of
operations related to the Plan.
9. Operating Leases
The Company's properties are leased to tenants under operating leases
with expiration dates extending to the year 2032. Future minimum rents
under noncancelable operating leases as of December 31,1999, excluding
tenant reimbursements of operating expenses and excluding additional
contingent rentals based on tenants' sales volume are as follows:
Year ending December 31, Amount
----------------------- -------------
2000 $ 225,984,790
2001 211,915,900
2002 187,844,994
2003 164,674,498
2004 136,173,121
Thereafter 943,744,557
---------------
Total $ 1,870,337,860
===============
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.
F-20
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
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 1999 and 1998, the Company has established
environmental reserves which amounted to $2.6 million and $2.2 million at
December 31, 1999 and 1998, 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 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
----------------------------------- ---------------------------------
Cash Cash
High Low Dividends High Low Dividends
Price Price Declared Price Price Declared
------- ------ ---------- ------ ------- ----------
<S> <C> <C> <C> <C> <C> <C>
March 31 $ 23.125 18.750 .46 27.812 24.750 .44
June 30 22.500 19.000 .46 26.687 24.062 .44
September 30 22.125 19.875 .46 26.500 20.500 .44
December 31 20.813 18.750 .46 23.437 20.250 .44
</TABLE>
F-21
<PAGE>
REGENCY REALTY CORPORATION
Notes to Consolidated Financial Statements
December 31, 1999
12. Summary of Quarterly Financial Data (Unaudited)
Presented below is a summary of the consolidated quarterly financial data
for the years ended December 31, 1999 and 1998 (amounts in thousands,
except per share data):
<TABLE>
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
--------- -------- --------- ---------
<S> <C> <C> <C> <C>
1999:
Revenues $ 51,422 79,664 79,598 91,203
Net income for
common stockholders 13,456 24,330 23,965 25,850
Net income per share:
Basic .34 .41 .40 .44
Diluted .34 .41 .40 .44
1998:
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
</TABLE>
F-22
<PAGE>
Independent Auditors' Report
On Financial Statement Schedule
The Shareholders and Board of Directors
Regency Realty Corporation
Under date of January 26, 2000, we reported on the consolidated balance sheets
of Regency Realty Corporation as of December 31, 1999 and 1998, 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, 1999, as contained
in the annual report on Form 10-K for the year 1999. 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 1999. 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
January 26, 2000
S-1
<PAGE>
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
<TABLE>
<CAPTION>
Schedule III
Initial Cost Cost Capitalized Total Cost
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements Total
--------- ------------ ---------------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
ANASTASIA SHOPPING PLAZA 1,072,451 3,617,493 176,624 1,072,451 3,794,117 4,866,568
ARAPAHO VILLAGE 837,148 8,031,688 -- 837,148 8,031,688 8,868,836
ARDEN SQUARE 3,140,000 7,420,438 -- 3,140,000 7,420,438 10,560,438
ASHFORD PLACE 2,803,998 9,163,994 345,480 2,583,998 9,729,474 12,313,472
AVENTURA SHOPPING CENTER 2,751,094 9,317,790 277,419 2,751,094 9,595,209 12,346,303
BECKETT COMMONS 1,625,242 5,844,871 269,559 1,625,242 6,114,430 7,739,672
BENEVA 2,483,547 8,851,199 293,537 2,483,547 9,144,736 11,628,283
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 88,422 2,294,960 8,239,658 10,534,618
BLOOMINGDALE 3,861,759 14,100,891 235,565 3,861,759 14,336,456 18,198,215
BLOSSOM VALLEY 7,803,568 10,320,913 -- 7,803,568 10,320,913 18,124,481
BOLTON PLAZA 2,660,227 6,209,110 1,435,951 2,634,664 7,670,624 10,305,288
BONNERS POINT 859,854 2,878,641 189,356 859,854 3,067,997 3,927,851
BOULEVARD CENTER 3,659,040 9,658,227 -- 3,659,040 9,658,227 13,317,267
BOYNTON LAKES PLAZA 2,783,000 10,043,027 43,649 2,783,000 10,086,676 12,869,676
BRAELINN VILLAGE EQUIPORT 4,191,214 12,389,585 883,677 4,191,214 13,273,262 17,464,476
BRIARCLIFF LA VISTA 694,120 2,462,819 583,747 694,120 3,046,566 3,740,686
BRIARCLIFF VILLAGE 4,597,018 16,303,813 1,476,227 4,597,018 17,780,040 22,377,058
BRISTOL WARNER 5,000,000 11,997,016 -- 5,000,000 11,997,016 16,997,016
BROOKVILLE PLAZA 1,208,012 4,205,994 186,518 1,208,012 4,392,512 5,600,524
BUCKHEAD COURT 1,737,569 6,162,941 1,515,521 1,627,569 7,788,462 9,416,031
BUCKLEY SQUARE 2,970,000 5,126,240 -- 2,970,000 5,126,240 8,096,240
CAMBRIDGE SQUARE 792,000 2,916,034 309,747 792,000 3,225,781 4,017,781
CARMEL COMMONS 2,466,200 8,903,187 1,659,743 2,466,200 10,562,930 13,029,130
CARRIAGE GATE 740,960 2,494,750 1,232,323 740,960 3,727,073 4,468,033
CASA LINDA PLAZA 4,515,000 30,809,330 -- 4,515,000 30,809,330 35,324,330
CASCADE PLAZA 3,023,165 10,694,460 -- 3,023,165 10,694,460 13,717,625
CENTER OF SEVEN SPRINGS 1,737,994 6,290,048 1,781,068 1,757,440 8,051,670 9,809,110
CHAMPIONS FOREST 2,665,875 8,678,603 -- 2,665,875 8,678,603 11,344,478
CHASEWOOD PLAZA 1,675,000 11,390,727 5,844,360 2,476,486 16,433,601 18,910,087
CHERRY GROVE 3,533,146 12,710,297 497,290 3,533,146 13,207,587 16,740,733
CHERRY PARK MARKET 2,400,000 16,162,934 -- 2,400,000 16,162,934 18,562,934
CITY VIEW SHOPPING CENTER 1,207,204 4,341,304 53,659 1,207,204 4,394,963 5,602,167
COLUMBIA MARKETPLACE 1,280,158 4,285,745 193,291 1,280,158 4,479,036 5,759,194
COOPER STREET 2,078,891 10,682,189 -- 2,078,891 10,682,189 12,761,080
COSTA VERDE 12,740,000 25,261,188 -- 12,740,000 25,261,188 38,001,188
COUNTRY CLUB 1,105,201 3,709,452 150,765 1,105,201 3,860,217 4,965,418
COUNTRY CLUB CALIF 3,000,000 11,657,200 -- 3,000,000 11,657,200 14,657,200
COURTYARD SHOPPING CENTER 1,761,567 4,187,039 843,408 1,761,567 5,030,447 6,792,014
CROMWELL SQUARE 1,771,892 6,285,288 263,146 1,771,892 6,548,434 8,320,326
CROSSROADS 3,513,903 2,595,055 -- 3,513,903 2,595,055 6,108,958
CUMMING 400 2,374,562 8,420,776 476,617 2,374,562 8,897,393 11,271,955
DELK SPECTRUM 2,984,577 11,048,896 20,949 2,984,577 11,069,845 14,054,422
DIABLO PLAZA 5,300,000 7,535,866 -- 5,300,000 7,535,866 12,835,866
DUNWOODY HALL 1,819,209 6,450,922 983,126 1,819,209 7,434,048 9,253,257
DUNWOODY VILLAGE 2,326,063 7,216,045 2,129,971 2,326,063 9,346,016 11,672,079
EAST POINTE 1,868,120 6,742,983 37,375 1,868,120 6,780,358 8,648,478
EAST PORT PLAZA 3,257,023 11,611,363 283,522 3,257,023 11,894,885 15,151,908
EL CAMINO 7,600,000 10,852,428 -- 7,600,000 10,852,428 18,452,428
EL NORTE PARKWAY PLA 2,833,510 6,332,078 -- 2,833,510 6,332,078 9,165,588
ENCINA GRANDE 5,040,000 10,378,539 -- 5,040,000 10,378,539 15,418,539
ENSLEY SQUARE 915,493 3,120,928 436,060 915,493 3,556,988 4,472,481
EVANS CROSSING 1,468,743 5,123,617 171,720 1,634,997 5,129,083 6,764,080
FLEMING ISLAND 3,076,701 6,291,505 31,752 3,076,701 6,323,257 9,399,958
FRANKLIN SQUARE 2,584,025 9,379,749 478,328 2,584,025 9,858,077 12,442,102
FRIARS MISSION 6,660,000 27,276,992 -- 6,660,000 27,276,992 33,936,992
GARDEN SQUARE 2,073,500 7,614,748 425,298 2,136,135 7,977,411 10,113,546
GARNER FESTIVAL 5,591,099 19,897,197 864,979 5,591,099 20,762,176 26,353,275
GLENWOOD VILLAGE 1,194,198 4,235,476 227,955 1,194,198 4,463,431 5,657,629
HAMILTON MEADOWS 2,034,566 6,582,429 3,380 2,034,566 6,585,809 8,620,375
HAMPSTEAD VILLAGE 2,769,901 5,152,103 -- 2,769,901 5,152,103 7,922,004
HANCOCK 8,231,581 24,248,620 -- 8,231,581 24,248,620 32,480,201
HARPETH VILLAGE FIELDSTONE 2,283,874 5,559,498 3,537,926 2,283,874 9,097,424 11,381,298
HARWOOD HILLS VILLAGE 2,852,704 9,192,614 -- 2,852,704 9,192,614 12,045,318
HERITAGE LAND 12,390,000 -- -- 12,390,000 -- 12,390,000
HERITAGE PLAZA -- 23,675,957 -- -- 23,675,957 23,675,957
HIGHLAND SQUARE 2,615,250 9,359,722 4,964,243 2,615,250 14,323,965 16,939,215
HILLCREST VILLAGE 1,600,000 1,797,686 -- 1,600,000 1,797,686 3,397,686
HINSDALE LAKE COMMONS 4,217,840 15,039,854 71,706 4,217,840 15,111,560 19,329,400
HYDE PARK 9,240,000 33,340,181 2,744,895 9,735,102 35,589,974 45,325,076
INGLEWOOD PLAZA 1,300,000 1,862,406 -- 1,300,000 1,862,406 3,162,406
JAMES CENTER 2,706,000 9,451,497 -- 2,706,000 9,451,497 12,157,497
KERNERSVILLE PLAZA 1,741,562 6,081,020 268,646 1,741,562 6,349,666 8,091,228
KINGSDALE SHOPPING CENTER 3,866,500 14,019,614 1,165,620 3,866,500 15,185,234 19,051,734
LAGRANGE MARKETPLACE 983,923 3,294,003 100,669 983,923 3,394,672 4,378,595
LAKE MERIDIAN 6,510,000 12,121,889 -- 6,510,000 12,121,889 18,631,889
</TABLE>
S-2
<PAGE>
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
<TABLE>
<CAPTION>
Schedule III (continued)
Initial Cost Cost Capitalized Total Cost
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements Total
--------- ------------ ---------------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
LAKE PINE PLAZA 2,008,110 6,908,986 309,124 2,008,110 7,218,110 9,226,220
LAKESHORE 1,617,940 5,371,499 11,789 1,617,940 5,383,288 7,001,228
LEETSDALE MARKETPLACE 3,420,000 9,933,701 -- 3,420,000 9,933,701 13,353,701
LITTLETON SQUARE 2,030,000 8,254,964 -- 2,030,000 8,254,964 10,284,964
LOEHMANNS PLAZA 3,981,525 14,117,891 758,111 3,981,525 14,876,002 18,857,527
LOEHMANNS PLAZA CALIFORNIA 5,420,000 8,679,135 -- 5,420,000 8,679,135 14,099,135
LOVEJOY STATION 1,540,000 5,581,468 5,754 1,540,000 5,587,222 7,127,222
LUCEDALE MARKETPLACE 641,565 2,147,848 98,306 641,565 2,246,154 2,887,719
MAINSTREET SQUARE 1,274,027 4,491,897 47,467 1,274,027 4,539,364 5,813,391
MARINERS VILLAGE 1,628,000 5,907,835 136,797 1,628,000 6,044,632 7,672,632
MARKET AT PRESTON FOREST 4,400,000 10,752,712 -- 4,400,000 10,752,712 15,152,712
MARKET AT ROUND ROCK 2,000,000 9,676,170 -- 2,000,000 9,676,170 11,676,170
MARKETPLACE ST PETE 1,287,000 4,662,740 283,120 1,287,000 4,945,860 6,232,860
MARTIN DOWNS VILLAGE CENTER 2,000,000 5,133,495 3,134,394 2,437,664 7,830,225 10,267,889
MARTIN DOWNS VILLAGE SHOPPES 700,000 1,207,861 2,901,488 817,135 3,992,214 4,809,349
MAXTOWN ROAD (NORTHGATE) 1,753,136 6,244,449 28,947 1,753,136 6,273,396 8,026,532
MAYNARD CROSSING 4,066,381 14,083,800 616,760 4,066,381 14,700,560 18,766,941
MEMORIAL BEND SHOPPING CENTER 3,256,181 11,546,660 2,121,856 3,366,181 13,558,516 16,924,697
MERCHANTS VILLAGE 1,054,306 3,162,919 3,399,315 1,054,306 6,562,234 7,616,540
MILLHOPPER 1,073,390 3,593,523 957,748 1,073,390 4,551,271 5,624,661
MILLS POINTE 2,000,000 11,919,176 -- 2,000,000 11,919,176 13,919,176
MOCKINGBIRD COMMON 3,000,000 9,675,600 -- 3,000,000 9,675,600 12,675,600
MORNINGSIDE PLAZA 4,300,000 13,119,929 -- 4,300,000 13,119,929 17,419,929
MURRAYHILL MARKETPLACE 2,600,000 15,753,034 -- 2,600,000 15,753,034 18,353,034
NASHBORO 1,824,320 7,167,679 145,528 1,824,320 7,313,207 9,137,527
NEWBERRY SQUARE 2,341,460 8,466,651 868,040 2,341,460 9,334,691 11,676,151
NEWLAND CENTER 12,500,000 12,221,279 -- 12,500,000 12,221,279 24,721,279
NORTH HILLS 4,900,000 18,972,202 -- 4,900,000 18,972,202 23,872,202
NORTH MIAMI SHOPPING CENTER 603,750 2,021,250 94,045 603,750 2,115,295 2,719,045
NORTHVIEW PLAZA 1,956,961 8,694,879 -- 1,956,961 8,694,879 10,651,840
OAKBROOK PLAZA 4,000,000 6,365,704 -- 4,000,000 6,365,704 10,365,704
OAKLEY PLAZA 1,772,540 6,406,975 78,014 1,772,540 6,484,989 8,257,529
OCEAN BREEZE 1,250,000 3,341,199 2,491,222 1,527,400 5,555,021 7,082,421
OLD ST AUGUSTINE PLAZA 2,047,151 7,355,162 295,861 2,047,151 7,651,023 9,698,174
ORCHARD SQUARE 1,155,000 4,135,353 284,028 1,155,000 4,419,381 5,574,381
PACES FERRY PLAZA 2,811,522 9,967,557 2,047,867 2,811,622 12,015,324 14,826,946
PALM HARBOUR SHOPPING VILLAGE 2,899,928 10,998,230 1,264,129 2,899,928 12,262,359 15,162,287
PALM TRAILS PLAZA 2,438,996 5,818,523 47,362 2,438,996 5,865,885 8,304,881
PARK PLACE 2,231,745 7,974,362 8,795 2,231,745 7,983,157 10,214,902
PARKWAY STATION 1,123,200 4,283,917 216,003 1,123,200 4,499,920 5,623,120
PASEO VILLAGE 2,550,000 7,780,102 -- 2,550,000 7,780,102 10,330,102
PEACHLAND PROMENADE 1,284,562 5,143,564 93,215 1,284,561 5,236,780 6,521,341
PEARTREE VILLAGE 5,196,653 8,732,711 10,768,493 5,196,653 19,501,204 24,697,857
PIKE CREEK 5,077,406 18,860,183 398,631 5,077,406 19,258,814 24,336,220
PIMA CROSSING 5,800,000 24,891,690 -- 5,800,000 24,891,690 30,691,690
PINE LAKE VILLAGE 6,300,000 10,522,041 -- 6,300,000 10,522,041 16,822,041
PINE TREE PLAZA 539,000 1,995,927 3,310,606 539,000 5,306,533 5,845,533
PLAZA DE HACIENDA 4,230,000 11,741,933 -- 4,230,000 11,741,933 15,971,933
PLAZA HERMOSA 4,200,000 9,369,630 -- 4,200,000 9,369,630 13,569,630
POWERS FERRY 1,190,822 4,223,606 243,073 1,190,822 4,466,679 5,657,501
POWERS FERRY SQUARE 3,607,647 12,790,749 3,901,785 3,607,647 16,692,534 20,300,181
PRESTON PARK 6,400,000 46,896,071 -- 6,400,000 46,896,071 53,296,071
QUEENSBOROUGH 1,826,000 6,501,056 (833,622)(*) 1,163,021 6,330,413 7,493,434
REGENCY COURT 3,571,337 12,664,014 1,032,708 3,571,337 13,696,722 17,268,059
REGENCY SQUARE BRANDON 577,975 18,156,719 7,850,159 4,491,461 22,093,392 26,584,853
RIDGLEA PLAZA 1,675,498 12,912,138 -- 1,675,498 12,912,138 14,587,636
RIVERMONT STATION 2,887,213 10,445,109 87,952 2,887,213 10,533,061 13,420,274
RONA PLAZA 1,500,000 4,356,480 -- 1,500,000 4,356,480 5,856,480
ROSWELL VILLAGE 2,304,345 6,777,200 5,729,925 2,304,345 12,507,125 14,811,470
RUSSELL RIDGE 2,153,214 -- 6,574,954 2,215,341 6,512,827 8,728,168
SAMMAMISH HIGHLAND 9,300,000 7,553,288 -- 9,300,000 7,553,288 16,853,288
SAN LEANDRO 1,300,000 7,891,091 -- 1,300,000 7,891,091 9,191,091
SANDY PLAINS VILLAGE 2,906,640 10,412,440 1,555,213 2,906,640 11,967,653 14,874,293
SANDY SPRINGS VILLAGE 733,126 2,565,411 1,013,964 733,126 3,579,375 4,312,501
SANTA ANA DOWTOWN 4,240,000 7,319,468 -- 4,240,000 7,319,468 11,559,468
SEQUOIA STATION 9,100,000 17,899,819 -- 9,100,000 17,899,819 26,999,819
SHERWOOD MARKET CENTER 3,475,000 15,897,972 -- 3,475,000 15,897,972 19,372,972
SHOPPES @ 104 2,651,000 9,523,429 440,325 2,651,000 9,963,754 12,614,754
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 21,690 2,004,860 7,183,559 9,188,419
SOUTH MONROE 1,200,000 6,566,974 (1,351,812)(*) 874,999 5,540,163 6,415,162
SOUTH POINT PLAZA 5,000,000 10,085,995 -- 5,000,000 10,085,995 15,085,995
<FN>
(*) Includes land parcels sold during 1999.
</FN>
</TABLE>
S-3
<PAGE>
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
<TABLE>
<CAPTION>
Schedule III (continued)
Initial Cost Cost Capitalized Total Cost
Building & Subsequent to Building &
Land Improvements Acquisition Land Improvements Total
--------- ------------ ---------------- --------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C>
SOUTH POINTE CROSSING 4,399,303 11,116,491 247,094 4,399,303 11,363,585 15,762,888
SOUTHCENTER 1,300,000 12,250,504 -- 1,300,000 12,250,504 13,550,504
SOUTHPARK 3,077,667 9,399,976 -- 3,077,667 9,399,976 12,477,643
ST ANN SQUARE 1,541,883 5,597,282 5,663 1,541,883 5,602,945 7,144,828
STATLER SQUARE 2,227,819 7,479,952 402,540 2,227,819 7,882,492 10,110,311
STRAWFLOWER VILLAGE 4,060,228 7,232,936 -- 4,060,228 7,232,936 11,293,164
SUNNYSIDE 205 1,200,000 8,703,281 -- 1,200,000 8,703,281 9,903,281
TAMIAMI TRAILS 2,046,286 7,463,336 169,041 2,046,286 7,632,377 9,678,663
TASSAJARA CROSSING 8,560,000 14,899,929 -- 8,560,000 14,899,929 23,459,929
TEQUESTA SHOPPES 1,782,000 6,426,042 245,223 1,782,000 6,671,265 8,453,265
TERRACE WALK 1,196,286 2,935,683 123,782 1,196,286 3,059,465 4,255,751
THE MARKETPLACE 1,211,605 4,056,242 2,875,421 1,758,434 6,384,834 8,143,268
THE PROMENADE 2,526,480 12,712,811 -- 2,526,480 12,712,811 15,239,291
THE VILLAGE 522,313 6,984,992 -- 522,313 6,984,992 7,507,305
THOMAS LAKE 6,000,000 10,301,811 -- 6,000,000 10,301,811 16,301,811
TOWN CENTER AT MARTIN DOWNS 1,364,000 4,985,410 35,225 1,364,000 5,020,635 6,384,635
TOWN SQUARE 438,302 1,555,481 1,593,834 768,302 2,819,315 3,587,617
TROWBRIDGE CROSSING EQUIPORT 910,263 1,914,551 1,162,927 910,263 3,077,478 3,987,741
TWIN PEAKS 5,200,000 25,119,758 -- 5,200,000 25,119,758 30,319,758
UNION SQUARE SHOPPING CENTER 1,578,654 5,933,889 425,198 1,578,656 6,359,085 7,937,741
UNIVERSITY COLLECTION 2,530,000 8,971,597 149,697 2,530,000 9,121,294 11,651,294
UNIVERSITY MARKETPLACE 3,250,562 7,056,855 2,518,819 3,532,046 9,294,190 12,826,236
VALLEY RANCH CENTRE 3,021,181 10,727,623 -- 3,021,181 10,727,623 13,748,804
VENTURA VILLAGE 4,300,000 6,351,012 -- 4,300,000 6,351,012 10,651,012
VILLAGE CENTER 6 3,885,444 10,799,316 441,127 3,885,444 11,240,443 15,125,887
VILLAGE IN TRUSSVILLE 973,954 3,260,627 110,895 973,954 3,371,522 4,345,476
WALKER CENTER 3,840,000 6,417,522 -- 3,840,000 6,417,522 10,257,522
WATERFORD TOWNE CENTER 5,650,058 5,514,671 -- 5,650,058 5,514,671 11,164,729
WELLEBY 1,496,000 5,371,636 1,656,583 1,496,000 7,028,219 8,524,219
WELLINGTON MARKET PLACE 5,070,384 13,308,972 352,814 5,070,384 13,661,786 18,732,170
WELLINGTON TOWN SQUARE 1,914,000 7,197,934 691,879 1,914,000 7,889,813 9,803,813
WEST COUNTY 1,491,462 4,993,155 126,744 1,491,462 5,119,899 6,611,361
WEST HILLS 2,200,000 6,045,233 -- 2,200,000 6,045,233 8,245,233
WEST PARK PLAZA 5,840,225 4,991,746 -- 5,840,225 4,991,746 10,831,971
WESTCHESTER PLAZA 1,857,048 6,456,178 284,131 1,857,048 6,740,309 8,597,357
WESTLAKE VILLAGE CENTER -- 32,786,739 -- -- 32,786,739 32,786,739
WINDMILLER PLAZA PHASE I 2,620,355 11,190,526 468,768 2,620,355 11,659,294 14,279,649
WOODCROFT SHOPPING CENTER 1,419,000 5,211,981 388,944 1,419,000 5,600,925 7,019,925
WOODMAN VAN NUYS 5,500,000 6,835,246 -- 5,500,000 6,835,246 12,335,246
WOODSIDE CENTRAL 3,500,000 8,845,697 -- 3,500,000 8,845,697 12,345,697
WORTHINGTON PARK CENTRE 3,346,203 10,053,858 482,503 3,346,203 10,536,361 13,882,564
----------- ------------- ----------- ----------- ------------- -------------
561,396,266 1,722,634,268 117,922,770 567,673,872 1,834,279,432 2,401,953,304
=========== ============= =========== =========== ============= =============
</TABLE>
S-4
<PAGE>
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III (continued)
Total Cost
Net of
Accumulated Accumulated
Depreciation Depreciation Mortgages
------------ ------------ ---------
ANASTASIA SHOPPING PLAZA 703,411 4,163,157 --
ARAPAHO VILLAGE 167,115 8,701,721 --
ARDEN SQUARE 154,340 10,406,098 --
ASHFORD PLACE 919,895 11,393,577 4,550,587
AVENTURA SHOPPING CENTER 2,590,758 9,755,545 8,470,790
BECKETT COMMONS 290,832 7,448,840 --
BENEVA 234,349 11,393,934 --
BENT TREE PLAZA 333,929 8,252,865 5,524,586
BERKSHIRE COMMONS 1,293,958 9,240,660 --
BLOOMINGDALE 689,773 17,508,442 --
BLOSSOM VALLEY 214,502 17,909,979 --
BOLTON PLAZA 1,164,968 9,140,320 --
BONNERS POINT 640,470 3,287,381 1,613,000
BOULEVARD CENTER 200,691 13,116,576 --
BOYNTON LAKES PLAZA 503,861 12,365,815 --
BRAELINN VILLAGE EQUIPORT 1,169,840 16,294,636 12,218,290
BRIARCLIFF LA VISTA 228,379 3,512,307 1,630,511
BRIARCLIFF VILLAGE 1,531,761 20,845,297 13,113,636
BRISTOL WARNER 254,072 16,742,944 --
BROOKVILLE PLAZA 232,409 5,368,115 --
BUCKHEAD COURT 640,706 8,775,325 --
BUCKLEY SQUARE 114,662 7,981,578 --
CAMBRIDGE SQUARE 231,738 3,786,043 --
CARMEL COMMONS 724,774 12,304,356 --
CARRIAGE GATE 929,813 3,538,220 2,266,757
CASA LINDA PLAZA 646,494 34,677,836 --
CASCADE PLAZA 89,111 13,628,514 --
CENTER OF SEVEN SPRINGS 1,365,365 8,443,745 --
CHAMPIONS FOREST 180,533 11,163,945 --
CHASEWOOD PLAZA 3,164,413 15,745,674 8,000,000
CHERRY GROVE 608,392 16,132,341 --
CHERRY PARK MARKET 336,746 18,226,188 --
CITY VIEW SHOPPING CENTER 387,717 5,214,450 --
COLUMBIA MARKETPLACE 816,828 4,942,366 2,586,000
COOPER STREET 222,192 12,538,888 --
COSTA VERDE 524,233 37,476,955 --
COUNTRY CLUB 676,689 4,288,729 2,264,000
COUNTRY CLUB CALIF 243,184 14,414,016 --
COURTYARD SHOPPING CENTER 1,384,366 5,407,648 1,378,000
CROMWELL SQUARE 582,640 7,737,686 4,411,629
CROSSROADS 53,918 6,055,040 --
CUMMING 400 785,766 10,486,189 6,349,087
DELK SPECTRUM 588,826 13,465,596 --
DIABLO PLAZA 156,691 12,679,175 --
DUNWOODY HALL 612,852 8,640,405 --
DUNWOODY VILLAGE 768,329 10,903,750 7,144,500
EAST POINTE 328,701 8,319,777 5,173,921
EAST PORT PLAZA 840,051 14,311,857 --
EL CAMINO 226,355 18,226,073 --
EL NORTE PARKWAY PLA 131,548 9,034,040 --
ENCINA GRANDE 215,852 15,202,687 --
ENSLEY SQUARE 326,996 4,145,485 --
EVANS CROSSING 268,899 6,495,181 4,277,340
FLEMING ISLAND 237,072 9,162,886 3,404,648
FRANKLIN SQUARE 517,497 11,924,605 8,989,157
FRIARS MISSION 564,821 33,372,171 17,686,329
GARDEN SQUARE 447,836 9,665,710 6,403,488
GARNER FESTIVAL 626,736 25,726,539 --
GLENWOOD VILLAGE 402,574 5,255,055 2,127,621
HAMILTON MEADOWS 385,108 8,235,267 5,528,516
HAMPSTEAD VILLAGE 20,684 7,901,320 2,431,616
HANCOCK 497,293 31,982,908 --
HARPETH VILLAGE FIELDSTONE 446,475 10,934,823 --
HARWOOD HILLS VILLAGE 187,491 11,857,827 --
HERITAGE LAND -- 12,390,000 --
HERITAGE PLAZA 508,580 23,167,377 --
HIGHLAND SQUARE 386,415 16,552,800 3,835,315
HILLCREST VILLAGE 37,464 3,360,222 --
HINSDALE LAKE COMMONS 411,905 18,917,495 --
HYDE PARK 2,306,602 43,018,474 24,750,000
INGLEWOOD PLAZA 38,648 3,123,758 --
JAMES CENTER 177,930 11,979,567 5,787,944
KERNERSVILLE PLAZA 281,973 7,809,255 5,146,742
KINGSDALE SHOPPING CENTER 838,852 18,212,882 --
LAGRANGE MARKETPLACE 612,680 3,765,915 1,645,000
LAKE MERIDIAN 253,379 18,378,510 --
S-5
<PAGE>
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III (continued)
Total Cost
Net of
Accumulated Accumulated
Depreciation Depreciation Mortgages
------------ ------------ ---------
LAKE PINE PLAZA 324,461 8,901,759 5,888,137
LAKESHORE 256,291 6,744,937 3,668,020
LEETSDALE MARKETPLACE 210,546 13,143,155 --
LITTLETON SQUARE 171,608 10,113,356 --
LOEHMANNS PLAZA 1,316,391 17,541,136 --
LOEHMANNS PLAZA CALIFORNIA 182,289 13,916,846 --
LOVEJOY STATION 349,967 6,777,255 --
LUCEDALE MARKETPLACE 415,786 2,471,933 1,390,000
MAINSTREET SQUARE 322,753 5,490,638 --
MARINERS VILLAGE 438,189 7,234,443 --
MARKET AT PRESTON FOREST 223,653 14,929,059 --
MARKET AT ROUND ROCK 202,961 11,473,209 7,298,779
MARKETPLACE ST PETE 511,093 5,721,767 --
MARTIN DOWNS VILLAGE CENTER 1,549,336 8,718,553 4,150,000
MARTIN DOWNS VILLAGE SHOPPES 446,248 4,363,101 1,313,000
MAXTOWN ROAD (NORTHGATE) 273,865 7,752,667 5,339,003
MAYNARD CROSSING 653,322 18,113,619 11,550,269
MEMORIAL BEND SHOPPING CENTER 1,179,660 15,745,037 8,089,362
MERCHANTS VILLAGE 374,103 7,242,437 --
MILLHOPPER 1,141,519 4,483,142 2,401,000
MILLS POINTE 254,094 13,665,082 5,741,898
MOCKINGBIRD COMMON 202,283 12,473,317 --
MORNINGSIDE PLAZA 277,236 17,142,693 --
MURRAYHILL MARKETPLACE 332,855 18,020,179 8,209,237
NASHBORO 159,122 8,978,405 --
NEWBERRY SQUARE 1,667,918 10,008,233 6,346,921
NEWLAND CENTER 265,001 24,456,278 --
NORTH HILLS 394,792 23,477,410 8,688,589
NORTH MIAMI SHOPPING CENTER 725,877 1,993,168 1,160,000
NORTHVIEW PLAZA 180,899 10,470,941 --
OAKBROOK PLAZA 137,140 10,228,564 --
OAKLEY PLAZA 455,637 7,801,892 --
OCEAN BREEZE 1,114,671 5,967,750 2,805,000
OLD ST AUGUSTINE PLAZA 684,282 9,013,892 --
ORCHARD SQUARE 475,492 5,098,889 --
PACES FERRY PLAZA 1,013,894 13,813,052 --
PALM HARBOUR SHOPPING VILLAGE 1,030,852 14,131,435 --
PALM TRAILS PLAZA 237,875 8,067,006 --
PARK PLACE 233,562 9,981,340 --
PARKWAY STATION 437,015 5,186,105 --
PASEO VILLAGE 162,823 10,167,279 4,081,445
PEACHLAND PROMENADE 724,060 5,797,281 4,095,518
PEARTREE VILLAGE 1,208,491 23,489,366 12,613,011
PIKE CREEK 715,709 23,620,511 12,237,467
PIMA CROSSING 521,129 30,170,561 --
PINE LAKE VILLAGE 218,507 16,603,534 --
PINE TREE PLAZA 152,747 5,692,786 --
PLAZA DE HACIENDA 243,335 15,728,598 6,604,058
PLAZA HERMOSA 194,980 13,374,650 --
POWERS FERRY 379,832 5,277,669 2,885,949
POWERS FERRY SQUARE 1,328,284 18,971,897 --
PRESTON PARK 984,572 52,311,499 24,478,620
QUEENSBOROUGH 176,070 7,317,364 --
REGENCY COURT 1,156,685 16,111,374 --
REGENCY SQUARE BRANDON 6,778,241 19,806,612 12,000,000
RIDGLEA PLAZA 273,345 14,314,291 --
RIVERMONT STATION 665,282 12,754,992 --
RONA PLAZA 90,620 5,765,860 --
ROSWELL VILLAGE 622,605 14,188,865 --
RUSSELL RIDGE 823,061 7,905,107 6,124,639
SAMMAMISH HIGHLAND 157,091 16,696,197 --
SAN LEANDRO 166,369 9,024,722 --
SANDY PLAINS VILLAGE 955,297 13,918,996 --
SANDY SPRINGS VILLAGE 248,139 4,064,362 --
SANTA ANA DOWTOWN 153,685 11,405,783 --
SEQUOIA STATION 372,249 26,627,570 --
SHERWOOD MARKET CENTER 343,240 19,029,732 --
SHOPPES @ 104 385,985 12,228,769 --
SHOPPES AT MASON 249,129 6,685,382 3,861,074
SILVERLAKE 285,014 8,903,405 --
SOUTH MONROE 213,093 6,202,069 --
SOUTH POINT PLAZA 209,355 14,876,640 --
S-6
<PAGE>
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III (continued)
Total Cost
Net of
Accumulated Accumulated
Depreciation Depreciation Mortgages
------------ ------------ ---------
SOUTH POINTE CROSSING 279,858 15,483,030 --
SOUTHCENTER 257,171 13,293,333 --
SOUTHPARK 195,568 12,282,075 --
ST ANN SQUARE 345,192 6,799,636 4,861,922
STATLER SQUARE 370,770 9,739,541 5,393,006
STRAWFLOWER VILLAGE 153,788 11,139,376 --
SUNNYSIDE 205 182,560 9,720,721 5,678,996
TAMIAMI TRAILS 481,369 9,197,294 --
TASSAJARA CROSSING 310,417 23,149,512 --
TEQUESTA SHOPPES 564,489 7,888,776 --
TERRACE WALK 704,586 3,551,165 683,000
THE MARKETPLACE 1,038,753 7,104,515 4,833,300
THE PROMENADE 268,195 14,971,096 --
THE VILLAGE 146,548 7,360,757 --
THOMAS LAKE 214,407 16,087,404 --
TOWN CENTER AT MARTIN DOWNS 387,973 5,996,662 --
TOWN SQUARE 178,771 3,408,846 --
TROWBRIDGE CROSSING EQUIPORT 202,473 3,785,268 1,800,000
TWIN PEAKS 524,275 29,795,483 --
UNION SQUARE SHOPPING CENTER 556,755 7,380,986 --
UNIVERSITY COLLECTION 737,604 10,913,690 --
UNIVERSITY MARKETPLACE 2,122,729 10,703,507 --
VALLEY RANCH CENTRE 227,928 13,520,876 --
VENTURA VILLAGE 132,059 10,518,953 --
VILLAGE CENTER 6 1,189,672 13,936,215 --
VILLAGE IN TRUSSVILLE 631,669 3,713,807 1,775,000
WALKER CENTER 135,589 10,121,933 --
WATERFORD TOWNE CENTER 43,360 11,121,369 --
WELLEBY 780,688 7,743,531 --
WELLINGTON MARKET PLACE 1,498,316 17,233,854 --
WELLINGTON TOWN SQUARE 692,458 9,111,355 --
WEST COUNTY 1,006,227 5,605,134 3,190,000
WEST HILLS 125,737 8,119,496 5,185,042
WEST PARK PLAZA 103,736 10,728,235 --
WESTCHESTER PLAZA 390,261 8,207,096 5,712,441
WESTLAKE VILLAGE CENTER 681,958 32,104,781 --
WINDMILLER PLAZA PHASE I 431,949 13,847,700 --
WOODCROFT SHOPPING CENTER 469,317 6,550,608 --
WOODMAN VAN NUYS 138,667 12,196,579 5,895,124
WOODSIDE CENTRAL 186,176 12,159,521 --
WORTHINGTON PARK CENTRE 510,888 13,371,676 4,858,536
----------- -------------- -----------
104,467,176 2,297,486,128 401,596,373
=========== ============== ===========
S-7
<PAGE>
REGENCY REALTY CORPORATION
Combined Real Estate and Accumulated Depreciation
December 31, 1999
Schedule III
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
$2,100,351,999 at December 31, 1999.
The changes in total real estate assets for the period ended December 31, 1999,
1998 and 1997:
<TABLE>
<CAPTION>
1999 1998 1997
--------------- -------------- ------------
<S> <C> <C> <C>
Balance, beginning of period 1,183,184,013 799,801,367 389,007,481
Developed or acquired properties 1,215,563,938 399,305,955 408,475,251
Sale of property (18,330,608) (24,248,801) (2,907,503)
Improvements 21,535,961 8,325,492 5,226,138
-------------- -------------- ------------
Balance, end of period 2,401,953,304 1,183,184,013 799,801,367
============== ============== ============
</TABLE>
The changes in accumulated depreciation for the period ended December 31, 1999,
1998 and 1997:
<TABLE>
<CAPTION>
1999 1998 1997
------------ ------------ ------------
<S> <C> <C> <C>
Balance, beginning of period 58,983,738 40,795,801 26,213,225
Sale of property (721,034) (5,121,929) (713,176)
Depreciation for period 46,204,472 23,309,866 15,295,752
------------ ----------- -----------
Balance, end of period 104,467,176 58,983,738 40,795,801
============ =========== ===========
</TABLE>
S-8
<PAGE>
RESTATED ARTICLES OF INCORPORATION
OF
REGENCY REALTY CORPORATION
This corporation was incorporated on July 8, 1993, effective July 9,
1993, under the name Regency Realty Corporation. Pursuant to Section 607.1007,
Florida Business Corporation Act, restated Articles of Incorporation were
approved at a meeting of the directors of this corporation on October 28, 1996.
The Restated Articles of Incorporation adopted by the directors incorporate
previously filed amendments and omit items of historical interest only.
Accordingly, shareholder approval was not required.
ARTICLE 1
NAME AND ADDRESS
Section 1.1 Name. The name of the corporation is Regency Realty Corporation
(the "Corporation").
Section 1.2 Address of Principal Office. The address of the principal
office of the Corporation is 121 West Forsyth Street, Jacksonville, Florida
32202.
ARTICLE 2
DURATION
Section 2.1 Duration. The Corporation shall exist perpetually.
ARTICLE 3
PURPOSES
Section 3.1 Purposes. This corporation is organized for the purpose of
transacting any or all lawful business permitted under the laws of the United
States and of the State of Florida.
ARTICLE 4
CAPITAL STOCK
Section 4.1 Authorized Capital. The maximum number of shares of stock which the
Corporation is authorized to have outstanding at any one time is forty-five
million (45,000,000) shares (the "Capital Stock") divided into classes as
follows:
(a) Ten million (10,000,000) shares of preferred stock having a par value
of $0.01 per share (the "Preferred Stock"), and which may be issued in
one or more classes or series as further described in Section 4.2; and
(b) Twenty-five million (25,000,000) shares of voting common stock having a
par value of $0.01 per share (the "Common Stock"); and
(c) Ten million (10,000,000) shares of common stock having a par value of
$0.01 per share (the "Special Common Stock") and which may be issued in
one or more classes or series as further described in Section 4.4.
All such shares shall be issued fully paid and nonassessable.
Section 4.2 Preferred Stock. The Board of Directors is authorized to provide for
the issuance of the Preferred Stock in one or more classes and in one or more
series within a class and, by filing the appropriate Articles of Amendment with
the Secretary of State of Florida which shall be effective without shareholder
action, is authorized to establish the number of shares to be included in each
class and each series and the preferences, limitations and relative rights of
each class and each series. Such preferences must include the preferential right
to receive distributions of dividends or the preferential right to receive
distributions of assets upon the dissolution of the Corporation before shares of
Common Stock are entitled to receive such distributions.
Section 4.3 Voting Common Stock. Holders of Voting Common Stock are entitled to
one vote per share on all matters required by Florida law to be approved by the
shareholders. Subject to the rights of any outstanding classes or series of
Preferred Stock having preferential dividend rights, holders of Common Stock are
entitled to such dividends as may be declared by the Board of Directors out of
funds lawfully available therefor. Upon the dissolution of the Corporation,
holders of Common Stock are entitled to receive, pro rata in accordance with the
number of shares owned by each, the net assets of the Corporation remaining
after the holders of any outstanding classes or series of Preferred Stock having
preferential rights to such assets have received the distributions to which they
are entitled.
Section 4.4 Special Common Stock. The Board of Directors is authorized to
provide for the issuance of the Special Common Stock in one or more classes and
in one or more series within a class and, by filing the appropriate Articles of
Amendment with the Secretary of State of Florida which shall be effective
without shareholder action, is authorized to establish the number of shares to
be included in each class and each series and the limitations and relative
rights of each class and each series. Each class or series of Special Common
Stock (1) shall bear dividends, pari passu with dividends on the Common Stock,
in such amount as the Board of Directors shall determine, (2) shall vote
together with the Common Stock, and not separately as a class except where
otherwise required by law, on all matters on which the Common Stock is entitled
to vote, unless the Board of Directors determines that any such class or series
shall have limited voting rights or shall not be entitled to vote except as
otherwise required by law, (3) may be convertible or redeemable on such terms as
the Board of Directors may determine, and (4) may have such other relative
rights and limitations as the Board of Directors is allowed by law to determine.
ARTICLE 5
REIT PROVISIONS
Section 5.1 Definitions. For the purposes of this Article 5, the following
terms shall have the following meanings:
(a) "Acquire" shall mean the acquisition of Beneficial Ownership of shares
of Capital Stock by any means including, without limitation,
acquisition pursuant to the exercise of any option, warrant, pledge or
other security interest or similar right to acquire shares, but shall
not include the acquisition of any such rights, unless, as a result,
the acquirer would be considered a Beneficial Owner as defined below.
The term "Acquisition" shall have the correlative meaning.
(b) "Actual Owner" shall mean, with respect to any Capital Stock, that
Person who is required to include in its gross income any dividends
paid with respect to such Capital Stock.
(c) "Beneficial Ownership" shall mean ownership of Capital Stock by a
Person who would be treated as an owner of such shares of Capital
Stock, either directly or indirectly, under Section 542(a)(2) of the
Code, taking into account for this purpose (i) constructive ownership
determined under Section 544 of the Code, as modified by Section
856(h)(1)(B) of the Code (except where expressly provided otherwise);
and (ii) any future amendment to the Code which has the effect of
modifying the ownership rules under Section 542(a)(2) of the Code. The
terms "Beneficial Owner," "Beneficially Owns" and "Beneficially Owned"
shall have the correlative meanings.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended. In the
event of any future amendments to the Code involving the renumbering of
Code sections, the Board of Directors may, in its sole discretion,
determine that any reference to a Code section herein shall mean the
successor Code section pursuant to such amendment.
(e) "Constructive Ownership" shall mean ownership of Capital Stock by a
Person who would be treated as an owner of such Capital Stock, either
directly or constructively, through the application of Section 318 of
the Code, as modified by Section 856(d)(5) of the Code. The terms
"Constructive Owner', "Constructively Owns" and "Constructively Owned"
shall have the correlative meanings.
(f) "Existing Holder" shall mean any of The Regency Group, Inc., MEP, Ltd.,
and The Regency Group II, Ltd. (and any Person who is a Beneficial
Owner of Capital Stock as a result of attribution of the Beneficial
Ownership from any of the Persons previously identified) who at the
opening of business on the date after the Initial Public Offering was
the Beneficial Owner of Capital Stock in excess of the Ownership Limit;
and any Person who Acquires Beneficial Ownership from another Existing
Holder, except by Acquisition on the open market, so long as, but only
so long as, such Person Beneficially Owns Capital Stock in excess of
the Ownership Limit.
(g) "Existing Holder Limit" for an Existing Holder shall mean, initially,
the percentage by value of the outstanding Capital Stock Beneficially Owned by
such Existing Holder at the opening of business on the date after the Initial
Public Offering, and after any adjustment pursuant to Section 5.8 hereof, shall
mean such percentage of the outstanding Capital Stock as so adjusted; provided,
however, that the Existing Holder Limit shall not be a percentage which is less
than the Ownership Limit or in excess of 9.8%. Beginning with the date after the
Initial Public Offering, the Secretary of the Corporation shall maintain and,
upon request, make available to each Existing Holder, a schedule which sets
forth the then current Existing Holder Limits for each Existing Holder.
(h) "Initial Public Offering" means the closing of the sale of shares of
Common Stock pursuant to the Corporation's first effective registration
statement for such Common Stock filed under the Securities Act of 1933,
as amended.
(i) "Non-U.S. Person" shall mean any Person who is not (i) a citizen or
resident of the United States, (ii) a partnership created or organized
in the United States or under the laws of the United States or any
state therein (including the District of Columbia), (iii) a corporation
created or organized in the United States or under the laws of the
United States or any state therein (including the District of
Columbia), or (iv) any estate or trust (other than a foreign estate or
foreign trust, within the meaning of Section 7701(a)(31) of the Code).
(j) "Ownership Limit" shall initially mean 7% by value of the outstanding
Capital Stock of the Corporation, and after any adjustment as set forth
in Section 5.9, shall mean such greater percentage (but not greater
than 9.8%) by value of the outstanding Capital Stock as so adjusted.
(k) "Person" shall mean an individual, corporation, partnership, estate,
trust (including a trust qualified under Section 401(a) or 501(c)(17) of the
Code), a portion of a trust permanently set aside for or to be used exclusively
for the purposes described in Section 642(c) of the Code, association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity, and also includes a group as that term is used for purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended; but does
not include an underwriter retained by the Company which participates in a
public offering of the Capital Stock for a period of 90 days following the
purchase by such underwriter of the Capital Stock, provided that ownership of
Capital Stock by such underwriter would not result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code and would not
otherwise result in the Corporation failing to quality as a REIT.
(l) "REIT" shall mean a real estate investment trust under Section 856 of
the Code.
(m) "Redemption Price" shall mean the lower of (i) the price paid by the
transferee from whom shares are being redeemed and (ii) the average of the last
reported sales price, regular way, on the New York Stock Exchange of the
relevant class of Capital Stock on the ten trading days immediately preceding
the date fixed for redemption by the Board of Directors, or if the relevant
class of Capital Stock is not then traded on the New York Stock Exchange, the
average of the last reported sales prices, regular way, of such class of Capital
Stock (or, if sales prices, regular way, are not reported, the average of the
closing bid and asked prices) on the ten trading days immediately preceding the
relevant date as reported on any exchange or quotation system over which the
Capital Stock may be traded, or if such class of Capital Stock is not then
traded over any exchange or quotation system, then the price determined in good
faith by the Board of Directors of the Corporation as the fair market value of
such class of Capital Stock on the relevant date.
(n) "Related Tenant Owner" shall mean any Constructive Owner who also owns,
directly or indirectly, an interest in a Tenant, which interest is
equal to or greater than (i) 10% of the combined voting power of all
classes of stock of such Tenant, (ii) 10% of the total number of shares
of all classes of stock of such Tenant, or (iii) if such Tenant is not
a corporation, 10% of the assets or net profits of such Tenant.
(o) "Related Tenant Limit" shall mean 9.8% by value of the outstanding
Capital Stock of the Corporation.
(p) "Restriction Termination Date" shall mean the first day after the date
of the Initial Public Offering on which the Corporation determines
pursuant to Section 5.13 that it is no longer in the best interest of
the Corporation to attempt to, or continue to, qualify as a REIT.
(q) "Special Shareholder" shall mean any of (i) Security Capital U.S.
Realty, Security Capital Holdings S.A. and any Affiliate (as such term is
defined in the Stockholders Agreement) of Security Capital U.S. Realty or
Security Capital Holdings S.A., (ii) any Investor (as such term is defined in
Section 5.2 of the Stockholders Agreement), (iii) any bona fide financial
institution to whom Capital Stock is Transferred in connection with any bona
fide indebtedness of any Investor or any Person previously identified, (iv) any
Person who is considered a Beneficial Owner of Capital Stock as a result of the
attribution of Beneficial Ownership from any of the Persons previously
identified and (v) any one or more Persons who Acquire Beneficial Ownership from
a Special Shareholder, except by Acquisition on the open market.
(r) "Special Shareholder Limit" for a Special Shareholder shall mean,
initially, 45% of the outstanding shares of Common Stock, on a fully diluted
basis, of the Corporation and after any adjustment pursuant to Section 5.8 shall
mean the percentage of the outstanding Capital Stock as so adjusted; provided,
however, that if any Person and its Affiliates (taken as a whole), other than
the Special Shareholder, shall directly or indirectly own in the aggregate more
than 45% of the outstanding shares of Common Stock, on a fully diluted basis, of
the Corporation, the definition of "Special Shareholder Limit" shall be revised
in accordance with Section 5.8 of the Stockholders Agreement. Notwithstanding
the foregoing provisions of this definition, if, as the result of any Special
Shareholder's ownership (taking into account for this purpose constructive
ownership under Section 544 of the Code, as modified by Section 856(h)(1)(B) of
the Code) of shares of Capital Stock, any Person who is an individual within the
meaning of Section 542(a)(2) of the Code (taking into account the ownership
attribution rules under Section 544 of the Code, as modified by Section 856(h)
of the Code) and who is the Beneficial Owner of any interest in a Special
Shareholder would be considered to Beneficially Own more than 9.8% of the
outstanding shares of Capital Stock, then unless such individual reduces his or
her interest in the Special Shareholder so that such Person no longer
Beneficially Owns more than 9.8% of the outstanding shares of Capital Stock, the
Special Shareholder Limit shall be reduced to such percentage as would result in
such Person not being considered to Beneficially Own more than 9.8% of the
outstanding Shares of Capital Stock. Notwithstanding anything contained herein
to the contrary, in no event shall the Special Shareholder Limit be reduced
below the Ownership Limit. At the request of the Special Shareholders, the
Secretary of the Corporation shall maintain and, upon request, make available to
each Special Shareholder a schedule which sets forth the then current Special
Shareholder Limits for each Special Shareholder.
(s) "Stock Purchase Agreement" shall mean that Stock Purchase Agreement
dated as of June 11, 1996, by and among the Corporation, Security
Capital Holdings S.A., and Security Capital U.S. Realty, as the same
may be amended from time to time.
(t) "Stockholders Agreement" shall mean that Stockholders Agreement dated
as of July 10, 1996, by and among the Corporation, Security Capital Holdings
S.A., and Security Capital U.S. Realty, as the same may be amended from time to
time.
(u) "Tenant" shall mean any tenant of (i) the Corporation, (ii) a
subsidiary of the Corporation which is deemed to be a "qualified REIT
subsidiary" under Section 856(i)(2) of the Code, or (iii) a partnership
in which the Corporation or one or more of its qualified REIT
subsidiaries is a partner.
(v) "Transfer" shall mean any sale, transfer, gift, assignment, devise, or
other disposition of Capital Stock or the right to vote or receive dividends on
Capital Stock (including (i) the granting of any option or entering into any
agreement for the sale, transfer or other disposition of Capital Stock or the
right to vote or receive dividends on the Capital Stock or (ii) the sale,
transfer, assignment or other disposition or grant of any securities or rights
convertible or exchangeable for Capital Stock), whether voluntarily or
involuntarily, whether of record or Beneficially, and whether by operation of
law or otherwise; provided, however, that any bona fide pledge of Capital Stock
shall not be deemed a Transfer until such time as the pledgee effects an actual
change in ownership of the pledged shares of Capital Stock.
Section 5.2 Restrictions on Transfer. Except as provided in Section 5.11
and Section 5.16, during the period commencing at the Initial Public Offering:
(a) No Person (other than an Existing Holder or a Special Shareholder)
shall Beneficially Own Capital Stock in excess of the Ownership Limit,
no Existing Holder shall Beneficially Own Capital Stock in excess of
the Existing Holder Limit for such Existing Holder and no Special
Shareholder shall Beneficially Own Capital Stock in excess of the
Special Shareholder Limit.
(b) No Person shall Constructively Own Capital Stock in excess of the
Related Tenant Limit for more than thirty (30) days following the date
such Person becomes a Related Tenant Owner.
(c) Any Transfer that, if effective, would result in any Person (other than
an Existing Holder or a Special Shareholder) Beneficially Owning
Capital Stock in excess of the Ownership Limit shall be void ab initio
as to the Transfer of such Capital Stock which would be otherwise
Beneficially Owned by such Person in excess of the Ownership Limit, and
the intended transferee shall Acquire no rights in such Capital Stock.
(d) Any Transfer that, if effective, would result in any Existing Holder
Beneficially Owning Capital Stock in excess of the applicable Existing
Holder Limit shall be void ab initio as to the Transfer of such Capital
Stock which would be otherwise Beneficially Owned by such Existing
Holder in excess of the applicable Existing Holder Limit, and such
Existing Holder shall Acquire no rights in such Capital Stock.
(e) Any Transfer that, if effective, would result in any Special
Shareholder Beneficially Owning Capital Stock in excess of the
applicable Special Shareholder Limit shall be void ab initio as to the
Transfer of such Capital Stock which would be otherwise Beneficially
Owned by such Special Shareholder in excess of the applicable Special
Shareholder Limit, and such Special Shareholder shall Acquire no rights
in such Capital Stock.
(f) Any Transfer that, if effective, would result in any Related Tenant
Owner Constructively Owning Capital Stock in excess of the Related
Tenant Limit shall be void ab initio as to the Transfer of such Capital
Stock which would be otherwise Constructively Owned by such Related
Tenant Owner in excess of the Related Tenant Limit, and the intended
transferee shall Acquire no rights in such Capital Stock.
(g) Any Transfer that, if effective, would result in the Capital Stock
being beneficially owned by less than 100 Persons (within the meaning
of Section 856(a)(5) of the Code) shall be void ab initio as to the
Transfer of such Capital Stock which would be otherwise beneficially
owned by the transferee, and the intended transferee shall Acquire no
rights in such Capital Stock.
(h) Any Transfer that, if effective, would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the Code shall
be void ab initio as to the portion of any Transfer of the Capital
Stock which would cause the Corporation to be "closely held" within the
meaning of Section 856(h) of the Code, and the intended transferee
shall Acquire no rights in such Capital Stock.
(i) Any other Transfer that, if effective, would result in the
disqualification of the Corporation as a REIT by virtue of actual,
Beneficial or Constructive Ownership of Capital Stock shall be void ab
initio as to such portion of the Transfer resulting in the
disqualification, and the intended transferee shall Acquire no rights
in such Capital Stock.
Section 5.3 Remedies for Breach.
- -------------------------------------
(a) If the Board of Directors or a committee thereof shall at any time
determine in good faith that a Transfer has taken place that falls within the
scope of Section 5.2 or that a Person intends to Acquire Beneficial Ownership of
any shares of the Corporation that would result in a violation of Section 5.2
(whether or not such violation is intended), the Board of Directors or a
committee thereof shall take such action as it or they deem advisable to refuse
to give effect to or to prevent such Transfer, including, but not limited to,
refusing to give effect to such Transfer on the books of the Corporation or
instituting proceedings to enjoin such Transfer, subject, however, in all cases
to the provisions of Section 5.16.
(b) Without limitation to Sections 5.2 and 5.3(a), any purported transferee
of shares Acquired in violation of Section 5.2 and any Person retaining shares
in violation of Section 5.2(b) shall be deemed to have acted as agent on behalf
of the Corporation in holding those shares Acquired or retained in violation of
Section 5.2 and shall be deemed to hold such shares in trust on behalf of and
for the benefit of the Corporation. Such shares shall be deemed a separate class
of stock until such time as the shares are sold or redeemed as provided in
Section 5.3(c). The holder shall have no right to receive dividends or other
distributions with respect to such shares, and shall have no right to vote such
shares. Such holder shall have no claim, cause of action or any other recourse
whatsoever against any transferor of shares Acquired in violation of Section
5.2. The holder's sole right with respect to such shares shall be to receive, at
the Corporation's sole and absolute discretion, either (i) consideration for
such shares upon the resale of the shares as directed by the Corporation
pursuant to Section 5.3(c) or (ii) the Redemption Price pursuant to Section
5.3(c). Any distribution by the Corporation in respect of such shares Acquired
or retained in violation of Section 5.2 shall be repaid to the Corporation upon
demand.
(c) The Board of Directors shall, within six months after receiving notice
of a Transfer or Acquisition that violates Section 5.2 or a retention of shares
in violation of Section 5.2(b), either (in its sole and absolute discretion,
subject to the requirements of Florida law applicable to redemption) (i) direct
the holder of such shares to sell all shares held in trust for the Corporation
pursuant to Section 5.3(b) for cash in such manner as the Board of Directors
directs or (ii) redeem such shares for the Redemption Price in cash on such date
within such six month period as the Board of Directors may determine. If the
Board of Directors directs the holder to sell the shares, the holder shall
receive such proceeds as the trustee for the Corporation and pay the Corporation
out of the proceeds of such sale (i) all expenses incurred by the Corporation in
connection with such sale, plus (ii) any remaining amount of such proceeds that
exceeds the amount paid by the holder for the shares, and the holder shall be
entitled to retain only the amount of such proceeds in excess of the amount
required to be paid to the Corporation.
Section 5.4 Notice of Restricted Transfer. Any Person who Acquires, attempts or
intends to Acquire, or retains shares in violation of Section 5.2 shall
immediately give written notice to the Corporation of such event and shall
provide to the Corporation such other information as the Corporation may request
in order to determine the effect, if any, of such Transfer, attempted or
intended Transfer, or retention, on the Corporation's status as a REIT.
Section 5.5 Owners Required to Provide Information. From the date of the
Initial Public Offering and prior to the Restriction Termination Date:
(a) Every shareholder of record of more than 5% by value (or such lower
percentage as required by the Code or the regulations promulgated thereunder) of
the outstanding Capital Stock of the Corporation shall, within 30 days after
December 31 of each year, give written notice to the Corporation stating the
name and address of such record shareholder, the number and class of shares of
Capital Stock Beneficially Owned by it, and a description of how such shares are
held; provided that a shareholder of record who holds outstanding Capital Stock
of the Corporation as nominee for another Person, which Person is required to
include in its gross income the dividends received on such Capital Stock (an
"Actual Owner"), shall give written notice to the Corporation stating the name
and address of such Actual Owner and the number and class of shares of such
Actual Owner with respect to which the shareholder of record is nominee. Each
such shareholder of record shall provide to the Corporation such additional
information as the Corporation may request in order to determine the effect, if
any, of such Beneficial Ownership on the Corporation's status as a REIT.
(b) Every Actual Owner of more than 5% by value (or such lower percentage
as required by the Code or Regulations promulgated thereunder) of the
outstanding Capital Stock of the Corporation who is not a shareholder
of record of the Corporation, shall within 30 days after December 31 of
each year, give written notice to the Corporation stating the name and
address of such Actual Owner, the number and class of shares
Beneficially Owned, and a description of how such shares are held.
(c) Each Person who is a Beneficial Owner of Capital Stock and each Person
(including the shareholder of record) who is holding Capital Stock for
a Beneficial Owner shall provide to the Corporation such information as
the Corporation may request, in good faith, in order to determine the
Corporation's status as a REIT.
(d) Nothing in this Section 5.5 or any request pursuant hereto shall be
deemed to waive any limitation in Section 5.2.
Section 5.6 Remedies Not Limited. Except as provided in Section 5.15, nothing
contained in this Article shall limit the authority of the Board of Directors to
take such other action as it deems necessary or advisable to protect the
Corporation and the interests of its shareholders in preserving the
Corporation's status as a REIT.
Section 5.7 Ambiguity. In the case of an ambiguity in the application of any of
the provisions of this Article 5, including without limitation any definition
contained in Section 5.1 and any determination of Beneficial Ownership, the
Board of Directors in its sole discretion shall have the power to determine the
application of the provisions of this Article 5 with respect to any situation
based on the facts known to it.
Section 5.8 Modification of Existing Holder Limits and Special Shareholder
Limits. Subject to the provisions of Section 5.10, the Existing Holder Limits
may or shall, as provided below, be modified as follows:
(a) Any Existing Holder or Special Shareholder may Transfer Capital Stock
to another Person, and, so long as such Transfer is not on the open market, any
such Transfer will decrease the Existing Holder Limit or Special Shareholder
Limit, as applicable, for such transferor (but not below the Ownership Limit)
and increase the Existing Holder Limit or Special Shareholder Limit, as
applicable, for such transferee by the percentage of the outstanding Capital
Stock so transferred. The transferor Existing Holder or Special Shareholder, as
applicable, shall give the Board of Directors of the Corporation prompt written
notice of any such transfer. Any Transfer by an Existing Holder or Special
Shareholder on the open market shall neither reduce its Existing Holder Limit or
Special Shareholder Limit, as applicable, nor increase the Ownership Limit,
Existing Holder Limit or Special Shareholder Limit of the transferee.
(b) Any grant of Capital Stock or a stock option pursuant to any benefit
plan for directors or employees shall increase the Existing Holder
Limit or Special Shareholder Limit for the affected Existing Holder or
Special Shareholder, as the case may be, to the maximum extent possible
under Section 5.10 to permit the Beneficial Ownership of the Capital
Stock granted or issuable under such employee benefit plan.
(c) The Board of Directors may reduce the Existing Holder Limit of any
Existing Holder, with the written consent of such Existing Holder,
after any Transfer permitted in this Article 5 by such Existing Holder
on the open market.
(d) Any Capital Stock issued to an Existing Holder or Special Shareholder
pursuant to a dividend reinvestment plan adopted by the Corporation
shall increase the Existing Holder Limit or Special Shareholder Limit,
as the case may be, for the Existing Holder or Special Shareholder to
the maximum extent possible under Section 5.10 to permit the Beneficial
Ownership of such Capital Stock.
(e) Any Capital Stock issued to an Existing Holder or Special Shareholder
in exchange for the contribution or sale to the Corporation of real
property, including Capital Stock issued pursuant to an "earn-out"
provision in connection with any such sale, shall increase the Existing
Holder Limit or Special Shareholder Limit, as the case may be, for the
Existing Holder or Special Shareholder to the maximum extent possible
under Section 5.10 to permit the Beneficial Ownership of such Capital
Stock.
(f) The Special Shareholder Limit shall be increased, from time to time,
whenever there is an increase in Special Shareholders' percentage
ownership (taking into account for this purpose constructive ownership
under Section 544 of the Code, as modified by Section 856(h)(1)(B) of
the Code) of the Capital Stock (or any other capital stock) of the
Corporation due to any event other than the purchase of Capital Stock
(or any other capital stock) of the Corporation by a Special
Shareholder, by an amount equal to such percentage increase multiplied
by the Special Shareholder Limit.
(g) The Board of Directors may reduce the Special Shareholder Limit for any
Special Shareholder and the Existing Holder Limit for any Existing
Holder, as applicable, after the lapse (without exercise) of an option
described in Clause (b) of this Section 5.8 by the percentage of
Capital Stock that the option, if exercised, would have represented,
but in either case no Existing Holder Limit or Special Shareholder
Limit shall be reduced to a percentage which is less than the Ownership
Limit.
Section 5.9 Modification of Ownership Limit. Subject to the limitations provided
in Section 5.10, the Board of Directors may from time to time increase or
decrease the Ownership Limit; provided, however, that any decrease may only be
made prospectively as to subsequent holders (other than a decrease as a result
of a retroactive change in existing law that would require a decrease to retain
REIT status, in which case such decrease shall be effective immediately).
Section 5.10 Limitations on Modifications. Notwithstanding any other
provision of this Article 5:
(a) Neither the Ownership Limit, the Special Shareholder Limit nor any
Existing Holder Limit may be increased if, after giving effect to such
increase, five Persons who are considered individuals pursuant to
Section 542(a)(2) of the Code (taking into account all of the then
Existing Holders and Special Shareholders) could Beneficially Own, in
the aggregate, more than 49.5% by value of the outstanding Capital
Stock.
(b) Prior to the modification of any Existing Holder Limit or Ownership
Limit pursuant to Section 5.8 or 5.9, the Board of Directors of the
Corporation may require such opinions of counsel, affidavits,
undertakings or agreements as it may deem necessary or advisable in
order to determine or insure the Corporation's status as a REIT.
(c) No Existing Holder Limit or Special Shareholder Limit may be a
percentage which is less than the Ownership Limit.
(d) The Ownership Limit may not be increased to a percentage which is
greater than 9.8%.
Section 5.11 Exceptions. The Board of Directors may, upon receipt of either a
certified copy of a ruling of the Internal Revenue Service, an opinion of
counsel satisfactory to the Board of Directors or such other evidence as the
Board of Directors deems appropriate, but shall in no case be required to,
exempt a Person (the "Exempted Holder") from the Ownership Limit, the Special
Shareholder Limit, the Existing Holder Limit or the Related Tenant Limit, as the
case may be, if the ruling or opinion concludes or the other evidence shows (A)
that no Person who is an individual as defined in Section 542(a)(2) of the Code
will, as the result of the ownership of the shares by the Exempted Holder, be
considered to have Beneficial Ownership of an amount of Capital Stock that will
violate the Ownership Limit, the Special Shareholder Limit or the applicable
Existing Holder Limit, as the case may be, or (B) in the case of an exception of
a Person from the Related Tenant Limit that the exemption from the Related
Tenant Limit would not cause the Corporation to fail to qualify as a REIT. The
Board of Directors may condition its granting of a waiver on the Exempted
Holder's agreeing to such terms and conditions as the Board of Directors
determines to be appropriate in the circumstances.
Section 5.12 Legend. All certificates representing shares of Capital Stock of
the Corporation shall bear a legend referencing the restrictions on ownership
and transfer as set forth in these Articles. The form and content of such legend
shall be determined by the Board of Directors.
Section 5.13 Termination of REIT Status. The Board of Directors may revoke the
Corporation's election of REIT status as provided in Section 856(g)(2) of the
Code if, in its discretion, the qualification of the Corporation as a REIT is no
longer in the best interests of the Corporation. Notwithstanding any such
revocation or other termination of REIT status, the provisions of this Article 5
shall remain in effect unless amended pursuant to the provisions of Article 10.
Section 5.14 Certain Transfers to Non-U.S. Persons Void. Any Transfer of shares
of Capital Stock of the Corporation to any Person (other than a Special
Shareholder) that results in the fair market value of the shares of Capital
Stock of the Corporation owned directly and indirectly by Non-U.S. Persons to
comprise 50% or more of the fair market value of the issued and outstanding
shares of Capital Stock of the Corporation (determined, until the 15%
Termination Date (as defined in the Stockholders Agreement), if any, by assuming
that the Special Shareholders are Non-U.S. Persons, and own a percentage of the
outstanding shares of Common Stock of the Corporation equal to 45%, on a fully
diluted basis), shall be void ab initio to the fullest extent permitted under
applicable law and the intended transferee shall be deemed never to have had an
interest therein. If the foregoing provision is determined to be void or invalid
by virtue of any legal decision, statute, rule or regulation, then the shares
held or purported to be held by the transferee shall, automatically and without
the necessity of any action by the Board of Directors or otherwise, (i) be
prohibited from being voted at any time such securities result in the fair
market value of the shares of Capital Stock of the Corporation owned directly
and indirectly by Non-U.S. Persons to comprise 50% or more of the fair market
value of the issued and outstanding shares of Capital Stock of the Corporation
(determined, until the 15% Termination Date, if any, assuming that the Special
Shareholders are Non-U.S. Persons, and own a percentage of the outstanding
shares of Common Stock of the Corporation equal to 45%, on a fully diluted
basis), (ii) not be entitled to dividends with respect thereto, (iii) be
considered held in trust by the transferee for the benefit of the Corporation
and shall be subject to the provisions of Section 5.3(c) as if such shares of
Capital Stock were the subject of a Transfer that violates Section 5.2, and (iv)
not be considered outstanding for the purpose of determining a quorum at any
meeting of shareholders.
Section 5.15 Severability. If any provision of this Article or any application
of any such provision is determined to be invalid by any federal or state court
having jurisdiction over the issues, the validity of the remaining provisions
shall not be affected and the application of such provisions shall be affected
only to the extent necessary to comply with the determination of such court.
Section 5.16 New York Stock Exchange Transactions. Nothing in this Article 5
shall preclude the settlement of any transaction entered into through the
facilities of the New York Stock Exchange."
ARTICLE 6
REGISTERED OFFICE AND AGENT
Section 6.1 Name and Address. The street address of the registered office of the
Corporation is 200 Laura Street, Jacksonville, Florida 32202, and the name of
the initial registered agent of this Corporation at that address is F & L Corp.
ARTICLE 7
DIRECTORS
Section 7.1 Number. The number of directors may be increased or diminished from
time to time by the bylaws, but shall never be more than fifteen (15) or less
than three (3).
Section 7.2 Classification. The Directors shall be classified into three
classes, as nearly equal in number as possible. At each annual meeting of the
shareholders of the Corporation, the date of which shall be fixed by or pursuant
to the Bylaws of the Corporation, the successors of the class of directors whose
terms expire at that meeting shall be elected to hold office for a term expiring
at the annual meeting of shareholders held in the third year following the year
of their election.
ARTICLE 8
BYLAWS
Section 8.1 Bylaws. The Bylaws may be amended or repealed from time to time by
either the Board of Directors or the shareholders, but the Board of Directors
shall not alter, amend or repeal any Bylaw adopted by the shareholders if the
shareholders specifically provide that the Bylaw is not subject to amendment or
repeal by the Board of Directors.
ARTICLE 9
INDEMNIFICATION
Section 9.1 Indemnification. The Board of Directors is hereby specifically
authorized to make provision for indemnification of directors, officers,
employees and agents to the full extent permitted by law.
ARTICLE 10
AMENDMENT
Section 10.1 Amendment. The Corporation reserves the right to amend or repeal
any provision contained in these Amended and Restated Articles of Incorporation,
and any right conferred upon the shareholders is subject to this reservation.
IN WITNESS WHEREOF, the undersigned President of the Corporation has
executed these Restated Articles this 1st day of November, 1996.
/s/ Martin E. Stein, Jr.
------------------------
Martin E. Stein, Jr., President
<PAGE>
ACCEPTANCE BY REGISTERED AGENT
Having been named to accept service of process for the above-stated
corporation, at the place designated in the above Articles of Incorporation, I
hereby agree to act in this capacity, and I further agree to comply with the
provisions of all statutes relative to the proper and complete performance of my
duties. I am familiar with and I accept the obligations of a registered agent.
F & L CORP., Registered Agent
/s/ Charles V. Hedrick
----------------------
Charles V. Hedrick, Authorized Signatory
Date: November 4, 1996
<PAGE>
004.160941.1
7
004.160941.1
ADDENDUM TO RESTATED ARTICLES OF INCORPORATION
of
REGENCY REALTY CORPORATION
DESIGNATION OF
CLASS B NON-VOTING COMMON STOCK
$0.01 PAR VALUE
(Filed with the Florida Department of State on December 20, 1995)
Pursuant to Section 607.0602 of the
Florida Business Corporation Act
----------------
Pursuant to the authority expressly conferred upon the Board of
Directors by Section 4.4 of the Restated Articles of Incorporation of the
Corporation, as amended, in accordance with the provisions of Section 607.0602
of the Florida Business Corporation Act, the Board of Directors, at meetings
duly held on October 23, 1995 and December 14, 1995, duly adopted the following
resolution providing for an issue of a class of the Corporation's Special Common
Stock to be designated Class B Non-Voting Common Stock, $0.01 par value.
Shareholder action was not required with respect to such designation.
"RESOLVED, that pursuant to the authority expressly granted to the
Corporation's Board of Directors by Section 4.4 of the Restated Articles of
Incorporation of the Corporation, as amended, the Board of Directors hereby
establishes a class of the Corporation's Special Common Stock, $0.01 par value
per share, and hereby fixes the designation, the number of shares and the
relative rights, preferences and limitations thereof as follows:
1. Designation. The designation of the class of Special Common
Stock created by this resolution shall be Class B Non-Voting Convertible Common
Stock, $0.01 par value (hereinafter referred to as "Class B Common Stock"), and
the number of shares constituting such class shall be two million five hundred
thousand (2,500,000) shares.
2. Dividend Rights.
(a) Subject to the rights of classes or series of Preferred Stock now in
existence or which may from time to time come into existence, the holders of
shares of Class B Common Stock shall be entitled to receive dividends, when, as
and if declared by the Board of Directors, out of any assets legally available
therefor, pari passu with any dividend (payable other than in voting common
stock of the Corporation (hereinafter referred to as the "Common Stock")) on the
Common Stock of the Corporation, in the amount per share equal to the Class B
Dividend Amount, as in effect from time to time. The initial per share Class B
Dividend Amount per annum shall be equal to $1.9369. Each calendar quarter
hereafter (or if the Original Issue Date is not on the first day of a calendar
quarter, the period beginning on the date of issuance and ending on the last day
of the calendar quarter of issuance) is referred to hereinafter as a "Dividend
Period." The amount of dividends payable with respect to each full Dividend
Period for the Class B Common Stock shall be computed by dividing the Class B
Dividend Amount by four. The amount of dividends on the Class B Common Stock
payable with respect to the initial Dividend Period, or any other period shorter
or longer than a full Dividend Period, shall be computed ratably on the basis of
the actual number of days in such Dividend Period. In the event of any change in
the quarterly cash dividend per share applicable to the Common Stock after the
date of these Articles of Amendment, the quarterly cash dividend per share on
the Class B Common Stock shall be adjusted for the same dividend period by an
amount computed by (1) multiplying the amount of the change in the Common Stock
dividend (2) times the Conversion Ratio (as defined in Section 4.(a)).
(b) In the event the Corporation shall declare a distribution payable in
(i) securities of other persons, (ii) evidences of indebtedness issued by the
Corporation or other persons, (iii) assets (excluding cash dividends) or (iv)
options or rights to purchase capital stock or evidences of indebtedness in the
Corporation or other persons, then, in each such case for the purpose of this
Section 2.(b), the holders of the Class B Common Stock shall be entitled to a
proportionate share of any such distribution as though they were the holders of
the number of shares of Common Stock of the Corporation into which their shares
of Class B Common Stock are or would be convertible (assuming such shares of
Class B Common Stock were then convertible).
3. Liquidation Preference. The holders of record of Class B
Common Stock shall not be entitled to any liquidation preference. In the event
of any liquidation, dissolution or winding up of the affairs of the Corporation,
whether voluntary or involuntary, the holders of record of Class B Common Stock
shall be treated pari passu with the holders of record of Common Stock, with
each holder of record of Class B Common Stock being entitled to receive that
amount which such holder would be entitled to receive if such holder had
converted all its Class B Common Stock into Common Stock immediately prior to
the liquidating distribution in question.
4. Conversion.
(a) Conversion Date and Conversion Ratio. Beginning on the three-year
anniversary date of the Original Issue Date thereof (the "Third Anniversary"),
the holders of shares of Class B Common Stock shall have the right, at their
option, at any time and from time to time, to convert each such shares into
1.1901872 (hereinafter referred to as "Conversion Ratio", which shall be subject
to adjustment as hereinafter provided) shares of fully paid and nonassessable
shares of Common Stock; provided, however, that no holder of Class B Common
Stock shall be entitled to convert shares of Class B Common Stock into Common
Stock pursuant to the foregoing provision, if, as a result of such conversion
such person (x) would become the Beneficial Owner of more than 4.9% of the
Corporation's outstanding Common Stock (the "Percentage Limit"), or (y) would
acquire upon such conversion during any consecutive three-month period more than
495,911 shares of Common Stock (the "Share Limit," which shall be subject to
adjustment as hereinafter provided). Beneficial Owner shall have the meaning set
forth in Rule 13d-3 under the Securities Exchange Act of 1934 (or any successor
provision thereto). Notwithstanding the foregoing, such conversion right may be
exercised from time to time after the Third Anniversary irrespective of the
Percentage Limit or the Share Limit (and no conversion limit shall apply) as
follows:
(A) If the holder duly exercises piggyback registration rights
in connection with an underwritten public offering pursuant to a
Registration Rights Agreement executed by the Corporation on August 25,
1995, the holder shall be entitled to convert shares of Class B Common
Stock effective at the closing of the offering in an amount sufficient
to enable the holder to honor its sale obligations to the underwriters
at such closing, even though the amount so converted exceeds the
Percentage Limit or the Share Limit; and
(B) If (x) the holder arranges for the sale of Common Stock
issuable upon conversion of Class B Common Stock in a transaction that
complies with applicable securities laws and with the Corporation's
Amended and Restated Articles of Incorporation as then in effect which
transaction will not be effected on a securities exchange or through an
established quotation system or in the over-the-counter market, and (y)
the holder provides the Corporation with copies of written
documentation relating to the transaction sufficient to enable the
Corporation to determine whether the transaction meets the requirements
of the preceding clause, the holder shall be entitled to convert shares
of Class B Common Stock effective at the closing of the sale in an
amount sufficient for the holder to effect the transaction at such
closing, even though the amount so converted exceeds the Percentage
Limit or the Share Limit.
In addition, notwithstanding the foregoing, the conversion right set
forth above may be exercised without regard to the Percentage Limit or the Share
Limit (and no conversion limit shall apply) before the Third Anniversary if one
of the following conditions has occurred:
(i) For any two consecutive fiscal quarters, the aggregate amount
outstanding as of the end of the quarter under (1) all mortgage indebtedness of
the Corporation and its consolidated entities and (2) unsecured indebtedness of
the Corporation and its consolidated entities for money borrowed that has not
been made generally subordinate to any other indebtedness for borrowed money of
the Corporation or any consolidated entity exceeds sixty five percent (65%) of
the amount arrived at by (A) taking the Corporation's consolidated gross
revenues less property-related expenses, including real estate taxes, insurance,
maintenance and utilities, but excluding depreciation, amortization and
corporate general and administrative expenses, for the quarter in question and
the immediately preceding quarter, (B) multiplying the amount in clause A by two
(2), and (C) dividing the resulting product in clause B by nine percent (9%)
(all as such items of indebtedness, revenues and expenses are reported in
consolidated financial statements contained in the Corporation's Form 10-Ks and
Form 10-Qs as filed with the Securities and Exchange Commission); or
(ii) In the event that (1) Martin E. Stein, Jr. has ceased to be an
executive officer of the Corporation, or (2) Bruce M. Johnson and any one of (a)
Richard E. Cook, (b) Robert C. Gillander, Jr. or (c) James D. Thompson have
ceased to be executive officers of the Corporation, or (3) all of Richard E.
Cook, Robert C. Gillander, Jr., and James. D. Thompson have ceased to be
executive officers of the Corporation; or
(iii) If (A) the Corporation shall be party to, or shall have announced or
entered into an agreement for, any transaction (including, without limitation, a
merger, consolidation, statutory share exchange or sale of all or substantially
all of its assets (each of the foregoing being referred to herein as a
"Transaction")), in each case as a result of which shares of Common Stock shall
have been or will be converted into the right to receive stock, securities or
other property (including cash or any combination thereof) or which has resulted
or will result in the holders of Common Stock immediately prior to the
Transaction owning less than 50% of the Common Stock after the Transaction, or
(B) a "change of control" as defined in the next sentence occurs with respect to
the Corporation. A change of control shall mean the acquisition (including by
virtue of a merger, share exchange or other business combination) by one
stockholder or a group of stockholders acting in concert of the power to elect a
majority of the Corporation's board of directors. The Corporation shall notify
the holder of Class B Common Stock promptly if any of the events listed in this
Section 4.(a)(iii) shall occur.
Calculations set forth in Section 4.(a)(i) shall be made without regard
to unconsolidated indebtedness incurred as a joint venture partner, and the
effect of any unconsolidated joint venture, including any income from such
unconsolidated joint venture, shall be excluded for purposes of the calculation
set forth in Section 4.(a)(i).
(b) Procedure for Conversion. In order to convert shares of Class B Common
Stock into Common Stock, the holder thereof shall surrender the certificate(s)
therefor, duly endorsed if the Corporation shall so require, or accompanied by
appropriate instruments of transfer satisfactory to the Corporation, at the
office of any transfer agent for the Class B Common Stock, or if there is no
such transfer agent, at the principal offices of the Corporation, or at such
other office as may be designated by the Corporation, together with written
notice that such holder irrevocably elects to convert such shares. Such notice
shall also state the name(s) and address(es) in which such holder wishes the
certificate(s) for the shares of Common Stock issuable upon conversion to be
issued. As soon as practicable thereafter, the Corporation shall issue and
deliver at said office a certificate or certificates for the number of shares of
Common Stock issuable upon conversion of the shares of Class B Common Stock duly
surrendered for conversion, to the person(s) entitled to receive the same.
Shares of Class B Common Stock shall be deemed to have been converted
immediately prior to the close of business on the date on which the certificates
therefor and notice of election to convert the same are duly received by the
Corporation in accordance with the foregoing provisions, and the person(s)
entitled to receive the Common Stock issuable upon such conversion shall be
deemed for all purposes as record holder(s) of such Common Stock as of the close
of business on such date.
(c) No Fractional Shares. No fractional shares shall be issued upon
conversion of the Class B Common Stock into Common Stock, and the number of
shares of Common Stock to be issued shall be rounded to the nearest whole share.
Whether or not fractional shares are issuable upon such conversion shall be
determined on the basis of the total number of shares of Class B Common Stock
the holder is at the time converting into Common Stock and the number of shares
of Common Stock issuable upon such aggregate conversion.
(d )Payment of Adjusted Accrued Dividends Upon Conversion. On the next
dividend payment date (or such later date as is permitted in this Section 4.(d)
following any conversion hereunder, the Corporation shall pay in cash Adjusted
Accrued Dividends (as defined below) on shares of Class B Common Stock so
converted. The holder shall be entitled to receive accrued and unpaid dividends
accrued to and including the conversion date on the shares of Class B Common
Stock converted (assuming that such dividends accrue ratably each day that such
shares are outstanding), less an amount equal to the pre-conversion portion of
the dividends paid on the shares of Common Stock issued upon such conversion the
record date for which such Common Stock dividend occurs on or after the
conversion date but before the three-month anniversary date of the conversion
date (the "Subsequent Record Date"). The pre-conversion portion of such Common
Stock dividend means that portion of such dividend as is attributable to the
period ending on the conversion date, assuming that such dividend accrues
ratably during the period that (i) begins on the day after the last Common Stock
dividend record date occurring before such Subsequent Record Date and (ii) ends
on such Subsequent Record Date. The term "Adjusted Accrued Dividends" means the
amount arrived at through the application of the foregoing formula. Adjusted
Accrued Dividends shall not be less than zero. The formula for Adjusted Accrued
Dividends shall be applied to effectuate the Corporation's intent that the
holder converting shares of Class B Common Stock to Common Stock shall be
entitled to receive dividends on such shares of Class B Common Stock up to and
including the conversion date and shall be entitled to the dividends on the
shares of Common Stock issued upon such conversion which are deemed to accrue
beginning on the first day after the conversion date, but shall not be entitled
to dividends attributable to the same period for both the shares of Class B
Common Stock converted and the shares of Common Stock issued upon such
conversion. The Corporation shall be entitled to withhold (to the extent
consistent with the intent to avoid double dividends for overlapping portions of
Class B Common Stock and Common Stock dividend periods) the payment of Adjusted
Accrued Dividends until the Common Stock dividend declaration date for the
applicable Subsequent Record Date, even though such date occurs after the
applicable dividend payment date with respect to the Class B Common Stock, in
which event the Corporation shall mail to each holder who converted Class B
Common Stock a check for the Adjusted Accrued Dividends thereon within five (5)
business days after such Common Stock dividend declaration date. Adjusted
Accrued Dividends shall be accompanied by an explanation of how such Adjusted
Accrued Dividends have been calculated. Adjusted Accrued Dividends shall not
bear interest.
5. Adjustments. (a) In the event the Corporation shall at any time (i) pay
a dividend or make a distribution to holders of Common Stock in shares of Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a larger
number of shares, or (iii) combine its outstanding shares of Common Stock into a
smaller number of shares, the Conversion Ratio and the Share Limit shall be
adjusted on the effective date of the dividend, distribution, subdivision or
combination by multiplying the Conversion Ratio or the Share Limit (as the case
may be) by a fraction, the numerator of which shall be the number of shares of
Common Stock outstanding immediately prior to such dividend, distribution,
subdivision or combination and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after such dividend,
distribution, subdivision or combination.
(b) Whenever the Conversion Ratio and the Share Limit shall be adjusted as
herein provided, the Corporation shall cause to be mailed by first class mail,
postage prepaid, as soon as practicable to each holder of record of shares of
Class B Common Stock a notice stating that the Conversion Ratio and the Share
Limit has been adjusted and setting forth the adjusted Conversion Ratio and the
Share Limit, together with an explanation of the calculation of the same.
(c) If the Corporation shall be party to any Transaction in each case as a
result of which shares of Common Stock shall be converted into the right to
receive stock, securities or other property (including cash or any combination
thereof), the holder of each share of Class B Common Stock shall have the right,
after such Transaction to convert such share pursuant to the conversion
provisions hereof, into the number and kind of shares of stock or other
securities and the amount and kind of property receivable upon such Transaction
by a holder of the number of shares of Common Stock issuable upon conversion of
such share of Class B Common Stock immediately prior to such Transaction. The
Corporation shall not be party to any Transaction unless the terms of such
Transaction are consistent with the provisions of this Section 5.(c), and it
shall not consent to or agree to the occurrence of any Transaction until the
Corporation has entered into an agreement with the successor or purchasing
entity, as the case may be, for the benefit of the holders of the Class B Common
Stock, thereby enabling the holders of the Class B Common Stock to receive the
benefits of this Section 5.(c) and the other provisions of these Articles of
Amendment. Without limiting the generality of the foregoing, provision shall be
made for adjustments in the Conversion Ratio which shall be as nearly equivalent
as may be practicable to the adjustments provided for in Section 5.(a). The
provisions of this Section 5.(c) shall similarly apply to successive
Transactions. In the event that the Corporation shall propose to effect any
Transaction which would result in an adjustment under Section 5.(c), the
Corporation shall cause to be mailed to the holders of record of Class B Common
Stock at least 20 days prior to the applicable date hereinafter specified a
notice stating the date on which such Transaction is expected to become
effective, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their shares of Common Stock for
securities or other property deliverable upon such Transaction. Failure to give
such notice, or any defect therein, shall not affect the legality or validity of
such Transaction.
6. Other.
(a) The Corporation shall at all times reserve and keep available out of
its authorized but unissued Common Stock the maximum number of shares of Common
Stock issuable upon the conversion of all shares of Class B Common Stock then
outstanding and if, at any time, the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Class B Common Stock, in addition to such other
remedies as shall be available to the holder of such Class B Common Stock, the
Corporation shall take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued shares of Common
Stock to such number of shares as shall be sufficient for such purposes.
(b) The Corporation shall pay any taxes that may be payable in respect of
the issuance of shares of Common Stock upon conversion of shares of Class B
Common Stock, but the Corporation shall not be required to pay any taxes which
may be payable in respect of any transfer of shares of Class B Common Stock or
any transfer involved in the issuance of shares of Common Stock in a name other
than that in which the shares of Class B Common Stock so converted are
registered, and the Corporation shall not be required to transfer any such
shares of Class B Common Stock or to issue or deliver any such shares of Common
Stock unless and until the person(s) requesting such transfer or issuance shall
have paid to the Corporation the amount of any such taxes, or shall have
established to the satisfaction of the Corporation that such taxes have been
paid.
(c) The Corporation will not, by amendment of the Articles of Incorporation
or through any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in carrying out of all the provisions of these
Articles of Amendment and in the taking of all such action as may be necessary
or appropriate to protect the conversion rights of the holders of the Class B
Common Stock against impairment.
(d) Holders of Class B Common Stock shall be entitled to receive copies of
all communications by the Corporation to its holders of Common Stock,
concurrently with the distribution to such shareholders.
7. Voting Rights. The holders of record of Class B Common
Stock shall not be entitled to vote on any matter on which the holders of record
of Common Stock are entitled to vote, except where a separate vote of the Class
B Common Stock is required by law.
8. Reacquired Shares. Shares of Class B Common Stock converted, redeemed or
otherwise purchased or acquired by the Corporation shall be restored to the
status of authorized but unissued shares of Non-Voting Common Stock without
designation as to class or series.
<PAGE>
004.160941.1
2
004.160941.1
ARTICLES OF AMENDMENT
OF
REGENCY REALTY CORPORATION
This corporation was incorporated on July 8, 1993 effective July 9,
1993 under the name Regency Realty Corporation. Pursuant to Sections 607.1001,
607.1003, 607.1004 and 607.1006, Florida Business Corporation Act, amendments to
the Articles of Incorporation, as restated on November 4, 1996, were approved by
the Board of Directors at a meeting held on January 27, 1997 and adopted by the
shareholders of the corporation on June 12, 1997. The only voting group entitled
to vote on the adoption of the amendment to the Articles of Incorporation
consists of the holders of the corporation's common stock. The number of votes
cast by such voting group was sufficient for approval by that voting group. The
Restated Articles of Incorporation of the Company are hereby amended as follows
(amended language is underscored):
Section 4.1 is amended to read as follows:
"Section 4.1 Authorized Capital. The maximum number of shares
of stock which the corporation is authorized to have outstanding at any
one time is one hundred seventy million (170,000,000) shares (the
"Capital Stock") divided into classes as follows:
(a) Ten million (10,000,000) shares of preferred
stock having a par value of $0.01 per share (the "Preferred
Stock"), and which may be issued in one or more classes or
series as further described in Section 4.2;
(b) One hundred fifty million (150,000,000) shares of voting common stock
having a par value of $0.01 per share (the "Common Stock"); and
(c) Ten million (10,000,000) shares of common stock
having a par value of $0.01 per share (the "Special Common
Stock") and which may be issued in one or more classes or
series as further described in Section 4.4.
All such shares shall be issued fully paid and non assessable."
Section 5.14 is hereby amended in its entirety to read as follows:
"Section 5.14 Certain Transfers to Non-U.S. Persons Void. Any
Transfer of shares of Capital Stock of the Corporation to any Person
(other than a Special Shareholder) that results in the fair market
value of the shares of Capital Stock of the Corporation owned directly
and indirectly by Non-U.S. Persons to comprise 50% or more of the fair
market value of the issued and outstanding shares of Capital Stock of
the Corporation (determined, until the 15% Termination Date (as defined
in the Stockholders Agreement), if any, by assuming that the Special
Shareholders (i) are Non-U.S. Persons and (ii) own (A) a percentage of
the outstanding shares of Common Stock of the Corporation equal to 45%,
on a fully diluted basis, and (B) a percentage of the outstanding
shares of each class of Capital Stock of the Corporation (other than
Common Stock) equal to the quotient obtained by dividing the sum of its
actual ownership thereof and, without duplication of shares included in
clause (A), the shares it has a right to acquire by the number of
outstanding shares of such class (clauses (i) and (ii) are referred to
collectively as the "Presumption") shall be void ab initio to the
fullest extent permitted under applicable law and the intended
transferee shall be deemed never to have had an interest therein. If
the foregoing provision is determined to be void or invalid by virtue
of any legal decision, statute, rule or regulation, then the shares
held or purported to be held by the transferee shall, automatically and
without the necessity of any action by the Board of Directors or
otherwise, (i) be prohibited from being voted at any time such
securities result in the fair market value of the shares of Capital
Stock of the Corporation owned directly and indirectly by Non-U.S.
Persons to comprise 50% or more of the fair market value of the issued
and outstanding shares of Capital Stock of the Corporation (determined,
until the 15% Termination Date, if any, by applying the Presumption,
(ii) not be entitled to dividends with respect thereto, (iii) be
considered held in trust by the transferee for the benefit of the
Corporation and shall be subject to the provisions of Section 5.3(c) as
if such shares of Capital Stock were the subject of a Transfer that
violates Section 5.2, and (iv) not be considered outstanding for the
purpose of determining a quorum at any meeting of shareholders. The
Special Shareholders may, in their sole discretion, with prior notice
to and the approval of the Board of Directors, waive in writing all or
any portion of the Presumption, on such terms and conditions as they in
their sole discretion determine.
IN WITNESS WHEREOF, the undersigned Executive Vice President of this
corporation has executed these Articles of Amendment this 12th day of June,
1997.
/s/ Bruce M. Johnson
--------------------
Bruce M. Johnson, Managing Director
<PAGE>
004.160941.1
2
004.160941.1
ARTICLES OF MERGER
OF
RRC FL TWO, INC. AND REGENCY ATLANTA, INC.
WITH AND INTO
REGENCY REALTY CORPORATION
Pursuant to the provisions of Sections 607.1105 and 607.1107 of the
Florida Business Corporation Act (the "Florida Act") and Sections 14-2-1105 and
14-2-1107 of the Georgia Business Corporation Code (the "Georgia Act"), the
undersigned corporations enter into these Articles of Merger by which RRC FL
Two, Inc., a Florida corporation and Regency Atlanta, Inc., a Georgia
corporation, both of which are wholly owned subsidiaries of Regency Realty
Corporation, shall be merged with and into Regency Realty Corporation, a Florida
corporation, and Regency Realty Corporation shall be the surviving corporation,
in accordance with a Plan of Merger (the "Plan"), adopted pursuant to Section
607.1104 of the Florida Act and Section 14-2-1104 of the Georgia Act, and the
undersigned corporations hereby certify as follows:
FIRST, a copy of the Plan is attached hereto and made a part hereof.
SECOND, the merger shall become effective at the close of business on
the date on which these Articles of Merger are filed with the Department of
State of Florida and the Secretary of State of Georgia.
THIRD, pursuant to Sections 607.1101 and 607.1103 of the Florida Act,
the Plan was adopted the Board of Directors of Regency Realty Corporation on
February 3, 1998. Shareholder approval of the Plan was not required. Pursuant to
Sections 607.1101 and 607.1103 of the Florida Act, the Plan was adopted the
Board of Directors of RRC FL Two, Inc. on February 3, 1998. Shareholder approval
of the Plan was not required. Pursuant to Sections 14-2-1101 and 14-2-1103 of
the Georgia Act, the Plan was adopted by the Board of Directors of Regency
Atlanta, Inc. on February 3, 1998. Shareholder approval of the Plan was not
required.
IN WITNESS WHEREOF, these Articles of Merger have been executed by RRC FL
Two, Inc. and Regency Atlanta, Inc., as the merging corporations, and by Regency
Realty Corporation, as surviving corporation, this 16th day of February, 1998.
WITNESSES RRC FL TWO, INC., a Florida corporation
/s/ Yona C. Sharp
Yona C. Sharp By: /s/ J. Christian Leavitt
-----------------------------
J. Christian Leavitt, Vice President
121 West Forsyth Street, Suite 200
/s/ Karen R. Peterson Jacksonville, Florida 32202
- ---------------------
Karen R. Peterson
REGENCY ATLANTA, INC., a Georgia
corporation
/s/ Yona C. Sharp
Yona C. Sharp By: /s/ J. Christian Leavitt
-----------------------------
J. Christian Leavitt, Vice President
121 West Forsyth Street, Suite 200
/s/ Karen R. Peterson Jacksonville, Florida 32202
- ---------------------
Karen R. Peterson
REGENCY REALTY CORPORATION,
a Florida corporation
/s/ Yona C. Sharp
Yona C. Sharp By: /s/ J. Christian Leavitt
-----------------------------
J. Christian Leavitt, Vice President
121 West Forsyth Street, Suite 200
/s/ Karen R. Peterson Jacksonville, Florida 32202
- ---------------------
Karen R. Peterson
<PAGE>
STATE OF FLORIDA
COUNTY OF DUVAL
The foregoing instrument was acknowledged before me this 16th day of
February, 1998, by J. Christian Leavitt, Vice President of RRC FL Two, Inc. Such
person did take an oath and: (notary must check applicable box)
|X| is/are personally known to me.
o produced a current Florida driver's license as identification.
o produced _______________________________ as identification.
{Notary Seal must be affixed} /s/ Yona C. Sharp
--------------------------
Signature of Notary
Yona C. Sharp
----------------------
Name of Notary (Typed, Printed or Stamped)
Commission Number (if not legible on seal): CC 578957
My Commission Expires (if not legible on seal): September 15, 2000
STATE OF FLORIDA
COUNTY OF DUVAL
The foregoing instrument was acknowledged before me this 16th day of
February, 1998, by J. Christian Leavitt, Vice President of Regency Atlanta, Inc.
Such person did take an oath and: (notary must check applicable box)
|X| is/are personally known to me.
o produced a current Florida driver's license as identification.
o produced _______________________________ as identification.
{Notary Seal must be affixed} /s/ Yona C. Sharp
--------------------------
Signature of Notary
Yona C. Sharp
----------------------
Name of Notary (Typed, Printed or Stamped)
Commission Number (if not legible on seal): CC 578957
My Commission Expires (if not legible on seal): September 15, 2000
STATE OF FLORIDA
COUNTY OF DUVAL
The foregoing instrument was acknowledged before me this 16th day of
February, 1998, by J. Christian Leavitt, Vice President of Regency Realty
Corporation. Such person did take an oath and: (notary must check applicable
box)
|X| is/are personally known to me.
o produced a current Florida driver's license as identification.
o produced _______________________________ as identification.
{Notary Seal must be affixed} /s/ Yona C. Sharp
--------------------------
Signature of Notary
Yona C. Sharp
----------------------
Name of Notary (Typed, Printed or Stamped)
Commission Number (if not legible on seal): CC 578957
My Commission Expires (if not legible on seal): September 15, 2000
<PAGE>
PLAN OF MERGER
This Plan of Merger (the "Plan") provides for the merger of RRC FL TWO,
INC., a Florida corporation, and REGENCY ATLANTA, INC., a Georgia corporation,
with and into REGENCY REALTY CORPORATION, a Florida corporation as follows:
1. Merger of Subsidiaries into Parent. RRC FL Two, Inc. and Regency
Atlanta, Inc. (the "Merging Corporations") are both wholly owned subsidiaries of
Regency Realty Corporation (the "Surviving Corporation"). The Merging
Corporations shall be merged with and into the Surviving Corporation, the
separate corporate existence of the Merging Corporations shall cease and the
Surviving Corporation shall be the surviving corporation.
2. Effective Date. The Merger shall become effective at the close of
business on the date on which Articles of Merger are filed with the Florida
Department of State and the Georgia Secretary of State (the "Effective Date").
3. Cancellation of Merging Corporation Stock. Each share of common stock of the
Merging Corporations which is issued and outstanding on the Effective Date shall
be deemed retired and canceled by virtue of the Merger, automatically, without
any action on the part of the Merging Corporations or otherwise.
4. Effect of Merger. On the Effective Date, the separate existence of the
Merging Corporations shall cease, and the Surviving Corporation shall succeed to
all the rights, privileges, immunities, and franchises, and to all the property,
real, personal and mixed, of the Merging Corporations, without the necessity for
any separate transfer. The Surviving Corporation shall thereafter be responsible
and liable for all liabilities and obligations of the Merging Corporations,
including but not limited to the obligations of Regency Atlanta, Inc. as general
partner of Regency Retail Partnership, L.P., and neither the rights of creditors
nor any liens on the property of the Merging Corporations shall be impaired by
the Merger. If at any time after the Effective Date the Surviving Corporation
shall consider or be advised that any deeds, bills of sale, assignments or
assurances or any other acts or things are necessary, desirable or proper (a) to
vest, perfect or confirm, of record or otherwise, in the Surviving Corporation,
its right, title or interest in, to or under any of the rights, privileges,
powers, franchises, properties or assets of the Merging Corporations acquired or
to be acquired as a result of the Merger, or (b) otherwise to carry out the
purposes of this Plan, the Surviving Corporation and its officers and directors
or their designees shall be authorized to execute and deliver, in the name and
on behalf of the Merging Corporations, all deeds, bills of sale, assignments and
assurances, and to do, in the name and on behalf of the Merging Corporations,
all other acts and things necessary, desirable or proper to vest, perfect or
confirm the Surviving Corporation's right, title or interest in, to or under any
of the rights, privileges, powers, franchises, properties or assets of the
Merging Corporations acquired or to be acquired as a result of the Merger and
otherwise to carry out the purposes of this Plan.
5. Waiver of Notice. The Surviving Corporation, being the sole shareholder of
both of the Merging Corporations, by execution of the Articles of Merger waives
the notice requirements of Section 607.1104 of the Florida Business Corporation
Act and Section 14-2-1104 of the Georgia Business Corporation Code.
6. Abandonment. This Plan may be abandoned at any time prior to the Effective
Date by either of the Merging Corporations or the Surviving Corporation, without
further shareholder action and, if Articles of Merger have been filed with the
Department of State of Florida, the Department of State of Alabama, and the
Department of State of Georgia, by filing a Notice of Abandonment with each such
Department.
<PAGE>
004.160941.1
2
004.160941.1
REGENCY REALTY CORPORATION
AMENDMENT TO ARTICLES OF INCORPORATION
This corporation was incorporated on July 8, 1993 effective July 9,
1993 under the name Regency Realty Corporation. Pursuant to Sections 607.1001,
607.1003, 607.1004 and 607.1006, Florida Business Corporation Act, amendments to
Section 5.14 of the Articles of Incorporation, as restated on November 4, 1996,
were approved by the Board of Directors at a meeting held on December 5, 1997
and adopted by the shareholders of the corporation on May 26, 1998. The only
voting group entitled to vote on the adoption of the amendment to Section 5.14
of the Articles of Incorporation consists of the holders of the corporation's
common stock. The number of votes cast by such voting group was sufficient for
approval by that voting group. Section 5.14 of the Restated Articles of
Incorporation of the Company is hereby amended in its entirety to read as
follows:
"Section 5.14 Certain Transfers to Non-U.S. Persons Void. Any Transfer
of shares of Capital Stock of the Corporation to any Person on or after the
effective date of this Amendment shall be void ab initio to the fullest extent
permitted under applicable law and the intended transferee shall be deemed never
to have had an interest therein if the Transfer:
1. occurs prior to the 15% Termination Date and results in the
fair market value of the shares of Capital Stock of the
Corporation owned directly or indirectly by Non-U.S. Persons
(other than a Special Shareholder who is a Non-U.S. Person)
comprising five percent (5%) or more of the fair market value
of the issued and outstanding shares of Capital Stock of the
Corporation; or
2. results in the fair market value of the shares of Capital
Stock of the Corporation owned directly or indirectly by
Non-U.S. Persons (including Special Shareholders who are
Non-U.S. Persons) comprising fifty percent (50%) or more of
the fair market value of the issued and outstanding shares of
Capital Stock of the Corporation.
If either of the foregoing provisions is determined to be void or
invalid by virtue of any legal decision, statute, rule or regulation,
then the shares held or purported to be held by the transferee shall,
automatically and without the necessity of any action by the Board of
Directors or otherwise:
(i) be prohibited from being voted at any time such
securities result in the fair market value of the shares of
Capital Stock of the Corporation owned directly or indirectly
by Non-U.S. Persons (other than Special Shareholders who are
Non-U.S. Persons) or by Non-U.S. Persons (including Special
Shareholders who are Non-U.S. Persons) comprising five percent
(5%) or more or fifty percent (50%) or more, respectively, of
the fair market value of the issued and outstanding shares of
Capital Stock of the Corporation;
(ii) not be entitled to dividends with respect thereto;
(iii) be considered held in trust by the transferee
for the benefit of the Corporation and shall be subject to the
provisions of Section 5.3(c) as if such shares of Capital
Stock were the subject of a Transfer that violates Section
5.2; and
(iv) not be considered outstanding for the purpose of determining a quorum
at any meeting of shareholders.
The Special Shareholders may, in their sole discretion, with prior
notice to the Board of Directors, waive, alter or revise in writing all
or any portion of the Transfer restrictions set forth in this Section
5.14 from and after the date on which such notice is given, on such
terms and conditions as they in their sole discretion determine."
IN WITNESS WHEREOF, the undersigned Chairman of this corporation has
executed these Articles of Amendment this 26th day of May, 1998.
/s/ Martin E. Stein, Jr.
------------------------
Martin E. Stein, Jr., Chairman and Chief Executive
Officer
<PAGE>
004.160941.1
3
004.160941.1
ARTICLES OF MERGER
OF
REGENCY RETAIL CENTERS OF OHIO, INC.
WITH AND INTO
REGENCY REALTY CORPORATION
Pursuant to the provisions of Sections 607.1104 and 607.1105 of the Florida
Business Corporation Act (the "Florida Act"), the undersigned corporations enter
into these Articles of Merger by which Regency Retail Centers of Ohio, Inc., an
Ohio corporation shall be merged with and into Regency Realty Corporation, a
Florida corporation, and Regency Realty Corporation shall be the surviving
corporation, in accordance with an Agreement and Plan of Merger (the "Plan"),
adopted pursuant to Section 607.1104 of the Act and Section 1701.80 of the Ohio
General Corporation Law (the "Ohio Act"). The undersigned corporations hereby
certify as follows:
FIRST, a copy of the Plan is attached hereto and made a part hereof.
SECOND, the merger shall become effective at the close of business on
the date on which these Articles of Merger are filed with the Department of
State of Florida and a Certificate of Merger is filed with the Secretary of
State of Ohio.
THIRD, pursuant to Section 607.1104 of the Florida Act and Section
1701.80 of the Ohio Act, the Plan was adopted the Board of Directors of Regency
Realty Corporation, the sole shareholder of Regency Retail Centers of Ohio,
Inc., on December 15, 1998. Approval by shareholders of Regency Realty
Corporation was not required.
IN WITNESS WHEREOF, these Articles of Merger have been executed by
Regency Retail Centers of Ohio, Inc., as the merging corporation, and by Regency
Realty Corporation., as the surviving corporation, this 28th day of December,
1998.
WITNESSES REGENCY RETAIL CENTERS OF
OHIO, INC., an Ohio corporation
_________________________________ By:
J. Christian Leavitt, Vice President
121 West Forsyth Street, Suite 200
_____________________ Jacksonville, Florida 32202
REGENCY REALTY CORPORATION., a
Florida corporation
_________________________________ By:
J. Christian Leavitt, Vice President
121 West Forsyth Street, Suite 200
____ _____________________ Jacksonville, Florida 32202
STATE OF FLORIDA
COUNTY OF DUVAL
The foregoing instrument was acknowledged before me this 28th day of
December, 1998, by J. Christian Leavitt, Vice President of Regency Retail
Centers of Ohio, Inc. Such person did take an oath and: (notary must check
applicable box)
|_| is/are personally known to me.
|_| produced a current Florida driver's license as identification.
|_| produced _______________________________ as identification.
{Notary Seal must be affixed}
- ----------------------------------------------
Signature of Notary
- ----------------------------------------------
Name of Notary (Typed, Printed or Stamped)
Commission Number (if not legible on seal): __________________________ My
Commission Expires (if not legible on seal): _______________________
<PAGE>
STATE OF FLORIDA
COUNTY OF DUVAL
The foregoing instrument was acknowledged before me this 28th day of
December, 1998, by J. Christian Leavitt, Vice President of Regency Realty
Corporation Such person did take an oath and: (notary must check applicable box)
|_| is/are personally known to me.
|_| produced a current Florida driver's license as identification.
|_| produced _______________________________ as identification.
{Notary Seal must be affixed}
- ----------------------------------------------
Signature of Notary
- ----------------------------------------------
Name of Notary (Typed, Printed or Stamped)
Commission Number (if not legible on seal): __________________________ My
Commission Expires (if not legible on seal): _______________________
<PAGE>
004.160941.1
6
004.160941.1
ARTICLES OF MERGER AND PLAN OF MERGER
Merging
PACIFIC RETAIL TRUST
(a real estate investment trust formed under the laws of the
State of Maryland)
with and into
REGENCY REALTY CORPORATION
(a corporation incorporated under the laws of the State of Florida)
Pursuant to Sections 607.1101 and 607.1108, Florida Statutes and
Sections 3-109 and 8-501.1 of the Corporations and Associations Article of the
Annotated Code of Maryland, as amended.
Regency Realty Corporation, a corporation organized and existing under
the laws of the State of Florida ("Regency"), and Pacific Retail Trust, a real
estate investment trust formed and existing under the laws of the State of
Maryland ("Pacific Retail"), agree that Pacific Retail shall be merged with and
into Regency, the latter of which is to survive the merger, and hereby adopt the
following Articles of Merger. The terms and conditions of the merger and the
mode of carrying the same into effect are as herein set forth in these Articles
of Merger.
FIRST: The parties to these Articles of Merger are Pacific Retail, a
real estate investment trust formed and existing under the laws of the State of
Maryland, and Regency, a corporation organized and existing under the general
laws of the State of Florida. Regency was incorporated on July 9, 1993 under the
Florida Business Corporation Act (the "Florida Act") and qualified to do
business in Maryland on February 9, 1999.
SECOND: Pacific Retail shall be merged with and into Regency in
accordance with Title 8 of the Corporations and Associations Article of the
Annotated Code of Maryland (the "Maryland Code") and the Florida Act and Regency
shall survive the merger and continue under its present name (the "Surviving
Entity"). At the effective time of the merger (the "Effective Time"), the
separate existence of Pacific Retail shall cease in accordance with the
provisions of the Maryland Code. From and after the Effective Time, the
Surviving Entity shall continue its existence as a corporation under the Florida
Act, shall succeed to all of the rights, privileges, properties, real, personal
and mixed, liabilities and other assets without the necessity of any separate
deed or other transfer and shall be subject to all of the liabilities and
obligations of Pacific Retail without further action by either of the parties
hereto, and will continue to be governed by the laws of the State of Florida. If
at any time after the Effective Time the Surviving Entity shall consider or be
advised that any deeds, bills of sale, assignments or assurances or any other
acts or things are necessary, desirable or proper (a) to vest, perfect or
confirm, of record or otherwise, in the Surviving Entity, its right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of Pacific Retail acquired or to be acquired as a result of
the merger, or (b) otherwise to carry out the purposes of these Articles, the
Surviving Entity and its officers and directors or their designees shall be
authorized to execute and deliver, in the name and on behalf of Pacific Retail,
all deeds, bills of sale, assignments and assurances, and to do, in the name and
on behalf of Pacific Retail, all other acts or things necessary, desirable or
proper to vest, perfect or confirm the Surviving Entity's right, title or
interest in, to or under any of the rights, privileges, powers, franchises,
properties or assets of Pacific Retail acquired or to be acquired as a result of
the merger and otherwise to carry out the purposes of these Articles.
THIRD: The principal office of Pacific Retail in the State of Maryland
is located at 11 East Chase Street, the City of Baltimore, Maryland. The name
and address of the registered agent of Regency is CSC - Lawyers Incorporating
Service Company, 11 East Chase Street, Baltimore, Maryland 21202 The principal
office of Regency is located at 121 W. Forsyth Street, Suite 200, Jacksonville,
Florida 32202. Neither Regency nor Pacific Retail owns any interest in land in
any county in the State of Maryland or in Baltimore City.
FOURTH: The terms and conditions of the transaction set forth in these
Articles of Merger were advised, authorized and approved by each party to these
Articles of Merger in the manner and by the vote required by Regency's articles
of incorporation and the Florida Act or Pacific Retail's declaration of trust
and the Maryland Code, as the case may be.
FIFTH: The merger was duly (a) advised by the board of directors of
Regency by the adoption of a resolution declaring that the merger set forth in
these Articles of Merger was advisable on substantially the terms and conditions
set forth in the resolution and directing that the proposed merger be submitted,
together with the board's recommendation, for consideration at a special meeting
of the shareholders of Regency and (b) approved by the shareholders of Regency
on February 26, 1999 by the vote required by its articles of incorporation and
the Florida Act. The only voting group of Regency entitled to vote on the
adoption of the Plan was the holders of Regency Common Stock. The number of
votes cast by such voting group was sufficient for approval by that group.
SIXTH: The merger was duly (a) advised by the board of trustees of
Pacific Retail by the adoption of a resolution declaring that the merger set
forth in these Articles of Merger was advisable on substantially the terms and
conditions set forth or referred to in the resolution and directing that the
proposed merger be submitted for consideration at a special meeting of the
shareholders of Pacific Retail and (b) approved by the shareholders of Pacific
Retail on February 26, 1999 by the vote required by its declaration of trust and
the Maryland Code.
SEVENTH: The total number of shares of beneficial interest of all
classes which Pacific Retail has authority to issue is 150,000,000 shares of
beneficial interest, of the par value of $.01 each, all such shares having an
aggregate par value of $1,500,000. Of such shares of beneficial interest,
142,739,448 shares are classified as common shares ("Pacific Retail Common
Stock"), 1,130,276 shares have been classified as Series A Cumulative
Convertible Redeemable Preferred Shares of Beneficial Interest ("Pacific Retail
Series A Preferred Stock"), and 6,130,276 shares have been classified as Series
B Cumulative Convertible Redeemable Preferred Shares of Beneficial Interest
("Pacific Retail Series B Preferred Stock").
Immediately before the Effective Time, the total number of shares of
stock of all classes which Regency had authority to issue is 170,000,000 shares,
of the par value of $.01 each, all such shares having an aggregate par value of
$1,700,000. Of such 170,000,000 shares, 150,000,000 shares were classified as
common stock ("Regency Common Stock"), 10,000,000 shares were classified as
Special Common Stock (of which 2,500,000 have been classified as Class B
Non-Voting Stock) and 10,000,000 shares were classified as Preferred Stock (of
which 1,600,000 have been classified as 8.125% Series A Cumulative Redeemable
Preferred Stock). Immediately after the Effective Time, the total number of
shares of stock of all classes which Regency has authority to issue is
170,000,000 shares, of the par value of $0.01 each, all such shares having an
aggregate par value of $1,700,000. Of such 170,000,000 shares, 150,000,000
shares are classified as Regency Common Stock, 10,000,000 shares are classified
as Special Common Stock (of which 2,500,000 are classified as Class B Non-Voting
Common Stock) and 10,000,000 shares are classified as Preferred Stock (of which
542,532 shares have been classified as Series 1 Cumulative Convertible
Redeemable Preferred Stock and 1,502,532 shares have been classified as Series 2
Cumulative Convertible Redeemable Preferred Stock and 1,600,000 have been
classified as 8.125% Series A Cumulative Redeemable Preferred Stock).
EIGHTH: As of the Effective Time, by virtue of the Merger and without any
action on the part of Regency, Pacific Retail, or any holder of any of the
following securities:
(a) Cancellation of Treasury Stock and Regency-Owned Shares of Beneficial
Interest of Pacific Retail. Each share of beneficial interest of Pacific Retail
that is owned by Pacific Retail or any subsidiary of Pacific Retail or Regency
or any subsidiary of Regency shall automatically be cancelled and retired and
shall cease to exist, and no consideration shall be delivered or deliverable in
exchange therefor.
(b) Conversion of Pacific Retail Common Stock. Each issued and outstanding share
of Pacific Retail Common Stock, other than shares cancelled pursuant to
paragraph (a) of this Article or shares as to which a demand for dissenter's
rights has been duly perfected in accordance with the Maryland Code, shall be
converted into the right to receive 0.48 validly issued, fully paid, and
nonassessable shares of Regency Common Stock. The consideration to be issued to
the holders of Pacific Retail Common Stock is referred to herein as the "Common
Stock Merger Consideration." No fractional shares shall be issued as part of the
Common Stock Merger Consideration.
(c) Conversion of Pacific Retail Series A Preferred Stock. Each issued and
outstanding share of Pacific Retail Series A Preferred Stock, other than shares
cancelled pursuant to paragraph (a) of this Article or shares as to which a
demand for dissenters rights has been duly perfected in accordance with the
Maryland Code, shall be converted into the right to receive 0.48 validly issued,
fully paid and nonassessable shares of Series 1 Cumulative Convertible
Redeemable Preferred Stock of Regency ("Regency Series 1 Preferred Stock"). The
consideration to be issued to holders of Pacific Retail Series A Preferred Stock
is referred to as the "Series A Merger Consideration."
(d) Conversion of Pacific Retail Series B Preferred Stock. Each issued and
outstanding share of Pacific Retail Series B Preferred Stock, other than shares
cancelled pursuant to paragraph (a) of this Article or shares as to which a
demand for dissenters rights has been duly perfected in accordance with the
Maryland Code, shall be converted into the right to receive 0.48 validly issued,
fully paid and nonassessable shares of Series 2 Cumulative Convertible
Redeemable Preferred Stock of Regency ("Regency Series 2 Preferred Stock"). The
consideration to be issued to holders of Pacific Retail Series B Preferred Stock
is referred to as the "Series B Merger Consideration." The Common Stock Merger
Consideration, Series A Merger Consideration and Series B Merger Consideration
are referred to collectively herein as the "Merger Consideration."
(e) No Fractional Shares. Each holder of Pacific Retail Common Stock, Pacific
Retail Series A Preferred Stock or Pacific Retail Series B Preferred Stock
exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of (i) Regency Common Stock, (ii) Regency Series A
Preferred Stock or (iii) Regency Series B Preferred Stock, as the case may be
(after taking into account all shares of Pacific Retail Common Stock, Pacific
Retail Series A Preferred Stock or Pacific Retail Series B Preferred Stock held
of record by such holder at the Effective Time), shall receive, in lieu of such
fraction of a share, cash in an amount arrived at by multiplying such fraction
times the average closing price of a share of Regency Common Stock on the New
York Stock Exchange on the ten (10) consecutive trading days ending on the fifth
day immediately preceding the Effective Time.
(f) Cancellation and Retirement of Shares of Beneficial Interest of Pacific
Retail. As of the Effective Time, all shares of beneficial interest of Pacific
Retail converted into the right to receive the applicable Merger Consideration
pursuant to this Article shall no longer be outstanding and shall automatically
be cancelled and retired and shall cease to exist, and each holder of a
certificate evidencing any such shares of beneficial interest of Pacific Retail
shall cease to have any rights with respect thereto, except the right to receive
the applicable Merger Consideration in accordance with this Article, and any
cash in lieu of fractional shares of Regency Common Stock, Regency Series 1
Preferred Stock or Regency Series 2 Preferred Stock paid in cash by Regency
based on the average of the closing price of the Regency Common Stock on the New
York Stock Exchange for the ten (10) consecutive trading days ending on the
fifth day immediately preceding the Effective Time.
(g) Conversion of Pacific Retail Stock Options. Each option granted by Pacific
Retail to purchase shares of Pacific Retail Common Stock (a "Pacific Retail
Stock Option") which is outstanding and unexercised immediately prior to the
Effective Time shall cease to represent a right to acquire such shares and shall
be converted into an option to purchase shares of Regency Common Stock (a
"Regency Stock Option") in an amount and at an exercise price determined as
provided below and otherwise subject to the terms and conditions of Regency's
Long-Term Omnibus Plan and the agreements evidencing grants thereunder but
having the same vesting, exercise, and termination dates that such Pacific
Retail Stock Options had immediately prior to the Effective Time except that
departing officers' options shall fully vest and shall terminate on the dates
set forth in agreements between the departing officers and Regency.
(i) the number of shares of Regency Common Stock to be subject to the new
Regency Stock Option will be equal to the product of (A) the number of shares of
Pacific Retail Common Stock subject to the existing Pacific Retail Stock Option
immediately prior to the Effective Time and (B) the ratio of the value per share
of Pacific Retail Common Stock immediately prior to the Effective Time to the
value per share of Regency Common Stock immediately after the Effective Time,
and
(ii) the exercise price per share of Regency Common Stock under the new Regency
Stock Option will be equal to (A) the value per share of Regency Common Stock
immediately after the Effective Time multiplied by (B) the ratio of the exercise
price per share of Pacific Retail Common Stock to the value per share of Pacific
Retail Common Stock immediately prior to the Effective Time.
NINTH: The parties hereto intend that the execution of these Articles
of Merger constitute the adoption of a "plan of reorganization" within the
meaning of Section 368 of the Internal Revenue Code of 1996, as amended.
TENTH: The merger shall be effective at 11:59 p.m. Eastern Standard Time on
February 28, 1999.
ELEVENTH: The merger may be abandoned at any time prior to the
Effective Time by either Pacific Retail or the Surviving Entity, without further
shareholder action by filing a Notice of Abandonment with each state authority
with which these Articles of Merger are filed.
TWELFTH: The Articles of Incorporation of Regency shall continue to be the
Articles of Incorporation of Regency on and after the Effective Time, except for
the following amendments:
(a) The Articles of Incorporation of Regency are hereby amended to add the
Certificate of Designations, Rights, Preferences and Limitations of Series 1
Cumulative Convertible Redeemable Preferred Stock of Regency attached hereto as
Exhibit A.
(b) The Articles of Incorporation of Regency are hereby amended to add the
Certificate of Designations, Rights, Preferences and Limitations of Series 2
Cumulative Convertible Redeemable Preferred Stock of Regency attached hereto as
Exhibit B.
(c) Article V of the Articles of Incorporation of Regency is hereby amended
as set forth in Exhibit C hereto.
<PAGE>
IN WITNESS WHEREOF, Regency Realty Corporation, a Florida corporation,
and Pacific Retail Trust, a Maryland real estate investment trust, the entities
parties to the merger, have caused these Articles of Merger to be signed in
their respective names and on their behalf and witnessed or attested all as of
the 26th day of February, 1999. Each of the individuals signing these Articles
of Merger on behalf of Regency Realty Corporation or Pacific Retail Trust
acknowledges these Articles of Merger to be the act of such respective entity
and, as to all other matters or facts required to be verified under oath, that
to the best of his or her knowledge, information and belief, these matters are
true in all material respects and that this statement is made under the
penalties for perjury.
REGENCY REALTY CORPORATION,
a Florida corporation
By: ___________________________________
Mary Lou Rogers, President
Attest:
- -------------------------------
J. Christian Leavitt, Secretary
PACIFIC RETAIL TRUST,
a Maryland real estate investment trust
By: ___________________________________
Jane E. Mody, Managing Director and
Chief Financial Officer
Attest:
- --------------------------------
Kelli Hlavenka, Assistant Secretary
<PAGE>
EXHIBIT "A'
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF
REGENCY REALTY CORPORATION
DESIGNATING THE PREFERENCES, RIGHTS AND
LIMITATIONS OF 542,532 SHARES OF
SERIES 1 CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK
$0.01 Par Value
Pursuant to Section 607.0602 of the Florida Business
Corporation Act ("FBCA"), Regency Realty Corporation, a Florida corporation (the
"Corporation"), does hereby certify that:
FIRST: Pursuant to the authority expressly vested in the Board of
Directors of the Corporation by Section 4.2 of the Restated Articles of
Incorporation of the Corporation, as amended (the "Charter") and Section
607.0602 of the FBCA, the Board of Directors of the Corporation, by resolutions
duly adopted on September 23, 1998 has classified 542,532 shares of the
authorized but unissued Preferred Stock par value $.01 per share (the "Series 1
Preferred Stock") as a separate class of Preferred Stock, authorized the
issuance of a maximum of 542,532 shares of such class of Series 1 Preferred
Stock, set certain of the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption and other terms and conditions of such class of Series
1 Preferred Stock. Shareholder approval was not required under the Charter with
respect to such designation.
SECOND: The class of Series 1 Preferred Stock of the Corporation
created by the resolutions duly adopted by the Board of Directors of the
Corporation shall have the following designation, number of shares, preferences,
conversion and other rights, voting powers, restrictions and limitation as to
dividends, qualifications, terms and conditions of redemption and other terms
and conditions:
Section 1. Number of Shares and Designation. The number of shares of Series 1
Preferred Stock which shall constitute such series shall not be more than
542,532 shares, par value $0.01 per share, which number may be decreased (but
not below the number thereof then outstanding plus the number required to
fulfill the Corporation's obligations under certain agreements, options,
warrants or similar rights issued by the Corporation) from time to time by the
Board of Directors of the Corporation. Except as otherwise specifically stated
herein, the Series 1 Preferred Stock shall have the same rights and privileges
as Common Stock under Florida law.
Section 2. Definitions. For purposes of the Series 1 Preferred Stock, the
following terms shall have the meanings indicated:
"Board" shall mean the Board of Directors of the Corporation
or any committee authorized by such Board of Directors to perform any of its
responsibilities with respect to the Series 1 Preferred Stock.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which state or federally chartered banking institutions in
New York City, New York are not required to be open.
"Call Date" shall mean the date specified in the notice to
holders required under subparagraph (d) of Section 5 as the Call Date.
"Common Stock" shall mean the common capital stock of the Corporation, par
value $0.01 per share.
"Constituent Person" shall have the meaning set forth in
paragraph (c) of Section 6 hereof.
"Dividend Payment Date" shall mean the last calendar day of
March, June, September and December, in each year, commencing on March 31, 1999;
provided, however, that if any Dividend Payment Date falls on any day other than
a Business Day, the dividend payment due on such Dividend Payment Date shall be
paid on the Business Day immediately following such Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods
commencing on April 1, July 1, October 1 and January 1 of each year and ending
on and including the day preceding the first day of the next succeeding Dividend
Period (other than the initial Dividend Period, which shall commence on the
Issue Date).
"Fully Junior Stock" shall mean any class or series of capital
stock of the Corporation now or hereafter issued and outstanding over which the
Series 1 Preferred Stock has preference or priority in both (i) the payment of
dividends and (ii) the distribution of assets on any liquidation, dissolution or
winding up of the Corporation.
"Funds from Operations per Share" shall mean the amount
determined by dividing (a) the net income of the Corporation before
extraordinary items (determined in accordance with generally accepted accounting
principles) as reported by the Corporation in its year-end audited financial
statements, minus gains (or losses) from debt restructuring and sales of
property, plus real property depreciation and amortization and amortization of
capitalized leasing expenses and tenant allowances or improvements (to the
extent such allowances or improvements are capital items), and after adjustments
for unconsolidated partnerships, corporations and joint ventures (such items of
depreciation and amortization and such gains, losses and adjustments as
determined in accordance with generally accepted accounting principles and as
reported by the Corporation in its year-end audited financial statements) by (b)
the weighted average number of shares of common stock of the Corporation
outstanding as reported by the Corporation in its year-end audited financial
statements. Adjustments for unconsolidated partnerships, corporations and joint
ventures shall be calculated to reflect Funds from Operations per Share on the
same basis. If the Corporation shall after the Issue Date (A) pay a dividend or
make a distribution in shares of common stock on its outstanding shares of
common stock, (B) subdivide its outstanding shares of common stock into a
greater number of shares, (C) combine its outstanding Common Stock into a
smaller number of shares or (D) issue any shares of common stock by
reclassification of its outstanding shares of common stock, the Funds from
Operations per Share shall be appropriately adjusted to give effect to such
events.
"Issue Date" shall mean the first date on which the Series 1
Preferred Stock is issued.
"Junior Stock" shall mean the Common Stock and any other class
or series of capital stock of the Corporation now or hereafter issued and
outstanding over which the Series 1 Preferred Stock has preference or priority
in the payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
"Minimum Amount" shall mean the greater of (A) $0.2083 and (B)
65% of the highest amount of Funds from Operations per Share for any preceding
fiscal year beginning with the fiscal year ending December 31, 1996, divided by
four.
"Non-Electing Share" shall have the meaning set forth in
paragraph (c) of Section 6 hereof.
"Parity Stock" shall have the meaning set forth in paragraph
(b) of Section 8.
"Person" shall mean any individual, firm, partnership,
corporation, or trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"PRT Issue Date" means October 13, 1995.
"Series 1 Preferred Stock" shall have the meaning set forth in
Article FIRST hereof.
"Series 2 Preferred Stock" shall mean the Series 2 Cumulative
Convertible Redeemable Preferred Stock of the Corporation, par value $0.01 per
share.
"set apart for payment" shall be deemed to include, without
any action other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other distribution by the Board, the
allocation of funds to be so paid on any series or class of capital stock of the
Corporation; provided, however, that if any funds for any class or series of
Junior Stock, Fully Junior Stock or any class or series of shares of capital
stock ranking on a parity with the Series 1 Preferred Stock as to the payment of
dividends are placed in a separate account of the Corporation or delivered to a
disbursing, paying or other similar agent, then "set apart for payment" with
respect to the Series 1 Preferred Stock shall mean placing such funds in a
separate account or delivering such funds to a disbursing, paying or other
similar agent.
"Transaction" shall have the meaning set forth in paragraph
(c) of Section 6 hereof.
"Transfer Agent" means initially the Corporation and shall
include such other agent or agents of the Corporation as may be designated by
the Board or their designee as the transfer agent for the Series 1 Preferred
Stock.
"Voting Preferred Stock" shall have the meaning set forth in
Section 9 hereof.
Section 3. Dividends.
(a) The holders of Series 1 Preferred Stock shall be entitled to receive, when,
as and if declared by the Board out of funds legally available for that purpose,
quarterly dividends payable in cash in an amount per share equal to the greater
of (i) the Minimum Amount or (ii) an amount equal to $0.02708 less than the
dividends (determined on each Dividend Payment Date) on a share of Common Stock,
or portion thereof, into which a share of Series 2 Preferred Stock is
convertible upon conversion of a share of Series 1 Preferred Stock. For purposes
of clause (ii) of the preceding sentence, such dividends shall equal the number
of shares of Common Stock, or portion thereof, into which a share of Series 2
Preferred Stock is convertible upon conversion of a share of Series 1 Preferred
Stock, multiplied by the most current quarterly dividend paid or payable on a
share of Common Stock on or before the applicable Dividend Payment Date.
Dividends on the Series 1 Preferred Stock shall begin to accrue and shall be
fully cumulative from the Issue Date, whether or not for any Dividend Period or
Periods there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly, when, as and if
declared by the Board, in arrears on Dividend Payment Dates, commencing on the
first Dividend Payment Date after the Issue Date. Accrued and unpaid dividends
on shares of Series 1 Preferred Stock shall include any accrued and unpaid
dividends on the Series A Cumulative Convertible Redeemable Preferred Shares of
Beneficial Interest of Pacific Retail Trust which are exchanged by operation of
law into such shares of Series 1 Preferred Stock pursuant to the merger of
Pacific Retail Trust into the Corporation. Each dividend on the Series 1
Preferred Stock shall be payable to the holders of record of Series 1 Preferred
Stock, as they appear on the stock records of the Corporation at the close of
business on such record dates as shall be fixed by the Board. Accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time and
for such interim periods, without reference to any regular Dividend Payment
Date, to holders of record on such date as may be fixed by the Board.
(b) The amount of dividends payable for any dividend period shorter or longer
than a full Dividend Period, on the Series 1 Preferred Stock shall be computed
on the basis of twelve 30-day months and a 360-day year. Holders of Series 1
Preferred Stock shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of current and cumulative but unpaid dividends, as
herein provided, on the Series 1 Preferred Stock. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series 1 Preferred Stock that may be in arrears.
(c) So long as any Series 1 Preferred Stock is outstanding, no dividends, except
as described in the immediately following sentence, shall be declared or paid or
set apart for payment on any class or series of Parity Stock for any period
unless full cumulative dividends have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for such
payment on the Series 1 Preferred Stock for all Dividend Periods terminating on
or prior to the Dividend Payment Date on such class or series of Parity Stock.
When dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared upon Series 1 Preferred Stock
and all dividends declared upon any other class or series of Parity Stock shall
be declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the Series 1 Preferred Stock and accumulated and
unpaid on such Parity Stock.
(d) So long as any Series 1 Preferred Stock is outstanding, no dividends (other
than dividends or distributions paid solely in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Fully Junior Stock) shall be
declared or paid or set apart for payment or other distribution declared or made
upon Junior Stock, nor shall any Junior Stock be redeemed, purchased or
otherwise acquired (other than a redemption, purchase or other acquisition of
Common Stock made for purposes of an employee incentive or benefit plan of the
Corporation or any subsidiary) for any consideration (or any moneys be paid to
or made available for a sinking fund for the redemption of any shares of any
such stock) by the Corporation, directly or indirectly (except by conversion
into or exchange for Fully Junior Stock), unless in each case (i) the full
cumulative dividends on all outstanding Series 1 Preferred Stock and any other
Parity Stock of the Corporation shall have been paid or declared and set apart
for payment for all past Dividend Periods with respect to the Series 1 Preferred
Stock and all past dividend periods with respect to such Parity Stock and (ii)
sufficient funds shall have been paid or declared and set apart for the payment
of the dividend for the current Dividend Period with respect to the Series 1
Preferred Stock and the current dividend period with respect to such Parity
Stock.
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for payment to the holders of Junior Stock or Fully
Junior Stock, the holders of the Series 1 Preferred Stock shall be entitled to
receive $20.8333 per share of Series 1 Preferred Stock plus an amount equal to
all dividends declared but unpaid thereon to the date of final distribution to
such holders; but such holders shall not be entitled to any further payment. If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of the
Series 1 Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of any class or
series of Parity Stock, then such assets, or the proceeds thereof, shall be
distributed among the holders of Series 1 Preferred Stock and any such other
Parity Stock ratably in accordance with the respective amounts that would be
payable on such Series 1 Preferred Stock and any such other Parity Stock if all
amounts payable thereon were paid in full. For the purposes of this Section 4,
(i) a consolidation or merger of the Corporation with one or more Persons, (ii)
a sale or transfer of all or substantially all of the Corporation's assets or
(iii) a statutory share exchange shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of shares of any series or class or
classes of shares of capital stock ranking on a parity with or prior to the
Series 1 Preferred Stock upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Corporation, after payment shall
have been made in full to the holders of the Series 1 Preferred Stock, as
provided in this Section 4, any other series or class or classes of Junior Stock
or Fully Junior Stock shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the Series 1 Preferred Stock shall not
be entitled to share therein.
Section 5. Redemption at the Option of the Corporation.
(a) The Series 1 Preferred Stock shall not be redeemable by the Corporation
prior to October 20, 2010. On and after October 20, 2010, the Corporation, at
its option, may redeem the Series 1 Preferred Stock, in whole at any time or
from time to time in part at the option of the Corporation at a redemption price
of $20.8333 per share of Series 1 Preferred Stock, plus the amounts indicated in
Section 5(b).
(b) Upon any redemption of Series 1 Preferred Stock pursuant to this Section 5,
the Corporation shall pay in full any and all accrued and unpaid dividends
(without interest or sum of money in lieu of interest) for any and all Dividend
Periods ending on or prior to the Call Date. If the Call Date falls after a
dividend payment record date and prior to the corresponding Dividend Payment
Date, then each holder of Series 1 Preferred Stock at the close of business on
such dividend payment record date shall be entitled to the dividend payable on
such shares on the corresponding dividend payment date notwithstanding the
redemption of such shares before such Dividend Payment Date.
(c) If full cumulative dividends on the Series 1 Preferred Stock and any other
class or series of Parity Stock of the Corporation have not been paid or
declared and set apart for payment, the Series 1 Preferred Stock may not be
redeemed under this Section 5 in part and the Corporation may not purchase or
acquire shares of Series 1 Preferred Stock, otherwise than pursuant to a
voluntary purchase or exchange offer made on the same terms to all holders of
Series 1 Preferred Stock.
(d) Notice of the redemption of any Series 1 Preferred Stock under this Section
5 shall be mailed by first-class mail to each holder of record of Series 1
Preferred Stock to be redeemed at the address of each such holder as shown on
the Corporation's record, not less than 30 nor more than 90 days prior to the
Call Date. Neither the failure to mail any notice required by this paragraph
(d), nor any defect therein or in the mailing thereof, to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or not the holder receives the notice. Each
such mailed notice shall state, as appropriate: (1) the Call Date; (2) the
number of shares of Series 1 Preferred Stock to be redeemed and, if fewer than
all the shares held by such holder are to be redeemed, the number of such shares
to be redeemed from such holder; (3) the place or places at which certificates
for such shares are to be surrendered; and (4) that dividends on the shares to
be redeemed shall cease to accrue on such Call Date except as otherwise provided
herein. Notice having been mailed as aforesaid, from and after the Call Date
(unless the Corporation shall fail to make available an amount of cash necessary
to effect such redemption), (i) except as otherwise provided herein, dividends
on the Series 1 Preferred Stock so called for redemption shall cease to accrue,
(ii) said shares shall no longer be deemed to be outstanding and (iii) all
rights of the holders thereof as holders of Series 1 Preferred Stock of the
Corporation shall cease (except the rights to convert and to receive cash
payable upon such redemption, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any dividends
payable thereon). The Corporation's obligation to provide cash in accordance
with the preceding sentence shall be deemed fulfilled if, on or before the Call
Date, the Corporation shall deposit with a bank or trust company (which may be
an affiliate of the Corporation) that has an office in the Borough of Manhattan,
City of New York, and that has, or is an affiliate of a bank or trust company
that has, capital and surplus of at least $50,000,000, sufficient cash necessary
for such redemption, in trust, with irrevocable instructions that such cash be
applied to the redemption of the Series 1 Preferred Stock so called for
redemption. No interest shall accrue for the benefit of the holders of Series 1
Preferred Stock to be redeemed on any cash so set aside by the Corporation.
Subject to applicable escheat laws and other unclaimed property laws, any such
cash unclaimed at the end of two years from the Call Date shall revert to the
general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash. Notwithstanding the above, at any time
after such redemption notice is received and on or prior to the Call Date, any
holder may exercise its conversion rights under Section 6 below.
As promptly as practicable after the surrender in accordance with said
notice of the certificates for any such shares so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and if the notice
shall so state), such shares shall be exchanged for any cash (including
accumulated and unpaid dividends but without interest thereon) for which such
shares have been redeemed. If fewer than all the outstanding shares of Series 1
Preferred Stock are to be redeemed, shares to be redeemed shall be selected by
the Corporation from outstanding Series 1 Preferred Stock not previously called
for redemption by lot or pro rata (as nearly as may be) or by any other method
determined by the Corporation in its sole discretion to be equitable. If fewer
than all shares of the Series 1 Preferred Stock represented by any certificate
are redeemed, then new certificates representing the unredeemed shares shall be
issued without cost to the holder thereof.
Section 6. Conversion. Subject to subparagraph (f) of this Section 6, holders of
Series 1 Preferred Stock shall have the right, at any time and from time to
time, to convert all or a portion of such shares into Series 2 Preferred Stock,
as follows:
(a) Subject to and upon compliance with the provisions of this Section 6, a
holder of Series 1 Preferred Stock shall have the right, at such holder's
option, at any time to convert each share of Series 1 Preferred Stock into one
fully paid and non-assessable share of Series 2 Preferred Stock by surrendering
such shares to be converted, such surrender to be made in the manner provided in
paragraph (b) of this Section 6. In addition, upon conversion of Series 1
Preferred Stock any holder may elect to simultaneously convert the Series 2
Preferred Stock issuable upon such conversion into that number of shares of
Common Stock into which such Series 2 Preferred Stock is then convertible
pursuant to the terms of the Series 2 Preferred Stock.
(b) In order to exercise the conversion right, the holder of each share of
Series 1 Preferred Stock to be converted shall surrender the certificate
representing such share, duly endorsed or assigned to the Corporation or in
blank, at the office of the Transfer Agent, accompanied by written notice to the
Corporation that the holder thereof elects to convert such Series 1 Preferred
Stock and payment of the amount, if any, determined pursuant to subparagraph (f)
of this Section 6. Unless the shares issuable on conversion are to be issued in
the same name as the name in which such Series 1 Preferred Stock is registered,
each share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Corporation, duly executed by the holder
or such holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the Corporation
demonstrating that such taxes have been paid).
Holders of Series 1 Preferred Stock at the close of business on a dividend
payment record date shall be entitled to receive the dividend payable on such
shares on the corresponding dividend payment date notwithstanding the conversion
thereof following such dividend payment record date and on or prior to such
dividend payment date. In no event shall a holder of Series 1 Preferred Stock be
entitled to receive a dividend payment on Series 2 Preferred Stock issued or
issuable upon conversion of Series 1 Preferred Stock if such holder is entitled
to receive a dividend in respect of the Series 1 Preferred Stock surrendered for
conversion. The Corporation shall make no payment or allowance for unpaid
dividends, whether or not in arrears, on converted shares or for dividends on
the Series 2 Preferred Stock issued upon such conversion, except as contemplated
pursuant to subparagraph (f) of this Section 6.
As promptly as practicable after the surrender of certificates for Series 1
Preferred Stock as aforesaid, the Corporation shall issue and shall deliver at
such office to such holder, or such holder's written order, a certificate or
certificates for the number of full shares of Series 2 Preferred Stock issuable
upon the conversion of such shares in accordance with provisions of this Section
6.
Each conversion shall be deemed to have been effected immediately prior to
the close of business on the date on which the certificates for Series 1
Preferred Stock shall have been surrendered and such notice (together with the
undertaking described below if such conversion occurs on or prior to the fifth
anniversary of the PRT Issue Date) received by the Corporation as aforesaid, and
the person or persons in whose name or names any certificate or certificates for
Series 2 Preferred Stock shall be issuable upon such conversion shall be deemed
to have become the holder or holders of record of the shares represented thereby
at such time on such date unless the stock transfer books of the Corporation
shall be closed on that date, in which event such person or persons shall be
deemed to have become such holder or holders of record at the close of business
on the next succeeding day on which such stock transfer books are open.
Concurrently with the delivery of any notice of conversion prior to the fifth
anniversary of the PRT Issue Date, any holder converting its Series 1 Preferred
Stock shall deliver to the Corporation an undertaking to pay the amount, if any,
pursuant to the last sentence of subparagraph (f) of this Section 6.
(c) If the Corporation shall be a party to any transaction (including without
limitation a merger, consolidation, statutory share exchange, self tender offer
for all or substantially all Series 2 Preferred Stock, sale of all or
substantially all of the Corporation's assets or recapitalization of the Series
2 Preferred Stock) (each of the foregoing being referred to herein as a
"Transaction"), in each case as a result of which all or substantially all
Series 2 Preferred Stock is converted into the right to receive stock,
securities or other property (including cash or any combination thereof) of
another Person, each share of Series 1 Preferred Stock, which is not converted
into a Series 2 Preferred Share prior to such Transaction, shall thereafter be
convertible into the kind and amount of shares of stock, securities and other
property (including cash or any combination thereof) receivable upon the
consummation of such Transaction by a holder of that number of shares of Series
2 Preferred Stock into which one share of Series 1 Preferred Stock was
convertible immediately prior to such Transaction, assuming such holder of
Series 2 Preferred Stock (i) is not a Person with which the Corporation
consolidated or into which the Corporation merged or which merged into the
Corporation or to which such sale or transfer was made, as the case may be
("Constituent Person"), or an affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of stock,
securities and other property (including cash) receivable upon such Transaction
(provided that if the kind or amount of stock, securities and other property
(including cash) receivable upon such Transaction is not the same for each share
of Series 2 Preferred Share held immediately prior to such Transaction by other
than a Constituent Person or an affiliate thereof and in respect of which such
rights of election shall not have been exercised ("Non-Electing Share"), then
for the purpose of this paragraph (c) the kind and amount of stock, securities
and other property (including cash) receivable upon such Transaction by each
Non-Electing Share shall be deemed to be the kind and amount so receivable per
share by a plurality of the Non-Electing Shares). The Corporation shall not be a
party to any Transaction unless the terms of such Transaction are consistent
with the provisions of this paragraph (c), and it shall not consent or agree to
the occurrence of any Transaction until the Corporation has entered into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Series 1 Preferred Stock that will contain
provisions enabling the holders of the Series 1 Preferred Stock that remain
outstanding after such Transaction to convert into the consideration received by
holders of Series 2 Preferred Stock at the conversion price in effect
immediately prior to such Transaction. The provisions of this paragraph (c)
shall similarly apply to successive Transactions.
(d) The Corporation covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued shares of Series 2 Preferred Stock, for the purpose of effecting
conversion of the Series 1 Preferred Stock, the full number of shares of Series
2 Preferred Stock deliverable upon the conversion of all outstanding Series 1
Preferred Stock not theretofore converted.
The Corporation covenants that any shares of Series 2 Preferred Stock
issued upon conversion of the Series 1 Preferred Stock shall be validly issued,
fully paid and non-assessable.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of the Series 1 Preferred Stock, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
(e) The Corporation will pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of Series 2 Preferred
Stock or other securities or property on conversion of the Series 1 Preferred
Stock pursuant hereto; provided, however, that the Corporation shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issue or delivery of Series 2 Preferred Stock or other securities or
property in a name other than that of the holder of the Series 1 Preferred Stock
to be converted, and no such issue or delivery shall be made unless and until
the person requesting such issue or delivery has paid to the Corporation the
amount of any such tax or established, to the reasonable satisfaction of the
Corporation, that such tax has been paid.
(f) In the event that any holder of Series 1 Preferred Stock shall exercise its
right to convert such shares into Series 2 Preferred Stock prior to the fifth
anniversary of the PRT Issue Date, upon any such conversion, the holder of the
Series 1 Preferred Stock surrendered for conversion shall pay an amount in cash
to the Corporation equal to the amount obtained by multiplying (i) 0.0052 times
(ii) the quotient obtained by dividing (A) the actual number of days that will
elapse beginning on and including the date on which the conversion is deemed to
have been effected and ending on and including the fifth anniversary of the PRT
Issue Date by (B) 365 times (iii) the difference between (X) the aggregate
liquidation preference (excluding accrued and unpaid dividends) of the Series 1
Preferred Stock being converted and (Y) the aggregate amount of accrued and
unpaid dividends on the Series 1 Preferred Stock being converted (provided that
the amount determined pursuant to this clause (iii) shall not be less than
zero). In addition, immediately after the dividend payment record date next
following the conversion date with respect to the Series 2 Preferred Stock into
which the Series 1 Preferred Stock is convertible (or the Common Stock into
which such Series 2 Preferred Stock is convertible, whichever is applicable),
the holder of the Series 1 Preferred Stock shall pay to the Corporation an
amount, if any, necessary to ensure that the holder has received an aggregate
amount of $0.02708 per share being converted less than the dividend payable on
Common Stock for the dividend period during which the conversion was effected.
Section 7. Shares to Be Retired. All shares of Series 1 Preferred Stock which
shall have been issued and reacquired in any manner by the Corporation shall be
restored to the status of authorized but unissued shares of Preferred Stock of
the Corporation, without designation as to class or series.
Section 8. Ranking. Any class or series of shares of capital stock of the
Corporation shall be deemed to rank:
(a) prior to the Series 1 Preferred Stock, as to the payment of dividends and as
to distribution of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of dividends or
of amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of Series 1 Preferred
Stock;
(b) on a parity with the Series 1 Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
liquidation prices per share thereof shall be different from those of the Series
1 Preferred Stock, if the holders of such class or series and the Series 1
Preferred Stock shall be entitled to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid dividends per share or liquidation
preferences, without preference or priority one over the other ("Parity Stock");
(c) junior to the Series 1 Preferred Stock, as to the payment of dividends or as
to the distribution of assets upon liquidation, dissolution or winding up, if
such class or series shall be Junior Stock; and
(d) junior to the Series 1 Preferred Stock, as to the payment of dividends and
as to the distribution of assets upon liquidation, dissolution or winding up, if
such class or series shall be Fully Junior Stock.
The Corporation's Series 2 Cumulative Convertible Redeemable
Preferred Stock and the Corporation's 8.125% Series A Cumulative Redeemable
Preferred Stock shall constitute Parity Stock.
Section 9. Voting.
(a) Each issued and outstanding share of Series 1 Preferred Stock shall entitle
the holder thereof to the number of votes per share of Common Stock into which a
share of Series 2 Preferred Stock is convertible upon conversion of a share of
Series 1 Preferred Stock (as of the close of business on the record date for
determination of shareholders entitled to vote on a matter) on all matters
presented for a vote of shareholders of the Corporation and, except as required
by applicable law and subject to the further provisions of this Section 9, the
Series 1 Preferred Stock shall be voted together with all issued and outstanding
Common Stock and Series 2 Preferred Stock voting as a single class.
(b) If and whenever twelve consecutive quarterly dividends payable on the Series
1 Preferred Stock or any series or class of Parity Stock shall be in arrears
(which shall, with respect to any such quarterly dividend, mean that any such
dividend has not been paid in full), whether or not earned or declared, the
number of directors then constituting the Board shall be increased by one and
the holders of Series 1 Preferred Stock, together with the holders of shares of
every other series of Parity Stock, including the Series 2 Preferred Stock (any
such other series, the "Voting Preferred Stock"), voting as a single class
regardless of series, shall be entitled to elect, at a special meeting of the
holders of the Series 1 Preferred Stock and the Voting Preferred Stock called as
hereinafter provided, the additional director to serve on the Board. Whenever
all arrearages in dividends on the Series 1 Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been paid or declared and set
apart for payment, then the right of the holders of the Series 1 Preferred Stock
and the Voting Preferred Stock to elect such additional director shall cease
(but subject always to the same provision for the vesting of such voting rights
in the case of any similar future arrearages in twelve quarterly dividends), and
the terms of office of the person elected as director by the holders of the
Series 1 Preferred Stock and the Voting Preferred Stock shall forthwith
terminate and the number of members of the Board shall be reduced accordingly.
At any time after such voting power shall have been so vested in the holders of
Series 1 Preferred Stock and the Voting Preferred Stock (or if any vacancy shall
occur in respect of the director previously elected by the holders of the Series
1 Preferred Stock and the Voting Preferred Stock), the secretary of the
Corporation shall call a special meeting of the holders of the Series 1
Preferred Stock and of the Voting Preferred Stock for the election of the
director to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws of the Corporation for a special
meeting of the shareholders or as required by law. If any such special meeting
required to be called as above provided shall not be called by the secretary
within 30 days after the end of the most recent Dividend Period during which the
right to elect such additional director arose or such vacancy occurred, then any
holder of Series 1 Preferred Stock may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock records of the
Corporation. The director elected at any such special meeting shall hold office
until the next annual meeting of the shareholders or special meeting held in
lieu thereof if such office shall not have previously terminated as above
provided.
(c) So long as any Series 1 Preferred Stock is outstanding, in addition to any
other vote or consent of shareholders required by law or by the Charter, the
affirmative vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the Series 1 Preferred Stock, together with the holders of Voting
Preferred Stock, at the time outstanding, acting as a single class regardless of
series, given in person or by proxy, either in writing without a meeting or by
vote at any meeting called for the purpose, shall be necessary for effecting or
validating:
(i) Any amendment, alteration or repeal of any of the
provisions of the Charter or these Articles of Amendment that
materially and adversely affects the voting powers, rights or
preferences of the holders of the Series 1 Preferred Stock or the
Voting Preferred Stock; provided, however, that the amendment of the
provisions of the Charter so as to authorize or create or to increase
the authorized amount of any Fully Junior Stock, Junior Stock that is
not senior in any respect to the Series 1 Preferred Stock, or any stock
of any class ranking on a parity with the Series 1 Preferred Stock or
the Voting Preferred Stock shall not be deemed to materially adversely
affect the voting powers, rights or preferences of the holders of
Series 1 Preferred Stock; and provided, further, that if any such
amendment, alteration or repeal would materially and adversely affect
any voting powers, rights or preferences of the Series 1 Preferred
Stock or another series of Voting Preferred Stock that are not enjoyed
by some or all of the other series otherwise entitled to vote in
accordance herewith, the affirmative vote of at least 66 2/3% of the
votes entitled to be cast by the holders of all series similarly
affected, similarly given, shall be required in lieu of the affirmative
vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the Series 1 Preferred Stock and the Voting Preferred Stock
otherwise entitled to vote in accordance herewith; or
(ii) A share exchange that affects the Series 1
Preferred Stock, a consolidation with or merger of the Corporation into
another Person, or a consolidation with or merger of another Person
into the Corporation, unless in each such case each share of Series 1
Preferred Stock (A) shall remain outstanding without a material and
adverse change to its terms and rights or (B) shall be converted into
or exchanged for convertible preferred stock of the surviving entity
having preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms or
conditions of redemption thereof identical to that of a share of Series
1 Preferred Stock (except for changes that do not materially and
adversely affect the holders of the Series 1 Preferred Stock); or
(iii) The authorization or creation of, or the
increase in the authorized amount of, any shares of any class or any
security convertible into shares of any class ranking prior to the
Series 1 Preferred Stock in the distribution of assets on any
liquidation, dissolution or winding up of the Corporation or in the
payment of dividends.
(d) For purposes of voting in respect to those matters referred to in
subparagraphs (b) and (c) of this Section 9, unless otherwise provided under
applicable law, each share of Series 1 Preferred Stock shall have one (1) vote
per share, except that when any other series of Preferred Stock shall have the
right to vote with the Series 1 Preferred Stock as a single class on any matter,
then the Series 1 Preferred Stock and such other series shall have with respect
to such matters one (1) vote per $20.8333 of stated liquidation preference.
Except as otherwise required by applicable law or as set forth herein, the
Series 1 Preferred Stock shall not have any relative, participating, optional or
other special voting rights and powers other than as set forth herein, and the
consent of the holders thereof shall not be required for the taking of any
corporate action.
Section 10. Record Holders. The Corporation and the Transfer Agent may deem and
treat the record holder of any shares of Series 1 Preferred Stock as the true
and lawful owner thereof for all purposes, and neither the Corporation nor the
Transfer Agent shall be affected by any notice to the contrary.
Section 11. Sinking Fund. The Series 1 Preferred Stock shall not be
entitled to the benefits of any retirement or sinking fund.
THIRD: The Series 1 Preferred Stock has been classified and designated by
the Board of Directors under the authority contained in Section 4.2 of the
Charter.
FOURTH: These Articles of Amendment have been approved by the Board of
Directors in the manner and by the vote required by law.
FIFTH: The undersigned President of the Corporation acknowledges these
Articles of Amendment to be the corporate act of the Corporation and, as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of her knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles
of Amendment to be executed under seal in its name and on its behalf by its
President and attested to by its Secretary on this 26th day of February, 1999.
REGENCY REALTY CORPORATION
By: /s/ Mary Lou Rogers
Name: Mary Lou Rogers
Title: President
[SEAL]
ATTEST:
/s/ J. Christian Leavitt
Name: J. Christian Leavitt
Title: Secretary
<PAGE>
EXHIBIT "B'
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF
REGENCY REALTY CORPORATION
DESIGNATING THE PREFERENCES, RIGHTS AND
LIMITATIONS OF 1,502,532 SHARES OF
SERIES 2 CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK
$0.01 Par Value
Pursuant to Section 607.0602 of the Florida Business
Corporation Act ("FBCA"), Regency Realty Corporation, a Florida corporation (the
"Corporation"), does hereby certify that:
FIRST: Pursuant to the authority expressly vested in the Board of
Directors of the Corporation by Section 4.2 of the Restated Articles of
Incorporation of the Corporation, as amended (the "Charter") and Section
607.0602 of the FBCA, the Board of Directors of the Corporation, by resolutions
duly adopted on September 23, 1998 has classified 1,502,532 shares of the
authorized but unissued Preferred Stock par value $.01 per share (the "Series 2
Preferred Stock") as a separate class of Preferred Stock, authorized the
issuance of a maximum of 1,502,532 shares of such class of Series 2 Preferred
Stock, set certain of the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption and other terms and conditions of such class of Series
2 Preferred Stock. Shareholder approval was not required under the Charter with
respect to such designation.
SECOND: The class of Series 2 Preferred Stock of the Corporation
created by the resolutions duly adopted by the Board of Directors of the
Corporation shall have the following designation, number of shares, preferences,
conversion and other rights, voting powers, restrictions and limitation as to
dividends, qualifications, terms and conditions of redemption and other terms
and conditions:
Section 1. Number of Shares and Designation. The number of shares of Series 2
Preferred Stock which shall constitute such series shall not be more than
1,502,532 shares, par value $0.01 per share, which number may be decreased (but
not below the number thereof then outstanding plus the number required to
fulfill the Corporation's obligations under certain agreements, options,
warrants or similar rights issued by the Corporation) from time to time by the
Board of Directors of the Corporation. Except as otherwise specifically stated
herein, the Series 2 Preferred Stock shall have the same rights and privileges
as Common Stock under Florida law.
Section 2. Definitions. For purposes of the Series 2 Preferred Stock, the
following terms shall have the meanings indicated:
"Board" shall mean the Board of Directors of the Corporation
or any committee authorized by such Board of Directors to perform any of its
responsibilities with respect to the Series 2 Preferred Stock.
"Business Day" shall mean any day other than a Saturday,
Sunday or a day on which state or federally chartered banking institutions in
New York City, New York are not required to be open.
"Call Date" shall mean the date specified in the notice to
holders required under subparagraph (d) of Section 5 as the Call Date.
"Common Stock" shall mean the common capital stock of the Corporation, par
value $0.01 per share.
"Constituent Person" shall have the meaning set forth in
paragraph (e) of Section 6 hereof.
"Conversion Price" shall mean the conversion price per share
of Common Stock for which the Series 2 Preferred Stock is convertible, as such
Conversion Price may be adjusted pursuant to Section 6. The initial conversion
price shall be $20.8333 (equivalent to a conversion rate of one (1) share of
Common Stock for each share of Series 2 Preferred Stock).
"Current Market Price" of publicly traded Common Stock or any
other class of capital stock or other security of the Corporation or any other
issuer for any day shall mean the last reported sales price on such day, regular
way, or, if no sale takes place on such day, the average of the reported closing
bid and asked prices on such day, regular way, in either case as reported on the
New York Stock Exchange ("NYSE") or, if such security is not listed or admitted
for trading on the NYSE, on the principal national securities exchange on which
such security is listed or admitted for trading or, if not listed or admitted
for trading on any national securities exchange, on the National Market System
of the National Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or, if such security is not quoted on such National Market
System, the average of the closing bid and asked prices on such day in the
over-the-counter market as reported by NASDAQ or, if bid and asked prices for
such security on such day shall not have been reported through NASDAQ, as
reported by the National Quotation Bureau, Incorporated, or, if not so reported,
the average of the closing bid and asked prices as furnished by any member of
the National Association of Securities Dealers, Inc. selected from time to time
by the Corporation for such purpose, or, if no such prices are furnished, the
fair market value of the security as determined in good faith by the Board.
"Dividend Payment Date" shall mean the last calendar day of
March, June, September and December, in each year, commencing on March 31, 1999;
provided, however, that if any Dividend Payment Date falls on any day other than
a Business Day, the dividend payment due on such Dividend Payment Date shall be
paid on the Business Day immediately following such Dividend Payment Date.
"Dividend Periods" shall mean quarterly dividend periods
commencing on April 1, July 1, October 1 and January 1 of each year and ending
on and including the day preceding the first day of the next succeeding Dividend
Period (other than the initial Dividend Period, which shall commence on the
Issue Date).
"Fully Junior Stock" shall mean any class or series of capital
stock of the Corporation now or hereafter issued and outstanding over which the
Series 2 Preferred Stock has preference or priority in both (i) the payment of
dividends and (ii) the distribution of assets on any liquidation, dissolution or
winding up of the Corporation.
"Funds from Operations per Share" shall mean the amount
determined by dividing (a) the net income of the Corporation before
extraordinary items (determined in accordance with generally accepted accounting
principles) as reported by the Corporation in its year-end audited financial
statements, minus gains (or losses) from debt restructuring and sales of
property, plus real property depreciation and amortization and amortization of
capitalized leasing expenses and tenant allowances or improvements (to the
extent such allowances or improvements are capital items), and after adjustments
for unconsolidated partnerships, corporations and joint ventures (such items of
depreciation and amortization and such gains, losses and adjustments as
determined in accordance with generally accepted accounting principles and as
reported by the Corporation in its year-end audited financial statements) by (b)
the weighted average number of shares of common stock of the Corporation
outstanding as reported by the Corporation in its year-end audited financial
statements. Adjustments for unconsolidated partnerships, corporations and joint
ventures shall be calculated to reflect Funds from Operations per Share on the
same basis. If the Corporation shall after the Issue Date (A) pay a dividend or
make a distribution in shares of common stock on its outstanding shares of
common stock, (B) subdivide its outstanding shares of common stock into a
greater number of shares, (C) combine its outstanding Common Stock into a
smaller number of shares or (D) issue any shares of common stock by
reclassification of its outstanding shares of common stock, the Funds from
Operations per Share shall be appropriately adjusted to give effect to such
events.
"Issue Date" shall mean the first date on which the Series 2
Preferred Stock is issued.
"Junior Stock" shall mean the Common Stock and any other class
or series of capital stock of the Corporation now or hereafter issued and
outstanding over which the Series 2 Preferred Stock has preference or priority
in the payment of dividends or in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
"Minimum Amount" shall mean the greater of (A) $0.2083 and (B)
65% of the highest amount of Funds from Operations per Share for any preceding
fiscal year, beginning with the fiscal year ending December 31, 1996, divided by
four.
"Non-Electing Share" shall have the meaning set forth in
paragraph (e) of Section 6 hereof.
"Parity Stock" shall have the meaning set forth in paragraph
(b) of Section 8.
"Person" shall mean any individual, firm, partnership,
corporation, or trust or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"Securities" and "Security" shall have the meanings set forth in paragraph
(d)(iv) of Section 6 hereof.
"Series 1 Preferred Stock" shall mean the Series 1 Cumulative
Convertible Redeemable Preferred Stock of the Corporation, par value $0.01 per
share.
"Series 2 Preferred Stock" shall have the meaning set forth in
Article FIRST hereof.
"set apart for payment" shall be deemed to include, without
any action other than the following, the recording by the Corporation in its
accounting ledgers of any accounting or bookkeeping entry which indicates,
pursuant to a declaration of dividends or other distribution by the Board, the
allocation of funds to be so paid on any series or class of capital stock of the
Corporation; provided, however, that if any funds for any class or series of
Junior Stock, Fully Junior Stock or any class or series of shares of capital
stock ranking on a parity with the Series 2 Preferred Stock as to the payment of
dividends are placed in a separate account of the Corporation or delivered to a
disbursing, paying or other similar agent, then "set apart for payment" with
respect to the Series 2 Preferred Stock shall mean placing such funds in a
separate account or delivering such funds to a disbursing, paying or other
similar agent.
"Transaction" shall have the meaning set forth in paragraph
(e) of Section 6 hereof.
"Transfer Agent" means initially the Corporation and shall
include such other agent or agents of the Corporation as may be designated by
the Board or their designee as the transfer agent for the Series 2 Preferred
Stock.
"Voting Preferred Stock" shall have the meaning set forth in
Section 9 hereof.
Section 3. Dividends.
(a) The holders of Series 2 Preferred Stock shall be entitled to receive, when,
as and if declared by the Board out of funds legally available for that purpose,
quarterly dividends payable in cash in an amount per share equal to the greater
of (i) the Minimum Amount or (ii) an amount equal to the dividend (determined on
each Dividend Payment Date) on a share of Common Stock, or portion thereof, into
which a share of Series 2 Preferred Stock is convertible. For purposes of clause
(ii) of the preceding sentence, such dividends shall equal the number of shares
of Common Stock, or portion thereof, into which a share of Series 2 Preferred
Stock is convertible, multiplied by the most current quarterly dividend paid or
payable on a share of Common Stock on or before the applicable Dividend Payment
Date. Dividends on the Series 2 Preferred Stock shall begin to accrue and shall
be fully cumulative from the Issue Date, whether or not for any Dividend Period
or Periods there shall be funds of the Corporation legally available for the
payment of such dividends, and shall be payable quarterly, when, as and if
declared by the Board, in arrears on Dividend Payment Dates, commencing on the
first Dividend Payment Date after the Issue Date. Accrued and unpaid dividends
on shares of Series 2 Preferred Stock shall include any accrued and unpaid
dividends on the Series B Cumulative Convertible Redeemable Preferred Shares of
Beneficial Interest of Pacific Retail Trust which are exchanged by operation of
law into such shares of Series 2 Preferred Stock pursuant to the merger of
Pacific Retail Trust into the Corporation. Each dividend on the Series 2
Preferred Stock shall be payable to the holders of record of Series 2 Preferred
Stock, as they appear on the stock records of the Corporation at the close of
business on such record dates as shall be fixed by the Board. Accrued and unpaid
dividends for any past Dividend Periods may be declared and paid at any time and
for such interim periods, without reference to any regular Dividend Payment
Date, to holders of record on such date as may be fixed by the Board.
(b) The amount of dividends payable for any dividend period shorter or longer
than a full Dividend Period, on the Series 2 Preferred Stock shall be computed
on the basis of twelve 30-day months and a 360-day year. Holders of Series 2
Preferred Stock shall not be entitled to any dividends, whether payable in cash,
property or stock, in excess of current and cumulative but unpaid dividends, as
herein provided, on the Series 2 Preferred Stock. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend payment or
payments on the Series 2 Preferred Stock that may be in arrears.
(c) So long as any Series 2 Preferred Stock is outstanding, no dividends, except
as described in the immediately following sentence, shall be declared or paid or
set apart for payment on any class or series of Parity Stock for any period
unless full cumulative dividends have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart for such
payment on the Series 2 Preferred Stock for all Dividend Periods terminating on
or prior to the Dividend Payment Date on such class or series of Parity Stock.
When dividends are not paid in full or a sum sufficient for such payment is not
set apart, as aforesaid, all dividends declared upon Series 2 Preferred Stock
and all dividends declared upon any other class or series of Parity Stock shall
be declared ratably in proportion to the respective amounts of dividends
accumulated and unpaid on the Series 2 Preferred Stock and accumulated and
unpaid on such Parity Stock.
(d) So long as any Series 2 Preferred Stock is outstanding, no dividends (other
than dividends or distributions paid solely in shares of, or options, warrants
or rights to subscribe for or purchase shares of, Fully Junior Stock) shall be
declared or paid or set apart for payment or other distribution declared or made
upon Junior Stock, nor shall any Junior Stock be redeemed, purchased or
otherwise acquired (other than a redemption, purchase or other acquisition of
Common Stock made for purposes of an employee incentive or benefit plan of the
Corporation or any subsidiary) for any consideration (or any moneys be paid to
or made available for a sinking fund for the redemption of any shares of any
such stock) by the Corporation, directly or indirectly (except by conversion
into or exchange for Fully Junior Stock), unless in each case (i) the full
cumulative dividends on all outstanding Series 2 Preferred Stock and any other
Parity Stock of the Corporation shall have been paid or declared and set apart
for payment for all past Dividend Periods with respect to the Series 2 Preferred
Stock and all past dividend periods with respect to such Parity Stock and (ii)
sufficient funds shall have been paid or declared and set apart for the payment
of the dividend for the current Dividend Period with respect to the Series 2
Preferred Stock and the current dividend period with respect to such Parity
Stock.
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, before any payment or
distribution of the assets of the Corporation (whether capital or surplus) shall
be made to or set apart for payment to the holders of Junior Stock or Fully
Junior Stock, the holders of the Series 2 Preferred Stock shall be entitled to
receive $20.8333 per share of Series 2 Preferred Stock plus an amount equal to
all dividends declared but unpaid thereon to the date of final distribution to
such holders; but such holders shall not be entitled to any further payment. If,
upon any liquidation, dissolution or winding up of the Corporation, the assets
of the Corporation, or proceeds thereof, distributable among the holders of the
Series 2 Preferred Stock shall be insufficient to pay in full the preferential
amount aforesaid and liquidating payments on any other shares of any class or
series of Parity Stock, then such assets, or the proceeds thereof, shall be
distributed among the holders of Series 2 Preferred Stock and any such other
Parity Stock ratably in accordance with the respective amounts that would be
payable on such Series 2 Preferred Stock and any such other Parity Stock if all
amounts payable thereon were paid in full. For the purposes of this Section 4,
(i) a consolidation or merger of the Corporation with one or more Persons, (ii)
a sale or transfer of all or substantially all of the Corporation's assets or
(iii) a statutory share exchange shall not be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of shares of any series or class or
classes of shares of capital stock ranking on a parity with or prior to the
Series 2 Preferred Stock upon liquidation, dissolution or winding up, upon any
liquidation, dissolution or winding up of the Corporation, after payment shall
have been made in full to the holders of the Series 2 Preferred Stock, as
provided in this Section 4, any other series or class or classes of Junior Stock
or Fully Junior Stock shall, subject to the respective terms and provisions (if
any) applying thereto, be entitled to receive any and all assets remaining to be
paid or distributed, and the holders of the Series 2 Preferred Stock shall not
be entitled to share therein.
Section 5. Redemption at the Option of the Corporation.
(a) The Series 2 Preferred Stock shall not be redeemable by the Corporation
prior to October 20, 2010. On and after October 20, 2010, the Corporation, at
its option, may redeem the Series 2 Preferred Stock, in whole at any time or
from time to time in part, at the option of the Corporation at a redemption
price of $20.8333 per share of Series 2 Preferred Stock, plus the amounts
indicated in Section 5(b).
(b) Upon any redemption of Series 2 Preferred Stock pursuant to this Section 5,
the Corporation shall pay in full any and all accrued and unpaid dividends
(without interest or sum of money in lieu of interest) for any and all Dividend
Periods ending on or prior to the Call Date. If the Call Date falls after a
dividend payment record date and prior to the corresponding Dividend Payment
Date, then each holder of Series 2 Preferred Stock at the close of business on
such dividend payment record date shall be entitled to the dividend payable on
such shares on the corresponding dividend payment date notwithstanding the
redemption of such shares before such Dividend Payment Date.
(c) If full cumulative dividends on the Series 2 Preferred Stock and any other
class or series of Parity Stock of the Corporation have not been paid or
declared and set apart for payment, the Series 2 Preferred Stock may not be
redeemed under this Section 5 in part and the Corporation may not purchase or
acquire shares of Series 2 Preferred Stock, otherwise than pursuant to a
voluntary purchase or exchange offer made on the same terms to all holders of
Series 2 Preferred Stock.
(d) Notice of the redemption of any Series 2 Preferred Stock under this Section
5 shall be mailed by first-class mail to each holder of record of Series 2
Preferred Stock to be redeemed at the address of each such holder as shown on
the Corporation's record, not less than 30 nor more than 90 days prior to the
Call Date. Neither the failure to mail any notice required by this paragraph
(d), nor any defect therein or in the mailing thereof, to any particular holder,
shall affect the sufficiency of the notice or the validity of the proceedings
for redemption with respect to the other holders. Any notice which was mailed in
the manner herein provided shall be conclusively presumed to have been duly
given on the date mailed whether or not the holder receives the notice. Each
such mailed notice shall state, as appropriate: (1) the Call Date; (2) the
number of shares of Series 2 Preferred Stock to be redeemed and, if fewer than
all the shares held by such holder are to be redeemed, the number of such shares
to be redeemed from such holder; (3) the place or places at which certificates
for such shares are to be surrendered; and (4) that dividends on the shares to
be redeemed shall cease to accrue on such Call Date except as otherwise provided
herein. Notice having been mailed as aforesaid, from and after the Call Date
(unless the Corporation shall fail to make available an amount of cash necessary
to effect such redemption), (i) except as otherwise provided herein, dividends
on the Series 2 Preferred Stock so called for redemption shall cease to accrue,
(ii) said shares shall no longer be deemed to be outstanding and (iii) all
rights of the holders thereof as holders of Series 2 Preferred Stock of the
Corporation shall cease (except the rights to convert and to receive cash
payable upon such redemption, without interest thereon, upon surrender and
endorsement of their certificates if so required and to receive any dividends
payable thereon). The Corporation's obligation to provide cash in accordance
with the preceding sentence shall be deemed fulfilled if, on or before the Call
Date, the Corporation shall deposit with a bank or trust company (which may be
an affiliate of the Corporation) that has an office in the Borough of Manhattan,
City of New York, and that has, or is an affiliate of a bank or trust company
that has, capital and surplus of at least $50,000,000, sufficient cash necessary
for such redemption, in trust, with irrevocable instructions that such cash be
applied to the redemption of the Series 2 Preferred Stock so called for
redemption. No interest shall accrue for the benefit of the holders of Series 2
Preferred Stock to be redeemed on any cash so set aside by the Corporation.
Subject to applicable escheat laws and other unclaimed property laws, any such
cash unclaimed at the end of two years from the Call Date shall revert to the
general funds of the Corporation, after which reversion the holders of such
shares so called for redemption shall look only to the general funds of the
Corporation for the payment of such cash. Notwithstanding the above, at any time
after such redemption notice is received and on or prior to the Call Date, any
holder may exercise its conversion rights under Section 6 below.
As promptly as practicable after the surrender in accordance
with said notice of the certificates for any such shares so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so require and if
the notice shall so state), such shares shall be exchanged for any cash
(including accumulated and unpaid dividends but without interest thereon) for
which such shares have been redeemed. If fewer than all the outstanding shares
of Series 2 Preferred Stock are to be redeemed, shares to be redeemed shall be
selected by the Corporation from outstanding Series 2 Preferred Stock not
previously called for redemption by lot or pro rata (as nearly as may be) or by
any other method determined by the Corporation in its sole discretion to be
equitable. If fewer than all shares of the Series 2 Preferred Stock represented
by any certificate are redeemed, then new certificates representing the
unredeemed shares shall be issued without cost to the holder thereof.
Section 6. Conversion. Holders of Series 2 Preferred Stock shall have the
right, at any time and from time to time, to convert all or a portion of such
shares into Common Stock, as follows:
(a) Subject to and upon compliance with the provisions of this Section 6, a
holder of Series 2 Preferred Stock shall have the right, at such holder's
option, at any time to convert each share of Series 2 Preferred Stock into the
number of fully paid and non-assessable shares of Common Stock obtained by
dividing the aggregate liquidation preference of such shares by the Conversion
Price (as in effect at the time and on the date provided for in the last
paragraph of paragraph (b) of this Section 6) by surrendering such shares to be
converted, such surrender to be made in the manner provided in paragraph (b) of
this Section 6.
(b) In order to exercise the conversion right, each holder of shares of Series 2
Preferred Stock to be converted shall surrender the certificate representing
such shares, duly endorsed or assigned to the Corporation or in blank, at the
office of the Transfer Agent, accompanied by written notice to the Corporation
that the holder thereof elects to convert such Series 2 Preferred Stock. Unless
the shares issuable on conversion are to be issued in the same name as the name
in which such Series 2 Preferred Stock is registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form satisfactory
to the Corporation, duly executed by the holder or such holder's duly authorized
attorney and an amount sufficient to pay any transfer or similar tax (or
evidence reasonably satisfactory to the Corporation demonstrating that such
taxes have been paid).
Holders of Series 2 Preferred Stock at the close of business
on a dividend payment record date shall be entitled to receive the dividend
payable on such shares on the corresponding dividend payment date
notwithstanding the conversion thereof following such dividend payment record
date and on or prior to such dividend payment date. In no event shall a holder
of Series 2 Preferred Stock be entitled to receive a dividend payment on Common
Stock issued or issuable upon conversion of Series 2 Preferred Stock if such
holder is entitled to receive a dividend in respect of the Series 2 Preferred
Stock surrendered for conversion. The Corporation shall make no payment or
allowance for unpaid dividends, whether or not in arrears, on converted shares
or for dividends on the Common Stock issued upon such conversion.
As promptly as practicable after the surrender of certificates
for Series 2 Preferred Stock as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or such holder's written order, a
certificate or certificates for the number of full shares of Common Stock
issuable upon the conversion of such shares in accordance with provisions of
this Section 6, and any fractional interest in respect of a share of Common
Stock arising upon such conversion shall be settled as provided in paragraph (c)
of this Section 6.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for Series 2 Preferred Stock shall have been surrendered and such notice
received by the Corporation as aforesaid, and the person or persons in whose
name or names any certificate or certificates for Common Stock shall be issuable
upon such conversion shall be deemed to have become the holder or holders of
record of the shares represented thereby at such time on such date and such
conversion shall be at the Conversion Price in effect at such time on such date
unless the stock transfer books of the Corporation shall be closed on that date,
in which event such person or persons shall be deemed to have become such holder
or holders of record at the close of business on the next succeeding day on
which such stock transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date on which such shares shall have been
surrendered and such notice received by the Corporation.
(c) No fractional shares or scrip representing fractions of a share of Common
Stock shall be issued upon conversion of the Series 2 Preferred Stock. Instead
of any fractional interest in a share of Common Stock that would otherwise be
deliverable upon the conversion of a share of Series 2 Preferred Stock, the
Corporation shall pay to the holder of such share an amount in cash based upon
the Current Market Price of Common Stock on the Business Day immediately
preceding the date of conversion. If more than one share shall be surrendered
for conversion at one time by the same holder, the number of full shares of
Common Stock issuable upon conversion thereof shall be computed on the basis of
the aggregate number of Series 2 Preferred Stock so surrendered.
(d) The Conversion Price shall be adjusted from time to time as follows:
(i) If the Corporation shall after the Issue Date (A) pay a
dividend or make a distribution in shares of Common Stock on its Common
Stock, (B) subdivide its outstanding shares of Common Stock into a
greater number of shares, (C) combine its outstanding shares of Common
Stock into a smaller number of shares or (D) issue any shares of Common
Stock by reclassification of its Common Stock, the Conversion Price in
effect at the opening of business on the day following the date fixed
for the determination of shareholders entitled to receive such dividend
or distribution or at the opening of business on the Business Day next
following the day on which such subdivision, combination or
reclassification becomes effective, as the case may be, shall be
adjusted so that the holder of any shares of Series 2 Preferred Stock
thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock that such holder would have owned or
have been entitled to receive after the happening of any of the events
described above as if such shares of Series 2 Preferred Stock had been
converted immediately prior to the record date in the case of a
dividend or distribution or the effective date in the case of a
subdivision, combination or reclassification. An adjustment made
pursuant to this subparagraph (i) shall become effective immediately
after the opening of business on the Business Day next following the
record date (except as provided in paragraph (g) below) in the case of
a dividend or distribution and shall become effective immediately after
the opening of business on the Business Day next following the
effective date in the case of a subdivision, combination or
reclassification.
(ii) If the Corporation shall issue after the Issue Date
rights, options or warrants to subscribe for or purchase Common Stock,
or to subscribe for or purchase any security convertible into Common
Stock, and the price per share for which Common Stock is issuable upon
exercise of such rights, options or warrants, or upon the conversion or
exchange of such convertible securities, is less than the lesser of the
Conversion Price then in effect and the Current Market Price per share
of Common Stock on the date such rights, options or warrants are
issued, then the Conversion Price in effect at the opening of business
on the Business Day next following such issue date shall be adjusted to
equal the price determined by multiplying (A) the Conversion Price in
effect immediately prior to the opening of business on the date for
such issuance by (B) a fraction, the numerator of which shall be the
sum of (I) the number of shares of Common Stock outstanding immediately
prior to such issuance and (II) the number of shares that the aggregate
proceeds to the Corporation from the exercise of such rights, options
or warrants for Common Stock, or in the case of rights to purchase
convertible securities, the aggregate proceeds from the exercise of
such rights, options or warrants and the subsequent conversion of such
convertible securities, would purchase at such Conversion Price or
Current Market Price, as applicable, and the denominator of which shall
be the sum of (A) the number of shares of Common Stock outstanding
immediately prior to such issuance and (B) the number of additional
shares of Common Stock offered for subscription or purchase pursuant to
such rights, options or warrants. Such adjustment shall become
effective immediately after the opening of business on the day next
following such issue date (except as provided in paragraph (g) below).
In determining whether any rights, options or warrants entitle the
holders of Common Stock to subscribe for or purchase Common Stock or
any security convertible into or exchangeable for Common Stock at less
than such Conversion Price or Current Market Price, as applicable,
there shall be taken into account any consideration received by the
Corporation upon issuance and upon exercise of such rights, options or
warrants, and in the case of rights, options or warrants to subscribe
for or purchase convertible securities, upon the subsequent conversion
of such securities, the value of such consideration, if other than
cash, to be determined in good faith by the Board. In the event that
the securities referenced in this subparagraph (ii) are only issued to
all holders of Common Stock, no adjustment shall be made to the
Conversion Price under this subparagraph (ii) if the Corporation shall
issue to all holders of Series 2 Preferred Stock, the same number of
rights, options or warrants to subscribe for or purchase Common Stock
or any security convertible into or exchangeable for Common Stock, as
those issued to holders of Common Stock, based upon the number of
shares of Common Stock into which each share of Series 2 Preferred
Stock is then convertible.
(iii) If the Corporation shall issue after the Issue Date any
shares of capital stock or security convertible or exchangeable for
Common Stock (excluding rights, options or warrants referred to in
subparagraph (ii) above) and the price per share for which Common Stock
is issuable upon the conversion or exchange of such convertible or
exchangeable securities is less than the lesser of the Conversion Price
then in effect and the Current Market Price per share of Common Stock
on the date such convertible or exchangeable securities are issued,
then the Conversion Price in effect at the opening of business on the
Business Day next following such issue date shall be adjusted to equal
the price determined by multiplying (A) the Conversion Price in effect
immediately prior to the opening of business on the Business Day next
following the issue date by (B) a fraction, the numerator of which
shall be the sum of (I) the number of shares of Common Stock
outstanding on the close of business on the Business Day immediately
preceding the issue date and (II) the number of shares of Common Stock
that the aggregate proceeds to the Corporation from the conversion into
or in exchange for Common Stock would purchase at such Conversion Price
or Current Market Price, as applicable, and the denominator of which
shall be the sum of (A) the number of shares of Common Stock
outstanding on the close of business on the Business Day immediately
preceding the issue date and (B) the number of additional shares of
Common Stock issuable upon conversion or exchange of such convertible
or exchangeable securities. Such adjustment shall become effective
immediately after the opening of business on the day next following
such issue date (except as provided in paragraph (g) below). In
determining whether any securities are convertible for or exchangeable
into Common Stock at less than such Conversion Price or Current Market
Price, as applicable, there shall be taken into account any
consideration received by the Corporation upon issuance and upon
conversion or exchange of such convertible or exchangeable securities,
the value of such consideration, if other than cash, to be determined
in good faith by the Board.
(iv) If the Corporation shall distribute to all holders of its
Common Stock any shares of capital stock of the Corporation (other than
Common Stock) or evidence of its indebtedness or assets (excluding cash
dividends or distributions) or rights, options or warrants to subscribe
for or purchase any of its securities (excluding those rights, options
and warrants referred to in subparagraph (ii) above and excluding those
convertible or exchangeable securities referred to in subparagraph
(iii) above (any of the foregoing being hereinafter in this
subparagraph (iv) collectively called the "Securities" and individually
a "Security"), then in each such case the Conversion Price shall be
adjusted so that it shall equal the price determined by multiplying (A)
the Conversion Price in effect immediately prior to the close of
business on the date fixed for the determination of shareholders
entitled to receive such distribution by (B) a fraction, the numerator
of which shall be the lesser of the Conversion Price then in effect and
the Current Market Price per share of Common Stock on the record date
mentioned below less the then fair market value (as determined in good
faith by the Board) of the portion of the shares of capital stock or
assets or evidences of indebtedness so distributed or of such rights,
options or warrants applicable to one share of Common Stock, and the
denominator of which shall be the lesser of the Conversion Price then
in effect and the Current Market Price per share of Common Stock on the
record date mentioned below. Such adjustment shall become effective
immediately at the opening of business on the Business Day next
following (except as provided in paragraph (g) below) the record date
for the determination of shareholders entitled to receive such
distribution. For the purposes of this clause (iv), the distribution of
a Security, which is distributed not only to the holders of the Common
Stock on the date fixed for the determination of shareholders entitled
to such distribution of such Security, but also is distributed with
each share of Common Stock delivered to a Person converting Series 2
Preferred Stock after such determination date, shall not require an
adjustment of the Conversion Price pursuant to this clause (iv);
provided that on the date, if any, on which a Person converting a share
of Series 2 Preferred Stock would no longer be entitled to receive such
Security with a share of Common Stock (other than as a result of the
termination of all such Securities), a distribution of such Securities
shall be deemed to have occurred and the Conversion Price shall be
adjusted as provided in this clause (iv) (and such day shall be deemed
to be "the date fixed for the determination of the shareholders
entitled to receive such distribution" and "the record date" within the
meaning of the two preceding sentences).
(v) No adjustment in the Conversion Price shall be required
unless such adjustment would require a cumulative increase or decrease
of at least 1% in such price; provided, however, that any adjustments
that by reason of this subparagraph (v) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment until made; and provided, further, that any adjustment shall
be required and made in accordance with the provisions of this Section
6 (other than this subparagraph (v)) not later than such time as may be
required in order to preserve the tax-free nature of a distribution to
the holders of Common Stock. Notwithstanding any other provisions of
this Section 6, the Corporation shall not be required to make any
adjustment of the Conversion Price for the issuance of any Common Stock
pursuant to (A) any plan providing for the reinvestment of dividends or
interest payable on securities of the Corporation and the investment of
additional optional amounts in Common Stock under such plan or (B) any
right, option or warrant to acquire Common Stock granted to any
employee (as such term is defined in General Instruction A to Form S-8
under the Securities Act) of the Corporation under a plan providing for
the granting of such securities to employees; provided, however, that
such plan is approved by the shareholders and the aggregate amount of
Common Stock issuable under the rights, options and warrants granted
under such plan shall not exceed 20% of the shares of Common Stock
issued and outstanding on the date such plan is approved by
shareholders. In addition, the Corporation shall not be required to
make any adjustment of the Conversion Price for the issuance of any
Common Stock or any other class or series of shares of capital stock
pursuant to the terms of that certain Shareholders' Agreement among
Pacific Retail Trust (to which the Corporation is successor by merger),
Security Capital Holdings S.A. and Opportunity Capital Partners Limited
Partnership. All calculations under this Section 6 shall be made to the
nearest cent (with $.005 being rounded upward) or to the nearest
one-tenth of a share (with .05 of a share being rounded upward), as the
case may be. Anything in this paragraph (d) to the contrary
notwithstanding, the Corporation shall be entitled, to the extent
permitted by law, to make such reductions in the Conversion Price, in
addition to those required by this paragraph (d), as it in its
discretion shall determine to be advisable in order that any share
dividends, subdivision of shares, reclassification or combination of
shares, distribution of rights, options or warrants to purchase stock
or securities, or a distribution of other assets (other than cash
dividends) hereafter made by the Corporation to its shareholders shall
not be taxable.
(e) If the Corporation shall be a party to any transaction (including without
limitation a merger, consolidation, statutory share exchange, self tender offer
for all or substantially all Common Stock, sale of all or substantially all of
the Corporation's assets or recapitalization of the Common Stock and excluding
any transaction as to which subparagraph (d)(i) of this Section 6 applies) (each
of the foregoing being referred to herein as a "Transaction"), in each case as a
result of which all or substantially all shares of Common Stock are converted
into the right to receive stock, securities or other property (including cash or
any combination thereof) of another Person, each share of Series 2 Preferred
Stock, which is not converted into the right to receive stock, securities or
other property of such Person prior to such Transaction (and each share of
Series 2 Preferred Stock issuable after such Transaction upon conversion of
securities convertible into Series 2 Preferred Stock), shall thereafter be
convertible into the kind and amount of shares of stock, securities and other
property (including cash or any combination thereof) receivable upon the
consummation of such Transaction by a holder of that number of shares of Common
Stock into which one share of Series 2 Preferred Stock was convertible
immediately prior to such Transaction, assuming such holder of Common Stock (i)
is not a Person with which the Corporation consolidated or into which the
Corporation merged or which merged into the Corporation or to which such sale or
transfer was made, as the case may be ("Constituent Person"), or an affiliate of
a Constituent Person and (ii) failed to exercise his rights of election, if any,
as to the kind or amount of stock, securities and other property (including
cash) receivable upon such Transaction (provided that if the kind or amount of
stock, securities and other property (including cash) receivable upon such
Transaction is not the same for each share of Common Stock held immediately
prior to such Transaction by other than a Constituent Person or an affiliate
thereof and in respect of which such rights of election shall not have been
exercised ("Non-Electing Share"), then for the purpose of this paragraph (e) the
kind and amount of stock, securities and other property (including cash)
receivable upon such Transaction by each Non-Electing Share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
Non-Electing Shares). The Corporation shall not be a party to any Transaction
unless the terms of such Transaction are consistent with the provisions of this
paragraph (e), and it shall not consent or agree to the occurrence of any
Transaction until the Corporation has entered into an agreement with the
successor or purchasing entity, as the case may be, for the benefit of the
holders of the Series 2 Preferred Stock (and securities convertible into Series
2 Preferred Stock) that will contain provisions enabling the holders of the
Series 2 Preferred Stock that remain outstanding (or are issuable upon
conversion of securities convertible into Series 2 Preferred Stock) after such
Transaction to convert into the consideration received by holders of Common
Stock at the Conversion Price in effect immediately prior to such Transaction.
The provisions of this paragraph (e) shall similarly apply to successive
Transactions.
(f) Whenever the Conversion Price is adjusted as herein provided, the
Corporation shall promptly mail notice of such adjustment of the Conversion
Price to each holder of Series 2 Preferred Stock at such holder's last address
as shown on the share records of the Corporation.
(g) In any case in which paragraph (d) of this Section 6 provides that an
adjustment shall become effective on the day next following the record date for
an event, the Corporation may defer until the occurrence of such event (A)
issuing to the holder of any Series 2 Preferred Stock converted after such
record date and before the occurrence of such event the additional shares of
Common Stock issuable upon such conversion by reason of the adjustment required
by such event over and above the shares of Common Stock issuable upon such
conversion before giving effect to such adjustment and (B) paying to such holder
any amount of cash in lieu of any fraction pursuant to paragraph (c) of this
Section 6.
(h) There shall be no adjustment of the Conversion Price in case of the issuance
of any shares of capital stock of the Corporation in a reorganization,
acquisition or other similar transaction except as specifically set forth in
this Section 6. If any action or transaction would require adjustment of the
Conversion Price pursuant to more than one paragraph of this Section 6, only one
adjustment shall be made and such adjustment shall be the adjustment that yields
the highest absolute value.
(i) The Corporation covenants that it will at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Common Stock, for the purpose of effecting conversion of the Series
2 Preferred Stock, the full number of shares of Common Stock deliverable upon
the conversion of all outstanding Series 2 Preferred Stock not theretofore
converted. For purposes of this paragraph (i), the number of shares of Common
Stock that shall be deliverable upon the conversion of all outstanding Series 2
Preferred Stock shall be computed as if at the time of computation all such
outstanding shares were held by a single holder.
The Corporation covenants that any shares of Common Stock
issued upon conversion of the Series 2 Preferred Stock shall be validly issued,
fully paid and non-assessable. Before taking any action that would cause an
adjustment reducing the Conversion Price below the then-par value of the Common
Stock deliverable upon conversion of the Series 2 Preferred Stock, the
Corporation will take any corporate action that, in the opinion of its counsel,
may be necessary in order that the Corporation may validly and legally issue
fully paid and non-assessable shares of Common Stock at such adjusted Conversion
Price.
Prior to the delivery of any securities that the Corporation
shall be obligated to deliver upon conversion of the Series 2 Preferred Stock,
the Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
(j) The Corporation will pay any and all documentary stamp or similar issue or
transfer taxes payable in respect of the issue or delivery of Common Stock or
other securities or property on conversion of the Series 2 Preferred Stock
pursuant hereto; provided, however, that the Corporation shall not be required
to pay any tax that may be payable in respect of any transfer involved in the
issue or delivery of Common Stock or other securities or property in a name
other than that of the holder of the Series 2 Preferred Stock to be converted,
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Corporation the amount of any
such tax or established, to the reasonable satisfaction of the Corporation, that
such tax has been paid.
Section 7. Shares to Be Retired. All shares of Series 2 Preferred Stock which
shall have been issued and reacquired in any manner by the Corporation shall be
restored to the status of authorized but unissued shares of Preferred Stock of
the Corporation, without designation as to class or series.
Section 8. Ranking. Any class or series of shares of capital stock of the
Corporation shall be deemed to rank:
(a) prior to the Series 2 Preferred Stock, as to the payment of dividends and as
to distribution of assets upon liquidation, dissolution or winding up, if the
holders of such class or series shall be entitled to the receipt of dividends or
of amounts distributable upon liquidation, dissolution or winding up, as the
case may be, in preference or priority to the holders of Series 2 Preferred
Stock;
(b) on a parity with the Series 2 Preferred Stock, as to the payment of
dividends and as to distribution of assets upon liquidation, dissolution or
winding up, whether or not the dividend rates, dividend payment dates or
liquidation prices per share thereof shall be different from those of the Series
2 Preferred Stock, if the holders of such class or series and the Series 2
Preferred Stock shall be entitled to the receipt of dividends and of amounts
distributable upon liquidation, dissolution or winding up in proportion to their
respective amounts of accrued and unpaid dividends per share or liquidation
preferences, without preference or priority one over the other ("Parity Stock");
(c) junior to the Series 2 Preferred Stock, as to the payment of dividends or as
to the distribution of assets upon liquidation, dissolution or winding up, if
such class or series shall be Junior Stock; and
(d) junior to the Series 2 Preferred Stock, as to the payment of dividends and
as to the distribution of assets upon liquidation, dissolution or winding up, if
such class or series shall be Fully Junior Stock.
The Corporation's Series 1 Cumulative Convertible Redeemable
Preferred Stock and the Corporation's 8.125% Series A Cumulative Redeemable
Preferred Stock shall constitute Parity Stock.
Section 9. Voting.
(a) Each issued and outstanding share of Series 2 Preferred Stock shall entitle
the holder thereof to the number of votes per share of Common Stock into which
such share of Series 2 Preferred Stock is convertible (as of the close of
business on the record date for determination of shareholders entitled to vote
on a matter) on all matters presented for a vote of shareholders of the
Corporation and, except as required by applicable law and subject to the further
provisions of this Section 9, the Series 2 Preferred Stock shall be voted
together with all issued and outstanding Common Stock and Series 1 Preferred
Stock voting as a single class.
(b) If and whenever twelve consecutive quarterly dividends payable on the Series
2 Preferred Stock or any series or class of Parity Stock shall be in arrears
(which shall, with respect to any such quarterly dividend, mean that any such
dividend has not been paid in full), whether or not earned or declared, the
number of directors then constituting the Board shall be increased by one and
the holders of Series 2 Preferred Stock, together with the holders of shares of
every other series of Parity Stock, including the Series 1 Preferred Stock (any
such other series, the "Voting Preferred Stock"), voting as a single class
regardless of series, shall be entitled to elect, at a special meeting of the
holders of the Series 2 Preferred Stock and the Voting Preferred Stock called as
hereinafter provided, the additional director to serve on the Board. Whenever
all arrearages in dividends on the Series 2 Preferred Stock and the Voting
Preferred Stock then outstanding shall have been paid and dividends thereon for
the current quarterly dividend period shall have been paid or declared and set
apart for payment, then the right of the holders of the Series 2 Preferred Stock
and the Voting Preferred Stock to elect such additional director shall cease
(but subject always to the same provision for the vesting of such voting rights
in the case of any similar future arrearages in twelve quarterly dividends), and
the terms of office of the person elected as director by the holders of the
Series 2 Preferred Stock and the Voting Preferred Stock shall forthwith
terminate and the number of members of the Board shall be reduced accordingly.
At any time after such voting power shall have been so vested in the holders of
Series 2 Preferred Stock and the Voting Preferred Stock (or if any vacancy shall
occur in respect of the director previously elected by the holders of the Series
2 Preferred Stock and the Voting Preferred Stock), the secretary of the
Corporation shall call a special meeting of the holders of the Series 2
Preferred Stock and of the Voting Preferred Stock for the election of the
director to be elected by them as herein provided, such call to be made by
notice similar to that provided in the Bylaws of the Corporation for a special
meeting of the shareholders or as required by law. If any such special meeting
required to be called as above provided shall not be called by the secretary
within 30 days after the end of the most recent Dividend Period during which the
right to elect such additional director arose or such vacancy occurred, then any
holder of Series 2 Preferred Stock may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock records of the
Corporation. The director elected at any such special meeting shall hold office
until the next annual meeting of the shareholders or special meeting held in
lieu thereof if such office shall not have previously terminated as above
provided.
(c) So long as any Series 2 Preferred Stock is outstanding, in addition to any
other vote or consent of shareholders required by law or by the Charter, the
affirmative vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the Series 2 Preferred Stock, together with the holders of Voting
Preferred Stock, at the time outstanding, acting as a single class regardless of
series, given in person or by proxy, either in writing without a meeting or by
vote at any meeting called for the purpose, shall be necessary for effecting or
validating:
(i) Any amendment, alteration or repeal of any of the
provisions of the Charter or these Articles of Amendment that
materially and adversely affects the voting powers, rights or
preferences of the holders of the Series 2 Preferred Stock or the
Voting Preferred Stock; provided, however, that the amendment of the
provisions of the Charter so as to authorize or create or to increase
the authorized amount of, any Fully Junior Stock, Junior Stock that is
not senior in any respect to the Series 2 Preferred Stock, or any stock
of any class ranking on a parity with the Series 2 Preferred Stock or
the Voting Preferred Stock shall not be deemed to materially adversely
affect the voting powers, rights or preferences of the holders of
Series 2 Preferred Stock; and provided, further, that if any such
amendment, alteration or repeal would materially and adversely affect
any voting powers, rights or preferences of the Series 2 Preferred
Stock or another series of Voting Preferred Stock that are not enjoyed
by some or all of the other series otherwise entitled to vote in
accordance herewith, the affirmative vote of at least 66 2/3% of the
votes entitled to be cast by the holders of all series similarly
affected, similarly given, shall be required in lieu of the affirmative
vote of at least 66 2/3% of the votes entitled to be cast by the
holders of the Series 2 Preferred Stock and the Voting Preferred Stock
otherwise entitled to vote in accordance herewith; or
(ii) A share exchange that affects the Series 2 Preferred
Stock, a consolidation with or merger of the Corporation into another
Person, or a consolidation with or merger of another Person into the
Corporation, unless in each such case each share of Series 2 Preferred
Stock (A) shall remain outstanding without a material and adverse
change to its terms and rights or (B) shall be converted into or
exchanged for convertible preferred stock of the surviving entity
having preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications and terms or
conditions of redemption thereof identical to that of a share of Series
2 Preferred Stock (except for changes that do not materially and
adversely affect the holders of the Series 2 Preferred Stock); or
(iii) The authorization or creation of, or the increase in the
authorized amount of, any shares of any class or any security
convertible into shares of any class ranking prior to the Series 2
Preferred Stock in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation or in the payment of
dividends.
(d) For purposes of voting in respect to those matters referred to in
subparagraphs (b) and (c) of this Section 9, unless otherwise provided under
applicable law, each Series 2 Preferred Stock shall have one (1) vote per share,
except that when any other series of Preferred Stock shall have the right to
vote with the Series 2 Preferred Stock as a single class on any matter, then the
Series 2 Preferred Stock and such other series shall have with respect to such
matters one (1) vote per $20.8333 of stated liquidation preference. Except as
otherwise required by applicable law or as set forth herein, the Series 2
Preferred Stock shall not have any relative, participating, optional or other
special voting rights and powers other than as set forth herein, and the consent
of the holders thereof shall not be required for the taking of any corporate
action.
Section 10. Record Holders. The Corporation and the Transfer Agent may deem and
treat the record holder of any shares of Series 2 Preferred Stock as the true
and lawful owner thereof for all purposes, and neither the Corporation nor the
Transfer Agent shall be affected by any notice to the contrary.
Section 11. Sinking Fund. The Series 2 Preferred Stock shall not be
entitled to the benefits of any retirement or sinking fund.
THIRD: The Series 2 Preferred Stock has been classified and designated by
the Board of Directors under the authority contained in Section 4.2 of the
Charter.
FOURTH: These Articles of Amendment have been approved by the Board of
Directors in the manner and by the vote required by law.
FIFTH: The undersigned President of the Corporation acknowledges these
Articles of Amendment to be the corporate act of the Corporation and, as to all
matters or facts required to be verified under oath, the undersigned President
acknowledges that to the best of her knowledge, information and belief, these
matters and facts are true in all material respects and that this statement is
made under the penalties for perjury.
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles
of Amendment to be executed under seal in its name and on its behalf by its
President and attested to by its Secretary on this 26th day of February, 1999.
REGENCY REALTY CORPORATION
By: /s/ Mary Lou Rogers
Name: Mary Lou Rogers
Title: President
[SEAL]
ATTEST:
/s/ J. Christian Leavitt
Name: J. Christian Leavitt
Title: Secretary
<PAGE>
EXHIBIT "C'
004.160941.1
AMENDMENT TO ARTICLES OF INCORPORATION
OF
REGENCY REALTY CORPORATION
This corporation was incorporated on July 8, 1993 effective July 9,
1993 under the name Regency Realty Corporation. Pursuant to Sections 607.1001,
607.1003, 607.1004 and 607.1006 of the Florida Business Corporation Act,
amendments to Section 5.1(r) and Section 5.14 of the Articles of Incorporation
of Regency Realty Corporation were approved by the Board of Directors at a
meeting held on September 23, 1998, and adopted by the shareholders of the
corporation on February 26, 1999.
Section 5.1(r) is hereby amended in its entirety as follows:
(r) "Special Shareholder Limit" for a Special Shareholder
shall initially mean 60% of the outstanding shares of Common Stock, on a fully
diluted basis, of the Corporation; provided, however, that if at any time after
the effective date of this Amendment a Special Stockholder's ownership of Common
Stock, on a fully diluted basis, of the Corporation shall have been below 45%
for a continuous period of 180 days, then the definition of "Special Shareholder
Limit" shall mean 49% of the outstanding shares of Common Stock, on a fully
diluted basis, of the Corporation. After any adjustment pursuant to Section 5.8,
the definition of "Special Shareholder Limit" shall mean the percentage of the
outstanding Common Stock as so adjusted, and the definition of "Special
Shareholder Limit" shall also be appropriately and equitably adjusted in the
event of a repurchase of shares of Common Stock of the Corporation or other
reduction in the number of outstanding shares of Common Stock of the
Corporation. Notwithstanding the foregoing, if any Person and its Affiliates
(taken as a whole), other than the Special Shareholder, shall directly or
indirectly own in the aggregate more than 45% of the outstanding shares of
Common Stock, on a fully diluted basis, of the Corporation, the definition of
"Special Shareholder Limit" shall be revised in accordance with Section 5.8 of
the Stockholders Agreement. Notwithstanding the foregoing provisions of this
definition, if, as the result of any Special Shareholder's ownership (taking
into account for this purpose constructive ownership under Section 544 of the
Code, as modified by Section 856(h)(1)(B) of the Code) of shares of Capital
Stock, any Person who is an individual within the meaning of Section 542(a)(2)
of the Code (taking into account the ownership attribution rules under Section
544 of the Code, as modified by Section 856(h) of the Code) and who is the
Beneficial Owner of any interest in a Special Shareholder would be considered to
Beneficially Own more than 9.8% of the outstanding shares of Capital Stock, then
unless such individual reduces his or her interest in the Special Shareholder so
that such Person no longer Beneficially Owns more than 9.8% of the outstanding
shares of Capital Stock, the Special Shareholder Limit shall be reduced to such
percentage as would result in such Person not being considered to Beneficially
Own more than 9.8% of the outstanding Shares of Capital Stock. Notwithstanding
anything contained herein to the contrary, in no event shall the Special
Shareholder Limit be reduced below the Ownership Limit. At the request of the
Special Shareholders, the Secretary of the Corporation shall maintain and, upon
request, make available to each Special Shareholder a schedule which sets forth
the then current Special Shareholder Limits for each Special Shareholder.
Section 5.14 is hereby amended in its entirety as follows:
Section 5.14 Certain Transfers to Non-U.S. Persons Void.
(a) At any time that Non-U.S. Persons (including Special Shareholders who will
at all times be presumed to be Non-U.S. Persons) own directly or indirectly 50%
or more of the fair market value of the issued and outstanding shares of Capital
Stock of the Corporation, any Transfer of shares of Capital Stock of the
Corporation by any Person (other than a Special Shareholder) on or after the
effective date of this Amendment that results in such shares being owned
directly or indirectly by a Non-U.S. Person (other than a Special Shareholder)
shall be void ab initio to the fullest extent permitted under applicable law and
the intended transferee shall be deemed never to have had an interest therein.
(b) At any time that Non-U.S. Persons (including Special Shareholders who will
at all times be presumed to be Non-U.S. Persons) own directly or indirectly less
than 50% of the fair market value of the issued and outstanding shares of
Capital Stock of the Corporation, any Transfer of shares of Capital Stock of the
Corporation by any Person (other than a Special Shareholder) to any Person on or
after the effective date of this Amendment shall be void ab initio to the
fullest extent permitted under applicable law and the intended transferee shall
be deemed never to have had an interest therein if such Transfer
(i) occurs prior to the 10% Termination Date and results in the
fair market value of the shares of Capital Stock of the
Corporation owned directly or indirectly by Non-U.S. Persons
(other than Special Shareholders) comprising 4.9 percent
(4.9%) or more of the fair market value of the issued and
outstanding shares of Capital Stock of the Corporation; or
(ii) results in the fair market value of the shares of Capital
Stock of the Corporation owned directly or indirectly by
Non-U.S. Persons (including Special Shareholders who will at
all times be presumed to be Non-U.S. Persons) comprising fifty
percent (50%) or more of the fair market value of the issued
and outstanding shares of Capital Stock the Corporation.
(c) If any of the foregoing provisions is determined to be void or invalid by
virtue of any legal decision, statute, rule or regulation, then the shares of
Capital Stock of the Corporation held or purported to be held by the transferee
shall, automatically and without the necessity of any action by the Board of
Directors or otherwise:
(i) be prohibited from being voted;
(ii) not be entitled to dividends with respect thereto;
(iii) be considered held in trust by the transferee for the benefit
of the Corporation and shall be subject to the provisions of
Section 5.3(c) as if such shares of Capital Stock were the
subject of a Transfer that violates Section 5.2; and
(iv) not be considered outstanding for the purpose of determining a quorum
at any meeting of shareholders.
(d) The Special Shareholders may, in their sole discretion, with prior notice to
the Board of Directors, waive, alter or revise in writing all or any portion of
the Transfer restrictions set forth in this Section 5.14 from and after the date
on which such notice is given, on such terms and conditions as they in their
sole discretion determine.
IN WITNESS WHEREOF, the undersigned President of this corporation has
executed these Articles of Amendment this 26th day of February, 1999.
/s/ Mary Lou Rogers
Mary Lou Rogers, President
<PAGE>
004.160941.1
11
004.160941.1
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF
REGENCY REALTY CORPORATION
AMENDING AND RESTATING THE DESIGNATION OF THE PREFERENCES,
RIGHTS AND LIMITATIONS OF 1,600,000 SHARES OF
8.125% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
$0.01 Par Value
Pursuant to Section 607.0602 of the Florida Business
Corporation Act ("FBCA"), Regency Realty Corporation, a Florida corporation (the
"Corporation"), does hereby certify that the Articles of Amendment to the
Articles of Incorporation of the Corporation Designating the Preferences, Rights
and Limitations of 1,600,000 shares of 8.125% Series A Cumulative Redeemable
Preferred Stock, as filed in the Office of the Florida Secretary of State on
June 24, 1998, shall be amended and restated in its entirety as follows:
FIRST: Pursuant to the authority expressly vested in the Board
of Directors of the Corporation by Section 4.2 of the Amended and Restated
Articles of Incorporation of the Corporation (the "Charter") and Section
607.0602 of the FBCA, the Board of Directors of the Corporation (the "Board of
Directors"), by resolutions duly adopted on May 26, 1998 has classified
1,600,000 shares of the authorized but unissued Preferred Stock par value $.01
per share ("Preferred Stock") as a separate class of Preferred Stock, authorized
the issuance of a maximum of 1,600,000 shares of such class of Preferred Stock,
set certain of the preferences, conversion and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, terms and conditions
of redemption and other terms and conditions of such class of Preferred Stock,
and pursuant to the powers contained in the Bylaws of the Corporation and the
FBCA, appointed a committee (the "Committee") of the Board of Directors and
delegated to the Committee, to the fullest extent permitted by the FBCA and the
Charter and Bylaws of the Corporation, all powers of the Board of Directors with
respect to designating, and setting all other preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption of, such
class of Preferred Stock determining the number of shares of such class of
Preferred Stock (not in excess of the aforesaid maximum number) to be issued and
the consideration and other terms and conditions upon which such shares of such
class of Preferred Stock are to be issued. Shareholder approval was not required
under the Charter with respect to such designation.
SECOND: Pursuant to the authority conferred upon the Committee
as aforesaid, the Committee has unanimously adopted resolutions designating the
aforesaid class of Preferred Stock as the "8.125% Series A Cumulative Redeemable
Preferred Stock," setting the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption and other terms and conditions of such 8.125% Series A
Cumulative Redeemable Preferred Stock (to the extent not set by the Board of
Directors in the resolutions referred to in Article FIRST of these Articles of
Amendment) and authorizing the issuance of up to 1,600,000 shares of 8.125%
Series A Cumulative Redeemable Preferred Stock.
THIRD: Pursuant to the authority conferred upon the Committee,
the Committee has, by unanimous written consent dated September 29, 1999,
adopted resolutions amending and restating the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications, terms and conditions of redemption and other terms and
conditions of such 8.125% Series A Cumulative Redeemable Preferred Stock (to the
extent not set by the Board of Directors in the resolutions referred to in
Article FIRST of these Articles of Amendment). There are no shares of 8.125%
Series A Cumulative Redeemable Preferred Stock outstanding and, accordingly, no
shareholder approval was required. The class of Preferred Stock of the
Corporation created by the resolutions duly adopted by the Board of Directors of
the Corporation and by the Committee and referred to in Articles FIRST and
SECOND of these Articles of Amendment and amended hereby shall have the
following designation, number of shares, preferences, conversion and other
rights, voting powers, restrictions and limitation as to dividends,
qualifications, terms and conditions of redemption and other terms and
conditions:
Section 1. Designation and Number. A series of Preferred
Stock, designated the "8.125% Series A Cumulative Redeemable Preferred Stock"
(the "Series A Preferred Stock") is hereby established. The number of shares of
Series A Preferred Stock shall be 1,600,000.
Section 2. Rank. The Series A Preferred Stock will, with
respect to distributions or rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Corporation, or both, rank senior to all
classes or series of Common Stock (as defined in the Charter) and to all classes
or series of equity securities of the Corporation now or hereafter authorized,
issued or outstanding, other than any class or series of equity securities of
the Corporation expressly designated as ranking on a parity with or senior to
the Series A Preferred Stock as to distributions or rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Corporation, or both.
For purposes of these Articles of Amendment, the term "Parity Preferred Stock"
shall be used to refer to any class or series of equity securities of the
Corporation now or hereafter authorized, issued or outstanding expressly
designated by the Corporation to rank on a parity with Series A Preferred Stock
with respect to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Corporation, or both, as the
context may require, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or conversion rights or exchange
rights shall be different from those of the Series A Preferred Stock. The term
"equity securities" does not include debt securities, which will rank senior to
the Series A Preferred Stock prior to conversion.
Section 3. Distributions. (a) Payment of Distributions.
Subject to the rights of holders of Parity Preferred Stock as to the payment of
distributions and holders of equity securities issued after the date hereof in
accordance herewith ranking senior to the Series A Preferred Stock as to payment
of distributions, holders of Series A Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors of the Corporation,
out of funds legally available for the payment of distributions, cumulative cash
distributions at the rate per annum of 8.125% of the $50.00 liquidation
preference per share of Series A Preferred Stock. Such distributions shall be
cumulative, shall accrue from the original date of issuance and will be payable
in cash (A) quarterly in arrears, on or before March 31, June 30, September 30
and December 31 of each year commencing on the first of such dates to occur
after the original date of issuance and, (B) in the event of a redemption, on
the redemption date (each a "Preferred Stock Distribution Payment Date"). The
amount of the distribution payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months and for any period shorter than a full
quarterly period for which distributions are computed, the amount of the
distribution payable will be computed on the basis of the actual number of days
elapsed in such a 30-day month. If any date on which distributions are to be
made on the Series A Preferred Stock is not a Business Day (as defined herein),
then payment of the distribution to be made on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day is in
the next succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. Distributions on the Series A Preferred Stock will be made to the
holders of record of the Series A Preferred Stock on the relevant record dates
to be fixed by the Board of Directors of the Corporation, which record dates
shall be not less than 10 days and not more than 30 Business Days prior to the
relevant Preferred Stock Distribution Payment Date (each a "Distribution Record
Date"). Notwithstanding anything to the contrary set forth herein, each share of
Series A Preferred Stock shall also continue to accrue all accrued and unpaid
distributions, whether or not declared, up to the exchange date on any Series A
Preferred Unit (as defined in the Second Amended and Restated Agreement of
Limited Partnership of Regency Centers, L.P., dated as March 5, 1998 as amended
by that certain Amendment No. One to Second Amendment and Restatement of
Agreement of Limited Partnership dated as of June 25, 1998 (as amended the
"Partnership Agreement")) validly exchanged into such share of Series A
Preferred Stock in accordance with the provisions of such Partnership Agreement.
The term "Business Day" shall mean each day, other than a
Saturday or a Sunday, which is not a day on which banking institutions in New
York, New York are authorized or required by law, regulation or executive order
to close.
(b) Limitation on Distributions. No distribution on the Series
A Preferred Stock shall be declared or paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation (other than any agreement with a holder or affiliate of holder of
Capital Stock of the Corporation) relating to its indebtedness, prohibit such
declaration, payment or setting apart for payment or provide that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment shall be restricted or prohibited by law. Nothing in this
Section 3(b) shall be deemed to modify or in any manner limit the provisions of
Section 3(c) and 3(d).
(c) Distributions Cumulative. Distributions on the Series A
Preferred Stock will accrue whether or not the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness at any time prohibit the current payment of distributions, whether
or not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Accrued but unpaid distributions on
the Series A Preferred Stock will accumulate as of the Preferred Stock
Distribution Payment Date on which they first become payable. Distributions on
account of arrears for any past distribution periods may be declared and paid at
any time, without reference to a regular Preferred Stock Distribution Payment
Date to holders of record of the Series A Preferred Stock on the record date
fixed by the Board of Directors which date shall be not less than 10 days and
not more than 30 Business Days prior to the payment date. Accumulated and unpaid
distributions will not bear interest.
(d) Priority as to Distributions. (i) So long as any Series A
Preferred Stock is outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or with respect to any
class or series of Common Stock or any class or series of other stock of the
Corporation ranking junior as to the payment of distributions to the Series A
Preferred Stock (such Common Stock or other junior stock, collectively, "Junior
Stock"), nor shall any cash or other property be set aside for or applied to the
purchase, redemption or other acquisition for consideration of any Series A
Preferred Stock, any Parity Preferred Stock with respect to distributions or any
Junior Stock, unless, in each case, all distributions accumulated on all Series
A Preferred Stock and all classes and series of outstanding Parity Preferred
Stock as to payment of distributions have been paid in full. The foregoing
sentence will not prohibit (i) distributions payable solely in Junior Stock,
(ii) the conversion of Series A Preferred Stock, Junior Stock or Parity
Preferred Stock into stock of the Corporation ranking junior to the Series A
Preferred Stock as to distributions, and (iii) purchases by the Corporation of
such Series A Preferred Stock or Parity Preferred Stock with respect to
distributions or Junior Stock pursuant to Article 5 of the Charter to the extent
required to preserve the Corporation's status as a real estate investment trust.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series A Preferred Stock, all distributions authorized and
declared on the Series A Preferred Stock and all classes or series of
outstanding Parity Preferred Stock with respect to distributions shall be
authorized and declared so that the amount of distributions authorized and
declared per share of Series A Preferred Stock and such other classes or series
of Parity Preferred Stock shall in all cases bear to each other the same ratio
that accrued distributions per share on the Series A Preferred Stock and such
other classes or series of Parity Preferred Stock (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such class or series of Parity Preferred Stock do not have cumulative
distribution rights) bear to each other.
(e) No Further Rights. Holders of Series A Preferred Stock
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
Section 4. Liquidation Preference. (a) Payment of Liquidating
Distributions. Subject to the rights of holders of Parity Preferred Stock with
respect to rights upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation and subject to equity securities ranking senior to
the Series A Preferred Stock with respect to rights upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, the
holders of Series A Preferred Stock shall be entitled to receive out of the
assets of the Corporation legally available for distribution or the proceeds
thereof, after payment or provision for debts and other liabilities of the
Corporation, but before any payment or distributions of the assets shall be made
to holders of Common Stock or any other class or series of shares of the
Corporation that ranks junior to the Series A Preferred Stock as to rights upon
liquidation, dissolution or winding-up of the Corporation, an amount equal to
the sum of (i) a liquidation preference of $50 per share of Series A Preferred
Stock, and (ii) an amount equal to any accumulated and unpaid distributions
thereon, whether or not declared, to the date of payment. In the event that,
upon such voluntary or involuntary liquidation, dissolution or winding-up, there
are insufficient assets to permit full payment of liquidating distributions to
the holders of Series A Preferred Stock and any Parity Preferred Stock as to
rights upon liquidation, dissolution or winding-up of the Corporation, all
payments of liquidating distributions on the Series A Preferred Stock and such
Parity Preferred Stock shall be made so that the payments on the Series A
Preferred Stock and such Parity Preferred Stock shall in all cases bear to each
other the same ratio that the respective rights of the Series A Preferred Stock
and such other Parity Preferred Stock (which shall not include any accumulation
in respect of unpaid distributions for prior distribution periods if such Parity
Preferred Stock do not have cumulative distribution rights) upon liquidation,
dissolution or winding-up of the Corporation bear to each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, stating
the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i) fax
and (ii) by first class mail, postage pre-paid, not less than 30 and not more
that 60 days prior to the payment date stated therein, to each record holder of
the Series A Preferred Stock at the respective addresses of such holders as the
same shall appear on the share transfer records of the Corporation.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series A Preferred
Stock will have no right or claim to any of the remaining assets of the
Corporation.
(d) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the Corporation to, or the consolidation or merger or
other business combination of the Corporation with or into, any corporation,
trust or other entity (or of any corporation, trust or other entity with or into
the Corporation) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Corporation.
(e) Permissible Distributions. In determining whether a
distribution (other than upon voluntary liquidation) by dividend, redemption or
other acquisition of shares of stock of the Corporation or otherwise is
permitted under the FBCA, no effect shall be given to amounts that would be
needed, if the Corporation were to be dissolved at the time of the distribution,
to satisfy the preferential rights upon dissolution of holders of shares of
stock of the Corporation whose preferential rights upon dissolution are superior
to those receiving the distribution.
Section 5. Optional Redemption. (a) Right of Optional
Redemption. The Series A Preferred Stock may not be redeemed prior to June 25,
2003. On or after such date, the Corporation shall have the right to redeem the
Series A Preferred Stock, in whole or in part, at any time or from time to time,
upon not less than 30 nor more than 60 days' written notice, at a redemption
price, payable in cash, equal to $50 per share of Series A Preferred Stock plus
accumulated and unpaid distributions, whether or nor declared, to the date of
redemption. If fewer than all of the outstanding shares of Series A Preferred
Stock are to be redeemed, the shares of Series A Preferred Stock to be redeemed
shall be selected pro rata (as nearly as practicable without creating fractional
shares).
(b) Limitation on Redemption. (i) The redemption price of the
Series A Preferred Stock (other than the portion thereof consisting of
accumulated but unpaid distributions) will be payable solely out of sale
proceeds of capital stock of the Corporation and from no other source. For
purposes of the preceding sentence, "capital stock" means any equity securities
(including Common Stock and Preferred Stock), shares, participation or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity securities) or options to
purchase any of the foregoing.
(ii) The Corporation may not redeem fewer than all of the outstanding
shares of Series A Preferred Stock unless all accumulated and unpaid
distributions have been paid on all Series A Preferred Stock for all quarterly
distribution periods terminating on or prior to the date of redemption.
(c) Procedures for Redemption. (i) Notice of redemption will
be (i) faxed, and (ii) mailed by the Corporation, postage prepaid, not less than
30 nor more than 60 days prior to the redemption date, addressed to the
respective holders of record of the Series A Preferred Stock to be redeemed at
their respective addresses as they appear on the transfer records of the
Corporation. No failure to give or defect in such notice shall affect the
validity of the proceedings for the redemption of any Series A Preferred Stock
except as to the holder to whom such notice was defective or not given. In
addition to any information required by law or by the applicable rules of any
exchange upon which the Series A Preferred Stock may be listed or admitted to
trading, each such notice shall state: (i) the redemption date, (ii) the
redemption price, (iii) the number of shares of Series A Preferred Stock to be
redeemed, (iv) the place or places where such shares of Series A Preferred Stock
are to be surrendered for payment of the redemption price, (v) that
distributions on the Series A Preferred Stock to be redeemed will cease to
accumulate on such redemption date and (vi) that payment of the redemption price
and any accumulated and unpaid distributions will be made upon presentation and
surrender of such Series A Preferred Stock. If fewer than all of the shares of
Series A Preferred Stock held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of Series A
Preferred Stock held by such holder to be redeemed.
(ii) If the Corporation gives a notice of redemption in respect of Series A
Preferred Stock (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date, the Corporation will deposit irrevocably in
trust for the benefit of the Series A Preferred Stock being redeemed funds
sufficient to pay the applicable redemption price, plus any accumulated and
unpaid distributions, whether or not declared, if any, on such shares to the
date fixed for redemption, without interest, and will give irrevocable
instructions and authority to pay such redemption price and any accumulated and
unpaid distributions, if any, on such shares to the holders of the Series A
Preferred Stock upon surrender of the certificate evidencing the Series A
Preferred Stock by such holders at the place designated in the notice of
redemption. If fewer than all Series A Preferred Stock evidenced by any
certificate is being redeemed, a new certificate shall be issued upon surrender
of the certificate evidencing all Series A Preferred Stock, evidencing the
unredeemed Series A Preferred Stock without cost to the holder thereof. On and
after the date of redemption, distributions will cease to accumulate on the
Series A Preferred Stock or portions thereof called for redemption, unless the
Corporation defaults in the payment thereof. If any date fixed for redemption of
Series A Preferred Stock is not a Business Day, then payment of the redemption
price payable on such date will be made on the next succeeding day that is a
Business Bay (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. If
payment of the redemption price or any accumulated or unpaid distributions in
respect of the Series A Preferred Stock is improperly withheld or refused and
not paid by the Corporation, distributions on such Series A Preferred Stock will
continue to accumulate from the original redemption date to the date of payment,
in which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the applicable redemption price and any
accumulated and unpaid distributions.
(d) Status of Redeemed Stock. Any Series A Preferred Stock
that shall at any time have been redeemed shall after such redemption, have the
status of authorized but unissued Preferred Stock, without designation as to
class or series until such shares are once more designated as part of a
particular class or series by the Board of Directors.
Section 6. Voting Rights. (a) General. Holders of the Series A Preferred
Stock will not have any voting rights, except as set forth below.
(b) Right to Elect Directors. (i) If at any time distributions
shall be in arrears (which means that, as to any such quarterly distributions,
the same have not been paid in full) with respect to six (6) prior quarterly
distribution periods (including quarterly periods on the Series A Preferred
Units prior to the exchange into Series A Preferred Stock), whether or not
consecutive, and shall not have been paid in full (a "Preferred Distribution
Default"), the authorized number of members of the Board of Directors shall
automatically be increased by two and the holders of record of such Series A
Preferred Stock, voting together as a single class with the holders of each
class or series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable, will be entitled to fill the vacancies so
created by electing two additional directors to serve on the Corporation's Board
of Directors (the "Preferred Stock Directors") at a special meeting called in
accordance with Section 6(b)(ii) or at the next annual meeting of stockholders
and at each subsequent annual meeting of stockholders or special meeting held in
place thereof, until all such distributions in arrears and distributions for the
current quarterly period on the Series A Preferred Stock and each such class or
series of Parity Preferred Stock have been paid in full.
(ii) At any time when such voting rights shall have vested, a proper
officer of the Corporation shall call or cause to be called, upon written
request of holders of record of at least 10% of the outstanding shares of Series
A Preferred Stock, a special meeting of the holders of Series A Preferred Stock
and all the series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable (collectively, the "Parity Securities") by
mailing or causing to be mailed to such holders a notice of such special meeting
to be held not less than ten and not more than 45 days after the date such
notice is given. The record date for determining holders of the Parity
Securities entitled to notice of and to vote at such special meeting will be the
close of business on the third Business Day preceding the day on which such
notice is mailed. At any annual or special meeting at which Parity Securities
are entitled to vote, all of the holders of the Parity Securities, by plurality
vote, voting together as a single class without regard to series will be
entitled to elect two directors on the basis of one vote per $25.00 of
liquidation preference to which such Parity Securities are entitled by their
terms (excluding amounts in respect of accumulated and unpaid dividends) and not
cumulatively. The holder or holders of Parity Securities representing one-third
of the total voting power of the Parity Securities then outstanding, present in
person or by proxy, will constitute a quorum for the election of the Preferred
Stock Directors except as otherwise provided by law. Notice of all meetings at
which holders of the Series A Preferred Stock shall be entitled to vote will be
given to such holders at their addresses as they appear in the transfer records.
At any such meeting or adjournment thereof in the absence of a quorum, subject
to the provisions of any applicable law, the holders of Parity Securities
representing a majority of the voting power of the Parity Securities present in
person or by proxy shall have the power to adjourn the meeting for the election
of the Preferred Stock Directors, without notice other than an announcement at
the meeting, until a quorum is present. If a Preferred Distribution Default
shall terminate after the notice of an annual or special meeting has been given
but before such special meeting has been held, the Corporation shall, as soon as
practicable after such termination, mail or cause to be mailed notice of such
termination to holders of the Series A Preferred Stock that would have been
entitled to vote at such meeting.
(iii) If and when all accumulated distributions and the distribution for
the current distribution period on the Series A Preferred Stock shall have been
paid in full or a sum sufficient for such payment is irrevocably deposited in
trust for payment, the holders of the Series A Preferred Stock shall be divested
of the voting rights set forth in Section 6(b) herein (subject to revesting in
the event of each and every Preferred Distribution Default) and, if all
distributions in arrears and the distributions for the current distribution
period have been paid in full or set aside for payment in full on all other
classes or series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable, the term and office of each Preferred Stock
Director so elected shall terminate. Any Preferred Stock Director may be removed
at any time with or without cause by the vote of, and shall not be removed
otherwise than by the vote of, the holders of record of a majority of the
outstanding Series A Preferred Stock when they have the voting rights set forth
in Section 6(b) (voting separately as a single class with all other classes or
series of Parity Preferred Stock upon which like voting rights have been
conferred and are exercisable). So long as a Preferred Distribution Default
shall continue, any vacancy in the office of a Preferred Stock Director may be
filled by written consent of the Preferred Stock Director remaining in office,
or if none remains in office, by a vote of the holders of record of a majority
of the outstanding Series A Preferred Stock when they have the voting rights set
forth in Section 6(b) (voting separately as a single class with all other
classes or series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable). The Preferred Stock Directors shall each be
entitled to one vote per director on any matter.
(c) Certain Voting Rights. So long as any Series A Preferred
Stock remains outstanding, the Corporation shall not, without the affirmative
vote of the holders of at least two-thirds of the Series A Preferred Stock and
Series A Preferred Units outstanding at such time and not previously surrendered
in exchange for Series A Preferred Stock together, if applicable, voting as a
single class based on the number of shares into which such Series A Preferred
Units are then convertible (collectively, the "Voting Securities") (i) designate
or create, or increase the authorized or issued amount of, any class or series
of shares ranking prior to the Series A Preferred Stock with respect to payment
of distributions or rights upon liquidation, dissolution or winding-up or
reclassify any authorized shares of the Corporation into any such shares, or
create, authorize or issue any obligations or securities convertible into or
evidencing the right to purchase any such shares, (ii) designate or create, or
increase the authorized or issued amount of, any Parity Preferred Stock or
reclassify any authorized shares of the Corporation into any such shares, or
create, authorize or issue any obligations or securities convertible into or
evidencing the right to purchase any such shares, but only to the extent such
Parity Preferred Stock is issued to an affiliate of the Corporation (other than
Security Capital U.S. Realty, Security Capital Holdings, S.A. or their
affiliates), or (iii) either (A) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety, to any corporation or
other entity, or (B) amend, alter or repeal the provisions of the Corporation's
Charter (including these Articles of Amendment) or By-laws, whether by merger,
consolidation or otherwise, in each case that would materially and adversely
affect the powers, special rights, preferences, privileges or voting power of
the Series A Preferred Stock or the holders thereof; provided, however, that
with respect to the occurrence of a merger, consolidation or a sale or lease of
all of the Corporation's assets as an entirety, so long as (a) the Corporation
is the surviving entity and the Series A Preferred Stock remains outstanding
with the terms thereof unchanged, or (b) the resulting, surviving or transferee
entity is a corporation organized under the laws of any state and substitutes
the Series A Preferred Stock for other preferred stock having substantially the
same terms and same rights as the Series A Preferred Stock, including with
respect to distributions, voting rights and rights upon liquidation, dissolution
or winding-up, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series A Preferred Stock and no vote of the Series A Voting
Securities shall be required in such case and provided further that any increase
in the amount of authorized Preferred Stock or the creation or issuance of any
other class or series of Preferred Stock, or any increase in an amount of
authorized shares of each class or series, in each case ranking either (a)
junior to the Series A Preferred Stock with respect to payment of distributions
or the distribution of assets upon liquidation, dissolution or winding-up, or
(b) on a parity with the Series A Preferred Stock with respect to payment of
distributions or the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Stock is not issued to a affiliate of
the Corporation, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers and no vote of the Voting
Securities shall be required in such case.
Section 7. No Conversion Rights. The holders of the Series A
Preferred Stock shall not have any rights to convert such shares into shares of
any other class or series of stock or into any other securities of, or interest
in, the Corporation.
Section 8. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series A Preferred Stock.
Section 9. No Preemptive Rights. No holder of the Series A
Preferred Stock of the Corporation shall, as such holder, have any preemptive
rights to purchase or subscribe for additional shares of stock of the
Corporation or any other security of the Corporation which it may issue or sell.
FOURTH: The Series A Preferred Stock have been classified and designated by
the Board of Directors under the authority contained in the Charter.
FIFTH: These Articles of Amendment have been approved by the Board of
Directors in the manner and by the vote required by law.
SIXTH: The undersigned President of the Corporation
acknowledges these Articles of Amendment to be the corporate act of the
Corporation and, as to all matters or facts required to be verified under oath,
the undersigned President acknowledges that to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects and that this statement is made under the penalties for perjury.
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles
of Amendment to be executed under seal in its name and on its behalf by its
Executive Vice President and attested to by its Secretary on this ________ day
of September, 1999
REGENCY REALTY CORPORATION
By: /s/ Bruce M. Johnson
-----------------------------
Name: Bruce M. Johnson
Title: Executive Vice President
[SEAL]ATTEST:
/s/ J. Christian Leavitt
Name: J. Christian Leavitt
Title: Secretary
<PAGE>
Fax Audit No.
Fax Audit No. ________________________ 10
Fax Audit No.
Prepared by: Linda Y. Kelso (FL Bar No. 298662)
Foley & Lardner
P.O. Box 240
Jacksonville, FL 32202
Telephone No. (904)359-2000
Fax Audit No. ________________________
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF
REGENCY REALTY CORPORATION
DESIGNATING THE PREFERENCES, RIGHTS AND
LIMITATIONS OF 850,000 SHARES OF
8.75% SERIES B CUMULATIVE REDEEMABLE PREFERRED STOCK
$0.01 Par Value
Pursuant to Section 607.0602 of the Florida Business Corporation Act
("FBCA"), Regency Realty Corporation, a Florida corporation (the "Corporation"),
does hereby certify that:
FIRST: Pursuant to the authority expressly vested in the Board
of Directors of the Corporation by Section 4.2 of the Amended and Restated
Articles of Incorporation of the Corporation (as amended, the "Charter") and
Section 607.0602 of the FBCA, the Board of Directors of the Corporation (the
"Board of Directors"), by resolutions duly adopted on August 23, 1999 has
classified 850,000 shares of the authorized but unissued Preferred Stock par
value $.0l per share ("Preferred Stock") as a separate class of Preferred Stock,
authorized the issuance of a maximum of 850,000 shares of such class of
Preferred Stock, set certain of the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, terms
and conditions of redemption and other terms and conditions of such class of
Preferred Stock, and pursuant to the powers contained in the Bylaws of the
Corporation and the FBCA, appointed a committee (the "Committee") of the Board
of Directors and delegated to the Committee, to the fullest extent permitted by
the FBCA and the Charter and Bylaws of the Corporation, all powers of the Board
of Directors with respect to designating, and setting all other preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications and terms and conditions of
redemption of, such class of Preferred Stock, determining the number of shares
of such class of Preferred Stock (not in excess of the aforesaid maximum number)
to be issued and the consideration and other terms and conditions upon which
such shares of such class of Preferred Stock are to be issued. Shareholder
approval was not required under the Charter with respect to such designation.
Capitalized terms used and not otherwise defined herein shall have the meaning
assigned thereto in the Charter.
SECOND: Pursuant to the authority conferred upon the Committee
as aforesaid, the Committee has unanimously adopted resolutions designating the
aforesaid class of Preferred Stock as the "8.75% Series B Cumulative Redeemable
Preferred Stock," setting the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption and other terms and conditions of such 8.75% Series B
Cumulative Redeemable Preferred Stock (to the extent not set by the Board of
Directors in the resolutions referred to in Article First of these Articles of
Amendment) and authorizing the issuance of up to 850,000 shares of 8.75% Series
B Cumulative Redeemable Preferred Stock.
THIRD: The class of Preferred Stock of the Corporation created
by the resolutions duly adopted by the Board of Directors of the Corporation and
by the Committee and referred to in Articles First and Second of these Articles
of Amendment shall have the following designation, number of shares,
preferences, conversion and other rights, voting powers, restrictions and
limitation as to dividends, qualifications, terms and conditions of redemption
and other terms and conditions:
Section 1. Designation and Number. A series of Preferred
Stock, designated the "8.75% Series B Cumulative Redeemable Preferred Stock"
(the "Series B Preferred Stock") is hereby established. The number of shares of
Series B Preferred Stock shall be 850,000.
Section 2. Rank. The Series B Preferred Stock will, with
respect to distributions or rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Corporation, or both, rank senior to all
classes or series of Common Stock (as defined in the Charter) and to all classes
or series of equity securities of the Corporation now or hereafter authorized,
issued or outstanding other than any class or series of equity securities of the
Corporation expressly designated as ranking on a parity with or senior to the
Series B Preferred Stock as to distributions or rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Corporation, or both.
For purposes of these Articles of Amendment, the term "Parity Preferred Stock"
shall be used to refer to any class or series of equity securities of the
Corporation now or hereafter authorized, issued or outstanding expressly
designated by the Corporation to rank on a parity with Series B Preferred Stock
with respect to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Corporation, or both, as the
context may require, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or conversion rights or exchange
rights shall be different from those of the Series B Preferred Stock. The term
"equity securities" does not include debt securities, which will rank senior to
the Series B Preferred Stock prior to conversion. The Series B Preferred Stock
is expressly designated as ranking on a parity with the Series A Preferred
Stock.
Section 3. Distributions. (a) Payment of Distributions.
Subject to the rights of holders of Parity Preferred Stock as to the payment of
distributions and holders of equity securities issued after the date hereof in
accordance herewith ranking senior to the Series B Preferred Stock as to payment
of distributions, holders of Series B Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors of the Corporation,
out of funds legally available for the payment of distributions, cumulative cash
distributions at the rate per annum of 8.75% of the $100.00 liquidation
preference per share of Series B Preferred Stock (the "Distribution Rate").
Notwithstanding anything herein to the contrary, the Distribution Rate shall be
equal to the Coupon Rate (as defined in Amendment No. 1 to the Third Amended and
Restated Agreement of Limited Partnership of Regency Centers, L.P.) in effect at
the time of issuance of the Series C Preferred Stock. Such distributions shall
be cumulative, shall accrue from the original date of issuance and will be
payable in cash (A) quarterly in arrears, on or before March 1, June 1,
September 1 and December 1 of each year commencing on the first of such dates to
occur after the original date of issuance and, (B) in the event of a redemption,
on the redemption date (each a "Series B Preferred Stock Distribution Payment
Date"). The amount of the distribution payable for any period will be computed
based on the ratio basis of a 360-day year of twelve 30-day months and for any
period shorter than a full quarterly period for which distributions are
computed, the amount of the distribution payable will be computed on the basis
of the actual number of days elapsed in such quarterly period to 90 days. If any
date on which distributions are to be made on the Series B Preferred Stock is
not a Business Day (as defined herein), then payment of the distribution to be
made on such date will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay) except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. Distributions on the Series B
Preferred Stock will be made to the holders of record of the Series B Preferred
Stock on the relevant record dates to be fixed by the Board of Directors of the
Corporation, which record dates shall be not less than 10 days and not more than
30 Business Days prior to the relevant Series B Preferred Stock Distribution
Payment Date (each a "Distribution Record Date"). Notwithstanding anything to
the contrary set forth herein, each share of Series B Preferred Stock shall also
continue to accrue all accrued and unpaid distributions, whether or not
declared, up to the exchange date on any Series B Preferred Unit (as defined in
the Third Amended and Restated Agreement of Limited Partnership of Regency
Centers, L.P., dated as September 1, 1999 as amended by that certain Amendment
No. 1 to Third Amended and Restated Agreement of Limited Partnership dated as of
September 3, 1999 (as amended, the "Partnership Agreement")) validly exchanged
into such share of Series B Preferred Stock in accordance with the provisions of
such Partnership Agreement.
The term "Business Day" shall mean each day, other than a
Saturday or a Sunday, which is not a day on which banking institutions in New
York, New York are authorized or required by law, regulation or executive order
to close.
(b) Distributions Cumulative. Distributions on the Series B
Preferred Stock will accrue whether or not the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness at any time prohibit the current payment of distributions, whether
or not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Accrued but unpaid distributions on
the Series B Preferred Stock will accumulate as of the Series B Preferred Stock
Distribution Payment Date on which they first become payable. Distributions on
account of arrears for any past distribution periods may be declared and paid at
any time, without reference to a regular Series B Preferred Stock Distribution
Payment Date to holders of record of the Series B Preferred Stock on the record
date fixed by the Board of Directors which date shall be not less than 10 days
and not more than 30 Business Days prior to the payment date. Accumulated and
unpaid distributions will not bear interest.
(c) Priority as to Distributions. (i) So long as any Series B
Preferred Stock is outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or with respect to any
class or series of Common Stock or any class or series of other stock of the
Corporation ranking junior as to the payment of distributions to the Series B
Preferred Stock (such Common Stock or other junior stock, collectively, "Junior
Stock"), nor shall any cash or other property be set aside for or applied to the
purchase, redemption or other acquisition for consideration of any Series B
Preferred Stock, any Parity Preferred Stock with respect to distributions or any
Junior Stock, unless in each case, all distributions accumulated on all Series B
Preferred Stock and all classes and series of outstanding Parity Preferred Stock
as to payment of distributions have been paid in full. The foregoing sentence
will not prohibit (i) distributions payable solely in Junior Stock, (ii) the
conversion of Series B Preferred Stock, Junior Stock or Parity Preferred Stock
into stock of the Corporation ranking junior to the Series B Preferred Stock as
to distributions, and (iii) purchases by the Corporation of such Series B
Preferred Stock or Parity Preferred Stock with respect to distributions or
Junior Stock pursuant to Article 5 of the Charter to the extent required to
preserve the Corporation's status as a real estate investment trust.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series B Preferred Stock, all distributions authorized and
declared on the Series B Preferred Stock and all classes or series of
outstanding Parity Preferred Stock with respect to distributions shall be
authorized and declared so that the amount of distributions authorized and
declared per share of Series B Preferred Stock and such other classes or series
of Parity Preferred Stock shall in all cases bear to each other the same ratio
that accrued distributions per share on the Series B Preferred Stock and such
other classes or series of Parity Preferred Stock (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such class or series of Parity Preferred Stock do not have cumulative
distribution rights) bear to each other.
(d) No Further Rights. Holders of Series B Preferred Stock shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
Section 4. Liquidation Preference. (a) Payment of Liquidation
Distributions. Subject to the rights of holders of Parity Preferred Stock with
respect to rights upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation, the holders of Series B Preferred Stock shall be
entitled to receive out of the assets of the Corporation legally available for
distribution or the proceeds thereof, after payment or provision for debts and
other liabilities of the Corporation, but before any payment or distributions of
the assets shall be made to holders of Common Stock or any other class or series
of shares of the Corporation that ranks junior to the Series B Preferred Stock
as to rights upon liquidation, dissolution or winding-up of the Corporation, an
amount equal to the sum of (i) a liquidation preference of $100.00 per share of
Series B Preferred Stock, and (ii) an amount equal to any accumulated and unpaid
distributions thereon, whether or not declared, to the date of payment. In the
event that, upon such voluntary or involuntary liquidation, dissolution or
winding-up, there are insufficient assets to permit full payment of liquidating
distributions to the holders of Series B Preferred Stock and any Parity
Preferred Stock as to rights upon liquidation, dissolution or winding-up of the
Corporation, all payments of liquidating distributions on the Series B Preferred
Stock and such Parity Preferred Stock shall be made so that the payments on the
Series B Preferred Stock and such Parity Preferred Stock shall in all cases bear
to each other the same ratio that the respective rights of the Series B
Preferred Stock and such other Parity Preferred Stock (which shall not include
any accumulation in respect of unpaid distributions for prior distribution
periods if such Parity Preferred Stock do not have cumulative distribution
rights) upon liquidation, dissolution or winding-up of the Corporation bear to
each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, stating
the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i) fax
and (ii) by first class mail, postage pre-paid, not less than 30 and not more
that 60 days prior to the payment date stated therein, to each record holder of
the Series B Preferred Stock at the respective addresses of such holders as the
same shall appear on the share transfer records of the Corporation.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series B Preferred
Stock will have no right or claim to any of the remaining assets of the
Corporation.
(d) Consolidation Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the Corporation to, or the consolidation or merger or
other business combination of the Corporation with or into, any corporation,
trust or other entity (or of any corporation, trust or other entity with or into
the Corporation) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Corporation.
(e) Permissible Distributions. In determining whether a
distribution (other than upon voluntary liquidation) by dividend, redemption or
other acquisition of shares of stock of the Corporation or otherwise is
permitted under the FBCA, no effect shall be given to amounts that would be
needed, if the Corporation were to be dissolved at the time of the distribution,
to satisfy the preferential rights upon dissolution of holders of shares of
stock of the Corporation whose preferential rights upon dissolution are superior
to those receiving the distribution.
Section 5. Optional Redemption. (a) Right of Optional
Redemption. The Series B Preferred Stock may not be redeemed prior to September
3, 2004. On or after such date, the Corporation shall have the right to redeem
the Series B Preferred Stock, in whole or in part, at any time or from time to
time, upon not less than 30 nor more than 60 days' written notice, at a
redemption price, payable in cash, equal to $100.00 per share of Series B
Preferred Stock plus accumulated and unpaid distributions, whether or nor
declared, to the date of redemption. If fewer than all of the outstanding shares
of Series B Preferred Stock are to be redeemed, the shares of Series B Preferred
Stock to be redeemed shall be selected pro rata (as nearly as practicable
without creating fractional shares).
(b) Limitation on Redemption. (i) The redemption price of the
Series B Preferred Stock (other than the portion thereof consisting of
accumulated but unpaid distributions) will be payable solely out of sale
proceeds of capital stock of the Corporation and from no other source. For
purposes of the preceding sentence, "capital stock" means any equity securities
(including Common Stock and Preferred Stock), shares, participation or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity securities) or options to
purchase any of the foregoing.
(ii) The Corporation may not redeem fewer than all of the outstanding
shares of Series B Preferred Stock unless all accumulated and unpaid
distributions have been paid on all Series B Preferred Stock for all quarterly
distribution periods terminating on or prior to the date of redemption.
(c) Procedures for Redemption. (i) Notice of redemption will
be (i) faxed, and (ii) mailed by the Corporation, postage prepaid, not less than
30 nor more than 60 days prior to the redemption date, addressed to the
respective holders of record of the Series B Preferred Stock to be redeemed at
their respective addresses as they appear on the transfer records of the
Corporation. No failure to give or defect in such notice shall affect the
validity of the proceedings for the redemption of any Series B Preferred Stock
except as to the holder to whom such notice was defective or not given. In
addition to any information required by law or by the applicable rules of any
exchange upon which the Series B Preferred Stock may be listed or admitted to
trading, each such notice shall state: (i) the redemption date, (ii) the
redemption price, (iii) the number of shares of Series B Preferred Stock to be
redeemed, (iv) the place or places where such shares of Series B Preferred Stock
are to be surrendered for payment of the redemption price, (v) that
distributions on the Series B Preferred Stock to be redeemed will cease to
accumulate on such redemption date and (vi) that payment of the redemption price
and any accumulated and unpaid distributions will be made upon presentation and
surrender of such Series B Preferred Stock. If fewer than all of the shares of
Series B Preferred Stock held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of Series B
Preferred Stock held by such holder to be redeemed.
(ii) If the Corporation gives a notice of redemption in respect of Series B
Preferred Stock (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date, the Corporation will deposit irrevocably in
trust for the benefit of the Series B Preferred Stock being redeemed funds
sufficient to pay the applicable redemption price' plus any accumulated and
unpaid distributions, whether or not declared, if any, on such shares to the
date fixed for redemption, without interest, and will give irrevocable
instructions and authority to pay such redemption price and any accumulated and
unpaid distributions, if any, on such shares to the holders of the Series B
Preferred Stock upon surrender of the certificate evidencing the Series B
Preferred Stock by such holders at the place designated in the notice of
redemption. If fewer than all Series B Preferred Stock evidenced by any
certificate is being redeemed, a new certificate shall be issued upon surrender
of the certificate evidencing all Series B Preferred Stock, evidencing the
unredeemed Series B Preferred Stock without cost to the holder thereof. On and
after the date of redemption, distributions will cease to accumulate on the
Series B Preferred Stock or portions thereof called for redemption, unless the
Corporation defaults in the payment thereof. If any date fixed for redemption of
Series B Preferred Stock is not a Business Day, then payment of the redemption
price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. If
payment of the redemption price or any accumulated or unpaid distributions in
respect of the Series B Preferred Stock is improperly withheld or refused and
not paid by the Corporation, distributions on such Series B Preferred Stock will
continue to accumulate from the original redemption date to the date of payment,
in which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the applicable redemption price and any
accumulated and unpaid distributions.
(d) Status of Redeemed Stock. Any Series B Preferred Stock
that shall at any time have been redeemed shall after such redemption, have the
status of authorized but unissued Preferred Stock, without designation as to
class or series until such shares are once more designated as part of a
particular class or series by the Board of Directors.
Section 6. Voting Rights. (a) General. Holders of the Series B Preferred
Stock will not have any voting rights, except as set forth below.
(b) Right to Elect Directors. (i) If at any time distributions
shall be in arrears (which means that as to any such quarterly distributions,
the same have not been paid in full) with respect to six (6) prior quarterly
distribution periods (including quarterly periods on the Series B Preferred
Units prior to the exchange into Series B Preferred Stock), whether or not
consecutive, and shall not have been paid in full (a "Series B Preferred
Distribution Default"), the authorized number of members of the Board of
Directors shall automatically be increased by two and the holders of record of
such Series B Preferred Stock, voting together as a single class with the
holders of each class or series of Parity Preferred Stock upon which like voting
rights have been conferred and are exercisable, will be entitled to fill the
vacancies so created by electing two additional directors to serve on the
Corporation's Board of Directors (the "Preferred Stock Directors") at a special
meeting called in accordance with Section 6(b)(ii), and at each subsequent
annual meeting of stockholders or special meeting held in place thereof, until
all such distributions in arrears and distributions for the current quarterly
period on the Series B Preferred Stock and each such class or series of Parity
Preferred Stock have been paid in full.
(ii) At any time when such voting rights shall have vested, a proper
officer of the Corporation shall call or cause to be called, upon written
request of holders of record of at least 10% of the outstanding shares of Series
B Preferred Stock, a special meeting of the holders of Series B Preferred Stock
and all the series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable (collectively, the "Parity Securities") by
mailing or causing to be mailed to such holders a notice of such special meeting
to be held not less than ten and not more than 45 days after the date such
notice is given. The record date for determining holders of the Parity
Securities entitled to notice of and to vote at such special meeting will be the
close of business on the third Business Day preceding the day on which such
notice is mailed. At any annual or special meeting at which Parity Securities
are entitled to vote, all of the holders of the Parity Securities, by plurality
vote, voting together as a single class without regard to series will be
entitled to elect two directors on the basis of one vote per $25.00 of
liquidation preference to which such Parity Securities are entitled by their
terms (excluding amounts in respect of accumulated and unpaid dividends) and not
cumulatively. The holder or holders of the Parity Securities representing
one-third of the total voting power of the Parity Securities then outstanding,
present in person or by proxy, will constitute a quorum for the election of the
Preferred Stock Directors except as otherwise provided by law. Notice of all
meetings at which holders of the Series B Preferred Stock shall be entitled to
vote will be given to such holders at their addresses as they appear in the
transfer records. At any such meeting or adjournment thereof in the absence of a
quorum, subject to the provisions of any applicable law, the holders of the
Parity Securities representing a majority of the voting power of the Parity
Securities present in person or by proxy shall have the power to adjourn the
meeting for the election of the Preferred Stock Directors, without notice other
than an announcement at the meeting, until a quorum is present. If a Series B
Preferred Distribution Default shall terminate after the notice of an annual or
special meeting has been given but before such special meeting has been held,
the Corporation shall, as soon as practicable after such termination, mail or
cause to be mailed notice of such termination to holders of the Series B
Preferred Stock that would have been entitled to vote at such meeting.
(iii) If and when all accumulated distributions and the distribution for
the current distribution period on the Series B Preferred Stock shall have been
paid in full or a sum sufficient for such payment is irrevocably deposited in
trust for payment, the holders of the Series B Preferred Stock shall be divested
of the voting rights set forth in Section 6(b) herein (subject to revesting in
the event of each and every Series B Preferred Distribution Default) and, if all
distributions in arrears and the distributions for the current distribution
period have been paid in full or set aside for payment in full on all other
classes or series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable, the terms and office of each Preferred Stock
Director so elected shall terminate. Any Preferred Stock Director may be removed
at any time with or without cause by the vote of, and shall not be removed
otherwise than by the vote of, the holders of record of a majority of the
outstanding Series B Preferred Stock when they have the voting rights set forth
in Section 6(b) (voting separately as a single class with all other classes or
series of Parity Preferred Stock upon which like voting rights have been
conferred and are exercisable). So long as a Series B Preferred Distribution
Default shall continue, any vacancy in the office of a Preferred Stock Director
may be filled by written consent of the Preferred Stock Director remaining in
office, or if none remains in office, by a vote of the holders of record of a
majority of the outstanding Series B Preferred Stock when they have the voting
rights set forth in Section 6(b) (voting separately as a single class with all
other classes or series of Parity Preferred Stock upon which like voting rights
have been conferred and are exercisable). The Preferred Stock Directors shall
each be entitled to one vote per director on any matter.
(c) Certain Voting Rights. So long as any Series B Preferred
Stock or Series C Preferred Unit remains outstanding, the Corporation shall not,
without the affirmative vote of the holders of at least two-thirds of the Series
B Preferred Stock and Series B Preferred Units outstanding at the time
(together, if applicable, voting as a single class) (collectively, the "Voting
Securities") (i) designate or create, or increase the authorized or issued
amount of, any class or series of shares ranking prior to the Series B Preferred
Stock with respect to payment of distributions or rights upon liquidation,
dissolution or winding-up or reclassify any authorized shares of the Corporation
into any such shares, or create, authorize or issue any obligations or
securities convertible into or evidencing the right to purchase any such shares,
(ii) designate or create, or increase the authorized or issued amount of, any
Parity Preferred Stock or reclassify any authorized shares of the Corporation
into any such shares, or create, authorize or issue any obligations or
securities convertible into or evidencing the right to purchase any such shares,
but only to the extent such Parity Preferred Stock is issued to an affiliate of
the Corporation (other than Security Capital U.S. Realty, Security Capital
Holdings, S.A. or their affiliates purchasing preferred stock of the same series
on the same terms as non-affiliates), or (iii) either (A) consolidate, merge
into or with, or convey, transfer or lease its assets substantially as an
entirety, to any corporation or other entity, or (B) amend, alter or repeal the
provisions of the Corporation's Charter (including these Articles of Amendment)
or By-laws, whether by merger, consolidation or otherwise, in each case that
would materially and adversely affect the powers, special rights, preferences,
privileges or voting power of the Series B Preferred Stock or the holders
thereof; provided, however, that with respect to the occurrence of a merger,
consolidation or a sale or lease of all of the Corporation's assets as an
entirety, so long as (a) the Corporation is the surviving entity and the Series
B Preferred Stock remains outstanding (or remains exchangeable for Series B
Preferred Units) with the terms thereof unchanged, or (b) the resulting,
surviving or transferee entity is a corporation organized under the laws of any
state and substitutes the Series B Preferred Stock for other preferred stock
having substantially the same terms and same rights as the Series B Preferred
Stock, including with respect to distributions, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such rights, privileges
or voting powers of the holders of the Series B Preferred Stock and no vote of
the Series B Preferred Stock shall be required in such case and provided further
that any increase in the amount of authorized Preferred Stock or the creation or
issuance of any other class or series of Preferred Stock, or any increase in an
amount of authorized shares of each class or series, in each case ranking either
(a) junior to the Series B Preferred Stock with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up, or (b) on a parity with the Series B Preferred Stock with respect to
payment of distributions and the distribution of assets upon liquidation,
dissolution or winding-up to the extent such Preferred Stock is not issued to an
affiliate of the Corporation (other than Security Capital U.S. Realty, Security
Capital Holdings, S.A. or their affiliates purchasing preferred stock of the
same series on the same terms as non-affiliates), shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers and no vote of the Voting Securities shall be required in such case.
Section 7. No Conversion Rights. The holders of the Series B
Preferred Stock shall not have any rights to convert such shares into shares of
any other class or series of stock or into any other securities of, or interest
in, the Corporation.
Section 8. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series B Preferred Stock.
Section 9. No Preemptive Rights. No holder of the Series B
Preferred Stock of the Corporation shall, as such holder, have any preemptive
rights to purchase or subscribe for additional shares of stock of the
Corporation or any other security of the Corporation which it may issue or sell.
FOURTH: The Series B Preferred Stock have been classified and designated by
the Board of Directors under the authority contained in the Charter.
FIFTH: These Articles of Amendment have been approved by the Board of
Directors in the manner and by the vote required by law.
SIXTH: The undersigned Officer of the Corporation acknowledges
these Articles of Amendment to be the corporate act of the Corporation and, as
to all matters or facts required to be verified under oath, the undersigned
Officer acknowledges that to the best of his knowledge, information and belief,
these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
[Signature Page Follows]
<PAGE>
Fax Audit No. ________________________ 11
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed under seal in its name and on its behalf by its
Executive Vice President and attested to by its Secretary on this __________ day
of September, 1999.
REGENCY REALTY CORPORATION
By: /s/ Bruce M. Johnson
Name: Bruce M. Johnson
Title: Executive Vice President
[SEAL]
[ATTEST]
/s/ J. Christian Leavitt
Name: J. Christian Leavitt
Title: Secretary
<PAGE>
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF
REGENCY REALTY CORPORATION
DESIGNATING THE PREFERENCES, RIGHTS AND
LIMITATIONS OF 750,000 SHARES OF
9.0% SERIES C CUMULATIVE REDEEMABLE PREFERRED STOCK
$0.01 Par Value
Pursuant to Section 607.0602 of the Florida Business
Corporation Act ("FBCA"), Regency Realty Corporation, a Florida corporation (the
"Corporation"), does hereby certify that:
FIRST: Pursuant to the authority expressly vested in the Board
of Directors of the Corporation by Section 4.2 of the Amended and Restated
Articles of Incorporation of the Corporation (as amended, the "Charter") and
Section 607.0602 of the FBCA, the Board of Directors of the Corporation (the
"Board of Directors"), by resolutions duly adopted on August 23, 1999 has
classified 750,000 shares of the authorized but unissued Preferred Stock par
value $.0l per share ("Preferred Stock") as a separate class of Preferred Stock,
authorized the issuance of a maximum of 750,000 shares of such class of
Preferred Stock, set certain of the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, terms
and conditions of redemption and other terms and conditions of such class of
Preferred Stock, and pursuant to the powers contained in the Bylaws of the
Corporation and the FBCA, appointed a committee (the "Committee") of the Board
of Directors and delegated to the Committee, to the fullest extent permitted by
the FBCA and the Charter and Bylaws of the Corporation, all powers of the Board
of Directors with respect to designating, and setting all other preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications and terms and conditions of
redemption of, such class of Preferred Stock, determining the number of shares
of such class of Preferred Stock (not in excess of the aforesaid maximum number)
to be issued and the consideration and other terms and conditions upon which
such shares of such class of Preferred Stock are to be issued. Shareholder
approval was not required under the Charter with respect to such designation.
Capitalized terms used and not otherwise defined herein shall have the meaning
assigned thereto in the Charter.
SECOND: Pursuant to the authority conferred upon the Committee
as aforesaid, the Committee has unanimously adopted resolutions designating the
aforesaid class of Preferred Stock as the "9.0% Series C Cumulative Redeemable
Preferred Stock," setting the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption and other terms and conditions of such 9.0% Series C
Cumulative Redeemable Preferred Stock (to the extent not set by the Board of
Directors in the resolutions referred to in Article First of these Articles of
Amendment) and authorizing the issuance of up to 750,000 shares of 9.0% Series C
Cumulative Redeemable Preferred Stock.
THIRD: The class of Preferred Stock of the Corporation created
by the resolutions duly adopted by the Board of Directors of the Corporation and
by the Committee and referred to in Articles First and Second of these Articles
of Amendment shall have the following designation, number of shares,
preferences, conversion and other rights, voting powers, restrictions and
limitation as to dividends, qualifications, terms and conditions of redemption
and other terms and conditions:
Section 1. Designation and Number. A series of Preferred
Stock, designated the "9.0% Series C Cumulative Redeemable Preferred Stock" (the
"Series C Preferred Stock") is hereby established. The number of shares of
Series C Preferred Stock shall be 750,000.
Section 2. Rank. The Series C Preferred Stock will, with
respect to distributions or rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Corporation, or both, rank senior to all
classes or series of Common Stock (as defined in the Charter) and to all classes
or series of equity securities of the Corporation now or hereafter authorized,
issued or outstanding other than any class or series of equity securities of the
Corporation expressly designated as ranking on a parity with or senior to the
Series C Preferred Stock as to distributions or rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Corporation, or both.
For purposes of these Articles of Amendment, the term "Parity Preferred Stock"
shall be used to refer to any class or series of equity securities of the
Corporation now or hereafter authorized, issued or outstanding expressly
designated by the Corporation to rank on a parity with Series C Preferred Stock
with respect to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Corporation, or both, as the
context may require, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or conversion rights or exchange
rights shall be different from those of the Series C Preferred Stock. The term
"equity securities" does not include debt securities, which will rank senior to
the Series C Preferred Stock prior to conversion. The Series C Preferred Stock
is expressly designated as ranking on a parity with the Series A Preferred Stock
and the Series B Preferred Stock.
Section 3. Distributions. (a) Payment of Distributions.
Subject to the rights of holders of Parity Preferred Stock as to the payment of
distributions and holders of equity securities issued after the date hereof in
accordance herewith ranking senior to the Series C Preferred Stock as to payment
of distributions, holders of Series C Preferred Stock shall be entitled to
receive, out of funds legally available for the payment of distributions,
cumulative preferential cash distributions at the rate per annum of 9.0% of the
$100.00 liquidation preference per share of Series C Preferred Stock. Such
distributions shall be cumulative, shall accrue from the original date of
issuance and will be payable in cash when, as and if declared by the Board of
Directors of the Corporation (A) quarterly in arrears, on or before March 31,
June 30, September 30 and December 31 of each year commencing on the first of
such dates to occur after the original date of issuance and, (B) in the event of
a redemption, on the redemption date (each a "Series C Preferred Stock
Distribution Payment Date"). The amount of the distribution payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months
and for any period shorter than a full quarterly period for which distributions
are computed, the amount of the distribution payable will be computed based on
the ratio of the actual number of days elapsed in such quarterly period to 90
days. If any date on which distributions are to be made on the Series C
Preferred Stock is not a Business Day (as defined herein), then payment of the
distribution to be made on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
Distributions on the Series C Preferred Stock will be made to the holders of
record of the Series C Preferred Stock on the relevant record dates to be fixed
by the Board of Directors of the Corporation, which record dates shall be not
less than 10 days and not more than 30 Business Days prior to the relevant
Series C Preferred Stock Distribution Payment Date (each a "Distribution Record
Date"). Notwithstanding anything to the contrary set forth herein, each share of
Series C Preferred Stock shall also continue to accrue all accrued and unpaid
distributions, whether or not declared, up to the exchange date on any Series C
Preferred Unit (as defined in the Third Amended and Restated Agreement of
Limited Partnership of Regency Centers, L.P., dated as September 1, 1999 as
amended by that certain Amendment No. 2 to Third Amended and Restated Agreement
of Limited Partnership dated as of September 3, 1999 (as amended, the
"Partnership Agreement")) validly exchanged into such share of Series C
Preferred Stock in accordance with the provisions of such Partnership Agreement.
The term "Business Day" shall mean each day, other than a Saturday or a
Sunday, which is not a day on which banking institutions in New York, New York
are authorized or required by law, regulation or executive order to close.
(b) Distributions Cumulative. Distributions on the Series C
Preferred Stock will accrue whether or not the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness at any time prohibit the current payment of distributions, whether
or not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Accrued but unpaid distributions on
the Series C Preferred Stock will accumulate as of the Series C Preferred Stock
Distribution Payment Date on which they first become payable. Distributions on
account of arrears for any past distribution periods may be declared and paid at
any time, without reference to a regular Series C Preferred Stock Distribution
Payment Date to holders of record of the Series C Preferred Stock on the record
date fixed by the Board of Directors which date shall be not less than 10 days
and not more than 30 Business Days prior to the payment date. Accumulated and
unpaid distributions will not bear interest.
(c) Priority as to Distributions. (i) So long as any Series C
Preferred Stock is outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or with respect to any
class or series of Common Stock or any class or series of other stock of the
Corporation ranking junior as to the payment of distributions to the Parity
Preferred Stock (such Common Stock or other junior stock, collectively, "Junior
Stock"), nor shall any cash or other property be set aside for or applied to the
purchase, redemption or other acquisition for consideration of any Series C
Preferred Stock, any Parity Preferred Stock with respect to distributions or any
Junior Stock, unless in each case, all distributions accumulated on all Series C
Preferred Stock and all classes and series of outstanding Parity Preferred Stock
as to payment of distributions have been paid in full. The foregoing sentence
will not prohibit (i) distributions payable solely in Junior Stock, (ii) the
conversion of Series C Preferred Stock, Junior Stock or Parity Preferred Stock
into stock of the Corporation ranking junior to the Series C Preferred Stock as
to distributions, and (iii) purchases by the Corporation of such Series C
Preferred Stock or Parity Preferred Stock with respect to distributions or
Junior Stock pursuant to Article 5 of the Charter to the extent required to
preserve the Corporation's status as a real estate investment trust.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series C Preferred Stock, all distributions authorized and
declared on the Series C Preferred Stock and all classes or series of
outstanding Parity Preferred Stock with respect to distributions shall be
authorized and declared so that the amount of distributions authorized and
declared per share of Series C Preferred Stock and such other classes or series
of Parity Preferred Stock shall in all cases bear to each other the same ratio
that accrued distributions per share on the Series C Preferred Stock and such
other classes or series of Parity Preferred Stock (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such class or series of Parity Preferred Stock does not have cumulative
distribution rights) bear to each other.
(d) No Further Rights. Holders of Series C Preferred Stock shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
Section 4. Liquidation Preference. (a) Payment of Liquidation
Distributions. Subject to the rights of holders of Parity Preferred Stock with
respect to rights upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation and subject to equity securities ranking senior to
the Series C Preferred Stock with respect to rights upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, the
holders of Series C Preferred Stock shall be entitled to receive out of the
assets of the Corporation legally available for distribution or the proceeds
thereof, after payment or provision for debts and other liabilities of the
Corporation, but before any payment or distributions of the assets shall be made
to holders of Common Stock or any other class or series of shares of the
Corporation that ranks junior to the Series C Preferred Stock as to rights upon
liquidation, dissolution or winding-up of the Corporation, an amount equal to
the sum of (i) a liquidation preference of $100.00 per share of Series C
Preferred Stock, and (ii) an amount equal to any accumulated and unpaid
distributions thereon, whether or not declared, to the date of payment. In the
event that, upon such voluntary or involuntary liquidation, dissolution or
winding-up, there are insufficient assets to permit full payment of liquidating
distributions to the holders of Series C Preferred Stock and any Parity
Preferred Stock as to rights upon liquidation, dissolution or winding-up of the
Corporation, all payments of liquidating distributions on the Series C Preferred
Stock and such Parity Preferred Stock shall be made so that the payments on the
Series C Preferred Stock and such Parity Preferred Stock shall in all cases bear
to each other the same ratio that the respective rights of the Series C
Preferred Stock and such other Parity Preferred Stock (which shall not include
any accumulation in respect of unpaid distributions for prior distribution
periods if such Parity Preferred Stock does not have cumulative distribution
rights) upon liquidation, dissolution or winding-up of the Corporation bear to
each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, stating
the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i) fax
and (ii) by first class mail, postage pre-paid, not less than 30 and not more
than 60 days prior to the payment date stated therein, to each record holder of
the Series C Preferred Stock at the respective addresses of such holders as the
same shall appear on the share transfer records of the Corporation.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series C Preferred
Stock will have no right or claim to any of the remaining assets of the
Corporation.
(d) Consolidation Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the Corporation to, or the consolidation or merger or
other business combination of the Corporation with or into, any corporation,
trust or other entity (or of any corporation, trust or other entity with or into
the Corporation) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Corporation.
(e) Permissible Distributions. In determining whether a
distribution (other than upon voluntary liquidation) by dividend, redemption or
other acquisition of shares of stock of the Corporation or otherwise is
permitted under the FBCA, no effect shall be given to amounts that would be
needed, if the Corporation were to be dissolved at the time of the distribution,
to satisfy the preferential rights upon dissolution of holders of shares of
stock of the Corporation whose preferential rights upon dissolution are superior
to those receiving the distribution.
Section 5. Optional Redemption. (a) Right of Optional
Redemption. The Series C Preferred Stock may not be redeemed prior to September
3, 2004. On or after such date, the Corporation shall have the right to redeem
the Series C Preferred Stock, in whole or in part, at any time or from time to
time, upon not less than 30 nor more than 60 days' written notice, at a
redemption price, payable in cash, equal to $100.00 per share of Series C
Preferred Stock plus accumulated and unpaid distributions, whether or nor
declared, to the date of redemption. If fewer than all of the outstanding shares
of Series C Preferred Stock are to be redeemed, the shares of Series C Preferred
Stock to be redeemed shall be selected pro rata (as nearly as practicable
without creating fractional shares).
(b) Limitation on Redemption. (i) The redemption price of the
Series C Preferred Stock (other than the portion thereof consisting of
accumulated but unpaid distributions) will be payable solely out of sale
proceeds of capital stock of the Corporation and from no other source. For
purposes of the preceding sentence, "capital stock" means any equity securities
(including Common Stock and Preferred Stock), shares, participation or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity securities) or options to
purchase any of the foregoing.
(ii) The Corporation may not redeem fewer than all of the outstanding
shares of Series C Preferred Stock unless all accumulated and unpaid
distributions have been paid on all Series C Preferred Stock for all quarterly
distribution periods terminating on or prior to the date of redemption.
(c) Procedures for Redemption. (i) Notice of redemption will
be (i) faxed, and (ii) mailed by the Corporation, postage prepaid, not less than
30 nor more than 60 days prior to the redemption date, addressed to the
respective holders of record of the Series C Preferred Stock to be redeemed at
their respective addresses as they appear on the transfer records of the
Corporation. No failure to give or defect in such notice shall affect the
validity of the proceedings for the redemption of any Series C Preferred Stock
except as to the holder to whom such notice was defective or not given. In
addition to any information required by law or by the applicable rules of any
exchange upon which the Series C Preferred Stock may be listed or admitted to
trading, each such notice shall state: (i) the redemption date, (ii) the
redemption price, (iii) the number of shares of Series C Preferred Stock to be
redeemed, (iv) the place or places where such shares of Series C Preferred Stock
are to be surrendered for payment of the redemption price, (v) that
distributions on the Series C Preferred Stock to be redeemed will cease to
accumulate on such redemption date and (vi) that payment of the redemption price
and any accumulated and unpaid distributions will be made upon presentation and
surrender of such Series C Preferred Stock. If fewer than all of the shares of
Series C Preferred Stock held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of Series C
Preferred Stock held by such holder to be redeemed.
(ii) If the Corporation gives a notice of redemption in respect of Series C
Preferred Stock (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date, the Corporation will deposit irrevocably in
trust for the benefit of the Series C Preferred Stock being redeemed funds
sufficient to pay the applicable redemption price, plus any accumulated and
unpaid distributions, whether or not declared, if any, on such shares to the
date fixed for redemption, without interest, and will give irrevocable
instructions and authority to pay such redemption price and any accumulated and
unpaid distributions, if any, on such shares to the holders of the Series C
Preferred Stock upon surrender of the certificate evidencing the Series C
Preferred Stock by such holders at the place designated in the notice of
redemption. If fewer than all Series C Preferred Stock evidenced by any
certificate is being redeemed, a new certificate shall be issued upon surrender
of the certificate evidencing all Series C Preferred Stock, evidencing the
unredeemed Series C Preferred Stock without cost to the holder thereof. On and
after the date of redemption, distributions will cease to accumulate on the
Series C Preferred Stock or portions thereof called for redemption, unless the
Corporation defaults in the payment thereof. If any date fixed for redemption of
Series C Preferred Stock is not a Business Day, then payment of the redemption
price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. If
payment of the redemption price or any accumulated or unpaid distributions in
respect of the Series C Preferred Stock is improperly withheld or refused and
not paid by the Corporation, distributions on such Series C Preferred Stock will
continue to accumulate from the original redemption date to the date of payment,
in which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the applicable redemption price and any
accumulated and unpaid distributions.
(d) Status of Redeemed Stock. Any Series C Preferred Stock
that shall at any time have been redeemed shall after such redemption, have the
status of authorized but unissued Preferred Stock, without designation as to
class or series until such shares are once more designated as part of a
particular class or series by the Board of Directors.
Section 6. Voting Rights. (a) General. Holders of the Series C Preferred
Stock will not have any voting rights, except as set forth below.
(b) Right to Elect Directors. (i) If at any time distributions
shall be in arrears (which means that as to any such quarterly distributions,
the same have not been paid in full) with respect to six (6) prior quarterly
distribution periods (including quarterly periods on the Series C Preferred
Units prior to the exchange into Series C Preferred Stock), whether or not
consecutive, and shall not have been paid in full (a "Series C Preferred
Distribution Default"), the authorized number of members of the Board of
Directors shall automatically be increased by two and the holders of record of
such Series C Preferred Stock, voting together as a single class with the
holders of each class or series of Parity Preferred Stock upon which like voting
rights have been conferred and are exercisable, will be entitled to fill the
vacancies so created by electing two additional directors to serve on the
Corporation's Board of Directors (the "Preferred Stock Directors") at a special
meeting called in accordance with Section 6(b)(ii), and at each subsequent
annual meeting of stockholders or special meeting held in place thereof, until
all such distributions in arrears and distributions for the current quarterly
period on the Series C Preferred Stock and each such class or series of Parity
Preferred Stock have been paid in full.
(ii) At any time when such voting rights shall have vested, a proper
officer of the Corporation shall call or cause to be called, upon written
request of holders of record of at least 10% of the outstanding shares of Series
C Preferred Stock, a special meeting of the holders of Series C Preferred Stock
and all the series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable (collectively, the "Parity Securities") by
mailing or causing to be mailed to such holders a notice of such special meeting
to be held not less than ten and not more than 45 days after the date such
notice is given. The record date for determining holders of the Parity
Securities entitled to notice of and to vote at such special meeting will be the
close of business on the third Business Day preceding the day on which such
notice is mailed. At any annual or special meeting at which Parity Securities
are entitled to vote, all of the holders of the Parity Securities, by plurality
vote, voting together as a single class without regard to series will be
entitled to elect two directors on the basis of one vote per $25.00 of
liquidation preference to which such Parity Securities are entitled by their
terms (excluding amounts in respect of accumulated and unpaid dividends) and not
cumulatively. The holder or holders of the Parity Securities representing
one-third of the total voting power of the Parity Securities then outstanding,
present in person or by proxy, will constitute a quorum for the election of the
Preferred Stock Directors except as otherwise provided by law. Notice of all
meetings at which holders of the Series C Preferred Stock shall be entitled to
vote will be given to such holders at their addresses as they appear in the
transfer records. At any such meeting or adjournment thereof in the absence of a
quorum, subject to the provisions of any applicable law, the holders of the
Parity Securities representing a majority of the voting power of the Parity
Securities present in person or by proxy shall have the power to adjourn the
meeting for the election of the Preferred Stock Directors, without notice other
than an announcement at the meeting, until a quorum is present. If a Series C
Preferred Distribution Default shall terminate after the notice of an annual or
special meeting has been given but before such meeting has been held, the
Corporation shall, as soon as practicable after such termination, mail or cause
to be mailed notice of such termination to holders of the Series C Preferred
Stock that would have been entitled to vote at such meeting.
(iii) If and when all accumulated distributions and the distribution for
the current distribution period on the Series C Preferred Stock shall have been
paid in full or a sum sufficient for such payment is irrevocably deposited in
trust for payment, the holders of the Series C Preferred Stock shall be divested
of the voting rights set forth in Section 6(b) herein (subject to revesting in
the event of each and every Series C Preferred Distribution Default) and, if all
distributions in arrears and the distributions for the current distribution
period have been paid in full or set aside for payment in full on all other
classes or series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable, the terms and office of each Preferred Stock
Director so elected shall terminate. Any Preferred Stock Director may be removed
at any time with or without cause by the vote of, and shall not be removed
otherwise than by the vote of, the holders of record of a majority of the
outstanding Series C Preferred Stock when they have the voting rights set forth
in Section 6(b) (voting separately as a single class with all other classes or
series of Parity Preferred Stock upon which like voting rights have been
conferred and are exercisable). So long as a Series C Preferred Distribution
Default shall continue, any vacancy in the office of a Preferred Stock Director
may be filled by written consent of the Preferred Stock Director remaining in
office, or if none remains in office, by a vote of the holders of record of a
majority of the outstanding Series C Preferred Stock when they have the voting
rights set forth in Section 6(b) (voting separately as a single class with all
other classes or series of Parity Preferred Stock upon which like voting rights
have been conferred and are exercisable). The Preferred Stock Directors shall
each be entitled to one vote per director on any matter.
(c) Certain Voting Rights. So long as any Series C Preferred
Stock remains outstanding, the Corporation shall not, without the affirmative
vote of the holders of at least two-thirds of the Series C Preferred Stock
outstanding at the time (i) authorize, designate or create, or increase the
authorized or issued amount of, any class or series of shares ranking prior to
the Series C Preferred Stock with respect to payment of distributions or rights
upon liquidation, dissolution or winding-up or reclassify any authorized shares
of the Corporation into any such shares, or create, authorize or issue any
obligations or securities convertible into or evidencing the right to purchase
any such shares, (ii) authorize, designate or create, or increase the authorized
or issued amount of, any Parity Preferred Stock or reclassify any authorized
shares of the Corporation into any such shares, or create, authorize or issue
any obligations or securities convertible into or evidencing the right to
purchase any such shares, but only to the extent such Parity Preferred Stock is
issued to an affiliate of the Corporation (other than Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates), or (iii) either
(A) consolidate, merge into or with, or convey, transfer or lease its assets
substantially as an entirety, to any corporation or other entity, or (B) amend,
alter or repeal the provisions of the Corporation's Charter (including these
Articles of Amendment) or By-laws, whether by merger, consolidation or
otherwise, in each case in a manner that would materially and adversely affect
the powers, special rights, preferences, privileges or voting power of the
Series C Preferred Stock or the holders thereof; provided, however, that with
respect to the occurrence of a merger, consolidation or a sale or lease of all
of the Corporation's assets as an entirety, so long as (a) the Corporation is
the surviving entity and the Series C Preferred Stock remains outstanding with
the terms thereof unchanged, or (b) the resulting, surviving or transferee
entity is a corporation organized under the laws of any state and substitutes
the Series C Preferred Stock for other preferred stock having substantially the
same terms and same rights as the Series C Preferred Stock, including with
respect to distributions, redemptions, transfers, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such rights, privileges
or voting powers of the holders of the Series C Preferred Stock and no vote of
the Series C Preferred Stock shall be required in such case and provided further
that any increase in the amount of authorized Preferred Stock or the creation or
issuance of any other class or series of Preferred Stock, or any increase in an
amount of authorized shares of each class or series, in each case ranking either
(a) junior to the Series C Preferred Stock with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up, or (b) on a parity with the Series C Preferred Stock with respect to
payment of distributions and the distribution of assets upon liquidation,
dissolution or winding-up to the extent such Preferred Stock is not issued to an
affiliate of the Corporation (other than Security Capital U.S. Realty, Security
Capital Holdings, S.A. or their affiliates), shall not be deemed to materially
and adversely affect such rights, preferences, privileges or voting powers and
no vote of the Series C Preferred Stock shall be required in such case.
Section 7. No Conversion Rights. The holders of the Series C
Preferred Stock shall not have any rights to convert such shares into shares of
any other class or series of stock or into any other securities of, or interest
in, the Corporation.
Section 8. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series C Preferred Stock.
Section 9. No Preemptive Rights. No holder of the Series C
Preferred Stock of the Corporation shall, as such holder, have any preemptive
rights to purchase or subscribe for additional shares of stock of the
Corporation or any other security of the Corporation which it may issue or sell.
FOURTH: The Series C Preferred Stock have been classified and designated by
the Board of Directors under the authority contained in the Charter.
FIFTH: These Articles of Amendment have been approved by the Board of
Directors in the manner and by the vote required by law.
SIXTH: The undersigned Officer of the Corporation acknowledges
these Articles of Amendment to be the corporate act of the Corporation and, as
to all matters or facts required to be verified under oath, the undersigned
Officer acknowledges that to the best of his knowledge, information and belief,
these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
[Signature Page Follows]
<PAGE>
Fax Audit No. H99000022256 11
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be executed under seal in its name and on its behalf by its
Executive Vice President and attested to by its Secretary on this _________ day
of September, 1999.
REGENCY REALTY CORPORATION
By: /s/ Bruce M. Johnson
Name: Bruce M. Johnson
Title: Executive Vice President
[SEAL]
[ATTEST]
J. Christian Leavitt
Name: J. Christian Leavitt
Title: Secretary
<PAGE>
NYDOCS03/486174 6 12
004.160941.1
NYDOCS03/486174 6
004.160941.1
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF
REGENCY REALTY CORPORATION
DESIGNATING THE PREFERENCES, RIGHTS AND
LIMITATIONS OF 500,000 SHARES OF
9.125% SERIES D CUMULATIVE REDEEMABLE PREFERRED STOCK
$0.01 Par Value
Pursuant to Section 607.0602 of the Florida Business
Corporation Act ("FBCA"), Regency Realty Corporation, a Florida corporation (the
"Corporation"), does hereby certify that:
FIRST: Pursuant to the authority expressly vested in the Board
of Directors of the Corporation by Section 4.2 of the Amended and Restated
Articles of Incorporation of the Corporation (the "Charter") and Section
607.0602 of the FBCA, the Board of Directors of the Corporation (the "Board of
Directors"), by resolutions duly adopted on August 23, 1999 and resolutions duly
adopted by a committee of the Board of Directors on September 29, 1999 has
classified 500,000 shares of the authorized but unissued Preferred Stock par
value $.01 per share ("Preferred Stock") as a separate class of Preferred Stock,
authorized the issuance of a maximum of 500,000 shares of such class of
Preferred Stock, set certain of the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications, terms
and conditions of redemption and other terms and conditions of such class of
Preferred Stock, and pursuant to the powers contained in the Bylaws of the
Corporation and the FBCA, appointed a committee (the "Committee") of the Board
of Directors and delegated to the Committee, to the fullest extent permitted by
the FBCA and the Charter and Bylaws of the Corporation, all powers of the Board
of Directors with respect to designating, and setting all other preferences,
conversion and other rights, voting powers, restrictions, limitations as to
dividends and other distributions, qualifications and terms and conditions of
redemption of, such class of Preferred Stock determining the number of shares of
such class of Preferred Stock (not in excess of the aforesaid maximum number) to
be issued and the consideration and other terms and conditions upon which such
shares of such class of Preferred Stock are to be issued. Shareholder approval
was not required under the Charter with respect to such designation.
SECOND: Pursuant to the authority conferred upon the Committee
as aforesaid, the Committee has unanimously adopted resolutions designating the
aforesaid class of Preferred Stock as the "9.125% Series D Cumulative Redeemable
Preferred Stock," setting the preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications, terms and
conditions of redemption and other terms and conditions of such 9.125% Series D
Cumulative Redeemable Preferred Stock (to the extent not set by the Board of
Directors in the resolutions referred to in Article FIRST of these Articles of
Amendment) and authorizing the issuance of up to 500,000 shares of 9.125% Series
D Cumulative Redeemable Preferred Stock.
THIRD: The class of Preferred Stock of the Corporation created
by the resolutions duly adopted by the Board of Directors of the Corporation and
by the Committee and referred to in Articles FIRST and SECOND of these Articles
of Amendment shall have the following designation, number of shares,
preferences, conversion and other rights, voting powers, restrictions and
limitation as to dividends, qualifications, terms and conditions of redemption
and other terms and conditions:
Section 1. Designation and Number. A series of Preferred
Stock, designated the "9.125% Series D Cumulative Redeemable Preferred Stock"
(the "Series D Preferred Stock") is hereby established. The number of shares of
Series D Preferred Stock shall be 500,000.
Section 2. Rank. The Series D Preferred Stock will, with
respect to distributions and rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Corporation, rank senior to all classes or
series of Common Stock (as defined in the Charter) and to all classes or series
of equity securities of the Corporation now or hereafter authorized, issued or
outstanding, other than any class or series of equity securities of the
Corporation expressly designated as ranking on a parity with or senior to the
Series D Preferred Stock as to distributions or rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Corporation or both.
For purposes of these Articles of Amendment, the term "Parity Preferred Stock"
shall be used to refer to any class or series of equity securities of the
Corporation now or hereafter authorized, issued or outstanding expressly
designated by the Corporation to rank on a parity with Series D Preferred Stock
with respect to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Corporation or both, as the
context may require, whether or not the dividend rates, dividend payment dates
or redemption or liquidation prices per share or conversion rights or exchange
rights shall be different from those of the Series D Preferred Stock and
includes the Series A Cumulative Redeemable Preferred Stock, the Series B
Cumulative Redeemable Preferred Stock, the Series C Cumulative Redeemable
Preferred Stock, the Series 1 Cumulative Convertible Redeemable Preferred Stock
and the Series 2 Cumulative Convertible Redeemable Preferred Stock of the
Corporation. The term "equity securities" does not include debt securities,
which will rank senior to the Series D Preferred Stock prior to conversion.
Section 3. Distributions. (a) Payment of Distributions.
Subject to the rights of holders of Parity Preferred Stock as to the payment of
distributions and holders of equity securities issued after the date hereof in
accordance herewith ranking senior to the Series D Preferred Stock as to payment
of distributions, holders of Series D Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors of the Corporation,
out of funds legally available for the payment of distributions, cumulative cash
distributions at the rate per annum of 9.125% of the $100.00 liquidation
preference per share of Series D Preferred Stock. Such distributions shall be
cumulative, shall accrue from the original date of issuance and will be payable
in cash (A) quarterly (such quarterly periods for purposes of payment and
accrual will be the quarterly periods ending on the dates specified in this
sentence) in arrears, on or before March 31, June 30, September 30 and December
31 of each year commencing on the first of such dates to occur after the
original date of issuance and, (B) in the event of a redemption, on the
redemption date (each a "Preferred Stock Distribution Payment Date"). The amount
of the distribution payable for any period will be computed on the basis of a
360-day year of twelve 30-day months and for any period shorter than a full
quarterly period for which distributions are computed, the amount of the
distribution payable will be computed on the basis of the ratio of the actual
number of days elapsed in such period to ninety (90) days. If any date on which
distributions are to be made on the Series D Preferred Stock is not a Business
Day (as defined herein), then payment of the distribution to be made on such
date will be made on the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Distributions on the Series D Preferred Stock
will be made to the holders of record of the Series D Preferred Stock on the
relevant record dates to be fixed by the Board of Directors of the Corporation,
which record dates shall be not less than 10 days and not more than 30 Business
Days prior to the relevant Preferred Stock Distribution Payment Date (each a
"Distribution Record Date"). Notwithstanding anything to the contrary set forth
herein, each share of Series D Preferred Stock shall also continue to accrue all
accrued and unpaid distributions, whether or not declared, up to the exchange
date on any Series D Preferred Unit (as defined in the Third Amended and
Restated Agreement of Limited Partnership of Regency Centers, L.P., dated as
September 1, 1999 as amended by Amendment No. 1 to the Third Amended and
Restated Agreement of Limited Partnership of Operating Partnership, dated as of
September 3, 1999, Amendment No. 2 to the Third Amended and Restated Agreement
of Limited Partnership of Operating Partnership, dated as of September 3, 1999
and that certain Third Amendment to Third Amended and Restated Agreement of
Limited Partnership dated as of September 29, 1999 (as amended the "Partnership
Agreement")) validly exchanged into such share of Series D Preferred Stock in
accordance with the provisions of such Partnership Agreement.
The term "Business Day" shall mean each day, other than a
Saturday or a Sunday, which is not a day on which banking institutions in New
York, New York are authorized or required by law, regulation or executive order
to close.
(b) Limitation on Distributions. No distribution on the Series
D Preferred Stock shall be declared or paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation (other than any agreement with a holder or affiliate of holder of
Capital Stock of the Corporation) relating to its indebtedness, prohibit such
declaration, payment or setting apart for payment or provide that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment shall be restricted or prohibited by law. Nothing in this
Section 3(b) shall be deemed to modify or in any manner limit the provisions of
Section 3(c) and 3(d).
(c) Distributions Cumulative. Distributions on the Series D
Preferred Stock will accrue whether or not the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness at any time prohibit the current payment of distributions, whether
or not the Corporation has earnings, whether or not there are funds legally
available for the payment of such distributions and whether or not such
distributions are authorized or declared. Accrued but unpaid distributions on
the Series D Preferred Stock will accumulate as of the Preferred Stock
Distribution Payment Date on which they first become payable. Distributions on
account of arrears for any past distribution periods may be declared and paid at
any time, without reference to a regular Preferred Stock Distribution Payment
Date to holders of record of the Series D Preferred Stock on the record date
fixed by the Board of Directors which date shall be not less than 10 days and
not more than 30 Business Days prior to the payment date. Accumulated and unpaid
distributions will not bear interest.
(d) Priority as to Distributions. (i) So long as any Series D
Preferred Stock is outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or with respect to any
class or series of Common Stock or any class or series of other stock of the
Corporation ranking junior to the Series D Preferred Stock as to the payment of
distributions (such Common Stock or other junior stock, collectively, "Junior
Stock"), nor shall any cash or other property be set aside for or applied to the
purchase, redemption or other acquisition for consideration of any Series D
Preferred Stock, any Parity Preferred Stock with respect to distributions or any
Junior Stock, unless, in each case, all distributions accumulated on all Series
D Preferred Stock and all classes and series of outstanding Parity Preferred
Stock with respect to distributions have been paid in full. Without limiting
Section 6(b) hereof, the foregoing sentence will not prohibit (i) distributions
payable solely in shares of Junior Stock, (ii) the conversion of Junior Stock or
Parity Preferred Stock into Junior Stock, and (iii) purchases by the Corporation
of such Series D Preferred Stock or Parity Preferred Stock or Junior Stock
pursuant to Article 5 of the Charter to the extent required to preserve the
Corporation's status as a real estate investment trust.
(ii) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series D Preferred Stock, all distributions authorized and
declared on the Series D Preferred Stock and all classes or series of
outstanding Parity Preferred Stock with respect to distributions shall be
authorized and declared so that the amount of distributions authorized and
declared per share of Series D Preferred Stock and such other classes or series
of Parity Preferred Stock shall in all cases bear to each other the same ratio
that accrued distributions per share on the Series D Preferred Stock and such
other classes or series of Parity Preferred Stock (which shall not include any
accumulation in respect of unpaid distributions for prior distribution periods
if such class or series of Parity Preferred Stock do not have cumulative
distribution rights) bear to each other.
(e) No Further Rights. Holders of Series D Preferred Stock
shall not be entitled to any distributions, whether payable in cash, other
property or otherwise, in excess of the full cumulative distributions described
herein.
Section 4. Liquidation Preference. (a) Payment of Liquidating
Distributions. Subject to the rights of holders of Parity Preferred Stock with
respect to rights upon any voluntary or involuntary liquidation, dissolution or
winding-up of the Corporation and subject to equity securities ranking senior to
the Series D Preferred Stock with respect to rights upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, the
holders of Series D Preferred Stock shall be entitled to receive out of the
assets of the Corporation legally available for distribution or the proceeds
thereof, after payment or provision for debts and other liabilities of the
Corporation, but before any payment or distributions of the assets shall be made
to holders of Common Stock or any other class or series of shares of the
Corporation that ranks junior to the Series D Preferred Stock as to rights upon
liquidation, dissolution or winding-up of the Corporation, an amount equal to
the sum of (i) a liquidation preference of $100 per share of Series D Preferred
Stock, and (ii) an amount equal to any accumulated and unpaid distributions
thereon, whether or not declared, to the date of payment. In the event that,
upon such voluntary or involuntary liquidation, dissolution or winding-up, there
are insufficient assets to permit full payment of liquidating distributions to
the holders of Series D Preferred Stock and any Parity Preferred Stock as to
rights upon liquidation, dissolution or winding-up of the Corporation, all
payments of liquidating distributions on the Series D Preferred Stock and such
Parity Preferred Stock shall be made so that the payments on the Series D
Preferred Stock and such Parity Preferred Stock shall in all cases bear to each
other the same ratio that the respective rights of the Series D Preferred Stock
and such other Parity Preferred Stock (which shall not include any accumulation
in respect of unpaid distributions for prior distribution periods if such Parity
Preferred Stock do not have cumulative distribution rights) upon liquidation,
dissolution or winding-up of the Corporation bear to each other.
(b) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Corporation, stating
the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i) fax
and (ii) by first class mail, postage pre-paid, not less than 30 and not more
than 60 days prior to the payment date stated therein, to each record holder of
the Series D Preferred Stock at the respective addresses of such holders as the
same shall appear on the share transfer records of the Corporation.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series D Preferred
Stock will have no right or claim to any of the remaining assets of the
Corporation.
(d) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the Corporation to, or the consolidation or merger or
other business combination of the Corporation with or into, any corporation,
trust or other entity (or of any corporation, trust or other entity with or into
the Corporation) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Corporation.
(e) Permissible Distributions. In determining whether a
distribution (other than upon voluntary liquidation) by dividend, redemption or
other acquisition of shares of stock of the Corporation or otherwise is
permitted under the FBCA, no effect shall be given to amounts that would be
needed, if the Corporation were to be dissolved at the time of the distribution,
to satisfy the preferential rights upon dissolution of holders of shares of
stock of the Corporation whose preferential rights upon dissolution are superior
to those receiving the distribution.
Section 5. Optional Redemption. (a) Right of Optional
Redemption. The Series D Preferred Stock may not be redeemed prior to September
29, 2004. On or after such date, the Corporation shall have the right to redeem
the Series D Preferred Stock, in whole or in part, at any time or from time to
time, upon not less than 30 nor more than 60 days' written notice, at a
redemption price, payable in cash, equal to $100 per share of Series D Preferred
Stock plus accumulated and unpaid distributions, whether or nor declared, to the
date of redemption. If fewer than all of the outstanding shares of Series D
Preferred Stock are to be redeemed, the shares of Series D Preferred Stock to be
redeemed shall be selected pro rata (as nearly as practicable without creating
fractional units).
(b) Limitation on Redemption. (i) The redemption price of the
Series D Preferred Stock (other than the portion thereof consisting of
accumulated but unpaid distributions) will be payable solely out of sale
proceeds of capital stock of the Corporation and from no other source. For
purposes of the preceding sentence, "capital stock" means any equity securities
(including Common Stock and Preferred Stock), shares, participation or other
ownership interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity securities) or options to
purchase any of the foregoing.
(ii) The Corporation may not redeem fewer than all of the outstanding
shares of Series D Preferred Stock unless all accumulated and unpaid
distributions have been paid on all Series D Preferred Stock for all quarterly
distribution periods terminating on or prior to the date of redemption.
(c) Procedures for Redemption. (i) Notice of redemption will
be (i) faxed, and (ii) mailed by the Corporation, postage prepaid, not less than
30 nor more than 60 days prior to the redemption date, addressed to the
respective holders of record of the Series D Preferred Stock to be redeemed at
their respective addresses as they appear on the transfer records of the
Corporation. No failure to give or defect in such notice shall affect the
validity of the proceedings for the redemption of any Series D Preferred Stock
except as to the holder to whom such notice was defective or not given. In
addition to any information required by law or by the applicable rules of any
exchange upon which the Series D Preferred Stock may be listed or admitted to
trading, each such notice shall state: (i) the redemption date, (ii) the
redemption price, (iii) the number of shares of Series D Preferred Stock to be
redeemed, (iv) the place or places where such shares of Series D Preferred Stock
are to be surrendered for payment of the redemption price, (v) that
distributions on the Series D Preferred Stock to be redeemed will cease to
accumulate on such redemption date and (vi) that payment of the redemption price
and any accumulated and unpaid distributions will be made upon presentation and
surrender of such Series D Preferred Stock. If fewer than all of the shares of
Series D Preferred Stock held by any holder are to be redeemed, the notice
mailed to such holder shall also specify the number of shares of Series D
Preferred Stock held by such holder to be redeemed.
(ii) If the Corporation gives a notice of redemption in respect of Series D
Preferred Stock (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date, the Corporation will deposit irrevocably in
trust for the benefit of the Series D Preferred Stock being redeemed funds
sufficient to pay the applicable redemption price, plus any accumulated and
unpaid distributions, whether or not declared, if any, on such shares to the
date fixed for redemption, without interest, and will give irrevocable
instructions and authority to pay such redemption price and any accumulated and
unpaid distributions, if any, on such shares to the holders of the Series D
Preferred Stock upon surrender of the certificate evidencing the Series D
Preferred Stock by such holders at the place designated in the notice of
redemption. If fewer than all Series D Preferred Stock evidenced by any
certificate is being redeemed, a new certificate shall be issued upon surrender
of the certificate evidencing all Series D Preferred Stock, evidencing the
unredeemed Series D Preferred Stock without cost to the holder thereof. On and
after the date of redemption, distributions will cease to accumulate on the
Series D Preferred Stock or portions thereof called for redemption, unless the
Corporation defaults in the payment thereof. If any date fixed for redemption of
Series D Preferred Stock is not a Business Day, then payment of the redemption
price payable on such date will be made on the next succeeding day that is a
Business Bay (and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date fixed for redemption. If
payment of the redemption price or any accumulated or unpaid distributions in
respect of the Series D Preferred Stock is improperly withheld or refused and
not paid by the Corporation, distributions on such Series D Preferred Stock will
continue to accumulate from the original redemption date to the date of payment,
in which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the applicable redemption price and any
accumulated and unpaid distributions.
(d) Status of Redeemed Stock. Any Series D Preferred Stock
that shall at any time have been redeemed shall after such redemption, have the
status of authorized but unissued Preferred Stock, without designation as to
class or series until such shares are once more designated as part of a
particular class or series by the Board of Directors.
Section 6. Voting Rights. (a) General. Holders of the Series D Preferred
Stock will not have any voting rights, except as set forth below.
(b) Right to Elect Directors. (i) If at any time distributions
shall be in arrears (which means that, as to any such quarterly distributions,
the same have not been paid in full) with respect to six (6) prior quarterly
distribution periods (including quarterly periods on the Series D Preferred
Units prior to the exchange into Series D Preferred Stock), whether or not
consecutive, and shall not have been paid in full (a "Preferred Distribution
Default"), the authorized number of members of the Board of Directors shall
automatically be increased by two and the holders of record of such Series D
Preferred Stock, voting together as a single class with the holders of each
class or series of Parity Securities (as defined below), will be entitled to
fill the vacancies so created by electing two additional directors to serve on
the Corporation's Board of Directors (the "Preferred Stock Directors") at a
special meeting called in accordance with Section 6(b)(ii) or at the next annual
meeting of stockholders, and at each subsequent annual meeting of stockholders
or special meeting held in place thereof, until all such distributions in
arrears and distributions for the current quarterly period on the Series D
Preferred Stock and each such class or series of Parity Securities have been
paid in full.
(ii) At any time when such voting rights shall have vested, a proper
officer of the Corporation shall call or cause to be called, upon written
request of holders of record of at least 10% of the outstanding shares of Series
D Preferred Stock, a special meeting of the holders of Series D Preferred Stock
and all the series of Parity Preferred Stock which are (i) on parity with the
Series D Preferred Stock both as to distributions and rights upon liquidation,
dissolution and winding up, (ii) with respect to Parity Preferred Stock
outstanding as a result of an acquisition of another corporation, on parity with
the Series D Preferred Stock as to distributions only or with respect to
distributions and rights upon liquidation, dissolution or winding up or (iii) on
parity with the Series D Preferred Stock as to distributions, but junior as to
rights upon liquidation, dissolution and winding up, but if any such Parity
Preferred Stock referred to in this clause (iii) was issued for an amount less
than its liquidation preference, the holders thereof shall be entitled to one
vote for each $25.00 of issuance price, in lieu of one vote for each $25.00 of
liquidation preference, and upon which like voting rights have been conferred
and are exercisable (collectively, the "Parity Securities") by mailing or
causing to be mailed to such holders a notice of such special meeting to be held
not less than ten and not more than 45 days after the date such notice is given.
The record date for determining holders of the Parity Securities entitled to
notice of and to vote at such special meeting will be the close of business on
the third Business Day preceding the day on which such notice is mailed. At any
annual or special meeting at which Parity Securities are entitled to vote, all
of the holders of the Parity Securities, by plurality vote, voting together as a
single class without regard to series will be entitled to elect two directors on
the basis of one vote per $25.00 of liquidation preference to which such Parity
Securities are entitled by their terms (excluding amounts in respect of
accumulated and unpaid dividends) and not cumulatively. The holder or holders of
the Parity Securities representing one-third of the total voting power of the
Parity Securities then outstanding, present in person or by proxy, will
constitute a quorum for the election of the Preferred Stock Directors except as
otherwise provided by law. Notice of all meetings at which holders of the Series
D Preferred Stock shall be entitled to vote will be given to such holders at
their addresses as they appear in the transfer records. At any such meeting or
adjournment thereof in the absence of a quorum, subject to the provisions of any
applicable law, the holders of the Parity Securities representing a majority of
the voting power of the Parity Securities present in person or by proxy shall
have the power to adjourn the meeting for the election of the Preferred Stock
Directors, without notice other than an announcement at the meeting, until a
quorum is present. If a Preferred Distribution Default shall terminate after the
notice of an annual or special meeting has been given but before such meeting
has been held, the Corporation shall, as soon as practicable after such
termination, mail or cause to be mailed notice of such termination to holders of
the Series D Preferred Stock that would have been entitled to vote at such
meeting.
(iii) If and when all accumulated distributions and the distribution for
the current distribution period on the Series D Preferred Stock shall have been
paid in full or a sum sufficient for such payment is irrevocably deposited in
trust for payment, the holders of the Series D Preferred Stock shall be divested
of the voting rights set forth in Section 6(b) herein (subject to revesting in
the event of each and every Preferred Distribution Default) and, if all
distributions in arrears and the distributions for the current distribution
period have been paid in full or set aside for payment in full on all other
classes or series of Parity Securities upon which like voting rights have been
conferred and are exercisable, the term and office of each Preferred Stock
Director so elected shall terminate. Any Preferred Stock Director may be removed
at any time with or without cause by the vote of, and shall not be removed
otherwise than by the vote of, the holders of record of a majority of the
outstanding Series D Preferred Stock when they have the voting rights set forth
in Section 6(b) (voting separately as a single class with all other classes or
series of Parity Preferred Stock upon which like voting rights have been
conferred and are exercisable). So long as a Preferred Distribution Default
shall continue, any vacancy in the office of a Preferred Stock Director may be
filled by written consent of the Preferred Stock Director remaining in office,
or if none remains in office, by a vote of the holders of record of a majority
of the outstanding Series D Preferred Stock when they have the voting rights set
forth in Section 6(b) (voting separately as a single class with all other
classes or series of Parity Securities upon which like voting rights have been
conferred and are exercisable). The Preferred Stock Directors shall each be
entitled to one vote per director on any matter.
(c) Certain Voting Rights. So long as any Series D Preferred
Stock remains outstanding, the Corporation shall not, without the affirmative
vote of the holders of at least two-thirds of the Series D Preferred Stock and
the Series D Preferred Units outstanding at such time and not previously
surrendered in exchange for Series D Preferred Stock together, if applicable,
voting as a single class based on the number of shares into which such Series D
Preferred Units are then convertible (collectively, the "Series D Voting
Securities") (i) designate or create, or increase the authorized or issued
amount of, any class or series of shares ranking senior to the Series D
Preferred Stock with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up or reclassify any authorized shares of
the Corporation into any such shares, or create, authorize or issue any
obligations or securities convertible into or evidencing the right to purchase
any such shares, (ii) designate or create, or increase the authorized or issued
amount of, any Parity Preferred Stock or reclassify any authorized shares of the
Corporation into any such shares, or create, authorize or issue any obligations
or securities convertible into or evidencing the right to purchase any such
shares, but only to the extent such Parity Preferred Stock is issued to an
affiliate of the Corporation (other than Security Capital U.S. Realty, Security
Capital Holdings, S.A. or their affiliates if issued upon arms-length terms in
the good faith determination of the Board of Directors), or (iii) either (A)
consolidate, merge into or with, or convey, transfer or lease its assets
substantially as an entirety, to any corporation or other entity, or (B) amend,
alter or repeal the provisions of the Corporation's Charter (including these
Articles of Amendment) or By-laws, whether by merger, consolidation or
otherwise, in each case that would materially and adversely affect the powers,
special rights, preferences, privileges or voting power of the Series D
Preferred Stock or the holders thereof; provided, however, that with respect to
the occurrence of a merger, consolidation or a sale or lease of all of the
Corporation's assets as an entirety, so long as (a) the Corporation is the
surviving entity and the Series D Preferred Stock remains outstanding with the
terms thereof unchanged, or (b) the resulting, surviving or transferee entity is
a corporation organized under the laws of any state and substitutes the Series D
Preferred Stock for other preferred stock having substantially the same terms
and same rights as the Series D Preferred Stock, including with respect to
distributions, voting rights and rights upon liquidation, dissolution or
winding-up, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series D Preferred Stock and no vote of the Series D Voting
Securities shall be required in such case; and provided further that any
increase in the amount of authorized Preferred Stock or the creation or issuance
of any other class or series of Preferred Stock, or any increase in an amount of
authorized shares of each class or series, in each case ranking either (a)
junior to the Series D Preferred Stock with respect to payment of distributions
or the distribution of assets upon liquidation, dissolution or winding-up, or
(b) on a parity with the Series D Preferred Stock with respect to payment of
distributions or the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Stock is not issued to a affiliate of
the Corporation (other than Security Capital U.S. Realty, Security Capital
Holdings, S.A. or their affiliates if issued upon arms-length terms in the good
faith determination of the Board of Directors), shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers and no vote of the Series D Preferred Stock shall be required in such
case.
Section 7. No Conversion Rights. The holders of the Series D
Preferred Stock shall not have any rights to convert such shares into shares of
any other class or series of stock or into any other securities of, or interest
in, the Corporation.
Section 8. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series D Preferred Stock.
Section 9. No Preemptive Rights. No holder of the Series D
Preferred Stock of the Corporation shall, as such holder, have any preemptive
rights to purchase or subscribe for additional shares of stock of the
Corporation or any other security of the Corporation which it may issue or sell.
FOURTH: The Series D Preferred Stock have been classified and designated by
the Board of Directors under the authority contained in the Charter.
FIFTH: These Articles of Amendment have been approved by the Board of
Directors in the manner and by the vote required by law.
SIXTH: The undersigned officer of the Corporation acknowledges
these Articles of Amendment to be the corporate act of the Corporation and, as
to all matters or facts required to be verified under oath, the undersigned
officer acknowledges that to the best of his knowledge, information and belief,
these matters and facts are true in all material respects and that this
statement is made under the penalties for perjury.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles
of Amendment to be executed under seal in its name and on its behalf by its
Senior Vice President and attested to by its Secretary on this ______ day of
September, 1999.
REGENCY REALTY CORPORATION
By: /s/ Robert L. Miller
Name: Robert L. Miller
Title: Sr. Vice President
[SEAL]
ATTEST:
/s/ J. Christian Leavitt
Name: J. Christian Leavitt
Title: Secretary
<PAGE>
004.160941.1
004.160941.1
2
004.160941.1
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF
REGENCY REALTY CORPORATION
AMENDING THE DESIGNATION OF THE PREFERENCES, RIGHTS
AND LIMITATIONS OF 542,532 SHARES OF
SERIES 1 CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK
$0.01 Par Value
Pursuant to Section 607.1003 of the Florida Business
Corporation Act ("FBCA"), Regency Realty Corporation, a Florida corporation (the
"Corporation"), does hereby certify that:
The Corporation was incorporated on July 8, 1993, effective
July 9, 1993, under the name Regency Realty Corporation. By resolutions duly
adopted on July 29, 1999, the Board of Directors of the Corporation has approved
an amendment ("Amendment") to the Articles of Amendment to the Charter (the
"Designation") designating the preferences, rights and limitations of 542,532
shares of Series 1 Cumulative Convertible Redeemable Preferred Stock, par value
$0.01 per share (the "Series 1 Preferred Stock"). Pursuant to Section 9(c) of
the Designation and pursuant to Sections 607.0704 and 607.1004 of the FBCA, the
Amendment was approved by the written consent of the holders of record of a
majority of the outstanding shares of the Series 1 Preferred Stock effective
August ___, 1999. The number of votes cast by such voting group was sufficient
for approval of the Amendment by such voting group. No other voting group was
entitled to vote on the Amendment.
The definition in the Designation of "Dividend Payment Date"
is hereby amended to read in full as follows:
"'Dividend Payment Date' shall mean the date on which any cash
dividend is paid on the Common Stock."
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, the undersigned Chief Executive Officer of
the Corporation has executed these Articles of Amendment this _____ day of
______________, 1999.
REGENCY REALTY CORPORATION
By:
Name: Bruce M. Johnson
Title: Executive Vice President and
Managing Director
[SEAL]
<PAGE>
004.160941.1
004.160941.1
2
004.160941.1
ARTICLES OF AMENDMENT TO ARTICLES OF INCORPORATION OF
REGENCY REALTY CORPORATION
AMENDING THE DESIGNATION OF THE PREFERENCES, RIGHTS
AND LIMITATIONS OF 1,502,532 SHARES OF
SERIES 2 CUMULATIVE CONVERTIBLE REDEEMABLE PREFERRED STOCK
$0.01 Par Value
Pursuant to Section 607.1003 of the Florida Business
Corporation Act ("FBCA"), Regency Realty Corporation, a Florida corporation (the
"Corporation"), does hereby certify that:
The Corporation was incorporated on July 8, 1993, effective
July 9, 1993, under the name Regency Realty Corporation. By resolutions duly
adopted on July 29, 1999, the Board of Directors of the Corporation has approved
an amendment ("Amendment") to the Articles of Amendment to the Charter (the
"Designation") designating the preferences, rights and limitations of 1,502,532
shares of Series 2 Cumulative Convertible Redeemable Preferred Stock, par value
$0.01 per share (the "Series 2 Preferred Stock"). Pursuant to Section 9(c) of
the Designation and pursuant to Sections 607.0704 and 607.1004 of the FBCA, the
Amendment was approved by the written consent of the holders of record of a
majority of the outstanding shares of the Series 2 Preferred Stock effective
August ___, 1999. The number of votes cast by such voting group was sufficient
for approval of the Amendment by such voting group. No other voting group was
entitled to vote on the Amendment.
The definition in the Designation of "Dividend Payment Date"
is hereby amended to read in full as follows:
"'Dividend Payment Date' shall mean the date on which any cash
dividend is paid on the Common Stock."
[Signature Page Follows]
<PAGE>
IN WITNESS WHEREOF, the undersigned Chief Executive Officer of
the Corporation has executed these Articles of Amendment this _____ day of
______________, 1999.
REGENCY REALTY CORPORATION
By:
Name: Bruce M. Johnson
Title: Executive Vice President and
Managing Director
[SEAL]
AMENDED AND RESTATED BYLAWS
OF
REGENCY REALTY CORPORATION
(a Florida corporation)
(as last amended on September 23, 1998)
<PAGE>
i
TABLE OF CONTENTS
Page
ARTICLE 1
Definitions
SECTION 1.1 DEFINITIONS..............................................1
ARTICLE 2
Offices
SECTION 2.1 PRINCIPAL AND BUSINESS OFFICES...........................1
SECTION 2.2 REGISTERED OFFICE........................................1
ARTICLE 3
Shareholders
SECTION 3.1 ANNUAL MEETING...........................................1
SECTION 3.2 SPECIAL MEETINGS.........................................2
SECTION 3.3 PLACE OF MEETING.........................................2
SECTION 3.4 NOTICE OF MEETING........................................2
SECTION 3.5 WAIVER OF NOTICE.........................................3
SECTION 3.6 FIXING OF RECORD DATE....................................3
SECTION 3.7 SHAREHOLDERS' LIST FOR MEETINGS..........................4
SECTION 3.8 QUORUM...................................................4
SECTION 3.9 VOTING OF SHARES.........................................5
SECTION 3.10 VOTE REQUIRED............................................5
SECTION 3.11 CONDUCT OF MEETING.......................................5
SECTION 3.12 INSPECTORS OF ELECTION...................................5
SECTION 3.13 PROXIES..................................................5
SECTION 3.14 SHAREHOLDER NOMINATIONS AND PROPOSALS....................6
SECTION 3.15 ACTION BY SHAREHOLDERS WITHOUT MEETING...................6
SECTION 3.16 ACCEPTANCE OF INSTRUMENTS SHOWING SHAREHOLDER ACTION.....7
ARTICLE 4
Board of Directors
SECTION 4.1 GENERAL POWERS AND NUMBER................................7
SECTION 4.2 QUALIFICATIONS...........................................8
SECTION 4.3 TERM OF OFFICE...........................................8
SECTION 4.4 REMOVAL..................................................8
SECTION 4.5 RESIGNATION..............................................8
SECTION 4.6 VACANCIES................................................8
SECTION 4.7 COMPENSATION.............................................8
SECTION 4.8 REGULAR MEETINGS.........................................9
SECTION 4.9 SPECIAL MEETINGS.........................................9
SECTION 4.10 NOTICE...................................................9
SECTION 4.11 WAIVER OF NOTICE.........................................9
SECTION 4.12 QUORUM AND VOTING........................................9
SECTION 4.13 CONDUCT OF MEETINGS......................................9
SECTION 4.14 COMMITTEES..............................................10
SECTION 4.15 ACTION WITHOUT MEETING..................................10
<PAGE>
ARTICLE 5
Officers
SECTION 5.1 NUMBER..................................................11
SECTION 5.2 ELECTION AND TERM OF OFFICE.............................11
SECTION 5.3 REMOVAL.................................................11
SECTION 5.4 RESIGNATION.............................................11
SECTION 5.5 VACANCIES...............................................11
SECTION 5.6 CHAIRMAN................................................11
SECTION 5.7 PRESIDENT...............................................12
SECTION 5.8 MANAGING DIRECTORS......................................12
SECTION 5.9 VICE PRESIDENTS.........................................12
SECTION 5.10 SECRETARY...............................................13
SECTION 5.11 TREASURER...............................................13
SECTION 5.12 ASSISTANT SECRETARIES AND ASSISTANT TREASURERS..........13
SECTION 5.13 OTHER ASSISTANTS AND ACTING OFFICERS....................13
SECTION 5.14 SALARIES................................................13
ARTICLE 6
Contracts, Checks and Deposits; Special Corporate Acts
SECTION 6.1 CONTRACTS...............................................14
SECTION 6.2 CHECKS, DRAFTS, ETC.....................................14
SECTION 6.3 DEPOSITS................................................14
SECTION 6.4 VOTING OF SECURITIES OWNED BY CORPORATION...............14
ARTICLE 7
Certificates for Shares; Transfer of Shares
SECTION 7.1 CONSIDERATION FOR SHARES................................14
SECTION 7.2 CERTIFICATES FOR SHARES.................................15
SECTION 7.3 TRANSFER OF SHARES......................................15
SECTION 7.4 RESTRICTIONS ON TRANSFER................................15
SECTION 7.5 LOST, DESTROYED, OR STOLEN CERTIFICATES.................15
SECTION 7.6 STOCK REGULATIONS.......................................16
ARTICLE 8
Seal
SECTION 8.1 SEAL....................................................16
ARTICLE 9
Books and Records
SECTION 9.1 BOOKS AND RECORDS.......................................16
SECTION 9.2 SHAREHOLDERS' INSPECTION RIGHTS.........................16
SECTION 9.3 DISTRIBUTION OF FINANCIAL INFORMATION...................16
SECTION 9.4 OTHER REPORTS...........................................16
ARTICLE 10
Indemnification
SECTION 10.1 PROVISION OF INDEMNIFICATION............................16
ARTICLE 11
Amendments
SECTION 11.1 POWER TO AMEND..........................................17
ARTICLE 1
<PAGE>
-1-
ARTICLE 1
Definitions
Section 1.1 Definitions. The following terms shall have the following
meanings for purposes of these
------------
bylaws:
"Act" means the Florida Business Corporation Act, as it may be amended
from time to time, or any successor legislation thereto.
"Deliver" or "delivery" includes delivery by hand; United States mail;
facsimile, telegraph, teletype or other form of electronic transmission; and
private mail carriers handling nationwide mail services.
"Distribution" means a direct or indirect transfer of money or other
property (except shares in the corporation) or an incurrence of indebtedness by
the corporation to or for the benefit of shareholders in respect of any of the
corporation's shares. A distribution may be in the form of a declaration or
payment of a dividend; a purchase, redemption, or other acquisition of shares; a
distribution of indebtedness; or otherwise.
"Principal office" means the office (within or without the State of
Florida) where the corporation's principal executive offices are located, as
designated in the Articles of Incorporation until an annual report has been
filed with the Florida Department of State, and thereafter as designated in the
annual report.
ARTICLE 2
Offices
Section 2.1 Principal and Business Offices. The corporation may have such
principal and other business offices, either within or without the State of
Florida, as the Board of Directors may designate or as the business of the
corporation may require from time to time.
Section 2.2 Registered Office. The registered office of the corporation required
by the Act to be maintained in the State of Florida may but need not be
identical with the principal office if located in the State of Florida, and the
address of the registered office may be changed from time to time by the Board
of Directors or by the registered agent. The business office of the registered
agent of the corporation shall be identical to such registered office.
ARTICLE 3
Shareholders
Section 3.1 Annual Meeting. The annual meeting of shareholders shall be held
within four months after the close of each fiscal year of the corporation on a
date and at a time and place designated by the Board of Directors, for the
purpose of electing directors and for the transaction of such other business as
may come before the meeting. If the election of directors shall not be held on
the day fixed as herein provided for any annual meeting of shareholders, or at
any adjournment thereof, the Board of Directors shall cause the election to be
held at a special meeting of shareholders as soon thereafter as is practicable.
Section 3.2 Special Meetings.
(a) Call by Directors or President. Special meetings of shareholders,
or any purpose or purposes, may be called by the Board of Directors, the
Chairman of the Board (if any) or the President.
(b) Call by Shareholders. The corporation shall call a special meeting of
shareholders in the event that the holders of at least ten percent of all of the
votes entitled to be cast on any issue proposed to be considered at the proposed
special meeting sign, date, and deliver to the Secretary one or more written
demands for the meeting describing one or more purposes for which it is to be
held. The corporation shall give notice of such a special meeting within sixty
days after the date that the demand is delivered to the corporation.
Section 3.3 Place of Meeting. The Board of Directors may designate any place,
either within or without the State of Florida, as the place of meeting for any
annual or special meeting of shareholders. If no designation is made, the place
of meeting shall be the principal office of the corporation.
Section 3.4 Notice of Meeting.
(a) Content and Delivery. Written notice stating the date, time, and place of
any meeting of shareholders and, in the case of a special meeting, the purpose
or purposes for which the meeting is called, shall be delivered not less than
ten days nor more than sixty days before the date of the meeting by or at the
direction of the President or the Secretary, or the officer or persons duly
calling the meeting, to each shareholder of record entitled to vote at such
meeting and to such other persons as required by the Act. Unless the Act
requires otherwise, notice of an annual meeting need not include a description
of the purpose or purposes for which the meeting is called. If mailed, notice of
a meeting of shareholders shall be deemed to be delivered when deposited in the
United States mail, addressed to the shareholder at his or her address as it
appears on the stock record books of the corporation, with postage thereon
prepaid.
(b) Notice of Adjourned Meetings. If an annual or special meeting of
shareholders is adjourned to a different date, time, or place, the corporation
shall not be required to give notice of the new date, time, or place if the new
date, time, or place is announced at the meeting before adjournment; provided,
however, that if a new record date for an adjourned meeting is or must be fixed,
the corporation shall give notice of the adjourned meeting to persons who are
shareholders as of the new record date who are entitled to notice of the
meeting.
(c) No Notice Under Certain Circumstances. Notwithstanding the other provisions
of this Section, no notice of a meeting of shareholders need be given to a
shareholder if: (1) an annual report and proxy statement for two consecutive
annual meetings of shareholders, or (2) all, and at least two, checks in payment
of dividends or interest on securities during a twelve-month period have been
sent by first-class, United States mail, addressed to the shareholder at his or
her address as it appears on the share transfer books of the corporation, and
returned undeliverable. The obligation of the corporation to give notice of a
shareholders' meeting to any such shareholder shall be reinstated once the
corporation has received a new address for such shareholder for entry on its
share transfer books.
Section 3.5
<PAGE>
Waiver of Notice.
(a) Written Waiver. A shareholder may waive any notice required by the Act or
these bylaws before or after the date and time stated for the meeting in the
notice. The waiver shall be in writing and signed by the shareholder entitled to
the notice, and be delivered to the corporation for inclusion in the minutes or
filing with the corporate records. Neither the business to be transacted at nor
the purpose of any regular or special meeting of shareholders need be specified
in any written waiver of notice.
(b) Waiver by Attendance. A shareholder's attendance at a meeting, in person or
by proxy, waives objection to all of the following: (1) lack of notice or
defective notice of the meeting, unless the shareholder at the beginning of the
meeting objects to holding the meeting or transacting business at the meeting;
and (2) consideration of a particular matter at the meeting that is not within
the purpose or purposes described in the meeting notice, unless the shareholder
objects to considering the matter when it is presented.
Section 3.6 Fixing of Record Date.
(a) General. The Board of Directors may fix in advance a date as the record date
for the purpose of determining shareholders entitled to notice of a
shareholders' meeting, entitled to vote, or take any other action. In no event
may a record date fixed by the Board of Directors be a date preceding the date
upon which the resolution fixing the record date is adopted or a date more than
seventy days before the date of meeting or action requiring a determination of
shareholders.
(b) Special Meeting. The record date for determining shareholders entitled
to demand a special meeting shall be the close of business on the date the first
shareholder delivers his or her demand to the corporation.
(c) Shareholder Action by Written Consent. If no prior action is required by the
Board of Directors pursuant to the Act, the record date for determining
shareholders entitled to take action without a meeting shall be the close of
business on the date the first signed written consent with respect to the action
in question is delivered to the corporation, but if prior action is required by
the Board of Directors pursuant to the Act, such record date shall be the close
of business on the date on which the Board of Directors adopts the resolution
taking such prior action unless the Board of Directors otherwise fixes a record
date.
(d) Absence of Board Determination for Shareholders' Meeting. If the Board of
Directors does not determine the record date for determining shareholders
entitled to notice of and to vote at an annual or special shareholders' meeting,
such record date shall be the close of business on the day before the first
notice with respect thereto is delivered to shareholders.
(e) Adjourned Meeting. A record date for determining shareholders entitled to
notice of or to vote at a shareholders' meeting is effective for any adjournment
of the meeting unless the Board of Directors fixes a new record date, which it
must do if the meeting is adjourned to a date more than 120 days after the date
fixed for the original meeting.
(f) Certain Distributions. If the Board of Directors does not determine the
record date for determining shareholders entitled to a distribution (other than
one involving a purchase, redemption, or other acquisition of the corporation's
shares or a share dividend), such record date shall be the close of business on
the date on which the Board of Directors authorizes the distribution.
Section 3.7 Shareholders' List for Meetings.
(a) Preparation and Availability. After a record date for a meeting of
shareholders has been fixed, the corporation shall prepare an alphabetical list
of the names of all of the shareholders entitled to notice of the meeting. The
list shall be arranged by class or series of shares, if any, and show the
address of and number of shares held by each shareholder. Such list shall be
available for inspection by any shareholder for a period of ten days prior to
the meeting or such shorter time as exists between the record date and the
meeting date, and continuing through the meeting, at the corporation's principal
office, at a place identified in the meeting notice in the city where the
meeting will be held, or at the office of the corporation's transfer agent or
registrar, if any. A shareholder or his or her agent may, on written demand,
inspect the list, subject to the requirements of the Act, during regular
business hours and at his or her expense, during the period that it is available
for inspection pursuant to this Section. The corporation shall make the
shareholders' list available at the meeting and any shareholder or his or her
agent or attorney may inspect the list at any time during the meeting or any
adjournment thereof.
(b) Prima Facie Evidence. The shareholders' list is prima facie evidence of
the identity of shareholders entitled to examine the shareholders' list or to
vote at a meeting of shareholders.
(c) Failure to Comply. If the requirements of this Section have not been
substantially complied with, or if the corporation refuses to allow a
shareholder or his or her agent or attorney to inspect the shareholders' list
before or at the meeting, on the demand of any shareholder, in person or by
proxy, who failed to get such access, the meeting shall be adjourned until such
requirements are complied with.
(d) Validity of Action Not Affected. Refusal or failure to prepare or make
available the shareholders' list shall not affect the validity of any action
taken at a meeting of shareholders.
Section 3.8 Quorum.
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(a) What Constitutes a Quorum. Shares entitled to vote as a separate voting
group may take action on a matter at a meeting only if a quorum of those shares
exists with respect to that matter. If the corporation has only one class of
stock outstanding, such class shall constitute a separate voting group for
purposes of this Section. Except as otherwise provided in the Act, a majority of
the votes entitled to be cast on the matter shall constitute a quorum of the
voting group for action on that matter.
(b) Presence of Shares. Once a share is represented for any purpose at a
meeting, other than for the purpose of objecting to holding the meeting or
transacting business at the meeting, it is considered present for purposes of
determining whether a quorum exists for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for the
adjourned meeting.
(c) Adjournment in Absence of Quorum. Where a quorum is not present, the holders
of a majority of the shares represented and who would be entitled to vote at the
meeting if a quorum were present may adjourn such meeting from time to time.
Section 3.9 Voting of Shares. Except as provided in the Articles of
Incorporation or the Act, each outstanding share, regardless of class, is
entitled to one vote on each matter voted on at a meeting of shareholders.
Section 3.10 Vote Required.
(a) Matters Other Than Election of Directors. If a quorum exists, except in the
case of the election of directors, action on a matter shall be approved by a
majority of the votes cast at such meeting, unless the Act or the Articles of
Incorporation require a greater number of affirmative votes.
(b) Election of Directors. Each director shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election of directors at a
meeting at which a quorum is present. Each shareholder who is entitled to vote
at an election of directors has the right to vote the number of shares owned by
him or her for as many persons as there are directors to be elected.
Shareholders do not have a right to cumulate their votes for directors.
Section 3.11 Conduct of Meeting. The Chairman of the Board of Directors, and if
there be none, or in his or her absence, the President, and in his or her
absence, a Vice President in the order provided under the Section of these
bylaws titled "Vice Presidents," and in their absence, any person chosen by the
shareholders present shall call a shareholders' meeting to order and shall act
as presiding officer of the meeting, and the Secretary of the corporation shall
act as secretary of all meetings of the shareholders, but, in the absence of the
Secretary, the presiding officer may appoint any other person to act as
secretary of the meeting. The presiding officer of the meeting shall have broad
discretion in determining the order of business at a shareholders' meeting. The
presiding officer's authority to conduct the meeting shall include, but in no
way be limited to, recognizing shareholders entitled to speak, calling for the
necessary reports, stating questions and putting them to a vote, calling for
nominations, and announcing the results of voting. The presiding officer also
shall take such actions as are necessary and appropriate to preserve order at
the meeting. The rules of parliamentary procedure need not be observed in the
conduct of shareholders' meetings; however, meetings shall be conducted in
accordance with accepted usage and common practice with fair treatment to all
who are entitled to take part.
Section 3.12 Inspectors of Election. Inspectors of election may be appointed by
the Board of Directors to act at any meeting of shareholders at which any vote
is taken. If inspectors of election are not so appointed, the presiding officer
of the meeting may, and on the request of any shareholder shall, make such
appointment. The inspectors of election shall determine the number of shares
outstanding, the voting rights with respect to each, the shares represented at
the meeting, the existence of a quorum, and the authenticity, validity, and
effect of proxies; receive votes, ballots, consents, and waivers; hear and
determine all challenges and questions arising in connection with the vote;
count and tabulate all votes, consents, and waivers; determine and announce the
result; and do such acts as are proper to conduct the election or vote with
fairness to all shareholders. No inspector, whether appointed by the Board of
Directors or by the person acting as presiding officer of the meeting, need be a
shareholder.
Section 3.13 Proxies.
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(a) Appointment. At all meetings of shareholders, a shareholder may vote his or
her shares in person or by proxy. A shareholder may appoint a proxy to vote or
otherwise act for the shareholder by signing an appointment form, either
personally or by his or her attorney-in-fact. If an appointment form expressly
provides, any proxy holder may appoint, in writing, a substitute to act in his
or her place. A telegraph, telex, or a cablegram, a facsimile transmission of a
signed appointment form, or a photographic, photostatic, or equivalent
reproduction of a signed appointment form is a sufficient appointment form.
(b) When Effective. An appointment of a proxy is effective when received by the
Secretary or other officer or agent of the corporation authorized to tabulate
votes. An appointment is valid for up to eleven months unless a longer period is
expressly provided in the appointment form. An appointment of a proxy is
revocable by the shareholder unless the appointment form conspicuously states
that it is irrevocable and the appointment is coupled with an interest.
Section 3.14 Shareholder Nominations and Proposals. Any shareholder nomination
or proposal for action at a forthcoming shareholder meeting must be delivered to
the corporation no later than the deadline for submitting shareholder proposals
pursuant to Securities Exchange Commission Regulations Section 240.14a-8. The
presiding officer at any shareholder meeting shall not be required to recognize
any proposal or nomination which did not comply with such deadline.
Section 3.15 Action by Shareholders Without Meeting.
(a) Requirements for Written Consents. Any action required or permitted by the
Act to be taken at any annual or special meeting of shareholders may be taken
without a meeting, without prior notice, and without a vote if one or more
written consents describing the action taken shall be signed and dated by the
holders of outstanding stock entitled to vote thereon having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and
voted. Such consents must be delivered to the principal office of the
corporation in Florida, the corporation's principal place of business, the
Secretary, or another officer or agent of the corporation having custody of the
books in which proceedings of meetings of shareholders are recorded. No written
consent shall be effective to take the corporate action referred to therein
unless, within sixty days of the date of the earliest dated consent delivered in
the manner required herein, written consents signed by the number of holders
required to take action are delivered to the corporation by delivery as set
forth in this Section.
(b) Revocation of Written Consents. Any written consent may be revoked prior to
the date that the corporation receives the required number of consents to
authorize the proposed action. No revocation is effective unless in writing and
until received by the corporation at its principal office in Florida or its
principal place of business, or received by the Secretary or other officer or
agent having custody of the books in which proceedings of meetings of
shareholders are recorded.
(c) Notice to Nonconsenting Shareholders. Within ten days after obtaining such
authorization by written consent, notice must be given in writing to those
shareholders who have not consented in writing or who are not entitled to vote
on the action. The notice shall fairly summarize the material features of the
authorized action and, if the action be such for which dissenters' rights are
provided under the Act, the notice shall contain a clear statement of the right
of shareholders dissenting therefrom to be paid the fair value of their shares
upon compliance with the provisions of the Act regarding the rights of
dissenting shareholders.
(d) Same Effect as Vote at Meeting. A consent signed under this Section has the
effect of a meeting vote and may be described as such in any document. Whenever
action is taken by written consent pursuant to this Section, the written consent
of the shareholders consenting thereto or the written reports of inspectors
appointed to tabulate such consents shall be filed with the minutes of
proceedings of shareholders.
Section 3.16 Acceptance of Instruments Showing Shareholder Action. If the name
signed on a vote, consent, waiver, or proxy appointment corresponds to the name
of a shareholder, the corporation, if acting in good faith, may accept the vote,
consent, waiver, or proxy appointment and give it effect as the act of a
shareholder. If the name signed on a vote, consent, waiver, or proxy appointment
does not correspond to the name of a shareholder, the corporation, if acting in
good faith, may accept the vote, consent, waiver, or proxy appointment and give
it effect as the act of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed purports to be
that of an officer or agent of the entity;
(b) The name signed purports to be that of a administrator, executor,
guardian, personal representative, or conservator representing the
shareholder and, if the corporation requests, evidence of fiduciary
status acceptable to the corporation is presented with respect to the
vote, consent, waiver, or proxy appointment;
(c) The name signed purports to be that of a receiver or trustee in
bankruptcy, or assignee for the benefit of creditors of the shareholder
and, if the corporation requests, evidence of this status acceptable to
the corporation is presented with respect to the vote, consent, waiver,
or proxy appointment;
(d) The name signed purports to be that of a pledgee, beneficial owner, or
attorney-in-fact of the shareholder and, if the corporation requests,
evidence acceptable to the corporation of the signatory's authority to
sign for the shareholder is presented with respect to the vote,
consent, waiver, or proxy appointment; or
(e) Two or more persons are the shareholder as cotenants or fiduciaries and
the name signed purports to be the name of at least one of the
co-owners and the person signing appears to be acting on behalf of all
co-owners.
The corporation may reject a vote, consent, waiver, or proxy appointment if the
Secretary or other officer or agent of the corporation who is authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
ARTICLE 4
Board of Directors
Section 4.1 General Powers and Number. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the corporation
managed under the direction of, the Board of Directors, a majority of whom shall
be Independent Directors. The number of directors shall be established from time
to time by resolution of the Board of Directors. For purposes of this section,
"Independent Director" shall mean a person other than an officer or employee of
the corporation or its subsidiaries or any other individual having a
relationship which, in the opinion of the board of directors, would interfere
with the exercise of independent judgment in carrying out the responsibilities
of a director.
Section 4.2 Qualifications. Directors must be natural persons who are
eighteen years of age or older but need not be residents of this state or
shareholders of the corporation.
Section 4.3 Term of Office. The directors shall be classified, with respect to
the time for which they severally hold office, into three classes, as nearly
equal in number as possible. The first class shall be established for a term
expiring at the annual meeting of shareholders to be held in 1994 and shall
consist initially of one director. The second class shall be established for a
term expiring at the annual meeting of shareholders to be held in 1995 and shall
consist initially of one director. The third and final class shall be
established for a term expiring at the annual meeting of shareholders to be held
in 1996 and shall consist initially of two directors. Each class shall hold
office until its successors are elected and qualified. At each annual meeting of
the shareholders of the corporation, the successors of the class of directors
whose terms expire at that meeting shall be elected to hold office for a term
expiring at the annual meeting of shareholders held in the third year following
the year of their election.
Section 4.4 Removal. The shareholders may remove one or more directors with or
without cause. A director may be removed by the shareholders at a meeting of
shareholders, provided that the notice of the meeting states that the purpose,
or one of the purposes, of the meeting is such removal.
Section 4.5 Resignation. A director may resign at any time by delivering written
notice to the Board of Directors or its Chairman (if any) or to the corporation.
A director's resignation is effective when the notice is delivered unless the
notice specifies a later effective date.
Section 4.6 Vacancies.
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(a) Who May Fill Vacancies. Except as provided below, whenever any vacancy
occurs on the Board of Directors, including a vacancy resulting from an increase
in the number of directors, it may be filled by the affirmative vote of a
majority of the remaining directors though less than a quorum of the Board of
Directors, or by the shareholders. Any director elected in accordance with the
preceding sentence shall hold office until the next annual meeting of the
corporation, at which time a successor shall be elected to finish the remaining
term of such director's position. If the directors first fill a vacancy, the
shareholders shall have no further right with respect to that vacancy, and if
the shareholders first fill the vacancy, the directors shall have no further
rights with respect to that vacancy.
(b) Directors Elected by Voting Groups. Whenever the holders of shares of any
voting group are entitled to elect a class of one or more directors by the
provisions of the Articles of Incorporation, vacancies in such class may be
filled by holders of shares of that voting group or by a majority of the
directors then in office elected by such voting group or by a sole remaining
director so elected. If no director elected by such voting group remains in
office, unless the Articles of Incorporation provide otherwise, directors not
elected by such voting group may fill vacancies.
(c) Prospective Vacancies. A vacancy that will occur at a specific later date,
because of a resignation effective at a later date or otherwise, may be filled
before the vacancy occurs, but the new director may not take office until the
vacancy occurs.
Section 4.7 Compensation. The Board of Directors, irrespective of any personal
interest of any of its members, may establish reasonable compensation of all
directors for services to the corporation as directors, officers, or otherwise,
or may delegate such authority to an appropriate committee. The Board of
Directors also shall have authority to provide for or delegate authority to an
appropriate committee to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers, and employees
and to their families, dependents, estates, or beneficiaries on account of prior
services rendered to the corporation by such directors, officers, and employees.
Section 4.8 Regular Meetings. A regular meeting of the Board of Directors shall
be held without other notice than this bylaw immediately after the annual
meeting of shareholders and each adjourned session thereof. The place of such
regular meeting shall be the same as the place of the meeting of shareholders
which precedes it, or such other suitable place as may be announced at such
meeting of shareholders. The Board of Directors may provide, by resolution, the
date, time, and place, either within or without the State of Florida, for the
holding of additional regular meetings of the Board of Directors without notice
other than such resolution.
Section 4.9 Special Meetings. Special meetings of the Board of Directors may be
called by the Chairman of the Board (if any), the President or one-third of the
members of the Board of Directors. The person or persons calling the meeting may
fix any place, either within or without the State of Florida, as the place for
holding any special meeting of the Board of Directors, and if no other place is
fixed, the place of the meeting shall be the principal office of the corporation
in the State of Florida.
Section 4.10 Notice. Special meetings of the Board of Directors must be preceded
by at least two days' notice of the date, time, and place of the meeting. The
notice need not describe the purpose of the special meeting.
Section 4.11 Waiver of Notice. Notice of a meeting of the Board of Directors
need not be given to any director who signs a waiver of notice either before or
after the meeting. Attendance of a director at a meeting shall constitute a
waiver of notice of such meeting and waiver of any and all objections to the
place of the meeting, the time of the meeting, or the manner in which it has
been called or convened, except when a director states, at the beginning of the
meeting or promptly upon arrival at the meeting, any objection to the
transaction of business because the meeting is not lawfully called or convened.
Section 4.12 Quorum and Voting. A quorum of the Board of Directors consists of a
majority of the number of directors prescribed by these bylaws. If a quorum is
present when a vote is taken, the affirmative vote of a majority of directors
present is the act of the Board of Directors. A director who is present at a
meeting of the Board of Directors or a committee of the Board of Directors when
corporate action is taken is deemed to have assented to the action taken unless:
(a) he or she objects at the beginning of the meeting (or promptly upon his or
her arrival) to holding it or transacting specified business at the meeting; or
(b) he or she votes against or abstains from the action taken.
Section 4.13 Conduct of Meetings.
(a) Presiding Officer. The Board of Directors may elect from among its members a
Chairman of the Board of Directors, who shall preside at meetings of the Board
of Directors. The Chairman, and if there be none, or in his or her absence, the
President, and in his or her absence, a Vice President in the order provided
under the Section of these bylaws titled "Vice Presidents," and in their
absence, any director chosen by the directors present, shall call meetings of
the Board of Directors to order and shall act as presiding officer of the
meeting.
(b) Minutes. The Secretary of the corporation shall act as secretary of all
meetings of the Board of Directors but in the absence of the Secretary, the
presiding officer may appoint any other person present to act as secretary of
the meeting. Minutes of any regular or special meeting of the Board of Directors
shall be prepared and distributed to each director.
(c) Adjournments. A majority of the directors present, whether or not a quorum
exists, may adjourn any meeting of the Board of Directors to another time and
place. Notice of any such adjourned meeting shall be given to the directors who
are not present at the time of the adjournment and, unless the time and place of
the adjourned meeting are announced at the time of the adjournment, to the other
directors.
(d) Participation by Conference Call or Similar Means. The Board of Directors
may permit any or all directors to participate in a regular or a special meeting
by, or conduct the meeting through the use of, any means of communication by
which all directors participating may simultaneously hear each other during the
meeting. A director participating in a meeting by this means is deemed to be
present in person at the meeting.
Section 4.14 Committees. The Board of Directors, by resolution adopted by a
majority of the full Board of Directors, may designate from among its members an
Executive Committee and one or more other committees (which may include, by way
of example and not as a limitation, a Compensation Committee and an Audit
Committee) each of which, to the extent provided in such resolution, shall have
and may exercise all the authority of the Board of Directors, except that no
such committee shall have the authority to:
(a) approve or recommend to shareholders actions or proposals
required by the Act to be approved by shareholders;
(b) fill vacancies on the Board of Directors or any committee thereof;
(c) adopt, amend, or repeal these bylaws;
(d) authorize or approve the reacquisition of shares unless
pursuant to a general formula or method specified by the Board of
Directors; or
(e) authorize or approve the issuance or sale or contract for the sale of
shares, or determine the designation and relative rights, preferences,
and limitations of a voting group except that the Board of Directors
may authorize a committee (or a senior executive officer of the
corporation) to do so within limits specifically prescribed by the
Board of Directors.
Each committee must have two or more members, who shall serve at the pleasure of
the Board of Directors. The Board of Directors, by resolution adopted in
accordance with this Section, may designate one or more directors as alternate
members of any such committee, who may act in the place and stead of any absent
member or members at any meeting of such committee. The provisions of these
bylaws which govern meetings, notice and waiver of notice, and quorum and voting
requirements of the Board of Directors apply to committees and their members as
well.
Section 4.15 Action Without Meeting. Any action required or permitted by the Act
to be taken at a meeting of the Board of Directors or a committee thereof may be
taken without a meeting if the action is taken by all members of the Board or of
the committee. The action shall be evidenced by one or more written consents
describing the action taken, signed by each director or committee member and
retained by the corporation. Such action shall be effective when the last
director or committee member signs the consent, unless the consent specifies a
different effective date. A consent signed under this Section has the effect of
a vote at a meeting and may be described as such in any document.
ARTICLE 5
Officers
Section 5.1 Number. The principal officers of the corporation shall be a
President, the number of Managing Directors and Vice Presidents as authorized
from time to time by the Board of Directors, a Secretary, and a Treasurer, each
of whom shall be elected by the Board of Directors. The President and the
Managing Directors shall be the executive officers of the corporation
responsible for all policy making functions, under the direction of the Board of
Directors. Such other officers and assistant officers as may be deemed necessary
may be elected or appointed by the Board of Directors. The Board of Directors
may also authorize any duly appointed officer to appoint one or more officers or
assistant officers. The same individual may simultaneously hold more than one
office.
Section 5.2 Election and Term of Office. The officers of the corporation to be
elected by the Board of Directors shall be elected annually by the Board of
Directors at the first meeting of the Board of Directors held after each annual
meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as is practicable.
Each officer shall hold office until his or her successor shall have been duly
elected or until his or her prior death, resignation, or removal.
Section 5.3 Removal. The Board of Directors may remove any officer and, unless
restricted by the Board of Directors, an officer may remove any officer or
assistant officer appointed by that officer, at any time, with or without cause
and notwithstanding the contract rights, if any, of the officer removed. The
appointment of an officer does not of itself create contract rights.
Section 5.4 Resignation. An officer may resign at any time by delivering notice
to the corporation. The resignation shall be effective when the notice is
delivered, unless the notice specifies a later effective date and the
corporation accepts the later effective date. If a resignation is made effective
at a later date and the corporation accepts the future effective date, the
pending vacancy may be filled before the effective date but the successor may
not take office until the effective date.
Section 5.5 Vacancies. A vacancy in any principal office because of death,
resignation, removal, disqualification, or otherwise, shall be filled as soon
thereafter as practicable by the Board of Directors for the unexpired portion of
the term.
Section 5.6 Chairman. The Chairman of the Board of Directors shall be the
principal executive officer of the corporation and, subject to the direction of
the Board of Directors, shall in general supervise all of the business
operations and affairs of the corporation, the daily operations of which shall
be under the control of the President. The Chairman shall, when present, preside
over all meetings of the Board of Directors and shareholders of the corporation.
The Chairman shall have authority, subject to such rules as may be prescribed by
the Board of Directors, to direct the President in the performance of the
President's duties. The Chairman shall have authority, subject to such rules as
may be prescribed by the Board of Directors, to appoint such agents and
employees of the corporation as he shall deem necessary, to prescribe their
powers, duties and compensation, and to delegate authority to them. Such agents
and employees shall hold office at the discretion of the Chairman. The Chairman
shall have authority to sign certificates for shares of the corporation the
issuance of which shall have been authorized by resolution of the Board of
Directors, and to execute and acknowledge, on behalf of the corporation, all
deeds, mortgages, bonds, contracts, leases, reports, and all other documents or
instruments necessary or proper to be executed in the course of the
corporation's regular business, or which shall be authorized by resolution of
the Board of Directors; and except as otherwise provided by law or the Board of
Directors, the Chairman may authorize the President, any Managing Director, Vice
President or other officer or agent of the corporation to execute and
acknowledge such documents or instruments in his place and stead. In general, he
or she shall perform all duties as may be prescribed by the Board of Directors
from time to time.
Section 5.7 President. The President shall be the principal operating officer of
the corporation and, subject to the direction of the Board of Directors and the
Chairman, shall in general supervise and control all of the business and affairs
of the corporation. If the Chairman of the Board is not present, the President
shall preside at all meetings of the Board of Directors and shareholders. The
President shall have authority, subject to such rules as may be prescribed by
the Board of Directors, to appoint such agents and employees of the corporation
as he or she shall deem necessary, to prescribe their powers, duties and
compensation, and to delegate authority to them. Such agents and employees shall
hold office at the discretion of the President. The President shall have
authority, subject to such rules as may be prescribed by the Board of Directors
and/or the Chairman, to sign certificates for shares of the corporation the
issuance of which shall have been authorized by resolution of the Board of
Directors, and to execute and acknowledge, on behalf of the corporation, all
deeds, mortgages, bonds, contracts, leases, reports, and all other documents or
instruments necessary or proper to be executed in the course of the
corporation's regular business, or which shall be authorized by resolution of
the Board of Directors; and, except as otherwise provided by law or the Board of
Directors or the Chairman, the President may authorize any Managing Director,
Vice President or other officer or agent of the corporation to execute and
acknowledge such documents or instruments in his or her place and stead. In
general he or she shall perform all duties incident to the office of President
and such other duties as may be prescribed by the Board of Directors from time
to time.
Section 5.8 Managing Directors. In the absence of the President or in the event
of the President's death, inability or refusal to act, or in the event for any
reason it shall be impracticable for the President to act personally, the
Managing Director (or in the event there be more than one Managing Director, the
Managing Directors in the order designated by the Board of Directors, or in the
absence of any designation, then in the order of their seniority with the
corporation), shall perform the duties of the President, and when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President. Any Managing Director may sign certificates for shares of the
corporation the issuance of which shall have been authorized by resolution of
the Board of Directors; and shall perform such other duties and have such
authority as from time to time may be delegated or assigned to him or her by the
President or by the Board of Directors. The execution of any instrument of the
corporation by any Managing Director shall be conclusive evidence, as to third
parties, of his or her authority to act in the stead of the President.
Section 5.9 Vice Presidents. The Board of Directors may appoint one or more
Executive Vice Presidents, Senior Vice Presidents and other Vice Presidents,
prescribe their powers and duties, including performing the duties of a Managing
Director in such officer's absence, and specify to which Managing Director or
other officer a Vice President should report. The Board of Directors may
authorize the President to appoint one or more Vice Presidents, to prescribe
their powers, duties and compensation, and to delegate authority to them.
Section 5.10 Secretary. The Secretary shall: (a) keep, or cause to be kept,
minutes of the meetings of the shareholders and of the Board of Directors (and
of committees thereof) in one or more books provided for that purpose (including
records of actions taken by the shareholders or the Board of Directors (or
committees thereof) without a meeting); (b) be custodian of the corporate
records and of the seal of the corporation, if any, and if the corporation has a
seal, see that it is affixed to all documents the execution of which on behalf
of the corporation under its seal is duly authorized; (c) authenticate the
records of the corporation; (d) maintain a record of the shareholders of the
corporation, in a form that permits preparation of a list of the names and
addresses of all shareholders, by class or series of shares and showing the
number and class or series of shares held by each shareholder; (e) have general
charge of the stock transfer books of the corporation; and (f) in general
perform all duties incident to the office of Secretary and have such other
duties and exercise such authority as from time to time may be delegated or
assigned by the President or by the Board of Directors.
Section 5.11 Treasurer. The Treasurer shall: (a) have charge and custody of and
be responsible for all funds and securities of the corporation; (b) maintain
appropriate accounting records; (c) receive and give receipts for moneys due and
payable to the corporation from any source whatsoever, and deposit all such
moneys in the name of the corporation in such banks, trust companies, or other
depositaries as shall be selected in accordance with the provisions of these
bylaws; and (d) in general perform all of the duties incident to the office of
Treasurer and have such other duties and exercise such other authority as from
time to time may be delegated or assigned by the President or by the Board of
Directors. If required by the Board of Directors, the Treasurer shall give a
bond for the faithful discharge of his or her duties in such sum and with such
surety or sureties as the Board of Directors shall determine.
Section 5.12 Assistant Secretaries and Assistant Treasurers. There shall be such
number of Assistant Secretaries and Assistant Treasurers as the Board of
Directors may from time to time authorize. The Assistant Treasurers shall
respectively, if required by the Board of Directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as the Board of
Directors shall determine. The Assistant Secretaries and Assistant Treasurers,
in general, shall perform such duties and have such authority as shall from time
to time be delegated or assigned to them by the Secretary or the Treasurer,
respectively, or by the President or the Board of Directors.
Section 5.13 Other Assistants and Acting Officers. The Board of Directors shall
have the power to appoint, or to authorize any duly appointed officer of the
corporation to appoint, any person to act as assistant to any officer, or as
agent for the corporation in his or her stead, or to perform the duties of such
officer whenever for any reason it is impracticable for such officer to act
personally, and such assistant or acting officer or other agent so appointed by
the Board of Directors or an authorized officer shall have the power to perform
all the duties of the office to which he or she is so appointed to be an
assistant, or as to which he or she is so appointed to act, except as such power
may be otherwise defined or restricted by the Board of Directors or the
appointing officer.
Section 5.14 Salaries. The salaries of the principal officers shall be fixed
from time to time by the Board of Directors or by a duly authorized committee
thereof, and no officer shall be prevented from receiving such salary by reason
of the fact that he or she is also a director of the corporation.
ARTICLE 6
<PAGE>
Contracts, Checks and Deposits; Special Corporate Acts
Section 6.1 Contracts. The Board of Directors may authorize any officer or
officers, or any agent or agents to enter into any contract or execute or
deliver any instrument in the name of and on behalf of the corporation, and such
authorization may be general or confined to specific instances. In the absence
of other designation, all deeds, mortgages, and instruments of assignment or
pledge made by the corporation shall be executed in the name of the corporation
by the President or one of the Vice Presidents; the Secretary or an Assistant
Secretary, when necessary or required, shall attest and affix the corporate
seal, if any, thereto; and when so executed no other party to such instrument or
any third party shall be required to make any inquiry into the authority of the
signing officer or officers.
Section 6.2 Checks, Drafts, etc. All checks, drafts or other orders for the
payment of money, notes, or other evidences of indebtedness issued in the name
of the corporation, shall be signed by such officer or officers, agent or agents
of the corporation and in such manner as shall from time to time be determined
by or under the authority of a resolution of the Board of Directors.
Section 6.3 Deposits. All funds of the corporation not otherwise employed shall
be deposited from time to time to the credit of the corporation in such banks,
trust companies, or other depositaries as may be selected by or under the
authority of a resolution of the Board of Directors.
Section 6.4 Voting of Securities Owned by Corporation. Subject always to the
specific directions of the Board of Directors, (a) any shares or other
securities issued by any other corporation and owned or controlled by this
corporation may be voted at any meeting of security holders of such other
corporation by the President of this corporation if he or she be present, or in
his or her absence by any Vice President of this corporation who may be present,
and (b) whenever, in the judgment of the President, or in his or her absence, of
any Vice President, it is desirable for this corporation to execute a proxy or
written consent in respect of any such shares or other securities, such proxy or
consent shall be executed in the name of this corporation by the President or
one of the Vice Presidents of this corporation, without necessity of any
authorization by the Board of Directors, affixation of corporate seal, if any,
or countersignature or attestation by another officer. Any person or persons
designated in the manner above stated as the proxy or proxies of this
corporation shall have full right, power, and authority to vote the shares or
other securities issued by such other corporation and owned or controlled by
this corporation the same as such shares or other securities might be voted by
this corporation.
ARTICLE 7
Certificates for Shares; Transfer of Shares
Section 7.1 Consideration for Shares. The Board of Directors may authorize
shares to be issued for consideration consisting of any tangible or intangible
property or benefit to the corporation, including cash, promissory notes,
services performed, promises to perform services evidenced by a written
contract, or other securities of the corporation. Before the corporation issues
shares, the Board of Directors shall determine that the consideration received
or to be received for the shares to be issued is adequate. The determination of
the Board of Directors is conclusive insofar as the adequacy of consideration
for the issuance of shares relates to whether the shares are validly issued,
fully paid, and nonassessable. The corporation may place in escrow shares issued
for future services or benefits or a promissory note, or make other arrangements
to restrict the transfer of the shares, and may credit distributions in respect
of the shares against their purchase price, until the services are performed,
the note is paid, or the benefits are received. If the services are not
performed, the note is not paid, or the benefits are not received, the
corporation may cancel, in whole or in part, the shares escrowed or restricted
and the distributions credited.
Section 7.2 Certificates for Shares. Every holder of shares in the corporation
shall be entitled to have a certificate representing all shares to which he or
she is entitled unless the Board of Directors authorizes the issuance of some or
all shares without certificates. Any such authorization shall not affect shares
already represented by certificates until the certificates are surrendered to
the corporation. If the Board of Directors authorizes the issuance of any shares
without certificates, within a reasonable time after the issue or transfer of
any such shares, the corporation shall send the shareholder a written statement
of the information required by the Act or the Articles of Incorporation to be
set forth on certificates, including any restrictions on transfer. Certificates
representing shares of the corporation shall be in such form, consistent with
the Act, as shall be determined by the Board of Directors. Such certificates
shall be signed (either manually or in facsimile) by the President or any Vice
President or any other persons designated by the Board of Directors and may be
sealed with the seal of the corporation or a facsimile thereof. All certificates
for shares shall be consecutively numbered or otherwise identified. The name and
address of the person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the stock transfer
books of the corporation. Unless the Board of Directors authorizes shares
without certificates, all certificates surrendered to the corporation for
transfer shall be canceled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
canceled, except as provided in these bylaws with respect to lost, destroyed, or
stolen certificates. The validity of a share certificate is not affected if a
person who signed the certificate (either manually or in facsimile) no longer
holds office when the certificate is issued.
Section 7.3 Transfer of Shares. Prior to due presentment of a certificate for
shares for registration of transfer, the corporation may treat the registered
owner of such shares as the person exclusively entitled to vote, to receive
notifications, and otherwise to have and exercise all the rights and power of an
owner. Where a certificate for shares is presented to the corporation with a
request to register a transfer, the corporation shall not be liable to the owner
or any other person suffering loss as a result of such registration of transfer
if (a) there were on or with the certificate the necessary endorsements, and (b)
the corporation had no duty to inquire into adverse claims or has discharged any
such duty. The corporation may require reasonable assurance that such
endorsements are genuine and effective and compliance with such other
regulations as may be prescribed by or under the authority of the Board of
Directors.
Section 7.4 Restrictions on Transfer. The face or reverse side of each
certificate representing shares shall bear a conspicuous notation as required by
the Act or the Articles of Incorporation of the restrictions imposed by the
corporation upon the transfer of such shares.
Section 7.5 Lost, Destroyed, or Stolen Certificates. Unless the Board of
Directors authorizes shares without certificates, where the owner claims that
certificates for shares have been lost, destroyed, or wrongfully taken, a new
certificate shall be issued in place thereof if the owner (a) so requests before
the corporation has notice that such shares have been acquired by a bona fide
purchaser, (b) files with the corporation a sufficient indemnity bond if
required by the Board of Directors or any principal officer, and (c) satisfies
such other reasonable requirements as may be prescribed by or under the
authority of the Board of Directors.
Section 7.6 Stock Regulations. The Board of Directors shall have the power and
authority to make all such further rules and regulations not inconsistent with
law as they may deem expedient concerning the issue, transfer, and registration
of shares of the corporation.
ARTICLE 8
Seal
Section 8.1 Seal. The Board of Directors may provide for a corporate seal
for the corporation.
ARTICLE 9
Books and Records
Section 9.1 Books and Records.
(a) The corporation shall keep as permanent records minutes of all meetings
of the shareholders and Board of Directors, a record of all actions
taken by the shareholders or Board of Directors without a meeting, and
a record of all actions taken by a committee of the Board of Directors
in place of the Board of Directors on behalf of the corporation.
(b) The corporation shall maintain accurate accounting records.
(c) The corporation or its agent shall maintain a record of the
shareholders in a form that permits preparation of a list of the names
and addresses of all shareholders in alphabetical order by class of
shares showing the number and series of shares held by each.
(d) The corporation shall keep a copy of all written communications within
the preceding three years to all shareholders generally or to all
shareholders of a class or series, including the financial statements
required to be furnished by the Act, and a copy of its most recent
annual report delivered to the Department of State.
Section 9.2 Shareholders' Inspection Rights. Shareholders are entitled to
inspect and copy records of the corporation as permitted by the Act.
Section 9.3 Distribution of Financial Information. The corporation shall
prepare and disseminate financial statements to shareholders as required by the
Act.
Section 9.4 Other Reports. The corporation shall disseminate such other reports
to shareholders as are required by the Act, including reports regarding
indemnification in certain circumstances and reports regarding the issuance or
authorization for issuance of shares in exchange for promises to render services
in the future.
ARTICLE 10
Indemnification
Section 10.1 Provision of Indemnification. The corporation shall, to the fullest
extent permitted or required by the Act, including any amendments thereto (but
in the case of any such amendment, only to the extent such amendment permits or
requires the corporation to provide broader indemnification rights than prior to
such amendment), indemnify its Directors and Executive Officers against any and
all Liabilities, and advance any and all reasonable Expenses, incurred thereby
in any Proceeding to which any such Director or Executive Officer is a Party or
in which such Director or Executive Officer is deposed or called to testify as a
witness because he or she is or was a Director of the corporation. The rights to
indemnification granted hereunder shall not be deemed exclusive of any other
rights to indemnification against Liabilities or the advancement of Expenses
which a Director or Executive Officer may be entitled under any written
agreement, Board resolution, vote of shareholders, the Act, or otherwise. The
corporation may, but shall not be required to, supplement the foregoing rights
to indemnification against Liabilities and advancement of Expenses by the
purchase of insurance on behalf of any one or more of its Directors or Executive
Officers whether or not the corporation would be obligated to indemnify or
advance Expenses to such Director or Executive Officer under this Article. For
purposes of this Article, the term "Directors" includes former directors and any
directors who are or were serving at the request of the corporation as
directors, officers, employees, or agents of another corporation, partnership,
joint venture, trust, or other enterprise, including, without limitation, any
employee benefit plan (other than in the capacity as agents separately retained
and compensated for the provision of goods or services to the enterprise,
including, without limitation, attorneys-at-law, accountants, and financial
consultants). The term "Executive Officers" refers to those persons described in
Securities Exchange Commission Regulations Section 240.3b-7. All other
capitalized terms used in this Article and not otherwise defined herein shall
have the meaning set forth in Section 607.0850, Florida Statutes (1991). The
provisions of this Article are intended solely for the benefit of the
indemnified parties described herein, their heirs and personal representatives
and shall not create any rights in favor of third parties. No amendment to or
repeal of this Article shall diminish the rights of indemnification provided for
herein prior to such amendment or repeal.
ARTICLE 11
Amendments
Section 11.1 Power to Amend. These bylaws may be amended or repealed by either
the Board of Directors or the shareholders, unless the Act reserves the power to
amend these bylaws generally or any particular bylaw provision, as the case may
be, exclusively to the shareholders or unless the shareholders, in amending or
repealing these bylaws generally or any particular bylaw provision, provide
expressly that the Board of Directors may not amend or repeal these bylaws or
such bylaw provision, as the case may be.
THIRD AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
REGENCY CENTERS, L.P.
(formerly known as Regency Retail Partnership, L.P.)
<PAGE>
004.197245.1
vi
TABLE OF CONTENTS
Article 1
Defined Terms
Article 2
Organizational Matters
Section 2.1 Organization; Application of Act.......................16
Section 2.2 Name...................................................16
Section 2.3 Registered Office and Agent; Principal Office..........17
Section 2.4 Term...................................................17
Article 3
Purpose
Section 3.1 Purpose and Business...................................17
Section 3.2 Powers.................................................17
Article 4
Capital Contributions; Issuance Of Units;
Capital Accounts
Section 4.1 Capital Contributions of the Partners..................18
Section 4.2 Issuances of Additional Partnership Interests..........19
Section 4.3 No Preemptive Rights...................................21
Section 4.4 Capital Accounts of the Partners.......................21
Section 4.5 Issuance of Series A Preferred Units...................22
Article 5
Distributions
Section 5.1 Requirement and Characterization of Distributions......34
Section 5.2 Amounts Withheld.......................................36
Section 5.3 Withholding............................................36
Section 5.4 Distributions Upon Liquidation.........................38
Article 6
Allocations
Section 6.1 Allocations of Net Income and Net Loss.................38
Section 6.2 Special Allocation Rules...............................42
Section 6.3 Allocations for Tax Purposes...........................45
Article 7
Management And Operations Of Business
Section 7.1 Management.............................................46
Section 7.2 Certificate of Limited Partnership.....................51
Section 7.3 Restriction on General Partner's Authority.............52
Section 7.4 Responsibility for Expenses............................52
Section 7.5 Outside Activities of the General Partner..............53
Section 7.6 Contracts with Affiliates..............................53
Section 7.7 Indemnification........................................54
Section 7.8 Liability of the General Partner.......................55
Section 7.9 Other Matters Concerning the General Partner...........56
Section 7.10 Title to Partnership Assets............................57
Section 7.11 Reliance by Third Parties..............................57
Article 8
Rights And Obligations Of Limited Partners
Section 8.1 Limitation of Liability................................58
Section 8.2 Management of Business.................................58
Section 8.3 Outside Activities of Limited Partners.................58
Section 8.4 Priority Among Partners................................59
Section 8.5 Rights of Limited Partners Relating
to the Partnership........ ..59
Section 8.6 Redemption of Units....................................60
Section 8.7 Regency's Assumption of Right..........................63
Article 9
Books, Records, Accounting And Reports
Section 9.1 Records and Accounting.................................64
Section 9.2 Fiscal Year............................................64
Section 9.3 Reports................................................64
<PAGE>
Article 10
Tax Matters
Section 10.1 Preparation of Tax Returns.............................65
Section 10.2 Tax Elections..........................................65
Section 10.3 Tax Matters Partner....................................65
Section 10.4 Organizational Expenses................................66
Article 11
Transfers And Withdrawals
Section 11.1 Transfer...............................................67
Section 11.2 Transfer of General Partner's
Partnership Interests. ...67
Section 11.3 Limited Partners' Rights to Transfer...................68
Section 11.4 Substituted Limited Partners...........................71
Section 11.5 Assignees..............................................71
Section 11.6 General Provisions.....................................71
Article 12
Admission Of Partners
Section 12.1 Admission of Successor General Partner.................72
Section 12.2 Admission of Additional Limited Partners...............73
Section 12.3 Amendment of Agreement and Certificate.................73
Section 12.4 Representations and Warranties of
Additional Limited Partners. ..73
Article 13
Dissolution And Liquidation
Section 13.1 Dissolution............................................74
Section 13.2 Winding Up.............................................75
Section 13.3 Compliance with Timing Requirements of Regulations;
Allowance for Contingent orUnforeseen
Liabilities or Obligations............................77
Section 13.4 Deficit Capital Account Restoration....................78
Section 13.5 Deemed Distribution and Recontribution.................79
Section 13.6 Rights of Limited Partners.............................79
Section 13.7 Notice of Dissolution..................................80
Section 13.8 Cancellation of Certificate of Limited Partnership.....80
Section 13.9 Reasonable Time for Winding-Up.........................80
Article 14
Amendment Of Partnership Agreement; Meetings
Section 14.1 Amendments.............................................80
Section 14.2 Meetings of Limited Partners...........................83
Article 15
General Provisions
Section 15.1 Addresses and Notice...................................84
Section 15.2 Titles and Captions....................................85
Section 15.3 Pronouns and Plurals...................................85
Section 15.4 Further Action.........................................85
Section 15.5 Binding Effect.........................................85
Section 15.6 Waiver of Partition....................................85
Section 15.7 Entire Agreement.......................................85
Section 15.8 Remedies Not Exclusive.................................86
Section 15.9 Time...................................................86
Section 15.10 Creditors...........................................86
Section 15.11 Waiver..............................................86
Section 15.12 Execution Counterparts..............................86
Section 15.13 Applicable Law......................................86
Section 15.14 Invalidity of Provisions............................86
Article 16
Power Of Attorney
Section 16.1 Power of Attorney......................................86
<PAGE>
SCHEDULES
Schedule 7.8(b)...Regency's PFIC Obligations
Schedule 8.6(a)...Transfer Restrictions in Regency's Articles of Incorporation
Schedule 13.4(a)..Electing Partners with Deficit Capital Account Make-up
Requirement
<PAGE>
EXHIBITS
Exhibit A.........Partners and Partnership Interests (addresses)
Exhibit B.........Notice of Redemption
Exhibit C.........Security Capital Waiver and Consent Agreement
Exhibit D.........Class Z Branch Partners and Class Z Midland Partners
Exhibit E Fourth Amended and Restated Agreement of Limited Partnership
of Regency Centers, L.P.
<PAGE>
004.197245.1
83
004.197245.1
THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP
OF
REGENCY CENTERS, L.P.
THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP is dated as of __________, 1999, by and among Regency Realty
Corporation, a Florida corporation, as general partner (the "General Partner"),
and those additional persons who from time to time agree to be bound by this
Agreement as limited partners (the "Limited Partners"), and amends and restates
the Second Amended and Restated Agreement of Limited Partnership of the
Partnership dated as of March 5, 1998 (the "Second Amended Agreement"), as
amended by Amendment No. 1 dated as of June 25, 1998.
Background
Limited Partners (the "Original Limited Partners") who
formerly were partners of Branch Properties, L.P. or its affiliates were
admitted to the Partnership on March 7, 1997 pursuant to an Amended Restated
Agreement of Limited Partnership as of that date (as amended, the "Initial
Agreement").
In February 1998, Regency Realty Corporation ("Regency")
merged with Regency Atlanta, Inc., which was then the general partner of the
Partnership, with Regency being the surviving corporation in the merger.
Accordingly, Regency became the General Partner of the Partnership. Regency also
caused the merger into the Partnership of its subsidiary, Regency Centers, Inc.,
which owned at least 35 shopping center properties immediately prior to the
merger.
In connection with the first admission of Class 2 Unit
holders, the General Partner amended and restated the Initial Agreement on March
5, 1998 (the "Second Amended Agreement") (i) to provide for admitting Additional
Limited Partners (as defined below) to the Partnership from time to time, (ii)
to make certain changes of an inconsequential nature to the form of the
provisions governing the maintenance of Capital Accounts, and (iii) to delete
matters of historical interest.
In connection with the issuance by the Partnership of $80
million Series A Preferred Units (as defined below) to an institutional investor
pursuant to Section 4.2 hereof, the General Partner and Security Capital (as
defined below) entered into Amendment No. 1 to the Second Amended Agreement on
June 25, 1998 (the "Preferred Unit Amendment"). The Preferred Unit Amendment
designated the rights, preferences and limitations of the Series A Preferred
Units and was approved by the holders of a majority of the Original Limited
Partnership Units and the holders of a majority of the Class 2 Units.
Pursuant to authority granted to the General Partner in
Section 14.1(b)(iv), the General Partner wishes to amend and restate the Second
Amended Agreement, as amended, (i) to reflect the admission of the Series A
Preferred Partners (as defined below), (ii) to incorporate the Preferred Unit
Amendment, and (iii) to delete matters of historical interest that are no longer
relevant.
The General Partner anticipates that it will contribute all or
substantially all its assets to the Partnership, subject to applicable consents
of third parties or in the case of shopping centers securing $51 million of
securitized mortgage debt due November 5, 2000, upon the repayment of such debt,
so as to cause the Partnership to become an "UPREIT".
Pursuant to Section 14.1(a), a majority in interest of the
Original Limited Partners and a majority in interest of the Additional Limited
Partners have consented to amending and restating the Second Amended Agreement,
as amended, (i) to make certain changes to the allocations of Net Income and Net
Loss and (ii) to approve the form of the Partnership's Fourth Amended and
Restated Agreement of Limited Partnership attached hereto (the "Fourth Amended
Agreement") to be effective upon the Partnership becoming an UPREIT and upon the
unanimous consent of the remaining Limited Partners, subject to Section 14.1(g).
Consent to this Third Amended and Restated Agreement of Limited Partnership
shall be deemed an irrevocable consent to the form of Fourth Amended Agreement.
Pursuant to Section 4.2, a majority in interest of the
Original Limited Partners and a majority in interest of the Additional Limited
Partners have consented to (i) the issuance of Preferred Units from time to
time, subject to the conditions set forth in Section 4.2(b)(i).
NOW, THEREFORE, the Second Amended Agreement shall be amended
and restated as follows (matters in italics are agreements with the Original
Limited Partners only).
Article 1.........
Defined Terms
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the terms used in this
Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership
Act, as it may be amended from time to time, and any successor to such statute.
"Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 4.2 hereof (other than (i)
a Preferred Partner, (ii) the General Partner or (iii) any Affiliate of the
General Partner other than a Property Affiliate) and who is shown as such on the
books and records of the Partnership, including the Persons admitted in
connection with the Partnership's acquisition of assets from Midland Development
Group, Inc. and certain of its affiliated entities.
"Additional Units" means Units issued to an Additional Limited
Partner. As provided in Section 5.2, the distribution rights of the Additional
Units are subordinate to the distribution rights of the Original Limited
Partnership Units but senior to distribution rights of the Class B Units.
"Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each Partnership Year (i) increased
by any amounts which such Partner is obligated to restore pursuant to any
provision of this Agreement or is deemed to be obligated to restore pursuant to
the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5) and (ii) decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Adjusted Capital Account
as of the end of the relevant Partnership Year.
"Adjusted Series A Preferred Units" of a Partner means the
number of Series A Preferred Units owned by the Partner multiplied by the
quotient obtained by dividing $50 by $24.25 (the Value of a Share on June 25,
1998).
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by or under common control with
such Person.
"Agreement" means this Third Amended and Restated Agreement of
Limited Partnership, as it may be amended, supplemented or restated from time to
time.
"Articles of Incorporation" means the Amended and Restated
Articles of Incorporation of Regency, as filed with the Florida Department of
State, as further amended or restated from time to time.
"Assignee" means a Person to whom one or more Partnership
Units have been transferred in a manner permitted under this Agreement, but who
has not become a Substituted Limited Partner, and who has the rights set forth
in Section 11.5.
"Available Cash" means with respect to any period for which
such calculation is being made:
(a) all cash revenues and funds received by the Partnership from whatever
source (excluding the proceeds of any Capital Contribution other than a
Capital Contribution made by the General Partner for the purpose of
funding distributions to Limited Partners and excluding Capital
Transaction Proceeds) plus the amount of any reduction (including,
without limitation, a reduction resulting because the General Partner
determines such amounts are no longer necessary) in reserves of the
Partnership, which reserves are referred to in clause (b)(iv) below;
(b) less the sum of the following (except to the extent made with the
proceeds of any Capital Contribution and except to the extent taken
into account in determining Capital Transaction Proceeds), all of which
shall be paid subject to Section 7.1(h):
(i) all interest, principal and other debt payments made during such period
by the Partnership,
(ii) all other cash expenditures (including capital expenditures) made by
the Partnership during such period,
(iii) investments in any entity (including loans made thereto) to
the extent that such investments are not otherwise described
in clauses (b)(i) or (ii), and
(iv) the amount of any increase in reserves established during such
period which the General Partner determines is necessary or
appropriate in its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any cash
received or reductions in reserves, or take into account any disbursements made
or reserves established, after commencement of the dissolution and liquidation
of the Partnership.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York City, New York are authorized or
required by law to close.
"Capital Account" means the Capital Account maintained for a Partner
pursuant to Section 4.4 hereof.
"Capital Contribution" means, with respect to any Partner, any
cash, cash equivalents or the value (as set forth by separate agreement) of
property which such Partner contributes or is deemed to contribute to the
Partnership pursuant to Section 4.1, Section 4.2 or Section 4.5 hereof and which
shall be treated as a contribution to the Partnership pursuant to Section 721(a)
of the Code.
"Capital Transaction" means a sale, exchange or other
disposition (other than in liquidation of the Partnership) or a financing or
refinancing by the Partnership (which shall not include any loan or financing to
the General Partner as permitted by Section 7.1(a)(iii)) of a Partnership asset
or any portion thereof.
"Capital Transaction Proceeds" means the net cash proceeds of
a Capital Transaction, after deducting all expenses incurred in connection
therewith and after application of any proceeds, at the sole discretion of the
General Partner, toward the payment of any indebtedness of the Partnership
whether or not secured by the property that is the subject of that Capital
Transaction, the purchase, improvement or expansion of Partnership property, or
the establishment of any reserves deemed reasonably necessary by the General
Partner, including reserves for the purchase, improvement or expansion of
Partnership property.
"Cash Amount" means an amount of cash arrived at by
multiplying (i) the number of Partnership Units that are the subject of a Notice
of Redemption times (ii) the Unit Adjustment Factor times (iii) the Value on the
Valuation Date of a Share.
"Certificate" means the Certificate of Limited Partnership
relating to the Partnership filed in the office of the Secretary of State of the
State of Delaware, as amended from time to time in accordance with the terms
hereof and the Act.
"Class B Units" means the Partnership Interest in the
Partnership owned by the General Partner or any Affiliate other than a Property
Affiliate but shall exclude any Series A Preferred Units and any other Preferred
Units issued pursuant to Section 4.2(b)(i). As provided in Section 5.1(a) and
Section 5.1(b), the distribution rights of the Class B Units are subordinate to
the distribution rights of the non-Class B Units.
"Class 2 Units" means the Partnership Interests issued in
connection with the Partnership's acquisition of assets from Midland Development
Group, Inc. and certain of its affiliated entities. Pursuant to this Third
Amended and Restated Agreement of Limited Partnership of the Partnership, all
Class 2 Units have been reclassified as Additional Units.
"Class Z Branch Partners" means the Original Limited Partners
listed on Exhibit D, who have failed to consent within 30 days after the Third
Amendment Date to the adoption of this Third Amended Agreement; provided that an
Original Limited Partner who consents to the Third Amended Agreement after such
30 day period, which consent may not be revoked, shall not be deemed a Class Z
Branch Partner effective the first day of January after the date that the
General Partner receives such consent.
"Class Z Midland Partners" means the Additional Limited
Partners listed on Exhibit D, who have failed to consent within 30 days after
the Third Amendment Date to the adoption of this Third Amended Agreement;
provided that an Additional Limited Partner who consents to the Third Amended
Agreement after such 30 day period, which consent may not be revoked, shall not
be deemed a Class Z Midland Partner effective the first day of January after the
date that the General Partner receives such consent.
"Code" means the Internal Revenue Code of 1986, as amended.
Any reference herein to a specific section or sections of the Code shall be
deemed to include a reference to any corresponding provision of future law.
"Common Stock" means the voting Common Stock, $0.01 par value,
of Regency.
"Common Units" means the Original Limited Partnership Units,
the Additional Units and any other Partnership Interests in the Partnership
other than Class B Units hereafter authorized, issued or outstanding which are
entitled to distributions and to rights upon voluntary or involuntary
liquidation, winding-up or dissolution only out of any assets remaining after
all Preferred Units have received the amounts to which they are entitled. Common
Units shall rank senior to the Class B Units as to distributions made pursuant
to Section 5.1(a) or Section 5.1(b).
"Consent" means, except where this Agreement expressly
specifies otherwise, with respect to Limited Partners holding any class of Units
(other than Series A Preferred Units), the written consent or affirmative vote
of those Limited Partners holding a majority of such Units outstanding at the
time in question. Except where this Agreement expressly specifies otherwise, the
Consent of the Original Limited Partners means the written consent or
affirmative vote of the Original Limited Partners holding a majority of the
Original Limited Partnership Units outstanding at the time in question. Consent
of the Limited Partners means the written consent of the Original Limited
Partners and the Additional Limited Partners holding a majority of the Units
outstanding at the time in question, treating such Units as a single class, and
shall exclude any Partners holding Preferred Units unless this Agreement is
amended to expressly provide for a particular class or series of Preferred Units
to vote together with the holders of Common Units as a single class. "Consent of
the Limited Partners" shall be determined excluding any Units held by the
General Partner or any of its Affiliates other than a Property Affiliate who
shall have no right to vote on any matter for which the consent of the Limited
Partners is solicited.
"Contribution Agreement" means that certain Contribution Agreement and Plan
of Reorganization, dated as of February 10, 1997, by and among Branch
Properties, L.P., Branch Realty Inc. and Regency.
"Cumulative Unpaid Accrued Return Account" means, with respect
to any Original or Additional Limited Partner, an amount equal to (i) the
interest that would accrue at the Prime Rate plus two percent (2%) on such
Partner's Cumulative Unpaid Priority Distribution Account outstanding from time
to time, less (ii) the cumulative amount of Available Cash and the cumulative
amount of any Capital Transaction Proceeds distributed with respect to the
Limited Partnership Units of such Partner in reduction of such Cumulative Unpaid
Accrued Return Account pursuant to Section 5.1(a)(ii), Section 5.1(a)(v),
Section 5.1(b)(i) and Section 5.1(b)(iii).
"Cumulative Unpaid Priority Distribution Account" means, with
respect to any Original or Additional Limited Partner, an amount equal to (i)
the aggregate of all Priority Distribution Amounts for Limited Partnership Units
held by such Partner, less (ii) the cumulative amount of Available Cash and the
cumulative amount of any Capital Transaction Proceeds distributed with respect
to such Limited Partnership Units of such Partner in reduction of such
Cumulative Unpaid Priority Distribution Account pursuant to Section 5.1(a)(i),
Section 5.1(a)(iii), Section 5.1(a)(iv), Section 5.1(a)(vi), Section 5.1(b)(ii)
and Section 5.1(b)(iv).
"Depreciation" means for each Partnership Year or other
period, an amount equal to the federal income tax depreciation, amortization, or
other cost recovery deduction allowable with respect to an asset for such year
or other period, except that if the Gross Asset Value of an asset differs from
its adjusted basis for federal income tax purposes at the beginning of such year
or other period, Depreciation shall be an amount which bears the same ratio to
such beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such year bears to such
beginning adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization, or other cost recovery deduction for such year is
zero, Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner, except
that in the case of a zero basis property contributed by an Original Limited
Partner, such property shall be depreciated for book purposes over a period of
not more than ten years.
"Event of Dissolution" has the meaning set forth in Section
13.1.
"Excess Units" has the meaning set forth in Section
4.5(g)(i)(C).
"Exchange Notice" has the meaning set forth in Section
4.5(g)(ii)(A).
"Exchange Price" has the meaning set forth in Section
4.5(g)(i)(A).
"First Closing" has the meaning set forth in the Contribution
Agreement.
"Fourth Amended Agreement" means the Fourth Amended and
Restated Agreement of Limited Partnership attached hereto as Exhibit E.
"General Partner" means Regency Realty Corporation or its
permitted successors as a general partner of the Partnership.
"General Partnership Interest" means a Partnership Interest
held by a General Partner that is a general partnership interest. A General
Partnership Interest may be expressed as a number of Class B Units.
"Gross Asset Value" means with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Partner to
the Partnership shall be the fair market value (exclusive of
liabilities) of such asset, as determined by the General Partner,
unless required to be determined in some other manner herein;
(b) The Gross Asset Values of all Partnership assets shall be adjusted to
equal their respective fair market values (exclusive of liabilities), as
determined by the General Partner, as of the following times: (i) the
acquisition of an additional interest in the Partnership by any new or existing
Partner in exchange for more than a de minimis capital contribution; (ii) the
distribution by the Partnership to a Partner of more than a de minimis amount of
property as consideration for an interest in the Partnership; and (iii) the
liquidation of the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant to clauses
(i) and (ii) above shall be made only if the General Partner reasonably
determines that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership;
(c) The Gross Asset Value of any Partnership asset distributed to any
Partner shall be adjusted to equal the fair market value (exclusive of
liabilities) of such asset on the date of distribution as determined by
the General Partner; and
(d) The Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Code Section 734(b) or Code Section 743(b), but only
to the extent that such adjustments are taken into account in
determining Capital Accounts pursuant to Regulations Section
1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall
not be adjusted pursuant to this paragraph (d) to the extent the
General Partner determines that an adjustment pursuant to paragraph (b)
above is necessary or appropriate in connection with a transaction that
would otherwise result in an adjustment pursuant to this paragraph (d).
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
paragraphs (a), (b), or (d) above, such Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into account with respect to such asset for
purposes of computing profits and losses.
"Immediate Family" means, with respect to any natural Person,
such natural Person's spouse, parents, descendants, nephews, nieces, brothers
and sisters and trusts for the benefit of any of the foregoing.
"Incapacity" or "Incapacitated" means, (i) as to any
individual Partner, death, total physical disability or entry by a court of
competent jurisdiction adjudicating him incompetent to manage his Person or his
estate; (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter; (iii) as to any partnership which is a Partner, the
dissolution and commencement of winding up of the partnership; (iv) as to any
estate which is a Partner, the distribution by the fiduciary of the estate's
entire interest in the Partnership; (v) as to any trustee of a trust which is a
Partner, the termination of the trust (but not the substitution of a new
trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For
purposes of this definition, bankruptcy of a Partner shall be deemed to have
occurred when the Partner (a) makes an assignment for the benefit of creditors,
(b) files a voluntary petition in bankruptcy, (c) is adjudged a bankrupt or
insolvent, or has entered against him an order of relief in any bankruptcy or
insolvency proceeding, (d) files a petition or answer seeking for himself any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any statute, law or regulation, (e) files an answer or
other pleading admitting or failing to contest the material allegations of a
petition filed against him in any proceeding of this nature, (f) seeks, consents
to or acquiesces in the appointment of a trustee, receiver or liquidator of the
Partner or of all or any substantial part of his properties, (g) is the debtor
in any proceeding seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any statute, law
or regulation, which has not been dismissed within 120 days after the
commencement thereof, or (h) is the subject of a proceeding whereby a trustee,
receiver or liquidator is appointed for the Partner or all or any substantial
part of its properties without the Partner's consent or acquiescence of a
trustee, receiver or liquidator, and such appointment has not been vacated or
stayed within 90 days after the appointment or such appointment is not vacated
within 90 days after the expiration of any such stay.
"Indemnitee" means (i) any Person made a party to a proceeding
by reason of his status as (a) the General Partner, (b) a Limited Partner or (c)
a director or officer of the Partnership or a Partner, and (ii) such other
Persons (including Affiliates of the General Partner or the Partnership) acting
in good faith on behalf of the Partnership as determined by the General Partner
in its good faith judgment other than for any action by such Person involving
fraud, willful misconduct or gross negligence.
"IRS" means the Internal Revenue Service, which administers
the internal revenue laws of the United States.
"Junior Units" has the meaning set forth in Section
4.5(c)(iv).
"Limited Partner" means any Person named as a Limited Partner
in Exhibit A attached hereto, as such Exhibit may be amended from time to time
in accordance with the terms of this Agreement, or any Substituted Limited
Partner, Preferred Partner or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.
"Limited Partnership Interest" means a Partnership Interest of
a Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Limited Partners and includes any and all benefits
to which the holder of such a Partnership Interest may be entitled as provided
in this Agreement, together with all obligations of such Person to comply with
the terms and provisions of this Agreement. A Limited Partnership Interest may
be expressed as a number of Preferred Units, Common Units or Class B Units as
provided herein.
"Liquidating Transaction" means any sale or other disposition
of all or substantially all of the assets of the Partnership following the
adoption by the General Partner of a plan of liquidation for the Partnership.
"Liquidator" has the meaning set forth in Section 13.2.
"Management Business" has the meaning set forth in Section
7.1(g).
"Net Income" and "Net Loss" means for any taxable period, an
amount equal to the Partnership's taxable income or loss for such taxable period
determined in accordance with Section 703(a) of the Code (for this purpose all
items of income, gain, loss or deduction required to be stated separately
pursuant to Section 703(a)(1) of the Code shall be included in taxable income or
loss), with the following adjustments:
(a) Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and
deduction shall be made without regard to any election under Section 754 of the
Code which may be made by the Partnership; provided, that the amounts of any
adjustments to the adjusted bases of the assets of the Partnership made pursuant
to Section 734 of the Code as a result of the distribution of property by the
Partnership to a Partner (to the extent that such adjustments have not
previously been reflected in the Partners' Capital Accounts) shall be reflected
in the Capital Accounts of the Partners in the manner and subject to the
limitations prescribed in Regulations Section 1.704-1(b)(2)(iv)(m).
(b) Any income of the Partnership that is exempt from federal income tax
and not otherwise taken into account in computing Net Income or Net
Loss pursuant to this definition shall be added to such Net Income or
Net Loss.
(c) The computation of all items of income, gain, loss and deduction shall
be made without regard to the fact that items described in Sections
705(a)(1)(B) or 705(a)(2)(B) of the Code are not includable in gross
income or are neither currently deductible nor capitalized for federal
income tax purposes.
(d) Any income, gain or loss attributable to the taxable disposition of any
Partnership property shall be determined as if the adjusted basis of
such property as of such date of disposition were equal in amount to
the Partnership's Gross Asset Value with respect to such property as of
such date.
(e) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year.
(f) In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to clause (b) or (c) of the definition thereof, the amount of
any such adjustment shall be taken into account as gain or loss from
the disposition of such asset and shall be allocated pursuant to
Section 6.2(g).
(g) Any items specially allocated under Section 6.2 and Section 6.3 hereof
shall not be taken into account.
Solely for purposes of allocating Net Income or Net Loss in
any Fiscal Year to the holders of the Series A Preferred Units, items of Net
Income and Net Loss, as the case may be, shall not include Depreciation with
respect to properties (or groupings of properties selected by the General
Partner using any method determined by it to be reasonable) that are "ceiling
limited" in respect of the holders of the Series A Preferred Units. For purposes
of the preceding sentence, Partnership property shall be considered ceiling
limited in respect of a holder of Series A Preferred Units if Depreciation
attributable to such Partnership property which would otherwise be allocable to
such Partner, without regard to this paragraph, exceeded depreciation determined
for federal income tax purposes attributable to such Partnership property which
would otherwise be allocated to such Partner by more than 5%.
"Non-U.S. Person" means with respect to the acquisition,
ownership or transfer of any Partnership Interest or Shares, the direct or
indirect acquisition or ownership thereof by or a transfer that results in the
direct or indirect ownership thereof by any Person who is not (i) a citizen or
resident of the United States, (ii) a partnership or corporation created or
organized in the United States or under the laws of the United States or any
state therein (including the District of Columbia), or (iii) a foreign estate or
trust within the meaning of Section 7701(a)(31) of the Code.
"Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
a Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in
Regulations Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption,
Security Agreement and Investor Questionnaire substantially in the form of
Exhibit B to this Agreement, as it may be amended from time to time by the
General Partner effective upon written notice to the Limited Partners.
"Original Limited Partner" means the Partners who received
Original Limited Partnership Units distributed by Branch Properties, L.P. to its
respective partners pursuant to the Contribution Agreement. The Original Limited
Partners are listed on Exhibit A attached hereto. The term "Original Limited
Partner" shall also include any permitted transferee of an Original Limited
Partner pursuant to Section 11.3 other than (i) the General Partner or (ii) any
Affiliate of the General Partner other than a Property Affiliate.
"Original Limited Partnership Unit" means a Partnership Unit
issued to an Original Limited Partner. The term "Original Limited Partnership
Unit" does not include or refer to any Preferred Units, Additional Units or
Class B Units.
"Parity Preferred Units" means any class or series of
Partnership Interests of the Partnership now or hereafter authorized, issued or
outstanding expressly designated by the Partnership to rank on a parity with
Series A Preferred Units with respect to distributions or rights upon voluntary
or involuntary liquidation, winding-up or dissolution of the Partnership, or
both, as the context may require, whether or not the dividend rates, dividend
payment dates or redemption or liquidation prices per Unit or conversion rights
or exchange rights shall be different from those of the Series A Preferred
Units.
"Partner" means a General Partner or a Limited Partner, and
"Partners" means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
"Partnership" means the limited partnership formed under the
Act and pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means an ownership interest in the
Partnership representing a Capital Contribution and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement. A Partnership Interest
may be expressed as a number of Preferred Units, Original Limited Partnership
Units, Additional Units or Class B Units.
"Partnership Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
as well as any net increase or decrease in Partnership Minimum Gain, for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
"Partnership Record Date" means the record date established by
the General Partner for the distribution of Available Cash pursuant to Section
5.1(a) hereof to Partners holding Common Units, which record date shall be the
same as the record date established by Regency for a dividend to the holders of
Common Stock.
"Partnership Year" means the fiscal year of the Partnership,
which shall be the calendar year.
"Percentage Interest" means, as to a Partner, its interest in
the Partnership as determined by dividing (i) the Adjusted Series A Preferred
Units, Common Units and Class B Units owned by such Partner by (ii) the total
number of Adjusted Series A Preferred Units, Common Units and Class B Units then
outstanding and as specified in Exhibit A attached hereto, as such Exhibit may
be amended from time to time in accordance with the terms of this Agreement.
"Person" means an individual or a corporation, limited
liability company, partnership, trust, unincorporated organization, association
or other entity.
"Pledged Units" means any Units pledged by a Limited Partner
to the Partnership or the General Partner, whether pursuant to this Agreement or
by separate agreement.
"Preexisting Partner" has the meaning set forth in Section
14.1(g)(iv) of this Agreement. Preexisting Partner shall not include any Person
who is not a transferee of a Preexisting Partner and who first became a Limited
Partner after the Third Amendment Date.
"Preferred Partner" means a Partner who holds Preferred Units.
-----------------
"Preferred Unit Distribution Payment Date" has the meaning set
forth in Section 4.5(c)(i).
"Preferred Unit Partnership Record Date" has the meaning set
forth in Section 4.5(c)(i).
"Preferred Units" means the Series A Preferred Units and any
Partnership Interests in the Partnership hereafter authorized, issued or
outstanding from time to time pursuant to Section 4.2(b)(i) expressly designated
by the Partnership to rank senior to the Common Units and Class B Units with
respect to distributions or rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Partnership, or both.
"Property Affiliate" means a Person, other than any Subsidiary
of Regency, who contributed property in exchange for a Limited Partnership
Interest and who may be deemed an Affiliate of the General Partner, e.g.,
because such person is a director of Regency or owns a significant number of
Units or shares of Regency stock.
"Prime Rate" means, on any date, a fluctuating rate of
interest per annum equal to the rate of interest most recently established by
Wachovia Bank of Georgia, N.A. at its Atlanta, Georgia office (or, at the
General Partner's election, another major lender to the Partnership, at the
office with which the Partnership deals), as its prime rate of interest for
loans in United States dollars.
"Priority Distribution Amount" means with respect to an
Original Limited Partnership Unit or Additional Unit outstanding on a
Partnership Record Date (i) the cash dividend per share of Common Stock
(including any dividend designated by Regency as capital gain pursuant to
Section 857(b)(3)(C) of the Code) declared by Regency on the Partnership Record
Date, multiplied by (ii) the Unit Adjustment Factor in effect on such
Partnership Record Date except that on the first Partnership Record Date that
occurs with respect to an Additional Unit, the General Partner may require that
the Priority Distribution Amount be prorated to the extent that the Unit has not
been outstanding each day since the immediately preceding Partnership Record
Date.
"PTP" means a "publicly traded partnership" within the meaning
of Section 7704 of the Code.
"Recapture Income" means any gain recognized by the
Partnership (computed without regard to any adjustment required by Section 734
or Section 743 of the Code) upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.
"Recourse Liabilities" has the meaning set forth in
Regulations Section 1.752-1(a)(1).
"Redeeming Partner" means a Limited Partner who duly exercised
a Redemption Right.
"Redemption Amount" means the Share Amount or, as determined
by the General Partner in its sole and absolute discretion, the Cash Amount or
any combination of the Share Amount and the Cash Amount.
"Redemption Right" with respect to the Original Limited
Partners has the meaning set forth in Section 8.6(a) hereof and with respect to
Additional Limited Partners means any right granted to such Partners by separate
agreement of the Partnership to redeem such Partners' Limited Partnership
Interests for Common Stock and/or cash.
"Regency" means Regency Realty Corporation, a Florida corporation.
"Regulations" means the Income Tax Regulations, including the
Temporary Regulations, promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).
"REIT" means a real estate investment trust under Section 856
of the Code.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Capital" means Security Capital U.S. Realty, a Luxembourg
corporation, Security Capital Holdings, S.A., a Luxembourg corporation, and
their Affiliates.
"Series A Preferred Partner" means the Limited Partners who
received Series A Preferred Units and also include any permitted transferee of a
Series A Preferred Partner pursuant to Section 11.3 and the General Partner or
any Affiliate of Regency upon exchange or redemption of the Series A Preferred
Units pursuant to Section 4.5.
"Series A Preferred Stock" has the meaning set forth in
Section 4.5(g)(i)(A).
"Series A Preferred Units" means the Partnership Interest in
the Partnership issued pursuant to Section 4.2 and Section 4.5 hereof
representing 8.125% Series A Cumulative Redeemable Preferred Units. The term
"Series A Preferred Unit" does not include or refer to any Original Limited
Partnership Units, Additional Units or Class B Units.
"Series A Priority Return" means an amount equal to 8.125% per
annum, determined on the basis of a 360 day year of twelve 30 day months (or
actual days for any month which is shorter than a full monthly period),
cumulative to the extent not distributed for any given distribution period, of
the stated value of $50 per Series A Preferred Unit, commencing on the date of
issuance of such Series A Preferred Unit.
"Series A Redemption Price" has the meaning set forth in
Section 4.5(e)(i).
"Share Amount" means a number of Shares arrived at by
multiplying (i) the number of Partnership Units that are the subject of a Notice
of Redemption times (ii) the Unit Adjustment Factor.
"Shares" means (i) the Common Stock of Regency, and (ii) any
securities issuable with respect to Shares as a result of the application of
Section 11.2(b).
"Specified Redemption Date" means the later of (i) 5:00 p.m.
Eastern time, on the date specified by the Redeeming Partner in such Partner's
Notice of Redemption, or (ii) the close of business, Eastern time, on the first
Business Day after the date in clause (i) if such date is not a Business Day, or
(iii) 5:00 p.m. Eastern time, on the tenth Business Day after receipt by the
General Partner of a Notice of Redemption.
"Subsidiary" means, with respect to any Person, any
corporation or other entity of which a majority of (i) the voting power of the
voting equity securities or (ii) the outstanding equity interests is owned,
directly or indirectly, by such Person.
"Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Partnership pursuant to Section 11.4.
"Third Amended Agreement" means this Third Amended and
Restated Agreement of Limited Partnership dated as of __________, 1999.
"Third Amendment Date" means __________________, 1999, the
effective date of the Third Amended Agreement.
"Transaction" has the meaning set forth in Section 11.2(b).
"Unit," "Limited Partnership Unit" or "Partnership Unit" means
the Partnership Interest in the Partnership to be issued to and held by the
Limited Partners pursuant to Section 4.1, Section 4.2 or Section 4.5. The
ownership of Units may be evidenced by such form of certificate as the General
Partner may determine, in its discretion, and the transfer of the Units
evidenced by such certificates shall be governed by Article 11.
"Unit Adjustment Factor" means initially 1.0; provided that,
in order to prevent dilution of the Redemption Right, in the event that Regency
(i) declares or pays a dividend on its outstanding Common Stock in Common Stock
or makes a distribution to all holders of its outstanding Common Stock in Common
Stock, (ii) subdivides its outstanding Common Stock, or (iii) combines its
outstanding Common Stock into a smaller number of shares, except as provided
below, the Unit Adjustment Factor shall be adjusted by multiplying the Unit
Adjustment Factor by a fraction, the numerator of which shall be the number of
Shares issued and outstanding on the record date (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time), and the denominator of which shall be the actual number of Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination. Any adjustment
to the Unit Adjustment Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event. If the General Partner (i) makes a distribution to all holders of
outstanding Units in Units, (ii) subdivides the outstanding Units, or (iii)
combines the outstanding Units into a smaller number of Units at the same time
as a distribution, subdivision or combination, as the case may be, occurs with
respect to the Common Stock, in such manner as to prevent enlargement or
dilution of the right to redeem one Unit for one share of Common Stock, then no
adjustment shall be made to the Unit Adjustment Factor, and such distribution,
subdivision or combination of Units shall take the place of an adjustment to the
Unit Adjustment Factor so as to preserve the one-Share-for-one Unit equivalency
for purposes of any Redemption Right.
"Valuation Date" means the date of receipt by the General
Partner of a Notice of Redemption or, if such date is not a Business Day, the
first Business Day thereafter.
"Value" means, with respect to a Share, the average of the
daily market price of the Common Stock for the ten (10) consecutive trading days
immediately preceding the Valuation Date. The market price for each such trading
day shall be: (i) if the Common Stock is listed or admitted to trading on any
securities exchange or the Nasdaq National Market, the closing price, regular
way, on such day, or if no such sale takes place on such day, the average of the
closing bid and asked prices on such day, (ii) if the Common Stock is not listed
or admitted to trading on any securities exchange or the Nasdaq National Market,
the last reported sale price on such day or, if no sale takes place on such day,
the average of the closing bid and asked prices on such day, as reported by a
reliable quotation source designated by the General Partner, or (iii) if the
Common Stock is not listed or admitted to trading on any securities exchange or
the Nasdaq National Market and no such last reported sale price or closing bid
and asked prices are available, the average of the reported high bid and low
asked prices on such day, as reported by a reliable quotation source designated
by the General Partner, or if there shall be no bid and asked prices on such
day, the average of the high bid and low asked prices, as so reported, on the
most recent day (not more than 10 days prior to the date in question) for which
prices have been so reported; provided, that if there are no bid and asked
prices reported during the 10 days prior to the date in question, the Value of
the Common Stock shall be determined by Regency's board of directors acting in
good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.
Article 2.........
Organizational Matters
Section 2.1.......Organization; Application of Act.
--------------------------------
(a) Organization and Formation of Partnership. The Partnership has been formed
as a limited partnership under the Act. The General Partner is the sole general
partner and the Limited Partners are the sole limited partners of the
Partnership.
(b) Application of Act. The Partnership is a limited partnership pursuant to the
provisions of the Act and upon the terms and conditions set forth in this
Agreement. Except as expressly provided herein to the contrary, the rights and
obligations of the Partners and the administration and termination of the
Partnership shall be governed by the Act. No Partner has any interest in any
Partnership property, and the Partnership Interest of each Partner shall be
personal property for all purposes.
Section 2.2.......Name. The name of the Partnership is Regency Centers, L.P. The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall promptly
notify the Limited Partners of such change; provided, that the name of the
Partnership may not be changed to include the name, or any variant thereof, of
any Limited Partner without the written consent of that Limited Partner.
Section 2.3.......Registered Office and Agent; Principal Office. The address of
the registered office of the Partnership in the State of Delaware is located at
1013 Centre Road, City of Wilmington, County of New Castle, Delaware 19801, and
the registered agent for service of process on the Partnership in the State of
Delaware at such registered office is Corporation Service Company. The principal
office of the Partnership is 121 W. Forsyth Street, Suite 200, Jacksonville,
Florida 32202, or such other place as the General Partner may from time to time
designate by notice to the Limited Partners. The Partnership may maintain
offices at such other place or places within or outside the State of Florida as
the General Partner deems advisable.
Section 2.4.......Term. The term of the Partnership shall commence on the date
hereof and shall continue until December 31, 2097, unless it is dissolved sooner
pursuant to the provisions of Article 13 or as otherwise provided by law.
Article 3.........
Purpose
Section 3.1.......Purpose and Business. The purpose and nature of the business
to be conducted by the Partnership is (i) to conduct any business that may be
lawfully conducted by a limited partnership organized pursuant to the Act and in
connection therewith to sell or otherwise dispose of Partnership assets, (ii) to
enter into any partnership, joint venture or other similar arrangement to engage
in any of the foregoing or the ownership of interests in any entity engaged in
any of the foregoing and (iii) to do anything necessary or incidental to the
foregoing which, in each case, is not in breach of this Agreement; provided,
however, that each of the foregoing clauses (i), (ii), and (iii) shall be
limited and conducted in such a manner as to permit Regency at all times to be
classified as a REIT, unless Regency provides notice to the Partnership that it
intends to cease or has ceased to qualify as a REIT.
Section 3.2.......Powers. The Partnership is empowered to do any and all acts
and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership;
provided, however, that the Partnership shall not take, or refrain from taking,
any action which, in the judgment of the General Partner, (i) could adversely
affect the ability of Regency to continue to qualify as a REIT, unless Regency
provides notice to the Partnership that it intends to cease or has ceased to
qualify as a REIT, (ii) could subject Regency to any additional taxes under
Section 857 or Section 4981 of the Code or (iii) could violate any law or
regulation of any governmental body or agency having jurisdiction over the
General Partner, Regency or their securities, unless such action (or inaction)
shall have been specifically consented to by the General Partner in writing.
Article 4.........
Capital Contributions; Issuance Of Units;
Capital Accounts
Section 4.1.......Capital Contributions of the Partners.
(a) Initial Capital Contributions of Original Limited Partners. Branch
Properties, L.P. has contributed property to the Partnership which shall be
deemed to have been contributed by its respective partners as Original Limited
Partners. The Original Limited Partners who have not exercised a Redemption
Right with respect to all their Units are set forth on Exhibit A, together with
their respective Percentage Interests. Percentage Interests of the Original
Limited Partners shall be adjusted in Exhibit A from time to time by the General
Partner to the extent permitted by this Agreement to reflect accurately
redemptions, Capital Contributions, the issuance of Additional Units or Class B
Units, or similar events having an effect on a Partner's Percentage Interest.
Any Partnership Interests held by the General Partner or any Affiliate other
than a Property Affiliate (including Partnership Interests acquired under
Section 4.2, Section 8.6 and Section 8.7) shall be Class B Units, other than the
Series A Preferred Units, the issuance of which has been approved by the Limited
Partners pursuant to Section 4.2, and any Preferred Units issued pursuant to
Section 4.2(b)(i).
(b) Initial Capital Contributions of Additional Limited Partners. Midland
Development Group, Inc. and certain of its affiliated entities and PP Center
Limited have contributed property to the Partnership which shall be deemed to
have been contributed by their respective equity owners as Additional Limited
Partners. Such Additional Limited Partners who have not exercised a Redemption
Right with respect to all their Units are set forth on Exhibit A, together with
their respective Percentage Interests.
(c) Capital Contributions by General Partner. The General Partner has
contributed cash or other assets to the Partnership in exchange for the number
of Class B Units set forth on Exhibit A. The General Partner also owns the
number of Class B Units set forth on Exhibit A which were acquired by Regency
upon the exchange by Regency of Shares pursuant to the exercise by former
Limited Partners of Redemption Rights.
(d) Capital Contributions of Series A Preferred Partners. The Series A Preferred
Partners have contributed cash to the Partnership in the amount of $50 per
Series A Preferred Unit. The distribution rights for the Series A Preferred
Units shall be senior to the distribution rights of the Original Limited
Partnership Units, the Additional Units and the Class B Units. The number of
Series A Preferred Units issued to the Series A Preferred Partners is set forth
on Exhibit A.
(e) Additional Capital Contributions or Assessments. No Partner shall be
assessed or be required to contribute additional funds or other property to the
Partnership, except for any such amounts which a Limited Partner may be
obligated to repay under Section 5.3 or Section 13.4 and such amounts which the
General Partner may be obligated to contribute as provided under Section
7.1(a)(iii). Any additional funds required by the Partnership, as determined by
the General Partner in its reasonable business judgment, may, at the option of
the General Partner and without an obligation to do so, be contributed by the
General Partner as additional Capital Contributions. If and as the General
Partner or any other Partner makes additional Capital Contributions to the
Partnership, each such Partner shall receive Additional Units, Class B Units or
other Partnership Interests, subject to the provisions of Section 4.2 and
Section 4.5, and such Partner's Capital Account shall be adjusted as provided in
Section 4.4.
(f) Return of Capital Contributions. Except as otherwise expressly provided
herein, the Capital Contribution of each Partner will be returned to that
Partner only in the manner and to the extent provided in Article 5 and Article
13 hereof, and no Partner may withdraw from the Partnership or otherwise have
any right to demand or receive the return of its Capital Contribution to the
Partnership (as such), except as specifically provided herein. Under
circumstances requiring a return of any Capital Contribution, no Partner shall
have the right to receive property other than cash, except as specifically
provided herein. No Partner shall be entitled to interest on any Capital
Contribution or Capital Account notwithstanding any disproportion therein as
between the Partners. Except as specifically provided herein, the General
Partner shall not be liable for the return of any portion of the Capital
Contribution of any Limited Partner, and the return of such Capital
Contributions shall be made solely from Partnership assets. The General Partner
may, but shall not be obligated to, make Capital Contributions for the purpose
of enabling the Partnership to make distributions of Available Cash to Limited
Partners.
(g) Liability of Limited Partners. No Limited Partner shall have any further
personal liability to contribute money to, or in respect of, the liabilities or
the obligations of the Partnership, nor shall any Limited Partner be personally
liable for any obligations of the Partnership, except as otherwise provided in
Section 4.1(e) or in the Act. No Limited Partner shall be required to make any
contributions to the capital of the Partnership other than its Capital
Contribution.
Section 4.2.......Issuances of Additional Partnership Interests.
(a) Limitations. Separate agreements relating to the admission of Additional
Limited Partners set forth the provisions, if any, upon which any Additional
Units shall be issued to Additional Limited Partners in the form of earn-out or
as consideration for additional assets to be contributed by such Additional
Limited Partners to the Partnership. The General Partner shall cause the
earn-out Additional Units to be issued to the Additional Limited Partners
entitled to receive the same, and shall cause the amendment of this Agreement to
reflect the issuance of any such Additional Units. Subject to the restrictions
set forth below and in Section 4.5(f)(ii), the General Partner is hereby
authorized to cause the Partnership at any time or from time to time to issue to
the Partners or to other Persons such Partnership Interests in one or more
classes, or one or more series of any such classes, with such designations,
preferences and relative, participating, optional or other special rights,
powers and duties, and for such consideration as shall be determined by the
General Partner in its sole and absolute discretion, subject to Delaware law,
including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Interests, (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions, and (iii) the
rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership; provided, however, that so long as there
shall be any Original Limited Partnership Units outstanding, without the Consent
of the Original Limited Partners, (a) any Partnership Interests issued shall be
subordinate to the Original Limited Partnership Units and will not affect the
priority of distributions with respect to the Original Limited Partnership Units
as set forth in Section 5.1 hereof, (b) no Partnership Interests other than
Class B Units shall be issued to the General Partner or any Affiliate of the
General Partner other than a Property Affiliate, and (c) no Partnership
Interests on a parity with the Original Limited Partnership Units shall be
issued to any Person, and provided, further, that without the Consent of the
Additional Limited Partners holding Additional Units, (a) no Partnership
Interests other than Class B Units shall be issued to the General Partner or any
Affiliate of the General Partner other than a Property Affiliate, and (b) except
as provided in Section 6.2(g), no Partnership Interests senior to the Additional
Units shall be issued to any Person.
(b) Consent Granted by Limited Partners for Certain Issuances. Pursuant to
Section 4.2(a), the Consent of Limited Partners holding Original Limited
Partnership Units and the Consent of Limited Partners holding Additional Units
has been obtained for, and no further Consent of the Limited Partners or of any
class of Limited Partners shall be required for, the issuance of additional
Units from time to time as follows:
(i) Issuance of Preferred Units. Subject to Section 4.5(f)(ii), Preferred
Units may be issued to any Limited Partner if, as a result of such issuance and
the application of the proceeds therefrom, the sum of (i) the aggregate
liquidation preference of all outstanding Preferred Units entitled to priority
upon liquidation and (ii) the Partnership's gross sales price of outstanding
Preferred Units entitled to priority only with respect to distributions of
Available Cash would not exceed twenty percent (20%) of the Partnership's book
value before depreciation and amortization as of the end of the calendar quarter
preceding the date of issuance, determined in accordance with generally accepted
accounting principles. Nothing in this Section 4.2(b)(i) shall be construed to
prohibit the General Partner from (i) redeeming Series A Preferred Units or
other Preferred Units issued from time to time pursuant to this Section
4.2(b)(i) to third parties who are not Affiliates of the General Partner and
(ii) holding and receiving distributions on such Redeemed Preferred Units where
such Units are redeemed in exchange for preferred stock of the General Partner
having designations, preferences and other rights substantially similar to the
designations, preferences and other rights of the Units so redeemed.
(c) Certain Issuances in the Nature of Stock Split. Nothing herein shall
prohibit the General Partner from issuing Units pro rata to the holders of
existing Units in lieu of adjusting the Unit Adjustment Factor in connection
with a stock split, stock dividend or similar event with respect to the Common
Stock.
Section 4.3.......No Preemptive Rights. No Person shall have any preemptive,
preferential or other similar right with respect to (i) additional Capital
Contributions or loans to the Partnership or (ii) issuance or sale of any
Partnership Interests.
Section 4.4.......Capital Accounts of the Partners.
(a) General. The Partnership shall maintain for each Partner a separate Capital
Account in accordance with the rules of Regulations Section 1.704-1(b)(2)(iv).
Such Capital Account shall be increased by (i) the amount of all Capital
Contributions made by such Partner to the Partnership pursuant to this
Agreement, (ii) all items of Partnership income and gain (including income and
gain exempt from tax) allocated to such Partner pursuant to Section 6.1 and
Section 6.2 of this Agreement, and (iii) the amount of any Partnership
liabilities assumed by such Partner or which are secured by any property
distributed to such Partner, and decreased by (x) the amount of cash or Gross
Asset Value of all actual and deemed distributions of cash or property made to
such Partner pursuant to this Agreement, (y) all items of Partnership deduction
and loss allocated to such Partner pursuant to Section 6.1 and Section 6.2 of
this Agreement, and (z) the amount of any liabilities of such Partner assumed by
the Partnership or which are secured by any property contributed by such Partner
to the Partnership. Additional Capital Contributions shall be deemed to be made
by reason of the issuance, and the Additional Limited Partner's Capital Account
shall be adjusted by an amount equal to the agreed value (as set forth by
separate agreement), of additional Partnership Interests issued to an Additional
Limited Partner pursuant to any earn-out provisions in the agreement governing
such Additional Limited Partner's admission to the Partnership. Any such
additional Capital Contributions shall be allocated to the items of contributed
property contributed by each such Additional Limited Partner in proportion to
their book values at the time of issuance of the additional Partnership
Interests.
(b) Transfers of Partnership Units. A transferee of a Partnership Interest
shall succeed to a pro rata portion of the Capital Account of the transferor.
(c) Modification by General Partner. The provisions of this Agreement relating
to the maintenance of Capital Accounts are intended to comply with Regulations
Section 1.704-1(b), and shall be interpreted and applied in a manner consistent
with such Regulations. In the event the General Partner shall determine that it
is prudent to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including, without limitation, debits or credits relating to
liabilities which are secured by contributed or distributed property or which
are assumed by the Partnership, the General Partner, or any Limited Partners),
are computed in order to comply with such Regulations, the General Partner may
make such modification without regard to Article 14 of this Agreement. The
General Partner also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Partners
and the amount of Partnership capital reflected on the Partnership's balance
sheet, as computed for book purposes, in accordance with Regulations Section
1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section 1.704-1(b).
Section 4.5.......Issuance of Series A Preferred Units. Pursuant to authority
granted by Section 4.2 with the Consent of the Original Limited Partners and the
Consent of the Additional Limited Partners, the General Partner caused the
Partnership to establish a series of Partnership Interests representing the
Series A Preferred Units, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties as are set
forth in this Section 4.5. In the event of a conflict between this Section 4.5
and any other provision of this Agreement as to the Series A Preferred Units,
the provisions of this Section 4.5 shall control.
(a) Designation and Number. A series of Partnership Units in the Partnership
designated as the "8.125% Series A Cumulative Redeemable Preferred Units" is
hereby established. The number of Series A Preferred Units shall be 1,600,000.
(b) Rank. The Series A Preferred Units will, with respect to distributions or
rights upon voluntary or involuntary liquidation, winding-up or dissolution of
the Partnership, or both, rank senior to all classes or series of Partnership
Interests now or hereafter authorized, issued or outstanding, other than any
class or series of equity securities of the Partnership issued after the
issuance of the Series A Preferred Units and expressly designated in accordance
with this Agreement as ranking on a parity with or senior to the Series A
Preferred Units as to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Partnership, or both.
(c) Distributions.
(i) Payment of Distributions. Subject to the rights of holders of Parity
Preferred Units and any holders of Partnership Interests issued after the date
of issuance of the Series A Preferred Units in accordance herewith ranking
senior to the Series A Preferred Units as to the payment of distributions,
holders of Series A Preferred Units shall be entitled to receive, when, as and
if declared by the Partnership acting through the General Partner, out of
Available Cash and Capital Transaction Proceeds, cumulative preferential cash
distributions at the rate per annum of 8.125% of the original Capital
Contribution per Series A Preferred Unit. Such distributions shall be
cumulative, shall accrue from the original date of issuance and will be payable
(A) quarterly in arrears, on or before March 31, June 30, September 30 and
December 31 of each year commencing on June 30, 1998 and, (B), in the event of
(i) an exchange of Series A Preferred Units into Series A Preferred Stock, or
(ii) a redemption of Series A Preferred Units, on the exchange date or
redemption date, as applicable (each a "Preferred Unit Distribution Payment
Date"). The amount of the distribution payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months and for any period
shorter than a full quarterly period for which distributions are computed, the
amount of the distribution payable will be computed on the basis of the actual
number of days elapsed in such a 30-day month. If any date on which
distributions are to be made on the Series A Preferred Units is not a Business
Day, then payment of the distribution to be made on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) except that, if such Business Day is
in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date. Distributions on June 30, 1998 and thereafter on the
Series A Preferred Units will be made to the holders of record of the Series A
Preferred Units on the relevant record dates to be fixed by the Partnership
acting through the General Partner, which record dates shall be not less than
ten (10) days and not more than thirty (30) Business Days prior to the relevant
Preferred Unit Distribution Payment Date (the "Preferred Unit Partnership Record
Date").
(ii) Limitation on Distributions. No distribution on the Series A Preferred
Units shall be declared or paid or set apart for payment by the Partnership at
such time as the terms and provisions of any agreement of the Partnership
relating to its indebtedness (other than any agreement with the holder of
Partnership Interests or an Affiliate thereof), prohibits such declaration,
payment or setting apart for payment or provide, that such declaration, payment
or setting apart for payment would constitute a breach thereof or a default
thereunder, or if such declaration, payment or setting apart for payment shall
be restricted or prohibited by law. Nothing in this Section 4.5(c)(ii) shall be
deemed to modify or in any manner limit the provisions Section 4.5(c)(iii) and
(iv).
(iii) Distributions Cumulative. Distributions on the Series A Preferred
Units will accrue whether or not the terms and provisions of any agreement of
the Partnership, including any agreement relating to its indebtedness at any
time prohibit the current payment of distributions, whether or not the
Partnership has earnings, whether or not there are funds legally available for
the payment of such of such distributions and whether or not such distributions
are authorized. Accrued but unpaid distributions on the Series A Preferred Units
will accumulate as of the Preferred Unit Distribution Payment Date on which they
first become payable. Distributions on account of arrears for any past
distribution periods may be declared and paid at any time, without reference to
a regular Preferred Unit Distribution Payment Date to holders of record of the
Series A Preferred Units on the record date fixed by the Partnership acting
through the General Partner which date shall be not less than ten (10) days and
not more than thirty (30) Business Days prior to the payment date. Accumulated
and unpaid distributions will not bear interest.
(iv) Priority as to Distributions.
(A) So long as any Series A Preferred Units are outstanding, no
distribution of cash or other property shall be authorized, declared, paid or
set apart for payment on or with respect to any class or series of Partnership
Interests of the Partnership ranking junior as to the payment of distributions
to the Series A Preferred Units (collectively, "Junior Units"), nor shall any
cash or other property be set aside for or applied to the purchase, redemption
or other acquisition for consideration of any Series A Preferred Units, any
Parity Preferred Units with respect to distributions or any Junior Units,
unless, in each case, all distributions accumulated on all Series A Preferred
Units and all classes and series of outstanding Parity Preferred Units as to
payment of distributions have been paid in full. The foregoing sentence will not
prohibit (a) distributions payable solely in Junior Units, (b) the conversion of
Junior Units or Parity Preferred Units into Partnership Interests of the
Partnership ranking junior to the Series A Preferred Units as to distributions,
or (c) the redemption of Partnership Interests corresponding to any Series A
Preferred Stock, Parity Preferred Stock with respect to distributions or Junior
Stock (as such terms are defined herein or in the Articles of Incorporation) to
be purchased by the General Partner pursuant to Article 5 of the Articles of
Incorporation to preserve the General Partner's status as a real estate
investment trust, provided that such redemption shall be upon the same terms as
the corresponding purchase pursuant to Article 5 of the Articles of
Incorporation.
(B) So long as distributions have not been paid in full (or a sum
sufficient for such full payment is not irrevocably deposited in trust for
payment) upon the Series A Preferred Units, all distributions authorized and
declared on the Series A Preferred Units and all classes or series of
outstanding Parity Preferred Units with respect to distributions shall be
authorized and declared so that the amount of distributions authorized and
declared per Series A Preferred Unit and such other classes or series of Parity
Preferred Units shall in all cases bear to each other the same ratio that
accrued distributions per Series A Preferred Unit and such other classes or
series of Parity Preferred Units (which shall not include any accumulation in
respect of unpaid distributions for prior distribution periods if such class or
series of Parity Preferred Units do not have cumulative distribution rights)
bear to each other.
(v) No Further Rights. Holders of Series A Preferred Units shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
(d) Liquidation Preference.
(i) Payment of Liquidating Distributions. Subject to the rights of holders
of Parity Preferred Units with respect to rights upon any voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership and
subject to Partnership Interests ranking senior to the Series A Preferred Units
with respect to rights upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership, the holders of Series A Preferred
Units shall be entitled to receive out of the assets of the Partnership legally
available for distribution or the proceeds thereof, after payment or provision
for debts and other liabilities of the Partnership, but before any payment or
distributions of the assets shall be made to holders of any class or series of
Partnership Interest that ranks junior to the Series A Preferred Units as to
rights upon liquidation, dissolution or winding-up of the Partnership, an amount
equal to the sum of (i) a liquidation preference equal to their positive Capital
Account balances, determined after taking into account all Capital Account
adjustments for the Partnership taxable year during which the liquidation occurs
(other than those made as a result of the liquidating distribution set forth in
this Section 4.5(d)(i) and (ii) an amount equal to any accumulated and unpaid
distributions thereon, whether or not declared, to the date of payment. In the
event that, upon such voluntary or involuntary liquidation, dissolution or
winding-up, there are insufficient assets to permit full payment of liquidating
distributions to the holders of Series A Preferred Stock and any Parity
Preferred Units as to rights upon liquidation, dissolution or winding-up of the
Partnership, all payments of liquidating distributions on the Series A Preferred
Units and such Parity Preferred Units shall be made so that the payments on the
Series A Preferred Units and such Parity Preferred Units shall in all cases bear
to each other the same ratio that the respective rights of the Series A
Preferred Unit and such other Parity Preferred Units (which shall not include
any accumulation in respect of unpaid distributions for prior distribution
periods if such Parity Preferred Units do not have cumulative distribution
rights) upon liquidation, dissolution or winding-up of the Partnership bear to
each other.
(ii) Notice. Written notice of any such voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership,
stating the payment date or dates when, and the place or
places where, the amounts distributable in such circumstances
shall be payable, shall be given by (x) fax and (y) by first
class mail, postage pre-paid, not less than 30 and not more
that 60 days prior to the payment date stated therein, to each
record holder of the Series A Preferred Units at the
respective addresses of such holders as the same shall appear
on the transfer records of the Partnership.
(iii) No Further Rights. After payment of the full amount of the
liquidating distributions to which they are entitled, the
holders of Series A Preferred Units will have no right or
claim to any of the remaining assets of the Partnership.
(iv) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for
cash, shares of stock, securities or other consideration) of
all or substantially all of the property or assets of the
General Partner to, or the consolidation or merger or other
business combination of the Partnership with or into, any
corporation, trust or other entity (or of any corporation,
trust or other entity with or into the Partnership) shall not
be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
(e) Optional Redemption.
(i) Right of Optional Redemption. The Series A Preferred Units may not be
redeemed prior to the fifth anniversary of the issuance date. On or after such
date, the Partnership shall have the right to redeem the Series A Preferred
Units, in whole or in part, at any time or from time to time, upon not less than
30 nor more than 60 days' written notice, at a redemption price, payable in
cash, equal to the Capital Account balance of the holder of Series A Preferred
Units (the "Series A Redemption Price"); provided, however, that no redemption
pursuant to this Section 4.5(e) will be permitted if the Series A Redemption
Price does not equal or exceed the original Capital Contribution of such holder
plus the cumulative Series A Priority Return, whether or not declared, to the
redemption date to the extent not previously distributed or distributed on the
redemption date pursuant to Section 4.5(c)(i). If fewer than all of the
outstanding Series A Preferred Units are to be redeemed, the Series A Preferred
Units to be redeemed shall be selected pro rata (as nearly as practicable
without creating fractional units).
(ii) Limitation on Redemption.
(A) The Series A Redemption Price of the Series A Preferred Units (other
than the portion thereof consisting of accumulated but unpaid distributions)
will be payable solely out of the sale proceeds of capital stock of the General
Partner, which will be contributed by the General Partner to the Partnership as
additional capital contribution, or out of the sale of limited partner interests
in the Partnership and from no other source. For purposes of the preceding
sentence, "capital stock" means any equity securities (including Common Stock
and Preferred Stock (as such terms are defined in the Articles of
Incorporation)), shares, participation or other ownership interests (however
designated) and any rights (other than debt securities convertible into or
exchangeable for equity securities) or options to purchase any of the foregoing.
(B) The Partnership may not redeem fewer than all of the
outstanding Series A Preferred Units unless all
accumulated and unpaid distributions have been paid
on all Series A Preferred Units for all quarterly
distribution periods terminating on or prior to the
date of redemption.
(iii) Procedures for Redemption.
(A) Notice of redemption will be (i) faxed, and (ii) mailed by the
Partnership, by certified mail, postage prepaid, not less than 30 nor more than
60 days prior to the redemption date, addressed to the respective holders of
record of the Series A Preferred Units at their respective addresses as they
appear on the records of the Partnership. No failure to give or defect in such
notice shall affect the validity of the proceedings for the redemption of any
Series A Preferred Units except as to the holder to whom such notice was
defective or not given. In addition to any information required by law, each
such notice shall state: (i) the redemption date, (ii) the Series A Redemption
Price, (iii) the aggregate number of Series A Preferred Units to be redeemed and
if fewer than all of the outstanding Series A Preferred Units are to be
redeemed, the number of Series A Preferred Units to be redeemed held by such
holder, which number shall equal such holder's pro rata share (based on the
percentage of the aggregate number of outstanding Series A Preferred Units the
total number of Series A Preferred Units held by such holder represents) of the
aggregate number of Series A Preferred Units to be redeemed, (iv) the place or
places where such Series A Preferred Units are to be surrendered for payment of
the Series A Redemption Price, (v) that distributions on the Series A Preferred
Units to be redeemed will cease to accumulate on such redemption date and (vi)
that payment of the Series A Redemption Price will be made upon presentation and
surrender of such Series A Preferred Units.
(B) If the Partnership gives a notice of redemption in respect of Series A
Preferred Units (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date, the Partnership will deposit irrevocably in
trust for the benefit of the Series A Preferred Units being redeemed funds
sufficient to pay the applicable Series A Redemption Price and will give
irrevocable instructions and authority to pay such Series A Redemption Price to
the holders of the Series A Preferred Units upon surrender of the Series A
Preferred Units by such holders at the place designated in the notice of
redemption. If the Series A Preferred Units are evidenced by a certificate and
if fewer than all Series A Preferred Units evidenced by any certificate are
being redeemed, a new certificate shall be issued upon surrender of the
certificate evidencing all Series A Preferred Units, evidencing the unredeemed
Series A Preferred Units without cost to the holder thereof. On and after the
date of redemption, distributions will cease to accumulate on the Series A
Preferred Units or portions thereof called for redemption, unless the
Partnership defaults in the payment thereof. If any date fixed for redemption of
Series A Preferred Units is not a Business Day, then payment of the Series A
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such date fixed for
redemption. If payment of the Series A Redemption Price is improperly withheld
or refused and not paid by the Partnership, distributions on such Series A
Preferred Units will continue to accumulate from the original redemption date to
the date of payment, in which case the actual payment date will be considered
the date fixed for redemption for purposes of calculating the applicable Series
A Redemption Price.
(f) Voting Rights.
(i) General. Notwithstanding anything to the contrary contained in
this Agreement, Series A Preferred Partners will not have any
voting rights or right to consent to any matter requiring the
consent or approval of the Limited Partners, except as
otherwise expressly set forth in this Agreement and except as
set forth below.
(ii) Certain Voting Rights. So long as any Series A Preferred Units remain
outstanding, the Partnership shall not, without the affirmative vote of the
holders of at least two-thirds of the Series A Preferred Units outstanding at
the time (A) authorize or create, or increase the authorized or issued amount
of, any class or series of Partnership Interests ranking prior to the Series A
Preferred Units with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up or reclassify any Partnership Interests
of the Partnership into any such Partnership Interest, or create, authorize or
issue any obligations or security convertible into or evidencing the right to
purchase any such Partnership Interests, (B) authorize or create, or increase
the authorized or issued amount of any Parity Preferred Units or reclassify any
Partnership Interest of the Partnership into any such Partnership Interest or
create, authorize or issue any obligations or security convertible into or
evidencing the right to purchase any such Partnership Interests but only to the
extent such Parity Preferred Units are issued to an affiliate of the
Partnership, other than (I) Security Capital or (II) the General Partner to the
extent the issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership or (C) either (I) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety to, any corporation or
other entity or (II) amend, alter or repeal the provisions of this Agreement,
whether by merger, consolidation or otherwise, that would materially and
adversely affect the powers, special rights, preferences, privileges or voting
power of the Series A Preferred Units or the holders thereof; provided, however,
that with respect to the occurrence of a merger, consolidation or a sale or
lease of all of the Partnership's assets as an entirety, so long as (a) the
Partnership is the surviving entity and the Series A Preferred Units remain
outstanding with the terms thereof unchanged, or (b) the resulting, surviving or
transferee entity is a partnership, limited liability company or other
pass-through entity organized under the laws of any state and substitutes the
Series A Preferred Units for other interests in such entity having substantially
the same terms and rights as the Series A Preferred Units, including with
respect to distributions, voting rights and rights upon liquidation, dissolution
or winding-up, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series A Preferred Units and no vote of the Series A Preferred
Units shall be required in such case; and provided further that any increase in
the amount of Partnership Interests or the creation or issuance of any other
class or series of Partnership Interests, in each case ranking (a) junior to the
Series A Preferred Units with respect to payment of distributions and the
distribution of assets upon liquidation, dissolution or winding-up, or (b) on a
parity to the Series A Preferred Units with respect to payment of distributions
and the distribution of assets upon liquidation, dissolution or winding-up to
the extent such Partnership Interest are not issued to an affiliate of the
Partnership, other than the General Partner to the extent the issuance of such
interests was to allow the General Partner to issue corresponding preferred
stock to persons who are not affiliates of the Partnership, shall not be deemed
to materially and adversely affect such rights, preferences, privileges or
voting powers and no vote of the Series A Preferred Units shall be required in
such case.
(g) Exchange Rights.
(i) Right to Exchange.
(A) Series A Preferred Units will be exchangeable in whole or in part at
anytime on or after the tenth anniversary of the date of issuance, at the option
of the holders thereof, for authorized but previously unissued shares of 8.125%
Series A Cumulative Redeemable Preferred Stock of Regency (the "Series A
Preferred Stock") at an exchange rate of one share of Series A Preferred Stock
for one Series A Preferred Unit, subject to adjustment as described below (the
"Exchange Price"), provided that the Series A Preferred Units will become
exchangeable at any time, in whole or in part, at the option of the holders of
Series A Preferred Units for Series A Preferred Stock if (I) at any time full
distributions shall not have been timely made on any Series A Preferred Unit
with respect to six (6) prior quarterly distribution periods, whether or not
consecutive, provided, however, that a distribution in respect of Series A
Preferred Units shall be considered timely made if made within two (2) Business
Days after the applicable Preferred Unit Distribution Payment Date if at the
time of such late payment there shall not be any prior quarterly distribution
periods in respect of which full distributions were not timely made or (II) upon
receipt by a holder or holders of Series A Preferred Units of (a) notice from
the General Partner that the General Partner or a Subsidiary of the General
Partner has taken the position that the Partnership is, or upon the occurrence
of a defined event in the immediate future will be, a PTP and (b) an opinion
rendered by an outside nationally recognized independent counsel familiar with
such matters addressed to a holder or holders of Series A Preferred Units, that
the Partnership is or likely is, or upon the occurrence of a defined event in
the immediate future will be or likely will be, a PTP. In addition, the Series A
Preferred Units may be exchanged for Series A Preferred Stock, in whole or in
part, at the option of any holder prior to the tenth anniversary of the issuance
date and after the third anniversary thereof if such holder of a Series A
Preferred Units shall deliver to the General Partner either (i) a private ruling
letter addressed to such holder of Series A Preferred Units or (ii) an opinion
of independent counsel reasonably acceptable to the General Partner based on the
enactment of temporary or final Regulations or the publication of a Revenue
Ruling, in either case to the effect that an exchange of the Series A Preferred
Units at such earlier time would not cause the Series A Preferred Units to be
considered "stock and securities" within the meaning of Section 351(e) of the
Code for purposes of determining whether the holder of such Series A Preferred
Units is an "investment company" under Section 721(b) of the Code if an exchange
is permitted at such earlier date. Furthermore, the Series A Preferred Units may
be exchanged in whole or in part for Series A Preferred Stock at any time after
the date hereof, if both (x) the holder thereof concludes based on results or
projected results that there exists (in the reasonable judgement of the holder)
an imminent and substantial risk that the holder's interest in the Partnership
does or will represent more than 19.5% of the total profits or capital interests
in the Partnership (determined in accordance with Regulations Section
1.731-2(e)(4)) for a taxable year, and (y) the holder delivers to the General
Partner an opinion of nationally recognized independent counsel to the effect
that there is an imminent and substantial risk that the holder's interest in the
Partnership does or will represent more than 19.5% of the total profits or
capital interests in the Partnership (determined in accordance with Regulations
Section 1.731-2(e)(4)) for a taxable year.
(B) Notwithstanding anything to the contrary set forth in Section
4.5(g)(i)(A), if an Exchange Notice has been delivered to the General Partner,
then the General Partner may, at its option, elect to redeem or cause the
Partnership to redeem all or a portion of the outstanding Series A Preferred
Units for cash in an amount equal to the original Capital Contribution per
Series A Preferred Unit and all accrued and unpaid distributions thereon to the
date of redemption. The General Partner may exercise its option to redeem the
Series A Preferred Units for cash pursuant to this Section 4.5(g)(i)(B) by
giving each holder of record of Series A Preferred Units notice of its election
to redeem for cash, within five (5) Business Days after receipt of the Exchange
Notice, by (i) fax, and (ii) registered mail, postage paid, at the address of
each holder as it may appear on the records of the Partnership stating (i) the
redemption date, which shall be no later than sixty (60) days following the
receipt of the Exchange Notice, (ii) the redemption price, (iii) the place or
places where the Series A Preferred Units are to be surrendered for payment of
the redemption price, (iv) that distributions on the Series A Preferred Units
will cease to accrue on such redemption date; (v) that payment of the redemption
price will be made upon presentation and surrender of the Series A Preferred
Units and (vi) the aggregate number of Series A Preferred Units to be redeemed,
and if fewer than all of the outstanding Series A Preferred Units are to be
redeemed, the number of Series A Units to be redeemed held by such holder, which
number shall equal such holder's pro-rata share (based on the percentage of the
aggregate number of outstanding Series A Preferred Units the total number of
Series A Preferred Units held by such holder represents) of the aggregate number
of Series A Preferred Units being redeemed.
(C) Upon the occurrence of an event giving rise to exchange rights pursuant
to Section 4.5(g)(i)(A), in the event an exchange of all or a portion of Series
Preferred A Preferred Units pursuant to Section 4.5(g)(i)(A) would violate the
provisions on ownership limitation of the General Partner set forth in Article 5
of the Articles of Incorporation, the General Partner shall give written notice
thereof to each holder of record of Series A Preferred Units, within five (5)
Business Days following receipt of the Exchange Notice, by (i) fax, and (ii)
registered mail, postage prepaid, at the address of each such holder set forth
in the records of the Partnership. In such event, each holder of Series A
Preferred Units shall be entitled to exchange, pursuant to the provision of
Section 4.5(g)(ii) a number of Series A Preferred Units which would comply with
the provisions on the ownership limitation of the General Partner set forth in
such Article 5 of the Articles of Incorporation and any Series A Preferred Units
not so exchanged (the "Excess Units") shall be redeemed by the Partnership for
cash in an amount equal to the original Capital Contribution per Excess Unit,
plus any accrued and unpaid distributions thereon, whether or not declared, to
the date of redemption. The written notice of the General Partner shall state
(i) the number of Excess Units held by such holder, (ii) the redemption price of
the Excess Units, (iii) the date on which such Excess Units shall be redeemed,
which date shall be no later than sixty (60) days following the receipt of the
Exchange Notice, (iv) the place or places where such Excess Units are to be
surrendered for payment of the Series A Redemption Price, (iv) that
distributions on the Excess Units will cease to accrue on such redemption date,
and (v) that payment of the redemption price will be made upon presentation and
surrender of such Excess Units. In the event an exchange would result in Excess
Units, as a condition to such exchange, each holder of such units agrees to
provide representations and covenants reasonably requested by the General
Partner relating to (i) the widely held nature of the interests in such holder,
sufficient to assure the General Partner that the holder's ownership of stock of
the General Partner (without regard to the limits described above) will not
cause any individual to own in excess of 9.8% of the stock of the General
Partner; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates.
(D) The redemption of Series A Preferred Units described
in Section 4.5(g)(i)(B) and (C) shall be subject to
the provisions of Section 4.5(e)(ii)(A) and Section
4.5(e)(iii)(B); provided, however, that for purposes
hereof the term "Series A Redemption Price" in
Section 4.5(e)(ii)(A) and Section 4.5(e)(iii)(B)
shall be read to mean the original Capital
Contribution per Series A Preferred Unit being
redeemed plus all accrued and unpaid distributions to
the redemption date.
(ii) Procedure for Exchange.
(A) Any exchange shall be exercised pursuant to a notice of exchange (the
"Exchange Notice") delivered to the General Partner by the holder who is
exercising such exchange right, by (i) fax and (ii) by certified mail postage
prepaid. Upon request of the General Partner, such holder delivering the
Exchange Notice shall provide to the General Partner in writing such information
as the General Partner may reasonably request to determine whether any portion
of the exchange by the delivering holder will result in the violation of the
restrictions of Article 5 of the Articles of Incorporation, including the
Ownership Limit and the Related Tenant Limit. The exchange of Series A Preferred
Units, or a specified portion thereof, may be effected after the fifth (5th)
Business Days following receipt by the General Partner of the Exchange Notice
and such requested information by delivering certificates, if any, representing
such Series A Preferred Units to be exchanged together with, if applicable,
written notice of exchange and a proper assignment of such Series A Preferred
Units to the office of the General Partner maintained for such purpose.
Currently, such office is 121 West Forsyth Street, Suite 200, Jacksonville,
Florida 32202. Each exchange will be deemed to have been effected immediately
prior to the close of business on the date on which such Series A Preferred
Units to be exchanged (together with all required documentation) shall have been
surrendered and notice shall have been received by the General Partner as
aforesaid and the Exchange Price shall have been paid. Any Series A Preferred
Stock issued pursuant to this Section 4.5(g) shall be delivered as shares which
are duly authorized, validly issued, fully paid and nonassessable, free of
pledge, lien, encumbrance or restriction other than those provided in the
Articles of Incorporation, the Bylaws of the General Partner, the Securities Act
and relevant state securities or blue sky laws.
(B) In the event of an exchange of Series A Preferred Units for shares of
Series A Preferred Stock, an amount equal to the accrued and unpaid
distributions which are not paid pursuant to Section 4.5(c)(i) hereof, whether
or not declared, to the date of exchange on any Series A Preferred Units
tendered for exchange shall (i) accrue and be payable by the General Partner
from and after the date of exchange on the shares of the Series A Preferred
Stock into which such Series A Preferred Units are exchanged, and (ii) continue
to accrue on such Series A Preferred Units, which shall remain outstanding
following such exchange, with the General Partner as the holder of such Series A
Preferred Units. Notwithstanding anything to the contrary set forth herein, in
no event shall a holder of a Series A Preferred Unit that was validly exchanged
into Series A Preferred Stock pursuant to this section (other than the General
Partner now holding such Series A Preferred Unit), receive a distribution out of
Available Cash or Capital Transaction Proceeds of the Partnership with respect
to any Series A Preferred Units so exchanged.
(C) Fractional shares of Series A Preferred Stock are not
to be issued upon exchange but, in lieu thereof, the
General Partner will pay a cash adjustment based upon
the fair market value of the Series A Preferred Stock
on the day prior to the exchange date as determined
in good faith by the Board of Directors of the
General Partner.
(iii) Adjustment of Exchange Price.
(A) The Exchange Price is subject to adjustment upon
certain events, including, (i) subdivisions,
combinations and reclassification of the Series A
Preferred Stock, and (ii) distributions to all
holders of Series A Preferred Stock of evidences of
indebtedness of the General Partner or assets
(including securities, but excluding dividends and
distributions paid in cash out of equity applicable
to Series A Preferred Stock).
(B) In case the General Partner shall be a party to any transaction
(including, without limitation, a merger, consolidation, statutory share
exchange, tender offer for all or substantially all of the General Partner's
capital stock or sale of all or substantially all of the General Partner's
assets), in each case as a result of which the Series A Preferred Stock will be
converted into the right to receive shares of capital stock, other securities or
other property (including cash or any combination thereof), each Series A
Preferred Unit will thereafter be exchangeable into the kind and amount of
shares of capital stock and other securities and property receivable (including
cash or any combination thereof) upon the consummation of such transaction by a
holder of that number of shares of Series A Preferred Stock or fraction thereof
into which one Series A Preferred Unit was exchangeable immediately prior to
such transaction. The General Partner may not become a party to any such
transaction unless the terms thereof are consistent with the foregoing.
(h) No Conversion Rights. The holders of the Series A Preferred Units shall not
have any rights to convert such shares into shares of any other class or series
of stock or into any other securities of, or interest in, the Partnership.
(i) No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series A Preferred Units.
Article 5
Distributions
Section 5.1 Requirement and Characterization of Distributions.
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(a) Subject to Section 5.1(c), the General Partner shall distribute quarterly an
amount equal to 100% of Available Cash generated by the Partnership during such
quarter to the Partners who are Partners on the Partnership Record Date with
respect to such quarter as follows:
(i) First, one hundred percent (100%) to the Original Limited
Partners, pro rata based on the number of Original Limited
Partnership Units held by each such Partner on the applicable
Partnership Record Date, until each has received an amount
equal to the Priority Distribution Amount for the quarter for
each such Unit;
(ii) Next, if any Original Limited Partners have a positive
Cumulative Unpaid Accrued Return Account, one hundred percent
(100%) to such Original Limited Partners, pro rata based on
the relative amounts of their Cumulative Unpaid Accrued Return
Accounts, until each such Cumulative Unpaid Accrued Return
Account reaches zero;
(iii) Next, if any Original Limited Partners have a positive
Cumulative Unpaid Priority Distribution Account, one hundred
percent (100%) to such Original Limited Partners, pro rata
based on the relative amounts of their Cumulative Unpaid
Priority Distribution Accounts, until each such Cumulative
Unpaid Priority Distribution Account reaches zero;
(iv) Next, one hundred percent (100%) to the Additional Limited
Partners, pro rata based on the relative amounts of their
Priority Distribution Amounts, until each has received an
amount equal to the Priority Distribution Amount for the
quarter for each Unit held by such Additional Limited Partner
on the applicable Partnership Record Date;
(v) Next, if any Additional Limited Partners have a positive
Cumulative Unpaid Accrued Return Account, one hundred percent
(100%) to such Additional Limited Partners, pro rata based on
the relative amounts of their Cumulative Unpaid Accrued Return
Accounts, until each such Cumulative Unpaid Accrued Return
Account reaches zero;
(vi) Next, if any Additional Limited Partners have a positive
Cumulative Unpaid Priority Distribution Account, one hundred
percent (100%) to such Additional Limited Partners, pro rata
based on the relative amounts of their Cumulative Unpaid
Priority Distribution Accounts, until each such Cumulative
Unpaid Priority Distribution Account reaches zero; and
(vii) Thereafter, to the General Partner and any other holders of
Class B Units, pro rata in accordance with the relative number
of Class B Units held by each.
(b) Subject to Section 5.1(c), the General Partner shall distribute Capital
Transaction Proceeds received by the Partnership within 30 days after the date
of such Capital Transaction, provided that the General Partner has given the
Limited Partners 20 days' prior written notice of the date for any such
distribution (the "Capital Transaction Record Date"), as follows:
(i) First, if any Original Limited Partners have a positive
Cumulative Unpaid Accrued Return Account, one hundred percent
(100%) to such Original Limited Partners, pro rata based on
the relative amounts of their Cumulative Unpaid Accrued Return
Accounts, until each such Cumulative Unpaid Accrued Return
Account reaches zero;
(ii) Next, if any Original Limited Partners have a positive
Cumulative Unpaid Priority Distribution Account, one hundred
percent (100%) to such Original Limited Partners, pro rata
based on the relative amounts of their Cumulative Unpaid
Priority Distribution Accounts, until each such Cumulative
Unpaid Priority Distribution Account reaches zero;
(iii) Next, if any Additional Limited Partners have a positive
Cumulative Unpaid Accrued Return Account, one hundred percent
(100%) to such Additional Limited Partners, pro rata based on
the relative amounts of their Cumulative Unpaid Accrued Return
Accounts, until each such Cumulative Unpaid Accrued Return
Account reaches zero;
(iv) Next, if any Additional Limited Partners have a positive
Cumulative Unpaid Priority Distribution Account, one hundred
percent (100%) to such Additional Limited Partners, pro rata
based on the relative amounts of their Cumulative Unpaid
Priority Distribution Accounts, until each such Cumulative
Unpaid Priority Distribution Account reaches zero; and
(v) Thereafter, to the General Partner and any other holders of
Class B Units, pro rata in accordance with the relative number
of Class B Units held by each.
(c) Anything herein to the contrary notwithstanding, no Available Cash or
Capital Transaction Proceeds shall be distributed pursuant to Section 5.1(a),
Section 5.1(b) or any other provision of this Article 5 unless all distributions
accumulated on all Series A Preferred Units pursuant to Section 4.5 have been
paid in full and unless all distributions accumulated on any other outstanding
Preferred Units have been paid in full.
Section 5.2 Amounts Withheld. All amounts withheld pursuant to the Code or any
provisions of any state or local tax law and Section 5.3 hereof with respect to
any allocation, payment or distribution to the General Partner, or any Limited
Partners or Assignees shall be promptly paid, solely out of funds of the
Partnership (except as otherwise provided in Section 5.3 in connection with the
exercise by a Limited Partner of a Redemption Right), by the General Partner to
the appropriate taxing authority and treated as amounts distributed to the
General Partner or such Limited Partners or Assignees pursuant to Section 5.1
for all purposes under this Agreement.
Section 5.3 Withholding. Each Limited Partner hereby authorizes the Partnership
to withhold from or pay on behalf of or with respect to such Limited Partner any
amount of federal, state, local, or foreign taxes that the General Partner
determines that the Partnership is required to withhold or pay with respect to
any amount distributable or allocable to such Limited Partner pursuant to this
Agreement or with respect to the exercise by such Limited Partner of the
Redemption Rights set forth in Section 8.6 or in any separate agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445, or 1446 of the Code and
Section 48-7-129 of the Official Code of Georgia Annotated. Any amount paid on
behalf of or with respect to a Limited Partner shall constitute a loan by the
Partnership to such Limited Partner, which loan shall be repaid by such Limited
Partner within 15 days after notice from the General Partner that such payment
must be made unless (i) the Partnership withholds such payment from a
distribution which would otherwise be made to the Limited Partner or (ii) the
General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the available funds of the Partnership which
would, but for such payment, be distributed to the Limited Partner. Any amounts
withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as
having been distributed to such Limited Partner and shall be promptly paid,
solely out of funds of the Partnership, by the General Partner to the
appropriate taxing authority. Each Limited Partner hereby unconditionally and
irrevocably grants to the Partnership a security interest in such Limited
Partner's Partnership Interest as to secure such Limited Partner's obligation to
pay to the Partnership any amounts required to be paid pursuant to this Section
5.3 (together with attorney's fees and other costs in enforcing the
Partnership's rights against the collateral). In the event that a Limited
Partner or Redeeming Partner fails to pay any amounts owed to the Partnership
pursuant to this Section 5.3 when due, the General Partner may, in its sole and
absolute discretion, elect to make the payment on behalf of such defaulting
Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Partner and shall succeed to all rights and remedies of the
Partnership as against such defaulting Partner (including, without limitation,
in the case of a default by other than a Redeeming Partner the right to receive
distributions from the Partnership). Any amounts payable by a Limited Partner or
a Redeeming Partner hereunder shall bear interest at the Prime Rate, plus two
percentage points (but not higher than the maximum lawful rate) from the date
such amount is due (i.e., 15 days after demand) until such amount is paid in
full. In the event that the Partnership or the General Partner is required to
withhold tax with respect to the exercise by a Limited Partner of a Redemption
Right, the Limited Partner exercising the Redemption Right shall make
arrangements with the Partnership or the General Partner, as the case may be, to
provide the funds to the Partnership necessary to effect the required
withholding. In the event that, pursuant to applicable laws and regulations, the
General Partner may withhold a reduced amount pending a determination by
applicable taxing authorities as to whether any additional withholding tax must
subsequently be deposited, the General Partner shall have the right to require
the Redeeming Partner to pledge a first priority security interest in a portion
of the Redemption Amount as collateral for the Redeeming Partner's obligation to
provide the funds necessary to effect any subsequent required holding (together
with attorney's fees and other costs in enforcing the Partnership's rights
against the collateral), in an amount in the case of a Share Amount equal to
Shares having a Value on the date of the pledge equal to 125% of the maximum
possible subsequent required withholding (or 100% of the maximum possible
subsequent required withholding if the Redemption Amount is paid in the form of
the Cash Amount) (the "Withholding Collateral"). The General Partner shall be
entitled to retain possession of the Withholding Collateral until either the
Redeeming Partner provides funds to the General Partner sufficient to make any
subsequent required withholding deposit or the General Partner receives a
determination from the applicable authorities that no subsequent withholding is
required. All dividends, distributions, interest or other income on the
Withholding Collateral while subject to the pledge hereunder shall be paid to
the Redeeming Partner pledging the Withholding Collateral. If the applicable
authorities advise that subsequent withholding is required and the Redeeming
Partner does not deliver the necessary funds to the General Partner within 20
days after receipt of the General Partner's request therefor, the General
Partner shall be entitled to exercise all rights and remedies of a secured party
under the Uniform Commercial Code with respect to the Withholding Collateral.
Each Limited Partner and each Redeeming Partner shall take such actions as the
Partnership or the General Partner shall request in order to perfect or enforce
the security interest created hereunder.
Section 5.4 Distributions Upon Liquidation. Notwithstanding anything contained
in Section 5.1 to the contrary, proceeds from a Liquidating Transaction shall be
distributed to the Partners in accordance with Section 13.2.
Article 6
Allocations
Section 6.1 Allocations of Net Income and Net Loss. For purposes of maintaining
the Capital Accounts and in determining the rights of the Partners among
themselves, the Partnership's Net Income and Net Loss shall be allocated among
the Partners for each taxable year (or portion thereof) as provided herein
below.
(a) Net Income. After giving effect to the special allocations set forth in
Section 6.2 below, Net Income shall be allocated as follows:
(i) First, one hundred percent (100%) to the General Partner in an
amount equal to the excess, if any, of (A) the cumulative Net
Losses allocated to the General Partner pursuant to Section
6.1(b)(ix) and the last sentence of Section 6.1(b) for all
prior fiscal years, over (B) the cumulative Net Income
allocated pursuant to this Section 6.1(a)(i) for all prior
fiscal years;
(ii) Second, one hundred percent (100%) to the Series A Preferred
Partners in an amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to the Series A Preferred
Partners pursuant to Section 6.1(b)(viii) for all prior fiscal
years, over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(ii), including any amounts allocated
pursuant to Section 6.2(g) which were attributable to this
Section 6.1(a)(ii), for all prior fiscal years;
(iii) Third, one hundred percent (100%) to the Original Limited
Partners in an amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to such Partners pursuant to
Section 6.1(b)(iv) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this Section
6.1(a)(iii) for all prior fiscal years, which amount shall be
allocated among such Partners in the same proportions and in
the reverse order as the Net Losses were allocated pursuant to
Section 6.1(b)(iv);
(iv) Fourth, one hundred percent (100%) to the Original Limited
Partners in an amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to such Partners pursuant to
Section 6.1(b)(iii) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this Section
6.1(a)(iv) for all prior fiscal years, which amount shall be
allocated among such Partners in the same proportions and in
the reverse order as the Net Losses were allocated pursuant to
Section 6.1(b)(iii);
(v) Fifth, one hundred percent (100%) to the Series A Preferred
Partners until the Series A Preferred Partners have been
allocated an amount equal to the excess of the cumulative
Series A Priority Return through the last day of the current
fiscal year (determined without reduction for distributions
made to date in satisfaction thereof) over the cumulative Net
Income allocated to the Series A Preferred Partners pursuant
to this Section 6.1(a)(v), including any amounts allocated
pursuant to Section 6.2(g) which were attributable to this
Section 6.1(a)(v), for all prior periods;
(vi) Sixth, one hundred percent (100%) to the Original Limited Partners
until the cumulative allocations of Net Income to each Original Limited Partner
under this Section 6.1(a)(vi) for the current and all prior fiscal years equal
the cumulative distributions paid to the Original Limited Partner pursuant to
Section 5.1(a)(i) and Section 13.2(a)(iv), provided, however, in the case of
Original Limited Partners other than Class Z Branch Partners, no allocations of
Net Income shall be made under this Section 6.1(a)(vi) to such Limited Partners
with respect to distributions made under Section 5.1(a)(i) and Section
13.2(a)(iv) after the Third Amendment Date;
(vii) Seventh, one hundred percent (100%) to the Original Limited Partners
until the cumulative allocations of Net Income to each Original Limited Partner
under this Section 6.1(a)(vii) for the current and all prior fiscal years equal
the sum of the cumulative amounts credited to such Partner's Cumulative Unpaid
Priority Distribution Account and Cumulative Unpaid Accrued Return Account for
the current and all prior fiscal years, provided, however, in the case of
Original Limited Partners other than Class Z Branch Partners, no allocations of
Net Income shall be made under this Section 6.1(a)(vii) with respect to amounts
credited to such Partners' Cumulative Unpaid Priority Distribution Accounts and
Cumulative Unpaid Accrued Return Accounts after the Third Amendment Date; and
(viii) Eighth, one hundred percent (100%) to the Additional Limited
Partners in an amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to the Additional Limited
Partners pursuant to Section 6.1(b)(vii) for all prior fiscal
years, over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(viii) for all prior fiscal years, which
amount shall be allocated among the Additional Limited
Partners in the same proportions and in the reverse order as
the Net Losses were allocated pursuant to Section 6.1(b)(vii);
(ix) Ninth, one hundred percent (100%) to the Additional Limited
Partners in an amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to the Additional Limited
Partners pursuant to Section 6.1(b)(vi) for all prior fiscal
years, over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(ix) for all prior fiscal years, which
amount shall be allocated among such Partners in the same
proportions and in the reverse order as the Net Losses were
allocated pursuant to Section 6.1(b)(vi);
(x) Tenth, one hundred percent (100%) to the Additional Limited Partners
until the cumulative allocations of Net Income to each Additional Limited
Partner under this Section 6.1(a)(x) for the current and all prior fiscal years
equal the cumulative distributions paid to the Additional Limited Partners
pursuant to Section 5.1(a)(iv) and Section 13.2(a)(v), provided, however, in the
case of Additional Limited Partners other than Class Z Midland Partners, no
allocations of Net Income shall be made under this Section 6.1(a)(x) to such
Limited Partners with respect to distributions made under Section 5.1(a)(iv) and
Section 13.2(a)(v) after the Third Amendment Date;
(xi) Eleven, one hundred percent (100%) to the Additional Limited Partners
until the cumulative allocations of Net Income to each Additional Limited
Partner under this Section 6.1(a)(xi) for the current and all prior fiscal years
equal the sum of (A) the cumulative amounts credited to such Partner's
Cumulative Unpaid Priority Distribution Account and Cumulative Unpaid Accrued
Return Account for the current and all prior fiscal years and (B) the cumulative
Net Losses allocated to the Additional Limited Partner pursuant to Section
6.1(b)(v) for all prior fiscal years, provided, however, in the case of
Additional Limited Partners other than Class Z Midland Partners, no allocation
of Net Income shall be made under this Section 6.1(a)(xi) with respect to
amounts credited to such Partners' Cumulative Unpaid Priority Distribution
Accounts and Cumulative Unpaid Accrued Return Accounts after the Third Amendment
Date; and
(xii) Thereafter, to the Original and Additional Limited Partners
other than Class Z Branch Partners or Class Z Midland
Partners, to the General Partner and to any other holders of
Class B Units, pro rata in accordance with the relative
amounts of Available Cash and Capital Transaction Proceeds
distributed to each of them during the taxable year.
(b) Net Losses. After giving effect to the special allocations set forth in
Section 6.2 below, Net Losses shall be allocated as follows:
(i) First, one hundred percent (100%) to the Original and
Additional Limited Partners other than Class Z Branch Partners
or Class Z Midland Partners, to the General Partner and to the
Class B Unit holders in an amount equal to the excess, if any,
of (A) the cumulative Net Income allocated pursuant to Section
6.1(a)(xii) hereof for all prior fiscal years in excess of
distributions of Available Cash to such Partners for which no
corresponding allocation of Net Income had been made (or is
required to be made) under Sections 6.1(a)(i)-(xi) hereof,
over (B) the cumulative Net Losses allocated pursuant to this
Section 6.1(b)(i) for all prior fiscal years;
(ii) Second, to the Original Limited Partners until the cumulative
allocations of Net Losses under this Section 6.1(b)(ii) equal
the excess, if any, of the cumulative allocations of Net
Income under Section 6.1(a)(vii) to such Partners for all
prior fiscal years over the cumulative distributions to such
Partners under Section 5.1(a)(ii) and (iii) and Section
5.1(b)(i) and (ii) for the current and all prior fiscal years
(such allocation being made in proportion to such Partners'
respective excess amounts);
(iii) Third, to the Original Limited Partners with positive Adjusted
Capital Account balances (determined, solely for purposes of
this Section 6.1(b)(iii), without regard to any obligation of
a Partner to restore a negative Capital Account under Section
13.4), in proportion to such balances, until such balances are
reduced to zero;
(iv) Fourth, to the Original Limited Partners in proportion to
their relative Percentage Interests; provided, however, that
to the extent that an allocation under this Section 6.1(b)(iv)
would cause or increase an Adjusted Capital Account Deficit
for such Partner, such Net Loss shall be allocated to those
Original Limited Partners (in proportion to their relative
Percentage Interests) for whom such allocation would not cause
or increase an Adjusted Capital Account Deficit;
(v) Fifth, to the Additional Limited Partners until the cumulative
allocations of Net Losses under this Section 6.1(b)(v) equal
the excess, if any, of the cumulative allocations of Net
Income under Section 6.1(a)(xi) to such Partners for all prior
fiscal years over the cumulative distributions to such
Partners under Section 5.1(a)(v) and (vi) and Section
5.1(b)(iii) and (iv) for the current and all prior fiscal
years (such allocation being made in proportion to such
Partners' respective excess amounts);
(vi) Sixth, to the Additional Limited Partners with positive
Adjusted Capital Accounts balances (determined, solely for
purposes of this Section 6.1(b)(vi), without regard to any
obligation of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances, until
such balances are reduced to zero;
(vii) Seventh, to the Additional Limited Partners in proportion to
their relative Percentage Interests; provided, however, that
to the extent that an allocation under this Section
6.1(b)(vii) would cause or increase an Adjusted Capital
Account Deficit for such Partner, such Net Loss shall be
allocated to those Additional Limited Partners (in proportion
to their relative Percentage Interests) for whom such
allocation would not cause or increase an Adjusted Capital
Account Deficit;
(viii) Eighth, to the Series A Preferred Partners until their
Adjusted Capital Account balance (determined, solely for
purposes of this Section 6.1(b)(viii), without regard to any
obligation of a Partner to restore a negative Capital Account
under Section 13.4), has been reduced to zero; and
(ix) Any remaining Net Loss shall be allocated to the General Partner and any
other holders of Class B Units.
Notwithstanding the foregoing, Net Losses shall not be allocated to any Limited
Partner pursuant to this Section 6.1(b) to the extent that such allocation would
cause such Limited Partner to have an Adjusted Capital Account Deficit at the
end of such taxable year (or increase any existing Adjusted Capital Account
Deficit). All Net Losses in excess of the limitations set forth in the preceding
sentence of this Section 6.1(b) shall be allocated to the General Partner.
(c) Nonrecourse Liabilities. The Partners agree that excess Nonrecourse
Liabilities of the Partnership (within the meaning of Section 1.752-3(a)(3) of
the Regulations) will be allocated among the Partners for purposes of Section
752 of the Code in accordance with their respective Percentage Interests.
(d) Gains. Any gain allocated to the Partners upon the sale or other taxable
disposition of any Partnership asset shall to the extent possible, after taking
into account other required allocations of gain pursuant to Section 6.2 below,
be characterized as Recapture Income in the same proportions and to the same
extent as such Partners have been allocated any deductions directly or
indirectly giving rise to the treatment of such gains as Recapture Income.
Section 6.2 Special Allocation Rules. Notwithstanding any other provision
of this Agreement, the following special allocations shall be made in the
following order:
(a) Minimum Gain Chargeback. Notwithstanding any other provisions of Article 6,
if there is a net decrease in Partnership Minimum Gain during any Partnership
Year, each Partner shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount equal to
such Partner's share of the net decrease in Partnership Minimum Gain, as
determined under Regulations Section 1.704-2(g). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts required
to be allocated to each Partner pursuant thereto. The items to be so allocated
shall be determined in accordance with Regulations Section 1.704-2(f)(6). This
Section 6.2(a) is intended to comply with the minimum gain chargeback
requirements in Regulations Section 1.704-2(f) and for purposes of this Section
6.2(a) only, each Partner's Adjusted Capital Account Deficit shall be determined
prior to any other allocations pursuant to Section 6.1 of the Agreement with
respect to such fiscal year and without regard to any decrease in Partner
Minimum Gain during such Partnership Year.
(b) Partner Minimum Gain Chargeback. Notwithstanding any other provision of
Article 6 (except Section 6.2(a) hereof), if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership
Year, each Partner who has a share of the Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2(i)(4). This Section 6.2(b) is intended to
comply with the minimum gain chargeback requirement in such Section of the
Regulations and shall be interpreted consistently therewith. Solely for purposes
of this Section 6.2(b), each Partner's Adjusted Capital Account Deficit shall be
determined prior to any other allocations pursuant to Article 6 of this
Agreement with respect to such Partnership Year, other than allocations pursuant
to Section 6.2(a) hereof.
(c) Qualified Income Offset. In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6),
and after giving effect to the allocations required under Section 6.2(a) and
Section 6.2(b) hereof, such Partner has an Adjusted Capital Account Deficit,
items of Partnership income and gain shall be specially allocated to such
Partner in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, its Adjusted Capital Account Deficit created by such
adjustments, allocations or distributions as quickly as possible.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any taxable period
shall be allocated to the Partners in accordance with their respective
Percentage Interests.
(e) Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for any
Partnership Year shall be specially allocated to the Partner who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable in accordance with Regulations
Section 1.704-2(i)(2).
(f) Code Section 754 Adjustments. To the extent an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the
Code is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), to be
taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis), and such item of gain or loss shall be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted pursuant to such Section of the
Regulations.
(g) Capital Account Adjustments. Notwithstanding anything herein to the contrary
other than the last sentence of Section 14.1(g), any gain or loss arising from
an adjustment to the Gross Asset Value of any Partnership asset pursuant to
clause (b) or (c) of the definition thereof shall be allocated (i) first, to the
Series A Preferred Partners, but only to the extent that they would have been
allocated such gain pursuant to Section 6.1(a)(ii) or Section 6.1(a)(v) of this
Agreement or such loss pursuant to Section 6.1(b)(viii) of this Agreement, as
applicable, if such gain or loss had been actually realized; and (ii) second,
and subject to Section 6.2(h) hereof, one hundred percent (100%) of the
remainder of such gain or loss to the General Partner and the Additional Limited
Partners pro-rata in accordance with the relative number of Units held by each;
provided, however, that for this purpose, the General Partner shall be treated
as owning all of the outstanding Original Limited Partnership Units in addition
to the actual number of Units which the General Partner holds. An Additional
Limited Partner, at the time of admission to the Partnership, may elect with the
consent of the General Partner to not receive special allocations of any gain or
loss resulting from such adjustments.
(h) Special Adjustments. Notwithstanding anything herein to the contrary, the
following adjustments shall be made to the amount of income, gain, losses and
deductions allocated under Section 6.1 and Section 6.2 of this Agreement and the
amounts distributed to the Partners under Section 13.2(a)(vi):
(i) In the event that (A) a Liquidating Transaction shall occur and (B) the
Original and Additional Limited Partners other than the Class Z Branch Partners
and the Class Z Midland Partners would, after giving effect to all
contributions, distributions and allocations for all periods, receive amounts
under Section 13.2(a)(vi) of this Agreement which are less than they would have
received had they not consented to the Third Amended Agreement, then the General
Partner shall (1) cause to be distributed to each of these Partners out of
amounts otherwise distributable to the General Partner pursuant to Section
13.2(a)(vi) amounts equal to such shortfall amount and (2) cause to be allocated
to each of these Partners out of income (including gross income) or gain
otherwise allocable to the General Partner an amount of income (including gross
income) or gain equal to such deficit amount;
(ii) In the event that (A) any gain or loss arises from an adjustment to
the Gross Asset Value of any Partnership asset pursuant to clause (b) or (c) of
the definition thereof and (B) any such gain or loss would, but for Section
6.2(g), have been allocated to the Original Limited Partners pursuant to
Sections 6.1 and 6.2 hereof (other than Section 6.2(g)) if such gain or loss
were included in the definition of Net Profits and Net Losses, then (1) any gain
or loss which would have been so allocated shall be allocated to the Original
Limited Partners to the fullest extent possible out of gains or losses otherwise
allocable to the General Partner pursuant to Section 6.2(g), or to the extent
the gains or losses otherwise allocable to the General Partner are insufficient
to permit such an allocation, out of the first items of income, gain, loss or
deduction thereafter allocable to the General Partner and (2) in the event that
a Liquidating Transaction shall occur at a time when gain or loss is required to
be allocated to the Original Limited Partners pursuant to this Section
6.2(h)(ii), but which allocation has not been made as of the time of the
liquidating distribution, the General Partner shall, (x) in the case of net
unallocated gain, distribute to the Original Limited Partners out of amounts
otherwise distributable to the General Partner amounts equal to the amounts the
Original Limited Partners would have received under Section 13.2(a)(vi) if the
net unallocated gain had been allocated thereunder or (y) in the case of net
unallocated loss, distribute to the General Partner out of amounts otherwise
distributable to the Original Limited Partners amounts equal to the amounts the
General Partner would have received under Section 13.2(a)(vi) if the net
unallocated loss had been allocated thereunder; and
(iii) In the event that (A) a Liquidating Transaction shall occur and (B)
an Original Limited Partner would, after giving effect to all contributions,
distributions and allocations for all periods, receive amounts under Section
13.2(a)(vi) of this Agreement which are less than they would have received had
the order of subsections 6.1(b)(ii), (iii) and (iv) on the one hand and
subsections 6.1(b)(v), (vi) and (vii) on the other hand been reversed effective
as of the date of the Second Amended Agreement, then the General Partner shall
(1) cause to be distributed to these Partners out of amounts otherwise
distributable to the General Partner under Section 13.2(a)(vi) amounts equal to
such deficit amount and (2) cause to be allocated to these Partners out of
income (including gross income) or gain otherwise allocable to the General
Partner an amount of income (including gross income) or gain equal to such
deficit amount.
Section 6.3 Allocations for Tax Purposes.
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(a) General. Except as otherwise provided in this Section 6.3, for federal
income tax purposes, each item of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Section 6.1 and
Section 6.2 of this Agreement.
(b) Other Allocation Rules.
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(i) For purposes of determining Net Income, Net Losses, or other
items allocable to any period, Net Income, Net Losses, and any
such other items shall be determined on a daily, monthly, or
other basis, as determined by the General Partner using any
permissible method under Section 706 of the Code and the
Regulations thereunder.
(ii) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to
any property contributed to the capital of the Partnership
shall, solely for tax purposes, be allocated among the
Partners so as to take account of any variation between the
adjusted basis of such property to the Partnership for federal
income tax purposes and its initial Gross Asset Value.
(iii) To the extent that the fair market value of a property contributed to
the Partnership by Branch Properties, L.P. differed from its adjusted tax basis
at the time it was originally contributed to Branch Properties, L.P. (the
"Original Book-Tax Disparity"), the allocation of tax items with respect to such
contributed property shall take into account any remaining Original Book-Tax
Disparity at the time such property is contributed to the Partnership in a
manner consistent with the principles of Section 704(c) of the Code, using the
"traditional method" under Section 1.704-3(b) of the Regulations, so that the
Limited Partners who originally contributed such property to Branch Properties,
L.P. (or their successors-in-interest) bear the tax burden (or benefit, if
applicable) of the remaining Original Book-Tax Disparity.
(iv) In the event the Gross Asset Value of any Partnership asset is
adjusted, subsequent allocations of income, gain, loss, and deductions with
respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and its Gross Asset Value in
the same manner as under Code Section 704(c) and the Regulations thereunder. Any
elections or other decisions relating to Code Section 704(c) allocations shall
be made by the General Partner; provided, however, that the "traditional method"
of making Section 704(c) allocations without curative allocations described in
Section 1.704-3(b) of the Regulations shall be used. Allocations pursuant to
Sections 6.3(b)(ii), (iii) and (iv) hereof are solely for purposes of federal,
state, and local taxes and shall not affect, or in any way be taken into account
in computing, any Partner's Capital Account or share of Net Income, Net Losses,
other items, or distributions pursuant to any provision of this Agreement.
Article 7
Management And Operations Of Business
Section 7.1 Management.
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(a) Powers of General Partner. Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership are exclusively vested in the General Partner, and no Limited
Partner shall have any right to participate in or exercise control or management
power over the business and affairs of the Partnership. Notwithstanding anything
to the contrary in this Agreement, the General Partner may not be removed by the
Limited Partners with or without cause. In addition to the powers now or
hereafter granted a general partner of a limited partnership under applicable
law or which are granted to the General Partner under any other provision of
this Agreement, the General Partner shall have full power and authority to do
all things deemed necessary or desirable by it to conduct the business of the
Partnership, to exercise all powers set forth in Section 3.2 hereof and to
effectuate the purposes set forth in Section 3.1 hereof, including, without
limitation:
(i) the making of any expenditures, the lending or borrowing of money
(including, without limitation, borrowing money to permit the Partnership to
make distributions to its Partners in such amounts as will permit Regency (so
long as Regency desires to qualify as a REIT) to avoid the payment of any
federal income tax (including, for this purpose, any excise tax pursuant to
Section 4981 of the Code) and to make distributions to its shareholders
sufficient to permit Regency to maintain REIT status), the assumption or
guarantee of, or other contracting for, indebtedness and other liabilities, the
issuance of evidences of indebtedness (including the securing of same by
mortgage, deed of trust or other lien or encumbrance on the Partnership's
assets), the incurring of any obligations it deems necessary for the conduct of
the activities of the Partnership, and the repayment (including prepayment) of
such indebtedness, liabilities and obligations;
(ii) the making of tax, regulatory and other filings, or rendering
of periodic or other reports to governmental or other agencies
having jurisdiction over the business or assets of the
Partnership;
(iii) the acquisition, disposition, conveyance, mortgage, pledge,
encumbrance, hypothecation or exchange of all or any assets of the Partnership
or the merger or other combination of the Partnership with or into another
entity (provided that such merger or other combination does not result in the
Partnership recognizing taxable gain or loss for federal income tax purposes) on
such terms as the General Partner deems proper (subject to Section 7.6 in the
case of transactions between the Partnership and the General Partner or any
Affiliate), and no approval of the Limited Partners shall be required for the
exercise of such powers, which powers shall include, without limitation, the
power to pledge any or all of the assets of the Partnership to secure a loan or
other financing to the General Partner (the proceeds of which are not required
to be contributed or loaned to the Partnership), provided, however, that to the
extent that any payment of debt service or closing costs on any such mortgage,
pledge, encumbrance or hypothecation shall result in the Partnership being
unable to pay the maximum amount payable with respect to any distributions to
the Limited Partners pursuant to Section 5.1, then Regency shall cause the
General Partner to make such additional Capital Contributions as are necessary
to enable the Partnership to pay the maximum amount payable with respect to any
distributions to the Limited Partners pursuant to Section 5.1 (provided that the
General Partner shall have no obligation to make such additional Capital
Contributions in an amount exceeding the amount of debt service and closing
costs paid), and provided, further, that the General Partner shall use
reasonable efforts to effect all dispositions of the Partnership's assets that
were contributed by the Limited Partners in accordance with Section 1031 of the
Code although, except as provided in Section 7.1(c) hereof, it shall not be
required to do so;
(iv) subject to the provisions of Section 7.1(h) hereof, the use of the
assets of the Partnership (including, without limitation, cash on hand) for any
purpose consistent with the terms of this Agreement and on any terms it sees
fit, including, without limitation, the financing of the conduct of the
operations of the General Partner, the Partnership or any of the Partnership's
Subsidiaries, the lending of funds to other Persons (including Regency or any of
the Partnership's Subsidiaries) and the repayment of obligations of the
Partnership and its Subsidiaries and any other Person in which it has an equity
investment and the making of capital contributions to its Subsidiaries, the
holding of any real, personal and mixed property of the Partnership in the name
of the Partnership or in the name of a nominee or trustee (subject to Section
7.10), the creation, by grant or otherwise, of easements or servitudes, and the
performance of any and all acts necessary or appropriate to the operation of the
Partnership assets including, but not limited to, applications for rezoning,
objections to rezoning, constructing, altering, improving, repairing,
renovating, rehabilitating, razing, demolishing or condemning any improvements
or property of the Partnership;
(v) the negotiation, execution, and performance of any contracts,
conveyances or other instruments (including with Affiliates of the Partnership
to the extent provided in Section 7.6) that the General Partner considers useful
or necessary to the conduct of the Partnership's operations or the
implementation of the General Partner's powers under this Agreement, including,
without limitation, the execution and delivery of a REIT management agreement on
behalf of or in the name of the Partnership providing for the day-to-day
management and operation of the Partnership and including, without limitation,
the execution and delivery of leases on behalf of or in the name of the
Partnership (including the lease of Partnership property for any purpose and
without limit as to the term thereof, whether or not such term (including
renewal terms) shall extend beyond the date of termination of the Partnership
and whether or not the portion so leased is to be occupied by the lessee or, in
turn, subleased in whole or in part to others);
(vi) the opening and closing of bank accounts, the investment of
Partnership funds in securities, certificates of deposit and
other instruments, and the distribution of Partnership cash or
other Partnership assets in accordance with this Agreement;
(vii) the selection and dismissal of employees of the Partnership or
the General Partner (including, without limitation, employees
having titles such as "president," "vice president,"
"secretary" and "treasurer"), and the engagement and dismissal
of agents, outside attorneys, accountants, engineers,
appraisers, consultants, contractors and other professionals
on behalf of the General Partner or the Partnership and the
determination of their compensation and other terms of
employment or hiring;
(viii) the maintenance of such insurance for the benefit of the Partnership
and the Partners as it deems necessary or appropriate;
(ix) subject to the provisions of Section 4.2 and Section 7.1(h)
hereof, the formation of, or acquisition of an interest in,
and the contribution of property to any further limited or
general partnerships, joint ventures or other relationships
that it deems desirable (including, without limitation, the
acquisition of interests in, and the contribution of property
to, its Subsidiaries and any other Person in which it has an
equity investment from time to time) (provided that such
transaction does not result in the Partnership recognizing
taxable gain or loss for federal income tax purposes);
(x) the control of any matters affecting the rights and
obligations of the Partnership, including the conduct of
litigation and the incurring of legal expense and the
settlement of claims and litigation, the submission of any
matter to arbitration, and the indemnification of any Person
against liabilities and contingencies to the extent permitted
by law;
(xi) subject to the provisions of Section 7.1(h) hereof, the
undertaking of any action in connection with the Partnership's
direct or indirect investment in its Subsidiaries or any other
Person (including, without limitation, the contribution or
loan of funds by the Partnership to such Persons) (provided
that such action does not result in the Partnership
recognizing taxable gain or loss for federal income tax
purposes);
(xii) the distribution in kind of the Briarcliff Village property pursuant
to Section 13.2(c);
(xiii) the determination of the fair market value of any Partnership
property distributed in kind using such reasonable method of
valuation as it may adopt; and
(xiv) the execution, acknowledgment and delivery of any and all documents
and instruments to effectuate any or all of the foregoing.
(b) No Approval Required for Above Powers. Subject to any other restriction set
forth in this Agreement, each of the Limited Partners agrees that the General
Partner is authorized to execute, deliver and perform the above-mentioned
agreements and transactions on behalf of the Partnership without any further
act, approval or vote of the Partners, notwithstanding any other provision of
this Agreement (except where Limited Partner Consent, Original Limited Partner
Consent or the consent of the Series A Preferred Partners or of any other class
or series of Partnership Interests is expressly required herein), the Act or any
applicable law, rule or regulation. The execution, delivery or performance by
the General Partner or the Partnership of any agreement authorized or permitted
under this Agreement shall not constitute a breach by the General Partner of any
duty that the General Partner may owe the Partnership or the Limited Partners or
any other Persons under this Agreement or of any duty stated or implied by law
or equity.
(c) Approval of Sale of Briarcliff Village. Except pursuant to the dissolution
and liquidation of the Partnership in accordance with Article 13 hereof, the
property commonly known as Briarcliff Village (the "Briarcliff Village
Property") shall not be sold by the Partnership or the General Partner on or
before December 19, 2005 (other than in a transaction in which the Partnership
recognizes no taxable gain or loss for federal income purposes) without the
approval of a Majority-in-Interest of the Original Briarcliff Partners (as
defined below) who continue, as of such time, to hold Original Limited
Partnership Units attributable to the contribution of the Briarcliff Village
Property to Branch Properties, L.P. and Branch Properties, L.P.'s subsequent
contribution of the Briarcliff Village Property to the Partnership (the
"Original Briarcliff Partners"). Such approval right of the Original Briarcliff
Partners is personal to the Original Briarcliff Partners and shall terminate
upon the death of an Original Briarcliff Partner or a sale, assignment,
conveyance, or other transfer by an Original Briarcliff Partner, with respect to
that Partner's Original Limited Partnership Units, and shall not be exercisable
by any successor, transferee or assignee of an Original Briarcliff Partner. In
the event of a like-kind exchange involving the Briarcliff Village Property by
the Partnership, then such approval right for the benefit of the Original
Briarcliff Partners will continue to be enforceable after such like-kind
exchange, but shall relate to the property (whether real, personal or mixed,
tangible or intangible) acquired by the Partnership in such like-kind exchange.
Nothing herein shall be deemed to require that the Partnership or the General
Partner take any action to avoid or prevent an involuntary disposition of all or
part of said Briarcliff Village pursuant to a condemnation proceeding or other
taking. For purposes of this Section 7.1(c), Majority-In-Interest of the
Original Briarcliff Partners shall mean the Original Briarcliff Partners who
hold, in the aggregate, more than fifty percent (50%) of the Percentage
Interests then allocable to and held by all of the Original Briarcliff Partners
with respect to the Original Limited Partnership Units received by the Original
Briarcliff Partners as a result of the contribution of the Briarcliff Village
Property to Branch Properties, L.P. and Branch Properties, L.P.'s subsequent
contribution of the Briarcliff Village Property to the Partnership. The
Partnership shall not engage in any merger, consolidation or other business
combination with or into another Person unless the Partnership has entered into
an agreement with such Person in which such Person expressly agrees to be bound
by the provisions of this Section 7.1(c).
(d) Insurance. At all times from and after the date hereof, the General Partner
may cause the Partnership to obtain and maintain casualty, liability and other
insurance on the properties of the Partnership and liability insurance for the
Indemnitees hereunder.
(e) Working Capital and Other Reserves. At all times from and after the date
hereof, the General Partner may cause the Partnership to establish and maintain
working capital reserves in such amounts as the General Partner, in its sole and
absolute discretion, deems appropriate and reasonable from time to time subject
to the provisions of Section 7.1(h) hereof.
(f) No Obligation to Consider Tax Consequences to Limited Partners. Except as
provided in Section 7.1(c) and Section 13.2(c) with respect to Briarcliff
Village, except as provided in Section 7.1(g) with respect to the sale of the
Management Business, and except for the obligation of the General Partner set
forth in Section 7.1(a)(iii) to use reasonable efforts to effect all
dispositions of the Partnership's assets that were contributed by the Limited
Partners in accordance with Section 1031 of the Code, (i) in exercising its
authority under this Agreement, the General Partner may, but shall be under no
obligation to, take into account the tax consequences to any Partner of any
action taken by it, and (ii) the General Partner and the Partnership shall not
have liability to a Limited Partner under any circumstances as a result of an
income tax liability incurred by such Limited Partner as a result of an action
(or inaction) by the General Partner pursuant to its authority under this
Agreement.
(g) Approval of Sale of Management Business. Notwithstanding anything contained
herein to the contrary, the Third Party Management Business (as defined in the
Contribution Agreement) contributed by Branch Properties, L.P. to the
Partnership as part of its initial Capital Contribution (the "Management
Business") shall not be sold by the Partnership on or before the tenth (10th)
anniversary of the First Closing (other than in a transaction in which the
Partnership recognizes no taxable gain or loss for federal income tax purposes);
provided, however, that the Partnership shall be permitted to undertake the
following transactions: (i) contribution of the Management Business to a
corporation (the "New Management Company") in which the Partnership owns five
percent (5%) of the issued and outstanding voting common stock and 100% of the
issued and outstanding non-voting preferred stock and in which The Regency
Group, Inc., a Florida corporation, owns ninety-five percent (95%) of the issued
and outstanding voting common stock and in which no other shares of stock are
issued and outstanding following the contribution; (ii) a distribution by the
Partnership of part or all of the stock of the New Management Company to the
General Partner on or after the fifth (5th) anniversary of the First Closing; or
(iii) a sale of part or all of the stock of the New Management Company if no
Original Limited Partners hold Units which they received on the date of this
Agreement or any Additional Units received by them subsequent to the date of
this Agreement, or with the unanimous written consent of the Original Limited
Partners then holding such Units).
(h) Distributions. Notwithstanding anything contained in this Agreement to the
contrary, the General Partner, acting as a fiduciary, shall use its reasonable
best efforts and act in good faith to operate the Partnership's assets and
manage the Partnership's business, including its indebtedness, so as to produce
sufficient Available Cash and Capital Transaction Proceeds to fund to the
Limited Partners the Priority Distribution Amount on a current basis and any
balance in the Cumulative Unpaid Accrued Return Accounts and Cumulative Unpaid
Priority Distribution Accounts of the Limited Partners pursuant to Section 5.1
hereof.
Nothing in Section 7.1(h) shall require the General Partner to contribute
additional capital to the Partnership.
Section 7.2 Certificate of Limited Partnership. To the extent that such action
is determined by the General Partner to be reasonable and necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate and do all the things to maintain the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of Delaware and each other jurisdiction
in which the Partnership may elect to do business or own property. Subject to
the terms of Section 8.5(a)(iv) hereof, the General Partner shall not be
required, before or after filing, to deliver or mail a copy of the Certificate
or any amendment thereto to any Limited Partner. The General Partner shall use
all reasonable efforts to cause to be filed such other certificates or documents
as may be reasonable and necessary or appropriate for the formation,
continuation, qualification and operation of a limited partnership (or a
partnership in which the Limited Partners have limited liability) in the State
of Delaware and any other jurisdiction in which the Partnership may elect to do
business or own property.
Section 7.3 Restriction on General Partner's Authority. Without the consent
of all the Limited Partners, the General Partner may not:
(a) Take any action that would make it impossible to carry on the ordinary
business of the Partnership, except as otherwise provided in this Agreement;
(b) Possess Partnership property for other than a Partnership purpose;
(c) Admit a Person as a Partner, except as otherwise provided in this
Agreement; or
(d) Perform any act that would subject a Limited Partner to liability as a
general partner.
Section 7.4 Responsibility for Expenses.
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(a) No Compensation. Except as provided in this Section 7.4 and elsewhere in
this Agreement (including the provisions of Article 5 and Article 6 regarding
distributions, payments, and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.
(b) Responsibility for Ownership and Operation Expenses. The Partnership shall
be responsible for and shall pay all expenses relating to the Partnership's
ownership of its assets, and the operation of, or for the benefit of, the
Partnership, and the General Partner shall be reimbursed on a monthly basis, or
such other basis as the General Partner may determine in its sole and absolute
discretion, for all expenses it incurs relating to the Partnership's ownership
of its assets and the operation of, or for the benefit of, the Partnership;
provided, that the amount of any such reimbursement shall be reduced by any
interest earned by the General Partner with respect to bank accounts or other
instruments held by it as permitted in Section 7.10 and not contributed to the
Partnership. Such reimbursements shall be in addition to any reimbursement to
the General Partner pursuant to Section 10.3(c) and as a result of
indemnification pursuant to Section 7.7. The General Partner shall determine in
good faith the amount of expenses incurred by it relating to the operation of,
or that inure to the benefit of, the Partnership. In the event that certain
expenses are incurred for the benefit of the Partnership and other Persons
(including the General Partner), such expenses will be allocated to the
Partnership and such other Persons in such a manner as the General Partner deems
fair and reasonable, subject to the provisions of Section 7.1(h) hereof.
(c) Responsibility for Organizational Expenses. The Partnership shall be
responsible for and shall pay all expenses incurred relating to the organization
of the Partnership.
(d) Partnership Interest Issuance Expenses. The General Partner shall be
reimbursed for all expenses it incurs relating to any issuance of additional
Partnership Interests pursuant to Section 4.2 or Section 4.5 hereof, all of
which shall be expenses of the Partnership.
Section 7.5 Outside Activities of the General Partner. Nothing contained in this
Agreement shall prevent or prohibit the General Partner or any employee,
officer, director, agent, shareholder or Affiliate of the General Partner from
entering into, engaging in or conducting any other activity or performing for a
fee any service including (without limiting the generality of the foregoing)
engaging in any business dealing with real property of any type or location,
including, without limitation, property of a type similar to those properties
owned by the Partnership, its Subsidiaries or any other Person in which the
Partnership has an equity investment; acting as a director, officer or employee
of any corporation, as a trustee of any trust, as a general partner of any
partnership, or as an administrative official of any other business entity; or
receiving compensation for services to, or participating in profits derived
from, the investments of any such corporation, trust, partnership or other
entity, regardless of whether such activities are competitive, directly or
indirectly, with the Partnership. Nothing herein shall require the General
Partner or any employee, agent, shareholder or Affiliate thereof to offer any
interest in such activities or any particular opportunity to the Partnership or
any Partner, and neither the Partnership nor any Partner shall have any right by
virtue of this Agreement or the partnership relationship established hereby in
or to such other activities or to the income or proceeds derived therefrom. The
pursuit of such activities, even if competitive with the business of the
Partnership (including, without limitation, causing tenants to transfer from one
of the Partnership's properties to other properties in which the General Partner
has an interest, directly or indirectly, without compensation to the
Partnership, or taking other actions for the benefit of the General Partner or
Affiliates of the General Partner that are detrimental to the Partnership),
shall not be deemed wrongful or improper.
Section 7.6 Contracts with Affiliates.
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(a) General. The General Partner or any of its Affiliates may enter into
transactions or agreements with the Partnership, including transactions and
agreements (i) to sell, transfer or convey any property to, or purchase any
property from, the Partnership, directly or indirectly, or (ii) for the
provision of services to the Partnership, provided that such transactions or
agreements, including transactions and agreements with Security Capital
Investment Research, Inc. or any of its Affiliates, are on terms that are fair
and reasonable and no less favorable to the Partnership than would be obtained
from an unaffiliated third party in connection therewith. In entering into such
transactions with Affiliates the General Partner shall not allocate expenses and
similar items disproportionately between the General Partner and the
Partnership.
(b) Employee Benefit Plans. The General Partner may propose and adopt on behalf
of the Partnership employee benefit plans funded by the Partnership for the
benefit of employees of the General Partner, the Partnership, Subsidiaries of
the Partnership or any Affiliate of any of them in respect of services
performed, directly or indirectly, for the benefit of the Partnership, the
General Partner, or any of the Partnership's Subsidiaries, subject to the
provisions of Section 7.1(h) hereof.
(c) Conflict Avoidance Agreements. The General Partner is expressly authorized
to enter into, in the name and on behalf of the Partnership, a right of first
opportunity arrangement and other conflict avoidance agreements with various
Affiliates of the Partnership and the General Partner, on such terms as the
General Partner believes are advisable, subject to the provisions of Section
7.6(a) and Section 7.1(h) hereof.
Section 7.7 Indemnification.
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(a) General. The Partnership shall indemnify an Indemnitee from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including legal fees and expenses), judgments, fines, settlements, and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, that relate to the operations
of the Partnership as set forth in this Agreement in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, unless it is
established that: (i) the act or omission of the Indemnitee was material to the
matter giving rise to the proceeding and constituted willful misconduct or
fraud; (ii) the Indemnitee actually received an improper personal benefit in
money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 7.7(a). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 7.7(a). Any indemnification pursuant to this Section 7.7 shall be
made only out of the assets of the Partnership.
(b) Advancement of Expenses. Reasonable expenses incurred by an Indemnitee who
is, or is threatened to be made, a party to a proceeding may be paid or
reimbursed by the Partnership in advance of the final disposition of the
proceeding upon receipt by the Partnership of (i) a written affirmation by the
Indemnitee of the Indemnitee's good faith belief that the standard of conduct
necessary for indemnification by the Partnership as authorized in this Section
7.7 has been met and (ii) a written undertaking by or on behalf of the
Indemnitee to repay the amount if it shall ultimately be determined that the
standard of conduct has not been met.
(c) No Limitation of Rights. The indemnification provided by this Section 7.7
shall be in addition to any other rights to which an Indemnitee or any other
Person may be entitled under any agreement, pursuant to any vote of the
Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity.
(d) Insurance. The Partnership may purchase and maintain insurance, on behalf of
the Indemnitees and such other Persons as the General Partner shall determine,
against any liability that may be asserted against or expenses that may be
incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) No Personal Liability for Partners. In no event may an Indemnitee
subject any Partner to personal liability by reason of the indemnification
provisions set forth in this Agreement.
(f) Interested Transactions. An Indemnitee shall not be denied indemnification
in whole or in part under this Section 7.7 because the Indemnitee had an
interest in the transaction with respect to which the indemnification applies if
the transaction was otherwise permitted by the terms of this Agreement.
(g) Benefit. The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
Section 7.8 Liability of the General Partner.
--------------------------------
(a) General. Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership, any Partners or any Assignees for losses sustained or liabilities
incurred as a result of errors in judgment or of any act or omission if the
General Partner acted in good faith.
(b) No Obligation to Consider Interests of Limited Partners. The Limited
Partners expressly acknowledge that the General Partner is acting on behalf of
the Partnership, the General Partner and Regency's shareholders collectively,
that except as provided in Section 7.1(e) with respect to the establishment and
maintenance of working capital reserves, except as provided in Section 7.1(f)
with respect to tax consequences, except as provided in Section 7.1(h) with
respect to the generation of funds for distributions and except as expressly
provided otherwise in Section 7.1(a)(iv), Section 7.1(a)(ix) and Section
7.1(a)(xi) with respect to the powers of the General Partner, the General
Partner is under no obligation to consider the separate interests of the Limited
Partners (including, without limitation, the tax consequences to Limited
Partners or Assignees except as expressly provided otherwise in Section 7.1(f)
and Section 7.1(h)) in deciding whether to cause the Partnership to take (or
decline to take) any actions which the General Partner has undertaken in good
faith on behalf of the Partnership, and that the General Partner shall not be
liable for monetary damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such decisions,
provided that the General Partner has acted in good faith and in accordance with
the provisions of this Agreement. For purposes hereof, a Person acting in a
manner which furthers compliance by Regency with the REIT requirements of the
Code, shall be deemed to satisfy the standards of conduct hereunder. The Limited
Partners further expressly acknowledge that Regency is obligated to cause the
Partnership to take (or decline to take) certain actions in order to assist
Security Capital and its Affiliates in avoiding classification as a passive
foreign investment company within the meaning of Section 1296 of the Code. Such
obligation is set forth on Schedule 7.8(b).
(c) Acts of Agents. Subject to its obligations and duties as General Partner set
forth in Section 7.1(a) hereof, the General Partner may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents. The General
Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by it in good faith.
(d) Effect of Amendment. Any amendment, modification or repeal of this Section
7.8 or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's liability to the Partnership and
the Limited Partners under this Section 7.8 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.9 Other Matters Concerning the General Partner.
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(a) Reliance on Documents. The General Partner may rely and shall be protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture,
or other paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
(b) Reliance on Consultants and Advisers. The General Partner may consult with
legal counsel, accountants, appraisers, management consultants, investment
bankers and other consultants and advisers selected by it, and any act taken or
omitted to be taken in reliance upon and in accordance with the opinion of such
Persons as to matters which such General Partner reasonably believes to be
within such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with such
opinion.
(c) Action Through Officers and Attorneys. The General Partner shall have the
right, in respect of any of its powers or obligations hereunder, to act through
any of its duly authorized officers and a duly appointed attorney or
attorneys-in-fact. Each such attorney shall, to the extent provided by the
General Partner in the power of attorney, have full power and authority to do
and perform all and every act and duty which is permitted or required to be done
by the General Partner hereunder.
(d) Actions to Maintain REIT Status or Avoid Taxation of the General Partner.
Notwithstanding any other provisions of this Agreement or the Act, any action of
the General Partner on behalf of the Partnership or any decision of the General
Partner to refrain from acting on behalf of the Partnership, undertaken in the
good faith belief that such action or omission is necessary or advisable in
order (i) to protect the ability of Regency to continue to qualify as a REIT or
(ii) to avoid Regency incurring any taxes under Section 857 or Section 4981 of
the Code, is expressly authorized under this Agreement and is deemed approved by
all of the Limited Partners.
(e) Sales of Assets. In the event that Regency or any of its Affiliates in which
it owns, directly or indirectly, an interest disposes of properties or assets
(other than those properties or assets owned by the Partnership) in transactions
or exchanges which Regency reasonably believes create capital gains to Regency
and a resulting distribution or dividend to Regency's shareholders, the General
Partner shall provide the Original Limited Partners with at least 20 days prior
written notice of the record date for any distribution of the proceeds thereof,
together with relevant information concerning such dividend, including the
amount, to enable the Original Limited Partners to exercise the Redemption Right
prior to said record date.
Section 7.10 Title to Partnership Assets. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
Section 7.11 Reliance by Third Parties. Notwithstanding anything to the contrary
in this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority to encumber, sell
or otherwise use in any manner any and all assets of the Partnership (including,
without limitation, in connection with any pledge of Partnership assets to
secure a loan or other financing to the General Partner as provided by Section
7.1(a)(iii)) and to enter into any contracts on behalf of the Partnership, and
such Person shall be entitled to deal with the General Partner as if it were the
Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies which may
be available against such Person to contest, negate or disaffirm any action of
the General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership and (iii) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and provisions of this
Agreement and is binding upon the Partnership.
Article 8
Rights And Obligations Of Limited Partners
Section 8.1 Limitation of Liability. The Limited Partners shall have no
liability under this Agreement except as expressly provided in Section 5.3
hereof, or under the Act.
Section 8.2 Management of Business. No Limited Partner or Assignee (other than
the General Partner, any of its Affiliates or any officer, director, employee,
partner, agent or trustee of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such) shall take part in the operation,
management or control (within the meaning of the Act) of the Partnership's
business, transact any business in the Partnership's name or have the power to
sign documents for or otherwise bind the Partnership. The transaction of any
such business by the General Partner, any of its Affiliates or any officer,
director, employee, partner, agent or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such, shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners. Subject to any agreements
entered into by a Limited Partner or its Affiliates with the General Partner,
the Partnership or a Subsidiary or an Affiliate of any of them, the following
rights shall govern outside activities of Limited Partners: (i) any Limited
Partner and any officer, director, employee, agent, trustee, Affiliate, partner,
beneficiary or shareholder of any such Limited Partner shall be entitled to and
may have business interests and engage in business activities in addition to
those relating to the Partnership, including business interests and activities
in direct competition with the Partnership, the General Partner or their
Affiliates; (ii) neither the Partnership nor any Partners shall have any rights
by virtue of this Agreement in any business ventures of any Partner or Assignee;
(iii) none of the Partners nor any other Person shall have any rights by virtue
of this Agreement or the partnership relationship established hereby in any
business ventures of any other Person, and such Person shall have no obligation
pursuant to this Agreement to offer any interest in any such business ventures
to the Partnership, any Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Partner or such other Person, could be taken by such Person; (iv) the fact that
a Partner may encounter opportunities to purchase, otherwise acquire, lease,
sell or otherwise dispose of real or personal property and may take advantage of
such opportunities himself or introduce such opportunities to entities in which
it has or has not any interest, shall not subject such Partner to liability to
the Partnership or any of the other Partners on account of the lost opportunity;
and (v) except as otherwise specifically provided herein, nothing contained in
this Agreement shall be deemed to prohibit a Partner or any Affiliate of a
Partner from dealing, or otherwise engaging in business, with Persons
transacting business with the Partnership or from providing services relating to
the purchase, sale, rental, management or operation of real or personal property
(including real estate brokerage services) and receiving compensation therefor,
from any Persons who have transacted business with the Partnership or other
third parties.
Section 8.4 Priority Among Partners. Except to the extent provided by Section
4.2, Section 4.5, Section 5.1(a), Section 5.1(b), Section 5.1(c), Section
6.1(a), Section 6.1(b), Section 6.2 or Section 6.3 hereof (with respect to the
respective priority of the Series A and any other Preferred Units and the
Original Limited Partnership Units and the subordination of the Class B Units to
the Original Limited Partners Units and Additional Units), or except as
otherwise expressly provided in this Agreement, no Partner (Limited or General)
or Assignee shall have priority over any other Partner (Limited or General) or
Assignee either as to the return of Capital Contributions or as to profits,
losses or distributions.
Section 8.5 Rights of Limited Partners Relating to the Partnership.
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(a) Copies of Business Records. In addition to other rights provided by this
Agreement or by the Act, and except as limited by Section 8.5(c) hereof, each
Limited Partner shall be provided the following without demand, except as
otherwise provided below, at the Partnership's expense:
(i) promptly after becoming available, a copy of the most recent
annual, quarterly and current reports and proxy statements
filed with the Securities and Exchange Commission by Regency
pursuant to the Securities Exchange Act of 1934, if any;
(ii) promptly after becoming available, a copy of the Partnership's
federal, state and local income tax returns for each Partnership Year;
(iii) upon written demand and for a purpose reasonably related to
such Limited Partner's interest as a Limited Partner in the
Partnership, a current list of the name and last known
business, residence or mailing address of each Partner;
(iv) a copy of this Agreement and (upon written demand) the
Certificate and all amendments hereto or (upon written demand)
to the Certificate, together with executed copies of all
powers of attorney pursuant to which this Agreement, the
Certificate and all amendments hereto and thereto have been
executed; and
(v) upon written demand, true and full information regarding the
amount of cash and a description and statement of any other
property or services contributed by each Partner and which
each Partner has agreed to contribute in the future, and the
date on which each became a Partner.
(b) Notification of Changes in Unit Adjustment Factor. The General Partner shall
notify each Limited Partner (other than any Partner who does not have a
Redemption Right) in writing of any change made to the Unit Adjustment Factor
within 10 Business Days of the date such change becomes effective.
(c) Confidential Information. Notwithstanding any other provision of this
Section 8.5, the General Partner may keep confidential from the Limited
Partners, for such period of time as the General Partner determines in its
discretion to be reasonable, any information (i) relating to the General Partner
or any of its Affiliates or the conduct of their business that the General
Partner believes, in its good faith judgment, the disclosure of which
information would adversely affect a material financing, acquisition,
disposition of assets or securities or other comparable transaction to which the
General Partner or any of its Affiliates is a party, (ii) that the General
Partner believes to be in the nature of trade secrets of Regency or its
Affiliates or (iii) that the Partnership, Regency or any of their Affiliates is
required by law or by agreements with unaffiliated third parties to keep
confidential. Nothing contained in this Section 8.5(c) shall permit the General
Partner to keep confidential from the Limited Partners any information relating
to the Partnership or its business.
Section 8.6 Redemption of Units. The Redemption Rights of the Original Limited
Partners are set forth in this Section 8.6. Any Redemption Rights granted to
Additional Limited Partners shall be set forth in amendments to this Agreement
or in separate redemption agreements.
(a) Exercise. Subject to the provisions of this Section 8.6, the Original
Limited Partners shall have the right (the "Redemption Right") to require the
Partnership to redeem any Unit held by such Original Limited Partner in exchange
for the Redemption Amount to be paid by the Partnership. A Redemption Right
shall be exercised pursuant to a Notice of Redemption delivered to the General
Partner by the Original Limited Partner who is exercising the Redemption Right
(the "Redeeming Partner"), which shall be irrevocable except as set forth in
this Section 8.6(a). The redemption shall occur on the Specified Redemption
Date; provided, however, a Specified Redemption Date shall not occur until such
later date as may be specified pursuant to any agreement with an Original
Limited Partner. An Original Limited Partner may exercise a Redemption Right any
time and any number of times. A Redeeming Partner may not exercise the
Redemption Right for less than 1,000 Units or, if such Redeeming Partner holds
less than 1,000 Units, all of the Units held by such Redeeming Partner. If (i)
an Original Limited Partner acquires any Units after the First Closing from
another Original Limited Partner or holds or acquires any Shares otherwise than
pursuant to the exercise of a Redemption Right hereunder and (ii) the issuance
of a Share Amount pursuant to the exercise of a Redemption Right would violate
the provisions of Section 5.2 of the Articles of Incorporation as a result of
the ownership of such additional Units or Shares so acquired by such Original
Limited Partner (the number of Shares in excess of the number of Shares
permitted pursuant to said Section 5.2 is herein referred to as the "Excess
Shares") and (iii) such Original Limited Partner does not revoke or amend the
exercise of such Redemption Right to comply with the provisions of said Section
5.2 of the Articles of Incorporation within five days after receipt of written
notice from the General Partner that the redemption would be in violation
thereof, then the Partnership shall pay to such Redeeming Partner, in lieu of
the Share Amount or the Cash Amount attributable to the Excess Shares, the
amount which would be payable to such Redeeming Partner pursuant to Section 5.3
of the Articles of Incorporation if such Excess Shares were issued in violation
of Section 5.2 of the Articles of Incorporation and Regency exercised the
remedies pursuant to said Section 5.3 of the Articles of Incorporation. The
relevant provisions of the Articles of Incorporation as presently in effect are
attached hereto as Schedule 8.6(a). This Section 8.6(a) shall in no way or
manner be construed as limiting the application of the Articles of Incorporation
or constitute any form of waiver or exemption thereunder.
(b) Payment. The General Partner shall have the right to elect to fund the
Redemption Amount through the issuance of (i) the Share Amount or (ii) the Cash
Amount The Redeeming Partner shall have no right, with respect to any Unit so
redeemed, to receive any distributions paid by the Partnership after the
Specified Redemption Date.
(c) Exceptions for Payment. Notwithstanding anything contained in this Section
8.6 to the contrary, the following provisions shall apply with respect to the
payment of a Redemption Amount:
(i) If the funding of the Share Amount with respect to the exercise of a
Redemption Right would cause the issuance of the Shares in connection therewith
to violate Article 5.14 of the Articles of Incorporation of Regency, then the
Redeeming Partner shall not have the right to receive the Share Amount with
respect to the issuance of any Shares resulting in such a violation, and the
balance of any Redemption Amount relating to the exercise of such Redemption
Right shall be paid by a Cash Amount. A Non-U.S. Person who (i) has signed a
Waiver and Consent Agreement in the form of Exhibit C attached hereto for the
benefit of Regency and Security Capital (the "Security Capital Waiver and
Consent") and (ii) is exercising a Redemption Right (and will receive a Share
Amount) in compliance with the Security Capital Waiver and Consent, will not be
in violation of the provisions of Article 5.14 of the Articles of Incorporation
if (x) the aggregate number of Shares to be issued on such Specified Redemption
Date to all Redeeming Partners who are Non-U.S. Persons is equal to or less than
(y) the aggregate number of Shares to be issued on such Specified Redemption
Date to all Redeeming Partners who are other than Non-U.S. Persons (the maximum
number of Shares which may be issued to Redeeming Partners on a Specified
Redemption Date who are Non-U.S. Persons in order to satisfy the foregoing
requirement is herein referred to as the "Matching Share Amount"). If more than
one Redeeming Partner who is a Non-U.S. Person exercises a Redemption Right for
the same Specified Redemption Date and if the aggregate Share Amount payable to
all such Redeeming Partners would cause the issuance of Shares to such Non-U.S.
Persons to exceed the Matching Share Amount on such Specified Redemption Date,
then the Matching Share Amount shall be allocated among such Redeeming Partners
who are Non-U.S. Persons pro rata in proportion to the respective Share Amounts
otherwise payable to such Redeeming Partners, and any balance of a Redemption
Amount payable to any such Redeeming Partner on such Specified Redemption Date
shall be paid by a Cash Amount.
(ii) If the issuance of Shares for a Share Amount to a Redeeming
Partner would be in violation of the Securities Act and
applicable state securities laws then such Redeeming Partner
shall not have the right to receive the Share Amount, and the
Redemption Amount shall be paid by the Cash Amount; provided,
however, the issuance of Shares for a Share Amount shall not
violate the registration requirements of the Securities Act as
in effect on the date hereof if such Shares are issued to an
"accredited investor" as defined in the Securities Act.
(d) [Intentionally Omitted.]
(e) Conditions. As a condition to exercising a Redemption Right, each Redeeming
Partner shall execute a Notice of Redemption in the form attached as Exhibit B
and, if a Non-U.S. Person, the Security Capital Waiver and Consent in the form
attached as Exhibit C; and execute such other documents and take such other
actions as the General Partner may reasonably require, including a Foreign
Investment and Real Property Tax Act ("FIRPTA") or similar state and/or local
affidavit (or make appropriate arrangements for deposit with the General Partner
for payment to the Internal Revenue Service or any state or local governmental
authority of the amount required for the General Partner to comply with the
withholding provisions of such federal, state and local laws, and if applicable,
providing a withholding certificate evidencing the Redeeming Partner's right to
a reduced rate of FIRPTA withholding). As a further condition to exercising a
Redemption Right, the Units to be redeemed shall be delivered to the Partnership
or Regency, as the case may be, free and clear of all liens, security interests,
deeds of trust, pledges and other encumbrances of any nature whatsoever
(collectively the "Liens"), subject to the provisions of Section 5.3 hereof. In
the event any Lien exists on the Specified Redemption Date with respect to the
Units to be redeemed, neither the Partnership nor Regency (if Regency assumes
the Redemption Right pursuant to Section 8.7) shall have any obligation to
redeem such Units, unless, in connection therewith, the General Partner has
elected to pay a portion of the Redemption Amount in cash and such cash is
sufficient to discharge such Lien, subject to the provisions of Section 5.3
hereof. Each Redeeming Partner hereby expressly authorizes the General Partner
to apply such portion of such cash as may be necessary to discharge such Lien in
full.
(f) [Intentionally Omitted.]
(g) Regency Agreement. Regency agrees (i) to perform Regency's obligations
described in this Section 8.6, (ii) to cause the General Partner to perform the
General Partner's obligations described in this Section 8.6 and (iii) to cause
the General Partner to cause the Partnership to perform the Partnership's
obligations described in this Section 8.6.
(h) Additional Rights. In case Regency shall issue rights, options or warrants
to all holders of its Shares entitling them to subscribe for or purchase Shares
or other securities convertible into Shares at a price per share less than the
current per share market price as of the day before the "ex date" with respect
to the issuance or distribution requiring such computation, each Original
Limited Partner holding Redemption Rights shall be entitled to receive such
number of such rights, options or warrants, as the case may be, as he would have
been entitled to receive had he exercised all of his then existing Redemption
Rights immediately prior to the record date for such issuance by Regency. The
term "ex date" shall mean the first date on which Shares trade regularly without
the right to receive such issuance or distribution. In case the Shares shall be
changed into the same or a different number of shares of any class or classes of
stock, whether by capital reorganization, reclassification, or otherwise (other
than subdivision or combination of Shares or a stock dividend described in this
definition), then and in each such event the Original Limited Partners holding
Redemption Rights shall have the right thereafter to exercise their Redemption
Rights for the kind and amount of shares and other securities and property that
would have been received upon such reorganization, reclassification or other
change by holders of the number of Shares with respect to which such Redemption
Rights could have been exercised immediately prior to such reorganization,
reclassification or change.
(i) Distributions. A Redeeming Partner exercising a Redemption Right with a
Specified Redemption Date after a Partnership Record Date and prior to the
payment of the distribution of Available Cash relating to such Partnership
Record Date shall retain the right to receive such distribution with respect to
such Units redeemed on such Specified Redemption Date.
Section 8.7 Regency's Assumption of Right. Notwithstanding the provisions of
Section 8.6, Regency may, in its sole and absolute discretion, assume directly
and satisfy a Redemption Right by paying to the Redeeming Partner the Share
Amount on the Specified Redemption Date, whereupon Regency shall acquire the
Units offered for redemption by the Redeeming Partner and shall be treated for
all purposes of this Agreement as the owner of such Units, which shall become
Class B Units. In the event Regency shall exercise its right to satisfy the
Redemption Right in the manner described in the preceding sentence, the
Partnership shall have no obligation to pay any amount to the Redeeming Partner
with respect to such Redeeming Partner's exercise of the Redemption Right, and
each of the Redeeming Partner, the Partnership, the General Partner and Regency
shall treat the transaction between Regency and the Redeeming Partner as a sale
of the Redeeming Partner's Units to Regency for federal income tax purposes.
Regency agrees that if the General Partner elects to pay the Redemption Amount
through the payment of the Share Amount, Regency shall guarantee the General
Partner's payment thereof.
Article 9
Books, Records, Accounting And Reports
Section 9.1 Records and Accounting. The General Partner shall keep or cause to
be kept at the principal office of the Partnership appropriate books and records
with respect to the Partnership's business, including, without limitation, all
books and records necessary to provide to the Limited Partners any information,
lists and copies of documents required to be provided pursuant to Section 8.5 or
Section 9.3 hereof. Any records maintained by or on behalf of the Partnership in
the regular course of its business may be kept on, or be in the form of,
magnetic tape, photographs, micrographics or any other information storage
device; provided, that the records so maintained are convertible into clearly
legible written form within a reasonable period of time. The books of the
Partnership shall be maintained for financial purposes on an accrual basis in
accordance with generally accepted accounting principles and for tax reporting
purposes on the accrual basis.
Section 9.2 Fiscal Year. The fiscal year of the Partnership shall be the
calendar year.
Section 9.3 Reports.
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(a) Annual Reports. As soon as practicable, but in no event later than the date
when mailed to Regency's shareholders, the General Partner shall cause to be
mailed to each Limited Partner as of the close of the Partnership Year, an
annual report containing financial statements of the Partnership, or of Regency
if such statements are prepared solely on a consolidated basis with Regency for
such Partnership Year, presented in accordance with generally accepted
accounting principles, such statements to be audited by a nationally recognized
firm of independent public accountants selected by the General Partner.
(b) Quarterly Reports. As soon as practicable, but in no event later than the
date when mailed to Regency's shareholders, the General Partner shall cause to
be mailed to each Limited Partner as of the last day of the calendar quarter
(except the last calendar quarter of each year) who has asked to be placed on
the mailing list for the same, a report containing unaudited financial
statements of the Partnership, or of Regency if such statements are prepared
solely on a consolidated basis with Regency, and such other information as may
be required by applicable law or regulation, or as the General Partner
determines to be appropriate.
(c) Other. During the pendency of the Redemption Rights, Limited Partners
holding Redemption Rights shall receive in a timely manner all other
communications transmitted from time to time by Regency to its shareholders.
Article 10
Tax Matters
Section 10.1 Preparation of Tax Returns. The General Partner shall arrange for
the preparation and timely filing of all returns of Partnership income, gains,
deductions, losses and other items required of the Partnership for federal and
state income tax purposes and shall use all reasonable efforts to furnish,
within 90 days of the close of each taxable year, the tax information reasonably
required by Limited Partners for federal and state income tax reporting
purposes.
Section 10.2 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole and absolute discretion, determine whether to make
any available election pursuant to the Code; provided, however, that the General
Partner shall make the election under Section 754 of the Code in accordance with
applicable Regulations thereunder. The General Partner shall have the right to
seek to revoke any such election (including, without limitation, the election
under Section 754 of the Code) upon the General Partner's determination in its
sole and absolute discretion that such revocation is in the best interests of
the Partners.
Section 10.3 Tax Matters Partner.
-------------------
(a) General. The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes. Pursuant to Section 6223(c) of the
Code, upon receipt of notice from the IRS of the beginning of an administrative
proceeding with respect to the Partnership, the tax matters partner shall
furnish the IRS with the name, address and profit interest of each of the
Limited Partners; provided, however, that such information is provided to the
Partnership by the Limited Partners.
(b) Powers. The tax matters partner is authorized, but not required:
(i) to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of Partnership items
required to be taken into account by a Partner for income tax purposes (such
administrative proceedings being referred to as a "tax audit" and such judicial
proceedings being referred to as "judicial review"), and in the settlement
agreement the tax matters partner may expressly state that such agreement shall
bind all Partners, except that such settlement agreement shall not bind any
Partner (1) who (within the time prescribed pursuant to the Code and
Regulations) files a statement with the IRS providing that the tax matters
partner shall not have the authority to enter into a settlement agreement on
behalf of such Partner or (2) who is a "notice partner" (as defined in Section
6231 of the Code) or a member of a "notice group" (as defined in Section
6223(b)(2) of the Code), and, to the extent provided by law, the General Partner
shall cause each Limited Partner to be designated a notice partner;
(ii) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be
taken into account by a Partner for tax purposes (a "final
adjustment") is mailed or otherwise given to the tax matters
partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the
Tax Court or the United States Claims Court, or the filing of
a complaint for refund with the District Court of the United
States for the district in which the Partnership's principal
place of business is located;
(iii) to intervene in any action brought by any other Partner for judicial
review of a final adjustment;
(iv) to file a request for an administrative adjustment with the
IRS at any time and, if any part of such request is not
allowed by the IRS, to file an appropriate pleading (petition,
complaint or other document) for judicial review with respect
to such request;
(v) to enter into an agreement with the IRS to extend the period
for assessing any tax which is attributable to any item
required to be taken into account by a Partner for tax
purposes, or an item affected by such item; and
(vi) to take any other action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial
review proceeding to the extent permitted by applicable law or
regulations.
The taking of any action and the incurring of any
expense by the tax matters partner in connection with any such
proceeding, except to the extent required by law, is a matter in the
sole and absolute discretion of the tax matters partner, and the
provisions relating to indemnification of the General Partner set forth
in Section 7.7 of this Agreement shall be fully applicable to the tax
matters partner in its capacity as such.
(c) Reimbursement. The tax matters partner shall receive no compensation for its
services. All third-party costs and expenses incurred by the tax matters partner
in performing its duties as such (including legal and accounting fees) shall be
borne by the Partnership. Nothing herein shall be construed to restrict the
Partnership from engaging an accounting firm and a law firm to assist the tax
matters partner in discharging his duties hereunder, so long as the compensation
paid by the Partnership for such services is reasonable.
Section 10.4 Organizational Expenses. The Partnership shall elect to deduct
expenses, if any, incurred by it in organizing the Partnership ratably over a 60
month period as provided in Section 709 of the Code.
Article 11
Transfers And Withdrawals
Section 11.1 Transfer.
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(a) Definition. The term "transfer," when used in this Article 11 with respect
to a Partnership Unit, shall be deemed to refer to a transaction by which the
General Partner purports to assign its General Partnership Interest to another
Person or by which a Limited Partner purports to assign its Limited Partnership
Interest to another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law
or otherwise. The term "transfer" when used in this Article 11 does not include
any redemption of Partnership Units by a Limited Partner.
(b) Requirements. No Partnership Interest shall be transferred, in whole or in
part, except in accordance with the terms and conditions set forth in this
Article 11. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void.
Section 11.2 Transfer of General Partner's Partnership Interests.
---------------------------------------------------
(a) General Partnership Interest. The General Partner may not transfer any of
its General Partnership Interest (other than any transfer to an Affiliate of the
General Partner) or withdraw as General Partner (other than pursuant to a
permitted transfer), other than in connection with a transaction described in
Section 11.2(b). Any transfer or purported transfer of the General Partner's
Partnership Interest not made in accordance with this Section 11.2 shall be null
and void. Notwithstanding any permitted transfer of its General Partnership
Interest or withdrawal as General Partner hereunder (other than in connection
with a transaction described in Section 11.2(b)), Regency shall remain subject
to Section 7.1(a)(iii), Section 7.9(e), Section 8.6 and Section 8.7 of this
Agreement unless such transferee General Partner provides substantially similar
rights to the Limited Partners and Consent of the Limited Partners is obtained.
Nothing contained in this Section 11.2(a) shall entitle the General Partner to
withdraw as General Partner unless a successor General Partner has been
appointed and approved by obtaining (i) the Consent of the Original Limited
Partners and (ii) the Consent of the Additional Limited Partners. Any General
Partner other than Regency admitted to the Partnership by reason of being an
Affiliate of Regency shall be a subsidiary of Regency so long as it is the
General Partner, unless (i) the Consent of the Original Limited Partners and
(ii) the Consent of the Additional Limited Partners is obtained.
(b) Transfer in Connection With Reclassification, Recapitalization, or Business
Combination Involving General Partner. Subject to the provisions of Section
4.5(f), neither the General Partner nor Regency shall engage in any merger,
consolidation or other business combination or transaction with or into another
Person or sale of all or substantially all of its assets, or any
reclassification, or recapitalization (other than a change in par value, or a
change in the number of shares of Common Stock resulting from a subdivision or
combination as described in the definition of Unit Adjustment Factor)
("Transaction"), unless as a result of the Transaction such other Person (i)
agrees that each Limited Partner who holds a Redemption Right shall thereafter
remain entitled to exchange each Partnership Unit owned by such Limited Partner
(after application of the Unit Adjustment Factor) for an amount of cash,
securities, or other property equal to the greatest amount of cash, securities
or other property paid to a holder of one Share in consideration of one Share
which a Limited Partner holding a Redemption Right would have received at any
time during the period from and after the date on which the Transaction is
consummated, as if the Limited Partner had exercised its Redemption Right
immediately prior to the Transaction and received the Share Amount, and (ii)
agrees to assume the General Partner's obligations pursuant to Section 8.6
hereof, provided, that if, in connection with the Transaction, a purchase,
tender or exchange offer shall have been made to and accepted by the holders of
more than 50 percent of the outstanding shares of Common Stock, the holders of
such Partnership Units shall receive the greatest amount of cash, securities, or
other property which a Limited Partner holding a Redemption Right would have
received had it exercised the Redemption Right and received the Share Amount in
redemption of its Partnership Units immediately prior to the expiration of such
purchase, tender or exchange offer. Prior to consummating any such Transaction,
Regency shall cause appropriate amendments to be made to this Agreement pursuant
to Section 14.1(b) (including the definitions of Shares, Unit Adjustment Factor
and Value) to carry out the intent of the parties that the rights of the Limited
Partners holding Redemption Rights hereunder shall not be prejudiced as the
result of any such Transaction. Notwithstanding anything contained in this
Section 11.2(b) to the contrary, the General Partner shall not engage in a
Transaction that causes the Original Limited Partners to recognize gain or loss
for federal income tax purposes.
(c) Limited Partnership Interests. The General Partner may transfer all or any
portion of its Limited Partnership Interests represented by Class B Units, or
any of the rights associated with such Limited Partnership Interests, to any
party without the consent of the Partnership or any Partner (regardless of
whether such transfer triggers a termination of the Partnership for tax purposes
under Section 708 of the Code).
(d) Admission of Additional General Partner. Except as provided in Section
11.2(a) and Section 11.2(b), the General Partner may not admit an additional
general partner other than an Affiliate of the General Partner pursuant to
Section 11.2(a).
Section 11.3 Limited Partners' Rights to Transfer.
------------------------------------
(a) General. No transfer of a Limited Partnership Interest by a Limited Partner
is permitted without the prior written consent of the General Partner, which it
may withhold in its sole and absolute discretion; provided, that a Limited
Partner may transfer Units without the consent of the General Partner: (i) to
members of the Limited Partner's Immediate Family or one or more trusts for
their benefit pursuant to applicable laws of descent and distribution, gift or
otherwise; (ii) among its Affiliates; (iii) to a lender, provided that the Units
are not Pledged Units, where such Units are pledged to secure a bona fide
obligation of the Limited Partner and any transfer in accordance with the rights
of such lender under the instruments evidencing such obligation (provided that
the General Partner receives 10 days prior written notice of any transfer under
this clause (a)); (iv) if the Limited Partner is a trust, to the beneficiaries
of the Limited Partner or to another trust (1) that is either established by the
same grantor as the Limited Partner or (2) whose beneficiaries consist of
members of the Immediate Family of the grantor of the Limited Partner or (3)
whose beneficiaries consist of beneficiaries of the transferor trust or members
of their Immediate Family; (v) if the Limited Partner is an entity, to the
direct or indirect equity holders of the Limited Partner; and (vi) to other
Limited Partners. In order to effect any transfer under this Section 11.3, the
Limited Partner must deliver to the General Partner a duly executed copy of the
instrument making such transfer and such instrument must evidence the written
acceptance by the assignee of all of the terms and conditions of this Agreement,
including, where applicable, the security interest described in Section 5.3, and
represent that such assignment was made in accordance with all applicable laws
and regulations.
(b) Incapacitated Limited Partners. If a Limited Partner is subject to
Incapacity, the executor, administrator, trustee, committee, guardian,
conservator or receiver of such Limited Partner's estate shall have all the
rights of a Limited Partner, but not more rights than those enjoyed by other
Limited Partners for the purpose of settling or managing the estate and such
power as the Incapacitated Limited Partner possessed to transfer all or any part
of his or its interest in the Partnership. The Incapacity of a Limited Partner,
in and of itself, shall not dissolve or terminate the Partnership.
(c) No Transfers Violating Securities Laws. The General Partner may prohibit any
transfer by a Limited Partner of his Partnership Units if, in the opinion of
legal counsel to the Partnership, such transfer would require filing of a
registration statement under the Securities Act of 1933 or would otherwise
violate any federal or state securities laws or regulations applicable to the
Partnership or the Partnership Units.
(d) Transfers Resulting in Corporation Status. Regardless of whether the General
Partner is required to provide or has provided its consent under Section
11.3(a), no transfer by a Limited Partner of his Partnership Units (or any
economic or other interest, right or attribute therein) may be made to any
Person if legal counsel for the Partnership renders an opinion letter that it
creates a substantial risk that the Partnership would be treated as an
association taxable as a corporation.
(e) Transfers Causing Termination. Regardless of whether the General Partner is
required to provide or has provided its consent under Section 11.3(a), no
transfer of any Partnership Interests other than the exercise of Redemption
Rights shall be effective if such transfer would, in the opinion of counsel for
the Partnership, result in the termination of the Partnership for federal income
tax purposes, in which event such transfer shall be made effective as of the
first fiscal quarter in which such termination would not occur, if the Partner
making such transfer continues to desire to effect the transfer.
(f) Transfer to Certain Lenders. Notwithstanding anything contained herein to
the contrary, no transfer of any Partnership Units may be made to a lender to
the Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
constitutes a Nonrecourse Liability, without the consent of the General Partner,
which consent may be given or withheld by the General Partner in its sole and
absolute discretion, provided, that as a condition to such consent the lender
will be required to enter into an arrangement with the Partnership and the
General Partner to redeem for the Redemption Amount any Partnership Units in
which a security interest is held, simultaneously with the time at which such
lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Section 752 of the Code.
(g) Transfers by Limited Partners Requiring 1934 Act Registration. Regardless of
whether the General Partner is required to provide or has provided its consent
under Section 11.3(a), no transfer by a Limited Partner of his or its Limited
Partnership Interest (or any economic or other interest, right or attribute
therein) may be made to any Person if (i) such transfer would require the
Partnership to register its equity securities under the Securities Exchange Act
of 1934 and (ii) the Partnership does not then have any class of equity
securities so registered.
(h) Transfers by Series A Preferred Partners. In addition to the other
restrictions on transfer set forth in this Article 11, which apply to Series A
Preferred Units, no transfer of the Series A Preferred Units may be made without
the consent of the General Partner, which consent may be given or withheld in
its sole and absolute discretion, if such transfer would result in more than
four partners holding all outstanding Series A Preferred Units within the
meaning of Regulation Section 1.7704-1(h)(3).
(i) Transfers Violating PTP Obligations. Regardless of whether the General
Partner is required to provide or has provided its consent under Section
11.3(a), at any time on or before December 31, 2004, unless the provisions of
this Section 11.3(i) are waived in writing by the General Partner, no transfer
(or purported transfer) by a Limited Partner of his or its Partnership Units (or
any economic or other interest, right or attribute therein) other than a
transfer to the General Partner or any of its Subsidiaries may be made to any
Person, and any such transfer (or purported transfer) shall be void ab initio,
and no Person shall otherwise become a Partner if (a) legal counsel to the
Partnership renders an opinion letter that such transfer creates a substantial
risk that the Partnership would be treated as a PTP within the meaning of
Section 7704 of the Code or (b) such transfer would cause the Partnership to
have more than 100 Partners within the meaning of Regulation Section
1.7704-1(h)(3) immediately after such transfer ("Prohibited PTP Transfer"). If a
Limited Partner presents any Units to the General Partner for transfer, the
General Partner shall advise the Limited Partner within ten Business Days after
receiving the transfer request if the purported transfer would constitute a
Prohibited Transfer. Notwithstanding the foregoing, a transfer of Partnership
Units which occurs by operation of law or as a result of a bona fide foreclosure
of a lender's security interest and which would otherwise constitute a
Prohibited PTP Transfer shall result in the mandatory redemption of such Units
for the Share Amount simultaneously with the time at which the respective
transferee would otherwise be deemed a Partner in the Partnership but for this
sentence; provided, however, if the issuance of the Share Amount pursuant to
this sentence would violate the provisions of Section 5.2 of the Articles of
Incorporation, then the Partnership shall pay the Cash Amount in lieu of the
Share Amount in satisfaction of such mandatory redemption. (For purposes of this
Section 11.3, "Valuation Date" shall mean the date the Partnership receives
notice of the Prohibited PTP Transfer.)
Section 11.4 Substituted Limited Partners.
----------------------------
(a) Consent of General Partner Required. The Limited Partner shall have the
right to substitute a transferee as a Limited Partner in his place, but only if
such transferee is a permitted transferee under Section 11.3, in which event
such substitution shall occur if the Limited Partner so provides. With respect
to any other transfers, the General Partner shall have the right to consent to
the admission of a transferee of the interest of a Limited Partner pursuant to
this Section 11.4 as a Substituted Limited Partner, which consent may be given
or withheld by the General Partner in its sole and absolute discretion. The
General Partner's failure or refusal to permit a transferee of any such
interests to become a Substituted Limited Partner shall not give rise to any
cause of action against the Partnership or any Partner.
(b) Rights and Duties of Substituted Limited Partners. A transferee who has been
admitted as a Substituted Limited Partner in accordance with this Article 11
shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement.
(c) Amendment of Exhibit A. Upon the admission of a Substituted Limited Partner,
the General Partner shall amend Exhibit A to reflect the name, address, number
of Partnership Units, and Percentage Interest of such Substituted Limited
Partner and to eliminate or adjust, if necessary, the name, address and interest
of the predecessor of such Substituted Limited Partner.
Section 11.5 Assignees. If a transferee is not admitted as a Substituted Limited
Partner in accordance with Section 11.4(a), such transferee shall be considered
an Assignee for purposes of this Agreement. An Assignee shall be entitled to all
the rights of an assignee of a limited partnership interest under the Act,
including (if applicable) the right to redeem Units under Section 8.6 or any
separate redemption agreement, and the right to receive distributions from the
Partnership and the share of Net Income, Net Losses, gain, loss and Recapture
Income attributable to the Partnership Units assigned to such transferee, but
shall not be deemed to be a holder of Partnership Units for any other purpose
under this Agreement, and shall not be entitled to vote such Partnership Units
in any matter presented to the Limited Partners for a vote (such Partnership
Units being deemed to have been voted on such matter in the same proportion as
all Partnership Units of the same class held by Limited Partners are voted). In
the event any such transferee desires to make a further assignment of any such
Partnership Units, such transferee shall be subject to all the provisions of
this Article 11 to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of Partnership Units.
Section 11.6 General Provisions.
------------------
(a) Withdrawal of Limited Partner. No Limited Partner may withdraw from the
Partnership other than as a result of a permitted transfer of all of such
Limited Partner's Partnership Units in accordance with this Article 11 or
pursuant to the redemption of all of his Partnership Units.
(b) Termination of Status as Limited Partner. Any Limited Partner who shall
transfer all of his Partnership Units in a transfer permitted pursuant to this
Article 11 or pursuant to the redemption of all of his Partnership Units shall
cease to be a Limited Partner.
(c) Timing of Transfers. Transfers pursuant to this Article 11 may only be made
on the first day of a fiscal quarter, unless the General Partner otherwise
agrees, or unless resulting by operation of law.
(d) Allocation When Transfer Occurs. If any Partnership Interest is transferred
during any quarterly segment of the Partnership's fiscal year in compliance with
the provisions of this Article 11 or redeemed pursuant to Section 8.6, Net
Income, Net Losses, each item thereof and all other items attributable to such
interest for such fiscal year shall be divided and allocated between the
transferor Partner and the transferee Partner by taking into account their
varying interests during the fiscal year in accordance with Section 706(d) of
the Code, using the interim closing of the books method (other than Net Income
or Net Loss attributable to a Capital Transaction, which shall be allocated as
of the Capital Transaction Record Date). Solely for purposes of making such
allocations, each of such items for the calendar month in which the transfer or
redemption occurs shall be allocated to the Person who is a Partner as of
midnight on the last day of said month. All distributions of Available Cash with
respect to which the Partnership Record Date is before the date of such transfer
or redemption shall be made to the transferor Partner, and all distributions of
Available Cash thereafter shall be made to the transferee Partner.
(e) Continued Obligations Following Redemption by Certain Additional Limited
Partners. Anything herein to the contrary notwithstanding, if an Additional
Limited Partner is an Electing Partner (as defined in Section 13.4), and if such
Additional Limited Partner exercises a Redemption Right with respect to such
Additional Limited Partner's entire Limited Partnership Interest, and the
General Partner determines in good faith that such Redeeming Partner has
exercised a Redemption Right in order to avoid such Additional Limited Partner's
deficit Capital Account restoration obligations in Section 13.4, the General
Partner may require, upon delivery of written notice to the Redeeming Partner no
later than thirty (30) days after the applicable Specified Redemption Date, that
the Redeeming Partner remain liable to restore his "Hypothetical Negative
Capital Account Balance" if the Partnership adopts a plan of liquidation within
three hundred sixty five (365) days following such applicable Specified
Redemption Date. A Redeeming Partner's Hypothetical Negative Capital Account
Balance is the hypothetical amount such Redeeming Partner would have had to pay
to the Partnership pursuant to his obligations under Section 13.4 hereof if he
had remained as an Additional Limited Partner until the liquidation of the
Partnership.
Article 12
Admission Of Partners
Section 12.1 Admission of Successor General Partner. A successor to all of the
General Partner's General Partnership Interest pursuant to Section 11.2 hereof
who is proposed and permitted to be admitted as a successor General Partner
shall be admitted to the Partnership as the General Partner, effective upon such
transfer. Any such transferee shall assume all of the General Partner's
obligations under this Agreement and shall carry on the business of the
Partnership without dissolution. In each case, the admission shall be subject to
the successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission.
Section 12.2 Admission of Additional Limited Partners.
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(a) General. A Person who makes a Capital Contribution to the Partnership in
accordance with Section 4.2 of this Agreement shall be admitted to the
Partnership as an Additional Limited Partner upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Article 16 hereof and (ii) such
other documents or instruments as may be required in the sole and absolute
discretion of the General Partner in order to effect such Person's admission as
an Additional Limited Partner.
(b) Consent of General Partner Required. Notwithstanding anything to the
contrary in this Section 12.2, no Person shall be admitted as an additional
Limited Partner without the consent of the General Partner (other than a Person
to whom a Limited Partner may transfer Units pursuant to Section 11.3(a) without
the consent of the General Partner), which consent may be given or withheld in
the General Partner's sole and absolute discretion. The admission of any Person
as an additional Limited Partner shall become effective on the date upon which
the name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.
Section 12.3 Amendment of Agreement and Certificate. For the admission to the
Partnership of any Partner, the General Partner shall, subject to the
requirements of Section 4.2, take all steps necessary and appropriate under the
Act to amend the records of the Partnership and, if necessary, to prepare as
soon as practical an amendment of this Agreement (including an amendment of
Exhibit A) and, if required by law, shall prepare and file an amendment to the
Certificate and may for this purpose exercise the power of attorney granted
pursuant to Article 16 hereof.
Section 12.4 Representations and Warranties of Additional Limited Partners. As
inducement for their admission to the Partnership, each Additional Limited
Partner hereby represents and warrants that such Limited Partner (a) has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Partnership; (b) has
been given the opportunity to examine all documents and to ask questions of, and
to receive answers from, the General Partner and its representatives concerning
the terms and conditions of the acquisition by it of Units in the Partnership,
and to obtain any additional information which it deems necessary to verify the
accuracy of the information with respect thereto; and (c) understands that there
will be no public market for the Units. Such Additional Limited Partner has
received and carefully reviewed copies of the reports filed by Regency for its
two most recent fiscal years and the interim period to date under the Securities
Exchange Act of 1934 and such additional information concerning Regency, the
Partnership and the transactions contemplated by this Agreement, to the extent
that Regency could acquire such information without unreasonable effort or
expense, as such Additional Limited Partner deems necessary for purposes of
making an investment in the Partnership. The Units in the Partnership acquired
by such Additional Limited Partner are being acquired by such Limited Partner
for its own account for investment and not with a view to, or for resale in
connection with, the public distribution or other disposition thereof. Such
Additional Limited Partner agrees as a condition to the issuance of such Units
in its name that any transfer, sale, assignment, hypothecation, offer or other
disposition of such Units may not be effected except in accordance with the
terms of this Agreement and pursuant to an effective registration statement
under the Securities Act and the rules and regulations promulgated thereunder,
or an exemption therefrom, and in compliance with all other applicable
securities and "blue sky" laws. Each Additional Limited Partner acknowledges
that the Partnership is not required to register any of the Units under the
Securities Act or any other applicable securities or "blue sky" laws. Each such
Additional Limited Partner represents and warrants that it has relied on its own
advisors for advice in connection with structuring the transactions contemplated
by this Agreement and is not relying on the General Partner or its accountants,
attorneys or other advisors with regard to such matters.
Article 13
Dissolution And Liquidation
Section 13.1 Dissolution. The Partnership shall not be dissolved by the
admission of Substituted Limited Partners or Additional Limited Partners or by
the admission of a successor General Partner in accordance with the terms of
this Agreement. Upon the withdrawal of the General Partner, any successor
General Partner shall continue the business of the Partnership. Notwithstanding
anything contained herein to the contrary, except as provided below in this
Section 13.1, the General Partner and the Partnership shall not dissolve the
Partnership, adopt a plan of liquidation for the Partnership or sell all or
substantially all of the assets of the Partnership in a Liquidating Transaction
or otherwise without the (i) Consent of the Original Limited Partners and (ii)
the Consent of the Additional Limited Partners. The Partnership shall dissolve,
and its affairs shall be wound up, upon the first to occur of any of the
following (each an "Event of Dissolution"):
(a) Expiration of Term-- the expiration of its term as provided in Section
2.4 hereof;
(b) Withdrawal of General Partner -- an event of withdrawal of the last
remaining General Partner, as defined in the Act (other than an event of
bankruptcy), unless, within 90 days after the withdrawal, all the remaining
Limited Partners agree in writing to continue the business of the Partnership
and to the appointment, effective as of the date of withdrawal, of a substitute
General Partner;
(c) Judicial Dissolution Decree-- entry of a decree of judicial dissolution
of the Partnership pursuant to the provisions of the Act; or
(d) Bankruptcy or Insolvency of General Partner -- the last remaining General
Partner shall be Incapacitated by reason of its bankruptcy unless, within 90
days after the withdrawal, all the remaining Limited Partners agree in writing
to continue the business of the Partnership and to the appointment, effective as
of the date of withdrawal, of a substitute General Partner.
Section 13.2 Winding Up.
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(a) General. The General Partner shall provide written notice to the Limited
Partners of the occurrence of an Event of Dissolution, giving them at least 20
days in which to exercise any Redemption Right prior to the distribution of any
proceeds from the liquidation of the Partnership pursuant to this Section
13.2(a). Upon the occurrence of an Event of Dissolution, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Partners.
No Partner shall take any action that is inconsistent with, or not necessary to
or appropriate for, the winding up of the Partnership's business and affairs.
The General Partner (or, in the event there is no remaining General Partner, any
Person elected by a majority in interest of the Limited Partners (the
"Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership's
liabilities and property and the Partnership property (subject to Section
13.2(b) and Section 13.2(c)) shall be liquidated as promptly as is consistent
with obtaining the fair value thereof, and the proceeds therefrom shall be
applied and distributed in the following order:
(i) First, to the payment and discharge of all of the Partnership's debts
and liabilities to creditors other than the Partners;
(ii) Second, to the payment and discharge of all of the Partnership's debts
and liabilities to the Partners, pro rata in accordance with amounts owed to
each such Partner;
(iii) Third, to the Series A Preferred Partners in accordance with the
provisions of Section 4.5(d);
(iv) Fourth, to the Original Limited Partners, pro rata based on
the number of Original Limited Partnership Units held by such
Partners, until each such Partner has received an amount equal
to the aggregate Priority Distribution Amounts for each
Partnership Record Date (if any) occurring subsequent to the
Event of Dissolution;
(v) Fifth, one hundred percent (100%) to the Additional Limited
Partners, pro rata based on the number of Additional Units
held by such Partners, until each such Partner has received an
amount equal to the aggregate Priority Distribution Amounts
for each Partnership Record Date (if any) occurring subsequent
to the Event of Dissolution; and
(vi) The balance, if any, to the General Partner and Limited
Partners in accordance with their Capital Accounts, after
giving effect to all contributions, distributions, and
allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
(b) Deferred Liquidation. Notwithstanding the provisions of Section 13.2(a)
hereof which require liquidation of the assets of the Partnership, but subject
to the order of priorities set forth therein, and further subject to Section
13.2(c) hereof and any separate agreement of the Partnership or the General
Partner with respect to the distribution in kind to Additional Limited Partners
of assets contributed by such Additional Limited Partners (or assets exchanged
for such assets), if prior to or upon dissolution of the Partnership the
Liquidator determines that an immediate sale of part or all of the Partnership's
assets would be impractical or would cause undue loss to the Partners, the
Liquidator may, in its sole and absolute discretion, defer for a reasonable time
the liquidation of any assets except those necessary to satisfy liabilities of
the Partnership (including to those Partners as creditors) and/or distribute to
the Partners, in lieu of cash, as tenants in common and in accordance with the
provisions of Section 13.2(a) and Section 13.2(c) hereof and any such separate
agreement, undivided interests in such Partnership assets as the Liquidator
deems not suitable for liquidation. Any such distributions in kind shall be made
only if, in the good faith judgment of the Liquidator, such distributions in
kind are in the best interest of the Partners, and shall be subject to such
conditions relating to the disposition and management of such properties as the
Liquidator deems reasonable and equitable and to any agreements governing the
operation of such properties at such time. The Liquidator shall determine the
fair market value of any property distributed in kind using such reasonable
method of valuation as it may adopt.
(c) Distribution of Briarcliff Village.
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(i) In the event that the Partnership is dissolved in accordance with this
Article 13, the Briarcliff Village Property (as defined in Section 7.1(c)) will
be distributed in-kind to the Original Briarcliff Partners (as defined in
Section 7.1(c)) who continue, as of such time, to hold Original Limited
Partnership Units attributable to the contribution of the Briarcliff Village
Property to Branch Properties, L.P. and Branch Properties, L.P.'s subsequent
contribution of the Briarcliff Village Property to the Partnership, with such
Partners to take title to the Briarcliff Village Property in any manner which
they are able to agree among themselves. In the event that such Partners are to
receive the Briarcliff Village Property pursuant to this Section 13.2(c), then
the Briarcliff Village Property shall have the net value agreed upon by the
General Partner and the Partners receiving an interest in the Briarcliff Village
Property, or, if they cannot agree, then the Briarcliff Village Property shall
be valued in accordance with Section 13.2(d).
(ii) If the net value of the Briarcliff Village Property determined
pursuant to Section 13.2(c)(i) exceeds the amount to which the Partners
receiving the Briarcliff Village Property are entitled pursuant to this Article
13, then such partners may contribute to the capital of the Partnership the
amount of cash equal to such excess, pro rata in proportion to the relative
number of Units of each such Partners attributable to the contribution of the
Briarcliff Village Property to Branch Properties, L.P. and Branch Properties,
L.P.'s subsequent contribution of the Briarcliff Village Property to the
Partnership. If such a contribution is not made in full, then Section 13.2(c)(i)
shall not apply and the Liquidator shall be entitled to sell the Briarcliff
Village Property in connection with the dissolution of the Partnership.
(d) Appraisal. In the event that the Briarcliff Village Property is to be
distributed to the Original Briarcliff Partners in liquidation of the
Partnership pursuant to the provisions of this Section 13.1(d), then the amount
of such distribution shall be determined as follows if the net value thereof has
not been agreed on pursuant to Section 13.2(c)(i):
(i) Within twenty (20) days after the determination that the
Partnership shall distribute the Briarcliff Village Property
to the Original Briarcliff Partners, the General Partner and a
Majority-In-Interest of the Original Briarcliff Partners (as
defined in Section 7.1(c)) shall each select an independent,
regionally or nationally recognized appraiser or appraisal
group which is experienced in valuing separate real estate
property ("Appraiser"), and the two Appraisers selected by the
parties shall jointly select a third Appraiser. Each party
shall pay the cost of their respective Appraiser and shall
split the cost of the third Appraiser.
(ii) Within sixty (60) days of selection of the third Appraiser,
each of the three Appraisers shall determine the gross fair
market value of the Briarcliff Village Property as of the date
of the election to liquidate the Partnership, calculated based
on the net fair market value of Briarcliff Village (net of the
loans encumbering Briarcliff Village), taking into
consideration the terms and relative value of the loans
encumbering Briarcliff Village, the fact that Briarcliff
Village is not being sold and the loans are not being repaid.
(iii) Upon receipt of the three appraisals determining the gross
fair market value of the Briarcliff Village Property, the two
closest gross fair market values shall be averaged, with such
average to constitute the distribution value of the Briarcliff
Village Property.
Section 13.3 Compliance with Timing Requirements of Regulations; Allowance for
Contingent or Unforeseen Liabilities or Obligations. Notwithstanding anything to
the contrary in this Agreement, in the event the Partnership is "liquidated"
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions
shall be made pursuant to this Article 13 to the General Partner and Limited
Partners who have positive Capital Accounts in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(2) (including any timing requirements therein).
Except as provided in Section 13.4, if any Limited Partner has a deficit balance
in his Capital Account (after giving effect to all contributions, distributions
and allocations for all taxable years, including the year during which such
liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit, and
such deficit shall not be considered a debt owed to the Partnership or to any
other Person for any purpose whatsoever. In the sole and absolute discretion of
the General Partner, a pro rata portion of the distributions that would
otherwise be made to the General Partner and Limited Partners pursuant to this
Article 13 may be: (i) distributed to a liquidating trust established for the
benefit of the General Partner and Limited Partners for the purposes of
liquidating Partnership assets, collecting amounts owed to the Partnership, and
paying any contingent or unforeseen liabilities or obligations of the
Partnership or of the General Partner arising out of or in connection with the
Partnership (the assets of any such trust shall be distributed to the General
Partner and Limited Partners from time to time, in the reasonable discretion of
the General Partner, in the same proportions as the amount distributed to such
trust by the Partnership would otherwise have been distributed to the General
Partner and Limited Partners pursuant to this Agreement); or (ii) withheld to
provide a reasonable reserve for Partnership liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment obligations
owed to the Partnership; provided, that such withheld amounts shall be
distributed to the General Partner and Limited Partners as soon as practicable.
Section 13.4 Deficit Capital Account Restoration.
-----------------------------------
(a) Subject to Section 13.4(b), if an Original Limited Partner listed on
Schedule 13.4(a) (who constituted an "Electing Partner" of Branch and is
referred to hereinafter as an "Electing Partner") and any Additional Limited
Partner who elects to be added to such Schedule (also an "Electing Partner"), on
the date of the "liquidation" of his respective interest in the Partnership
(within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g)), has a negative
balance in his Capital Account, then such Electing Partner shall contribute in
cash to the capital of the Partnership the lesser of (i) the maximum amount (if
any such maximum amount is stated) listed beside such Electing Partner's name on
Schedule 13.4(a) or (ii) the amount required to increase his Capital Account as
of such date to zero. Any such contribution required of a Partner hereunder
shall be made on or before the later of (i) the end of the Partnership fiscal
year in which the interest of such Partner is liquidated or (ii) the ninetieth
(90th) day following the date of such liquidation. Notwithstanding any provision
hereof to the contrary, all amounts so contributed by a partner to the capital
of the Partnership shall, upon the liquidation of the Partnership under this
Article 13, be first paid to any then creditors of the Partnership, including
Partners that are Partnership creditors (in the order provided in Section
13.2(a)), and any remaining amount shall be distributed to the other Partners
then having positive balances in their respective Capital Accounts in proportion
to such positive balances.
(b) After the death of an Electing Partner, the executor of the estate of such
an Electing Partner may elect to reduce (or eliminate) the deficit Capital
Account restoration obligation of such an Electing Partner pursuant to Section
13.4(a). Such election may be made by such executor by delivering to the General
Partner within two hundred seventy (270) days of the death of such an Electing
Partner a written notice setting forth the maximum deficit balance in his
Capital Account that such executor agrees to restore under Section 13.4(a), if
any. If such executor does not make a timely election pursuant to this Section
13.4(b) (whether or not the balance in his Capital Account is negative at such
time), then such Electing partner's estate (and the beneficiaries thereof who
receive distribution of Partnership Units therefrom) shall be deemed to have a
deficit Capital Account restoration obligation as set forth pursuant to the
terms of Section 13.4(a).
(c) If the General Partner, on the date of "liquidation" of its interest in the
Partnership, within the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations, has a negative balance in its Capital Account, then the General
Partner shall contribute in cash to the capital of the Partnership the amount
needed to restore its Capital Account balance to zero. Any such contribution
required to be made by the General Partner shall be made by the General Partner
on or before the later of (i) the end of the Partnership Year in which the
General Partner's interest is liquidated, or (ii) the ninetieth (90th) calendar
day following the date of such liquidation. Notwithstanding any provision of
this Agreement to the contrary, all amounts so contributed to the capital of the
Partnership in accordance with this Section 13.4 shall be distributed in
accordance with Section 13.2(a). Regency unconditionally guarantees the
obligation of the General Partner under this Section 13.4(c) for the benefit of
the Partnership and the other Partners.
Section 13.5 Deemed Distribution and Recontribution. Notwithstanding any other
provision of this Article 13 (but subject to Section 13.3), in the event the
Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Event of Dissolution has occurred, the Partnership's
property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged, and the Partnership's affairs shall not be wound up.
Instead, the Partnership shall be deemed to have distributed the Property in
kind to the General Partner and Limited Partners, who shall be deemed to have
assumed and taken such property subject to all Partnership liabilities, all in
accordance with their respective Capital Accounts. Immediately thereafter, the
General Partner and Limited Partners shall be deemed to have recontributed the
Partnership property in kind to the Partnership, which shall be deemed to have
assumed and taken such property subject to all such liabilities.
Section 13.6 Rights of Limited Partners. Except as specifically provided in this
Agreement, including Section 7.1(a)(iii), Section 8.6, Section 8.7 and Section
13.4, each Limited Partner shall look solely to the assets of the Partnership
for the return of his Capital Contribution and shall have no right or power to
demand or receive property other than cash from the Partnership. Except as
specifically provided in this Agreement, including Section 4.5 with respect to
the Series A Preferred Units, no Limited Partner shall have priority over any
other Limited Partner as to the return of his Capital Contributions,
distributions, or allocations.
Section 13.7 Notice of Dissolution. In the event an Event of Dissolution or an
event occurs that would, but for the provisions of Section 13.1, result in a
dissolution of the Partnership, the General Partner shall, within 30 days
thereafter, provide written notice thereof to each of the Partners and to all
other parties with whom the Partnership regularly conducts business (as
determined in the sole and absolute discretion of the General Partner) and shall
publish notice thereof in a newspaper of general circulation in each place in
which the Partnership regularly conducts business (as determined in the sole and
absolute discretion of the General Partner).
Section 13.8 Cancellation of Certificate of Limited Partnership. Upon the
completion of the liquidation of the Partnership as provided in Section 13.2
hereof, the Partnership shall be terminated and the Certificate and all
qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than the State of Delaware shall be canceled and such other
actions as may be necessary to terminate the Partnership shall be taken.
Section 13.9 Reasonable Time for Winding-Up. A reasonable time shall be allowed
for the orderly winding-up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 13.2 hereof, in order to
minimize any losses otherwise attendant upon such winding-up, and the provisions
of this Agreement shall remain in effect between the Partners during the period
of liquidation.
Article 14
Amendment Of Partnership Agreement; Meetings
Section 14.1 Amendments.
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(a) General. Amendments to this Agreement may be proposed only by the General
Partner, who shall submit any proposed amendment (other than an amendment
pursuant to Section 14.1(b)) to the Limited Partners. The General Partner shall
seek the written vote of the applicable Partners on the proposed amendment or
shall call a meeting to vote thereon and to transact any other business that it
may deem appropriate. Except as provided in Section 4.5(f)(ii) and Section
14.1(b), Section 14.1(c), Section 14.1(d), Section 14.1(e) or Section 14.1(f) or
except as may be expressly provided to the contrary elsewhere herein, a proposed
amendment shall be adopted and be effective as an amendment hereto if it is
approved by the General Partner and it receives (i) the Consent of the Original
Limited Partners and (ii) the Consent of the Additional Limited Partners.
(b) General Partner's Power to Amend. Notwithstanding Section 14.1(a), the
General Partner shall have the power, without the consent of the Limited
Partners, to amend this Agreement as may be required to facilitate or implement
any of the following purposes:
(i) to add to the obligations of the General Partner or surrender any right
or power granted to the General Partner or any Affiliate of the General Partner
for the benefit of the Limited Partners;
(ii) to add to or change the name of the Partnership;
(iii) to reflect the admission, substitution, termination, or withdrawal of
Partners in accordance with this Agreement;
(iv) to set forth the rights, powers, duties and preferences of the holders
of any additional Partnership Interests issued pursuant to Section 4.2;
(v) to reflect a change that is of an inconsequential nature and
does not adversely affect the Limited Partners in any material
respect, or to cure any ambiguity, correct or supplement any
provision in this Agreement not inconsistent with law or with
other provisions, or make other changes with respect to
matters arising under this Agreement that will not be
inconsistent with law or with the provisions of this
Agreement; and
(vi) to satisfy any requirements, conditions, or guidelines
contained in any order, directive, opinion, ruling or
regulation of a federal or state agency or contained in
federal or state.
The General Partner will provide 10 days' prior written notice to the Limited
Partners when any action under this Section 14.1(b) is taken.
(c) Consent of Adversely Affected Partner Required. Notwithstanding Section
14.1(a) hereof and subject to Section 4.5(f)(ii) hereof, this Agreement shall
not be amended without the consent of each Partner (other than a Series A
Preferred Partner) adversely affected if such amendment would (i) convert a
Limited Partner's interest in the Partnership into a general partner's interest,
(ii) modify the limited liability of a Limited Partner, (iii) alter rights of
the Partner to receive distributions pursuant to Article 5 or Article 13, or the
allocations specified in Article 6 (except as permitted pursuant to Section 4.2
or Section 4.4(c) hereof), (iv) alter or modify the Redemption Right or
Redemption Amount as set forth in Section 8.6 and related definitions hereof, or
(v) amend Section 4.2(a) (issuances of additional Partnership Interests),
Section 7.1(a)(iii) (Section 1031 exchanges), Section 7.1(h) (distributions),
Section 7.3 (restrictions on General Partner's authority), or (vi) amend this
Section 14.1(c).
(d) When Consent of Limited Partnership Interests Required. Notwithstanding
Section 14.1(a) hereof and subject to Section 4.5(f)(ii), the General Partner
shall not amend Section 4.2 (issuances of additional Partnership Interests),
Section 7.1(h) (distributions), Section 7.6 (contracts with Affiliates) or
Section 11.2 (transfer of General Partnership Interest) without the Consent of
the Limited Partners and the General Partner shall not amend this Section
14.1(d) without the unanimous consent of the Limited Partners (other than Series
A Preferred Partners and any other Preferred Partners unless such other
Preferred Partners are expressly granted voting rights under this Section
14.1(d).
(e) When Consent of Other Limited Partners Required.
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(i) Matters Relating to Briarcliff. Notwithstanding Section
14.1(a) hereof, Section 7.1(c) (sale of Briarcliff Village),
Section 13.2(c) (distribution of Briarcliff Village) and this
Section 14.1(e)(i) may be amended only with the Consent of a
Majority in Interest of the Original Briarcliff Partners (as
defined in Section 7.1(c).
(ii) Matters Relating to Other Classes of Partners. Notwithstanding
Section 14.1(a) hereof, except as provided in Section 14.1(c)
and Section 4.5(f)(ii), any amendment that would adversely
affect only a class of Limited Partners, including the
Original Limited Partners, may be amended with the Consent of
such class of Limited Partners.
(f) Security Capital Consent. So long as the Stockholders Agreement referred to
in Schedule 7.8(b) remains in effect, this Agreement shall not be amended,
modified or supplemented, in any such case, without the prior written consent of
Security Capital. Any amendment, modification or supplement adopted without
Security Capital's consent shall be void.
(g) UPREIT Amendment. On the first day of the month immediately after the date
that the General Partner Meets the UPREIT Test (as defined below), this
Agreement shall be automatically amended and restated in the form of the Fourth
Amended Agreement attached hereto as Exhibit E, and such Fourth Amended
Agreement shall govern the Partnership from such date. In its discretion, the
General Partner may defer the effective date of the Fourth Amendment until the
first day of the calendar quarter immediately after the General Partner meets
the UPREIT Test. "Meets the UPREIT Test" means that:
(i) from the most recent date that any distribution has been paid pursuant
to Article 5 until the date on which the test is being applied, one hundred
percent (100%) of the revenues of the General Partner, determined on a
consolidated basis in accordance with generally accepted accounting principles,
are attributable to revenues of the Partnership and its Subsidiaries, including
revenues attributable to the Partnership pursuant to one or more nominee
agreements between the Partnership and Regency and its Subsidiaries in which the
economic benefit and detriment of assets governed by such agreements are
attributed to the Partnership even though record title to such assets is held by
Regency and/or its Subsidiaries which are not also Subsidiaries of the
Partnership but excluding any revenues attributable to outside activities of the
General Partner permitted by Section 7.5 of the Fourth Amended Agreement;
(ii) the General Partner holds (x) the number of Class B Units
equal to the total number of Shares of Common Stock then
outstanding and (y) the number of additional Units equal to
the number and having designations, preferences and other
rights substantially similar to the designations, preferences
and other rights of other classes of equity of the General
Partner then outstanding, whether consisting of preferred
stock or special common stock, and the General Partner is
hereby authorized to issue or redeem such Units as are
necessary to effectuate the foregoing;
(iii) on the date on which the test is being applied, no Original
Limited Partner or Additional Limited Partner has a positive
Cumulative Unpaid Accrued Return Account or a positive
Cumulative Unpaid Priority Distribution Account; and
(iv) Persons (or their transferees) who are Limited Partners on the Third
Amendment Date (the "Preexisting Partners," which term includes any transferee
of a Preexisting Partner) have unanimously consented to the Fourth Amended
Agreement attached hereto as Exhibit E; provided, however, that this unanimous
consent requirement may be reduced, in the General Partner's discretion, to the
consent of Preexisting Partners holding not less than eighty-five (85%) of the
outstanding Units held by the Preexisting Partners (excluding any Units acquired
as transferee from a Limited Partner who is not a Preexisting Partner). A
non-consenting Preexisting Partner may consent in writing at any time after the
Third Amendment Date to the provisions of such Fourth Amended Agreement by
delivering written notice of such consent to the General Partner in such form as
the General Partner may require. Once a consent is delivered hereunder, it may
not be revoked. Any Limited Partner that consented to this Third Amended
Agreement shall be deemed to have irrevocably consented to the Fourth Amended
Agreement, such consent shall be included for the purpose of determining the
percentage of Preexisting Partners who have consented thereto and no further
consent of such Limited Partner or of any Partner who is not a Preexisting
Partner is required for the effectiveness of the Fourth Amended Agreement.
Contemporaneously with the adoption of the Fourth Amended Agreement and the
General Partner's most recent contribution of asset(s) to the Partnership, the
Gross Asset Values of all Partnership assets shall be adjusted to equal their
fair market values (exclusive of liabilities), as determined by the General
Partner, and, notwithstanding anything else herein to the contrary, any
resulting unrealized gain or loss shall be allocated first to the Series A
Preferred Partners to the extent required by Section 6.2(g) hereof and
thereafter in a manner which will cause the remaining Partners' Capital Account
balances to be in proportion with the number of Units which each Partner will
own immediately following the time that the Fourth Amended Agreement is adopted.
Section 14.2 Meetings of Limited Partners.
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(a) General. Meetings of the Limited Partners may be called only by the General
Partner. Such meeting shall be held at the principal office of the Partnership,
or at such other place as may be designated by the General Partner. Notice of
any such meeting shall be given to all Limited Partners not less than fifteen
days nor more than sixty days prior to the date of such meeting. The notice
shall state the purpose or purposes of the meeting. Limited Partners may vote in
person or by proxy at such meeting. Whenever the vote or consent of Limited
Partners is permitted or required under this Agreement, such vote or consent may
be given at a meeting of Limited Partners or may be given in accordance with the
procedure prescribed in Section 14.1 hereof. Except as otherwise expressly
provided in this Agreement, including without limitation Section 4.5(f)(ii), the
Consent of the Original Limited Partners and the Consent of the Additional
Limited Partners shall be required.
(b) Actions Without a Meeting. Any action required or permitted to be taken at a
meeting of the Limited Partners may be taken without a meeting if a written
consent setting forth the action so taken is signed by the Limited Partners
holding the number and type of Units that would be sufficient to approve the
action if taken at a meeting. Such consent may be in one instrument or in
several instruments, and shall have the same force and effect as a vote of such
Limited Partners at a meeting. Such consent shall be filed with the General
Partner. An action so taken shall be deemed to have been taken at a meeting held
on the effective date so certified.
(c) Proxy. Each Limited Partner may authorize any Person or Persons to act for
him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or his
attorney-in-fact. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Limited Partner executing it.
(d) Conduct of Meeting. Each meeting of Limited Partners shall be conducted by
the General Partner or such other Person as the General Partner may appoint
pursuant to such rules for the conduct of the meeting as the General Partner or
such other Person deems appropriate.
Article 15
General Provisions
Section 15.1 Addresses and Notice. All notices and demands under this Agreement
shall be in writing, and may be either delivered personally (which shall include
deliveries by courier) by U.S. mail or a nationally recognized overnight
courier, by telefax, telex or other wire transmission (with request for
assurance of receipt in a manner appropriate with respect to communications of
that type; provided, that a confirmation copy is concurrently sent by a
nationally recognized express courier for overnight delivery) or mailed, postage
prepaid, by certified or registered mail, return receipt requested, directed to
the parties at their respective addresses set forth on Exhibit A attached
hereto, as it may be amended from time to time, and, if to the Partnership, such
notices and demands sent in the aforesaid manner must be delivered at its
principal place of business set forth above. Notices and demands shall be
effective upon receipt. Any party hereto may designate a different address to
which notices and demands shall thereafter be directed by written notice given
in the same manner and directed to the Partnership at its office hereinabove set
forth.
Section 15.2 Titles and Captions. All article or section titles or captions in
this Agreement are for convenience only. They shall not be deemed part of this
Agreement and in no way define, limit, extend or describe the scope or intent of
any provisions hereof. Except as specifically provided otherwise, references to
"Articles" and "Sections" are to Articles and Sections of this Agreement.
Section 15.3 Pronouns and Plurals. Whenever the context may require, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
Section 15.4 Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns. Section 14.1(f) shall
inure to the benefit of Security Capital.
Section 15.6 Waiver of Partition. The Partners hereby agree that the Partnership
properties are not and will not be suitable for partition. Accordingly, each of
the Partners hereby irrevocably waives any and all rights (if any) that it may
have to maintain any action for partition of any of the Partnership properties.
Section 15.7 Entire Agreement. This Agreement supersedes any prior agreements or
understandings among the parties with respect to the matters contained herein
and it may not be modified or amended in any manner other than pursuant to
Article 14. Matters (including but not limited to Redemption Rights) affecting
Additional Limited Partners who are admitted to the Partnership from time to
time may be set forth from time to time in separate agreements, provided that
such agreements would not require the consent of any other Limited Partners if
included as part of this Agreement, and in the event of any inconsistency
between this Agreement and any such separate agreement permitted hereunder, the
provisions of the separate agreement shall control.
Section 15.8 Remedies Not Exclusive. Any remedies herein contained for breaches
of obligations hereunder shall not be deemed to be exclusive and shall not
impair the right of any party to exercise any other right or remedy, whether for
damages, injunction or otherwise.
Section 15.9 Time. Time is of the essence of this Agreement.
----
Section 15.10 Creditors. None of the provisions of this Agreement shall be
for the benefit of, or shall be enforceable by, any creditor of the Partnership.
Section 15.11 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
Section 15.12 Execution Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart.
Section 15.13 Applicable Law. This Agreement shall be construed in accordance
with and governed by the laws and judicial decisions of the State of Delaware,
without regard to the principles of conflicts of law.
Section 15.14 Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.
Article 16
Power Of Attorney
Section 16.1 Power of Attorney.
-----------------
(a) Scope. Each Limited Partner and each Assignee hereby constitutes and
appoints the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution and resubstitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and stead to:
(i) execute, swear to, acknowledge, deliver, file and record in the
appropriate public offices (1) all certificates, documents and other instruments
(including, without limitation, this Agreement and the Certificate and all
amendments or restatements thereof) that the General Partner or the Liquidator
deems appropriate or necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership (or a partnership in
which the limited partners have limited liability) in the State of Delaware and
in all other jurisdictions in which the Partnership may conduct business or own
property; (2) all instruments that the General Partner deems appropriate or
necessary to reflect any amendment, change, modification or restatement of this
Agreement in accordance with its terms; (3) all conveyances and other
instruments or documents that the General Partner deems appropriate or necessary
to reflect the dissolution and liquidation of the Partnership pursuant to the
terms of this Agreement, including, without limitation, a certificate of
cancellation; (4) all instruments or documents and all certificates and
acknowledgments relating to any mortgage, pledge, or other form of encumbrance
in connection with any loan or other financing to the General Partner as
provided by Section 7.1(a)(iii); (5) all instruments relating to the admission,
withdrawal, removal or substitution of any Partner pursuant to, or other events
described in, Article 11, Article 12 or Article 13 hereof or the Capital
Contribution of any Partner; (6) all certificates, documents and other
instruments relating to the determination of the rights, preferences and
privileges of Partnership Interests; and (7) all financing statements,
continuation statements and similar documents which the General Partner deems
appropriate to perfect and to continue perfection of the security interest
referred to in Section 5.3; and
(ii) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments
appropriate or necessary, to evidence, confirm or ratify any
vote, consent, approval, agreement or other action which is
made or given by the Partners hereunder or is consistent with
the terms of this Agreement or appropriate or necessary, to
effectuate the terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
to amend this Agreement except in accordance with Article 14 hereof or as may be
otherwise expressly provided for in this Agreement.
(b) Additional Power of Attorney of Limited Partners. Each Additional Limited
Partner hereby grants to the General Partner and any Liquidator and authorizes
officers and attorneys-in-fact of such Persons, and each of those acting singly,
in each case with full power of substitution and resubstitution, as its true and
lawful agent and attorney-in-fact, with full power and authority in its name,
place and stead to execute and file in such Additional Limited Partner's name
any financing statements, continuation statements and similar documents and to
perform all other acts which the General Partner deems appropriate to perfect
and to continue perfection of the security interest in any Pledged Units owned
by such Additional Limited Partner.
(c) Irrevocability. The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Partners will be relying upon the power of the General Partner
and any Liquidator to act as contemplated by this Agreement in any filing or
other action by it on behalf of the Partnership, and it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or Assignee and the
transfer of all or any portion of such Limited Partner's or Assignee's
Partnership Units and shall extend to such Limited Partner's or Assignee's
heirs, successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner, acting in good faith pursuant to such power of attorney; and
each such Limited Partner or Assignee hereby waives any and all defenses which
may be available to contest, negate or disaffirm the action of the General
Partner, taken in good faith under such power of attorney. Each Limited Partner
or Assignee shall execute and deliver to the General Partner or the Liquidator,
within 15 days after receipt of the General Partner's request therefor, such
further designations, powers of attorney and other instruments as the General
Partner or the Liquidator, as the case may be, deems necessary to effectuate
this Agreement and the purposes of the Partnership.
<PAGE>
004.197245.1
Signature Pages to Regency Centers, L.P. Third Amended and Restated
Agreement of Limited Partnership
85
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
GENERAL PARTNER:
REGENCY REALTY CORPORATION
By:____________________________________
Name: Bruce M. Johnson
Title: Managing Director
SECURITY CAPITAL U.S. REALTY,
a Luxembourg corporation
By:____________________________________
Name: ______________________________
Title: ______________________________
SECURITY CAPITAL HOLDINGS, S.A.,
a Luxembourg corporation
By:____________________________________
Name: ______________________________
Title: ______________________________
ARDEN SQUARE HOLDINGS SARL
By:____________________________________
Name: ______________________________
Title: ______________________________
<PAGE>
BLOSSOM VALLEY HOLDINGS SARL
By:____________________________________
Name: ______________________________
Title: ______________________________
COOPER STREET PLAZA HOLDINGS SARL
By:____________________________________
Name: ______________________________
Title: ______________________________
DALLAS HOLDINGS SARL
By:____________________________________
Name: ______________________________
Title: ______________________________
EL CAMINO HOLDINGS SARL
By:____________________________________
Name: ______________________________
Title: ______________________________
FRIARS MISSION HOLDINGS SARL
By:____________________________________
Name: ______________________________
Title: ______________________________
<PAGE>
004.197245.1
19
004.197245.1
Series B Amendment to Partnership Agreement
Regency Centers, L.P.
Amendment No. 1 to Third Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement")
Relating to 8.75% Series B Cumulative Redeemable Preferred Units
Section 1. Definitions. Capitalized terms used and not
otherwise defined herein shall have the meaning assigned thereto in the
Partnership Agreement. For purposes of this Amendment, the term "Series B
Limited Partner" means a Limited Partner holding Series B Preferred Units. The
term "Parity Preferred Units" shall be used to refer to Series A Preferred
Units, Series B Preferred Units (as hereafter defined) and any class or series
of Partnership Interests of the Partnership now or hereafter authorized, issued
or outstanding expressly designated by the Partnership to rank on a parity with
Series A Preferred Units or Series B Preferred Units with respect to
distributions or rights upon voluntary or involuntary liquidation, winding-up or
dissolution of the Partnership, or both, as the context may require, whether or
not the dividend rates, dividend payment dates or redemption or liquidation
prices per unit or conversion rights or exchange rights shall be different from
those of the Series A Preferred Units. The term "Series B Priority Return" shall
mean, an amount equal to 8.75% per annum, determined on the basis of a 360 day
year of twelve 30 day months (or actual days for any month which is shorter than
a full monthly period), cumulative to the extent not distributed for any given
distribution period, of the stated value of $100 per Series B Preferred Unit,
commencing on the date of issuance of such Series B Preferred Unit. The
Partnership Agreement shall be amended to add such definitions, and shall be
further amended to add the following definition: "Priority Returns" means the
Series A Priority Return and the Series B Priority Return or similar amount
payable with respect to any other Parity Preferred Units. The term "Junior
Stock" means any class or series of capital stock of the General Partner ranking
junior as to the payment of distributions or rights upon voluntary or
involuntary liquidation, winding up or dissolution of the General Partner to the
Series B Preferred Stock. The term "PTP" shall mean a "publicly traded
partnership" within the meaning of Section 7704 of the Code (as hereafter
defined). The final Paragraph in the definition of "Net Income" and "Net Loss"
in the Partnership Agreement shall be restated in its entirety as follows:
"Solely for purposes of allocating Net Income or Net Loss in
any Fiscal Year to the holders of the Parity Preferred Units,
items of Net Income and Net Loss, as the case may be, shall
not include Depreciation with respect to properties (or
groupings of properties selected by the General Partner using
any method determined by it to be reasonable) that are
"ceiling limited" in respect of the holders of the Parity
Preferred Units. For purposes of the preceding sentence,
Partnership property shall be considered ceiling limited in
respect of a holder of Parity Preferred Units if Depreciation
attributable to such Partnership property which would
otherwise be allocable to such Partner, without regard to this
paragraph, exceeded depreciation determined for federal income
tax purposes attributable to such Partnership property which
would otherwise be allocated to such Partner by more than 5%."
Section 2. Designation and Number. A series of Partnership
Units in the Partnership designated as the "8.75% Series B Cumulative Redeemable
Preferred Units" (the "Series B Preferred Units") is hereby established. The
number of Series B Preferred Units shall be 850,000.
Section 3. Rank.
----
(a) The Series B Preferred Units will, with respect to distributions or rights
upon voluntary or involuntary liquidation, winding-up or dissolution of the
Partnership, or both, rank senior to all classes or series of Partnership
Interests now or hereafter authorized, issued or outstanding other than any
class or series of equity securities of the Partnership issued after the
issuance of the Series B Preferred Units and expressly designated in accordance
with the Partnership Agreement as ranking on a parity with the Series B
Preferred Units as to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Partnership, or both. The Series B
Preferred Units are expressly designated as ranking on a parity with the Series
A Preferred Units.
(b) The last sentence of Section 4.1(a) of the Partnership Agreement shall be
amended to read in full as follows (new language is underscored):
Any Partnership Interests held by the General Partner or any
Affiliate other than a Property Affiliate (including
Partnership Interests acquired under Sections 4.2, 8.6 and
8.7) shall be Class B Units, other than Parity Preferred
Units, the issuance of which has been approved by the Limited
Partners pursuant to Section 4.2, and any Preferred Units
issued pursuant to Section 4.2(b)(i).
Section 4. Distributions.
-------------
(a) Payment of Distributions. Subject to the rights of holders of Parity
Preferred Units, holders of Series B Preferred Units shall be entitled to
receive, when, as and if declared by the Partnership acting through the General
Partner, out of Available Cash and Capital Transaction Proceeds, cumulative
preferential cash distributions at the rate per annum of 8.75% of the original
Capital Contribution per Series B Preferred Unit (the "Original Coupon Rate"; as
it may be adjusted from time to time, the "Coupon Rate"). If (i) on or prior to
January 31, 2000, the Partnership or the General Partner consummates a merger or
consolidation (the "Merger") with another entity (the "Merger Partner") having
an equity market capitalization in excess of $1 billion, and (ii) after the date
of consummation of the Merger and on or before the later of the 180th day
following the first public announcement of the proposed Merger and the 90th day
following the consummation of the Merger (the "Adjustment Period"), either
Moody's or Standard & Poor's (each a "Rating Agency") changes (a "Rating
Change") its unconditional, published rating of the General Partner's preferred
stock (such Agency's "GP Rating"), then, from and after the date of each such
Rating Change by either such Rating Agency during the Adjustment Period, the
Coupon Rate shall be adjusted to equal an amount determined by decreasing (if
the product described below is a positive number) or increasing (if the product
described below is a negative number) the Original Coupon Rate by the product of
(A) the positive number of grade levels of such Rating Agency by which its new
GP Rating exceeds, or the negative number of grade levels of such Rating Agency
by which its new GP Rating is less than, its GP Rating as of September 3, 1999,
multiplied by (B) 12.5 basis points. In the case of each such Rating Change, the
designation of the Series B Preferred Units will change accordingly to reflect
such new Coupon Rate. Promptly after the expiration of the Adjustment Period,
the parties hereto shall execute, acknowledge and deliver or cause to be
executed, acknowledged and delivered all instruments and documents as may be
reasonably necessary or desirable to memorialize the revised Coupon Rate,
including making a corresponding change to the Series B Priority Return. Such
distributions shall be cumulative, shall accrue from the original date of
issuance and will be payable (A) quarterly in arrears, on or before March 1,
June 1, September 1 and December 1 of each year commencing on December 1, 1999
and (B) in the event of (i) an exchange of Series B Preferred Units into Series
B Preferred Stock, or (ii) a redemption of Series B Preferred Units, on the
exchange date or redemption date, as applicable (each a "Series B Preferred Unit
Distribution Payment Date"). The amount of the distribution payable for any
period will be computed on the basis of a 360-day year of twelve 30-day months
and for any period shorter than a full quarterly period for which distributions
are computed, the amounts of the distribution payable will be computed based on
the ratio of the actual number of days elapsed in period to ninety (90) days. If
any date on which distributions are to be made on the Series B Preferred Units
is not a Business Day (as defined herein), then payment of the distribution to
be made on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. Distributions on
December 31, 1999 and thereafter on the Series B Preferred Units will be made to
the holders of record of the Series B Preferred Units on the relevant record
dates to be fixed by the Partnership acting through the General Partner, which
record dates shall be not less than ten (10) days and not more than thirty (30)
Business Days prior to the relevant Preferred Unit Distribution Payment Date
(the "Series B Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day, other than a
Saturday or a Sunday, which is not a day on which banking institutions in New
York, New York are authorized or required by law, regulation or executive order
to close.
(b) Distributions Cumulative. Distributions on the Series B Preferred Units will
accrue whether or not the terms and provisions of any agreement of the
Partnership, including any agreement relating to its indebtedness, at any time
prohibit the current payment of distributions, whether or not the Partnership
has earnings, whether or not there are funds legally available for the payment
of such distributions and whether or not such distributions are authorized.
Accrued but unpaid distributions on the Series B Preferred Units will accumulate
as of the Series B Preferred Unit Distribution Payment Date on which they first
become payable. Distributions on account of arrears for any past distribution
periods may be declared and paid at any time, without reference to a regular
Series B Preferred Unit Distribution Payment Date to holders of records of the
Series B Preferred Units on the record date fixed by the Partnership acting
through the General Partner which date shall be not less than ten (10) days and
not more than thirty (30) Business Days prior to the payment date. Accumulated
and unpaid distributions will not bear interest.
(c) Priority as to Distributions.
- -------------------------------------
(i) So long as any Series B Preferred Units are outstanding, no distribution of
cash or other property shall be authorized, declared, paid or set apart for
payment on or with respect to any class or series of Partnership Interests of
the Partnership ranking junior as to the payment of distributions to Parity
Preferred Units (collectively, "Junior Units"), nor shall any cash or other
property be set aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series B Preferred Units, any Parity
Preferred Units with respect to distributions or any Junior Units, unless, in
each case, all distributions accumulated on all Series B Preferred Units and all
classes and series of outstanding Parity Preferred Units as to payment of
distributions have been paid in full. The foregoing sentence will not prohibit
(a) distributions payable solely in Junior Units, (b) the conversion of Junior
Units or Parity Preferred Units into Partnership Interests of the Partnership
ranking junior to the Series B Preferred Units as to distributions, or (c) the
redemption of Partnership Interests corresponding to any Series B Preferred
Stock, Parity Preferred Stock with respect to distributions or Junior Stock to
be purchased by the General Partner pursuant to Article 5 of the Articles of
Incorporation of the General Partner (the "Charter") to preserve the General
Partner's status as a real estate investment trust, provided that such
redemption shall be upon the same terms as the corresponding purchase pursuant
to Article 5 of the Charter.
(ii) So long as distributions have not been paid in full (or a sum sufficient
for such full payment is not irrevocably deposited in trust for payment) upon
the Series B Preferred Units, all distributions authorized and declared on the
Series B Preferred Units and all classes or series of outstanding Parity
Preferred Units with respect to distributions shall be authorized and declared
so that the amount of distributions authorized and declared per Series B
Preferred Unit and such other classes or series of Parity Preferred Units shall
in all cases bear to each other the same ratio that accrued distributions per
Series B Preferred Unit and such other classes or series of Parity Preferred
Units (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such classes or series of Parity
Preferred Units do not have cumulative distribution rights) bear to each other.
(d) No Further Rights. Holders of Series B Preferred Units shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
(e) Section 5.1(c) of the Partnership Agreement shall be amended to read in
full as follows (new language is underscored):
"Anything herein to the contrary notwithstanding, subject to
Section 4(c)(i) of Amendment No. 1 to this Agreement, no
Available Cash or Capital Transaction Proceeds shall be
distributed pursuant to Section 5.1(a), Section 5.1(b) or any
other provisions of this Article 5 unless all distributions
accumulated on all Series A Preferred Units pursuant to
Section 4.5 have been paid in full and unless all
distributions accumulated on any other outstanding Preferred
units have been paid in full."
Section 5. Allocations.
-----------
(a) Section 6.1(a) and 6.1(b) of the Agreement are hereby deleted and the
following inserted as new Sections 6.1(a) and 6.1(b) in lieu thereof (new
language is underscored):
Section 6.1 Allocations of Net Income and Net Loss. For
purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's Net Income
and Net Loss shall be allocated among the Partners for each taxable
year (or portion thereof) as provided herein below.
(a) Net Income. After giving effect to the
special allocations set forth in Section 6.2 below, Net Income
shall be allocated as follows (and for this purpose, the
holders of Class A Units shall be treated as if they were
Original Limited Partners):
(i) First, one hundred percent
(100%) to the General Partner in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to the General Partner pursuant to Section
6.1(b)(ix) and the last sentence of Section 6.1(b)
for all prior fiscal years, over (B) the cumulative
Net Income allocated pursuant to this Section
6.1(a)(i) for all prior fiscal years;
(ii) Second, one hundred percent
(100%) to the holders of Parity Preferred Units in an
amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to the holders of
Parity Preferred Units pursuant to Section
6.1(b)(viii) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this
Section 6.1(a)(ii), including any amounts allocated
pursuant to Section 6.2(g) which were attributable to
this Section 6.1(a)(ii), for all prior fiscal years;
(iii) Third, one hundred percent
(100%) to the Original Limited Partners in an amount
equal to the excess, if any, of (A) the cumulative
Net Losses allocated to such Partners pursuant to
Section 6.1(b)(iv) for all prior fiscal years, over
(B) the cumulative Net Income allocated pursuant to
this Section 6.1(a)(iii) for all prior fiscal years,
which amount shall be allocated among such Partners
in the same proportions and in the reverse order as
the Net Losses were allocated pursuant to Section
6.1(b)(iv);
(iv) Fourth, one hundred percent
(100%) to the Original Limited Partners in an amount
equal to the excess, if any, of (A) the cumulative
Net Losses allocated to such Partners pursuant to
Section 6.1(b)(iii) for all prior fiscal years, over
(B) the cumulative Net Income allocated pursuant to
this Section 6.1(a)(iv) for all prior fiscal years,
which amount shall be allocated among such Partners
in the same proportions and in the reverse order as
the Net Losses were allocated pursuant to Section
6.1(b)(iii);
(v) Fifth, one hundred percent
(100%) to the holders of Parity Preferred Units until
the holders of Parity Preferred Units have been
allocated an amount equal to the excess of their
respective cumulative Priority Returns through the
last day of the current fiscal year (determined
without reduction for distributions made to date in
satisfaction thereof) over the cumulative Net Income
allocated to the holders of Parity Preferred Units
pursuant to this Section 6.1(a)(v), including any
amounts allocated pursuant to Section 6.2(g) which
were attributable to this Section 6.1(a)(v), for all
prior periods;
(vi) Sixth, one hundred percent
(100%) to the Original Limited Partners until the
cumulative allocations of Net Income to each Original
Limited Partner under this Section 6.1(a)(vi) for the
current and all prior fiscal years equal the
cumulative distributions paid to the Original Limited
Partner pursuant to Section 5.1(a)(i) and Section
13.2(a)(iv) , provided, however, in the case of
Original Limited Partners other than Class Z Branch
Partners, no allocations of Net Income shall be made
under this Section 6.1(a)(vi) to such Limited
Partners with respect to distributions made under
Section 5.1(a)(i) and Section 13.2(a)(iv) after the
Third Amendment Date;.
(vii) Seventh, one hundred percent
(100%) to the Original Limited Partners until the
cumulative allocations of Net Income to each Original
Limited Partner under this Section 6.1(a)(vii) for
the current and all prior fiscal years equal the sum
of the cumulative amounts credited to such Partner's
Cumulative Unpaid Priority Distribution Account and
Cumulative Unpaid Accrued Return Account for the
current and all prior fiscal years, provided,
however, in the case of Original Limited Partners
other than Class Z Branch Partners, no allocations of
Net Income shall be made under this Section
6.1(a)(vii) with respect to amounts credited to such
Partners' Cumulative Unpaid Priority Distribution
Accounts and Cumulative Unpaid Accrued Return
Accounts after the Third Amendment Date;
(viii) Eighth, one hundred percent
(100%) to the Additional Limited Partners in an
amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to the Additional
Limited Partners pursuant to Section 6.1(b)(vii) for
all prior fiscal years, over (B) the cumulative Net
Income allocated pursuant to this Section
6.1(a)(viii) for all prior fiscal years, which amount
shall be allocated among the Additional Limited
Partners in the same proportions and in the reverse
order as the Net Losses were allocated pursuant to
Section 6.1(b)(vii);
(ix) Ninth, one hundred percent
(100%) to the Additional Limited Partners in an
amount equal to the excess, if any of (A) the
cumulative Net Losses allocated to the Additional
Limited Partners pursuant to Section 6.1(b)(vi) for
all prior fiscal years, over (B) the cumulative Net
Income allocated pursuant to this Section 6.1(a)(ix)
for all prior fiscal years, which amount shall be
allocated among such Partners in the same proportions
and in the reverse order as the Net Losses were
allocated pursuant to Section 6.1(b)(vi);
(x) Tenth, one hundred percent
(100%) to the Additional Limited Partners until the
cumulative allocations of Net Income to each
Additional Limited Partner under this Section
6.1(a)(x) for the current and all prior fiscal years
equal the cumulative distributions paid to the
Additional Limited Partners pursuant to Section
5.1(a)(iv) and Section 13.2(a)(v), provided, however,
in the case of Additional Limited Partners other than
Class Z Midland Partners, no allocations of Net
Income shall be made under this Section 6.1(a)(x) to
such Limited Partners with respect to distributions
made under Section 5.1(a)(iv) and Section 13.2(a)(v)
after the Third Amendment Date;
(xi) Eleventh, one hundred percent
(100%) to the Additional Limited Partners until the
cumulative allocations of Net Income to each
Additional Limited Partner under this Section
6.1(a)(xi) for the current and all prior fiscal years
equal the sum of (A) the cumulative amounts credited
to such Partner's Cumulative Unpaid Priority
Distribution Account and Cumulative Unpaid Accrued
Return Account for the current and all prior fiscal
years and (B) the cumulative Net Losses allocated to
the Additional Limited Partner pursuant to Section
6.1(b)(v) for all prior fiscal years, provided,
however, in the case of Additional Limited Partners
other than Class Z Midland Partners, no allocation of
Net Income shall be made under this Section
6.1(a)(xi) with respect to amounts credited to such
Partners' Cumulative Unpaid Priority Distribution
Accounts and Cumulative Unpaid Accrued Return
Accounts after the Third Amendment Date; and
(xii) Thereafter, to the Original
and Additional Limited Partners other than Class Z
Branch Partners or Class Z Midland Partners, to the
General Partner and to any other holders of Class B
Units, pro rata in accordance with the relative
amounts of Available Cash and Capital Transaction
Proceeds distributed to each of them during the
taxable year.
(b) Net Losses. After giving effect to the special allocations set forth in
Section 6.2 below, Net Losses shall be allocated as follows:
(i) First, one hundred percent
(100%) to the Original and Additional Limited
Partners other than Class Z Branch Partners or Class
Z Midland Partners, to the General Partner and the
Class B Unit holders in an amount equal to the
excess, if any, of (A) the cumulative Net Income
allocated pursuant to Section 6.1(a)(xii) hereof for
all prior fiscal years in excess of distributions of
Available Cash to such Partners for which no
corresponding allocation of Net Income had been made
(or is required to be made) under Sections
6.1(a)(i)-(xi) hereof, over (B) the cumulative Net
Losses allocated pursuant to this Section 6.1(b)(i)
for all prior fiscal years;
(ii) Second, to the Original Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(ii) equal the
excess, if any, of the cumulative allocations of Net
Income under Section 6.1(a)(vii) to such Partners for
all prior fiscal years over the cumulative
distributions to such Partners under Section
5.1(a)(ii) and (iii) and Section 5.1(b)(i) and (ii)
for the current and all prior fiscal years (such
allocation being made in proportion to such Partners'
respective excess amounts);
(iii) Third, to the Original Limited
Partners with positive Adjusted Capital Account
balances (determined, solely for purposes of this
Section 6.1(b)(iii), without regard to any obligation
of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances,
until such balances are reduced to zero;
(iv) Fourth, to the Original Limited
Partners in proportion to their relative Percentage
Interests; provided, however, that to the extent that
an allocation under this Section 6.1(b)(iv) would
cause or increase an Adjusted Capital Account Deficit
for such Partner, such Net Loss shall be allocated to
those Original Limited Partners (in proportion to
their relative Percentage Interests) for whom such
allocation would not cause or increase an Adjusted
Capital Account Deficit;
(v) Fifth, to the Additional Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(v) equal the excess,
if any, of the cumulative allocations of Net Income
under Section 6.1(a)(xi) to such Partners for all
prior fiscal years over the cumulative distributions
to such Partners under Section 5.1(a)(v) and (vi) and
Section 5.1(b)(iii) and (iv) for the current and all
prior fiscal years (such allocation being made in
proportion to such Partners' respective excess
amounts);
(vi) Sixth, to the Additional
Limited Partners with positive Adjusted Capital
Accounts balances (determined, solely for purposes of
this Section 6.1(b)(vi), without regard to any
obligation of a Partner to restore a negative Capital
Account under Section 13.4), in proportion to such
balances, until such balances are reduced to zero;
(vii) Seventh, to the Additional
Limited Partners in proportion to their relative
Percentage Interests; provided, however, that to the
extent that an allocation under this Section
6.1(b)(vii) would cause or increase an Adjusted
Capital Account Deficit for such Partner, such Net
Loss shall be allocated to those Additional Limited
Partners (in proportion to their relative Percentage
Interests) for whom such allocation would not cause
or increase an Adjusted Capital Account Deficit;
(viii) Eighth, to the holders of
Parity Preferred Units until their respective
Adjusted Capital Account Balance (determined, solely
for purposes of this Section 6.1(b)(viii), without
regard to any obligation of a Partner to restore a
negative Capital Account under Section 13.4), has
been reduced to zero; and
(ix) Any remaining Net Loss shall be
allocated to the General Partner and any other
holders of Class B Units.
Notwithstanding the foregoing, Net Losses shall not be allocated to any
Limited Partner pursuant to this Section 6.1(b)(ix) to the extent that
such allocation would cause such Limited Partner to have an Adjusted
Capital Account Deficit at the end of such taxable year (or increase
any existing Adjusted Capital Account Deficit). All Net Losses in
excess of the limitations set forth in the preceding sentence of this
Section 6.1(b) shall be allocated to the General Partner.
(b) Section 6.2(g) of the Agreement is hereby deleted and the following
inserted as new Section 6.2(g) in lieu thereof (new language is underscored):
(g) Capital Account Adjustments.
Notwithstanding anything herein to the contrary other than the
last sentence of Section 14.1(g), any gain or loss arising
from an adjustment to the Gross Asset Value of any Partnership
asset pursuant to clause (b) or (c) of the definition thereof
shall be allocated (i) first, to the holders of the Parity
Preferred Units, but only to the extent that they would have
been allocated such gain pursuant to Section 6.1(a)(ii) or
Section 6.1(a)(v) of this Agreement or such loss pursuant to
Section 6.1(b)(viii) of this Agreement, as applicable, if such
gain or loss had been actually realized; and (ii) second, and
subject to section 6.2(h) hereof, one hundred percent (100%)
of the remainder of such gain or loss to the General Partner
and the Additional Limited Partners (other than holders of
Parity Preferred Units) pro rata in accordance with the
relative number of Units held by each; provided, however, that
for this purpose, the General Partner shall be treated as
owning all of the outstanding Class A Units and all of the
outstanding Original Limited Partnership Units in addition to
the actual number of Units which the General Partner holds. An
Additional Limited Partner (except for holders of Parity
Preferred Units), at the time of admission to the Partnership,
may elect with the consent of the General Partner to not
receive special allocations of any gain or loss resulting from
such adjustments.
Section 6. Liquidation Preference.
----------------------
(a) Payment of Liquidating Distributions. Subject to the rights of holders of
Parity Preferred Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership the holders of Series
B Preferred Units shall be entitled to receive out of the assets of the
Partnership legally available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the Partnership, but
before any payment or distributions of the assets shall be made to holders of
any class or series of Partnership Interest that ranks junior to the Series B
Preferred Units as to rights upon liquidation, dissolution or winding-up of the
Partnership, an amount equal to the sum of (i) a liquidation preference equal to
their positive Capital Account balances, determined after taking into account
all Capital Account adjustments for the Partnership taxable year during which
the liquidation occurs (other than those made as a result of the liquidating
distribution set forth in this Section 6(a)), and (ii) an amount equal to any
accumulated and unpaid distributions thereon, whether or not declared, to the
date of payment. In the event that, upon such voluntary or involuntary
liquidation, dissolution or winding-up, there are insufficient assets to permit
full payment of liquidating distributions to the holders of Series B Preferred
Stock and any Parity Preferred Units as to rights upon liquidation, dissolution
or winding-up of the Partnership, all payments of liquidating distributions on
the Series B Preferred Units and such Parity Preferred Units shall in all cases
bear to each other the same ratio that the respective rights of the Series B
Preferred Unit and such other Parity Preferred Units (which shall not include
any accumulation in respect of unpaid distributions for prior distribution
periods if such Parity Preferred Units do not have cumulative distribution
rights) upon liquidation, dissolution or winding-up of the Partnership bear to
each other.
(b) Notice. Written notice of any such voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership, stating the payment date or dates
when, and the place or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (i) fax and (ii) by first
class mail, postage pre-paid, not less than 30 and not more than 60 days prior
to the payment date stated therein, to each record holder of the Series B
Preferred Units at the respective addresses of such holders as the same shall
appear on the transfer records of the Partnership.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series B Preferred
Units will have no right or claim to any of the remaining assets of the
Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The voluntary sale,
conveyance, lease, exchange or transfer (for cash, shares of stock, securities
or other consideration) of all or substantially all of the property or assets of
the General Partner to, or the consolidation or merger or other business
combination of the Partnership with or into, any corporation, trust or other
entity (or of any corporation, trust or other entity with or into the
Partnership) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
Section 7. Optional Redemption.
-------------------
(a) Right of Optional Redemption. The Series B Preferred Units may not be
redeemed prior to the fifth anniversary of the issuance date. On or after such
date, the Partnership shall have the right to redeem the Series B Preferred
Units, in whole or in part, at any time or from time to time, upon not less than
30 nor more than 60 days' written notice, at a redemption price, payable in
cash, equal to the Capital Account balance of the holder of Series B Preferred
Units (the "Redemption Price"); provided, however, that no redemption pursuant
to this Section 7 will be permitted if the Redemption Price does not equal or
exceed the original Capital Contribution of such holder plus the cumulative
Series B Priority Return, whether or not declared, to the redemption date to the
extent not previously distributed or distributed on the redemption date pursuant
to Section 4(a). If fewer than all of the outstanding Series B Preferred Units
are to be redeemed, the Series B Preferred Units to be redeemed shall be
selected pro rata (as nearly as practicable without creating fractional units).
(b) Limitation on Redemption.
- ---------------------------------
(i) The Redemption Price of the Series B Preferred Units (other than the portion
thereof consisting of accumulated but unpaid distributions) will be payable
solely out of the sale proceeds of capital stock of the General Partner, which
will be contributed by the General Partner to the Partnership as additional
capital contribution, or out of the sale of limited partner interests in the
Partnership and from no other source. For purposes of the preceding sentence,
"capital stock" means any equity securities (including Common Stock and
Preferred Stock (as such terms are defined in the Charter)), shares,
participation or other ownership interests (however designated) and any rights
(other than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(ii) The Partnership may not redeem fewer than all of the outstanding Series B
Preferred Units unless all accumulated and unpaid distributions have been paid
on all Series B Preferred Units for all quarterly distribution periods
terminating on or prior to the date of redemption.
(c) Procedures for Redemption.
- ----------------------------------
(i) Notice of redemption will be (i) faxed, and (ii) mailed by the Partnership,
by certified mail, postage prepaid, not less than 30 nor more than 60 days prior
to the redemption date, addressed to the respective holders of record of the
Series B Preferred Units at their respective addresses as they appear on the
records of the Partnership. No failure to give or defect in such notice shall
affect the validity of the proceedings for the redemption of any Series B
Preferred Units except as to the holder to whom such notice was defective or not
given. In addition to any information required by law, each such notice shall
state: (i) the redemption date, (ii) the Redemption Price, (iii) the aggregate
number of Series B Preferred Units to be redeemed and if fewer than all of the
outstanding Series B Preferred Units are to be redeemed, the number of Series B
Preferred Units to be redeemed held by such holder, which number shall equal
such holder's pro rata share (based on the percentage of the aggregate number of
outstanding Series B Preferred Units the total number of Series B Preferred
Units held by such holder represents) of the aggregate number of Series B
Preferred Units to be redeemed, (iv) the place or places where such Series B
Preferred Units are to be surrendered for payment of the Redemption Price, (v)
that distributions on the Series B Preferred Units to be redeemed will cease to
accumulate on such redemption date and (vi) that payment of the Redemption Price
will be made upon presentation and surrender of such Series B Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of Series B
Preferred Units (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date, the Partnership will deposit irrevocably in
trust for the benefit of the Series B Preferred Units being redeemed funds
sufficient to pay the applicable Redemption Price and will give irrevocable
instructions and authority to pay such Redemption Price to the holders of the
Series B Preferred Units upon surrender of the Series B Preferred Units by such
holders at the place designated in the notice of redemption. If the Series B
Preferred Units are evidenced by a certificate and if fewer than all Series B
Preferred Units evidenced any certificate are being redeemed, a new certificate
shall be issued upon surrender of the certificate evidencing all Series B
Preferred Units, evidencing the unredeemed Series B Preferred Units without cost
to the holder thereof. On and after the date of redemption, distributions will
cease to accumulate on the Series B Preferred Units or portions thereof called
for redemption, unless the Partnership defaults in the payment thereof. If any
date fixed for redemption of Series B Preferred Units is not a Business Day,
then payment of the Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such Business Day falls in
the next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price is improperly
withheld or refused and not paid by the Partnership, distributions on such
Series B Preferred Units will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
Section 8. Voting Rights.
-------------
(a) General. Holders of the Series B Preferred Units will not have any voting
rights or right to consent to any matter requiring the consent or approval of
the Limited Partners, except as otherwise expressly set forth in the Partnership
Agreement and except as set forth below.
(b) Certain Voting Rights. So long as any Series B Preferred Units remain
outstanding, the Partnership shall not, without the affirmative vote of the
holders of at least two-thirds of the Series B Preferred Units outstanding at
the time (i) authorize or create, or increase the authorized or issued amount
of, any class or series of Partnership Interests ranking prior to the Series B
Preferred Units with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up or reclassify any Partnership Interests
of the Partnership into such Partnership Interest, or create, authorize or issue
any obligations or security convertible into or evidencing the right to purchase
any such Partnership Interest, (ii) authorize or create, or increase the
authorized or issued amount of any Parity Preferred Units or reclassify any
Partnership interest of the Partnership into any such Partnership Interest or
create, authorize or issue any obligations or security convertible into or
evidencing the right to purchase any such Partnership Interests but only to the
extent such Parity Preferred Units are issued to an affiliate of the
Partnership, other than (A) Security Capital U.S. Realty, Security Capital
Holdings, S.A. or their affiliates purchasing preferred stock of the same series
on the same terms as non-affiliates or (B) the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership in the same transaction or (iii) either (A) consolidate, merge into
or with, or convey, transfer or lease its assets substantially as an entirety
to, any corporation or other entity or (B) amend, alter or repeal the provisions
of the Partnership Agreement, whether by merger, consolidation or otherwise,
that would materially and adversely affect the powers, special rights,
preferences, privileges or voting power of the Series B Preferred Units or the
holders thereof; provided, however, that with respect to the occurrence of a
merger, consolidation or a sale or lease of all of the Partnership's assets as
an entirety, so long as (a) the Partnership is the surviving entity and the
Series B Preferred Units remain outstanding with the terms thereof unchanged, or
(b) the resulting, surviving or transferee entity is a partnership, limited
liability company or other pass-through entity organized under the laws of any
state and substitutes the Series B Preferred Units for other interests in such
entity having substantially the same terms and rights as the Series B Preferred
Units, including with respect to distributions, voting rights and rights upon
liquidation, dissolution or winding-up, then the occurrence of any such event
shall not be deemed to materially and adversely affect such rights, privileges
or voting powers of the holders of the Series B Preferred Units and no vote of
the Series B Preferred Units shall be required in such case; and provided
further than any increase in the amount of Partnership Interests or the creation
or issuance of any other class or series of Partnership Interests, in each case
ranking (a) junior to the Series B Preferred Units with respect to payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up, or (b) on a parity to the Series B Preferred Units with respect to
payment of distributions and the distribution of assets upon liquidation,
dissolution or winding-up to the extent such Partnership Interests are not
issued to an affiliate of the Partnership, other than (A) Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates purchasing
Partnership interests of the same series on the same terms as non-affiliates, or
(B) the General Partner to the extent the issuance of such interests was to
allow the General Partner to issue corresponding preferred stock to persons who
are not affiliates of the Partnership, shall not be deemed to materially and
adversely affect such rights, preferences, privileges or voting powers and no
vote of the Series B Preferred Units shall be required in such case.
In addition to the foregoing, the Partnership will not (x)
enter into any contract, mortgage, loan or other agreement that prohibits or
restricts, or has the effect of prohibiting or restricting, the ability of a
Preferred Partner to exercise its rights set forth herein to effect in full an
exchange or redemption pursuant to Section 10, except with the written consent
of the holders of at least two-thirds of the Series B Preferred Units
outstanding at the time; or (y) amend, alter, or repeal or waive Section 7.5 of
the Fourth Amended Agreement (to the extent in effect) or, until December 31,
2000, Section 11.3(i) of the Partnership Agreement if such amendment, alteration
or waiver adversely affects the holders of Series B Preferred Units without the
affirmative vote of at least two-thirds of the Series B Preferred Units
outstanding at the time.
Notwithstanding anything to the contrary in this Section 8, in
no event shall the General Partner or any of its affiliates have any voting,
consent or approval rights in respect of any Series B Preferred Units it or they
may hold, and any percentage or portion of outstanding Series B Preferred Units
that may be required hereunder for any vote, consent or approval of holders
thereof shall be determined as if all Series B Preferred Units then held by the
General Partner or any of its affiliates were not outstanding.
Section 9. Transfer Restrictions.
---------------------
(a) The Series B Preferred Units shall not be subject to the provisions of
Article 11 of the Partnership Agreement other than Sections 11.1(a), 11.3(b),
11.3(c), 11.3(d), 11.3(e), 11.3(f), 11.3(g), 11.3(i) and 11.6.
(b) No transfer of the Series B Preferred Units may be made without the consent
of the General Partner, which consent may be given or withheld in its sole and
absolute discretion, if such transfer would result in more than four partners
holding all outstanding Series B Preferred Units within the meaning of Treasury
Regulation Section 1.7704-1(h)(1)(ii) (without regard to Treasury Regulation
Section 1.7704-1(h)(3)(ii)); provided, however, that the General Partner's
consent may not be unreasonably withheld if (a) such transfer would not result
in more than four (4) partners holding all outstanding Series B Preferred Units
within the meaning of such Treasury Regulation Sections or (b) the General
Partner is relying on a provision other than Treasury Regulation Section
1.7704-1(h) to avoid classification of Operating Partnership as a PTP. In
addition, no transfer may be made to any person if such transfer would cause the
exchange of the Series B Preferred Units for Series B Preferred Stock, as
provided herein, to be required to be registered under the Securities Act, or
any state securities laws. Notwithstanding anything in this Agreement to the
contrary, the Series B Preferred Units shall be freely transferable to LLC,
which shall upon such transfer be admitted as a Limited Partner hereunder.
Section 10. Exchange Rights.
---------------
(a) Right to Exchange.
- --------------------------
(i) Series B Preferred Units will be exchangeable in whole or in part at anytime
on or after the tenth anniversary of the date of issuance, at the option of the
holders thereof, for authorized but previously unissued shares of 8.75% Series B
Cumulative Redeemable Preferred Stock of the General Partner (the "Series B
Preferred Stock") at an exchange rate of one share of Series B Preferred Stock
for one Series B Preferred Unit , subject to adjustment as described below (the
"Exchange Price"), provided that the Series B Preferred Units will become
exchangeable at any time, in whole or in part, at the option of the holders of
Series B Preferred Units for Series B Preferred Stock if (y) at any time full
distributions shall not have been timely made on any Series B Preferred Unit
with respect to six (6) prior quarterly distribution periods, whether or not
consecutive, provided, however, that a distribution in respect of Series B
Preferred Units shall be considered timely made if made within two (2) Business
Days after the applicable Preferred Unit Distribution Payment Date if at the
time of such late payment there shall not be any prior quarterly distribution
periods in respect of which full distributions were not timely made or (z) upon
receipt by a holder or holders of Series B Preferred Units of (A) notice from
the General Partner that the General Partner or a subsidiary of the General
Partner has become aware of facts that will or likely will cause the Partnership
to become a PTP and (B) an opinion rendered by an outside nationally recognized
independent counsel familiar with such matters addressed to a holder or holders
of Series B Preferred Units, that the Partnership is or likely is, or upon the
occurrence of a defined event in the immediate future will be or likely will be,
a PTP. In addition, the Series B Preferred Units may be exchanged for Series B
Preferred Stock, in whole or in part, at the option of any holder prior to the
tenth anniversary of the issuance date and after the third anniversary thereof
if such holder of a Series B Preferred Units shall deliver to the General
Partner either (i) a private letter ruling addressed to such holder of Series B
Preferred Units or (ii) an opinion of independent counsel reasonably acceptable
to the General Partner based on the enactment of temporary or final Treasury
Regulations or the publication of a Revenue Ruling, in either case to the effect
that an exchange of the Series B Preferred Units at such earlier time would not
cause the Series B Preferred Units to be considered "stock and securities"
within the meaning of Section 351(e) of the Internal Revenue Code of 1986, as
amended (the "Code") for purposes of determining whether the holder of such
Series B Preferred Units is an "investment company" under Section 721(b) of the
Code if an exchange is permitted at such earlier date. Furthermore, the Series B
Preferred Units may be exchanged in whole or in part for Series B Preferred
Stock at any time after the date hereof, if both (1) the holder thereof
concludes based on results or projected results that there exists (in the
reasonable judgment of the holder) an imminent and substantial risk that the
holder's interest in the Partnership does or will represent more than 19.5% of
the total profits or capital interests in the Partnership (determined in
accordance with Treasury Regulations Section 1.731-2(e)(4)) for a taxable year,
and (2) the holder delivers to the General Partner an opinion of nationally
recognized independent counsel to the effect that there is an imminent and
substantial risk that the holder's interest in the Partnership does or will
represent more than 19.5% of the total profits or capital interests in the
Partnership (determined in accordance with Treasury Regulations Section
1.731-2(e)(4)) for a taxable year.
(ii) Notwithstanding anything to the contrary set forth in Section 10(a)(i), if
an Exchange Notice (as defined herein) has been delivered to the General
Partner, then the General Partner may, at its option, elect to redeem or cause
the Partnership to redeem all or a portion of the outstanding Series B preferred
Units for cash in an amount equal to the original Capital Contribution per
Series B Preferred Unit and all accrued and unpaid distributions thereon to the
date of redemption. The General Partner may exercise its option to redeem the
Series B Preferred Units for cash pursuant to this Section 10(a)(ii) by giving
each holder of record of Series B Preferred Units notice of its election to
redeem for cash, within five (5) Business Days after receipt of the Exchange
Notice, by (i) fax, and (ii) registered mail, postage paid, at the address of
each holder as it may appear on the records of the Partnership stating (i) the
redemption date, which shall be no later than sixty (60) days following the
receipt of the Exchange Notice, (ii) the redemption price, (iii) the place or
places where the Series B Preferred Units are to be surrendered for payment of
the redemption price, (iv) that distribution on the Series B Preferred Units
will cease to accrue on such redemption date; (v) that payment of the redemption
price will be made upon presentation and surrender of the Series B Preferred
Units and (vi) the aggregate number of Series B Preferred Units to be redeemed,
and if fewer than all of the outstanding Series B Preferred Units are to be
redeemed, the number of Series B Preferred Units to be redeemed held by such
holder, which number shall equal such holder's pro-rata share (based on the
percentage of the aggregate number of outstanding Series B Preferred Units the
total number of Series B Preferred Units held by such holder represents) of the
aggregate number of Series B Preferred Units being redeemed.
(iii) Upon the occurrence of an event giving rise to exchange rights pursuant to
Section 10(a)(i), in the event an exchange of all or a portion of Series B
Preferred Units pursuant to Section 10(a)(i) would violate the provisions on
ownership limitation of the General Partner set forth in Article 5 of the
Charter, the General Partner shall give written notice thereof to each holder of
record of Series B Preferred Units, within five (5) Business Days following
receipt of the Exchange Notice, by (i) fax, and (ii) registered mail, postage
prepaid, at the address of each such holder set forth in the records of the
Partnership. In such event, each holder of Series B Preferred Units shall be
entitled to exchange, pursuant to the provision of Section 10(b) a number of
Series B Preferred Units which would comply with the provisions on the ownership
limitation of the General Partner set forth in such Article 5 of the Charter and
any Series B Preferred Units not so exchanged (the "Excess Units") shall be
redeemed by the Partnership for cash in an amount equal to the original Capital
Contribution per Excess Unit, plus any accrued and unpaid distributions thereon,
whether or not declared, to the date of redemption. The written notice of the
General Partner shall state (i) the number of Excess Units held by such holder,
(ii) the redemption price of the Excess Units, (iii) the date on which such
Excess Units shall be redeemed, which date shall be no later than sixty (60)
days following the receipt of the Exchange Notice, (iv) the place or places
where such Excess Units are to be surrendered for payment of the Redemption
Price, (v) that distributions on the Excess Units will cease to accrue on such
redemption date, and (vi) that payment of the redemption price will be made upon
presentation and surrender of such Excess Units. In the event an exchange would
result in Excess Units, as a condition to such exchange, each holder of such
units agrees to provide representations and covenants reasonably requested by
the General Partner relating to (i) the widely held nature of the interests in
such holder, sufficient to assure the General Partner that the holder's
ownership of stock of the General Partner (without regard to the limits
described above) will not cause any individual to own in excess of 9.8% of the
stock of the General Partner, to the extent such holder can reasonably make such
representation; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates.
To the extent the General Partner would not be able to pay the
cash set forth above in exchange for the Excess Units, and to the extent
consistent with the Charter, the General Partner agrees that it will grant to
the holders of the Series B Preferred Units exceptions to the Beneficial
Ownership Limit and Constructive Ownership Limit set forth in the Series B
Articles Supplementary sufficient to allow such holders to exchange all of their
Series B Preferred Units for Series B Preferred Stock, provided such holders
furnish to the General Partner representations acceptable to the General Partner
in its sole and absolute discretion which assure the General Partner that such
exceptions will not jeopardize the General Partner's tax status as a REIT for
purposes of federal and applicable state law.
Notwithstanding any provision of this Agreement to the
contrary, no Series B Limited Partner shall be entitled to effect an exchange of
Series B Preferred Units for Series B Preferred Stock to the extent that
ownership or right to acquire such shares would cause the Partner or any other
Person or, in the opinion of counsel selected by the General Partner, may cause
the Partner or any other Person, to violate the restrictions on ownership and
transfer of Series B Preferred Stock set forth in the Charter. To the extent any
such attempted exchange for Series B Preferred Stock would be in violation of
the previous sentence, it shall be void ab initio and such Series B Limited
Partner shall not acquire any rights or economic interest in the Series B
Preferred Stock otherwise issuable upon such exchange.
(iv) The redemption of Series B Preferred Units described in Section 10(a)(ii)
and (iii) shall be subject to the provisions of Section 7(b)(i) and Section
7(c)(ii); provided, however, that for purposes hereof the term "Redemption
Price" in Sections 7(b)(i) and 7(c)(ii) shall be read to mean the original
Capital Contribution per Series B Preferred Unit being redeemed plus all accrued
and unpaid distributions to the redemption date.
(b) Procedure for Exchange.
- -------------------------------
(i) Any exchange shall be exercised pursuant to a notice of exchange (the
"Exchange Notice") delivered to the General Partner by the holder who is
exercising such exchange right, by (i) fax and (ii) by certified mail postage
prepaid. Upon request of the General Partner, such holder delivering the
Exchange Notice shall provide to the General Partner in writing such information
as the General Partner may reasonably request to determine whether any portion
of the exchange by the delivering holder will result in the violation of the
restrictions of Article 5 of the Charter, including the Ownership Limit and the
Related Tenant Limit. The exchange of Series B Preferred Units, or a specified
portion thereof, may be effected after the fifth (5th) Business Days following
receipt by the General Partner of the Exchange Notice and such requested
information by delivering certificates, if any, representing such Series B
Preferred Units to be exchanged together with, if applicable, written notice of
exchange and a proper assignment of such Series B Preferred Units to the office
of the General Partner maintained for such purpose. Currently, such office is
121 West Forsyth Street, Suite 200, Jacksonville, Florida 32202. Each exchange
will be deemed to have been effected immediately prior to the close of business
on the date on which such Series B Preferred Units to be exchanged (together
with all required documentation) shall have been surrendered and notice shall
have been received by the General Partner as aforesaid and the Exchange Price
shall have been paid. Any Series B Preferred Stock issued pursuant to this
Section 10 shall be delivered as shares which are duly authorized, validly
issued, fully paid and nonassessable, free of pledge, lien, encumbrance or
restriction other than those provided in the Charter, the Bylaws of the General
Partner, the Securities Act and relevant state securities or blue sky laws.
(ii) In the event of an exchange of Series B Preferred Units for shares of
Series B Preferred Stock, an amount equal to the accrued and unpaid
distributions which are not paid pursuant to Section 4(a) hereof, whether or not
declared, to the date of exchange on any Series B Preferred Units tendered for
exchange shall (i) accrue and be payable by the General Partner from and after
the date of exchange on the shares of the Series B Preferred Stock into which
such Series B Preferred Units are exchanged, and (ii) continue to accrue on such
Series B Preferred Units, which shall remain outstanding following such
exchange, with the General Partner as the holder of such Series B Preferred
Units. Notwithstanding anything to the contrary set forth herein, in no event
shall a holder of a Series B Preferred Unit that was validly exchanged into
Series B Preferred Stock pursuant to this section (other than the General
Partner now holding such Series B Preferred Unit), receive a distribution out of
Available Cash or Capital Transaction Proceeds of the Partnership with respect
to any Series B Preferred Units so exchanged.
(iii) Fractional shares of Series B Preferred Stock are not to be issued upon
exchange but, in lieu thereof, the General Partner will pay a cash adjustment
based upon the fair market value of the Series B Preferred Stock on the day
prior to the exchange date as determined in good faith by the Board of Directors
of the General Partner.
(c) Adjustment of Series B Exchange Price. In case the General Partner shall be
a party to any transaction (including, without limitation, a merger,
consolidation, statutory share exchange, tender offer for all or substantially
all of the General Partner's capital stock or sale of all or substantially all
of the General Partner's assets), in each case as a result of which the Series B
Preferred Stock will be converted into the right to receive shares of capital
stock, other securities or other property (including cash or any combination
thereof), each Series B Preferred Unit will thereafter be exchangeable into the
kind and amount of shares of capital stock and other securities and property
receivable (including cash or any combination thereof) upon the consummation of
such transaction by a holder of that number of Series B Preferred Stock or
fraction thereof into which one Series B Preferred Unit was exchangeable
immediately prior to such transaction. The General Partner may not become a
party to any such transaction, whether or not any Series B Preferred Stock are
then outstanding: (i) which does not preserve the existence of the Series B
Preferred Stock with their current rights, preferences and privileges, or (ii)
if the terms thereof are inconsistent with the foregoing. In addition, so long
as a Preferred Partner or any of its permitted successors or assigns holds any
Series B Preferred Units as the case may be, the General Partner shall not,
without the affirmative vote of the holders of at least two-thirds of the Series
B Preferred Units (voting together as a class with any outstanding Series B
Preferred Stock) outstanding at the time: (a) designate or create, or increase
the authorized or issued amount of, any class or series of shares ranking senior
to the Series B Preferred Stock with respect to the payment of distributions or
rights upon liquidation, dissolution or winding-up or reclassify any authorized
shares of the General Partner into any such shares, or create, authorize or
issue any obligations or securities convertible into or evidencing the right to
purchase any such shares; (b) designate or create, or increase the authorized or
issued amount of, any Parity Preferred Stock or reclassify any authorized shares
of the General Partner into any such shares, or create, authorize or issue any
obligations or security convertible into or evidencing the right to purchase any
such shares, but only to the extent that such Parity Preferred Stock are issued
to an Affiliate of the General Partner other than (A) Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates if issued on the
same terms in the transaction as to non-affiliates, or (B) the General Partner
to the extent the issuance of such interests was to allow the General Partner to
issue corresponding preferred stock in the same transaction to persons who are
not affiliates of the Partnership; (c) amend, alter or repeal the provisions of
the Charter or bylaws of the General Partner, whether by merger, consolidation
or otherwise, that would materially and adversely affect the powers, special
rights, preferences, privileges or voting power of the Series B Preferred Stock
or the holders thereof; provided, however, that any increase in the amount of
authorized Preferred Stock or the creation or issuance of any other series or
class of Preferred Stock, or any increase in the amount of authorized shares of
each class or series, in each case ranking either (1) junior to the Series B
Preferred Stock with respect to the payment of distributions and the
distribution of assets upon liquidation, dissolution or winding-up, or (2) on a
parity with the Series B Preferred Stock with respect to the payment of
distributions and the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Stock are not issued to an Affiliate of
the Company, other than the General Partner to the extent the issuance of such
interests was to allow the General Partner to issue corresponding preferred
stock to persons who are not affiliates of the Partnership, shall not be deemed
to materially and adversely affect such rights, preferences, privileges or
voting powers.
Section 11. No Conversion Rights. The holders of the Series B Preferred
Units shall not have any rights to convert such Partnership Units into any other
class of Partnership Interests or any interest in the Partnership.
Section 12. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of the Series B Preferred Units.
Section 13. Miscellaneous.
-------------
(a) The terms "Original Limited Partnership Units," "Class B Units," "Class 2
Units," "Class Z Branch Partners," "Class Z Midland Partners" "Additional
Units," "Additional Limited Partners," "Common Units" and "General Partner
Units" and "Percentage Interest" in the Partnership Agreement shall not be
deemed to include the Series B Preferred Units. The terms "Limited Partnership
Interest" and "Partnership Interest" shall be deemed to include the Series B
Preferred Units.
(b) Exhibit A to the Partnership Agreement is hereby amended to include the
Series B Preferred Units as Limited Partnership Interests.
(c) Section 7.1(h) of the Partnership Agreement is hereby amended to
include the Series B Priority Return Amount.
(d) Nothing contained in Section 8.4 or the last sentence of Section 13.6 of the
Partnership Agreement shall be deemed to limit the issuance of, and provisions
applicable to, the Series B Preferred Units.
(e) Notwithstanding anything to the contrary contained in Section 8.6 of the
Partnership Agreement, in no event shall the rights of the holders of the Series
B Preferred Units set forth in Section 10 of this Agreement be subordinate to
the Redemption Rights set forth in Section 8.6 of the Partnership Agreement.
(f) Notwithstanding any other provisions of this Amendment, this Amendment shall
not be amended, and no action may be taken by the General Partner, without the
Consent of each Partner adversely affected if such amendment or action would
alter the redemption or exchange rights as set forth in Sections 7 and 10
hereof, respectively or amend this Section 14(f).
(g) Upon effectiveness of the Fourth Amended Agreement, the Fourth Amended
Agreement shall be amended, to the extent applicable, to incorporate this
Amendment and be consistent herewith.
(h) At such time, and in the event that, the Company authorizes sufficient
additional shares of preferred stock, the holders of a majority in interest of
the Series B Preferred Units and Series B Preferred Stock in the aggregate may
request in writing to the Company that the stated value of the Series B Priority
Return may be reduced to $25, with all reference herein to "$100" to thereafter
be deemed references to "$25," and with appropriate proportionate adjustments to
be made herein, mutatis mutandis, in distributions, liquidation preferences,
shares issuable upon exchange, and otherwise as necessary and appropriate to
preserve the economic value of Series B Preferred Units and the Series B
Preferred Stock, and the Company shall take all reasonable steps necessary and
appropriate to give effect to such request.
<PAGE>
004.197245.1
Series B Amendment to Partnership Agreement
004.197245.1
Series B Amendment to Partnership Agreement
GENERAL PARTNER
Regency Realty Corporation
By:___________________________
Bruce M. Johnson
Its Managing Director and Executive
Vice President
CONTRIBUTOR
TIMES MIRROR COMPANY
By:___________________________
Name:
Title:
SECURITY CAPITAL U.S. REALTY
By:_________________________________
Name:______________________________
Title:_______________________________
SECURITY CAPITAL HOLDINGS S.A.
By:_________________________________
Name:______________________________
Title:_______________________________
ARDEN SQUARE HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
<PAGE>
BLOSSOM VALLEY HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
COOPER STREET PLAZA HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
DALLAS HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
EL CAMINO HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
FRIARS MISSION HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
<PAGE>
Series C Amendment to Partnership Agreement 18
004.197245.1
004.197245.1
Series C Amendment to Partnership Agreement
Regency Centers, L.P.
Amendment No. 2 to Third Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement")
Relating to 9.0% Series C Cumulative Redeemable Preferred Units
Section 1. Definitions. Capitalized terms used and not
otherwise defined herein shall have the meaning assigned thereto in the
Partnership Agreement. For purposes of this Amendment the term "Series C Limited
Partner" shall mean a Limited Partner holding Series C Preferred Units. The term
"Parity Preferred Units" shall be used to refer to Series A Preferred Units,
Series B Preferred Units, Series C Preferred Units (as hereafter defined) and
any class or series of Partnership Interests of the Partnership now or hereafter
authorized, issued or outstanding expressly designated by the Partnership to
rank on a parity with Series A Preferred Units or Series B Preferred Units with
respect to distributions or rights upon voluntary or involuntary liquidation,
winding-up or dissolution of the Partnership, or both, as the context may
require, whether or not the dividend rates, dividend payment dates or redemption
or liquidation prices per unit or conversion rights or exchange rights shall be
different from those of the Series A Preferred Units. The term "Series C
Priority Return" shall mean, an amount equal to 9.0% per annum, determined on
the basis of a 360 day year of twelve 30 day months (or actual days for any
month which is shorter than a full monthly period), cumulative to the extent not
distributed for any given distribution period, of the stated value of $100.00
per Series C Preferred Unit, commencing on the date of issuance of such Series C
Preferred Unit. The Partnership Agreement shall be amended to add such
definitions, and shall be further amended to add the following definition:
"Priority Returns" means the Series A Priority Return, the Series B Priority
Return and the Series C Priority Return or similar amount payable with respect
to any other Parity Preferred Units. The term "Junior Stock" means any class or
series of capital stock of the General Partner ranking junior as to the payment
of distributions or rights upon voluntary or involuntary liquidation, winding up
or dissolution of the General Partner to the Series C Preferred Stock or other
Parity Preferred Shares. The term "PTP" shall mean a "publicly traded
partnership" within the meaning of Section 7704 of the Code (as hereafter
defined). The final Paragraph in the definition of "Net Income" and "Net Loss"
in the Partnership Agreement shall be restated in its entirety as follows (new
language is underscored):
"Solely for purposes of allocating Net Income or Net Loss in
any Fiscal Year to the holders of the Parity Preferred Units,
items of Net Income and Net Loss, as the case may be, shall
not include Depreciation with respect to properties (or
groupings of properties selected by the General Partner using
any method determined by it to be reasonable) that are
"ceiling limited" in respect of the holders of the Parity
Preferred Units. For purposes of the preceding sentence,
Partnership property shall be considered ceiling limited in
respect of a holder of Parity Preferred Units if Depreciation
attributable to such Partnership property which would
otherwise be allocable to such Partner, without regard to this
paragraph, exceeded depreciation determined for federal income
tax purposes attributable to such Partnership property which
would otherwise be allocated to such Partner by more than 5%."
Section 2. Designation and Number. A series of Partnership
Units in the Partnership designated as the "9.0% Series C Cumulative Redeemable
Preferred Units" (the "Series C Preferred Units") is hereby established. The
number of Series C Preferred Units shall be 750,000.
Section 3. Rank.
----
(a) The Series C Preferred Units will, with respect to distributions or rights
upon voluntary or involuntary liquidation, winding-up or dissolution of the
Partnership, or both, rank senior to all classes or series of Partnership
Interests now or hereafter authorized, issued or outstanding other than any
class or series of equity securities of the Partnership issued after the
issuance of the Series C Preferred Units and expressly designated in accordance
with the Partnership Agreement as ranking on a parity with the Series C
Preferred Units as to distributions or rights upon voluntary or involuntary
liquidation, winding-up or dissolution of the Partnership, or both. The Series C
Preferred Units are expressly designated as ranking on a parity with the Series
A Preferred Units and the Series B Preferred Units.
(b) The last sentence of Section 4.1(a) of the Partnership Agreement shall be
amended to read in full as follows (new language is underscored):
Any Partnership Interests held by the General Partner or any
Affiliate other than a Property Affiliate (including
Partnership Interests acquired under Sections 4.2, 8.6 and
8.7) shall be Class B Units, other than Parity Preferred
Units, the issuance of which has been approved by the Limited
Partners pursuant to Section 4.2, and any Preferred Units
issued pursuant to Section 4.2(b)(i).
Section 4. Distributions.
-------------
(a) Payment of Distributions. Subject to the rights of holders of Parity
Preferred Units, holders of Series C Preferred Units shall be entitled to
receive, out of Available Cash and Capital Transaction Proceeds, cumulative
preferential cash distributions at the rate per annum of 9.0% of the original
Capital Contribution per Series C Preferred Unit. Such distributions shall be
cumulative, shall accrue from the original date of issuance and will be payable
in cash when, as and if declared by the Partnership acting through the General
Partner, (A) quarterly in arrears, on or before March 31, June 30, September 30
and December 31 of each year commencing on September 30, 1999 and (B) in the
event of (i) an exchange of Series C Preferred Units into Series C Preferred
Stock, or (ii) a redemption of Series C Preferred Units, on the exchange date or
redemption date, as applicable (each a "Series C Preferred Unit Distribution
Payment Date"). The amount of the distribution payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months and for any
period shorter than a full quarterly period for which distributions are
computed, the amounts of the distribution payable will be computed based on the
ratio of the actual number of days elapsed in the quarterly period to ninety
(90) days. If any date on which distributions are to be made on the Series C
Preferred Units is not a Business Day (as defined herein), then payment of the
distribution to be made on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
Distributions on the Series C Preferred Units will be made to the holders of
record of the Series C Preferred Units on the relevant record dates to be fixed
by the Partnership acting through the General Partner, which record dates shall
be not less than ten (10) days and not more than thirty (30) Business Days prior
to the relevant Preferred Unit Distribution Payment Date (the "Series C
Preferred Unit Partnership Record Date").
The term "Business Day" shall mean each day, other than a
Saturday or a Sunday, which is not a day on which banking institutions in New
York, New York are authorized or required by law, regulation or executive order
to close.
(b) Distributions Cumulative. Distributions on the Series C Preferred Units will
accrue whether or not the terms and provisions of any agreement of the
Partnership, including any agreement relating to its indebtedness at any time
prohibit the current payment of distributions, whether or not the Partnership
has earnings, whether or not there are funds legally available for the payment
of such distributions and whether or not such distributions are authorized or
declared. Accrued but unpaid distributions on the Series C Preferred Units will
accumulate as of the Series C Preferred Unit Distribution Payment Date on which
they first become payable. Distributions on account of arrears for any past
distribution periods may be declared and paid at any time, without reference to
a regular Series C Preferred Unit Distribution Payment Date to holders of record
of the Series C Preferred Units on the record date fixed by the Partnership
acting through the General Partner which date shall be not less than ten (10)
days and not more than thirty (30) Business Days prior to the payment date.
Accumulated and unpaid distributions will not bear interest.
(c) Priority as to Distributions.
- -------------------------------------
(i) So long as any Series C Preferred Units are outstanding, no distribution of
cash or other property shall be authorized, declared, paid or set apart for
payment on or with respect to any class or series of Partnership Interests of
the Partnership ranking junior as to the payment of distributions to Parity
Preferred Units (collectively, "Junior Units"), nor shall any cash or other
property be set aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series C Preferred Units, any Parity
Preferred Units with respect to distributions or any Junior Units, unless, in
each case, all distributions accumulated on all Series C Preferred Units and all
classes and series of outstanding Parity Preferred Units as to payment of
distributions have been paid in full. The foregoing sentence will not prohibit
(a) distributions payable solely in Junior Units, (b) the conversion of Junior
Units or Parity Preferred Units into Partnership Interests of the Partnership
ranking junior to the Series C Preferred Units as to distributions, or (c) the
redemption of Partnership Interests corresponding to any Series C Preferred
Stock, Parity Preferred Stock with respect to distributions or Junior Stock to
be purchased by the General Partner pursuant to Article 5 of the Articles of
Incorporation of the General Partner (the "Charter") to preserve the General
Partner's status as a real estate investment trust, provided that such
redemption shall be upon the same terms as the corresponding purchase pursuant
to Article 5 of the Charter.
(ii) So long as distributions have not been paid in full (or a sum sufficient
for such full payment is not irrevocably deposited in trust for payment) upon
the Series C Preferred Units, all distributions authorized and declared on the
Series C Preferred Units and all classes or series of outstanding Parity
Preferred Units with respect to distributions shall be authorized and declared
so that the amount of distributions authorized and declared per Series C
Preferred Unit and such other classes or series of Parity Preferred Units shall
in all cases bear to each other the same ratio that accrued distributions per
Series C Preferred Unit and such other classes or series of Parity Preferred
Units (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such classes or series of Parity
Preferred Units do not have cumulative distribution rights) bear to each other.
(d) No Further Rights. Holders of Series C Preferred Units shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
(e) Section 5.1(c) of the Partnership Agreement shall be amended to read in
full as follows (new language is underscored):
"Anything herein to the contrary notwithstanding, subject to
Section 4(d)(i) of Amendment No. 2 to this Agreement, no
Available Cash or Capital Transaction Proceeds shall be
distributed pursuant to Section 5.1(a), Section 5.1(b) or any
other provisions of this Article 5 unless all distributions
accumulated on all Series A Preferred Units pursuant to
Section 4.5 have been paid in full and unless all
distributions accumulated on any other outstanding Preferred
Units have been paid in full."
Section 2. Allocations.
-----------
(a) Section 6.1(a) and 6.1(b) of the Agreement are hereby deleted and the
following inserted as new Sections 6.1(a) and 6.1(b) in lieu thereof (new
language is underscored):
Section 6.1 Allocations of Net Income and Net Loss.
For purposes of maintaining the Capital Accounts and in determining the
rights of the Partners among themselves, the Partnership's Net Income
and Net Loss shall be allocated among the Partners for each taxable
year (or portion thereof) as provided herein below.
(a) Net Income. After giving effect to the special
allocations set forth in Section 6.2 below, Net Income shall
be allocated as follows (and for this purpose, the holders of
Class A Units shall be treated as if they were Original
Limited Partners):
(i) First, one hundred percent (100%) to the
General Partner in an amount equal to the excess, if
any, of (A) the cumulative Net Losses allocated to
the General Partner pursuant to Section 6.1(b)(ix)
and the last sentence of Section 6.1(b) for all prior
fiscal years, over (B) the cumulative Net Income
allocated pursuant to this Section 6.1(a)(i) for all
prior fiscal years;
(ii) Second, one hundred percent (100%) to
the holders of Parity Preferred Units in an amount
equal to the excess, if any, of (A) the cumulative
Net Losses allocated to the holders of Parity
Preferred Units pursuant to Section 6.1(b)(viii) for
all prior fiscal years, over (B) the cumulative Net
Income allocated pursuant to this Section 6.1(a)(ii),
including any amounts allocated pursuant to Section
6.2(g) which were attributable to this Section
6.1(a)(ii), for all prior fiscal years;
(iii) Third, one hundred percent (100%) to
the Original Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to such Partners pursuant to Section
6.1(b)(iv) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this
Section 6.1(a)(iii) for all prior fiscal years, which
amount shall be allocated among such Partners in the
same proportions and in the reverse order as the Net
Losses were allocated pursuant to Section 6.1(b)(iv);
(iv) Fourth, one hundred percent (100%) to
the Original Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to such Partners pursuant to Section
6.1(b)(iii) for all prior fiscal years, over (B) the
cumulative Net Income allocated pursuant to this
Section 6.1(a)(iv) for all prior fiscal years, which
amount shall be allocated among such Partners in the
same proportions and in the reverse order as the Net
Losses were allocated pursuant to Section
6.1(b)(iii);
(v) Fifth, one hundred percent (100%) to the
holders of Parity Preferred Units until the holders
of Parity Preferred Units have been allocated an
amount equal to the excess of their respective
cumulative Priority Returns through the last day of
the current fiscal year (determined without reduction
for distributions made to date in satisfaction
thereof) over the cumulative Net Income allocated to
the holders of Parity Preferred Units pursuant to
this Section 6.1(a)(v), including any amounts
allocated pursuant to Section 6.2(g) which were
attributable to this Section 6.1(a)(v), for all prior
periods;
(vi) Sixth, one hundred percent (100%) to
the Original Limited Partners until the cumulative
allocations of Net Income to each Original Limited
Partner under this Section 6.1(a)(vi) for the current
and all prior fiscal years equal the cumulative
distributions paid to the Original Limited Partner
pursuant to Section 5.1(a)(i) and Section 13.2(a)(iv)
, provided, however, in the case of Original Limited
Partners other than Class Z Branch Partners, no
allocations of Net Income shall be made under this
Section 6.1(a)(vi) to such Limited Partners with
respect to distributions made under Section 5.1(a)(i)
and Section 13.2(a)(iv) after the Third Amendment
Date;.
(vii) Seventh, one hundred percent (100%) to
the Original Limited Partners until the cumulative
allocations of Net Income to each Original Limited
Partner under this Section 6.1(a)(vii) for the
current and all prior fiscal years equal the sum of
the cumulative amounts credited to such Partner's
Cumulative Unpaid Priority Distribution Account and
Cumulative Unpaid Accrued Return Account for the
current and all prior fiscal years, provided,
however, in the case of Original Limited Partners
other than Class Z Branch Partners, no allocations of
Net Income shall be made under this Section
6.1(a)(vii) with respect to amounts credited to such
Partners' Cumulative Unpaid Priority Distribution
Accounts and Cumulative Unpaid Accrued Return
Accounts after the Third Amendment Date;
(viii) Eighth, one hundred percent (100%) to
the Additional Limited Partners in an amount equal to
the excess, if any, of (A) the cumulative Net Losses
allocated to the Additional Limited Partners pursuant
to Section 6.1(b)(vii) for all prior fiscal years,
over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(viii) for all prior fiscal
years, which amount shall be allocated among the
Additional Limited Partners in the same proportions
and in the reverse order as the Net Losses were
allocated pursuant to Section 6.1(b)(vii);
(ix) Ninth, one hundred percent (100%) to
the Additional Limited Partners in an amount equal to
the excess, if any of (A) the cumulative Net Losses
allocated to the Additional Limited Partners pursuant
to Section 6.1(b)(vi) for all prior fiscal years,
over (B) the cumulative Net Income allocated pursuant
to this Section 6.1(a)(ix) for all prior fiscal
years, which amount shall be allocated among such
Partners in the same proportions and in the reverse
order as the Net Losses were allocated pursuant to
Section 6.1(b)(vi);
(x) Tenth, one hundred percent (100%) to the
Additional Limited Partners until the cumulative
allocations of Net Income to each Additional Limited
Partner under this Section 6.1(a)(x) for the current
and all prior fiscal years equal the cumulative
distributions paid to the Additional Limited Partners
pursuant to Section 5.1(a)(iv) and Section
13.2(a)(v), provided, however, in the case of
Additional Limited Partners other than Class Z
Midland Partners, no allocations of Net Income shall
be made under this Section 6.1(a)(x) to such Limited
Partners with respect to distributions made under
Section 5.1(a)(iv) and Section 13.2(a)(v) after the
Third Amendment Date;
(xi) Eleventh, one hundred percent (100%) to
the Additional Limited Partners until the cumulative
allocations of Net Income to each Additional Limited
Partner under this Section 6.1(a)(xi) for the current
and all prior fiscal years equal the sum of (A) the
cumulative amounts credited to such Partner's
Cumulative Unpaid Priority Distribution Account and
Cumulative Unpaid Accrued Return Account for the
current and all prior fiscal years and (B) the
cumulative Net Losses allocated to the Additional
Limited Partner pursuant to Section 6.1(b)(v) for all
prior fiscal years, provided, however, in the case of
Additional Limited Partners other than Class Z
Midland Partners, no allocation of Net Income shall
be made under this Section 6.1(a)(xi) with respect to
amounts credited to such Partners' Cumulative Unpaid
Priority Distribution Accounts and Cumulative Unpaid
Accrued Return Accounts after the Third Amendment
Date; and
(xii) Thereafter, to the Original and
Additional Limited Partners other than Class Z Branch
Partners or Class Z Midland Partners, to the General
Partner and to any other holders of Class B Units,
pro rata in accordance with the relative amounts of
Available Cash and Capital Transaction Proceeds
distributed to each of them during the taxable year.
(b) Net Losses. After giving effect to the special allocations set forth in
Section 6.2 below, Net Losses shall be allocated as follows:
(i) First, one hundred percent (100%) to the
Original and Additional Limited Partners other than
Class Z Branch Partners or Class Z Midland Partners,
to the General Partner and the Class B Unit holders
in an amount equal to the excess, if any, of (A) the
cumulative Net Income allocated pursuant to Section
6.1(a)(xii) hereof for all prior fiscal years in
excess of distributions of Available Cash to such
Partners for which no corresponding allocation of Net
Income had been made (or is required to be made)
under Sections 6.1(a)(i)-(xi) hereof, over (B) the
cumulative Net Losses allocated pursuant to this
Section 6.1(b)(i) for all prior fiscal years;
(ii) Second, to the Original Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(ii) equal the
excess, if any, of the cumulative allocations of Net
Income under Section 6.1(a)(vii) to such Partners for
all prior fiscal years over the cumulative
distributions to such Partners under Section
5.1(a)(ii) and (iii) and Section 5.1(b)(i) and (ii)
for the current and all prior fiscal years (such
allocation being made in proportion to such Partners'
respective excess amounts);
(iii) Third, to the Original Limited
Partners with positive Adjusted Capital Account
balances (determined, solely for purposes of this
Section 6.1(b)(iii), without regard to any obligation
of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances,
until such balances are reduced to zero;
(iv) Fourth, to the Original Limited
Partners in proportion to their relative Percentage
Interests; provided, however, that to the extent that
an allocation under this Section 6.1(b)(iv) would
cause or increase an Adjusted Capital Account Deficit
for such Partner, such Net Loss shall be allocated to
those Original Limited Partners (in proportion to
their relative Percentage Interests) for whom such
allocation would not cause or increase an Adjusted
Capital Account Deficit;
(v) Fifth, to the Additional Limited
Partners until the cumulative allocations of Net
Losses under this Section 6.1(b)(v) equal the excess,
if any, of the cumulative allocations of Net Income
under Section 6.1(a)(xi) to such Partners for all
prior fiscal years over the cumulative distributions
to such Partners under Section 5.1(a)(v) and (vi) and
Section 5.1(b)(iii) and (iv) for the current and all
prior fiscal years (such allocation being made in
proportion to such Partners' respective excess
amounts);
(vi) Sixth, to the Additional Limited
Partners with positive Adjusted Capital Accounts
balances (determined, solely for purposes of this
Section 6.1(b)(vi), without regard to any obligation
of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances,
until such balances are reduced to zero;
(vii) Seventh, to the Additional Limited
Partners in proportion to their relative Percentage
Interests; provided, however, that to the extent that
an allocation under this Section 6.1(b)(vii) would
cause or increase an Adjusted Capital Account Deficit
for such Partner, such Net Loss shall be allocated to
those Additional Limited Partners (in proportion to
their relative Percentage Interests) for whom such
allocation would not cause or increase an Adjusted
Capital Account Deficit;
(viii) Eighth, to the holders of Parity
Preferred Units until their respective Adjusted
Capital Account Balance (determined, solely for
purposes of this Section 6.1(b)(viii), without regard
to any obligation of a Partner to restore a negative
Capital Account under Section 13.4), has been reduced
to zero; and
(ix) Any remaining Net Loss shall be
allocated to the General Partner and any other
holders of Class B Units.
Notwithstanding the foregoing, Net Losses shall not be
allocated to any Limited Partner pursuant to this Section 6.1(b)(ix) to the
extent that such allocation would cause such Limited Partner to have an Adjusted
Capital Account Deficit at the end of such taxable year (or increase any
existing Adjusted Capital Account Deficit). All Net Losses in excess of the
limitations set forth in the preceding sentence of this Section 6.1(b) shall be
allocated to the General Partner.
(b) Section 6.2(g) of the Agreement is hereby deleted and the following
inserted as new Section 6.2(g) in lieu thereof (new language is underscored):
(g) Capital Account Adjustments. Notwithstanding
anything herein to the contrary other than the last sentence
of Section 14.1(g), any gain or loss arising from an
adjustment to the Gross Asset Value of any Partnership asset
pursuant to clause (b) or (c) of the definition thereof shall
be allocated (i) first, to the holders of the Parity Preferred
Units, but only to the extent that they would have been
allocated such gain pursuant to Section 6.1(a)(ii) or Section
6.1(a)(v) of this Agreement or such loss pursuant to Section
6.1(b)(viii) of this Agreement, as applicable, if such gain or
loss had been actually realized; and (ii) second, and subject
to Section 6.2(h) hereof, one hundred percent (100%) of the
remainder of such gain or loss to the General Partner and the
Additional Limited Partners (other than holders of Parity
Preferred Units) pro rata in accordance with the relative
number of Units held by each; provided, however, that for this
purpose, the General Partner shall be treated as owning all of
the outstanding Class A Units and all of the outstanding
Original Limited Partnership Units in addition to the actual
number of Units which the General Partner holds. An Additional
Limited Partner (except for holders of Parity Preferred
Units), at the time of admission to the Partnership, may elect
with the consent of the General Partner to not receive special
allocations of any gain or loss resulting from such
adjustments.
Section 3. Liquidation Preference.
----------------------
(a) Payment of Liquidating Distributions. Subject to the rights of holders of
Parity Preferred Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership and subject to
Partnership Interests ranking senior to the Series C Preferred Units with
respect to rights upon any voluntary or involuntary liquidation, dissolution or
winding up of the Partnership, the holders of Series C Preferred Units shall be
entitled to receive out of the assets of the Partnership legally available for
distribution or the proceeds thereof, after payment or provision for debts and
other liabilities of the Partnership, but before any payment or distributions of
the assets shall be made to holders of any class or series of Partnership
Interest that ranks junior to the Series C Preferred Units as to rights upon
liquidation, dissolution or winding-up of the Partnership, an amount equal to a
liquidation preference equal to their positive Capital Account balances,
determined after taking into account all Capital Account adjustments for the
Partnership taxable year during which the liquidation occurs, including the
allocation of Net Income or Net Loss (and any specially allocated items)
computed after adjusting the Gross Asset Values of the Partnership's assets
immediately prior to any such liquidation if failure to make such adjustment to
the Gross Asset Values would have an adverse economic impact the Series C
Preferred Units (other than those made as a result of the liquidating
distribution set forth in this Section 6(a)). In the event that, upon such
voluntary or involuntary liquidation, dissolution or winding-up, there are
insufficient assets to permit full payment of liquidating distributions to the
holders of Series C Preferred Units and any Parity Preferred Units as to rights
upon liquidation, dissolution or winding-up of the Partnership, all payments of
liquidating distributions on the Series C Preferred Units and such Parity
Preferred Units shall in all cases bear to each other the same ratio that the
respective rights of the Series C Preferred Unit and such other Parity Preferred
Units (which shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such Parity Preferred Units do
not have cumulative distribution rights) upon liquidation, dissolution or
winding-up of the Partnership bear to each other.
(b) Notice. Written notice of any such voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership, stating the payment date or dates
when, and the place or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (i) fax and (ii) by first
class mail, postage pre-paid, not less than 30 and not more than 60 days prior
to the payment date stated therein, to each record holder of the Series C
Preferred Units at the respective addresses of such holders as the same shall
appear on the transfer records of the Partnership.
(c) No Further Rights. After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Series C Preferred
Units will have no right or claim to any of the remaining assets of the
Partnership.
(d) Consolidation, Merger or Certain Other Transactions. The voluntary sale,
conveyance, lease, exchange or transfer (for cash, shares of stock, securities
or other consideration) of all or substantially all of the property or assets of
the General Partner to, or the consolidation or merger or other business
combination of the Partnership with or into, any corporation, trust or other
entity (or of any corporation, trust or other entity with or into the
Partnership) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
Section 4. Optional Redemption.
-------------------
(a) Right of Optional Redemption. The Series C Preferred Units may not be
redeemed prior to the fifth anniversary of the issuance date. On or after such
date, the Partnership shall have the right to redeem the Series C Preferred
Units, in whole or in part, at any time or from time to time, upon not less than
30 nor more than 60 days' written notice, at a redemption price, payable in
cash, equal to the Capital Account balance of the holder of Series C Preferred
Units (the "Redemption Price"); provided, however, that no redemption pursuant
to this Section 7 will be permitted if such Redemption Price does not equal or
exceed the original Capital Contribution of such holder plus the cumulative
Series C Priority Return, whether or not declared, to the redemption date to the
extent not previously distributed or distributed on the redemption date pursuant
to Section 4(a). If fewer than all of the outstanding Series C Preferred Units
are to be redeemed, the Series C Preferred Units to be redeemed shall be
selected pro rata (as nearly as practicable without creating fractional units).
(b) Limitation on Redemption.
- ---------------------------------
(i) The Redemption Price of the Series C Preferred Units (other than the portion
thereof consisting of accumulated but unpaid distributions) will be payable
solely out of the sale proceeds of capital stock of the General Partner, which
will be contributed by the General Partner to the Partnership as an additional
capital contribution, or out of the sale of limited partner interests in the
Partnership and from no other source. For purposes of the preceding sentence,
"capital stock" means any equity securities (including Common Stock and
Preferred Stock (as such terms are defined in the Charter)), shares,
participation or other ownership interests (however designated) and any rights
(other than debt securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(ii) The Partnership may not redeem fewer than all of the outstanding Series C
Preferred Units unless all accumulated and unpaid distributions have been paid
on all Series C Preferred Units for all quarterly distribution periods
terminating on or prior to the date of redemption.
(c) Procedures for Redemption.
- ----------------------------------
(i) Notice of redemption will be (i) faxed, and (ii) mailed by the Partnership,
by certified mail, postage prepaid, not less than 30 nor more than 60 days prior
to the redemption date, addressed to the respective holders of record of the
Series C Preferred Units at their respective addresses as they appear on the
records of the Partnership. No failure to give or defect in such notice shall
affect the validity of the proceedings for the redemption of any Series C
Preferred Units except as to the holder to whom such notice was defective or not
given. In addition to any information required by law, each such notice shall
state: (i) the redemption date, (ii) the Redemption Price, (iii) the aggregate
number of Series C Preferred Units to be redeemed and if fewer than all of the
outstanding Series C Preferred Units are to be redeemed, the number of Series C
Preferred Units to be redeemed held by such holder, which number shall equal
such holder's pro rata share (based on the percentage of the aggregate number of
outstanding Series C Preferred Units the total number of Series C Preferred
Units held by such holder represents) of the aggregate number of Series C
Preferred Units to be redeemed, (iv) the place or places where such Series C
Preferred Units are to be surrendered for payment of the Redemption Price, (v)
that distributions on the Series C Preferred Units to be redeemed will cease to
accumulate on such redemption date and (vi) that payment of the Redemption Price
will be made upon presentation and surrender of such Series C Preferred Units.
(ii) If the Partnership gives a notice of redemption in respect of Series C
Preferred Units (which notice will be irrevocable) then, by 12:00 noon, New York
City time, on the redemption date, the Partnership will deposit irrevocably in
trust for the benefit of the Series C Preferred Units being redeemed funds
sufficient to pay the applicable Redemption Price and will give irrevocable
instructions and authority to pay such Redemption Price to the holders of the
Series C Preferred Units upon surrender of the Series C Preferred Units by such
holders at the place designated in the notice of redemption. If the Series C
Preferred Units are evidenced by a certificate and if fewer than all Series C
Preferred Units evidenced by any certificate are being redeemed, a new
certificate shall be issued upon surrender of the certificate evidencing all
Series C Preferred Units, evidencing the unredeemed Series C Preferred Units
without cost to the holder thereof. On and after the date of redemption,
distributions will cease to accumulate on the Series C Preferred Units or
portions thereof called for redemption, unless the Partnership defaults in the
payment thereof. If any date fixed for redemption of Series C Preferred Units is
not a Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
is improperly withheld or refused and not paid by the Partnership, distributions
on such Series C Preferred Units will continue to accumulate from the original
redemption date to the date of payment, in which case the actual payment date
will be considered the date fixed for redemption for purposes of calculating the
applicable Redemption Price.
Section 5. Voting Rights.
-------------
(a) General. Holders of the Series C Preferred Units will not have any voting
rights or right to consent to any matter requiring the consent or approval of
the Limited Partners, except as otherwise expressly set forth in the Partnership
Agreement and except as set forth below.
(b) Certain Voting Rights. So long as any Series C Preferred Units remain
outstanding, the Partnership shall not, without the affirmative vote of the
holders of at least two-thirds of the Series C Preferred Units outstanding at
the time (i) authorize or create, or increase the authorized or issued amount
of, any class or series of Partnership Interests ranking prior to the Series C
Preferred Units with respect to payment of distributions or rights upon
liquidation, dissolution or winding-up or reclassify any Partnership Interests
of the Partnership into such Partnership Interest, or create, authorize or issue
any obligations or security convertible into or evidencing the right to purchase
any such Partnership Interest, (ii) authorize or create, or increase the
authorized or issued amount of any Parity Preferred Units or reclassify any
Partnership Interest of the Partnership into any such Partnership Interest or
create, authorize or issue any obligations or security convertible into or
evidencing the right to purchase any such Partnership Interests but only to the
extent such Parity Preferred Units are issued to an affiliate of the
Partnership, other than (A) Security Capital U.S. Realty, Security Capital
Holdings, S.A. or their affiliates or (B) the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership or (iii) either (A) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety to, any corporation or
other entity or (B) amend, alter or repeal the provisions of the Partnership
Agreement (including without limitation this Amendment No. 2 to Third Amended
and Restated Agreement of Limited Partnership), whether by merger, consolidation
or otherwise, in each case in a manner that would materially and adversely
affect the powers, special rights, preferences, privileges or voting power of
the Series C Preferred Units or the holders thereof; provided, however, that
with respect to the occurrence of a merger consolidation or a sale or lease of
all of the Partnership's assets as an entirety, so long as (a) the Partnership
is the surviving entity and the Series C Preferred Units remain outstanding with
the terms thereof unchanged, or (b) the resulting, surviving or transferee
entity is a partnership, limited liability company or other pass-through entity
organized under the laws of any state and substitutes the Series C Preferred
Units for other interests in such entity having substantially the same terms and
rights as the Series C Preferred Units, including with respect to distributions,
redemptions, transfers, voting rights and rights upon liquidation, dissolution
or winding-up, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series C Preferred Units and no vote of the Series C Preferred
Units shall be required in such case; and provided further than any increase in
the amount of Partnership Interests or the creation or issuance of any other
class or series of Partnership Interests, in each case ranking (a) junior to the
Series C Preferred Units with respect to payment of distributions and the
distribution of assets upon liquidation, dissolution or winding-up, or (b) on a
parity to the Series C Preferred Units with respect to payment of distributions
and the distribution of assets upon liquidation, dissolution or winding-up to
the extent such Partnership Interests are not issued to an affiliate of the
Partnership, other than (A) Security Capital U.S. Realty, Security Capital
Holdings, S.A. or their affiliates or (B) the General Partner to the extent the
issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers and no vote of the Series C Preferred
Units shall be required in such case.
Section 6. Transfer Restrictions.
---------------------
(a) The Series C Preferred Units shall be subject to the provisions of
Article 11 of the Partnership Agreement.
(b) No transfer of the Series C Preferred Units may be made without the consent
of the General Partner, which consent may be given or withheld in its sole and
absolute discretion, if such transfer would result in more than four partners
holding all outstanding Series C Preferred Units within the meaning of Treasury
Regulation Section 1.7704-1(h)(1)(ii) (without regard to Treasury Regulation
Section 1.7704-1(h)(3)(ii)); provided, however, that the General Partner's
consent may not be unreasonably withheld if (a) such transfer would not result
in more than four (4) partners holding all outstanding Series C Preferred Units
within the meaning of such Treasury Regulation Sections or (b) the General
Partner is relying on a provision other than Treasury Regulation Section
1.7704-1(h) to avoid classification of Operating Partnership as a PTP. In
addition, no transfer may be made to any person if such transfer would cause the
exchange of the Series C Preferred Units for Series C Preferred Shares, as
provided herein, to be required to be registered under the Securities Act, or
any state securities laws.
Section 7. Exchange Rights.
---------------
(a) Right to Exchange.
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(i) Series C Preferred Units will be exchangeable in whole or in part at anytime
on or after the tenth anniversary of the date of issuance, at the option of the
holders thereof, for authorized but previously unissued shares of 9.0% Series C
Cumulative Redeemable Preferred Stock of the General Partner (the "Series C
Preferred Stock") at an exchange rate of one share of Series C Preferred Stock
for one Series C Preferred Unit, subject to adjustment as described below (the
"Exchange Price"), provided that the Series C Preferred Units will become
exchangeable at any time, in whole or in part, at the option of the holders of
Series C Preferred Units for Series C Preferred Stock if (y) at any time full
distributions shall not have been timely made on any Series C Preferred Unit
with respect to six (6) prior quarterly distribution periods, whether or not
consecutive, provided, however, that a distribution in respect of Series C
Preferred Units shall be considered timely made if made within two (2) Business
Days after the applicable Preferred Unit Distribution Payment Date if at the
time of such late payment there shall not be any prior quarterly distribution
periods in respect of which full distributions were not timely made or (z) upon
receipt by a holder or holders of Series C Preferred Units of (A) notice from
the General Partner that the General Partner or a subsidiary of the General
Partner has become aware of facts that will or likely will cause the Partnership
to become a PTP and (B) an opinion rendered by an outside nationally recognized
independent counsel familiar with such matters addressed to a holder or holders
of Series C Preferred Units, that the Partnership is or likely is, or upon the
occurrence of a defined event in the immediate future will be or likely will be,
a PTP. In addition, the Series C Preferred Units may be exchanged for Series C
Preferred Stock, in whole or in part, at the option of any holder prior to the
tenth anniversary of the issuance date and after the third anniversary thereof
if such holder of a Series C Preferred Units shall deliver to the General
Partner either (i) a private ruling letter addressed to such holder of Series C
Preferred Units or (ii) an opinion of independent counsel reasonably acceptable
to the General Partner based on the enactment of temporary or final Treasury
Regulations or the publication of a Revenue Ruling, in either case to the effect
that an exchange of the Series C Preferred Units at such earlier time would not
cause the Series C Preferred Units to be considered "stock and securities"
within the meaning of Section 351(e) of the Internal Revenue Code of 1986, as
amended (the "Code") for purposes of determining whether the holder of such
Series C Preferred Units is an "investment company" under Section 721(b) of the
Code if an exchange is permitted at such earlier date. Furthermore, the Series C
Preferred Units may be exchanged in whole or in part for Series C Preferred
Shares at any time after the date hereof, if both (1) the holder thereof
concludes based on results or projected results that there exists (in the
reasonable judgment of the holder) a material risk that the holder's interest in
the Partnership does or will represent more than 19.5% of the total profits or
capital interests in the Partnership (determined in accordance with Treasury
Regulations Section 1.731-2(e)(4)) for a taxable year, and (2) the holder
delivers to the General Partner an opinion of nationally recognized independent
counsel to the effect that there is a material risk that the holder's interest
in the Partnership does or will represent more than 19.5% of the total profits
or capital interests in the Partnership (determined in accordance with Treasury
Regulations Section 1.731(e)(4)) for a taxable year. In addition, Series C
Preferred Units, if the holder thereof so determines, may be exchanged in whole
or in part for Series C Preferred Stock at any time after the date hereof, if
(1) the holder concludes (in the reasonable judgment of the holder) that less
than 90% of the gross income of the Partnership for any taxable year will or
likely will constitute "qualifying income" within the meaning of Section 7704(d)
of the Code and (2) the holder delivers to the General Partner an opinion of
nationally recognized independent counsel to the effect that less than 90% of
the gross income of the Partnership for a taxable year will or likely will
constitute "qualifying income" within the meaning of Section 7704(d) of the
Code.
(ii) Notwithstanding anything to the contrary set forth in Section 10(a)(i), if
an Exchange Notice (as defined herein) has been delivered to the General
Partner, then the General Partner may, at its option, elect to redeem or cause
the Partnership to redeem all or a portion of the outstanding Series C Preferred
Units for cash in an amount equal to the holder's positive Capital Account
balance as apportioned with respect to such redeemed Units, determined after
adjusting the holder's Capital Account for its allocable share of the
Partnership's Net Income or Net Loss (and specially allocated items) up to the
redemption date computed after adjusting the Gross Asset Values of the
Partnership's assets immediately prior to such redemption if failure to make
such adjustment to Gross Asset Values would have an adverse economic impact the
Series C Preferred Units. The General Partner may exercise its option to redeem
the Series C Preferred Units for cash pursuant to this Section 10(a)(ii) by
giving each holder of record of Series C Preferred Units notice of its election
to redeem for cash, within five (5) Business Days after receipt of the Exchange
Notice, by (i) fax, and (ii) registered mail, postage paid, at the address of
each holder as it may appear on the records of the Partnership stating (i) the
redemption date, which shall be no later than sixty (60) days following the
receipt of the Exchange Notice, (ii) the redemption price, (iii) the place or
places where the Series C Preferred Units are to be surrendered for payment of
the redemption price, (iv) that distribution on the Series C Preferred Units
will cease to accrue on such redemption date; (v) that payment of the redemption
price will be made upon presentation and surrender of the Series C Preferred
Units and (vi) the aggregate number of Series C Preferred Units to be redeemed,
and if fewer than all of the outstanding Series C Preferred Units are to be
redeemed, the number of Series C Preferred Units to be redeemed held by such
holder, which number shall equal such holder's pro-rata share (based on the
percentage of the aggregate number of outstanding Series C Preferred Units the
total number of Series C Preferred Units held by such holder represents) of the
aggregate number of Series C Preferred Units being redeemed.
(iii) Upon the occurrence of an event giving rise to exchange rights pursuant to
Section 10(a)(i), in the event an exchange of all or a portion of Series C
Preferred Units pursuant to Section 10(a)(i) would violate the ownership
limitation provisions of the General Partner set forth in Article 5 of the
Charter, the General Partner shall give written notice thereof to each holder of
record of Series C Preferred Units, within five (5) Business Days following
receipt of the Exchange Notice, by (i) fax, and (ii) registered mail, postage
prepaid, at the address of each such holder set forth in the records of the
Partnership. In such event, each holder of Series C Preferred Units shall be
entitled to exchange, pursuant to the provisions of Section 10(b) a number of
Series C Preferred Units which would comply with the ownership limitation
provisions of the General Partner set forth in such Article 5 of the Charter and
any Series C Preferred Units not so exchanged (the "Excess Units") shall be
redeemed by the Partnership for cash in an amount equal to the original Capital
Contribution per Excess Unit, plus any accrued and unpaid distributions thereon,
whether or not declared, to the date of redemption. The written notice of the
General Partner shall state (i) the number of Excess Units held by such holder,
(ii) the redemption price of the Excess Units, (iii) the date on which such
Excess Units shall be redeemed, which date shall be no later than sixty (60)
days following the receipt of the Exchange Notice, (iv) the place or places
where such Excess Units are to be surrendered for payment of the Redemption
Price, (v) that distributions on the Excess Units will cease to accrue on such
redemption date, and (vi) that payment of the redemption price will be made upon
presentation and surrender of such Excess Units. In the event an exchange would
result in Excess Units, as a condition to such exchange, each holder of such
units agrees to provide representations and covenants reasonably requested by
the General Partner relating to (i) the widely held nature of the interests in
such holder, sufficient to assure the General Partner that the holder's
ownership of stock of the General Partner (without regard to the limits
described above) will not cause any individual to own in excess of 9.8% of the
stock of the General Partner, to the extent such holder can reasonably make such
representation; and (ii) to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's ownership of tenants
of the Partnership and its affiliates.
Notwithstanding any provision of this Agreement to the
contrary, no Series C Limited Partner shall be entitled to effect an exchange of
Series C Preferred Units for Series C Preferred Stock to the extent that
ownership or right to acquire such shares would cause the Partner or any other
Person or, in the opinion of counsel selected by the General Partner, may cause
the Partner or any other Person, to violate the restrictions on ownership and
transfer of Series C Preferred Stock set forth in the Charter. To the extent any
such attempted exchange for Series C Preferred Stock would be in violation of
the previous sentence, it shall be void ab initio and such Series C Limited
Partner shall not acquire any rights or economic interest in the Series C
Preferred Stock otherwise issuable upon such exchange.
(iv) The redemption of Series C Preferred Units described in Section 10(a)(ii)
and (iii) shall be subject to the provisions of Section 7(b)(i) and Section
7(c)(ii); provided, however, that for purposes hereof the term "Redemption
Price" in Sections 7(b)(i) and 7(c)(ii) shall be read to mean the original
Capital Contribution per Series C Preferred Unit being redeemed plus all accrued
and unpaid distributions to the redemption date.
(b) Procedure for Exchange.
- -------------------------------
(i) Any exchange shall be exercised pursuant to a notice of exchange (the
"Exchange Notice") delivered to the General Partner by the holder who is
exercising such exchange right, by (i) fax and (ii) by certified mail postage
prepaid. Upon request of the General Partner, such holder delivering the
Exchange Notice shall provide to the General Partner in writing such information
as the General Partner may reasonably request to determine whether any portion
of the exchange by the delivering holder will result in the violation of the
restrictions of Article 5 of the Charter, including the Ownership Limit and the
Related Tenant Limit. The exchange of Series C Preferred Units, or a specified
portion thereof, may be effected after the fifth (5th) Business Day following
receipt by the General Partner of the Exchange Notice and such requested
information by delivering certificates, if any, representing such Series C
Preferred Units to be exchanged together with, if applicable, written notice of
exchange and a proper assignment of such Series C Preferred Units to the office
of the General Partner maintained for such purpose. Currently, such office is
121 West Forsyth Street, Suite 200, Jacksonville, Florida 32202. Each exchange
will be deemed to have been effected immediately prior to the close of business
on the date on which such Series C Preferred Units to be exchanged (together
with all required documentation) shall have been surrendered and notice shall
have been received by the General Partner as aforesaid and the Exchange Price
shall have been paid. Any Series C Preferred Shares issued pursuant to this
Section 10 shall be delivered as shares which are duly authorized, validly
issued, fully paid and nonassessable, free of pledge, lien, encumbrance or
restriction other than those provided in the Charter, the Bylaws of the General
Partner, the Securities Act and relevant state securities or blue sky laws.
(ii) In the event of an exchange of Series C Preferred Units for shares of
Series C Preferred Stock, an amount equal to the accrued and unpaid
distributions which are not paid pursuant to Section 4(a) hereof, whether or not
declared, to the date of exchange on any Series C Preferred Units tendered for
exchange shall (i) accrue and be payable by the General Partner from and after
the date of exchange on the shares of the Series C Preferred Stock into which
such Series C Preferred Units are exchanged, and (ii) continue to accrue on such
Series C Preferred Units, which shall remain outstanding following such
exchange, with the General Partner as the holder of such Series C Preferred
Units. Notwithstanding anything to the contrary set forth herein, in no event
shall a holder of a Series C Preferred Unit that was validly exchanged into
Series C Preferred Stock pursuant to this section (other than the General
Partner now holding such Series C Preferred Unit), receive a distribution out of
Available Cash or Capital Transaction Proceeds of the Partnership with respect
to any Series C Preferred Units so exchanged.
(iii) Fractional shares of Series C Preferred Stock are not to be issued upon
exchange but, in lieu thereof, the General Partner will pay a cash adjustment
based upon the fair market value of the Series C Preferred Stock on the day
prior to the exchange date as determined in good faith by the Board of Directors
of the General Partner.
(c) Adjustment of Series C Exchange Price. In case the General Partner shall be
a party to any transaction (including, without limitation, a merger,
consolidation, statutory share exchange, tender offer for all or substantially
all of the General Partner's capital stock or sale of all or substantially all
of the General Partner's assets), in each case as a result of which the Series C
Preferred Stock will be converted into the right to receive shares of capital
stock, other securities or other property (including cash or any combination
thereof), each Series C Preferred Unit will thereafter be exchangeable into the
kind and amount of shares of capital stock and other securities and property
receivable (including cash or any combination thereof) upon the consummation of
such transaction by a holder of that number of Series C Preferred Stock or
fraction thereof into which one Series C Preferred Unit was exchangeable
immediately prior to such transaction. The General Partner may not become a
party to any such transaction unless the terms thereof are consistent with the
foregoing.
Section 8. No Conversion Rights. The holders of the Series C
Preferred Units shall not have any rights to convert such Partnership Units into
any other class of Partnership Interests or any other interest in the
Partnership.
Section 9. No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of the Series C Preferred Units.
Section 10. Miscellaneous.
-------------
(a) The terms "Original Limited Partnership Units," "Class B Units," "Class 2
Units," "Class Z Branch Partners," "Class Z Midland Partners," "Additional
Limited Partners," "Common Units," "General Partner Units" and "Percentage
Interest" in the Partnership Agreement shall not be deemed to include the Series
C Preferred Units. The terms "Limited Partnership Interest" and "Partnership
Interest" shall be deemed to include the Series C Preferred Units.
(b) Exhibit A to the Partnership Agreement is hereby amended to include the
Series C Preferred Units as Limited Partnership Interests.
(c) Section 7.1(h) of the Partnership Agreement is hereby amended to
include the Series C Priority Return Amount.
(d) Nothing contained in Section 8.4 or the last sentence of Section 13.6 of the
Partnership Agreement shall be deemed to limit the issuance of, and provisions
applicable to, the Series C Preferred Units.
(e) Notwithstanding anything to the contrary contained in Section 8.6 of the
Partnership Agreement, in no event shall the rights of the holders of the Series
C Preferred Units set forth in Section 10 of this Agreement be subordinate to
the Redemption Rights set forth in Section 8.6 of the Partnership Agreement.
(f) All references to Section 4.5(f) and Section 4.5(f)(ii) shall be deemed to
include a reference to Section 8 and Section 8(b) hereof, respectively.
(g) Simultaneously with the effectiveness of the Fourth Amended Agreement, this
Amendment No. 2 to the Partnership Agreement shall be deemed Amendment No. 2 to
the Fourth Amended Agreement, mutatis mutandis, and the Series C Preferred Units
shall continue to be outstanding upon the terms and conditions set forth herein.
(h) This Amendment may be executed in one or more counterparts, all of
which shall constitute one and the same agreement.
<PAGE>
004.197245.1
Series C Amendment to Partnership Agreement
004.197245.1
Series C Amendment to Partnership Agreement
GENERAL PARTNER
Regency Realty Corporation
By:___________________________
Bruce M. Johnson
Its Managing Director and Executive
Vice President
CONTRIBUTOR
GOLDMAN SACHS 1999 EXCHANGE PLACE FUND, L.P.
By: Goldman Sachs Management Partners, L.P., as its general
partner
By: Goldman Sachs Management, Inc., as its general partner
By: ___________________________
Name: Elizabeth C. Groves
Title: Vice President
SECURITY CAPITAL U.S. REALTY
By:_________________________________
Name:______________________________
Title:_______________________________
SECURITY CAPITAL HOLDINGS S.A.
By:_________________________________
Name:______________________________
Title:_______________________________
ARDEN SQUARE HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
BLOSSOM VALLEY HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
COOPER STREET PLAZA HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
DALLAS HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
EL CAMINO HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
FRIARS MISSION HOLDINGS SARL
By:_________________________________
Name:______________________________
Title:_______________________________
<PAGE>
2
004.197245.1
NYDOCS03/486233 5
004.197245.1
Series C Amendment to Partnership Agreement
Regency Centers, L.P.
Amendment No. 3 to Third Amended and Restated Agreement of
Limited Partnership
Relating to 9.125% Series D Cumulative Redeemable Preferred Units
This Amendment No. 3 (this "Amendment") to the Third Amended
and Restated Agreement of Limited Partnership, dated as of September 1, 1999 (as
amended through the date hereof, the "Partnership Agreement"), of Regency
Centers, L.P., a Delaware limited partnership (the "Partnership"), is made as of
the 29th day of September, 1999 by Regency Realty Corporation, Inc., a Florida
corporation, as general partner (the "General Partner"), and the undersigned
Limited Partners that are being admitted to the Partnership on the date hereof.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the General Partner and the Limited Partners desire
to amend the Partnership Agreement to create a class of Preferred Units and to
set forth the rights, powers, duties and preferences of such Preferred Units.
NOW THEREFORE, pursuant to the authority contained in Section
4.2(b) of the Partnership Agreement, the General Partner hereby amends the
Partnership Agreement as follows:
A. Defined Terms. Capitalized terms used in this Amendment and not
otherwise defined herein shall have the meaning assigned thereto in the
Partnership Agreement.
B. Amendments. Effective as of the date hereof, the Partnership Agreement
is hereby amended as follows:
Section 1. Amendments to Article 1 - Defined Terms.
---------------------------------------
(a) New Definitions
The following terms are hereby added to Article 1 in their correct
alphabetical order"
"Series D Excess Units" has the meaning set forth in Section
4.8(g)(i)(C).
"Series D Exchange Notice" has the meaning set forth in
Section 4.8(g)(ii)(A).
"Series D Exchange Price" has the meaning set forth in Section
4.8(g)(i)(A).
"Series D Preferred Partner" means the Limited Partners who
received Series D Preferred Units and also include any permitted transferee of a
Series D Preferred Partner pursuant to Section 11.3 and the General Partner or
any Affiliate of Regency upon exchange or redemption of the Series D Preferred
Units pursuant to Section 4.8.
<PAGE>
21
NYDOCS03/486233 5
"Series D Preferred Stock" has the meaning set forth in
Section 4.8(g)(i)(A).
"Series D Preferred Units" means the Partnership Interest in
the Partnership issued pursuant to Section 4.2 and Section 4.8 hereof
representing 9.125% Series D Cumulative Redeemable Preferred Units. The term
"Series D Preferred Unit" does not include or refer to any Original Limited
Partnership Units, Additional Units or Class B Units.
"Series D Preferred Unit Distribution Payment Date" has the
meaning set forth in Section 4.8(c)(i).
"Series D Preferred Unit Partnership Record Date" has the
meaning set forth in Section 4.8(c)(i).
"Series D Priority Return" means an amount equal to 9.125% per
annum, determined on the basis of a 360 day year of twelve 30 day months (or
actual days for any month which is shorter than a full monthly period),
cumulative to the extent not distributed for any given distribution period, of
the stated value of $100 per Series D Preferred Unit, commencing on the date of
issuance of such Series D Preferred Unit.
"Series D Redemption Price" has the meaning set forth in
Section 4.8(e)(i).
(b) Amendment to Existing Definitions
(i) All references in Article I and elsewhere in the
Partnership Agreement to: "Excess Units", "Exchange Notice", "Exchange Price",
"Preferred Unit Distribution Payment Date", "Preferred Unit Partnership Record
Date" and "Priority Return" shall be deemed references to "Series A Excess
Units", "Series A Exchange Notice", "Series A Exchange Price", "Series A
Preferred Unit Distribution Payment Date", "Series A Preferred Unit Partnership
Record Date" and "Series A Priority Return" respectively.
(ii) The definition of "Percentage Interest" is hereby amended
by deleting the words "Adjusted Series A Preferred Units" each time such words
appear in said definition.
(iii) The definition of "Adjusted Series A Preferred Units" is
hereby deleted.
Section 2. Section 4.1 - Capital Contributions of Series A Preferred
Partners and Series D Preferred Partners.
Section 4.1(d) of the Partnership Agreement is hereby deleted and the
following inserted in lieu thereof:
<PAGE>
"(d) (i) The Series A Preferred Partners have contributed cash
to the Partnership in the amount of $50 per Series A Preferred Unit. The
distribution rights for the Series A Preferred Units shall be senior to the
distribution rights of the Original Limited Partnership Units, the Additional
Units, the Common Units, the Class 2 Units and the Class B Units. The number of
Series A Preferred Units issued to the Series A Preferred Partners is set forth
on Exhibit A. (ii) The Series D Preferred Partners have contributed cash to the
Partnership in the amount of $100 per Series D Preferred Unit. The distribution
rights for the Series D Preferred Units shall be senior to the distribution
rights of the Original Limited Partnership Units, the Additional Units, Common
Units, the Class 2 Units and the Class B Units . The number of Series D
Preferred Units issued to the Series D Preferred Partners is set forth on
Exhibit A."
Section 3. Section 4.2 - Issuance of Additional Partnership Interests.
(a) Section 4.2(a) is hereby amended by inserting the words
"and Section 4.8(f)(ii)" after the reference to "Section 4.5 (f)(ii)" in the
third sentence thereof.
(b) Section 4.2(b)(i) is hereby amended by inserting the words
"and Section 4.8(f)(ii)" after the reference to "Section 4.5 (f)(ii)" in the
first line thereof.
Section 4. Section 4.5
(a) Section 4.5(c)(i) is hereby amended by (i) inserting the
parenthetical "(such quarterly periods to be the quarterly periods ending on the
dates specified in this sentence)" after the first reference to "quarterly" in
clause (A) in the second sentence thereof; and (ii) deleting the words "computed
on the basis of the actual number of days elapsed in such a 30-day month" in the
third sentence thereof and inserting "computed on the basis of the ratio of the
actual number of days elapsed in such quarterly period to ninety (90) days"
therefor.
(b) Section 4.5(c)(iv)(A) is hereby amended by deleting it in its entirety
and inserting the following in lieu thereof:
<PAGE>
"(A) So long as any Series A Preferred Units are
outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or
with respect to any class or series of Junior Units as to
distributions, nor shall any cash or other property be set
aside for or applied to the purchase, redemption or other
acquisition for consideration of any Series A Preferred Units,
any Parity Preferred Units as to distributions or any Junior
Units, unless, in each case, all distributions accumulated on
all Series A Preferred Units and all classes and series of
outstanding Parity Preferred Units as to distributions have
been paid in full. The foregoing sentence will not prohibit
(a) distributions payable solely in Junior Units, (b) the
conversion of Junior Units or Parity Preferred Units into
Junior Units, or (c) the redemption of Partnership Interests
corresponding to any Series A Preferred Stock, Parity
Preferred Stock or Junior Stock to be purchased by the General
Partner pursuant to Article 5 of the Articles of Incorporation
to preserve the General Partner's status as a real estate
investment trust, provided that such redemption shall be upon
the same terms as the corresponding purchase pursuant to
Article 5 of the Articles of Incorporation."
(c) Section 4.5(d)(i) is hereby amended by (A) deleting the
words "and (ii) an amount equal to any accumulated and unpaid distributions
thereon, whether or not declared, to the date of payment" from the end of the
first sentence and deleting the reference to "(i)" after the words "an amount
equal to the sum of" in that sentence and (B) inserting the words "(including
all accumulated and unpaid distributions, whether or not declared, to the date
of payment to the extent not previously credited to such Capital Account
balances)" after the words "Capital Account balances" in the former clause (i)
thereof.
(d) Section 4.5(f)(ii) is hereby amended by inserting the
words "if issued upon arm's length terms in the good faith determination of the
board of directors of the General Partner" after the words "Security Capital" in
clause (B)(I) thereof.
(e) The last sentence of Section 4.5(g)(i)(A) is hereby deleted and the
following inserted in lieu thereof:
"Furthermore, the Series A Preferred Units may be exchanged in whole
but not in part by any holder thereof which is a real estate investment
trust within the meaning of Sections 856 through 859 of the Code for
Series A Preferred Stock (but only if the exchange in whole may be
accomplished consistently with the ownership limitations set forth
under Article 5 of the Articles of Incorporation (taking into account
exceptions thereto)) if at any time (i) the Partnership reasonably
determines that the assets and income of the Partnership for a taxable
year after 1999 would not satisfy the income and assets tests of
Section 856 of the Code for such taxable year if the Partnership were a
real estate investment trust within the meaning of the Code or (ii) any
such holder of Series A Preferred Units shall deliver to the
Partnership and the General Partner an opinion of independent counsel
reasonably acceptable to the General Partner to the effect that, based
on the assets and income of the Partnership for a taxable year after
1999, the Partnership would not satisfy the income and assets tests of
Section 856 of the Code for such taxable year if the Partnership were a
real estate investment trust within the meaning of the Code and that
such failure would create a meaningful risk that a holder of the Series
A Preferred Units would fail to maintain qualification as a real estate
investment trust.
(f) The following Section 4.5(g)(iii)(C) is hereby added to the Partnership
Agreement:
<PAGE>
(C) So long as a Preferred Partner or any of its permitted successors
or assigns holds any Series A Preferred Units as the case may be, the
General Partner shall not, without the affirmative vote of the holders
of at least two-thirds of the Series A Preferred Units (excluding any
Series A Preferred Units surrendered to the General Partner in exchange
for Series A Preferred Stock) and Series A Preferred Stock (voting
together as a class based on the number of shares into which such
Series A Preferred Units are then convertible) outstanding at the time:
(a) designate or create, or increase the authorized or issued amount
of, any class or series of shares ranking senior to the Series A
Preferred Stock with respect to the payment of distributions or rights
upon liquidation, dissolution or winding-up or reclassify any
authorized shares of the General Partner into any such shares, or
create, authorize or issue any obligations or securities convertible
into or evidencing the right to purchase any such shares; (b) designate
or create, or increase the authorized or issued amount of, any Parity
Preferred Stock or reclassify any authorized shares of the General
Partner into any such shares, or create, authorize or issue any
obligations or security convertible into or evidencing the right to
purchase any such shares, but only to the extent that such Parity
Preferred Stock are issued to an Affiliate of the General Partner other
than (A) Security Capital U.S. Realty, Security Capital Holdings, S.A.
or their affiliates (if issued on arm's length terms in the good faith
determination of the board of directors of the General Partner), or (B)
the General Partner to the extent the issuance of such interests was to
allow the General Partner to issue corresponding preferred stock in the
same transaction to persons who are not affiliates of the Partnership;
(c) amend, alter or repeal the provisions of the Charter or bylaws of
the General Partner, whether by merger, consolidation or otherwise,
that would materially and adversely affect the powers, special rights,
preferences, privileges or voting power of the Series A Preferred Stock
or the holders thereof; provided, however, that any increase in the
amount of authorized Preferred Stock or the creation or issuance of any
other series or class of Preferred Stock, or any increase in the amount
of authorized shares of each class or series, in each case ranking
either (1) junior to the Series A Preferred Stock with respect to the
payment of distributions or the distribution of assets upon
liquidation, dissolution or winding-up, or (2) on a parity with the
Series A Preferred Stock with respect to the payment of distributions
or the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Stock are not issued to an
Affiliate of the General Partner (other than Security Capital U.S.
Realty, Security Capital Holdings, S.A. or their affiliates if issued
on arm's length terms in the good faith determination of the board of
directors of the General Partner), or (B) General Partner to the extent
the issuance of such interests was to allow the General Partner to
issue corresponding preferred stock to persons who are not affiliates
of the Partnership, shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting powers."
Section 5. Section 4.8 - Series D Preferred Units
The Partnership Agreement is hereby amended by inserting the
following as a new Section 4.8:
"Section 4.8 Issuance of Series D Preferred Units.
(a) Designation and Number. A series of Partnership Units in
the Partnership designated as the "9.125%" Series D Cumulative Redeemable
Preferred Units (the "Series D Preferred Units") is hereby established. The
number of Series D Preferred Units shall be 500,000.
<PAGE>
NYDOCS03/486233 6
(b) Rank.
The Series D Preferred Units will, with respect to
distributions and rights upon voluntary or involuntary liquidation, winding-up
or dissolution of the Partnership, rank senior to all classes or series of
Partnership Interests now or hereafter authorized, issued or outstanding, other
than the Series A Preferred Units, Series B Preferred Units and Series C
Preferred Units and any class or series of equity securities of the Partnership
issued after the issuance of the Series D Preferred Units and expressly
designated in accordance with the Partnership Agreement as ranking on a parity
with or senior to the Series D Preferred Units as to distributions or rights
upon voluntary or involuntary liquidation, winding-up or dissolution of the
Partnership. The Series D Preferred Units are expressly designated as ranking on
a parity with the Series A Preferred Units, the Series B Preferred Units and the
Series C Preferred Units as to both distributions and rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the Partnership.
(c) Distributions.
<PAGE>
(i) Payment of Distributions. Subject to the rights of holders
of Parity Preferred Units and any holders of Partnership Interests issued after
the date hereof in accordance herewith ranking senior to the Series D Preferred
Units as to the payment of distributions, holders of Series D Preferred Units
shall be entitled to receive, when, as and if declared by the Partnership acting
through the General Partner, out of Available Cash and Capital Transaction
Proceeds, cumulative preferential cash distributions at the rate per annum of
9.125% of the original Capital Contribution per Series D Preferred Unit. Such
distributions shall be cumulative, shall accrue from the original date of
issuance and will be payable (A) quarterly (such quarterly periods to be the
quarterly periods ending on the dates set forth in this sentence) in arrears, on
or before March 31, June 30, September 30 and December 31 of each year,
commencing on December 31, 1999 (with the first such payment to include the
amount accrued from the period commencing September 29, 1999 and ending December
31, 1999) and, (B) in the event of (i) an exchange of Series D Preferred Units
into Series D Preferred Stock, or (ii) a redemption of Series D Preferred Units,
on the exchange date or redemption date, as applicable (each a "Series D
Preferred Unit Distribution Payment Date"). The amount of the distribution
payable for any period will be computed on the basis of a 360-day year of twelve
30-day months and for any period shorter than a full quarterly period for which
distributions are computed, the amount of the distribution payable will be
computed on the basis of the ratio of the actual number of days elapsed in such
period to ninety (90) days. If any date on which distributions are to be made on
the Series D Preferred Units is not a Business Day (as defined herein), then
payment of the distribution to be made on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. Distributions on December 31, 1999 and thereafter will be made to
the holders of record of the Series D Preferred Units on the relevant record
dates to be fixed by the Partnership acting through the General Partner, which
record dates shall be not less than ten (10) days and not more than thirty (30)
Business Days prior to the relevant Preferred Unit Distribution Payment Date
(the "Series D Preferred Unit Partnership Record Date").
(ii) Limitation on Distributions. No distribution on the
Series D Preferred Units shall be declared or paid or set apart for payment by
the Partnership at such time as the terms and provisions of any agreement of the
Partnership relating to its indebtedness (other than any agreement with the
holder of Partnership Interests or an Affiliate thereof), prohibits such
declaration, payment or setting apart for payment or provide, that such
declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration, payment or setting
apart for payment shall be restricted or prohibited by law. Nothing in this
Section 4(c)(ii) shall be deemed to modify or in any manner limit the provisions
of Sections 4.8(c)(iii) or 4.8(c)(iv).
(iii) Distributions Cumulative. Distributions on the Series D
Preferred Units will accrue whether or not the terms and provisions of any
agreement of the Partnership, including any agreement relating to its
indebtedness, at any time prohibit the current payment of distributions, whether
or not the Partnership has earnings, whether or not there are funds legally
available for the payment of such of such distributions and whether or not such
distributions are authorized. Accrued but unpaid distributions on the Series D
Preferred Units will accumulate as of the Series D Preferred Unit Distribution
Payment Date on which they first become payable. Distributions on account of
arrears for any past distribution periods may be declared and paid at any time,
without reference to a regular Series D Preferred Unit Distribution Payment Date
to holders of record of the Series D Preferred Units on the record date fixed by
the Partnership acting through the General Partner which date shall be not less
than ten (10) days and not more than thirty (30) Business Days prior to the
payment date. Accumulated and unpaid distributions will not bear interest.
(iv) Priority as to Distributions.
(A) So long as any Series D Preferred Units are
outstanding, no distribution of cash or other property shall
be authorized, declared, paid or set apart for payment on or
with respect to any class or series of Junior Units with
respect to distributions, nor shall any cash or other property
be set aside for or applied to the purchase, redemption or
other acquisition for consideration of any Series D Preferred
Units, any Parity Preferred Units with respect to
distributions or any Junior Units, unless, in each case, all
distributions accumulated on all Series D Preferred Units and
all classes and series of outstanding Parity Preferred Units
as to the payment of distributions have been paid in full.
Without limiting Section 4.8(f)(ii), the foregoing sentence
will not prohibit (a) distributions payable solely in Junior
Units, (b) the conversion of Junior Units or Parity Preferred
Units into Junior Units, or (c) the redemption of Partnership
Interests corresponding to any Series D Preferred Stock,
Parity Preferred Stock or Junior Stock to be purchased by the
General Partner pursuant to Article 5 of the Articles of
Incorporation to preserve the General Partner's status as a
real estate investment trust, provided that such redemption
shall be upon the same terms as the corresponding purchase
pursuant to Article 5 of the Articles of Incorporation.
<PAGE>
(B) So long as distributions have not been paid in
full (or a sum sufficient for such full payment is not
irrevocably deposited in trust for payment) upon the Series D
Preferred Units, all distributions authorized and declared on
the Series D Preferred Units and all classes or series of
outstanding Parity Preferred Units as to distributions shall
be authorized and declared so that the amount of distributions
authorized and declared per Series D Preferred Unit and such
other classes or series of Parity Preferred Units shall in all
cases bear to each other the same ratio that accrued
distributions per Series D Preferred Unit and such other
classes or series of Parity Preferred Units (which shall not
include any accumulation in respect of unpaid distributions
for prior distribution periods if such class or series of
Parity Preferred Units do not have cumulative distribution
rights) bear to each other.
(v) No Further Rights. Holders of Series D Preferred Units shall not be
entitled to any distributions, whether payable in cash, other property or
otherwise, in excess of the full cumulative distributions described herein.
(d) Liquidation Preference.
(i) Payment of Liquidating Distributions. Subject to the
rights of holders of Parity Preferred Units with respect to rights upon any
voluntary or involuntary liquidation, dissolution or winding-up of the
Partnership and subject to Partnership Interests ranking senior to the Series D
Preferred Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, the holders of Series
D Preferred Units shall be entitled to receive out of the assets of the
Partnership legally available for distribution or the proceeds thereof, after
payment or provision for debts and other liabilities of the Partnership, but
before any payment or distributions of the assets shall be made to holders of
any class or series of Partnership Interest that ranks junior to the Series D
Preferred Units as to rights upon liquidation, dissolution or winding-up of the
Partnership, an amount equal to the sum of a liquidation preference equal to
their positive Capital Account balances (including, without limitation, any
accumulated and unpaid distributions, whether or not declared, to the date of
payment to the extent not previously credited to such Capital Account balances),
determined after taking into account all Capital Account adjustments for the
Partnership taxable year during which the liquidation occurs (other than those
made as a result of the liquidating distribution set forth in this 4.8(d)(i)).
In the event that, upon such voluntary or involuntary liquidation, dissolution
or winding-up, there are insufficient assets to permit full payment of
liquidating distributions to the holders of Series D Preferred Stock and any
Parity Preferred Units as to rights upon liquidation, dissolution or winding-up
of the Partnership, all payments of liquidating distributions on the Series D
Preferred Units and such Parity Preferred Units shall be made so that the
payments on the Series D Preferred Units and such Parity Preferred Units shall
in all cases bear to each other the same ratio that the respective rights of the
Series D Preferred Unit and such other Parity Preferred Units (which shall not
include any accumulation in respect of unpaid distributions for prior
distribution periods if such Parity Preferred Units do not have cumulative
distribution rights) upon liquidation, dissolution or winding-up of the
Partnership bear to each other.
<PAGE>
(ii) Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the Partnership, stating
the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by (i) fax
and (ii) by first class mail, postage pre-paid, not less than 30 and not more
that 60 days prior to the payment date stated therein, to each record holder of
the Series D Preferred Units at the respective addresses of such holders as the
same shall appear on the transfer records of the Partnership.
(iii) No Further Rights. After payment of the full amount of
the liquidating distributions to which they are entitled, the holders of Series
D Preferred Units will have no right or claim to any of the remaining assets of
the Partnership.
(iv) Consolidation, Merger or Certain Other Transactions. The
voluntary sale, conveyance, lease, exchange or transfer (for cash, shares of
stock, securities or other consideration) of all or substantially all of the
property or assets of the General Partner to, or the consolidation or merger or
other business combination of the Partnership with or into, any corporation,
trust or other entity (or of any corporation, trust or other entity with or into
the Partnership) shall not be deemed to constitute a liquidation, dissolution or
winding-up of the Partnership.
(e) Optional Redemption.
(i) Right of Optional Redemption. The Series D Preferred Units
may not be redeemed prior to the fifth anniversary of the issuance date. On or
after such date, the Partnership shall have the right to redeem the Series D
Preferred Units, in whole or in part, at any time or from time to time, upon not
less than 30 nor more than 60 days' written notice, at a redemption price,
payable in cash, equal to the Capital Account balance of the holder of Series D
Preferred Units (the "Series D Redemption Price"); provided, however, that no
redemption pursuant to this Section 4.8(e)(i) will be permitted if the Series D
Redemption Price does not equal or exceed the original Capital Contribution of
such holder plus the cumulative Series D Priority Return, whether or not
declared, to the redemption date to the extent not previously distributed or
distributed on the redemption date pursuant to Section 4.8(c)(i). If fewer than
all of the outstanding Series D Preferred Units are to be redeemed, the Series D
Preferred Units to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
(ii) Limitation on Redemption.
<PAGE>
(A) The Series D Redemption Price (other than the
portion thereof consisting of accumulated but unpaid
distributions) will be payable solely out of the sale proceeds
of capital stock of the General Partner, which will be
contributed by the General Partner to the Partnership as
additional capital contribution, or out of the sale of limited
partner interests in the Partnership and from no other source.
For purposes of the preceding sentence, "capital stock" means
any equity securities (including Common Stock and Preferred
Stock (as such terms are defined in the Articles of
Incorporation)), shares, participation or other ownership
interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity
securities) or options to purchase any of the foregoing.
(B) The Partnership may not redeem fewer than all of
the outstanding Series D Preferred Units unless all
accumulated and unpaid distributions have been paid on all
Series D Preferred Units for all quarterly distribution
periods terminating on or prior to the date of redemption.
(iii) Procedures for Redemption.
(A) Notice of redemption will be (i) faxed, and (ii)
mailed by the Partnership, by certified mail, postage prepaid,
not less than 30 nor more than 60 days prior to the redemption
date, addressed to the respective holders of record of the
Series D Preferred Units at their respective addresses as they
appear on the records of the Partnership. No failure to give
or defect in such notice shall affect the validity of the
proceedings for the redemption of any Series D Preferred Units
except as to the holder to whom such notice was defective or
not given. In addition to any information required by law,
each such notice shall state: (i) the redemption date, (ii)
the Series D Redemption Price, (iii) the aggregate number of
Series D Preferred Units to be redeemed and if fewer than all
of the outstanding Series D Preferred Units are to be
redeemed, the number of Series D Preferred Units to be
redeemed held by such holder, which number shall equal such
holder's pro rata share (based on the percentage of the
aggregate number of outstanding Series D Preferred Units the
total number of Series D Preferred Units held by such holder
represents) of the aggregate number of Series D Preferred
Units to be redeemed, (iv) the place or places where such
Series D Preferred Units are to be surrendered for payment of
the Series D Redemption Price, (v) that distributions on the
Series D Preferred Units to be redeemed will cease to
accumulate on such redemption date and (vi) that payment of
the Series D Redemption Price will be made upon presentation
and surrender of such Series D Preferred Units.
<PAGE>
(B) If the Partnership gives a notice of redemption
in respect of Series D Preferred Units (which notice will be
irrevocable) then, by 12:00 noon, New York City time, on the
redemption date, the Partnership will deposit irrevocably in
trust for the benefit of the Series D Preferred Units being
redeemed funds sufficient to pay the applicable Series D
Redemption Price and will give irrevocable instructions and
authority to pay such Series D Redemption Price to the holders
of the Series D Preferred Units upon surrender of the Series D
Preferred Units by such holders at the place designated in the
notice of redemption. If the Series D Preferred Units are
evidenced by a certificate and if fewer than all Series D
Preferred Units evidenced by any certificate are being
redeemed, a new certificate shall be issued upon surrender of
the certificate evidencing all Series D Preferred Units,
evidencing the unredeemed Series D Preferred Units without
cost to the holder thereof. On and after the date of
redemption, distributions will cease to accumulate on the
Series D Preferred Units or portions thereof called for
redemption, unless the Partnership defaults in the payment
thereof. If any date fixed for redemption of Series D
Preferred Units is not a Business Day, then payment of the
Series D Redemption Price payable on such date will be made on
the next succeeding day that is a Business Day (and without
any interest or other payment in respect of any such delay)
except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as
if made on such date fixed for redemption. If payment of the
Series D Redemption Price is improperly withheld or refused
and not paid by the Partnership, distributions on such Series
D Preferred Units will continue to accumulate from the
original redemption date to the date of payment, in which case
the actual payment date will be considered the date fixed for
redemption for purposes of calculating the applicable Series D
Redemption Price.
(f) Voting Rights.
(i) General. Holders of the Series D Preferred Units will not
have any voting rights or right to consent to any matter requiring the consent
or approval of the Limited Partners, except as otherwise expressly set forth in
the Partnership Agreement and except as set forth below.
<PAGE>
(ii) Certain Voting Rights. So long as any Series D Preferred
Units remain outstanding, the Partnership shall not, without the affirmative
vote of the holders of at least two-thirds of the Series D Preferred Units
outstanding at the time (i) authorize or create, or increase the authorized or
issued amount of, any class or series of Partnership Interests ranking prior to
the Series D Preferred Units with respect to payment of distributions or rights
upon liquidation, dissolution or winding-up or create, authorize or issue any
obligations or security convertible into or evidencing the right to purchase any
such Partnership Interests, (ii) authorize or create, or increase the authorized
or issued amount of any Parity Preferred Units or reclassify any Partnership
Interest of the Partnership into any such Partnership Interest or create,
authorize or issue any obligations or security convertible into or evidencing
the right to purchase any such Partnership Interests but only to the extent such
Parity Preferred Units are issued to an affiliate of the Partnership, other than
(A) Security Capital U.S. Realty, Security Capital Holdings, S.A. or their
affiliates (if issued upon arm's length terms in the good faith determination of
the board of directors of the General Partner) or (B) the General Partner to the
extent the issuance of such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not affiliates of the
Partnership or (iii) either (A) consolidate, merge into or with, or convey,
transfer or lease its assets substantially as an entirety to, any corporation or
other entity or (B) amend, alter or repeal the provisions of the Partnership
Agreement, whether by merger, consolidation or otherwise, that would materially
and adversely affect the powers, special rights, preferences, privileges or
voting power of the Series D Preferred Units or the holders thereof; provided,
however, that with respect to the occurrence of a merger, consolidation or a
sale or lease of all of the Partnership's assets as an entirety, so long as (a)
the Partnership is the surviving entity and the Series D Preferred Units remain
outstanding with the terms thereof unchanged, or (b) the resulting, surviving or
transferee entity is a partnership, limited liability company or other
pass-through entity organized under the laws of any state and substitutes the
Series D Preferred Units for other interests in such entity having substantially
the same terms and rights as the Series D Preferred Units, including with
respect to distributions, voting rights and rights upon liquidation, dissolution
or winding-up, then the occurrence of any such event shall not be deemed to
materially and adversely affect such rights, privileges or voting powers of the
holders of the Series D Preferred Units and no vote of the Series D Preferred
Units shall be required in such case; and provided further that any increase in
the amount of Partnership Interests or the creation or issuance of any other
class or series of Partnership Interests, in each case ranking (a) junior to the
Series D Preferred Units with respect to payment of distributions or the
distribution of assets upon liquidation, dissolution or winding-up, or (b) on a
parity to the Series D Preferred Units with respect to payment of distributions
or the distribution of assets upon liquidation, dissolution or winding-up to the
extent such Partnership Interest are not issued to an affiliate of the
Partnership, other than the General Partner to the extent the issuance of such
interests was to allow the General Partner to issue corresponding preferred
stock to persons who are not affiliates of the Partnership, shall not be deemed
to materially and adversely affect such rights, preferences, privileges or
voting powers and no vote of the Series D Preferred Units shall be required in
such case.
(g) Exchange Rights.
(i) Right to Exchange.
-----------------
<PAGE>
(A) Series D Preferred Units will be exchangeable in
whole or in part at anytime on or after the tenth anniversary
of the date of issuance, at the option of the holders thereof,
for authorized but previously unissued shares of 9.125% Series
D Cumulative Redeemable Preferred Stock of the General Partner
(the "Series D Preferred Stock") at an exchange rate of one
share of Series D Preferred Stock for one Series D Preferred
Unit, subject to adjustment as described below (the "Series D
Exchange Price"), provided that the Series D Preferred Units
will become exchangeable at any time, in whole or in part, at
the option of the holders of Series D Preferred Units for
Series D Preferred Stock if (y) at any time full distributions
shall not have been made on the applicable Series D Preferred
Unit Distribution Payment Date on any Series D Preferred Unit
with respect to six (6) prior quarterly distribution periods,
whether or not consecutive, provided, however, that a
distribution in respect of Series D Preferred Units shall be
considered timely made if made within two (2) Business Days
after the applicable Series D Preferred Unit Distribution
Payment Date if at the time of such late payment there shall
not be any prior quarterly distribution periods in respect of
which full distributions were made more than two (2) Business
Days after the applicable Series D Preferred Unit Distribution
Payment Date or (z) upon receipt by a holder or holders of
Series D Preferred Units of (A) notice from the General
Partner that the General Partner or a Subsidiary of the
General Partner has taken the position that the Partnership
is, or upon the occurrence of a defined event in the immediate
future will be, a PTP and (B) an opinion rendered by an
outside nationally recognized independent counsel familiar
with such matters addressed to a holder or holders of Series D
Preferred Units, that the Partnership is or likely is, or upon
the occurrence of a defined event in the immediate future will
be or likely will be, a PTP. In addition, the Series D
Preferred Units may be exchanged for Series D Preferred Stock,
in whole or in part, at the option of any holder prior to the
tenth anniversary of the issuance date and after the third
anniversary thereof if such holder of a Series D Preferred
Units shall deliver to the General Partner either (i) a
private ruling letter addressed to such holder of Series D
Preferred Units or (ii) an opinion of independent counsel
reasonably acceptable to the General Partner based on the
enactment of temporary or final Treasury Regulations or the
publication of a Revenue Ruling, in either case to the effect
that an exchange of the Series D Preferred Units at such
earlier time would not cause the Series D Preferred Units to
be considered "stock and securities" within the meaning of
section 351(e) of the Code for purposes of determining whether
the holder of such Series D Preferred Units is an "investment
company" under section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, the Series D
Preferred Units may be exchanged in whole but not in part by
any holder thereof which is a real estate investment trust
within the meaning of Sections 856 through 859 of the Code for
Series D Preferred Stock (but only if the exchange in whole
may be accomplished consistently with the ownership
limitations set forth under Article 5 of the Articles of
Incorporation (taking into account exceptions thereto) if at
any time (i) the Partnership reasonably determines that the
assets and income of the Partnership for a taxable year after
1999 would not satisfy the income and assets tests of Section
856 of the Code for such taxable year if the Partnership were
a real estate investment trust within the meaning of the Code
or (ii) any such holder of Series D Preferred Units shall
deliver to the Partnership and the General Partner an opinion
of independent counsel reasonably acceptable to the General
Partner to the effect that, based on the assets and income of
the Partnership for a taxable year after 1999, the Partnership
would not satisfy the income and assets tests of Section 856
of the Code for such taxable year if the Partnership were a
real estate investment trust within the meaning of the Code
and that such failure would create a meaningful risk that a
holder of the Series D Preferred Units would fail to maintain
qualification as a real estate investment trust.
<PAGE>
(B) Notwithstanding anything to the contrary set
forth in Section 4.8(G)(i)(A), if an Series D Exchange Notice
(as defined herein) has been delivered to the General Partner,
then the General Partner may, at its option, elect to redeem
or cause the Partnership to redeem all or a portion of the
outstanding Series D Preferred Units for cash in an amount
equal to the original Capital Contribution per Series D
Preferred Unit and all accrued and unpaid distributions
thereon to the date of redemption. The General Partner may
exercise its option to redeem the Series D Preferred Units for
cash pursuant to this Section 4.8(g)(i)(B) by giving each
holder of record of Series D Preferred Units notice of its
election to redeem for cash, within five (5) Business Days
after receipt of the Series D Exchange Notice, by (i) fax, and
(ii) registered mail, postage paid, at the address of each
holder as it may appear on the records of the Partnership
stating (i) the redemption date, which shall be no later than
sixty (60) days following the receipt of the Series D Exchange
Notice, (ii) the redemption price, (iii) the place or places
where the Series D Preferred Units are to be surrendered for
payment of the redemption price, (iv) that distributions on
the Series D Preferred Units will cease to accrue on such
redemption date; (v) that payment of the redemption price will
be made upon presentation and surrender of the Series D
Preferred Units and (vi) the aggregate number of Series D
Preferred Units to be redeemed, and if fewer than all of the
outstanding Series D Preferred Units are to be redeemed, the
number of Series D Preferred Units to be redeemed held by such
holder, which number shall equal such holder's pro-rata share
(based on the percentage of the aggregate number of
outstanding Series D Preferred Units the total number of
Series D Preferred Units held by such holder represents) of
the aggregate number of Series D Preferred Units being
redeemed.
(C) Upon the occurrence of an event giving rise to
exchange rights pursuant to Section 4.8(g)(i)(A), in the event
an exchange of all or a portion of Series D Preferred Units
pursuant to Section 4.8(g)(i)(A) would violate the provisions
on ownership limitation of the General Partner set forth in
Article 5 of the Articles of Incorporation, the General
Partner shall give written notice thereof to each holder of
record of Series D Preferred Units, within five (5) Business
Days following receipt of the Series D Exchange Notice, by (i)
fax, and (ii) registered mail, postage prepaid, at the address
of each such holder set forth in the records of the
Partnership. In such event, each holder of Series D Preferred
Units shall be entitled to exchange, pursuant to the provision
of Section 4.8(g)(ii) a number of Series D Preferred Units
which would comply with the provisions on the ownership
limitation of the General Partner set forth in such Article 5
of the Articles of Incorporation and any Series D Preferred
Units not so exchanged (the "Series D Excess Units") shall be
redeemed by the Partnership for cash in an amount equal to the
original Capital Contribution per Series D Excess Unit, plus
any accrued and unpaid distributions thereon, whether or not
declared, to the date of redemption. The written notice of the
General Partner shall state (i) the number of Series D Excess
Units held by such holder, (ii) the redemption price of the
Series D Excess Units, (iii) the date on which such Series D
Excess Units shall be redeemed, which date shall be no later
than sixty (60) days following the receipt of the Series D
Exchange Notice, (iv) the place or places where such Series D
Excess Units are to be surrendered for payment of the Series D
Redemption Price, (iv) that distributions on the Series D
Excess Units will cease to accrue on such redemption date, and
(v) that payment of the redemption price will be made upon
presentation and surrender of such Series D Excess Units. In
the event an exchange would result in Series D Excess Units,
as a condition to such exchange, each holder of such units
agrees to provide representations and covenants reasonably
requested by the General Partner relating to (i) the widely
held nature of the interests in such holder, sufficient to
assure the General Partner that the holder's ownership of
stock of the General Partner (without regard to the limits
described above) will not cause any individual to own in
excess of 9.8% of the stock of the General Partner; and (ii)
to the extent such holder can so represent and covenant
without obtaining information from its owners, the holder's
ownership of tenants of the Partnership and its affiliates.
<PAGE>
(D) The redemption of Series D Preferred Units
described in Section 4.8(g)(i)(B) and (C) shall be subject to
the provisions of Section 4.8(e)(ii)(A) and Section
4.8(e)(iii)(B); provided, however, that for purposes hereof
the term "Redemption Price" in Sections 4.8(e)(ii)(A) and
4.8(e)(iii)(B) shall be read to mean the original Capital
Contribution per Series D Preferred Unit being redeemed plus
all accrued and unpaid distributions to the redemption date.
(ii) Procedure for Exchange.
----------------------
(A) Any exchange shall be exercised pursuant to a
notice of exchange (the "Series D Exchange Notice") delivered
to the General Partner by the holder who is exercising such
exchange right, by (i) fax and (ii) by certified mail postage
prepaid. Upon request of the General Partner, such holder
delivering the Series D Exchange Notice shall provide to the
General Partner in writing such information as the General
Partner may reasonably request to determine whether any
portion of the exchange by the delivering holder will result
in the violation of the restrictions of Article 5 of the
Articles of Incorporation, including the Ownership Limit and
the Related Tenant Limit. The exchange of Series D Preferred
Units, or a specified portion thereof, may be effected after
the fifth (5th) Business Days following receipt by the General
Partner of the Series D Exchange Notice and such requested
information by delivering certificates, if any, representing
such Series D Preferred Units to be exchanged together with,
if applicable, written notice of exchange and a proper
assignment of such Series D Preferred Units to the office of
the General Partner maintained for such purpose. Currently,
such office is 121 West Forsyth Street, Suite 200,
Jacksonville, Florida 32202. Each exchange will be deemed to
have been effected immediately prior to the close of business
on the date on which such Series D Preferred Units to be
exchanged (together with all required documentation) shall
have been surrendered and notice shall have been received by
the General Partner as aforesaid and the Series D Exchange
Price shall have been paid. Any Series D Preferred Stock
issued pursuant to this Section 4.8(g) shall be delivered as
shares which are duly authorized, validly issued, fully paid
and nonassessable, free of pledge, lien, encumbrance or
restriction other than those provided in the Articles of
Incorporation, the Bylaws of the General Partner, the
Securities Act and relevant state securities or blue sky laws.
<PAGE>
(B) In the event of an exchange of Series D Preferred
Units for shares of Series D Preferred Stock, an amount equal
to the accrued and unpaid distributions which are not paid
pursuant to Section 4(a) hereof, whether or not declared, to
the date of exchange on any Series D Preferred Units tendered
for exchange shall (i) accrue and be payable by the General
Partner from and after the date of exchange on the shares of
the Series D Preferred Stock into which such Series D
Preferred Units are exchanged, and (ii) continue to accrue on
such Series D Preferred Units, which shall remain outstanding
following such exchange, with the General Partner as the
holder of such Series D Preferred Units. Notwithstanding
anything to the contrary set forth herein, in no event shall a
holder of a Series D Preferred Unit that was validly exchanged
into Series D Preferred Stock pursuant to this section (other
than the General Partner now holding such Series D Preferred
Unit), receive a distribution out of Available Cash or Capital
Transaction Proceeds of the Partnership with respect to any
Series D Preferred Units so exchanged.
(C) Fractional shares of Series D Preferred Stock are
not to be issued upon exchange but, in lieu thereof, the
General Partner will pay a cash adjustment based upon the fair
market value of the Series D Preferred Stock on the day prior
to the exchange date as determined in good faith by the Board
of Directors of the General Partner.
(iii) Adjustment of Exchange Price.
(A) The Series D Exchange Price is subject to
adjustment upon certain events, including, (i) subdivisions,
combinations and reclassification of the Series D Preferred
Stock, and (ii) distributions to all holders of Series D
Preferred Stock of evidences of indebtedness of the General
Partner or assets (including securities, but excluding
dividends and distributions paid in cash out of equity
applicable to Series D Preferred Stock).
(B) In case the General Partner shall be a party to
any transaction (including, without limitation, a merger,
consolidation, statutory share exchange, tender offer for all
or substantially all of the General Partner's capital stock or
sale of all or substantially all of the General Partner's
assets), in each case as a result of which the Series D
Preferred Stock will be converted into the right to receive
shares of capital stock, other securities or other property
(including cash or any combination thereof), each Series D
Preferred Unit will thereafter be exchangeable into the kind
and amount of shares of capital stock and other securities and
property receivable (including cash or any combination
thereof) upon the consummation of such transaction by a holder
of that number of shares of Series D Preferred Stock or
fraction thereof into which one Series D Preferred Unit was
exchangeable immediately prior to such transaction. The
General Partner may not become a party to any such transaction
unless the terms thereof are consistent with the foregoing.
<PAGE>
NYDOCS03/486233 6
(C) So long as a Preferred Partner or any of its
permitted successors or assigns holds any Series D Preferred
Units as the case may be, the General Partner shall not,
without the affirmative vote of the holders of at least
two-thirds of the Series D Preferred Units (excluding any
Series D Preferred Units surrendered to the General Partner in
exchange for Series D Preferred Stock) and Series D Preferred
Stock (voting together as a class on the basis of number of
shares into which Series D Preferred Units are exchangeable)
outstanding at the time: (a) designate or create, or increase
the authorized or issued amount of, any class or series of
shares ranking senior to the Series D Preferred Stock with
respect to the payment of distributions or rights upon
liquidation, dissolution or winding-up or reclassify any
authorized shares of the General Partner into any such shares,
or create, authorize or issue any obligations or securities
convertible into or evidencing the right to purchase any such
shares; (b) designate or create, or increase the authorized or
issued amount of, any Parity Preferred Stock or reclassify any
authorized shares of the General Partner into any such shares,
or create, authorize or issue any obligations or security
convertible into or evidencing the right to purchase any such
shares, but only to the extent that such Parity Preferred
Stock are issued to an Affiliate of the General Partner other
than (A) Security Capital U.S. Realty, Security Capital
Holdings, S.A. or their affiliates (if issued on arm's length
terms in the good faith determination of the board of
directors of the General Partner), or (B) the General Partner
to the extent the issuance of such interests was to allow the
General Partner to issue corresponding preferred stock in the
same transaction to persons who are not affiliates of the
Partnership; (c) amend, alter or repeal the provisions of the
Charter or bylaws of the General Partner, whether by merger,
consolidation or otherwise, that would materially and
adversely affect the powers, special rights, preferences,
privileges or voting power of the Series D Preferred Stock or
the holders thereof; provided, however, that any increase in
the amount of authorized Preferred Stock or the creation or
issuance of any other series or class of Preferred Stock, or
any increase in the amount of authorized shares of each class
or series, in each case ranking either (1) junior to the
Series D Preferred Stock with respect to the payment of
distributions or the distribution of assets upon liquidation,
dissolution or winding-up, or (2) on a parity with the Series
D Preferred Stock with respect to the payment of distributions
or the distribution of assets upon liquidation, dissolution or
winding-up to the extent such Preferred Stock are not issued
to an Affiliate of the General Partner (other than Security
Capital U.S. Realty, Security Capital Holdings, S.A. or their
affiliates if issued on arm's length terms in the good faith
determination of the board of directors of the General
Partner), or (B) General Partner to the extent the issuance of
such interests was to allow the General Partner to issue
corresponding preferred stock to persons who are not
affiliates of the Partnership, shall not be deemed to
materially and adversely affect such rights, preferences,
privileges or voting powers.
(h) No Conversion Rights. The holders of the Series D
Preferred Units shall not have any rights to convert such shares into shares of
any other class or series of stock or into any other securities of, or interest
in, the Partnership.
(i) No Sinking Fund. No sinking fund shall be established for the
retirement or redemption of Series D Preferred Units."
Section 6. Article 7 - Management and Operating of Business.
------------------------------------------------
Section 7.1(h) is hereby amended by inserting the words "Series A Priority
Return, Series D Priority Return and" before the words "Priority Distribution
Amount" therein.
<PAGE>
Section 7. Article 8 - Rights and Obligations of Limited Partners.
------------------------------------------------------
Section 8.4 is hereby amended by (i) inserting the words "Section 4.8,"
after the words "Section 4.5," therein and (ii) inserting the words "Preferred
Units" after the words "Series A" therein.
Section 8. Article 11 - Transfers and Withdrawals.
(a) Section 11.2(b) is hereby amended by inserting the words
"and Section 4.8(f)" after the words "4.5(f)" in the first sentence thereof.
(b) The Series A Preferred Partners and Series D Preferred
Partners may, subject to Sections 11.3(b)-(j), assign their Units to any Person,
and any such assignee shall be admitted as a Substituted Limited Partner.
(c) Section 11.3(h) is hereby amended by adding the following at the end of
the section:
"; provided, however, that the General Partner shall not
unreasonably withhold its consent to a waiver of the
limitations set forth in this Section 11.3(h) if the
Partnership is (1) relying on a provision other than Treasury
Regulation Section 1.7704-1(h) to avoid classification of
Partnership as a PTP or (2) a PTP."
(d) The following is inserted as a new Section 11.3(j):
"(j) Transfers by Series D Preferred Partners. In addition to
the other restrictions on transfer set forth in this Article
11, which apply to Series D Preferred Units, no transfer of
the Series D Preferred Units may be made without the consent
of the General Partner, which consent may be given or withheld
in its sole and absolute discretion, if such transfer would
result in more than four partners holding all outstanding
Series D Preferred Units within the meaning of Regulation
Section 1.7704-1(h)(3) "; provided, however, that the General
Partner shall not unreasonably withhold its consent to a
waiver of the limitations set forth in this Section 11.3(j) if
the Partnership is (1) relying on a provision other than
Treasury Regulation Section 1.7704-1(h) to avoid
classification of Partnership as a PTP or (2) a PTP."
Section 9. Article 12 - Admission of Partners.
<PAGE>
Section 12.2(a) and 12.4 are hereby amended by deleting all
references therein to "Additional Limited Partners" and inserting the words
"additional Limited Partners" therefor.
<PAGE>
Section 10. Article 13 - Dissolution and Liquidation.
(a) The first reference to "Additional Limited Partners" in
the first paragraph of Section 13.1 is hereby deleted and the words "additional
Limited Partners" are hereby inserted in lieu thereof.
(b) Clause (iii) of Section 13.2(a) is hereby deleted and the following
inserted in lieu thereof:
"(iii) Third, one hundred percent (100%) to the Series A
Preferred Partners in accordance with the provisions of
Section 4.5(d) and to the Series D Preferred Partners in
accordance with the provisions of Section 4.8(d)."
(c) The words "and Section 4.8 with respect to the Series D
Preferred Units" is hereby inserted after the words "Section 4.5 with respect to
the Series A Preferred Units" in Section 13.6.
Section 11. Article 14 - Amendment of Partnership Agreement; Meetings.
---------------------------------------------------------
(a) Sections 14.1(a), 14.1(c) and 14.1(d) are hereby amended
by inserting the words "and 4.8(f)(ii)" after each reference to "4.5(f)(ii)"
therein.
(b) Section 14.1(c) is hereby amended by replacing the words
"Series A Preferred Partner" with the words "holder of Parity Preferred Units."
(c) The last paragraph of Section 14.1(g) is hereby amended by
replacing the words "Series A Preferred Partners" with the words "holders of
Parity Preferred Units."
Section 12. Miscellaneous.
(a) Notwithstanding anything to the contrary contained in
Section 8.6 of the Partnership Agreement, in no event shall the rights of the
holders of the Series D Preferred Units set forth in Section 5 of this Amendment
be subordinate to the Redemption Rights set forth in Section 8.6 of the
Partnership Agreement.
(b) The Partnership and the General Partner represent and
warrant that the issuance of the Series D Preferred Units pursuant to this
Amendment is permitted pursuant to Section 4.2(b)(i).
<PAGE>
(c) The Partnership and General Partner (i) represent and
warrant that, except as disclosed on Schedule 1 attached hereto, no Redemption
Rights contemplated in Section 8.6 require the Partnership or General Partner to
pay cash in lieu of the Share Amount in exchange for Units (other than at the
election of the Partnership or General Partner) and (ii) covenant and agree not
to grant, without the consent of the Series A Preferred Partners and Series D
Preferred Partners, any Redemption Rights requiring the Partnership or General
Partner to pay cash in lieu of the Share Amount in exchange for Units (other
than at the election of the Partnership or General Partner) except (i)
redemption rights assumed by Partnership or General Partner in connection with
the acquisition of an existing operating partnership and (ii) redemption rights
as to less than 5% of the Common Units arising from a tender offer by the
Partnership intended to reduce the number of partners of the Partnership, unless
(i) the cash used to effectuate any such cash redemption is raised from the
issuance of Common Stock of the General Partner issued for such purpose or (ii)
the Partnership shall allow the holders of the Series A Preferred Units and
Series D Preferred Units to redeem their Units for the Series A Redemption Price
and Series D Redemption Price, respectively, immediately prior to the time of
such other redemption.
Section 13. Fourth Amended and Restated Agreement of Limited Partnership.
------------------------------------------------------------
The form of Fourth Amended and Restated Agreement of Limited
Partnership (the "Restated Form") attached to the Partnership Agreement is
hereby amended to conform to the amendments set forth in this Amendment, all of
which shall be deemed incorporated in said Fourth Amended and Restated Agreement
of Limited Partnership (the "Restated Agreement") upon the effectiveness thereof
(with such conforming changes as may be necessary to give substantive effect
thereto). Additionally, the Restated Agreement Form and, upon its effectiveness,
the Restated Agreement are hereby amended as follows:
(a) Section 4.2(b)(i)(A) is hereby amended by inserting the words "subject
to Sections 4.5(f)(ii) and 4.8(f)(ii)," at the beginning of clause (ii);
(b) Section 4.2(b)(i)(B) is hereby amended by inserting the words "and
Sections 4.5(f)(ii) and 4.8(f)(ii) after the reference to "Section 14.1(g)(ii)"
in clause (ii);
(c) Section 13.4(c) is hereby amended by inserting the words
"subject to the priorities set forth in Section 13.2(a)" after the word
"balances" at the end of the next to last sentence thereof; and
(d) Section 14.1(g) is hereby amended by inserting the following at the end
thereof:
"Nothing contained in Section 14(g) shall be deemed to modify
or affect the rights, preferences and priorities of the Series
A Preferred Partners and Series D Preferred Partners as to
distributions and allocations."
<PAGE>
Section 14. Reaffirmation. Except as modified herein, all terms and
conditions of the Partnership Agreement shall remain in full force and effect,
which terms and conditions the General Partner hereby ratifies and affirms.
<PAGE>
NYDOCS03/486233 5
Signature Page to Partnership Agreement Amendment
IN WITNESS WHEREOF, this Amendment has been executed as of the
date first above written.
GENERAL PARTNER
Regency Realty Corporation
By:
Name:
Title:
BELAIR REAL ESTATE CORPORATION
By:
Name:
Title:
BELCREST REALTY CORPORATION
By:
Name:
Title:
[Footnote Continued From Previous Page]
[Footnote Continued On Next Page]
ATL01/10574409v1
August 30, 1999
Wells Fargo Bank, National
Association, as Agent
Each of the Lenders party to the Credit
Agreement referred to below
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999 (as amended and in effect immediately prior to the
date hereof, the "Credit Agreement"), by and 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"), 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 has informed the Lenders that the Borrower intends to
amend and restate its Second Amended and Restated Agreement of Limited
Partnership dated as of March 5, 1998 to provide for a variety of matters
including, (a) revising the allocations of income and loss in a manner designed
to reduce the problem of phantom income by causing allocations of taxable income
to more clearly match the amount of cash distributed to the consenting Limited
Partners; (b) permitting the issuance of Preferred Units from time to time,
subject to certain limitations; (c) through December 31, 2004, restricting
transfers of Partnership Interests which would cause the Partnership to have
more than 100 partners for purposes of determining whether the Partnership is a
"publicly traded partnership"; and (d) establishing the form of the
Partnership's Fourth Amended and Restated Agreement of Limited Partnership (the
"UPREIT Agreement") to be effective when the Parent directly or indirectly
contributes all of its assets to the Borrower, causing the Borrower to become an
"UPREIT"; all as more particularly described in the letter from the Borrower
addressed to the Agent and Lenders attached hereto as Exhibit A. The Lenders
hereby agree that notwithstanding Sections 8.8 and 8.22 of the Credit Agreement,
the Borrower may amend and restate its Second Amended and Restated Agreement of
Limited Partnership by incorporating the amendments described on Exhibit A into
the Third Amended and Restated Agreement of Limited Partnership and the Fourth
Amended and Restated Agreement of Limited Partnership.
The Borrower also requests that the Credit Agreement be amended by
deleting Section 8.8 therein in its entirety and replacing it with the
following, which amendment will permit certain amendments, supplements,
restatements and other nonmaterial modifications to the Parent's, the Borrower's
and each Guarantor's articles of incorporation, by-laws, operating agreement,
partnership agreement or other organizational or constituent documents without
the prior written consent of the Lenders as is currently permitted in Section
8.22 of the Credit Agreement:
"SECTION 8.8 Modifications to Material Contracts.
Except as otherwise provided in Section 8.22, 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."
To induce the Lenders to agree as requested above, the Borrower makes
the following representations and warranties (the accuracy of which assumes the
Lenders have agreed as requested above):
(i) no Default or Event of Default has occurred and is continuing; and
(ii) the representations and warranties of Borrower and
Guarantors contained in the Loan Documents to which any is a party are
true in all material respects as of the date hereof except to the
extent (x) such representations or warranties specifically relate to an
earlier date or (y) such representations or warranties have become
untrue by reason of events or conditions otherwise permitted under the
other Loan Documents.
The Parent and the Borrower each confirms that this letter agreement is
a Loan Document. Further, the Parent and the Borrower each acknowledges that
this letter agreement applies only to the Sections of the Credit Agreement
specifically referred to above and shall not be construed to be a waiver or
amendment of any of the other terms and conditions of the Credit Agreement or
any of the other Loan Documents.
This letter agreement may be executed in counterparts and shall be
governed by and construed in accordance with the laws of the State of Georgia.
Very truly yours,
REGENCY CENTERS, L.P.
BY: Regency Realty Corporation, its general partner
By:
Title:
REGENCY REALTY CORPORATION
By:
Title:
[Acceptance on Following Page]
<PAGE>
[Letter Agreement dated as of August __, 1999 regarding
Regency Centers, L.P.]
Agreed and Accepted:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent
By:_________________________________________
Name:__________________________________
Title:_________________________________
WACHOVIA BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
PNC BANK, NATIONAL ASSOCIATION
By:_________________________________________
Name:__________________________________
Title:_________________________________
CHASE BANK OF TEXAS, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
SUNTRUST BANK, ATLANTA
By:_________________________________________
Name:__________________________________
Title:_________________________________
LASALLE NATIONAL BANK
By:_________________________________________
Name:__________________________________
Title:_________________________________
BANK ONE, ARIZONA, NA, a national banking association
By:_________________________________________
Name:__________________________________
Title:_________________________________
FIRST UNION NATIONAL BANK
By:_________________________________________
Name:__________________________________
Title:_________________________________
COMMERZBANK AG, ATLANTA AGENCY
By:_________________________________________
Name:__________________________________
Title:_________________________________
AMSOUTH BANK
By:_________________________________________
Name:__________________________________
Title:_________________________________
SOUTHTRUST BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
ING (U.S.) CAPITAL LLC
By:_________________________________________
Name:__________________________________
Title:_________________________________
STAR BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
MELLON BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
FIRST UNION NATIONAL BANK
By:_________________________________________
Name:__________________________________
Title:_________________________________
COMMERZBANK AG, ATLANTA AGENCY
By:_________________________________________
Name:__________________________________
Title:_________________________________
AMSOUTH BANK
By:_________________________________________
Name:__________________________________
Title:_________________________________
SOUTHTRUST BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
ING (U.S.) CAPITAL LLC
By:_________________________________________
Name:__________________________________
Title:_________________________________
STAR BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
MELLON BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
[Footnote Continued On Next Page]
ATL01/10608033v2
Execution Copy
October 29, 1999
Wells Fargo Bank, National
Association, as Agent
Each of the Lenders party to the Credit
Agreement referred to below
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit Agreement
dated as of February 26, 1999 (as amended and in effect immediately prior to the
date hereof, the "Credit Agreement"), by and 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"), 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 previously requested and the Agent and Lenders agreed
pursuant to a letter agreement dated as of June 30, 1999 to extend the deadline
set forth in Section 8.25.(d)(i) by which the Parent is required to transfer its
general partnership interest in Retail Property Partners Limited Partnership
("RPPLP") to the Borrower (or cause the merger of RPPLP with and into the
Borrower) from June 30, 1999 to October 31, 1999. The new deadline expires on
October 31, 1999.
The Borrower hereby requests that the Agent and Lenders extend such
deadline from October 31, 1999 to on or before December 31, 1999.
Additionally, the Borrower requests that:
(a) Section 8.14 of the Credit Agreement be amended by deleting the
second sentence of Section 8.14 in its entirety and replacing it with the
following:
"Except as permitted in Section 8.23, 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."
(b) Section 8.23 of the Credit Agreement be amended by deleting Section
8.23 in its entirety and replacing it with the following:
"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 (other than
payments described in clause (b) below), 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
(b) other payments made by the Parent to purchase outstanding
shares of the common stock of the Parent up to an amount equal to the
aggregate net proceeds received by the Parent or the Borrower in
connection any issuance by the Parent or the Borrower of Preferred
Stock (which payments may be made with proceeds of Loans to the extent
net proceeds of such Preferred Stock issuance were used to make an
optional prepayment of outstanding Loans); provided, however, that any
such payments made pursuant to this clause (b) must be made within
twelve months after the date of issuance of such Preferred Stock; and
(c) 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."
To induce the Lenders to agree as requested above, the Borrower makes
the following representations and warranties (the accuracy of which assumes the
Lenders have agreed as requested above):
(i) no Default or Event of Default has occurred and is continuing; and
(ii) the representations and warranties of Borrower and
Guarantors contained in the Loan Documents to which any is a party are
true in all material respects as of the date hereof except to the
extent (x) such representations or warranties specifically relate to an
earlier date or (y) such representations or warranties have become
untrue by reason of events or conditions otherwise permitted under the
other Loan Documents.
The Parent and the Borrower each confirms that this letter agreement is
a Loan Document. Further, the Parent and the Borrower each acknowledges that
this letter agreement applies only to the Sections and definition of the Credit
Agreement specifically referred to above and shall not be construed to be a
waiver or amendment of any of the other terms and conditions of the Credit
Agreement or any of the other Loan Documents.
Each reference to the Credit Agreement in any of the Loan Documents
(including the Credit Agreement) shall be deemed to be a reference to the Credit
Agreement, as amended by this letter agreement.
<PAGE>
This letter agreement may be executed in counterparts and shall be
governed by and construed in accordance with the laws of the State of Georgia.
Very truly yours,
REGENCY CENTERS, L.P.
BY: Regency Realty Corporation, it general partner
By:
Title:
REGENCY REALTY CORPORATION
By:
Title:
[Acceptance on Following Page]
<PAGE>
[Letter Agreement dated as of October 29, 1999 regarding
Regency Centers, L.P.]
Agreed and Accepted:
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Agent
By:_________________________________________
Name:__________________________________
Title:_________________________________
WACHOVIA BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
PNC BANK, NATIONAL ASSOCIATION
By:_________________________________________
Name:__________________________________
Title:_________________________________
CHASE BANK OF TEXAS, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
SUNTRUST BANK, ATLANTA
By:_________________________________________
Name:__________________________________
Title:_________________________________
LASALLE NATIONAL BANK
By:_________________________________________
Name:__________________________________
Title:_________________________________
BANK ONE, ARIZONA, NA, a national banking association
By:_________________________________________
Name:__________________________________
Title:_________________________________
FIRST UNION NATIONAL BANK
By:_________________________________________
Name:__________________________________
Title:_________________________________
COMMERZBANK AG, ATLANTA AGENCY
By:_________________________________________
Name:__________________________________
Title:_________________________________
AMSOUTH BANK
By:_________________________________________
Name:__________________________________
Title:_________________________________
SOUTHTRUST BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
ING (U.S.) CAPITAL LLC
By:_________________________________________
Name:__________________________________
Title:_________________________________
STAR BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
MELLON BANK, N.A.
By:_________________________________________
Name:__________________________________
Title:_________________________________
PURCHASE AND SALE AGREEMENT
This Agreement is made as of the 22nd day of December, 1999, by and between
Regency Realty Group, Inc. (the "Buyer") and Security Capital Holdings, S.A.
(the "Seller").
WHEREAS, the Seller is the owner of 33,892 shares (the "Shares") of
Class A Voting Stock of PRT Development Corporation, a Delaware corporation,
which Shares represent all of the outstanding Class A Voting Stock.
WHEREAS, the Buyer has offered to purchase the Shares and the Seller
has agreed to sell the Shares to Buyer on the terms and subject to the
conditions set forth herein.
NOW THEREFORE, the parties agree as follows:
1. The Seller hereby sells, assigns and transfers the Shares to the Buyer for an
aggregate purchase price of $272,000, the receipt and sufficiency of which are
hereby acknowledged by the Seller.
2. The Seller represents and warrants as follows:
a. Seller has all requisite capacity and authority to execute, deliver and
perform this Agreement, and the execution, delivery and performance of this
Agreement by the Seller has been duly authorized by all requisite corporate
action;
b. Seller owns the Shares free and clear of all liens, claims or
encumbrances of any nature;
c. No consent, approval or other action by any governmental authority or
third party is required in connection with the execution, delivery and
performance of this Agreement by Seller; and
d. Neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (1) violate, or conflict with or
result in a breach of any provisions of, or constitute a default or an event
which with notice or lapse of time or both, would constitute a default under,
any agreement, instrument or obligation to which the Seller is a party or by
which the Seller may be bound or affected where such violation, conflict, breach
or default would have a material adverse effect on the transactions contemplated
by this Agreement, or (ii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Seller where such violation would have a
material adverse effect on the transactions contemplated by this Agreement.
3. The Buyer represents and warrants as follows:
a. Buyer has all requisite capacity and authority to execute, deliver and
perform this Agreement, and the execution, delivery and performance of this
Agreement by the Buyer has been duly authorized by all requisite corporate
action.
b. No consent, approval or other action by any governmental authority or
third party is required in connection with the execution, delivery and
performance of this Agreement by Buyer; and
c. Neither the execution and delivery of this Agreement nor the consummation of
the transactions contemplated hereby will (i) violate, or conflict with or
result in a breach of any provisions of, or constitute a default or an event
which with notice or lapse of time or both, would constitute a default under,
any agreement, instrument or obligation to which the Buyer is a party or by
which the Buyer may be bound or affected where such violation, conflict, breach
or default would have a material adverse effect on the transactions contemplated
by this Agreement, or (ii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable to the Buyer where such violation would have a
material adverse effect on the transactions contemplated by this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
SECURITY CAPITAL HOLDINGS, S.A.
By: /s/ Jeffrey A. Cozad
--------------------------
Its Managing Director
REGENCY REALTY GROUP, INC.
By: /s/ J. Christian Leavitt
------------------------------
Its Sr. Vice President and Secretary
Exhibit 21
REGENCY REALTY CORPORATION
Subsidiaries
RRC FL SPC, Inc., a Florida corporation
RRC AL SPC, Inc., an Alabama corporation
RRC GA SPC, Inc., a Georgia corporation
RRC MS SPC, Inc., a Mississippi corporation
RRC General SPC, Inc., a Florida corporation
RRC Limited SPC, Inc., a Florida corporation
Regency Centers, L.P., a Delaware limited partnership
PRT Sunnyside LLC, a Delaware limited liability company
RRC Operating Partnership of Georgia, L.P.,
a Georgia limited partnership
Branch/HOP Associates, L.P., a Georgia limited partnership
Old Fort Associates, L.P., a Georgia limited partnership
Equiport Associates, L.P., a Georgia limited partnership
Fieldstone Associates, L.P., a Georgia limited partnership
T&M Durham Development Company LLC,
a North Carolina limited liability company
Queensboro Associates, L.P., a Georgia limited partnership
Delk Spectrum, L.P., a Georgia limited partnership
Regency Ocean East, Ltd. a Florida limited partnership
Treasure Coast Investors, Ltd., a Florida limited partnership
Regency Rosewood Temple Terrace, Ltd., a Florida limited partnership
Landcom Regency Mandarin, Ltd., a Florida limited partnership
RSP IV Criterion, Ltd., a Florida limited partnership
PRT Development Corporation, a Delaware corporation Fountain Valley, LLC, a
Delaware limited liability company
Regency Realty Group, Inc., a Florida corporation
RRC Lender, Inc., a Florida corporation
Panama Cove, Inc., a Florida corporation
Chestnut Powder LLC, a Georgia limited liability company
Marietta Outparcel, Inc., a Georgia corporation
Barnett Shoales LLC, a Georgia limited liability company
Thompson-Nolensville, LLC, a Florida limited liability company
Dixon LLC, a Florida limited liability company
Atlantic-Pennsylvania, LLC, a Florida limited liability company
Rhett-Remount, LLC, a Florida limited liability company
Dunn & Briarscliff, Inc., a Florida corporation
Regency Realty Group-NE, Inc., a Florida corporation
Edmunson Orange Corp., a Tennessee corporation
Tulip Grove, LLC, a Florida limited liability company
Hermitage Development, LLC, a Florida limited liability
company Hermitage Development II, LLC, a Florida limited
liability company West End Property, LLC, a Florida limited
liability company
RRG-RMC/Tracy, LLC, a Delaware limited liability company K&G/RRG I,
LLC, a Delaware limited liability company R&M Western Partnership,
L.P., a Delaware limited liability company
OTR/Regency Colorado Realty Holdings, L.P., an Ohio limited
partnership OTR/Regency Texas Realty Holdings, L.P., an Ohio
limited partnership T&M Allen Development Company, a Texas
general partnership T&M Arlington Development Company, a Texas
general partnership M&KS Arvada Development LLC, a Colorado
limited liability company M&KS Parker Development LLC, a
Colorado limited liability company M&KS Cheyenne Meadows LLC,
a Colorado limited liability company M&KS Woodmen Development
LLC, a Colorado limited liability company R&KS Dell Range LLC,
a Wyoming limited liability company T&M Frisco Development
Company, a Texas general partnership T&M Shiloh Development
Company, a Texas general partnership R&KS Monument, LLC, a
Colorado limited liability company T&M Realty No. 1, LLC, a
Georgia limited liability company
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. 333-37911, 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 statement (No. 333-72899) on Form S-3 of Regency
Centers, L.P., of our reports dated January 26, 2000, relating to the
consolidated balance sheets of Regency Realty Corporation as of December 31,
1999 and 1998, 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, 1999, and related schedule, which reports appear in
the December 31, 1999, annual report on Form 10-K of Regency Realty Corporation.
KPMG LLP
Jacksonville, Florida
March 17, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM REGENCY
REALTY CORPORATION'S QUARTERLY REPORT FOR THE YEAR ENDED 12/31/99
</LEGEND>
<CIK> 0000910606
<NAME> REGENCY REALTY CORPORATION
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> DEC-31-1999
<CASH> 54,117,443
<SECURITIES> 0
<RECEIVABLES> 35,398,587
<ALLOWANCES> 1,883,547
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,636,192,981
<DEPRECIATION> 104,467,176
<TOTAL-ASSETS> 2,654,935,978
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 596,395
<OTHER-SE> 1,246,652,780
<TOTAL-LIABILITY-AND-EQUITY> 2,654,935,978
<SALES> 0
<TOTAL-REVENUES> 301,886,931
<CGS> 0
<TOTAL-COSTS> 67,458,070
<OTHER-EXPENSES> 48,611,519
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 60,067,007
<INCOME-PRETAX> 89,845,964
<INCOME-TAX> 0
<INCOME-CONTINUING> 89,845,964
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 87,601,371
<EPS-BASIC> 1.61
<EPS-DILUTED> 1.61
</TABLE>
