________________________________________________________________________________
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
UNITED STATES
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 11, 2003
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REGENCY CENTERS CORPORATION
(Exact name of registrant as specified in its charter)
Florida 001-12298 59-3191743
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
121 West Forsyth Street, Suite 200 32202
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Jacksonville, Florida
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (904)-598-7000
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Not Applicable
(Former name or former address, if changed since last report)
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Item 9. Regulation FD Disclosure
On June 12, 2003, Regency Centers Corporation and Security Capital Group
Incorporated, an indirect wholly-owned subsidiary of General Electric Capital
Corporation, jointly issued a press release regarding Security Capital's plans
to sell up to 34.3 million shares of Regency common stock, representing all the
Regency stock owned by Security Capital, through an underwritten public
offering, forward sales contracts with certain of the underwriters expiring in
2004, and the sale of up to $150 million of shares to Regency. The text of the
press release is attached as Exhibit 99.1.
Regency and Security Capital have entered into a Purchase and Sale Agreement, a
copy of which is attached as Exhibit 99.2, in which Regency has agreed to
purchase up to $150 million of its shares owned by Security Capital at the same
per share price as the shares sold in the underwritten public offering.
Regency's purchase obligation will be reduced, based on a sliding scale, if the
public offering and the forward contracts do not reduce Security Capital's
ownership to 9.8% or less. Regency will have no purchase obligation if the
public offering and the forward contracts do not reduce Security Capital's
ownership to 15% or less. For purposes of these percentage calculations,
Security Capital will be deemed to have sold the shares covered by the forward
sales contracts and the underwriters' over-allotment options, and Regency's
total outstanding common stock will be reduced by an assumed purchase of $150
million of shares.
Regency and Security Capital have agreed, in an Agreement Relating to
Disposition of Shares, a copy of which is attached as Exhibit 99.3, that their
Stockholders Agreement will terminate if, as a result of these transactions,
Security Capital's ownership in Regency (excluding shares subject to the forward
contracts) has been reduced to 15% or less. Following the closing of the public
offering, Security Capital has agreed to vote all Regency shares subject to the
forward contracts over which it has voting power in the same proportion as
shares are voted by other shareholders of Regency. The agreement also provides
that following the closing, Joseph E. Parsons, President-North American Equity
Holdings of GE Real Estate and Security Capital's representative on Regency's
board of directors, will resign from Regency's board. In addition, Security
Capital has agreed to waive special ownership limits created for it in Regency's
articles of incorporation, provided that its ownership in Regency falls below
45% as a result of these transactions. Once Security Capital reduces its
ownership to 7% or less after the forward contracts settle in 2004, it will be
subject to the same 7% ownership limit in Regency's articles of incorporation
that applies to other shareholders.
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Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit 99.1 Joint press release issued by Regency
Centers Corporation and Security
Capital Group Incorporated on June 12,
2003.
Exhibit 99.2 Purchase and Sale Agreement among
Regency Centers Corporation, Security
Capital Group Incorporated and Security
Capital Shopping Mall Business Trust
dated June 11, 2003.
Exhibit 99.3 Agreement Relating to Disposition of
Shares between Regency Centers
Corporation and Security Capital
Group Incorporated dated June 11, 2003
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REGENCY CENTERS CORPORATION
(registrant)
June 12, 2003 By: /s/ J. Christian Leavitt
-------------------------------------
J. Christian Leavitt, Senior Vice
President, Finance and Principal
Accounting Officer
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SECURITY CAPITAL REGENCY CENTERS
Contact:
GE Real Estate
Dan Whitney
203-961-5932
Regency Centers Corp.
Lisa Palmer
904-598-7636
SECURITY CAPITAL AND REGENCY CENTERS ANNOUNCE
SECURITY CAPITAL PLAN TO SELL SHARES
SANTA FE, N.M. and JACKSONVILLE, Fla., June 12, 2003 /PRNewswire-FirstCall/ --
Security Capital Group Incorporated, an indirect wholly-owned subsidiary of
General Electric Capital Corporation, and Regency Centers Corp. (NYSE: REG)
announced today that Security Capital plans to sell up to 34.3 million shares of
Regency common stock, representing all of the shares held by Security Capital,
through an underwritten common stock offering, private sale contracts with
certain underwriters, and sale to Regency of up to $150 million of shares at the
public offering price.
In connection with these transactions, Citigroup Global Markets Holdings Inc.
plans to offer SynDECSSM linked to a portion of the Regency shares of common
stock which are to be sold by Security Capital under private sale contracts.
Each SynDECSSM will bear a coupon consisting of interest at a fixed rate plus an
amount equal to Regency's common stock dividend up to its current dividend rate
plus a portion of any increased dividend. The SynDECSSM will be exchanged at
maturity for cash or for Regency common stock based on a specified formula.
Citigroup Global Markets and Merrill Lynch & Co. will act as joint book runners,
and J.P. Morgan Securities Inc., UBS Securities LLC, and Wachovia Securities,
LLC will act as co-managers in the underwritten common stock offering. Citigroup
Global Markets will act as sole book runner on the SynDECSSM offering, with
Merrill Lynch & Co. acting as a joint lead manager.
Upon the closing of the underwritten offering, the entering into of the private
sale contracts and the sale of shares by Security Capital to Regency, Security
Capital and Regency have agreed that subject to certain conditions the
Stockholders Agreement between Security Capital and Regency will terminate.
The transactions described in this announcement are subject to market conditions
and other factors, and there can be no assurance that the transactions will be
completed as contemplated or that Security Capital will sell all or any of the
shares.
This is not an offer to sell, or the solicitation of an offer to buy, any of the
securities described in this press release.
You may obtain a written prospectus relating to the common stock offering from
Merrill Lynch Capital Markets, 4 World Financial Center, New York, NY 10080 or
Citigroup Global Markets Inc., Brooklyn Army Terminal, 140 58th Street, 8th
Floor, Brooklyn, NY 11220. You may obtain a written prospectus relating to the
offering of SynDECSSM from Citigroup Global Markets Inc. at the address above.
Regency is the leading national owner, operator, and developer focused on
grocery-anchored, neighborhood retail centers. Regency's total assets before
depreciation exceed $3 billion. As of March 31, 2003, the Company owned 261
retail properties totaling 29.6 million square feet located in high growth
markets throughout the United States. Operating as a fully integrated real
estate company, Regency is a qualified real estate investment trust that is
self-administered and self-managed.
Security Capital, an indirect wholly-owned subsidiary of General Electric
Capital Corporation, is an international real estate operating company.
This press release contains certain forward-looking statements under the federal
securities laws. These statements are based on management's current expectations
and are subject to uncertainty and changes in circumstances. Forward-looking
statements are not guarantees of future performance and involve certain risks
and uncertainties, which are difficult to predict. Actual events may differ
materially from what is expressed or forecast in this press release.
For More Information Contact:
For Security Capital:
Dan Whitney, GE Real Estate, 203-961-5932
For Regency:
Lisa Palmer, Regency Centers Corp., 904-598-7636
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this "Agreement"),
dated as of June 11, 2003, is by and between Regency Centers Corporation, a
Florida corporation ("Regency"), Security Capital Group Incorporated, a Maryland
corporation ("Security Capital Group") and Security Capital Shopping Mall
Business Trust, a Maryland real estate investment trust ("Sub," and together
with Security Capital Group, "Security Capital").
WHEREAS, Security Capital is the beneficial owner of
34,273,236 shares of Regency common stock, $0.01 par value per share (the
"Shares");
WHEREAS, Security Capital desires to dispose of a
portion of the Shares through an underwritten public offering (the "Secondary
Offering") pursuant to an underwriting agreement to be entered into among
Regency, Security Capital Group, Sub, Citigroup Global Markets Inc. and Merrill
Lynch & Co. and such other underwriters as provided therein (the "Underwriting
Agreement");
WHEREAS, Security Capital expects to enter into a series
of forward contracts (the "Forward Contracts") with certain underwriters
(the "Forward Contract Underwriters") covering a portion of the Shares;
WHEREAS, Security Capital may lend a portion of the
Shares to the Forward Contract Underwriters pursuant to stock loan agreements
(the "Stock Loan Agreements");
WHEREAS, the Forward Contract Underwriters intend to
sell the Shares borrowed under the Stock Loan Agreements in the Secondary
Offering;
WHEREAS, concurrent with the Secondary Offering, Citigroup
Global Markets Holdings Inc. ("Citigroup Holdings") intends to offer, through an
underwritten public offering, SynDECSSM linked to a portion of the Shares
subject to the Forward Contracts (the "SynDECSSM Offering");
WHEREAS, Citigroup Holdings intends to enter into equity
swap agreements with respect to a specified number of shares of common
stock of Regency providing for cash payments to Citigroup Holdings in an amount
equal to the value of the specified shares of Regency common stock on the swap
termination date (with such cash swap agreements being capable of settlement in
shares of Regency common stock if and to the extent that, after giving effect to
such settlement in shares, Citigroup Holdings would not be considered to own,
for purposes of the Section 856(d)(2)(B) of the Code, more than 9.8% of the
capital stock of Regency) (the "Cash Swap Agreements"); and
WHEREAS, Security Capital desires to sell to Regency and
Regency desires to purchase from Security Capital up to $150,000,000 of
the Shares, subject to the terms described herein.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants, agreements and warranties herein contained, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Purchase and Sale.
(a) Subject to adjustment as set forth in Section
1(b) hereof and to the other terms and conditions herein set forth, Regency
agrees to purchase and Sub agrees to sell on the Closing Date (as hereinafter
defined) the number of whole Shares (the "Regency Shares"), free and clear of
all liens, encumbrances, claims and security interests, equal to (i)
$150,000,000 divided by (ii) the per share offering price to the public of the
Shares offered pursuant to the Underwriting Agreement (the "Public Offering
Price Per Share"), rounded up to the nearest whole number and as may be adjusted
pursuant to Section 1(b) hereof.
(b) If, upon the consummation of the Secondary
Offering and the execution by Security Capital of the Forward Contracts, the
Adjusted Stock Ownership Percentage (as defined below) is 9.8% or less, Regency
shall purchase from Sub a number of Regency Shares equal to (i) $150,000,000
divided by (ii) the Public Offering Price Per Share, as set forth in Section
1(a) above, without adjustment. If, upon the consummation of the Secondary
Offering and the execution by Security Capital of the Forward Contracts, the
Adjusted Stock Ownership Percentage is greater than 9.8%, then Regency shall
purchase from Sub at the Public Offering Price Per Share an aggregate value of
Regency Shares as set forth in the following table; provided, however, that if
the disposition of Shares by Sub pursuant to the Secondary Offering and this
Agreement would result in Security Capital's aggregate ownership of the Shares
being reduced by 20% or less (calculated in accordance with Section 302(b) of
the Internal Revenue Code), then Regency will not be obligated to purchase from
Sub and Sub will not be obligated to sell to Regency any of the Regency Shares;
Adjusted Stock Regency's
Ownership Percentage Participation
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< 9.8% $150MM
-
> 9.8% and < 11.0% $135MM
-
>11.0% and < 12.0% $120MM
-
>12.0% and < 13.0% $105MM
-
>13.0% and < 14.0% $90MM
-
>14.0% and < 15.0% $75MM
-
> 15.0% $0MM
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As used in this Section 1(b), the term "Adjusted Stock Ownership Percentage"
shall mean the percentage of the total outstanding shares of Regency common
stock (on a fully diluted basis assuming that Regency purchases $150,000,000 of
the Shares pursuant to this Agreement) owned by Security Capital after the
consummation of Secondary Offering and the execution of the Forward Contracts.
For purposes of this calculation, the Shares subject to the over-allotment
options granted by Security Capital to the underwriters in the Underwriting
Agreement and the Shares linked to the over-allotment option granted to the
underwriters of the SynDECSSM Offering (the "Greenshoe Shares") shall be deemed
not owned by Security Capital. For illustration purposes, the Adjusted Stock
Ownership Percentage equals (i) the Security Capital Owned Shares (as defined
below) divided by (ii) the Total Outstanding Shares (as defined below).
The term "Security Capital Owned Shares" shall mean (i)
34,273,236 minus (ii) the sum of (A) the number of Shares sold by Security
Capital in the Secondary Offering plus (B) the number of Shares subject to the
Forward Contracts plus (C) the Greenshoe Shares.
The term "Total Outstanding Shares" shall mean (i)
60,511,537 minus (ii) (A) $150,000,000 divided by (B) the Public Offering Price
Per Share.
2. Representations and Warranties of Regency. Regency
hereby represents and warrants to Security Capital as follows:
(a) Due Organization. Regency is duly organized,
validly existing and in good standing under the laws of the State of Florida.
(b) Authorization; Non-Contravention. Regency has
the requisite power and authority to enter into this Agreement and the
transactions and agreements contemplated hereby and to carry out its obligations
hereunder and thereunder. This Agreement has been duly authorized, executed and
delivered by Regency and constitutes a valid and binding agreement enforceable
against it in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors rights
generally or by general equitable principles and except as the enforcement of
the provisions of Section 9 hereof may be limited by public policy. Neither the
execution and delivery of this Agreement, the consummation of the transactions
and agreements contemplated hereby, nor compliance with the terms, conditions or
provisions of this Agreement, will be a violation of any of the terms,
conditions or provisions of Regency's Restated Articles of Incorporation, as
amended, or bylaws or of any material agreement or instrument to which it or one
of its
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subsidiaries is a party or by which it or one of its subsidiaries or its
or their material properties may be bound, or constitute a default or create
a right of termination or acceleration thereunder. A special committee of the
Board of Directors of Regency has determined that this Agreement and the
transactions contemplated hereby are advisable, fair to and in the best
interests of the shareholders of Regency.
(c) Regency Shares Outstanding. As of the date
hereof, Regency has outstanding 60,511,537 shares of common stock, $0.01 par
value per share.
(d) REIT Status. Regency further represents and
warrants that (i) it intends in its federal income tax return for the tax
years that will end on December 31, 2003 to be taxed as a real estate investment
trust (a "REIT") within the meaning of Section 856 of the Internal Revenue Code
of 1986, as amended (the "Code"), (ii) it has operated, and intends to continue
to operate, in such a manner as to qualify as a REIT for 2003, and (iii)
assuming the Forward Contracts, the Stock Loan Agreements and the Cash Swap
Agreements are in substantially the form attached hereto as Exhibit A, Exhibit B
and Exhibit C, respectively, the consummation of the transactions contemplated
by this Agreement, the Underwriting Agreement, the Forward Contracts, the Stock
Loan Agreements and the Cash Swap Agreements will not prevent or prohibit
Regency from continuing to qualify as a REIT for federal income tax purposes, or
result in the loss of Regency's status as a REIT for federal income tax
purposes.
3. Representations and Warranties of Security Capital.
Security Capital Group and Sub hereby jointly and severally represent and
warrant to Regency as follows:
(a) Due Organization. Security Capital Group and
Sub are each duly organized, validly existing and in good standing under the
laws of the State of Maryland.
(b) Authorization; Non-Contravention. Security
Capital Group and Sub each have the requisite power to enter into this Agreement
and the transactions and agreements contemplated hereby and to carry out its
obligations hereunder and thereunder. This Agreement has been duly authorized,
executed and delivered by each of Security Capital Group and Sub and constitutes
a valid and binding agreement of Security Capital Group and Sub enforceable
against it in accordance with its terms, except to the extent that
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors rights
generally or by general equitable principles and except as the enforcement of
the provisions of Section 9 hereof may be limited by public policy. Neither the
execution and delivery of this Agreement, consummation of the transactions and
agreements contemplated hereby, nor compliance with the terms, conditions or
provisions of this Agreement, will be a violation of any of the
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terms, conditions or provisions of either Security Capital Group's or Sub's
charter or bylaws or of any material agreement or instrument to which Security
Capital Group or Sub is a party or constitute a default or create a right of
termination or acceleration thereunder.
(c) Title. Sub is the sole legal and record owner of
the Shares and owns the Regency Shares free and clear of all liens,
encumbrances, claims and security interests.
4. Public Announcements. The parties hereto will consult
with each other before issuing, and provide each other with the reasonable
opportunity to review and comment upon, any press release or other public
statements with respect to the transactions contemplated by this Agreement, and
shall not issue any such press release or make any such public statement without
the reasonable consent of the other party, except as may be required by
applicable law, rule or regulation, by court process or by obligations pursuant
to any listing agreement with any national securities exchange or transaction
reporting system so long as the other party is notified promptly by the
disclosing party of such press release or public statement. For avoidance of
doubt, the parties acknowledge that Security Capital Group, Sub and certain of
their affiliates will be filing, with respect to these transactions, an
amendment to its report on Schedule 13D, and Regency will be filing, with
respect to these transactions, a Current Report on Form 8-K.
5. Closing. Subject to the satisfaction of the conditions
set forth in Sections 6 and 7 hereof, the purchase and sale of the Regency
Shares (the "Closing") shall occur concurrently with the later to occur of (i)
the initial closing of the Secondary Offering and (ii) the initial closing of
the SynDECSSM Offering (such date being the "Closing Date"). The Closing shall
take place at the offices of Hogan & Hartson, 555 Thirteenth Street, N.W.,
Washington, District of Columbia 20004, at which time the parties shall make
the deliveries described below. At the Closing, in addition to any other
documents required to be delivered under this Agreement, the parties hereto
shall deliver the documents described below:
(a) Deliveries by Regency. At the Closing, Regency
shall deliver or cause to be delivered the following to Security Capital:
(1) an amount of U.S. Dollars equal to the
product of the number of Regency Shares
to be purchased by Regency determined in
accordance with Section 1 of this
Agreement times the Public Offering
Price Per Share, to be delivered by wire
transfer of immediately available funds
to the account specified by Security
Capital;
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(2) a certificate, dated the Closing Date,
of an executive officer of Regency,
certifying that, as of such date, the
representations and warranties of
Regency contained herein are accurate,
true and correct with the same force and
effect as though made on and as of such
date;
(3) a certificate of Regency's secretary
certifying resolutions of the special
committee of the Board of Directors of
Regency approving this Agreement and the
transactions contemplated hereby
(together with an incumbency and
signature certificate regarding the
officer(s) signing on behalf of
Regency); and
(4) an opinion of Foley & Lardner (the "Tax
Opinion"), in form and substance
reasonably satisfactory to Security
Capital, to the effect that the
transactions contemplated by this
Agreement (i) will qualify as a
substantially disproportionate
redemption of stock under Section
302(b)(2) of the Code and (ii) taken
together with the other transactions
contemplated by this Agreement, the
Underwriting Agreement, the Forward
Contracts, the Stock Loan Agreements and
the Cash Swap Agreements (to the extent
such agreements are substantially in the
form attached hereto as Exhibit A,
Exhibit B and Exhibit C, respectively),
will not prevent or prohibit Regency
from continuing to elect to be taxed as
a REIT in its federal income tax
returns, or result in the loss of
Regency's status as a REIT for federal
income tax purposes.
(b) Deliveries by Security Capital. At the Closing,
Security Capital shall deliver or cause to be delivered the following to
Regency:
(1) the Regency Shares to be purchased by
Regency determined in accordance with
Section 1 of this Agreement, to be
delivered by DWAC to an account
specified by Regency;
(2) the resignation of Joseph E. Parsons
from Regency's Board of Directors and
all committees thereof;
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(3) a certificate, dated the Closing Date,
of an executive officer of Security
Capital Group, certifying that, as of
such date, the representations and
warranties of Security Capital Group
contained herein are accurate, true and
correct with the same force and effect
as though made on and as of such date;
(4) a certificate, dated the Closing Date,
of an executive officer of Sub,
certifying that, as of such date, the
representations and warranties of Sub
contained herein are accurate, true and
correct with the same force and effect
as though made on and as of such date;
(5) a certificate of Security Capital
Group's secretary certifying resolutions
of the Board of Directors of Security
Capital Group approving this Agreement
and the transactions contemplated hereby
(together with an incumbency and
signature certificate regarding the
officer(s) signing on behalf of Security
Capital Group) and certifying that
attached to such certificate are true,
accurate and complete executed copies of
the Forward Contracts, the Stock Loan
Agreements and the Cash Swap Agreements;
and
(6) a certificate of Sub's secretary
certifying resolutions of the Board of
Trustees of Sub approving this Agreement
and the transactions contemplated hereby
(together with an incumbency and
signature certificate regarding the
officer(s) signing on behalf of Sub).
6. Conditions to the Obligations of Regency. The
obligations of Regency under this Agreement are subject to the fulfillment of
each of the following conditions:
(a) Performance. Each of Security Capital and Sub
shall have performed and complied in all material respects with all agreements,
covenants, obligations and conditions required by this Agreement to be performed
or complied with by it.
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(b) Injunctions. No preliminary or permanent
injunction or other final order by any United States federal or state
court shall have been issued which prevents the consummation of the
transactions contemplated hereby.
(c) Underwriting Agreement. The initial closing of
the transactions contemplated by the Underwriting Agreement shall have occurred.
7. Conditions to the Obligations of Security Capital.
The obligations of Security Capital under this Agreement are subject to the
fulfillment of each of the following conditions:
(a) Performance. Regency shall have performed and
complied in all material respects with all agreements, covenants, obligations
and conditions required by this Agreement to be performed or complied with by
it.
(b) Injunctions. No preliminary or permanent
injunction or other final order by any United States federal or state court
shall have been issued which prevents the consummation of the transactions
contemplated hereby.
(c) Underwriting Agreement. The initial closing of
the transactions contemplated by the Underwriting Agreement shall have occurred.
(d) Tax Opinion. Receipt by Security Capital of the
Tax Opinion described in Section 5(a)(4).
8. Survival. The representations and warranties of the
parties shall survive until the third anniversary of the Closing Date.
9. Indemnification.
(a) Each party (the "Indemnifying Party") agrees to
indemnify the other party, and each of their affiliates and their respective
officers, directors, employees, agents and representatives (each, an
"Indemnified Party" and together the "Indemnified Parties") against, and agrees
to hold each of them harmless from, any and all liabilities, losses, costs,
claims, damages, penalties and expenses (including, without limitation,
reasonable attorneys' fees and expenses and costs of investigation and
litigation) ("Losses") incurred or suffered by them relating to or arising out
of or in connection with any breach of or any inaccuracy in any representation
or warranty made by the Indemnifying Party in this Agreement or any document
delivered by it at the Closing pursuant to Section 5 hereof. No person shall be
entitled to indemnification hereunder to the extent that the act or omission of
such person for which indemnification is claimed arises out of such person's
fraud, bad faith or willful misconduct.
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(b) As soon as is reasonably practicable after
becoming aware of a claim for indemnification under this Agreement the
Indemnified Party shall promptly give notice to the Indemnifying Party of such
claim and the amount the Indemnified Party will be entitled to receive hereunder
from the Indemnifying Party; provided that the failure of the Indemnified Party
to give notice shall not relieve the Indemnifying Party of its obligations
hereunder except to the extent (if any) that the Indemnifying Party shall have
been prejudiced thereby. If the Indemnifying Party agrees that it has an
indemnification obligation but objects that it is obligated to pay only a lesser
amount, the Indemnified Party shall nevertheless be entitled to recover promptly
from the Indemnifying Party the lesser amount, without prejudice to the
Indemnified Party's claim for the difference.
(c) After receiving a claim as set forth above, the
Indemnifying Party may, at its own expense, (i) participate in the defense of
any claim, suit, action or proceeding and (ii) upon notice to the Indemnified
Party and the Indemnifying Party's delivering to the Indemnified Party a written
agreement that the Indemnified Party is entitled to indemnification for all
Losses arising out of such claim, suit, action or proceeding, assume the defense
thereof; provided, however, that (x) the Indemnifying Party's counsel is
reasonably satisfactory to the Indemnified Party, and (y) the Indemnifying Party
shall thereafter consult with the Indemnified Party upon the Indemnified Party's
reasonable request for such consultation from time to time with respect to such
claim, suit, action or proceeding. If the Indemnifying Party assumes such
defense, the Indemnified Party shall have the right (but not the duty) to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party. If, however, the
Indemnified Party reasonably determines in its judgment that representation by
the Indemnifying Party's counsel of both the Indemnifying Party and the
Indemnified Party would present such counsel with a conflict of interest, then
such Indemnified Party may employ separate counsel to represent or defend it in
any such claim, action, suit or proceeding and the Indemnifying Party shall pay
the reasonable fees and disbursements of such separate counsel. Whether or not
the Indemnifying Party chooses to defend or prosecute any such claim, suit,
action or proceeding, all of the parties hereto shall cooperate in the defense
or prosecution thereof.
(d) Notwithstanding anything in this Section 9 to
the contrary, neither the Indemnifying Party nor the Indemnified Party shall,
without the written consent of the other, settle or compromise any claim or
permit a default or consent to entry of any judgment unless the claimant and
such party provide to such other party an unqualified release from all liability
in respect of such claim. Notwithstanding the foregoing, if a settlement offer
solely for money damages is made by the applicable third party claimant, and
the Indemnifying Party notifies the Indemnified Party in writing of the
Indemnifying Party's willingness to accept the settlement offer and pay the
amount called for by such offer, and the
9
Indemnified Party declines to accept such offer, the Indemnified Party may
continue to contest such claim, free of any participation by the Indemnifying
Party, and the amount of any ultimate liability with respect to such claim that
the Indemnifying Party has an obligation to pay hereunder shall be limited to
the lesser of (i) the amount of the settlement offer that the Indemnified Party
declined to accept or (ii) the aggregate Losses of the Indemnified Party with
respect to such claim. If the Indemnifying Party makes any payment on any claim,
the Indemnifying Party shall be subrogated, to the extent of such payment, to
all rights and remedies of the Indemnified Party to any insurance benefits or
other claims of the Indemnified Party with respect to such claim.
(e) In the event that the Indemnifying Party does
not elect to assume the defense of any claim, suit, action or proceeding, then
any failure of the Indemnified Party to defend or to participate in the defense
of any such claim, suit, action or proceeding or to cause the same to be done,
shall not relieve the Indemnifying Party of its obligations hereunder.
10. Successors and Assigns. This Agreement shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
heirs, personal representatives, successors, assigns and affiliates.
11. Notices. Any notice or other communication provided for
herein or given hereunder to a party hereto shall be in writing and shall be
given by delivery, by telex, telecopier or by mail (registered or certified
mail, postage prepaid, return receipt requested) to the respective parties
as follows:
If to Regency:
Regency Centers Corporation
121 West Forsyth Street, Suite 200
Jacksonville, Florida 32202
Attention: Martin E. Stein, Jr.
Facsimile: (904) 354-1832
with a copy to:
Foley & Lardner
200 Laura Street
Jacksonville, Florida 32202
Attention: Linda Y. Kelso, Esq.
Facsimile: (904) 359-8700
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If to Security Capital:
c/o GE Capital Real Estate
292 Long Ridge Road
Stamford, Connecticut 06927
Attention: Legal Department/Security Capital
Facsimile: (203) 357-6768
with a copy to:
Hogan & Hartson L.L.P.
Columbia Square
555 Thirteenth Street, N.W.
Attention: J. Warren Gorrell, Jr., Esq.
Facsimile: (202) 637-5910
or to such other address with respect to a party as such party shall notify the
other in writing.
12. Waiver. No party may waive any of the terms or
conditions of this Agreement, nor may this Agreement be amended or modified,
except by a duly signed writing referring to the specific provision to be
waived, amended or modified.
13. Entire Agreement. This Agreement constitutes the entire
agreement with respect to the subject matter hereof, and supersedes all other
prior agreements and understandings, both written and oral, among the parties
hereto and their affiliates.
14. Expenses. Except as otherwise expressly contemplated
herein to the contrary, regardless of whether the transactions contemplated
hereby are consummated, each party hereto shall pay its own expenses incident to
preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby. Notwithstanding the
foregoing, to the extent that any of the underwriters set forth in the
Underwriting Agreement is entitled to any fees, discounts or commissions with
respect to the Regency Shares purchased by Regency hereunder, Security Capital
agrees to pay any and all such fees, discounts and commissions and shall hold
Regency harmless from and against any liability in respect thereof.
15. Captions. The Section and Paragraph captions herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
16. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same instrument.
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17. Governing Law. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Florida.
18. No Presumption Against Drafter. Each of the parties
hereto has jointly participated in the negotiation and drafting of this
Agreement. In the event of an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by each of the parties hereto and no presumptions or burdens of proof shall
arise favoring any party by virtue of the authorship of any of the provisions of
this Agreement.
19. Termination. If the closing of the transactions
contemplated hereby has not occurred on or prior to September 30, 2003, this
Agreement shall terminate and be of no further force or effect.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered as of the day and year first
executed.
REGENCY CENTERS CORPORATION
By: /s/ Martin E. Stein, Jr.
-------------------------------------
Name: Martin E. Stein, Jr.
Title: Chairman
SECURITY CAPITAL GROUP INCORPORATED
By: /s/ Philip Mintz
-------------------------------------
Name: Philip Mintz
Title: Authorized Signatory
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SECURITY CAPITAL SHOPPING MALL BUSINESS
TRUST
By: /s/ Philip Mintz
-------------------------------------
Name: Philip Mintz
Title: Authorized Signatory
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AGREEMENT RELATING TO DISPOSITION OF SHARES
THIS AGREEMENT is dated as of June 11, 2003, by and between
REGENCY CENTERS CORPORATION, a Florida corporation ("Company"), and SECURITY
CAPITAL GROUP INCORPORATED, a Maryland corporation ("Security Capital").
WHEREAS, Security Capital beneficially owns 34,273,236 shares
of the Company's common stock (the "Shares"), constituting approximately 56.6%
of the Company's outstanding common stock;
WHEREAS, Security Capital and the Company are parties to a
Stockholders Agreement dated as of July 10, 1996 entered into by the Company and
Security Capital's predecessors in interest, Security Capital U.S. Realty and
Security Capital Holdings, S.A., as amended by (i) Amendment No. 1 to
Stockholders Agreement dated as of February 10, 1997, (ii) Amendment No. 2 to
Stockholders Agreement dated as of December 4, 1997, (iii) Amendment No. 3 to
Stockholders Agreement dated as of September 23, 1998, (iv) Amendment No. 4 to
Stockholders Agreement dated as of September 2, 1999, (v) letter agreement dated
June 14, 2002, and (vi) Amendment to Stockholders Agreement dated as of April 4,
2002 (as so amended, the "Stockholders Agreement");
WHEREAS, pursuant to a Registration Rights Agreement dated as
of July 10, 1996 (the "Registration Rights Agreement"), the Company has filed a
registration statement with the Securities and Exchange Commission for the sale
by Security Capital of the Shares from time to time (SEC File No. 333-105408)
(the "Registration Statement");
WHEREAS, Security Capital wishes to realize the value of its
investment in the Shares by disposing of a portion of the Shares in an
underwritten public offering pursuant to the Registration Statement (the
"Secondary Offering") and a contemporaneous underwritten public offering
involving the sale of underwriter debt securities exchangeable for Shares after
three years (the "DECS Offering");
WHEREAS, Security Capital expects to enter into forward
contracts (the "Forward Contracts") with certain of the underwriters (the
"Forward Contract Underwriters") covering a portion of the Shares (the "Forward
Contract Shares") providing for Security Capital to deliver the Forward Contract
Shares to the Forward Contract Underwriters in 2004;
WHEREAS, Security Capital expects to cease to have any
economic interest in the Forward Contract Shares at the time of closing of the
public offerings but will continue to have voting power over the Forward
Contract Shares during the term of the Forward Contracts;
WHEREAS, the Company wishes to facilitate Security Capital's
sale of the Shares and in connection therewith and as a condition to this
Agreement is entering into a purchase and sale agreement of even date herewith
(the "Purchase and Sale Agreement") to acquire up to $150,000,000 of Shares,
subject to adjustment as provided therein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties agree as follows (all capitalized terms not
otherwise defined herein shall have the meanings set forth in the Stockholders
Agreement):
1. Extension of Lock-Up Period. The Company hereby agrees that
the lock-up period referred to in Section 2(c) of the Registration Rights
Agreement shall extend for 90 days (as opposed to 60 days) after the filing with
the Securities and Exchange Commission of the final prospectus supplement for
the Secondary Offering. The Company agrees to use good faith efforts to cause
each of its directors and executive officers to enter into lock-up agreements
having the same lock-up period.
2. Events to Occur at Closing of Public Offerings. On the later
of the date of closing (the "Closing Date") of the Secondary Offering and the
DECS Offering (the "Closing"), provided that Security Capital shall not
Beneficially Own (as defined in the Stockholders Agreement) Shares constituting
more than 15% of the common stock of Regency outstanding, on a fully diluted
basis, immediately following the Closing and Regency's purchase of Shares
pursuant to the Purchase and Sale Agreement (assuming for this purpose that all
Shares subject to the Forward Contracts at Closing are Beneficially Owned by the
Forward Contract Underwriters and not by Security Capital), the following shall
occur:
(a) Termination of Stockholders Agreement. The Stockholders
Agreement shall terminate on the Closing Date, and neither party shall
have any right, claim or obligation thereunder, except for the
provisions of Section 7.14 ("Confidentiality"), which shall remain in
full force and effect until the six-month anniversary of the Closing
Date, at which time such Section 7.14 shall terminate and be of no
further force or effect.
(b) Resignation of Security Capital Director. Security
Capital shall cause Joseph E. Parsons a representative on the Company's
board of directors nominated by Security Capital pursuant to Section
2.1 of the Stockholders Agreement, to resign as a director as promptly
as practicable following the Closing Date.
(c) Voting of Forward Shares. From the Closing Date, if
there shall be any vote by the holders of the Company's common stock,
Security Capital shall vote all of the Forward Contract Shares over
which Security Capital has voting power (including but not limited to
any Forward Contract Shares that it retains upon any cash settlement of
the Forward Contracts), proportionally in accordance with the vote of
the other holders of the Company's common stock, except as provided in
Section 6 with respect to deleting the Special Shareholder Limit from
the Articles.
3. Events to Occur if Forward Contracts Settled in Cash. If,
after the termination of the Stockholders Agreement pursuant to Section 2(a),
Security Capital settles Forward Contracts in cash, the Forward Contract Shares
that Security Capital retains as a result shall continue to constitute
"Registrable Securities" under the Registration Rights Agreement until sold
pursuant to the Registration Statement or sold in reliance on Rule 144. In
addition, Security Capital agrees to sell Forward Contract Shares within 100
trading days following the consummation of the cash settlement to the extent
necessary to cause the number of Shares Beneficially Owned by it (as defined in
the Articles) to not exceed the 7% Ownership Limit.
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4. Lapse. The provisions of Section 1 ("Extension of Lock-Up
Period"), Section 2 ("Events to Occur at Closing of Public Offerings") and
Section 3 ("Events to Occur if Forward Contracts Settled in Cash") shall cease
to have any effect if the Closing Date has not occurred on or prior to September
30, 2003.
5. Amendment to Stockholders Agreement. If the Closing occurs on
or prior to September 30, 2003, but the Stockholders Agreement remains in effect
because Security Capital did not dispose of sufficient Shares to reduce its
ownership below the requisite threshold set forth in Section 2, the Stockholders
Agreement shall be amended on the Closing Date (a) to provide that it terminates
on the 15% Termination Date, with the same force and effect as a termination
pursuant to Section 2(a), and the definition of 15% Termination Date shall be
amended to read in full as follows:
" `15% Termination Date' shall mean the first date,
if any, on which Investor's Beneficial Ownership of Company
Common Stock shall be less than 15% of the outstanding shares
of Company Common Stock, on a fully diluted basis."
6. Ownership Limit. All capitalized terms not otherwise
expressly defined above or defined in this Section 6 shall have the meanings
given to them in the Company's Articles of Incorporation as presently in effect
(the "Articles"). If the Closing occurs on or before September 30, 2003, the
Company and Security Capital agree that notwithstanding any provision that may
be interpreted to the contrary in the Articles, and subject to the condition set
forth in the last sentence of this paragraph, the Special Shareholder Limit
shall be eliminated and may not be transferred to any person, Security Capital
shall not be entitled to the benefit thereof, and in lieu thereof Security
Capital shall be entitled to the Security Capital Shareholder Limit, all as more
fully described in ownership limit waiver resolutions adopted by the Board of
Directors on the date hereof, a copy of which are attached hereto as Exhibit A.
If so requested by Regency, Security Capital agrees to vote any Shares over
which it has voting power in favor of an amendment to the Articles carrying out
the intent of this Section 6. The relinquishment of the Special Shareholder
Limit described above will not occur if the closing of the Secondary Offering or
the DECS Offering occurs and on such date Security Capital will continue to
Beneficially Own (as defined in the Stockholders Agreement) Shares constituting
45% or more of the common stock of Regency outstanding, on a fully diluted basis
(assuming for this purpose that all Shares subject to the Forward Contracts at
Closing are Beneficially Owned by the Forward Contract Underwriters and not by
Security Capital).
7. Specific Performance. The parties agree that in view of the
uniqueness of the arrangements contemplated by this Agreement, the parties
hereto would not have an adequate remedy at law for money damages in the event
that this Agreement is not performed in accordance with its terms, and
therefore, the parties agree that they shall be entitled to specific performance
of this Agreement in addition to any other remedy to which the parties may be
entitled at law or in equity.
8. Miscellaneous. This Agreement shall be governed by and
construed in accordance with the laws of the state of Florida, without regard to
conflict of law principles. This Agreement shall be binding upon, and inure to
the benefit of, the parties hereto and their
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respective successors, assigns and affiliates. No provision of this Agreement
may be waived, modified or amended except in a writing signed by the party
against which enforcement is sought. The captions in this Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Agreement. This Agreement shall be construed without regard to any presumption
requiring construction against the party causing its drafting.
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REGENCY CENTERS CORPORATION
By: /s/ Martin E. Stein, Jr.
-------------------------------------
Name: Martin E. Stein, Jr.
Title: Chairman
SECURITY CAPITAL GROUP INCORPORATED
By: /s/ Philip Mintz
-------------------------------------
Name: Philip Mintz
Title: Authorized Signatory
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