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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)
REGENCY REALTY CORPORATION
(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
(Title of Class of Securities)
758939 10 2
(CUSIP Number)
DAVID A. ROTH
SECURITY CAPITAL U.S. REALTY
86 JERMYN STREET
LONDON SW1Y 6JD
UNITED KINGDOM
(44-171) 647 8800
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
July 16, 1997
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Sche-
dule 13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of Rule 13d-
1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with this state-
ment / /. (A fee is not required only if the reporting person:
(1) has a previous statement on file reporting beneficial own-
ership of more than five percent of the class of securities
described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less
of such class.) (See Rule 13d-7.)
Note: Six copies of this statement, including all
exhibits, should be filed with the Commission. See Rule
13d-1(a) for other parties to whom copies are to be sent.
(Continued on following pages)
Page 1 of 8 Pages
This Amendment No. 3 to Schedule 13D contains 27 pages
including Exhibits. The Exhibit Index appears on page 8.
CUSIP No. 758939 10 2 13D Page 2 of 8 Pages
1 NAME OF PERSON
SECURITY CAPITAL U.S. REALTY
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) /x/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
LUXEMBOURG
7 SOLE VOTING POWER
NUMBER OF 11,153,500 (SEE ITEM 5)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 11,153,500 (SEE ITEM 5)
WITH
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,153,500 (SEE ITEM 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.0% (SEE ITEM 5)
14 TYPE OF PERSON REPORTING*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT
CUSIP No. 758939 10 2 13D Page 3 of 8 Pages
1 NAME OF PERSON
SECURITY CAPITAL HOLDINGS S.A.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) / /
(b) /x/
3 SEC USE ONLY
4 SOURCE OF FUNDS*
BK, OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
LUXEMBOURG
7 SOLE VOTING POWER
NUMBER OF 11,153,500 (SEE ITEM 5)
SHARES
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 11,153,500 (SEE ITEM 5)
WITH
10 SHARED DISPOSITIVE POWER
-0-
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
11,153,500 (SEE ITEM 5)
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
47.0% (SEE ITEM 5)
14 TYPE OF PERSON REPORTING*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT
This Amendment No. 3 is filed by Security Capital
U.S. Realty ("Security Capital U.S. Realty"), a corporation
organized and existing under the laws of Luxembourg, and by
Security Capital Holdings S.A. ("Holdings"), a corporation or-
ganized and existing under the laws of Luxembourg and a wholly
owned subsidiary of Security Capital U.S. Realty (together with
Security Capital U.S. Realty, "SC-USREALTY"), and amends the
Schedule 13D (the "Schedule 13D") originally filed on June 21,
1996, as amended by Amendment No. 1 ("Amendment No. 1") filed
on July 15, 1996, and by Amendment No. 2 ("Amendment No. 2")
filed on July 3, 1997. This Amendment No. 3 relates to shares
of common stock, par value $0.01 per share ("Common Stock"), of
Regency Realty Corporation, a Florida corporation ("Regency").
Capitalized terms used herein without definition shall have the
meanings ascribed thereto in the Schedule 13D, as amended by
Amendment No. 1 and Amendment No. 2.
On July 16, 1997, SC-USREALTY purchased 1,785,000
shares of Common Stock directly from Regency for an aggregate
purchase price of $48,641,250, or $27.25 per share, pursuant to
a Subscription Agreement, dated as of July 10, 1997, by and
among Regency, Holdings and Security Capital U.S. Realty (the
"Subscription Agreement"). Such purchase was effected concur-
rently with an underwritten public offering by Regency of
2,415,000 shares of Common Stock. These funds were obtained by
SC-USREALTY under the Facility Agreement. No underwriting dis-
counts were applied to any shares of Common Stock purchased by
SC-USREALTY pursuant to the Subscription Agreement, and
accordingly SC-USREALTY paid the same price as the price at
which the shares in the public offering were sold.
In connection with the public offering, the under-
writer has retained an over-allotment option to subscribe to up
to an additional 362,500 shares of Common Stock. In the event
the underwriter exercises this over-allotment option in full,
Holdings will have the right to purchase up to 267,750 shares
of Common Stock.
A copy of the Subscription Agreement is attached
hereto as Exhibit 3.1, and such agreement is specifically in-
corporated herein by reference, and the description herein of
such agreement is qualified in its entirety by reference to
such agreement.
ITEM 1. SECURITY AND ISSUER.
No material change.
Page 4 of 8 Pages
ITEM 2. IDENTITY AND BACKGROUND.
No material change except as set forth above.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
No material change except as set forth above.
ITEM 4. PURPOSE OF TRANSACTION.
No material change except as set forth above.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
No material change except as set forth above and be-
low.
As of July 16, 1997, SC-USREALTY beneficially owns
9,403,500 shares of Common Stock as a result of its acquisition
of 1,785,000 shares of Common Stock. In addition, because of
SC-USREALTY's right to acquire up to an additional 1,750,000
shares of Common Stock pursuant to Amendment No. 1, SC-USREALTY
may be deemed to beneficially own up to 11,153,500 shares of
Common Stock. Based on SC-USREALTY's ownership of 9,403,500
shares of Common Stock, it owns approximately 42.8% of the out-
standing Common Stock, and approximately 36.9% on a fully di-
luted basis, based on the number of outstanding shares of Com-
mon Stock and the number of outstanding options and other secu-
rities convertible into Common Stock (but not including the
additional shares of Common Stock to be acquired by SC-USREALTY
pursuant to Amendment No. 1). If SC-USREALTY acquires such
additional 1,750,000 shares of Common Stock, it will own ap-
proximately 47.0% of the outstanding Common Stock, and ap-
proximately 40.9% on a fully diluted basis, based on the number
of outstanding shares of Common Stock and the number of out-
standing options and other securities convertible into Common
Stock (and including in each case the additional shares of Com-
mon Stock to be acquired by SC-USREALTY pursuant to Amendment
No. 1). All of these calculations do not take into account the
possible exercise of the over-allotment option by the
underwriters.
Except as set forth herein and as described in prior
filings, to the best knowledge and belief of SC-USREALTY, no
transactions involving Common Stock have been effected during
the past 60 days by SC-USREALTY or by its directors, executive
officers or controlling persons.
Page 5 of 8 Pages
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDING OR RELATION-
SHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
No material change except as described above.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
The following Exhibit is filed as part of this Schedule
13D:
Exhibit 3.1 Subscription Agreement, dated as of July 10,
1997, by and among Regency Realty Corporation,
Security Capital Holdings S.A. and Security
Capital U.S. Realty
Page 6 of 8 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge
and belief, I certify that the information set forth in this
statement is true, complete, and correct.
SECURITY CAPITAL U.S. REALTY
By:/s/ David A. Roth
Name: David A. Roth
Title: Vice President
SECURITY CAPITAL HOLDINGS S.A.
By:/s/ David A. Roth
Name: David A. Roth
Title: Vice President
July 25, 1997
Page 7 of 8 Pages
EXHIBIT INDEX
SEQUENTIAL
EXHIBIT DESCRIPTION PAGE NO.
3.1 Subscription Agreement, dated as of *
July 10, 1997, by and among Regency
Realty Corporation, Security Capital
Holdings S.A. and Security Capital U.S.
Realty
Exhibit 3.1
SUBSCRIPTION AGREEMENT
BY AND AMONG
REGENCY REALTY CORPORATION
SECURITY CAPITAL HOLDINGS S.A.
and
SECURITY CAPITAL U.S. REALTY
dated as of
July 10, 1997
TABLE OF CONTENTS
SECTION PAGE
1. SUBSCRIPTION; CLOSING................................. 1
1.1 Subscription for Company Common Stock................. 1
1.2 Acceptance of Subscription............................ 2
1.3 Purchase Price........................................ 2
1.4 Closing............................................... 2
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............... 2
2.1 Organization and Qualification........................ 2
2.2 Authority Relative to the Agreement; Board Approval... 3
2.3 Capital Stock......................................... 3
2.4 No Conflicts; No Defaults; Required Filings and
Consents.............................................. 3
2.5 Securities Law Matters; Material Changes; Corporate
Action Covenants...................................... 4
2.6 Litigation; Compliance With Law....................... 6
2.7 Tax Matters; REIT and Partnership Status.............. 6
2.8 Compliance with Organization Documents................ 7
2.9 Florida Takeover Law.................................. 7
2.10 Brokers or Finders.................................... 7
3. REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER AND THE
ADVANCING PARTY............................................ 7
3.1 Organization and Standing............................. 7
3.2 Due Authorization..................................... 8
3.3 Conflicting Agreements and Other Matters.............. 8
3.4 Source of Funds....................................... 8
3.5 Brokers or Finders.................................... 8
3.6 REIT Qualification Matters............................ 8
3.7 Investment Company Matters............................ 9
4. CONDITIONS TO CLOSING....................................... 9
4.1 Conditions to Obligations of Subscriber............... 9
4.2 Conditions to Obligations of the Company.............. 10
5. SURVIVAL; INDEMNIFICATION................................... 10
5.1 Survival.............................................. 10
5.2 Indemnification by Subscriber or the Company.......... 11
6. MISCELLANEOUS............................................... 12
6.1 Counterparts.......................................... 12
6.2 Governing Law......................................... 12
6.3 Entire Agreement...................................... 12
i
6.4 Notices............................................... 13
6.8 Expenses.............................................. 14
6.9 Severability.......................................... 14
6.10 Further Assurances.................................... 14
6.11 Joint and Several Liability; Guaranty................. 15
ii
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is entered
into as of July 10, 1997 by and among Regency Realty Corpora-
tion, a Florida corporation (the "Company"), Security Capital
U.S. Realty, a Luxembourg corporation (the "Advancing Party"),
and Security Capital Holdings S.A., a Luxembourg corporation
and a wholly-owned subsidiary of the Advancing Party ("Sub-
scriber" or "Investor"). Capitalized terms not otherwise de-
fined herein have the meanings ascribed to them in the Stock-
holders Agreement (as hereinafter defined).
WHEREAS, in connection with the Company's initial issuance
and sale to Subscriber of shares of the Company's common stock,
par value $0.01 per share (the "Company Common Stock"), pursu-
ant to a Stock Purchase Agreement dated as of June 11, 1996,
the Company, the Advancing Party and Subscriber entered into a
Stockholders Agreement on July 10, 1996 (the "Stockholders
Agreement");
WHEREAS, pursuant to the terms of the Stockholders Agree-
ment, in the event that the Company issues or sells shares of
capital stock of the Company, Investor is, during a specified
term, entitled (except in certain limited circumstances) to a
participation right to purchase, or subscribe for, a total num-
ber of shares equal to up to 42.5% of the total number of
shares of capital stock proposed to be issued by the Company in
its first offering after the final closing under the above-
referenced Stock Purchase Agreement (the "Participation
Rights");
WHEREAS, contemporaneously herewith the Company is enter-
ing into an underwriting agreement for the offer and sale in a
public offering (the "Public Offering") of 2,777,250 shares
(the "Public Shares") of Company Common Stock, including
362,250 shares subject to an over-allotment option (the "Option
Shares");
WHEREAS, in connection with the Public Shares to be issued
by the Company in the Public Offering, Investor is entitled to,
and has indicated to the Company that it desires to, exercise
its Participation Rights; and
WHEREAS, in accordance with Investor's desire to exercise
its Participation Rights, the Company desires to issue and sell
to Subscriber shares of Company Common Stock in an offering
(the "Concurrent Purchase") from the Company to Subscriber.
NOW, THEREFORE, in consideration of the foregoing and of
the mutual covenants and agreements hereinafter set forth, the
parties hereto hereby agree as follows:
1. SUBSCRIPTION; CLOSING
1.1 SUBSCRIPTION FOR COMPANY COMMON STOCK
(a) Subject to the terms and conditions
hereof, Subscriber hereby subscribes (the "Subscription")
to purchase 1,785,000 shares of Company Common Stock (the
"Concurrent Shares").
(b) Investor hereby agrees that the Subscrip-
tion represents the complete and exclusive exercise of its
Participation Rights with regard to the Public Shares
other than the Option Shares. The Company agrees that
Investor's Participation Rights remain in full force and
effect with respect to the Option Shares and in the event
the underwriters of the Public Offering exercise the over-
allotment option, Investor shall have its Participation
Rights (up to 42.5 % thereof) with respect to the result-
ing offering (such Participation Rights not being ad-
dressed herein).
1.2 ACCEPTANCE OF SUBSCRIPTION
Subject to the terms and conditions hereof, the Com-
pany hereby accepts the Subscription.
1.3 PURCHASE PRICE
The per share purchase price (the "Per Share Pur-
chase Price") for the Concurrent Shares shall be $27.25 for an
aggregate purchase price of $48,641,250 (the "Purchase Price").
The Per Share Purchase Price shall be the same as the per share
"Price to Public" for the Public Shares, as shown on the cover
page of the final prospectus for the Public Offering.
1.4 CLOSING
Subject to the terms and conditions hereof, the
closing of the Concurrent Purchase (the "Closing") shall occur
on the date of the closing of the Public Offering but in no
event later than five business days after the date of this
Agreement. At the Closing, the Company will sell, convey, as-
sign, transfer and deliver, and Subscriber will purchase and
acquire (and the Advancing Party shall advance sufficient funds
for such purchase) from the Company, the Concurrent Shares, and
Subscriber will pay to the Company the Purchase Price by wire
transfer of immediately-available funds in U. S. dollars to the
account or accounts specified by the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Subscriber
as follows:
2.1 ORGANIZATION AND QUALIFICATION
(a) The Company is a corporation duly incorpo-
rated, validly existing and in good standing under the laws of
the State of Florida. The Company has all requisite corporate
power and authority to own, operate, lease and encumber its
properties and carry on its business as described in the Com-
pany Prospectus (as hereinafter defined), and to enter into
this Agreement and to perform its obligations hereunder.
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(b) Each of the Subsidiaries of the Company is a
corporation, partnership or limited liability company duly or-
ganized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or organization, and
has the corporate or partnership power and authority to own its
properties and carry on its business as it is now being con-
ducted.
(c) Each of the Company and its Subsidiaries is
duly qualified to do business and in good standing in each ju-
risdiction in which the ownership of its property or the con-
duct of its business requires such qualification, except for
any failures to be so qualified or to be in good standing as
would not, individually or in the aggregate, reasonably be ex-
pected to result in a Material Adverse Effect.
(d) The issue and sale of the Concurrent Shares
hereunder will not give any stockholder of the Company the
right to demand payment for his shares under the Florida Busi-
ness Corporation Act.
2.2 AUTHORITY RELATIVE TO THE AGREEMENT; BOARD APPROVAL
(a) The execution, delivery and performance of
this Agreement have been duly and validly authorized by all
necessary corporate action on the part of the Company. This
Agreement has been duly executed and delivered by the Company
for itself and constitutes the valid and legally binding obli-
gation of the Company, enforceable against the Company in ac-
cordance with its terms, subject to applicable bankruptcy, in-
solvency, moratorium or other similar laws relating to credi-
tors' rights or general principles of equity.
(b) The Board of Directors of the Company has, as
of the date hereof, approved the transactions contemplated
hereby.
(c) The Concurrent Shares have been duly autho-
rized for issuance, and upon issuance will be duly and validly
issued, fully paid and nonassessable.
2.3 CAPITAL STOCK
All of the issued, and outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully
paid, nonassessable and free of preemptive rights (excluding
any preemptive rights that Investor may have under the Stock-
holders Agreement).
2.4 NO CONFLICTS; NO DEFAULTS; REQUIRED FILINGS AND CON-
SENTS
Neither the execution and delivery by the Company
hereof nor the consummation by the Company of the transactions
contemplated hereby in accordance with the terms hereof, will:
-3-
(a) conflict with or result in a breach of any
provisions of the Company Charter or Bylaws of the Company;
(b) result in a breach or violation of, a default
under, or the triggering of any payment or other obligations
pursuant to, or accelerate vesting under, any of the Company
stock option plans or similar compensation plan or any grant or
award made under any of the foregoing, except as would not,
individually or in the aggregate, reasonable be expected to
result in a Material Adverse Effect;
(c) violate or conflict with any statute, regula-
tion, judgment, order, writ, decree or injunction applicable to
the Company, except as would not, individually or in the ag-
gregate, reasonably be expected to result in a Material Adverse
Effect;
(d) violate or conflict with or result in a breach
of any provision of, or constitute a default (or any event
which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination or in a right of
termination or cancellation of, or accelerate the performance
required by, or result in the creation of any Lien upon any of
the properties of the Company under, or result in being de-
clared void, voidable or without further binding effect, any of
the terms, conditions or provisions of any note, bond, mort-
gage, indenture, deed of trust or any license, franchise, per-
mit, lease, contract, agreement or other instrument, commitment
or obligation to which the Company is a party, or by which the
Company or any of its properties is bound or affected, except
for any of the foregoing matters which would not reasonably be
expected to, individually or in the aggregate, result in a Ma-
terial Adverse Effect; or
(e) require any consent, approval or authorization
of, or declaration, filing or registration with any Governmen-
tal Authority, other than any filings required under the Secu-
rities Act, the Exchange Act, Blue Sky Laws and any filings
required to be made with any national securities exchange on
which the Company Common Stock is listed, except as would not,
individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.
2.5 SECURITIES LAW MATTERS; MATERIAL CHANGES; CORPORATE
ACTION COVENANTS
(a) As of the date hereof and as of the date of
the Closing, the Company Prospectus does not and will not con-
tain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the cir-
cumstances under which they were made, not misleading.
(b) The documents incorporated or deemed to be
incorporated by reference in the Company Prospectus pursuant to
Item 12 of Form S-3 under the
-4-
Securities Act, at the time they were or hereafter are filed
with the SEC, complied and will comply in all material respects
with the requirements of the Exchange Act and the rules and
regulations of the SEC under the Exchange Act, and, when read
together with the other information in the Company Prospectus,
as of the date hereof and as of the date of the Closing, did
not and will not include an untrue statement of a material fact
or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(c) Since the respective dates as of which infor-
mation is given in the Company Prospectus, except as otherwise
stated there, (A) there has been no change in the condition,
financial, or otherwise, or in the earnings, assets or business
affairs of the Company and the Subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of
business, except as would not reasonably be expected to, indi-
vidually or in the aggregate, result in a Material Adverse Ef-
fect, (B) no casualty loss or condemnation or other event with
respect to any of the interests held directly or indirectly in
any of the real properties owned, directly or indirectly, by
the Company or any entity wholly or partially owned by the Com-
pany has occurred, except as would not reasonably be expected
to, individually or in the aggregate, result in a material Ad-
verse Effect, (C) except for regular quarterly dividends on the
Common Stock and distributions with respect to the Units in
amounts per share or Unit that are, in each case, consistent
with past practice, there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class
of its capital stock or by the Partnership with respect to its
Units, and (D) with the exception of transactions in connection
with the Company's Long-Term Omnibus Plan and the issuance of
shares of Common Stock upon the exchange of Units of the Part-
nership, there has been no change in the capital stock or in
the partnership interests, as the case may be, of the Company
or any Subsidiary, and no increase in the indebtedness of the
Company or any Subsidiary, that is material to such entities
considered as one enterprise.
(d) The financial statements (including the notes
thereto) included in, or incorporated by reference into, the
Company Prospectus present fairly the financial position of the
respective entity or entities presented therein at the respec-
tive dates indicated (if such financial position is presented)
and the results of their operations for the respective periods
specified and, except as otherwise stated in the Company Pro-
spectus, said financial statements have been prepared in con-
formity with generally-accepted accounting principles applied
on a consistent basis.
(e) As of the date hereof, the Company and its
Subsidiaries have complied in all material respects with the
Corporate Action Covenants set forth in Section 6.1 of the
Stockholders Agreement.
(f) For purposes hereof, the terms listed below
shall have the following meanings:
-5-
"Company Prospectus" shall mean, collectively,
the Prospectus dated July 10, 1997 and the Prospectus
Supplement dated July 10, 1997 relating to the shares of
Company Common Stock to be offered to the Subscriber and
the Prospectus Supplement dated July 10, 1997 relating to
the Public Shares, a copy of which is attached hereto as
Exhibit A.
"Partnership" shall mean Regency Retail Part-
nership, L.P., a Delaware limited partnership.
"Units" shall mean units of partnership inter-
est in the Partnership.
2.6 LITIGATION; COMPLIANCE WITH LAW
(a) There are no Actions pending or, to the
Company's knowledge, threatened against the Company or any of
its Subsidiaries that would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect,
or which question the validity hereof or any action taken or to
be taken in connection herewith. There are no continuing or-
ders, injunctions or decrees of any Government Authority to
which the Company or any of its Subsidiaries is a party or by
which any of its properties or assets are bound.
(b) None of the Company or its Subsidiaries is in
violation of any statute, rule, regulation, order, writ, decree
or injunction of any Government Authority or any body having
jurisdiction over them or any of their respective properties
which, if enforced, would, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Effect.
2.7 TAX MATTERS; REIT AND PARTNERSHIP STATUS
(a) The Company (i) intends in its federal income
tax return for the tax year ended on December 31, 1996, and in
its federal income tax return for the tax year that will end on
December 31, 1997, to elect to be taxed as a REIT within the
meaning of Section 856 of the Code, and has complied (or will
comply) with all applicable provisions of the Code relating to
a REIT for 1997, (ii) has operated, and intends to continue to
operate, in such a manner as to qualify as a REIT for 1997,
(iii) has not taken or omitted to take any action which would
reasonably be expected to result in a challenge to its status
as a REIT, and, to the Company's knowledge, no such challenge
is pending or threatened, and (iv) to the Company's knowledge,
and assuming the accuracy of Subscriber's representation in
Section 3.7, will not be rendered unable to qualify as a REIT
for federal income tax purposes as a consequence of the trans-
actions contemplated hereby.
(b) The Company was eligible to and did validly
elect to be taxed as a REIT for federal income tax purposes for
calendar years 1993, 1994, and 1995. Each
-6-
Partnership and each subsidiary of the Company organized as a
partnership (and any other subsidiary of the Company that files
tax returns as a partnership for federal income tax purposes)
was and continues to be classified as a partnership for federal
income tax purposes.
(c) For purposes of this Section 2.7, no represen-
tation set forth in Section 2.7 shall be deemed to be untrue
unless such untruths would, individually or in the aggregate,
be reasonably expected to result in a Material Adverse Effect.
2.8 COMPLIANCE WITH ORGANIZATION DOCUMENTS
Neither the Company nor any of its Subsidiaries is
in default under or in violation of any provision of its char-
ter, bylaws or partnership agreement (or equivalent organiza-
tional documents), except for such defaults or violations which
would not, individually or in the aggregate, reasonably be ex-
pected to result in a Material Adverse Effect.
2.9 FLORIDA TAKEOVER LAW
The terms of Sections 607.0901 and 607.0902 of the
Florida Business Corporation Act will not apply to Subscriber,
the Subscription or any other transaction contemplated hereby.
2.10 BROKERS OR FINDERS
No agent, broker, investment banker or other firm or
person, including any of the foregoing that is an Affiliate of
the Company, is or will be entitled to any broker's or finder's
fee or any other commission or similar fee from the Company in
connection with this Agreement or any of the transactions con-
templated hereby for which Subscriber will be responsible.
3. REPRESENTATIONS AND WARRANTEES OF SUBSCRIBER AND THE AD-
VANCING PARTY
Subscriber and the Advancing Party hereby jointly
and severally represent and warrant to the Company as follows:
3.1 ORGANIZATION AND STANDING
Each of Subscriber and the Advancing Party is a cor-
poration duly incorporated, validly existing and in good stand-
ing under the laws of Luxembourg. Subscriber has all requisite
corporate power and authority to own, operate, lease and encum-
ber its properties and carry on its business as now conducted,
and to enter into this Agreement and to perform its obligations
hereunder.
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3.2 DUE AUTHORIZATION
The execution, delivery and performance of this
Agreement have been duly and validly authorized by all neces-
sary corporate action on the part of Subscriber and the Advanc-
ing Party. This Agreement has been duly executed and delivered
by each of Subscriber and the Advancing Party for itself and
constitutes the valid and legally binding obligations of Sub-
scriber and the Advancing party, enforceable against Subscriber
or the Advancing Party, as the case may be, in accordance with
its terms, subject to applicable bankruptcy, insolvency, mora-
torium or other similar laws relating to creditors' rights or
general principles of equity.
3.3 CONFLICTING AGREEMENTS AND OTHER MATTERS
Neither the execution and delivery of this Agreement
nor the performance by Subscriber or the Advancing Party, as
the case may be, of its obligations hereunder will conflict
with, result in a breach of the terms, conditions or provisions
of, constitute a default under, result in the creation of any
mortgage, security interest, encumbrance, lien or charge of any
kind upon any of the properties or assets of Subscriber or the
Advancing Party, as the case may be, pursuant to, or require
any consent, approval or other action by or any notice to or
filing with any Government Authority pursuant to, the organiza-
tion documents or agreements of Subscriber or the Advancing
Party, as the case may be, or any agreement, instrument, order,
judgment, decree, statute, law, rule or regulation by which
Subscriber or the Advancing Party, as the case may be, is
bound, except for filings after the Closing under Section 13(d)
of the Exchange Act.
3.4 SOURCE OF FUNDS
At the Closing, the Advancing Party shall have
available and shall advance to Subscriber all of the funds nec-
essary to satisfy Subscriber's obligations hereunder and to pay
any related fees and expenses in connection with the foregoing.
3.5 BROKERS OR FINDER
No agent, broker, investment banker or other firm or
person, including any of the foregoing that is an Affiliate of
Subscriber or the Advancing Party, is or will be entitled to
any broker's or finder's fee or any other commission or similar
fee from Subscriber or the Advancing Party in connection with
this Agreement or the transactions contemplated hereby for
which the Company will be responsible.
3.6 REIT QUALIFICATION MATTERS
To Subscriber's knowledge, no person which would be
treated as an "individual" for purposes of Section 542(a)(2) of
the Code (as modified by Section 856(h) of the Code) owns or
would be considered to own (taking into account the ownership
attribution
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rules under Section 544 of the Code, as modified by
Section 856(h) of the Code) in excess of 9.8% of the value of
the outstanding equity interest in Subscriber or the Advancing
Party.
3.7 INVESTMENT COMPANY MATTERS
Neither the Advancing Party nor Subscriber is, and
after giving effect to the purchase of the Concurrent Shares,
neither will be, an "investment company" or an entity "con-
trolled" by an "investment company," as such terms are defined
in the Investment Company Act of 1940, as amended.
4. CONDITIONS TO CLOSING
4.1 CONDITIONS TO OBLIGATIONS OF SUBSCRIBER
The obligations of Subscriber to purchase and pay
for the Concurrent Shares at the Closing are subject to satis-
faction or waiver of each of the following conditions prece-
dent:
(a) The Closing of the Public Offering shall have
occurred at the same per share Price to Public as the Per Share
Purchase Price for the Concurrent Shares.
(b) The representations and warranties of the Com-
pany contained herein shall have been true and correct in all
respects on and as of the date hereof, and shall be true and
correct in all respects on and as of the Closing with the same
effect as though such representations and warranties had been
made on and as of the date of the Closing (except for represen-
tations and warranties that speak as of a specific date or time
other than the date of the Closing (which need only be true and
correct in all respects as of such date or time)), other than,
in all such cases, such failures to be true and/or correct as
would not in the aggregate reasonably be expected to have a
Material Adverse Effect; provided, however, that if any of the
representations and warranties is already qualified in any re-
spect by materiality or as to Material Adverse Effect for pur-
poses of this Section 4.1(b) such materiality or Material Ad-
verse Effect qualification will be in all respects ignored (but
subject to the overall standard as to Material Adverse Effect
set forth immediately prior to this proviso). The Company
shall have delivered to Subscriber at the Closing a certificate
of an appropriate officer in form and substance reasonably sat-
isfactory to Subscriber dated the date of the Closing to such
effect.
In making any determination as to Material Adverse
Effect under this Section 4.1(b), the matters set forth in each
such Section shall be aggregated and considered together.
(c) There shall not be in effect any order, decree
or injunction of a court or agency of competent jurisdiction
which enjoins or prohibits consummation of the
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transactions contemplated hereby and there shall be no pending
Actions which would reasonably be expected to have a material
adverse effect on the ability of the Company to consummate the
transactions contemplated hereby or to issue the Concurrent Shares.
(d) The Company shall not have taken any action or
have failed to take any action which would reasonably be ex-
pected to, alone or in conjunction with any other factors, re-
sult in the loss of its status as a REIT for federal income tax
purposes.
4.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligations of the Company to issue and sell the
Concurrent Shares at the Closing are subject to satisfaction or
waiver of each of the following conditions precedent:
(a) The closing of the Public Offering shall have
occurred.
(b) The representations and warranties of Sub-
scriber and the Advancing Party contained herein shall have
been true and correct in all respects on and as of the date
hereof, and shall be true and correct in all respects on and as
of the Closing with the same effect as though such representa-
tions and warranties had been made on and as of the date of the
Closing (except for representations and warranties that speak
as of a specific date or time other than the date of the Clos-
ing (which need only be true and correct in all respects as of
such date or time)), other than, in all such cases, such fail-
ures to be true and/or correct as would not in the aggregate
reasonably be expected to have a Material Adverse Effect. Sub-
scriber shall have delivered to the Company at the Closing a
certificate of an appropriate officer in form and substance
reasonably satisfactory to the Company dated the date of the
Closing in such effect.
(c) There shall not be in effect any order, decree
or injunction of a court or agency of competent jurisdiction
which enjoins or prohibits consummation of the transactions
contemplated hereby and there shall be no pending Actions which
would reasonably be expected to have a material adverse effect
on the ability of the Company to consummate the transactions
contemplated hereby or to issue the Concurrent Shares.
5. SURVIVAL; INDEMNIFICATION
5.1 SURVIVAL
All representations, warranties, covenants and
agreements of the parties contained herein, including indemnity
or indemnification agreements contained herein, shall survive
the Closing until the first anniversary of the Closing. No
Action or proceeding may be brought with respect to any of the
representations, warranties, covenants or agreements unless
written notice thereof, setting forth in reasonable details the
claimed misrepresentations or breach of warranty or breach of
covenant or
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agreement, shall have been delivered to the party alleged to have
breached such representation or warranty or such covenant or
agreement prior to the first anniversary of the Closing. Those
covenants or agreements that contemplate or may involve actions
to be taken or obligations in effect after the Closing shall
survive in accordance with their terms.
5.2 INDEMNIFICATION BY SUBSCRIBER OR THE COMPANY
(a) Subject to Section 5.1, from and after the
Closing, Subscriber shall indemnify and hold harmless the Com-
pany, its successors and assigns, from and against any and all
Loss and Expenses suffered, directly or indirectly, by the Com-
pany by reason of, or arising out of (i) any breach as of the
date made or deemed made or required to be true of any repre-
sentations or warranty made by Subscriber in or pursuant to
this Agreement, or (ii) any failure by Subscriber to perform or
fulfill any of its covenants or agreements set forth herein.
Notwithstanding any other provision of this Agreement to the
contrary, in no event shall Loss and Expenses include a party's
incidental or consequential damages.
(b) Subject to Section 5.1, from and after the
Closing, the Company shall indemnify and hold harmless Sub-
scriber, its successors and assigns, from and against any and
all Loss and Expenses, suffered, directly or indirectly, by
Subscriber by reason of, or arising out of, any breach as of
the date made or deemed made or required to be true of any rep-
resentations or warranty made by the Company in or pursuant to
this Agreement and any statements made in any certificate de-
livered pursuant to this Agreement, or (ii) any failure by the
Company to perform or fulfill any of its covenants or agree-
ments set forth herein. Notwithstanding any other provision of
this Agreement to the contrary, in no event shall Loss and Ex-
penses include a party's incidental or consequential damages.
(c) Notwithstanding the foregoing, (i) neither
Subscriber nor the Company shall be responsible for any Loss
and Expenses as provided by paragraphs (a) and (b), respec-
tively, of this Section 5.2, until the cumulative aggregate
amount of such Loss and Expenses suffered by Subscriber or the
Company, as the case may be, exceeds $500,000, in which case
Subscriber or the Company, as the case may be, shall then be
liable for all such Loss and Expenses, and (ii) the cumulative
aggregate indemnity obligations of each of Subscriber and the
Company under this Section 5.2 shall in no event exceed the
Purchase Price. Except with respect to third-party claims be-
ing defended in good faith or claims for indemnification with
respect to which there exists a good faith dispute, the indem-
nifying party shall satisfy its obligations hereunder within 30
days of receipt of a notice of claim under this Section 5.
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5.3 THIRD-PARTY CLAIMS
If a claim by a third party is made against Sub-
scriber or the Advancing Party or the Company (each, an "Indem-
nified Party") and if such Indemnified Party intends to seek
indemnity with respect thereto under this Section 5, such In-
demnified Party shall promptly notify the indemnifying party in
writing of such claims setting forth such claims in reasonable
detail. The indemnifying party shall have 20 days after re-
ceipt of such notice to undertake, through counsel of its own
choosing and at its own expense, the settlement or defense
thereof, and the Indemnified Party shall cooperate with it in
connection therewith; provided, however, that the Indemnified
Party may participate in such settlement or defense through
counsel chosen by such Indemnified Party, provided that the
fees and expenses of such counsel shall be borne by such Indem-
nified Party. The Indemnified Party shall not pay or settle
any claim which the indemnifying party is contesting. Notwith-
standing the foregoing, the Indemnified Party shall have the
right to pay or settle any such claim, provided that in such
event it shall waive any right to indemnity therefor by the
indemnifying party. If the indemnifying party does not notify
the Indemnified Party within 20 days after the receipt of the
Indemnified Party's notice of a claim of indemnity hereunder
that it elects to undertake the defense thereof, the Indemni-
fied Party shall have the right to contest, settle or compro-
mise the claim but shall not thereby waive any right to indem-
nity therefor pursuant to this Agreement.
6. MISCELLANEOUS
6.1 COUNTERPARTS
This Agreement may be executed in one or more coun-
terparts, all of which shall be considered one and the same
agreement, and shall be effective when one or more counterparts
have been signed by each party hereto and delivered to the
other party. Copies of executed counterparts transmitted by
telecopy, telefax or other electronic transmission service
shall be considered original executed counterparts for purposes
of this Section, provided receipt of copies of such counter-
parts is confirmed.
6.2 GOVERNING LAW
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF FLORIDA WITHOUT REFER-
ENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF.
6.3 ENTIRE AGREEMENT
This Agreement contains the entire agreement between
the parties hereto with respect to the subject matter hereof
and there are no agreements, understandings, representations or
warranties between the parties other than those set forth or
referred to herein. This Agreement is not intended to confer
upon any person not a party hereto
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(and their successors and assigns) any rights or remedies
hereunder.
6.4 NOTICES
All notices and other communications hereunder shall
be sufficiently given for all purposes hereunder if in writing
and delivered personally, sent by documented overnight delivery
service or, to the extent receipt is confirmed, telecopy, tele-
fax or other electronic transmission service to the appropriate
address or numbers as set forth below. Notices to the Company
shall be addressed to:
Regency Realty Corporation
121 W. Forsyth Street, Suite 200
Jacksonville, Florida 32202
Attention: Martin E. Stein, Jr.
Telecopy Number: (904) 634-3428
with a copy (which shall not constitute notice) to:
Foley & Lardner
Greenleaf Building
200 Laura Street
Jacksonville, Florida 32202
Attention: Charles E. Commander, III, Esq.
Telecopy Number: (904) 359-8700
Notices to Subscriber or the Advancing Party shall
be addressed to:
Security Capital Holdings S.A.
69, route d'Esch
L-2953 Luxembourg
Attention: David A. Roth, Vice President
Telecopy Number: (352) 4590-3331
with a copy (which shall not constitute notice) to:
Wachtell, Lipton, Rosen & Katz
51 W. 52nd Street
New York, New York 10018
Attention: Adam O. Emmerich, Esq.
Telecopy Number: (212) 403-2000
6.5 SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and insure to
the benefit of the
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parties hereto and their respective successors. Neither Subscriber
nor the Advancing Party shall be permitted to assign any of its
rights hereunder to any third party; provided, however, that
Subscriber and the Advancing Party may assign all (but not less
than all) of their rights hereunder to any other Investor so long
as such other Investor agrees in writing, in a form reasonably
acceptable to the Company, to be bound by all the terms and
conditions of this Agreement.
6.6 HEADINGS
The Section and other headings contained in this
Agreement are inserted for convenience of reference only and
shall not affect the meaning or interpretation of this Agree-
ment.
6.7 AMENDMENTS AND WAIVERS
This Agreement may not be modified or amended except by an
instrument or instruments in writing signed by the party
against whom enforcement of any such modification or amendment
is sought. Any party hereto may, only by an instrument in
writing, waive compliance by the other parties hereto with any
term or provision hereof on the part of such other party hereto
to be performed or complied with. The waiver by any party
hereto of a breach of any term or provision hereof shall not be
construed as a waiver of any subsequent breach.
6.8 EXPENSES
Except as set forth in this Agreement, whether or not the
Closing is consummated, all legal and other costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such
costs and expenses.
6.9 SEVERABILITY
Any provision hereof which is invalid or unenforce-
able shall be ineffective to the extent of such invalidity or
unenforceabilty, without affecting in any way the remaining
provisions hereof.
6.10 FURTHER ASSURANCES
The Company, Subscriber and the Advancing Party
agree that, from time to time, whether before, at or after the
Closing, each of them will execute and deliver such further
instruments of conveyance and transfer and take such other ac-
tion as may be necessary to carry out the purposes and intents
hereof.
6.11 JOINT AND SEVERAL LIABILITY; GUARANTY
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The obligations and liability of Subscriber and the
Advancing Party under or in connection with this Agreement are
joint and several. The Advancing Party hereby unconditionally
and irrevocably guarantees and agrees to be responsible for the
payment and performance of all of Subscriber's obligations
hereunder.
[The remainder of this page is blank intentionally.]
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IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement or have caused this Agreement to be
duly executed on their behalf, as of the day and year first
above written.
REGENCY REALTY CORPORATION
By: /s/ Bruce M. Johnson
Name: Bruce M. Johnson
Title: Managing Director
SECURITY CAPITAL HOLDINGS S.A.
By: /s/ David A. Roth
Name: David A. Roth
Title: Vice President
SECURITY CAPITAL U.S. REALTY
By: /s/ David A. Roth
Name: David A. Roth
Title: Vice President