CONSENT AGREEMENT
THIS CONSENT AGREEMENT (the "Agreement") is made as of the 10th day of
February, 1997, by and between OPPORTUNITY CAPITAL PARTNERS II LIMITED
PARTNERSHIP, a Maryland limited partnership ("OCP"), and REGENCY REALTY
CORPORATION, a Florida corporation ("Regency"), under the following
circumstances:
A. Pursuant to the terms and conditions of that certain Contribution
Agreement and Plan of Reorganization, dated February 10, 1997 executed
contemporaneously herewith, by and among Branch Properties, L.P., a Georgia
limited partnership ("Branch"), Regency Realty Corporation, a Florida
corporation ("Regency") and Branch Realty, Inc. (the "Contribution Agreement"),
Branch has formed Regency Retail Partnership, L.P., a Delaware limited
partnership (the "Partnership"), to which a wholly owned subsidiary of Regency
will contribute cash and Branch will contribute shopping center properties and
other assets used in the real estate business. Except as set forth below,
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Contribution Agreement.
B. OCP is the special limited partner of Branch and is receiving
Partnership Units pursuant to the Contribution Agreement that are convertible
into Shares.
C. To induce Regency to enter into the Contribution Agreement, OCP has
agreed, solely in its capacity as the special limited partner of Branch, to,
among other things, (i) approve and consent to the transactions contemplated by
the Contribution Agreement pursuant to the terms (including, without limitation,
Section 6.4) of that certain Amended and Restated Agreement of Limited
Partnership of Branch Properties, L.P. dated December 19, 1995, as amended (the
"Partnership Agreement") and (ii) approve and consent to the amendment of the
Partnership Agreement to effect the transactions contemplated by the
Contribution Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1: REPRESENTATIONS, WARRANTIES AND
COVENANTS OF REGENCY
Regency hereby represents, warrants and covenants to OCP as of the date of
this Agreement as follows:
1.1 Due Organization. Regency has been duly organized and is validly
existing and in good standing under the Laws of its jurisdiction of
organization, and is qualified to do business and is in good standing in all
jurisdictions where such qualification is necessary to carry on its business as
now conducted, except where failure to so qualify would not have an adverse
effect on the ability of Regency to perform its obligations under this
Agreement.
1.2 Due Authorization. Regency has full power and authority to enter into
this Agreement, and to consummate the transactions contemplated hereby, and the
Persons executing this Agreement have been duly authorized to do so on behalf of
Regency. The execution, delivery and performance by Regency of this Agreement
have been duly and validly approved by all necessary corporate or other
applicable action and no other actions or proceedings on the part of Regency are
necessary to authorize this Agreement and the transactions contemplated hereby.
Regency has duly and validly executed and delivered this Agreement. This
Agreement constitutes legal, valid and binding obligations of Regency,
enforceable against Regency in accordance with its respective terms.
1.3 Access to Information. At all times before the First Closing, Regency
shall provide OCP, and its respective agents, employees, consultants, and
representatives, with continuing and reasonable access to all files, books,
records and other materials in Regency's possession or control relating to the
business and operations of Regency and the right to examine, inspect and make
copies of such materials as appropriate. No investigation made by OCP shall
limit, qualify or modify any representations, warranties, covenants made by
Regency in the Contribution Agreement, irrespective of the knowledge and
information obtained as a result of any such investigation.
1.4 OCP Representation on Regency's Board of Directors. Regency's Board of
Directors has created a vacancy on its Board of Directors, subject to
consummation of the First Closing, and shall elect a nominee selected by OCP and
reasonably acceptable to Regency's Board of Directors, who shall not be an
officer or employee of OCP's Affiliate, LaSalle Advisors Limited Partnership
("OCP Nominee"), to fill the vacancy immediately following the First Closing.
Thereafter, so long as OCP continues to beneficially own, or has the right to
acquire through the exercise of Redemption Rights not less than the number of
Shares equal to the number of units issued to OCP at the First Closing (after
making appropriate adjustments for any stock splits, stock dividends and similar
events taking place after the First Closing), OCP shall have the right to
nominate an OCP Nominee to stand for election at any annual or special meeting
of shareholders at which directors are to be elected, or in connection with the
taking of written consent in lieu thereof, if no OCP Nominee will continue to
serve on Regency's Board of Directors without regard to the results of such
meeting or consent. In addition, Regency's Board of Directors agrees to elect an
OCP Nominee to fill any mid-term vacancy created by the resignation or other
early termination of the term of an OCP Nominee prior to its scheduled
expiration.
1.5 Waiver of Related Tenant Limit. Regency covenants to use reasonable
best efforts to obtain the waiver by its Board of Directors, as promptly as
practical after the date hereof, of the Related Tenant Limit under Article 5 of
Regency's Articles of Incorporation to permit OCP to receive Units pursuant to
the Contribution Agreement and redeem such Units pursuant to the Partnership
Agreement even though OPERF (as defined in Section 2.3) is a Related Tenant
Owner (as defined in Article 5.1 of Regency's Articles of Incorporation) with
respect to Bruno's as described in Exhibit A.
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ARTICLE 2: REPRESENTATIONS, WARRANTIES AND
COVENANTS OF OCP
OCP hereby represents, warrants and covenants to Regency as of the date of
this Agreement as follows:
2.1 Due Organization. OCP has been duly organized and is validly existing
and in good standing under the Laws of its jurisdiction of organization, and is
qualified to do business and is in good standing in all jurisdictions where such
qualification is necessary to carry on its business as now conducted, except
where failure to so qualify would not have an adverse effect on the ability of
OCP to perform its obligations under this Agreement.
2.2 Due Authorization. OCP has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, and the
Persons executing this Agreement have been duly authorized to do so on behalf of
OCP. The execution, delivery and performance by OCP of this Agreement have been
duly and validly approved by all necessary partnership or other applicable
action and no other actions or proceedings on the part of OCP are necessary to
authorize this Agreement and the transactions contemplated hereby. OCP has duly
and validly executed and delivered this Agreement. This Agreement constitutes
the legal, valid and binding obligation of OCP, enforceable against OCP in
accordance with its respective terms.
2.3 OPERF. The income of Oregon Public Employees' Retirement Fund
("OPERF"), the sole limited partner of OCP, is exempt from tax under Section 115
of the Code.
2.4 U.S. Person Status. The execution, delivery and performance by OCP of
the transactions contemplated by the Contribution Agreement and the exercise by
OCP of a Redemption Right or Redemption Rights with respect to all Units
issuable to it will not result in the Shares received by OCP as a result thereof
being directly or indirectly owned by any Non-U.S. Person (other than indirect
ownership by retired OPERF participants residing outside the United States, who,
to OCP's knowledge, have no more than a one percent interest in OCP).
2.5 Consent. OCP hereby consents to the execution, delivery and
performance by Branch of the Contribution Agreement and consents to amending the
Partnership Agreement to effectuate the transactions contemplated by the
Contribution Agreement; provided, however, that such consents shall be null and
void if the waiver referred to in Section 1.5 is not in effect as of the date of
the First Closing.
2.6 Redemption of Units. OCP hereby irrevocably elects, for the benefit of
the Non-U.S. Persons who will hold Units, to exercise a Redemption Right under
Section 8.6 of the Partnership Agreement effective as of the First Redemption
Date with respect to all Units received by OCP at the First Closing and
consequently shall be deemed also to have elected to exercise a Redemption Right
effective as of the date of the applicable Subsequent Closing with respect to
any and all Units issuable to OCP at any Subsequent Closing, provided, however,
in
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either case that such election is effective only to the extent that the
Redemption Amount is paid in the form of the Share Amount, it being the intent
of OCP that such exercise of a Redemption Right shall not be effective if as a
result thereof OCP would receive the Cash Amount with respect to any such Units.
OCP hereby appoints J. Alexander Branch III, Richard H. Lee and Nicholas B.
Telesca, and each or either of them, each with full power of substitution, as
its attorney-in-fact for the purpose of executing a Notice of Redemption and
such other documents as the General Partner may reasonably require in connection
with such exercise by OCP of its Redemption Right, and OCP agrees to deposit no
later than 15 days prior to the First Redemption Date with such
attorneys-in-fact, or such other person as they may designate, any and all
certificates for Units to be redeemed pursuant to such exercise by OCP of its
Redemption Right, for the purpose of effectuating such redemption simultaneously
with the exercise of a Redemption Right by Persons who are Non-U.S. Persons (as
defined in the Partnership Agreement).
2.7 Standstill. During the Standstill Period, if any, and any Standstill
Extension Term, OCP will not, and neither OCP nor ABKB/LaSalle Securities
Limited ("ABKB/LaSalle") will cause OPERF to, directly or indirectly, purchase
or otherwise acquire one or more Shares (or options, rights or warrants or other
commitments to purchase and securities convertible into (or exchangeable or
redeemable for) one or more Shares) until such time as OCP and OPERF accounts
directed by OCP or ABKB/LaSalle ("OPERF Accounts") Beneficially Own a number of
Shares equal to or less than 9.8% of the outstanding shares of Common Stock, on
a fully diluted basis, and thereafter will not purchase or otherwise acquire one
or more Shares (or options, rights or warrants or other commitments to purchase)
and securities convertible into (or exchangeable or redeemable for) one or more
Shares as a result of which, after giving effect to such purchase or
acquisition, OCP and OPERF Accounts will Beneficially Own more than 9.8% of the
outstanding shares of Company Common Stock, on a fully diluted basis. All
capitalized terms not otherwise defined in the Contribution Agreement or in this
Agreement have the meanings ascribed to them in that certain Stockholders
Agreement by and among Regency, Security Capital, and The Regency Group, Inc.
dated as of July 10, 1996.
2.8 Matters Relating to OCP. Neither Branch Realty nor any other Branch
Affiliate is in default under the Branch Partnership Agreement such that OCP has
the right, nor to OCP's knowledge has any event or omission occurred which
through the passage of time or the giving of notice, or both, would entitle OCP
(i) to exercise any remedy with respect to the Assets or (ii) to avoid making
the capital contributions described in Section 10.1.5 of the Contribution
Agreement.
2.9 Ownership of Tenants. To the best of OCP's knowledge, except as set
forth on Exhibit A with respect to Bruno's, OCP does not own, directly or
indirectly, an interest in a tenant listed on Exhibit A, which interest is equal
to or greater than (i) 10% of the combined voting power of all classes of stock
of such tenant, (ii) 10% of the total number of shares in all classes of stock
of such tenant, or (iii) if such tenant is not a corporation, 10% of the assets
or net profits of such tenant. For purposes of this Section 2.9, the rules
prescribed by Section 318(a) of the Code for determining the ownership of stock,
as modified by Section 856(d)(5) of
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the Code, shall apply in determining direct and indirect ownership of stock,
assets or net profits. Regency shall advise OCP within a reasonable period of
time before the First Closing of any material changes to Exhibit A (including
changes resulting from the proposed investments in neighborhood and community
shopping centers contemplated herein).
2.10 Information in Connection with Preserving REIT Status. From and after
the First Closing, OCP will provide Regency with such information as Regency may
reasonably request from time to time regarding OCP in order to allow Regency to
determine its status as a real estate investment trust under the Code, including
with respect to OCP's ownership of a tenant in a leasing transaction which
Regency proposes to enter into that could have a material effect on Regency's
income. Regency shall provide OCP, in accordance with the notice provisions
contained in Section 0 hereof, with an annual list of tenants in a form
substantially similar to Exhibit A attached hereto, asking OCP to verify that it
is not a Related Tenant Owner (as defined in Article 5 of Regency's Articles of
Incorporation) as to the tenants listed thereon, or shall make a comparable
request for information, and OCP shall use reasonable best efforts to reply
within 30 days after the receipt of the request.
ARTICLE 3: MISCELLANEOUS
3.1 Headings. The headings contained in this Agreement are for reference
purposes only and are in no way intended to describe, interpret, define or limit
the scope, extent or intent of this Agreement or any provision hereof.
3.2 Pronouns and Plurals. Whenever required by the context, any pronoun
used in this Agreement shall include the corresponding masculine, feminine or
neuter forms, and the singular form of nouns, pronouns and verbs shall include
the plural and vice versa.
3.3 Survival. The representations and warranties contained in this
Agreement and the provisions of this Agreement that contemplate performance
after the First Closing shall survive the First Closing and shall not be deemed
to be merged into or waived by the instruments of such First Closing.
3.4 Costs of Litigation. The parties agree that the prevailing party in
any action brought with respect to or to enforce any right or remedy under this
Agreement shall be entitled to recover from the other party or parties all
reasonable costs and expenses of any nature whatsoever incurred by the
prevailing party in connection with such action, including, without limitation,
attorneys' fees and prejudgment interest.
3.5 Additional Actions and Documents. Each party hereto hereby agrees to
take or cause to be taken such further actions, to execute, deliver and file or
cause to be executed, delivered and filed such further documents, and to obtain
such consents, as may be necessary or as may be reasonably requested on or after
the Closing Date in order to fully effectuate the purposes, terms and conditions
of this Agreement, including, without limitation, the transfer and assignment to
the Partnership of, and the vesting in the Partnership title to, the Assets.
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3.6 Remedies Cumulative. The remedies provided in this Agreement shall be
cumulative and, except as otherwise expressly provided shall not preclude the
assertion or exercise of any other rights or remedies available by Law, in
equity or otherwise.
3.7 Entire Agreement; Amendment and Modification. This Agreement,
including the exhibits and other documents referred to herein or furnished
pursuant hereto, constitutes the entire understanding and agreement among the
parties hereto with respect to the transactions contemplated herein, and
supersedes all prior oral or written agreements, commitments or understandings
with respect to the matters provided for herein. No amendment, modification or
discharge of, or supplement to, this Agreement shall be valid or binding unless
set forth in writing and duly executed and delivered by the party against whom
enforcement of the amendment, modification, or discharge is sought.
3.8 Notices. All notices, demands, requests, and other communications
which may be or are required to be given, served, or sent by any party to any
other party pursuant to this Agreement shall be in writing and shall be hand
delivered, sent by overnight courier or mailed by first-class, registered or
certified U.S. mail, return receipt requested and postage prepaid, or
transmitted by facsimile, telegram, telecopy or telex, addressed as follows:
(i) If to OCP: (ii) If to Regency:
c/o LaSalle Advisors Limited 121 W. Forsyth St., Suite 200
100 E. Pratt St., 20th Fl. Jacksonville, Florida 32202
Baltimore, Maryland 21202 Telephone: (904) 356-7000
Telephone: (410) 347-0600 Facsimile: (904) 634-3428
Facsimile: (410) 528-8129 Attention: Martin E. Stein, Jr.,
Attention: Stanley J. Kraska, Jr. President
with copies to: with copies to:
Elizabeth Grieb, Esq. Charles E. Commander, Esq.
Piper & Marbury LLP Foley & Lardner
36 South Carles Street Green Leaf Building
Baltimore, Maryland 21201 200 Laura Street
Jacksonville, Florida 32202
If personally delivered, such communication shall be deemed delivered upon
actual receipt; if electronically transmitted pursuant to this paragraph, such
communication shall be deemed delivered the next business day after transmission
(and sender shall bear the burden of proof of delivery); if sent by overnight
courier pursuant to this paragraph, such communication shall be deemed delivered
upon receipt; and if sent by U.S. mail pursuant to this paragraph, such
communication shall be deemed delivered as of the date of delivery indicated on
the receipt issued by the relevant postal service, or, if the addressee fails or
refuses to accept delivery, as of the date of such failure or refusal. Any party
to this Agreement may change its address for the purposes of this Agreement by
giving notice thereof in accordance with this Section 0.
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3.9 Waivers. No delay or failure on the part of any party hereto in
exercising any right, power or privilege under this Agreement or under any other
documents furnished in connection with or pursuant to this Agreement shall
impair any such right, power or privilege or be construed as a waiver of any
default or any acquiescence therein. No single or partial exercise of any such
right, power or privilege shall preclude the further exercise of such right,
power or privilege, or the exercise of any other right, power or privilege. No
waiver shall be valid against any party hereto unless made in writing and signed
by the party against whom enforcement of such waiver is sought and then only to
the extent expressly specified therein.
3.10 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.11 Governing Law. This Agreement, the rights and obligations of the
parties hereto, and any claim or disputes relating thereto, shall be governed by
and construed and enforced in accordance with the Laws and judicial decisions of
the State of Florida, without regard to conflict of Law principles, except for
actions affecting title to real property, in which case the Laws of the State in
which the real property is located shall apply.
3.12 Assignment; Parties in Interest. No party hereto shall assign its
rights and/or obligations under this Agreement, in whole or in part, whether by
operation of Law or otherwise, without the prior written consent of the other
parties hereto. This Agreement shall be binding upon, inure to the benefit of,
and be enforceable by the respective heirs, executors, administrators,
successors, legal representatives and permitted assigns of the parties hereto.
Nothing contained herein shall be deemed to confer upon any other Person any
right or remedy under or by reason of this Agreement.
3.13 No Third Party Beneficiaries. This Agreement is solely for the benefit
of the parties hereto, and no provision of this Agreement shall be deemed to
confer any third party benefit.
3.14 Severability. Every provision of this Agreement is intended to be
severable. If any provision or term of this Agreement, or the application of a
provision or term to any Person or circumstance, shall be held invalid, illegal
or unenforceable, the validity, legality or enforceability of the other
provisions and terms hereof, or the application of such provision or term to
Persons or circumstances other than those to which it is held invalid, illegal
or enforceable, shall not be affected thereby, and there shall be deemed
substituted for the provision or term at issue a valid, legal and enforceable
provision as similar as possible to the provision or term at issue.
3.15 Limitation of Liability. Any obligation or liability whatsoever of
Regency which may arise at any time under this Agreement or any obligation or
liability which may be incurred by it pursuant to any other instrument,
transaction or undertaking contemplated hereby shall be satisfied, if at all,
out of Regency's assets only. No such obligation or liability shall be
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personally binding upon, nor shall resort for the enforcement thereof be had to,
the property of any of its shareholders, trustees, officers, employees or
agents, regardless of whether such obligation or liability is in the nature of
contract, tort or otherwise.
3.16 Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE
PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE CONTRIBUTION
AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. THE PROVISIONS OF
THIS SECTION 0 SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT.
REGENCY REALTY CORPORATION
By: /s/ Martin E. Stein, Jr.
Martin E. Stein, Jr., President
OPPORTUNITY CAPITAL PARTNERS
II LIMITED PARTNERSHIP
By: /s/ Stanley J. Kraska, Jr.
Opportunity Capital Corporation,
General Partner
By: /s/ Stanley J. Kraska, Jr.
Stanley J. Kraska, Jr.
Vice President
ABKB/LASALLE SECURITIES
LIMITED, as to Sections 2.7 and Article
3 only
By: /s/ Stanley J. Kraska, Jr.
Name: Stanley J. Kraska, Jr.
Title: Vice President
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EXHIBIT A
Tenant List
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