Prospectus Supplement to Prospectus dated August 24, 2000.
[LOGO OF REGENCY CENTERS APPEARS HERE]
FILED PURSUANT TO
RULE 424 (b) (5)
$150,000,000 FILE NO: 333-72899
Regency Centers, L.P.
8.45% Notes due September 1, 2010
Guaranteed as to the Payment of Principal and Interest by
Regency Realty Corporation
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Regency Centers will pay interest on the notes on March 1 and September 1
of each year. The first such payment will be made on March 1, 2001. The notes
will be issued only in denominations of $1,000 and even multiples of $1,000.
Regency Centers has the option to redeem some or all of the notes at any
time at a redemption price equal to the principal amount of the notes to be
redeemed plus a make-whole amount. The make-whole amount will be equal to the
excess of (1) the present value of the notes being redeemed and of the
interest Regency Centers would have paid on the notes being redeemed over (2)
the aggregate principal amount of notes being redeemed, determined using a
discount rate of 0.25% plus the average of the most recently published
treasury rates for the maturity comparable to the notes being redeemed.
Regency Realty Corporation guarantees the payment of principal and
interest on the notes.
See "Risk Factors" beginning on page 2 of the accompanying prospectus for
a discussion of material risks that you should consider before buying the
notes.
----------------
Neither the Securities and Exchange Commission nor any other regulatory
body has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
----------------
Per Note Total
-------- -----
Initial public offering price............................ 99.819% $149,728,500
Underwriting discount.................................... 0.650% $ 975,000
Proceeds, before expenses, to Regency Centers............ 99.169% $148,753,500
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the notes will accrue from August 29, 2000 and
must be paid by the purchaser if the notes are delivered after August 29,
2000.
----------------
The underwriter expects to deliver the notes in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York on August 29, 2000.
Goldman, Sachs & Co.
----------------
Prospectus Supplement dated August 24, 2000.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus supplement and the accompanying
prospectus that are not historical facts are forward-looking statements and,
with respect to Regency Realty, within Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934. These forward-
looking statements are based on current expectations, estimates and projections
about the industry and markets in which Regency Realty operates, management's
beliefs and assumptions made by management. Words such as "expects,"
"anticipates," "intends," "plans," "believes," "estimates," "should" and
similar expressions are intended to identify forward-looking statements. Such
statements involve known and unknown risks, uncertainties and other factors,
including those identified under the caption "Risk Factors" in the accompanying
prospectus, that may cause actual results to be materially different from any
future results expressed or implied by such forward-looking statements. You
should not place undue reliance on these forward-looking statements, which
speak only as of the date of this prospectus supplement.
S-2
REGENCY CENTERS AND REGENCY REALTY
We are a limited partnership which acquires, owns, develops and manages
grocery-anchored shopping centers in targeted markets in the United States. We
are the primary entity through which Regency Realty, our general partner and
97% owner, owns and operates its properties. Regency Realty will
unconditionally guarantee the payment of principal and interest on the notes.
Regency Realty is a real estate investment trust whose common stock is traded
on the New York Stock Exchange. Regency Centers' executive offices are located
at 121 West Forsyth Street, Suite 200, Jacksonville, Florida 32202 and our
telephone number is (904) 356-7000.
USE OF PROCEEDS
The net proceeds to Regency Centers from the sale of the notes of
approximately $148 million will be used to repay outstanding indebtedness under
our line of credit, which currently accrues interest at a rate equal to LIBOR
plus 1%. Subject to extension or renewal, our line of credit matures in March
2002.
CAPITALIZATION
The following table sets forth our capitalization as of June 30, 2000, as
adjusted to give effect to the offering and application of the net proceeds of
the offering. The capitalization table should be read in conjunction with our
consolidated financial statements and the related notes incorporated by
reference in this prospectus supplement and the accompanying prospectus.
June 30, 2000
---------------------
Offering
Actual Pro Forma
---------- ----------
(in thousands)
Debt:
Notes payable......................................... $ 687,634 $ 687,634
Notes offered hereby.................................. -- 150,000
Unsecured line of credit(1)........................... 340,000 191,697
---------- ----------
Total debt.......................................... 1,027,634 1,029,331
---------- ----------
Limited partners' interest in consolidated
partnerships........................................... 9,211 9,211
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Partners' capital:
Cumulative redeemable preferred units(2).............. 352,059 352,059
Operating partnership units........................... 1,193,441 1,193,441
---------- ----------
Total partners' capital............................. 1,545,500 1,545,500
---------- ----------
Total capitalization................................ $2,582,345 $2,584,042
========== ==========
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(1) As of August 23, 2000, the outstanding balance on our line of credit was
$395 million. We intend to apply the net proceeds of the offering to repay
outstanding balances under our line of credit and, after giving effect to
this repayment and a $40 million draw under our line of credit to pay
partner distributions on August 25, 2000, the outstanding balance under our
line of credit is expected to be $287 million. See "Use of Proceeds".
(2) Represents our cumulative redeemable preferred limited partnership units.
We anticipate selling in the next two weeks approximately $24 million of
preferred limited partnership units with an annual distribution rate of
8.75%. The proceeds will be used to repay outstanding debt under our line
of credit. We expect the terms of the preferred units to be similar to
those of our five other series of preferred units. For example, the units
will be redeemable at our option under certain circumstances.
S-3
DESCRIPTION OF THE NOTES
Title: 8.45% Notes due September 1, 2010
Total principal amount being issued: $150,000,000
Due date for principal: September 1, 2010
Interest rate: 8.45% per annum
Date interest starts accruing: August 29, 2000
Interest due dates: Every March 1 and September 1
First interest due date: March 1, 2001
Regular record dates for interest: February 15 for March interest; August 15 for
September interest
Form of Notes: The notes will be issued as one or more global securities, and
may only be withdrawn from the depositary in the limited situations described
under "Description of the Notes--Denomination, Registration, Transfer and Book-
Entry Procedures--Exchanges of Book-Entry Notes for Certificated Notes" in the
accompanying prospectus on page 12.
Name of Depositary: The Depository Trust Company ("DTC"). See the information
under "Description of the Notes--Denomination, Registration, Transfer and Book-
Entry Procedures" in the accompanying prospectus for more information about
DTC's procedures.
Trading in DTC: Indirect holders trading their beneficial interests in the
global securities through DTC must trade in DTC's same-day funds settlement
system and pay in immediately available funds.
Redemption: We may redeem some or all of the notes at any time--that is, we may
repay them early. You have no right to require us to call the notes.
Redemption Price: If we redeem the notes, we must pay you the principal amount
of the notes we are redeeming, plus an amount which is intended to compensate
you for the loss of interest over the term of the notes due to the early
payment. This "Make-Whole Amount" is the excess of (1) the present value of the
notes being redeemed and of the interest you would have received if we did not
redeem the notes (exclusive of interest accrued to the redemption date) over
(2) the aggregate principal amount of notes we are redeeming. The present value
is determined using a discount rate of 0.25% plus the average of the most
recent published treasury rates for the maturity corresponding to the remaining
time to maturity of the notes to be redeemed. In each case, we will also pay
you accrued interest if we have not otherwise paid you interest through the
redemption date. Notes will stop bearing interest on the redemption date, even
if you do not collect your money.
For more detailed information on the determination of the redemption price,
you should read "Description of the Notes--Optional Redemption" on page 13 and
"--Certain Definitions" beginning on page 17, each in the accompanying
prospectus.
Redemption Notices: We will give notice to DTC of any redemption we propose to
make at least 30 days, but not more than 60 days, before the redemption date.
If we redeem only some of the notes, DTC's practice is to determine by lot the
amount of notes to be redeemed of each of its participating institutions.
Notice by DTC to these participants and by participants to "street name"
holders of indirect interests in the notes will be made according to
arrangements among them and may be subject to statutory or regulatory
requirements.
Sinking Fund: There is no sinking fund.
Defeasance: We may defease the notes, or certain covenants of the notes, as
described under "Description of the Notes--Defeasance" beginning on page 21 of
the accompanying prospectus.
S-4
Certain Covenants: The notes contain various covenants, including the following
limitations on our ability to incur debt. For additional information on these
covenants, including definitions of the capitalized terms in this summary, see
"Description of the Notes--Covenants--Limitation on Indebtedness" beginning on
page 14 and "--Certain Definitions" beginning on page 17, each in the
accompanying prospectus.
. Neither Regency Centers nor any subsidiary will incur any Indebtedness
if, immediately after giving effect to the incurrence of the
additional Indebtedness and the application of the proceeds of such
Indebtedness, the aggregate principal amount of all outstanding
Indebtedness of Regency Centers and its subsidiaries on a consolidated
basis determined in accordance with GAAP is greater than 60% of the
sum of, without duplication:
(A) Total Assets as of the end of the most recent calendar quarter and
(B) The purchase price of any real estate assets or mortgages
receivable acquired and the amount of any securities offering
proceeds received (to the extent that the proceeds were not used
to acquire real estate assets or mortgages receivable or used to
reduce Indebtedness) by Regency Centers or any subsidiary since
the end of the most recent calendar quarter, including proceeds
obtained in connection with the incurrence of the additional
Indebtedness.
. Neither Regency Centers nor any subsidiary will incur any Indebtedness
secured by any encumbrance on the property of Regency Centers or any
subsidiary if, immediately after giving effect to the incurrence of
the additional Indebtedness and the application of the proceeds from
such Indebtedness, the aggregate amount of all outstanding
Indebtedness of Regency Centers and its subsidiaries on a consolidated
basis which is secured by an encumbrance on property of Regency
Centers or any subsidiary is greater than 40% of the sum of:
(A) Total Assets as of the end of the most recent calendar quarter and
(B) The purchase price of any real estate assets or mortgages
receivable acquired and the amount of any securities offering
proceeds received (to the extent that the proceeds were not used
to acquire real estate assets or mortgages receivable or used to
reduce Indebtedness) by Regency Centers or any subsidiary since
the end of the most recent calendar quarter, including proceeds
obtained in connection with the incurrence of the additional
Indebtedness.
. Neither Regency Centers nor any subsidiary will incur any Indebtedness
if Consolidated Income Available for Debt Service for the four
consecutive fiscal quarters most recently ended prior to the date of
the incurrence of the additional Indebtedness, on a pro forma basis,
would be less than 1.5 times the Annual Service Charge on all
Indebtedness outstanding after giving effect to the incurrence of such
Indebtedness and to the application of the proceeds from such
Indebtedness, calculated on the assumptions described under
"Description of the Notes--Covenants--Limitation on Indebtedness"
beginning on page 14 of the accompanying prospectus.
. Regency Centers and its subsidiaries must at all times own Total
Unencumbered Assets equal to at least 150% of the aggregate
outstanding principal amount of the Unsecured Indebtedness of Regency
Centers and its subsidiaries on a consolidated basis.
The notes will also contain the other covenants described under
"Description of the Notes--Covenants" beginning on page 14 and will be subject
to the events of default described under "Description of the Notes-- Events of
Default" beginning on page 20, each in the accompanying prospectus.
S-5
This section summarizes the specific financial and legal terms of the notes
that are more generally described under "Description of the Notes" beginning on
page 10 of the accompanying prospectus. If anything described in this section
is inconsistent with the terms described under "Description of the Notes" in
the accompanying prospectus, you should consider the terms here to be the ones
that prevail.
UNDERWRITING
Regency Centers and Goldman, Sachs & Co. ("Goldman Sachs") have entered
into an underwriting agreement and a pricing agreement with respect to the
notes. Subject to certain conditions, Goldman Sachs has agreed to purchase all
of the notes.
Notes sold by Goldman Sachs to the public will initially be offered at the
initial public offering price set forth on the cover page of this prospectus
supplement. Any notes sold by Goldman Sachs to securities dealers may be sold
at a discount from the initial public offering price of up to 0.400% of the
principal amount of the notes. Any such securities dealers may resell any notes
purchased from Goldman Sachs to certain other brokers or dealers at a discount
from the initial public offering price of up to 0.250% of the principal amount
of the notes. If all the notes are not sold at the initial public offering
price, Goldman Sachs may change the offering price and the other selling terms.
The notes are a new issue of securities with no established trading market.
Regency Centers has been advised by Goldman Sachs that Goldman Sachs intends to
make a market in the notes but is not obligated to do so and may discontinue
market making at any time without notice. No assurance can be given as to the
liquidity of the trading market for the notes.
In connection with the offering, Goldman Sachs may purchase and sell the
notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by Goldman Sachs of a greater aggregate
principal amount of notes than it is required to purchase in the offering.
Stabilizing transactions consist of certain bids or purchases made for the
purpose of preventing or retarding a decline in the market price of the notes
while the offering is in progress.
These activities by Goldman Sachs may stabilize, maintain or otherwise
affect the market price of the notes. As a result, the price of the notes may
be higher than the price that otherwise might exist in the open market. If
these activities are commenced, they may be discontinued by Goldman Sachs at
any time. These transactions may be effected in the over-the-counter market or
otherwise.
Goldman Sachs intends to contribute approximately $20 million of the notes
to an entity formed for the purpose of holding the notes and other debt
securities of other issuers and issuing collateralized debt obligations and
will receive a cash payment from the trust in the amount of the initial public
offering price for those notes.
Regency Centers estimates that its share of the total expenses of the
offering, excluding underwriting discounts and commissions, will be
approximately $450,000.
Regency Centers has agreed to indemnify Goldman Sachs against certain
liabilities, including liabilities under the Securities Act of 1933.
In the ordinary course of their respective businesses, Goldman Sachs and
its affiliates have engaged, and may in the future engage, in investment
banking and/or commercial banking transactions with Regency Centers and its
affiliates.
VALIDITY OF NOTES
The validity of the notes offered hereby and the guarantee will be passed
upon for Regency Centers and Regency Realty by Foley & Lardner, Jacksonville,
Florida. The validity of the notes offered hereby and the guarantee will be
passed upon for Goldman Sachs by Sullivan & Cromwell, New York, New York.
S-6
PROSPECTUS
[LOGO OF REGENCY CENTERS, L.P. APPEARS HERE]
$600,000,000
Notes
Regency Centers, L.P.
121 W. Forsyth Street
Suite 200
Jacksonville, Florida 32202
(904) 356-7000
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Regency Centers, L.P. may offer from time to time up to $600,000,000 of
unsecured notes. We will provide the amount, price and terms of the notes in a
prospectus supplement.
The notes will be guaranteed by our affiliate, Regency Realty Corporation.
If any agents, underwriters or dealers are involved in the sale of the notes,
we will include the names of such agents, underwriters or dealers and their
commissions or discounts and the net proceeds we will receive from such sale in
a prospectus supplement.
This prospectus may not be used for the sale of notes unless accompanied by a
prospectus supplement.
See "Risk Factors" beginning on page 2 for a discussion of material risks which
you should consider before buying notes.
- --------------------------------------------------------------------------------
These notes have not been approved by the Securities and Exchange Commission or
any state securities commission nor has the Securities and Exchange Commission
or any state securities commission passed upon the accuracy or adequacy of this
prospectus. Any representation to the contrary is a criminal offense.
August 24, 2000
PROSPECTUS SUMMARY
The Issuer
Regency Centers, L.P. is a limited partnership which acquires, owns, develops
and manages neighborhood shopping centers throughout the United States. We are
the primary entity through which our general partner, Regency Realty
Corporation, owns and operates its properties. Regency Realty is a real estate
investment trust whose common stock is traded on the New York Stock Exchange.
The Guarantor
Regency Realty, our general partner and 97% owner, will unconditionally
guarantee the notes.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with the
SEC. You may read and copy any document we file at the SEC's public reference
rooms in Washington, D.C., New York, New York and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information on the public reference
rooms. Our SEC filings are also available to the public from the SEC's web site
at http://www.sec.gov. Our general partner also maintains a web site at
www.regencyrealty.com.
This prospectus is part of a registration statement we filed with the SEC. The
SEC allows us to "incorporate by reference" the information we file with them,
which means that we can disclose important information to you by referring you
to those documents. The information incorporated by reference is considered to
be part of this prospectus, and later information that we file with the SEC
will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings made with the SEC
under Section 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of 1934
until we sell all of the notes:
. Our registration statement on Form 10 filed August 7, 1998 (Commission File
No. 0-24763) as amended by Form 10/A filed October 20, 1998, by Form 10/A-2
filed November 25, 1998 and by Form 10/A-3 filed January 11, 1999;
. Our annual report on Form 10-K for the year ended December 31, 1999
(Commission File No. 0-24763);
. Regency Realty's annual report on Form 10-K for the year ended December 31,
1999 (Commission File No. 1-12298);
. Our quarterly reports on Form 10-Q for the quarters ended March 31, 2000 and
June 30, 2000 (Commission File No. 0-24763); and
. Regency Realty's quarterly reports on Form 10-Q for the quarters ended
March 31, 2000 and June 30, 2000 (Commission File No. 1-12298).
You may request a copy of these filings, at no cost, by writing or telephoning
us at the following address:
Ms. Lesley Stocker
Shareholder Communications
Regency Realty Corporation
121 W. Forsyth Street
Suite 200
Jacksonville, FL 32202
(904) 356-7000
You should rely only on the information incorporated by reference or provided
in this prospectus or any supplement. We have not authorized anyone else to
provide you with different information. We are not making an offer of these
notes in any state where the offer is not permitted. You should not assume that
the information in this prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
1
RISK FACTORS
The following contains a description of the material risks involved in owning
notes.
Our Debt Financing May Adversely
Affect Payment of Notes
We do not expect to generate sufficient funds from operations to make balloon
principal payments when due on our debt, including the notes. If we are unable
to refinance our debt on acceptable terms, we might be forced to dispose of
properties, which might result in losses, or to obtain financing at unfavorable
terms. Either could reduce the cash flow available to meet debt service
obligations. In addition, if we are unable to meet required mortgage payments,
the property securing the mortgage could be foreclosed upon by the mortgagee,
causing the loss of cash flow from that property to meet debt service
obligations.
Neither Regency Realty's nor our organizational documents limit the amount of
debt that may be incurred. Regency Realty has established a policy limiting
total debt to 50% of total assets at cost and maintaining a minimum debt
service coverage ratio of 2:1. The board of directors of Regency Realty may
amend this policy at any time without the approval of its shareholders or our
limited partners.
Unless otherwise indicated in the prospectus supplement, the indenture for the
notes will permit us to incur additional debt, subject to certain limits. The
degree to which we are leveraged could have important consequences to you,
including the following:
. Leverage could affect our ability to obtain additional financing in the
future to repay the notes or for working capital, capital expenditures,
acquisitions, development or other general corporate purposes, and
. Leverage could make us more vulnerable to a downturn in our business or the
economy generally.
Substantially all of our debt is cross-defaulted, but not cross-collateralized.
Our line of credit also imposes certain covenants which limit our flexibility
in obtaining other financing, such as limitations on floating rate debt and a
prohibition on negative pledge agreements.
Increased Interest Rates May
Reduce Our Cash Flow
We are obligated on floating rate debt. If we do not eliminate our exposure to
increases in interest rates through interest rate protection or cap agreements,
such increases may reduce cash flow and our ability to service our debt. If
interest rates increase significantly, we would consider entering into interest
rate swap or cap agreements with respect to all or a portion of our remaining
floating rate debt.
We are also prohibited by the terms of our unsecured line of credit from
incurring other floating rate debt in excess of 25% of the gross asset value of
our assets unless we obtain interest rate swaps, caps or collars which prevent
the effective interest rate on the portion of such other debt in excess of 25%
from increasing above 9% per year.
Although swap agreements would enable us to convert floating rate liabilities
to fixed rate liabilities and cap agreements would enable us to cap our maximum
interest rate, they would expose us to the risk that the counterparties to such
hedge agreements may not perform, which could increase our exposure to rising
interest rates. Generally, however, the counterparties to our hedging
agreements would be major financial institutions. If we enter into any swap
agreements in the future, decreases in interest rates would increase our
interest expense as compared to the underlying floating rate debt. This could
result in our making payments to unwind such agreements, such as in connection
with a prepayment of the floating rate debt. Cap agreements would not protect
us from increases up to the capped rate.
Effective Subordination of Notes
May Reduce Amounts Available for
Payment of Notes
The notes will be unsecured. Because the holders of secured debt may foreclose
on our assets securing such debt, thereby reducing the cash flow from the
foreclosed property available for payment of unsecured debt, and because the
holders of secured
2
debt would have priority over unsecured creditors in the event of our
liquidation, the notes will be effectively subordinated to our secured debt.
The indenture for the notes permits us to enter into additional mortgages and
incur secured debt provided certain conditions are met. See "Description of the
Notes--Covenants". Consequently, in the event of our bankruptcy, liquidation or
similar proceeding, the holders of secured debt will be entitled to proceed
against their collateral, and such collateral will not be available for payment
of unsecured debt, including the notes.
The guarantee of the notes by the guarantor is an unsecured obligation of the
guarantor, and (1) is effectively subordinated to mortgage and other secured
debt of the guarantor and (2) ranks equally with the guarantor's other
unsecured and unsubordinated debt.
Unsuccessful Development
Activities Could Reduce Cash Flow
We intend to actively pursue development activities as opportunities arise.
Development activities generally require various government and other
approvals. We may not recover our investment in development projects for which
approvals are not received. We will incur risks associated with any such
development activities. These risks include:
. the risk that we may abandon development opportunities and lose our
investment in such developments;
. the risk that construction costs of a project may exceed original estimates,
possibly making the project unprofitable;
. a lack of cash flow during the construction period; and
. the risk that occupancy rates and rents at a completed project will not be
sufficient to make the project profitable.
In the case of an unsuccessful development project, our loss could exceed our
investment in the project. Also, we have competitors seeking properties for
development, some of which may have greater resources than we have.
If we sustain material losses due to an unsuccessful development project, our
cash flow will be reduced and the creditworthiness of the notes may be
adversely affected.
Loss of Revenues from Major Tenant
Could Reduce Our Future Cash Flow
We derive significant revenues from anchor tenants such as Kroger or Publix
that occupy more than one center. We could be adversely affected by the loss of
revenues in the event a major tenant:
. files for bankruptcy or insolvency;
. experiences a downturn in its business;
. does not renew its leases as they expire; or
. renews at lower rental rates.
Vacated anchor space, including space owned by the anchor, can reduce rental
revenues generated by the shopping center because of the loss of the departed
anchor tenant's customer drawing power. Most anchors have the right to vacate
and prevent retenanting by paying rent for the balance of the lease term. If
certain major tenants cease to occupy a property, then certain other tenants
are entitled to terminate their leases at the property.
We Could Be Adversely Affected by
Poor Market Conditions Where
Properties Are Geographically
Concentrated
Our performance depends on the economic conditions in markets in which our
properties are concentrated, including California, Florida, Georgia and Texas.
Our operating results could be adversely affected if market conditions, such as
an oversupply of space or a reduction in demand for real estate, in such areas
become more competitive relative to other geographic areas.
Partnership Structure May Limit
Flexibility to Manage Assets
We are Regency Realty's primary property-owning vehicle. From time to time, we
acquire properties in exchange for limited partnership interests. This
3
acquisition structure may permit limited partners who contribute properties to
us to defer some, if not all, of the income tax that they would incur if they
sold the property.
Properties contributed to us may have unrealized gain attributable to the
difference between the fair market value and adjusted tax basis in the
properties prior to contribution. As a result, the sale of these properties
could cause adverse tax consequences to the limited partners who contributed
the properties.
Generally, we have no obligation to consider the tax consequences of our
actions to any limited partner. However, we may acquire properties in the
future subject to material restrictions on refinancing or resale designed to
minimize the adverse tax consequences to the limited partners who contribute
such properties. These restrictions could significantly reduce our flexibility
to manage our assets by preventing us from reducing mortgage debt or selling a
property when such a transaction might be in our best interest in order to
reduce interest costs or dispose of an under-performing property.
Uninsured Loss May Adversely
Affect Our Ability to Pay Notes
We carry comprehensive liability, fire, flood, extended coverage and rental
loss insurance with respect to our properties with policy specifications and
insured limits customarily carried for similar properties. We believe that the
insurance carried on our properties is adequate in accordance with industry
standards. There are, however, certain types of losses (such as from
hurricanes, wars or earthquakes) which may be uninsurable, or the cost of
insuring against such losses may not be economically justifiable. If an
uninsured loss occurs, we could lose both the invested capital in and
anticipated revenues from the property, and would still be obligated to repay
any recourse mortgage debt on the property. In that event, our cash flow
available to pay the notes could be reduced.
Highly Leveraged Transaction or
Change In Control May Adversely
Affect Credit-worthiness of Notes
The indenture for the notes contains provisions that are intended to protect
holders of the notes against adverse effects on the creditworthiness of the
notes in the event of a highly leveraged transaction or a significant corporate
transaction (such as the acquisition of securities, merger, the sale of assets
or otherwise) involving us or Regency Realty. However, the indenture does not
contain provisions which protect holders of notes against adverse effects of a
change in control per se, such as the sale of Regency Realty stock or the
election of directors of Regency Realty. Accordingly, there can be no assurance
that we or Regency Realty will not enter into such a transaction and thereby
adversely affect our ability to meet our obligations under the notes or Regency
Realty's obligation under its guarantee. Moreover, there can be no assurance
that a significant corporate transaction such as an acquisition which complies
with the indenture provisions will not adversely affect the creditworthiness of
the notes.
Tax-Driven Actions by Regency
Realty May Reduce Creditworthiness
of Notes
We must rely upon Regency Realty as general partner to manage our affairs and
business. In addition to the risks described above that relate to us, Regency
Realty is subject to certain other risks that may affect its financial
condition, including adverse consequences if Regency Realty fails to qualify as
a real estate investment trust for federal income tax purposes. Regency Realty,
as our general partner, could cause us to take actions which help Regency
Realty maintain its qualification as a real estate investment trust even though
such actions may adversely affect the creditworthiness of the notes. For
example, Regency Realty could cause us to incur debt to enable it to fulfill
the shareholder distribution requirements necessary to maintain its real estate
investment trust qualification. If Regency fails to qualify as a real estate
investment trust, the adverse tax consequences could also reduce its ability to
satisfy its obligations under its guarantee.
SC-USRealty Contractual
Limitations May Adversely Impact
Our Operations and Cash Flow
Affiliates of Security Capital Holdings S.A. and Security Capital U.S. Realty
owned 34,378,236 shares of common stock of Regency Realty as of June 30, 2000,
constituting 53.2% of Regency Realty's common stock outstanding on that date
(including options and convertible securities on a
4
fully diluted basis). See "--Prohibitions on Investments by Non-U.S. Investors
Limit Ability to Raise Capital."
SC-USRealty is Regency Realty's single largest shareholder and has
participation rights entitling it to maintain its percentage ownership of the
common stock. SC-USRealty has the right to nominate the number of the directors
of Regency Realty's board of directors proportionate to its ownership in
Regency Realty, rounded down to the nearest whole number, but not more than 49%
of the board. Although certain "standstill" provisions preclude SC-USRealty
from owning more than 60% of Regency Realty common stock on a fully diluted
basis and limit SC-US Realty's ability to vote its shares, SC-USRealty has
substantial influence over Regency Realty's affairs. If the standstill period
or any standstill extension term ends, SC-USRealty could be in a position to
control the election of the board or the outcome of any corporate transaction
or other matter submitted to the shareholders for approval.
Regency Realty has agreed with SC-USRealty to certain limitations on Regency
Realty's operations, including restrictions relating to:
. incurrence of total debt exceeding 60% of the gross book value of Regency
Realty's consolidated assets,
. investments in properties other than certain shopping centers,
. the amount of assets that it owns indirectly through other entities,
. the amount of assets managed by third parties,
. the amount of passive income produced by Regency Realty and
. entering into joint ventures or similar arrangements.
These restrictions, which are intended to permit SC-USRealty to comply with
certain requirements of the Internal Revenue Code, and other countries' tax
laws applicable to foreign investors, limit somewhat Regency Realty's
flexibility to structure transactions that might otherwise be advantageous to
Regency Realty or to us. Although we do not believe that these limitations will
materially impair our ability to conduct our business, there can be no
assurance that these limitations will not adversely affect our operations in
the future, including causing a reduction in the cash flow available for
payment of the notes.
Prohibitions on Investments by
Non-U.S. Investors Limit Ability
to Raise Capital
Section 5.14 of Regency Realty's Articles of Incorporation invalidates any
issuance or transfer of shares that would (1) result in 4.9% or more of the
fair market value of Regency Realty's capital stock being held by non-U.S.
persons excluding SC-USRealty, or (2) result in 50% or more of such fair market
value being held by non-U.S. persons, including SC-USRealty. SC-USRealty has
the right to waive any of these restrictions.
Section 5.14 of Regency's Realty's Articles of Incorporation also contains
prohibitions on transfers of shares which will:
. preserve Regency Realty's ability to requalify as a domestically controlled
REIT if ownership by non-U.S. persons drops below 50% by value of Regency
Realty's outstanding capital stock, and
. ensure that once Regency Realty returns to the status of a domestically
controlled REIT, it will remain one unless such restrictions are waived by
SC-USRealty.
The transfer restrictions summarized above will limit Regency Realty's ability
to raise capital from non-U.S. persons and therefore may reduce the capital
available for payment of the notes.
We Face Competition from Numerous
Sources
The ownership of shopping centers is highly fragmented, with less than 10%
owned by real estate investment trusts. We face competition from other real
estate investment trusts in the acquisition, ownership and leasing of shopping
centers as well as from numerous small owners. We compete to develop shopping
centers with other real estate investment trusts engaged in development
activities as well as with local, regional and national real estate developers.
We compete in the acquisition of properties through proprietary research that
identifies opportunities in markets with high barriers to entry and higher-
than-average population growth and household income.
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We seek to maximize rents per square foot by establishing relationships with
supermarket chains that are first or second in their markets and leasing non-
anchor space in multiple centers to national or regional tenants. We compete to
develop properties by applying our proprietary research methods to identify
development and leasing opportunities and by pre-leasing a significant portion
of a center before beginning construction.
There can be no assurance, however, that other real estate owners or developers
will not utilize similar research methods and target the same markets and
anchor tenants that we target, or that such entities may successfully control
these markets and tenants to our exclusion. If we cannot successfully compete
in our targeted markets, our cash flow, and therefore our ability to pay the
notes, may be adversely affected.
Costs of Environmental Remediation
Could Reduce Our Cash Flow
Under various federal, state and local laws, an owner or manager of real estate
may be liable for the costs of removal or remediation of certain hazardous or
toxic substances on such property. These laws often impose liability without
regard to whether the owner knew of, or was responsible for, the presence of
hazardous or toxic substances. The cost of any required remediation and the
owner's liability therefor could exceed the value of the property and/or the
aggregate assets of the owner.
We have properties that will require or are currently undergoing varying levels
of environmental remediation. These remediations are not expected to have a
material financial effect on us or the guarantors due to financial statement
reserves and various state-regulated programs that shift the responsibility and
cost for remediation to the state.
The presence of such substances, or the failure to properly remediate hazardous
or toxic substances, may adversely affect our ability to sell or rent a
contaminated property or borrow using such property as collateral. Any of these
developments could reduce the cash flow available for payment of the notes.
USE OF PROCEEDS
The net proceeds from the sale of the notes will be used for general corporate
purposes, which may include the repayment of outstanding indebtedness, the
acquisition of shopping centers as suitable opportunities arise, the expansion
and improvement of properties in our portfolio and development costs for new
centers. If we use the net proceeds for another purpose, we will include that
information in a prospectus supplement.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our ratios of earnings to fixed charges for the six months ended June 30, 2000
and the years ended December 31, 1999, 1998, 1997, 1996 and 1995 were 1.7, 1.9,
2.0, 2.3, 1.7 and 1.1, respectively.
The ratios of earnings to fixed charges were computed by dividing earnings by
fixed charges. For purposes of computing these ratios, earnings have been
calculated by adding fixed charges (excluding capitalized interest and
preferred distributions) to income before minority interests and gains and
losses from the sale of operating properties and subtracting equity in income
of investments in real estate. Fixed charges consist of interest costs (whether
expensed or capitalized) and amortization of deferred debt costs and preferred
distributions.
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REGENCY REALTY AND THE ISSUER
We acquire, own, develop and manage neighborhood shopping centers in targeted
markets. As a result of our formation in 1996 and the consolidation of
substantially all of our neighborhood shopping centers in early 1998, we are
the primary entity through which Regency Realty owns and operates its
properties and through which Regency Realty intends to expand its ownership and
operation of properties.
Operating and Investment Philosophy
Regency Realty's key operating and investment objective is to create long-term
shareholder value by:
. growing its high quality real estate portfolio of grocery-anchored
neighborhood shopping centers in attractive infill markets;
. maximizing the value of the portfolio through its "Retail Operating System,"
developed in conjunction with SC-USRealty, which incorporates research based
investment strategies, value-added leasing and management systems, and
customer-driven development programs; and
. using conservative financial management and Regency Realty's substantial
capital base to access the most cost effective capital to fund Regency
Realty's growth.
Management believes that the key to achieving its objective is its single focus
on, and growing critical mass of, quality grocery-anchored neighborhood
shopping centers. In the opinion of management, our premier platform of
shopping centers in targeted markets, our proprietary research capabilities,
our value enhancing Retail Operating System, our cohesive and experienced
management team and our access to competitively priced capital enable us to
maintain a competitive advantage over other operators.
Regency Realty believes that ownership of shopping centers throughout the
United States is highly fragmented, with less than 10% owned by REITs, and that
many centers are held by unsophisticated and undercapitalized owners. As a
result, Regency Realty believes that an opportunity exists for it to be a
consolidating force in the industry. In addition, Regency Realty believes that
through proprietary demographic research and targeting, its portfolio and
tenant mix can be customized for and marketed to national and regional
retailers, thereby producing greater sales and a value-added shopping
environment for both retailer and shopper.
Grocery-Anchored Infill Strategy
We focus our investment strategy on grocery-anchored infill shopping centers.
Infill locations are situated in densely populated residential communities
where there are significant barriers to entry, such as zoning restrictions,
growth management laws or limited availability of sites for development or
expansions. We are focused on building a platform of grocery-anchored
neighborhood shopping centers because grocery stores provide convenience
shopping for daily necessities, generate foot traffic for adjacent "side shop"
tenants and should be better able to withstand adverse economic conditions. By
developing close relationships with the leading supermarket chains, we believe
we can attract the best "side shop" merchants and enhance revenue potential.
Research Driven Market Selection
We have identified target markets which were selected because, in general, they
offer greater growth in population, household income and employment than the
national averages. In addition, we believe that we can achieve "critical mass"
in these markets (defined as owning or managing four to five shopping centers)
and that we can generate sustainable competitive advantages, through long-term
leases to the predominant grocery-anchor and other barriers to entry from
competition. Within these markets, our research staff further defines and
selects submarkets and trade areas based on additional analysis of the above
data. We then identify target properties and their owners (including
development opportunities) within these submarkets and trade areas based on
3-mile radius demographic data and rank potential properties for purchase.
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Retail Operating System
Our Retail Operating System drives our value-added operating strategy. Our
Retail Operating System is characterized by:
. proactive leasing and management;
. value enhancing remerchandising initiatives;
. our "preferred customer initiative"; and
. a customer-driven development and redevelopment program.
Proactive leasing and management
Our integrated approach to property management strengthens our leasing and
management efforts. Property managers are an integral component of the
acquisition and integration teams. Thorough, candid tenant interviews by
property managers during acquisition due diligence allow us to quickly assess
both problem areas as well as opportunities for revenue enhancement prior to
closing. Property managers are responsible not only for the general operations
of their centers, but also for coordinating leasing efforts, thereby aligning
their interests with ours. In addition, our information systems allow managers
to spot future lease expirations and to proactively market and remerchandise
spaces several years in advance of such expirations.
Value enhancing remerchandising initiatives
We believe that certain shopping centers underserve their customers, reducing
foot traffic and negatively affecting the tenants located in the shopping
center. In response, we have a remerchandising program which is directed at
obtaining the optimum mix of tenants offering goods, personal services and
entertainment and dining options in each of our shopping centers. By re-
tenanting shopping centers with tenants that more effectively service the
community, we expect to increase sales, and therefore the value of our shopping
centers.
Preferred customer initiative
We have established a preferred customer initiative with dedicated personnel
whose goal is to establish new and strengthen existing strategic relationships
with successful retailers at the national, regional and local levels. We
achieve this goal by establishing corporate relationships, negotiating standard
lease forms and working with the preferred customers to match expansion plans
with future availability in our shopping centers. We monitor retail trends and
the operating performance of these preferred customers. Management expects the
benefits of the preferred customer initiative to improve the merchandising and
performance of the shopping centers, establish brand recognition among leading
operators, reduce turnover of tenants and reduce vacancies. We currently have
identified and are developing relationships with 75 preferred customers,
including Radio Shack, GNC, Hallmark Cards, Mailboxes, Etc. and Starbucks
Coffee, and continue to target additional tenants with which to establish
preferred customer relationships.
Customer-driven development and redevelopment program
We conduct our development and redevelopment program in close cooperation with
our major customers, including Kroger, Publix and Eckerd. We use our
development capabilities to service these customer's growth needs by building
or re-developing modern properties with state of the art supermarket formats
that generate higher returns for us under new long-term leases. We manage our
development risk by obtaining signed anchor leases prior to beginning
construction.
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Capital Strategy
We intend to maintain a conservative capital structure designed to enhance
access to capital on favorable terms, to allow growth through development and
acquisition and to promote future earnings growth. We have adopted a policy of
limiting total indebtedness to 50% of total assets at cost and maintaining a
minimum debt service coverage ratio of 2:1.
Under our unsecured line of credit we are required to comply with certain
financial and other covenants customary with this type of unsecured financing.
These financial covenants include (i) maintenance of minimum net worth, (ii)
ratio of total liabilities to gross asset value, (iii) ratio of secured
indebtedness to gross asset value, (iv) ratio of EBITDA to interest expense,
(v) ratio of EBITDA to debt service, preferred stock distributions and reserve
for replacements, and (vi) ratio of unencumbered net operating income to
interest expense on unsecured indebtedness. In addition, we may not enter into
a negative pledge agreement with another lender and may not incur other
floating rate debt in excess of 25% of gross asset value without interest rate
protection. The line is used primarily to finance the acquisition and
development of real estate, but is available for general working capital
purposes.
Since Regency Realty's initial public offering in 1993, we and Regency Realty
have financed our growth in part through a series of public and private
offerings of Regency Realty equity and private placement of our partnership
units.
SC-USRealty Alliance
In June 1996, Regency Realty entered into a strategic alliance with Security
Capital Holdings, S.A. (together with its parent company, Security Capital U.S.
Realty, "SC-USRealty"). As a result of such alliance, SC-USRealty became
Regency Realty's principal shareholder. In addition to SC-USRealty's initial
investment in 1996, SC-USRealty has participated in subsequent Regency Realty
equity issuances pursuant to participation rights. SC-USRealty beneficially
owned 53.2% of Regency Realty's common stock as of June 30, 2000, including
options and convertible securities on a fully diluted basis. SC-USRealty's
stockholders agreement with Regency Realty, which includes provisions limiting
SC-USRealty's stock ownership for a specific period of time, gives SC-USRealty
the right to own up to 60% of Regency Realty's common stock on a fully diluted
basis. In connection with its investment, SC-USRealty has placed two of its
nominees on Regency Realty's 13-member board of directors.
SC-USRealty endeavors to obtain strategic ownership positions in leading real
estate operating companies in the United States. SC-USRealty's investments
focus on real estate operating companies in which opportunities exist to
enhance asset cash flow by combining a strategically focused asset portfolio
with marketing and other strategies that meet the needs of customers. Regency
Realty's relationship with SC-USRealty combines SC-USRealty's commitment to in-
depth market research, tested operating systems and access to global capital
with Regency Realty's market presence, operating skills and grocery-anchored
real estate platform. This relationship provides Regency Realty with access to
financial and strategic resources and differentiates Regency Realty from its
competitors in the retail shopping center industry.
THE GUARANTOR
The following provides certain material information with respect to Regency
Realty, the guarantor of the notes.
Regency Realty, a Florida corporation, commenced operations as a real estate
investment trust in 1993 with the completion of its initial public offering,
and was the successor to the real estate business of The Regency Group, Inc.
which had operated since 1963. Regency Realty is our sole general partner and
approximately 97% owner as of June 30, 2000.
Regency Realty is also a guarantor of our $625 million unsecured line of
credit, as well as our $100 million 7 1/8% Notes Due 2005, our $200 million
7.40% Notes Due 2004 and our $50 million 7.75% Notes Due 2009.
9
DESCRIPTION OF THE NOTES
This prospectus describes certain general terms and provisions of our notes.
When we offer to sell a particular series of notes, we will describe the
specific terms of those notes in a supplement to this prospectus. We will also
indicate in the supplement whether the general terms described in this
prospectus apply to a particular series of debt securities. Accordingly, for a
description of the terms of a particular issue of notes, you should read both
the applicable prospectus supplement and the following description.
The notes will be issued under an indenture, dated as of March 9, 1999, as
amended or supplemented from time to time, among Regency Centers, Regency
Realty and First Union National Bank, as trustee. We have summarized select
portions of the indenture below. The summary is not complete. The form of the
indenture has been incorporated by reference as an exhibit to the registration
statement. You should read the indenture for provisions that may be important
to you. In the summary below, we have included references to the section
numbers of the indenture so that you can easily locate these provisions.
Capitalized terms used in the summary have the meanings specified in the
indenture. The indenture is governed by the Trust Indenture Act of 1939, as
amended.
General
The notes will be our direct unsecured obligations. We can issue an unlimited
amount of notes under the indenture in one or more series. The terms of each
series of notes will be established by or pursuant to a resolution of the board
of directors of our general partner or as established in the indenture. We may
issue notes of one series at different times and we may issue additional notes
of a series without the consent of the holders of such series.
The prospectus supplement relating to any series of notes being offered will
contain the specific terms thereof, including, without limitation:
(1) the title of the notes;
(2) any limit on the aggregate principal amount of the notes;
(3) the person to whom interest is payable, if other than the person in
whose name the note is registered on the regular record date for such
interest;
(4) the date or dates on which the principal of the notes will be payable;
(5) the rate or rates at which the notes will bear interest, if any, the
date or dates from which interest will accrue, the dates on which
interest will be payable, the regular record dates for such interest
payment dates, and the basis upon which interest shall be calculated if
other than a 360 day year of twelve 30 day months;
(6) the place or places where the principal of, premium or interest on such
notes will be payable, if other than our office maintained for that
purpose in Jacksonville, Florida or the borough of Manhattan in New
York;
(7) the period or periods within which, the price or prices at which and
the terms and conditions upon which we may redeem the notes;
(8) any obligation we have to redeem or purchase the notes under any
sinking fund or analogous provision or at the option of a holder of
notes, and the dates on which and the price or prices at which we will
repurchase notes at the option of holders and other terms and
conditions of these repurchase obligations;
10
(9) whether the amount of payments of principal of, premium or interest on
such notes will be determined by reference to an index, formula or
other method and the manner in which such amounts will be determined;
(10) if other than U.S. dollars, the currency, currencies or currency units
in which principal of, premium and interest on the notes will be paid;
(11) if payments of principal of, premium or interest on the notes will be
made in a currency or currency unit other than that in which the notes
are stated to be payable, at our election or at the election of
holders of notes, the currency or currency units which may be elected,
the terms of the election and the manner for determining the amount
payable upon such an election;
(12) if other than the principal amount of the notes, the portion of the
principal amount of the notes payable upon acceleration of the
maturity date;
(13) if the principal amount payable at the maturity of the notes cannot be
determined prior to maturity, the amount which shall be deemed to be
the principal amount of such notes prior to maturity;
(14) whether the notes will be issued in certificated and/or book-entry
form;
(15) any additions to or changes from the terms of such notes with respect
to the events of default, covenants or other terms of the indenture;
and
(16) any other terms of such notes not inconsistent with the provisions of
the indenture.
The notes may provide for less than the entire principal amount thereof to be
payable upon declaration of acceleration of the maturity thereof. Special
federal income tax, accounting and other considerations applicable to these
notes will be described in the applicable prospectus supplement.
Denomination, Registration, Transfer and Book-Entry Procedures
Denomination
The notes of any series will be issued in denominations of $1,000 and even
multiples of $1,000, unless we describe other denominations in the applicable
prospectus supplement. We will only issue the notes in fully registered form,
without interest coupons. We will not issue notes in bearer form.
Registration and Transfer
You may transfer or exchange the notes of any series at the office of the
trustee. No service charge will be made for any transfer or exchange of notes,
but we may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the transfer or exchange. If we
designate any transfer agent (in addition to the trustee) in the applicable
prospectus supplement, we may at any time change such designation or change the
location through which such transfer agent acts, except that we must maintain a
transfer agent in each place of payment for such notes. We may at any time
designate additional transfer agents with respect to any series of notes.
Book-Entry Procedures
Global Notes. Notes may be represented by one or more notes in global form (a
"global note"). Global notes will be deposited upon issuance with the trustee
as custodian for The Depository Trust Company ("DTC"), in New York, New York,
and registered in the name of DTC or its nominee. Each global note will be
credited to the account of a direct or indirect participant in DTC as described
below.
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Except as set forth below, a global note may be transferred, in whole and not
in part, only to another nominee of DTC or to a successor of DTC or its
nominee. Beneficial interests in a global note may not be exchanged for notes
in certificated form except as described below under "--Exchanges of Book-Entry
Notes for Certificated Notes."
Exchanges of Book-Entry Notes for Certificated Notes. A beneficial interest in
a global note may not be exchanged for a note in certificated form unless (1)
DTC (x) notifies us that it is unwilling or unable to continue as depositary
for the global note or (y) has ceased to be a clearing agency registered under
the Securities Exchange Act of 1934, and in either case we fail to appoint a
successor depositary, (2) we, at our option, notify the trustee in writing that
we elect to issue the notes in certificated form, (3) an event of default with
respect to the notes has occurred and is continuing or (4) other circumstances
have occurred that were specified for this purpose in the designation of a
series of notes. In all cases, certificated notes delivered in exchange for any
global note will be registered in the names and issued in the denominations
requested by the depositary (in accordance with its customary procedures). Any
such exchange will be effected through the DWAC System. An adjustment will be
made in the records of the note registrar to reflect the decrease in the
principal amount of the relevant global note.
Certain Book-Entry Procedures. DTC has indicated that it intends to follow the
following operations and procedures with respect to book-entry notes. DTC may
change these procedures from time to time. We are not responsible for these
operations and procedures. You should contact DTC or their participants
directly to discuss these matters.
DTC has advised us as follows: DTC is a limited purpose trust company organized
under the laws of the State of New York, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "clearing agency" registered under Section 17A of the Securities
Exchange Act of 1934. DTC was created to hold securities for its participants
and facilitate the clearance and settlement of securities transactions between
participants through electronic book-entry changes in accounts of its
participants. These book-entry procedures eliminate the need for physical
transfer and delivery of certificates. Participants include securities brokers
and dealers, banks, trust companies and clearing corporations and other
organizations. Indirect access to the DTC system is available to other entities
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly ("indirect participants").
DTC has advised us that, upon the issuance of a global note under its current
practice, DTC credits the respective principal amounts of the beneficial
interests represented by such global note to the DTC accounts of the
participants through which such interests are to be held. Ownership of
beneficial interests in the global notes will be shown on, and the transfer of
that ownership will be effected only through, records maintained by DTC or its
nominees (with respect to interests of participants) and the records of
participants and indirect participants (with respect to interests of persons
other than participants).
AS LONG AS DTC, OR ITS NOMINEE, IS THE REGISTERED HOLDER OF A GLOBAL NOTE, DTC
OR SUCH NOMINEE, AS THE CASE MAY BE, WILL BE CONSIDERED THE SOLE OWNER AND
HOLDER OF THE NOTES REPRESENTED BY SUCH GLOBAL NOTE FOR ALL PURPOSES UNDER THE
INDENTURE AND THE NOTES.
Except in the limited circumstances described above under "--Exchanges of Book-
Entry Notes for Certificated Notes", owners of beneficial interests in a global
note may not have any portions of the global note registered in their names,
will not receive physical delivery of notes in definitive form and will not be
considered the owners or holders of the global note (or any note represented
thereby).
The laws of some states require that certain persons take physical delivery in
definitive form of securities that they own. The ability to transfer beneficial
interests in a global note to such persons may be limited to that
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extent. Because DTC can act only on behalf of its participants, which in turn
act on behalf of indirect participants and certain banks, the ability of a
person having a beneficial interest in a global note to pledge such interest to
persons that do not participate in the DTC system, or take other actions in
respect of such interest, may be affected by the lack of a physical
certificate.
Payments of the principal of, premium, if any, and interest on global notes
will be made to DTC or its nominee as the registered owner of the global note.
Neither we, the guarantor, the trustee nor our respective agents will be
responsible or liable for maintaining, supervising or reviewing records
relating to or payments made on account of beneficial ownership interests in
global notes.
We expect that DTC or its nominee, upon receipt of any payment of principal or
interest in respect of a global note, will immediately credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in such global note as shown on the records of DTC or its nominee. We
also expect that payments by participants to owners of beneficial interests in
the global note held through such participants will be governed by standing
instructions and customary practices, as is the case with securities held for
the accounts of customers registered in "street name". Such payment will be the
responsibility of the participants.
Interests in a global note will trade in DTC's settlement system. Secondary
market trading activity in such interests will therefore settle in immediately
available funds, subject to the rules and procedures of DTC and its
participants. Transfers between participants in DTC will be effected in
accordance with DTC's procedures and will be settled in same-day funds.
DTC has advised us that it will take any action permitted to be taken by a
holder of notes (including the presentation of notes for exchange as described
below) only at the direction of one or more participants to whose DTC account
interests in global notes are credited. However, if there is an event of
default under the notes, the global notes will be exchanged for notes in
certificated form and distributed to DTC's participants.
Although DTC has agreed to these procedures in order to facilitate transfers of
beneficial ownership interests in global notes among participants of DTC, it is
under no obligation to perform such procedures, and such procedures may be
discontinued at any time. Neither we, the guarantor, the trustee nor our
respective agents are responsible for the performance by DTC, its participants
or indirect participants of their obligations under the rules and procedures
governing their operations.
Optional Redemption
If indicated in the applicable prospectus supplement, we may redeem the notes
at any time, at our option, in whole or in part from time to time, at a
redemption price equal either to (A) the sum of (i) the principal amount of the
notes being redeemed plus accrued interest thereon to the redemption date and
(ii) the Make-Whole Amount, if any, with respect to such notes (or portion
thereof) or (B) such other redemption price which is established in accordance
with the indenture. ((S) 1101) We will redeem notes in accordance with the
following procedures, unless different procedures are set forth in the
applicable prospectus supplement.
If notice of redemption has been given and we have provided the funds for the
redemption of the notes to be redeemed on the applicable redemption date, such
notes will cease to bear interest on the redemption date. The only right of the
holders of such note will then be to receive payment of the redemption price.
((S) 1107)
Notice of any optional redemption of any note will be given to holders between
30 and 60 days prior to the redemption date. The notice of redemption will
specify, among other items, the redemption price and the principal amount of
the notes held by such holder to be redeemed. ((S) 1105)
We will notify the trustee at least 60 days prior to giving notice of
redemption (or a shorter period if satisfactory to the trustee) of the
principal amount of notes to be redeemed and their redemption date. If less
than all of the notes of any series are to be redeemed, the trustee shall
select, in a manner it deems fair and appropriate, the notes to be redeemed.
((S)(S) 1103 and 1104).
All notes that we redeem in full will be canceled and may not be reissued or
resold.
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Sinking Fund
If indicated in the applicable prospectus supplement, we may be obligated to
make mandatory sinking fund payments on the notes. Each sinking fund payment
will be applied to the redemption of the applicable series of notes.
Guarantee
The guarantor will, on an unsubordinated basis, unconditionally guarantee the
payment of principal of, premium, if any, and interest on each series of the
notes, when the same becomes due and payable, whether at the maturity date, by
declaration of acceleration, call for redemption or otherwise. If we default in
the payment of the principal of, premium, if any, or interest on the notes, the
guarantor will be required promptly to make such payment in full, without any
action by the trustee or the holder of any notes.
The guarantee is an unsecured obligation of the guarantor and will be
effectively subordinated to mortgage and other secured indebtedness of the
guarantor. In the event of a guarantor insolvency, a creditor may avoid an
intercorporate guarantee in its entirety under federal and state bankruptcy and
fraudulent transfer law if the guarantee impaired the guarantor's financial
condition and was given without receiving reasonably equivalent value in
return. The indenture limits recovery under the guarantee to the highest amount
that would not render the guarantee void against creditors under such laws.
The indenture provides that the guarantor may not, in a single transaction or a
series of related transactions, consolidate with or merge into any other person
or permit any other person to consolidate with or merge into such guarantor,
unless: (1) in a transaction in which the guarantor does not survive, the
successor entity is organized under the laws of the United States of America or
any state thereof or the District of Columbia and, unless we or another
guarantor is the successor entity, shall unconditionally assume by a
supplemental indenture all of such guarantor's obligations under the indenture;
(2) immediately before and after giving effect to such transaction and treating
any Indebtedness which becomes an obligation of such guarantor or a subsidiary
thereof as a result of such transaction as having been incurred by such
guarantor or such subsidiary thereof at the time of the transaction, no event
of default with respect to the notes of any series shall have occurred and be
continuing; and (3) certain other conditions are met.
The guarantee will remain in effect until the entire principal of, premium, if
any, and interest on the notes of each series has been paid in full or the
notes shall have been defeased and discharged as described under clause (A)
under "--Defeasance".
Covenants
The indenture contains, among others, the covenants set forth below. These
covenants may be modified by supplemental indenture with respect to any series
of notes prior to issuance. We will describe any modifications in the
applicable prospectus supplement. You should refer to the definitions beginning
on page 17 when reviewing these covenants. When we refer to "Regency Centers"
in this discussion, we mean Regency Centers, L.P.
Limitation on Indebtedness
Regency Centers will not, and will not permit any Subsidiary to, incur any
Indebtedness, if, immediately after giving effect to the incurrence of such
additional Indebtedness and the application of the proceeds of such
Indebtedness, the aggregate principal amount of all outstanding Indebtedness of
Regency Centers and Subsidiaries on a consolidated basis determined in
accordance with GAAP is greater than 60% of the sum of (without duplication):
(1) Total Assets as of the end of the calendar quarter covered in Regency
Centers' annual report on Form 10-K or quarterly report on Form 10-Q,
as the case may be, most recently filed with the trustee (or
14
such reports of Regency Realty if filed by Regency Centers with the
trustee in lieu of filing its own reports) prior to the incurrence of
such additional Indebtedness; and
(2) the purchase price of any real estate assets or mortgages receivable
acquired and the amount of any securities offering proceeds received
(to the extent that the proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Indebtedness) by
Regency Centers or any Subsidiary since the end of the calendar
quarter, including those proceeds obtained in connection with the
incurrence of the additional Indebtedness. ((S) 1008)
In addition, neither Regency Centers nor any Subsidiary may incur any
Indebtedness secured by any Encumbrance upon any of the property of Regency
Centers or any Subsidiary if, immediately after giving effect to the
incurrence of the additional Indebtedness and the application of the proceeds
of such Indebtedness, the aggregate principal amount of all outstanding
Indebtedness of Regency Centers and its Subsidiaries on a consolidated basis
which is secured by any Encumbrance on property of Regency Centers or any
Subsidiary is greater than 40% of the sum of (without duplication):
(1) the Total Assets of Regency Centers and its Subsidiaries as of the end
of the calendar quarter covered in Regency Centers' annual report on
Form 10-K or quarterly report on Form 10-Q, as the case may be, most
recently filed with the trustee (or such reports of Regency Realty if
filed by Regency Centers with the trustee in lieu of filing its own
reports) prior to the incurrence of the additional Indebtedness; and
(2) the purchase price of any real estate assets or mortgages receivable
acquired and the amount of any securities offering proceeds received
(to the extent that the proceeds were not used to acquire real estate
assets or mortgages receivable or used to reduce Indebtedness) by
Regency Centers or any Subsidiary since the end of the calendar
quarter, including those proceeds obtained in connection with the
incurrence of the additional Indebtedness. ((S) 1008)
Regency Centers and its Subsidiaries must at all times own Total Unencumbered
Assets equal to at least 150% of the aggregate outstanding principal amount of
the Unsecured Indebtedness of Regency Centers and its Subsidiaries on a
consolidated basis. ((S) 1008)
Regency Centers also will not, and will not permit any Subsidiary to, incur
any Indebtedness if the ratio of Consolidated Income Available for Debt
Service to the Annual Service Charge for the four consecutive fiscal quarters
most recently ended prior to the date on which such additional Indebtedness is
to be incurred shall have been less than 1.5 to 1, on a pro forma basis, after
giving effect to the incurrence of such Indebtedness and to the application of
the proceeds of such Indebtedness and calculated on the assumption that:
(1) such Indebtedness and any other Indebtedness incurred by Regency
Centers or its Subsidiaries since the first day of such four-quarter
period and the application of the proceeds of such Indebtedness,
including Indebtedness to refinance other Indebtedness, had occurred at
the beginning of such period;
(2) the repayment or retirement of any other Indebtedness by Regency
Centers or its Subsidiaries since the first day of such four-quarter
period had been incurred, repaid or retired at the beginning of such
period (except that, in making such computation, the amount of
Indebtedness under any revolving credit facility shall be computed
based upon the average daily balance of such Indebtedness during such
period);
(3) in the case of Acquired Indebtedness or Indebtedness incurred in
connection with any acquisition since the first day of the four-quarter
period, the related acquisition had occurred as of the first day of the
period with appropriate adjustments with respect to the acquisition
being included in the pro forma calculation; and
(4) in the case of any acquisition or disposition by Regency Centers or any
Subsidiary of any asset or group of assets since the first day of such
four-quarter period, including, without limitation, by
15
merger, stock purchase or sale, or asset purchase or sale, such
acquisition or disposition or any related repayment Indebtedness had
occurred as of the first day of such period with appropriate adjustments
with respect to such acquisition or disposition being included in such
pro forma calculation. ((S) 1008)
For purposes of the foregoing provisions, Indebtedness is deemed to be
"incurred" by Regency Centers or a Subsidiary whenever Regency Centers and its
Subsidiary create, assume, guarantee or otherwise become liable for such
Indebtedness.
Provision of Financial Information
Whether or not Regency Centers is subject to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 or any successor provision, Regency Centers
will timely file with the Securities and Exchange Commission the annual
reports, quarterly reports and other documents which Regency Centers would
have been required to file with the Securities and Exchange Commission if
subject to Section 13(a) or 15(d) or any successor provision. If filing such
documents by Regency Centers with the Securities and Exchange Commission is
not permitted, Regency Centers will, within 15 days of each required filing
date, file with the trustee copies of the annual reports, quarterly reports
and other documents which Regency Centers would have been required to file
with the Securities and Exchange Commission and will also supply copies of
such documents to any holder or prospective holder upon written request. ((S)
1010)
Existence
Except as permitted under "--Merger, Consolidation or Sale", Regency Centers
and the guarantor are required to do all things necessary to preserve and keep
in full force and effect their respective existence, rights and franchises.
However, Regency Centers and the guarantor are not required to preserve any
right or franchise if they determine that the preservation thereof is no
longer desirable in the conduct of their business and that the loss of such
right or franchise is not disadvantageous in any material respect to the
holders of the notes. ((S) 1004)
Maintenance of Properties
Regency Centers is required to maintain and keep all properties used or useful
in the conduct of its business or the business of any Subsidiary in good
condition, repair and working order and supplied with all necessary equipment
and to make all necessary repairs, as in the judgment of Regency Centers may
be necessary so that its business may be properly and advantageously conducted
at all times. However, Regency Centers is not prevented from discontinuing the
operation or maintenance of any of its respective properties if such
discontinuance is, in the judgment of Regency Centers, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the holders of the notes. ((S)
1005)
Insurance
Regency Centers and the guarantor are required to, and to cause each of their
respective subsidiaries to, keep all of their insurable properties insured
against loss or damage with insurers of recognized responsibility, in
commercially reasonable amounts and types. ((S) 1007)
Payment of Taxes and Other Claims
Regency Centers and the guarantor will be required to pay or discharge, before
the same shall become delinquent, (i) all taxes, assessments and governmental
charges levied or imposed upon Regency Centers, the guarantor or any
subsidiary or upon the income, profits or property of Regency Centers, the
guarantor or any subsidiary, and (ii) all lawful claims for labor, materials
and supplies which, if unpaid, might by law become a lien upon the property of
Regency Centers, the guarantor or any subsidiary. However, neither Regency
Centers nor the guarantor shall be required to pay or discharge or cause to be
paid or discharged any such tax,
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assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings. ((S) 1006)
Merger, Consolidation or Sale
Regency Centers may not, in a single transaction or a series of related
transactions, (1) consolidate with or merge into any other person or permit any
other person to consolidate with or merge into Regency Centers, (2) directly or
indirectly, transfer, convey, sell, lease or otherwise dispose of all or
substantially all of its assets, (3) acquire, or permit any Subsidiary to
acquire Capital Stock or other ownership interests of any other person such
that such person becomes a Subsidiary of Regency Centers and (4) directly or
indirectly purchase, lease or otherwise acquire, or permit any Subsidiary to
purchase, lease or otherwise acquire, (A) all or substantially all of the
property and assets of any person as an entirety or (B) any existing business
(whether existing as a separate entity, subsidiary, division, unit or
otherwise) of any person, unless:
. in a transaction in which Regency Centers does not
survive or in which Regency Centers sells, leases
or otherwise disposes of all or substantially all
of its assets, the successor entity to Regency
Centers is organized under the laws of the United
States of America or any state thereof or the
District of Columbia and shall expressly assume by
a supplemental indenture all of Regency Centers'
obligations under the indenture;
. immediately before and after giving effect to such
transaction and treating any Indebtedness which
becomes an obligation of Regency Centers or a
Subsidiary as a result of such transaction as
having been Incurred by Regency Centers or such
Subsidiary at the time of the transaction, no
event of default with respect to the notes of any
series, or event that with the passing of time or
the giving of notice, or both, would become an
event of default with respect to the notes of any
series, shall have occurred and be continuing;
. immediately after giving effect to such
transaction, the Consolidated Net Worth of Regency
Centers (or other successor entity) is equal to or
greater than that of Regency Centers immediately
prior to the transaction; and
. certain other conditions are met. ((S) 801)
Paying Agents
We have initially appointed the trustee, acting through its corporate trust
office in Jacksonville, Florida, as paying agent. We may change or terminate
any paying agent, or appoint additional paying agents. However, as long as any
notes remain outstanding, we must maintain a paying agent and a transfer agent
in Jacksonville, Florida, or the Borough of Manhattan, The City of New York. We
will cause the trustee to notify the holders of notes, in the manner described
under "--Notices" below, of any change or termination of any paying agent and
of any changes in the specified offices.
Certain Definitions
Set forth below are certain of the defined terms used in the indenture. You
should refer to the indenture for the definition of any other terms used in
this prospectus for which no definition is provided. ((S) 101)
"Acquired Indebtedness" means Indebtedness of a person (i) existing at the time
the person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from the person, in each case, other than
17
Indebtedness incurred in connection with, or in contemplation of, the person
becoming a Subsidiary or that acquisition. Acquired Indebtedness shall be
deemed to be incurred on the date of the related acquisition of assets from any
person or the date the acquired person becomes a Subsidiary.
"Affiliate" of any person means any other person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such person. For the purposes of this definition, "control," when used with
respect to any person, means the power to direct the management and policies of
such person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Annual Service Charge" for any period means the aggregate interest expense for
the period in respect of, and the amortization during the period of any
original issue discount of, Indebtedness of Regency Centers and its
Subsidiaries and the amount of dividends which are payable during the period in
respect of any Disqualified Stock.
"Capital Stock" means, with respect to any person, any capital stock (including
preferred stock), shares, interests, participations or other ownership
interests (however designated) of the person and any rights (other than debt
securities convertible into or exchangeable for corporate stock), warrants or
options to purchase any thereof.
"Consolidated Income Available for Debt Service" for any period means Earnings
from Operations of Regency Centers and its Subsidiaries plus amounts which have
been deducted, and minus amounts which have been added, for the following
(without duplication): (i) interest expense on Indebtedness of Regency Centers
and its Subsidiaries; (ii) provision for taxes of Regency Centers and its
Subsidiaries based on income; (iii) amortization of debt discount; (iv)
provisions for gains and losses on properties and property depreciation and
amortization; (v) the effect of any noncash charge resulting from a change in
accounting principles in determining Earnings from Operations for the period;
and (vi) amortization of deferred charges.
"Consolidated Net Worth" of any person means the consolidated equity of such
person, determined on a consolidated basis in accordance with GAAP, less
amounts attributable to Disqualified Stock of such person; provided that, with
respect to Regency Centers, adjustments following the date of the indenture to
the accounting books and records of Regency Centers in accordance with
Accounting Principles Board Opinions Nos. 16 and 17 (or successor opinions
thereto) or otherwise resulting from the acquisition of control of Regency
Centers by another person shall not be given effect.
"Disqualified Stock" means, with respect to any person, any Capital Stock of
the person which by the terms of that Capital Stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (i) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise
(other than Capital Stock which is redeemable solely in exchange for common
stock), (ii) is convertible into or exchangeable or exercisable for
Indebtedness or Disqualified Stock or (iii) is redeemable at the option of the
holder thereof, in whole or in part (other than Capital Stock which is
redeemable solely in exchange for Capital Stock which is not Disqualified Stock
or the redemption price of which may, at the option of that person, be paid in
Capital Stock which is not Disqualified Stock), in each case on or prior to the
stated maturity of the notes of the relevant series; provided, however, that
equity interests whose holders have (or will have after the expiration of an
initial holding period) the right to have such equity interests redeemed for
cash in an amount determined by the value of the common stock of Regency Realty
do not constitute Disqualified Stock.
"Earnings from Operations" for any period means net earnings excluding gains
and losses on sales of investments, extraordinary items and property valuation
losses, net, as reflected in the financial statements of Regency Centers and
its Subsidiaries for the period determined on a consolidated basis in
accordance with GAAP.
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"Encumbrance" means any mortgage, lien, charge, pledge or security interest of
any kind, except any mortgage, lien, charge, pledge or security interest of any
kind which secures debt of any guarantor owed to Regency Centers.
"Indebtedness" of Regency Centers or any Subsidiary means any indebtedness of
Regency Centers or such Subsidiary, as applicable, whether or not contingent,
in respect of (i) borrowed money or indebtedness evidenced by bonds, notes,
debentures or similar instruments, (ii) borrowed money or indebtedness
evidenced by bonds, notes, debentures or similar instruments secured by any
Encumbrance existing on property owned by Regency Centers or any Subsidiary,
(iii) reimbursement obligations in connection with any letters of credit
actually issued or amounts representing the balance deferred and unpaid of the
purchase price of any property or services, except any such balance that
constitutes an accrued expense or trade payable, or all conditional sale
obligations or obligations under any title retention agreement, (iv) the amount
of all obligations of Regency Centers or any Subsidiary with respect to
redemption, repayment or other repurchase of any Disqualified Stock and (v) any
lease of property by Regency Centers or any Subsidiary as lessee which is
reflected on Regency Centers' consolidated balance sheet as a capitalized lease
in accordance with GAAP, to the extent, in the case of items of indebtedness
under (i) through (iv) above, that any such items (other than letters of
credit) would appear as a liability on Regency Centers' consolidated balance
sheet in accordance with GAAP, and also includes, to the extent not otherwise
included, any obligation of Regency Centers or any Subsidiary to be liable for,
or to pay, as obligor, guarantor or otherwise (other than for purposes of
collection in the ordinary course of business), Indebtedness of another person
(other than Regency Centers or any Subsidiary) (it being understood that
Indebtedness shall be deemed to be incurred by Regency Centers or any
Subsidiary whenever Regency Centers or the Subsidiary shall create, assume,
guarantee or otherwise become liable in respect thereof).
"Make-Whole Amount" means, in connection with any optional redemption or
accelerated payment of any notes, the excess, if any, of (i) the aggregate
present value as of the date of such redemption or accelerated payment of each
dollar of principal being redeemed or paid and the amount of interest
(exclusive of interest accrued to the date of redemption or accelerated
payment) that would have been payable in respect of each such dollar if such
redemption or accelerated payment had not been made, determining by
discounting, on a semi-annual basis, such principal and interest at the
Reinvestment Rate (determined on the third Business Day preceding the date such
notice of redemption is given or declaration of acceleration is made) from the
respective dates on which such principal and interest would have been payable
if such redemption or accelerated payment had not been made, over (ii) the
aggregate principal amount of the notes being redeemed or paid.
"Reinvestment Rate" means the percentage established by Board Resolution (or,
in the absence of such Board Resolution, 0.25%) plus the arithmetic mean of the
yields under the respective heading "Week Ending" published in the most recent
Statistical Release under the caption "Treasury Constant Maturities" for the
maturity (rounded to the nearest month) corresponding to the remaining life to
maturity, as of the payment date of the principal being redeemed or paid. If no
maturity exactly corresponds to such maturity, yields for the two published
maturities most closely corresponding to such maturity shall be calculated
pursuant to the immediately preceding sentence and the Reinvestment Rate shall
be interpolated or extrapolated from such yields on a straight-line basis,
rounding in each of such relevant periods to the nearest month. For the
purposes of calculating the Reinvestment Rate, the most recent Statistical
Release published prior to the date of determination of the Make-Whole Amount
shall be used.
"Statistical Release" means the statistical release designated "H.15(519)" or
any successor publication which is published weekly by the Federal Reserve
System and which establishes yields on actively traded United States government
securities adjusted to constant maturities, or, if such statistical release is
not published at the time of any determination under the indenture, then such
other reasonably comparable index which shall be designated by Regency Centers.
"Subsidiary" means a corporation, partnership or other entity a majority of the
voting power of the voting equity securities or the outstanding equity
interests of which are owned, directly or indirectly, by Regency
19
Centers or by one or more other Subsidiaries of Regency Centers. For the
purposes of this definition, "voting equity securities" means equity securities
having voting power for the election of directors, whether at all times or only
so long as no senior class of security has such voting power by reason of any
contingency.
"Total Assets" as of any date means the sum of (i) Undepreciated Real Estate
Assets and (ii) all other assets of Regency Centers and its Subsidiaries on a
consolidated basis determined in accordance with GAAP (but excluding
intangibles).
"Total Unencumbered Assets" means the sum of (i) those Undepreciated Real
Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of Regency Centers and its Subsidiaries not subject to an
Encumbrance for borrowed money determined in accordance with GAAP (but
excluding intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost (original cost
plus capital improvements) of real estate assets of Regency Centers and its
Subsidiaries on such date, before depreciation and amortization, determined on
a consolidated basis in accordance with GAAP.
"Unsecured Indebtedness" means Indebtedness which is (i) not subordinated to
any other Indebtedness and (ii) not secured by any Encumbrance upon any of the
properties of Regency Centers or any Subsidiary.
Events of Default
Set forth below are events of default with respect to notes of any series under
the indenture. We may change, add to or take away from the events of default by
supplemental indenture with respect to any series of notes prior to issuance.
We will describe any such changes, additions or deletions in the applicable
prospectus supplement.
(a) we do not pay principal of or premium on any note of that series when
due;
(b) we do not pay any interest on any note of that series within 30 days of
the due date;
(c) we fail to comply with the provisions described under "--Merger,
Consolidation or Sale";
(d) we or the guarantor fail to perform any other covenant or agreement
under the indenture or the notes (other than a covenant or agreement
expressly included in the indenture for the benefit of another series
of notes) for 60 days after we receive written notice of the default
from the trustee or holders of at least 25% in aggregate principal
amount of outstanding notes of that series;
(e) we fail to make any sinking fund payment when due;
(f) we or the guarantor default under the terms of any instrument
evidencing or securing Indebtedness having an outstanding principal
amount of $10.0 million individually or in the aggregate, which default
results in the acceleration of the payment of such indebtedness or
constitutes the failure to pay such indebtedness when due;
(g) we or the guarantor are subject to a final judgment or judgments (not
subject to appeal) in excess of $10.0 million which remains
undischarged or unstayed for 60 days after the right to appeal expires;
(h) certain events of bankruptcy, insolvency or reorganization affecting us
or the guarantor occur; or
(i) any other event of default provided with respect to the notes of that
series occurs. ((S) 501)
Subject to the provisions of the indenture relating to the duties of the
trustee, in case an event of default shall occur and be continuing, the trustee
will be under no obligation to exercise any of its rights or powers under the
indenture at the request or direction of any of the holders of notes of any
series, unless such holders shall have offered to the trustee reasonable
indemnity. ((S) 603) Subject to such indemnification provisions, the holders of
a majority in aggregate principal amount of the outstanding notes of any series
will have the right to
20
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred on the
trustee with respect to the notes of that series. ((S) 512)
If an event of default (other than an event of default described in clause (h)
above) shall occur and be continuing with respect to the notes of any series
outstanding, either the trustee or the holders of at least 25% in aggregate
principal amount of the outstanding notes of that series may accelerate the
maturity of the notes of that series. However, after such acceleration, but
before a judgment or decree based on acceleration, the holders of a majority in
aggregate principal amount of outstanding notes of that series may, under
certain circumstances, rescind and annul such acceleration if all events of
default, other than the non-payment of accelerated principal, have been cured
or waived as provided. If an event of default specified in clause (h) above
occurs with respect to the notes of any series outstanding, the outstanding
notes of that series will become immediately due and payable without any
declaration or other act on the part of the trustee or any holder. ((S) 502)
For information as to waiver of defaults, see "--Modification and Waiver".
No holder of any note of any series will have the right to institute any
proceeding with respect to the indenture or for any remedy thereunder, unless
(1) such holder shall have previously given to the trustee written notice of a
continuing event of default with respect to the notes of that series; (2)
holders of at least 25% in aggregate principal amount of the outstanding notes
of that series have made written request, and offered reasonable indemnity, to
the trustee to institute such proceeding as trustee; (3) the trustee shall not
have received from the holders of a majority in aggregate principal amount of
the outstanding notes of that series a direction inconsistent with such
request; and (4) the trustee shall have failed to institute such proceeding
within 60 days. ((S) 507) However, such limitations do not apply to a suit
instituted by a holder of a note for enforcement of payment of the principal of
and premium, if any, or interest on such note on or after the respective due
dates expressed in such note. ((S) 508)
We will be required to furnish to the trustee quarterly a statement as to our
performance of certain of our obligations under the indenture and as to any
default in such performance. ((S) 1011)
Satisfaction and Discharge of the Indenture
The indenture will cease to be of further effect as to all outstanding notes,
except as to (1) rights of registration of transfer and exchange and our right
of optional redemption, (2) substitution of apparently mutilated, defaced,
destroyed, lost or stolen notes, (3) rights of holders to receive payment of
principal and interest on the notes, (4) rights, obligations and immunities of
the trustee under the indenture and (5) rights of the holders of the notes as
beneficiaries of the indenture with respect to any property deposited with the
trustee payable to all or any of them, if
(a) we have paid the principal of and interest on the notes when due; or
(b) all outstanding notes, except lost, stolen or destroyed notes which
have been replaced or paid, have been delivered to the trustee for
cancellation.
Defeasance
The indenture provides that, at our option, (A) we will be discharged from all
obligations in respect of any notes or (B) we may omit to comply with certain
restrictive covenants and that such omission will not be an event of default
under the indenture and the notes, if, in either case (A) or (B), we
irrevocably deposit with the trustee, in trust, money and/or U.S. government
obligations which will provide money in an amount sufficient in the opinion of
a nationally recognized firm of independent certified public accountants to pay
the principal of and premium, if any, and each installment of interest on such
notes. With respect to clause (B), the obligations under the indenture other
than with respect to such covenants and the events of default other than the
events of default relating to such covenants shall remain in full force and
effect.
21
Such trust may only be established if, among other things:
(1) with respect to clause (A), we have received from, or there has
been published by, the Internal Revenue Service a ruling or there has
been a change in law, which in the opinion of counsel provides that
holders of such notes will not recognize gain or loss for federal
income tax purposes as a result of such deposit, defeasance and
discharge to be effected with respect to such securities and will be
subject to Federal income tax on the same amount, in the same manner
and at the same times as would have been the case if such deposit,
defeasance and discharge had not occurred; or, with respect to clause
(B), we have delivered to the trustee an opinion of counsel to the
effect that the holders of such notes will not recognize gain or loss
for Federal income tax purposes as a result of such deposit and
defeasance and will be subject to Federal income tax on the same
amount, in the same manner and at the same times as would have been the
case if such deposit and defeasance had not occurred;
(2) no event of default or event that with the passing of time or the
giving of notice, or both, would become an event of default with
respect to any series shall have occurred or be continuing;
(3) we have delivered to the trustee an opinion of counsel to the
effect that such deposit shall not cause the trustee or the trust so
created to be subject to the Investment Company Act of 1940; and
(4) certain other customary conditions precedent are satisfied.
(Article Thirteen)
Modification and Waiver
We may amend the indenture with the consent of the holders of a majority in
aggregate principal amount of the outstanding notes of each series affected by
such amendment. However, no amendment may, without the consent of the holder of
each outstanding note affected, (a) change the stated maturity of the principal
of, or any installment of principal or interest on, any note, (b) reduce the
principal amount of, the premium or interest on, or the amount payable upon
redemption of any note, (c) change the place or currency of payment of
principal of, or premium or interest on, any note, (d) impair the right to
institute suit for the enforcement of any payment on, or with respect to, any
note, (e) reduce the percentage of outstanding notes necessary to amend the
indenture, (f) reduce the percentage of outstanding notes necessary for waiver
of compliance with certain provisions of the indenture or for waiver of certain
defaults, or (g) modify any provisions of the indenture relating to the
amendment of the indenture or the waiver of past defaults or covenants, except
as otherwise specified. ((S) 902)
We may also amend the indenture without the consent of any holders of notes to
(a) reflect a successor to us or the guarantor which is assuming our
obligations, (b) add to our covenants for the benefit of the holders of any
series of notes, (c) add additional events of default for the benefit of any
series of notes, (d) change provisions of the indenture to the extent necessary
to permit the issuance of notes in bearer or uncertificated form, registrable
or not registrable as to principal, and with or without interest coupons, (e)
change any provisions of the indenture so long as such change does not apply to
notes outstanding at the time of the change, (f) establish the form or terms of
any series of notes, (g) reflect a successor trustee or add provisions
necessary for the administration of the indenture by more than one trustee, (h)
secure the notes, (i) maintain the qualification of the indenture under the
Trust Indenture Act, or (j) correct any ambiguous, defective or inconsistent
provision of the indenture so long as such correction does not adversely affect
holders of any notes in any material respect.
A supplemental indenture which changes or eliminates any covenant or other
provision of the indenture which was expressly included in the indenture solely
for the benefit of a particular series of notes shall be deemed not to affect
the rights under the indenture of the holders of notes of any other series.
The holders of a majority in aggregate principal amount of the outstanding
notes of each series, on behalf of all holders of notes of such series, may
waive our compliance with certain restrictive provisions of the indenture. ((S)
1012) Subject to certain rights of the trustee, the holders of a majority in
aggregate principal amount of the outstanding notes of any series, on behalf of
all holders of notes of such series, may waive any past default
22
under the indenture, except a default in the payment of principal, premium or
interest on any notes of such series. ((S) 513)
Notices
The trustee will cause all notices to the holders of the notes to be mailed by
first class mail, postage prepaid to the address of each holder as it appears
in the register of notes. Any notice so mailed will be conclusively presumed to
have been received by the holders of the notes.
PROSPECTIVE PURCHASERS SHOULD NOTE THAT UNDER NORMAL CIRCUMSTANCES DTC WILL BE
THE ONLY "HOLDER" OF THE NOTES. See "--Denomination, Registration, Transfer and
Book-Entry Procedures".
Governing Law
The indenture and the notes are governed by the laws of the State of New York.
The Trustee
Except during the continuance of an event of default, the trustee will perform
only such duties as are specifically set forth in the indenture. During the
existence of an event of default, the trustee will exercise such rights and
powers vested in it under the indenture and use the same degree of care and
skill as a prudent person would exercise under the circumstances in the conduct
of such person's own affairs. ((S)(S) 601 and 603)
The indenture and provisions of the Trust Indenture Act of 1939 incorporated by
reference in the indenture limit the rights of the trustee, should it become
our creditor, to obtain payment of claims in certain cases or to realize on
certain property received by it in respect of any such claim as security or
otherwise. The trustee is permitted to engage in other transactions with us or
any affiliate. However, if it acquires any conflicting interest (as defined in
the indenture or in the Trust Indenture Act of 1939), it must eliminate such
conflict or resign. ((S) 608)
Subordination
We will describe the terms and conditions, if any, upon which the notes are
subordinated to our other indebtedness in the applicable prospectus supplement.
Such terms will include a description of the indebtedness ranking senior to
such notes, the restrictions on payments to the holders of such notes while a
default with respect to such senior indebtedness is continuing, the
restrictions, if any, on payments to the holders of such notes following an
event of default and provisions requiring holders of such notes to remit
certain payments to holders of senior indebtedness.
23
PLAN OF DISTRIBUTION
We may sell the notes through underwriters or dealers, directly to one or more
purchasers, or through agents. We will describe in the applicable prospectus
supplement the terms of the offering of the notes, including the name or names
of any underwriters, dealers or agents, the purchase price of the notes and the
proceeds to us from such sale, any delayed delivery arrangements, any
underwriting discounts and other items constituting underwriters' compensation,
the initial public offering price, any discounts or concessions allowed or
reallowed or paid to dealers, and any securities exchanges on which the notes
may be listed.
If underwriters are used in the sale of the notes, underwriters may acquire the
notes for their own account and may resell the notes from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale. The notes
may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more firms acting as
underwriters. We will name the underwriters with respect to a particular
underwritten offering of notes in the prospectus supplement relating to such
offering, and if an underwriting syndicate is used, we will set forth the
managing underwriter or underwriters on the cover of the prospectus supplement.
Unless otherwise set forth in the prospectus supplement, the obligations of the
underwriters or agents to purchase the notes will be subject to certain
conditions, and the underwriters will be obligated to purchase all the notes if
any are purchased. The initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time to
time.
If we utilize dealers in the sale of notes, we will sell the notes to the
dealers as principals. The dealers may then resell the notes to the public at
varying prices to be determined by the dealers at the time of resale. We will
set forth the names of the dealers and the terms of the transaction in the
applicable prospectus supplement.
We may sell notes directly or through agents which we designate from time to
time at fixed prices, which may be changed, or at varying prices determined at
the time of sale. We will set forth the names of any agent involved in the
offer or sale of the notes and any commissions payable by us to the agent in
the applicable prospectus supplement. Unless otherwise indicated in the
prospectus supplement, any agent will act on a best efforts basis for the
period of its appointment.
In connection with the sale of the notes, underwriters or agents may receive
compensation from us or from purchasers of notes for whom they may act as
agents, in the form of discounts, concessions or commissions. Underwriters,
agents and dealers participating in the distribution of the notes may be deemed
to be underwriters, and any discounts or commissions received by them and any
profit on the resale of the notes by them may be deemed to be underwriting
discounts or commissions under the Securities Act of 1933.
If so indicated in the prospectus supplement, we will authorize agents,
underwriters, or dealers to solicit offers from certain types of institutions
to purchase notes at the public offering price set forth in the prospectus
supplement pursuant to delayed delivery contracts providing for payment and
delivery on a specified date in the future. Such contracts will be subject only
to those conditions set forth in the prospectus supplement, and the prospectus
supplement will set forth the commission payable for solicitation of such
contracts.
Agents, dealers, and underwriters may be entitled under agreements with us to
indemnification by us against certain civil liabilities, including liabilities
under the Securities Act of 1933, or to contribution with respect to payments
that such agents, dealers or underwriters may be required to make. Agents,
dealers and underwriters may be customers of, engage in transactions with, or
perform services for us in the ordinary course of business.
The notes may or may not be listed on a national securities exchange. No
assurances can be given that there will be a market for the notes.
24
FEDERAL INCOME TAX CONSIDERATIONS
The following is a general summary of the material U.S. federal income tax
considerations applicable to the notes as well as a general summary of certain
of the material federal income tax considerations regarding Regency Realty. To
the extent that the following discussion constitutes matters of law or legal
conclusions, they are based upon the opinions of Foley & Lardner. This summary
is based on current law, is for general information only and is not tax advice.
This discussion deals only with notes held as capital assets by initial
purchasers. This discussion does not purport to deal with all aspects of
taxation that may be relevant to particular investors in light of their
personal investment or tax circumstances, or to certain types of holders
subject to special treatment under the federal income tax laws, including
insurance companies, tax-exempt organizations, financial institutions or
broker-dealers, traders in securities who elect mark-to-market treatment,
persons who own notes as part of a conversion transaction, as part of a hedging
transaction or as a position in a straddle for tax purposes, persons whose
functional currency is not the U.S. dollar, and persons who own 10% or more of
the capital or profits interests in Regency Centers. This summary does not give
a detailed discussion of any state, local, or foreign tax considerations. This
summary is qualified in its entirety by the applicable provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), the rules and
regulations promulgated thereunder, and administrative and judicial
interpretations thereof, all as of the date hereof and all of which are subject
to change (which change may apply retroactively).
As used in this section, the term "Regency Realty" refers to Regency Realty
Corporation and all qualified subsidiaries (a wholly-owned subsidiary which is
not treated as a separate entity for federal income tax purposes) but excludes
Regency Realty Group, Inc. and its subsidiaries (the "Management Company")
(which are treated as separate entities for federal income tax purposes,
although their results are consolidated with those of Regency Realty for
financial reporting purposes).
United States Holders
Payments of Interest
In the opinion of Foley & Lardner, interest on a note will be taxable to a
United States holder as ordinary income at the time it is received or accrued,
depending on the holder's method of accounting for tax purposes. A United
States holder is a beneficial owner that is (1) a citizen or resident of the
United States, (2) a domestic corporation, (3) an estate the income of which is
subject to United States federal income tax without regard to its source or (4)
a trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United States
persons have the authority to control all substantial decisions of the trust.
Purchase, Sale and Retirement of the Notes
In the opinion of Foley & Lardner, a United States holder's tax basis in a note
will generally be its cost. In the opinion of Foley & Lardner, upon the sale or
retirement of a note, a United States holder will generally recognize gain or
loss on the sale or retirement of a note equal to the difference between the
amount realized (not including any amounts attributable to accrued and unpaid
interest) and the holder's tax basis of the note. Long-term capital gain of a
non-corporate United States holder is generally subject to a maximum tax rate
of 20% in respect of property held for more than one year.
United States Alien Holders
For purposes of this discussion, a "United States Alien holder" is any holder
of a note who is (i) a nonresident alien individual or (ii) a foreign
corporation, partnership or estate or trust, in either case not subject to
United States federal income tax on a net income basis in respect of income or
gain from a note.
In the opinion of Foley & Lardner, under present United States federal income
and estate tax law, and subject to the discussion of backup withholding below:
(1) payments of principal and interest by Regency Centers or any of its
paying agents to any holder of a note that is a United States Alien
holder will not be subject to United States federal withholding tax
25
if, in the case of interest, (a) the beneficial owner of the note does
not actually or constructively own 10% or more of the capital or
profits interest of Regency Centers, (b) the beneficial owner of the
note is not a controlled foreign corporation that is related to Regency
Centers through stock ownership, and (c) either (A) the beneficial
owner of the note certifies to Regency Centers or its agent, under
penalties of perjury, that it is not a United States Holder and
provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a
"financial institution") and holds the note certifies to Regency
Centers or its agent under penalties of perjury that such statement has
been received from the beneficial owner by it or by a financial
institution between it and the beneficial owner and furnishes the payor
with a copy thereof;
(2) a United States Alien holder of a note will generally not be subject to
United States federal withholding tax on any gain realized on the sale
of a note; and
(3) a note held by an individual who at death is not a citizen or resident
of the United States will not be includable in the individual's gross
estate for purposes of the United States federal estate tax as a result
of the individual's death if (a) the individual did not actually or
constructively own 10% or more of the capital or profits interest of
Regency Centers and (b) the income on the note would not have been
effectively connected with a United States trade or business of the
individual at the individual's death.
Backup Withholding
Each holder (other than an exempt holder such as a corporation, tax-exempt
organization, qualified pension and profit-sharing trust, individual retirement
account or United States Alien holder who provides certification as to status
as a nonresident) will be required to provide, under penalties of perjury, a
certificate providing the owner's name, address, correct federal taxpayer
identification number and a statement that the holder is not subject to backup
withholding. Should a nonexempt holder fail to provide the required
certification, Regency Centers will be required to withhold 31 percent of the
amount otherwise payable to the holder, and remit the withheld amount to the
IRS as a credit against the holder's federal income tax liability.
New Withholding Regulations
Recently, the Treasury Department issued new regulations which make certain
modifications to the withholding and backup withholding rules described above.
The new regulations attempt to unify certification requirements and modify
reliance standards. The new regulations will generally be effective for
payments made after December 31, 2000, subject to certain transition rules. It
is suggested that prospective investors consult their own tax advisors
regarding the new regulations.
Tax Considerations Regarding Regency Realty
Regency Realty made an election to be taxed as a real estate investment trust
("REIT") under Sections 856 through 860 of the Code commencing with its taxable
year ending December 31, 1993. Regency Realty believes that it has been
organized and operated in such a manner as to qualify for taxation as a REIT
under the Code for such taxable year and all subsequent taxable years to date,
and Regency Realty intends to continue to operate in such a manner in the
future. However, no assurance can be given that Regency Realty will operate in
a manner so as to qualify or remain qualified as a REIT.
The following sets forth only a summary of the material aspects of the Code
sections that govern the federal income tax treatment of a REIT and its
shareholders.
26
A REIT is defined in the Code as a corporation, trust or association:
(1) which is managed by one or more trustees or directors;
(2) the beneficial ownership of which is evidenced by transferable shares
or by transferable certificates of beneficial interest;
(3) which would be taxable as a domestic corporation, but for Sections 856
through 859 of the Code;
(4) which is neither a financial institution nor an insurance company
subject to certain provisions of the Code;
(5) the beneficial ownership of which is held by 100 or more persons
(determined without reference to any rules of attribution);
(6) not more than 50% in value of the outstanding stock of which is owned
during the last half of each taxable year, directly or indirectly, by
or for "five or fewer" individuals (as defined in the Code to include
certain entities); and
(7) which meets certain income and asset tests.
Conditions (1) to (4), inclusive, must be met during the entire taxable year
and condition (5) must be met during at least 335 days of a taxable year of 12
months, or during a proportionate part of a taxable year of less than 12
months.
Qualification as a REIT
It is the opinion of Foley & Lardner that (1) Regency Realty has qualified as a
REIT for its taxable years beginning with the taxable year ended December 31,
1993; (2) Regency Realty has been organized in conformity with the requirements
for qualification and taxation as a REIT and (3) Regency Realty's method of
operation has enabled it and will continue to enable it to meet the
requirements for qualification and taxation as a REIT under the Code. It must
be emphasized that this opinion is based on various assumptions and is
conditioned upon certain representations made by Regency Realty as to factual
matters including, but not limited to, those concerning its business and
properties, and certain matters relating to Regency Realty's manner of
operation. Foley & Lardner is not aware of any facts or circumstances that are
inconsistent with these factual representations and assumptions. The
qualification and taxation as a REIT depends upon Regency Realty's ability to
meet, through actual annual operating results, the various income, asset,
distribution, stock ownership and other tests for qualification as a REIT set
forth in the Code, the results of which will not be reviewed by nor be under
the control of Foley & Lardner. Accordingly, no assurance can be given that the
actual results of Regency Realty's operation for any particular taxable year
will satisfy the requirements under the Code for qualification and taxation as
a REIT. For a discussion of the tax consequences of failure to qualify as a
real estate investment trust, see "--Failure to Qualify."
Taxation of Regency Realty
As a REIT, Regency Realty generally is not subject to federal corporate income
tax on its net income that is currently distributed to shareholders. This
treatment substantially eliminates the "double taxation" (at the corporate and
shareholder levels) that generally results from an investment in a corporation.
However, Regency Realty will be subject to federal income tax in the following
circumstances. First, Regency Realty will be taxed at regular corporate rates
on any undistributed REIT taxable income, including undistributed net capital
gains. Second, under certain circumstances, Regency Realty may be subject to
the "corporate alternative minimum tax" on its items of tax preference. Third,
if Regency Realty has (i) net income from the sale or other disposition of
"foreclosure property" (which is, in general, property acquired by Regency
Realty by foreclosure or otherwise on default of a loan secured by the
property) which is held primarily for sale to customers in the ordinary course
of business or (ii) other non-qualifying net income from foreclosure property,
27
it will be subject to tax on such income at the highest corporate rate. Fourth,
if Regency Realty has net income from "prohibited transactions" (which are, in
general, certain sales or other dispositions of property held primarily for
sale to customers in the ordinary course of business other than foreclosure
property), such income will be subject to a 100% tax. Fifth, if Regency Realty
should fail to satisfy the 75% gross income test or the 95% gross income test
(as discussed below), and has nonetheless maintained its qualification as a
REIT because certain other requirements have been met, it will be subject to a
100% tax on the net income attributable to the greater of the amount by which
Regency Realty fails the 75% or 95% test, multiplied by a fraction intended to
reflect Regency Realty's profitability. Sixth, if Regency Realty should fail to
distribute during each calendar year at least the sum of (i) 85% of its REIT
ordinary income for such year, (ii) 95% of its REIT capital gain net income for
such year, and (iii) any undistributed taxable income from prior years, it will
be subject to a 4% excise tax on the excess of such required distribution over
the amounts actually distributed. Seventh, if during the 10-year period (the
"recognition period") beginning on the first day of the first taxable year for
which Regency Realty qualified as a REIT, Regency Realty recognizes gain on the
disposition of any asset held by Regency Realty as of the beginning of such
recognition period, then, to the extent of the excess of (a) the fair market
value of such asset as of the beginning of such recognition period over (b)
Regency Realty's adjusted basis in such asset as of the beginning of such
recognition period (the "built-in gain"), such gain will be subject to tax at
the highest regular corporate rate. Because Regency Realty initially acquired
its properties in connection with its initial public offering in fully taxable
transactions, it is not anticipated that Regency Realty will own any assets
with substantial built-in gain. Eighth, if Regency Realty acquires any asset
from a C corporation (i.e., generally a corporation subject to full corporate-
level tax) in a transaction in which the basis of the asset in Regency Realty's
hands is determined by reference to the basis of the asset (or any other
property) in the hands of the C corporation ("carry-over basis"), and Regency
Realty recognizes gain on the disposition of such asset during the recognition
period beginning on the date on which such asset was acquired by Regency
Realty, then, to the extent of the built-in gain, such gain will be subject to
tax at the highest regular corporate rate. The result described above with
respect to the recognition of built-in gain during the recognition period
assumes Regency Realty will make an election in accordance with regulations
issued by the Internal Revenue Service ("IRS").
In addition, the Management Company is taxed on its income at regular corporate
rates.
Failure to Qualify
If Regency Realty fails to qualify for taxation as a REIT in any taxable year,
and the relief provisions do not apply, Regency Realty will be subject to tax
(including any applicable corporate alternative minimum tax) on its taxable
income at regular corporate rates. Distributions to shareholders in any year in
which Regency Realty fails to qualify will not be deductible by Regency Realty
nor will they be required to be made. Unless entitled to relief under specific
statutory provisions, Regency Realty will also be disqualified from taxation as
a REIT for the four taxable years following the year during which qualification
was lost. It is not possible to state whether Regency Realty would be entitled
to such statutory relief.
28
ERISA CONSIDERATIONS
The following is a summary of material considerations arising under the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and the
prohibited transactions provisions of Section 4975 of the Code that may be
relevant to a prospective purchaser. This discussion does not purport to deal
with all aspects of ERISA or Section 4975 of the Code that may be relevant to
particular investors in light of their particular circumstances, including
plans subject to Title I of ERISA, other retirement plans and Individual
Retirement Accounts ("IRAs") subject to the prohibited transaction provisions
of Section 4975 of the Code, and governmental plans or church plans that are
exempt from ERISA and Section 4975 of the Code but that may be subject to the
prohibited transaction provisions of Section 503 of the Code and to state law
requirements.
A FIDUCIARY MAKING THE DECISION TO INVEST IN SECURITIES ON BEHALF OF A
PROSPECTIVE PURCHASER WHICH IS AN EMPLOYEE BENEFIT PLAN, A TAX QUALIFIED
RETIREMENT PLAN, OR AN IRA IS ADVISED TO CONSULT ITS OWN LEGAL ADVISOR
REGARDING THE SPECIFIC CONSIDERATIONS ARISING UNDER ERISA, SECTIONS 4975 AND
503 OF THE CODE AND STATE LAW WITH RESPECT TO THE PURCHASE, OWNERSHIP OR SALE
OF THE SECURITIES BY SUCH PLAN OR IRA.
Employee Benefit Plans, Tax Qualified Retirement Plans and IRAs
Each fiduciary of a pension, profit sharing or other employee benefit plan
subject to Title I of ERISA should carefully consider whether an investment in
the notes is consistent with its fiduciary responsibilities under ERISA. The
fiduciary must make its own determination as to whether an investment in the
notes (i) is permissible under the documents governing the ERISA plan, (ii) is
appropriate for the ERISA plan under the general fiduciary standards of
investment prudence and diversification, taking into account the overall
investment policy of the ERISA plan and the composition of the ERISA plan's
investment portfolio, and (iii) would result in a nonexempt prohibited
transaction under ERISA and the Code.
The fiduciary of an IRA or of a qualified retirement plan not subject to Title
I of ERISA because it is a governmental or church plan or because it does not
cover common law employees should consider that such an IRA or non-ERISA plan
may only make investments that are authorized by the appropriate governing
documents and under applicable state law. The fiduciary should also consider
the applicable prohibited transaction rules of Sections 4975 and 503 of the
Code.
LEGAL MATTERS
The validity of the notes and certain tax matters described under "Federal
Income Tax Considerations" and "ERISA Considerations" will be passed upon for
Regency Centers by Foley & Lardner, Jacksonville, Florida. Attorneys with Foley
& Lardner representing Regency Centers with respect to this offering
beneficially owned approximately 4,100 shares of common stock of Regency Realty
as of the date of this prospectus.
EXPERTS
The consolidated financial statements and schedule of Regency Centers, L.P. as
of December 31, 1999 and 1998, and for each of the years in the three-year
period ended December 31, 1999, and the consolidated financial statements of
Regency Realty Corporation as of December 31, 1999 and 1998, and for each of
the years in the three-year period ended December 31, 1999, have been
incorporated by reference herein and in the registration statement in reliance
upon the reports of KPMG LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing. To the extent that KPMG LLP audits and
reports on consolidated financial statements of Regency Centers and Regency
Realty issued at future dates, and consents to the use of their reports
thereon, such consolidated financial statements also will be incorporated by
reference in the registration statement in reliance upon their reports and said
authority.
29
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No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You
must not rely on any unauthorized information or representations. This
prospectus is an offer to sell only the notes offered hereby, but only under
circumstances and in jurisdictions where it is lawful to do so. The
information contained in this prospectus is current only as of its date.
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TABLE OF CONTENTS
Prospectus Supplement
Page
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Disclosure Regarding Forward-Looking Statements............................ S-2
Regency Centers and Regency Realty......................................... S-3
Use of Proceeds............................................................ S-3
Capitalization ............................................................ S-3
Description of the Notes................................................... S-4
Underwriting............................................................... S-6
Validity of Notes.......................................................... S-6
Prospectus
Prospectus Summary......................................................... 1
Where You Can Find More Information........................................ 1
Risk Factors............................................................... 2
Use of Proceeds............................................................ 6
Consolidated Ratios of Earnings to Fixed Charges........................... 6
Regency Realty and the Issuer.............................................. 7
The Guarantor.............................................................. 9
Description of the Notes................................................... 10
Plan of Distribution....................................................... 24
Federal Income Tax Considerations.......................................... 25
ERISA Considerations....................................................... 29
Legal Matters.............................................................. 29
Experts.................................................................... 29
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$150,000,000
Regency Centers, L.P.
8.45% Notes due September 1, 2010
Guaranteed as to the Payment
of Principal and Interest by
Regency Realty Corporation
Goldman, Sachs & Co.
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[LOGO OF REGENCY CENTERS APPEARS HERE]
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