EXHIBIT 42
SUPPLEMENTAL SECURITIES LOAN AGREEMENT
AGREEMENT dated as of June 18, 2003 between JPMORGAN CHASE BANK, a New
York Banking corporation, as borrower ("BORROWER"), SECURITY CAPITAL SHOPPING
MALL BUSINESS TRUST, a Maryland real estate investment trust, as lender
("LENDER") and UBS SECURITIES LLC, a dealer registered pursuant to the
Securities Exchange Act of 1934, as amended, as agent for the Borrower ("UBS").
This Supplemental Agreement, with respect only to the loan of securities
referred to below, supplements and amends the Securities Lending Agency Client
Agreement dated as of June 18, 2003 (the "CLIENT AGREEMENT") between Lender and
UBS and the Securities Loan Agreement dated as of December 22, 1999 (the "AGENCY
SECURITIES LOAN AGREEMENT") among UBS and X.X. Xxxxxx Securities Inc. ("JPMSI"),
as amended to add Borrower as a party pursuant to a letter agreement dated as of
June 18, 2003, among UBS, JPMSI and Borrower.
The parties hereto agree as follows:
1. LOANS OF REGENCY CENTERS CORPORATION COMMON STOCK.
1.1 Subject to the terms and conditions of this Agreement, the Agency
Securities Loan Agreement and the Client Agreement, if after reasonable efforts
the Borrower is unable to borrow, on terms reasonably acceptable to Borrower,
shares of the Common Stock of Regency Centers Corporation ("REGENCY SHARES")
from lenders reasonably acceptable to Borrower available in the market, the
Borrower may orally initiate a transaction whereby UBS, as agent for Lender, may
lend to Borrower, who along with Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated, Wachovia Bank, National Association and Citigroup Global Markets,
Inc., shall be the sole Eligible Borrowers with respect to the Regency Shares
under the Client Agreement, up to 3,906,667 Regency Shares which are fully-paid
or which constitute excess margin shares owned by Lender. Each such loan shall
be on the terms and conditions contained in the Agency Securities Loan
Agreement, as supplemented by this Agreement. Terms not defined herein shall
have the meanings ascribed to them in the Agency Securities Loan Agreement as in
existence on the date hereof, as amended by this Agreement
2. FEE FOR LOAN.
2.1 Unless otherwise agreed, (a) the Loan Fee under Section 4.1 of the
Agency Securities Loan Agreement shall be at the rate of 20 basis points (0.20%)
per annum, computed daily on the basis of a 360-day year, and (b) the Cash
Collateral Fee under Section 4.2 of the Agency Securities Loan Agreement shall
be as displayed on the page Feds Open - Index - [GO] on the BLOOMBERG
Professional Service, or successor page or such other source for the US dollar
Federal Funds rate designated by Borrower and Lender.
3. TERMINATION OF THE LOAN.
3.1 Borrower may terminate a Loan on any Business Day by giving notice
to Lender and UBS and transferring the Loaned Securities to UBS before the close
of business of Borrower on such Business Day.
3.2 UBS, as agent for Lender, may terminate a Loan on a termination
date established by notice given to Borrower prior to the close of business on a
Business Day. The termination date established by a termination notice given by
UBS to Borrower shall be a date no earlier than the standard settlement date for
trades of the Loaned Securities entered into on the date of such notice, which
date shall, unless Borrower, Lender and UBS agree to the contrary, be the third
Business Day following such notice.
4. RIGHTS OF BORROWER IN RESPECT OF THE LOANED SHARES.
4.1 The rights of Borrower in respect of Loaned Securities under
Section 6 of the Agency Securities Loan Agreement are limited to the extent that
Borrower shall not have any incidents of ownership or take any action with
respect to the Loaned Securities that would cause any Loaned Securities to
become "Excess Shares" under the articles of incorporation of Regency Centers
Corporation; PROVIDED, HOWEVER, that, to the extent required to prevent any
Loaned Securities to become "Excess Shares", Borrower shall have the right, upon
written consent of the Lender (which consent shall not be unreasonably withheld)
to assign its obligations under this Agreement to any entity with a credit
rating of AA- or above or to an affiliate of the Borrower without the prior
consent of the Lender; PROVIDED, FURTHER, that the Borrower may not make any
such assignment if immediately after giving effect to the proposed assignment,
there would be an Event of Default or Potential Event of Default of the Borrower
or such proposed assignee pursuant to the Confirmation.
5. XXXX TO MARKET MARGIN.
5.1 For purposes of Section 8 of the Agency Securities Loan Agreement
and Sections 3(a) and 3(b) of the Client Agreement, the Market Value of the
Collateral and the Required Collateral Level shall be 102% of the Market Value
of the Loaned Securities, and shall be valued on an Account-by-Account basis as
contemplated by Section 8.4 of the Agency Securities Loan Agreement. Without the
prior written consent of Borrower, Lender will not permit the collateral to be
held other than in Lender's Client Account at UBS. Collateral shall consist only
of cash and shall be invested as specified by Lender and Borrower.
6. Forward Sale Agreement.
6.1 Notwithstanding anything in this Agreement and the Agency
Securities Loan Agreement to the contrary, Borrower, UBS and Lender hereby agree
and acknowledge that, pursuant to the terms of a Confirmation dated June 18,
2003 between Lender and Borrower (the "CONFIRMATION"), if Lender or Borrower
fails to perform its
obligation to return the Collateral or to deliver the Loaned Shares, as the case
may be, hereunder then Physical Settlement (as defined in the Confirmation)
shall apply and (a) Lender shall be deemed to have elected to satisfy its
obligation to deliver Shares under the Confirmation, in whole or in part, by
assigning to Borrower its right to receive delivery of an equal number of Shares
(or such lesser number as may then be subject to a loan) hereunder and (b)
Borrower shall be deemed to have elected to satisfy its payment obligation under
the Confirmation, in whole or in part, by assigning to Lender its right to the
return of Collateral hereunder in amount equal to the amount of such payment
obligation (or such amount as may then be held as Collateral hereunder).
6.2 Notwithstanding anything in the Agency Securities Loan Agreement
and this Agreement to the contrary, Borrower, UBS and Lender hereby agree and
acknowledge that, pursuant to the terms of the Confirmation, if Lender or
Borrower fails to perform its delivery or payment obligations, as the case may
be, under the Confirmation on the Settlement Date (as defined in the
Confirmation) then Physical Settlement (as defined in the Confirmation) shall
apply and (a) Lender shall be deemed to have elected to satisfy its obligation
to deliver Shares under the Confirmation, in whole or in part, by assigning to
Borrower its right to receive delivery of an equal number of Shares (or such
lesser number as may then be subject to a loan) hereunder and (b) Borrower shall
be deemed to have elected to satisfy its payment obligation under the
Confirmation, in whole or in part, by assigning to Lender its right to the
return of Collateral hereunder in amount equal to the amount of such payment
obligation (or such amount as may then be held as Collateral hereunder).
6.3 Notwithstanding anything in the Agency Securities Loan Agreement
and this Agreement to the contrary, if Physical Settlement (as defined in the
Confirmation) is elected under the Confirmation, then (a) Lender shall be deemed
to have elected to satisfy its obligation to deliver Shares under the
Confirmation, in whole or in part, by assigning to Borrower its right to receive
delivery of an equal number of Shares (or such lesser number as may then be
subject to a loan) hereunder and (b) Borrower shall be deemed to have elected to
satisfy its payment obligation under the Confirmation, in whole or in part, by
assigning to Lender its right to the return of Collateral hereunder in amount
equal to the amount of such payment obligation (or such amount as may then be
held as Collateral hereunder).
6.4 Notwithstanding anything in the Agency Securities Loan Agreement
and this Agreement to the contrary, Borrower, UBS and Lender hereby agree and
acknowledge the non-defaulting party in Section 6.1, 6.2 or 6.3 hereof shall not
be deemed to have made its respective election under clause (a) or clause (b)
unless, concurrently with the assignment by the non-defaulting party of the
right to receive delivery of Shares hereunder or the right to return of the
Collateral, as the case may be, the defaulting party fully performs its
obligation under the Confirmation to deliver Shares or to pay the Settlement
Amount (as defined in the Confirmation), as the case may be, to the extent that
the number of Loaned Shares is less than the number of Shares required to be
delivered under the
Confirmation or the amount of Collateral required to be returned is less than
the amount required to be paid under the Confirmation, as the case may be.
7. APPLICABLE LAW.
7.1 This Agreement shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed wholly within such state, without reference to its conflicts of laws
principles or rules.
8. REPRESENTATION OF THE LENDER.
8.1 Lender hereby represents and warrants to Borrower that the
representations and warranties of Lender contained in Section 4(a) of the Client
Agreement are true and correct as of the date hereof (provided that Section
4(a)(iii) is subject to the rights of Borrower under the Confirmation) and shall
be deemed made and repeated for all purposes at and as of all times when any
Loan entered into under the Agency Securities Loan Agreement is outstanding.
9. TERMINATION.
9.1 Lender and UBS agree that they will not terminate the Client
Agreement prior to the Settlement Date specified in the Confirmation without the
prior written consent of Borrower.
10. DEFAULT.
10.1 In the event of any default by Borrower under any Loan, UBS shall
take action only in accordance with express instructions from Lender, Section
3(f) of the Client Agreement to the contrary notwithstanding.
11. COMPENSATION OF UBS.
11.1 The compensation of UBS under the Client Agreement shall be paid
by Lender and UBS is not authorized to collect any compensation from the
principal of the Collateral or that would affect the Cash Collateral Fee payable
to Borrower.
JPMORGAN CHASE BANK
By: /s/ XXXXXXX X. XXXX
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Name: Xxxxxxx X. Xxxx
Title: Managing Director
SECURITY CAPITAL SHOPPING MALL BUSINESS TRUST
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. Xxxxx
Title: Vice President
UBS SECURITIES LLC
By: /s/ XXXXXX XXXXXXXX
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Name: Xxxxxx Xxxxxxxx
Title: Executive Director
