-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VsfGiFU7gxb5uM/pVbODDQ9nqal6k2YwNp9hRl6JjGUIkmVjMblIP8aoehytfhGV mI7cLJr6+3VW0zY8oCbABA== 0000927016-98-002935.txt : 19980810 0000927016-98-002935.hdr.sgml : 19980810 ACCESSION NUMBER: 0000927016-98-002935 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19980807 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980807 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BRADLEY REAL ESTATE INC CENTRAL INDEX KEY: 0000013777 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 046034603 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10328 FILM NUMBER: 98679797 BUSINESS ADDRESS: STREET 1: 40 SKOKIE BLVD STE 600 CITY: NORTHBROOK STATE: IL ZIP: 60062-1626 BUSINESS PHONE: 8472729800 MAIL ADDRESS: STREET 1: 40 SKOKIE BOULEVARD SUITE 600 CITY: NORTHBROOK STATE: IL ZIP: 60062-1626 FORMER COMPANY: FORMER CONFORMED NAME: BRADLEY REAL ESTATE TRUST DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: August 7, 1998 Date of earliest event reported: July 31, 1998 _______________________ BRADLEY REAL ESTATE, INC. (Exact name of Registrant as specified in its charter) MARYLAND 1-10328 04-6034603 (State or other jurisdiction (Commission File (I.R.S. Employer of incorporation) Number) Identification No.) 40 SKOKIE BOULEVARD, NORTHBROOK, ILLINOIS 60062 (Address of principal executive offices and zip code) Registrant's telephone number, including area code: (847) 272-9800 Item 2. Acquisition or Disposition of Assets. ------------------------------------ Sale of One North State Property -------------------------------- On July 31, 1998, Bradley Real Estate, Inc. ("Bradley") sold the One North State property, a "mixed use" retail/office building located in downtown Chicago, for a gross sales price of approximately $84.5 million, subject to certain closing adjustments, to two private institutional buyers, Whitehall Street Real Estate Limited Partnership IX and the Archon Group (the "Purchasers"). The purchase price was the result of a bidding process established by Bradley for the property and subsequent arms' length negotiations between Bradley and the Purchasers concerning certain adjustments to the bid price. There had been no material relationship between the Purchasers and Bradley or any of its affiliates, directors or officers or any associate of a director or officer of Bradley. Acquisition of Mid-America Realty Investments, Inc. by Merger ------------------------------------------------------------- On August 6, 1998, pursuant to an Agreement and Plan of Merger dated as of May 30, 1998 (the "Merger Agreement") between Mid-America Realty Investments, Inc., a Maryland corporation ("Mid-America"), and Bradley, Mid-America was merged with and into Bradley (the "Merger") with Bradley as the surviving corporation in the Merger. The Merger and the Merger Agreement were approved by the stockholders of Mid-America at its Special Meeting of Stockholders held on August 5, 1998. At the effective time of the Merger (the "Effective Time"), the separate corporate existence of Mid-America ceased and each issued and outstanding share of common stock, par value $.01 per share (the "Mid-America Common Stock"), of Mid-America was converted into the right to receive forty-two hundredths (0.42) of a share of 8.4% Series A Convertible Preferred Stock, par value $.01 per share ("Series A Preferred Stock"), of Bradley. In lieu of fractional shares, holders of Mid-America Common Stock ("Mid-America Stockholders") are being paid an amount in cash (without interest), rounded to the nearest cent, determined by multiplying $25.00 by the fraction of a share of Series A Preferred Stock, if any, to which such holder would otherwise be entitled. The Series A Preferred Stock will pay an annual dividend equal to 8.4% of the $25.00 liquidation preference and is convertible into shares of common stock, par value $.01 per share ("Bradley Common Stock"), of Bradley at a conversion price of $24.49 per share, subject to certain adjustments (the "Conversion Price"). At any time after five years, the Series A Preferred Stock is redeemable at Bradley's option for $25.00 per share so long as the Bradley Common Stock is trading at or above the Conversion Price. The Series A Preferred Stock has been approved for listing on the New York Stock Exchange. Based upon the number of shares of Mid-America Common Stock outstanding at the Effective Time, the former Mid-America stockholders received approximately 3,480,210 shares of Series A Preferred Stock as a result of the Merger, convertible into approximately 12.21% of the aggregate number of outstanding shares of Bradley Common Stock on a fully diluted basis. There was no material relationship between Mid-America or its stockholders and Bradley or any of its affiliates, directors or officers, or any associate of a director or officer of Bradley. Mid-America, which had elected to qualify as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"), was a self-administered REIT, which owned, managed and operated income producing real estate consisting primarily of community and neighborhood shopping centers and enclosed malls. Upon consummation of the Merger, Bradley effectively acquired Mid-America's 22 properties, certain office equipment and other assets described in Bradley's Registration Statement on Form S-4 (No. 333-57123) effective July 1, 1998 (the "Registration Statement") and succeeded to Mid-America's 50% general partner interest in Mid-America Bethal Limited Partnership, a joint venture which owns two neighborhood shopping centers and one enclosed mall. Following the Merger, Bradley contributed title to 15 of the properties it acquired from Mid-America and its 50% general partner interest in Mid-America Bethal Limited Partnership to Bradley Operating Limited Partnership (a 95% owned subsidiary) (the "Partnership") in exchange for 3,480,210 preferred 2 units of limited partnership interest of a newly created class with substantially similar economic rights as the Series A Preferred Stock. Bradley holds title to the remaining seven properties acquired from Mid-America and any proceeds therefrom for the benefit of the Partnership. As a consequence, the Partnership has effectively acquired all of the business and assets (subject to the liabilities) of Mid-America. The contribution will have no effect upon the consolidated financial statements of Bradley. Bradley intends to continue to use the acquired assets in the same manner and to conduct the same type of business as Mid-America did prior to the Merger, although it may seek to dispose of the enclosed malls or certain of the other properties that may not be consistent with Bradley's strategic focus. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits ------------------------------------------------------------------ Pursuant to Instruction B.3. to Form 8-K, the financial statements of Mid- America and pro forma financial information of Bradley relating to the acquisition and the disposition described in Item 2 above were reported previously in the Registration Statement. Exhibits -------- NUMBER DESCRIPTION ------ ----------- 2.1 Agreement and Plan of Merger, dated as of May 30, 1998, between Mid-America Realty Investments, Inc. and Bradley Real Estate, Inc. (the "Merger Agreement"), attached as Annex A to the Proxy Statement/Prospectus included in Part I of the Registration Statement on Form S-4 (No. 333-57123) and incorporated herein by reference. A list briefly identifying the contents of all omitted Exhibits is incorporated by reference to page (iv) of the Merger Agreement. Bradley agrees to furnish supplementally to the Commission, upon request, a copy of any Exhibit. Pursuant to Item 601(b)(2) of Regulation S-K, the Schedules and the Disclosure Letters to the Merger Agreement are omitted. Bradley hereby undertakes to furnish supplementally a copy of any omitted Schedule to the Commission upon request. *2.2 Purchase and Sale Agreement, dated as of June 15, 1998, by and among Bradley Real Estate, Inc. and Whitehall Street Real Estate Limited Partnership IX and the Archon Group. *4.1 Articles of Merger between Bradley Real Estate, Inc. and Mid- America Realty Investments, Inc. dated August 6, 1998. 4.2 Form of Articles Supplementary Establishing and Fixing the Rights and Preferences of a Series of Shares of Preferred Stock for the 8.4% Series A Convertible Preferred Stock of Bradley Real Estate, Inc. attached as Annex B to the Proxy Statement/Prospectus included in Part I to the Registration Statement on Form S-4 (No. 333-57123) and incorporated herein by reference. 4.3 Articles of Amendment and Restatement of Bradley Real Estate, Inc., incorporated by reference to Exhibit 3.1 of Bradley's Current Report on Form 8-K dated October 17, 1994. 3 4.4 By-laws of Bradley Real Estate, Inc., incorporated by reference to Exhibit 3.3 of Bradley's Current Report on Form 8-K dated October 17, 1994. *10.1 Amendment to Second Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership, dated August 6, 1998, designating the 8.4% Series A Convertible Preferred Units. *99.1 Press Release announcing the consummation of the merger of Mid- America Realty Investments, Inc. with and into Bradley Real Estate, Inc. ____________________ * Filed herewith. 4 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. BRADLEY REAL ESTATE, INC. By: /s/ Thomas P. D'Arcy -------------------- Date: August 7, 1998 Thomas P. D'Arcy Chairman, President and Chief Executive Officer 5 EX-2.2 2 PURCHASE & SALE AGREEMENT (DATED 6/15/98) EXHIBIT 2.2 PURCHASE AGREEMENT THIS PURCHASE AGREEMENT ("Agreement") is made as of May 27, 1998, by and between Bradley Financing Partnership, a Delaware general partnership ("Seller") and W9/ONS Real Estate Limited Partnership, a Delaware limited partnership ("Purchaser"). In consideration of this Agreement, Seller and Purchaser agree as follows: 1. SALE OF SUBJECT PROPERTY. Seller agrees to sell to Purchaser and Purchaser agrees to buy from Seller, all of Seller's right, title and interest in and to the following property (collectively, "Subject Property"): (a) REAL PROPERTY. Fee simple interest in that certain parcel of real estate located at One North State Street, Chicago, Illinois, legally described on Exhibit A attached hereto and made a part hereof ("Land"), --------- together with (i) all building structures, improvements and fixtures owned by Seller located on the Land, including two interconnected mixed use office and retail buildings of 11 and 16 floors respectively ("Improvements"), and (ii) all rights, privileges, servitudes and appurtenances thereunto belonging or appertaining, including all right, title and interest of Seller, if any, in and to the streets, alleys and rights-of-way across, beneath, through and adjacent to the Land and the Improvements (collectively, the "Real Property"). (b) PERSONAL PROPERTY. All of the equipment and personal property owned by Seller and used in the operation of the Real Property and described on Exhibit B attached hereto and made a part hereof ("Personal --------- Property"). (c) LEASES. Seller's interest as lessor in and to the leases, license agreements and other occupancy agreements described on Exhibit C attached --------- hereto and made a part hereof, together with all amendments or modifications thereto (collectively, "Leases"). (d) PERMITS. Seller's interest in and to the licenses, permits, and certificates of occupancy described on Exhibit D attached hereto and made a --------- part hereof in Seller's possession, to the extent the same are assignable ("Permits"). (e) SERVICE CONTRACTS. Subject to the provisions of the following sentence, Seller's interest in and to the existing service and maintenance contracts described on Exhibit E attached hereto and made a part hereof, --------- together with all amendments or modifications thereto ("Service Contracts"). On or before the Contingency Date (as herein defined), Purchaser shall advise Seller, in writing, of any Service Contracts that Purchaser does not desire to be assigned to and assumed by Purchaser at Closing (as herein defined), and any such Service Contracts shall, at Seller's cost and expense, be terminated prior to Closing; provided, however, it is understood that Service Contracts listed as items 1, 4, 6, 24, 26, 28 and 30 on Exhibit E may not be terminated at Closing, and shall --------- be assigned to and assumed by Purchaser. Failure by Purchaser to notify Seller prior to the Contingency Date, shall constitute an election by Purchaser to have all of the Service Contracts assigned to and assumed by Purchaser. (f) WARRANTIES. Seller's interest in and to all unexpired warranties and guaranties given or assigned to or benefitting Seller or the Real Property or the Personal Property regarding the acquisition, construction, design, use, operation, management or maintenance of the Real Property or the Personal Property and described on Exhibit F attached hereto and made a --------- part hereof in Seller's possession, to the extent the same are assignable ("Warranties"). (g) PLANS. Seller's interest in and to all final plans and specifications relating to the construction of the Improvements in Seller's possession, to the extent the same are assignable ("Plans"). Anything herein to the contrary notwithstanding, the Subject Property specifically excludes the following property: (a) Seller's right, title and interest in and to the pending legal proceedings concerning the Subject Property described on Exhibit J and the --------- right to any settlement or other like amount (including insurance proceeds) made available in connection therewith. (b) Seller's right, title and interest in and to any refund, relief, abatement or like reimbursement of amounts paid to the relevant taxing authority (i) as part of the so-called "circulator" tax assessment levied against the Real Property for the proposed installation of a light rail system serving the downtown Chicago "loop" area, and (ii) which are the subject of any current real estate tax contest proceeding concerning the Real Property for calendar years 1993, 1994, 1996 and 1997 (second installment), except to the extent that any such refund, relief, abatement or like reimbursement is due to any tenants pursuant to any Lease. 2. PURCHASE PRICE. Purchaser shall pay to Seller, as consideration for the purchase of the Subject Property, the sum ("Purchase Price") of Eighty-Five Million and 00/100 Dollars ($85,000,000.00). The Purchase Price shall be payable as follows: (a) Concurrently herewith, Purchaser shall deposit the sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) with the escrow department of Lawyers Title Insurance Corporation ("Title Company") pursuant to an escrow agreement in substantially the form of Exhibit G attached hereto and made a part hereof, which --------- sum, together with any interest thereon less any investment fees related thereto, is sometimes hereinafter collectively referred to as the "Earnest Money", all or a portion of which shall, at Purchaser's election, be credited against the Purchase Price or returned to Purchaser at Closing. (b) The balance of the Purchase Price, plus or minus prorations and other adjustments, if any, shall be due at Closing and shall be paid by wire transfer of immediately available funds. 3. CONDITIONS PRECEDENT TO CLOSING. Purchaser's obligation to consummate the transaction contemplated by this Agreement shall be subject to satisfaction or waiver of each of the following conditions ("Conditions Precedent") on or before June 3, 1998 ("Contingency Date"): (a) TITLE/SURVEY. Seller has previously furnished to Purchaser (i) a current title commitment ("Commitment") for an owner's title policy issued by the Title Company showing title in Seller (with copies of all underlying title documents listed in the Commitment with the commitment of the Title Company to delete general exceptions 1 through 5 (which Commitment is in a nominal amount, but shall be increased to the Purchase Price at Closing), and (ii) a survey ("Survey") for the Real Property prepared in accordance with the Minimum Standard Detail Requirements for Class A Land Title Surveys (jointly established by ALTA/ACSM, as revised in 1992) and certified to Purchaser, Seller and the Title Company. If the Commitment shows exceptions or the Survey discloses survey defects that are objectionable to Purchaser, then Purchaser shall notify Seller, in writing, on or before May 27, 1998, specifying any such objectionable title or survey matter. If Purchaser so notifies Seller of such objections, then on or before the Contingency Date, Seller may provide Purchaser with adequate assurances that any such objectionable title or survey matter will be 2 removed or endorsed over, in form and substance acceptable to Purchaser, on or before Closing. Seller shall not be in breach or default of this Agreement if Seller does not give Purchaser such assurances, it being understood that Seller shall have no duty or obligation to cause any such objectionable title or survey matter to be removed or endorsed over other than liens or encumbrances of an ascertainable amount created by Seller, and other then liens or encumbrances of an ascertainable amount created by parties other than Seller, not to exceed $100,000.00. Matters disclosed by the Commitment or the Survey which are not objected to by Purchaser or which are objected to but which are waived by Purchaser shall constitute "Permitted Encumbrances"; any other title or survey matters shall constitute "Unpermitted Encumbrances." On or prior to the Contingency Date, Seller and Purchaser shall prepare a list of the Permitted Encumbrances, which list shall be incorporated herein by reference and made a part hereof as Exhibit H. Failure of Purchaser to notify Seller in writing of any --------- objectionable title or survey matter on or before May 27, 1998, shall constitute an election by Purchaser to take title to the Real Property subject to all such title and survey matters as are disclosed by the Commitment and the Survey. (b) TESTS. Seller has previously delivered to Purchaser (or provided Purchaser with access to) true and correct copies of all Leases, Permits, Warranties, Plans, Service Contracts and all environmental assessment, structural, soils and other reports prepared for Seller by third party consultants of Seller concerning the physical condition of the Real Property in Seller's possession or reasonable control with respect to the Subject Property for Purchaser's review and analysis, it being understood that any reports concerning the physical condition of the Real Property have been furnished or made available without representation or warranty regarding the contents thereof. Seller shall allow Purchaser and Purchaser's officers, employees, agents, attorneys, accountants, architects and engineers access to the Real Property, subject to the rights of the tenants under the Leases, and books and records relating to the Subject Property, without charge and at all reasonable times (including any time from and after the Contingency Date thru and including the Closing Date, provided this Agreement has not been terminated subject to and in accordance with the conditions and limitations herein contained), for the purpose of making any inspections, tests and verifications (collectively, "Tests") as they shall deem reasonably necessary. Purchaser shall have the absolute right to terminate this Agreement at any time through the Contingency Date if Purchaser is not satisfied, in its sole discretion, with the results of any of the Tests. In the event of such termination, the Earnest Money less the sum of $100.00 (which shall be the consideration paid to Seller for Purchaser's right to conduct the Tests) shall be returned to Purchaser and neither party shall have any further obligation to the other except for Purchaser's obligations pursuant to this Section 3(b), which obligations shall survive any such termination. Purchaser shall pay all costs and expenses of the Tests and shall defend, indemnify and hold harmless Seller and its partners and their respective agents, employees, officers, directors, affiliates and contractors and the Subject Property from and against any and all loss, cost, damage, liability, settlement, cause of action or threat thereof or expense (including, without limitation, reasonable attorneys' fees and costs) arising from or relating to the Tests. Purchaser acknowledges that all on-site inspections shall be at the sole risk and expense of Purchaser. Purchaser shall obtain and maintain during the conduct of any Tests commercial general liability insurance with limits of not less than $5,000,000.00 naming Seller as an additional insured, as evidenced by certificates of insurance (coupled with evidence of endorsement of the insurance binder reasonably satisfactory to Seller). Purchaser shall promptly repair and restore any damage to the Subject Property attributable to Purchaser's testing and return the Subject Property to substantially the same condition as 3 existed prior to the conduct of the Tests. No Tests shall be done without Seller's approval as to the time and manner of such Tests, which approval shall not be unreasonably withheld or delayed, and, at Seller's option, any such Tests shall be performed in the presence of a representative of Seller, and shall be conducted in such a manner so as to minimize interference with the operation of the Subject Property and the business of tenants and occupants. If Purchaser elects to terminate this Agreement on or before the Contingency Date, Purchaser shall promptly deliver to Seller copies of any environmental assessment prepared with respect to the Subject Property without representation or warranty; provided, however, if Purchaser and any party performing such assessment have entered into a written agreement prohibiting delivery of any such environmental assessment to any other party, Purchaser shall not be required to so deliver copies of any such environmental assessment. Purchaser shall keep all information obtained by Purchaser arising from or relating to the Tests confidential except such information may be disclosed to Purchaser's affiliates, advisors, financing sources, consultants, or as otherwise required in connection with legal requirements or legal process. The obligations of Purchaser under this Section 3(b) shall survive Closing (or termination) of this Agreement, notwithstanding any provision to the contrary herein contained. (c) IRPTA DISCLOSURE DOCUMENT. Within five (5) days following execution and delivery of this Agreement, Seller shall deliver to Purchaser an Illinois Responsible Property Transfer Act ("Act") Disclosure Document ("IRPTA Disclosure Document") with respect to the Subject Property. Purchaser's obligation to consummate the transaction contemplated by this Agreement is subject to Purchaser's satisfaction, in its sole and absolute discretion, on or before the Contingency Date, with the matters disclosed by the IRPTA Disclosure Document. If any of the Conditions Precedent have not been satisfied on or before the Contingency Date, then this Agreement may be terminated, at Purchaser's option, by written notice from Purchaser to Seller. Such notice of termination may be given at any time on or before the Contingency Date. Upon such termination, neither party will have any further rights or obligations regarding this Agreement or the Subject Property, and the Earnest Money shall be returned to Purchaser. Failure of Purchaser to give Seller notice of termination on or before the Contingency Date shall constitute a waiver by Purchaser of the Conditions Precedent. All the Conditions Precedent are specifically stated and agreed to be for the sole and exclusive benefit of Purchaser and Purchaser shall have the right unilaterally to waive, in whole or in part, any Condition Precedent by written notice to Seller. 4. COVENANTS BY SELLER. Seller covenants and agrees with Purchaser that from the date hereof until the Closing Date (as herein defined), Seller shall conduct its business involving the Subject Property as follows, and during such period will (except as specifically provided to the contrary herein): (a) Refrain from transferring any of the Subject Property, or creating on the Subject Property any easements other than as may be required prior to the Closing Date by any applicable governmental or quasi governmental authority or by a provider of utility services; provided, however, nothing herein shall preclude Seller from replacing any equipment, supplies or machinery in the ordinary course of operating the Subject Property; (b) Refrain from entering into or amending any contracts or other agreements regarding the Subject Property (other than contracts in the ordinary course of business which are cancelable by the owner of the Subject Property without penalty within thirty (30) days after giving notice thereof) without the prior written consent of Purchaser. 4 (c) Operate, maintain, repair and insure the Subject Property in a manner consistent with the existing operation, maintenance, repair and insurance of the Subject Property; (d) Refrain from entering into any new leases, amendments, extensions or expansions (unless required to do so by the terms and any Lease) with respect to the Real Property without Purchaser's written approval, as provided below. Seller shall furnish Purchaser with a true and complete copy of any such proposed lease, amendment, extension, or expansion that Seller desires to enter into with respect to the Real Property. Purchaser shall have five (5) business days from receipt of any such lease, amendment, extension, or expansion to approve or disapprove the same in Purchaser's sole discretion. In the event Purchaser does not approve any such lease, amendment, extension, or expansion Purchaser shall notify Seller in writing of the same prior to expiration of said 5-business day period stating under what conditions, if any, Purchaser's approval would be forthcoming. Failure by Purchaser to notify Seller in writing within said 5-business day period shall constitute an approval by Purchaser of any such lease, amendment, extension, or expansion. All costs of tenant improvements and leasing commissions with respect to any such lease, amendment, extension or expansion approved or deemed approved by Purchaser and entered into between the date of this Agreement and the Closing Date shall be paid by Purchaser. 5. REPRESENTATIONS AND WARRANTIES BY SELLER. Seller represents and warrants to Purchaser as follows: (a) AUTHORITY. Seller is a general partnership duly organized and validly existing and in good standing under the laws of the State of Delaware and in good standing under the laws of the State of Illinois; Seller has the requisite power and authority to enter into and perform this Agreement and Seller's Closing Documents (as herein defined); such documents have been duly authorized by all necessary action on the part of Seller and have been or will be duly executed and delivered; such execution, delivery and performance by Seller of such documents will not conflict with or result in a violation of Seller's organizational documents, or any judgment, order, or decree of any court or arbiter to which Seller is a party or any agreement or instrument by which Seller is bound; such documents are valid and binding obligations of Seller, and are enforceable against Seller in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, creditor's rights and other similar laws. (b) UTILITIES. Seller has received no written notice of actual or threatened reduction or curtailment of any utility service now supplied to the Real Property. (c) HAZARDOUS SUBSTANCES. Except as set forth in the Environmental Reports (as herein defined), to the knowledge of Seller, the Real Property does not contain, and there is not located on, in or under any part of the Real Property, any of the following: "toxic substances," "toxic materials," "hazardous waste," "hazardous substances," "pollutants," or "contaminants" [as those terms are defined in the Resource, Conservation and Recovery Act of 1976, as amended (42 U.S.C. (S) 6901 et. seq.), the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended (42 U.S.C. (S) 9601 et. seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C. (S) 1801 et. seq.), the Toxic Substances Control Act of 1976, as amended (15 U.S.C. (S) 2601 et. seq.), the Clean Air Act, as amended (42 U.S.C. (S) 1251 et. seq.) and any other federal, state or local law, statute, ordinance, rule, regulation, code, order, approval, policy and authorization relating to health, safety or the environment (said laws being hereafter referred to collectively as "Environmental Laws")] in violation of applicable Environmental Laws asbestos or asbestos containing materials; lead or lead containing materials; oils; petroleum-derived compounds; pesticides; or polychlorinated 5 biphenyls (all of which are hereafter collectively referred to as "Hazardous Materials"). To Seller's knowledge, no part of the Real Property has been previously used by Seller, or by any other person or entity, for the storage, manufacture or disposal of Hazardous Materials, except as may be disclosed in the environmental reports delivered by Seller to Purchaser or in any other environmental report prepared on behalf of Purchaser (collectively, the "Environmental Reports") in violation of applicable Environmental Laws. Seller has not received from any governmental body having authority any written complaint, order, citation or notice of violation with regard to air emissions, water discharges, noise emissions and Hazardous Materials, if any, or any other environmental, health or safety matters affecting the Real Property or any part thereof, which has not been remedied or remains outstanding. Except as set forth in the Environmental Reports, to the knowledge of Seller, there are no underground storage tanks of any nature located on any of the Real Property. Notwithstanding the foregoing, Purchaser acknowledges the existence of asbestos and asbestos containing materials at the Real Property. (d) FIRPTA. Seller is not a "foreign person," "foreign partnership," "foreign trust" or "foreign estate" as those terms are defined in Section 1445 of the Internal Revenue Code. (e) PROCEEDINGS. There is no action, litigation, condemnation or proceeding of any kind pending or, to the best knowledge of Seller, threatened against Seller which would have a material and adverse affect on the ability of Seller to perform its obligations under this Agreement, or against any portion of the Real Property other than (i) the In re Flood ----------- Litigation and the tax contest proceeding matters described in Article 1 of ---------- this Agreement and (ii) the matters described on Exhibit J attached hereto --------- and made a part hereof. (f) BOOKS AND RECORDS. The books and records relating to the Subject Property which have been made or will be made available to Purchaser, and which have been prepared by Seller's property manager, accurately reflect the operation of the Subject Property, are the only books and records prepared by Seller's property manager relating to the Subject Property for the operating period to which they relate, and Seller does not have any actual knowledge that any information set forth in such books and records is not true and correct in all material respects. (g) LEASES. The rent roll (the "Rent Roll") attached hereto as Exhibit C-1 is ----------- true, correct and complete in all material respects as of the date of this Agreement. Exhibit C is a complete and accurate schedule (the --------- "Lease Schedule") of the Leases now in effect, relating to any portion of the Real Property, including the name of each tenant, the date of each tenant's Lease and all amendments or modifications, if any, thereto, and the amount of any security deposit, whether in the form of cash or a letter of credit, paid or deposited by the tenant under each Lease. There are no leases, license agreements, occupancy agreements or tenancies for any space in the Real Property other than those set forth on the Lease Schedule and there are no oral agreements relating to use or occupancy of any portion of the Real Property or any oral leases which will be binding upon any portion of the Real Property or Purchaser other than set forth on the Lease Schedule. Except as may be otherwise disclosed on the Rent Roll or the Lease Schedule: (i) Each of the Leases is in full force and effect according to the terms set forth therein subject to (i) applicable bankruptcy, insolvency, reorganization, moratorium, creditor's 6 rights and other similar laws limiting the enforceability of creditor's rights generally, as from time to time in effect; and (ii) general principles of equity, whether considered in a proceeding at law or in equity. (ii) there are no arrearages of base annual rent or any additional rent payable by any tenant in excess of one (1) month. (iii) to the knowledge of Seller, none of the tenants are in default in the observance of any of the material covenants or conditions to be kept, observed or performed by it under its Lease beyond any applicable grace or cure period; (iv) no tenant is entitled to any free rent, rebate, rent concession, deduction or offset not set forth in the Leases; (v) Other than any amounts that may be owing pursuant to any Lease entered into in compliance with the provisions of Section 4(d) of this Agreement, no tenant is entitled to receive money, or any contribution from the landlord, either in money or in kind, on account of the construction of any improvements as a condition to commencement of the Leases and, except for the obligations disclosed on the Lease Schedule (which shall be the responsibility of Seller), all alterations, installations, decorations and other work required to be performed by the landlord under the Leases as a condition to commencement of the Leases have been completed and fully paid for; (vi) Seller has not received from any tenant under a Lease a written notice of default by Seller in performing any of its obligations as landlord under such Lease or a written notice of violation of any statute, rule, law, ordinance, or other legal regulation pertaining to the Real Property or any part thereof; (vii) Seller has the sole right to collect rent under each Lease and such right has not been assigned, pledged, hypothecated or otherwise encumbered, except for an assignment as security for the payment of any indebtedness to any existing mortgage holder of the Real Property that Seller shall discharge and release at or prior to settlement hereunder; and (viii) all security deposits required under the Leases have been paid and are being held by Seller. (h) CONTRACTS. Exhibit E is a complete and accurate schedule (the --------- "Contract Schedule") of all Service Contracts now in effect, relating to the Real Property, except for management and leasing agreements which Seller shall terminate on the Closing Date without penalty or liability to Purchaser ("Terminating Management and Leasing Contracts"). Except as set forth on the Contract Schedule and except for Terminating Management and Leasing Contracts, there are no oral agreements between Seller and service contractors relating to the management, leasing, operation or maintenance of the Real Property or any portion thereof. Seller has not delivered or received any written notice alleging any default in the performance or observance of any of the covenants, conditions or obligations to be kept, observed or performed under any of the Service Contracts that has not been cured or remedied. 7 (i) UNPAID BILLS. All bills and claims for labor performed or materials furnished to Seller for the benefit of Real Property for the period prior to the Closing Date have been (or prior to the Closing Date will be ) paid in full or Purchaser shall receive a credit for any unpaid amount in accordance with the provisions of Article 9 of this Agreement. (j) MANAGEMENT AND LEASING AGREEMENTS. On the Closing Date, there will be no contacts or agreements in effect with any party for the management or leasing of the Real Property (other than agreements entered into by Purchaser) and the Terminating Management and Leasing Contracts shall be terminated by the parties thereto without penalty or liability to Purchaser. (k) LEASING COMMISSIONS. On the Closing Date there shall be no leasing commissions that are payable or may hereafter become payable in connection with any of the Leases described in the Lease Schedule or any renewals or extensions thereof or any expansion options set forth in such Leases, except (i) those commissions (the "Renewal Commissions") set forth on Exhibit C that are due and payable in the event a tenant exercises an --------- option available under a Lease to renew or extend the term of the Lease or expand the space occupied by the tenant, (ii) those other commissions (the "Other Commissions") which become due and payable after the Closing Date upon conditions set forth in the commission agreements described on Exhibit ------- C, complete copies of which have been delivered to Purchaser prior to the - date hereof, and (iii) any commissions that may be owing pursuant to Leases entered into in compliance with the provisions of Section 4(d) of this Agreement. All Renewal Commissions and all Other Commissions which may become due and payable (other than any such commissions that may be owing pursuant to Leases entered into in compliance with the provisions of Section 4(d) hereof) after the date hereof are set forth on Exhibit C. --------- (l) COMPLIANCE WITH LAWS. Seller has not received any written notice of any violations of law, statutes, rules, governmental ordinances, orders or requirements noted or issued by any governmental authority having jurisdiction over or affecting the Real Property that has not been cured or remedied. (m) BANKRUPTCY. There is no bankruptcy, insolvency, rearrangement or similar action or proceeding, whether voluntary or involuntary, pending or, to the Seller's knowledge, threatened against Seller. (n) INSURANCE. Seller has not received from any insurance company which carries insurance on any of the Real Property, or any Board of Fire Underwriters, any written notice of any defect or inadequacy in connection with the Real Property, or its operation. (o) PERSONAL PROPERTY. The execution and delivery to Purchaser of the Bill of Sale required by Section 9(b)(ii) shall vest title to all of the Personal Property in Purchaser, free and clear of liens, encumbrances and adverse claims. Exhibit B attached hereto is a complete and accurate schedule of all the Personal Property. (p) LABOR UNIONS. Seller is not a party to any contract or agreement with any labor union except as set forth on Exhibit K attached hereto --------- and made a part hereof. Seller has delivered to Purchaser true, correct and complete copies of the agreements identified on Exhibit K. --------- (q) SPECIAL ASSESSMENTS. Except as shown on any tax bills delivered to Purchaser and the Commitment, Seller has not received any notice, in writing, of any special assessment which affects the Subject Property. 8 (r) NO OTHER AGREEMENTS. Except for the Leases, Permits, Warranties, Plans, Service Contracts, Permitted Encumbrances, and the matters described in Section 3(b), there are no contractual agreements that bind Seller, as the owner of the Real Property. For purposes of this Agreement, the phrase "to the best of Seller's knowledge" or words of similar import shall mean the actual knowledge of E. Paul Dunn, as Executive Vice President of Bradley Real Estate, Inc. and Craig B. Matuszewski, as General Manager of Bradley Real Estate, Inc., without independent inquiry or investigation. Seller represents and warrants to Purchaser that the foregoing individuals are the individuals with direct responsibility for the operations of the Subject Property. 6. REPRESENTATIONS AND WARRANTIES BY PURCHASER AND OTHER MATTERS. (a) REPRESENTATIONS AND WARRANTIES BY PURCHASER. Purchaser represents and warrants to Seller that Purchaser is a limited partnership duly organized and validly existing and in good standing under the laws of the State of Delaware; that Purchaser has the requisite power and authority to enter into this Agreement and Purchaser's Closing Documents (as herein defined); such documents have been duly authorized by all necessary action on the part of Purchaser and have been or will be duly executed and delivered; that the execution, delivery and performance by Purchaser of such documents will not conflict with or result in violation of Purchaser's organizational documents or any judgment, order or decree of any court or arbiter to which Purchaser is a party or any agreement or instrument by which Purchaser is bound; such documents are valid and binding obligations of Purchaser, and are enforceable against Purchaser in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, creditor's rights and other similar laws. (b) OTHER MATTERS. The representations and warranties contained in this Agreement shall survive Closing; provided, however, (i) any cause of action of Purchaser against Seller by reason of a breach or default of any of the representations and warranties set forth herein shall expire as of the date twelve (12) months following the Closing Date (the "Warranty Expiration Date"), except that the same shall not expire as to any such breach or default as to which Purchaser has (x) notified Seller, in writing, prior to Warranty Expiration Date and (y) instituted litigation prior to the date eighteen (18) months following the Closing Date, (ii) Seller's total liability for breach thereof shall in no event exceed $7,500,000.00 in the aggregate, and Seller shall have no liability with respect to any breach to the extent the loss sustained by Purchaser as a result thereof does not exceed $150,000.00 in the aggregate, provided, further, if any such loss exceeds $150,000.00, Seller shall be liable for the total amount of such loss subject to the maximum loss provisions herein contained, and (iii) Seller shall have no liability whatsoever to Purchaser with respect to a breach of any of the representations and warranties herein contained if, prior to the Closing Date, Purchaser obtains knowledge (which, for purposes of this paragraph, shall mean the actual knowledge of James W. Jones and Ernest O. Perry, III, based upon investigation and inquiry being made by Purchaser in the course of its due diligence and investigations for the Subject Property, and Purchaser represents and warrants that the foregoing individuals are the individuals with direct responsibility for the analysis and underwriting for the Subject Property, including reviewing any Test results) of a fact or circumstance the existence of which would constitute a breach of Seller's representations and warranties hereunder. For purposes hereof, Purchaser shall be deemed to have knowledge of any fact or circumstance set forth in the estoppel letters delivered to Purchaser and in any environmental assessment or engineering report or other written due diligence information or material received or reviewed by Purchaser, and the representations and warranties herein contained shall be deemed modified to the extent information contained in any estoppel certificate delivered to Purchaser prior to Closing or in any environmental assessment or engineering report or other written due diligence information or material received or reviewed by Purchaser is inconsistent with the matters covered herein. 9 7. CLOSING. (a) CLOSING DATE. The closing of the purchase and sale contemplated by this Agreement (the "Closing") shall occur on or before July 1, 1998 ("Closing Date"), subject to delays occasioned by operation of Paragraph 8(b) at the office of the Title Company, 10 South LaSalle Street, Suite 2500, Chicago, Illinois or at such other time and place as the parties may mutually agree. (b) PURCHASER'S CLOSING CONDITIONS PRECEDENT. Purchaser's obligation to consummate the transaction contemplated by this Agreement shall be subject to satisfaction or waiver of each of the following conditions ("Purchaser's Closing Conditions Precedent"), but Purchaser shall have the unilateral right to waive any Purchaser's Closing Condition Precedent, in whole or in part, by written notice to Seller: (i) The representations and warranties of Seller set forth in Article 5 hereof shall be, in all material respects, true and complete. (ii) Seller shall have performed all of the obligations required to be performed by Seller under this Agreement, as and when required by this Agreement, in all material respects. (iii) Purchaser shall have received, on or before three (3) business days prior to the Closing Date, estoppel certificates dated not earlier than thirty (30) days before the Closing Date in substantially the form of Exhibit I attached hereto and made a part hereof or --------- otherwise reasonably approved by Purchaser and conforming to the representations set forth in Section 5(g) hereof (provided, however, failure of the estoppel certificates to conform to such representations shall not constitute a breach or default by Seller) from the following tenants: International Academy, Arthur Andersen, First Chicago, T.J. Maxx and Filene's Basement. Seller shall use reasonable efforts to obtain estoppel certificates from all tenants; provided, however, Seller shall not be required to expend significant monies or make significant concessions or institute litigation in order to obtain such estoppel certificates. In the event Purchaser has not, by the date three (3) business days prior to the scheduled Closing Date, received estoppel certificates as required by the preceding sentence, Seller may (A) deliver a certificate of Seller containing information which was intended to be included in each such estoppel certificate (modified to reflect Seller's best knowledge as to such matters which would be known to a certainty only by the tenant), which certificate may (but is not required to be) be accepted by Purchaser in lieu of such estoppel certificates or (B) extend the Closing Date for a period not to exceed thirty (30) days to obtain such estoppel certificates provided Seller is using all reasonable efforts and due diligence to obtain such estoppel certificates and, in any case, Seller shall not be in breach or default of this Agreement because Purchaser has not received such estoppel certificates or if the estoppel certificates received do not conform to the representations set forth in Section 5(g) of this Agreement. Seller may substitute for a certificate delivered by Seller a tenant estoppel certificate later received from a tenant under a Lease for which such certificate was given. In exercising its reasonable discretion concerning the acceptability of a tenant estoppel letter on a form other than that prescribed by Exhibit I, Purchaser will accept an alternative form which --------- provides information which is complete in all material 10 respects concerning the terms of the Lease, the performance of the parties to the Lease (which may be limited to the tenant's knowledge in case of landlord defaults), and the condition of the leased premises. (c) SELLER'S CLOSING CONDITIONS PRECEDENT. Seller's obligation to consummate the transaction contemplated by this Agreement shall be subject to satisfaction or waiver of each of the following conditions ("Seller's Closing Conditions Precedent"), but Seller shall have the unilateral right to waive, in whole or in part, any Seller's Closing Condition Precedent by written notice to Purchaser: (i) The representations and warranties of Purchaser set forth in Article 6(a) hereof shall be, in all material respects, true and complete. (ii) Purchaser shall have performed all of the obligations required to be performed by Purchaser under this Agreement, as and when required by this Agreement, in all material respects. In the event Purchaser's Closing Conditions Precedent or Seller's Closing Conditions Precedent, as the case may be, have not been satisfied or waived as of the scheduled Closing Date as the same may be extended as permitted above, and provided the failure to satisfy or waive any such condition is not attributable to a breach or default of this Agreement by Seller or Purchaser, as the case may be, this Agreement shall terminate (other than the obligations of Purchaser set forth in Section 3(b) and Article 13 hereof, which obligations shall survive any such termination) and the Earnest Money shall be returned to Purchaser. 8. CLOSING DELIVERIES. (a) SELLER'S CLOSING DOCUMENTS. On the Closing Date, Seller shall execute and/or deliver to Purchaser or cause to be executed and/or delivered the following (collectively, "Seller's Closing Documents"): (i) DEED. A Special Warranty Deed conveying the Real Property to Purchaser, free and clear of all encumbrances, except the Permitted Encumbrances. (ii) BILL OF SALE. A Bill of Sale transferring the Personal Property to Purchaser. (iii) SELLER'S AFFIDAVIT. An Affidavit of Seller indicating that on the Closing Date, there are no outstanding, unsatisfied judgments, tax liens (other than the lien of real estate taxes not yet due and payable) or bankruptcies against or involving Seller or, to the best of Seller's knowledge, the Real Property; and that, to the best of Seller's knowledge, there are no other unrecorded interests in the Real Property other than the Leases. (iv) ORIGINAL DOCUMENTS. Original copies of the Permits, the Warranties, and the Plans to the extent in Seller's possession and not previously delivered to Purchaser. (v) FIRPTA AFFIDAVIT. A non-foreign affidavit properly containing such information as is required by IRC Section 1445(b)(2) and its regulations. 11 (vi) BULK SALE CERTIFICATE. A Certificate issued by the Illinois Department of Revenue showing that Seller does not have any liability for payment of any tax under the Illinois Income Tax Act or, if applicable, The Illinois Retailer's Occupation Tax Act. (vii) IRPTA DISCLOSURE DOCUMENT. An IRPTA Disclosure Document disclosing all items required by the Act. (viii) TITLE DOCUMENTS. Such affidavits of Seller or other documents as may be reasonably required by the Title Company in order to record the Special Warranty Deed and issue the title insurance policy required by this Agreement. (ix) CERTIFICATE. A certificate duly executed by Seller certifying that all of the representations and warranties set forth in Article 5 are true and correct in all material respects as of the Closing Date. (x) KEYS. All keys to the Real Property which are in Seller's possession. (xi) RENT ROLL. A rent roll and schedule updating the Rent Roll and the Lease Schedule and the most recently available schedule setting forth all past due and uncollected rent and additional rent owned by tenants, all prepayments of rent or any additional rent and all security deposits (including interest thereon, if any) held by Seller, certified by Seller. (xii) EVIDENCE OF TERMINATION OF AGREEMENTS. Evidence of the termination (without penalty or liability to Purchaser) of all management agreements and leasing agreements of Seller relating to the Real Property. (xiii) POSSESSION. On the Closing Date, Seller agrees to give full, complete and actual possession of the Subject Property to the Purchaser, subject only to (a) the rights of tenants under the Leases described in the Lease Schedule and any new leases or lease amendments executed after the date hereof that are approved in writing by Purchaser in accordance with Section 4(d), (b) the right of service provided under the Service Contracts, and (c) Permitted Encumbrances. Seller agrees to cooperate fully with the Purchaser to ensure that the transfer of possession takes place with the least possible disruption in the normal operation of the Subject Property. (xiv) SELLER'S OPERATING RECORDS. On the Closing Date, Seller shall deliver to Purchaser all original (or, to the extent that Seller reasonably requires to retain any of the following items, copies thereof) books, records, operating reports, files, permits and licenses, and other materials in Seller's possession or control that are necessary to a complete continuity in the operation of the Subject Property and an executed original of each Lease and each Service Contract to the extent in Seller's possession and not previously delivered to Purchaser. (xv) 1998 BILLS. Copies (to the extent available) of all bills paid in 1998 by Seller relating to the Real Property. (b) TITLE POLICY. At Closing, Seller shall cause the Title Company to deliver to Purchaser its owner's title insurance policy required by this Agreement. If the owner's title insurance policy which the Title 12 Company is prepared to issue shows any Unpermitted Encumbrances, Seller covenants and agrees, within thirty (30) days (such 30-day period being sometimes hereinafter referred to as the "Cure Period"), to use reasonable efforts to remove such Unpermitted Encumbrances or to cause the Title Company to issue its endorsement (reasonably acceptable to Purchaser) over any such Unpermitted Encumbrances. If, after using reasonable efforts, as aforesaid, Seller cannot cause such Unpermitted Encumbrances to be removed or if Seller cannot cause the Title Company to issue its endorsement (reasonably acceptable to Purchaser) over any such Unpermitted Encumbrances on or before the expiration of the Cure Period, Purchaser shall, within five (5) business days following expiration of the Cure Period, elect to either (1) terminate this Agreement (other than the obligations set forth in Section 3(b) and Article 13 hereof, which obligations shall survive any such termination), or (2) take title to the Real Property as it then is (without any abatement in the Purchase Price unless any such Unpermitted Encumbrance constitutes a lien or encumbrance of a definite or ascertainable amount created by Seller or unless any such Unpermitted Encumbrance constitutes a lien or encumbrance of a definite or ascertainable amount created by parties other than Seller, in which event the abatement shall not exceed $100,000.00). Failure of Purchaser to notify Seller within the time limits prescribed herein shall constitute an election under clause (2) above. In the event Purchaser terminates this Agreement as provided in clause (1) above the Earnest Money shall be promptly returned to Purchaser. (c) PURCHASER'S CLOSING DOCUMENTS. On the Closing Date, Purchaser will execute and/or deliver or cause to be executed and/or delivered to Seller the following (collectively, "Purchaser's Closing Documents"): (i) PURCHASE PRICE. The Purchase Price, by wire transfer of immediately available funds. (ii) TITLE DOCUMENTS. Such affidavits of Purchaser or other documents as may be reasonably required by the Title Company in order to record the Special Warranty Deed and issue the title insurance policy required by this Agreement. (d) PURCHASER'S AND SELLER'S CLOSING DOCUMENTS. On the Closing Date, Seller and Purchaser shall jointly execute and deliver the following: (i) CLOSING STATEMENT. A closing statement setting forth the prorations and adjustments to the Purchase Price as provided in this Agreement, to be agreed upon and signed by the parties not later than forty-eight (48) hours prior to the Closing Date. (ii) TRANSFER TAX DECLARATIONS. (iii) ASSIGNMENT OF LEASES AND ASSUMPTION AGREEMENT. An Assignment of Leases and Assumption Agreement pursuant to which, among other things, (A) Seller shall assign to Purchaser all of Seller's right, title and interest as landlord in, to and under the Leases and Purchaser shall assume the obligations of the landlord under the Leases with respect to any event, fact or circumstance that occurs from and after the Closing Date; (B) Seller shall defend, indemnify and hold harmless Purchaser from and against any lease defaults by the landlord under the Leases with respect to any event, fact or circumstance that occurs prior to the Closing Date, and Purchaser shall defend, indemnify and hold harmless Seller from and against any lease defaults by the landlord under the Leases with respect to any event, fact or circumstance that occurs from and after the Closing Date, and (C) the total liability of Seller for breach thereof shall be subject to the conditions and limitations set forth in Section 6(b) of this Agreement, and the total liability of Purchaser for breach thereof shall be limited to Purchaser's interest in the Subject Property. 13 (iv) ASSIGNMENT OF PLANS, PERMITS AND WARRANTIES AND ASSUMPTION AGREEMENT. An Assignment of Plans, Permits and Warranties and Assumption Agreement, pursuant to which, among other things, (A) Seller shall assign to Purchaser all of Seller's right, title and interest as owner in, to and under the Plans, Permits and Warranties and Purchaser shall assume all obligations of the owner under the Plans, Permits and Warranties with respect to any event, fact or circumstance that occurs from and after the Closing Date, (B) Seller shall defend, indemnify and hold harmless Purchaser from and against any default in the performance by the owner of its obligations under the Plans, Permits and Warranties with respect to any event, fact or circumstance that occurs prior to the Closing Date, and Purchaser shall defend, indemnify and hold harmless Seller from and against any default in the performance by the owner of its obligations under the Plans, Permits and Warranties with respect to any event, fact or circumstance that occurs from and after the Closing Date, and (C) the total liability of Seller for breach thereof shall be subject to the conditions and limitations set forth in Section 6(b) of this Agreement, and the total liability of Purchaser for breach thereof shall be limited to Purchaser's interest in the Subject Property. (v) ASSIGNMENT OF SERVICE CONTRACTS AND ASSUMPTION AGREEMENT. An Assignment of Service Contracts and Assumption Agreement pursuant to which, among other things, (A) Seller and/or the property manager shall assign to Purchaser all right, title and interest of Seller and/or the property manager, as buyer, in, to and under the Service Contracts, and Purchaser shall assume all obligations of Seller and/or the property manager under the Service Contracts with respect to any event, fact or circumstance that occurs from and after the Closing Date, (B) Seller and/or the property manager shall defend, indemnify and hold harmless Purchaser from and against any defaults by the buyer under the Service Contracts with respect to any event, fact or circumstance that occurs prior to the Closing Date, and Purchaser shall defend, indemnify and hold harmless Seller and/or the property manager from and against any defaults by the buyer under the Service Contracts with respect to any event, fact or circumstance that occurs from and after the Closing Date, and (C) the total liability of Seller for breach thereof shall be subject to the conditions and limitations set forth in Section 6(b) of this Agreement, and the total liability of Purchaser for breach thereof shall be limited to Purchaser's interest in the Subject Property. (vi) NOTICES TO TENANTS. Notices to the tenants under the Leases advising them of the sale of the Subject Property and directing them to make future lease payments to Purchaser at the place designated by Purchaser. (vii) MISCELLANEOUS. Such other documents, instruments and affidavits as shall be reasonably necessary to consummate the transaction contemplated by this Agreement, including without limitation affidavits identifying any brokers involved as the only persons entitled to a brokerage or similar commission in connection with consummation of the transaction contemplated hereby. (e) ESCROW CLOSING. This transaction shall be closed through an escrow with the escrow department of the Title Company ("Escrowee"), in accordance with the general provisions of the Escrowee's usual form of deed and money escrow agreement with provision for a "New York" style closing and with special provisions inserted in the escrow agreement as may be required to conform to this Agreement, and subject to the terms of a 14 separate money lender's escrow, if any. The attorneys for both Seller and Purchaser are authorized to sign the escrow agreement. Upon the creation of such escrow, payment of the Purchase Price and delivery of the Special Warranty Deed shall be made through the escrow. The cost of the deed and money escrow shall be divided equally between Seller and Purchaser, but Purchaser shall be responsible for any costs associated with a separate money lender's escrow. This Agreement shall not be merged into nor in any manner superseded by the escrow agreement. 9. ADJUSTMENT AND PRORATIONS. Seller and Purchaser shall make all adjustments and apportion all expenses with respect to the Subject Property, including, without limitation, the following: (a) REAL ESTATE TAXES AND SPECIAL ASSESSMENTS. Seller shall be responsible for payment to the collecting authorities of all real estate taxes and installments of special assessments affecting the Real Property (collectively "Taxes") which have been assessed and which are due and payable as of the date immediately preceding the Closing Date ("Proration Date"), and Purchaser shall be responsible for payment to the collecting authorities of all Taxes which have been or will be assessed and which become due and payable after the Proration Date. Taxes shall not be prorated, it being understood that Purchaser shall not be entitled to any credit for Taxes. Notwithstanding the foregoing, if the Closing Date occurs prior or subsequent to July 1, 1998, then the appropriate party (Seller, in the case the Closing Date is prior to July 1, 1998; Purchaser, in the case the Closing Date is subsequent to July 1, 1998) shall receive a Purchase Price credit in an amount equal to Tax contributions made or to be made by tenants (attributable to base rent, additional rent or otherwise) for period prior or subsequent to July 1, 1998. (b) TITLE INSURANCE. Seller shall pay for the cost of the owner's title insurance policy and any reinsurance for portions of the coverage in excess of $50,000,000.00 required under this Agreement together with a 3.1 zoning endorsement. Purchaser shall pay for the cost of any additional endorsements to the owner's title insurance policy which Purchaser is able to obtain from the Title Company, and all costs of any lender's title insurance policy. (c) CLOSING FEE. Seller and Purchaser will each pay one-half of any reasonable and customary closing fee by the Title Company. (d) DEED TAX. Seller shall pay all state, county and local deed tax regarding the Special Warranty Deed to be delivered by Seller under this Agreement. (e) RENTS. Current and advance rentals; operating expense and insurance escalations and adjustments and other charges payable by tenants under the Leases (excluding real estate tax contributions) (collectively, "Expense Contributions"); utility charges and deposits made by Seller with respect to common area utilities; and all other items of accrued or prepaid income and expenses shall be prorated on an accrual basis up to and including the Proration Date on the basis of the most recent ascertainable amounts of or other reliable information in respect to each such item of income and expense. Unapplied security deposits in the possession of Seller and any interest accrued thereon which is required to be paid to tenants shall be credited to Purchaser at Closing. Percentage rents under the Leases shall be adjusted as and when collected, with Seller receiving that portion of such percentage rent equal to the total amount thereof multiplied by a fraction, the numerator of which is the number of days elapsed in the applicable calculation period under such Lease up to and including the Proration Date and the denominator of which is the total number of days in such calculation period, and Purchaser receiving the balance of such percentage rents. Such prorations shall not account for or reflect any of the foregoing items to the extent any tenant is delinquent in payment of the same. 15 When actual Expense Contributions for the year in which Closing occurs are known, Purchaser shall bill each tenant for the additional amount, if any, owed by such tenant as a result of non-payment or underpayment of such tenant's share of Expense Contributions for the year to which such Expense Contributions apply under such tenant's Lease. Upon collection of such amounts the same shall be prorated between Seller and Purchaser, and Purchaser shall pay Seller all amounts due Seller for the period prior to the Proration Date as soon as reasonably practical. In the event Expense Contributions collected by Seller for the period up to and including the Proration Date exceed actual Expense Contributions for such period, Seller shall pay to Purchaser an amount equal to the excess of Expense Contributions collected over actual Expense Contributions for such period as soon as reasonably practical after such Expense Contributions are known. Upon reasonable notice to Purchaser, Seller shall have the right for twelve (12) months following Closing, which time period shall be extended as may be reasonably required until such time as all Expense Contributions or percentage rent payments under the Leases can be estimated with reasonable certainty, to inspect the books and records of the Subject Property to verify that Purchaser is remitting to Seller all amounts to be remitted to Seller according to the terms of this Agreement, and for any other purpose related to Seller's prior ownership of the Subject Property. Seller shall pay to Purchaser rents (base rent, additional rent or otherwise) attributable to free rent that extend beyond the Closing Date with respect to any Leases executed prior to the date of this Agreement. On the Closing Date, Seller shall deliver to Purchaser a schedule of all past due but uncollected rent owed by tenants. Purchaser agrees to cause the amount of such rental arrearages to be included in the first bills thereafter submitted by Purchaser to such tenants after the Closing Date, and to use commercially reasonable and diligent efforts to recover such amounts from tenants after the Closing Date. Any amounts recovered shall be distributed in the following order of priority: (i) to Purchaser for amounts due or accrued from tenants from and after the Proration Date, then (ii) the balance to Seller. Seller shall deliver to Purchaser on the Closing Date a schedule of all security deposits held or required to be held by Seller on the Closing Date which have been deposited by tenants, together with any interest that may be required under the Leases to be accrued thereon as of the Closing Date. All security deposits so held or required to be held by Seller (including interest as aforesaid) shall be transferred and delivered to Purchaser on the Closing Date. If any security deposit is in the form of a letter of credit, then Seller shall cause a replacement letter of credit to be issued and delivered to Purchaser on the Closing Date upon the same terms and conditions as the original letter of credit. If replacement letters of credit cannot be issued and delivered to Purchaser on the Closing Date, then Seller shall deposit with Purchaser on the Closing Date cash equal to the amount of letters of credit not replaced, to be held by Purchaser as tenant security deposits until replacement letters of credit are delivered to Purchaser. (f) RECORDING COSTS. Seller will pay the cost of recording (i) all documents necessary to place record title in the condition required by this Agreement and (ii) the Special Warranty Deed. Purchaser will pay the cost of recording all other documents required by its lender, if any. 16 (g) OPERATING EXPENSES. All operating costs of the Subject Property will be allocated between Seller and Purchaser as of the Proration Date, so that Seller pays that part of such operating costs payable before the Proration Date, and Purchaser pays that part of such operating costs payable from and after the Proration Date. If there are meters on the Real Property measuring consumption of water, gas or electric current for which tenants are not responsible and which would not constitute Expense Contributions, Seller and Purchaser shall reasonably cooperate to have such meters read on or about Closing, and amounts owing shall be prorated consistent with the provisions of this Section 9(g). (h) ATTORNEY'S FEES. Each of the parties will pay its own attorneys fees, except that a party defaulting under this Agreement or any closing document will pay the reasonable attorney's fees and court costs incurred by the nondefaulting party to enforce successfully its rights regarding such default. (i) OTHER COSTS. All other costs shall be allocated in accordance with the customs prevailing in similar transactions in the greater Chicago, Illinois metropolitan area. Within sixty (60) days following the Closing Date, Purchaser and Seller shall verify all prorations and shall make such adjustments as may reasonably be necessary to conform to the provisions of this Agreement. 10. DEFAULT. (a) If Purchaser defaults in its obligation to consummate this Agreement, Seller shall be entitled to terminate this Agreement and the Earnest Money shall be forfeited to Seller, as Seller's sole and exclusive remedy in the event of a default by Purchaser in consummating this Agreement. (b) If Seller defaults in its obligation to consummate this Agreement, Purchaser shall be entitled either to terminate this Agreement and have the Earnest Money returned, or to enforce specific performance of the terms and provisions of this Agreement, as Purchaser's sole and exclusive remedy in the event of a default by Seller in consummating this Agreement. 11. DAMAGE. If, prior to the Closing Date, all or any part of the Improvements are substantially damaged by fire or other casualty, Seller shall immediately give notice to Purchaser of such fact and, at Purchaser's option (to be exercised within thirty (30) days after Seller's notice), this Agreement shall terminate, in which event neither party will have any further obligations under this Agreement (other than the obligations set forth in Section 3(b) and Article 13 hereof, which obligations shall survive any such termination) and the Earnest Money shall be refunded to Purchaser provided Purchaser is not in breach or default hereunder beyond any applicable grace or cure period. If Purchaser fails to elect to terminate despite such damage, or if the Improvements are damaged but not substantially, Seller shall promptly commence to repair such damage or destruction and return the Improvements to substantially its condition prior to such damage. If such damage shall be completely repaired prior to the Closing Date then there shall be no reduction in the Purchase Price and Seller shall retain the proceeds of all insurance related to such damage. If such damage shall not be completely repaired prior to the Closing Date but Seller is diligently proceeding to repair, then Seller shall complete the repair after the Closing Date and shall be entitled to receive the proceeds of all insurance related to such damage; provided, however, Purchaser shall have the right to delay the Closing Date until repair is completed for a period not to exceed thirty (30) days, and if any damage remains unrepaired at Closing, Seller shall assign all of its right, title and interest in and to any insurance claims and proceeds relating to such damage and shall deliver to Purchaser an amount equal to any deductible portion of any applicable casualty insurance policy, and the Purchase Price shall not be reduced. For purposes of this Section, the words "substantially damaged" mean damage that would cost Seven Hundred Fifty Thousand and 00/100 Dollars ($750,000.00) or more to repair. 17 12. CONDEMNATION. If, prior to the Closing Date, eminent domain proceedings are commenced against all or any substantial part of the Subject Property, Seller shall immediately give notice to Purchaser of such fact and, at Purchaser's option (to be exercised within thirty (30) days after Seller's notice), this Agreement shall terminate, in which event neither party will have further obligations under this Agreement (other than the obligations set forth in Section 3(b) and Article 13 hereof, which obligations shall survive any such termination) and the Earnest Money shall be refunded to Purchaser provided Purchaser is not in breach or default hereunder beyond any applicable grace or cure period. If Purchaser shall fail to give such notice then there shall be no reduction in the Purchase Price, and Seller shall assign to Purchaser at the Closing Date all of Seller's right, title and interest in and to any award made or to be made in the condemnation proceedings. Prior to the Closing Date, Seller shall not designate counsel, appear in, or otherwise act with respect to the condemnation proceedings without Purchaser's prior written consent, which consent shall not be unreasonably withheld or delayed; provided, however, if any action is necessary with respect to such proceeding to avoid any forfeiture or material prejudice, Seller shall be entitled to take such action as and to the extent necessary without obtaining Purchaser's prior written consent. For purposes of this Section, the words "substantial part" mean the fair market value of the portion of the Subject Property so taken exceeds Seventy Hundred Fifty Thousand and 00/100 Dollars ($750,000.00). 13. BROKER'S COMMISSION. Seller represents and warrants to Purchaser that in connection with the transaction contemplated hereby no third party broker or finder has been engaged or consulted by Seller or is entitled to compensation or commission in connection herewith other than LaSalle Partners Limited ("Seller's Broker"). Seller shall be responsible for payment of the broker's commission due and owing Seller's Broker. Seller shall defend, indemnify and hold harmless Purchaser from and against any and all claims of brokers, finders of any like third party claiming any right to commission or compensation by or through acts of Seller in connection herewith. Purchaser represents and warrants to Seller that in connection with the transaction contemplated hereby, no third party broker or finder has been engaged or consulted by Purchaser or is entitled to compensation or commission in connection herewith other than Seller's Broker. Purchaser shall defend, indemnify and hold harmless Seller from and against any and all claims of brokers, finders or any like party claiming any right to commission or compensation by or through acts of Purchaser in connection herewith other than Seller's Broker. The indemnity obligations hereunder shall include all damages, losses, risks, liabilities, and expenses (including reasonable attorneys' fees and costs) arising from and related to matters being indemnified hereunder. Neither Seller's Broker nor any other broker, finder or like party shall be entitled to rely (as a third party beneficiary or otherwise) on the provisions herein in claiming any right to commission or compensation or otherwise. 14. MUTUAL INDEMNIFICATION. Seller and Purchaser agree to indemnify each other against, and hold each other harmless from all liabilities (including reasonable attorneys' fees in defending against claims) arising out of the ownership, operation or maintenance of the Subject Property for their respective periods of ownership; provided, however, nothing herein shall diminish the defense, indemnification and hold harmless obligations of Purchaser set forth in Section 3(b) hereof with respect to matters arising from or related to the Tests. If and to the extent that the indemnified party has insurance coverage, or the right to make claim against any third party for any amount to be indemnified against as set forth above, the indemnified party will, upon full performance by the indemnifying party of its indemnification obligations, assign such rights to the indemnifying party or, if such rights are not assignable, the indemnified party will diligently pursue such rights by appropriate legal action or proceeding and assign the recovery and/or right of recovery to the indemnifying party to the extent of the indemnification payment made by such party. The provisions of this paragraph shall survive Closing and execution and delivery of the Special Warranty Deed, subject to the conditions and limitations set forth in Section 6(b) of this Agreement. 15. ASSIGNMENT. Purchaser may not assign its rights under this Agreement without the prior written consent of Seller; provided, however, Purchaser may assign its rights under this Agreement to any trust, corporation, partnership or limited liability company controlling, controlled by or under common control with Purchaser. For purposes hereof, "control" shall mean ownership (directly or indirectly) of 51% or more of the voting or other 18 comparable ownership interest of any such trust, corporation, partnership or limited liability company. Any assignment shall be subject to all the provisions, terms, covenants and conditions of this Agreement and the assignor shall, in any event, continue to be and remain liable under this Agreement, as it may be amended from time to time, as a principal and not as a surety without notice to such assignor. Any such assignment and assumption shall be evidenced by a written agreement in form and substance reasonably acceptable to Seller. 16. NOTICES. Any notice or other communication in connection with this Agreement shall be in writing and shall be sent by United States Certified Mail, return receipt requested, postage prepaid, by nationally recognized overnight courier guarantee next day delivery, by telecopy, or by personal delivery, properly addressed as follows: If to Seller: Bradley Real Estate, Inc. 40 Skokie Boulevard, Suite 600 Northbrook, Illinois 60062-1626 Attn: Thomas P. D'Arcy Facsimile No.: (847) 480-1893 With a copy to: Burke, Warren, MacKay & Serritella, P.C. 330 North Wabash Avenue 22nd Floor Chicago, Illinois 60611-3607 Attn: D. Albert Daspin Facsimile No.: (312) 840-7900 If to Purchaser: W9/ONS Real Estate Limited Partnership c/o The Archon Group, L.P. 600 East Las Colinas Boulevard Suite 1900 Irvine, Texas 75039 Attn: James W. Jones Facsimile No.: (972) 830-7644 With a copy to: Arent Fox Kintner Plotkin & Kahn, PLLC 1050 Connecticut Avenue, NW Washington, D.C. 20036-5339 Attn: Gerard Leval Facsimile No.: (202) 857-6395 All notices shall be deemed given four (4) business days following deposit in the United States mail with respect to certified or registered letters, one (1) business day following deposit if delivered to an overnight courier guaranteeing next day delivery and on the same day if sent by personal delivery or telecopy (with proof of transmission). Attorneys for each party shall be authorized to give notices for each such party. Any party may change its address for the service of notice by giving written notice of such change to the other party, in any manner above specified. 17. CAPTIONS. The paragraph headings or captions appearing in this Agreement are for convenience only, are not a part of this Agreement, and are not to be considered in interpreting this Agreement. 18. ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the entire agreement between the parties with respect to the subject matter herein contained and all prior negotiations, discussions, writings and 19 agreements between the parties with respect to the subject matter herein contained are superseded and of no further force and effect. No covenant, term or condition of this Agreement shall be deemed to have been waived by either party, unless such waiver is in writing signed by the party charged with such waiver. 19. BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns. 20. CONTROLLING LAW. This Agreement shall be governed by and construed in accordance and the laws of the State of Illinois. 21. SEVERABILITY. The unenforceability or invalidity of any provisions hereof shall not render any other provision herein contained unenforceable or invalid. 22. "AS IS" SALE. Purchaser acknowledges that except as set forth in this Agreement and in the Closing documents executed by Seller (a) neither Seller, nor any principal, agent, attorney, employee, broker, or other representative of Seller, has made any representation or warranty of any kind whatsoever, either express or implied, with respect to the Subject Property or any matter related thereto, and (b) Purchaser is not relying on any warranty, representation, or covenant, express or implied, with respect to the condition of the Subject Property, and that Purchaser is acquiring the Subject Property in its "as-is" condition with all faults. In particular, but without limitation, except as set forth in this Agreement, Seller makes no representations or warranties with respect to the use, condition, occupation or management of the Subject Property, compliance of the Subject Property with applicable statutes, laws, codes, ordinances, regulations or requirements or compliance of the Subject Property with covenants, conditions, and restrictions, whether or not of record. 23. TIME OF ESSENCE. Time is of the essence of this Agreement. 24. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 25. EXHIBITS. The following exhibits are made a part hereof, with the same force and effect as if specifically set forth herein: A Exhibit A - Legal Description B Exhibit B - Personal Property C Exhibit C Schedule of Leases C-1 Exhibit C-1 Rent Roll D Exhibit D - Schedule of Permits E Exhibit E - Schedule of Service Contracts F Exhibit F - Schedule of Warranties G Exhibit G - Earnest Money Escrow H Exhibit H - Permitted Encumbrances I Exhibit I - Form of Tenant Estoppel Certificate J Exhibit J - Pending Litigation K Exhibit K - Labor Union Contracts L Exhibit L - Memorandum of Purchase Agreement M Exhibit M - Termination of Memorandum of Purchase Agreement 26. CONFIDENTIALITY. Until Closing, Purchaser shall keep all matters concerning the documents and other information relating to the Property confidential, provided Purchaser shall be allowed to disclose to its attorneys, 20 accountants, affiliates, advisors, financing sources and consultants such documents and information as shall be reasonably necessary for Purchaser's acquisition of the Property and/or in connection with legal requirements or legal process. Purchaser shall direct its attorneys, accountants, affiliates, advisors, financing sources and consultants to comply with this paragraph. If this Agreement is terminated, Purchaser will return to Seller all documents and information relating to the Property in its possession which were provided by Seller or its agents. The provisions of this paragraph shall survive until the earlier of (i) two (2) years following termination of this Agreement, and (ii) Closing. Any press release or other media or related communication disclosing the transaction contemplated by this Agreement shall require the prior written consent of each party, not to be unreasonably withheld, delayed or conditioned. 27. LIKE-KIND EXCHANGE. Notwithstanding the provisions contained in this Agreement relating to the sale of the Real Property, the parties acknowledge that it is the desire and intention of Seller, if possible, to exchange the Real Property for property of a like kind in an exchange qualifying as a tax-free exchange under Section 1031 of the Internal Revenue Code of 1986. If requested by Seller, Purchaser shall reasonably cooperate with Seller in attempting to implement such exchange as hereinafter provided, at Seller's sole cost and expense, in lieu of the sale provided for above, provided that such cooperation shall be limited to (a) acknowledging and agreeing to the assignment by Seller of all of its rights (but not its obligations) under this Agreement to a qualified intermediary in a manner consistent with the provisions of Treasury Regulations Sections 1.1031(k)-1(g)(4), (b) to paying the net Purchase Price (after deposits to required escrowees and other adjustments provided hereunder) in accordance with the joint directions of Seller and any such qualified intermediary and (c) taking any other action as may otherwise be reasonably required to effect such exchange and further provided that: (a) Purchaser incurs no risk, liability, obligation, cost or expense associated with the exchange; (b) the exchange does not affect or delay settlement of Purchaser's acquisition of the Real Property as provided in this Agreement; (c) Seller hereby waives any and all claims it may have against Purchaser resulting from the transaction described in this Article 27 and agrees to indemnify and hold Purchaser harmless from and against all liability arising out of its cooperation in effecting the exchange as requested by Seller including, without limitation, any liability or costs incurred by Purchaser arising from any tax proceedings or investigation conducted in connection with the exchange; (d) if the terms regarding the purchase of the exchange property provides for any financing other than the payment of all costs, Purchaser shall have no liability for such financing; (e) Purchaser shall not be required to take title to any exchange property; and (f) any documentation required to be signed by Purchaser shall be delivered to Purchaser and its counsel at least three (3) days prior to the Closing Date and shall be in form and substance reasonably satisfactory to Purchaser. In the event Seller elects to exchange the Real Property as set forth herein, any exchange contract to be signed by Purchaser shall provide that the sole and exclusive remedy of the seller of the exchange property shall be forfeiture of any deposit which may be required thereunder. The parties hereto acknowledge that Purchaser shall not be deemed Seller's agent in connection with said exchange. All costs and expenses in connection with the acquisition or transfer of any exchange property, including any deposit required by any exchange property contract, shall be the obligation of Seller and all costs and expenses incurred by Purchaser in conjunction with the acquisition of such exchange property pursuant to the contact therefor and transferring same to Seller shall, at Purchaser's sole option, either be (i) credited toward the Purchase Price otherwise due Seller under this Agreement, or (ii) fully reimbursed to the Purchaser (or if requested by Purchaser, advanced by Seller to Purchaser prior to the time that Purchaser incurs, or becomes obligated to pay, such cost or expense); provided, however, if Purchaser reasonably anticipates that attorneys' fees and costs incurred by Purchaser in cooperating with any such like-kind exchange transaction will exceed Two Thousand Five Hundred and 00/100 Dollars ($2,500.00), Purchaser shall immediately notify Seller, in writing, of the same, and, anything herein to the contrary notwithstanding, Seller shall have no liability for payment of Purchaser's attorneys' fees and costs in excess of Two Thousand Five Hundred and 00/100 Dollars ($2,500.00) unless and until Seller has notified Purchaser, in writing, that Seller shall pay any such excess attorneys' fees and costs. If Seller fails to so notify Purchaser, in writing, Purchaser's obligation to cooperate with Seller in effecting any such like-kind exchange transaction shall terminate. In the event that for any reason exchange property is not located or any transaction involving the acquisition by Seller or exchange property is not consummated, Seller shall be obligated to consummate settlement under this Agreement as fully and as effectively as if the provision of this Article 27 were not set forth in this Agreement. 21 28. MEMORANDUM. Seller agrees that Purchaser may record a memorandum of this Agreement in the form attached hereto and made a part hereof as Exhibit L, --------- provided that Purchaser first deposits with the Title Company a termination of such memorandum in the form attached hereto and made a part hereof as Exhibit M, --------- which termination of memorandum shall be recorded if this Agreement is terminated in accordance with conditions and limitations herein contained, and such recordation shall be a condition precedent to a return of the Earnest Money to Purchaser in circumstances where Purchaser is entitled to the same. Any and all costs of recording the memorandum or the termination of memorandum shall be borne by Purchaser. [Signature Page Follows] 22 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. SELLER: PURCHASER: BRADLEY FINANCING PARTNERSHIP, W9/ONS Real Estate Limited Partnership, a Delaware general partnership a Delaware limited partnership By: Bradley Operating Limited Partnership Its: General Partner By: W9/ONS Gen-Par, Inc. Its: General Partner By: Bradley Real Estate, Inc., a Delaware corporation Its: General Partner By: /s/ Ronald Bernstein --------------------------------- Its: Assistant Vice President -------------------------------- By: /s/ Thomas P. D'Arcy --------------------------------- Its: President -------------------------------- 23 FIRST AMENDMENT TO PURCHASE AGREEMENT THIS FIRST AMENDMENT TO PURCHASE AGREEMENT ("First Amendment") is made as of June 5, 1998, by and between Bradley Financing Partnership, a Delaware general partnership ("Seller") and W9/ONS Real Estate Limited Partnership, a Delaware limited partnership ("Purchaser"). RECITALS: A. By that certain Purchase Agreement dated as of May 27, 1998 ("Agreement") by and between Seller and Purchaser, Seller agreed to sell to Purchaser and Purchaser agreed to purchase from Seller, all of Seller's right, title and interest in and to the Subject Property, upon and subject to the terms and conditions set forth in the Agreement. B. Seller and Purchaser desire to amend and modify the Agreement in the manner hereinafter set forth. C. Unless otherwise provided herein, all capitalized words and terms used in this First Amendment shall have the same meanings ascribed to such words and terms as in the Agreement. NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Purchaser hereby agree as follows: 1. Section 2 of the Agreement is hereby amended, in part, in that the Purchase Price shall be Eighty-Four Million Four Hundred Fifty-Two Thousand Four Hundred and 00/100 Dollars ($84,452.400.00). 2. Concurrently herewith, Purchaser shall deposit the additional sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) with the escrow department of the Title Company, which sum shall form part of the Earnest Money. 3. Section 7(a) of the Agreement is hereby amended, in part, in that Closing shall occur on or before August 1, 1998, and all references in the Agreement to the Closing Date shall mean and refer to August 1, 1998. 4. Except as expressly provided in this First Amendment, all provisions of the Agreement remain in full force and effect and are not modified by this First Amendment, and the parties hereby ratify and confirm each and every provision thereof. 5. Seller and Purchaser agree and acknowledge that the title and survey matters set forth on Exhibit H attached hereto and made a part hereof shall --------- constitute the Permitted Encumbrances. 6. This First Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 7. This First Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns under the Agreement. 24 IN WITNESS WHEREOF, Seller and Purchaser have executed this First Amendment as of the day and year first above written. SELLER: PURCHASER: BRADLEY FINANCING PARTNERSHIP, W9/ONS Real Estate Limited Partnership, a Delaware general partnership a Delaware limited partnership By: Bradley Operating Limited Partnership Its: General Partner By: W9/ONS Gen-Par, Inc. Its: General Partner By: Bradley Real Estate, Inc., a Delaware corporation By: /s/ Ronald Bernstein Its: General Partner Its: Assistant Vice President By: /s/ Thomas P. D'Arcy Its: President 25 EX-4.1 3 ARTICLES OF MERGER W/ MID-AMERICA EXHIBIT 4.1 ARTICLES OF MERGER BETWEEN MID-AMERICA REALTY INVESTMENTS, INC. AND BRADLEY REAL ESTATE, INC. THIS IS TO CERTIFY THAT: FIRST: Bradley Real Estate, Inc. and Mid-America Realty Investments, Inc. ----- agree to merge in the manner hereinafter set forth. SECOND: Bradley Real Estate, Inc. is the corporation to survive the ------ merger. THIRD: Both Bradley Real Estate, Inc. (the "Surviving Corporation") and ----- Mid-America Realty Investments, Inc. (the "Merging Corporation") are incorporated under the laws of the State of Maryland. FOURTH: The principal office of the Surviving Corporation in the State of ------ Maryland is located in Baltimore City and the principal office of the Merging Corporation in the State of Maryland is located in Baltimore City. FIFTH: The Merging Corporation owns no interest in land in the State of ----- Maryland. SIXTH: The charter of the Surviving Corporation will not be amended as a ----- result of the merger. SEVENTH: The total number of shares of all classes of stock which each ------- corporation party to these Articles has the authority to issue and the number of shares of each class are as follows: a) Surviving Corporation The total number of shares of all classes of stock which the Surviving Corporation has authority to issue is one hundred fifty million (150,000,000) shares, consisting of eighty million (80,000,000) shares of common stock, par value $.01 per share, twenty million (20,000,000) shares of preferred stock, par value $.01 per share, of which three million four hundred eighty thousand two hundred and ten (3,480,210) shares have been designated as 8.4% Series A Convertible Preferred Stock, par value $.01 per share ("Series A Preferred Stock") and fifty million (50,000,000) shares of excess stock, par value $.01 per share. The aggregate par value of all shares of all classes having a par value is one million five hundred thousand dollars ($1,500,000). b) Merging Corporation The total number of shares of all classes of stock which the Merging Corporation has authority to issue is twenty-five million (25,000,000) shares of common stock, par value $.01 per share, and the Merging Corporation has no authority to issue preferred stock. The aggregate par value of all shares of all classes having a par value is two-hundred and fifty thousand dollars ($250,000). EIGHTH: Upon the Effective Time (as defined in Article Eleventh), the ------ Merging Corporation shall be merged with and into the Surviving Corporation and the separate corporate existence of the Merging Corporation shall thereupon cease. Each share of common stock, par value $.01 per share, of the Merging Corporation shall be converted into the right to receive 0.42 of a share of Series A Preferred Stock ("Common Stock") of the Surviving Corporation on the Effective Time, without the necessity of any action on the part of the holder thereof, except that fractional shares will be treated as described below. No fractional shares of the Series A Preferred Stock of the Surviving Corporation shall be issued. In lieu of the issuance of any fractional share of Series A Preferred Stock of the Surviving Corporation, each holder of Common Stock of the Merging Corporation upon surrender of a Certificate for exchange shall be paid an amount in cash (without interest), rounded to the nearest cent, determined by multiplying (i) the fraction of a share of Series A Preferred Stock of the Surviving Corporation which such holder would otherwise be entitled to receive by (ii) $25.00. At the Effective Time, without any action on the part of the holder thereof, all shares of Common Stock of the Merging Corporation, shall cease to be outstanding, shall be canceled and retired and shall cease to exist and each holder of a certificate representing any shares of the Common Stock of the Merging Corporation shall thereafter cease to have any rights with respect to such shares of Common Stock of the Merging Corporation, except the right to receive, without interest, shares of Series A Preferred Stock of the Surviving Corporation and cash in lieu of fractional shares of Preferred Stock of the Surviving Corporation upon the surrender of such certificate. No dividends or other distributions on the Series A Preferred Stock of the Surviving Corporation paid with respect to any shares of the Common Stock of the Merging Corporation represented by a Certificate shall be delivered to the holder of such Certificate until such Certificate is surrendered for exchange. Following surrender of such Certificate, such dividends or other distributions shall be paid to such holder, without interest, less the amount of any withholding or other applicable taxes which may be required thereon. NINTH: The terms and conditions of the transaction described in these ----- Articles were duly advised, authorized and approved by the Merging Corporation in the manner and by the vote required by the laws of the State of Maryland and the charter of the Merging Corporation, as follows: 2 a) At a meeting of the Board of Directors of the Merging Corporation held on May 30, 1998, the Board of Directors adopted a resolution declaring that the terms and conditions of the transaction described herein were advisable and in the best interests of the Merging Corporation and its stockholders and directing that the proposed transaction be submitted for consideration by the stockholders of the Merging Corporation and such resolution is filed with the minutes of the proceedings of the Board of Directors. b) At a special meeting of stockholders of the Merging Corporation held on August 5, 1998, the stockholders adopted a resolution approving the terms and conditions of the transaction and of the Merger Agreement described herein as so proposed and such resolution is filed with the minutes of the proceedings of the stockholders. TENTH: The terms and conditions of the transaction described in these ----- Articles were duly advised, authorized and approved by the Surviving Corporation, in the manner and by the vote required by the laws of the State of Maryland and the charter of the Surviving Corporation, as follows: a) At a special meeting of the Board of Directors of the Surviving Corporation held on May 27, 1998, the Board of Directors adopted a resolution (i) declaring that the merger between the Merging Corporation and the Surviving Corporation, as contemplated by the Agreement and Plan of Merger, is deemed to be in the best interests of the Surviving Corporation and its stockholders and advisable on substantially all the terms and conditions set forth in the Merger Agreement, and (ii) approving such merger, and such resolution is filed with the minutes of the proceedings of the Board of Directors. ELEVENTH: These Articles of Merger shall become effective upon acceptance -------- for record by the State Department of Assessments and Taxation of Maryland (the "Effective Time"). TWELFTH: Each undersigned President acknowledges these Articles of Merger ------- to be the corporate act of the respective corporate party on whose behalf he has signed, and further, as to all matters or facts required to be verified under oath, each President acknowledges that to the best of his knowledge, information and belief, these matters and facts relating to the corporation on whose behalf he has signed are true in all material respects and that this statement is made under the penalties for perjury. 3 IN WITNESS WHEREOF, these Articles of Merger have been duly executed by the parties hereto this 6th day of August, 1998. ATTEST: MID-AMERICA REALTY INVESTMENTS, INC. /s/ Jerome L. Heinrichs By: /s/ Dennis G. Gethmann (SEAL) - --------------------------------------- ----------------------------- Jerome L. Heinrichs Dennis G. Gethmann Secretary President ATTEST: BRADLEY REAL ESTATE, INC. /s/ William B. King By: /s/ Thomas P. D'Arcy (SEAL) - --------------------------------------- ----------------------------- William B. King Thomas P. D'Arcy Secretary President 4 EX-10.1 4 AMEND. TO 2ND RESTATED AGREE. (DATED 08/06/98) EXHIBIT 10.1 BRADLEY OPERATING LIMITED PARTNERSHIP AMENDMENT TO SECOND RESTATED AGREEMENT OF LIMITED PARTNERSHIP ESTABLISHING AND FIXING THE RIGHTS, LIMITATIONS AND PREFERENCES OF 8.4% SERIES A CONVERTIBLE PREFERRED UNITS This Amendment to the Second Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership, a Delaware limited partnership (the "Partnership"), dated August 6, 1998 (this "Amendment") amends the Second Restated Agreement of Limited Partnership of the Partnership, dated September 2, 1997, as amended, by and among Bradley Real Estate, Inc. (the "General Partner") and each of the limited partners executing a signature page thereto (the "Partnership Agreement"). Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Partnership Agreement. Section references are (unless otherwise specified) references to sections in this Amendment. WHEREAS, pursuant to Section 3.1.C of the Partnership Agreement, the General Partner desires to cause the Partnership to issue additional Units of a new class and series, with the designations, preferences and relative, participating, optional or other special rights, powers and duties set forth herein; and WHEREAS, such new class and series of Units shall be issued to the General Partner in connection with the issuance by the General Partner of shares of 8.4% Series A Convertible Preferred Stock, par value $.01 per share ("Series A Preferred Stock"), to the stockholders of Mid-America Realty Investments, Inc. ("MDI") at the effective time of the merger of MDI with and into the General Partner, and such shares of Series A Preferred Stock have designations, preferences and other rights such that the economic interests attributable to such shares are substantially similar to the designations, preferences and other rights of the new class and series of Units issued hereby; and WHEREAS, the General Partner is making a Capital Contribution to the Partnership in an amount equal to the Net Proceeds raised in connection with the issuance of the 8.4% Series A Convertible Preferred Stock; and WHEREAS, pursuant to Section 17.1 of the Partnership Agreement, the General Partner, without the consent of the Limited Partners, may amend the Partnership Agreement by executing a written instrument setting forth the terms of such amendment; and WHEREAS, the General Partner desires by this Amendment to so amend the Partnership Agreement as of the date first set forth above to provide for the designation and issuance of such new class and series of Units. NOW THEREFORE, the Partnership Agreement is hereby amended by establishing and fixing the rights, limitations and preferences of a new class and series of Units as follows: 1. Designation, Amount and Ranking. ------------------------------- Pursuant to Section 3.1.C of the Partnership Agreement, a class and series of Preferred Units, designated "8.4% Series A Convertible Preferred Units," is hereby established (the "Series A Preferred Units"). The aggregate number of Series A Preferred Units shall be 3,480,210, all of which are hereby issued to the General Partner. The General Partner is authorized to issue on behalf of the Partnership one or more Unit Certificates which evidence ownership of the Series A Preferred Units in accordance with Section 3.1.A of the Partnership Agreement. The Series A Preferred Units shall, with respect to distribution rights and rights upon liquidation, dissolution or winding up of the Partnership, rank (a) senior to all Units (whether General Partner Units or Limited Partner Units) outstanding prior to the date hereof and all units of the same class or series as such previously outstanding Units (hereinafter referred to collectively as, "Common Units"), and to all classes or series of Units the terms of which specifically provide that such Units rank junior to such Series A Preferred Units; (b) on parity with all classes or series of Units issued by the Partnership the terms of which specifically provide that such Units rank on a parity with the Series A Preferred Units; and (c) junior to all other classes or series of Units issued by the Partnership. 2. Distribution Rights. ------------------- (a) The holder of the outstanding Series A Preferred Units shall be entitled to receive, when, as and if authorized by the General Partner, out of funds legally available therefor, cash distributions of Operating Cash Flow and Capital Cash Flow which are (1) cumulative, (2) preferential to the distributions paid on the Partnership's Common Units and (3) payable quarterly in arrears at the rate of 8.4% of the $25.00 liquidation preference per annum (equivalent to a fixed quarterly amount of $.525 per Series A Preferred Unit) (the "Distribution Amount") and no more, on the same day as the payment date for dividends declared by the General Partner on the Series A Preferred Stock (each, a "Distribution Payment Date"). Each calendar quarter immediately preceding the Distribution Payment Date (or if the date of original issuance of the Series A Preferred Units (the "Original Issue Date") is not on the first day of a calendar quarter, the period beginning on the date of issuance and ending on the Distribution Payment Date) is referred to hereinafter as a "Distribution Period." The General Partner may not authorize, declare or pay any distribution on the Series A Preferred Stock with respect to any period unless it has authorized, declared and paid a dividend payable by it in the same amount on the Series A Preferred Stock with respect to the same Distribution Period. Distributions will be payable to the holder of record with respect to that number of Series A Preferred Units outstanding on the records of the Partnership at the close of business on the applicable record date, which shall be the same day as the record date for any distribution payable by the General Partner on the Series A Preferred Stock with respect to the same period (each, a "Distribution Record Date"). Notwithstanding anything in the terms of the Series A Preferred Units to the contrary, the Distribution Amount for the 2 initial Distribution Period and, if applicable, for the next succeeding Distribution Period(s) shall be reduced in the aggregate by the amount (calculated to the nearest one-tenth of one cent) obtained by (x) dividing (i) the amount of the "Merger Dividend," if any, paid to the holders of common stock, par value $.01 per share of MDI, prior to its merger with and into the General Partner by (ii) the number of shares of such common stock of MDI with respect to which the Merger Dividend was paid and (y) dividing (i) the quotient so obtained by (ii) the Exchange Ratio. For the purposes of the preceding sentence, the Merger Dividend shall have the meaning set forth in Section 7.14(b) of the Agreement and Plan of Merger dated as of May 30, 1998 by and between MDI and the General Partner, as amended from time to time (the "Merger Agreement"), and the Exchange Ratio shall be 0.42 (or such other amount as is provided in Section 4.1(b) of the Merger Agreement). (b) No distributions on Series A Preferred Units shall be authorized by the General Partner or paid or set apart for payment by the Partnership at any such time as the terms and provisions of any agreement of the Partnership or the General Partner, including any agreement relating to their indebtedness, prohibits such authorization, payment or setting apart for payment or provides that such authorization, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or to the extent that such authorization or payment shall be restricted or prohibited by law. (c) Notwithstanding the foregoing, distributions on the Series A Preferred Units shall accrue whether or not the terms and provisions set forth in Section 2(b) hereof at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are declared. Accrued but unpaid distributions on the Series A Preferred Units will accumulate as of the Distribution Payment Date on which they first become payable. (d) The Partnership shall not (i) declare or pay or set apart for payment any distributions on any Units ranking as to distributions junior to the Series A Preferred Units (other than distributions paid by issue or delivery of such junior Units) or (ii) make any purchase or redemption of, or any sinking fund payment for the purchase or redemption of, any Units ranking as to distributions junior to the Series A Preferred Units (other than a purchase or redemption made by issue or delivery of such junior Units) unless all distributions payable on all outstanding Series A Preferred Units for all past Distribution Periods shall have been paid in full or declared and a sufficient sum set apart for payment thereof; provided, however, that any moneys -------- ------- theretofore deposited in any sinking fund with respect to any Preferred Units of the Partnership in compliance with the provisions of such sinking fund may thereafter be applied to the purchase or redemption of such Preferred Units in accordance with the terms of such sinking fund. (e) All distributions declared on any other class of Preferred Units or series thereof ranking on a parity as to distributions with the Series A Preferred Units shall be declared pro rata, so that the amounts of distributions declared per Series A Preferred Unit for 3 the Distribution Period of the Series A Preferred Units ending either on the same day or within the distribution period of such other class or series of Units, shall, in all cases, bear to each other the same ratio that accrued distributions per Series A Preferred Unit and such other class or series of Units bear to each other. (f) Any distribution payment made on the Series A Preferred Units shall first be credited against the earliest accrued but unpaid distribution due with respect to such Series A Preferred Units which remains payable. Holders of the Series A Preferred Units shall not be entitled to any distribution, whether payable in cash, property or Units, in excess of full cumulative distributions on the Series A Preferred Units as described above. 3. Liquidation Rights. ------------------ (a) Subject to any prior rights of any class or series of Units, in the event of any liquidation, dissolution, or winding up of the Partnership, either voluntary or involuntary and whether or not in connection with the liquidation of the Bradley Group, the holder of all Series A Preferred Units then outstanding shall be entitled to receive out of the assets of the Partnership legally available for distribution, on a prior basis and in preference to any distribution of any of the assets or surplus funds of the Partnership to the holders of Common Units by reason of their ownership of such Units, a liquidation preference of $25.00 per Series A Preferred Unit, plus an amount equal to all accrued but unpaid distributions as determined in accordance with Section 2(c) for each Series A Preferred Unit then held by it. If, upon the occurrence of such event, the assets and funds thus distributed to the holder of the Series A Preferred Units shall be insufficient to permit the payment to it and the holders of any other class or series of Units on parity with the Series A Preferred Units of the full aforesaid amounts to which they are entitled, then, subject to any prior rights of any classes or series of Units, the entire assets and funds of the Partnership legally available for distribution shall be distributed ratably to the holders of Series A Preferred Units and any other Units on a parity for liquidation purposes in proportion to the aggregate amounts to which each such holder would otherwise be respectively entitled. (b) After payment of the full amount of the liquidating distributions to which it is entitled pursuant to Section 3(a) hereof, the holder of Series A Preferred Units will have no right or claim to any of the remaining assets of the Partnership arising from its ownership of such Series A Preferred Units (it being understood that such holder may have additional rights or claims to the remaining assets of the Partnership as a result of its ownership of Units of other classes or series or its status as General Partner.) (c) The consolidation or merger of the Partnership or the General Partner with or into any other corporation, partnership, limited liability company, trust or other entity or of any other corporation, partnership, limited liability company, trust or other entity with or into the Partnership or the General Partner, or the sale, lease, transfer or conveyance of all or substantially all of the property or business of the Partnership or the General Partner or a statutory share exchange, shall not be deemed to constitute a liquidation, dissolution or winding up of the Partnership. 4 4. Conversion. ---------- 4.1 Mandatory Conversion. -------------------- At any time that any outstanding shares of Series A Preferred Stock of the General Partner are converted into shares of common stock, par value $.01 per share, of the General Partner ("Common Stock") pursuant to the terms thereof, a like number of Series A Preferred Units shall be converted (without taking into account any accumulated, accrued but unpaid distributions) into Common Units as follows: the number of Common Units to which a holder of Series A Preferred Units shall be entitled to receive upon conversion shall be the product obtained by multiplying the Conversion Rate (as defined below) by the number of Series A Preferred Units being converted at such time. The Conversion Rate shall be the quotient obtained by dividing $25.00 by the Conversion Price. The Conversion Price shall, except as adjusted pursuant to Section 4.4 below, be $24.49. Any Series A Preferred Units which have been called for redemption pursuant to Section 5 hereof may be converted at any time prior to the close of business on the Series A Preferred Redemption Date (as defined in Section 5(a)); provided, -------- however, that such Series A Preferred Units may be converted after such date if - ------- the Partnership shall default in making payment of any cash payable upon such redemption under Section 5 hereof. 4.2 Procedure for Conversion. ------------------------ Upon conversion of any shares of Series A Preferred Stock into Common Stock, the holder of Series A Preferred Units shall surrender the certificate(s) therefor, at the principal offices of the Partnership, or at such other office as may be designated by the Partnership for notation that a like number of Series A Preferred Units have been converted or alternatively for cancellation upon delivery to the holder of a replacement certificate representing the balance of the Series A Preferred Units not converted. As soon as practicable after a conversion of Series A Preferred Stock, the Partnership shall issue and deliver at said office a certificate or certificates for the whole number of Common Units issuable upon conversion of the Series A Preferred Units duly surrendered for conversion to such holder if the Common Units are represented by certificates at such time. The Series A Preferred Units shall be deemed to have been converted at the same date and time as the corresponding shares of Series A Preferred Stock are converted into Common Stock, and the holder entitled to receive the Common Units issuable upon such conversion shall be deemed for all purposes as record holder of such Common Units as of the close of business on such date (hereinafter, the "Conversion Date"). The holder of Series A Preferred Units at the close of business on a Distribution Record Date shall be entitled to receive the distribution payable on such Series A Preferred Units on the corresponding Distribution Payment Date notwithstanding the conversion thereof following such Distribution Record Date and prior to such Distribution Payment Date. Except as provided above, the Partnership shall make no payment or allowances for unpaid distributions, whether or not in arrears, on converted Series A Preferred Units or for distributions on the Common Units issued upon such conversion. 5 4.3 No Fractional Units. ------------------- No fractional Common Units shall be issued upon conversion of the Series A Preferred Units into Common Units, and, in lieu thereof, the Partnership shall pay a cash adjustment in an amount equal to the same fraction of the last sale price (or bid price if there were no sales) per share of Common Stock on the New York Stock Exchange on the business day which immediately precedes the Conversion Date or, if such Common Stock is not then listed on the New York Stock Exchange, of the market price per share (as determined in a manner prescribed by the General Partner) at the close of business on the business day which immediately precedes the Conversion Date. 4.4 Adjustments; Change in Control Transactions. ------------------------------------------- (a) In the event the General Partner shall at any time (i) pay a dividend or make a distribution to holders of Common Stock in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a larger number of shares, or (iii) combine its outstanding shares of Common Stock into a smaller number of shares, the Conversion Price shall be adjusted by multiplying the Conversion Price by a fraction, the denominator of which shall be the number of shares of Common Stock outstanding immediately after such dividend, distribution, subdivision or combination and the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such dividend, distribution, subdivision or combination. An adjustment made pursuant to this subparagraph (a) shall become effective immediately upon the opening of business on the day next following the record date in the case of a dividend or distribution (except as provided in paragraph (h) of this Section 4.4 below) and shall become effective immediately upon the opening of business on the day next following the effective date in the case of a subdivision, combination or reclassification. (b) In the event the General Partner shall at any time distribute to all holders of its Common Stock (i) any rights or warrants to subscribe for or purchase any security of the General Partner (excluding those rights and warrants issued to all holders of Common Stock entitling them for a period expiring within 45 days after the record date referred to in subparagraph (c) below to subscribe for or purchase Common Stock, which rights and warrants are referred to in and treated under subparagraph (c) below), or any evidence of indebtedness or other securities of the General Partner (other than Common Stock) or (ii) cash or other assets (excluding cash dividends or distributions in an amount not in excess of the greater of either (x) with respect to all cash dividends or distributions paid on Common Stock after December 31, 1997, the cumulative amount of funds from operations reported for the General Partner after December 31, 1997, or (y) with respect to cash dividends or distributions paid on Common Stock for any fiscal year, the taxable income as reflected on the General Partner's federal income tax return on Form 1120 REIT (or successor form) for such fiscal year), then in each such case the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on the record date for the determination of the Stockholders entitled to 6 receive such distribution by a fraction, the denominator of which shall be the Fair Market Value (as defined in Section 4.4(g)) of the Common Stock and the numerator of which shall be the Fair Market Value of the Common Stock less the then fair market value (as determined in good faith by the Board of Directors of the General Partner or a duly authorized committee thereof, which determination shall be conclusive) of the portion of the rights, warrants, evidence of indebtedness or other securities, cash or other assets so distributed applicable to one share of Common Stock. Such adjustment shall become effective immediately upon the opening of business on the day next following the record date for the determination of stockholders entitled to receive such distribution. (c) In the event the General Partner shall at any time issue rights, options or warrants to all holders of Common Stock entitling them (for a period expiring within 45 days after the record date mentioned below) to subscribe for or purchase Common Stock at a price per share less than the Fair Market Value of Common Stock on the record date for the determination of stockholders entitled to receive such rights, options or warrants, then the Conversion Price shall be adjusted so that the same shall equal the price determined by multiplying the Conversion Price in effect immediately prior to the close of business on such record date by a fraction, the numerator of which shall be the sum of (i) the number of shares of Common Stock outstanding on the close of business on such record date and (ii) the number of shares of Common Stock that the aggregate proceeds to the General Partner from the exercise of such rights, options or warrants for shares of Common Stock would purchase at the Fair Market Value and the denominator of which will be the sum of number of shares of Common Stock outstanding on the close of business on such record date and the number of additional shares of Common Stock offered for subscription or purchase pursuant to such rights, options or warrants. Such adjustment shall become effective immediately upon the opening of business on the day next following the record date for the determination of stockholders entitled to receive such rights, options or warrants. (d) Whenever the Conversion Price shall be adjusted as herein provided, the Partnership shall cause to be filed with the records of the Partnership a notation that the Conversion Price has been adjusted and setting forth the adjusted Conversion Price, together with an explanation of the calculation of the same. (e) No adjustment in the Conversion Price shall be required unless such adjustment would require a cumulative increase or decrease of at least 1% in such price; provided, however, that any adjustment that by reason of this -------- ------- subparagraph (e) is not required to be made shall be carried forward and taken into account in any subsequent adjustment until made; and provided, further, -------- ------- that any adjustment shall be required and made in accordance with the provisions of this Section 4.4 (other than this subparagraph (e)) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of Common Units. Notwithstanding any other provisions of this Section 4.4, the Partnership shall not be required to make any adjustment of the Conversion Price for the issuance of any Common Stock in connection with the issuance of Common Stock pursuant to any plan providing for the reinvestment of dividends or interest payable on securities of the General 7 Partner and the investment of additional optional amounts in shares of Common Stock under such plan. All calculations under this Section 4.4 shall be made to the nearest cent with $.005 being rounded upward or to the nearest one-tenth of a share (with .05 of a share being rounded upward), as the case may be. Anything in this Section 4.4 to the contrary notwithstanding, the General Partner shall be entitled, to the extent permitted by law, to make such reductions in the Conversion Price, in addition to those required by this Section 4.4, as in its discretion, it shall determine to be advisable in order that any stock dividends, subdivision of shares, reclassification or combination of shares, distribution of rights, options or warrants to purchase stock or securities, or a distribution of other assets (other than cash dividends) hereafter made by the General Partner to its stockholders shall not be taxable. (f) If the General Partner shall be party to, or shall have entered into an agreement for, any transaction (including, without limitation, a merger, consolidation, statutory share exchange or sale of all or substantially all of its assets), in each case as a result of which shares of Common Stock generally shall be converted into the right to receive stock, securities or other property (including cash or any combination thereof) (a "Transaction"), the Series A Preferred Units shall, in connection with such Transaction, convert into the number of Common Units issuable upon conversion of such Series A Preferred Unit immediately prior to the consummation of such Transaction. (g) For the purposes of this Section 4.4, "Fair Market Value" shall mean the average of the last reported sale price (or bid price if there were no sales) per share of Common Stock as reported on the New York Stock Exchange (or such other national securities exchange or NASDAQ National Market on which the Common Stock is traded at the time of such computation) during 5 consecutive trading days selected by the General Partner commencing not more than 20 trading days before, and ending not later than the day immediately prior to the "ex" date with respect to the issuance or distribution requiring such computation. The term "'ex' date," when used with respect to any issuance or distribution, means the first day on which the Common Stock trades regular way, without the right to receive such issuance or distribution, on the exchange or in the market, as the case may be, used to determine the Fair Market Value. In the event that, at any time, the Common Stock is not then traded on a national securities exchange or the NASDAQ National Market then "Fair Market Value" shall be determined in good faith by the Board of Directors of the General Partner. (h) In any case in which this Section 4.4 provides that an adjustment shall become effective on the date next following the record date for an event, the General Partner may defer until the occurrence of such event (A) issuing to the holder of Series A Preferred Units converted after such record date and before the occurrence of such event the additional Common Units issuable upon such conversion by reason of the adjustment required by such event over and above the Common Units issuable upon such conversion before giving effect to such adjustment and (B) fractionalizing any Series A Preferred Units and/or paying to such holder any amount of cash in lieu of any fraction pursuant to Section 4.3. Any adjustment of the Conversion Price in accordance with either paragraph (b) or (c) of this Section 4.4 shall be 8 disregarded if, as, and when the rights to acquire Common Units upon exercise or conversion of the rights, warrants or options which give rise to such adjustment expire or are canceled without having been exercised, so that the Conversion Price effective immediately upon such cancellation or expiration shall be equal to the Conversion Price in effect immediately prior to the time of the issuance of the expired or cancelled rights, warrants or options, with such additional adjustments as would have been made to the Conversion Price had the expired or cancelled rights, warrants or options never been issued. (i) There shall be no adjustment of the Conversion Price in case of the issuance of any shares of Common Stock in a reorganization, acquisition or other similar transaction except as specifically set forth in this Section 4.4. If any action or transaction would require adjustment of the Conversion Price pursuant to more than one paragraph of this Section 4.4, only one adjustment shall be made, and such adjustment shall be the amount of adjustment that has the highest absolute value. Notwithstanding anything in this Section 4.4 to the contrary, no adjustment shall be made to the Conversion Price as a result of the issuance of rights by the General Partner in connection with the establishment of a shareholder rights plan (or other comparable plan) so long as the terms of such plan provide that such rights will attach to the shares of Common Stock into which the Series A Preferred Stock may be converted at the time of such conversion. 5. Redemption. ---------- (a) At such time or times as the General Partner exercises its right, in its sole and absolute discretion, to redeem the outstanding shares of Series A Preferred Stock and such shares are in fact redeemed, the General Partner shall cause the Partnership to redeem all of the outstanding Series A Preferred Units. This redemption shall become effective, without any further action by the General Partner or the Partnership, on the date and at the time that the redemption of the Series A Preferred Stock by the General Partner becomes effective (such date being referred to as the "Series A Preferred Redemption Date"). (b) On a Series A Redemption Date, each Series A Preferred Unit so redeemed shall be redeemed in cash or immediately available funds at a price per Series A Preferred Unit equal to $25.00, plus all accrued but unpaid distributions (such amount being referred to as the "Series A Preferred Redemption Amount"). (c) In the event that the funds of the Partnership legally available for redemption of the Series A Preferred Units on any Series A Preferred Redemption Date are insufficient to redeem the number of Series A Preferred Units to be so redeemed on such date, the Partnership shall in good faith use reasonable efforts as expeditiously as possible to eliminate, or obtain an exception, waiver or exemption from, any and all restrictions under applicable law that prevented the Partnership from redeeming all of the Series A Preferred Units to be redeemed hereunder. At any time thereafter when additional funds of the Partnership are legally available for the redemption of Series A Preferred Units, such funds will be used to redeem the balance of such Series A Preferred Units, or such portion thereof 9 for which funds are available. If any Series A Preferred Units are not redeemed for the foregoing reason or because the Partnership otherwise failed to pay or tender to pay the aggregate Series A Preferred Redemption Amount on the Series A Preferred Units required to be redeemed, all Series A Preferred Units which have not been redeemed shall remain outstanding and entitled to all the rights and preferences provided herein. (d) Upon receipt of payment of the Series A Preferred Redemption Amount, the holder of the Series A Preferred Units to be redeemed shall surrender the certificate or certificates representing such Series A Preferred Units to the Partnership for notation or cancellation consistent with the provision of Section 4.2(e) hereof. (e) Notwithstanding anything in this Section 5 to the contrary, no Series A Preferred Units may be redeemed except from proceeds from the sale of equity securities of the General Partner (other than the Series A Preferred Stock), including, but not limited to, shares of Common Stock, shares of preferred stock, depositary shares, interests, participation or other ownership interests (however designated) and any rights (other than debt securities convertible into or exchangeable for equity securities) or options to purchase any of the foregoing, and which proceeds are contributed as a Capital Contribution to the Partnership by the General Partner in accordance with the terms of the Partnership Agreement. 6. Voting and Consent Rights; Amendment of Terms. --------------------------------------------- (a) The holder of Series A Preferred Units shall have the right, with the holders of Common Units and any other Units authorized, to vote upon or consent to each matter on which the holders of Common Units are entitled to vote or consent, on the basis of one vote or consent for each Common Unit into which the Series A Preferred Units held by such holder are then convertible (rounded to the nearest whole number of Units). The holders of Series A Preferred Units and Common Units shall vote together as one class except as otherwise set forth herein. (b) Notwithstanding Section 17.1 of the Partnership Agreement, so long as any Series A Preferred Units remain outstanding, the General Partner may not amend the terms of the Series A Preferred Units to affect materially and adversely the rights, preferences, privileges or voting power of the Series A Preferred Units unless the terms of the Series A Preferred Stock of the General Partner are similarly amended and an amendment to these terms of the Series A Preferred Units is necessary so that the economic interests of the Series A Preferred Stock and the Series A Preferred Units remain substantially similar. For purposes of the foregoing and without limitation of the foregoing, (i) the increase or decrease in the amount of authorized Units of any class or series including the Series A Preferred Units, (ii) the creation of a new class or series of Units having rights, preferences, privileges or voting power senior to, on a parity with or junior to the rights, preferences or privileges of the Series A Preferred Units in the distribution of assets on any liquidation, dissolution or winding up of the Partnership and/or in the payment of dividends and (iii) the entering into of any agreement providing for the actions in (i) or (ii) above and the taking of any actions in connection with 10 the consummation of any such agreement shall not be deemed to materially and adversely affect the rights, preferences, privileges or voting power of the Series A Preferred Units, and the General Partner may amend the terms of the Series A Preferred Units as it deems advisable, in its sole and absolute discretion, to reflect such actions. Notwithstanding anything in the terms of the Series A Preferred Units to the contrary, the holder of Series A Preferred Units is not entitled to vote or consent as a single class on (i) any Transaction (as defined in Section 4.4(f), (ii) any transaction (including, without limitation, a merger, consolidation, statutory share exchange or sale of all or substantially all of its assets) in which the General Partner or the Partnership would be the surviving entity (an "Acquisition Transaction"), or (iii) on any other matter except as specifically provided in this Section 6, irrespective of the effect such Transaction, Acquisition Transaction, or other matter may have on the rights, preferences, privileges or voting power of the Series A Preferred Units 7. No Preemptive or Other Rights. ----------------------------- The holder of Series A Preferred Units shall have no preemptive rights, including preemptive rights with respect to any Units or other Partnership Interest of the Partnership convertible into or carrying rights or options to purchase any such Series A Preferred Units. 8. Exhibit A to Partnership Agreement. ---------------------------------- In order to duly reflect the issuance of the Series A Preferred Units provided for herein, the Partnership Agreement is hereby further amended pursuant to Section 12.3 thereof by deleting Exhibit A thereto and replacing --------- Exhibit A attached hereto therefor. - --------- 11 IN WITNESS WHEREOF, this Amendment has been executed as of the date first above written. BRADLEY REAL ESTATE, INC. By: /s/ Thomas P. D'Arcy ------------------------------------------ Thomas P. D'Arcy Chairman, President and Chief Executive Officer 12 EX-99.1 5 PRESS RELEASE EXHIBIT 99.1 NEWS BULLETIN BRADLEY REAL ESTATE, INC. 40 SKOKIE BLVD., SUITE 600 FROM: NORTHBROOK, IL 60062-1626 NYSE: BTR FRB - -------------------------------------------------------------------------------- The Financial Relations Board, Inc. FOR FURTHER INFORMATION: AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD: THOMAS P. D'ARCY DENNIS WAITE CHAIRMAN AND CEO SENIOR COUNSELOR (847) 272-9800 (312) 640-6674 FOR IMMEDIATE RELEASE THURSDAY, AUGUST 6, 1998 BRADLEY REAL ESTATE COMPLETES ACQUISITION OF MID-AMERICA REALTY INVESTMENTS, INC. NORTHBROOK, ILL., AUGUST 6, 1998--BRADLEY REAL ESTATE, INC. (NYSE:BTR) today announced that it has completed the acquisition of Mid-America Realty Investments, Inc. The merger was approved by share owners of Mid-America Realty Investments, Inc. on August 5, 1998. A vote by Bradley share owners was not required. As provided in the merger agreement, each share of Mid-America Realty Investments common stock was exchanged for 0.42 shares 8.4% Series A Convertible Preferred Stock of Bradley Real Estate, Inc. with a liquidation preference of $25.00 per share. The 8.4 percent Series A Convertible Preferred Stock will be traded on the NYSE commencing at the opening on August 7, 1998, under the symbol "BTRPrA" and is convertible into Bradley common stock at any time at a price of $24.49. Thomas P. D'Arcy, chairman and chief executive officer of Bradley, commented, "We are pleased to have completed this transaction on schedule and believe it to be a very positive event for both share owner groups. As we have previously stated, this acquisition represents an excellent strategic fit and a further step in Bradley's continued consolidation of grocery-anchored shopping centers in the Midwest. This acquisition, comprising 25 shopping centers totaling 3.2 million square feet, when coupled with our recently completed sale of our One North State Street building, improves the quality and diversity of our earnings stream and further enhances our platform for continued growth." The preceding information contains forward-looking statements of the company's plans, objectives and expectations, which are dependent upon a number of factors including a stable retailing climate in the Midwestern United States, the financial viability of the company's tenants and the continuing availability of retail center acquisitions and development opportunities in the Midwest on favorable terms. Reference is made to the discussions under the captions "Risk Factors" in the company's 1997 Form 10-K report which includes a discussion of certain other factors which could cause actual results to differ materially from those in forward-looking statements. Bradley Real Estate, Inc. is the nation's oldest real estate investment trust (REIT) and a leading owner and operator of neighborhood and community shopping centers located in the Midwest region of the United States. The company has paid 148 consecutive quarterly distributions to its share owners, one of the longest records of distributions among publicly traded REITs. With this acquisition, the company now owns 90 properties located in 15 states aggregating 14.4 million square feet of rentable space. TO RECEIVE ADDITIONAL INFORMATION ON BRADLEY REAL ESTATE FREE OF CHARGE VIA FAX, DIAL 1-800-PRO-INFO AND ENTER "BTR." 2 -----END PRIVACY-ENHANCED MESSAGE-----