-----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, VbHktD8jx92I5LJWt06DvaYQ4S6cNnDMNDldJUY96Da4hwYv1BshaHc6yS/p41Lt WoHhiscriFOHHbx0pI+hDw== 0000950109-96-002115.txt : 19960416 0000950109-96-002115.hdr.sgml : 19960416 ACCESSION NUMBER: 0000950109-96-002115 CONFORMED SUBMISSION TYPE: S-3DPOS PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19960412 EFFECTIVENESS DATE: 19960412 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: S-3DPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-64811 FILM NUMBER: 96546560 BUSINESS ADDRESS: STREET 1: 250 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6178674200 FORMER COMPANY: FORMER CONFORMED NAME: BRADLEY REAL ESTATE TRUST DATE OF NAME CHANGE: 19920703 S-3DPOS 1 FORM S-3 As filed with the Securities and Exchange Commission on April 12, 1996 REGISTRATION STATEMENT NO. 33-64811 ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________ POST-EFFECTIVE AMENDMENT NO. 1 ON FORM S-3 TO REGISTRATION STATEMENT ON FORM S-4 UNDER THE SECURITIES ACT OF 1933 _________________________ BRADLEY REAL ESTATE, INC. (Exact name of Registrant as specified in its charter) Maryland 04-6034603 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 699 Boylston Street Boston, MA 02116 (617) 867-4200 (Address, including zip code, and telephone number, including area code of Registrant's principal executive offices) _______________________________ Thomas P. D'Arcy President and Chief Executive Officer BRADLEY REAL ESTATE, INC. 699 Boylston Street Boston, MA 02116 (617) 867-4200 (Name, address, including zip code, and telephone number, including area code, of agent for service) Copies to: WILLIAM B. KING, P.C. JOSEPH L. JOHNSON III, ESQ. Goodwin, Procter & Hoar LLP Exchange Place Boston, Massachusetts 02109-2881 (617) 570-1000 _____________________________ Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this Registration Statement. If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] ___________________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. [_] ________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] _______________ ================================================================================ CROSS REFERENCE SHEET SHOWING LOCATION IN PROSPECTUS OF INFORMATION REQUIRED BY ITEMS OF PART I OF FORM S-3
LOCATION OR ITEM NUMBERS AND CAPTIONS HEADING IN PROSPECTUS ------------------------- --------------------- 1. Forepart of Registration Statement and Outside Front Cover Page of Prospectus........ Outside Front Cover Page 2. Inside Front and Outside Back Cover Pages of Prospectus................................. Inside Front Cover Page; Outside Back Cover Page 3. Summary Information, Risk Factors and Ratio of Earnings to Fixed Changes.................. Prospectus Summary; Risk Factors 4. Use of Proceeds............................... Use of Proceeds 5. Determination of Offering Price............... Description of Units and Redemption of Units -- General 6. Dilution...................................... * 7. Selling Security-Holders...................... * 8. Plan of Distribution.......................... Plan of Distribution 9. Description of Securities to be Registered.... Description of Capital Stock 10. Interests of Named Experts and Counsel........ Experts and Legal Matters 11. Material Changes.............................. The Company; Risk Factors 12. Incorporation of Certain Information by Reference.................................. Incorporation of Certain Documents by Reference 13. Disclosure of Commission Position on Indemnification For Securities Act Liabilities................................... *
________________________ * Item is omitted because answer is negative or item is inapplicable PROSPECTUS - ---------- 314,749 SHARES BRADLEY REAL ESTATE, INC. COMMON STOCK ____________ This prospectus (the "Prospectus") relates to the possible issuance from time to time by Bradley Real Estate, Inc. (the "Company") of up to 314,749 shares (the "Redemption Shares") of common stock, par value $.01 per share ("Common Stock"), of the Company, if and to the extent that holders ("Unitholders") of up to 314,749 units of limited partnership interest ("Units") in Bradley Operating Limited Partnership, a Delaware limited partnership (the "Operating Partnership"), of which the Company is the sole general partner, exchange such Units for Redemption Shares. The Units were issued to the former equity holders of the various entities which held the properties transferred to the Operating Partnership in connection with the initial public offering of Tucker Properties Corporation ("Tucker") in October 1993. On March 15, 1996, Tucker merged with and into the Company pursuant to the Agreement and Plan of Merger, dated as of October 30, 1995, by and between Tucker and the Company (the "Merger"). In connection with the Merger, the Company succeeded to Tucker's general partnership interest in the Operating Partnership and the Agreement of Limited Partnership of the Operating Partnership was amended and restated (the "Amended Operating Partnership Agreement") to, among other things, change the name of the Operating Partnership. Subsequent to the Merger, the Units may be tendered by the Unitholders for redemption for either cash or shares of Common Stock, at the Company's option, pursuant to the terms of the Amended Operating Partnership Agreement. The Company has registered the Redemption Shares pursuant to the Company's obligations under a registration rights agreement entered into with the Unitholders in connection with the consummation of the Merger, but the registration of the Redemption Shares does not necessarily mean that any of the Redemption Shares will be issued by the Company hereunder. In the event that the Company opts to issue shares of Common Stock in exchange for Units, upon the redemption of such Units, such shares will be issued on the basis of one share of Common Stock for one Unit pursuant to the Amended Operating Partnership Agreement. The Common Stock is traded on the New York Stock Exchange (the "NYSE") under the symbol "BTR." To ensure that the Company maintains its qualification as a real estate investment trust, ownership by any person is limited to 9.8% of the value of the outstanding capital stock of the Company, with certain exceptions. See "Description of Capital Stock -- Restrictions on Transfers." SEE "RISK FACTORS" ON PAGE 4 FOR CERTAIN FACTORS RELEVANT TO AN INVESTMENT IN THE COMMON STOCK. The Company will not receive any proceeds from the issuance of Redemption Shares but has agreed to bear certain expenses of registration of such shares under federal and state securities laws. The Company will acquire additional Units in the Operating Partnership in exchange for any Redemption Shares that the Company may issue to a Unitholder pursuant to this Prospectus. ____________________ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. ____________________ THE DATE OF THIS PROSPECTUS IS APRIL 12, 1996 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance therewith, files reports and other information with the Securities and Exchange Commission (the "Commission"). Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and may be available at the following Regional Offices of the Commission: Chicago Regional Office, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and New York Regional Office, 7 World Trade Center, New York, New York 10048. Copies of such materials can be obtained at prescribed rates from the Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C., 20549. The Common Stock is listed on the NYSE and such reports, proxy statements and other information concerning the Company can also be inspected at the office of the NYSE, 20 Broad Street, New York, New York 10005. The Company has filed with the Commission a registration statement on Form S-4, as amended by this Post-Effective Amendment on Form S-3, (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the Redemption Shares. For further information with respect to the Company and the Redemption Shares reference is made to the Registration Statement and exhibits thereto. Statements contained herein or incorporated herein by reference concerning the provisions of documents are summaries of such documents, and each statement is qualified in its entirety by reference to the copy of the applicable document if filed with the Commission. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE The following documents previously filed by the Company with the Commission are incorporated herein by reference: 1. Annual Report on Form 10-K for the fiscal year ended December 31, 1995 (filed March 29, 1996); 2. Current Report on Form 8-K dated March 30, 1996 (filed April 1, 1996) reporting the consummation of the Merger; 3. The description of the Common Stock contained or incorporated by reference in Bradley's Registration Statement on Form 8-A, dated August 5, 1994, (filed August 8, 1994) including any amendments thereto; and 4. Proxy Statement dated April 1, 1996 (filed March 29, 1996) in connection with Bradley's 1996 Annual Meeting of Stockholders. In addition, all documents subsequently filed with the Securities and Exchange Commission by the Company pursuant to Sections 13(a) and 13(c), Section 14 and Section 15(d) of the Exchange Act prior to the filing of a post-effective amendment hereto that indicates that all securities offered hereunder have been sold or that deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document that is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. THIS PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (NOT INCLUDING EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS) ARE AVAILABLE, WITHOUT CHARGE, UPON WRITTEN OR ORAL REQUEST OF ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROSPECTUS IS DELIVERED. REQUESTS SHOULD BE DIRECTED TO BRADLEY REAL ESTATE, INC., 699 BOYLSTON STREET, BOSTON, MASSACHUSETTS 02116, ATTENTION: DONNA MACAULEY (TELEPHONE NO. (617) 867-4200). (ii) ________________________________________________________________________________ PROSPECTUS SUMMARY The following summary is qualified in its entirety by the more detailed information included elsewhere in this Prospectus. Unless the context otherwise requires, all references in this Prospectus to the "Company" shall mean Bradley Real Estate, Inc. and its subsidiaries and affiliated partnerships on a consolidated basis (including Bradley Operating Limited Partnership (the "Operating Partnership") and its subsidiaries or affiliates) or, where the context so requires, Bradley Real Estate, Inc. only, and, as the context may require, its predecessors. THE COMPANY The Company is one of the nation's oldest continuously qualified real estate investment trusts ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). The Company focuses on the ownership and operation of community shopping centers, primarily in the Midwestern and, to a lesser extent, the Northeastern regions of the United States. The Company's objective is to enhance the operating performance and value of its portfolio through renovation, expansion and leasing strategies designed to meet the needs of an evolving retail marketplace. The Company also seeks to create value through the acquisition of properties which can benefit from the Company's expertise in shopping center management, renovation and expansion. The Company currently owns 31 community shopping centers encompassing approximately 7.4 million square feet of rentable retail space in eleven states. Originally organized in 1961 as a Massachusetts business trust under the name Bradley Real Estate Trust, the Company was reorganized as a Maryland corporation in October 1994. On March 15, 1996, the Company consummated its merger (the "Merger") with Tucker Properties Corporation, a Maryland corporation ("Tucker"), pursuant to which the Company was the surviving corporation. Tucker was formed on May 28, 1993 and elected to qualify as a REIT under the Code following the initial public offering of its common stock, par value $.001 per share ("Tucker Common Stock"), in October 1993. Prior to the Merger, all of Tucker's real estate properties were held by, and all of its operations were conducted through, the Operating Partnership and its subsidiaries. Tucker was the sole general partner of the Operating Partnership and owned 95.9% of the outstanding partnership units of the Operating Partnership ("Units"). The remaining Units were held by the former equity holders of the various entities which previously held the properties transferred to the Operating Partnership in connection with Tucker's initial public offering (the "Unitholders"). The Units were exchangeable, subject to certain limitations imposed to protect Tucker's status as a REIT, into shares of Tucker Common Stock on the basis of one Unit for one share of Tucker Common Stock. In connection with the Merger, the Company succeeded to Tucker's general partnership interest in the Operating Partnership and the Agreement of Limited Partnership of the Operating Partnership was amended and restated (the "Amended Operating Partnership Agreement") to, among other things, change the name of the Operating Partnership and to make the Units exchangeable by the Unitholders into either cash or, at the option of the Company, shares of common stock, par value $.01 per share, of the Company (the "Common Stock") on the basis of one Unit for one share of Common Stock. Immediately after the Merger, the Company had the following subsidiaries or affiliates: the Operating Partnership, Bradley Real Estate Management, Inc., Bradley Midwest Management, Inc., Bradley Financing Corp. ("BFC"), Bradley Financing Partnership ("BFP"), Bradley Management Corp., Bradley Management Limited Partnership, Williamson Square Associates Limited Partnership ("WSALP") and Bradley Properties Investments, Inc. The Company holds 17 properties directly, 7 properties through the Operating Partnership, 6 properties through BFP and 1 through WSALP. BFP was originally formed as an affiliate of Tucker and the Operating Partnership to facilitate the refinancing of indebtedness encumbering certain properties, then held by Tucker, through a loan to BFP from a trust qualifying as a real estate mortgage investment conduit (the "REMIC") for federal income tax purposes. The six properties owned by BFP collateralize a $100 million mortgage note (the "REMIC Note") held by the REMIC and issued pursuant to that certain indenture dated as of June 1, 1994 by and among BFP, Bankers Trust Company of California, N.A. and Bankers Trust Company (the "REMIC Indenture"). The Operating Partnership is the 99% general partner of BFP, and BFC, a wholly- owned subsidiary of the Company, is the 1% general partner of BFP. The Company's principal executive office is located at 699 Boylston Street, Boston, Massachusetts 02116 and its telephone number is (617) 867-4200. ________________________________________________________________________________ 1 ________________________________________________________________________________ RISK FACTORS In considering whether to redeem their Units, the Unitholders should consider, in addition to the other information in this Prospectus, the matters discussed under "Risk Factors." Such matters include: . Possible tax liability to Unitholders as a result of the redemption or in the event that the Company exercises its right to acquire Units tendered for redemption in exchange for cash or Redemption Shares (as such term is hereinafter defined). See "Risk Factors--Tax Consequences of Exchange to Holders of Original Units." . Possible adverse consequences as a result of (i) the Company's total debt payable of approximately $226.3 million; (ii) the Company's ratio of debt to Total Market Capitalization of approximately 44% and (iii) the Company's adjustable interest rate debt of approximately $95.5 million. . Risks associated with the Company's potential inability to refinance indebtedness when due on reasonable terms and conditions, including approximately $100 million of indebtedness relating to the REMIC Note which matures in September 2000. . Restrictions on the ability of the Company to dispose of properties collateralizing the REMIC Note or to prepay the REMIC Note. Pursuant to the terms of the REMIC Indenture, prior to October 1997, the principal amount of the REMIC Note cannot be prepaid and the properties securing the REMIC Note cannot be sold. If the Company wishes either to prepay principal amounts of the REMIC Note or to sell any of the properties collateralizing the REMIC Note after such date, it will incur significant prepayment penalties. The Amended Operating Partnership Agreement also contains certain restrictions on the sale of properties held by the Operating Partnership. See "Risk Factors-- Restrictions on Ability of the Company to Dispose of Properties." TAX STATUS OF THE COMPANY The Company has filed an election to be taxed as a REIT under Sections 856 through 860 of the Code and believes it has qualified as a REIT since its organization in 1961. If and as long as the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax on that portion of its ordinary income and capital gains that is currently distributed to its stockholders. REITs are subject to a number of highly technical and complex organizational and operational requirements. Although the Company believes it has operated, and intends to continue to operate, in such a manner as to qualify as a REIT under the Code, no assurance can be given that the Company has qualified and will at all times so qualify. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property and to federal income and excise taxes on its undistributed income. See "Federal Income Tax Considerations." SECURITIES TO BE OFFERED This prospectus (the "Prospectus") relates to the possible issuance by the Company of up to 314,749 shares (the "Redemption Shares") of Common Stock if, and to the extent that, holders of up to 314,749 Units tender such Units to the Operating Partnership for redemption and the Company exercises its contractual right to acquire such tendered Units for Redemption Shares. The Company has registered the Redemption Shares pursuant to its obligations under a registration rights agreement entered into with the Unitholders in connection with the consummation of the Merger. See "Registration Rights." Pursuant to the Amended Operating Partnership Agreement, each Unit may be tendered by its holder to the Operating Partnership for redemption for the cash equivalent of an equivalent number of shares of Common Stock (subject to certain adjustments to prevent dilution), provided that, at the option of the Company, the Company, as general partner, may acquire any Units so tendered for an equivalent number of shares of Common Stock (subject to certain adjustments to prevent dilution). ________________________________________________________________________________ 2 ________________________________________________________________________________ The Company anticipates that it generally will elect to acquire directly Units tendered for redemption and to issue shares of Common Stock pursuant to this Prospectus in exchange therefor rather than paying cash. As a result, the Company may from time to time issue up to 314,749 Redemption Shares upon the acquisition of Units tendered to the Operating Partnership for redemption. With each such acquisition, the Company's interest in the Operating Partnership will increase. The Company will not receive any proceeds from the issuance of any Redemption Shares, but will acquire Units tendered to the Operating Partnership for redemption for which it elects to issue Redemption Shares. ________________________________________________________________________________ 3 RISK FACTORS In considering whether to redeem their Units, Unitholders should consider, in addition to the other information in this Prospectus, the material discussed in this section. TAX CONSEQUENCES OF EXCHANGE TO HOLDERS OF ORIGINAL UNITS Tax Consequences of Exchange of Units. In the event that the Company exercises its right to acquire Units tendered for redemption in exchange for cash or Redemption Shares, the Company's acquisition of such Units from the holder of such Units will be treated for tax purposes as a sale of the Units by the Unitholder. Such a sale will be fully taxable to the Unitholder and such Unitholder will be treated as realizing for tax purposes an amount equal to the sum of the cash received or the value of the Redemption Shares received in the exchange plus the amount of any Operating Partnership liabilities allocable to the exchanged Units at the time of the redemption or exchange. It is possible that the amount of gain recognized or even the tax liability resulting from such gain could exceed the amount of cash and the value of other property (e.g., Redemption Shares) received upon such disposition. See "Description of Units and Redemption of Units -- Tax Consequences of Redemption." In addition, the ability of a Unitholder to sell a substantial number of Redemption Shares in order to raise cash to pay tax liabilities associated with the redemption of Units may be limited as a result of fluctuations in the market price of the Common Stock, and the price the Unitholder receives for such shares may not equal the value of his or her Units at the time of redemption or exchange. In the event that the Company does not exercise its right to acquire Units tendered for redemption in exchange for Redemption Shares, and such Units are redeemed by the Operating Partnership for cash, the tax consequences may differ. See "Description of Units and Redemption of Units." Potential Change in Investment Upon Redemption of Units. If a Unitholder exercises the right to require the redemption of all or a portion of his Units, such Unitholder may receive cash or, at the option of the Company, Redemption Shares in exchange for his or her Units. If the Unitholder receives cash, the Unitholder will no longer have any interest in the Company (except to the extent that he or she retains Units) and will not benefit from any subsequent increases in share price and will not receive any future distributions from the Company (unless the Unitholder retains or acquires in the future additional shares of Common Stock or Units). If the Unitholder receives Common Stock, the Unitholder will become a stockholder of the Company rather than a holder of Units in the Operating Partnership. See "Description of Units and Redemption of Units -- Comparison of Ownership of Units and Common Stock." SUBSTANTIAL DEBT OBLIGATIONS AND TERMS OF DEBT Following the consummation of the Merger, the Company's pro forma obligations for borrowed money increased to approximately $226.3 million as compared to $39.4 million at December 31, 1995. The ratio of debt to Total Market Capitalization of the Company following the Merger increased to approximately 44% as compared to 20% at December 31, 1995. This increase in the Company's leverage and its ratio of debt to Total Market Capitalization could increase the risk of default under its indebtedness. Failure to pay the debt obligations when due could result in the Company losing its interest in the properties collateralizing such obligations. The Company believes that the ratio of debt to Total Market Capitalization is an important factor to consider in evaluating a REIT's debt level because this ratio is one indicator of a company's ability to borrow funds. The Company believes that using the ratio of debt to book value of assets is not as reliable an indicator of a REIT's debt level because the book value of a REIT's assets indicates only the depreciated value of the REIT's property without consideration of the market value of such assets at a particular point in time. The use of the ratio of debt to Total Market Capitalization of a company is more variable than the book value because it is dependent on the current stock price of a company. Accordingly, there can be no assurance that the use of the ratio of debt to Total Market Capitalization in evaluating the Company's debt level will adequately protect it from being too highly leveraged. In particular, the maturity in September 2000 of the $100 million REMIC Note collateralized by various of the properties acquired by Tucker may increase the Company's risk of default on its indebtedness. Prior to the date hereof, the Company has been able to refinance debt when it has become due on terms which it believes to be commercially reasonable. There can be no assurance that the Company will continue to be able to repay or to 4 refinance its indebtedness relating to the REMIC Note or any of its other indebtedness on commercially reasonable or any other terms. The Company's debt obligations subject to floating interest rates immediately after the Merger aggregate approximately $95.5 million at a weighted average interest rate of approximately 7.2% per annum as compared to $14.6 million at a weighted average interest rate of approximately 7.6% per annum for the Company at December 31, 1995. To the extent the Company's exposure to increases in interest rates is not eliminated through interest rate protection or cap agreements, such increases will adversely affect the Company's net income, funds from operations ("FFO") and cash available for distribution and may affect the amount of distributions it can make to its stockholders. The Company's line of credit requires the Company to maintain interest rate protection, at a rate satisfactory to the lead lender, with respect to $100 million of indebtedness and the Company has entered into such agreements with The First National Bank of Boston (the "Bank"). There can be no assurance that these interest rate protection provisions will be effective. See "The Company." The foregoing risks associated with the debt obligations of the Company may adversely affect the market price of the Common Stock and may inhibit the Company's ability to raise capital and issue equity in both the public and private markets. RESTRICTIONS ON ABILITY OF THE COMPANY TO DISPOSE OF PROPERTIES Pursuant to the terms of the REMIC Indenture, prior to October 1997 principal payments on the REMIC Note cannot be made and the properties collateralizing the REMIC Note cannot be sold. If the Company wishes either to repay all or part of the $100 million principal of the REMIC Note or to sell any of the properties collateralizing the REMIC Note after such date, it will incur significant prepayment penalties. The prepayment of principal of the REMIC Note requires an additional payment of the greater of either (i) 1% of the amount of principal being prepaid or (ii) the product of (A) the difference between the outstanding principal balance of the REMIC Note before prepayment and the present value of all remaining interest and principal payments thereon and (B) the amount of principal being prepaid divided by the outstanding principal balance of the REMIC Note. After October 1997, in order to release any of the properties collateralizing the REMIC Note from the lien so that such properties may be sold, the REMIC Indenture requires that certain additional conditions be met, including that (i) the aggregate amount of principal repaid on the REMIC Note equal at least 125% of the amount of principal allocated to the property to be released and (ii) certain debt service coverage ratios continue to be satisfied. Pursuant to the terms of the Amended Operating Partnership Agreement, for a period of 24 months after the Merger, the general partner of the Operating Partnership may not elect to dissolve the Operating Partnership or sell all or substantially all of the assets of the Operating Partnership without the consent of a majority in interest of the limited partners, except in connection with a merger or other business combination of the Company. Thus, the Company is restricted from disposing of all or substantially all of the properties held by the Operating Partnership. Certain of the REIT provisions of the Code and the rules governing the qualification of the Merger as a tax-free reorganization under the Code also may limit the Company's ability to dispose of properties. POTENTIAL ANTI-TAKEOVER EFFECT OF CERTAIN PROVISIONS Certain provisions contained in the Company's Articles of Amendment and Restatement (the "Charter") and Bylaws (the "Bylaws") may have the effect of discouraging a third party from making an acquisition proposal for the Company and may thereby inhibit a change in control of the Company. These provisions include the following: (i) the Company's Charter provides for three classes of Directors, with the term of office of one class expiring each year, (ii) the Company's Bylaws provide that the holders of not less than 25% of the outstanding shares of Common Stock may call a special meeting of the Company's stockholders, and (iii) the Charter generally limits any holder from acquiring more than 9.8% of the value of all outstanding capital stock of the Company. These provisions described above could have a potential anti-takeover effect on the Company. The staggered Board provision in the Charter prevents stockholders from voting on the election of more than one class of directors at each annual meeting of stockholders and thus, may have the effect of keeping the members of the Board of Directors of the Company in control for a longer period of time. The staggered Board provision and the provision in the Bylaws requiring holders of at least 25% of the outstanding shares of Common Stock to call a special meeting 5 of stockholders may have the effect of making it more difficult for a third party to acquire control of the Company without the consent of its Board of Directors, including certain acquisitions which stockholders deem to be in their best interest. For a discussion of the potential effect of the ownership limit described above, see "--Ownership Limits" below. REAL ESTATE INVESTMENT CONSIDERATIONS Dependence on Midwestern Region and Retail Industry The substantial majority of the Company's properties are located in the Midwestern region of the United States and such properties consist predominantly of community shopping centers. The Company's performance therefore is linked to economic conditions in the Midwest and in the market for retail space generally. The market for retail space has been adversely affected by the ongoing consolidation in the retail sector, the adverse financial condition of certain large companies in this sector and the excess amount of retail space in certain markets. To the extent that these conditions impact the market rents for retail space, they could result in a reduction of net income, FFO and cash available for distribution and thus affect the amount of distributions the Company can make to its stockholders. In addition, the Company predominantly owns and operates retail shopping centers catering to retail tenants. To the extent that the investing public has a negative perception of the retail sector, the value of the Common Stock may be negatively impacted, thereby resulting in such shares trading at a discount below the inherent value of the assets of the Company as a whole. Financial Condition and Bankruptcy of Tenants Since substantially all of the Company's and Tucker's income has been, and substantially all of the Company's income will continue to be, derived from rental income from retail shopping centers, the Company's net income, FFO and cash available for distribution would be adversely affected if a significant number of the tenants were unable to meet their obligations to the Company or if the Company were unable to lease on economically favorable terms a significant amount of space in its shopping centers. In addition, in the event of default by a tenant, the Company may experience delays and incur substantial costs in enforcing its rights as landlord. At any time, a tenant of the Company's properties may seek the protection of the bankruptcy laws, which could result in the rejection and termination of the tenant lease. Such an event could cause a reduction of net income, FFO and cash available for distribution and thus affect the amount of distributions the Company can make to its stockholders. No assurance can be given that any present tenant which has filed for bankruptcy protection will continue making payments under its lease or that any tenants will not file for bankruptcy protection in the future or, if any tenants file, that they will continue to make rental payments in a timely manner. In addition, a tenant may, from time to time, experience a downturn in its business, which may weaken its financial condition and result in a reduction or failure to make rental payments when due. If a lessee or sublessee defaults in its obligations to the Company, the Company may experience delays in enforcing its rights as lessor or sublessor and may incur substantial costs and experience significant delays associated with protecting its investment, including costs incurred in renovating and releasing the property. Potential Negative Effect of One North State Property On a pro forma combined basis, for the year ended December 31, 1995, more than 10% of the total revenue of the Company and Tucker was derived from rents and expense reimbursements from tenants of Tucker's One North State property, which is a "mixed use" property located in downtown Chicago. The total charges currently being paid by certain of this property's tenants may be in excess of current market rates. The leases of these tenants begin to expire in 2001. One office tenant, however, had the option exercisable on or before April 1, 1996 to terminate its lease, effective as of April 1, 1998, upon payment of a $1.8 million cancellation fee. This tenant exercised its early termination option on April 1, 1996 and has paid the Company the required $1.8 million cancellation fee. Pursuant to the terms of the REMIC Indenture, this termination fee was paid into a reserve account which is required to be used, among other things, to pay for tenant alterations, leasing commissions and other lease inducements directly related to this space. Any unused amount of this reserve account must be used to repay the principal amounts owed under the REMIC Note. The inability of the Company to lease such property, or a significant reduction in the amount of rent and expense reimbursements paid by the tenants of such property, could have an adverse impact on the operating results of the Company. 6 VACANCIES AND LEASE RENEWALS A number of the leases on the properties owned by the Company at December 31, 1995 expire during 1996. Some of these lease expirations provide the Company with the opportunity to increase rentals or to hold the space available for a stronger long-term tenancy. In other cases, there may be no immediately foreseeable strong tenancy for space, and the space may remain vacant for a longer period than anticipated or may be able to be re-leased only at less favorable rents. In such situations, the Company may be subject to competitive and economic conditions over which it has no control. The Company's underwriting and negotiation of the terms of the Tucker acquisition took into consideration anticipated lease expirations and possible resulting vacancies at One North State and the other Tucker properties. There is, however, no assurance that the effects of possible vacancies or lease renewals at such properties, or at the Company's previously owned properties, may not reduce the rental income, net income, FFO and funds available for distribution below levels anticipated by the Company. POSSIBLE ENVIRONMENTAL LIABILITIES Under various federal, state and local laws, ordinances and regulations, an owner of real estate is liable for the costs of removal or remediation of certain hazardous or toxic substances on or in such property. Such laws often impose such liability without regard to whether the owner knew of, or was responsible for, the presence of such hazardous or toxic substances. The presence of such substances, or the failure to properly remediate such substances, may adversely affect the owner's ability to sell or rent such property or to use such property as collateral in its borrowings. All of the properties of the Company, including those acquired from Tucker, have been subjected to Phase I or similar environmental audits (which involve inspection without soil sampling or groundwater analysis) by independent environmental consultants. Except as described below, these environmental audit reports have not revealed any potential significant environmental liability, nor is management aware of any environmental liability with respect to the properties that management believes would have a material adverse effect on the Company's business, assets or results of operations. No assurance can be given that existing environmental studies with respect to the properties reveal all environmental liabilities or that any prior owner of any such property did not create any material environmental condition not known to the Company. Phase II site assessments of the Commons of Chicago Ridge property acquired from Tucker have disclosed the presence of contaminants in fill material and soil at the property that could be associated with the property's former use as a landfill and as the former site of an asphalt plant and storage tanks for petroleum products (which storage tanks have been removed from the property), but not at such levels as would require reporting to environmental agencies. These Phase II site assessments also disclosed the presence in the groundwater of contaminants similar to those detected in the soil samples. Environmental assessments of the property have also detected methane gas, probably associated with the former use of the property as a landfill. A regular maintenance program was implemented by Tucker and is being continued by the Company to control the migration and effect of the methane gas. There can be no assurance that an environmental regulatory agency such as the Illinois Environmental Protection Agency will not in the future require investigation to determine the source and vertical and horizontal extent of the contamination. If any such investigation is required and confirms the existence of contaminants at the levels disclosed in the Phase II site assessments, it is possible that the relevant agency could require the Company to take action to address the contamination, which action could range from ongoing monitoring to remediation of the contamination. Based on the information currently available, management does not believe that the cost of responding to such contamination would be material to the Company. In connection with the execution of the merger agreement relating to the acquisition of Tucker (the "Merger Agreement"), the Company and certain individuals who had previously provided a limited indemnity to Tucker for environmental liabilities at Commons of Chicago Ridge (the "Individuals") have agreed to share the cost of having an outside consultant conduct a new Phase II investigation of the soil and groundwater of the property and to prepare a report recommending what action the Company should take with respect to such matters. In the event that the Company decides to implement any of the recommendations of such consultant (the "Recommended Work"), the Individuals have agreed to pay fifty percent of the costs of the Recommended Work, with their aggregate liability for the cost of the Recommended Work limited to a maximum of $200,000. The Individuals have also agreed to indemnify the Company and its subsidiaries and affiliates against all claims, losses, costs and expenses incurred by such parties arising out of any administrative, regulatory or judicial action, suit, investigation or proceeding in connection with any applicable environmental health or safety law regarding hazardous substances, materials, wastes or petroleum products, or any common law right action regarding such substances, 7 materials, wastes or products, whether brought by a governmental or regulatory authority or by a third party, that is initiated on or before October 4, 2003 with respect to conditions or acts at the Commons of Chicago Ridge which existed prior to October 4, 1993. In connection with this indemnification obligation, the Company has agreed to keep the Individuals reasonably informed of various activities relating to the properties and to consult with the Individuals with respect to any potential claims, settlements and remediation which could trigger the indemnification obligations of the Individuals. There is no assurance that the Individuals will be in a position to honor their indemnity obligations or that the liabilities will not exceed the limit of their indemnity obligations. Regardless of such indemnification, based on the information currently available, the management of the Company does not believe that the environmental liabilities and expenses relating to the Commons of Chicago Ridge property would have a material effect on the liquidity, financial condition or operating results of the Company. INSURANCE The Company carries comprehensive general liability coverage and umbrella liability coverage on all of its properties with limits of liability which the Company deems adequate to insure against liability claims and provide for the costs of defense. Similarly, the Company is insured against the risk of direct physical damage in amounts the Company estimates to be adequate to reimburse the Company on a replacement cost basis for costs incurred to repair or rebuild each property, including loss of rental income during the reconstruction period. Currently, the Company also insures the properties for loss caused by earthquake or flood in the aggregate amount of $10 million per occurrence. Because of the high cost of this type of insurance coverage and the wide fluctuations in price and availability, the Company has made the determination that the risk of loss due to earthquake and flood does not justify the cost to increase coverage limits any further under current market conditions. Should the availability and pricing of this coverage become more cost advantageous, management would re- evaluate its position. COMPETITION All of the properties owned by the Company are located in developed areas. There are numerous other retail properties and real estate companies within the market area of each such property which compete with the Company for tenants and development and acquisition opportunities. The number of competitive real properties and real estate companies in such areas could have a material effect on (i) the Company's ability to rent space at the properties and the amount of rents currently charged and (ii) development and acquisition opportunities. The Company competes for tenants and acquisitions with others who have greater resources than the Company. ADVERSE CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT; OTHER TAX LIABILITIES The Company believes that it (including its predecessor, Bradley Real Estate Trust) has operated in a manner that permits it to qualify as a REIT under the Code for each taxable year since its formation in 1961. Although management of the Company believes that it is organized and is operating in such a manner, no assurance can be given that the Company will be able to continue to operate in a manner so as to qualify or remain so qualified. Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial or administrative interpretations and the determination of various factual matters and circumstances not entirely within the Company's control. For example, in order to qualify as a REIT, at least 95% of the Company's gross income in any year must be derived from qualifying sources and the Company must make distributions to stockholders aggregating annually at least 95% of its REIT taxable income (excluding net capital gains). In addition, no assurance can be given that new legislation, new regulations, administrative interpretations or court decisions will not change the tax laws with respect to qualification as a REIT or the federal income tax consequences of such qualification. The Company, however, is not aware of any currently pending tax legislation that would adversely affect its ability to continue to operate as a REIT. If the Company fails to qualify as a REIT, it will be subject to federal income tax (including any applicable alternative minimum tax) on its taxable income at corporate rates. In addition, unless entitled to relief under certain statutory provisions, the Company will also be disqualified from treatment as a REIT for the four taxable years following the year during which qualification is lost. This treatment would reduce the net earnings of the Company available for investment or distribution to stockholders because of the additional tax liability for the year or years involved. In addition, distributions would no longer be required to be made. To the extent that distributions to stockholders would have been made in anticipation of the Company's qualifying as a REIT, the Company might be required to borrow funds or to liquidate certain of its investments to pay the applicable tax. The failure to qualify as a REIT would also constitute a default under certain debt obligations of the Company. 8 In connection with the Merger, Tucker represented to the Company that, since Tucker's formation, Tucker also operated so as to qualify as a REIT under the Code up to the time of the Merger. If Tucker failed to qualify as a REIT in any year in which it elected so to qualify and consequently becomes liable to pay taxes as a regular non-REIT corporation, the liabilities of Tucker that the Company assumed upon effectiveness of the Merger include such tax liability. Moreover, Tucker's failure to qualify as a REIT could disqualify the Company as a REIT for the periods following the Merger. The Company's acquisition of Tucker's general partner interest in the Operating Partnership and Tucker's indirect interests in certain subsidiary partnerships of the Operating Partnership involve special tax considerations, including the qualification of each such partnership as a "partnership" for federal income tax purposes, which also could impact the Company's ability to qualify as a REIT following the Merger. The failure to qualify as a REIT would have a material adverse effect on an investment in the Company as the taxable income of the Company would be subject to federal income taxation at corporate rates, and, therefore, the amount of cash available for distribution to its stockholders would be reduced or eliminated. OWNERSHIP LIMITS In order to maintain its qualification as a REIT, not more than 50% in value of the outstanding shares of the Company may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code). To minimize the possibility that the Company will fail to qualify as a REIT under this test, the Charter authorizes the directors to take such action as may be required to preserve its qualification as a REIT and generally limits the ownership of Common Stock by any particular stockholder to 9.8% of the value of the outstanding shares of Common Stock. The ownership limits in the Charter, as well as the Company's authority to issue preferred stock and other provisions in the Charter and the Bylaws, may delay, defer or prevent a change in control of the Company and may also (i) deter certain tender offers for the shares of Common Stock, which might be attractive to certain stockholders, or (ii) limit the opportunity for stockholders to receive a premium for their shares of Common Stock that might otherwise exist if an investor were attempting to assemble a block of shares in excess of 9.8% of the value of the outstanding shares of Common Stock, or otherwise effect a change in control. 9 THE COMPANY The Company is one of the nation's oldest continuously qualified REITs under the Code. The Company focuses on the ownership and operation of community shopping centers, primarily in the Midwestern and, to a lesser extent, the Northeastern regions of the United States. The Company's objective is to enhance the operating performance and value of its portfolio through renovation, expansion and leasing strategies designed to meet the needs of an evolving retail marketplace. The Company also seeks to create value through the acquisition of properties which can benefit from the Company's expertise in shopping center management, renovation and expansion. The Company currently owns 31 community shopping centers encompassing approximately 7.4 million square feet of rentable retail space in eleven states. Originally organized in 1961 as a Massachusetts business trust under the name Bradley Real Estate Trust, the Company was reorganized as a Maryland corporation in October 1994. On March 15, 1996, the Company consummated the Merger with Tucker, pursuant to which the Company was the surviving corporation. Tucker was formed on May 28, 1993 and elected to qualify as a REIT under the Code following the public offering of Tucker Common Stock, in October 1993. Prior to the Merger, all of Tucker's real estate properties were held by, and all of its operations were conducted through, the Operating Limited Partnership and its subsidiaries. Tucker was the sole general partner of the Operating Partnership and owned 95.9% of the outstanding Units. The remaining Units were held by the former equity holders of the various entities which previously held the properties transferred to the Operating Partnership in connection with Tucker's initial public offering in October 1993. The Units were exchangeable, subject to certain limitations imposed to protect Tucker's status as a REIT, into shares of Tucker Common Stock on the basis of one Unit for one share of Tucker Common Stock. In connection with the Merger, the Company succeeded to Tucker's general partnership interest in the Operating Partnership and the Amended Operating Partnership Agreement was amended and restated to, among other things, change the name of the Operating Partnership and to make the Units exchangeable into either cash or shares of Common Stock on the basis of one Unit for one share of Common Stock, at the Company's option. Immediately after the Merger, the Company had the following subsidiaries or affiliates: the Operating Partnership, Bradley Real Estate Management, Inc., Bradley Midwest Management, Inc., BFC, BFP, Bradley Management Corp., Bradley Management Limited Partnership, WSALP and Bradley Properties Investments, Inc. As a result of the Merger, the Company believes that it became one of the largest owners and operators of community shopping centers in the Midwestern region of the United States. The Company owns 31 community shopping centers encompassing approximately 7.4 million square feet of rentable retail space in eleven states. The Company holds 17 properties directly, 7 properties through the Operating Partnership, 6 properties through BFP and 1 through WSALP. BFP, which owns six of the Company's properties, was created prior to the Merger as an affiliate of Tucker to facilitate the refinancing of indebtedness encumbering certain properties through a loan to BFP from a trust qualifying as a REMIC for federal income tax purposes. The Operating Partnership is the 99% general partner of BFP, and BFC, a wholly-owned subsidiary of the Company, is the 1% general partner of BFP. Upon completion of Tucker's initial public offering, BFP issued mortgage notes in an aggregate principal amount of $100 million (the "Original Mortgage Notes") to finance these six properties. Net proceeds to Tucker from this issuance were approximately $97,400,000. In June 1994, BFP exchanged the Original Mortgage Notes for the REMIC Note which was issued pursuant to the REMIC Indenture. At the same time Kidder, Peabody Acceptance Corporation I sold six classes of pass-through certificates evidencing the entire beneficial ownership of interest of the REMIC, a trust consisting solely of the REMIC Note and related instruments evidencing the REMIC's security interest in the related collateral. The REMIC Note matures in one balloon payment in September 2000 and bears interest at a fixed-rate of 7.3% per annum, with monthly interest-only payments required. The REMIC Note is recourse only to the assets of BFP and is collateralized by first mortgage liens on each of the properties owned by BFP (Commons of Crystal Lake, Heritage Square, Sheridan Village, Speedway SuperCenter, Washington Lawndale Commons and One North State) and by an assignment of all of the BFP's interest in the rents and the leases at each of these properties. Concurrently with the Merger, on March 15, 1996, the Company entered into a $150 million unsecured revolving credit facility with the Bank. The line bears interest at the Bank's base rate or 1.75% over LIBOR. The LIBOR rate available under the line becomes more favorable in the event the Company meets certain loan to value tests or receives an investment grade unsecured debt rating. In addition to replacing outstanding borrowings under 10 the Company's and Tucker's previously outstanding secured lines of credit, the facility is available for the acquisition, development, renovation and expansion of new and existing properties (including but not limited to capital improvements, tenant improvements and leasing commissions), and for other working capital purposes. The new line of credit contains certain financial and operational covenants that, among other provisions, limit the amount of secured and unsecured indebtedness the Company may have outstanding at any time and provides for the maintenance of certain financial tests including minimum net worth and debt service coverage requirements. The Company believes that such covenants will not adversely affect the Company's business or the operation of its properties. The Company's line of credit requires the Company to maintain interest rate protection, at a rate satisfactory to the lead lender, with respect to $100 million of indebtedness, and the Company has entered into such agreements with the Bank. ONE NORTH STATE One North State is the only property of the Company that accounts for 10% or more of the post-Merger book value of the Company or of the Company's pro forma gross income. One North State is a mixed-use property located in the "Loop" area of downtown Chicago, Illinois. The property aggregates 639,164 square feet of gross leasable area ("GLA"), including approximately 159,000 square feet of retail space. The retail portion of the property is currently 99% leased and is anchored by T.J. Maxx and Filene's Basement. The office portion of this property is currently 94% leased primarily to First Chicago Corp. and Arthur Andersen & Co. First Chicago Corp. and Arthur Andersen & Co. both lease more than 10% of the building's square footage. The lease with First Chicago Corp. requires First Chicago Corp. to pay base rent equal to $13.25 per square foot per annum until November 1998 and $15.75 per square foot per annum from December 1998 through November 2003. The lease does not contain renewal options. The lease with Arthur Andersen & Co. expires March 31, 2003 and requires Arthur Andersen & Co. to pay base rent equal to $12.00 per square foot per annum though March 31,1998 and $13.00 per square foot per annum from April 1,1998 through March 31, 2003. The lease does not contain renewal options and Arthur Andersen & Co. has the right to cancel its lease as of April 1, 1998, provided that it gives the Company notice by April 1, 1996 and pays the Company a $1.8 million cancellation fee. Arthur Andersen & Co. exercised its early termination option on April 1, 1996 and has paid the Company the required $1.8 million cancellation fee. Pursuant to the terms of the REMIC Indenture, this termination fee was paid into a reserve account which is required to be used, among other things, to pay for tenant alterations, leasing commissions and other leasing expenses directly related to this space. Any unused amount of this reserve account must be used to repay the principal amounts owed under the REMIC Note. See "Risk Factors--Real Estate Investment Considerations." The table below sets forth certain information with respect to the occupancy rate of One North State expressed as a percent of total GLA for each of the last five years and the average annual base rent per square foot for each of the last five years.
AVERAGE EFFECTIVE YEAR ENDING OCCUPANCY ANNUAL RENT DECEMBER 31, RATE PER SQ. FT. ------------ --------- ----------- 1995...................................... 95.32% $15.80 1994...................................... 95.20 15.98 1993...................................... 91.90 14.69 1992...................................... 89.42 14.12 1991...................................... 83.59 13.20
11 At December 31, 1995, One North State had a total of 17 tenants. The following table sets forth certain information with respect to the expiration of leases at this mixed-use property.
PERCENT OF 1996 ANNUAL GLA OF ANNUALIZED BASE RENT NUMBER OF EXPIRING BASE RENT REPRESENTED YEAR ENDING LEASES LEASES OF EXPIRING BY EXPIRING DECEMBER 31, EXPIRING (SQ. FT.) LEASES LEASES ------------ --------- --------- ----------- ----------- 1996........................... 2 2,477 $ 179,260 1.90% 1997........................... 0 0 0 0.00 1998........................... 1 126,533 1,518,396 16.11 1999........................... 0 0 0 0.00 2000........................... 1 1,807 182,507 1.94 2001........................... 5 89,091 2,022,968 21.46 2002........................... 2 51,451 1,101,566 11.68 2003........................... 4 327,702 4,289,619 45.50 2004........................... 0 0 0 0.00 2005........................... 2 2,035 132,846 1.41
For federal income tax purposes, as of December 31, 1995, the basis of1 BFP in One North State was approximately $73.6 million. Property taxes paid in 1995 for the tax year ended 1994 (the most recent tax year for which information is available) aggregated $3,424,957. One North State was originally constructed in 1904. In connection with the construction, the City of Chicago granted the original developer permission and authority (the "Authority") to construct the center portion of the building over a portion of a public alley commonly known as Holden Court, to use and occupy certain subsurface vaults and a subway connection and to construct and maintain a loading dock encroaching onto a portion of Holden Court (together, except for the subsurface vaults and the subway connection, the "Permitted Improvement Property"). The Authority has been continually renewed by the City of Chicago under permits issued pursuant to ordinances passed by the City of Chicago but is subject to amendment, modification or repeal. The Company has no reason to believe that the City of Chicago will exercise their right to amend, modify, repeal or revoke the current ordinance but there can be no assurance that such actions will not be taken. On March 6, 1996, BFP acquired fee ownership of a portion of the Permitted Improvement Property consisting of the air rights (the "Air Rights") over Holden Court for approximately $480,000 plus costs and expenses of approximately $42,000, with funds from a special interest-bearing escrow account set up in connection with Tucker's initial public offering to purchase and maintain the Permitted Improvement Property (the "Holden Court Escrow"). After the acquisition of the Air Rights, the balance of the Holden Court Escrow, approximately $358,000, remains available for, among other approved costs (as described in the Escrow and Indemnity Agreement discussed below), the acquisition of the remaining Permitted Improvement Property and the continuation of the Authority (the "Approved Costs"). The Holden Court Escrow and the disbursement of funds to pay costs related to the purchase and maintenance of the Permitted Improvement Property are governed by that certain Escrow and Indemnity Agreement dated as of October 1, 1993 by and among BFP, Tucker, Kenneth Tucker, the former Chairman of the Board and President of Tucker, Richard Tucker, the former Executive Vice President and Chief Operating Officer of Tucker, and Commonwealth Land Title Insurance Company. Until October 1, 2004 (the "Escrow Period"), Kenneth Tucker and Richard Tucker are responsible for, and have agreed to indemnify BFP and the Company against, the amount, if any, that the Approved Costs exceed the funds available in the Holden Court Escrow. These obligations currently are secured by 70,183 shares of Bradley Common Stock and 265,471 Units. Subject to compliance with applicable securities laws, these shares and the shares to be received upon exchange of Units may, however, be transferred at any time. Accordingly, there can be no assurance that Kenneth Tucker and Richard Tucker will hold any share of Common Stock or Units at the time, if ever, when the Company attempts to realize this security interest. If the Permitted Improvement Property is acquired prior to the expiration of the Escrow Period, any remaining balance will be distributed to Kenneth Tucker and Richard Tucker in the form of cash or through the issuance of Units equal to the remaining balance valued at the initial public offering price. If the Permitted Improvement Property is not acquired on or before the expiration of the Escrow Period, any remaining balance will be distributed equally to BFP, on the one hand, and Kenneth Tucker and Richard Tucker, on the other hand. After the acquisition of the Air Rights, the existing five-year permit, which is subject to renewal in 12 September 1997, continues to relate to the subsurface vaults and the subway connection, although there can be no assurance that the City of Chicago will renew the permit upon its expiration. DESCRIPTION OF CAPITAL STOCK The description of the Company's capital stock set forth below does not purport to be complete and is qualified in its entirety by reference to the Company's Charter and Bylaws, copies of which are exhibits to the registration statement of which this Prospectus is a part. GENERAL Under its Charter, the Company has authority to issue up to 150 million shares of stock, consisting of 80 million shares of Common Stock, 50 million shares of "Excess Stock" (as described below), par value $.01 per share, and 20 million shares of preferred stock, par value $.01 per share (the "Preferred Stock"). Under Maryland law, stockholders generally are not responsible for a corporation's debts or obligations. At March 15, 1996, there were approximately 18,658,515 shares of Common Stock issued and outstanding and no Preferred Stock issued or outstanding. In addition, there are approximately 314,749 Units of the Operating Partnership outstanding (other than those held directly by the Company); such Units may be exchanged for shares of Common Stock at the option of the Company when such Units are tendered to the Operating Partnership for redemption. COMMON STOCK Upon the issuance of the Redemption Shares in accordance with the provisions of the Amended Operating Partnership Agreement, all shares of Common Stock offered hereby will be duly authorized, validly issued, fully paid and nonassessable. Subject to the preferential rights of any other shares or series of stock and to the provisions of the Company's Charter regarding Excess Stock, holders of shares of Common Stock are entitled to receive dividends on Common Stock if and when authorized and declared by the Board of Directors of the Company out of assets legally available therefor and to share ratably with each other holder of shares of Common Stock or Excess Stock in the assets of the Company legally available for distribution to its stockholders in the event of its liquidation, dissolution or winding-up after payment of, or adequate provision for, all known debts and liabilities of the Company. Subject to the provisions of the Company's Charter regarding Excess Stock, each outstanding share of Common Stock entitles the holder to one vote on all matters submitted to a vote of stockholders, including the election of directors, and except as provided with respect to any other class or series of stock, the holders of Common Stock will possess exclusive voting power. There is no cumulative voting in the election of directors, which means that the holders of a majority of the outstanding shares of Common Stock can elect all of the directors then standing for election, and the holders of the remaining shares of Common Stock will not be able to elect any directors. Subject to the Company's Charter regarding Excess Stock, all shares of Common Stock have equal dividend, distribution, liquidation and other rights, and have no preferences, appraisal or exchange rights. Holders of Common Stock have no conversion, sinking fund or redemption rights, or preemptive rights to subscribe for any securities of the Company. The Company intends to furnish its stockholders with annual reports containing audited consolidated financial statements and an opinion thereon expressed by an independent public accounting firm and quarterly reports for the first three quarters of each fiscal year containing unaudited financial information. Pursuant to the Maryland General Corporation Law ("MGCL") and the Company's Charter, the Company generally cannot dissolve, amend its Charter, merge, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business unless approved by the affirmative vote of holders of shares entitled to cast a majority of all the votes entitled to be cast. The transfer agent and registrar for the Common Stock is The First National Bank of Boston. 13 PREFERRED STOCK Shares of Preferred Stock may be issued from time to time, in one or more series, as authorized by the Board of Directors of the Company. Prior to issuance of shares of each series, the Board of Directors is required by the MGCL and the Company's Charter to fix for each series, subject to the provisions of the Company's Charter regarding Excess Stock, the terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and/or terms or conditions of redemption, as are permitted by the MGCL. The Preferred Stock will, when issued, be fully paid and nonassessable by the Company and will have no preemptive rights, other than as determined by the Board of Directors. The Board of Directors could authorize the issuance of shares of Preferred Stock with terms and conditions that could have the effect of discouraging a takeover or other transaction that holders of Common Stock might believe to be in their best interests or in which holders of some, or a majority, of Common Stock might receive a premium for their shares over the then-current market price of such shares of Common Stock. As of the date hereof, no shares of Preferred Stock are outstanding. RESTRICTIONS ON TRANSFERS For the Company to qualify as a REIT under the Code, among other things, not more than 50% in value of its outstanding shares of beneficial interest may be owned, directly or indirectly, by five or fewer individuals (defined in the Code to include certain entities) during the last half of a taxable year (other than the first year), and such shares of beneficial interest must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year) or during a proportionate part of a shorter taxable year. The Charter of the Company contains provisions, designed to ensure that the Company remains a qualified REIT, that limit any holder from owning, or being deemed to own by virtue of the attribution provisions of the Code, shares of capital stock having a value that is more than 9.8% (the "Ownership Limit") of the value of all outstanding capital stock of the Company. The Charter provides that each person (which includes natural persons, corporations, trusts, partnerships and other entities) shall be deemed to own stock that such person (i) actually owns, (ii) constructively owns after applying attribution rules specified in the Code, and (iii) has the right to acquire upon exercise of any rights, options or warrants or conversion of any convertible securities held by such persons. The fact that certain affiliated entities, such as separate mutual funds advised by the same investment adviser, may own more than 9.8% of the value of all outstanding capital stock in the aggregate will not of itself result in the Ownership Limit being exceeded, merely because a single person may be considered to be the "beneficial owner" of such stock for purposes of Section 13(g) of the Exchange Act. The Board of Directors may waive the Ownership Limit if evidence satisfactory to the Board of Directors and the Company's tax counsel is presented that the changes in ownership will not then or in the future jeopardize the Company's status as a REIT. Any transfer of capital stock or any security convertible into capital stock that would create direct or indirect ownership of capital stock in excess of the Ownership Limit or that would result in the disqualification of the Company as a REIT, including any transfer that results in the Company being "closely held" within the meaning of Section 856(h) of the Code, shall be null and void, and the intended transferee will acquire no rights to the capital stock. Shares of capital stock owned, or deemed to be owned, or transferred to a stockholder in excess of the Ownership Limit will automatically be exchanged for shares of Excess Stock that will be transferred, by operation of law, to a trustee (to be named by the Board of Directors of the Company, but unaffiliated with the Company) as trustee for the exclusive benefit (except to the extent described below) of one or more charitable beneficiaries designated from time to time by the Company. The Excess Stock held in trust will be considered as issued and outstanding shares of stock of the Company, will be entitled to receive distributions declared by the Company and may be voted by the trustee for the exclusive benefit of the charitable beneficiary. Any dividend or distribution paid to a purported transferee of Excess Stock prior to the discovery by the Company that capital stock has been transferred in violation of the provisions of the Company's Charter (a "prohibited transfer") shall be repaid to the Company upon demand and thereupon paid over by the Company to the trustee. Any votes of holders of shares of capital stock purported to have been cast by a purported transferee prior to such discovery of a prohibited transfer will be retroactively deemed to have been cast, but said retroactive nullification of the vote of the relevant shares of capital stock shall not adversely affect the rights of any person (other than the purported transferee) who has relied in good faith upon the effectiveness of the matter that was the subject of the stockholder action as to which such votes were cast. Excess Stock is not transferable. Subject to the redemption rights of the Company discussed below, the trustee of the trust may, however, sell and transfer the interest in the trust to a transferee in whose hands the interest in the trust representing Excess Stock would not be an interest in Excess Stock, and upon such sale the shares of Excess Stock represented by the sold interest shall be automatically exchanged for shares of capital stock of the class that was 14 originally exchanged into such Excess Stock. Upon such sale, the trustee shall distribute to the purported transferee only so much of the sales proceeds as is not more than the price paid by the purported transferee in the prohibited transfer that resulted in the exchange of Excess Stock for the capital stock purported to have been transferred (or, if the purported transferee received such capital stock by gift, devise or otherwise without giving value for such stock, only an amount that does not exceed the market price for such stock, as determined in the manner set forth in the Charter, at the time of the prohibited transfer), and the trustee shall distribute all remaining proceeds from such sale to the charitable beneficiary. In addition to the foregoing transfer restrictions, the Company will have the right, for a period of 90 days during the time any Excess Stock is held by the trustee, to purchase all or any portion of the Excess Stock from the trustee for the lesser of the price paid for the capital stock by the original purported transferee (or, if the purported transferee received such capital stock by gift, devise or otherwise without giving value for such stock, the market price of the capital stock on the date the Company exercises its options to purchase. Upon any such purchase by the Company, the trustee shall distribute the purchase price to the original purported transferee. The 90-day period begins on the date on which the Company receives written notice of the prohibited transfer or other event resulting in the exchange of capital stock for Excess Stock. If the foregoing transfer restrictions are determined to be void or invalid by virtue of any legal decision, statute, rule or regulation, then the intended transferee of any Excess Stock may be deemed, at the option of the Company, to have acted as an agent on behalf of the Company in acquiring the Excess Stock and to hold the Excess Stock on behalf of the Company. These restrictions will not preclude settlement of transactions on the NYSE or any other stock exchange on which capital stock of the Company is listed. The foregoing restrictions on transferability and ownership also will not apply if the Board of Directors determines that it is no longer in the best interest of the Company to continue to qualify as a REIT. The Company's Charter requires that, upon demand by the Company, each stockholder and each proposed transferee of capital stock will disclose to the Company in writing any information with respect to the direct, indirect and constructive ownership of shares of stock as the Board of Directors deems necessary to comply with the provisions of the Code applicable to REITs, to comply with the requirements of any taxing authority or governmental agency or to determine any such compliance. The Ownership Limitation provided by the Company's Charter may have the effect of delaying, deferring or preventing the acquisition of control of the Company. However, the Charter provides that the Ownership Limit shall not apply to shares of capital stock acquired pursuant to an all cash tender offer for all outstanding shares of capital stock in conformity with applicable laws where not less than two-thirds of the outstanding shares of capital stock (not including securities held by the tender offerer and/or its affiliates and associate) are tendered and accepted pursuant to such tender offer and where the tender offeror commits in such tender offer, if the offer is accepted by the holders of two- thirds of the outstanding stock, promptly after the tender offeror's purchaser of the tendered stock to give any non-tendering stockholders a reasonable opportunity to put their capital stock to the tender offeror at a price not less than that paid pursuant to the tender offer. DESCRIPTION OF UNITS AND REDEMPTION OF UNITS GENERAL Each Unitholder may, subject to certain limitations, require that the Operating Partnership redeem all or a portion of such holder's Units (the "Redemption Right"). This Redemption Right shall be exercised pursuant to a notice of redemption delivered to the Operating Partnership, with a copy delivered to the Company, by the Unitholder exercising the Redemption Right. Upon redemption, a Unitholder will receive for each Unit redeemed cash in an amount equal to the market value of a share of Common Stock (subject to certain adjustments to prevent dilution) plus any distribution amount owed but not yet paid to the Unitholder, provided that the Company may, in its sole discretion, by notice to the redeeming Unitholder within five business days after receipt of the notice of redemption, elect to acquire any Unit presented to the Operating Partnership for redemption by paying to the Unitholder cash in the amount described above or one share of Common Stock (subject to the same adjustments). When determining the amount of a cash redemption, the market value of Common Stock will be equal to the average of the closing trading price of the Common Stock on the NYSE (or substitute information, if no such closing price is available) for the ten 15 trading days before the day on which the redemption notice was received by the Operating Partnership. An acquisition by the Company pursuant to this Redemption Right will be treated as a sale of the Units to the Company for federal income tax purposes. See "-- Tax Consequences of Redemption" below. Upon any redemption such Unitholder's right to receive distributions with respect to the Units redeemed will cease. If the Company elects to redeem the Units for Redemption Shares, a Unitholder will have all rights as a stockholder of the Company, including the right to receive dividends, from the time of its acquisition of the Redemption Shares. The Company anticipates that it generally will elect to acquire any Units presented to the Operating Partnership for redemption by the issuance of the Redemption Shares pursuant to this Prospectus. However, under the terms of the Amended Operating Partnership Agreement, no redemption can occur if the delivery of Redemption Shares would be prohibited under the provisions of the Company's Charter that protect the Company's qualification as a REIT. In this circumstance Bradley has agreed to elect to acquire any Units presented for redemption for cash, not Redemption Shares. TAX CONSEQUENCES OF REDEMPTION The following discussion summarizes certain federal income tax considerations that may be relevant to a Unitholder who exercises his right to require the redemption of his Units. Tax Treatment of Exchange or Redemption of Units. If the Company elects to purchase Units tendered for redemption, the Amended Operating Partnership Agreement provides that each of the redeeming Unitholders, the Operating Partnership and the Company, as the case may be, shall treat the transaction between the redeeming Unitholder and the Company as a sale of Units by the Unitholder at the time of such redemption. Such sale will be fully taxable to the redeeming Unitholder and such redeeming Unitholder will be treated as realizing for tax purposes an amount equal to the sum of the cash value or the value of the Redemption Shares plus the amount of any Operating Partnership liabilities allocable to the redeemed Units at the time of the redemption. The determination of the amount of gain or loss is discussed more fully below. If the Company does not elect to purchase a Unitholder's Units tendered for redemption and the Operating Partnership redeems such Units for cash that the Company contributes to the Operating Partnership to effect such redemption, the redemption likely would be treated for tax purposes as a sale of such Units to the Company in a fully taxable transaction, although the matter is not free from doubt. In that event, the redeeming partner would be treated as realizing an amount equal to the sum of the cash received in the exchange plus the amount of any Operating Partnership liabilities allocable to the redeemed Units at the time of the redemption. The determination of the amount and character of gain or loss in the event of such a sale is discussed more fully below. See "--Tax Treatment of Disposition of Units by a Unitholder Generally" below. If the Company does not elect to purchase Units tendered for redemption and the Operating Partnership redeems a Unitholder's Units for cash that is not contributed by the Company to effect the redemption, the tax consequences would be the same as described in the previous paragraph, except that if the Operating Partnership redeems less than all of a Unitholder's Units, the Unitholder would not be permitted to recognize any loss occurring on the transaction and would recognize taxable gain only to the extent that the cash, plus the amount of any Operating Partnership liabilities allocable to the redeemed Units, exceeded the Unitholder's adjusted basis in all of such Unitholder's Units immediately before the redemption. If the Company contributes cash to the Operating Partnership to effect a redemption, and the form of the transaction is respected for tax purposes so that the redemption transaction is treated as the redemption of the Unitholder's Units by the Operating Partnership rather than a sale of Units to the Company, the income tax consequences to a Unitholder would be as described in the preceding paragraph. Tax Treatment of Disposition of Units by a Unitholder Generally. If a Unit is disposed of in a manner that is treated as a sale of the Unit, or a Unitholder otherwise disposes of a Unit, the determination of gain or loss from the sale or other disposition will be based on the difference between the amount considered realized for tax purposes and the tax basis in such Unit. See "-- Basis of Units" below. Upon the sale of a Unit, the "amount realized" will be measured by the sum of the cash and fair market value of other property (e.g., Redemption Shares) received plus the amount of any Operating Partnership liabilities allocable to the Units sold. To the extent that the amount of cash or property received plus the allocable share of any Operating Partnership liabilities exceeds the Unitholder's basis for the Units disposed of, such Unitholder will recognize gain. It is possible that the amount of gain recognized or even the tax liability resulting from such gain could exceed the amount of cash and/or the value of any other property (e.g., Redemption Shares) received upon such disposition. 16 Except as described below, any gain recognized upon a sale or other disposition of Units will be treated as gain attributable to the sale or disposition of a capital asset. To the extent, however, that the amount realized upon the sale of a Unit attributable to a Unitholder's share of "unrealized receivables" of the Operating Partnership (as defined in Section 751 of the Code) exceeds the basis attributed to those assets, such excess will be treated as ordinary income. Unrealized receivables include, to the extent not previously included in Operating Partnership income, any rights to payment for services rendered or to be rendered. Unrealized receivables also include amounts that would be subject to recapture as ordinary income if the Operating Partnership had sold its assets at their fair market value at the time of the transfer of a Unit. Basis of Units. In general, a Unitholder who acquired his Units by contribution of property and/or money to the Operating Partnership had an initial tax basis in his Units ("Initial Basis") equal to the sum of (i) the amount of money contributed (or deemed contributed as described below) and (ii) his adjusted tax basis in any other property contributed in exchange for such Units, and less the amount of any money distributed (or deemed distributed, as described below) in connection with the acquisition of Units. The Initial Basis of Units acquired by other means would have been determined under the general rules of the Code, including the partnership provisions, governing the determination of tax basis. Other rules, including the "disguised sale" rules discussed below, also may affect Initial Basis, and Unitholders are urged to consult their own tax advisors regarding their initial basis. A Unitholder's Initial Basis in his Units generally is increased by (i) such Unitholder's share of Operating Partnership taxable and tax-exempt income and (ii) increases in such Unitholder's allocable share of liabilities of the Operating Partnership (including any increase in his share of liabilities occurring in connection with the acquisition of his Units). Generally, such Unitholder's basis in his Units is decreased (but not below zero) by (i) such Unitholder's share of Operating Partnership distributions, (ii) decreases in such Unitholder's allocable share of liabilities of the Operating Partnership (including any decrease in his share of liabilities of the Operating Partnership occurring in connection with the acquisition of his Units), (iii) such Unitholder's share of losses of the Operating Partnership and (iv) such Unitholder's share of nondeductible expenditures of the Operating Partnership that are not chargeable to his capital account. Potential Application of the Disguised Sale Regulations to a Redemption of Units. There is a risk that a redemption by the Operating Partnership of Units issued in exchange for a contribution of property to the Operating Partnership may cause the original transfer of property to the Operating Partnership in exchange for Units to be treated as a "disguised sale" of property. Section 707 of the Code and the Treasury Regulations thereunder (the "Disguised Sale Regulations") generally provide that, unless one of the prescribed exceptions is applicable, a partner's contribution of property to a partnership and a simultaneous or subsequent transfer of money or other consideration (which may include the assumption of or taking subject to a liability) from the partnership to the partner will be presumed to be a sale, in whole or in part, of such property by the partner to the partnership. Further, the Disguised Sale Regulations provide generally that, in the absence of an applicable exception, if money or other consideration is transferred by a partnership to a partner within two years of the partner's contribution of property, the transactions are presumed to be a sale of the contributed property unless the facts and circumstances clearly establish that the transfers do not constitute a sale. The Disguised Sale Regulations also provide that if two years have passed between the transfer of money or other consideration and the contribution of property, the transactions will be presumed not to be a sale unless the facts and circumstances clearly establish that the transfers constitute a sale. Accordingly, if a Unit is redeemed by the Operating Partnership from a Unitholder who holds Units that were issued in exchange for a contribution of property to the Operating Partnership, the Internal Revenue Service (the "IRS") could contend that the Disguised Sale Regulations apply because the Unitholder will thus receive cash subsequent to a previous contribution of property to the Operating Partnership. In that event, the IRS could contend that the contribution was taxable as a disguised sale under the Disguised Sale Regulations. Any gain recognized thereby may be eligible for installment reporting under Section 453 of the Code, subject to certain limitations. In addition, in such event, the Disguised Sale Regulations might apply to cause a portion of the proceeds received by a redeeming Unitholder to be characterized as original issue discount on a deferred obligation which would be taxable as interest income in accordance with the provisions of Section 1272 of the Code. Each Unitholder is advised to consult its own tax advisors to determine whether redemption of its Units could be subject to the Disguised Sale Regulations. COMPARISON OF OWNERSHIP OF UNITS AND COMMON STOCK The nature of any investment in Common Stock of the Company is generally economically equivalent to an investment in Units in the Operating Partnership. There are, however, some differences between ownership of Units and ownership of Common Stock, some of which may be material to investors. The information below highlights a number of significant differences between the Operating Partnership and the Company relating to, among other things, form of organization, permitted investments, policies and restrictions, management structure, compensation 17 and fees, investor rights and federal income taxation and compares certain legal rights associated with the ownership of Units and Common Stock, respectively. These comparisons are intended to assist Unitholders in understanding how their investment will be changed if their Units are acquired for Common Stock. This discussion is summary in nature and does not constitute a complete discussion of these matters, and holders of Units should carefully review the balance of this Prospectus and the registration statement of which this Prospectus is a part for additional important information about the Company. Form of Organization and Assets Owned. The Operating Partnership is organized as a Delaware limited partnership and owns 7 properties directly. The Operating Partnership also is a general partner in BFP, which owns 6 properties, and the sole general partner in WSALP, which owns 1 property. The Company is a Maryland corporation which has elected to be taxed as a REIT under the Code and intends to maintain its qualifications as a REIT. The Company maintains a general partner interest in the Operating Partnership, which gives the Company an indirect investment in those properties and other assets owned by the Operating Partnership. The Company also owns 17 properties directly. The Company currently has a 95.9% economic interest in the Operating Partnership, and such interest will increase as Units are redeemed for cash or acquired by the Company. Length of Investment. The Operating Partnership has a stated termination date of December 31, 2050, although it may be terminated earlier under certain circumstances. The Company has a perpetual term and intends to continue its operations for an indefinite time period. Nature of Investment and Distribution Rights. The Units constitute equity interests entitling each Unitholder to his pro rata share of cash distributions made to the Unitholders of the Operating Partnership. In general, the Amended Operating Partnership Agreement provides for operating distributions to be made first to the Unitholders in an amount equal to the lesser of (i) 99% of the cash available for distribution from the Operating Partnership and (ii) an amount calculated in a manner intended to provide the Unitholders with distributions on each of their Units equal to the dividend yield for the same period on a share of Common Stock. Any remaining cash from operations available for distributions will be distributed to the Company as general partner. The Amended Operating Partnership Agreement generally provides for liquidating distributions to the Unitholders equal to either (i) an amount per Unit intended to equal the amount distributed with respect to each share of Common Stock upon the liquidation of the Company or (ii) in the event that the Operating Partnership is liquidated other than in connection with the liquidation of the Company, an amount per Unit equal to the then market price of a share of Common Stock; provided, however, that the Unitholders will not receive more than 99% of any proceeds available for distribution from the liquidation of the Operating Partnership. Any remaining liquidation proceeds will be distributed to the Company as the general partner. The Common Stock constitutes an equity interest in the Company. The Company is entitled to receive any operating cash flow and capital cash flow remaining after a distribution to the Unitholders has been effected, and each stockholder will be entitled to his pro rata share of any dividends or distributions paid with respect to Common Stock. The dividends payable to the stockholders are not fixed in amount and are only paid if, when and as declared by the Board of Directors. In order to qualify as a REIT, the Company must distribute at least 95% of its taxable income (excluding capital gains), and any taxable income (including capital gains) not distributed will be subject to corporate income tax. As a partnership, the Operating Partnership is not subject to federal income taxation. In determining their federal income tax, partners of the Operating Partnership, including Unitholders, must take into account their allocable share of partnership income, gain, deduction and loss (regardless of whether distributed), and otherwise are subject to the rules governing the taxation of partnerships and partners. By contrast, Unitholders who receive Redemption Shares upon exercise of their redemption rights will be taxed on such investment in accordance with the rules governing REITs. See "Federal Income Tax Considerations." Issuance of Additional Units. The issuance of additional Units, and the relative rights, powers and duties of such Units, will be at the discretion of the Company, as the sole general partner of the Operating Partnership. Notwithstanding the foregoing, for a period of 24 months after the consummation of the Merger, the general partner shall not cause the Operating Partnership to issue additional Units with rights, powers and duties senior to the Units currently held by the Unitholders. In addition, the general partner shall not permit the Operating Partnership to issue additional Units for a period of 24 months after the consummation of the Merger if the issuance of such Units would 18 cause a material adverse tax consequence to the Unitholders (determined in the manner described in the Amended Operating Partnership Agreement), other than in connection with the merger, consolidation or combination of the general partner or its affiliates. Liquidity. Subject to certain exceptions, a Unitholder may transfer all or any portion of his Units with or without the consent of the general partner. However, the general partner, in its sole and absolute discretion, may or may not consent to the admission as a Unitholder of any transferee of such Units. If the general partner does not consent to the admission of a permitted transferee, the transferee shall be considered an assignee of an economic interest in the Operating Partnership but will not be a holder of Units for any other purpose; as such the assignee will not be permitted to vote on any affairs or issues on which a Unitholder may vote. The Units are freely transferable (i) either by will, the laws of intestacy or otherwise to the legal representative or successor of the transferring Unitholder who shall be bound in all respects by the terms of the Amended Operating Partnership Agreement; (ii) for inter vivos transfers for estate planning purposes; or (iii) for pledges to secure the repayment of a loan. Other transfers are subject to the consent and approval of the general partner. Pursuant to the Amended Operating Partnership Agreement, the general partner may, in its sole and absolute discretion, transfer its interest in the Operating Partnership; provided, however, that for a period of 24 months after the consummation of the Merger, the general partner shall not without the consent of the majority of the limited partners, transfer its interest to any of its affiliates other than an affiliate whose securities will become issuable upon redemption of the Units. The Redemption Shares will be transferable subject to the requirements of the Securities Act. The Common Stock is listed on the NYSE. The breadth and strength of this market will depend, among other things, upon the number of shares outstanding, the Company's financial results and prospects, the general interest in the Company's and other real estate investments and the Company's dividend yield compared to that of other debt and equity securities. Purchase and Permitted Investments. The purpose of the Operating Partnership includes the conduct of any business that relates to the properties of the Operating Partnership or that relates to the properties of BFP, except that the Amended Operating Partnership Agreement requires the business of the Operating Partnership to be conducted in such a manner that will permit the Company to be classified as a REIT for Federal income tax purposes. The Operating Partnership may, subject to the foregoing limitation, invest or enter into partnerships, joint ventures or similar arrangements and may own interests in any other entity, such as its general partnership interest in BFP. Under its Charter, the Company may engage in any lawful activity permitted under Maryland law. The Board of Directors of the Company may issue, in its discretion, additional equity securities consisting of shares of Common Stock or Preferred Stock; provided, that the total number of shares issued does not exceed the authorized number of shares of capital stock set forth in the Company's Charter. Borrowing Policies. The Operating Partnership has no restrictions on borrowings, and the general partner, which is controlled by the Company, has full power and authority to borrow money on behalf of the Operating Partnership. The Company is not restricted under its governing instruments from incurring borrowings. Other Investment Restrictions. Other than restrictions precluding investments by the Operating Partnership that would adversely affect the qualification of the Company as a REIT, there are no restrictions upon the Operating Partnership's authority to enter into certain transactions, including, among others, making investments, lending Operating Partnership funds, or reinvesting the Operating Partnership's cash flow and net sale or refinancing proceeds. Neither the Company's Charter nor its Bylaws impose any restrictions upon the types of investments made by the Company. Management Control. All management powers over the business and affairs of the Operating Partnership are vested in the Company and no Unitholder of the Operating Partnership has any right to participate in or exercise control or management power over the business and affairs of the Operating Partnership. The Amended Operating Partnership Agreement provides that the Company shall be reimbursed for all expenses incurred by it relating to the management and business of the Operating Partnership. 19 The Board of Directors has exclusive control over the Company's business and affairs subject only to the restrictions in the Charter and the Bylaws. The Board of Directors is classified into three classes. At each annual meeting of the stockholders, the successors of the class of Directors whose terms expire at that meeting will be elected. The policies adopted by the Board of Directors may be altered or eliminated without advice of the stockholders. Accordingly, except for their vote in the elections of Directors, stockholders have no control over the ordinary business policies of the Company. Management Liability and Indemnification. The Amended Operating Partnership Agreement generally provides that the general partner and any person acting on its behalf will incur no liability to the Operating Partnership or any Unitholder for any act or omission within the scope of the general partner's authorities, provided the general partner's or such other person's action or omission to act was taken in good faith and in the belief that such action or omission was in the best interests of the Company and its affiliates, and provided further, that the general partner's or such other person's actions or omissions shall not constitute actual fraud or gross negligence or deliberately dishonest conduct. The Amended Operating Partnership Agreement also provides for the indemnification of the general partner and its affiliates and any individual acting on their behalf from any loss, damage, claim or liability, including, but not limited to, reasonable attorneys' fees and expenses, incurred by them by reason of any act performed by them in accordance with the standards set forth above or in enforcing the provisions of this indemnity. The Company's Charter eliminates, to the fullest extent permitted under the MGCL, the personal liability of a director to the Company or its stockholders for monetary damages for breaches of such director's duty of care or other duties as a director. The effect of this provision in the Charter is generally to eliminate the rights of the Company and its stockholders (through stockholders' derivative suits on behalf of the Company) to recover monetary damages against a director for breach of the fiduciary duty of care as a director (including breaches resulting from negligent or grossly negligent behavior). This provision does not limit or eliminate the rights of the Company or any stockholder to seek non-monetary relief such as an injunction or recession in the event of a breach of a director's duty of care. These provisions will not alter the liability of a director under federal securities laws. Anti-takeover Provisions. Except in limited circumstances, the general partner has exclusive management power over the business and affairs of the Operating Partnership. The general partner may not be removed by the Unitholders with or without cause. The Charter and Bylaws of the Company and Maryland law contain a number of provisions that may have the effect of delaying or discouraging an unsolicited proposal for the acquisition of the Company or the removal of incumbent management. See "Risk Factors -- Potential Anti-Takeover Effect of Certain Provisions." Voting Rights. Under the Amended Operating Partnership Agreement, the Company as general partner may take any action in a manner which it reasonably believes is in the best interests of the Company stockholders or complies with the REIT requirements for the Company. Holders of Units may not elect directors, or elect or remove the Company as the general partner of the Operating Partnership. For a period of 24 months after the consummation of the Merger, the general partner may not elect to dissolve the partnership or sell all or substantially all of the assets of the partnership without the consent of a majority in interest of the limited partners, except in connection with a merger or other business combination of the general partner or its affiliates. The Amended Operating Partnership Agreement provides for no other voting rights for the Unitholders. Stockholders of the Company have the right to vote, among other things, on a merger or sale of substantially all of the assets of the Company, certain amendments to the Charter and dissolution of the Company. Under MGCL and the Charter, the sale of all or substantially all of the assets of the Company or any merger or consolidation of the Company requires the approval of the Board of Directors and holders of a majority of the outstanding shares of Common Stock. No approval of the stockholders is required for the sale of less than all or substantially all of the Company's assets. Under Maryland law and the Charter and Bylaws, the Board of Directors must obtain approval of holders of not less than a majority of all outstanding shares of capital stock of the Company in order to dissolve the Company. The Company is managed and controlled by a Board of Directors consisting of three classes having staggered terms of office. Each class is to be elected by the stockholders at annual meetings of the Company. All shares of 20 Common Stock have one vote, and the Charter permits the Board of Directors to classify and issue Preferred Stock in one or more series having voting power which may differ from that of the Common Stock. Amendment of the Partnership Agreement or the Company's Charter. Generally, the Amended Operating Partnership Agreement may be amended by the general partner without the consent of the Unitholders, except that certain amendments which alter or change the distribution rights or redemption rights of a Unitholder shall require the consent of the Unitholders holding a majority in interest of Units. Amendments to the Charter must be approved by the Board of Directors and generally by the vote of a majority of the votes entitled to be cast at a meeting of stockholders except as otherwise provided by law. The Board of Directors may, however, amend the Charter without any action of the stockholders in certain respects to preserve the Company's REIT qualification. Compensation, Fees and Distributions. The general partner is not entitled to receive any compensation for its services as general partner of the Operating Partnership. As a partner in the Operating Partnership, however, the general partner has the same right to allocations and distributions as other partners of the Operating Partnership. In addition, the Operating Partnership will reimburse the general partner for administrative expenses incurred relating to the ongoing operation of the Company and certain other expenses arising in connection with its role as general partner. The Directors and officers of the Company receive compensation for their services. Liability of Investors. Under the Amended Operating Partnership Agreement and applicable Delaware law, the liability of the limited partners for the Operating Partnership's debts and obligations is generally limited to the amount of their investment in the Operating Partnership. Under the MGCL, stockholders generally are not personally liable for the debts or obligations of the Company. See "Description of Capital Stock-- General." REGISTRATION RIGHTS The registration of the Redemption Shares pursuant to the registration statement of which this Prospectus is a part will discharge the Company's obligations under the terms of a Registration Rights Agreement dated as of March 15, 1996 (the "Registration Rights Agreement"), which the Company entered into in connection with the consummation of the Merger. The following summary does not purport to be complete and is qualified in its entirety by reference to the Registration Rights Agreement. Under the Registration Rights Agreement, the Company is obligated to include any Redemption Shares that the Company issues or may issue when Units are presented for redemption by holders on the registration statement of which this Prospectus is a part. The Company also is required to use reasonable efforts to keep the shelf registration effective until such time as all of the Units have been redeemed for cash, or at the option of the Company, for the number of Redemption Shares issuable pursuant to the Amended Operating Partnership Agreement. As a result of the filing and effectiveness of the registration statement of which this Prospectus is a part, the Redemption Shares, when issued by the Company pursuant to this Prospectus, will no longer be entitled to the benefits of the Registration Rights Agreement. Pursuant to the Registration Rights Agreement, the Company has agreed to pay all expenses of effecting the registration of the Redemption Shares (other than brokerage and underwriting commissions and taxes of any kind and other than for any legal, accounting and other expenses incurred by a Unitholder thereunder). The Company also has agreed to indemnify each Unitholder under the Registration Rights Agreements and its officers, directors and other affiliated persons and any person who controls any holder against certain losses, claims, damages and expenses arising under the securities laws in connection with the registration statement or this Prospectus, subject to certain limitations. In addition, each Unitholder under the Registration Rights Agreement severally agreed to indemnify the Company and its respective directors, officers and any person who controls the Company against all losses, claims, damages and expenses arising under the securities laws insofar as such loss, claim, damage or expense relates to written information furnished to the Company by such Unitholder for use in the registration statement or Prospectus or an amendment or supplement thereto or the failure by such Unitholder to deliver or cause to be delivered this Prospectus or any 21 amendment or supplement thereto to any purchaser of shares covered by the registration statement from such holder through no fault of the Company. FEDERAL INCOME TAX CONSIDERATIONS The Company believes it has operated, and the Company intends to continue to operate, in such manner as to qualify as a REIT under the Code, but no assurance can be given that it will at all times so qualify. The provisions of the Code pertaining to REITs are highly technical and complex. The following is a brief and general summary of certain provisions that currently govern the federal income tax treatment of the Company and its stockholders. For the particular provisions that govern the federal income tax treatment of the Company and its stockholders, reference is made to Sections 856 through 860 of the Code and the regulations thereunder. The following summary is qualified in its entirety by such reference. TAXATION OF THE COMPANY Under the Code, if certain requirements are met in a taxable year, a REIT generally will not be subject to federal income tax with respect to income that it distributes to its stockholders. If the Company fails to qualify during any taxable year as a REIT, unless certain relief provisions are available, it will be subject to tax (including any applicable alternative minimum tax) on its taxable income at regular corporate rates, which could have a material adverse effect upon its stockholders. See "Risk Factors--Adverse Consequences of Failure to Qualify as a REIT; Other Tax Liabilities." TAXATION OF TAXABLE U.S. STOCKHOLDERS As long as the Company qualifies as a REIT, distributions made to the Company's taxable U.S. stockholders out of current or accumulated earnings and profits (and not designated as capital gain dividends) will be taken into account by such U.S. stockholders as ordinary income and will not be eligible for the dividends received deduction generally available to corporations. As used herein, the term "U.S. stockholder" means a holder of Common Stock that for U.S. federal income tax purposes is (i) a citizen or resident of the United States, (ii) a corporation, partnership, or other entity created or organized in or under the laws of the United States or of any political subdivision thereof, or (iii) an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source. Distributions that are designated as capital gain dividends will be taxed as long-term capital gains (to the extent they do not exceed the Company's actual net capital gain for the taxable year) without regard to the period for which the stockholder has held his Common Stock. However, corporate stockholders may be required to treat up to 20% of certain capital gain dividends as ordinary income. Distributions in excess of current and accumulated earnings and profits will not be taxable to a stockholder to the extent that they do not exceed the adjusted basis of the stockholder's Common Stock, but rather will reduce the adjusted basis of such stock. To the extent that such distributions in excess of current and accumulated earnings and profits exceed the adjusted basis of a stockholder's Common Stock, such distributions will be included in income as long-term capital gain (or short-term capital gain if the Common Stock has been held for one year or less) assuming the Common Stock is a capital asset in the hands of the stockholder. In addition, any distribution declared by the Company in October, November, or December of any year and payable to a stockholder of record on a specified date in any such month shall be treated as both paid by the Company and received by the stockholder on December 31 of such year, provided that the distribution is actually paid by the Company during January of the following calendar year. Stockholders may not include in their individual income tax returns any net operating losses or capital losses of the Company. Instead, such losses would be carried over by the Company for potential offset against its future income (subject to certain limitations). Taxable distributions from the Company and gain from the disposition of the Common Stock will not be treated as passive activity income and, therefore, stockholders generally will not be able to apply any "passive activity losses" (such as losses from certain types of limited partnerships in which the stockholder is a limited partner) against such income. In addition, taxable distributions from the Company generally will be treated as investment income for purposes of the investment interest limitations. Capital gains from the disposition of Common Stock (or distributions treated as such) will be treated as investment income only if the stockholder so elects, in which case such capital gains will be taxed at ordinary income rates. The Company will notify stockholders after the close of the Company's taxable year as to the portions of the distributions attributable to that year that constitute ordinary income, return of capital and capital gain. 22 In general, any gain or loss realized upon a taxable disposition of the Common Stock by a stockholder who is not a dealer in securities will be treated as long-term capital gain or loss if the Common Stock has been held for more than one year and otherwise as short-term capital gain or loss. However, any loss upon a sale or exchange of Common Stock by a stockholder who has held such stock for six months or less (after applying certain holding period rules), will be treated as a long-term capital loss to the extent of distributions from the Company required to be treated by such stockholder as long-term capital gain. All or a portion of any loss realized upon a taxable disposition of the Common Stock may be disallowed if other Common Stock is purchased within 30 days before or after the disposition. Investors are urged to consult their own tax advisors with respect to the appropriateness of an investment in the shares of Common Stock offered hereby and with respect to the tax consequences arising under federal law and the laws of any state, municipality or other taxing jurisdiction, including tax consequences resulting from such investor's own tax characteristics. In particular, the foregoing discussion does not attempt to address tax considerations of foreign investors, and foreign investors should consult their own tax advisors concerning the tax consequences of an investment in the Company, including the possibility of United States income tax withholding on Company distributions. USE OF PROCEEDS The Company will not receive any proceeds in connection with the issuance of the Redemption Shares offered hereby, although the Company will acquire Units in exchange for any Redemption Shares it issues. PLAN OF DISTRIBUTION This Prospectus relates to the possible issuance by the Company of the Redemption Shares if, and to the extent that, holders of the Units tender such Units for redemption and the Company elects to acquire such tendered Units for shares of Common Stock. The Company has registered the Redemption Shares for sale pursuant to its obligations under the Registration Rights Agreement, but registration of such shares does not necessarily mean that any of the Redemption Shares will be issued by the Company. The Company will not receive any proceeds from the issuance of Redemption Shares to Unitholders, although the Company will acquire Units from such Unitholders in exchange for Redemption Shares. The Company may from time to time issue up to 314,749 Redemption Shares upon the acquisition of an equivalent number of Units tendered for exchange. The Company will acquire one Unit in exchange for each Redemption Share that the Company issues in connection with these acquisitions. Consequently, with each exchange, the Company's interest in the Operating Partnership will increase. All expenses incident to the offering and sale of the Registered Shares, other than commissions, discounts and fees of underwriters, broker-dealers or agents, shall be paid by the Company. EXPERTS The financial statements of Bradley Real Estate, Inc. as of December 31, 1995 and 1994, and for each of the years in the three-year period ended December 31, 1995 and the financial statement schedule as of December 31, 1995, incorporated by reference in this Prospectus, have been audited by KPMG Peat Marwick LLP, independent certified public accountants, as indicated in their report with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing. The financial statements of Tucker as of December 31, 1995 and 1994, and for the years then ended, incorporated by reference in this Prospectus, have been audited by Coopers & Lybrand L.L.P., independent certified public accountants, as indicated in their report with respect thereto, and are incorporated by reference herein in reliance upon the authority of said firm as experts in accounting and auditing. LEGAL MATTERS The validity of the shares of the Common Stock offered hereby have been passed upon for the Company by Goodwin, Procter & Hoar LLP, Boston, Massachusetts. Certain tax matters discussed under "Description of Units and Redemption of Units -- Tax Consequences of Redemption" have also been passed upon for the Company by 23 Goodwin, Procter & Hoar LLP. William B. King, whose professional corporation is a partner in Goodwin, Procter & Hoar LLP, is Secretary of the Company and is the beneficial owner of approximately 8,000 shares of Common Stock. 24 ================================================================================ No dealer, salesperson or other individual has been authorized to give any information or make any representations not contained in this Prospectus. If given or made, such information or representation must not be relied upon as having been authorized by the Company. This Prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, the Common Stock in any jurisdiction where, or to any person to whom, it is unlawful to make such offer or solicitation. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create an implication that there has not been any change in the facts set forth in this Prospectus or in the affairs of the Company since the date hereof. --------------------- SUMMARY TABLE OF CONTENTS
PAGE ---- Available Information..................................................... (ii) Incorporation of Certain Documents by Reference........................... (ii) Prospectus Summary........................................................ 1 Risk Factors.............................................................. 4 The Company............................................................... 10 Description of Capital Stock.............................................. 13 Description of Units and Redemption of Units.............................. 15 Registration Rights....................................................... 21 Federal Income Tax Considerations......................................... 22 Use of Proceeds........................................................... 23 Plan of Distribution...................................................... 23 Experts................................................................... 23 Legal Matters............................................................. 23
--------------------- 314,749 Shares BRADLEY REAL ESTATE, INC. Common Stock --------------------- PROSPECTUS --------------------- April 12, 1996 ================================================================================ PART II. INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. ------------------------------------------- The expenses in connection with the issuance and distribution of the securities that are registered for sale pursuant to the Prospectus in this Amendment are set forth in the following table (all amounts except the registration fee are estimated): Registration fee -- Securities and Exchange Commission...... $ 1,365 Accountants' fees and expenses.............................. 1,500 Blue Sky fees and expenses.................................. -- Legal fees and expenses (other than Blue Sky)............... 7,500 Printing fees............................................... 500 Miscellaneous............................................... $ 1,000 TOTAL....................................................... $ 11,865 =======
All expenses in connection with the issuance and distribution of the securities being offered are being borne by the Company. ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS. ----------------------------------------- The Maryland General Corporation Law ("MGCL") permits a Maryland corporation to include in its charter a provision limiting the liability of its directors and officers to the corporation and its stockholders for money damages except for liability resulting from (i) actual receipt of an improper benefit or profit in money, property or services or (ii) active and deliberate dishonesty established by a final judgment as being material to the cause of action. The Articles of Amendment and Restatement (the "Charter") of Bradley Real Estate, Inc. (the "Company") contain such a provision which eliminates such liability to the maximum extent permitted by Maryland law. The Charter authorizes the Company, to the maximum extent permitted by Maryland law, to obligate itself to indemnify and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to (i) any present or former director, officer, agent, employee or plan administrator of the Company or of its predecessor Bradley Real Estate Trust (the "Trust") or (ii) any individual who, at the request of the Company, serves or has served in any of these capacities with another corporation, partnership, joint venture, trust, employee benefit plan or any other enterprise. The Bylaws of the Company obligate the Company, to the maximum extent permitted by Maryland law, to indemnify (i) any present or former director or officer of the Company, (ii) any individual who, at the request of the Company, serves or has served another corporation, partnership, joint venture, trust or other enterprise as a director or officer, or (iii) any present or former trustee or officer of the Trust. The MGCL requires a corporation (unless its charter provides otherwise, which the Charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he is made a party by reason of his service in that capacity. The MGCL permits a corporation to indemnify its present and former directors and officers, among others, against judgments, penalties, fines, settlements and reasonable expenses actually incurred by them in connection with any proceeding to which they may be made a party by reason of their service in those or other capacities unless it is established that (a) the act or omission of the director or officer was material to the matter giving rise to the proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty; (b) the director or officer actually received an improper personal benefit in money, property or services; or (c) in the case of any criminal proceeding, the director or officer had reasonable cause to believe that the act or omission was unlawful. However, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation. In addition, the MGCL requires a Maryland corporation, as a condition to advancing expenses, to obtain (i) a written affirmation by the director or officer of good faith belief that he has met the standard of conduct necessary for indemnification by the corporation as authorized by the corporation's bylaws and (ii) a written statement by or on his behalf to repay the amount paid or reimbursed by the corporation if it shall ultimately be determined that the standard of conduct was not met. II-1 The Company has a claims-made directors and officers liability insurance policy that insures the directors and officers of the Company against loss from claimed wrongful acts and insures the Company for indemnifying the directors and officers against such loss. The policy limit of liability is $5,000,000 each policy year and is subject to a retention of $150,000 of loss by the Company. ITEM 16. EXHIBITS. -------- Number Description - ------ ----------- 2.1 Agreement and Plan of Merger (the "Merger Agreement"), dated as of October 30, 1995, between Tucker Properties Corporation and Bradley Real Estate, Inc. ("Bradley"), attached as Annex A to the Joint Proxy Statement/Prospectus contained in the Registration Statement on Form S-4 (No. 33-64811) dated February 15, 1996 filed by Bradley and incorporated herein by reference. A list briefly identifying the contents of all Exhibits to the Merger Agreement 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 omitted Exhibit. Pursuant to Item 601(b)(2) of Regulation S-K, the Schedules to the Merger Agreement are omitted. Bradley hereby undertakes to furnish supplementally a copy of any omitted Schedule to the Commission upon request. 3.1 Articles of Amendment and Restatement of Bradley, incorporated by reference to Exhibit 3.1 of Bradley's Current Report on Form 8-K dated October 17, 1994. 3.2 By-laws of Bradley, incorporated by reference to Exhibit 3.3 of Bradley's Current Report on Form 8-K dated October 17, 1994. 4.1 Specimen Certificate for shares of Common Stock, $.01 par value per share, of Bradley, incorporated by reference to Exhibit 4.1 of Bradley's Registration Statement on Form S-4 (No. 33-81888) dated July 22, 1994. 5.1 Opinion of Goodwin, Procter & Hoar llp as to legality of the securities being offered./*/ 8.1 Opinion of Goodwin, Procter & Hoar llp regarding tax consequences of redemption of Units./*/ 23.1 Consent of KPMG Peat Marwick LLP./*/ 23.2 Consent of Coopers & Lybrand L.L.P./*/ 23.3 Consents of Goodwin, Procter & Hoar llp (included in Exhibits 5.1 and 8.1)./*/ 99.1 Amended and Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership, incorporated by reference to Exhibit 10.1 of Bradley's Current Report on Form 8-K dated November 3, 1995. 99.2 Registration Rights Agreement between Bradley Real Estate, Inc. and each of the limited partners to the Amended and Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership incorporated by reference to Exhibit 10.2 of the Registration Statement on Form S-4 (No. 33-64811) dated February 15, 1996. ______________________ /*/ Filed herewith. II-2 ITEM 17. UNDERTAKINGS. ------------ (a) The Company hereby undertakes: (1) To file, during any period in which offers or sales are being made pursuant to this Registration Statement, a post-effective amendment to this Registration Statement: (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement. provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in this Registration Statement; (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The Company hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in this Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-3 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Post-Effective Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Boston, Commonwealth of Massachusetts on the 12th day of April, 1996. BRADLEY REAL ESTATE, INC. By: /s/ THOMAS P. D'ARCY ---------------------------- Thomas P. D'Arcy President Pursuant to the requirements of the Securities Act of 1933, this Post- Effective Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
Name Title Date ---- ----- ---- /s/ THOMAS P. D'ARCY President, Chief Executive Officer April 12, 1996 - ------------------------------------------ THOMAS P. D'ARCY and Director * Chief Financial Officer April 12, 1996 - ------------------------------------------ IRVING E. LINGO, JR. * Director April 12, 1996 - ------------------------------------------ WILLIAM L. BROWN * Director April 12, 1996 - ------------------------------------------ JOSEPH E. HAKIM * Director April 12, 1996 - ------------------------------------------ JOHN B. HYNES III * Director April 12, 1996 - ------------------------------------------ STEPHEN G. KASNET * Director April 12, 1996 - ------------------------------------------ PAUL G. KIRK, JR. * Director April 12, 1996 - ------------------------------------------ W. NICHOLAS THORNDIKE * Director April 12, 1996 - ------------------------------------------ A. ROBERT TOWBIN
* By: /s/ Thomas P. D'Arcy ---------------------------------- Thomas P. D'Arcy Attorney-in-Fact II-4 EXHIBIT INDEX Exhibit No. Description Page/*/ - ---------- ----------- ---- 2.1 Agreement and Plan of Merger, dated as of October 30, 1995, between Tucker Properties Corporation and Bradley Real Estate, Inc. (the "Merger Agreement"), attached as Annex A to the Joint Proxy Statement/Prospectus contained in the Registration Statement on Form S-4 (No. 33-64811) dated February 15, 1996 filed by Bradley Real Estate, Inc. ("Bradley") and incorporated herein by reference. A list briefly identifying the contents of all Exhibits to the Merger Agreement 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 omitted Exhibit. Pursuant to Item 601(b)(2) of Regulation S-K, the Schedules to the Merger Agreement are omitted. Bradley hereby undertakes to furnish supplementally a copy of any omitted Schedule to the Commission upon request. 3.1 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. 3.2 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. 4.1 Specimen Certificate for shares of Common Stock, $.01 par value per share, of Bradley Real Estate, Inc., incorporated by reference to Exhibit 4.1 of Bradley's Registration Statement on Form S-4 (No. 33- 81888) dated July 22, 1994. 5.1 Opinion of Goodwin, Procter & Hoar LLP as to legality of the securities being offered./*/ 8.1 Opinion of Goodwin, Procter & Hoar LLP regarding tax consequences of redemption of Units./*/ 23.1 Consent of KPMG Peat Marwick LLP./*/ 23.2 Consent of Coopers & Lybrand L.L.P./*/ 23.3 Consents of Goodwin, Procter & Hoar LLP (included in Exhibits 5.1 and 8.1)./*/ 99.1 Amended and Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership, incorporated by reference to Exhibit 10.1 of Bradley's Current Report on Form 8-K dated November 3, 1995. 99.2 Registration Rights Agreement between Bradley Real Estate, Inc. and each of the limited partners to the Amended and Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership incorporated by reference to Exhibit 10.2 of the Registration Statement on Form S-4 (No. 33-64811) dated February 15, 1996. ________________________ * Filed herewith. II-5 EX-5.1 2 GOODWIN, PROCTER & HOAR OPINION EXHIBIT 5.1 [LETTER HEAD OF GOODWIN, PROCTER & HOAR LLP APPEAR HERE] April 11, 1996 Bradley Real Estate, Inc. 699 Boylston Street Boston, MA 02116 Re: Bradley Real Estate, Inc.--Post-Effective Amendment on Form S-3 to Registration Statement on Form S-4 (File No. 33-64811) (the "Registration Statement") Dear Ladies and Gentlemen: This opinion relates to shares of common stock, par value $.01 per share, of Bradley Real Estate, Inc., a Maryland corporation (the "Company"), to be issued upon the redemption of the outstanding partnership units of Bradley Operating Limited Partnership, a Delaware limited partnership (the "Redemption Shares"), which are the subject matter of the above-referenced Registration Statement filed with the Securities and Exchange Commission (the "Commission"). We have acted as counsel to the Company in connection with the preparation and filing with the Commission of the Registration Statement. For purposes of this opinion we have reviewed the Company's Articles of Amendment and Restatement and By-Laws and the Amended and Restated Agreement of Limited Partnership of Bradley Operating Limited Partnership, each as amended to date. We have also examined records of corporate proceedings of the Company and such other certificates and documents as we have deemed necessary to enable us to render this opinion. We express no opinion herein concerning the laws of any jurisdictions other than the laws of the United States of America and the General Corporation Law of the State of Maryland as in effect on the date hereof. Based upon the foregoing, and having regard for such legal considerations as we have deemed relevant, it is our opinion that, upon the issuance of the certificates representing the Redemption Shares in accordance with the provisions of the Amended and Restated Agreement GOODWIN, PROCTER & HOAR LLP Bradley Real Estate, Inc. April 11, 1996 Page 2 of Limited Partnership of Bradley Operating Limited Partnership, the Redemption Shares will be duly authorized, validly issued, fully paid and non-assessable. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us in the prospectus contained in such Registration Statement. Very truly yours, /s/ GOODWIN, PROCTER & HOAR LLP GOODWIN, PROCTER & HOAR LLP EX-8.1 3 GOODWIN, PROCTER & HOAR OPINION [LETTERHEAD OF GOODWIN, PROCTER & HOAR LLP APPEARS HERE] EXHIBIT 8.1 As of April 12, 1996 Bradley Real Estate, Inc. 699 Boylston Street Boston, MA 02116 Re: Certain Federal Income Tax Matters Dear Sirs: You have requested our opinion concerning the accuracy of the discussion under the headings "DESCRIPTION OF UNTIS AND REDEMPTION OF UNITS--Tax Consequences of Redemption," and "FEDERAL INCOME TAX CONSIDERATIONS" contained in the Post-Effective Amendment No. 1 on Form S-3 to Registration Statement on Form S-4, to be filed with the Securities and Exchange Commission on April 12, 1996 (No. 33-64811) (the "Registration Statement"),/1/ in connection with the issuance of up to 314,749 shares of common stock (the "Redemption Shares"), par value $.01 per share, by Bradley Real Estate, Inc., a Maryland real estate investment trust ("Bradley"). In connection with rendering our opinion, we have reviewed the discussion in the Registration Statement, under the headings "DESCRIPTION OF UNITS AND REDEMPTION OF UNITS--Tax Consequences of Redemption," and "FEDERAL INCOME TAX CONSIDERATIONS" as well as the partnership agreement of the Operating Partnership. Our opinion is based on the correctness of the following specific assumptions: (i) the conformity to the original of the partnership agreement of the Operating Partnership submitted to us; and (ii) the Operating Partnership has not made an election to be excluded from the provisions of Subchapter K of the Internal Revenue Code of 1986, as amended (the "Code"). In addition, our opinion is based upon the Code, the regulations promulgated thereunder (the "Regulations"), and the administrative and judicial interpretations thereof, all as they exist at the date of this letter. No assurance can therefore be given that the federal income tax consequences described below will not be altered in the future. With respect to the latter assumption, it should be noted that statutes, regulations, judicial decisions, and administrative interpretations are subject to change at any time and, in some circumstances, with retroactive effect. Based on the foregoing, we are of the opinion that, as of the date hereof, the discussion in the Registration Statement under the headings "DESCRIPTION OF UNITS AND REDEMPTION OF UNITS--Tax Consequences of Redemption," and "FEDERAL INCOME TAX CONSIDERATIONS" to the extent that each constitutes matters of law or legal conclusions, is correct in all material respects. Other than as expressly stated above, we express no opinion on any issue relating to Bradley or the Operating Partnership, or to any investment therein. We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and the use of our name in the Registration Statement under the heading "Legal Matters." Very truly yours, /s/Goodwin, Procter & Hoar LLP GOODWIN, PROCTER & HOAR LLP - --------- /1/ Unless otherwise specifically defined herein, all capitalized terms have the meanings assigned to them in the Registration Statement. EX-23.1 4 KMPG PEAT MARWICK CONSENT Exhibit 23.1 ------------ CONSENT OF INDEPENDENT AUDITORS The Board of Directors Bradley Real Estate, Inc.: We consent to incorporation by reference in the registration statement (No. 33- 64811) on Form S-3 of Bradley Real Estate, Inc. of our report dated February 19, 1996, except for note 10, which is as of March 15, 1996, relating to the balance sheets of Bradley Real Estate, Inc. as of December 31, 1995 and 1994, and the related statements of income, changes in stockholders' equity, and cash flows for each of the years in the three-year period ended December 31, 1995, and the related schedule, which report appears in the December 31, 1995 annual report on Form 10-K of Bradley Real Estate, Inc. KMPG Peat Marwick LLP Boston, Massachusetts April 11, 1996 EX-23.2 5 COOPERS & LYBRAND L.L.P. CONSENT EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS The Board of Directors Bradley Real Estate, Inc. We consent to the inclusion in this registration statement of Bradley Real Estate, Inc., on Form S-3, to which this consent is filed as an exhibit, of our report dated March 13, 1996 on our audit of the financial statements of Tucker Properties Corporation and Subsidiaries. We also consent to the reference to our firm under the caption "Experts". COOPERS & LYBRAND L.L.P. Chicago, Illinois April 10, 1996 -----END PRIVACY-ENHANCED MESSAGE-----