-----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, Vh5PrNtgT1lSHvuM9IZAbekaz6BN0ihVxSDSI2rG1ttY3DGKAsBOzt4fVTnxvtvn GbR8WSmvoyVFHWS8Jgoiwg== 0000950137-97-001935.txt : 19970515 0000950137-97-001935.hdr.sgml : 19970515 ACCESSION NUMBER: 0000950137-97-001935 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970514 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: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10328 FILM NUMBER: 97605387 BUSINESS ADDRESS: STREET 1: 250 BOYLSTON ST CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 6178674200 MAIL ADDRESS: STREET 1: 40 SKOKIE BLVD CITY: NORTHBROOK STATE: IL ZIP: 60062-1601 FORMER COMPANY: FORMER CONFORMED NAME: BRADLEY REAL ESTATE TRUST DATE OF NAME CHANGE: 19920703 10-Q 1 FORM 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q X Quarterly report pursuant to Section 13 or 15(d) of the Securities - --- Exchange Act of 1934 for the quarterly period ended March 31, 1997 or - --- Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _____to_____ Commission file number 1-10328 BRADLEY REAL ESTATE, INC. (Exact name of registrant as specified in its charter) Maryland 04-6034603 (State of Organization) (I.R.S. Identification No.) 40 Skokie Blvd., Northbrook, Illinois 60062 (Address of Registrant's Principal Executive Offices) Registrant's telephone number, including area code: (847) 272-9800 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes X No --- --- Indicate the number of shares outstanding of each class of Common Stock as of March 31, 1997: Shares of Common Stock, $.01 par value: 21,669,569 shares outstanding. 1 2 BRADLEY REAL ESTATE, INC. CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except share data) (UNAUDITED)
March 31, December 31, ASSETS 1997 1996 --------- ----------- Real estate investments-at cost $499,457 $490,133 Accumulated depreciation and amortization (33,561) (30,670) -------- -------- Net real estate investments 465,896 459,463 Real estate investments held for sale 9,904 10,285 Other Assets: Cash and cash equivalents 3,196 7,462 Rents and other receivables, net of allowance for doubtful accounts of $2,124 for 1997 and $1,636 for 1996 11,716 9,543 Deferred charges, net and other assets 14,347 15,531 -------- -------- Total assets $505,059 $502,284 ========= ========= LIABILITIES AND SHARE OWNERS' EQUITY Mortgage loans 129,024 125,394 Line of credit 55,300 63,500 Accounts payable, accrued expenses and other liabilities 19,666 19,505 -------- -------- Total liabilities 203,990 208,399 -------- -------- Minority interest 8,010 4,160 -------- -------- Share Owners' equity: Shares of preferred stock, par value $.01 per share: Authorized 20,000,000 shares; 0 shares issued and outstanding - - Shares of common stock, par value $.01 per share: Authorized 80,000,000 shares; Issued and outstanding, 21,669,569 and 21,658,790, respectively 217 217 Shares of excess stock, par value $.01 per share: Authorized 50,000,000 shares; 0 shares issued and outstanding - - Additional paid-in capital 300,434 298,875 Distributions in excess of accumulated earnings (7,592) (9,367) -------- -------- Total share owners' equity 293,059 289,725 -------- -------- Total liabilities and share owners' equity $505,059 $502,284 ======== ========
The accompanying notes are an integral part of these consolidated financial statements. 2 3 BRADLEY REAL ESTATE, INC. CONSOLIDATED STATEMENTS OF INCOME (Dollars in thousands, except per share data) (UNAUDITED)
Quarter Ended March 31, 1997 1996 ---- ---- Income: Rental income $22,855 $11,219 Other income 326 102 ---------- ---------- 23,181 11,321 ---------- ---------- Expenses: Operations, maintenance and management 3,333 2,085 Real estate taxes 5,068 2,675 Mortgage and other interest 3,650 1,385 Administrative and general 1,105 555 Write-off of deferred financing and acquisition costs - 344 Depreciation and amortization 3,930 2,252 ---------- ---------- 17,086 9,296 ---------- ---------- Income before gain on sale of property 6,095 2,025 Gain on sale of property 3,073 9,379 ---------- ---------- Income before allocation to minority interest 9,168 11,404 Income allocated to minority interest (244) (29) ---------- ---------- Net income $8,924 $11,375 ========== ========== Net income per weighted average share outstanding $0.41 $0.91 ========== ========== Weighted average shares outstanding 21,665,593 12,536,714 ========== ==========
The accompanying notes are an integral part of these consolidated financial statements. 3 4 BRADLEY REAL ESTATE, INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHARE OWNERS' EQUITY (Dollars in thousands, except per share data) (UNAUDITED)
Retained Earnings (Distributions Additional in Excess of Shares Paid-In Accumulated at par value Capital Earnings) -------------- ------------ -------------- Balance at December 31, 1996 $217 $298,875 $(9,367) Net income - - 8,924 Cash distributions ($.33 per share) - - (7,149) Exercise of stock options - 119 - Dividend reinvestment participation - 73 - Reallocation of minority interest - 1,367 - ------ -------- ------- Balance at March 31, 1997 $217 $300,434 $(7,592) ====== ======== =======
The accompanying notes are an integral part of these consolidated financial statements. 4 5 BRADLEY REAL ESTATE, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Dollars in thousands) (UNAUDITED)
For the quarter ended March 31, 1997 1996 ----------- ----------- Cash flows from operating activities: Net income $8,924 $11,375 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 3,930 2,252 Gain on sale of property (3,073) (9,379) Write-off of deferred financing and acquisition costs - 344 Income allocated to minority interest 244 29 Changes in operating assets and liabilities (net of the effect of the Tucker acquisition in 1996): (Increase) decrease in rents and other receivables (2,173) 1,010 Increase in accounts payable, accrued expenses and other liabilities 161 401 Increase in deferred charges (626) (279) ----------- ----------- Net cash provided by operating activities 7,387 5,753 ----------- ----------- Cash flows from investing activities: Expenditures for real estate investments (7,066) (2,245) Purchase of Tucker, net of cash acquired - (2,337) Net proceeds from sale of property 11,310 - Excess proceeds from like-kind exchange of properties - 4,145 ----------- ----------- Net cash provided by (used in) investing activities 4,244 (437) ----------- ----------- Cash flows from financing activities: Borrowing from lines of credit 5,800 108,000 Cost associated with modified line of credit (381) (1,463) Pay-off of secured mortgage loans with borrowings from lines of credit - (32,234) Payments under lines of credit (14,000) (73,208) Distributions paid (7,149) (3,706) Distributions to minority interest holders (195) - Proceeds from shares issued under dividend reinvestment plan 73 35 Proceeds from exercise of stock options 119 17 Principal payments on mortgage loans (164) (66) ----------- ----------- Net cash used in financing activities (15,897) (2,625) ----------- ----------- Net increase (decrease) in cash and cash equivalents (4,266) 2,691 Cash and cash equivalents: Beginning of period 7,462 697 ----------- ----------- End of period $3,196 $3,388 =========== =========== Supplemental cash flow information: Interest paid, net of amount capitalized $3,641 $1,179 =========== ===========
The accompanying notes are an integral part of these consolidated financial statements. 5 6 BRADLEY REAL ESTATE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 1997 (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION The accompanying interim financial statements have been prepared by the Company, without audit, and in the opinion of management reflect all normal recurring adjustments necessary for a fair presentation of results for the unaudited interim periods presented. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto for the fiscal year ended December 31, 1996. NOTE 2 - AMENDED LINE OF CREDIT AGREEMENT On March 28, 1997 the Company amended its $150 million unsecured revolving credit facility, extending the maturity date to March 15, 1999 and reducing the interest rate to the lower of the lead bank's base rate or 1.50% over LIBOR from the lower of the bank's base rate or 1.75% over LIBOR. The rates available under the line become more favorable in the event the Company receives an investment grade unsecured debt rating. 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 amended facility also liberalized various of the Company's financial and operating covenants that, among other provisions, limit the amount of secured and unsecured indebtedness the Company may have outstanding at any time to a percentage of the Company's Consolidated Market Value as defined, and provide for the maintenance of certain financial tests including minimum net worth and debt service coverage requirements. NOTE 3 - ACQUISITIONS AND DISPOSITIONS On March 15, 1996, the Company acquired all of the assets of Tucker Properties Corporation ("Tucker") in a merger transaction that involved the issuance of 7.4 million common shares of the Company valued at $13.96 per share, payment of certain transaction costs and the assumption of all of Tucker's liabilities. The acquisition was structured as a tax-free transaction, and was accounted for using the purchase method of accounting. Accordingly, the purchase price was allocated to the assets purchased and the liabilities assumed based upon the fair values at the date of acquisition, and the results of operations of Tucker have been included in the Company's financial statements from March 15, 1996. In separate transactions during January 1997, the Company acquired three shopping centers located in Indiana, Iowa and Minnesota, aggregating 245,000 square feet for a total purchase price of approximately $16.2 million. On April 28, 1997, the Company completed the acquisition of an additional shopping center located in Iowa for approximately $4.6 million. On March 13, 1997, the Company completed the sale of Hood Commons located in Derry, New Hampshire for a net sales price of $11.3 million, resulting in a gain of approximately $3.1 million for financial reporting purposes. As a result of these acquisition and disposition activities, the Company currently owns 35 properties in 12 states, aggregating over 7.8 million square feet of rentable space. 6 7 NOTE 4 - SUPPLEMENTAL CASH FLOW DISCLOSURE In January 1997, a property was purchased for approximately $5.4 million which included the issuance of limited partnership units ("OP Units") in Bradley Operating Limited Partnership ("BOLP") which the holders may ultimately exchange for 281,300 shares of the Company's common stock. BOLP is a limited partnership of which the Company owns a 92.6% general partner interest. Also in January 1997, a property was purchased for approximately $4.8 million which included the Company's assumption of a $3.8 million non-recourse mortgage note. NOTE 5 - REAL ESTATE INVESTMENTS HELD FOR SALE As of March 31, 1997, the Company is holding for sale Augusta Plaza, 585 Boylston Street and Village Shopping Center. The net book value of these properties, $9.9 million, has been reclassified on the balance sheet from "Real estate investments" to "Real estate investments held for sale". The balance as of December 31, 1996, $10.3 million, included Hood Commons, which was sold in March 1997 (see Note 3), and excluded Village Shopping Center, which was placed for sale during March 1997. The properties held for sale are no longer depreciated for financial reporting purposes. 7 8 ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS During the first quarter of 1997, the Company acquired three shopping centers in separate transactions for a total purchase price of approximately $16.2 million, and sold one shopping center that had been held for sale for a net sales price of approximately $11.3 million. During the year ended December 31, 1996, the Company acquired sixteen properties, including fourteen properties in connection with the acquisition of Tucker, and sold its interest in a ground lease. Including operations for the newly acquired properties and the gains on sales of properties of $9.4 million in 1996 and $3.1 million in 1997, net income decreased $2.5 million. Excluding the gains on sales in both years, however, net income per share increased 69% from $0.16 per share to $0.27 per share. Per share amounts reflect weighted average shares outstanding of 21,665,593 during the first quarter of 1997 and 12,536,714 during the first quarter of 1996. The increased number of shares outstanding was due primarily to a 2,875,000 share public offering completed in November 1996 and the issuance of 7,428,157 shares in connection with the Tucker acquisition on March 15, 1996. In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("Statement No. 128") which supersedes APB Opinion No. 15, "Earnings Per Share." Statement No. 128 replaces the presentation of "primary EPS," which the Company has historically presented, with a presentation of "basic EPS," and replaces the presentation of "fully diluted EPS," which the Company has not been required to present due to the immaterial difference from primary EPS, with "diluted EPS." It also requires dual presentation of basic and diluted EPS on the face of the income statement and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation. Basic EPS, unlike primary EPS, excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock (e.g., stock options) were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Statement No. 128 is effective for financial statements for both interim and annual periods ending after December 15, 1997. Management does not expect implementation of Statement No. 128 to have a material effect on the financial statements of the Company because basic EPS is not expected to differ from the primary earnings per share as previously presented, and diluted EPS is not expected to be materially different from basic EPS. Acquisitions and Disposition Activities:
Acquisitions Date - -------------------------- ----------------- Tucker (14 properties) March 15, 1996 Brookdale Square March 26, 1996 Santa Fe Square December 27, 1996 Roseville Center January 1, 1997 Martin's Bittersweet Plaza January 1, 1997 Warren Plaza January 21, 1997
Dispositions Date - -------------------------- ----------------- Nicollet Avenue March 26, 1996 Hood Commons March 13, 1997
8 9 Property Specific Revenues And Expenses (in thousands of dollars):
Three months ended March 31, Acquisitions/ Properties Held 1997 1996 Difference Dispositions Both Years ---------------- ---------- ------------ --------------- Rental income $22,855 $11,219 $11,636 $11,477 $159 Operations, maintenance and management 3,333 2,085 1,248 1,559 (311) Real estate taxes 5,068 2,675 2,393 2,238 155 Depreciation and amortization 3,930 2,252 1,678 1,542 136
Results attributable to acquisition and disposition activities: Rental income increased from $11,219,000 in the first quarter of 1996 to $22,855,000 in the first quarter of 1997. Approximately $11,807,000 of the increase was attributable to the Company's acquisition activities, partially offset by $330,000 attributable to disposition activities. Operations, maintenance and management expense increased from $2,085,000 in the first quarter of 1996 to $3,333,000 in the first quarter of 1997. Approximately $1,559,000 of the increase was attributable to the Company's acquisition and disposition activities. Real estate taxes increased from $2,675,000 in the first quarter of 1996 to $5,068,000 in the first quarter of 1997. Approximately $2,238,000 of the increase was attributable to the Company's acquisition activities. Depreciation and amortization increased from $2,252,000 in the first quarter of 1996 to $3,930,000 in the first quarter of 1997. Approximately $1,661,000 of the increase was attributable to the Company's acquisition activities, partially offset by $119,000 attributable to disposition activities. Results for properties fully operating throughout both periods: The remaining increase in rental income of approximately $159,000 represented an increase of 2.0% over the first quarter of 1996. The positive variance was primarily due to an increase at Har Mar Mall resulting from successful leasing activity during the second half of 1996, where leases were signed for approximately 26,000 square feet, or 6% of the Center. A decrease in rental income at Grandview Plaza due to the vacancy of JC Penney in 1996 was offset by an increase at Rivercrest Center due to an increase in average occupancy during the first quarter of 1997 compared with the first quarter of 1996. The remaining decrease in operations, maintenance and management expense of $311,000, or 20% from the first quarter of 1996, was primarily attributable to cost savings resulting from the completion of the internalization of the property management function for the properties located in the Midwest. The remaining increase in real estate taxes of $155,000, or 7% over the first quarter of 1996, was primarily attributable to estimated increases in 1997 real estate taxes at most of the Company's properties located in Minnesota. The remaining increase in depreciation and amortization of $136,000 was primarily a result of new construction and leasing at White Bear Hills, Har Mar Mall and Burning Tree Plaza as well as new tenancies at various other locations. 9 10 Non-Property Specific Expenses: Mortgage and other interest expense increased to $3,650,000 for the quarter ended March 31, 1997 from $1,385,000 during the same period in the prior year. Debt assumed in the Tucker acquisition, consisting primarily of the $100 million REMIC mortgage note secured by six of the acquired Tucker properties, accounted for a majority of the increase in interest expense. Interest expense of approximately $1,808,000 and $304,000 (sixteen days) for the three month periods ended March 31, 1997, and 1996, respectively, related to the REMIC. A higher weighted average outstanding balance on the Company's line of credit resulted in an increase in interest expense of approximately $467,000 for the three month period ended March 31, 1997 compared with the same period in the prior year. Additionally, mortgage interest expense on the mortgage note assumed in the acquisition of Martin's Bittersweet Plaza in January 1997 contributed approximately $88,000 to the increase during the first quarter of 1997 compared with the first quarter of 1996. The Company's weighted average interest rate for the three months ended March 31, 1997 was approximately 7.67%. Administrative and general expense increased from $555,000 during the quarter ended March 31, 1996 to $1,105,000 during the quarter ended March 31, 1997. Although the acquisition of Tucker created substantial operating efficiencies, following the Tucker acquisition the Company reorganized its internal operations to function by disciplines rather than geography. The reorganization included the addition of executive management for leasing, asset management and acquisition activities, mostly during the second half of 1996. Primarily as a result of the Tucker acquisition and the internal reorganization, the Company has increased the number of employees, resulting in an increase in payroll costs. During the first quarter of 1996, the Company incurred a one-time charge of $344,000 consisting of deferred financing costs related to the Company's former bank line of credit and certain deferred acquisition costs related to acquisitions which the Company chose not to pursue due to the efforts required to finalize the Tucker transaction. LIQUIDITY AND CAPITAL RESOURCES General The Company funds operating expenses and distributions primarily from operating cash flows, although its bank line of credit may also be used for these purposes. The Company funds acquisitions and capital expenditures primarily from the line of credit and, to a lesser extent, operating cash flows, as well as through the issuance of securities. The Company may also acquire properties through the direct issuance of securities of the Company, or via Bradley Operating Limited Partnership ("BOLP"), through the issuance of limited partnership units in the Operating Partnership. Additionally, the Company may dispose of certain non-core properties, reinvesting the proceeds from such dispositions in properties with higher growth potential and that are more consistent with the Company's strategic focus. In addition, the Company may acquire partial interests in real estate assets through participation in joint venture transactions. The Company focuses its investment activities on community and neighborhood shopping centers primarily in the Midwestern United States anchored by regional and national grocery store chains. The Company will continue to seek acquisition opportunities of individual properties and property portfolios in both primary and secondary Midwest markets where management can utilize its extensive experience in shopping center renovation, expansion, re-leasing and re-merchandising to achieve long-term cash flow growth and favorable investment returns. As of March 31, 1997, financial liquidity was provided by approximately $3,196,000 in cash and cash equivalents and by the Company's unused balance on the line of credit of $94,700,000. In addition, the Company has an effective "universal shelf" registration statement under which the Company may issue up to $34,460,000 in debt or equity securities. 10 11 The Company expects to file further "universal shelf" registration statements which will give it flexibility to issue additional debt or equity securities from time to time when the Company determines that market conditions and the opportunity to utilize the proceeds from the issuance of such securities are favorable. Operating Activities Net cash flows provided by operating activities increased to $7,387,000 during the first quarter of 1997, from $5,753,000 during the same period in 1996. The increase is primarily due to the growth of the Company's portfolio, from 17 properties at January 1, 1996, to 34 properties at March 31, 1997. For the three months ended March 31, 1997, funds from operations ("FFO") increased $5,474,000 or 134% from $4,083,000 to $9,557,000. The Company generally considers FFO to be a relevant and meaningful supplemental measure of the performance of an equity REIT because it is predicated on a cash flow analysis, contrasted with net income, a measure predicated on generally accepted accounting principles which gives effect to non-cash items such as depreciation. FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT") and as followed by the Company, represents net income (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property, plus depreciation and amortization. In computing FFO, the Company does not add back to net income the amortization of costs incurred in connection with the Company's financing activities or depreciation of non-real estate assets. FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles and should not be considered as an alternative to cash flow as a measure of liquidity. Since the definition of FFO is a guideline, computation of FFO may vary from one REIT to another. FFO is not necessarily indicative of cash available to fund cash needs. Investing Activities Net cash flows from investing activities increased to a source of cash of $4,244,000 during the first quarter of 1997, from a net use of cash of $437,000 during the same period of 1996. During the first quarter of 1997, the Company acquired three shopping centers in separate transactions for a total purchase price of approximately $16.2 million, and sold one property that had been held for sale for a net sales price of approximately $11.3 million. Subsequent to quarter-end, the Company completed the acquisition of its second shopping center located in Iowa for approximately $4.6 million. Financing Activities Net cash flows provided by financing activities declined to a net use of cash of $15,897,000 during the first quarter of 1997 from a net use of cash of $2,625,000 during the same period in 1996. Distributions (treated as a reduction in cash flows from financing activities in the Company's financial statements) were $7,149,000 in the first quarter of 1997, and $3,706,000 in the first quarter of 1996. The three acquisitions completed during the first quarter of 1997 demonstrated the important benefits of a flexible capital structure in executing the Company's growth strategy. Warren Plaza, a 90,000 square foot shopping center located in Dubuque, Iowa, was acquired for cash with financing provided by the Company's unsecured bank line of credit. Martin's Bittersweet Plaza, an 80,000 square foot shopping center located in Mishawaka, Indiana, was acquired with cash provided by the Company's unsecured bank line of credit and the assumption of a $3,800,000 non-recourse mortgage note. Roseville Center, a 75,000 square foot shopping center located in Roseville, Minnesota, was the first property acquired utilizing the Company's newly formed UPREIT structure, issuing limited partnership 11 12 units in BOLP to the former owners of the Center which the holders may ultimately exchange for 281,300 shares of the Company's common stock. In March 1997, the Company completed the sale of Hood Commons located in Derry, New Hampshire, for a net sales price of $11.3 million. The net proceeds were used to pay-down the Company's unsecured bank line of credit. Although the spread between the yield generated by Hood Commons and the interest rate incurred on the line of credit is slightly dilutive to earnings in the near term, the Company believes the proceeds can be better invested in properties with higher growth potential and that are more in line with the Company's strategic markets. Almost half of the net proceeds were used to acquire Spring Village, a 92,000 square foot shopping center located in Davenport, Iowa. The remaining proceeds are expected to be reinvested during the remainder of 1997. Also in March 1997, the Company amended its $150 million unsecured revolving credit facility, extending the maturity date to March 15, 1999, and reducing the interest rate to the lower of the bank's base rate or 1.50% over LIBOR from the lower of the bank's base rate or 1.75% over LIBOR, effectively lowering the Company's cost of capital, a critical component of the Company's growth strategy. The amended line of credit agreement also provides more flexible covenants compared with the previous agreement. Capital Strategy The Tucker liabilities assumed included a $100,000,000 mortgage note secured by six properties. The note had been issued to an entity qualifying as a real estate mortgage investment conduit (REMIC) for federal income tax purposes. The REMIC Note has a fixed, 7.3% rate of interest, with an effective rate of 7.23%, matures in September 2000 and becomes prepayable, with a significant prepayment premium, in October 1997. Management's objective is to obtain an investment grade rating from one or more national rating agencies that will further increase the Company's financial flexibility by permitting it to issue fixed-rate unsecured debt on favorable terms. Management believes that the bank line of credit, as well as the current value of the Company's assets, provide the Company with the necessary flexibility to refinance the REMIC Note, as well as its other debt obligations when due, although there can be no assurance that refinancing terms at the time of maturity will be favorable. Management believes that the Company's recent growth has enhanced the Company's ability to raise further capital in the public markets and, as indicated above, the Company intends to position itself to take advantage of favorable opportunities by increasing the dollar amount of securities that it may issue pursuant to a "universal shelf" registration statement. While the public capital markets have generally been favorable for selected REITs during the past few years, there can be no assurance either that the public markets will remain receptive to providing new capital to REITs or that the terms upon which the Company may be able to raise funds will be attractive or favorable to the Company or to its share owners. At March 31, 1997, the Company was holding for sale its Augusta Plaza and 585 Boylston Street properties because such properties are not aligned with the Company's strategic market focus. The dispositions of these properties are expected to be completed during 1997. Additionally, during March 1997, the Company placed for sale Village Shopping Center, one of the properties acquired from Tucker, since such property is considered by management to be a non-core property where the proceeds from a sale could be better invested in a property or properties with higher growth potential. Proceeds received from a sale of any or all of these properties would provide additional liquidity to the Company and may be applied in whole or in part to tax-deferred "like-kind" exchange acquisitions of additional properties. 12 13 FORWARD LOOKING STATEMENTS Statements made or incorporated in this Form 10-Q include "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The Company's actual results could differ materially from those set forth in the forward-looking statements. Certain factors that might cause such a difference include those factors discussed in the section entitled "Risk Factors" under the discussion of the Company's business in Item 1 of the Company's Form 10-K for the year ended December 31, 1996. 13 14 PART II - OTHER INFORMATION Item 1. LEGAL PROCEEDINGS Not applicable Item 2. CHANGES IN SECURITIES Not applicable Item 3. DEFAULTS UPON SENIOR SECURITIES Not applicable Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable Item 5. OTHER INFORMATION Not applicable Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit No. Description ----------------- ---------------------------------------------- 3.1 Articles of Amendment and Restatement of Bradley Real Estate, Inc., incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K dated October 17, 1994. 3.2 Articles of Merger between Bradley Real Estate Trust and Bradley Real Estate, Inc., incorporated by reference to Exhibit 3.2 of the Company's Current Report on Form 8-K dated October 17, 1994. 3.3 Articles of Merger between Tucker Properties Corporation and Bradley Real Estate, Inc. incorporated by reference to Exhibit 3.3 of the Company's Annual Report on Form 10-K dated March 25, 1996. 3.4 By-laws of Bradley Real Estate, Inc., incorporated by reference to Exhibit 3.3 of the Company's Current Report on Form 8-K dated October 17, 1994. 10.2.1 First Amendment dated as of May 2, 1996 and Second Amendment dated as of March 28, 1997 to Revolving Credit Agreement by and among Bradley Real Estate, Inc., Bradley Operating Limited Partnership, The First National Bank of Boston and other banks. 27 Financial Data Schedule
(b) Reports on Form 8-K The Registrant did not file any Form 8-K reports with respect to events occurring the quarter. 14 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereto duly authorized. Date: May 13, 1997 Bradley Real Estate, Inc. Registrant By: /s/ Thomas P. D'Arcy ----------------------- Thomas P. D'Arcy President and CEO By: /s/ Irving E. Lingo, Jr. ---------------------------- Irving E. Lingo, Jr. Chief Financial Officer (Principal Accounting Officer) 15 EX-10.2.1 2 FIRST & SECOND AMEND. TO CREDIT AGREE. 1 EXHIBIT 10.2.1 -1- FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT -------------------------- This First Amendment to Revolving Credit Agreement (this "Amendment") is dated as of May 2, 1996 by and among Bradley Real Estate, Inc., a Maryland corporation and Bradley Operating Limited Partnership, a Delaware limited partnership (jointly and severally, with certain Subsidiaries that become parties hereto, the "Borrower"), The First National Bank of Boston, a national banking association ("FNBB"), Fleet National Bank ("Fleet"), Wells Fargo Realty Advisors Funding, Incorporated ("Wells"), Mellon Bank, N.A. ("Mellon"), Signet Bank ("Signet") and The First National Bank of Boston, as agent for itself and such other Banks (the "Agent"). WHEREAS, the Borrower, FNBB and the Agent entered into a Revolving Credit Agreement dated as of March 15, 1996 (the "Credit Agreement"); WHEREAS, all capitalized terms used herein and not otherwise defined shall have the same respective meanings herein as in the Credit Agreement; WHEREAS, pursuant to Assignments and Acceptances of even date herewith, FNBB has assigned portions of its Commitment Percentage, Commitment and the same portion of the Loans owing to it to Fleet, Wells, Mellon and Signet; and Fleet, Wells, Mellon and Signet have become "Banks" under the Credit Agreement; WHEREAS, the Borrower, the Banks and the Agent desire to amend the Credit Agreement in several respects; NOW, THEREFORE, the Borrower, the Banks and the Agent hereby agree as follows: Section 1. Amendments. The Credit Agreement is amended as follows: Section 1.1. The definitions of "Assets under Development", and "Interest Payment Date" set forth in Section 1.1 of the Credit Agreement, are hereby amended by deleting such definitions and substituting the following therefor: "Assets Under Development. As of any date of determination, the total book value (as determined by generally accepted accounting principles) of land (and any Buildings to the extent constructed thereon, but not including the value of any tenant improvements constructed thereon) wholly owned by the Borrower or its Subsidiaries which is currently under development. As used herein, "currently under development" shall mean that the Borrower or its Subsidiaries is actively pursuing construction of Buildings, and such construction is proceeding to completion without undue delay from permit denial, construction delays or otherwise. For the purposes hereof, a Real Estate Asset shall no longer be deemed to be an Asset Under Development when the Buildings(s) 2 -2- on such Real Estate Asset have attained 90% physical and rental occupancy for six consecutive months (totalling at least 180 days) provided that nothing contained herein shall prohibit the Borrower from otherwise characterizing such Real Estate Asset if the same may be otherwise characterized under this Agreement." "Interest Payment Date. As to any Loan, the last day of each calendar month." Section 1.2 The definition of "Applicable Margin" set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting the fourth sentence thereof in its entirety and substituting the following therefor: "In the event that the Borrower has then current ratings from S&P and Moody's and neither of such ratings is lower than BBB- and Baa3, respectively, then the Applicable Margin shall be the average of the margins applicable to each rating." Section 1.3 The definition of "Eligible Assignee" set forth in Section 1.1 of the Credit Agreement is hereby amended by inserting the following clause after the figure "$5,000,000,000" appearing in the third and seventh lines of such definition: ", and having a rating of not less than A2/P2 or its equivalent by S&P". Section 1.4 The definition of "Indebtedness" set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting the word "and" before clause (e) and by inserting the following clause at the end thereof: "; and (f) the total aggregate proportionate share of the Borrower or its Subsidiaries in any borrowed-money indebtedness of unconsolidated joint ventures or other unconsolidated affiliates". Section 1.5. The definition of "Maturity Date" set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting the word "and" before clause (c) and by inserting the following clause at the end thereof: "and (d) prior to the Original Maturity Date, the Borrower shall purchase interest rate protection arrangements for such additional year." Section 1.6 The definition of "Real Estate Assets" set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting the number "30" contained in the sixth line thereof and substituting the number of "40" therefor. Section 1.7 The definition of "Unencumbered Asset" set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting the word "and" before clause (d) and by inserting the following clause at the end thereof: 3 -3- "and (e) is not a non-core asset or mixed use asset as referred to in the Business Plan Summary acquired by the Borrower after May 2, 1996. Notwithstanding anything contained herein to the contrary, in no event shall the value of Unencumbered Assets attributable to Real Estate Assets which are ground leases exceed $25,000,000 in the aggregate." Section 1.8 Section 2A.3 of the Credit Agreement is hereby amended by inserting the word "honoring" before the word "such" appearing in the eleventh line thereof and by inserting the words "and the Banks" after the word "Borrower" appearing in the twenty-fourth line thereof. Section 1.9 Section 7.2 of the Credit Agreement is hereby amended by inserting the following sentence at the end of the first sentence thereof: "In the event that Thomas P. D'Arcy dies, is incapacitated, is dismissed or resigns as chief executive officer of Bradley Real Estate, Inc., Bradley Real Estate, Inc. shall appoint a successor reasonably acceptable to the Banks within one hundred twenty (120) days thereafter". Section 1.10 Section 7.4 of the Credit Agreement is hereby amended by inserting the following clause after clause (h) of such section: "(hh) within thirty (30) days after the end of each fiscal year of the Borrower, current title reports for each of the Unencumbered Assets;". Section 1.11 Section 7.15 of the Credit Agreement is hereby amended by deleting the following words from the first sentence thereof: "for a period of two (2) years from the Effective Date". Section 1.12 Section 7.16 of the Credit Agreement is hereby amended by deleting the word "and" before clause (viii) and by inserting the following clause at the end thereof: ", and (ix) a copy of the owner's title insurance policy issued to the Borrower or a Subsidiary with respect to such Real Estate Asset". Section 1.13 Section 8.1 of the Credit Agreement is hereby amended by deleting the word "and" before clause(v) and by inserting the following: "and (vi) Accounts payable of the Borrower and its Subsidiaries which exceed $40,000,000 in the aggregate at any one time". 4 -4- Section 1.14 Section 9.7(b) of the Credit Agreement is hereby amended by inserting the words "gross rents and cash reimbursements to the applicable landlord" after the word "pro-forma" appearing in the fourth line thereof. Section 1.15 Section 9.7 of the Credit Agreement is hereby amended by inserting the following clause after Section 9.7(b) contained therein: "(c) The Borrower shall not permit, and shall not permit any of its Subsidiaries to allow, the projected full cost budgets of all Assets Under Development (excluding the costs of any tenant improvements) to exceed $50,000,000 in the aggregate at any one time." Section 1.16 Section 14.5(b) of the Credit Agreement is hereby amended by deleting the second sentence thereof in its entirety. Section 1.17 Section 14.9 of the Credit Agreement is hereby amended by inserting the following clause at the end of the second sentence thereof: ", provided that Borrower shall be deemed to have approved any Bank which is a party to this Agreement as of May 2, 1996, as a successor Agent hereunder." Section 1.18 Section 18.1 of the Credit Agreement is hereby amended by inserting the words "(provided there is no continuing Event of Default)" after the word "Borrower" appearing in the seventh line thereof. Section 1.19 Section 18.1 of the Credit Agreement is hereby further amended by inserting the following sentence at the end thereof: "Notwithstanding anything contained herein to the contrary, FNBB shall at all times maintain a Commitment Percentage equal to the greater of (a) 20% or (b) the Commitment Percentage of the Bank with the largest Commitment." Section 1.20 Schedule 1 and Schedule 1.2 of the Credit Agreement are hereby deleted in their entirety and Schedule 1 and Schedule 1.2 attached hereto substituted thereof. Section 2. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, constitute a waiver of, or otherwise affect the rights and remedies of the Agent or the Banks under the Credit Agreement, nor alter, modify or amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which shall continue in full force and effect. This Amendment shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. As of the date 5 -5- hereof, any reference to the Credit Agreement in any Loan Document shall mean the Credit Agreement as amended by this Amendment. Section 3. The Borrower hereby confirms that the representations and warranties of the Borrower contained in the Credit Agreement were true and correct in all material respects when made and continue to be true and correct in all material respects on the date hereof. Section 4. This Amendment shall be deemed to be a contract made under seal and shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts without regard to choice of law principles. Section 5. FNBB, Fleet, Wells, Mellon and Signet shall hereafter be Banks under the Credit Agreement. 6 -6- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized. BRADLEY REAL ESTATE, INC. By: -------------------------------- Name: ------------------------------ Title: ----------------------------- BRADLEY OPERATING LIMITED PARTNERSHIP By: Bradley Real Estate, Inc., its general partner By: -------------------------------- Name: ------------------------------ Title: ----------------------------- THE FIRST NATIONAL BANK OF BOSTON, individually and as Agent By: -------------------------------- Howard N. Blackwell Director FLEET NATIONAL BANK By: -------------------------------- Name: ------------------------------ Title: ----------------------------- MELLON BANK, N.A. By: -------------------------------- Name: ------------------------------ Title: ----------------------------- 7 -7- SIGNET BANK By: -------------------------------- Name: ------------------------------ Title: ----------------------------- WELLS FARGO REALTY ADVISORS FUNDING, INCORPORATED, a Colorado corporation By: WELLS FARGO REAL ESTATE GROUP, INC., its agent By: -------------------------------- Name: E.F. Shay III Title: Vice President By: -------------------------------- Name: Kimberly R. Perrell Title: Assistant Secretary 8 SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT -------------------------- This Second Amendment to Revolving Credit Agreement (this "Amendment") is dated as of March __, 1997 by and among Bradley Real Estate, Inc., a Maryland corporation and Bradley Operating Limited Partnership, a Delaware limited partnership (jointly and severally, with certain Subsidiaries that become parties hereto, the "Borrower"), The First National Bank of Boston, Fleet National Bank, Wells Fargo Bank, National Association (successor in interest to Wells Fargo Realty Advisors Funding, Incorporated), Mellon Bank, N.A., Signet Bank (collectively, the "Banks"), and The First National Bank of Boston, as agent for itself and the other Banks (the "Agent"). WHEREAS, the Borrower, the Banks and the Agent are parties to a Revolving Credit Agreement dated as of March 15, 1996, as amended by the First Amendment to Revolving Credit Agreement dated as of May 2, 1996 (as so amended, the "Credit Agreement"); WHEREAS, all capitalized terms used herein and not otherwise defined shall have the same respective meanings herein as in the Credit Agreement; WHEREAS, the Borrower, the Banks and the Agent desire to amend the Credit Agreement in several respects; NOW, THEREFORE, the Borrower, the Banks and the Agent hereby agree as follows: Section 1. Amendments. Effective as of the Effective Date (as defined in Section 6 hereof), the Credit Agreement is amended as follows: Section 1.1. The definition of "Applicable Margin" set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting such definition in its entirety and substituting the following new definition in place thereof: "Applicable Margin. The applicable margin over the then Eurodollar Rate or LIBOR Rate, as applicable to the Loan(s) in question, as set forth below used in calculating the interest rate applicable to Eurodollar Rate Loans and LIBOR Rate Loans, which shall vary from time to time in accordance with the Borrower's long term unsecured debt ratings (or, if applicable, Borrower's Indicative Rating). The Applicable Margin to be used in calculating the interest rate applicable to Eurodollar Rate or LIBOR Rate Loans shall vary from time to time in accordance with the Borrower's then applicable (x) Moody's debt rating or (y) S&P's debt rating, as the case may be, and the Applicable Margins shall be adjusted effective on the next Business Day following any change in Borrower's Moody's debt rating or S&P's debt rating, as the case may be, for Loans arising thereafter. In the event that only one of Moody's or S&P has set Borrower's credit rating, then the Applicable Margin shall be based on such rating only. In the event that the Borrower has then current ratings from S&P and Moody's 9 -2- and neither of such ratings is lower than BBB- and Baa3, respectively, then the Applicable Margin shall be the average of the margins applicable to each rating. In the event that the Borrower has then current ratings from S&P and Moody's, and one or both of such ratings is lower than BBB- or Baa3, as applicable, then the Applicable Margin shall be based upon the lower of such ratings. The applicable debt ratings and the Applicable Margins are set forth in the following table:
================================================================================ APPLICABLE APPLICABLE MARGIN FOR MARGIN LIBOR RATE FOR EURODOLLAR S&P RATING MOODY'S RATING LOANS RATE LOANS - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- BBB+ OR HIGHER Baa1 OR HIGHER 1.125% 1.125% - -------------------------------------------------------------------------------- BBB Baa2 1.250% 1.250% - -------------------------------------------------------------------------------- BBB- Baa3 1.375% 1.375% - -------------------------------------------------------------------------------- LESS THAN BBB- LESS THAN Baa3 1.500% 1.500% - --------------------------------------------------------------------------------
If a rating agency downgrade or discontinuance results in an increase in the Applicable Margin for Eurodollar Rate Loans or the Applicable Margin for LIBOR Rate Loans and if such downgrade or discontinuance is reversed and the affected Applicable Margin is restored within ninety (90) days thereafter to the Applicable Margin in effect immediately prior to such downgrade or discontinuance, then, at Borrower's request, borrower shall receive a credit against interest next due the Banks equal to interest accrued from time to time during such period of downgrade or discontinuance on the Loans at the differential between such Applicable Margins. Until such time as the Borrower obtains long-term unsecured debt ratings (or Indicative Rating, as applicable) from either S&P or Moody's, the Applicable Margin for Eurodollar Rate Loans and LIBOR Rate Loans shall be 1.50%." Section 1.2 The definition of "Maturity Date" set forth in Section 1.1 of the Credit Agreement is hereby amended by deleting such definition in its entirety and substituting the following new definition in place thereof: "Maturity Date. March 15, 1999, or such other date on which the Loans shall become due and payable pursuant to the terms hereof; provided that the Borrower may, at its option, 10 -3- extend the Maturity Date from March 15, 1999 (the "Original Maturity Date") to March 15, 2000 if: (a) the Borrower submits a written request for such extension to the Agent at least ninety (90) days but not more than one hundred and eighty (180) days prior to the Original Maturity Date together with an extension fee equal to one-quarter of one percent (1/4%) of the Total Commitment, and (b) no Default or Event of Default exists as of the date of such request or as of the Original Maturity Date, as evidenced by a certificate from the principal financial or accounting officer of the Borrower delivered as part of the request and at least five (5) days prior to the Original Maturity Date, as the case may be; and provided further that so long as the Borrower has successfully extended the Maturity Date to March 15, 2000 and has not received written notice from the Agent at the direction of any Bank on or before June 15, 1999 that no further extensions of the Maturity Date will be permitted (it being agreed that if such written notice is given to the Borrower by the Agent on or before June 15, 1999, then the Maturity Date shall remain as March 15, 2000), the Borrower may, at its option, further extend the Maturity Date from March 15, 2000 (the "Extended Maturity Date") to March 15, 2001 if: (a) the Borrower submits a written request for such extension to the Agent at least ninety (90) days but not more than one hundred and eighty (180) days prior to the Extended Maturity Date together with an extension fee equal to one-quarter of one percent (1/4%) of the Total Commitment, and (b) no Default or Event of Default exists as of the date of such request or as of the Extended Maturity Date, as evidenced by a certificate from the principal financial or accounting officer of the Borrower delivered as part of the request and at least five (5) days prior to the Extended Maturity Date, as the case may be. There shall be no further extensions beyond any extension, if exercisable and if exercised as provided herein, to March 15, 2001." Section 1.3 Section 4.2 of the Credit Agreement is hereby amended by (a) deleting the percentage "60%" immediately after the words "more than" in clause (a) on the ninth line of such Section 4.2 and substituting the percentage "50%" in place thereof and (b) deleting the percentage "60%" immediately after the words "less than" in clause (b) on the fifteenth and sixteenth lines of such Section 4.2 and substituting the percentage "50%" in place thereof. Section 1.4 Section 8.1 of the Credit Agreement is hereby amended by deleting clause (i) thereof in its entirety and substituting the following new clause (i) in place thereof: "(i) Consolidated Unsecured Indebtedness (excluding the Obligations), if (A) such Indebtedness is incurred under a line of credit or revolving credit facility with a bank or other financial institution, or (B) such Indebtedness matures within five (5) years of the date such indebtedness is incurred, or (C) the covenants applicable to such Indebtedness, taken as a whole, are more restrictive on the Borrower than the covenants 11 -4- contained in this Agreement, until such time as the Borrower receives a long-term unsecured debt rating or Indicative Rating from either Moody's or S&P of not less than BBB- or Baa3, whichever is applicable;" Section 1.5 Section 8.7 of the Credit Agreement is hereby amended by deleting such Section in its entirety and substituting the following new Section 8.7 in place thereof: "Section 8.7. Distributions. So long as no Event of Default has occurred and is continuing, the Borrower and its Subsidiaries shall be permitted to make Distributions from time to time in amounts determined by Borrower, provided, however, that in no event shall Borrower make any Distribution if such Distribution, together with other Distributions made in such fiscal year, in the aggregate, would exceed 95% of Funds From Operations for such fiscal year. Notwithstanding the foregoing, the Borrower shall be permitted at any time to make those Distributions which are necessary to maintain its tax status as a real estate investment trust; provided, however, that any such Distributions permitted to be made during the continuance of an Event of Default shall in no way constitute a waiver of or forbearance of such Event of Default by the Banks, it being understood and agreed that the Banks shall continue to have all rights and remedies with respect to such Event of Default as are provided in the Agreement, the other Loan Documents and applicable law." Section 1.6 Section 9.1 of the Credit Agreement is hereby amended by deleting the percentage "50%" immediately after the words "to exceed" on the third line thereof and substituting the percentage "55%" in place thereof. Section 1.7 Section 9.4 of the Credit Agreement is hereby amended by deleting the number "1.75" immediately after the words "less than" on the third line thereof and substituting the number "1.67" in place thereof. Section 1.8 Section 9.6 of the Credit Agreement is hereby amended by deleting such Section 9.6 in its entirety and substituting the following new Section 9.6 in place thereof: "Section 9.6. UNENCUMBERED ASSET DEBT SERVICE COVERAGE. As at the end of any fiscal quarter or any other date of measurement, the Borrower shall not permit Consolidated Unencumbered Asset Cash Flow to be less than 1.50 times Consolidated Unsecured Debt Service Charges, based on the most recent two (2) fiscal quarter results annualized." 12 -5- Section 1.9. Section 7.15 of the Credit Agreement is hereby amended by deleting the words "$100,000,000 for a period of two (2) years from the Effective Date" immediately after the words "not less then" on the fifth line thereof and substituting the phrase "66.67% of the average of the amount outstanding during the prior twelve (12) month period during the term of this Agreement" in place thereof. Section 2. Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, constitute a waiver of, or otherwise affect the rights and remedies of the Agent or the Banks under the Credit Agreement, nor alter, modify or amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement, all of which shall continue in full force and effect. This Amendment shall apply and be effective only with respect to the provisions of the Credit Agreement specifically referred to herein. As of the date hereof, any reference to the Credit Agreement in any Loan Document shall mean the Credit Agreement as amended by this Amendment. Section 3. The Borrower hereby confirms that the representations and warranties of the Borrower contained in the Credit Agreement were true and correct in all material respects when made and continue to be true and correct in all material respects on the date hereof, with the same force and effect as if each of such representations and warranties had been made by the Borrower on the date hereof and in this Amendment. No Default or Event of Default exists on the date hereof. Section 4. This Amendment has been duly authorized, executed and delivered by the Borrower, the Agent and each of the Banks. The agreements and obligations of the Borrower contained herein and in the Credit Agreement as amended by this Amendment constitute the legal, valid and binding obligations of the Borrower, enforceable against it in accordance with the respective terms and provisions hereof and thereof, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors' rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought. Section 5. This Amendment shall be deemed to be a contract made under seal and shall be construed in accordance with and governed by the laws of the Commonwealth of Massachusetts without regard to choice of law principles. Section 6. This Amendment shall be effective (the "Effective Date") when the Agent receives; 13 -6- (a) a duly executed counterpart of this Amendment from each of the Banks and the Borrower; (b) a certificate of the Secretary of Bradley Real Estate, Inc. as to the lack of changes in the organizational documents of Bradley Real Estate, Inc. and Bradley Operating Limited Partnership since March 15, 1996; (c) evidence that all corporate action or other charter or organizational acts on the part of the Borrower necessary for the valid execution, delivery and performance by Borrower of this Amendment and the Credit Agreement as amended by this Amendment have been duly and effectively taken; (d) good standing certificates dated as of a recent date from the Borrower's jurisdiction of incorporation; and (e) a favorable opinion, in form and substance satisfactory to the Banks and the Agent, from Goodwin, Procter & Hoar with respect to this Amendment. Section 7. This Amendment may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument. In proving this Amendment it shall not be necessary to produce or account for more than one such counterpart signed by the party against whom enforcement is sought. [End of Text] In witness whereof, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized. BRADLEY REAL ESTATE, INC. By: ----------------------------------- Name: --------------------------------- Title: -------------------------------- BRADLEY OPERATING LIMITED PARTNERSHIP By: Bradley Real Estate, Inc., its general partner 14 -7- By: ----------------------------------- Name: --------------------------------- Title: -------------------------------- THE FIRST NATIONAL BANK OF BOSTON, individually and as Agent By: ----------------------------------- Howard N. Blackwell Director FLEET NATIONAL BANK By: ----------------------------------- Name: --------------------------------- Title: -------------------------------- MELLON BANK, N.A. By: ----------------------------------- Name: --------------------------------- Title: -------------------------------- SIGNET BANK By: ----------------------------------- Name: --------------------------------- Title: -------------------------------- WELLS FARGO BANK, NATIONAL ASSOCIATION By: ----------------------------------- Name: E.F. Shay III Title: Vice President EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1997 JAN-01-1997 MAR-31-1997 3,196 0 13,840 2,124 0 29,259 509,361 33,561 505,059 19,666 184,324 0 0 217 300,852 505,059 22,855 23,181 0 8,401 5,035 0 3,650 8,924 0 8,924 0 0 0 8,924 .41 .41
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