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As filed with the Securities and Exchange Commission on May 1, 1998
REGISTRATION STATEMENT NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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BRADLEY OPERATING LIMITED
PARTNERSHIP
(Exact name of Registrant as specified in its charter)
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DELAWARE 04-3306041
(State of incorporation) (I.R.S. Employer Identification Number)
40 SKOKIE BOULEVARD, SUITE 600
NORTHBROOK, ILLINOIS 60062-1626
(847) 272-9800
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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THOMAS P. D'ARCY
PRESIDENT AND CHIEF EXECUTIVE OFFICER
BRADLEY REAL ESTATE, INC.
40 SKOKIE BOULEVARD, SUITE 600
NORTHBROOK, ILLINOIS 60062
(847) 272-9800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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With a copy to:
WILLIAM B. KING, P.C.
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 this Registration Statement becomes effective.
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, as amended, check the following box. [X]
If this form is used 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 effective 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. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Securities Amount to be Proposed Maximum Proposed Maximum Amount of
Being Registered Registered(1) Offering Price Per Unit(2) Aggregate Offering Price Registration Fee(3)
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<S> <C> <C> <C> <C>
Debt Securities $400,000,000 N.A. $400,000,000 $88,500
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</TABLE>
(1) The amount to be registered consists of up to $400,000,000 of
non-convertible investment grade Debt Securities to be issued by Bradley
Operating Limited Partnership.
(2) The proposed maximum offering price per unit has been omitted pursuant to
Securities Act Release No. 6964. The registration fee has been calculated
in accordance with rule 457(o) under the Securities Act of 1933, as
amended, and reflects the offering price rather than the principal amount
of any Debt Securities issued at a discount.
(3) Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
amount of $100,000,000 of securities covered by the earlier Registration
Statement on Form S-3 (No. 333-36577) is being carried forward and the
corresponding registration fee of $34,483 was previously paid at the time
of filing.
The Prospectus contained in this Registration Statement relates to and
constitutes a Post-Effective Amendment to the Registration Statement on Form S-3
(No. 333-36577) of the Registrant, and it is intended to be the combined
prospectus referred to in Rule 429 under the Securities Act of 1933, as amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not been declared effective. These
securities may not be sold nor may offers to buy be accepted prior to the time
the registration statement becomes effective. This prospectus shall not
constitute an offer to sell nor the solicitation of an offer to buy nor shall
there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED _________________
$400,000,000
BRADLEY OPERATING LIMITED PARTNERSHIP
Debt Securities
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Bradley Operating Limited Partnership (the "Operating Partnership") is
the entity through which Bradley Real Estate, Inc. ("Bradley" or the "Company"),
a self-administered and self-managed real estate investment trust ("REIT"),
conducts substantially all of its business and owns substantially all of its
assets. Bradley, the country's oldest continuously qualified REIT, is the sole
general partner of and owns a substantial majority of the economic interests in
the equity of the Operating Partnership.
The Operating Partnership may offer from time to time in one or more
series unsecured, non-convertible investment grade debt securities (the "Debt
Securities" or the "Securities"). The aggregate public offering price of the
Debt Securities shall be up to $400,000,000 (or its equivalent in another
currency based on the exchange rate at the time of sale) in amounts, at prices
and on terms to be determined at the time of offering. The Debt Securities may
be offered separately or together, in separate series, in amounts, at prices and
on terms to be set forth in one or more supplements to this Prospectus (each a
"Prospectus Supplement").
The specific terms of the Securities for which this Prospectus is being
delivered will be set forth in this Prospectus and in the applicable Prospectus
Supplement and will include, where applicable, the specific title, aggregate
principal amount, ranking, currency, form (which may be registered or bearer, or
certificated or global), authorized denominations, maturity, rate (or manner of
calculation thereof) and time of payment of interest, terms for redemption at
the option of the Operating Partnership or repayment at the option of the
holder, terms for sinking fund payments, covenants and any initial public
offering price.
The applicable Prospectus Supplement will also contain information,
where appropriate, about material United States federal income tax
considerations relating to, and any listing on a securities exchange of, the
Securities covered by such Prospectus Supplement.
The Securities may be offered directly by the Operating Partnership,
through agents designated from time to time by the Operating Partnership or to
or through underwriters or dealers. If, any agents or underwriters are involved
in the sale of any of the Securities, their names, and any applicable purchase
price, fee, commission or discount arrangement between or among them, will be
set forth, or will be calculable from the information set forth, in an
accompanying Prospectus Supplement. See "Plan of Distribution." No Securities
may be sold without delivery of a Prospectus Supplement describing the method
and terms of the offering of such Securities.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The date of this Prospectus is ____________, 1998.
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AVAILABLE INFORMATION
No person has been authorized to give any information or to make any
representation not contained or incorporated by reference in this Prospectus or
the accompanying Prospectus Supplement and, if given or made, such information
or representation must not be relied upon as having been authorized by the
Operating Partnership, the Company or any underwriter, dealer or agent. Neither
the delivery of this Prospectus or the accompanying Prospectus Supplement nor
any sale made hereunder of thereunder shall, under any circumstances, create an
implication that the information contained herein or in the accompanying
Prospectus Supplement is correct as of any date subsequent to the date hereof or
thereof or that there has been no change in the affairs of the Operating
Partnership or the Company since the date hereof or hereof. Neither this
Prospectus nor the accompanying Prospectus Supplement constitutes an offer to
sell or a solicitation of an offer to buy Securities in any jurisdiction in
which such offer or solicitation is not authorized or in which the person making
such offer or solicitation is not qualified to do so or to any person to whom it
is unlawful to make such offer or solicitation.
The Operating Partnership and the Company are subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith file reports, proxy statements
and other information with the Securities and Exchange Commission (the "SEC" or
the "Commission"). Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at
the Commission's Regional Offices at 7 World Trade Center, 13th Floor, New York,
New York 10048, and Northwest Atrium Center, 500 W. Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials can be obtained upon written
request from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, at prescribed rates. The Commission
also maintains a Web site at http://www.sec.gov containing reports, proxy and
information statements and other information regarding registrants, including
the Company and the Operating Partnership, that file electronically with the
Commission. Information concerning the Company's common stock, which is listed
on the New York Stock Exchange (the "NYSE") under the symbol "BTR," can be
inspected and copied at the NYSE, 20 Broad Street, New York, New York 10005.
The Operating Partnership has filed with the Commission a Registration
Statement on Form S-3 (No. 333-_______) under the Securities Act of 1933, as
amended (the "Securities Act") with respect to the Debt Securities. This
Prospectus, which constitutes a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and regulations of the
Commission. The Registration Statement, including exhibits thereto, may be
inspected and copied at public reference facilities of the Commission described
above. Statements contained in this Prospectus or any Prospectus Supplement as
to the contents of any document referred to are not necessarily complete, and in
each instance reference is made to the copy of such document filed as an exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission pursuant to
the Exchange Act are incorporated in this Prospectus by reference: (A), with
respect to the Operating Partnership (Commission File No. 000-23065), the
Operating Partnership's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997; and (B), with respect to the Company (Commission File No.
001-10328), the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997.
All other documents filed with the Commission by the Operating
Partnership or the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Prospectus and prior to the
termination of the offering of all Securities are to be incorporated herein by
reference and shall be deemed to be a part hereof from the date of filing of
such documents. In addition, all documents filed with the Commission and the
Operating Partnership or the Company pursuant to the Exchange Act after the date
of the initial Registration Statement and prior to the effectiveness of the
Registration Statement shall be deemed to be incorporated by reference into this
Prospectus.
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Any statement contained herein or in a document incorporated or deemed
to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein (or in an applicable Prospectus Supplement) or in any
subsequently filed document that is incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed to constitute a part of this Prospectus or any Prospectus
Supplement, except as so modified or superseded.
The Operating Partnership will provide, without charge, to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
at the request of such person, a copy of any or all of the documents
incorporated herein by reference (other than exhibits thereto, unless such
exhibits are specifically incorporated by reference into such documents).
Written requests for such copies should be directed to Ms. Marianne Dunn, Senior
Vice President, Bradley Real Estate, Inc., Suite 600, 40 Skokie Boulevard,
Northbrook, Illinois 60062-1626, telephone (847) 272-9800.
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RISK FACTORS
General
As in every business, there are risk factors that affect the Operating
Partnership and its operations. Set forth below are some of the factors that
could cause the actual results of the Operating Partnership's operations or
plans to differ materially from expectations set forth elsewhere in this
Registration Statement.
Increases in Interest Rates May Adversely Affect Net Income and Cash
Available for Distribution; Management Could Cause the Operating Partnership to
Become Highly Leveraged Because Organizational Documents Contain No Limitation
on Debt
To the extent that the Operating Partnership is responsible for floating
rate debt (such as that incurred under its revolving line of credit) and to the
extent that its exposure to increases in interest rates is not eliminated
through interest rate protection or cap agreements, such increases will
adversely affect the Operating Partnership's net income and cash available for
distribution and may affect the amount of distributions it can make to the
holders of Units (as hereinafter defined), including the Company.
The Amended and Restated Articles of Incorporation of the Company (the
"Charter") and the Bylaws of the Company (the "Bylaws") and the Second Restated
Agreement of Limited Partnership of the Operating Partnership (the "Operating
Partnership Agreement") do not contain any limitation on the amount of
indebtedness the Company or the Operating Partnership may incur. Although
management attempts to maintain a balance between total outstanding indebtedness
and the value of the portfolio of the Operating Partnership, (i.e., a ratio of
debt and preferred stock to Real Estate Value of 50% or less, with "Real Estate
Value" defined as net operating income divided by 10.25%) there can be no
assurance that management will not alter this balance at any time. Accordingly,
the Operating Partnership could become more highly leveraged, resulting in an
increase in debt service that could adversely affect the Operating Partnership's
ability to make expected distributions to holders of limited partner units ("LP
Units") and in an increased risk of default on its obligations under any
outstanding indebtedness. Failure to pay its debt obligations when due could
also result in the Operating Partnership losing its interest in any properties
that secure indebtedness included within such obligations.
Adverse Effects on Creditworthiness of Debt Securities May Result From a
Highly Leveraged Transaction or Change in Control
Unless otherwise provided in a supplemental indenture, the indentures
under which Debt Securities will be issued do not contain any provisions that
would limit the ability of the Operating Partnership to incur indebtedness or
protect holders of Debt Securities against adverse effects on the
creditworthiness of the Debt Securities in the event of a highly leveraged
transaction or change in control (through the acquisition of securities, the
election of directors or otherwise) involving the Operating Partnership or the
Company. Accordingly, there can be no assurance that the Company or Operating
Partnership will not enter into such a transaction and thereby adversely affect
the Operating Partnership's ability to meet its obligations under the Debt
Securities.
Adverse Economic Trends in the Midwestern Region or the Retail Industry May
Adversely Affect the Operating Partnership's Cash Available for Distribution
Substantially all of the Operating Partnership's properties are located
in the Midwestern region of the United States and such properties consist
predominantly of community and neighborhood shopping centers. The Operating
Partnership'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 cash receipts and cash available for distribution and
thus
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affect the amount of distributions the Operating Partnership can make to the
holders of its outstanding Units, including the Company.
If a Significant Number of Tenants Were Unable to Meet Their Obligations to
the Operating Partnership, then Cash Available for Distribution Would Be
Adversely Affected; Tenants Which File for Bankruptcy Protection May Not Make
Rental Payments in a Timely Manner
Since substantially all of the Operating Partnership's income has been,
and will continue to be, derived from rental income from retail shopping
centers, the amount of cash receipts and cash available for distribution to the
holders of its Units, including the Company, would be adversely affected if a
significant number of tenants were unable to meet their obligations to the
Operating Partnership or if the Operating Partnership was 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 Operating
Partnership may experience delays and incur substantial costs in enforcing its
rights as landlord.
At any time, a tenant of the Operating Partnership'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 cash
receipts and cash available for distribution and thus affect the amount of
distributions the Operating Partnership can make to the holders of its Units,
including the Company. 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 Operating Partnership, the
Operating Partnership may experience delays in enforcing its right 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.
Risks of Reduced Rental Income and Cash Available for Distribution from
Vacancies and Lease Renewals
The Operating Partnership is continually faced with expiring tenant
leases at its properties. Some lease expirations provide the Operating
Partnership 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 Operating Partnership may be
subject to competitive and economic conditions over which it has no control.
Accordingly, there is no assurance that the effects of possible vacancies or
lease renewals at such properties may not reduce the rental income and cash
available for distribution below levels anticipated by the Operating
Partnership.
Potential Negative Effect of Sale of One North State Property
During the year ended December 31, 1997, more than 10% of the total
revenue of the Operating Partnership was derived from rents and expense
reimbursements from tenants of the One North State property, which is a "mixed
use" property located in downtown Chicago. The total rents 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.
The Operating Partnership has listed for sale One North State because
the property does not fit with the Operating Partnership's grocery-anchored
community shopping center focus and the Operating Partnership believes, given
the current strong investment sales market in downtown Chicago, that it is an
opportune time to sell this asset. The disposition of this property is expected
to be completed during 1998, although there can be no such assurance. The
Operating Partnership's operating results could be adversely affected if the
Operating Partnership is not able, promptly after such a sale, to redeploy the
sales proceeds into one or more other properties that produce net operating
income at a level comparable to that of One North State.
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Adverse Effect on the Business May Result if Operating Partnership Becomes
Liable for the Cost of Remediation on Any of its Properties; Risk that Operating
Partnership Would be Required to Take Further Actions at Commons of Chicago
Ridge
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
Operating Partnership's properties, including those acquired in the Tucker
Acquisition (as hereinafter defined), have been subjected to Phase I or similar
environmental audits (which involve inspection without soil sampling or ground
water 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 it believes would
have a material adverse effect on the Operating Partnership'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 management.
Phase II site assessments of the Commons of Chicago Ridge property
acquired from Tucker Properties Corporation ("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 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 landfill. A regular maintenance program was implemented by Tucker
and is being continued by the Operating Partnership 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 further 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 Operating Partnership 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 Operating Partnership.
In connection with the execution of the merger agreement relating to the
Tucker Acquisition, the Operating Partnership and certain individuals who had
previously provided a limited indemnity to Tucker for environmental liabilities
at Commons of Chicago Ridge (the "Individuals") agreed to indemnify the Company,
Operating Partnership and its 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 of action
regarding such substances, 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 Operating Partnership has agreed to keep the
Individuals reasonably informed of various activities relating to the property
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 can be no assurance that the Individuals will be in a
position to honor their indemnity obligations. Regardless of such
indemnification, based on the information currently available, management 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 Operating Partnership.
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Possible Adverse Consequences of Limitations on Insurance
The Operating Partnership carries comprehensive general liability
coverage and umbrella liability coverage on all of its properties with limits of
liability which the management deems adequate to insure against liability claims
and provide for cost of defense. Similarly, the Operating Partnership is insured
against the risk of direct physical damage in amounts that management estimates
to be adequate to reimburse the Operating Partnership 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 Operating
Partnership 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, management 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 it's
position.
Uncertainty of Meeting Acquisition Objectives; Acquired Properties May Not
Meet Management's Expectation
The Operating Partnership continually seeks prospective acquisitions of
additional shopping centers and portfolios of shopping centers which management
believes can be purchased at attractive initial yields and/or which demonstrate
the potential for revenue and cash flow growth through implementation of
renovation, expansion, re-tenanting and re-leasing programs similar to those
undertaken with respect to properties in the existing portfolio. There can be no
assurance that the Operating Partnership will effect any potential acquisition
that it may evaluate. The evaluation process involves costs which are
non-recoverable in the case of acquisitions which are not consummated. In
addition, notwithstanding management's adherence to its criteria for evaluating
and due diligence regarding potential acquisitions, there can be no assurance
that any acquisition that is consummated will meet management's expectations.
During the course of 1997, the Operating Partnership noticed a trend of
decreasing capitalization rates applicable to properties being acquired, i.e.,
increasing purchase prices for comparable properties, and this trend has
continued in 1998.
Development Activities May Not Meet Management's Expectations
To the extent that the Operating Partnership may enter into agreements
to acquire newly developed shopping centers when they are completed, or acquire
newly developed shopping centers, the Operating Partnership will be subject to
risks inherent in acquiring newly constructed centers, which could carry a
higher level of risk than the acquisition of existing properties with a proven
performance record. These risks include, among others, the risk that funds will
be expended and management time will be devoted to projects which may not come
to fruition; the risk that occupancy rates and rents at a completed project will
be less than anticipated; and the risk that expenses at a completed development
will be higher than anticipated. These risks may adversely affect the Company's
results of operations and ability to make distributions to its stockholders.
Competition in the Properties' Market Areas Could Adversely Affect Ability to
Rent Space, Amount of Rents Charged or Development and Acquisition Opportunities
All of the Operating Partnership's properties 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 Operating
Partnership for tenants and development and acquisition opportunities. The
number of competitive retail properties and real estate companies in such areas
could have a material effect on (i) the Operating Partnership's ability to rent
space at the properties and the amount of rents charged and (ii) development and
acquisition opportunities. The Operating Partnership competes for tenants and
acquisitions with others who have greater resources than it does.
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Risk from Reliance Upon the Company to Manage the Operating Partnership;
Adverse Consequences of the Company's Failure to Qualify as a REIT; Risk of
Adverse Tax Consequences to Holders of Units
Although the fact that substantially all of the assets of the Company
are represented by its interest in the Operating Partnership, the Operating
Partnership in general, and the holders of the LP Units in particular, must rely
upon the Company as general partner to manage the affairs and business of the
Operating Partnership. In addition to the risks described above that relate to
the Operating Partnership, the Company is subject to certain other risks that
may affect its financial and other condition, including particularly adverse
consequences if the Company fails to qualify as a REIT for federal income tax
purposes. The description of certain risk factors applicable to the Company
contained under the caption "Business--Risk Factors" in Item 1 of the Company's
10-K report for the year ended December 31, 1997 is hereby incorporated by
reference.
Among the powers that the Company has as general partner of the
Operating Partnership are the powers to determine whether and when to sell any
particular property or properties owned by the Operating Partnership, subject to
any specific agreements limiting the power of sale that the Operating
Partnership may have entered into with the contributor or contributors of any
specific properties at the time that such contributor or contributors
contributed their interest in the property to the Operating Partnership in
exchange for LP Units. After the expiration of any such limiting agreement on
the Company's authority as general partner to sell a property, the property may
be sold and such sale may result in the recognition of capital gains or other
tax consequences to the holder or holders of LP Units that were deferred at the
time of the original contribution of the properties to the Operating
Partnership.
Company's Control of the Operating Partnership May Allow the Company to Take
Actions Adverse to the Best Interests of the Limited Partners
The Operating Partnership Agreement gives the Company as general partner
broad control over the operations and business activities of the Operating
Partnership. In exercising its authority as general partner, the Company is
subject to the provisions of the Delaware Revised Uniform Limited Partnership
Act and to general fiduciary principles of fair dealing to the limited partners
as well as to any specific limitations or restrictions on its authority
contained in the Operating Partnership Agreement or in any individually
negotiated agreement with a particular limited partner.
Ability to Transfer General Partnership Interest in Sole Discretion of the
Company Could Result in a General Partner Not in the Best Interest of the
Limited Partners
Pursuant to the Operating Partnership Agreement, the Company, as general
partner, may, in its sole and absolute discretion, transfer its interest in the
Operating Partnership at any time. The Partnership Agreement does not provide
the LP Unit holders or the holders of any of the Debt Securities issued by the
Operating Partnership any voting or consent rights with respect to a transfer of
the general partnership interest. Accordingly, the Company could, without the
consent of the LP Unit holders, transfer its general partnership interest to
another entity which could use the broad powers of the general partner in a
manner not in the best interests of the LP Unit holders or in a manner which
would have an adverse effect on the business or financial condition of the
Operating Partnership. Although the Company has no present intention of
transferring its general partnership interest, there can be no assurance that it
will not do so at some point in the future.
Year 2000 Issues
In the conduct of its own operations, the Operating Partnership relies
upon commercial computer software primarily provided by independent software
vendors. After an analysis of the Operating Partnership's exposure of the impact
of "year 2000 issues" (i.e., issues that may arise resulting from computer
programs that use only the last two, rather than all four, digits of the year),
the Operating Partnership believes that such commercial software is
substantially year 2000 compliant and that such independent vendors will be able
to complete such year 2000 compliance in a timely manner and without any
material impact on the Operating Partnership's business, operations or financial
condition. However, the Operating Partnership is subject to year 2000 issues
that may affect the economy generally or any tenants, suppliers or others with
whom the Operating Partnership does business and over whose year 2000 compliance
the Operating Partnership has no control.
8
<PAGE> 10
Limits on Changes in Control in Organizational Documents May Discourage a
Third Party From Making an Acquisition Proposal
Certain provisions contained in the Company's Charter and 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 (as hereinafter defined)
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. With respect to clause (ii) in the
proceeding sentence, Maryland General Corporation Law ("MGCL") authorizes the
Directors of the Company to amend the Bylaws to increase the number of
outstanding shares of Common Stock required to call a special meeting from 25%
to a majority.
The 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
to time. The staggered Board provision and the provision in the Bylaws requiring
holders of at least 25% of the outstanding shares of Common Stock (as
hereinafter defined) to call a special meeting 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. In addition,
the Ownership limits in the Charter 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.
Maryland Business Combination Statute. Under the MGCL, certain "business
combinations" (including mergers, consolidations, share exchanges, certain asset
transfers and certain issuances of equity securities) between a Maryland
corporation and any persons who own 10% or more of the voting power of the
corporation's shares (an "Interested Stockholder") are prohibited for five years
after the most recent date on which the Interested Stockholder became an
Interested Stockholder. Thereafter, any such business combination must be
approved by the affirmative vote of at least 80% of the votes entitled to be
cast by holders of outstanding voting shares of the corporation other than
shares held by the Interested Stockholder with whom the business combination is
to be effected, unless, among other things, the holders of the corporation's
shares receive a minimum price (as defined in the MGCL) for their shares and the
consideration is received in cash or in the same form as previously paid by the
Interested Stockholder for the shares that it owns. However, these provisions of
Maryland law do not apply to "business combinations" with an Interested
Stockholder that are approved or exempted by the board of directors of the
corporation before that Interested Stockholder becomes an Interested
Stockholder.
Maryland Control Share Acquisition Statute. Maryland law provides that
"control shares" of a Maryland corporation acquired in a "control share
acquisition" have no voting rights except to the extent approved by a vote of
two-thirds of the votes eligible under the statute to be cast on that matter.
"Control Shares" are voting shares that, if aggregated with all other such
shares of stock previously acquired by the acquiror, would entitle the acquiror
to exercise voting power in electing directors within one of the following
ranges of voting power (i) one-fifth or more but less than one-third, (ii)
one-third or more but less than a majority, or (iii) a majority of all voting
power. Control Shares do not include shares the acquiring person is then
entitled to vote as a result of having previously obtained stockholder approval.
A "control share acquisition" means the acquisition of Control Shares, subject
to certain expenses.
If voting rights are not approved at a meeting or if the acquiring
person does not deliver an acquiring person statement as required by the
statute, then, subject to certain conditions and limitations, the corporation
may redeem any or all of the Control Shares (except those for which voting
rights have previously been approved) for fair value. If voting rights for
Control Shares are approved at a stockholder meeting and the acquiror becomes
entitled to vote a majority of the shares entitled to vote, all other
stockholders may exercise appraisal rights.
9
<PAGE> 11
THE OPERATING PARTNERSHIP
The Operating Partnership is the entity through which the Company, a
self-administered and self-managed REIT, conducts substantially all of its
business and owns (either directly or through subsidiaries) substantially all of
its assets. The Operating Partnership owns and operates primarily
grocery-anchored, open-air neighborhood and community shopping centers in the
Midwestern region of the United States and is engaged in the business of
acquiring, and actively managing and leasing such properties. As used herein,
the term "Bradley Real Estate, Inc." refers also to its predecessor Bradley Real
Estate Trust, and the term "Company" or "Bradley" as used herein refers to
Bradley Real Estate, Inc. and its subsidiaries on a consolidated basis
(including Bradley Operating Limited Partnership and its subsidiaries) or, where
the context so requires, Bradley Real Estate, Inc. only. The term "Operating
Partnership" as used herein means Bradley Operating Limited Partnership and its
subsidiaries on a consolidated basis, or, where the context so requires, Bradley
Operating Limited Partnership only.
The Company has elected to qualify as a REIT for federal income tax
purposes since its organization in 1961 and is the nation's oldest continually
qualified REIT. In March 1996, the Company completed the acquisition of Tucker
(the "Tucker Acquisition"). The Tucker acquisition was consummated through the
issuance by the Company of approximately 7.4 million shares of its common stock,
par value $.01 per share, ("Common Stock"), valued at $13.96 per share, and was
accounted for using the purchase method of accounting. Tucker held title to all
of its properties through two partnerships: eight properties through Tucker
Operating Limited Partnership ("TOP"), in which Tucker had a 95.9% general
partnership interest, and six properties through Tucker Financing Partnership
("TFP"), a general partnership of which TOP owned 99% and a wholly-owned Tucker
corporate subsidiary owned the remaining 1%. Upon the acquisition of Tucker, the
Company succeeded to Tucker's interest in TOP, TFP and the wholly-owned Tucker
corporate subsidiary, and the name "Bradley" was substituted for "Tucker" in
each subsidiary and partnership. In August 1997, the Company contributed to the
Operating Partnership its interests in the 18 properties that it had theretofore
held directly. The Operating Partnership therefore succeeds Bradley as the
entity through which the Company expects to expand its ownership and operation
of properties primarily located in the Midwestern region of the country.
The Company currently owns an approximately 94% economic interest in and
is the sole general partner of the Operating Partnership (this structure is
commonly referred to as an umbrella partnership REIT or "UPREIT"). The board of
directors of the Company manages the affairs of the Operating Partnership by
directing the affairs of the Company. Economic interests in the equity of the
Operating Partnership are evidenced by units of partnership interest ("Units")
with the interest of the general partner evidenced by general partner units ("GP
Units").
The limited partners of the Operating Partnership are persons who
received limited partner interests evidenced by LP Units in connection with
their contributions of direct or indirect interests in certain properties to the
Operating Partnership. The Operating Partnership is obligated to redeem each LP
Unit at the request of the holder thereof for cash equal to the fair market
value of a share of the Company's Common Stock at the time of such redemption,
provided that the Company, at its option, may elect to acquire any such LP Unit
presented for redemption for either one share of Common Stock or cash. The
Company presently anticipates that it will elect to issue Common Stock to
acquire LP Units for redemption, rather than paying cash. With each such
redemption, the Company's percentage ownership interest in the equity of the
Operating Partnership will increase. In addition, whenever the Company issues
Common Stock, the Company will contribute any net proceeds therefrom to the
Operating Partnership and the Operating Partnership will issue an equivalent
number of GP Units to the Company. The Operating Partnership has authority to
issue preferred units that may have distribution and other rights senior to the
rights of holders of Units, but the Operating Partnership may issue preferred
units to the Company only in exchange for the contribution by the Company to the
Operating Partnership of the net proceeds from the Company's issuance of an
equivalent number of shares of preferred stock that have equivalent seniority
rights over the rights of holders of shares of Common Stock of the Company.
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<PAGE> 12
The Operating Partnership may issue additional Units to purchase
additional properties or to purchase land parcels for the development of
properties in transactions that defer some or all of the seller's tax
consequences. The Operating Partnership believes that many potential sellers of
properties have a low tax basis in their properties and would be more willing to
sell the properties in transactions that defer the federal income tax
consequences of the sale. Offering Units representing an equity interest in the
Operating Partnership instead of cash for properties may provide potential
sellers with partial federal income tax deferral.
As part of its ongoing business, the Operating Partnership regularly
evaluates, and engages in discussions with public and private real estate
entities regarding possible portfolio or individual asset acquisitions or
business combinations. In evaluating potential acquisitions, the Operating
Partnership focuses principally on community and neighborhood shopping centers
in the states of Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota,
Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin that are
anchored by strong national, regional and independent grocery store chains. The
Operating Partnership favors grocery-anchored shopping centers because, based on
its experience and current research, such properties offer better prospects for
sustainable cash flow growth over time due to their strong and predictable daily
consumer traffic and are less susceptible to downturns in the general economy
than apparel or leisure anchored shopping center properties.
The Operating Partnership is a Delaware limited partnership, and its
general partner, the Company, is a Maryland corporation. The executive offices
of both the Operating Partnership and the Company are located at 40 Skokie
Boulevard, Suite 600, Northbrook, Illinois 60062-1626 and their telephone number
is (847) 272-9800.
Reference is made to the applicable Prospectus Supplement accompanying
this Prospectus for additional information concerning the Operating Partnership
as of the date of such Prospectus Supplement.
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<PAGE> 13
USE OF PROCEEDS
Unless otherwise described in the applicable Prospectus Supplement, the
Operating Partnership intends to use the net proceeds from the sale of Debt
Securities primarily to repay indebtedness of the Operating Partnership, which
may include indebtedness incurred in connection with the acquisition,
development or improvement of shopping centers, to acquire or develop additional
shopping centers and to fund expansions and/or improvements to such shopping
centers or to certain shopping centers already owned by the Operating
Partnership.
Pending their use as described above, the net proceeds from the sale of
any Debt Securities may be used for other general purposes of the Operating
Partnership or invested in short-term securities.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to
fixed charges of the Operating Partnership for the periods indicated:
YEAR ENDED DECEMBER 31,
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C>
2.84:1 2.79:1 2.63:1 2.95:1 2.82:1
</TABLE>
For purposes of computing these ratios, earnings have been calculated by
adding fixed charges (excluding capitalized interest) to income before income
taxes and extraordinary items. Fixed charges consist of interest costs, whether
expensed or capitalized, the interest component of rental expense, if any, and
amortization of debt discounts and issue costs, whether expensed or capitalized.
DESCRIPTION OF DEBT SECURITIES
GENERAL
The Debt Securities will be issued under one or more indentures, each
dated as of a date prior to the issuance of the Debt Securities to which it
relates and containing such terms as either the chief executive officer or the
chief financial officer of the general partner shall determine. All of the Debt
Securities issued hereby will be investment grade. Senior securities ("Senior
Securities") and subordinated securities ("Subordinated Securities") may be
issued pursuant to separate indentures (respectively, a "Senior Indenture" and a
"Subordinated Indenture"), in each case between the Operating Partnership and a
trustee (a "Trustee"), which may be the same Trustee, and in the form that has
been filed as an exhibit to the Registration Statement of which this Prospectus
is a part, subject to such amendments or supplements as may be adopted from time
to time. The Senior Indenture and the Subordinated Indenture, as amended or
supplemented from time to time, are sometimes hereinafter referred to
collectively as the "Indentures." The Indentures will be subject to and governed
by the Trust Indenture Act of 1939, as amended (the "TIA"). The statements made
under this heading and in the applicable Prospectus Supplement relating to the
Debt Securities and the Indentures are descriptions of the material provisions
thereof.
Capitalized terms used herein and not defined shall have the meanings
assigned to them in the applicable Indenture.
TERMS
The indebtedness represented by the Senior Securities will rank equally
with all other unsecured and unsubordinated indebtedness of the Operating
Partnership. The indebtedness represented by Subordinated Securities will be
subordinated in right of payment to the prior payment in full of the Senior Debt
of the Operating Partnership as described under "--Subordination." The material
terms of the Debt Securities offered by a Prospectus Supplement will be
described in the applicable Prospectus Supplement, along with any applicable
additions to the general terms of the Debt Securities as described herein and
any applicable federal income tax considerations. Accordingly, for a description
of the material terms of any series of Debt Securities, reference must be made
to both the Prospectus Supplement relating thereto and the description of the
Debt Securities set forth in this Prospectus.
Except as set forth in any Prospectus Supplement, the Debt Securities
may be issued without limit as to aggregate principal amount, in one or more
series, in each case as established from time to time by the Operating
Partnership or as set forth in the applicable Indenture or in one or more
indentures supplemental to
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<PAGE> 14
such Indenture. All Debt Securities of one series need not be issued at the same
time and, unless otherwise provided, a series may be reopened, without the
consent of the holders of the Debt Securities of such series, for issuance of
additional Debt Securities of such series.
Each Indenture will provide that the Operating Partnership may, but need
not, designate more than one Trustee thereunder, each with respect to one or
more series of Debt Securities. Any Trustee under an Indenture may resign or be
removed with respect to one or more series of Debt Securities and a successor
Trustee may be appointed to act with respect to such series. In the event that
two or more persons are acting as Trustee with respect to different series of
Debt Securities, each such Trustee shall be a Trustee of a trust under the
applicable Indenture separate and apart from the trust administered by any other
Trustee, and, except as otherwise indicated herein, any action described herein
to be taken by each Trustee may be taken by each such Trustee with respect to,
and only with respect to, the one or more series of Debt Securities for which it
is Trustee under the applicable Indenture.
The following summaries set forth certain general terms and provisions
of the Indentures and the Debt Securities. The Prospectus Supplement relating to
the series of Debt Securities being offered will contain further terms of such
Debt Securities, including the following specific terms:
(1) The title of such Debt Securities and whether such Debt
Securities are Senior Securities or Subordinated Securities;
(2) The aggregate principal amount of such Debt Securities
and any limit on such aggregate principal amount;
(3) The price (expressed as a percentage of the principal
amount thereof) at which such Debt Securities will be issued and, if
other than the principal amount thereof, the portion of the principal
amount thereof payable upon declaration of acceleration of the maturity
thereof;
(4) The date or dates, or the method for determining such
date or dates, on which the principal of such Debt Securities will be
payable;
(5) The rate or rates (which may be fixed or variable), or
the method by which such rate or rates shall be determined, at which
such Debt Securities will bear interest, if any;
(6) The date or dates, or the method for determining such
date or dates, from which any such interest will accrue, the dates on
which any such interest will be payable, the record dates for such
interest payment dates, or the method by which such dates shall be
determined, the persons to whom such interest shall be payable, and the
basis upon which interest shall be calculated if other than that of a
360-day year of twelve 30-day months;
(7) The place or places where the principal of (and premium,
if any) and interest, if any, on such Debt Securities will be payable,
where such Debt Securities may be surrendered for registration of
transfer or exchange and where notices or demands to or upon the
Operating Partnership in respect of such Debt Securities and the
applicable Indenture may be served;
(8) The period or periods, if any, within which, the price
or prices at which and the other terms and conditions upon which such
Debt Securities may, pursuant to any optional or mandatory redemption
provisions, be redeemed, as a whole or in part, at the option of the
Operating Partnership;
(9) The obligation, if any, of the Operating Partnership to
redeem, repay or purchase such Debt Securities pursuant to any sinking
fund or analogous provision or at the option of a holder thereof, and
the period or periods within which, the price or prices at which and the
other terms and conditions upon which such Debt Securities will be
redeemed, repaid or purchased, as a whole or in part, pursuant to such
obligation;
(10) If other than U.S. dollars, the currency or currencies
in which such Debt Securities are denominated and payable, which may be
a foreign currency or units of two or more foreign currencies or a
composite currency or currencies, and the terms and conditions relating
thereto;
(11) Whether the amount of payments of principal of (and
premium, if any) or interest, if any, on such Debt Securities may be
determined with reference to an index, formula or other method (which
index, formula or method may, but need not be, based on a currency,
currencies, currency unit or units, or composite currency or currencies)
and the manner in which such amounts shall be determined;
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<PAGE> 15
(12) Whether such Debt Securities will be issued in
certificated or book-entry form and, if in book entry form, the identity
of the depository for such Debt Securities;
(13) Whether such Debt Securities will be in registered or
bearer form and, if in registered form, the denominations thereof if
other than $ 1,000 and any integral multiple thereof and, if in bearer
form, the denominations thereof and terms and conditions relating
thereto;
(14) The applicability, if any, of the defeasance and
covenant defeasance provisions described herein or set forth in the
applicable Indenture, or any modification thereof,
(15) Whether and under what circumstances the Operating
Partnership will pay any additional amounts on such Debt Securities in
respect of any tax, assessment or governmental charge and, if so,
whether the Company will have the option to redeem such Debt Securities
in lieu of making such payment;
(16) Any additions to the events of default or covenants of
the Operating Partnership with respect to such Debt Securities, and any
additions to the right of any Trustee or any of the holders to declare
the principal amount of any of such Debt Securities due and payable;
(17) With respect to any Debt Securities that provide for
optional redemption or prepayment upon the occurrence of certain events
(such as a change of control of the Operating Partnership), (i) the
possible effects of such provisions on the market price of the Operating
Partnership's or the Company's securities or in deterring certain
mergers, tender offers or other takeover attempts, and the intention of
the Operating Partnership to comply with the requirements of Rule 14e-1
under the Exchange Act and any other applicable securities laws in
connection with such provisions; (ii) whether the occurrence of the
specified events may give rise to cross-defaults on other indebtedness
such that payment on such Debt Securities may be effectively
subordinated; and, (iii) the existence of any limitation on the
Operating Partnership's financial or legal ability to repurchase such
Debt Securities upon the occurrence of such an event (including, if
true, the lack of assurance that such a repurchase can be effected) and
the impact, if any, under the Indenture of such a failure, including
whether and under what circumstances such a failure may constitute an
Event of Default; and
(18) Any other terms of such Debt Securities not inconsistent
with the provisions of the applicable Indenture.
If so provided in the applicable Prospectus Supplement, the Debt
Securities may be issued at a discount below their principal amount and provide
for less than the entire principal amount thereof to be payable upon declaration
of acceleration of the maturity thereof ("Original Issue Discount Securities").
In such cases, any special U.S. federal income tax, accounting and other
considerations applicable to Original Issue Discount Securities will be
described in the applicable Prospectus Supplement.
Except as described under "--Merger, Consolidation or Sale of Assets" or
as may be set forth in any Prospectus Supplement, the Debt Securities will not
contain any provisions that would limit the ability of the Operating Partnership
to incur indebtedness or that would afford holders of Debt Securities protection
in the event of (i) a highly leveraged or similar transaction involving the
Operating Partnership, the management of the Operating Partnership or the
Company, or any affiliate of any such party; (ii) a change of control; or (iii)
a reorganization, restructuring, merger or similar transaction involving the
Operating Partnership that may adversely affect the holders of the Debt
Securities. In addition, subject to the limitations set forth under "--Merger,
Consolidation or Sale of Assets," the Operating Partnership may, in the future,
enter into certain transactions, such as the sale of all or substantially all of
its assets or the merger or consolidation of the Operating Partnership, that
would increase the amount of the Operating Partnership's indebtedness or
substantially reduce or eliminate the Operating Partnership's indebtedness or
substantially reduce or eliminate the Operating Partnership's assets, which may
have an adverse effect on the Operating Partnership's ability to service its
indebtedness, including the Debt Securities. Reference is made to the applicable
Prospectus Supplement for information with respect to any additions to the
events of default or covenants that are described below, including any addition
of a covenant or other provision providing event risk or similar protection.
Any Prospectus Supplement relating to a series of Debt Securities that
is subject to the optional redemption of such series of Debt Securities will
describe, to the extent applicable, the obligation of the Operating Partnership
to comply with the requirements of Rule 14(e)-l under the Exchange Act and any
other applicable securities laws.
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<PAGE> 16
DENOMINATION, INTEREST, REGISTRATION AND TRANSFER
Unless otherwise described in the applicable Prospectus Supplement, the
Debt Securities of any series will be issuable in denominations of $1,000 and
integral multiples thereof.
Subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series will be exchangeable for any
authorized denomination of other Debt Securities of the same series and of a
like aggregate principal amount and tenor upon surrender of such Debt Securities
at the corporate trust office of the applicable Trustee or at the office of any
transfer agent designated by the Operating Partnership for such purpose. In
addition, subject to certain limitations imposed upon Debt Securities issued in
book-entry form, the Debt Securities of any series may be surrendered for
registration of transfer or exchange thereof at the corporate trust office of
the applicable Trustee or at the office of any transfer agent designated by the
Operating Partnership for such purpose. Every Debt Security surrendered for
registration of transfer or exchange must be duly endorsed or accompanied by a
written instrument of transfer, and the person requesting such action must
provide evidence of title and identity satisfactory to the applicable Trustee or
transfer agent. No service charge will be made for any registration of transfer
or exchange of any Debt Securities, but the Trustee or the Operating Partnership
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. If the applicable Prospectus Supplement
refers to any transfer agent (in addition to the applicable Trustee) initially
designated by the Operating Partnership with respect to any series of Debt
Securities, the Operating Partnership may at any time rescind the designation of
any such transfer agent or approve a change in the location through which any
such transfer agent acts, except that the Operating Partnership will be required
to maintain a transfer agent in each place of payment for such series. The
Operating Partnership may at any time designate additional transfer agents with
respect to any series of Debt Securities.
Neither the Operating Partnership nor any Trustee shall be required (i)
to issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before the day of
mailing of a notice of redemption of any Debt Securities that may be selected
for redemption and ending at the close of business on the day of such mailing;
(ii) to register the transfer of or exchange any Debt Security, or portion
thereof, so selected for redemption, in whole or in part, except the unredeemed
portion of any Debt Security being redeemed in part; or (iii) to issue, register
the transfer of or exchange any Debt Security that has been surrendered for
repayment at the option of the holder, except the portion, if any, of such Debt
Security not to be so repaid.
MERGER, CONSOLIDATION OR SALE OF ASSETS
The Indentures will provide that the Operating Partnership may, without
the consent of the holders of any outstanding Debt Securities, consolidate with,
or sell, lease or convey all or substantially all of its assets to, or merge
with or into, any other entity provided that (i) either the Operating
Partnership shall be the continuing entity, or the successor entity (if other
than the Operating Partnership) formed by or resulting from any such
consolidation or merger or which shall have received the transfer of such
assets, shall expressly assume (A) the Operating Partnership's obligations to
pay principal of (and premium, if any) and interest on all of the Debt
Securities and (B) the due and punctual performance and observance of all of the
covenants and conditions contained in each Indenture; (ii) immediately after
giving effect to such transaction and treating any indebtedness that becomes an
obligation of the Operating Partnership or any subsidiary as a result thereof as
having been incurred by the Operating Partnership or such subsidiary at the time
of such transaction, no event of default under the Indentures, and no event
which, after notice or the lapse of time, or both, would become such an event of
default, shall have occurred and be continuing; and (iii) an officers'
certificate and legal opinion covering such conditions shall be delivered to
each Trustee.
CERTAIN COVENANTS
Existence. Except as permitted under "--Merger, Consolidation or Sale of
Assets," the Indentures will require the Operating Partnership to do or cause to
be done all things necessary to preserve and keep in full force and effect its
existence, rights and franchises; provided, however, that the Operating
Partnership shall not be required to preserve any right or franchise if it
determines that the preservation thereof is no longer desirable in the conduct
of its business.
Maintenance of Properties. The Indentures will require the Operating
Partnership to cause all of its material properties used or useful in the
conduct of its business or the business of any subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Operating Partnership may be necessary so that the business carried on in
connection
15
<PAGE> 17
therewith may be properly and advantageously conducted at all times; provided,
however, that the Operating Partnership and its subsidiaries shall not be
prevented from selling or otherwise disposing of their properties for value in
the ordinary course of business.
Insurance. The Indentures will require the Operating Partnership to
cause each of its and its subsidiaries' insurable properties to be insured
against loss or damage at least equal to their then full insurable value with
insurers of recognized responsibility and, if described in the applicable
Prospectus Supplement, having a specified rating from a recognized insurance
rating service.
Payment of Taxes and Other Claims. The Indentures will require the
Operating Partnership to pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all taxes, assessments and
governmental charges levied or imposed upon it or any subsidiary or upon the
income, profits or property of the Operating Partnership or any subsidiary; and
(ii) all lawful claims for labor, materials and supplies which, if unpaid, might
by law become a lien upon the property of the Operating Partnership or any
subsidiary; provided, however, that the Operating Partnership shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith.
Additional Covenants. Any additional covenants of the Operating
Partnership with respect to any series of Debt Securities will be set forth in
the Prospectus Supplement relating thereto.
EVENTS OF DEFAULT, NOTICE AND WAIVER
Unless otherwise provided in the applicable Prospectus Supplement, each
Indenture will provide that the following events are "Events of Default" with
respect to any series of Debt Securities issued thereunder: (i) default for 30
days in the payment of any installment of interest on any Debt Security of such
series; (ii) default in the payment of principal of (or premium, if any, on) any
Debt Security of such series at its maturity; (iii) default in making any
sinking fund payment as required for any Debt Security of such series; (iv)
default in the performance or breach of any other covenant or warranty of the
Operating Partnership contained in the Indenture (other than a covenant added to
the Indenture solely for the benefit of a series of Debt Securities issued
thereunder other than such series), continued for 60 days after written notice
as provided in the applicable Indenture; (v) default under any bond, debenture,
note or other evidence of indebtedness for money borrowed (except mortgage
indebtedness) by the Operating Partnership or any of its subsidiaries in an
aggregate principal amount in excess of $25,000,000 or under any indenture or
instrument under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed (except mortgage indebtedness) by
the Operating Partnership or any of its subsidiaries in an aggregate principal
amount in excess of $25,000,000, whether such indebtedness exists on the date of
such Indenture or shall thereafter be created, which default shall have resulted
in such indebtedness becoming or being declared due and payable prior to the
date on which it would otherwise have become due and payable or such obligations
being accelerated, without such acceleration having been rescinded or annulled;
(vi) certain events of bankruptcy, insolvency or reorganization, or court
appointment of a receiver, liquidator or trustee of the Operating Partnership or
any Significant Subsidiary of the Operating Partnership; and (vii) any other
event of default provided with respect to a particular series of Debt
Securities. The term "Significant Subsidiary" has the meaning ascribed to such
term in Regulation S-X promulgated under the Securities Act.
If an Event of Default under any Indenture with respect to Debt
Securities of any series at the time outstanding occurs and is continuing, then
in every such case the applicable Trustee or the holders of not less than 25% in
principal amount of the Debt Securities of that series will have the right to
declare the principal amount (or, if the Debt Securities of that series are
Original Issue Discount Securities or indexed securities, such portion of the
principal amount as may be specified in the terms thereof) of all the Debt
Securities of that series to be due and payable immediately by written notice
thereof to the Operating Partnership (and to the applicable Trustee if given by
the holders). However, at any time after such a declaration of acceleration with
respect to Debt Securities of such series (or of all Debt Securities then
outstanding under any Indenture, as the case may be) has been made, but before a
judgment or decree for payment of the money due has been obtained by the
applicable Trustee, the holders of not less than a majority in principal amount
of outstanding Debt Securities of such series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be) may rescind and
annul such declaration and its consequences if (i) the Operating Partnership
shall have deposited with the applicable Trustee all required payments of the
principal of (and premium, if any) and interest on the Debt Securities of such
series (or of all Debt Securities then outstanding under the applicable
Indenture, as the case may be), plus certain fees, expenses, disbursements and
advances of the applicable Trustee; and (ii) all events of default, other than
the non-payment of accelerated principal (or specified portion thereof), with
respect to Debt Securities of such series (or of all Debt Securities then
outstanding under the applicable Indenture, as the case may be) have been cured
or waived as provided in such Indenture. The
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Indentures will also provide that the holders of not less than a majority in
principal amount of the outstanding Debt Securities of any series (or of all
Debt Securities then outstanding under the applicable Indenture, as the case may
be) may waive any past default with respect to such series and its consequences,
except a default (i) in the payment of the principal of (or premium, if any) or
interest on any Debt Security of such series; or (ii) in respect of a covenant
or provision contained in the applicable Indenture that cannot be modified or
amended without the consent of the holder of each outstanding Debt Security
affected thereby.
The Indentures will require each Trustee to give notice to the holders
of Debt Securities within 90 days of a default under the applicable Indenture
unless such default shall have been cured or waived; provided, however, that
such Trustee may withhold notice to the holders of any series of Debt Securities
of any default with respect to such series (except a default in the payment of
the principal of (or premium, if any) or interest on any Debt Security of such
series or in the payment of any sinking fund installment in respect of any Debt
Security of such series) if specified responsible officers of such Trustee
consider such withholding to be in the interest of such holders.
The Indentures will provide that no holders of Debt Securities of any
series may institute any proceedings, judicial or otherwise, with respect to
such Indenture or for any remedy thereunder, except in the case of failure of
the applicable Trustee, for 60 days, to act after it has received a written
request to institute proceedings in respect of an Event of Default from the
holders of not less than 25% in principal amount of the outstanding Debt
Securities of such series, as well as an offer of indemnity reasonably
satisfactory to it. This provision will not prevent, however, any holder of Debt
Securities from instituting suit for the enforcement of payment of the principal
of (and premium, if any) and interest on such Debt Securities at the respective
due dates thereof.
The Indentures will provide that, subject to provisions in each
Indenture relating to its duties in case of default, a Trustee will be under no
obligation to exercise any of its rights or powers under an Indenture at the
request or direction of any holders of any series of Debt Securities then
outstanding under such Indenture, unless such holders shall have offered to the
Trustee thereunder reasonable security or indemnity. The holders of not less
than a majority in principal amount of the outstanding Debt Securities of any
series (or of all Debt Securities then outstanding under an Indenture, as the
case may be) shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the applicable Trustee, or
of exercising any trust or power conferred upon such Trustee. However, a Trustee
may refuse to follow any direction which is in conflict with any law or the
applicable Indenture, which may involve such Trustee in personal liability or
which may be unduly prejudicial to the holders of Debt Securities of such series
not joining therein.
Within 120 days after the close of each fiscal year, the Operating
Partnership will be required to deliver to each Trustee a certificate, signed by
one of several specified officers of the Operating Partnership, stating whether
such officer has knowledge of any default under the applicable Indenture and, if
so, specifying each such default and the nature and status thereof.
MODIFICATION OF THE INDENTURES
Except as set forth in the second following paragraph, modifications and
amendments of an Indenture will be permitted to be made only with the consent of
the holders of not less than a majority in principal amount of all outstanding
Debt Securities issued under such Indenture affected by such modification or
amendment; provided, however, that no such modification or amendment may,
without the consent of the holder of each such Debt Security affected thereby,
(i) change the stated maturity of the principal of, or any installment of
interest (or premium, if any) on, any such Debt Security; (ii) reduce the
principal amount of, or the rate or amount of interest on, or any premium
payable on redemption of, any such Debt Security, or reduce the amount of
principal of an Original Issue Discount Security that would be due and payable
upon declaration of acceleration of the maturity thereof or would be provable in
bankruptcy, or adversely affect any right of repayment of the holder of any such
Debt Security; (iii) change the place of payment, or the coin or currency, for
payment of principal of, premium, if any, or interest on any such Debt Security;
(iv) impair the right to institute suit for the enforcement of any payment on or
with respect to any such Debt Security; (v) reduce the above-stated percentage
of any outstanding Debt Securities necessary to modify or amend the applicable
Indenture with respect to such Debt Securities, to waive compliance with certain
provisions thereof or certain defaults and consequences thereunder or to reduce
the quorum or voting requirements set forth in the applicable Indenture; or (vi)
modify any of the foregoing provisions or any of the provisions relating to the
waiver of certain past defaults or certain covenants, except to increase the
required percentage to effect such action or to provide that certain other
provisions may not be modified or waived without the consent of the holder of
such Debt Security.
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The holders of a majority in aggregate principal amount of the
outstanding Debt Securities of each series may, on behalf of all holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Operating Partnership with certain restrictive covenants of
the applicable Indenture.
Modifications and amendments of an Indenture will be permitted to be
made by the Operating Partnership and the respective Trustee thereunder without
the consent of any holder of Debt Securities for any of the following purposes:
(i) to evidence the succession of another person to the Operating Partnership as
obligor under such Indenture; (ii) to add to the covenants of the Operating
Partnership for the benefit of the holders of all or any series of Debt
Securities or to surrender any right or power conferred upon the Operating
Partnership in such Indenture; (iii) to add events of default for the benefit of
the holders of all or any series of Debt Securities; (iv) to add or change any
provisions of an Indenture to facilitate the issuance of, or to liberalize
certain terms of, Debt Securities in bearer form, or to permit or facilitate the
issuance of Debt Securities in uncertificated form, provided that such action
shall not adversely affect the interests of the holders of the Debt Securities
of any series in any material respect; (v) to change or eliminate any provisions
of an Indenture, provided that any such change or elimination shall become
effective only when there are no Debt Securities outstanding of any series
created prior thereto which are entitled to the benefit of such provision; (vi)
to secure the Debt Securities; (vii) to establish the form or terms of Debt
Securities of any series; (viii) to provide for the acceptance of appointment by
a successor Trustee or facilitate the administration of the trusts under an
Indenture by more than one Trustee; (ix) to cure any ambiguity, defect or
inconsistency in an Indenture, provided that such action shall not adversely
affect the interests of holders of Debt Securities of any series issued under
such Indenture; or (x) to supplement any of the provisions of an Indenture to
the extent necessary to permit or facilitate defeasance and discharge of any
series of such Debt Securities, provided that such action shall not adversely
affect the interests of the holders of the outstanding Debt Securities of any
series.
The Indentures will provide that in determining whether the holders of
the requisite principal amount of outstanding Debt Securities of a series have
given any request, demand, authorization, direction, notice, consent or waiver
thereunder or whether a quorum is present at a meeting of holders of Debt
Securities, (i) the principal amount of an Original Issue Discount Security that
shall be deemed to be outstanding shall be the amount of the principal thereof
that would be due and payable as of the date of such determination upon
declaration of acceleration of the maturity thereof; (ii) the principal amount
of any Debt Security denominated in a foreign currency that shall be deemed
outstanding shall be the U.S. dollar equivalent, determined on the issue date
for such Debt Security, of the principal amount (or, in the case of an Original
Issue Discount Security, the U.S. dollar equivalent on the issue date of such
Debt Security of the amount determined as provided in (i) above); (iii) the
principal amount of an indexed security that shall be deemed outstanding shall
be the principal face amount of such indexed security at original issuance,
unless otherwise provided with respect to such indexed security pursuant to such
Indenture; and (iv) Debt Securities owned by the Operating Partnership or any
other obligor upon the Debt Securities, or any affiliate of the Operating
Partnership or of such other obligor shall be disregarded.
The Indentures will contain provisions for convening meetings of the
holders of Debt Securities of a series. A meeting will be permitted to be called
at any time by the applicable Trustee, and also, upon request, by the Operating
Partnership or the holders of at least 10% in principal amount of the
outstanding Debt Securities of such series, in any such case upon notice given
as provided in such Indenture. Except for any consent that must be given by the
holder of each Debt Security affected by certain modifications and amendments of
an Indenture, any resolution presented at a meeting or adjourned meeting duly
reconvened at which a quorum is present may be adopted by the affirmative vote
of the holders of a majority in principal amount of the outstanding Debt
Securities of that series; provided, however, that, except as referred to above,
any resolution with respect to any request, demand, authorization, direction,
notice, consent, waiver or other action that may be made, given or taken by the
holders of a specified percentage, which is less than a majority, in principal
amount of the outstanding Debt Securities of a series may be adopted at a
meeting or adjourned meeting duly reconvened at which a quorum is present by the
affirmative vote of the holders of such specified percentage in principal amount
of the outstanding Debt Securities of that series. Any resolution passed or
decision taken at any meeting of holders of Debt Securities of any series duly
held in accordance with an Indenture will be binding on all holders of Debt
Securities of that series. The quorum at any meeting called to adopt a
resolution, and at any reconvened meeting, will be persons holding or
representing a majority in principal amount of the outstanding Debt Securities
of a series; provided, however, that if any action is to be taken at such
meeting with respect to a consent or waiver which may be given by the holders of
not less than a specified percentage in principal amount of the outstanding Debt
Securities of a series, the persons holding or representing such specified
percentage in principal amount of the outstanding Debt Securities of such series
will constitute a quorum.
Notwithstanding the foregoing provisions, the Indentures will provide
that if any action is to be taken at a meeting of holders of Debt Securities of
any series with respect to any request, demand, authorization,
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direction, notice, consent, waiver and other action that such Indenture
expressly provides may be made, given or taken by the holders of a specified
percentage in principal amount of all outstanding Debt Securities affected
thereby, or of the holders of such series and one or more additional series: (i)
there shall be no minimum quorum requirement for such meeting; and (ii) the
principal amount of the outstanding Debt Securities of such series that vote in
favor of such request, demand, authorization, direction, notice, consent, waiver
or other action shall be taken into account in determining whether such request,
demand, authorization, direction, notice, consent, waiver or other action has
been made, given or taken under such Indenture.
SUBORDINATION
Unless otherwise provided in the applicable Prospectus Supplement,
Subordinated Securities will be subject to the following subordination
provisions.
Upon any distribution to creditors of the Operating Partnership in a
liquidation, dissolution or reorganization, the payment of the principal of and
interest on any Subordinated Securities will be subordinated to the extent
provided in the applicable Indenture in right of payment to the prior payment in
full of all Senior Debt (as defined below), but the obligation of the Operating
Partnership to make payments of the principal of and interest on such
Subordinated Securities will not otherwise be affected. No payment of principal
or interest will be permitted to be made on Subordinated Securities at any time
if a default on Senior Debt exists that permits the holders of such Senior Debt
to accelerate its maturity and the default is the subject of judicial
proceedings or the Operating Partnership receives notice of the default. After
all Senior Debt is paid in full and until the Subordinated Securities are paid
in full, holders will be subrogated to the rights of holders of Senior Debt to
the extent that distributions otherwise payable to holders have been applied to
the payment of Senior Debt. The Subordinated Indenture will not restrict the
amount of Senior Debt or other indebtedness of the Operating Partnership and its
subsidiaries. As a result of these subordination provisions, in the event of a
distribution of assets upon insolvency, holders of Subordinated Securities may
recover less, ratably, than general creditors of the Operating Partnership.
Senior Debt will be defined in the applicable Indenture as the principal
of and interest on, or substantially similar payments to be made by the
Operating Partnership in respect of, the following, whether outstanding at the
date of execution of the applicable Indenture or thereafter incurred, created or
assumed: (i) indebtedness of the Operating Partnership for money borrowed or
represented by purchase-money obligations; (ii) indebtedness of the Operating
Partnership evidenced by notes, debentures, or bonds, or other securities issued
under the provisions of an indenture, fiscal agency agreement or other
agreement; (iii) obligations of the Operating Partnership as lessee under leases
of property either made as part of any sale and leaseback transaction to which
the Operating Partnership is a party or otherwise; (iv) indebtedness,
obligations and liabilities of others in respect of which the Operating
Partnership is liable contingently or otherwise to pay or advance money or
property or as guarantor, endorser or otherwise or which the Operating
Partnership has agreed to purchase or otherwise acquire; and (v) any binding
commitment of the Operating Partnership to fund any real estate investment or to
fund any investment in any entity making such real estate investment, in each
case other than (A) any such indebtedness, obligation or liability referred to
in clauses (i) through (iv) above as to which, in the instrument creating or
evidencing the same pursuant to which the same is outstanding, it is provided
that such indebtedness, obligation or liability is not superior in right of
payment to the Subordinated Securities or ranks without preference to the
Subordinated Securities; (B) any such indebtedness, obligation or liability
which is subordinated to indebtedness of the Operating Partnership to
substantially the same extent as or to a greater extent than the Subordinated
Securities are subordinated; and (C) the Subordinated Securities. There will not
be any restrictions in any Indenture relating to Subordinated Securities upon
the creation of additional Senior Debt.
If this Prospectus is being delivered in connection with a series of
Subordinated Securities, the accompanying Prospectus Supplement or the
information incorporated herein by reference will set forth the approximate
amount of Senior Debt outstanding as of the end of the Operating Partnership's
most recent fiscal quarter.
DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE
The Operating Partnership will be permitted, at its option, to discharge
certain obligations to holders of any series of Debt Securities issued under any
Indenture that have not already been delivered to the applicable Trustee for
cancellation and that either have become due and payable or will become due and
payable within one year (or scheduled for redemption within one year) by
irrevocably depositing with the applicable Trustee, in trust, funds in such
currency or currencies, currency unit or units or composite currency or
currencies in which such Debt Securities are payable in an amount sufficient to
pay the entire indebtedness on such Debt
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Securities in respect of principal (and premium, if any) and interest to the
date of such deposit (if such Debt Securities have become due and payable) or to
the stated maturity or redemption date, as the case may be.
The Indentures will provide that, unless otherwise indicated in the
applicable Prospectus Supplement, the Operating Partnership may elect either (i)
to defease and be discharged from any and all obligations with respect to such
Debt Securities (except for the obligation to pay additional amounts, if any,
upon the occurrence of certain events of tax, assessment or governmental charge
with respect to payments on such Debt Securities and the obligations to register
the transfer or exchange of such Debt Securities, to replace temporary or
mutilated, destroyed, lost or stolen Debt Securities, to maintain an office or
agency in respect of such Debt Securities and to hold moneys for payment in
trust) ("defeasance"); or (ii) to be released from its obligations with respect
to such Debt Securities under the applicable Indenture (being the restrictions
described under "--Certain Covenants") or, if provided in the applicable
Prospectus Supplement, its obligations with respect to any other covenant, and
any omission to comply with such obligations shall not constitute an event of
default with respect to such Debt Securities ("covenant defeasance"), in either
case upon the irrevocable deposit by the Operating Partnership with the
applicable Trustee, in trust, of an amount, in such currency or currencies,
currency unit or units or composite currency or currencies in which such Debt
Securities are payable at stated maturity, or Government Obligations (as defined
below), or both, applicable to such Debt Securities, which through the scheduled
payment of principal and interest in accordance with their terms will provide
money in an amount sufficient to pay the principal of (and premium, if any) and
interest on such Debt Securities, and any mandatory sinking fund or analogous
payments thereon, on the scheduled due dates therefor.
Such a trust will only be permitted to be established if, among other
things, the Operating Partnership has delivered to the applicable Trustee an
opinion of counsel (as specified in the applicable Indenture) to the effect that
the holders of such Debt Securities will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such defeasance or covenant
defeasance and will be subject to U.S. federal income tax on the same amounts,
in the same manner and at the same times as would have been the case if such
defeasance or covenant defeasance had not occurred, and such opinion of counsel,
in the case of defeasance, will be required to refer to and be based upon a
ruling received from or published by the Internal Revenue Service or a change in
applicable U.S. federal income tax law occurring after the date of the
Indenture. In the event of such defeasance, the holders of such Debt Securities
would thereafter be able to look only to such trust fund for payment of
principal (and premium, if any) and interest.
"Government Obligations" means securities that are (i) direct
obligations of the United States of America or the government which issued the
foreign currency in which the Debt Securities of a particular series are
payable, for the payment of which its full faith and credit is pledged; or (ii)
obligations of a person controlled or supervised by and acting as an agency or
instrumentality of the United States of America or such government which issued
the foreign currency in which the Debt Securities of such series are payable,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America or such other government, which, in
either case, are not callable or redeemable at the option of the issuer thereof,
and shall also include a depository receipt issued by a bank or trust company as
custodian with respect to any such Government Obligation or a specific payment
of interest on or principal of any such Government Obligation held by such
custodian for the account of the holder of a depository receipt; provided,
however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the Government
Obligation or the specific payment of interest on or principal of the Government
Obligation evidenced by such depository receipt.
Unless otherwise provided in the applicable Prospectus Supplement, if
after the Operating Partnership has deposited funds and/or Government
Obligations to effect defeasance or covenant defeasance with respect to Debt
Securities of any series, (i) the holder of a Debt Security of such series is
entitled to, and does, elect pursuant to the applicable Indenture or the terms
of such Debt Security to receive payment in a currency, currency unit or
composite currency other than that in which such deposit has been made in
respect of such Debt Security; or (ii) a Conversion Event (as defined below)
occurs in respect of the currency, currency unit or composite currency in which
such deposit has been made, the indebtedness represented by such Debt Security
will be deemed to have been, and will be, fully discharged and satisfied through
the payment of the principal of (and premium, if any) and interest on such Debt
Security as they become due out of the proceeds yielded by converting the amount
so deposited in respect of such Debt Security into the currency, currency unit
or composite currency in which such Debt Security becomes payable as a result of
such election or such cessation of usage based on the applicable market exchange
rate. "Conversion Event" means the cessation of use of (i) a currency, currency
unit or composite currency both by the government of the country which issued
such currency and for the settlement of transactions by a central bank or other
public institutions of or within the international banking community; (ii) the
European Currency Unit ("ECU") both within the European Monetary System and for
the settlement of transactions by public institutions of or within the European
Communities; or
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(iii) any currency unit or composite currency other than the ECU for the
purposes for which it was established. Unless otherwise provided in the
applicable Prospectus Supplement, all payments of principal of (and premium, if
any) and interest on any Debt Security that is payable in a foreign currency
that ceases to be used by its government of issuance shall be made in U.S.
dollars.
In the event the Operating Partnership effects covenant defeasance with
respect to any Debt Securities and such Debt Securities are declared due and
payable because of the occurrence of any event of default other than the event
of default described in clause (iv) under "--Events of Default, Notice and
Waiver" with respect to specified sections of an Indenture (which sections would
no longer be applicable to such Debt Securities) or described in clause (vii)
under "--Events of Default, Notice and Waiver" with respect to any other
covenant as to which there has been covenant defeasance, the amount in such
currency, currency unit or composite currency in which such Debt Securities are
payable, and Government Obligations on deposit with the applicable Trustee, will
be sufficient to pay amounts due on such Debt Securities at the time of their
stated maturity but may not be sufficient to pay amounts due on such Debt
Securities at the time of the acceleration resulting from such Event of Default.
However, the Operating Partnership would remain liable to make payment of such
amounts due at the time of acceleration.
The applicable Prospectus Supplement may further describe the
provisions, if any, permitting such defeasance or covenant defeasance, including
any modifications to the provisions described above, with respect to the Debt
Securities of or within a particular series.
NO CONVERSION RIGHTS
The Debt Securities will not be convertible into or exchangeable for any
equity interest in the Operating Partnership or any capital stock or debt
securities of the Company.
PAYMENT
Unless otherwise specified in the applicable Prospectus Supplement, the
principal of (and applicable premium, if any) and interest on any series of Debt
Securities will be payable at the corporate trust office of the Trustee, the
address of which will be stated in the applicable Prospectus Supplement;
provided, however, that, at the option of the Operating Partnership, payment of
interest may be made by check mailed to the address of the person entitled
thereto as it appears in the applicable register for such Debt Securities or by
wire transfer of funds to such person at an account maintained within the United
States.
All moneys paid by the Operating Partnership to a paying agent or a
Trustee for the payment of the principal of or any premium or interest on any
Debt Security which remain unclaimed at the end of two years after such
principal premium or interest has become due and payable will be repaid to the
Operating Partnership, and the holder of such Debt Security thereafter may look
only to the Operating Partnership for payment thereof.
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities which evidence the aggregate amount of a
particular series of the debt (the "Global Securities") that will be deposited
with, or on behalf of, a depositary identified in the applicable Prospectus
Supplement relating to such series. Global Securities may be issued in either
registered or bearer form and in either temporary or permanent form. The
specific terms of the depositary arrangement with respect to a series of Debt
Securities will be described in the applicable Prospectus Supplement relating to
such series.
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PLAN OF DISTRIBUTION
The Operating Partnership may sell Debt Securities through underwriters
or dealers, directly to one or more purchasers, through agents or through a
combination of any such methods of sale.
The distribution of the Debt Securities may be effected from time to
time in one or more transactions, at a fixed price or prices, which may be
changed, at market prices prevailing at the time of sale or at prices related to
such prevailing market prices, or at negotiated prices.
In connection with the sale of Debt Securities, underwriters or agents
may receive compensation from the Operating Partnership or from purchasers of
Debt Securities, for whom they may act as agents, in the form of discounts,
concessions, or commissions. Underwriters may sell Debt Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions, or commissions from the underwriters and/or commissions from the
purchasers for whom they may act as agents. Underwriters, dealers, and agents
that participate in the distribution of Debt Securities may be deemed to be
underwriters under the Securities Act, and any discounts or commissions they
receive from the Operating Partnership, and any profit on the resale of Debt
Securities they realize may be deemed to be underwriting discounts and
commissions under the Securities Act. Any such underwriter or agent will be
identified, and any such compensation received from the Operating Partnership
will be described, in the applicable Prospectus Supplement.
Unless otherwise specified in the related Prospectus Supplement, each
series of Debt Securities will be a new issue with no established trading
market. The Operating Partnership may elect to list any series of Debt
Securities on an exchange, but is not obligated to do so. It is possible that
one or more underwriters may make a market in a series of Debt Securities, but
will not be obligated to do so and may discontinue any market making at any time
without notice. Therefore, no assurance can be given as to the liquidity of, or
the trading market for, Debt Securities.
Under agreements into which the Operating Partnership may enter,
underwriters, dealers and agents who participate in the distribution of Debt
Securities may be entitled to indemnification by the Operating Partnership
against certain liabilities, including liabilities under the Securities Act.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, or be customers of, the Operating Partnership or the
Company in the ordinary course of business.
If so indicated in the applicable Prospectus Supplement, the Operating
Partnership may itself, or may authorize underwriters or other persons acting as
the Operating Partnership's agents to solicit offers by certain institutions to
purchase Debt Securities from the Operating Partnership pursuant to contracts
providing for payment and delivery on a future date. Institutions with which
such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Operating Partnership. The obligations of any purchaser under any such
contract will be subject to the condition that the purchase of the Debt
Securities shall not at the time of delivery be prohibited under the laws of the
jurisdiction to which such purchaser is subject. The underwriters and such other
agents will not have any responsibility in respect of the validity or
performance of such contracts.
In order to comply with the securities laws of certain states, if
applicable, the Debt Securities offered hereby will be sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain states Debt Securities may not be sold unless they have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is complied
with.
LEGAL MATTERS
Certain legal matters, including the legality of the Debt Securities,
will be passed upon for the Operating Partnership by Goodwin, Procter & Hoar
LLP, Boston, Massachusetts. William B. King, whose professional corporation is a
partner in Goodwin, Procter & Hoar LLP, is Secretary of the Company (the general
partner of the Operating Partnership) and is the beneficial owner of
approximately 9,000 shares of Common Stock of the Company. In case of an
underwritten public offering, certain legal matters will be passed upon for the
underwriters by legal counsel named in the applicable Prospectus Supplement.
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EXPERTS
The consolidated financial statements and schedule of Bradley Operating
Limited Partnership as of December 31, 1997 and 1996, and for each of the years
in the three-year period ended December 31, 1997 contained in the Operating
Partnership's Annual Report on Form 10-K, and the consolidated financial
statements and schedule of Bradley Real Estate, Inc. as of December 31, 1997 and
1996, and for each of the years in the three-year period ended December 31, 1997
contained in the Company's Annual Report on Form 10-K, have been incorporated by
reference herein and in the registration statement in reliance upon the reports
of KPMG Peat Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing. To the extent that KPMG Peat Marwick LLP audits and
reports on financial statements of the Operating Partnership or the Company
issued at future dates, and consents to the use of their reports thereon, such
financial statements also will be incorporated by reference in the registration
statement in reliance upon their reports and said authority.
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NO PERSON HAS BEEN AUTHORIZED IN CONNECTION WITH THE OFFERING MADE HEREBY TO
GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED OR INCORPORATED
BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS
(COLLECTIVELY, THE "PROSPECTUS") AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
OPERATING PARTNERSHIP OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY TO ANY PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH 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
ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE
SUBSEQUENT TO THE DATE HEREOF.
---------------------------
TABLE OF CONTENTS
PAGE
----
Available Information...................................................... 2
Incorporation of Certain Documents by Reference............................ 2
Risk Factors............................................................... 4
The Operating Partnership.................................................. 10
Use of Proceeds............................................................ 12
Ratios of Earnings to Fixed Charges........................................ 12
Description of Debt Securities............................................. 12
Plan of Distribution....................................................... 22
Legal Matters.............................................................. 22
Experts.................................................................... 23
---------------------------
BRADLEY OPERATING
LIMITED PARTNERSHIP
$400,000,000
----------
PROSPECTUS
----------
---------------------------
,1998
================================================================================
<PAGE> 26
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an estimate of the approximate amount of the fees and
expenses (other than underwriting commissions and discounts) anticipated to be
paid by the Company in connection with the issuance and distribution of the
Securities.
<TABLE>
<S> <C>
SEC Registration fee......................................... $ 88,500
Legal fees and expenses...................................... 250,000
Accounting fees and expenses................................. 75,000
Printing fees and expenses................................... 50,000
Rating agency costs.......................................... 200,000
Indenture Trustee fees....................................... 35,000
Miscellaneous................................................ 26,500
--------
Total.............................................. $725,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Delaware Revised Uniform Limited Partnership Act provides that a
limited partnership has the power to indemnify and hold harmless any partner or
other person from and against any and all claims and demands whatsoever, subject
to such standards and restrictions, if any, as are set forth in its partnership
agreement.
The 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 limited partner 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 Operating
Partnership 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 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 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 charter of the
Company contains such a provision which eliminates such liability to the maximum
extent permitted by Maryland law.
The charter of the Company authorizes it, 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 it, to the maximum extent permitted by Maryland law, to
indemnify (a) any present or former director or officer of the Company, (b) 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 (c) any present or former Trustee or officer of the Trust.
The MGCL requires a corporation (unless its charter provides otherwise,
which the Company's 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
II-1
<PAGE> 27
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 (i) the act or omission of the director or officer was
material to the matter giving rise to the proceeding and (a) was committed in
bad faith or (b) was the result of active and deliberate dishonesty, (ii) the
director or officer actually received an improper personal benefit in money,
property or services or (iii) 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 corporation as a condition to advancing expenses, to obtain (x) a
written affirmation by the director or officer of his good faith belief that he
has met the standard of conduct necessary for indemnification by the corporation
as authorized by the bylaws and (y) 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.
The Company and the Operating Partnership have claims-made directors and
officers liability insurance policies that insure the directors and officers of
the Company including in its capacity as general partner of the Operating
Partnership against loss from claimed wrongful acts and insure the Company for
indemnifying the directors and officers against such loss. The policy limits of
liability are $10,000,000 each policy year and are subject to a retention of
$150,000 of loss by the Company.
ITEM 16. EXHIBITS.
EXHIBIT
NO. DESCRIPTION
- ------- -----------
** 1.1 - Form of Underwriting Agreement.
3.1 - Second Restated Agreement of Limited Partnership of Bradley
Operating Limited Partnership, dated as of September 2, 1997,
incorporated by reference to the Operating Partnership's
Registration Statement on Form 10.
3.2.1 - Articles of Amendment and Restatement of Bradley Real Estate,
Inc. (the "Company"), incorporated by reference to Exhibit 3.1
of the Company's Current Report on Form 8-K dated October 17,
1994.
3.2.2 - 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.
4.1 - Indenture for Senior Debt Securities (includes form of Senior
Security in Exhibit A) incorporated by reference to Exhibit 4.1
of the Operating Partnership's Registration Statement on Form
S-3, File No. 333-36577.
4.2 - Indenture for Subordinated Debt Securities - same as Exhibit
4.1, except as described in Exhibit 4.2, incorporated by
reference to Exhibit 4.2 of the Operating Partnership's
Registration Statement on Form S-3, File No. 333-36577.
*5.1 - Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
Debt Securities being registered.
*12.1 - Calculation of Ratios of Earnings to Fixed Charges.
*23.1 - Consent of KPMG Peat Marwick LLP.
23.2 - Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1)
24.1 - Power of Attorney (included in Part 11 of this registration
statement).
*25.1 - Form T-1 Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation Designated to Act
as Trustee for Bradley Operating Limited Partnership.
- ----------
* Filed herewith.
** To be filed by amendment or incorporated by reference from subsequent
filings.
II-2
<PAGE> 28
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, 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, as amended (the
"Securities Act");
(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 the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered)
and any deviation from the low or high and of the estimated
maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table
in the effective registration statement; and
(iii) to include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act, 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, and
(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 undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Exchange
Act that is incorporated by reference in the 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) The undersigned registrant hereby undertakes: (1) to use its
best efforts to distribute prior to the opening of bids, to prospective bidders,
underwriters, and dealers, a reasonable number of copies of a prospectus which
at that time meets the requirements of Section 10(a) of the Act, and relating to
the securities offered at competitive bidding, as contained in the registration
statement, together with any supplements thereto, and (2) to file an amendment
to the registration statement reflecting the results of bidding, the terms of
the reoffering and related maters to the extent required by the applicable form,
not later than the first use, authorized by the issuer after the opening of
bids, of a prospectus relating to the securities offered at competitive bidding,
unless no further public offering of such securities by the issuer and no
reoffering of such securities by the purchasers is proposed to be made.
(d) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission (the "Commission") such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer, or controlling person of the registrant 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 registrant 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 Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 29
(e) The undersigned registrant hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Act.
II-4
<PAGE> 30
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Northbrook, State of Illinois on May 1, 1998.
BRADLEY OPERATING LIMITED PARTNERSHIP
By: Bradley Real Estate, Inc.
Its:General Partner
By: /s/ Thomas P. D'Arcy
--------------------------------------
Thomas P. D'Arcy
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated, each of whom also constitutes and
appoints Thomas P. D'Arcy and Irving E. Lingo, Jr., and each of them singly, his
true and lawful attorney-in-fact and agent, for him, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and a further registration statement filed conforming to Rule 462(b)
under the Act relating to securities of the same class(es) registered under this
Registration Statement and to file the same and all exhibits thereto and any
other documents in connection therewith with the Securities and Exchange
Commission, granting unto each attorney-in-fact and agent full power and
authority to do and perform each and every act and thing requisite and necessary
to be done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that each attorney-in-fact and agent
or his substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Name Title Date
---- ----- ----
/s/ Thomas P. D'Arcy President, Chief Executive May 1, 1998
- ------------------------------ Officer and Director
THOMAS P. D'ARCY
/s/ Irving E. Lingo, Jr. Senior Vice President and May 1, 1998
- ------------------------------ Chief Financial Officer
IRVING E. LINGO, JR.
/s/ David M. Garfinkle Controller May 1, 1998
- ------------------------------
DAVID M. GARFINKLE
/s/ Joseph E. Hakim Director, Chairman of May 1, 1998
- ------------------------------ the Board
JOSEPH E. HAKIM
/s/ William L. Brown Director May 1, 1998
- ------------------------------
WILLIAM L. BROWN
/s/ Stephen G. Kasnet Director May 1, 1998
- ------------------------------
STEPHEN G. KASNET
/s/ Paul G. Kirk, Jr. Director May 1, 1998
- ------------------------------
PAUL G. KIRK, JR.
/s/ W. Nicholas Thorndike Director May 1, 1998
- ------------------------------
W. NICHOLAS THORNDIKE
/s/ A. Robert Towbin Director May 1, 1998
- ------------------------------
A. ROBERT TOWBIN
II-5
<PAGE> 31
EXHIBIT
NO. DESCRIPTION PAGE
- ------- ----------- ----
** 1.1 - Form of Underwriting Agreement.
3.1 - Second Restated Agreement of Limited Partnership of Bradley
Operating Limited Partnership, dated as of September 2, 1997,
incorporated by reference to the Operating Partnership's
Registration Statement on Form 10.
3.2.1 - Articles of Amendment and Restatement of Bradley Real Estate, Inc.
(the "Company"), incorporated by reference to Exhibit 3.1 of the
Company's Current Report on Form 8-K dated October 17, 1994.
3.2.2 - Articles of Merger between Tucker Properties Corporation and the
Company incorporated by reference to Exhibit 3.3 of the Company's
Annual Report on Form 10-K dated March 25, 1996.
4.1 - Indenture for Senior Debt Securities (includes form of Senior
Security in Exhibit A), incorporated by reference to Exhibit 4.1
of the Operating Partnership's Registration Statement on Form S-3,
File No. 333-36577.
4.2 - Indenture for Subordinated Debt Securities - same as Exhibit 4.1,
except as described in Exhibit 4.2, incorporated by reference to
Exhibit 4.2 of the Operating Partnership's Registration Statement
on Form S-3, File No. 333-36577.
*5.1 - Opinion of Goodwin, Procter & Hoar LLP as to the legality of the
Debt Securities being registered.
*12.1 - Calculation of Ratios of Earnings to Fixed Charges.
* 23.1 - Consent of KPMG Peat Marwick LLP.
23.2 - Consent of Goodwin, Procter & Hoar LLP (included in Exhibit 5.1)
24.1 - Power of Attorney (included in Part 11 of this registration
statement).
*25.1 - Form T-1 Statement of Eligibility and Qualification Under the
Trust Indenture Act of 1939 of a Corporation Designated to Act as
Trustee for Bradley Operating Limited Partnership.
- ----------
* Filed herewith.
** To be filed by amendment or incorporated by reference from subsequent
filings.
II-6
<PAGE> 1
Exhibit 5.1
[LETTERHEAD OF GOODWIN, PROCTER & HOAR LLP]
May 1, 1998
Bradley Real Estate, Inc., General Partner
Bradley Operating Limited Partnership
40 Skokie Boulevard, Suite 600
Northbrook, IL 60062
Re: Bradley Operating Limited Partnership -
Issuance of up to $400,000,000 of Debt Securities
Ladies and Gentlemen:
This opinion is rendered as counsel to Bradley Operating Limited
Partnership, a Delaware limited partnership (the "Partnership"), of which
Bradley Real Estate, Inc. is sole general partner (the "General Partner"), in
connection with the Partnership's proposed registration under the Securities Act
of 1933, as amended, on Form S-3 (the "Registration Statement") of up to
$400,000,000 aggregate amount of unsecured non-convertible investment grade debt
securities of the Partnership ("Debt Securities"), which may be either Senior
Debt Securities or Subordinated Debt Securities, in such amounts and having such
maturities, interest rates and other terms as may be specified in one or more
further votes of the Board of Directors of the General Partner.
We have examined the Second Restated Agreement of Limited Partnership
of the Partnership, the Charter and Bylaws (each as amended to date) of the
General Partner, such proceedings of the General Partner, in its capacity as
general partner of the Partnership, as we deem relevant for the purposes of this
opinion, and the text of the proposed Registration Statement, including the
forms of Debt Securities and Underwriting Agreement included as exhibits
thereto.
With respect to the opinion rendered below, we assume that prior to the
issuance of any specific Debt Securities, the following further actions
(collectively, the "Further Actions") will have occurred: the Board of Directors
of the General Partner will have authorized the issuance of a specific amount of
Senior Debt Securities or Subordinated Debt Securities having such maturities,
interest rates and other terms as may be specified in one or more further
resolutions
<PAGE> 2
Bradley Real Estate, Inc., General Partner
Bradley Operating Limited Partnership
May 1, 1998
Page 2
of the Board of Directors and described in one or more supplemental prospectuses
to the prospectus that is to be a part of the Registration Statement; the
Partnership will have entered into one or more Indentures and/or Supplemental
Indentures relating to the specific Debt Securities with such bank trustee or
trustees and containing such terms as either the chief executive officer or the
chief financial officer of the General Partner shall determine; and that the
Partnership shall have entered into one or more underwriting agreement or agency
agreement or sale agreement (each, a "Sales Agreement") providing for the sale
of such Debt Securities on terms approved by the Board of Directors of the
General Partner.
Based upon the foregoing, we are of the opinion that upon the happening
of the Further Actions and the issuance and delivery of the Debt Securities that
are the subject of such Further Actions upon receipt by the Partnership of the
consideration described in the applicable Sales Agreement, such Debt Securities
will be legally issued and binding obligations of the Partnership.
The capitalized terms not defined herein shall have the meanings set
forth in the Registration Statement.
We consent to our firm being named under the caption "Legal Matters" in
the Registration Statement and to this opinion being filed as an exhibit
thereto.
Very truly yours,
/s/ Goodwin, Procter & Hoar LLP
--------------------------------
GOODWIN, PROCTER & HOAR LLP
<PAGE> 1
Exhibit 12.1
BRADLEY OPERATING LIMITED PARTNERSHIP
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995 1994 1993 1992
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Earnings, as defined..... $48,691,000 $42,153,000 $14,060,000 $14,025,000 $9,051,000 $4,667,000
----------- ----------- ----------- ----------- ---------- ----------
Fixed charges:
Interest expense.......... 16,562,000 13,404,000 4,705,000 4,524,000 2,947,000 3,596,000
Interest capitalized
during the period...... 30,000 150,000 137,000 89,000 58,000 178,000
Amortization of
deferred debt
issuance costs......... 670,000 715,000 494,000 408,000 185,000 99,000
----------- ----------- ----------- ----------- ---------- ----------
17,262,000 14,269,000 5,336,000 5,021,000 3,190,000 3,873,000
Ratio of earnings to
fixed charges.......... 2.82:1 2.95:1 2.63:1 2.79:1 2.84:1 1:21:1
=========== =========== =========== =========== ========== ==========
</TABLE>
<PAGE> 1
Exhibit 23.1
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors of Bradley Real Estate, Inc.:
We consent to the use of our report dated January 28, 1998, relating to the
consolidated balance sheets of Bradley Operating Limited Partnership and
subsidiaries as of December 31, 1997 and 1996, and the related consolidated
statements of income, changes in capital and cash flows for each of the years in
the three-year period ended December 31, 1997 and related schedule, which
report appears in the December 31, 1997, annual report on Form 10-K of Bradley
Operating Limited Partnership, our report dated January 28, 1998, relating to
the consolidated balance sheets of Bradley Real Estate, Inc. and subsidiaries
as of December 31, 1997 and 1996, and the related consolidated statements of
income, changes in share owners' equity and cash flows for each of the years in
the three-year period ended December 31, 1997 and related schedule, which
report appears in the December 31, 1997, annual report on Form 10-K of Bradley
Real Estate, Inc. incorporated herein by reference and to the reference to our
firm under the heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
Chicago, Illinois
May 1, 1998
<PAGE> 1
Exhibit 25.1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
-----------------------
LASALLE NATIONAL BANK
(Exact name of trustee as specified in its charter)
36-0884183
(I.R.S. Employer
Identification No.)
135 South LaSalle Street, Chicago, Illinois 60603
(Address of principal executive offices) (Zip Code)
-----------------------
M. ROBERT K. QUINN
Senior Vice President and General Counsel
Telephone: (312) 904-2010
135 South LaSalle Street
Chicago, Illinois 60603
(Name, address and telephone number of agent for service)
-----------------------
Bradley Operating Limited Partnership
(Exact name of obligor as specified in its charter)
Delaware 04-3306041
(State or other jurisdiction (I.R.S. Employer
incorporation or organization) Identification No.)
40 Skokie Boulevard
Northbrook, Illinois 60062
(Address of Principal Executive Offices) (Zip Code)
-----------------------
$400,000,000 Senior Debt Securities
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
1. Comptroller of the Currency, Washington D.C.
2. Federal Deposit Insurance Corporation, Washington, D.C.
3. The Board of Governors of the Federal Reserve Systems,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH OBLIGOR AND UNDERWRITERS.
If the obligor or any underwriter for the obligor is an affiliate of the
trustee, describe each such affiliation.
Neither the obligor nor any underwriter for the obligor is an affiliate
of the trustee.
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
Furnish the following information as to each class of voting securities of the
trustee:
Not applicable
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, furnish the following information:
(a) Title of the securities outstanding under each other
indenture.
$100,000,000 7.00% Senior Notes due 2004
$100,000,000 7.20% Senior Notes due 2008
(b) A brief statement of the facts relied upon as a basis for the
claim that no conflicting interest within the meaning of Section 310(b)(1) of
the Act arises as a result of the trusteeship under such other indenture,
including a statement as to how the indenture securities will rank as compared
with the securities issued under such other indenture.
We have performed our annual conflict of interest check and found no
conflicts with the Issuer in our individual capacity. The new
securities, when issued, would rank pari passu with the securities
under the existing indentures.
<PAGE> 3
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH THE OBLIGOR OR
UNDERWRITERS.
If the trustee or any of the directors or executive officers of the trustee is a
director, officer, partner, employee, appointee, or representative of the
obligor or of any underwriter for the obligor, identify each such person having
any such connection and state the nature of each such connection.
Not applicable
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS OFFICIALS.
Furnish the following information as to the voting securities of the trustee
owned beneficially by the obligor and each director, partner and executive
officer of the obligor.
Not applicable
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR THEIR
OFFICIALS.
Furnish the following information as to the voting securities of the trustee
owned beneficially by each underwriter for the obligor and each director,
partner, and executive officer of each such underwriter.
Not applicable
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
Furnish the following information as to securities of the obligor owned
beneficially or held as collateral security for obligations in default by the
trustee:
Not applicable
ITEM 9. SECURITIES OF THE UNDERWRITER OWNED OR HELD BY THE TRUSTEE.
If the trustee owns beneficially or holds as collateral security for obligations
in default any securities of an underwriter for the obligor, furnish the
following information as to each class of securities of such underwriter any of
which are so owned or held by the trustee.
Not applicable
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES OF CERTAIN
AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for obligations
in default voting securities of a person who, to the knowledge of the trustee
(1) owns 10 percent or more of the voting securities of the obligor or (2) is an
affiliate, other than a subsidiary, of the obligor, furnish the following
information as to the voting securities of such person.
Not applicable
<PAGE> 4
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF A PERSON
OWNING 50 PERCENT OR MORE OF THE VOTING SECURITIES OF THE OBLIGOR.
If the trustee owns beneficially or holds as collateral security for obligations
in default any securities of a person who, to the knowledge of the trustee, owns
50 percent or more of the voting securities of the obligor, furnish the
following information as to each class of securities of such person any of which
are so owned or held by the trustee.
Not applicable
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
If the obligor is indebted to the trustee, furnish the following information.
Not applicable
ITEM 13. DEFAULTS BY THE OBLIGOR.
a) State whether there is or has been a default with respect to the securities
under this indenture. Explain the nature of any such default.
Not applicable
b) If the trustee is a trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the obligor are outstanding, or is trustee for more than one
outstanding series of securities under the indenture, state whether there has
been a default under any such indenture or series, identify the indenture or
series affected, and explain the nature of any such default.
Not applicable
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
If any underwriter is an affiliate of the trustee, describe each such
affiliation.
Not applicable
ITEM 15. FOREIGN TRUSTEE.
Identify the order or rule pursuant to which the foreign trustee is authorized
to act as sole trustee under indentures qualified or to be qualified.
Not applicable
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as part of this statement of eligibility and
qualification.
1. A copy of the Articles of Association of LaSalle National Bank
now in effect.
2. A copy of the certificate of authority to commence business.
3. A copy of the authorization to exercise corporate trust
powers.
<PAGE> 5
4. A copy of the existing By-Laws of LaSalle National Bank.
5. Not applicable.
6. The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not applicable.
9. Not applicable.
<PAGE> 6
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,the trustee,
LaSalle National Bank, a corporation organized and existing under the laws of
the United States of America, has duly caused this statement of eligibility and
qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Chicago, State of Illinois, on the 3rd day of
March 1998.
LASALLE NATIONAL BANK
By: /s/ Sarah H. Webb
----------------------------
Sarah H. Webb
First Vice President
<PAGE> 7
EXHIBIT 1
ARTICLES OF ASSOCIATION
<PAGE> 8
ARTICLES
OF
ASSOCIATION
LA SALLE NATIONAL BANK (LOGO)
LA SALLE NATIONAL BANK
CHICAGO, ILLINOIS
<PAGE> 9
(LOGO)
LaSalle National Bank
ARTICLES OF ASSOCIATION
FIRST. The title of this association, which shall carry on the business
of banking under the laws of the United States shall be "LaSalle National Bank."
SECOND. The place where the main banking house or office of this
association shall be located, its operations of discount and deposit carried on,
and its general business conducted, shall be Chicago, County of Cook, State of
Illinois.
THIRD. The Board of Directors of this association shall consist of such
number of its shareholders, not less than five nor more than twenty-five, as
from time to time shall be determined by a majority of the votes to which all of
its shareholders are at the time entitled. A majority of the Board of Directors
shall be necessary to constitute a quorum for the transaction of business. The
Board of Directors, by vote of a majority of the full board, may, between annual
meetings of shareholders increase the membership of the Board where the number
of directors last elected by shareholders was 15 or less, by not more than two
members, and where the number of directors last elected by shareholders was 16
or more, by not more than four members and by a like vote appoint qualified
persons to fill the vacancies created thereby; provided that the number of
Directors shall at no time exceed twenty-five.
FOURTH. The regular annual meeting of the shareholders of this
association shall be held at its main banking house, or other convenient place
duly authorized by the board of directors on such day of each year as is
specified therefor in the bylaws.
FIFTH. The amount of capital stock which this association is authorized
to issue shall be Twenty Million Dollars ($20,000,000.00) divided into 2,000,000
shares of common capital stock of the par value of $10.00 each; but said capital
stock may be increased or decreased from time to time, in accordance with the
provisions of the laws of the United States.
If the capital stock is increased by the sale of additional shares
thereof, other than to key officers and employees of the association upon the
exercise of options granted pursuant to the terms of a stock option plan then in
effect, as to which sales all pre-emptive rights are waived, each shareholder
shall be entitled to subscribe for such additional shares in proportion to the
number of shares of said capital stock owned by him at the time the increase is
authorized by the shareholders, unless another time subsequent to the date of
the shareholders' meeting is specified in a resolution adopted by the
shareholders at the time the increase is authorized. The board of directors
shall have the power to prescribe a reasonable period of time within which the
pre-emptive rights to subscribe to the new shares of capital stock may be
exercised.
The association, at any time and from time to time, may authorize and
issue debt obligations, whether or not subordinated, without the approval of the
shareholders.
SIXTH. The board of directors shall appoint one of its members
president of this association, who shall be chairman of the board, but the board
of directors may appoint a director in lieu of the president to be chairman of
the board, who shall perform such duties as may be designated by the board of
directors. The board of directors shall have the power to appoint one or more
vice presidents, a cashier and such other officers as may be required to
transact the business of this association; to fix the salaries to be paid to all
officers of this association; and to dismiss such officers, or any of them.
The board of directors shall have the power to define the duties of
officers and employees of this association, to require bonds from them, and to
fix the penalty thereof; to regulate the manner in which directors shall be
elected
<PAGE> 10
or appointed, and to appoint judges of the election; to make all bylaws that it
may be lawful for them to make for the general regulation of the business of
this association and the management of its affairs; and generally to do and
perform all acts that it may be lawful for a board of directors to do and
perform.
SEVENTH. This association shall have succession from the date of its
organization certificate until such time as it be dissolved by act of its
shareholders in accordance with the provisions of the banking laws of the United
States, or until its franchise becomes forfeited by reason of violation of law,
or until terminated by either a general or a special act of Congress, or until
its affairs be placed in the hands of a receiver and finally wound up by him.
EIGHTH. The board of directors of this association, or any three or
more shareholders owning, in the aggregate, not less than ten per centum of the
stock of this association, may call a special meeting of shareholders at any
time: Provided, however, that, unless otherwise provided by law, not less than
ten days prior to the date fixed for any such meeting, a notice of the time,
place, and purpose of the meeting shall be given by first-class mail, postage
prepaid, to all shareholders of record of this association at their respective
addresses as shown upon the books of the association. These articles of
association may be amended at any regular or special meeting of the shareholders
by the affirmative vote of the shareholders owning at least a majority of the
stock of this association, subject to the provisions of the banking laws of the
United States. The notice of any shareholders' meeting, at which an amendment to
the articles of association of this association is to be considered, shall be
given as herein-above set forth.
NINTH. Any person, his heirs, executors, or administrators, may be
indemnified or reimbursed by the association for reasonable expenses actually
incurred in connection with any action, suit, or proceeding, civil or criminal,
to which he or they shall be made a party by reason of his being or having been
a director, officer, or employee of the association or of any firm, corporation,
or organization which he served in any such capacity at the request of the
association: Provided, however, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding as to
which he shall finally be adjudged to have been guilty of or liable for
negligence or wilful misconduct in the performance of his duties to the
association: And, provided further, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding which
has been made the subject of a compromise settlement except with the approval of
a court of competent jurisdiction, or the holders of record of a majority of the
outstanding shares of the association, or the board of directors, acting by vote
of directors not parties to the same or substantially the same action, suit, or
proceeding, constituting a majority of the whole number of the directors. The
foregoing right of indemnification or reimbursement shall not be exclusive of
other rights to which such person, his heirs, executors, or administrators, may
be entitled as a matter of law.
********
May 17, 1982
Form No. 181, Rev 5/17/82 GW
<PAGE> 11
EXHIBIT 2
CERTIFICATE OF AUTHORITY
TO COMMENCE BUSINESS
<PAGE> 12
STATE OF ILLINOIS
AUDITOR'S OFFICE
NO. 333 (LOGO)
NATIONAL BANK TRUST CERTIFICATE
Springfield, FEBRUARY 15th 1928
I, OSCAR NELSON, Auditor of Public Accounts of the State of Illinois,
do hereby certify that the NATIONAL BUILDERS BANK OF CHICAGO located at CHICAGO,
County of COOK and State of Illinois, a corporation organized under and by
authority of the statutes of the United States governing National Banks and
authority granted by the Federal Reserve Act for the purpose of accepting and
executing trusts, has this day deposited in this office, securities in the sum
of TWO HUNDRED THOUSAND Dollars, $200,000.00 of the character designated by
Section 6 of the Act of the Legislature of the State of Illinois entitled "An
Act to provide for and regulate the administration of trusts by trust
companies."
The said deposit is made for the benefit of the creditors of said
NATIONAL BUILDERS BANK OF CHICAGO under and by virtue of the provisions of the
Act above referred to and the said securities are now held by me in this office
in my official capacity as such Auditor of Public Accounts, for the uses and
purposes aforesaid.
I further certify that by virtue of the Acts aforesaid, the NATIONAL
BUILDERS BANK OF CHICAGO is hereby authorized to accept and execute trusts and
receive deposits of trust funds under the provisions and limitations of "An Act
to provide for and regulate the administration of trusts in Illinois.
IN TESTIMONY WHEREOF, I hereunto subscribe my name and affix
(SEAL) the seal of my office, the day and year first above written.
/s/ Oscar Nelson
-------------------------------
AUDITOR OF PUBLIC ACCOUNTS.
STATE OF ILLINOIS.
<PAGE> 13
NO. 13146.
TREASURY DEPARTMENT (LOGO)
OFFICE OF COMPTROLLER OF THE CURRENCY
Washington, D.C., NOVEMBER 29, 1927.
WHEREAS, by satisfactory evidence presented to the undersigned, it has
been made to appear that "NATIONAL BUILDERS BANK OF CHICAGO" in the CITY of
CHICAGO in the County of COOK and State of ILLINOIS has complied with all the
provisions of the Statutes of the United States, required to be complied with
before an association shall be authorized to commence the business of Banking;
NOW THEREFORE I, J.W. MCINTOSH, Comptroller of the Currency, do hereby
certify that "NATIONAL BUILDERS BANK OF CHICAGO" in the CITY of CHICAGO in the
County of COOK and State of ILLINOIS is authorized to commence the business of
Banking as provided in Section Fifty one hundred and sixty nine of the Revised
Statutes of the United States.
IN TESTIMONY WHEREOF witness my hand and Seal of (SEAL) office
(SEAL) this TWENTY-NINTH day of NOVEMBER, 1927.
/s/ J.W. McIntosh
-------------------------------
Comptroller of the Currency
<PAGE> 14
CERTIFICATE OF CHANGE OF CORPORATE TITLE
(LOGO)
NO. 13146.
TREASURY DEPARTMENT
OFFICE OF THE COMPTROLLER OF THE CURRENCY
WASHINGTON, D.C., MAY 1, 1940.
WHEREAS, by satisfactory evidence presented to me, it appears that
under authority of sections 2, 3, and 4, of the Act of Congress approved May 1,
1886, entitled "An Act to enable national banking associations to increase their
capital stock and to change their names or location," shareholders owning
two-thirds of the stock of the national banking association heretofore known
as-- "NATIONAL BUILDERS BANK OF CHICAGO," located in CHICAGO, County of COOK,
State of ILLINOIS, have voted to change the name of said association to--
"LASALLE NATIONAL BANK," and have complied with all the provisions of the said
Act relative to national banking associations changing their name.
NOW, THEREFORE, IT IS HEREBY CERTIFIED, that the name of the said
association has been changed to-- "LASALLE NATIONAL BANK," and that such change
of name is hereby approved under authority conferred by said Act.
(SEAL) IN TESTIMONY WHEREOF, witness my hand and seal of office this
FIRST day of MAY, 1940.
/s/
-----------------------------------
ACTING Comptroller of the Currency.
<PAGE> 15
EXHIBIT 3
AUTHORIZATION TO EXERCISE
CORPORATE TRUST POWERS
<PAGE> 16
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM [LETTERHEAD]
WASHINGTON
May 9, 1940
LaSalle National Bank,
Chicago, Illinois.
Gentlemen:
The Board of Governors of the Federal Reserve System has been
officially advised by the Comptroller of the Currency that on May 1, 1940,
National Builders Bank of Chicago, Chicago, Illinois, changed its title to
LaSalle National Bank, and accordingly there is enclosed herewith a certificate
showing that LaSalle National Bank has authority to exercise the fiduciary
powers enumerated therein.
Kindly acknowledge receipt of this certificate.
Very truly yours,
S. R. Carpenter
-----------------------
S. R. Carpenter,
Assistant Secretary.
Enclosure
<PAGE> 17
BOARD OF GOVERNORS
OF THE
FEDERAL RESERVE SYSTEM
WASHINGTON
I, S. R. Carpenter, Assistant Secretary of the Board of Governors of
the Federal Reserve System (formerly known as the Federal Reserve Board), do
hereby certify that it appears from the records of the Board of Governors of the
Federal Reserve System that:
(1) Pursuant to the authority vested in the Federal Reserve Board by an
Act of Congress approved December 23, 1913, known as the Federal Reserve Act, as
amended, the Federal Reserve Board on December 8, 1927, granted to National
Builders Bank of Chicago, Chicago, Illinois, the right to act, when not in
contravention of State or local law, as trustee, executor, administrator,
registrar of stocks and bonds, guardian of estates, assignee, receiver,
committee of estates of lunatics, or in any other fiduciary capacity in which
State banks, trust companies or other corporations which come into competition
with national banks are permitted to act under the laws of the State of
Illinois;
(2) Under the provisions of an Act of Congress approved May 1, 1886,
National Builders Bank of Chicago, Chicago, Illinois, on May 1, 1940, changed
its title to LaSalle National Bank; and
(3) By virtue of the foregoing, LaSalle National Bank, Chicago,
Illinois, has authority to act, when not in contravention of State or local law,
as trustee, executor, administrator, registrar of stocks and bonds, guardian of
estates, assignee, receiver, committee of estates of lunatics, or in any other
fiduciary capacity in which State banks, trust companies or other corporations
which come into competition with national banks are permitted to act under the
laws of the State of Illinois, subject to regulations prescribed by the Board of
Governors of the Federal Reserve System.
IN WITNESS WHEREOF, I have hereunto subscribed my name and caused the
seal of the Board of Governors of the Federal Reserve System to be affixed at
the City of Washington in the District of Columbia.
/s/ S. R. Carpenter
------------------------
Assistant Secretary.
Dated May 9, 1940
<PAGE> 18
EXHIBIT 4
BY-LAWS OF LA SALLE NATIONAL BANK
<PAGE> 19
BYLAWS
OF
LA SALLE NATIONAL BANK
CHICAGO, ILLINOIS
LA SALLE NATIONAL BANK (LOGO)
Organized Under the National Banking Laws
of the United States
<PAGE> 20
BYLAWS
of the
LA SALLE NATIONAL BANK
(a National Banking Association which association
is herein referred to as the "bank")
ARTICLE I
MEETINGS OF SHAREHOLDERS
SECTION 1.1. ANNUAL MEETING. The regular annual meeting of the
shareholders for the election of directors and the transaction of whatever other
business may properly come before the meeting, shall be held at the main office
of the Bank, 135 South LaSalle Street, Chicago, Illinois, or such other place as
the Board of Directors may designate, at 9:00 A.M., on the third Wednesday of
March of each year. Notice of such meeting shall be mailed, postage prepaid, at
least ten days prior to the date thereof, addressed to each shareholder at his
address appearing on the books of the Bank. If for any cause, an election of
directors is not made on the said day, the Board of Directors shall order the
election to be held on some subsequent day as soon thereafter as practicable,
according to the provisions of law; and notice thereof shall be given in the
manner herein provided for the annual meeting.
SECTION 1.2. SPECIAL MEETINGS. Except as otherwise specifically
provided by statute, special meetings of the shareholders may be called for any
purpose at anytime by the board of directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock of
the bank. Every such special meeting, unless otherwise provided by law, shall be
called by mailing, postage pre-paid, not less than ten days prior to the date
fixed for such meeting, to each shareholder at his address appearing on the
books of the bank, a notice stating the purpose of the meeting.
SECTION 1.3. NOMINATIONS FOR DIRECTOR. Nominations for election to the
board of directors may be made by the board of directors or by any shareholder
of any outstanding class of capital stock of the bank entitled to vote for the
election of directors. Nominations, other than those made by or on behalf of the
existing management of the bank, shall be made in writing and shall be delivered
or mailed to the president of the bank and to the Comptroller of the Currency,
Washington, D.C., not less than 14 days nor more than 50 days prior to any
meeting of shareholders called for the election of directors, provided, however,
that if less than 21 days' notice of the meeting is given to the shareholders,
such nomination shall be mailed or delivered to the president of the bank and to
the Comptroller of the Currency not later than the close of business on the
seventh day following the day on which the notice of meeting was mailed. Such
notification shall contain the following information to the extent known to the
notifying shareholder: (a) the name and address of each proposed nominee; (b)
the principal occupation of each proposed nominee; (c) the total number of
shares of capital stock of each proposed nominee; (d) the name and address of
the notifying shareholder; and (e) the number of shares of capital stock of the
bank owned by the notifying shareholder. Nominations not made in accordance
herewith, may, in his discretion, be disregarded by the chairman of the meeting,
and upon his instructions, the vote tellers may disregard all votes cast for
each such nominee.
SECTION 1.4. JUDGES OF ELECTION. Every election of directors shall be
managed by three judges, who shall be appointed by the board of directors prior
lo the time of said election. The judges of election shall hold and conduct the
election at which they are appointed to serve; and after the election, they
shall file with the cashier a certificate under their hands, certifying the
result thereof and the names of the directors elected. The judges of election.
at the request of the chairman of the meeting, shall act as tellers of any other
vote by ballot taken at such meeting, and shall certify the result thereof.
1
<PAGE> 21
SECTION 1.5. PROXIES. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this bank shall act as proxy. Proxies shall be valid only for one meeting, to
be specified therein, and any adjournments of such meeting. Proxies shall be
dated and shall be filed with the records of the meeting.
SECTION 1.6. QUORUM. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the articles of association.
ARTICLE II
DIRECTORS
SECTION 2.1. BOARD OF DIRECTORS. The board of directors (hereinafter
referred to as the "board"), shall have power to manage and administer the
business affairs of the bank. Except as expressly limited by law, all corporate
powers of the bank shall be vested in and may be exercised by said board.
SECTION 2.2. NUMBER. The board shall consist of not less than five or
more than twenty-five shareholders, the exact number within such minimum and
maximum limits to be fixed and determined from time to time by resolution of a
majority of the full board or by resolution of the shareholders at any meeting
thereof; provided, however, that a majority of the full board may not increase
the number of directors by more than two if the number of directors last elected
by shareholders was fifteen or less and by not more than four where the number
of directors last elected by shareholders was sixteen or more, provided that in
no event shall the number of directors exceed twenty-five.
SECTION 2.3. ORGANIZATION MEETING. The cashier, upon receiving the
certificate of the judges, of the result of any election, shall notify the
directors-elect of their election and of the time at which they are required to
meet at the main office of the bank for the purpose of organizing the new board
and electing and appointing officers of the bank for the succeeding year. Such
meeting shall be appointed to be held on the day of election or as soon
thereafter as practicable, and, in any event, within thirty days thereof. If, at
the time fixed for such meeting, there shall not be a quorum present the
directors present may adjourn the meeting, from time to time, until a quorum is
obtained.
SECTION 2.4 REGULAR MEETINGS. The regular meetings of the board shall
be held, without notice, on the third Wednesday of each month at the main
office. When any regular meeting of the board falls upon a holiday, the meeting
shall be held on the next banking business day unless the board shall designate
some other day.
SECTION 2.5 SPECIAL MEETINGS. Special meetings of the board may be
called by the chairman of the board, the president, or at the request of three
or more directors. Each member of the board shall be given notice stating the
time and place, by telegram, letter or in person, of each such special meeting.
SECTION 2.6. QUORUM. A majority of the directors shall constitute a
quorum at any meeting, except when otherwise provided by law; but a less number
may adjourn any meeting from time to time, and the meeting may be held, as
adjourned, without further notice.
SECTION 2.7. VACANCIES. When any vacancy occurs among the directors,
the remaining members of the board, in accordance with the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the board, or at a special meeting called for that purpose.
2
<PAGE> 22
SECTION 2.8. RETIREMENT POLICY. A retirement policy adopted by the
board of directors shall be applicable to directors who are not active officers
of the bank.
ARTICLE III
COMMITTEES OF THE BOARD
SECTION 3.1. EXECUTIVE COMMITTEE. There shall be an executive committee
of the board. The members of the executive committee shall be chosen by the
board from time to time, shall hold office during its pleasure, and shall
consist of the chairman of the board, the chairman of the executive committee
selected by the board, who may but need not be the same person designated to be
president, and the president, ex officio, and not less than seven additional
members of the board who shall not be active officers of the bank. It shall be
the duty of this committee to exercise such powers and perform such duties in
respect to the making of loans and discounts as shall from time to time be
specified by resolution of the board. During such periods as the board shall not
be in session, the executive committee shall have and may exercise all the
powers of the board except such as are by law or by these bylaws required to be
exercised only by the board. The executive committee may make rules for holding
and conducting its meetings and keep in the minute book of the bank a report of
all action taken which shall be submitted for approval at each regular meeting
of the board and the action of the board shall be recorded in the minutes of
that meeting. A quorum of the executive committee shall consist of not less than
five of its members, at least three of whom shall not be active officers of the
bank. The chairman of the board, or in his absence in the order named if
present, the chairman of the executive committee or the president, may designate
any director who is not an active officer of the bank, or a designated member,
to serve as a member of the executive committee at any specified meeting.
Vacancies in the executive committee at any time existing may be filled by
appointment by the board. The board may at anytime revise or change the
membership and chairmanship of the executive committee and make new or
additional appointments thereto. The chairman of the executive committee shall
be ex officio a member of all committees except the examining committee and the
trust audit committee, and shall have such other duties as may from time to time
be assigned him by the board.
SECTION 3.2. OFFICERS' COMPENSATION COMMITTEE. There shall be an
officers' compensation committee of the board. The members of the officers'
compensation committee shall consist of the members ex officio provided for in
other sections of these bylaws and not less than three additional non-officer
members of the board who shall be appointed by the board each year at its first
meeting after the directors have been elected and qualified. It shall be the
duty of this committee to study the compensation of all officers of the bank and
from time to time report their recommendations to the board; and such other
duties, if any, as may from time to time be assigned to it by the board. A
majority of the committee, including at least two non-officer members, shall be
necessary for the committee to keep records of its action.
SECTION 3.3. EXAMINING COMMITTEE. There shall be an examining committee
of the board. The members of the examining committee shall consist of the
members ex officio provided for in other sections of these bylaws, but exclusive
of any active officer of the bank and not less than three additional non-officer
members of the board who shall be appointed by the board each year at its first
meeting after the directors have been elected and qualified. It shall be the
duty of this committee to make an examination at least twice each year into the
affairs of the bank or to cause the examinations to be made by accountants (who
may be the bank's own accountants) responsible only to the board in such
examinations, and to report the result of such examinations in writing to the
board at the next regular meeting thereafter, or it may, at its sole discretion,
submit the reports of the national bank examiner or of the Chicago Clearing
House Association examination, with or without additional comments by the
committee itself, for, and in lieu of its personal examinations. Such reports
shall state whether the bank is in sound condition, whether adequate internal
audit controls and procedures are being maintained and shall recommend to the
board such changes in the manner of doing business or conducting the affairs of
the bank as shall be deemed advisable.
3
<PAGE> 23
SECTION 3.4. OTHER COMMITTEES. The board may appoint, from time to
time, from its own members, other committees of one or more persons, for such
purposes and with such powers as the board may determine.
ARTICLE IV
OFFICERS AND EMPLOYEES
SECTION 4.1. CHAIRMAN OF THE BOARD. The board shall appoint one of its
members to be chairman of the board. The chairman of the board shall supervise
the carrying out of the policies adopted or approved by the board. He shall have
general executive powers, as well as the specific powers conferred by these
bylaws. He shall be ex officio a member of all committees, except the examining
committee and the trust audit committee. He shall have general supervision and
direction of the business, affairs and personnel of the bank. He shall also have
and may exercise such further powers and duties as from time to time may be
conferred upon, or assigned to him by the board.
SECTION 4. 2. VICE CHAIRMAN OF THE BOARD. The board may appoint one of
its members to be vice chairman of the board. He shall perform such duties as
may from time to time be assigned to him by the board.
SECTION 4.3. PRESIDENT. The board shall appoint one of its members to
be president of the bank. He shall be the chief executive officer and the chief
administrative officer of the bank and in the absence of the chairman of the
board, he shall preside at any meeting of the board at which he is present. The
president shall have general executive powers, and shall have and may exercise
any and all other powers and duties pertaining by law, regulation, or practice
to the office of president, or imposed by these bylaws. He shall be ex officio a
member of all committees, except the examining committee and trust audit
committee. He shall have general supervision of the business, affairs and
personnel of the bank and in the absence of the chairman of the board, shall
exercise the powers and perform the duties of the chairman of the board. He
shall also have and may exercise such further powers and duties as from time to
time may be conferred upon or assigned to him by the board.
SECTION 4.4. SENIOR OFFICERS. The board may appoint one or more
executive vice presidents and one or more senior vice presidents. Each such
senior officer shall have such powers and duties as may be assigned to him by
the board, the chairman of the board, or the president.
SECTION 4.5. VICE PRESIDENT. The board may appoint one or more vice
presidents. Each vice president shall have such powers and duties as may be
assigned to him by the board, the chairman of the board, or the president.
SECTION 4.6. CASHIER. The board shall appoint a cashier who shall have
such powers and duties as may be assigned to him by the board, the chairman of
the board, or the president. The cashier shall be custodian of the corporate
seal, records, documents and papers of the bank. He shall provide for keeping of
proper records of all transactions of the bank.
SECTION 4.7. SECRETARY. The board shall appoint a secretary who shall
be secretary of the bank. He shall also perform such duties as may be assigned
to him from time to time by the board. The board may appoint a secretary of the
board who shall keep accurate minutes of all meetings. He shall attend to the
giving of all notices; he shall also perform such other duties as may be
assigned to him from time to time by the board.
SECTION 4.8. OTHER OFFICERS. The board may appoint one or more
assistant vice presidents, one or more trust officers, one or more assistant
secretaries, one or more assistant cashiers, and such other officers and
attorneys-in-fact as from time to time may appear to the board to be required or
desirable to transact the business of
4
<PAGE> 24
the bank. Such officers, respectively, shall exercise such powers and perform
such duties as pertain to their several offices or as may be conferred upon or
assigned to them by the board the chairman of the board or the president.
SECTION 4.9. CLERKS AND AGENTS. The chairman of the board, the
president, or any other active officer of the bank authorized by the chairman of
the board, or the president, may appoint and dismiss all or any paying tellers
receiving tellers note tellers, vault custodians, bookkeepers and other clerks,
agents and employees as they may deem advisable for the prompt and orderly
transaction of the business of the bank, define their duties, fix the salaries
to be paid them and the conditions of their employment.
SECTION 4.10. RESPONSIBILITY FOR MONEYS, ETC. Each of the active
officers and clerks of this bank shall be responsible for all moneys, funds
valuables and property of every kind and description that may from time to time
be entrusted to his care or placed in his hands by the board or others, or that
otherwise may come into his possession as an active officer or clerk of this
bank.
SECTION 4.11. SURETY BONDS. All the active officers and clerks of this
bank may be covered by one of the blanket form bonds customarily written by the
surety companies, drawn for such an amount, and executed by such surety company,
as the board may from time to time require, and duly approve; or at the
discretion of the board, all such active officers and clerks shall, each for
himself, give such bond, with such security, and in such denominations as the
board may from time to time require and direct. All bonds approved by the board
shall assure the faithful and honest discharge of the respective duties of such
active officer or clerk and shall provide that such active officer or clerk
shall faithfully apply and account for all moneys, funds, valuables and property
of every kind and description that may from time to time come into his hands or
be entrusted to his care, and pay over and deliver the same to the order of the
board or to such other person or persons as may be authorized to demand and
receive the same.
SECTION 4.12. TERM OF OFFICE - OFFICER DIRECTOR. The chairman of the
board, the vice chairman of the board and the president, together with any other
active officers who may be duly elected members of the board, shall hold their
respective offices for the current year for which the board (of which they shall
be members) was elected and until their successors are appointed, unless they
shall resign, be disqualified, or be removed; and any vacancy occurring in the
office of the chairman of the board, the vice chairman of the board, the
president, or in the board, shall, if required by these bylaws, be filled by the
remaining members.
SECTION 4.13. TERM OF OFFICE - OFFICER. The executive vice presidents,
the senior vice presidents, the vice presidents, the assistant vice presidents,
the cashier, the secretary, the trust officers and all other officers and
attorneys-in-fact who are not duly elected members of the board, shall be
appointed to hold their offices, respectively, during the pleasure of the board.
ARTICLE V
TRUST DEPARTMENT
SECTION 5.1. TRUST DEPARTMENT. There shall be a department of the bank
known as the trust department which shall perform the fiduciary responsibilities
of the bank.
SECTION 5.2. TRUST OFFICER. There shall be a senior vice president and
trust officer, or vice president and trust officer of this bank, who shall be
designated as the managing officer of the trust department and whose duties
shall be to manage, supervise and direct all the activities of the trust
department. He shall do, or cause to be done, all things necessary or proper in
carrying on the business of the trust department in accordance with provisions
of law and regulations. He shall act pursuant to opinion of counsel where such
opinion is deemed necessary. Opinions of counsel shall be retained on file in
connection with all important matters pertaining to fiduciary activities. The
trust officer shall be responsible for all assets and documents held by the bank
in connection with fiduciary matters.
5
<PAGE> 25
The board may appoint such other officers of the trust department as it may deem
necessary, with such duties as may be assigned to them by the board, the
chairman of the board, or the president.
SECTION 5.3. TRUST INVESTMENT COMMITTEE. There shall be appointed by
the board a trust investment committee of this bank composed of not less than
four members, including members ex officio provided for in other sections of
these bylaws, who shall be capable and experienced officers or directors of the
bank. All investments of funds held in a fiduciary capacity shall be made,
retained or disposed of only with the approval of the trust investment
committee; and the committee shall keep minutes of all its meetings, showing the
disposition of all matters considered and passed upon by it. The committee
shall, promptly after the acceptance of an account for which the bank has
investment responsibilities, review the assets thereof, to determine the
advisability of retaining or disposing of such assets. The committee shall
conduct a similar review at least once during each calendar year thereafter and
within fifteen months of the last such review. A report of all such reviews,
together with the action taken as a result thereof, shall be noted in the
minutes of the committee. Three members of the trust investment committee shall
constitute a quorum, and any action approved by a majority of those present
shall constitute the action of the committee.
SECTION 5.4. TRUST AUDIT COMMITTEE. The board shall appoint a committee
of not less than three directors, including members ex officio provided for in
other sections of these bylaws, exclusive of any active officers of the bank,
which shall at least once during each calendar year and within fifteen months of
the last such audit make suitable audits of the trust department, or cause
suitable audits to be made, by auditors responsible only to the board, and at
such time shall ascertain whether the department has been administered in
accordance with law, Regulation 9, and sound fiduciary principles.
Notwithstanding the provisions of this Section, the board at any time may assign
to the Examining Committee, in addition to the duties of the Examining Committee
set forth in Section 3.3 of these bylaws, all of the duties of the Trust Audit
Committee and during such time as the Examining Committee is performing the
duties of both committees, the Trust Audit Committee shall cease to function as
a committee of this board. The board at any time may reassign the duties
provided for in this Section to the Trust Audit Committee.
SECTION 5.5. TRUST DEPARTMENT FILES. There shall be maintained in the
trust department, files containing all fiduciary records necessary to assure
that its fiduciary responsibilities have been properly undertaken and
discharged.
SECTION 5.6. TRUST INVESTMENTS. Funds held in a fiduciary capacity
shall be invested in accordance with the instrument establishing the fiduciary
relationship and local law. Where such instrument does not specify the character
and class of investments to be made and does not vest in the bank a discretion
in the matter, fund shield pursuant to such instrument shall be invested in
investments in which corporate fiduciaries may invest under local law.
ARTICLE VI
STOCK AND STOCK CERTIFICATES
SECTION 6.1. TRANSFERS. Shares of capital stock shall be transferable
on the books of the bank and a transfer book shall be kept in which all
transfers of stock shall be recorded. Every person becoming a shareholder be
such transfer shall in proportion to his shares, succeed to all rights and
liabilities of the prior holder of such shares.
SECTION 6.2. STOCK CERTIFICATES. Certificates of capital stock shall
bear the signature of any one of, the chairman of the board, or the president
(which may be engraved, printed or impressed) and shall be signed manually or by
facsimile process by the secretary, assistant secretary, cashier, assistant
cashier, or any other officer appointed by the board for that purpose, to be
known as an authorized officer and the seal of the bank shall be engraven
thereon. Each certificate shall recite on its face that the stock represented
thereby is transferable, properly endorsed, only on the books of the bank.
6
<PAGE> 26
ARTICLE VII
CORPORATE SEAL
SECTION 7.1. CORPORATE SEAL. The chairman of the board, the president,
the cashier, the secretary or any assistant cashier or assistant secretary, or
other officer thereunto designated by the board, shall have authority to affix
the corporate seal to any document requiring such seal, and to attest the same.
Such seal shall be substantially in the form set forth herein.
ARTICLE VIII
INDEMNIFYING OFFICERS AND DIRECTORS
SECTION 8.1. INDEMNIFYING OFFICERS AND DIRECTORS. Any person, his
heirs, executors or administrators, may be indemnified or reimbursed by the bank
for reasonable expenses actually incurred in connection with any action, suit or
proceeding, civil or criminal, to which he or they shall be made a party by
reason of his being or having been a director, officer or employee of the bank
or of any firm, corporation or organization which he served in any such capacity
at the request of the bank; provided, however, that no person shall be so
indemnified or reimbursed in relation to any matter in such action, suit or
proceeding as to which he shall finally be adjudged to have been guilty of or
liable for negligence or willful misconduct in the performance of his duties to
the bank; and, provided further, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit or proceeding which
has been made the subject of a compromise settlement except with the approval of
a court of competent jurisdiction, or the holders of record of a majority of the
outstanding shares of the bank, or the board, acting by vote of directors not
parties to the same or substantially the same action suit or proceeding,
constituting a majority of the whole number of the directors. The foregoing
right of indemnification or reimbursement shall not be exclusive of other rights
to which such person, his heirs, executors or administrators, may be entitled as
a matter of law.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1. FISCAL YEAR. The fiscal year of the bank shall be the
calendar year.
SECTION 9.2. EXECUTION OF INSTRUMENTS. All agreements, indentures
mortgages, deeds, conveyances transfers certificates declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, schedules,
accounts, affidavits, bonds, undertakings, proxies and other instruments or
documents may be signed, executed, acknowledged, verified, delivered or accepted
for the bank by the chairman of the board, or the vice chairman of the board, or
the president, or any executive vice president, or any senior vice president, or
any vice president, or the secretary or the cashier, or, if in connection with
the exercise of fiduciary powers of the bank by any of said officers or by any
officer in the trust department. Any such instruments may also be signed,
executed, acknowledged, verified, delivered or accepted for the bank in such
other manner and by such other officers as the board may from time to time
direct. The provisions of this Section 9.2 are supplementary to any other
provisions of these bylaws.
SECTION 9.3. RECORDS. The articles of association, the bylaws, and the
proceedings of all meetings of the shareholders and of the board shall be
recorded in appropriate minute books provided for the purpose; where these
bylaws so provide, the proceedings of standing committees of the board shall be
recorded in appropriate minute books provided for the purpose.
7
<PAGE> 27
ARTICLE X
EMERGENCIES
SECTION 10.1. CONTINUATION OF BUSINESS. In the event of a state of
emergency of sufficient severity to interfere with the conduct and management of
the affairs of this bank, the officers and employees will continue to conduct
the affairs of the bank under such guidance from the directors as may be
available except as to matters which by statute require specific approval of the
board of directors and subject to conformance with any governmental directives
during the emergency.
SECTION 10.2. DESIGNATION OF PLACE OF BUSINESS. The offices of the bank
at which its business shall be conducted shall be the main office thereof
located at 135 South LaSalle Street, Chicago, Illinois, and any other legally
authorized location which may be leased or acquired by this bank to carry on its
business. During an emergency resulting in any authorized place of business of
this bank being unable to function, the business ordinarily conducted at such
location shall be relocated elsewhere in suitable quarters, in addition to or in
lieu of the locations heretofore mentioned, as may be designated by the board of
directors or by the executive committee or by such persons as are then, in
accordance with resolutions adopted from time to time by the board of directors
dealing with the exercise of authority in the time of such emergency, conducting
the affairs of this bank. Any temporarily relocated place of business of this
bank shall be returned to its legally authorized location as soon as practicable
and such temporary place of business shall then be discontinued.
ARTICLE XI
BYLAWS
SECTION 11.1 INSPECTION. A copy of the bylaws with all amendments
thereto, shall at all times be kept in a convenient place at the main office of
the bank and shall be open for inspection to all shareholders, during banking
hours.
SECTION 11.2 AMENDMENTS. The bylaws may be amended, altered or
repealed, at any regular meeting of the board, by a vote of a majority of the
whole number of the directors.
***
I ___________________ hereby certify that I am the
____________________Cashier/Secretary of LaSalle National Bank, Chicago,
Illinois and that the foregoing is a true and correct copy of the bylaws of this
bank as amended and that the same are in full force and effect ________ day of
___________ 19__.
--------------------------
Cashier/Secretary.
December 15, 1982
(SEAL)
8
<PAGE> 28
EXHIBIT 5
NOT APPLICABLE
<PAGE> 29
EXHIBIT 6
LaSalle National Bank hereby consents in accordance with the provisions of
Section 321(b) of the Trust Indenture Act of 1939, that reports of examinations
by Federal, State, Territorial and District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
LA SALLE NATIONAL BANK
By: /s/ Sarah H. Webb
-------------------------
Sarah H. Webb
Vice President
<PAGE> 30
EXHIBIT 7
Latest Report of Condition of
Trustee published pursuant to
law or the requirement of its
surviving or examining authority.
<PAGE> 31
<TABLE>
<S> <C> <C> <C> <C> <C>
LaSalle National Bank Call Date: 12/31/97 ST-BK: 17-1520 FFIEC 031
135 South LaSalle Street Page RC-1
Chicago, IL 60603 Vendor ID: D CERT: 15407 11
Transit Number: 71000505
</TABLE>
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL AND STATE-CHARTERED
SAVINGS BANKS FOR DECEMBER 31, 1997
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
SCHEDULE RC - BALANCE SHEET
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin (1) 0081 951,473 1.a
b. Interest-bearing balances (2) 0071 607 1.b
2. Securities:
a. Held-to-maturity securities (from Schedule RC-B, column A) 1754 925,051 2.a
b. Available-for-sale securities (from Schedule RC-B, column D) 1773 3,845,262 2.b
3. Federal funds sold and securities purchased under agreements to resell 1350 49,663 3.
4. Loans and lease financing receivables:
RCFD
a. Loans and leases, net of unearned income ----
(from Schedule RC-C) 2122 10,899,746 4.a
b. LESS: Allowance for loan and lease losses 3123 200,986 4.b
c. LESS: Allocated transfer risk reserve 3128 0 4.c
d. Loans and leases, net of unearned income,
allowance, and reserve (item 4.a minus 4.b and 4.c) 2125 10,698,760 4.d
5. Trading assets (from Schedule RC-D) 3545 59,618 5.
6. Premises and fixed assets (including capitalized leases) 2145 56,032 6.
7. Other real estate owned (from Schedule RC-M) 2150 2,273 7.
8. Investments in unconsolidated subsidiaries and associated companies (from
Schedule RC-M) 2130 0 8.
9. Customers' liability to this bank on acceptances outstanding 2155 13,630 9.
10. Intangible assets (from Schedule RC-M) 2143 20,083 10.
11. Other assets (from Schedule RC-F) 2160 218,814 11.
12. Total assets (sum of items 1 through 11) 2170 16,841,266 12.
</TABLE>
- -----------------
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE> 32
<TABLE>
<S> <C> <C> <C> <C> <C>
LaSalle National Bank Call Date: 12/31/97 ST-BK: 17-1520 FFIEC 031
135 South LaSalle Street Page RC- 2
Chicago, IL 60603 Vendor ID: D CERT: 15407 12
Transit Number: 71000505
</TABLE>
SCHEDULE RC - CONTINUED
<TABLE>
<CAPTION>
Dollar Amounts in Thousands
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of ----
columns A and C from Schedule RC-E, part I) 2200 8,623,777 13.a
RCON
----
(1) Noninterest-bearing (1) 6631 2,317,951 13.a.1
(2) Interest-bearing 6636 6,305,826 13.a.2
RCFN
----
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from
Schedule RC-E, part II) 2200 2,149,237 13.b
RCFN
----
(1) Noninterest-bearing 6631 0 13.b.1
(2) Interest-bearing 6636 2,149,237 13.b.2
RCFD
----
14. Federal funds purchased and securities sold under agreements to repurchase 2800 1,913,845 14.
RCON
----
15. a. Demand notes issued to the U.S. Treasury 2840 380,144 15.a
RCFD
----
b. Trading liabilities (from Schedule RC-D) 3548 30,006 15.b
16. Other borrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
a. With a remaining maturity of one year or less 2332 1,936,739 16.a
b. With a remaining maturity of more than one year through three years A547 28,833 16.b
c. With a remaining maturity of more than three years A548 28,143 16.c
17. Not applicable.
18. Bank's liability on acceptances executed and outstanding 2920 13,630 18.
19. Subordinated notes and debentures (2) 3200 396,250 19.
20. Other liabilities (from Schedule RC-G) 2930 257,013 20.
21. Total liabilities (sum of items 13 through 20) 2948 15,757,617 21.
22. Not applicable.
EQUITY CAPITAL
RCFD
----
23. Perpetual preferred stock and related surplus 3838 0 23.
24. Common stock 3230 18,417 24.
25. Surplus (exclude all surplus related to preferred stock) 3839 288,111 25.
26. a. Undivided profits and capital reserves 3632 737,758 26.a
b. Net unrealized holding gains (losses) on available-for-sale securities 8434 39,363 26.b
27. Cumulative foreign currency translation adjustments 3284 0 27.
28. Total equity capital (sum of items 23 through 27) 3210 1,083,649 28.
29. Total liabilities and equity capital (sum of items 21 and 28) 3300 16,841,266 29.
MEMORANDUM
TO BE REPORTED ONLY WITH THE MARCH REPORT OF CONDITION.
1. Indicate in the box at the right the number of the statement below that best describes
the most comprehensive level of auditing work performed for the bank by independent RCFD Number
external auditors as of any date during 1996 ---- ------
6724 N/A M.1
</TABLE>
<TABLE>
<S> <C>
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by
submits a report on the consolidated holding company (but external auditors
not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in accordance 8 = No external audit work
with generally accepted auditing standards by a certified
public accounting firm (may be required by state charter-
ing authority)
</TABLE>
- -----------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
(2) Includes limited-life preferred stock and related surplus.
<PAGE> 33
EXHIBIT 8
NOT APPLICABLE
<PAGE> 34
EXHIBIT 9
NOT APPLICABLE
