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Filed pursuant to Rule 424(b)(5)
File Number 333-51675
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Prospectus Supplement
March 7, 2000
(To Prospectus dated May 14, 1998)
$75,000,000
BRADLEY OPERATING LIMITED PARTNERSHIP
8.875% NOTES DUE 2006
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The Notes will mature on March 15, 2006. We may redeem some or all of the
Notes at any time at a redemption price described under "Description of the
Notes -- Optional Redemption."
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The Notes are unsecured and rank equally with all of our other unsecured
and unsubordinated indebtedness. The Notes will be represented by one or more
global certificates registered in the name of a nominee of The Depository Trust
Company. Except in limited circumstances, investors will not be entitled to
receive certificates representing the Notes. Interest will be payable
semi-annually in cash in arrears on March 15 and September 15, commencing
September 15, 2000.
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<TABLE>
<CAPTION>
PER NOTE TOTAL
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<S> <C> <C>
Public offering price....................................... 99.974% $74,980,500
Underwriting discount....................................... 0.650% $ 487,500
Proceeds to the Operating Partnership (before expenses)..... 99.324% $74,493,000
</TABLE>
The public offering price set forth above does not include accrued
interest, if any. Interest on the Notes will accrue from March 10, 2000, and
must be paid by the purchaser if the Notes are delivered after March 10, 2000.
BEFORE MAKING ANY INVESTMENT IN OUR COMPANY, YOU SHOULD CONSIDER CAREFULLY
CERTAIN RISKS THAT ARE DESCRIBED IN THE "RISK FACTORS" SECTION OF THE
ACCOMPANYING PROSPECTUS, BEGINNING ON PAGE 4.
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The underwriters are offering the Notes subject to various conditions. The
underwriters expect to deliver the Notes in book-entry form only through the
facilities of The Depository Trust Company against payment for the Notes in New
York, New York on or about March 10, 2000.
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Joint Book-Running Managers
DEUTSCHE BANC ALEX. BROWN SUTRO & CO. INCORPORATED
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FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus, including the
documents they incorporate by reference, contain "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E
of the Securities Exchange Act of 1934. Forward looking statements include,
without limitation, statements containing the words "anticipates," "believes,"
"expects," "intends," "future," and words of similar import which express our
belief, expectations or intentions regarding our future performance or future
events or trends. All statements regarding our expected financial position,
results of operations, business and financing plans are forward-looking
statements. Although we believe that the expectations reflected in our
forward-looking statements are reasonable, we cannot assure you that our
expectations will be realized. Cautionary statements describing important
factors that could cause our actual results to differ materially from our
expectations are included in this prospectus supplement, the accompanying
prospectus and the documents they incorporate by reference. All our
forward-looking statements are qualified by these cautionary statements.
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The following information may not contain all the information that may be
important to you. You should read the entire prospectus supplement and
accompanying prospectus, as well as the documents incorporated by reference into
the accompanying prospectus before making an investment decision.
BRADLEY OPERATING LIMITED PARTNERSHIP
We are a Delaware limited partnership managed by our general partner,
Bradley Real Estate, Inc. Bradley Real Estate is a real estate investment trust
with internal property management, leasing and development capabilities, which
conducts substantially all of its activities through us. Although not required
to do so under the terms of our partnership agreement, Bradley Real Estate
intends to continue to conduct substantially all of its activities through us.
Bradley Real Estate is currently our sole general partner and owner of
approximately 83% of our economic interests.
At December 31, 1999, we owned 98 properties throughout 15 Midwestern
states, which aggregate approximately 15.5 million square feet of gross leasable
area. Most of our properties are grocery store-anchored shopping centers that
are used by members of the surrounding communities for their day-to-day living
needs. Our shopping center portfolio consists of a diverse tenant base,
comprised of approximately 2,000 leases with no tenant accounting for more than
5% of our annualized base rent. Many of our properties have been renovated
within the last five to eight years. At December 31, 1999, over 94% of our
rentable space was occupied.
We own, operate and seek to acquire, develop and redevelop grocery
store-anchored, open-air community and neighborhood shopping centers
concentrated mainly in the Midwest states of Illinois, Indiana, Iowa, Kansas,
Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South
Dakota, Tennessee and Wisconsin. Through past experience as well as current
research, we believe that this area of the country is economically strong and
diverse and provides us with a favorable environment for the acquisition,
development, ownership and operation of retail properties. We favor grocery
store-anchored shopping centers because, based upon our past experience, these
properties offer us strong and predictable daily consumer traffic and are less
susceptible to downturns in the general economy than apparel or leisure anchored
shopping center properties.
As part of our ongoing business, we regularly evaluate and engage in
discussions with public and private third parties about possible portfolio or
asset acquisitions or business combinations. During 1999, we acquired 4 shopping
centers meeting our investment criteria for an aggregate acquisition price of
approximately $36.9 million. In evaluating potential acquisitions, we focus
principally on community and neighborhood shopping centers in the Midwest that
are anchored by strong national, regional and independent grocery store chains.
Over the past several years, we have diversified our income stream across many
Midwest markets in order to insulate our business from economic trends affecting
any particular market.
Our principal office is located at 40 Skokie Boulevard, Suite 600,
Northbrook, Illinois, 60062, and our telephone number is (847) 272-9800.
RECENT DEVELOPMENTS
ACQUISITIONS
During February 2000, we purchased two additional grocery store-anchored
shopping centers located in Kansas and Missouri, aggregating approximately
360,000 square feet of gross leasable area for a total purchase price of
approximately $19.1 million. The shopping centers were acquired with cash
provided by our line of credit.
SHARE REPURCHASE PROGRAM
On November 23, 1999, the board of directors of Bradley Real Estate
authorized the repurchase of up to 2,000,000 of its outstanding shares of common
stock. The repurchase program is in effect until
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December 31, 2000 or until the authorized limit has been reached. To date,
Bradley Real Estate has repurchased approximately 1,800,000 shares.
YEAR END RESULTS
On February 8, 2000, Bradley Real Estate, our general partner, issued a
press release announcing its consolidated results of operations for the twelve
months ended December 31, 1999. The primary difference between our results of
operations and those of Bradley Real Estate is that Bradley Real Estate's
results of operations include an allocation of income to exchangeable common
limited partnership units and preferred units, owned by third parties (minority
interest). Such unit holders comprise part of our capital and, accordingly,
share in the results of our operations. Additionally, our results of operations
do not include expenses associated with Bradley Real Estate's operation as a
public company. The expenses incurred by Bradley Real Estate in this regard for
fiscal 1999 were $747,000. The press release reported that Bradley Real Estate's
consolidated funds from operations for the quarter ended December 31, 1999 were
$15.2 million, or $0.59 per share, compared to $14.0 million, or $0.55 per
share, for the comparable quarter last year, a per share increase of 7.3%.
Bradley Real Estate's consolidated funds from operations for the year increased
to $58.7 million, or $2.28 per share, compared to $52.3 million, or $2.08 per
share, in the prior year, a per share increase of 9.6%. All per share amounts
are reported on a diluted basis.
For the quarter ended December 31, 1999, Bradley Real Estate's net income
attributable to its common stockholders totaled $8.4 million, or $0.35 per
share, compared to $7.2 million, or $0.30 per share, for the comparable quarter
last year. Bradley Real Estate's net income attributable to its common
stockholders for fiscal 1999 totaled $31.5 million, or $1.31 per share, compared
to $56.6 million, or $2.37 per share, for the prior year. Net income
attributable to common stockholders of Bradley Real Estate for fiscal 1998
included a net gain of $29.7 million on the sale of real estate investments. All
per share amounts are reported on a diluted basis.
Our total assets as of December 31, 1999 increased to $996.2 million,
compared to $967.1 million as of December 31, 1998, and total debt stood at
$444.8 million on December 31, 1999, compared to $472.4 million as of December
31, 1998. At December 31, 1999, we had $105.5 million available under our $250
million unsecured line of credit. Additionally, we were holding for sale certain
non-core real estate assets with a book value of approximately $29.9 million
that are projected to close during the first quarter of fiscal 2000, although we
cannot guarantee that these sales will occur. Any proceeds we receive from the
sale of these properties would be used to pay down our line of credit with the
expectation that we may re-borrow under our line of credit to fund Bradley Real
Estate's recently announced share repurchase program, ongoing redevelopment
initiatives, new acquisitions or development opportunities or for other general
working capital purposes.
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THE OFFERING
All capitalized terms used below have the meaning provided in the Indenture
or in the section entitled "Description of the Notes."
SECURITIES OFFERED......... $75,000,000 aggregate principal amount of Notes.
MATURITY................... March 15, 2006.
INTEREST PAYMENT DATES..... Semi-annually in arrears on March 15 and September
15, commencing September 15, 2000.
RANKING.................... The Notes will be our unsecured and unsubordinated
obligations and will rank on a parity in priority
of payment with all our other unsecured and
unsubordinated indebtedness. The Notes will be
effectively subordinated to our mortgages and other
secured indebtedness and to indebtedness and other
liabilities of any of our current or future
subsidiaries. Accordingly, our prior indebtedness
will have to be satisfied in full before holders of
the Notes will be able to realize any value from
encumbered or indirectly-held properties. In
addition, the Notes will be repaid solely from our
assets; holders of the Notes will not have recourse
against any of our general partners or limited
partners for the repayment of the Notes.
OPTIONAL REDEMPTION........ The Notes are redeemable at any time at our option,
in whole or in part, at a redemption price equal to
the sum of (i) the principal amount of the Notes
being redeemed plus accrued interest to the
redemption date and (ii) the Make-Whole Amount, if
any. See "Description of the Notes -- Optional
Redemption."
CERTAIN COVENANTS.......... Limitations on Incurrence of Indebtedness. We will
not incur any Indebtedness if, after giving effect
to the additional Indebtedness, the aggregate
principal amount of all of our outstanding
Indebtedness on a consolidated basis determined in
accordance with GAAP exceeds 60% of the SUM of
(1) our Total Assets as of the end of the calendar
quarter covered in our most recent Annual
Report on Form 10-K or Quarterly Report on Form
10-Q, as the case may be, filed with the
Securities and Exchange Commission or, if
applicable, with the Trustee, and
(2) the purchase price of any real estate assets or
mortgages receivable we acquired since the end
of the most recent calendar quarter, and
(3) the amount of any securities offering proceeds
received by us since the end of the most recent
calendar quarter, including the proceeds to be
obtained from any additional Indebtedness, to
the extent that such proceeds were not used to
acquire real estate assets or mortgages
receivable or used to reduce Indebtedness,
LESS the decrease, if any, in our Total Assets
since the end of the most recent calendar quarter.
In addition, we will not incur any Indebtedness
secured by any Encumbrance on any of our properties
if, after giving effect to the additional
Indebtedness, the aggregate principal amount of all
of our
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outstanding Indebtedness on a consolidated basis
which is secured by any Encumbrance on our property
exceeds 40% of the SUM of
(1) our Total Assets as of the end of the calendar
quarter covered in our most recent Annual
Report on Form 10-K or Quarterly Report on Form
10-Q, as the case may be, filed with the
Securities and Exchange Commission, or, if
applicable, with the Trustee, and
(2) the purchase price of any real estate assets or
mortgages receivable we acquired since the end
of the most recent calendar quarter, and
(3) the amount of any securities offering proceeds
received by us since the end of the most recent
calendar quarter, including the proceeds to be
obtained from the additional Indebtedness, to
the extent that such proceeds were not used to
acquire real estate assets or mortgages
receivable or used to reduce Indebtedness,
LESS the decrease, if any, in our Total Assets
since the end of the most recent calendar quarter.
We may not at any time own Total Unencumbered
Assets equal to less than 150% of the aggregate
outstanding principal amount of our Unsecured
Indebtedness on a consolidated basis.
In addition, we will not incur any Indebtedness if
the ratio of Consolidated Income Available for Debt
Service to the Annual Service Charge for the four
consecutive fiscal quarters most recently ended
prior to the date on which we would otherwise incur
the additional Indebtedness is less than 1.5:1 on a
pro forma basis after giving effect to certain
assumptions.
The foregoing covenants do not restrict us from
refinancing existing Indebtedness, provided that
the outstanding principal amount of the
Indebtedness is not increased. For a more complete
description of the terms and definitions used in
the foregoing limitations, see "Description of the
Notes -- Certain Covenants."
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USE OF PROCEEDS
We estimate that the net proceeds from the offering of the Notes will be
approximately $74.3 million, after deducting underwriting discounts and
commissions and other estimated offering expenses. We intend to use the net
proceeds from the offering of the Notes to reduce our outstanding indebtedness
incurred under our bank line of credit, with the expectation that we may
re-borrow under our line of credit for the purpose of funding Bradley Real
Estate's recently announced share repurchase program, ongoing redevelopment
initiatives, new acquisitions or development opportunities or for other general
working capital purposes. As of December 31, 1999 on a pro forma basis, after
this offering is complete, we will have approximately $179.8 million available
to us under our line of credit. Our line of credit matures on December 22, 2000
and our outstanding borrowings under the line of credit bear interest at a
variable rate, depending upon the rating assigned by recognized rating agencies,
which is currently 1.0% over LIBOR.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our historical ratios of earnings to fixed
charges for the periods indicated:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
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1994 1995 1996 1997 1998 1999
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<S> <C> <C> <C> <C> <C>
2.79:1 2.63:1 2.95:1 2.82:1 2.92:1 1.79:1
</TABLE>
For purposes of computing these ratios, we have calculated earnings by
adding fixed charges, including preference security dividends, excluding
capitalized interest, to income before income taxes and extraordinary items. Our
fixed charges consist of interest costs, whether expensed or capitalized, the
interest component of rental expense, if any, amortization of debt discounts and
issue costs, whether expensed or capitalized, and preference security dividends.
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DESCRIPTION OF THE NOTES
The following description of the particular terms and provisions of the
Notes supplements the description of our debt securities contained in the
accompanying prospectus. We have not described every aspect of the Notes. You
should refer to the Indenture described in the prospectus and the form of the
Notes for a complete description of the provisions of the Notes. The Indenture
is an exhibit to the registration statement referred to under "Available
Information" in the prospectus, and the form of the Notes will be filed as an
exhibit to a report we file with the SEC. See "Incorporation of Certain
Documents by Reference" in the prospectus for information on how to obtain a
copy of the Indenture and the form of the Notes for your review.
GENERAL
The Notes will constitute a separate series of Debt Securities under the
Indenture, initially limited to $75 million aggregate principal amount, subject
to our right to reopen the series and issue additional Notes without the consent
of holders. The Notes will be our unsecured and unsubordinated obligations and
will rank on a parity in priority of payment with all our other unsecured and
unsubordinated indebtedness. The Notes will be effectively subordinated to our
mortgages and other secured indebtedness and to indebtedness and other
liabilities of any of our current or future subsidiaries. Accordingly, our prior
indebtedness will have to be satisfied in full before holders of the Notes will
be able to realize any value from encumbered or indirectly-held properties. In
addition, the Notes will be repaid solely from our assets; holders of the Notes
will not have recourse against any of our general partners or limited partners
for the repayment of the Notes.
The Notes will be issued only in fully registered form without coupons, in
denominations of $1,000 and in integral multiples of $1,000. The Notes will be
represented by one or more permanent Global Securities in book-entry form,
except under the limited circumstance described below under "--Book-Entry
System." The Global Securities will be registered in the name of a nominee of
The Depository Trust Company, as depository for the Notes. See "--Book-Entry
System."
The Notes will not be entitled to the benefit of any sinking fund and will
not be subject to repurchase by us at the option of the holders.
The Notes will be subject to defeasance and covenant defeasance as
described under "Description of Debt Securities -- Discharge, Defeasance and
Covenant Defeasance" in the accompanying prospectus.
Notices and demands to or upon us in respect of the Notes and the Indenture
may be served and, in the event that the Notes are issued in definitive
certificated form, the Notes may be surrendered for payment, registration of
transfer or exchange, at our office or agency maintained for that purpose in the
City of Chicago, which will initially be the office of the Trustee, LaSalle Bank
National Association, located at 135 South LaSalle Street, Chicago, Illinois
60603.
INTEREST RATE, INTEREST PAYMENT DATES AND MATURITY
The Notes will mature on March 15, 2006. The Notes will bear interest at
the rate of 8.875% per annum. Interest on the Notes will accrue from and
including March 10, 2000 or from the most recent date to which interest has been
paid or duly provided for. Interest on the Notes will be payable semi-annually
in arrears on March 15 and September 15 of each year, commencing September 15,
2000, to the persons in whose names the Notes are registered at the close of
business on the preceding March 1 or September 1, as the case may be. Interest
on the Notes will be computed on the basis of a 360-day year of twelve 30-day
months.
If any interest payment date or maturity date for the Notes is not a
Business Day, then payment of principal and interest need not be made on that
date but may be made without additional interest on the next succeeding Business
Day.
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OPTIONAL REDEMPTION
The Notes may be redeemed at any time at our option, in whole or in part,
at a redemption price equal to the sum of (i) the principal amount of the Notes
being redeemed plus accrued interest to the redemption date, and (ii) the
Make-Whole Amount (as defined below), if any (the "Redemption Price").
If notice has been given as provided in the Indenture and funds for the
redemption of any Notes called for redemption have been made available on the
redemption date referred to in the notice, the Notes will cease to bear interest
on the date fixed for such redemption specified in the notice and the only right
of the holders of the Note will be to receive payment of the Redemption Price.
In the event, however, that we fail to redeem any Notes submitted for redemption
in an aggregate amount of $20 million or greater, the lenders under our line of
credit may accelerate such line of credit.
Notice of any optional redemption of any Notes will be given to holders at
their addresses, as shown in the Security Register for the Notes, not more than
60 nor less than 30 days prior to the date fixed for redemption. The notice of
redemption will specify, among other items, the Redemption Price and the
principal amount of the Notes held by each holder to be redeemed.
If less than all of the Notes are to be redeemed at our option, we will
notify the Trustee at least 45 days prior to the giving of the redemption notice
(or such shorter period as is satisfactory to the Trustee) of the aggregate
principal amount of Notes to be redeemed and their redemption date. The Trustee
shall select not more than 60 days prior the redemption date, in such manner as
it shall deem fair and appropriate, Notes to be redeemed in whole in part. Notes
may be redeemed in part in the minimum authorized denomination for Notes or in
any integral multiple thereof.
As used herein:
"Make-Whole Amount" means, in connection with any optional redemption or
accelerated payment of any Note the excess, if any, of (i) the aggregate present
value as of the date of such redemption or accelerated payment of each dollar of
principal being redeemed or paid and the amount of interest (exclusive of
interest accrued to the date of redemption or accelerated payment) that would
have been payable in respect of each such dollar if such redemption or
accelerated payment had not been made, determined by discounting, on a
semi-annual basis, such principal and interest at the Reinvestment Rate
(determined on the third Business Day preceding the date such notice of
redemption is given or declaration of acceleration is made) from the respective
dates on which such principal and interest would have been payable if such
redemption or accelerated payment had not been made to the date of redemption or
accelerated payment, over (ii) the aggregate principal amount of the respective
Notes being redeemed or paid. For purposes of the Indenture, all references to
any "premium" on the Notes shall be deemed to refer to any Make-Whole Amount,
unless the context otherwise requires.
"Reinvestment Rate" means 0.25% (twenty-five one hundredths of one percent)
plus the arithmetic mean of the yields under the respective headings "This Week"
and "Last Week" published in the Statistical Release (as defined below) under
the caption "Treasury Constant Maturities" for the maturity (rounded to the
nearest month) corresponding to the remaining life to maturity, as of the
payment date of the principal being redeemed or paid. If no maturity exactly
corresponds to such maturity, yields for the two published maturities most
closely corresponding to such maturity shall be calculated pursuant to the
immediately preceding sentence and the Reinvestment Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding in each of
such relevant periods to the nearest month. For the purposes of calculating the
Reinvestment Rate, the most recent Statistical Release published prior to the
date of determination of the Make-Whole Amount shall be used.
"Statistical Release" means the statistical release designated "H.15(519)"
or any successor publication which is published weekly by the Board of Governors
of the Federal Reserve System and which reports yields on actively traded United
States government securities adjusted to constant maturities or, if such
Statistical Release is not published at the time of any determination of the
Make-Whole Amount, then such other reasonably comparable index which shall be
designated by us.
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CERTAIN COVENANTS
For so long as any of the Notes are outstanding, we will comply with the
following covenants:
Limitations on Incurrence of Indebtedness. We will not incur any
Indebtedness (as defined below) if, after giving effect to the additional
Indebtedness, the aggregate principal amount of all of our outstanding
Indebtedness on a consolidated basis determined in accordance with GAAP exceeds
60% of the SUM of
(1) our Total Assets (as defined below) as of the end of the calendar
quarter covered in our most recent Annual Report on Form 10-K or Quarterly
Report on Form 10-Q, as the case may be, filed with the Securities and
Exchange Commission or, if applicable, with the Trustee, and
(2) the purchase price of any real estate assets or mortgages
receivable we acquired since the end of the most recent calendar quarter,
and
(3) the amount of any securities offering proceeds received by us
since the end of the most recent calendar quarter, including the proceeds
to be obtained from any additional Indebtedness, to the extent that such
proceeds were not used to acquire real estate assets or mortgages
receivable or used to reduce Indebtedness,
LESS the decrease, if any, in our Total Assets since the end of the most recent
calendar quarter.
In addition, we will not incur any Indebtedness secured by any Encumbrance
(as defined below) on any of our properties if, after giving effect to the
additional Indebtedness, the aggregate principal amount of all of our
outstanding Indebtedness on a consolidated basis which is secured by any
Encumbrance on our property exceeds 40% of the SUM of
(1) our Total Assets as of the end of the calendar quarter covered in
our most recent Annual Report on Form 10-K or Quarterly Report on Form
10-Q, as the case may be, filed with the Securities and Exchange
Commission, or, if applicable, with the Trustee, and
(2) the purchase price of any real estate assets or mortgages
receivable we acquired since the end of the most recent calendar quarter,
and
(3) the amount of any securities offering proceeds received by us
since the end of the most recent calendar quarter, including the proceeds
to be obtained from the additional Indebtedness, to the extent that such
proceeds were not used to acquire real estate assets or mortgages
receivable or used to reduce Indebtedness,
LESS the decrease, if any, in our Total Assets since the end of the most recent
calendar quarter.
We may not at any time own Total Unencumbered Assets (as defined below)
equal to less than 150% of the aggregate outstanding principal amount of our
Unsecured Indebtedness (as defined below) on a consolidated basis.
In addition, we will not incur any Indebtedness if the ratio of
Consolidated Income Available for Debt Service (as defined below) to the Annual
Service Charge (as defined below) for the four consecutive fiscal quarters most
recently ended prior to the date on which we would otherwise incur the
additional Indebtedness is less than 1.5:1 on a pro forma basis after giving
effect to the additional Indebtedness and calculated on the assumption that
(1) the additional Indebtedness and any other Indebtedness incurred by
us since the first day of such four-quarter period and the application of
the proceeds therefrom, including to refinance other Indebtedness, had
occurred at the beginning of such period;
(2) the repayment or retirement of any of our other Indebtedness since
the first day of such four-quarter period had been repaid or retired at the
beginning of such period, except that, in making such computation, the
amount of Indebtedness under any revolving credit facility shall be
computed based upon the average daily balance of such Indebtedness during
such period;
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(3) in the case of Acquired Indebtedness (as defined below) or
Indebtedness incurred in connection with any acquisition since the first
day of such four-quarter period, the related acquisition had occurred as of
the first day of such period with the appropriate adjustments with respect
to such acquisition being included in such pro forma calculation; and
(4) in the case of any acquisition or disposition by us of any asset
or group of assets since the first day of such four-quarter period, whether
by merger, stock purchase or sale, or asset purchase or sale, such
acquisition or disposition or any related repayment of Indebtedness had
occurred as of the first day of such period with the appropriate
adjustments with respect to such acquisition or disposition being included
in such pro forma calculation.
The foregoing covenants do not restrict us from refinancing existing
Indebtedness, provided that the outstanding principal amount of such
Indebtedness is not increased.
Provision of Financial Information. Whether or not we are subject to
Section 13 or 15(d) of the Exchange Act, we will, to the extent permitted under
the Exchange Act, file with the Commission the annual reports, quarterly reports
and other documents which we would have been required to file with the
Commission pursuant to such Section 13 or 15(d) if we were so subject, such
documents to be filed with the Commission on or prior to the respective dates
(the "Required Filing Dates") by which we would have been required to file such
documents if we were so subject. We will also in any event (x) within 15 days of
each Required Filing Date (1) if we are not then subject to such Section 13 or
15(d), transmit by mail to all holders of Notes, as their names and addresses
appear in the security register, without cost to such holders, copies of the
annual reports and quarterly reports that we would have been required to file
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act if we
were subject to such sections, (2) file with the Trustee copies of the annual
reports, quarterly reports and other documents that we would have been required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
if we were subject to such Sections and (y) if our filing of such documents is
not permitted under the Exchange Act, promptly upon written request and payment
of the reasonable cost of duplication and delivery, supply copies of such
documents to any prospective holder.
Waiver of Certain Covenants. We may omit to comply with any term,
provision or condition of the foregoing covenants, and with any other term,
provision or condition with respect to the Notes (except any such term,
provision or condition which could not be amended without the consent of all
holders of Notes), if before or after the time for such compliance the holders
of at least a majority in principal amount of all of the outstanding Notes by
act of such holders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition. Except to the extent so
expressly waived, and until such waiver shall become effective, our obligations
and the duties of the Trustee in respect of any such term, provision or
condition shall remain in full force and effect.
As used herein, and in the Indenture:
"Acquired Indebtedness" means Indebtedness of a person (1) existing at the
time such person becomes a Subsidiary or (2) assumed in connection with the
acquisition of assets from such person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such person becoming a
Subsidiary or such acquisition. Acquired Indebtedness will be deemed to be
incurred on the date of the related acquisition of assets from any person or the
date the acquired person becomes a Subsidiary.
"Annual Service Charge" for any period means the aggregate interest expense
for such period in respect of, and the amortization during such period of any
original issue discount of, our Indebtedness and the amount of dividends which
are payable during such period in respect of any of our Disqualified Stock.
"Business Day" means any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in the City of
New York or in the City of Chicago are authorized or required by law, regulation
or executive order to close.
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"Capital Stock" means, (i) with respect to any corporation, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such corporation's capital stock, whether now
outstanding or issued hereafter, including, without limitation, all common stock
and any series of preferred stock, and (ii) with respect to any other person,
any partnership interest, joint venture interest, limited liability company
member interest or other form of equity sharing or participation interest, as
applicable, and (iii) warrants, options, participations or other equivalents of
or interests (however designated) in any of the items described in clauses (i)
or (ii) above.
"Consolidated Income Available for Debt Service" for any period means our
Earnings from Operations (as defined below) plus amounts which have been
deducted, and minus amounts which have been added, for the following (without
duplication):
(1) interest on our Indebtedness,
(2) provision for taxes based on income,
(3) amortization of debt discount,
(4) provisions for gains and losses on properties and property
depreciation and amortization,
(5) the effect of any noncash charge resulting from a change in
accounting principles in determining Earnings from Operations for such
period and
(6) amortization of deferred charges.
"Disqualified Stock" means, with respect to any person, any capital stock
of such person which by the terms of such capital stock (or by the terms of any
security into which it is convertible or for which it is exchangeable or
exercisable), upon the happening of any event or otherwise (1) matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise,
other than Capital Stock which is redeemable solely in exchange for Capital
Stock which is not Disqualified Stock or the redemption price of which may, at
the option of such person, be paid in Capital Stock which is not Disqualified
Stock, (2) is convertible into or exchangeable or exercisable for Indebtedness
or Disqualified Stock or (3) is redeemable at the option of the holder thereof,
in whole or in part, other than Capital Stock which is redeemable solely in
exchange for Capital Stock which is not Disqualified Stock or the redemption
price of which may, at the option of such person, be paid in Capital Stock which
is not Disqualified Stock, in each case on or prior to the Stated Maturity of
the Notes.
"Earnings from Operations" for any period means net earnings excluding
gains and losses on sales of investments, extraordinary items and property
valuation losses, net, as reflected in our financial statements for such period
determined on a consolidated basis in accordance with GAAP.
"Encumbrance" means any mortgage, lien, charge, pledge or security interest
of any kind.
"Indebtedness" means any of our indebtedness, whether or not contingent, in
respect of
(1) borrowed money or evidenced by bonds, notes, debentures or similar
instruments whether or not such indebtedness is secured by any Encumbrance
existing on any of our properties,
(2) indebtedness for borrowed money of a person other than us which is
secured by any Encumbrance existing on any of our properties, to the extent
of the lesser of (a) the amount of indebtedness so secured and (b) the fair
market value of the property subject to such Encumbrance,
(3) the reimbursement obligations, contingent or otherwise, in
connection with any letters of credit actually issued or amounts
representing the balance deferred and unpaid of the purchase price of any
property or services, except any such balance that constitutes an accrued
expense or trade payable, or all conditional sale obligations or
obligations under any title retention agreement,
(4) the principal amount of all of our obligations with respect to
redemption, repayment or other repurchase of any Disqualified Stock,
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(5) any lease of our property as lessee which is reflected on our
consolidated balance sheet as a capitalized lease in accordance with GAAP,
or
(6) interest rate swaps, caps or similar agreements and foreign
exchange contracts, currency swaps or similar agreements, to the extent, in
the case of items of indebtedness under (1) through (3) above, that any
such items (other than letters of credit) would appear as a liability on
our consolidated balance sheet in accordance with GAAP, and also includes,
to the extent not otherwise included, any of our obligations to be liable
for, or to pay, as obligor, guarantor or otherwise (other than for purposes
of collection in the ordinary course of business), Indebtedness of another
person (it being understood that Indebtedness will be deemed to be incurred
by us whenever we create, assume, guarantee or otherwise become liable in
respect thereof).
"Subsidiary" means any corporation or other entity of which a majority of
(1) the voting power of the voting equity securities or (2) the outstanding
equity interests of which are owned, directly or indirectly, by us. For the
purposes of this definition, "voting equity securities" means equity securities
having voting power for the election of directors, whether at all times or only
so long as no senior class of security has such voting power by reason of any
contingency.
"Total Assets" as of any date means the sum of (1) the Undepreciated Real
Estate Assets and (2) all of our other assets determined in accordance with GAAP
(but excluding accounts receivable and intangibles).
"Total Unencumbered Assets" means the sum of (1) those Undepreciated Real
Estate Assets not subject to an Encumbrance for borrowed money and (2) all of
our other assets not subject to an Encumbrance for borrowed money, determined in
accordance with GAAP (but excluding accounts receivable and intangibles).
"Undepreciated Real Estate Assets" as of any date means the cost (original
cost plus capital improvements) of our real estate assets on such date, before
depreciation and amortization, determined on a consolidated basis in accordance
with GAAP.
"Unsecured Indebtedness" means Indebtedness which is not secured by any
Encumbrance upon any of our properties.
See "Description of Debt Securities -- Certain Covenants" in the
accompanying prospectus for a description of additional covenants in the
Indenture that apply to us.
MERGER, CONSOLIDATION OR SALE
The Indenture provides that we may, without the consent of the holders of
the Notes, consolidate with, or sell, lease or convey all or substantially all
of our assets to, or merge with or into, any other entity, provided that (a)
either we are the continuing entity, or the successor entity is an entity
organized and existing under the laws of the United States or a State thereof
and such successor entity (if other than us) formed by or resulting from any
such consolidation or merger or which shall have received the transfer of such
assets, shall expressly assume all of our obligations under the Indenture; (b)
immediately after giving effect to such transaction and treating any
indebtedness which becomes our obligation as a result thereof as having been
incurred by us at the time of such transaction, no Event of Default under the
Indenture, 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 (c)
an officer's certificate and legal opinion covering such conditions shall be
delivered to the Trustee. Accordingly, while we may transfer all or
substantially all of our assets, without the consent of the holders of the
Notes, any transaction that would result in us, or any successor entity,
breaching the limitations on the incurrence of indebtedness contained in the
covenants would result in an Event of Default under the Indenture. Thus, the
holders of the Notes are afforded some protection in the event of a highly
leveraged transaction, merger or similar transaction, which may adversely affect
our creditworthiness.
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The applicability of the covenants containing debt incurrence limitations
and the provisions regarding merger, consolidation or sales of assets may be
waived by the holders of at least a majority in principal amount of each series
of Notes but not by the Trustee or by Bradley Real Estate, in its capacity as
our general partner. In addition, the applicability of the Indenture provisions
relating to mergers, consolidations or sales of assets are not limited in the
event of a leveraged buyout initiated or supported by us, our management or any
affiliate thereof.
EVENTS OF DEFAULT
The Indenture provides that the following events are "Events of Default"
with respect to the Notes:
(a) default in the payment of any interest on any Notes when such
interest becomes due and payable that continues for a period of 30 days;
(b) default in the payment of the principal of (or Make-Whole Amount,
if any, on) any Notes when due and payable;
(c) our default in the performance, or breach, of any other covenant
or warranty in the Indenture with respect to the Notes and continuance of
such default or breach for a period of 60 days after written notice as
provided in the Indenture;
(d) default under any bond, debenture, note, mortgage, indenture or
instrument under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by us (or by any
Subsidiary, the repayment of which we have guaranteed or for which we are
directly responsible or liable as obligor or guarantor), having an
aggregate principal amount outstanding of at least $10,000,000, whether
such indebtedness now exists or shall hereafter 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, without such indebtedness having been discharged, or such
acceleration having been rescinded or annulled, within a period of 10 days
after written notice to us as provided in the Indenture;
(e) the entry by a court of competent jurisdiction of one or more
judgments, orders or decrees against us or any Subsidiary in an aggregate
amount (excluding amounts covered by insurance) in excess of $10,000,000
and such judgments, orders or decrees remain undischarged, unstayed and
unsatisfied in an aggregate amount (excluding amounts covered by insurance)
in excess $10,000,000 for a period of 30 consecutive days; and
(f) certain events of bankruptcy, insolvency or reorganization, or
court appointment of a receiver, liquidator or trustee with respect to us
or any Significant Subsidiary.
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
specified in clause (f) above, relating to us or any Significant Subsidiary
occurs, the principal amount of, and the Make-Whole Amount on, all outstanding
Notes shall become due and payable without any declaration or other act on the
part of the Trustee or of the holders of the Notes.
BOOK-ENTRY SYSTEM
The following are summaries of certain rules and operating procedures of
DTC that affect the payment of principal, premium, if any, and interest and
transfers of interests in the Global Security representing the Notes (the
"Global Note"). Upon issuance, the Notes will only be issued in the form of a
Global Note which will be deposited with, or on behalf of, DTC and registered in
the name of Cede & Co., as nominee of DTC. Unless and until it is exchanged in
whole or in part for notes in definitive form under the limited circumstances
described below, a Global Note may not be transferred except as a whole (i) by
DTC to a nominee of DTC, (ii) by a nominee of DTC to DTC or another nominee of
DTC or (iii) by DTC or any nominee to a successor of DTC or a nominee of a
successor.
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Ownership of beneficial interests in a Global Note will be limited to
persons that have accounts with DTC for such Global Note ("participants") or
persons that may hold interests through participants. Upon the issuance of a
Global Note, DTC will credit, on its book-entry registration and transfer
system, the participants' accounts with the respective principal amounts of the
Notes represented by such Global Note beneficially owned by participants.
Ownership of beneficial interests in the Global Note will be shown on, and the
transfer of ownership interests will be effected only through, records
maintained by DTC (with respect to interests of participants) and on the records
of participants (with respect to interests of persons holding through
participants). The laws of some states may require that certain purchasers of
securities take physical delivery of the securities in definitive form. These
laws may limit or impair the ability to own, transfer or pledge beneficial
interests in the Global Note.
So long as DTC or its nominee is the registered owner of a Global Note, DTC
or its nominee, as the case may be, will be considered the sole owner or holder
of the Notes represented by the Global Note for all purposes under the
Indenture. Except as set forth below, owners of beneficial interests in a Global
Note will not be entitled to have Notes represented by the Global Note
registered in their names, will not receive or be entitled to receive physical
delivery of notes in certificated form and will not be considered the registered
owners or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in a Global Note must rely on the procedures of DTC and, if
the person is not a participant, on the procedures of the participant through
which the person owns its interest, to exercise any rights of a holder under the
Indenture. We understand that under existing industry practices, if we request
any action of holders or if an owner of a beneficial interest in a Global Note
desires to give or take any action that a holder is entitled to give or take
under the Indenture, DTC would authorize the participants holding the relevant
beneficial interests to give or take this action, and the participants would
authorize beneficial owners owning through the participants to give or take this
action or would otherwise act upon the instructions of beneficial owners holding
through them.
Principal, premium, if any, and interest payments on interests represented
by a Global Note will be made to DTC or its nominee, as the case may be, as the
registered owner of the Global Note. None of us, the Trustee or any other agent
for us or agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership of interests in the Global Notes or for maintaining, supervising or
reviewing any records relating to beneficial ownership interests. We expect that
DTC, upon receipt of any payment of principal, premium, if any, or interest in
respect of a Global Note, will immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the Global Note as shown on the records of DTC. We also expect that payments by
participants to owners of beneficial interests in the Global Note held through
the participants will be governed by standing customer instructions and
customary practice, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of the participants.
The Indenture provides that if (i) DTC notifies us that it is unwilling or
unable to continue as depositary or if DTC ceases to be a clearing agency
registered under the Exchange Act at any time when the depositary is required to
be so registered to act as depositary for the Notes and a successor depositary
is not appointed within 90 days after we receive notice or learns of such
ineligibility, (ii) we determine that the Notes will no longer be represented by
a Global Note and execute and deliver to the Trustee an officers' certificate to
that effect or (iii) an Event of Default with respect to the Notes has occurred
and is continuing and beneficial owners representing a majority in aggregate
principal amount of the outstanding Notes advise DTC to cease acting as
depositary for the Notes, we will issue the Notes in definitive form in exchange
for interests in the Global Note. Any Notes issued in definitive form in
exchange for interests in the Global Note will be registered in such name or
names, and will be issued in denominations of $1,000 and integral multiples
thereof, as DTC will instruct the Trustee. It is expected that these
instructions will be based upon directions received by DTC from participants
with respect to ownership of beneficial interests in the Global Note. DTC is a
limited-purpose trust company organized under the Banking Law of the State of
New York, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the
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provisions of Section 17A of the Exchange Act. DTC was created to hold
securities of its participants and to facilitate the clearance and settlement of
transactions among its participants in these securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. DTC's participants include
securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations, some of which (and/or their representatives)
own DTC. Access to the DTC book-entry system is also available to others, such
as banks, brokers and dealers and trust companies that clear through or maintain
a custodial relationship with a participant, either directly or indirectly.
Same-Day Settlement and Payment. Settlement for the Notes will be made by
the underwriters in immediately available funds. All payments of principal,
premium, if any, and interest in respect of the Notes will be made by us by wire
transfer of immediately available funds to an account maintained in the United
States; provided that, if Notes are issued in definitive certificated form, the
holders thereof will have given appropriate wire transfer instructions to us.
The Notes will trade in DTC's Same-Day Funds Settlement System until
maturity or until the Notes are issued in certificated form, and secondary
market trading activity in the Notes will therefore be required by DTC to settle
in immediately available funds. We expect that secondary trading in the
certificated securities, if any, will also be settled in immediately available
funds.
GOVERNING LAW
The Indenture is governed by and will be construed in accordance with the
laws of the State of New York.
NO PERSONAL LIABILITY OR RECOURSE
No recourse under or upon any obligation, covenant or agreement contained
in the Indenture or the Notes, or because of any indebtedness evidenced thereby,
or for any claim based thereon or otherwise in respect thereof, shall be had (i)
against Bradley Real Estate, or any other past, present or future partner in
Bradley Operating Limited Partnership, (ii) against any other person or entity
which owns an interest, directly or indirectly, in any partner of Bradley
Operating Limited Partnership, or (iii) against any past, present or future
stockholder, employee, officer or director, as such, of Bradley Real Estate or
any successor, either directly or through Bradley Operating Limited Partnership
or Bradley Real Estate or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any assessment or by any legal
or equitable proceeding or otherwise. Each holder of Notes waives and releases
all such liability by accepting such Notes. The waiver and release are part of
the consideration for the issue of the Notes.
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UNDERWRITING
Subject to the terms and conditions set forth in an underwriting agreement
among us and the underwriters named below, we have agreed to sell to each of the
underwriters and each of the underwriters severally has agreed to purchase from
us the principal amount of the Notes set forth opposite its name below. The
underwriting agreement provides that the obligations of the underwriters are
subject to certain conditions and that the underwriters will be obligated to
purchase all of the Notes if any are purchased.
<TABLE>
<CAPTION>
PRINCIPAL
UNDERWRITERS AMOUNT OF NOTES
- ------------ ---------------
<S> <C>
Deutsche Bank Securities Inc................................ $30,000,000
Sutro & Co. Incorporated.................................... 45,000,000
-----------
Total.................................................. $75,000,000
===========
</TABLE>
The underwriters propose to offer the Notes to the public at the public
offering price set forth on the cover page of this prospectus supplement and to
dealers at that price less a concession of no more than 0.400% of the principal
amount of the Notes. The underwriters may allow, and the dealers may reallow, a
discount of no more than 0.250% of the principal amount of the Notes to other
dealers. The public offering price, concession and discount may be changed after
the initial offering to the public of the Notes.
The Notes are a new issue of securities with no established trading market.
We do not intend to apply for listing of the Notes on any national securities
exchange or for quotation of the Notes on any automated dealer quotation system.
The underwriters have advised us that they intend to make a market in the Notes
after the offering, although they are under no obligation to do so. The
underwriters may discontinue any market-making activities at any time without
any notice. We can give no assurance as to the liquidity of the trading market
for the Notes or that a public trading market for the Notes will develop. If no
active public trading market develops, the market price and liquidity of the
Notes may be adversely affected. If the Notes are traded, they may trade at a
discount from their initial offering price, depending on factors such as
prevailing interest rates, the market for similar securities, the performance of
our company as well as other factors not listed here.
We have agreed to indemnify the underwriters against, or to contribute to
payments that the underwriters may be required to make with respect to, certain
liabilities, including liabilities under the Securities Act of 1933.
The underwriters, as well as dealers and agents, may purchase and sell
Notes in the open market. These transactions may include stabilizing
transactions and purchases to cover syndicate short positions created in
connection with the offering. Stabilizing transactions consist of bids and
purchases made to prevent or slow a decline in the market price of the Notes.
Syndicate short positions arise when the underwriters or agents sell more Notes
than we are required to sell to them in the offering. The underwriters may also
impose penalty bids whereby the underwriting syndicate may reclaim selling
concessions allowed by either syndicate members or broker dealers who sell Notes
in the offering for their own account if the syndicate repurchases the Notes in
stabilizing or covering transactions. These activities may stabilize, maintain
or otherwise affect the market price of the Notes, which may be higher as a
result of these activities than it might otherwise be in the open market. These
activities, if commenced, may be discontinued at any time without notice.
We and the underwriters make no representation or prediction as to the
direction or magnitude of any effect that the transactions described above may
have on the price of the Notes. In addition, we and the underwriters make no
representation that the underwriters will engage in those types of transactions
or that those transactions, once commenced, will not be discontinued without
notice.
Certain of the underwriters, and certain of their affiliates, have
provided, and may continue to provide, investment banking, financial advisory,
commercial banking and other services to us and our affiliates.
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We estimate that our share of the total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately $175,000.
LEGAL MATTERS
The validity of the Notes offered hereby will be passed upon for us by
Goodwin, Procter & Hoar LLP, Boston, Massachusetts. Mayer, Brown & Platt,
Chicago, Illinois, will act as counsel to the underwriters.
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<PAGE> 19
$400,000,000
BRADLEY OPERATING LIMITED PARTNERSHIP
DEBT SECURITIES
---------------------
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.
---------------------
THE DATE OF THIS PROSPECTUS IS MAY 14, 1998.
<PAGE> 20
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. 333-51675) 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 the Operating Partnership's Current Report on Form 8-K
filed on May 13, 1998; 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.
2
<PAGE> 21
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.
3
<PAGE> 22
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
4
<PAGE> 23
distribution and thus 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
5
<PAGE> 24
into one or more other properties that produce net operating income at a level
comparable to that of One North State.
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
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<PAGE> 25
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.
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
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<PAGE> 26
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.
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.
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<PAGE> 27
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.
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.
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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.
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").
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<PAGE> 29
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.
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.
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.
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<PAGE> 30
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:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
- ------------------------------------------
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 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.
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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
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unit or units, or composite currency or currencies) and the manner in which
such amounts shall be determined;
(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
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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.
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
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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 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
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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 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
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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.
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
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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 25% 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, 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
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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
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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 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
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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 (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.
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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.
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,
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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. 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.
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 US 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.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
Forward Looking Statements............ S-2
Bradley Operating Limited
Partnership......................... S-3
Recent Developments................... S-3
The Offering.......................... S-5
Use of Proceeds....................... S-7
Ratio of Earnings to Fixed Charges.... S-7
Description of the Notes.............. S-8
Underwriting.......................... S-17
Legal Matters......................... S-18
PROSPECTUS
Available Information................. 2
Incorporation of Certain Documents by
Reference........................... 2
Risk Factors.......................... 4
The Operating Partnership............. 10
Use of Proceeds....................... 11
Ratios of Earnings to Fixed Charges... 12
Description of Debt Securities........ 12
Plan of Distribution.................. 23
Legal Matters......................... 24
Experts............................... 24
</TABLE>
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BRADLEY OPERATING
LIMITED PARTNERSHIP
$75,000,000
8.875% NOTES DUE 2006
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PROSPECTUS SUPPLEMENT
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DEUTSCHE BANC ALEX. BROWN
SUTRO & CO. INCORPORATED
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MARCH 7, 2000
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